Note 6 - Investment Securities

3 Months Ended

Mar. 31, 2013

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

6. Investment  Securities

Investment securities were $2.2 billion at March 31, 2013, compared to $2.1 billion at December 31, 2012.  During the first quarter of 2013, due to the ongoing discussions regarding corporate income tax rates which could have a negative impact on the after-tax yields and fair values of the Company’s portfolio of municipal securities, the Company determined it may sell such securities in response to market conditions.As a result, the Company reclassified its municipal securities from securities held-to-maturity to securities available-for-sale.  Concurrent with this reclassification, the Company also reclassified all other securities held-to-maturity, which together with the municipal securities had an amortized cost on the date of transfer of $722.5 million, to securities available-for-sale. At the reclassification date, a net unrealized gain was recorded in other comprehensive income for these securities totaling $40.5 million.

The following table reflects the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment securities as of March 31, 2013, and December 31, 2012:

	March 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	359,880	$	234	$	-	$	360,114
State and municipal securities		59,805		3,653		-		63,458
Mortgage-backed securities		1,449,816		42,335		1,553		1,490,598
Collateralized mortgage obligations		8,631		369		54		8,946
Asset-backed securities		136		-		4		132
Corporate debt securities		264,949		657		9,149		256,457
Mutual funds		6,000		48		13		6,035
Preferred stock of government sponsored entities		569		3,987		-		4,556
Total securities available-for-sale	$	2,149,786	$	51,283	$	10,773	$	2,190,296
Total investment securities	$	2,149,786	$	51,283	$	10,773	$	2,190,296

	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Securities Held-to-Maturity
State and municipal securities	$	129,037	$	9,268	$	-	$	138,305
Mortgage-backed securities		634,757		40,801		-		675,558
Corporate debt securities		9,974		69		-		10,043
Total securities held-to-maturity	$	773,768	$	50,138	$	-	$	823,906
Securities Available-for-Sale
U.S. treasury securities	$	509,748	$	228	$	5	$	509,971
Mortgage-backed securities		404,505		12,194		5		416,694
Collateralized mortgage obligations		9,772		430		34		10,168
Asset-backed securities		145		-		4		141
Corporate debt securities		349,973		106		14,102		335,977
Mutual funds		6,000		79		-		6,079
Preferred stock of government sponsored entities		569		1,766		-		2,335
Trust preferred securities		9,964		151		-		10,115
Total securities available-for-sale	$	1,290,676	$	14,954	$	14,150	$	1,291,480
Total investment securities	$	2,064,444	$	65,092	$	14,150	$	2,115,386

The amortized cost and fair value of investment securities at March 31, 2013, by contractual maturities, are shown below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties.   

	Securities available-for-sale
	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	299,974	$	300,139
Due after one year through five years		186,517		184,546
Due after five years through ten years		222,033		221,132
Due after ten years (1)		1,441,262		1,484,479
Total	$	2,149,786	$	2,190,296

(1) Equity securities are reported in this category

Proceeds from sales of mortgage-backed securities were zero and repayments, maturities and calls of mortgage-backed securities were $98.4 million during the first quarter of 2013 compared to proceeds from sales of $117.6 million and repayments, maturities, and calls of $94.2 million during the same quarter a year ago.  Proceeds from sales of other investment securities were $320.2 million during the first quarter of 2013 compared to $30.6 million during the same quarter a year ago.  Proceeds from maturity and calls of investment securities were $10.1 million during the first quarter of 2013 compared to $200.0 million during the same quarter a year ago.  Gains of $6.3 million and no losses of  were realized on sales and calls of investment securities during the first quarter of 2013 compared to gains of $2.8 million  and losses of $595,000 realized for the same quarter a year ago.

The Company's unrealized loss on investments in corporate bonds relates to 27 issues of investments in bonds of financial institutions, all of which were investment grade at the date of acquisition and as of March 31, 2013.  The unrealized losses were primarily caused by the widening of credit spreads since the dates of acquisition. The contractual terms of those investments do not permit the issuers to settle the security at a price less than the amortized cost of the investment. The Company currently does not believe it is probable that it will be unable to collect all amounts due according to the contractual terms of the investments. Therefore, it is expected that these bonds would not be settled at a price less than the amortized cost of the investment. Because the Company does not intend to sell and would not be required to sell these investments until a recovery of fair value, which may be at maturity, it does not consider its investments in these corporate bonds to be other-than-temporarily impaired at March 31, 2013.

The temporarily impaired securities represent 24.2% of the fair value of investment securities as of March 31, 2013.  Unrealized losses for securities with unrealized losses for less than twelve months represent 0.5%, and securities with unrealized losses for twelve months or more represent 4.4%, of the historical cost of these securities.  Unrealized losses on these securities generally resulted from increases in interest rate spreads subsequent to the date that these securities were purchased.

At March 31, 2013, management believed the impairment was temporary and, accordingly, no impairment loss has been recognized in our condensed consolidated statements of operations.  The Company expects to recover the amortized cost basis of its debt securities, and has no intent to sell and will not be required to sell available-for-sale debt securities that have declined below their cost before their anticipated recovery.

The table below shows the fair value and unrealized losses of the temporarily impaired securities in our investment securities portfolio as of March 31, 2013, and December 31, 2012:

	March 31, 2013
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities Available-for-Sale
Mortgage-backed securities	$	321,604	$	1,551	$	163	$	1	$	321,767	$	1,552
Mortgage-backed securities-Non-agency		-		-		96		1		96		1
Collateralized mortgage obligations		-		-		417		54		417		54
Asset-backed securities		-		-		132		4		132		4
Corporate debt securities		9,855		145		195,996		9,004		205,851		9,149
Mutual funds		1,987		13		-		-		1,987		13
Total securities available-for-sale	$	333,446	$	1,709	$	196,804	$	9,064	$	530,250	$	10,773
Total investment securities	$	333,446	$	1,709	$	196,804	$	9,064	$	530,250	$	10,773

	December 31, 2012
	Temporarily Impaired Securities
	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities Held-to-Maturity
Total securities held-to-maturity	$	-	$	-	$	-	$	-	$	-	$	-
Securities Available-for-Sale
U.S. treasury securities	$	49,969	$	5	$	-	$	-	$	49,969	$	5
Mortgage-backed securities		231		1		170		1		401		2
Mortgage-backed securities-Non-agency		-		-		96		2		96		2
Collateralized mortgage obligations		-		-		439		35		439		35
Asset-backed securities		-		-		141		4		141		4
Corporate debt securities		52,468		2,532		253,430		11,570		305,898		14,102
Total securities available-for-sale	$	102,668	$	2,538	$	254,276	$	11,612	$	356,944	$	14,150
Total investment securities	$	102,668	$	2,538	$	254,276	$	11,612	$	356,944	$	14,150

Investment securities having a carrying value of $1.36 billion at March 31, 2013, and $1.45 billion at December 31, 2012, were pledged to secure public deposits, other borrowings, treasury tax and loan, Federal Home Loan Bank advances, securities sold under agreements to repurchase, interest rate swaps, and foreign exchange transactions.