Investment Securities

The following tables provide the amortized cost and fair value for the major categories of held-to-maturity and available-for-sale securities. Held-to-maturity securities are carried at amortized cost, which reflects historical cost, adjusted for amortization of premiums and accretion of discounts. Available-for-sale securities are carried at fair value with net unrealized gains or losses reported on an after-tax basis as a component of other comprehensive income in shareholders’ equity.



		December 31, 2011
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available for sale
Debt securities
	U.S. government agency debentures	$	122,711	$	358	$	—		$	123,069
	U.S States and political subdivisions	334,916		22,865		(50		)	357,731
	Residential mortgage-backed securities:
	U.S. government agencies	1,407,345		53,129		(131		)	1,460,343
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,115,832		22,058		(55		)	1,137,835
	Non-agency	43,225		82		—			43,307
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	127,624		1,648		(145		)	129,127
	Corporate debt securities	115,947		276		(17,381		)	98,842
	Total debt securities	3,267,600		100,416		(17,762		)	3,350,254
Marketable equity securities		3,299		—		—			3,299
	Total securities available for sale	$	3,270,899	$	100,416	$	(17,762	)	$	3,353,553
Securities held to maturity
Debt securities
	U.S States and political subdivisions	$	82,764	$	2,348	$	—		$	85,112
	Total securities held to maturity	$	82,764	$	2,348	$	—		$	85,112



		December 31, 2010
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available for sale
Debt securities
	U.S. government agency debentures	$	399,122	$	703	$	(194	)	$	399,631
	U.S States and political subdivisions	296,327		3,537		(2,119		)	297,745
	Residential mortgage-backed securities:
	U.S. government agencies	1,343,021		52,230		(547		)	1,394,704
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	814,774		18,223		(2,306		)	830,691
	Non-agency	15,018		—		—			15,018
	Corporate debt securities	61,435		—		(16,106		)	45,329
	Total debt securities	2,929,697		74,693		(21,272		)	2,983,118
Marketable equity securities		3,922		—		—			3,922
	Total securities available for sale	$	2,933,619	$	74,693	$	(21,272	)	$	2,987,040
Securities held to maturity
Debt securities
	U.S States and political subdivisions	$	59,962	$	1,832	$	—		$	61,794
	Total securities held to maturity	$	59,962	$	1,832	$	—		$	61,794



FRB and FHLB stock constitute the majority of other investments on the consolidated balance sheets.
	December 31,
	2011		2010
FRB stock	$	21,003	$	20,725
FHLB stock	119,145		139,398
Other	578		629
Total other investments	$	140,726	$	160,752

FRB and FHLB stock is classified as a restricted investment, carried at cost and valued based on the ultimate recoverability of par value. Cash and stock dividends received on the stock are reported as interest income. There are no identified events or changes in circumstances that may have a significant adverse effect on these investments carried at cost.

The carrying value of investment securities pledged to secure trust and public deposits, other obligations and for purposes required or permitted by law amounted to $1.9 billion and $2.2 billion at December 31, 2011 and 2010, respectively.

Realized Gains and Losses

The following table presents the proceeds from sales of available-for-sale securities and the gross realized gains and losses on the sales of those securities that have been included in earnings as a result of those sales. Gains or losses on the sales of available-for-sale securities are recognized upon sale and are determined using the specific identification method.



	Years Ended December 31,
	2011			2010			2009
Proceeds	$	968,478		$	552,078		$	286,946

Realized gains	$	11,251		$	1,810		$	6,037
Realized losses	(170		)	(955		)	—
Net securities gains	$	11,081		$	855		$	6,037

Gross Unrealized Losses and Fair Value

The following table presents the gross unrealized losses and fair value of securities in the securities available-for-sale portfolio by length of time that individual securities in each category had been in a continuous loss position.



		December 31, 2011
		Less than 12 months							12 months or longer							Total
Securities available for sale		Fair Value		Unrealized Losses			Number Impaired Securities		Fair Value		Unrealized Losses			Number Impaired Securities		Fair Value		Unrealized Losses
Debt securities
	U.S States and political subdivisions	$	5,249	$	(50	)	6		$	—	$	—		—		$	5,249	$	(50	)
	Residential mortgage-backed securities:
	U.S. government agencies	40,020		(129		)	4		149		(2		)	1		40,169		(131		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	58,337		(102		)	7		—		—			—		58,337		(102		)
	Non-agency	—		—			—		2		—			1		2		—
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	19,892		(98		)	1		—		—			—		19,892		(98		)
	Corporate debt securities	24,846		(127		)	8		44,234		(17,254		)	8		69,080		(17,381		)
	Total temporarily impaired securities	$	148,344	$	(506	)	$	26	$	44,385	$	(17,256	)	$	10	$	192,729	$	(17,762	)



		December 31, 2010
		Less than 12 months						12 months or longer						Total
Securities available for sale		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Debt securities
	U.S. government agency debentures	$	109,238	$	(194	)	8	$	—	$	—		—	$	109,238	(194	)
	U.S. States and political subdivisions	105,530		(2,095		)	164	665		(24		)	1	106,195		(2,119	)
	Residential mortgage-backed securities:
	U.S. government agencies	67,474		(544		)	7	195		(3		)	1	67,669		(547	)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	188,264		(2,306		)	17	—		—			—	188,264		(2,306	)
	Corporate debt securities	—		—			—	45,329		(16,106		)	8	45,329		(16,106	)
	Total temporarily impaired securities	$	470,506	$	(5,139	)	196	$	46,189	$	(16,133	)	10	$	516,695	(21,272	)

At least quarterly the Corporation conducts a comprehensive security-level impairment assessment on all securities in an unrealized loss position to determine if OTTI exists. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Under the current OTTI accounting model for debt securities, an OTTI loss must be recognized for a debt security in an unrealized loss position if the Corporation intends to sell the security or it is more likely than not that the Corporation will be required to sell the security before recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the security. Even if the Corporation does not expect to sell the security, the Corporation must evaluate the expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in other comprehensive income. Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the Corporation will not recover the amortized cost basis, taking into consideration the estimated recovery period and its ability to hold the equity security until recovery, OTTI is recognized.

The security-level assessment is performed on each security, regardless of the classification of the security as available for sale or held to maturity. The assessments are based on the nature of the securities, the financial condition of the issuer, the extent and duration of the securities, the extent and duration of the loss and the intent and whether Management intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis, which may be maturity. For those securities for which the assessment shows the Corporation will recover the entire cost basis, Management does not intend to sell these securities and it is not more likely than not that the Corporation will be required to sell them before the anticipated recovery of the amortized cost basis, the gross unrealized losses are recognized in other comprehensive income, net of tax.

As of December 31, 2011, gross unrealized losses are concentrated within corporate debt securities which is composed of eight, single issuer, trust preferred securities with stated maturities. Such investments are less than 2% of the fair value of the entire investment portfolio. None of the corporate issuers have deferred paying dividends on their issued trust preferred shares in which the Corporation is invested. The fair values of these investments have been impacted by the recent market conditions which have caused risk premiums to increase, resulting in a significant decline in the fair value of the trust preferred securities. Management believes the Corporation will fully recover the cost of these securities and it does not intend to sell these securities and it is not more likely than not that it will be required to sell them before the anticipated recovery of the remaining amortized cost basis, which may be maturity. As a result, Management concluded that these securities were not other-than-temporarily impaired at December 31, 2011 and has recognized the total amount of the impairment in other comprehensive income, net of tax.

Contractual Maturity of Debt Securities

The following table shows the remaining contractual maturities and contractual yields of debt securities held-to-maturity and available-for-sale as of December 31, 2011. Estimated lives on mortgage-backed securities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.



	U.S. Government agency debentures			U.S. States and political subdivisions obligations			Residential mortgage backed securities U.S. govt. agency obligations			Residential collateralized mortgage obligations - U.S. govt. agency obligations			Residential collateralized mortgage obligations - non-U.S. govt. agency obligations			Commercial collateralized mortgage obligations - U.S. govt. agency obligations			Corporate debt securities			Total			Weighted Average Yield
Securities Available for Sale
Remaining maturity:
One year or less	$	123,069		$	8,062		$	2,758		$	50,863		$	—		$	—		$	—		$	184,752		1.89	%
Over one year through five years	—			17,845			1,442,442			1,086,972			16,094			39,541			20,977			2,623,871			2.94	%
Over five years through ten years	—			177,411			15,143			—			27,213			89,586			33,631			342,984			4.02	%
Over ten years	—			154,413			—			—			—			—			44,234			198,647			4.49	%
Fair Value	$	123,069		$	357,731		$	1,460,343		$	1,137,835		$	43,307		$	129,127		$	98,842		$	3,350,254		3.09	%
Amortized Cost	$	122,711		$	334,916		$	1,407,345		$	1,115,832		$	43,225		$	127,624		$	115,947		$	3,267,600
Weighted-Average Yield	0.78		%	5.65		%	3.36		%	2.51		%	0.77		%	2.71		%	1.67		%	3.09		%
Weighted-Average Maturity	0.61			9.85			3.45			2.64			5.54			6.52			11.06			4.14

Securities Held to Maturity
Remaining maturity:
One year or less	$	—		$	30,791		$	—		$	—		$	—		$	—		$	—		$	30,791		3.33	%
Over one year through five years	—			14,425			—			—			—			—			—			14,425			3.37	%
Over five years through ten years	—			5,657			—			—			—			—			—			5,657			3.37	%
Over ten years	—			34,239			—			—			—			—			—			34,239			7.27	%
Fair Value	$	—		$	85,112		$	—		$	—		$	—		$	—		$	—		$	85,112		4.93	%
Amortized Cost	$	—		$	82,764		$	—		$	—		$	—		$	—		$	—		$	82,764
Weighted-Average Yield	—			4.93		%	—		%	—		%	—		%	—		%	—		%	4.93		%
Weighted-Average Maturity	—			6.86			—			—			—			—			—			6.86