. 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.



		March 31, 2013
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	249,750	$	13,646	$	(790	)	$	262,606
	Residential mortgage-backed securities:
	U.S. government agencies	1,109,905		43,084		(663		)	1,152,326
	Commercial mortgage-backed securities:
	U.S. government agencies	58,827		406		(659		)	58,574
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,591,341		16,292		(2,354		)	1,605,279
	Non-agency	11		—		—			11
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	108,658		2,291		(347		)	110,602
	Corporate debt securities	61,555		—		(10,330		)	51,225
	Total debt securities	3,180,047		75,719		(15,143		)	3,240,623
Marketable equity securities		3,212		—		—			3,212
	Total securities available for sale	$	3,183,259	$	75,719	$	(15,143	)	$	3,243,835
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	292,689	$	5,041	$	(244	)	$	297,486
	Commercial mortgage-backed securities:
	U.S. government agencies	40,413		774		—			41,187
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	137,839		680		—			138,519
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	98,887		385		(339		)	98,933
	Corporate debt securities	95,761		1,615		—			97,376
	Total securities held to maturity	$	665,589	$	8,495	$	(583	)	$	673,501



		December 31, 2012
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	253,198	$	15,235	$	(229	)	$	268,204
	Residential mortgage-backed securities:
	U.S. government agencies	1,058,005		49,058		—			1,107,063
	Commercial mortgage-backed securities:
	U.S. government agencies	52,014		428		(406		)	52,036
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,311,501		18,180		(260		)	1,329,421
	Non-agency	11		—		—			11
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	109,260		2,221		(138		)	111,343
	Corporate debt securities	61,541		—		(11,889		)	49,652
	Total debt securities	2,845,530		85,122		(12,922		)	2,917,730
	Marketable equity securities	3,241		—		—			3,241
	Total securities available for sale	$	2,848,771	$	85,122	$	(12,922	)	$	2,920,971
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	270,005	$	5,126	$	(70	)	$	275,061
	Commercial mortgage-backed securities:
	U.S. government agencies	33,165		812		—			33,977
	Residential collateralized mortgage-backed securities:								—
	U.S. government agencies	123,563		533		(16		)	124,080
	Commercial collateralized mortgage-backed securities:								—
	U.S. government agencies	98,924		772		—			99,696
	Corporate debt securities	96,464		1,521		—			97,985
	Total securities held to maturity	$	622,121	$	8,764	$	(86	)	$	630,799



		March 31, 2012
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. government agency debentures	$	35,340	$	115	$	—		$	35,455
	U.S. states and political subdivisions	365,543		21,733		(751		)	386,525
	Residential mortgage-backed securities:
	U.S. government agencies	1,401,241		53,388		(213		)	1,454,416
	Commercial mortgage-backed securities:
	U.S. government agencies	27,689		34		(60		)	27,663
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,226,260		25,046		(2		)	1,251,304
	Non-agency	41,741		91		—			41,832
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	147,214		675		(534		)	147,355
	Corporate debt securities	158,019		955		(15,185		)	143,789
	Total debt securities	3,403,047		102,037		(16,745		)	3,488,339
	Marketable equity securities	3,308		—		—			3,308
	Total securities available for sale	$	3,406,355	$	102,037	$	(16,745	)	$	3,491,647
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	100,840	$	3,025	$	—		$	103,865
	Total securities held to maturity	$	100,840	$	3,025	$	—		$	103,865

Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stock constitute the majority of other investments on the consolidated balance sheets.



	March 31, 2013		December 31, 2012		March 31, 2012
FRB stock	$	21,324	$	21,045	$	21,003
FHLB stock	119,145		119,145		119,145
Other	515		527		565
Total other investments	$	140,984	$	140,717	$	140,713

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.

Securities with a carrying value of $2.7 billion, $1.6 billion and $1.9 billion at March 31, 2013, December 31, 2012 and March 31, 2012, respectively, were pledged to secure trust and public deposits and securities sold under agreements to repurchase and for other purposes required or permitted by law.

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.



	Three months ended March 31,
	2013			2012
Proceeds	$	25,674		$	94,865

Realized gains	$	—		$	260
Realized losses	(9		)	—
Net securities (losses)/gains	$	(9	)	$	260

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.



		March 31, 2013
		Less than 12 months						12 months or longer						Total
		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	33,648	$	(790	)	51	$	—	$	—		—	$	33,648	$	(790	)
	Residential mortgage-backed securities:
	U.S. government agencies	45,345		(663		)	5	—		—			—	45,345		(663		)
	Commercial mortgage-backed securities:
	U.S. government agencies	30,799		(659		)	3	—		—			—	30,799		(659		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	339,462		(2,354		)	21	—		—			—	339,462		(2,354		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	44,219		(347		)	6	—		—			—	44,219		(347		)
	Corporate debt securities	—		—			—	51,225		(10,330		)	8	51,225		(10,330		)
	Total available-for-sale securities	$	493,473	$	(4,813	)	86	$	51,225	$	(10,330	)	8	$	544,698	$	(15,143	)
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	29,823	$	(244	)	54	$	—	$	—		—	$	29,823	$	(244	)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	$	40,892	$	(339	)	4	$	—	$	—		—	$	40,892	$	(339	)
	Total held-to-maturity securities	$	70,715	$	(583	)	58	$	—	$	—		—	$	70,715	$	(583	)



		December 31, 2012
		Less than 12 months						12 months or longer						Total
		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	14,110	$	(229	)	24	$	—	$	—		—	$	14,110	$	(229	)
	Residential mortgage-backed securities:
	U.S. government agencies	14		—			1	13		—			1	27		—
	Commercial mortgage-backed securities:
	U.S. government agencies	31,237		(406		)	3	—		—			—	31,237		(406		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	133,008		(258		)	9	389		(2		)	1	133,397		(260		)
	Non-agency	—		—			—	2		—			1	2		—
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	35,316		(138		)	4	—		—			—	35,316		(138		)
	Corporate debt securities	—		—			—	49,652		(11,889		)	8	49,652		(11,889		)
	Total available-for-sale securities	$	213,685	$	(1,031	)	41	$	50,056	$	(11,891	)	11	$	263,741	$	(12,922	)
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	6,543	$	(70	)	12	$	—	$	—		—	$	6,543	$	(70	)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	$	17,413	$	(16	)	1	$	—	$	—		—	$	17,413	$	(16	)
	Total held-to-maturity securities	$	23,956	$	(86	)	13	$	—	$	—		—	$	23,956	$	(86	)



		March 31, 2012
		Less than 12 months						12 months or longer						Total
		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	26,915	$	(751	)	39	$	—	$	—		—	$	26,915	$	(751	)
	Residential mortgage-backed securities:
	U.S. government agencies	40,036		(213		)	4	—		—			—	40,036		(213		)
	Commercial mortgage-backed securities:
	U.S. government agencies	12,329		(60		)	2	—		—			—	12,329		(60		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	4,322		(2		)	1	—		—			—	4,322		(2		)
	Non-agency	—		—			—	2		—			1	2		—
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	64,435		(534		)	6	—		—			—	64,435		(534		)
	Corporate debt securities	33,250		(342		)	12	46,657		(14,843		)	8	79,907		(15,185		)
	Total temporarily impaired securities	$	181,287	$	(1,902	)	64	$	46,659	$	(14,843	)	9	$	227,946	(16,745		)

At least quarterly, the Corporation conducts a comprehensive security-level impairment assessment on all securities in an unrealized loss position to determine if other-than-temporary impairment ("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 March 31, 2013, 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 market conditions which have caused risk premiums to increase, resulting in the 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 March 31, 2013 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 March 31, 2013. 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. states and political subdivisions obligations			Residential mortgage backed securities U.S. govt. agency obligations			Commercial 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	$	11,950		$	2,360		$	17,976		$	27,621		$	—		$	—		$	—		$	59,907		3.58	%
Over one year through five years	37,903			1,070,345			—			1,448,836			11			81,606			—			2,638,701			2.20	%
Over five years through ten years	171,780			79,621			40,598			128,822			—			28,996			—			449,817			3.09	%
Over ten years	40,973			—			—			—			—			—			51,225			92,198			2.24	%
Fair Value	$	262,606		$	1,152,326		$	58,574		$	1,605,279		$	11		$	110,602		$	51,225		$	3,240,623		2.35	%
Amortized Cost	$	249,750		$	1,109,905		$	58,827		$	1,591,341		$	11		$	108,658		$	61,555		$	3,180,047
Weighted-Average Yield	5.14		%	2.64		%	2.14		%	1.80		%	3.41		%	1.82		%	0.99		%	2.35		%
Weighted-Average Maturity	7.67			3.60			4.53			3.72			1.52			4.81			14.52			4.25

Securities Held to Maturity
Remaining maturity:
One year or less	$	56,981		$	—		$	—		$	—		$	—		$	—		$	—		$	56,981		1.64	%
Over one year through five years	19,031			—			—			138,519			—			41,746			40,625			239,921			2.21	%
Over five years through ten years	60,079			—			41,187			—			—			57,187			56,751			215,204			3.30	%
Over ten years	161,395			—			—			—			—			—			—			161,395			5.50	%
Fair Value	$	297,486		$	—		$	41,187		$	138,519		$	—		$	98,933		$	97,376		$	673,501		3.30	%
Amortized Cost	$	292,689		$	—		$	40,413		$	137,839		$	—		$	98,887		$	95,761		$	665,589
Weighted-Average Yield	5.48		%	—		%	1.85		%	1.92		%	—		%	2.91		%	2.18		%	3.30		%
Weighted-Average Maturity	12.96			—			5.82			3.31			—			6.39			4.75			7.05