3. 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.



		June 30, 2013
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	272,254	$	9,207	$	(3,527	)	$	277,934
	Residential mortgage-backed securities:
	U.S. government agencies	1,058,323		27,797		(10,192		)	1,075,928
	Commercial mortgage-backed securities:
	U.S. government agencies	58,609		29		(2,141		)	56,497
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,586,576		7,272		(27,120		)	1,566,728
	Non-agency	10		—		—			10
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	108,000		533		(1,965		)	106,568
	Asset-backed securities:
	Collateralized loan obligations	159,916		—		(1,821		)	158,095
	Corporate debt securities	61,569		—		(10,431		)	51,138
	Total debt securities	3,305,257		44,838		(57,197		)	3,292,898
Equity Securities
	Marketable equity securities	3,213		—		—			3,213
	Non-marketable equity securities	3,281		—		—			3,281
	Total equity securities	6,494		—		—			6,494
	Total securities available for sale	$	3,311,751	$	44,838	$	(57,197	)	$	3,299,392
Securities held-to-maturity
Debt securities
	U.S. treasuries	$	4,999	$	—	$	—		$	4,999
	U.S. government agency debentures	25,000		—		(1,193		)	23,807
	U.S. states and political subdivisions	436,860		3,878		(9,041		)	431,697
	Residential mortgage-backed securities:
	U.S. government agencies	253,839		—		(8,051		)	245,788
	Commercial mortgage-backed securities:
	U.S. government agencies	50,352		—		(619		)	49,733
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,510,374		67		(41,674		)	1,468,767
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	175,384		—		(7,285		)	168,099
	Corporate debt securities	95,052		132		(1,003		)	94,181
	Total securities held to maturity	$	2,551,860	$	4,077	$	(68,866	)	$	2,487,071



		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



		June 30, 2012
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. government agency debentures	$	35,224	$	73	$	—		$	35,297
	U.S. states and political subdivisions	249,410		15,914		(200		)	265,124
	Residential mortgage-backed securities:
	U.S. government agencies	1,326,601		56,212		—			1,382,813
	Commercial mortgage-backed securities:
	U.S. government agencies	37,868		580		(20		)	38,428
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,258,742		18,962		(326		)	1,277,378
	Non-agency	13		—		—			13
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	66,806		1,739		—			68,545
	Corporate debt securities	157,434		1,555		(13,562		)	145,427
	Total debt securities	3,132,098		95,035		(14,108		)	3,213,025
	Marketable equity securities	3,340		—		—			3,340
	Total securities available for sale	$	3,135,438	$	95,035	$	(14,108	)	$	3,216,365
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	253,161	$	3,033	$	(119	)	$	256,075
	Commercial mortgage-backed securities:
	U.S. government agencies	5,113		—		(29		)	5,084
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	93,947		61		(47		)	93,961
	Total securities held to maturity	$	352,221	$	3,094	$	(195	)	$	355,120

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



	June 30, 2013		December 31, 2012		June 30, 2012
FRB stock	$	52,477	$	21,045	$	21,045
FHLB stock	214,586		119,145		119,145
Other	502		527		552
Total other investments	$	267,565	$	140,717	$	140,742

FRB and FHLB stock are 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 June 30, 2013, December 31, 2012 and June 30, 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 June 30,					Six months ended June 30,
	2013			2012		2013			2012
Proceeds	$	2,154,949		$	66,213	$	2,180,624		$	161,077

Realized gains	$	3,786		$	548	$	3,786		$	808
Realized losses	(6,580		)	—		(6,589		)	—
Net securities (losses)/gains	$	(2,794	)	$	548	$	(2,803	)	$	808

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.



		June 30, 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	$	61,933	$	(3,527	)	106	$	—	$	—		—	$	61,933	$	(3,527	)
	Residential mortgage-backed securities:
	U.S. government agencies	331,857		(10,191		)	23	—		—			—	331,857		(10,191		)
	Commercial mortgage-backed securities:
	U.S. government agencies	51,378		(2,141		)	7	—		—			—	51,378		(2,141		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,070,624		(27,120		)	64	—		—			—	1,070,624		(27,120		)
	Commercial collateralized mortgage-backed securities:
	U.S. Government agencies	42,537		(1,965		)	6	—		—			—	42,537		(1,965		)
	Collateralized loan obligations:
	Non-agency	74,779		(1,822		)	14	—		—			—	74,779		(1,822		)
	Corporate debt securities	—		—			—	51,138		(10,431		)	8	51,138		(10,431		)
	Total available-for-sale securities	$	1,633,108	$	(46,766	)	220	$	51,138	$	(10,431	)	8	$	1,684,246	$	(57,197	)
Securities held-to-maturity
Debt securities
	U.S. government agency debentures	$	23,807	$	(1,193	)	1	$	—	$	—		—	$	23,807	$	(1,193	)
	U.S. states and political subdivisions	228,098		(9,041		)	362	—		—			—	228,098		(9,041		)
	Residential mortgage-backed securities:
	U.S. government agencies	225,681		(8,051		)	11	—		—			—	225,681		(8,051		)
	Commercial mortgage-backed securities:
	U.S. government agencies	39,697		(619		)	7	—		—			—	39,697		(619		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,451,813		(41,674		)	65	—		—			—	1,451,813		(41,674		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	150,223		(7,285		)	14	—		—			—	150,223		(7,285		)
	Corporate debt securities	72,017		(1,003		)	25	—		—			—	72,017		(1,003		)
	Total held-to-maturity securities	$	2,191,336	$	(68,866	)	485	$	—	$	—		—	$	2,191,336	$	(68,866	)



		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	)



		June 30, 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	$	15,742	$	(200	)	28	$	—	$	—		—	$	15,742	$	(200	)
	Residential mortgage-backed securities:
	U.S. government agencies	30		—			2	—		—			—	30		—
	Commercial mortgage-backed securities:
	U.S. government agencies	5,137		(20		)	1	—		—			—	5,137		(20		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	88,482		(326		)	9	—		—			—	88,482		(326		)
	Non-agency	—		—			—	2		—			1	2		—
	Corporate debt securities	21,359		(133		)	6	48,085		(13,429		)	8	69,444		(13,562		)
	Total available-for-sale securities	$	130,750	$	(679	)	46	$	48,087	$	(13,429	)	9	$	178,837	$	(14,108	)
Securities held-to-maturity
Debt securities
	U.S. states and political subdivisions	$	53,450	$	(119	)	74	$	—	$	—		—	$	53,450	$	(119	)
	Commercial mortgage-backed securities:													—		—
	U.S. government agencies	5,084		(29		)	1	—		—			—	5,084		(29		)
	Commercial collateralized mortgage-backed securities:													—		—
	U.S. government agencies	41,494		(47		)	4	—		—			—	41,494		(47		)
	Total held-to-maturity securities	$	100,028	$	(195	)	79	$	—	$	—		—	$	100,028	$	(195	)

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.

Management does not believe that the investment securities that were in an unrealized loss position as of June 30, 2013 represent an other-than-temporary impairment. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Corporation does not intend to sell the investment securities that were in an unrealized loss position and it is not more likely than not that the Corporation will be required to sell the investment securities before recovery of their amortized cost bases, which may be at maturity.

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 June 30, 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.