5. Securities - (2011 Restated)

The amortized cost and estimated market value of investment and mortgage-backed securities as of March 31, 2011 and December 31, 2010, are reflected in the tables below (in thousands):

	March 31, 2011
			Gross		Gross Unrealized Losses
	Amortized		Unrealized		Non-Credit				Estimated
AVAILABLE FOR SALE:	Cost		Gains		OTTI		Other		Market Value
Investment Securities:
U.S. Treasury	$	4,700	$	-	$	-	$	-	$	4,700
State and Political Subdivisions		308,998		8,837		-		2,820		315,015
Other Stocks and Bonds		2,925		-		1,920		-		1,005
Mortgage-backed Securities:
U.S. Government Agencies		161,731		4,982		-		630		166,083
Government-Sponsored Enterprises		697,823		13,477		-		2,690		708,610
Total	$	1,176,177	$	27,296	$	1,920	$	6,140	$	1,195,413

	March 31, 2011
			Gross		Gross Unrealized Losses
	Amortized		Unrealized		Non-Credit					Estimated
HELD TO MATURITY:	Cost		Gains		OTTI		Other			Market Value
Investment Securities:
State and Political Subdivisions	$	1,011	$	81	$	-		$	-		$	1,092
Other Stocks and Bonds		484		20		-			-			504
Mortgage-backed Securities:
U.S. Government Agencies		19,348		554		-			16			19,886
Government-Sponsored Enterprises		377,231		6,972		-			1,187			383,016
Total	$	398,074	$	7,627	$	-		$	1,203		$	404,498

	December 31, 2010
			Gross		Gross Unrealized Losses
	Amortized		Unrealized		Non-Credit				Estimated
AVAILABLE FOR SALE:	Cost		Gains		OTTI		Other		Market Value
Investment Securities:
U.S. Treasury	$	4,700	$	-	$	-	$	-	$	4,700
State and Political Subdivisions		296,357		4,445		-		6,540		294,262
Other Stocks and Bonds		3,117		1		2,736		-		382
Mortgage-backed Securities:
U.S. Government Agencies		145,136		5,296		-		159		150,273
Government-Sponsored Enterprises		721,908		16,035		-		1,642		736,301
Total	$	1,171,218	$	25,777	$	2,736	$	8,341	$	1,185,918

	December 31, 2010
			Gross		Gross Unrealized Losses
	Amortized		Unrealized		Non-Credit					Estimated
HELD TO MATURITY:	Cost		Gains		OTTI		Other			Market Value
Investment Securities:
State and Political Subdivisions	$	1,012	$	44	$	-		$	-		$	1,056
Other Stocks and Bonds		483		14		-			-			497
Mortgage-backed Securities:
U.S. Government Agencies		20,821		566		-			55			21,332
Government-Sponsored Enterprises		384,546		8,576		-			589			392,533
Total	$	406,862	$	9,200	$	-		$	644		$	415,418

Securities carried at fair value through income were as follows (in thousands):

	At March 31,		At December 31,
	2011		2010
Mortgage-backed Securities:
U.S. Government Agencies	$	3,875	$	5,392
Government-Sponsored Enterprises		229,385		66,784
Total	$	233,260	$	72,176

Net gains and losses on securities carried at fair value through income were as follows (in thousands):

	Three Months Ended March 31,
	2011		2010
Net gain on sales transactions	$	254	$	-
Net mark-to-market gains (losses)		1,627		-
Net gain on securities carried at fair value through income	$	1,881	$	-

The following table represents the unrealized loss on securities for the three months ended March 31, 2011 and year ended December 31, 2010 (in thousands):

	Less Than 12 Months						More Than 12 Months						Total
	Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
As of March 31, 2011:

Available for Sale
State and Political Subdivisions		$	98,793		$	2,778		$	268		$	42		$	99,061		$	2,820
Other Stocks and Bonds			-			-			1,005			1,920			1,005			1,920
Mortgage-Backed Securities			340,453			3,312			1,919			8			342,372			3,320
Total		$	439,246		$	6,090		$	3,192		$	1,970		$	442,438		$	8,060

Held to Maturity
Mortgage-Backed Securities		$	62,218		$	249		$	34,296		$	954		$	96,514		$	1,203
Total		$	62,218		$	249		$	34,296		$	954		$	96,514		$	1,203

As of December 31, 2010:

Available for Sale
State and Political Subdivisions	$	136,671	$	6,501	$	270	$	39	$	136,941	$	6,540
Other Stocks and Bonds		-		-		189		2,736		189		2,736
Mortgage-Backed Securities		267,014		1,712		12,184		89		279,198		1,801
Total	$	403,685	$	8,213	$	12,643	$	2,864	$	416,328	$	11,077

Held to Maturity
Mortgage-Backed Securities	$	52,676	$	644	$	-	$	-	$	52,676	$	644
Total	$	52,676	$	644	$	-	$	-	$	52,676	$	644

When it is determined that a decline in fair value of Held to Maturity ("HTM") and Available for Sale ("AFS") securities is other-than-temporary, the carrying value of the security is reduced to its estimated fair value, with a corresponding charge to earnings for the credit portion and the noncredit portion to other comprehensive income. In estimating other-than-temporary impairment losses, management considers, among other things, the length of time and the extent to which the fair value has been less than cost and the financial condition and near-term prospects of the issuer. Additionally, we do not currently intend to sell the securities and it is not more likely than not that we will be required to sell the security before the anticipated recovery of its amortized cost basis.

The turmoil in the capital markets had a significant impact on our estimate of fair value for certain of our securities. We believe the market values are reflective of illiquidity and credit impairment. At March 31, 2011, we have in AFS Other Stocks and Bonds, $2.9 million amortized cost basis in pooled trust preferred securities ("TRUPs"). Those securities are structured products with cash flows dependent upon securities issued by U.S. financial institutions, including banks and insurance companies. Our estimate of fair value at March 31, 2011 for the TRUPs is approximately $1.0 million and reflects the market illiquidity. With the exception of the TRUPs, to the best of management's knowledge and based on our consideration of the qualitative factors associated with each security, there were no securities in our investment and mortgage-backed securities portfolio at March 31, 2011 with an other-than-temporary impairment.

Given the facts and circumstances associated with the TRUPs we performed detailed cash flow modeling for each TRUP using an industry-accepted cash flow model. Prior to loading the required assumptions into the model we reviewed the financial condition of each of the underlying issuing banks within the TRUP collateral pool that had not deferred or defaulted as of March 31, 2011. Management's best estimate of a deferral assumption was assigned to each issuing bank based on the category in which it fell. Our analysis of the underlying cash flows contemplated various default, deferral and recovery scenarios to arrive at our best estimate of cash flows. Based on that detailed analysis, we have concluded that the other-than-temporary impairment, which captures the credit component in compliance with FASB ASC Topic 320, "Investments - Debt and Equity Securities," was estimated at $3.1 million at both March 31, 2011 and December 31, 2010. The noncredit charge to other comprehensive income was estimated at $1.9 million and $2.7 million at March 31, 2011 and December 31, 2010, respectively. The carrying amount of the TRUPs was written down with $75,000 and $3.0 million recognized in earnings for the three months ended March 31, 2010 and for the year ended December 31, 2009, respectively. There was no additional write-down of the TRUPs recognized in earnings for the three months ended March 31, 2011. The cash flow model assumptions represent management's best estimate and consider a variety of qualitative factors, which include, among others, the credit rating downgrades, the severity and duration of the mark-to-market loss, and the structural nuances of each TRUP. Management believes that the detailed review of the collateral and cash flow modeling support the conclusion that the TRUPs had an other-than-temporary impairment at March 31, 2011. We will continue to update our assumptions and the resulting analysis each reporting period to reflect changing market conditions. Additionally, we do not currently intend to sell the TRUPs and it is not more likely than not that we will be required to sell the TRUPs before the anticipated recovery of their amortized cost basis.

The table below provides more detail on the TRUPs at March 31, 2011 (in thousands).

TRUP	Par		Credit Loss		Amortized Cost		Fair Value		Tranche	Credit Rating

1	$	2,000	$	1,075	$	925	$	285	C1	Ca
2		2,000		550		1,450		360	B1	Ca
3		2,000		1,450		550		360	B2	C
	$	6,000	$	3,075	$	2,925	$	1,005

The following table presents the impairment activity related to credit loss, which is recognized in earnings, and the impairment activity related to all other factors, which are recognized in other comprehensive income (in thousands).

	Three Months Ended March 31, 2011
	Impairment Related to Credit Loss		Impairment Related to All Other Factors		Total Impairment

Balance, beginning of the period	$	3,075	$	2,694	$	5,769
Charges on securities for which other-than-temporary impairment charges were not previously recognized		-		-		-
Additional charges on securities for which other-than-temporary impairment charges were previously recognized		-		-		-
Balance, end of the period	$	3,075	$	2,694	$	5,769

Interest income recognized on securities for the periods presented (in thousands):

	Three Months Ended
	March 31, 2011		March 31, 2010
U.S. Treasury	$	1	$	2
State and Political Subdivisions		3,237		2,836
Other Stocks and Bonds		9		14
Mortgage-backed Securities		11,297		14,277
Total interest income on securities	$	14,544	$	17,129

There were no securities transferred from AFS to HTM during the three months ended March 31, 2011 or 2010. There were no sales from the HTM portfolio during the three months ended March 31, 2011 or 2010. There were $398.1 million of securities classified as HTM for the three months ended March 31, 2011 compared to $406.9 million of securities classified as HTM for the year ended December 31, 2010.

Of the $1.6 million in net securities gains from the AFS portfolio for the three months ended March 31, 2011, there were $1.6 million in realized gains and $45,000 in realized losses. Of the $8.4 million in net securities gains from the AFS portfolio for the three months ended March 31, 2010, there were $9.3 million in realized gains and $0.9 million in realized losses.

The amortized cost and fair value of securities at March 31, 2011 are presented below by contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are presented in total by category due to the fact that mortgage-backed securities typically are issued with stated principal amounts, and the securities are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the certificate holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments.

	March 31, 2011
	Amortized Cost		Fair Value
	(in thousands)

Available for sale securities:

Investment Securities
Due in one year or less	$	6,946	$	6,981
Due after one year through five years		6,991		7,170
Due after five years through ten years		27,240		28,332
Due after ten years		275,446		278,237
		316,623		320,720
Mortgage-backed securities		859,554		874,693
Total	$	1,176,177	$	1,195,413

	March 31, 2011
	Amortized Cost		Fair Value
	(in thousands)

Held to maturity securities:

Investment Securities
Due in one year or less	$	-	$	-
Due after one year through five years		-		-
Due after five years through ten years		484		504
Due after ten years		1,011		1,092
		1,495		1,596
Mortgage-backed securities		396,579		402,902
Total	$	398,074	$	404,498

Investment and mortgage-backed securities with book values of $940.7 million at March 31, 2011 and $977.4 million at December 31, 2010 were pledged to collateralize Federal Home Loan Bank ("FHLB") advances, repurchase agreements, public funds and trust deposits or for other purposes as required by law.

Securities with limited marketability, such as FHLB stock and other investments, are carried at cost, which approximates its fair value and assessed for other-than-temporary impairment. These securities have no maturity date.