2. Securities

The amortized cost and fair value of securities classified as available for sale and held to maturity follow (in thousands):

Securitites Available for Sale


	September 30, 2013								December 31, 2012
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
US Treasury and government agency securities	$	615	$	6	$	1	$	620	$	18,246	$	19	$	—	$	18,265
Municipal obligations		43,573		197		122		43,648		49,608		571		14		50,165
Mortgage-backed securities		1,337,251		29,214		6,495		1,359,970		1,715,524		58,903		21		1,774,406
CMOs		46,288		—		1,256		45,032		196,723		1,354		—		198,077
Corporate debt securities		3,500		—		—		3,500		2,250		—		—		2,250
Other equity securities		4,596		774		20		5,350		4,531		752		4		5,279

	$	1,435,823	$	30,191	$	7,894	$	1,458,120	$	1,986,882	$	61,599	$	39	$	2,048,442

Securitites Held to Maturity


	September 30, 2013								December 31, 2012
			Gross		Gross						Gross		Gross
	Amortized		Unrealized		Unrealized		Fair		Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
US Treasury and government agency securities	$	100,000	$	688	$	—	$	100,688	$	—	$	—	$	—	$	—
Municipal obligations		195,662		1,137		5,291		191,508		164,493		16,017		—		180,510
Mortgage-backed securities		995,686		9,273		2,118		1,002,841		180,397		3,429		—		183,826
CMOs		1,374,734		2,615		18,519		1,358,830		1,323,128		23,942		941		1,346,129

	$	2,666,082	$	13,713	$	25,928	$	2,653,867	$	1,668,018	$	43,388	$	941	$	1,710,465

During the third quarter of 2013, approximately $1.0 billion of securities available for sale were reclassified as securities held to maturity. Management determined that the reclassified securities were not needed for liquidity purposes and that the Company had the ability and intent to hold the securities to maturity. The reclassified securities consisted of mortgage-backed securities and CMOs. The securities were transferred at fair value on the date of their reclassification, which became the cost basis for the securities held to maturity. The unrealized net holding loss on the available for sale securities on the date of transfer totaled approximately $56.8 million, and continues to be reported, net of tax, as a component of accumulated other comprehensive income. This net unrealized loss will be amortized to interest income over the remaining life of the securities as a yield adjustment, which will serve to offset the impact of the accretion of the net discount created in the transfer. There were no gains or losses recognized as a result of this transfer.

The following table presents the amortized cost and fair value of debt securities at September 30, 2013 by final contractual maturity (in thousands). Actual maturities will differ from final contractual maturities because of scheduled and early principal payments on mortgage-backed securities and CMOs and rights to call or repay other obligations with or without penalties.


	Amortized		Fair
	Cost		Value
Debt Securities Available for Sale
Due in one year or less	$	23,895	$	24,010
Due after one year through five years		130,419		130,124
Due after five years through ten years		154,962		161,485
Due after ten years		1,121,951		1,137,151

Total available for sale debt securities	$	1,431,227	$	1,452,770


	Amortized		Fair
	Cost		Value
Debt Securities Held to Maturity
Due in one year or less	$	107,697	$	108,407
Due after one year through five years		669,896		655,554
Due after five years through ten years		121,588		117,864
Due after ten years		1,766,901		1,772,042

Total held to maturity securities	$	2,666,082	$	2,653,867

The Company held no securities classified as trading at September 30, 2013 or December 31, 2012.

The details for securities classified as available for sale with unrealized losses as of September 30, 2013 follow (in thousands):


	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
US Treasury and government agency securities	$	—	$	—	$	104	$	1	$	104	$	1
Municipal obligations		13,647		122		—		—		13,647		122
Mortgage-backed securities		144,859		6,488		379		7		145,238		6,495
CMOs		45,032		1,256		—		—		45,032		1,256
Equity securities		3,290		19		2		1		3,292		20

	$	206,828	$	7,885	$	485	$	9	$	207,313	$	7,894

The details for securities classified as available for sale with unrealized losses as of December 31, 2012 follows (in thousands):


	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Municipal obligations	$	5,278	$	14	$	—	$	—	$	5,278	$	14
Mortgage-backed securities		57,752		14		1,097		7		58,849		21
Equity securities		268		2		2		2		270		4

	$	63,298	$	30	$	1,099	$	9	$	64,397	$	39

The details for securities classified as held to maturity with unrealized losses as of September 30, 2013 follows (in thousands):


	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Municpal obligations	$	115,901	$	5,252	$	1,253	$	39	$	117,154	$	5,291
Mortgage-backed securities		147,019		2,118		—		—		147,019		2,118
CMOs		720,157		17,377		280,855		1,142		1,001,012		18,519

	$	983,077	$	24,747	$	282,108	$	1,181	$	1,265,185	$	25,928

The details for securities classified as held to maturity with unrealized losses as of December 31, 2012 follows (in thousands):


	Losses < 12 months				Losses 12 months or >				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
CMOs	$	87,852	$	259	$	54,445	$	682	$	142,297	$	941

	$	87,852	$	259	$	54,445	$	682	$	142,297	$	941

Substantially all of the unrealized losses relate to changes in market rates on fixed-rate debt securities since the respective purchase dates. In all cases, the indicated impairment would be recovered no later than the security’s maturity date or possibly earlier if the market price for the security increases with a reduction in the yield required by the market. None of the unrealized losses relate to the marketability of the securities or the obligor’s ability to meet contractual obligations. The Company has adequate liquidity and, therefore, does not plan to and, more likely than not, will not be required to sell these securities before full recovery of the indicated impairment. Accordingly, the unrealized losses on these securities have been determined to be temporary.

Securities with carrying values totaling $2.6 billion at both September 30, 2013 and December 31, 2012 were pledged primarily to secure public deposits or securities sold under agreements to repurchase.