Investment Securities

6 Months Ended

Jun. 30, 2011

Investment Securities [Abstract]

Investment Securities

NOTE 5: Investment Securities

The amortized cost and fair values of investment securities available for sale were as follows.

			Gross		Gross
			unrealized		unrealized
	Amortized cost		gains		losses			Fair value
			($ in Thousands)
June 30, 2011:
U.S. Treasury securities	$	1,099	$	7	$	—		$	1,106
Federal agency securities		27,156		36		—			27,192
Obligations of state and political subdivisions (municipal securities)		787,768		31,115		(671	)		818,212
Residential mortgage-related securities		4,441,048		138,350		(1,011	)		4,578,387
Commercial mortgage-related securities		12,499		551		—			13,050
Asset-backed securities (1)		243,387		193		(465	)		243,115
Other securities (debt and equity)		58,894		3,428		(1,350	)		60,972
Total investment securities available for sale	$	5,571,851	$	173,680	$	(3,497	)	$	5,742,034

			Gross		Gross
			unrealized		unrealized
	Amortized cost		gains		losses			Fair value
			($ in Thousands)
December 31, 2010:
U.S. Treasury securities	$	1,199	$	9	$	—		$	1,208
Federal agency securities		29,791		1		(25	)		29,767
Obligations of state and political subdivisions (municipal securities)		829,058		14,894		(5,350	)		838,602
Residential mortgage-related securities		4,831,481		117,530		(38,514	)		4,910,497
Commercial mortgage-related securities		7,604		149		—			7,753
Asset-backed securities (1)		299,459		3		(621	)		298,841
Other securities (debt and equity)		13,384		2,603		(1,314	)		14,673
Total investment securities available for sale	$	6,011,976	$	135,189	$	(45,824	)	$	6,101,341

(1) The asset-backed securities position is largely comprised of senior, floating rate, tranches of student loan securities issued by SLM Corp (“Sallie Mae”) and guaranteed under the Federal Family Education Loan Program (“FFELP”).

The amortized cost and fair values of investment securities available for sale at June 30, 2011, by maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

($ in Thousands)	Amortized Cost		Fair Value
Due in one year or less	$	49,808	$	50,444
Due after one year through five years		159,225		164,076
Due after five years through ten years		543,481		566,183
Due after ten years		115,260		116,887
Total debt securities		867,774		897,590
Residential mortgage-related securities		4,441,048		4,578,387
Commercial mortgage-related securities		12,499		13,050
Asset-backed securities		243,387		243,115
Equity securities		7,143		9,892
Total investment securities available for sale	$	5,571,851	$	5,742,034

The following represents gross unrealized losses and the related fair value of investment securities available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2011.

	Less than 12 months					12 months or more					Total
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
June 30, 2011:						($ in Thousands)
Obligations of state and political subdivisions (municipal securities)	$	(308	)	$	22,384	$	(363	)	$	3,042	$	(671	)	$	25,426
Residential mortgage-related securities		(982	)		191,159		(29	)		2,505		(1,011	)		193,664
Asset-backed securities		(465	)		221,959		—			—		(465	)		221,959
Other securities (debt and equity)		(42	)		34,628		(1,308	)		819		(1,350	)		35,447
Total	$	(1,797	)	$	470,130	$	(1,700	)	$	6,366	$	(3,497	)	$	476,496

The Corporation reviews the investment securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in the other-than-temporary impairment analysis include, the length of time the security has been in an unrealized loss position, changes in security ratings, financial condition of the issuer, as well as security and industry specific economic conditions. In addition, with regards to its debt securities, the Corporation may also evaluate payment structure, whether there are defaulted payments or expected defaults, prepayment speeds, and the value of any underlying collateral. For certain debt securities in unrealized loss positions, the Corporation prepares cash flow analyses to compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.

Based on the Corporation’s evaluation, management does not believe any remaining unrealized loss at June 30, 2011, represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions, and not credit deterioration. At June 30, 2011, the number of investment securities in an unrealized loss position for less than 12 months for municipal, residential mortgage-related, and asset-backed securities was 30, 45 and 31, respectively. For investment securities in an unrealized loss position for 12 months or more, the number of individual securities in the municipal and residential mortgage-related categories was 4 and 5, respectively. The unrealized losses reported for residential mortgage-related securities relate to non-agency residential mortgage-related securities as well as residential mortgage-related securities issued by government agencies such as the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). At June 30, 2011, the $1.4 million unrealized loss position on other securities was primarily comprised of 3 individual trust preferred debt securities pools. The Corporation currently does not intend to sell nor does it believe that it is probable it will be required to sell the securities contained in the above unrealized losses table before recovery of their amortized cost basis.

The following is a summary of the credit loss portion of other-than-temporary impairment recognized in earnings on debt securities for 2010 and the six months ended June 30, 2011, respectively.

	Non-agency
	Mortgage-Related			Trust Preferred
$ in Thousands	Securities			Debt Securities			Total
Balance of credit-related other-than-temporary impairment at December 31, 2009	$	(17,472	)	$	(7,027	)	$	(24,499	)
Credit losses on newly identified impairment		(84	)		(2,992	)		(3,076	)
Balance of credit-related other-than-temporary impairment at December 31, 2010		(17,556	)		(10,019	)		(27,575	)
Adjustment for change in cash flows		—			—			—
Balance of credit-related other-than-temporary impairment at June 30, 2011	$	(17,556	)	$	(10,019	)	$	(27,575	)

For comparative purposes, the following represents gross unrealized losses and the related fair value of investment securities available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2010.

	Less than 12 months					12 months or more					Total
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
December 31, 2010:						($ in Thousands)
Federal agency securities	$	(25	)	$	29,716	$	—		$	—	$	(25	)	$	29,716
Obligations of state and political subdivisions (municipal securities)		(4,983	)		237,902		(367	)		2,543		(5,350	)		240,445
Residential		(36,280	)		1,613,498		(2,234	)		43,306		(38,514	)		1,656,804
mortgage-related securities
Asset-backed securities		(621	)		293,568		—			—		(621	)		293,568
Other securities (debt and equity)		(1	)		100		(1,313	)		864		(1,314	)		964
Total	$	(41,910	)	$	2,174,784	$	(3,914	)	$	46,713	$	(45,824	)	$	2,221,497

Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stocks: At both June 30, 2011 and December 31, 2010, the Corporation had FHLB stock of $121.1 million, respectively. The Corporation had Federal Reserve Bank stock of $70.0 million and $69.9 million at June 30, 2011 and December 31, 2010, respectively. The Corporation is required to maintain Federal Reserve stock and FHLB stock as a member of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation reviewed these securities for impairment in 2011 and 2010, including but not limited to, consideration of operating performance, as well as its liquidity and funding position. After evaluating all of these considerations, the Corporation believes the cost of these investments will be recovered and no impairment has been recorded on these securities during 2011 or 2010.