The following tables detail the amortized cost and the estimated fair value of the Company's mortgage-backed securities:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
		(In Thousands)
Available-for-sale securities:

September 30, 2011:
	Collateralized mortgage obligations (“CMO”) (1)	$	327,313	$	8,270	$	(1,536)	$	334,047
	Federal National Mortgage Association (“FNMA”)		294,022		8,917		(53)		302,886
	Federal Home Loan Mortgage Corporation (“FHLMC”)		72,256		2,019		(20)		74,255
	Government National Mortgage Association (“GNMA”)		58,649		2,671		-		61,320
		$	752,240	$	21,877	$	(1,609)	$	772,508

December 31, 2010:
	CMO (1)	$	490,946	$	9,687	$	(599)	$	500,034
	FNMA		89,226		1,253		(431)		90,048
	FHLMC		43,970		743		(273)		44,440
	GNMA		65,849		1,229		(674)		66,404
		$	689,991	$	12,912	$	(1,977)	$	700,926

Trading securities:

September 30, 2011:
	CMO	$	12,432	$	—	$	—	$	12,432

December 31, 2010:
	CMO	$	12,432	$	—	$	—	$	12,432

	(1) Includes Agency CMOs classified as available-for-sale and SASCO RM-1 2002 Class O securities classified as available-for-sale.

The portfolio of available-for-sale mortgage-backed securities is comprised of 183 securities with an amortized cost of $752.2 million of both GSE ($569.0 million) and non-GSE ($183.2 million) securities. All securities were AAA-rated at time of purchase; only two securities with an aggregate value of $10.8 million are now rated below AAA. Downgraded securities were re-evaluated at September 30, 2011. The result of this evaluation shows no other-than-temporary impairment for the nine months ended September 30, 2011. The weighted average duration of the mortgage-backed securities was 2.7 years at September 30, 2011.

At September 30, 2011, mortgage-backed securities with market values aggregating $368.5 million were pledged as collateral for retail customer repurchase agreements, municipal deposits and other obligations. From time to time, mortgage-backed securities are also pledged as collateral for Federal Home Loan Bank (FHLB) borrowings. The fair value of these FHLB-pledged mortgage-backed securities was $17.4 million at September 30, 2011.

During the first nine months of 2011, we sold available-for-sale mortgage-backed securities of $210.0 million with net gains of $2.8 million. The cost basis of all mortgage-backed securities sales is based on the specific identification method. There were sales of available-for-sale mortgage-backed securities of $92.5 million with net securities gains of $1.8 million during the first nine months of 2010.

MBS have expected maturities that differ from their contractual maturities. These differences arise because borrowers may have the right to call or prepay obligations with or without a prepayment penalty.

At September 30, 2011, we owned mortgage-backed securities totaling $80.9 million where the amortized cost basis exceeded fair value. Total unrealized losses on these securities were $1.6 million at September 30, 2011. This temporary impairment is the result of changes in market interest rates in the mortgage-backed securities market. There were no securities impaired for 12 months or longer. We have determined that these securities were not other-than-temporarily impaired at September 30, 2011. Quarterly, we evaluate the current characteristics of each of our mortgage-backed securities such as delinquency and foreclosure levels, credit enhancement, projected losses and coverage. In addition, we do not have the intent to sell, nor is it more likely-than-not we will be required to sell these securities before we are able to recover the amortized cost basis.

The table below shows our mortgage-backed securities' gross unrealized losses, fair value by investment category and length of time individual securities have been in continuous unrealized loss position at September 30, 2011.

			Less than 12 months				12 months or longer				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
			Value		Loss		Value		Loss		Value		Loss
			(In Thousands)
Available-for-sale
	CMO		$	64,739	$	1,536	$	—	$	—	$	64,739	$	1,536
	FNMA			10,488		53		—		—		10,488		53
	FHLMC			5,674		20		—		—		5,674		20
	GNMA			—		—		—		—		—		—

		Total temporarily impaired MBS	$	80,901	$	1,609	$	—	$	—	$	80,901	$	1,609

The table below shows our mortgage-backed securities' gross unrealized losses and fair value by investment category and length of time that individual securities were in a continuous unrealized loss position at December 31, 2010.

			Less than 12 months				12 months or longer				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
			Value		Loss		Value		Loss		Value		Loss
			(In Thousands)
Available-for-sale
	CMO		$	58,821	$	534	$	1,171	$	65	$	59,992	$	599
	FNMA			45,129		431		—		—		45,129		431
	FHLMC			14,981		273		—		—		14,981		273
	GNMA			23,831		674		—		—		23,831		674

		Total temporarily impaired MBS	$	142,762	$	1,912	$	1,171	$	65	$	143,933	$	1,977

We own $12.4 million par value of SASCO RM-1 2002 class B securities which are classified as trading, of which, $1.4 million is accrued interest paid in kind. We expect to recover all principal and interest due to seasoning and excess collateral. Based on FASB ASC 320, Investments – Debt and Equity Securities (“ASC 320”) (formerly SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities) when these securities were acquired they were classified as trading because it was our intent to sell them in the near term. We used the guidance under ASC 320 to provide a reasonable estimate of fair value in 2010. We estimated the value of these securities based on the pricing of BBB+ securities that have an active market through a technique which estimates the fair value of this asset using the income approach as of September 30, 2011.