Securities (Tables)

12 Months Ended

Dec. 31, 2012

The fair value and net unrealized gain (loss) included in trading securities is as follows (in thousands):



	December 31, 2012					December 31, 2011
	Fair Value		Net Unrealized Gain (Loss)			Fair Value		Net Unrealized Gain (Loss)
U.S. Government agency obligations	$	16,545	$	(57	)	$	22,203	$	63
U.S. agency residential mortgage-backed securities	86,361		447			12,379		59
Municipal and other tax-exempt securities	90,326		(226		)	39,345		652
Other trading securities	20,870		(13		)	2,873		9
Total	$	214,102	$	151		$	76,800	$	783

Investment Securities (Held-to-Maturity) [Table Text Block]

The amortized cost and fair values of investment securities are as follows (in thousands):



	December 31, 2012
	Amortized		Carrying		Fair		Gross Unrealized²
	Cost		Value¹		Value		Gain		Loss
Municipal and other tax-exempt	$	232,700	$	232,700	$	235,940	$	3,723	$	(483	)
U.S. agency residential mortgage-backed securities – Other	77,726		82,767		85,943		3,176		—
Other debt securities	184,067		184,067		206,575		22,528		(20		)
Total	$	494,493	$	499,534	$	528,458	$	29,427	$	(503	)


¹	Carrying value includes $5.0 million of net unrealized gain which remains in Accumulated other comprehensive income (“AOCI”) related to certain securities transferred from the Available for Sale securities portfolio to the Investment securities portfolio as discussed in greater detail following.


²	Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets.



	December 31, 2011
	Amortized		Carrying		Fair		Gross Unrealized²
	Cost		Value¹		Value		Gain		Loss
Municipal and other tax-exempt	$	128,697	$	128,697	$	133,670	$	4,975	$	(2	)
U.S. agency residential mortgage-backed securities – Other	110,062		121,704		120,536		602		(1,770		)
Other debt securities	188,835		188,835		208,451		19,616		—
Total	$	427,594	$	439,236	$	462,657	$	25,193	$	(1,772	)


¹	Carrying value includes $12 million of net unrealized gain which remains in AOCI in the Consolidated Balance Sheets related to certain securities transferred from the Available for Sale securities portfolio to the Investment securities portfolio as discussed in greater detail following.


²	Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets.

In 2011, the Company transferred certain U.S. government agency residential mortgage-backed securities from the available for sale portfolio to the investment securities (held-to-maturity) portfolio as the Company has the positive intent and ability to hold these securities to maturity. No gains or losses were recognized in the Consolidated Statement of Earnings at the time of the transfer. Transfers of debt securities into the investment securities portfolio (held-to-maturity) are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in Accumulated Other Comprehensive Income and in the carrying value of the investment securities portfolio. Such amounts are amortized over the estimated remaining life of the security as an adjustment to yield, offsetting the related amortization of the premium or accretion of the discount on the transferred securities. At the time of transfer, the fair value totaled $131 million, amortized cost totaled $118 million and the pretax unrealized gain totaled $13 million.

The amortized cost and fair values of investment securities at December 31, 2012, by contractual maturity, are as shown in the following table (dollars in thousands):



	Less than One Year			One to Five Years			Six to Ten Years			Over Ten Years			Total			Weighted Average Maturity²
Municipal and other tax-exempt:
Carrying value	$	26,827		$	123,489		$	79,569		$	2,815		$	232,700		4.01
Fair value	27,066			125,263			80,574			3,037			235,940
Nominal yield¹	4.25		%	2.51		%	2.45		%	6.57		%	2.74		%
Other debt securities:
Carrying value	$	9,687		$	30,531		$	35,131		$	108,718		$	184,067		9.24
Fair value	9,702			31,573			38,154			127,146			206,575
Nominal yield	4.22		%	5.30		%	5.57		%	6.24		%	5.85		%
Total fixed maturity securities:
Carrying value	$	36,514		$	154,020		$	114,700		$	111,533		$	416,767		6.32
Fair value	36,768			156,836			118,728			130,183			442,515
Nominal yield	4.24		%	3.06		%	3.41		%	6.25		%	4.11		%
Residential mortgage-backed securities:
Carrying value													$	82,767		³
Fair value													85,943
Nominal yield⁴													2.71		%
Total investment securities:
Carrying value													$	499,534
Fair value													528,458
Nominal yield													3.88		%


^1.	Calculated on a taxable equivalent basis using a 39% effective tax rate.


^2.	Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.


^3.	The average expected lives of residential mortgage-backed securities were 3.4 years based upon current prepayment assumptions.


^4.	The nominal yield on residential mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary - Unaudited for current yields on the investment securities portfolio.

Available For Sale Securities [Table Text Block]

The amortized cost and fair value of available for sale securities are as follows (in thousands):



	December 31, 2012
	Amortized		Fair		Gross Unrealized¹
	Cost		Value		Gain		Loss			OTTI²
U.S. Treasury	$	1,000	$	1,002	$	2	$	—		$	—
Municipal and other tax-exempt	84,892		87,142		2,414		(164		)	—
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	5,308,463		5,453,549		146,247		(1,161		)	—
FHLMC	2,978,608		3,045,564		66,956		—			—
GNMA	1,215,554		1,237,041		21,487		—			—
Other	148,025		153,667		5,642		—			—
Total U.S. government agencies	9,650,650		9,889,821		240,332		(1,161		)	—
Private issue:
Alt-A loans	124,314		123,174		1,440		—			(2,580		)
Jumbo-A loans	198,588		201,989		5,138		(134		)	(1,603		)
Total private issue	322,902		325,163		6,578		(134		)	(4,183		)
Total residential mortgage-backed securities	9,973,552		10,214,984		246,910		(1,295		)	(4,183		)
Commercial mortgage-backed securities guaranteed by U.S. government agencies	890,746		895,075		5,006		(677		)	—
Other debt securities	35,680		36,389		709		—			—
Perpetual preferred stock	22,171		25,072		2,901		—			—
Equity securities and mutual funds	24,593		27,557		3,242		(278		)	—
Total	$	11,032,634	$	11,287,221	$	261,184	$	(2,414	)	$	(4,183	)

¹ Gross unrealized gain/ loss recognized in AOCI in the consolidated balance sheet.

² Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income.



	December 31, 2011
	Amortized		Fair		Gross Unrealized¹
	Cost		Value		Gain		Loss			OTTI²
U.S. Treasury	$	1,001	$	1,006	$	5	$	—		$	—
Municipal and other tax-exempt	66,435		68,837		2,543		(141		)	—
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	5,823,972		5,987,287		163,319		(4		)	—
FHLMC	2,756,180		2,846,215		90,035		—			—
GNMA	647,569		678,924		31,358		(3		)	—
Other	69,668		75,751		6,083		—			—
Total U.S. government agencies	9,297,389		9,588,177		290,795		(7		)	—
Private issue:
Alt-A loans	168,461		132,242		—		—			(36,219		)
Jumbo-A loans	334,607		286,924		—		(11,096		)	(36,587		)
Total private issue	503,068		419,166		—		(11,096		)	(72,806		)
Total residential mortgage-backed securities	9,800,457		10,007,343		290,795		(11,103		)	(72,806		)
Other debt securities	36,298		36,495		197		—			—
Perpetual preferred stock	19,171		18,446		1,030		(1,755		)	—
Equity securities and mutual funds	33,843		47,238		13,727		(332		)	—
Total	$	9,957,205	$	10,179,365	$	308,297	$	(13,331	)	$	(72,806	)

¹ Gross unrealized gain/loss recognized in AOCI in the consolidated balance sheet

² Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income.

The amortized cost and fair values of available for sale securities at December 31, 2012, by contractual maturity, are as shown in the following table (dollars in thousands):



	Less than One Year			One to Five Years			Six to Ten Years			Over Ten Years⁶			Total			Weighted Average Maturity⁵
U.S. Treasuries:
Amortized cost	$	1,000		$	—		$	—		$	—		$	1,000		0.34
Fair value	1,002			—			—			—			1,002
Nominal yield	0.55		%	—		%	—		%	—		%	0.55		%
Municipal and other tax-exempt:
Amortized cost	794			29,598			11,121			43,379			84,892			14.59
Fair value	812			31,007			11,861			43,462			87,142
Nominal yield¹	—		%	0.95		%	0.78		%	2.85		%	1.89		%
Other debt securities:
Amortized cost	—			30,280			—			5,400			35,680			6.47
Fair value	—			30,990			—			5,399			36,389
Nominal yield	—		%	1.80		%	—		%	1.29		%	1.74		%
Total fixed maturity securities:
Amortized cost	$	1,794		$	59,878		$	11,121		$	48,779		$	121,572		12.09
Fair value	1,814			61,997			11,861			48,861			124,533
Nominal yield	0.31		%	1.38		%	0.78		%	2.68		%	1.83		%
Residential mortgage-backed securities:
Amortized cost													$	9,973,552		²
Fair value													10,214,984
Nominal yield⁴													2.27		%
Commercial mortgage-backed securities:
Amortized cost													$	890,746		7.09
Fair value													895,075
Nominal yield													1.35		%
Equity securities and mutual funds:
Amortized cost													$	46,764		³
Fair value													52,629
Nominal yield													1.12		%
Total available-for-sale securities:
Amortized cost													$	11,032,634
Fair value													11,287,221
Nominal yield													2.19		%


¹	Calculated on a taxable equivalent basis using a 39% effective tax rate.


²	The average expected lives of mortgage-backed securities were 2.5 years based upon current prepayment assumptions.


³	Primarily common stock and preferred stock of corporate issuers with no stated maturity.


⁴	The nominal yield on mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary –– Unaudited following for current yields on available for sale securities portfolio.


⁵	Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty.


⁶	Nominal yield on municipal and other tax-exempt securities and other debt securities with contractual maturity dates over ten years are based on variable rates which generally are reset within 35 days.

Sales of available for sale securities resulted in gains and losses as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Proceeds	$	1,744,662		$	2,725,760		$	2,013,620
Gross realized gains	41,191			41,284			26,007
Gross realized losses	(7,346		)	(7,140		)	(4,125		)
Related federal and state income tax expense	13,166			13,282			8,512

Securities Pledged As Collateral [Table Text Block]

A summary of investment and available for sale securities that have been pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was as follows (in thousands):



	December 31, 2012		December 31, 2011
Investment:
Carrying value	$	117,346	$	197,192
Fair value	121,647		200,006

Available for sale:
Amortized cost	4,070,250		4,188,075
Fair value	4,186,390		4,334,553

The secured parties do not have the right to sell or re-pledge these securities. At December 31, 2012, municipal trading securities with a fair value of $13 million were pledged as collateral on a line of credit for the trading activities of BOSC, Inc. Under the terms of the credit agreement, the creditor has the right to sell or repledge the collateral.

Schedule of Unrealized Loss on Investments [Table Text Block]



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investment:
Municipal and other tax-exempt	53	$	92,768	$	483	$	—	$	—	$	92,768	$	483
U.S. Agency residential mortgage-backed securities – Other	—	—		—		—		—		—		—
Other debt securities	14	881		20		—		—		881		20
Total investment	67	$	93,649	$	503	$	—	$	—	$	93,649	$	503

Available for sale:
Municipal and other tax-exempt	38	$	6,150	$	11	$	26,108	$	153	$	32,258	$	164
Residential mortgage-backed securities:
U. S. agencies:
FNMA	12	161,828		1,161		—		—		161,828		1,161
FHLMC	—	—		—		—		—		—		—
GNMA	—	—		—		—		—		—		—
Total U.S. agencies	12	161,828		1,161		—		—		161,828		1,161
Private issue¹:
Alt-A loans	12	—		—		87,907		2,580		87,907		2,580
Jumbo-A loans	11	—		—		43,252		1,737		43,252		1,737
Total private issue	23	—		—		131,159		4,317		131,159		4,317
Total residential mortgage-backed securities	35	161,828		1,161		131,159		4,317		292,987		5,478
Commercial mortgage-backed securities guaranteed by U.S. government agencies	8	275,065		677		—		—		275,065		677
Other debt securities	3	4,899		—		—		—		4,899		—
Perpetual preferred stocks	—	—		—		—		—		—		—
Equity securities and mutual funds	22	202		1		2,161		277		2,363		278
Total available for sale	106	$	448,144	$	1,850	$	159,428	$	4,747	$	607,572	$	6,597

¹Includes the following securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income:



Alt-A loans	12	—	—	87,907	2,580	87,907	2,580
Jumbo-A loans	10	—	—	29,128	1,602	29,128	1,602

Temporarily Impaired Securities as of December 31, 2011

(In thousands)



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investment:
Municipal and other tax- exempt	1	$	479	$	2	$	—	$	—	$	479	$	2
U.S. Agency residential mortgage-backed securities – Other	5	92,571		1,770		—		—		92,571		1,770
Other debt securities	—	—		—		—		—		—		—
Total investment	6	$	93,050	$	1,772	$	—	$	—	$	93,050	$	1,772

Available for sale:
Municipal and other tax-exempt	26	$	5,008	$	7	$	21,659	$	134	$	26,667	$	141
Residential mortgage-backed securities:
U. S. agencies:
FNMA	2	68,657		4		—		—		68,657		4
FHLMC	—	—		—		—		—		—		—
GNMA	1	2,072		3		—		—		2,072		3
Total U.S. agencies	3	70,729		7		—		—		70,729		7
Private issue¹:
Alt-A loans	19	—		—		132,242		36,219		132,242		36,219
Jumbo-A loans	48	8,142		842		278,781		46,841		286,923		47,683
Total private issue	67	8,142		842		411,023		83,060		419,165		83,902
Total residential mortgage-backed securities	70	78,871		849		411,023		83,060		489,894		83,909
Perpetual preferred stocks	6	11,147		1,755		—		—		11,147		1,755
Equity securities and mutual funds	7	221		5		2,551		327		2,772		332
Total available for sale	109	$	95,247	$	2,616	$	435,233	$	83,521	$	530,480	$	86,137


¹	Includes the following securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income:



Alt-A loans	19	$	—	$	—	$	132,242	$	36,219	$	132,242	$	36,219
Jumbo-A loans	36	3,809		256		202,874		36,331		206,683		36,587

Schedule of Investments by Lowest Current Credit Rating [Table Text Block]

At December 31, 2012, the composition of the Company’s investment and available for sale securities portfolios by the lowest current credit rating assigned by any of the three nationally-recognized rating agencies is as follows (in thousands):



	U.S. Govt / GSE ¹				AAA - AA				A - BBB				Below Investment Grade				Not Rated				Total
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Investment:
Municipal and other tax-exempt	$	—	$	—	$	155,088	$	155,945	$	23,515	$	24,055	$	—	$	—	$	54,097	$	55,940	$	232,700	$	235,940
Mortgage-backed securities -- other	82,767		85,943		—		—		—		—		—		—		—		—		82,767		85,943
Other debt securities	—		—		174,573		196,911		600		600		—		—		8,894		9,064		184,067		206,575
Total investment securities	$	82,767	$	85,943	$	329,661	$	352,856	$	24,115	$	24,655	$	—	$	—	$	62,991	$	65,004	$	499,534	$	528,458

	U.S. Govt / GSE ¹				AAA - AA				A - BBB				Below Investment Grade				Not Rated				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for Sale:
U.S. Treasury	$	1,000	$	1,002	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,000	$	1,002
Municipal and other tax-exempt	—		—		59,676		61,743		11,404		11,496		12,384		12,384		1,428		1,519		84,892		87,142
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	5,308,463		5,453,549		—		—		—		—		—		—		—		—		5,308,463		5,453,549
FHLMC	2,978,608		3,045,564		—		—		—		—		—		—		—		—		2,978,608		3,045,564
GNMA	1,215,554		1,237,041		—		—		—		—		—		—		—		—		1,215,554		1,237,041
Other	148,025		153,667		—		—		—		—		—		—		—		—		148,025		153,667
Total U.S. government agencies	9,650,650		9,889,821		—		—		—		—		—		—		—		—		9,650,650		9,889,821
Private issue:
Alt-A loans	—		—		—		—		—		—		124,314		123,174		—		—		124,314		123,174
Jumbo-A loans	—		—		—		—		—		—		198,588		201,989		—		—		198,588		201,989
Total private issue	—		—		—		—		—		—		322,902		325,163		—		—		322,902		325,163
Total residential mortgage-backed securities	9,650,650		9,889,821		—		—		—		—		322,902		325,163		—		—		9,973,552		10,214,984
Commercial mortgage-backed securities guaranteed by U.S. government agencies	890,746		895,075		—		—		—		—		—		—		—		—		890,746		895,075
Other debt securities	—		—		5,400		5,399		30,280		30,990		—		—		—		—		35,680		36,389
Perpetual preferred stock	—		—		—		—		22,171		25,072		—		—		—		—		22,171		25,072
Equity securities and mutual funds	—		—		—		—		—		—		—		—		24,593		27,557		24,593		27,557
Total available for sale securities	$	10,542,396	$	10,785,898	$	65,076	$	67,142	$	63,855	$	67,558	$	335,286	$	337,547	$	26,021	$	29,076	$	11,032,634	$	11,287,221


¹	U.S. government and government sponsored enterprises are not rated by the nationally-recognized rating agencies as these securities are guaranteed by agencies of the U.S. government or government-sponsored enterprises.

Schedule of Privately Issued Residential Mortgage-backed Securities [Table Text Block]



						Credit Losses Recognized
						Year ended
						December 31, 2012			Life-to-date
	Number of Securities	Amortized Cost		Fair Value		Number of Securities	Amount		Number of Securities	Amount
Alt-A	16	$	124,314	$	123,174	11	$	4,469	16	$	48,188
Jumbo-A	33	198,588		201,989		7	1,413		31	23,452
Total	49	$	322,902	$	325,163	18	$	5,882	47	$	71,640

Rollforward Other-than-temporary Impairment Credit Losses Recognized in Earnings [Table Text Block]



	Year Ended December 31,
	2012			2011
Balance of credit-related OTTI recognized on available for sale debt, beginning of period	$	76,131		$	52,624
Additions for credit-related OTTI not previously recognized	113			3,368
Additions for increases in credit-related OTTI previously recognized when there is no intent to sell and no requirement to sell before recovery of amortized cost	6,780			20,139
Sales	(7,796		)	—
Balance of credit-related OTTI recognized on available for sale debt securities, end of period	$	75,228		$	76,131

Fair Value Option Securities [Table Text Block]

The fair value and net unrealized gain (loss) included in Fair value option securities is as follows (in thousands):



	December 31, 2012				December 31, 2011
	Fair Value		Net Unrealized Gain		Fair Value		Net Unrealized Gain
U.S. agency residential mortgage-backed securities	$	257,040	$	3,314	$	626,109	$	19,233
Corporate debt securities	26,486		1,409		25,117		18
Other securities	$	770	$	47	$	—	$	—
Total	$	284,296	$	4,770	$	651,226	$	19,251