Investments And MBS

3 Months Ended

Mar. 31, 2012

Investments And MBS [Abstract]

Investments And MBS

Investments and MBS:

The carrying and fair values of investments and MBS are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2012
Available for sale
MBS	$	2,174,544	$	58,655	$	(24	)	$	2,233,175
Municipal bonds	193,687		14,112		(1,056		)	206,743
Other	24,948		5		(4,991		)	19,962
Total	$	2,393,179	$	72,772	$	(6,071	)	$	2,459,880
Held to maturity
Tax credits	$	1,736	$	0	$	0		$	1,736
Total	$	1,736	$	0	$	0		$	1,736
December 31, 2011
Available for sale
MBS	$	2,265,207	$	55,760	$	(33	)	$	2,320,934
Municipal bonds	195,512		13,338		(1,394		)	207,456
Other	24,923		2		(5,439		)	19,486
Total	$	2,485,642	$	69,100	$	(6,866	)	$	2,547,876
Held to maturity
Tax credits	$	1,747	$	0	$	0		$	1,747
Total	$	1,747	$	0	$	0		$	1,747

Sterling’s MBS portfolio is comprised primarily of residential agency securities. Other available for sale securities consist of a single issuer trust preferred security. Total sales of Sterling’s securities during the periods ended March 31, 2012 and 2011 are summarized as follows:

	Proceeds from Sales		Gross Realized Gains		Gross Realized Losses
	(in thousands)
Three Months Ended
March 31, 2012	$	178,663	$	142	$	0
March 31, 2011	118,779		6,004		3

The following table summarizes Sterling’s investments and MBS that had a market value below their amortized cost as of March 31, 2012 and December 31, 2011, segregated by those investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or longer:

	Less than 12 months					12 months or longer					Total
	Market Value		Unrealized Losses			Market Value		Unrealized Losses			Market Value		Unrealized Losses
	(in thousands)
March 31, 2012
MBS	$	30,030	$	(24	)	$	0	$	0		$	30,030	$	(24	)
Municipal bonds	0		0			15,192		(1,056		)	15,192		(1,056		)
Other	0		0			19,953		(4,991		)	19,953		(4,991		)
Total	$	30,030	$	(24	)	$	35,145	$	(6,047	)	$	65,175	$	(6,071	)
December 31, 2011
MBS	$	1,419	$	(12	)	$	24,726	$	(21	)	$	26,145	$	(33	)
Municipal bonds	0		0			17,289		(1,394		)	17,289		(1,394		)
Other	0		0			19,479		(5,439		)	19,479		(5,439		)
Total	$	1,419	$	(12	)	$	61,494	$	(6,854	)	$	62,913	$	(6,866	)

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities as of March 31, 2012, grouped by contractual maturity. Actual maturities for MBS will differ from contractual maturities as a result of the level of prepayments experienced on the underlying mortgages.

	Held-to-maturity				Available-for-sale
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(in thousands)
Due within one year	$	0	$	0	$	1,432	$	1,432
Due after one year through five years	0		0		805		805
Due after five years through ten years	0		0		177,549		181,900
Due after ten years	1,736		1,736		2,213,393		2,275,743
Total	$	1,736	$	1,736	$	2,393,179	$	2,459,880

Management evaluates investment securities for other-than-temporary declines in fair value each quarter. If the fair value of investment securities falls below the amortized cost and the decline is deemed to be other-than temporary, the securities are written down to current market value, resulting in a loss. At March 31, 2012, there were no investment securities that management identified to be other-than-temporarily impaired because Sterling expects the return of all principal and interest on all securities pursuant to their contractual terms, has the ability and intent to hold these securities, has no intent to sell securities that are deemed to have a market value impairment, and believes it is unlikely that it would be required to sell any of these securities prior to a recovery in market price, or until maturity. Realized losses could occur in future periods due to a change in management’s ability or intent to hold the securities to recovery, a change in management’s assessment of credit risk, or a change in regulatory or accounting requirements. As of March 31, 2012, Sterling held a single issuer trust preferred security issued by JP Morgan Chase with an amortized book value of $24.9 million, and a net unrealized loss of $5.0 million. Interest payments have not been deferred, and as of March 31, 2012, the security was rated A2 by Moody’s. Sterling currently expects to collect all amounts due according to the contractual terms of this investment.