Investments And MBS

9 Months Ended

Sep. 30, 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)
September 30, 2012
Available for sale
MBS	$	1,757,584	$	67,864	$	0		$	1,825,448
Municipal bonds	188,579		17,354		(528		)	205,405
Other	18,251		857		0			19,108
Total	$	1,964,414	$	86,075	$	(528	)	$	2,049,961
Held to maturity
Tax credits	$	1,716	$	0	$	0		$	1,716
Total	$	1,716	$	0	$	0		$	1,716
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 September 30, 2012 and 2011 are summarized as follows:

	Proceeds from Sales		Gross Realized Gains		Gross Realized Losses
	(in thousands)
Nine Months Ended
September 30, 2012	$	506,150	$	12,666	$	(74	)
September 30, 2011	384,431		16,605		(2,307		)

The following table summarizes Sterling’s investments and MBS that had a market value below their amortized cost as of September 30, 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)
September 30, 2012
MBS	$	0	$	0		$	0	$	0		$	0	$	0
Municipal bonds	0		0			12,664		(528		)	12,664		(528		)
Other	0		0			0		0			0		0
Total	$	0	$	0		$	12,664	$	(528	)	$	12,664	$	(528	)
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 September 30, 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	$	0	$	0
Due after one year through five years	0		0		0		0
Due after five years through ten years	0		0		134,019		138,991
Due after ten years	1,716		1,716		1,830,395		1,910,970
Total	$	1,716	$	1,716	$	1,964,414	$	2,049,961

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 the recognition of an other-than-temporary impairment ("OTTI"). As of September 30, 2012, Sterling held a single issuer trust preferred security issued by JP Morgan Chase with a par value of $27.5 million, and a fair value of $19.1 million. During the second quarter of 2012, Sterling recognized an OTTI charge on the security of $6.8 million, resulting in a new amortized cost basis of $18.2 million. The security is rated Baa2 by Moody's. Interest payments have not been deferred. Sterling intends to sell the security prior to its scheduled maturity or recovery of its amortized cost basis.

The following table presents a roll-forward of OTTI for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(in thousands)
OTTI, beginning balance	$	6,819	$	0	$	0	$	0
Additions	0		0		6,819		0
Ending Balance	$	6,819	$	0	$	6,819	$	0