Securities

6 Months Ended

Jun. 30, 2011

4. Securities

The amortized cost and estimated fair market value of investment securities and mortgage-backed securities available-for-sale at June 30, 2011 and December 31, 2010 are as follows:


			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(In thousands)
June 30, 2011
Investment Securities:
Equity securities	$	6,767	$	454	$	—		$	7,221

Total investment securities available for sale		6,767		454		—			7,221

Mortgage-backed securities:
GNMA pass-through certificates		1,138,860		15,874		(1,114	)		1,153,620
FNMA pass-through certificates		5,152,251		37,098		(5,270	)		5,184,079
FHLMC pass-through certificates		4,006,482		48,234		(1,896	)		4,052,820
FHLMC and FNMA — REMICs		92,549		1,196		—			93,745

Total mortgage-backed securities available for sale	$	10,390,142	$	102,402	$	(8,280	)	$	10,484,264


December 31, 2010
Investment securities:
United States government -sponsored enterprises debt	$	80,000	$	2,647	$	—		$	82,647
Equity securities		6,767		381		—			7,148

Total investment securities available for sale		86,767		3,028		—			89,795


Mortgage-backed securities:
GNMA pass-through certificates		1,560,755		27,214		(7,487	)		1,580,482
FNMA pass-through certificates		10,333,033		122,305		(57,550	)		10,397,788
FHLMC pass-through certificates		5,521,741		129,547		(32,116	)		5,619,172
FHLMC and FNMA — REMICs		509,755		13,340		—			523,095

Total mortgage-backed securities available for sale	$	17,925,284	$	292,406	$	(97,153	)	$	18,120,537

The amortized cost and estimated fair market value of investment securities and mortgage-backed securities held to maturity at June 30, 2011 and December 31, 2010 are as follows:


			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(In thousands)
June 30, 2011
Investment securities:
United States government -sponsored enterprises debt	$	3,638,950	$	3,913	$	(41,602	)	$	3,601,261

Total investment securities held to maturity		3,638,950		3,913		(41,602	)		3,601,261


Mortgage-backed securities:
GNMA pass-through certificates		93,571		3,375		—			96,946
FNMA pass-through certificates		1,379,845		85,863		(3	)		1,465,705
FHLMC pass-through certificates		2,482,825		142,010		—			2,624,835
FHLMC and FNMA — REMICs		939,975		47,650		—			987,625

Total mortgage-backed securities held to maturity	$	4,896,216	$	278,898	$	(3	)	$	5,175,111


December 31, 2010
Investment securities:
United States government -sponsored enterprises debt	$	3,939,006	$	3,698	$	(75,216	)	$	3,867,488

Total investment securities held to maturity		3,939,006		3,698		(75,216	)		3,867,488


Mortgage-backed securities:
GNMA pass-through certificates		98,887		2,802		—			101,689
FNMA pass-through certificates		1,622,994		87,271		—			1,710,265
FHLMC pass-through certificates		2,943,565		148,248		—			3,091,813
FHLMC and FNMA — REMICs		1,248,926		46,846		(32	)		1,295,740

Total mortgage-backed securities held to maturity	$	5,914,372	$	285,167	$	(32	)	$	6,199,507

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are deemed to be temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2011 and December 31, 2010.


	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
June 30, 2011
Held to maturity:
United States government -sponsored enterprises debt	$	2,908,340	$	(41,602	)	$	—	$	—		$	2,908,340	$	(41,602	)
FNMA pass-through certificates		144		(3	)		—		—			144		(3	)

Total temporarily impaired securities held to maturity		2,908,484		(41,605	)		—		—			2,908,484		(41,605	)

Available for sale:
GNMA pass-through certificates		403,749		(1,114	)		—		—			403,749		(1,114	)
FNMA pass-through certificates		1,727,381		(5,270	)		—		—			1,727,381		(5,270	)
FHLMC pass-through certificates		731,941		(1,896	)		—		—			731,941		(1,896	)

Total temporarily impaired securities available for sale		2,863,071		(8,280	)		—		—			2,863,071		(8,280	)

Total	$	5,771,555	$	(49,885	)	$	—	$	—		$	5,771,555	$	(49,885	)


December 31, 2010
Held to maturity:
United States government -sponsored enterprises debt	$	3,524,781		(75,216	)	$	—	$	—		$	3,524,781	$	(75,216	)
FHLMC and FNMA — REMICs		7,373		(24	)		3,163		(8	)		10,536		(32	)

Total temporarily impaired securities held to maturity		3,532,154		(75,240	)		3,163		(8	)		3,535,317		(75,248	)

Available for sale:
GNMA pass-through certificates		424,575		(7,487	)		—		—			424,575		(7,487	)
FNMA pass-through certificates		4,375,620		(57,550	)		—		—			4,375,620		(57,550	)
FHLMC pass-through certificates		2,425,458		(32,116	)		—		—			2,425,458		(32,116	)

Total temporarily impaired securities available for sale		7,225,653		(97,153	)		—		—			7,225,653		(97,153	)

Total	$	10,757,807	$	(172,393	)	$	3,163	$	(8	)	$	10,760,970	$	(172,401	)

The unrealized losses are primarily due to the changes in market interest rates subsequent to purchase. We only purchase securities issued by U.S. government-sponsored enterprises (“GSEs”) and do not own any unrated or private label securities or other high-risk securities such as those backed by sub-prime loans. We do not consider these investments to be other-than-temporarily impaired at June 30, 2011 and December 31, 2010 since the decline in market value is primarily attributable to changes in interest rates and not credit quality. In addition, the Company does not intend to sell and does not believe that it is more likely than not that we will be required to sell these investments until there is a full recovery of the unrealized loss, which may be at maturity. As a result no impairment loss was recognized during the six months ended June 30, 2011 or for the year ended December 31, 2010.

The amortized cost and estimated fair market value of our securities held to maturity and available-for-sale at June 30, 2011, by contractual maturity, are shown below. The table does not include the effect of prepayments or scheduled principal amortization. The expected maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations. Equity securities have been excluded from this table.


	Amortized Cost				Estimated
	Mortgage-backed		Investment		Fair Market
	securities		securities		Value
	(In thousands)
June 30, 2011
Held to Maturity:
Due in one year or less	$	6	$	—	$	6
Due after one year through five years		1,657		—		1,810
Due after five years through ten years		9,288		—		9,965
Due after ten years		4,885,265		3,638,950		8,764,591

Total held to maturity	$	4,896,216	$	3,638,950	$	8,776,372

Available for Sale:
Due after ten years	$	10,390,142	$	—	$	10,484,264

Total available for sale	$	10,390,142	$	—	$	10,484,264

Sales of mortgage-backed securities available-for-sale amounted to $8.96 billion and $1.09 billion for the six months ended June 30, 2011 and 2010, respectively, resulting in realized gains of $100.0 million and $61.4 million for the same respective periods. There were sales of $80.0 million of investment securities available-for-sale during the six months ended June 30, 2011. There were no sales of investment securities available-for-sale or held to maturity during the six months ended June 30, 2010. Gross realized gains on sales and calls of investment securities available-for-sale were $2.5 million during the first six months of 2011. Gains and losses on the sale of all securities are determined using the specific identification method.