XML 76 R13.htm IDEA: XBRL DOCUMENT
v2.4.0.6

INVESTMENT SECURITIES | 6 Months Ended
--- | ---
Jun. 30, 2012
INVESTMENT SECURITIES |
INVESTMENT SECURITIES |
NOTE 5 — INVESTMENT SECURITIES An analysis of the investment securities available-for-sale portfolio is presented as follows:
|  |  |  | Gross |  | Gross |  | Estimated |
|  | Amortized |  | Unrealized |  | Unrealized |  | Fair |
|  | Cost |  | Gains |  | Losses |  | Value |
|  |  |  | (In thousands) |  |  |
As of June 30, 2012 |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 71,509 |  | $ | 704 |  | $ | (25 | ) | $ | 72,188 |
U.S. Government agency and U.S. Government sponsored enterprise debt securities |  | 359,424 |  | 374 |  | (74 | ) | 359,724 |
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 44,702 |  | 3,987 |  | — |  | 48,689 |
Residential mortgage-backed securities |  | 856,734 |  | 19,969 |  | (459 | ) | 876,244 |
Municipal securities |  | 62,652 |  | 3,160 |  | (30 | ) | 65,782 |
Corporate debt securities: |  |  |  |  |  |  |  |  |
Investment grade |  | 473,187 |  | 245 |  | (47,377 | ) | 426,055 |
Non-investment grade (1) |  | 24,665 |  | 32 |  | (9,778 | ) | 14,919 |
Other securities |  | 9,916 |  | 222 |  | — |  | 10,138 |
Total investment securities available-for-sale |  | $ | 1,902,789 |  | $ | 28,693 |  | $ | (57,743 | ) | $ | 1,873,739 |
As of December 31, 2011 |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 19,892 |  | $ | 833 |  | $ | — |  | $ | 20,725 |
U.S. Government agency and U.S. Government sponsored enterprise debt securities |  | 575,148 |  | 1,709 |  | (279 | ) | 576,578 |
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 46,008 |  | 3,307 |  | — |  | 49,315 |
Residential mortgage-backed securities |  | 963,688 |  | 30,854 |  | (772 | ) | 993,770 |
Municipal securities |  | 76,255 |  | 3,696 |  | (5 | ) | 79,946 |
Corporate debt securities: |  |  |  |  |  |  |  |  |
Investment grade |  | 1,411,409 |  | 6,762 |  | (95,610 | ) | 1,322,561 |
Non-investment grade (1) |  | 30,693 |  | — |  | (11,078 | ) | 19,615 |
Other securities |  | 9,875 |  | 195 |  | (2 | ) | 10,068 |
Total investment securities available-for-sale |  | $ | 3,132,968 |  | $ | 47,356 |  | $ | (107,746 | ) | $ | 3,072,578 |
(1) For the six months ended June 30, 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. The Company recorded $633 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities and other mortgage-backed securities in other comprehensive income for the year ended December 31, 2011. The fair values of investment securities are generally determined by reference to the average of at least two quoted market prices obtained from independent external brokers or prices obtained from independent external pricing service providers who have experience in valuing these securities. The Company performs a monthly analysis on the broker quotes received from third parties to ensure that the prices represent a reasonable estimate of fair value. The procedures include, but are not limited to, initial and ongoing review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. The Company assesses whether the prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed that are based on spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon available market data, the price received from third parties is adjusted accordingly. Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations that utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding. As a result of the global financial crisis and illiquidity in the U.S. markets, the market for the pooled trust preferred securities has been inactive since mid-2007. It is the Company’s view that current broker prices (which are typically non-binding) on these securities are based on forced liquidation or distressed sale values in very inactive markets that are not representative of the fair value of these securities. As such, the Company considered what weight, if any, to place on transactions that are not orderly when estimating fair value. For the pooled trust preferred securities the Company determined their fair values using the methodologies set forth in Note 3 to the Company’s condensed consolidated financial statements presented elsewhere in this report. The following table shows the Company’s rollforward of the amount related to OTTI credit losses for the periods shown:
|  | Three Months Ended |
|  | June 30, |
|  | 2012 |  | 2011 |
|  | (In thousands) |
Beginning balance, April 1 |  | $ | 115,511 |  | $ | 115,243 |
Addition of other-than-temporary impairment that was not previously recognized |  | — |  | — |
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized |  | — |  | — |
Reduction for securities sold |  | — |  | — |
Ending balance |  | $ | 115,511 |  | $ | 115,243 |
|  | Six Months Ended |
|  | June 30, |
|  | 2012 |  | 2011 |
|  | (In thousands) |
Beginning balance, January 1 |  | $ | 115,412 |  | $ | 124,340 |
Addition of other-than-temporary impairment that was not previously recognized |  | — |  | — |
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized |  | 99 |  | 464 |
Reduction for securities sold |  | — |  | (9,561 | )
Ending balance |  | $ | 115,511 |  | $ | 115,243 |
During the three months ended June 30, 2012, the Company recorded $26.3 million of gross gains and $26.2 million of gross losses resulting in a net income statement impact of $71 thousand of gain on sale of investment securities. During the three months ended June 30, 2011, the Company recorded $1.7 million of gross gains and $563 thousand of gross losses resulting in a net income statement impact of $1.1 million of gain on sale of investment securities. Total net proceeds for these sales were $837.0 million and $215.0 million for the three months ended June 30, 2012 and 2011, respectively. During the six months ended June 30, 2012, the Company recorded $28.0 million of gross gains and $27.4 million of gross losses resulting in a net income statement impact of $554 thousand of gain on sale investment securities. During the six months ended June 30, 2011, the Company recorded $11.9 million of gross gains and $8.3 million of gross losses resulting in a net income statement impact of $3.6 million of gain on sale investment securities. Total net proceeds for these sales were $1.10 billion and $527.8 million for the six months ended June 30, 2012 and 2011, respectively. During the second quarter 2012, the Company reassessed the available for sales securities portfolio and elected to sell certain securities to reduce the exposure to specific industries within the corporate debt portfolio. This sale resulted in the greater gross loss for the period as compared to the prior periods. The following tables show the Company’s investment portfolio’s gross unrealized losses and related fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of June 30, 2012 and December 31, 2011:
|  | Less Than 12 Months |  | 12 Months or More |  | Total |
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized |
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses |
|  |  |  |  |  | (In thousands) |  |  |  |  |
As of June 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 30,468 |  | $ | (25 | ) | $ | — |  | $ | — |  | $ | 30,468 |  | $ | (25 | )
U.S. Government agency and U.S. Government sponsored enterprise debt securities |  | 223,269 |  | (74 | ) | — |  | — |  | 223,269 |  | (74 | )
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | — |  | — |  | — |  | — |  | — |  | — |
Residential mortgage-backed securities |  | 169,040 |  | (459 | ) | — |  | — |  | 169,040 |  | (459 | )
Municipal securities |  | 3,106 |  | (30 | ) | — |  | — |  | 3,106 |  | (30 | )
Corporate debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 101,425 |  | (15,499 | ) | 318,122 |  | (31,878 | ) | 419,547 |  | (47,377 | )
Non-investment grade |  | — |  | — |  | 10,357 |  | (9,778 | ) | 10,357 |  | (9,778 | )
Other securities |  | — |  | — |  | — |  | — |  | — |  | — |
Total investment securities available-for-sale |  | $ | 527,308 |  | $ | (16,087 | ) | $ | 328,479 |  | $ | (41,656 | ) | $ | 855,787 |  | $ | (57,743 | )
|  | Less Than 12 Months |  | 12 Months or More |  | Total |
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized |
|  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses |
|  |  |  |  |  | (In thousands) |  |  |  |  |
As of December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
U.S. Government agency and U.S. Government sponsored enterprise debt securities |  | 143,265 |  | (279 | ) | — |  | — |  | 143,265 |  | (279 | )
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | — |  | — |  | — |  | — |  | — |  | — |
Residential mortgage-backed securities |  | 195,393 |  | (772 | ) | — |  | — |  | 195,393 |  | (772 | )
Municipal securities |  | 1,158 |  | (5 | ) | — |  | — |  | 1,158 |  | (5 | )
Corporate debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 754,055 |  | (61,935 | ) | 350,181 |  | (33,675 | ) | 1,104,236 |  | (95,610 | )
Non-investment grade |  | 9,973 |  | (565 | ) | 9,595 |  | (10,513 | ) | 19,568 |  | (11,078 | )
Other securities |  | 4,503 |  | (2 | ) | — |  | — |  | 4,503 |  | (2 | )
Total investment securities available-for-sale |  | $ | 1,108,347 |  | $ | (63,558 | ) | $ | 359,776 |  | $ | (44,188 | ) | $ | 1,468,123 |  | $ | (107,746 | )
Unrealized Losses The majority of the unrealized losses related to securities that have been in a continuous loss position for less than twelve months is related to investment grade corporate debt securities. As of June 30, 2012, the Company had $426.1 million in investment grade corporate debt securities available-for-sale, representing 23% of the total investment securities available-for-sale portfolio. As of June 30, 2012, there were 20 individual securities that have been in a continuous unrealized loss position for twelve months or more. These securities are comprised of 5 positions in trust preferred securities with a total fair value of $10.4 million and 15 investment grade corporate debt securities with a fair value of $318.1 million. The unrealized losses on these securities are primarily attributed to the overall impact of the debt crisis in Europe, which has indirectly impacted both European and U.S. financial institutions in the corporate debt securities market. As of June 30, 2012, there were also 34 securities, not including the 20 securities above, which have been in a continuous unrealized loss position for less than twelve months. The securities in an unrealized loss position for less than twelve months include 18 residential agency mortgage-backed securities, 6 investment grade corporate debt securities, 6 government agency securities, 3 U.S. Treasury securities, and 1 municipal security. The issuers of these securities have not, to our knowledge, established any cause to believe the Company will not be able to collect all amounts due on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated. The Company does not intend to sell these securities and it is not more likely than not that the company will be required to sell these securities before recovery of their current amortized cost basis. As such, the Company does not deem these securities, other than those previously stated, to be other-than-temporarily impaired as of June 30, 2012. Corporate Debt Securities Corporate debt securities were reduced by $663.6 million during the three months ended June 30, 2012, primarily due to sales. During the second quarter 2012, the Company reassessed the portfolio and elected to sell these securities to reduce the exposure to specific industries within the corporate debt portfolio. For the remainder of the corporate debt portfolio held as of June 30, 2012 the Company has the intent and ability to hold these securities and it is not more likely than not that the Company will be required to sell the securities before it recovers the cost basis of its investment. The unrealized losses related to securities that have been in a continuous loss position of twelve months or longer are related to 5 positions in trust preferred debt securities and 15 investment grade corporate debt securities. As of June 30, 2012, these 5 positions in trust preferred securities had an estimated fair value of $10.4 million, representing less than 1% of the total investment securities available-for-sale portfolio. As of June 30, 2012, these non-investment grade trust preferred debt securities had gross unrealized losses amounting to $9.8 million, or 49% of the total amortized cost basis of these securities, comprised of $4.7 million in unrealized losses on securities that are not other-than-temporarily impaired and $5.1 million in noncredit-related impairment losses on securities that are other-than-temporarily impaired as of June 30, 2012 pursuant to the provisions of ASC 320-10-65. We recorded an impairment loss of $99 thousand on our portfolio of pooled trust preferred securities during the first six months of 2012 for additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized. The scheduled maturities of investment securities at June 30, 2012 are presented as follows:
|  | Amortized |  | Estimated |
|  | Cost |  | Fair Value |
|  | (In thousands) |
Due within one year |  | $ | 360,410 |  | $ | 356,383 |
Due after one year through five years |  | 150,822 |  | 149,545 |
Due after five years through ten years |  | 519,207 |  | 480,635 |
Due after ten years |  | 872,350 |  | 887,176 |
Total investment securities available-for-sale |  | $ | 1,902,789 |  | $ | 1,873,739 |

X
- Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03.4) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6871852&loc=d3e26626-111562 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.2,12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6871852&loc=d3e26610-111562 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563 + Details
Name: | us-gaap_MarketableSecuritiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration