Note 2 – Securities

The following is a comparative summary of mortgage-backed securities and other securities available-for-sale at September 30, 2013, and December 31, 2012 (in thousands):



	September 30, 2013
		Gross	Gross	Estimated
	Amortized	unrealized	unrealized	fair
	cost	gains	losses	value
Mortgage-backed securities:
Pass-through certificates:
Government sponsored enterprises (GSE)	$ 385,973	$ 10,773	$ 3,541	$ 393,205
Real estate mortgage investment conduits (REMICs):
GSE	521,132	1,043	10,254	511,921
Non-GSE	5,007	146	53	5,100
	912,112	11,962	13,848	910,226
Other securities:
GSE bonds	30,495	-	134	30,361
Equity investments-mutual funds	2,189	-	-	2,189
Corporate bonds	80,450	3	174	80,279
	113,134	3	308	112,829
Total securities available-for-sale	$ 1,025,246	$ 11,965	$ 14,156	$ 1,023,055



	December 31, 2012
		Gross	Gross	Estimated
	Amortized	unrealized	unrealized	fair
	cost	gains	losses	value
Mortgage-backed securities:
Pass-through certificates:
GSE	$ 456,441	$ 22,996	$ 99	$ 479,338
Real estate mortgage investment conduits (REMICs):
GSE	694,087	7,092	62	701,117
Non-GSE	7,543	266	33	7,776
	1,158,071	30,354	194	1,188,231
Other securities:
Equity investments-mutual funds	12,998	—	—	12,998
Corporate bonds	73,708	694	—	74,402
	86,706	694	—	87,400
Total securities available-for-sale	$ 1,244,777	$ 31,048	$ 194	$ 1,275,631

The following is a summary of the expected maturity distribution of debt securities available-for-sale, other than mortgage-backed securities, at September 30, 2013 (in thousands):



Available-for-sale	Amortized cost	Estimated fair value
Due in one year or less	$ -	$ -
Due after one year through five years	110,944	110,639
	$ 110,944	$ 110,639

Expected maturities on mortgage-backed securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties.

For the three months and nine months ended September 30, 2013, the Company had gross proceeds of $52.8 million and $199.3 million, respectively, on sales of securities available-for-sale with gross realized gains of approximately $394,000 and $2.5 million, respectively, and gross realized losses of $42,000 and $219,000, respectively. For the three and nine months ended September 30, 2012, the Company had gross proceeds of $46.3 million and $176.6 million, respectively, on sales of securities available-for-sale with gross realized gains of approximately $715,000 and $2.0 million, respectively, and gross realized losses of $490,000 for the three and nine months ended September 30, 2012. The Company recognized $390,000 and $696,000 in gains on its trading securities portfolio during the three and nine months ended September 30, 2013, respectively. The Company recognized $203,000 and $456,000 in gains on its trading securities portfolio during the three and nine months ended September 30, 2012, respectively. The Company recognized $0 and $434,000 of other-than-temporary impairment charges during the three and nine months ended September 30, 2013, respectively, and did not recognize any other-than-temporary impairment charges during the three and nine months ended September 30, 2012.

Activity related to the credit component recognized in earnings on debt securities for which a portion of other-than-temporary impairment was recognized in accumulated other comprehensive income for the three and nine months ended September 30, 2013 and 2012, is as follows (in thousands):



	Three months ended		Nine months ended
	September 30,		September 30,
	2013	2012	2013	2012
Balance, beginning of period	$ -	$ 578	$ -	$ 578
Additions to the credit component on debt securities in which other-than-temporary
impairment was not previously recognized	-	-	-	-
Reductions due to sales		(578)	-	(578)
Cumulative pre-tax credit losses, end of period	$ -	$ -	$ -	$ -

Gross unrealized losses on mortgage-backed securities, equity investments, and corporate bonds available-for-sale, and the estimated fair value of the related securities, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2013, and December 31, 2012, were as follows (in thousands):



	September 30, 2013
	Less than 12 months		12 months or more		Total
	Unrealized	Estimated	Unrealized	Estimated	Unrealized	Estimated
	losses	fair value	losses	fair value	losses	fair value
Mortgage-backed securities:
Pass-through certificates:
GSE	$ 3,493	$ 156,702	$ 48	$ 5,375	$ 3,541	$ 162,077
REMICs:
GSE	9,479	314,923	775	48,508	10,254	363,431
Non-GSE	24	1,246	29	482	53	1,728
Other securities:
GSE bonds	134	30,361	-	-	134	30,361
Corporate bonds	174	68,784	-	-	174	68,784
Total	$ 13,304	$ 572,016	$ 852	$ 54,365	$ 14,156	$ 626,381



	December 31, 2012
	Less than 12 months		12 months or more		Total
	Unrealized	Estimated	Unrealized	Estimated	Unrealized	Estimated
	losses	fair value	losses	fair value	losses	fair value
Mortgage-backed securities:
Pass-through certificates:
GSE	$ 99	$ 14,156	$ -	$ -	$ 99	$ 14,156
REMICs:
GSE	58	100,310	4	7,633	62	107,943
Non-GSE	-	-	33	604	33	604
Total	$ 157	$ 114,466	$ 37	$ 8,237	$ 194	$ 122,703

The Company held 37 REMIC pass-through mortgage-backed securities issued or guaranteed by GSEs, 7 REMIC mortgage-backed securities issued or guaranteed by GSEs and one REMIC mortgage-backed security not issued or guaranteed by GSEs that were in a continuous unrealized loss position of greater than twelve months at September 30, 2013. There were 20 pass-through mortgage-backed securities issued or guaranteed by GSEs, 20 REMIC mortgage-backed securities issued or guaranteed by GSEs, one GSE bond, one REMIC mortgage-backed security not issued or guaranteed by GSEs and 13 corporate bonds that were in an unrealized loss position of less than twelve months, and rated investment grade at September 30, 2013. The declines in value relate to the general interest rate environment and are considered temporary. The securities cannot be prepaid in a manner that would result in the Company not receiving substantially all of its amortized cost. The Company neither has an intent to sell, nor is it more likely than not that the Company will be required to sell, the securities before the recovery of their amortized cost basis or, if necessary, maturity.

The fair values of our investment securities could decline in the future if the underlying performance of the collateral for the collateralized mortgage obligations or other securities deteriorates and our credit enhancement levels do not provide sufficient protections to our contractual principal and interest.