DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE

12 Months Ended

Dec. 31, 2011

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 2 – Discontinued Operations and Assets and Liabilities Held for Sale

Discontinued Operations. The assets and liabilities associated with the transactions described (and defined) below were previously reported in the First Bank segment and were sold as part of the Company’s Capital Plan to preserve risk-based capital. The Company applied discontinued operations accounting in accordance with ASC Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the assets and liabilities related to the Florida Region as of December 31, 2011, to the assets and liabilities sold during the second quarter of 2011 related to the Northern Illinois Region as of December 31, 2010, and to the operations of the Florida, Northern Illinois, Chicago and Texas Regions, in addition to the operations of WIUS and MVP, for the years ended December 31, 2011, 2010 and 2009, as applicable. The Company did not allocate any consolidated interest that is not directly attributable to or related to discontinued operations.

All financial information in the consolidated financial statements and notes to the consolidated financial statements is reported on a continuing operations basis, unless otherwise noted.

Florida Region. On January 25, 2012, First Bank entered into a Branch Purchase and Assumption Agreement that provides for the sale of certain assets and the transfer of certain liabilities associated with First Bank’s Florida franchise (Florida Region) to an unaffiliated financial institution, as further described in Note 25 to the consolidated financial statements. Under the terms of the agreement, the unaffiliated financial institution is to assume approximately $345.9 million of deposits associated with First Bank’s 19 Florida retail branches for a premium of 2.3%. The unaffiliated financial institution is also expected to purchase premises and equipment and assume the leases associated with the Florida Region at a discount of $1.2 million. The transaction, which is subject to regulatory approvals and certain closing conditions, is expected to be completed during the second or third quarter of 2012. The assets and liabilities associated with the Florida Region are reflected in assets and liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2011.

Northern Illinois Region. During 2010, First Bank entered into three Branch Purchase and Assumption Agreements that provided for the sale of certain assets and the transfer of certain liabilities associated with 14 of First Bank’s branch banking offices in Northern Illinois, as further described below.

On December 21, 2010, First Bank entered into a Branch Purchase and Assumption Agreement with United Community Bank (United Community) that provided for the sale of certain assets and the transfer of certain liabilities associated with First Bank’s three retail branches in Pittsfield, Roodhouse and Winchester, Illinois to United Community. The transaction was completed on May 13, 2011. Under the terms of the agreement, United Community assumed $92.2 million of deposits associated with these branches for a weighted average premium of approximately 2.4%, or $2.2 million. United Community also purchased $37.5 million of loans as well as certain other assets at par value, including premises and equipment, associated with these branches. The assets and liabilities sold in this transaction are reflected in assets and liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2010.

On June 7, 2010, First Bank entered into a Branch Purchase and Assumption Agreement with Bank of Springfield that provided for the sale of certain assets and the transfer of certain liabilities of First Bank’s branch banking office located in Jacksonville, Illinois (Jacksonville Branch) to Bank of Springfield. The transaction was completed on September 24, 2010. Under the terms of the agreement, Bank of Springfield assumed $28.9 million of deposits associated with the Jacksonville Branch for a premium of approximately 4.00%, or $1.2 million. Bank of Springfield also purchased $2.2 million of loans as well as certain other assets at par value, including premises and equipment, associated with the Jacksonville Branch.

On May 7, 2010, First Bank entered into a Branch Purchase and Assumption Agreement with First Mid-Illinois Bank & Trust, N.A. (First Mid-Illinois) that provided for the sale of certain assets and the transfer of certain liabilities associated with 10 of First Bank’s retail branches in Peoria, Galesburg, Quincy, Bartonville, Knoxville and Bloomington, Illinois to First Mid-Illinois. The transaction was completed on September 10, 2010. Under the terms of the agreement, First Mid-Illinois assumed $336.0 million of deposits for a premium of 4.77%, or $15.6 million. First Mid-Illinois also purchased $135.2 million of loans as well as certain other assets at par value, including premises and equipment, associated with these branches.

The 14 branches in the transactions with United Community, Bank of Springfield and First Mid-Illinois are collectively defined as the Northern Illinois Region (Northern Illinois Region). The Bank of Springfield and First Mid-Illinois transactions, in the aggregate, resulted in a gain of $6.4 million, after the write-off of goodwill and intangible assets of $9.7 million allocated to the Northern Illinois Region, during the third quarter of 2010. The United Community transaction resulted in a gain of $425,000, after the write-off of goodwill and intangible assets of $1.6 million allocated to the Northern Illinois Region, during the second quarter of 2011.

Missouri Valley Partners, Inc. On March 5, 2010, First Bank entered into a Stock Purchase Letter Agreement that provided for the sale of First Bank’s subsidiary, Missouri Valley Partners, Inc. (MVP) to Stifel Financial Corp. The transaction was completed on April 15, 2010. Under the terms of the agreement, First Bank sold all of the capital stock of MVP for a purchase price of $515,000. The transaction resulted in a loss of $156,000 during the second quarter of 2010.

Texas Region. On February 8, 2010, First Bank entered into a Purchase and Assumption Agreement with Prosperity Bank (Prosperity), headquartered in Houston, Texas, that provided for the sale of certain assets and the transfer of certain liabilities of First Bank’s Texas franchise (Texas Region) to Prosperity. The transaction was completed on April 30, 2010. Under the terms of the agreement, Prosperity assumed substantially all of the deposits associated with First Bank’s 19 Texas retail branches which totaled $492.2 million, for a premium of 5.50%, or $26.9 million. Prosperity also purchased $96.7 million of loans as well as certain other assets, including premises and equipment, associated with First Bank’s Texas Region. The transaction resulted in a gain of $5.0 million, after the write-off of goodwill and intangible assets of $20.0 million allocated to the Texas Region, during the second quarter of 2010.

WIUS, Inc. and WIUS of California, Inc. On December 3, 2009, First Bank and Universal Premium Acceptance Corporation, predecessor to WIUS, Inc., and its wholly owned subsidiary, WIUS of California, Inc. (collectively, WIUS), entered into a Purchase and Sale Agreement that provided for the sale of certain assets and the transfer of certain liabilities of WIUS to PFS Holding Company, Inc., Premium Financing Specialists, Inc., Premium Financing Specialists of California, Inc. and Premium Financing Specialists of the South, Inc. (collectively, PFS). Under the terms of the agreement, PFS purchased $141.3 million of loans as well as certain other assets, including premises and equipment, associated with WIUS. PFS also assumed certain other liabilities associated with WIUS. With the exception of the subsequent sale of $1.5 million of additional loans to PFS on February 26, 2010, the transaction was completed on December 31, 2009, and resulted in a loss of $13.1 million, after the write-off of goodwill and intangible assets of $20.0 million allocated to WIUS, during the fourth quarter of 2009. On August 31, 2010, First Bank sold all of the capital stock of WIUS to an unrelated third party for a purchase price of $100,000, which resulted in a loss of $29,000.

Chicago Region. On November 11, 2009, First Bank entered into a Purchase and Assumption Agreement that provided for the sale of certain assets and the transfer of certain liabilities of First Bank’s Chicago franchise (Chicago Region) to FirstMerit Bank, N.A. (FirstMerit). The transaction was completed on February 19, 2010. Under the terms of the agreement, FirstMerit assumed substantially all of the deposits associated with First Bank’s 24 Chicago retail branches which totaled $1.20 billion, for a premium of 3.50%, or $42.1 million. FirstMerit also purchased $301.2 million of loans as well as certain other assets, including premises and equipment, associated with First Bank’s Chicago Region. The transaction resulted in a gain of $8.4 million, after the write-off of goodwill and intangible assets of $26.3 million allocated to the Chicago Region, during the first quarter of 2010.

Adrian N. Baker & Company. On September 18, 2009, First Bank and Adrian N. Baker & Company signed a Stock Purchase Agreement that provided for the sale of First Bank’s subsidiary, ANB, to AHM Corporation Holdings, Inc. (AHM). Under the terms of the agreement, AHM purchased all of the capital stock of ANB for a purchase price of $14.3 million. The sale of ANB was completed on September 30, 2009 and resulted in a gain of $120,000 during 2009, after the write-off of goodwill and intangible assets of $13.0 million allocated to ANB.

Assets and liabilities of discontinued operations at December 31, 2011 and 2010 were as follows:

	December 31, 2011		December 31, 2010
	Florida		Northern Illinois
	(dollars expressed in thousands)
Cash and due from banks	$	2,147	693
Loans:
Commercial, financial and agricultural		65	6,891
Real estate construction and development		—	50
Residential real estate		—	13,953
Multi-family residential		—	135
Commercial real estate		—	17,253
Consumer and installment, net of net deferred loan fees		263	1,983
Total loans		328	40,265
Bank premises and equipment, net		14,496	850
Goodwill and other intangible assets		4,000	1,558
Other assets		38	166
Assets of discontinued operations	$	21,009	43,532
Deposits:
Noninterest-bearing demand	$	24,966	11,223
Interest-bearing demand		23,144	17,619
Savings and money market		158,328	23,832
Time deposits of $100 or more		48,613	5,789
Other time deposits		90,823	35,613
Total deposits		345,874	94,076
Other borrowings		272	—
Accrued expenses and other liabilities		136	108
Liabilities of discontinued operations	$	346,282	94,184

Loss from discontinued operations, net of tax, for the year ended December 31, 2011 was as follows:

				Northern
	Florida			Illinois	Total
	(dollars expressed in thousands)
Interest income:
Interest and fees on loans	$	18		895	913
Interest expense:
Interest on deposits		4,040		261	4,301
Net interest (loss) income		(4,022	)	634	(3,388	)
Provision for loan losses		—		—	—
Net interest (loss) income after provision for loan losses		(4,022	)	634	(3,388	)
Noninterest income:
Service charges and customer service fees		1,298		259	1,557
Loan servicing fees		—		5	5
Other		24		—	24
Total noninterest income		1,322		264	1,586
Noninterest expense:
Salaries and employee benefits		4,576		357	4,933
Occupancy, net of rental income		2,495		68	2,563
Furniture and equipment		727		29	756
Legal, examination and professional fees		25		6	31
Amortization of intangible assets		125		—	125
FDIC insurance		920		100	1,020
Other		733		67	800
Total noninterest expense		9,601		627	10,228
(Loss) income from operations of discontinued operations		(12,301	)	271	(12,030	)
Net gain on sale of discontinued operations		—		425	425
Net (loss) income from discontinued operations, net of tax	$	(12,301	)	696	(11,605	)

Loss from discontinued operations, net of tax, for the year ended December 31, 2010 was as follows:

				Northern
	Florida			Illinois	Chicago		Texas		WIUS		MVP		Total
	(dollars expressed in thousands)
Interest income:
Interest and fees on loans	$	18		9,629	2,391		1,816		33		—		13,887
Interest expense:
Interest on deposits		6,388		4,232	2,550		1,796		—		—		14,966
Other borrowings		—		—	—		3		(2	)	—		1
Total interest expense		6,388		4,232	2,550		1,799		(2	)	—		14,967
Net interest (loss) income		(6,370	)	5,397	(159	)	17		35		—		(1,080	)
Provision for loan losses		—		—	—		—		—		—		—
Net interest (loss) income after provision for loan losses		(6,370	)	5,397	(159	)	17		35		—		(1,080	)
Noninterest income:
Service charges and customer service fees		1,358		2,500	523		1,192		—		—		5,573
Investment management income		—		—	—		—		—		787		787
Loan servicing fees		—		—	—		101		—		—		101
Other		14		30	254		60		—		(1	)	357
Total noninterest income		1,372		2,530	777		1,353		—		786		6,818
Noninterest expense:
Salaries and employee benefits		4,561		3,403	2,137		2,843		32		517		13,493
Occupancy, net of rental income		2,482		1,115	606		1,148		—		59		5,410
Furniture and equipment		1,095		365	178		345		—		17		2,000
Legal, examination and professional fees		13		62	123		111		153		115		577
Amortization of intangible assets		65		319	—		—		—		—		384
FDIC insurance		1,422		1,650	292		478		—		—		3,842
Other		745		709	424		860		184		29		2,951
Total noninterest expense		10,383		7,623	3,760		5,785		369		737		28,657
(Loss) income from operations of discontinued operations		(15,381	)	304	(3,142	)	(4,415	)	(334	)	49		(22,919	)
Net gain (loss) on sale of discontinued operations		—		6,355	8,414		4,984		(29	)	(156	)	19,568
Benefit for income taxes		—		—	—		—		(157	)	—		(157	)
Net (loss) income from discontinued operations, net of tax	$	(15,381	)	6,659	5,272		569		(206	)	(107	)	(3,194	)

Loss from discontinued operations, net of tax, for the year ended December 31, 2009 was as follows:

				Northern
	Florida			Illinois		Chicago		Texas		WIUS		MVP		ANB	Total
Interest income:
Interest and fees on loans	$	18		13,925		17,191		5,483		20,224		—		—	56,841
Interest expense:
Interest on deposits		10,792		9,017		26,961		8,006		—		—		—	54,776
Other borrowings		1		8		6		10		16		—		—	41
Total interest expense		10,793		9,025		26,967		8,016		16		—		—	54,817
Net interest (loss) income		(10,775	)	4,900		(9,776	)	(2,533	)	20,208		—		—	2,024
Provision for loan losses		—		—		—		—		—		—		—	—
Net interest (loss) income after provision                      for loan losses		(10,775	)	4,900		(9,776	)	(2,533	)	20,208		—		—	2,024
Noninterest income:
Service charges and customer service fees		1,320		3,404		4,179		4,378		782		—		—	14,063
Gain on loans sold and held for sale		—		—		—		218		—		—		—	218
Investment management income		—		—		—		—		—		2,316		—	2,316
Insurance fee and commission income		—		—		—		—		—		—		5,828	5,828
Loan servicing fees		—		—		7		383		—		—		—	390
Other		4		68		273		112		14		1		5	477
Total noninterest income		1,324		3,472		4,459		5,091		796		2,317		5,833	23,292
Noninterest expense:
Salaries and employee benefits		4,817		4,518		10,200		8,050		5,785		2,712		3,191	39,273
Occupancy, net of rental income		2,519		1,509		4,144		4,002		314		199		330	13,017
Furniture and equipment		1,232		549		1,101		1,100		1,253		69		50	5,354
Legal, examination and professional fees		5		86		508		667		2,453		434		542	4,695
Amortization of intangible assets		65		600		1,037		1,619		1,207		—		216	4,744
FDIC insurance		1,345		2,132		3,108		1,488		—		—		—	8,073
Other		889		1,023		1,997		2,891		2,049		139		500	9,488
Total noninterest expense		10,872		10,417		22,095		19,817		13,061		3,553		4,829	84,644
(Loss) income from operations of discontinued         operations		(20,323	)	(2,045	)	(27,412	)	(17,259	)	7,943		(1,236	)	1,004	(59,328	)
Net (loss) gain on sale of discontinued        operations		—		—		—		—		(13,077	)	—		120	(12,957	)
Provision for income taxes		—		—		—		—		27		—		2	29
Net (loss) income from discontinued operations,        net of tax	$	(20,323	)	(2,045	)	(27,412	)	(17,259	)	(5,161	)	(1,236	)	1,122	(72,314	)

Assets Held for Sale and Liabilities Held for Sale. On January 28, 2011, First Bank entered into a Branch Purchase and Assumption Agreement that provided for the sale of First Bank’s Edwardsville, Illinois branch office (Edwardsville Branch) to National Bank. The transaction was completed on April 29, 2011 and resulted in a gain of $263,000, after the write-off of goodwill of $500,000 allocated to the transaction. Under the terms of the agreement, National Bank assumed $10.4 million of deposits associated with the Edwardsville Branch for a premium of $130,000. National Bank also purchased $667,000 of loans associated with the Edwardsville Branch at a premium of 0.5%, or $3,000, and premises and equipment associated with the Edwardsville Branch at a premium of approximately $640,000.

On November 9, 2010, First Bank entered into a Branch Purchase and Assumption Agreement that provided for the sale of First Bank’s San Jose, California branch office (San Jose Branch) to City National Bank (City National). The transaction was completed on February 11, 2011 and resulted in a loss of $334,000 during the first quarter of 2011. Under the terms of the agreement, City National assumed $8.4 million of deposits for a premium of 5.85%, or $371,000. City National also purchased certain other assets at par value, including premises and equipment.

On January 22, 2010, First Bank completed the sale of its banking office located in Lawrenceville, Illinois (Lawrenceville Branch) to The Peoples State Bank of Newton (Peoples). The transaction resulted in a gain of $168,000, after the write-off of goodwill of $1.0 million allocated to the Lawrenceville Branch, during the first quarter of 2010. In conjunction with the transaction, Peoples assumed $23.7 million of deposits for a premium of 5.0%, or $1.2 million, as well as certain other liabilities, and purchased $13.5 million of loans at par value as well as certain other assets, including premises and equipment.

On November 23, 2009, First Bank completed the sale of its banking office located in Springfield, Illinois (Springfield Branch) to First Bankers Trust Company, National Association, a subsidiary of First Bankers Trustshares, Inc., resulting in a gain of $309,000, after the write-off of goodwill of $1.0 million allocated to the Springfield Branch. At the time of the transaction, the Springfield Branch had deposits of $20.1 million and loans of $887,000.

The assets and liabilities associated with the Edwardsville and San Jose Branches were reflected in assets held for sale and liabilities held for sale in the consolidated balance sheet as of December 31, 2010. The Edwardsville, San Jose, Lawrenceville and Springfield Branch sales were not included in discontinued operations as the Company has continuing involvement in the respective regions.