XML 26 R8.htm IDEA: XBRL DOCUMENT v2.4.0.6
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.