INVESTMENTS IN DEBT AND EQUITY SECURITIES

6 Months Ended

Jun. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 3–INVESTMENTS IN DEBT AND EQUITY SECURITIES

Securities Available for Sale. The amortized cost, contractual maturity, gross unrealized gains and losses and fair value of investment securities available for sale at June 30, 2012 and December 31, 2011 were as follows:

	Maturity									Total	Gross				Weighted
	1 Year			1-5		5-10		After		Amortized	Unrealized			Fair	Average
	or Less			Years		Years		10 Years		Cost	Gains	Losses		Value	Yield
	(dollars expressed in thousands)
June 30, 2012:
Carrying value:
U.S. Government
sponsored agencies	$	10,141		100,665		67,322		216,631		394,759	1,790	(880	)	395,669	1.66	%
Residential mortgage-
backed		—		24,948		149,144		1,302,225		1,476,317	37,098	(457	)	1,512,958	2.34
Commercial mortgage-
backed		—		—		812		—		812	108	—		920	5.03
State and political
subdivisions		170		4,023		576		—		4,769	204	—		4,973	4.02
Corporate notes		—		136,651		49,671		—		186,322	1,489	(3,463	)	184,348	3.30
Equity investments		—		—		—		1,000		1,000	29	—		1,029	2.67
Total	$	10,311		266,287		267,525		1,519,856		2,063,979	40,718	(4,800	)	2,099,897	2.30
Fair value:
Debt securities	$	10,431		267,875		266,661		1,553,901
Equity securities		—		—		—		1,029
Total	$	10,431		267,875		266,661		1,554,930
Weighted average yield		1.78	%	2.30	%	2.43	%	2.28	%
December 31, 2011:
Carrying value:
U.S. Government
sponsored agencies	$	1,000		231,691		107,019		—		339,710	2,107	—		341,817	1.75	%
Residential mortgage-
backed		—		2,726		64,309		1,821,209		1,888,244	36,908	(232	)	1,924,920	2.27
Commercial mortgage-
backed		—		—		818		—		818	92	—		910	4.86
State and political
subdivisions		310		4,088		786		—		5,184	226	—		5,410	4.00
Corporate notes		—		122,941		65,088		5,000		193,029	—	(9,216	)	183,813	3.28
Equity investments		—		—		—		1,000		1,000	17	—		1,017	2.83
Total	$	1,310		361,446		238,020		1,827,209		2,427,985	39,350	(9,448	)	2,457,887	2.28
Fair value:
Debt securities	$	1,314		357,194		236,824		1,861,538
Equity securities		—		—		—		1,017
Total	$	1,314		357,194		236,824		1,862,555
Weighted average yield		2.93	%	2.07	%	2.56	%	2.28	%

Securities Held to Maturity. The amortized cost, contractual maturity, gross unrealized gains and losses and fair value of investment securities held to maturity at June 30, 2012 and December 31, 2011 were as follows:

	Maturity									Total	Gross				Weighted
	1 Year			1-5		5-10		After		Amortized	Unrealized			Fair	Average
	or Less			Years		Years		10 Years		Cost	Gains	Losses		Value	Yield
	(dollars expressed in thousands)
June 30, 2012:
Carrying value:
U.S. Government
sponsored agencies	$	—		—		63,276		—		63,276	—	—		63,276	1.78	%
Residential mortgage-
backed		—		—		150,205		516,917		667,122	116	—		667,238	2.22
Commercial mortgage-
backed		—		6,245		—		—		6,245	382	—		6,627	5.34
State and political
subdivisions		1,371		1,926		253		1,534		5,084	73	(325	)	4,832	4.18
Total	$	1,371		8,171		213,734		518,451		741,727	571	(325	)	741,973	2.22
Fair value:
Debt securities	$	1,379		8,602		213,799		518,193
Weighted average yield		2.54	%	4.80	%	2.31	%	2.15	%
December 31, 2011:
Carrying value:
Residential mortgage-
backed	$	—		—		728		615		1,343	116	—		1,459	5.06	%
Commercial mortgage-
backed		—		6,310		—		—		6,310	447	—		6,757	5.16
State and political
subdivisions		1,372		2,004		254		1,534		5,164	44	—		5,208	4.20
Total	$	1,372		8,314		982		2,149		12,817	607	—		13,424	4.76
Fair value:
Debt securities	$	1,387		8,768		1,056		2,213
Weighted average yield		2.55	%	4.67	%	4.60	%	6.61	%

Proceeds from sales of available-for-sale investment securities were $153.2 million and $207.6 million for the three and six months ended June 30, 2012, respectively, compared to $101.8 million and $127.5 million for the comparable periods in 2011. Gross realized gains and gross realized losses on investment securities for the three and six months ended June 30, 2012 and 2011were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012			2011		2012		2011
	(dollars expressed in thousands)
Gross realized gains on sales of available-for-sale securities	$	370		591		892		1,120
Gross realized losses on sales of available-for-sale securities		(374	)	—		(374	)	(1	)
Other-than-temporary impairment		(1	)	(1	)	(1	)	(2	)
Net realized (loss) gain on investment securities	$	(5	)	590		517		1,117

Investment securities with a carrying value of $250.7 million and $228.9 million at June 30, 2012 and December 31, 2011, respectively, were pledged in connection with deposits of public and trust funds, securities sold under agreements to repurchase and for other purposes as required by law.

On June 30, 2012, the Company reclassified certain of its available-for-sale investment securities to held-to-maturity investment securities at their respective fair values, which totaled $729.1 million, in aggregate. The determination of the reclassification was made by management based on the Company’s current and expected future liquidity levels and the resulting intent to hold such investment securities to maturity. The net gross unrealized gain on these available-for-sale investment securities at the time of transfer of $11.7 million, in aggregate, was recorded as additional premium on the securities and will be amortized over the remaining lives of the respective securities, as further described in Note 10 to the consolidated financial statements.

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2012 and December 31, 2011 were as follows:

	Less than 12 months				12 months or more			Total
			Unrealized			Unrealized			Unrealized
	Fair Value		Losses		Fair Value	Losses		Fair Value	Losses
	(dollars expressed in thousands)
June 30, 2012:
Available for sale:
U.S. Government sponsored agencies	$	153,553	(880	)	—	—		153,553	(880	)
Residential mortgage-backed		69,201	(376	)	278	(81	)	69,479	(457	)
Corporate notes		42,552	(1,281	)	41,201	(2,182	)	83,753	(3,463	)
Total	$	265,306	(2,537	)	41,479	(2,263	)	306,785	(4,800	)
Held to maturity:
State and political subdivisions	$	1,210	(325	)	—	—		1,210	(325	)
Total	$	1,210	(325	)	—	—		1,210	(325	)
December 31, 2011:
Available for sale:
Residential mortgage-backed	$	67,395	(126	)	22,349	(106	)	89,744	(232	)
Corporate notes		173,813	(9,216	)	—	—		173,813	(9,216	)
Total	$	241,208	(9,342	)	22,349	(106	)	263,557	(9,448	)

The Company does not believe the investment securities that were in an unrealized loss position at June 30, 2012 and December 31, 2011 are other-than-temporarily impaired. The unrealized losses on the investment securities were primarily attributable to fluctuations in interest rates. It is expected that the securities would not be settled at a price less than the amortized cost. Because the decline in fair value is attributable to changes in interest rates and not credit loss, and because the Company does not intend to sell these investments and it is more likely than not that First Bank will not be required to sell these securities before the anticipated recovery of the remaining amortized cost basis or maturity, these investments are not considered other-than-temporarily impaired. The unrealized losses for residential mortgage-backed securities for 12 months or more at June 30, 2012 and December 31, 2011 included 10 and 11 securities, respectively. The unrealized losses for corporate notes for 12 months or more at June 30, 2012 included 11 securities.