DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

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

NOTE 2–DISCONTINUED OPERATIONS

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, or plan to be sold, as part of the Company’s Capital Plan to preserve regulatory 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 associated with the Florida Region as of June 30, 2012 and December 31, 2011, and to the operations of First Bank’s 19 Florida retail branches and three of First Bank’s Northern Illinois retail branches for the three and six months ended June 30, 2012 and 2011, 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 to sell certain assets and transfer certain liabilities associated with First Bank’s Florida franchise (Florida Region) to an unaffiliated financial institution. Under the terms of the agreement, the unaffiliated financial institution was to assume approximately $345.3 million of deposits associated with First Bank’s 19 Florida retail branches for a premium of 2.3%. The unaffiliated financial institution was also expected to purchase premises and equipment and assume the leases associated with the Florida Region at a discount of $1.2 million. The agreement was subject to several closing conditions. The potential buyer failed to meet certain conditions and First Bank exercised its right to terminate the agreement on April 4, 2012. Under the terms of the agreement, First Bank received an escrow deposit from the potential buyer upon the termination of the agreement that was more than sufficient to offset First Bank’s expenses associated with the proposed transaction. 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 June 30, 2012 and December 31, 2011. The Company continued to apply discontinued operations accounting to the assets and liabilities and related operations of the Florida Region as of June 30, 2012 and for the three and six months ended June 30, 2012 and 2011.

Northern Illinois Region. 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 (Northern Illinois Region) 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 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.

Assets and liabilities of discontinued operations at June 30, 2012 and December 31, 2011 were as follows:

	June 30, 2012		December 31, 2011
	Florida		Florida
	(dollars expressed in thousands)
Cash and due from banks	$	2,232	2,147
Loans:
Commercial, financial and agricultural		—	65
Consumer and installment, net of net deferred loan fees		—	263
Total loans		—	328
Bank premises and equipment, net		14,231	14,496
Goodwill and other intangible assets		4,000	4,000
Other assets		38	38
Assets of discontinued operations	$	20,501	21,009
Deposits:
Noninterest-bearing demand	$	30,263	24,966
Interest-bearing demand		23,575	23,144
Savings and money market		153,262	158,328
Time deposits of $100 or more		48,456	48,613
Other time deposits		84,007	90,823
Total deposits		339,563	345,874
Other borrowings		133	272
Accrued expenses and other liabilities		228	136
Liabilities of discontinued operations	$	339,924	346,282

Loss from discontinued operations, net of tax, for the three months ended June 30, 2012 and 2011 were as follows:

	Three Months Ended			Three Months Ended
	June 30, 2012			June 30, 2011
						Northern
	Florida			Florida		Illinois	Total
	(dollars expressed in thousands)
Interest income:
Interest and fees on loans	$	—		4		288	292
Interest expense:
Interest on deposits		516		1,119		80	1,199
Net interest (loss) income		(516	)	(1,115	)	208	(907	)
Provision for loan losses		—		—		—	—
Net interest (loss) income after provision for loan losses		(516	)	(1,115	)	208	(907	)
Noninterest income:
Service charges and customer service fees		335		327		98	425
Loan servicing fees		—		—		3	3
Other		13		7		—	7
Total noninterest income		348		334		101	435
Noninterest expense:
Salaries and employee benefits		1,115		1,148		154	1,302
Occupancy, net of rental income		634		630		24	654
Furniture and equipment		137		203		10	213
Legal, examination and professional fees		19		6		5	11
Amortization of intangible assets		—		17		—	17
FDIC insurance		195		245		19	264
Other		198		178		20	198
Total noninterest expense		2,298		2,427		232	2,659
(Loss) income from operations of discontinued operations		(2,466	)	(3,208	)	77	(3,131	)
Net gain on sale of discontinued operations		—		—		425	425
Benefit for income taxes		—		—		—	—
Net (loss) income from discontinued operations, net of tax	$	(2,466	)	(3,208	)	502	(2,706	)

Loss from discontinued operations, net of tax, for the six months ended June 30, 2012 and 2011 were as follows:

	Six Months Ended			Six Months Ended
	June 30, 2012			June 30, 2011
						Northern
	Florida			Florida		Illinois	Total
	(dollars expressed in thousands)
Interest income:
Interest and fees on loans	$	4		8		895	903
Interest expense:
Interest on deposits		1,068		2,383		261	2,644
Net interest (loss) income		(1,064	)	(2,375	)	634	(1,741	)
Provision for loan losses		—		—		—	—
Net interest (loss) income after provision for loan losses		(1,064	)	(2,375	)	634	(1,741	)
Noninterest income:
Service charges and customer service fees		656		637		259	896
Loan servicing fees		—		—		5	5
Other		20		11		—	11
Total noninterest income		676		648		264	912
Noninterest expense:
Salaries and employee benefits		2,263		2,315		357	2,672
Occupancy, net of rental income		1,268		1,253		68	1,321
Furniture and equipment		284		419		29	448
Legal, examination and professional fees		25		15		6	21
Amortization of intangible assets		—		33		—	33
FDIC insurance		404		476		100	576
Other		372		369		67	436
Total noninterest expense		4,616		4,880		627	5,507
(Loss) income from operations of discontinued operations		(5,004	)	(6,607	)	271	(6,336	)
Net gain on sale of discontinued operations		—		—		425	425
Benefit for income taxes		—		—		—	—
Net (loss) income from discontinued operations, net of tax	$	(5,004	)	(6,607	)	696	(5,911	)