INVESTMENTS IN DEBT AND EQUITY SECURITIES |
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, 2013 and December 31, 2012 were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Maturity | | Total Amortized Cost | | Gross | | | | Weighted Average Yield | | 1 Year | | 1-5 | | 5-10 | | After | | | Unrealized | | Fair | | | or Less | | Years | | Years | | 10 Years | | | Gains | | Losses | | Value | | | (dollars expressed in thousands) | June 30, 2013: | | | | | | | | | | | | | | | | | | Carrying value: | | | | | | | | | | | | | | | | | | U.S. Government sponsored agencies | $ | — |
| | 48,874 |
| | 17,036 |
| | 209,330 |
| | 275,240 |
| | 2,174 |
| | (3,172 | ) | | 274,242 |
| | 1.37 | % | Residential mortgage-backed | 50 |
| | 23,841 |
| | 141,120 |
| | 1,027,212 |
| | 1,192,223 |
| | 17,652 |
| | (9,729 | ) | | 1,200,146 |
| | 2.33 |
| Commercial mortgage-backed | — |
| | — |
| | 799 |
| | — |
| | 799 |
| | 73 |
| | — |
| | 872 |
| | 5.03 |
| State and political subdivisions | 1,323 |
| | 3,067 |
| | 201 |
| | 28,463 |
| | 33,054 |
| | 113 |
| | (524 | ) | | 32,643 |
| | 1.37 |
| Corporate notes | 4,941 |
| | 135,506 |
| | 49,737 |
| | — |
| | 190,184 |
| | 5,507 |
| | (805 | ) | | 194,886 |
| | 2.89 |
| Equity investments | — |
| | — |
| | — |
| | 1,500 |
| | 1,500 |
| | — |
| | (27 | ) | | 1,473 |
| | 2.25 |
| Total | $ | 6,314 |
| | 211,288 |
| | 208,893 |
| | 1,266,505 |
| | 1,693,000 |
| | 25,519 |
| | (14,257 | ) | | 1,704,262 |
| | 2.22 |
| Fair value: | | | | | | | | | | | | | | | | | | Debt securities | $ | 6,409 |
| | 217,042 |
| | 208,677 |
| | 1,270,661 |
| | | | | | | | | | | Equity securities | — |
| | — |
| | — |
| | 1,473 |
| | | | | | | | | | | Total | $ | 6,409 |
| | 217,042 |
| | 208,677 |
| | 1,272,134 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average yield | 3.09 | % | | 2.26 | % | | 2.24 | % | | 2.21 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2012: | | | | | | | | | | | | | | | | | | Carrying value: | | | | | | | | | | | | | | | | | | U.S. Government sponsored agencies | $ | 10,051 |
| | 80,328 |
| | — |
| | 213,892 |
| | 304,271 |
| | 6,304 |
| | (146 | ) | | 310,429 |
| | 1.42 | % | Residential mortgage-backed | 364 |
| | 24,014 |
| | 219,286 |
| | 1,251,917 |
| | 1,495,581 |
| | 38,983 |
| | (497 | ) | | 1,534,067 |
| | 2.32 |
| Commercial mortgage-backed | — |
| | — |
| | 806 |
| | — |
| | 806 |
| | 109 |
| | — |
| | 915 |
| | 4.86 |
| State and political subdivisions | 985 |
| | 3,579 |
| | 201 |
| | — |
| | 4,765 |
| | 164 |
| | — |
| | 4,929 |
| | 4.05 |
| Corporate notes | — |
| | 137,090 |
| | 49,704 |
| | — |
| | 186,794 |
| | 6,192 |
| | (621 | ) | | 192,365 |
| | 3.13 |
| Equity investments | — |
| | — |
| | — |
| | 1,000 |
| | 1,000 |
| | 22 |
| | — |
| | 1,022 |
| | 2.54 |
| Total | $ | 11,400 |
| | 245,011 |
| | 269,997 |
| | 1,466,809 |
| | 1,993,217 |
| | 51,774 |
| | (1,264 | ) | | 2,043,727 |
| | 2.26 |
| Fair value: | | | | | | | | | | | | | | | | | | Debt securities | $ | 11,476 |
| | 251,558 |
| | 275,251 |
| | 1,504,420 |
| | | | | | | | | | | Equity securities | — |
| | — |
| | — |
| | 1,022 |
| | | | | | | | | | | Total | $ | 11,476 |
| | 251,558 |
| | 275,251 |
| | 1,505,442 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average yield | 2.01 | % | | 2.17 | % | | 2.65 | % | | 2.21 | % | | | | | | | | | | |
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, 2013 and December 31, 2012 were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Maturity | | Total Amortized Cost | | Gross | | | | Weighted Average Yield | | 1 Year | | 1-5 | | 5-10 | | After | | | Unrealized | | Fair | | | or Less | | Years | | Years | | 10 Years | | | Gains | | Losses | | Value | | | (dollars expressed in thousands) | June 30, 2013: | | | | | | | | | | | | | | | | | | Carrying value: | | | | | | | | | | | | | | | | | | U.S. Government sponsored agencies | $ | — |
| | — |
| | 22,717 |
| | — |
| | 22,717 |
| | — |
| | (59 | ) | | 22,658 |
| | 1.41 | % | Residential mortgage-backed | — |
| | — |
| | 207,883 |
| | 566,691 |
| | 774,574 |
| | 554 |
| | (13,147 | ) | | 761,981 |
| | 1.81 |
| State and political subdivisions | 1,022 |
| | 1,019 |
| | 55 |
| | 1,066 |
| | 3,162 |
| | 16 |
| | (26 | ) | | 3,152 |
| | 2.08 |
| Total | $ | 1,022 |
| | 1,019 |
| | 230,655 |
| | 567,757 |
| | 800,453 |
| | 570 |
| | (13,232 | ) | | 787,791 |
| | 1.80 |
| Fair value: | | | | | | | | | | | | | | | | | | Debt securities | $ | 1,032 |
| | 1,024 |
| | 227,321 |
| | 558,414 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average yield | 2.91 | % | | 3.28 | % | | 1.60 | % | | 1.87 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2012: | | | | | | | | | | | | | | | | | | Carrying value: | | | | | | | | | | | | | | | | | | U.S. Government sponsored agencies | $ | — |
| | — |
| | 52,582 |
| | — |
| | 52,582 |
| | 269 |
| | — |
| | 52,851 |
| | 1.63 | % | Residential mortgage-backed | — |
| | — |
| | 108,420 |
| | 466,863 |
| | 575,283 |
| | 6,142 |
| | (614 | ) | | 580,811 |
| | 1.82 |
| State and political subdivisions | 826 |
| | 1,099 |
| | 252 |
| | 1,511 |
| | 3,688 |
| | 51 |
| | (377 | ) | | 3,362 |
| | 1.89 |
| Total | $ | 826 |
| | 1,099 |
| | 161,254 |
| | 468,374 |
| | 631,553 |
| | 6,462 |
| | (991 | ) | | 637,024 |
| | 1.80 |
| Fair value: | | | | | | | | | | | | | | | | | | Debt securities | $ | 836 |
| | 1,129 |
| | 164,433 |
| | 470,626 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted average yield | 2.56 | % | | 3.40 | % | | 1.77 | % | | 1.81 | % | | | | | | | | | | |
Proceeds from sales of available-for-sale investment securities were $52.1 million and $118.6 million for the three and six months ended June 30, 2013, respectively, compared to $153.2 million and $207.6 million for the comparable periods in 2012. Gross realized gains and gross realized losses on investment securities for the three and six months ended June 30, 2013 and 2012 were as follows: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | June 30, | | June 30, | | 2013 | | 2012 | | 2013 | | 2012 | | (dollars expressed in thousands) | Gross realized gains on sales of available-for-sale securities | $ | 346 |
| | 370 |
| | 692 |
| | 892 |
| Gross realized losses on sales of available-for-sale securities | — |
| | (374 | ) | | (354 | ) | | (374 | ) | Other-than-temporary impairment | (1 | ) | | (1 | ) | | (409 | ) | | (1 | ) | Net realized gain (loss) on investment securities | $ | 345 |
| | (5 | ) | | (71 | ) | | 517 |
|
Other-than-temporary impairment for the six months ended June 30, 2013 includes impairment of $407,000 recorded during the first quarter of 2013 on a municipal investment security classified as held-to-maturity. Investment securities with a carrying value of $201.6 million and $257.6 million at June 30, 2013 and December 31, 2012, 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. During the first quarter of 2013, the Company reclassified certain of its available-for-sale investment securities to held-to-maturity investment securities at their respective fair values, which totaled $242.5 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 $5.0 million, in aggregate, was recorded as additional premium on the securities and is being 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, 2013 and December 31, 2012, were as follows: | | | | | | | | | | | | | | | | | | | | | Less Than 12 Months | | 12 Months or More | | Total | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | | (dollars expressed in thousands) | June 30, 2013: | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | U.S. Government sponsored agencies | $ | 122,969 |
| | (2,643 | ) | | 19,624 |
| | (529 | ) | | 142,593 |
| | (3,172 | ) | Residential mortgage-backed | 419,287 |
| | (9,660 | ) | | 3,144 |
| | (69 | ) | | 422,431 |
| | (9,729 | ) | State and political subdivisions | 27,939 |
| | (524 | ) | | — |
| | — |
| | 27,939 |
| | (524 | ) | Corporate notes | 26,509 |
| | (798 | ) | | 4,993 |
| | (7 | ) | | 31,502 |
| | (805 | ) | Equity investments | 1,473 |
| | (27 | ) | | — |
| | — |
| | 1,473 |
| | (27 | ) | Total | $ | 598,177 |
| | (13,652 | ) | | 27,761 |
| | (605 | ) | | 625,938 |
| | (14,257 | ) | Held to maturity: | | | | | | | | | | | | U.S. Government sponsored agencies | $ | 22,658 |
| | (59 | ) | | — |
| | — |
| | 22,658 |
| | (59 | ) | Residential mortgage-backed | 706,199 |
| | (13,147 | ) | | — |
| | — |
| | 706,199 |
| | (13,147 | ) | State and political subdivisions | 1,040 |
| | (26 | ) | | — |
| | — |
| | 1,040 |
| | (26 | ) | Total | $ | 729,897 |
| | (13,232 | ) | | — |
| | — |
| | 729,897 |
| | (13,232 | ) | | | | | | | | | | | | | December 31, 2012: | | | | | | | | | | | | Available for sale: | | | | | | | | | | | | U.S. Government sponsored agencies | $ | 20,018 |
| | (146 | ) | | — |
| | — |
| | 20,018 |
| | (146 | ) | Residential mortgage-backed | 125,449 |
| | (441 | ) | | 270 |
| | (56 | ) | | 125,719 |
| | (497 | ) | Corporate notes | — |
| | — |
| | 17,675 |
| | (621 | ) | | 17,675 |
| | (621 | ) | Total | $ | 145,467 |
| | (587 | ) | | 17,945 |
| | (677 | ) | | 163,412 |
| | (1,264 | ) | Held to maturity: | | | | | | | | | | | | Residential mortgage-backed | $ | 66,011 |
| | (614 | ) | | — |
| | — |
| | 66,011 |
| | (614 | ) | State and political subdivisions | 1,133 |
| | (377 | ) | | — |
| | — |
| | 1,133 |
| | (377 | ) | Total | $ | 67,144 |
| | (991 | ) | | — |
| | — |
| | 67,144 |
| | (991 | ) |
The Company does not believe the investment securities that were in an unrealized loss position at June 30, 2013 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 U.S. Government sponsored agencies for 12 months or more at June 30, 2013 included one security. The unrealized losses for residential mortgage-backed securities for 12 months or more at June 30, 2013 and December 31, 2012 included nine securities. The unrealized losses for corporate notes for 12 months or more at June 30, 2013 and December 31, 2012 included one and six securities, respectively. |