DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUEDOPERATIONS

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 Optimization Plan (Capital Plan). The Company applied discontinued operations accounting in accordance with ASC Topic 205-20, “Presentation of Financial Statements – Discontinued Operations,” to the operations of First Bank’s Association Bank Services line of business and Northern Florida Region for the three and six months ended June 30, 2013. 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.

Association Bank Services. On May 13, 2013, First Bank entered into a Purchase and Assumption Agreement that provided for the sale of certain assets and the transfer of certain liabilities, primarily deposits, of First Bank's Association Bank Services (ABS) line of business, to Union Bank, N.A. (Union Bank), headquartered in San Francisco, California. ABS, previously headquartered in Vallejo, California, provided a full range of services to homeowners associations and community management companies. The transaction was completed on November 22, 2013. Under the terms of the agreement, Union Bank assumed $572.1 million of deposits, as well as certain other liabilities, and paid a premium on certain deposit accounts acquired in the transaction. Union Bank also purchased certain assets, including $20.8 million of loans, at par value. The transaction resulted in a gain of $28.6 million, after the write-off of goodwill of $18.0 million allocated to the transaction in the fourth quarter of 2013.

Northern Florida Region. On November 21, 2012, First Bank entered into a Branch Purchase and Assumption Agreement that provided for the sale of certain assets and the transfer of certain liabilities associated with eight of First Bank’s retail branches located in Pinellas County, Florida to HomeBanc National Association (HomeBanc), headquartered in Lake Mary, Florida. The transaction was completed on April 19, 2013. Under the terms of the agreement, HomeBanc assumed $120.3 million of deposits, purchased the premises and equipment, and assumed the leases associated with these eight retail branches. The transaction resulted in a gain of $408,000, after the write-off of goodwill of $700,000 allocated to the Northern Florida Region, primarily during the second quarter of 2013.

On April 5, 2013, First Bank closed its three remaining retail branches located in Hillsborough County and in Pasco County. The closure of these three remaining retail branches in the Northern Florida Region resulted in expense of $2.3 million during the second quarter of 2013 attributable to continuing obligations under facility leasing arrangements.

The eight branches sold and three branches closed during the second quarter of 2013 are collectively defined as the Northern Florida Region. First Bank presently continues to operate its remaining eight retail branches in Manatee County’s communities of Bradenton, Palmetto and Longboat Key, Florida.

Losses from discontinued operations, net of tax, for the three and six months ended June 30, 2013 were as follows:

	Three Months Ended							Six Months Ended
	June 30, 2013							June 30, 2013
	Association Bank Services			Northern Florida		Total		Association Bank Services		Northern Florida		Total
	(dollars expressed in thousands)
Interest income:
Interest and fees on loans	$	339		—		339		704		—		704
Interest expense:
Interest on deposits	82			41		123		170		233		403
Net interest income (loss)	257			(41	)	216		534		(233	)	301
Provision for loan losses	—			—		—		—		—		—
Net interest income (loss) after provision for loan losses	257			(41	)	216		534		(233	)	301
Noninterest income:
Service charges and customer service fees	16			30		46		57		134		191
Other	27			1		28		53		4		57
Total noninterest income	43			31		74		110		138		248
Noninterest expense:
Salaries and employee benefits	813			306		1,119		1,456		885		2,341
Occupancy, net of rental income	2			124		126		4		579		583
Furniture and equipment	9			1		10		21		40		61
FDIC insurance	205			—		205		409		53		462
Other	218			2,340		2,558		442		2,452		2,894
Total noninterest expense	1,247			2,771		4,018		2,332		4,009		6,341
Loss from operations of discontinued operations	(947		)	(2,781	)	(3,728	)	(1,688	)	(4,104	)	(5,792	)
Net gain on sale of discontinued operations	—			394		394		—		394		394
Benefit for income taxes	—			—		—		—		—		—
Net loss from discontinued operations, net of tax	$	(947	)	(2,387	)	(3,334	)	(1,688	)	(3,710	)	(5,398	)