UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ		Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

o		Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Commission file number 001-31940

F.N.B. CORPORATION

(Exact name of registrant as specified in its charter)

Florida		25-1255406
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One F.N.B. Boulevard, Hermitage, PA		16148
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 724-981-6000

 

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at July 31, 2009
Common Stock, $0.01 Par Value		113,965,669 Shares

 

 

F.N.B. CORPORATION
FORM 10-Q
June 30, 2009

INDEX

		PAGE
PART I — FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheets			2
Consolidated Statements of Income			3
Consolidated Statements of Stockholders’ Equity			5
Consolidated Statements of Cash Flows			6
Notes to Consolidated Financial Statements			7
Report of Independent Registered Public Accounting Firm			35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			36
Item 3. Quantitative and Qualitative Disclosures About Market Risk			59
Item 4. Controls and Procedures			59
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			60
Item 1A. Risk Factors			60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			60
Item 3. Defaults Upon Senior Securities			60
Item 4. Submission of Matters to a Vote of Security Holders			60
Item 5. Other Information			61
Item 6. Exhibits			61
Signatures			62
EX-15
EX-31.1
EX-31.2
EX-32.1
EX-32.2

F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands, except par value

		June 30,				December 31,
		2009				2008
		(Unaudited)
Assets
Cash and due from banks		$	492,203			$	169,224
Interest bearing deposits with banks			2,276				2,979
Securities available for sale			636,182				482,270
Securities held to maturity (fair value of $778,183 and $851,251)			766,543				843,863
Residential mortgage loans held for sale			26,707				10,708
Loans, net of unearned income of $34,937 and $33,962			5,767,109				5,820,380
Allowance for loan losses			(99,415	)			(104,730	)
Net Loans			5,667,694				5,715,650
Premises and equipment, net			120,246				122,599
Goodwill			529,065				528,278
Core deposit and other intangible assets, net			42,601				46,229
Bank owned life insurance			204,497				217,737
Other assets			222,306				225,274
Total Assets		$	8,710,320			$	8,364,811
Liabilities
Deposits:
Non-interest bearing demand		$	948,925			$	919,539
Savings and NOW			3,077,091				2,816,628
Certificates and other time deposits			2,262,677				2,318,456
Total Deposits			6,288,693				6,054,623
Other liabilities			88,263				92,305
Short-term borrowings			540,573				596,263
Long-term debt			436,595				490,250
Junior subordinated debt owed to unconsolidated subsidiary trusts			205,049				205,386
Total Liabilities			7,559,173				7,438,827
Stockholders’ Equity
Preferred stock — no par value Authorized — 20,000,000 shares Issued — 100,000 shares			95,462				—
Common stock — $0.01 par value Authorized — 500,000,000 shares Issued — 114,060,432 and 89,726,592 shares			1,137				894
Additional paid-in capital			1,085,647				953,200
Retained earnings			5,262				(1,143	)
Accumulated other comprehensive loss			(34,748	)			(26,505	)
Treasury stock - 94,763 and 26,440 shares at cost			(1,613	)			(462	)
Total Stockholders’ Equity			1,151,147				925,984
Total Liabilities and Stockholders’ Equity		$	8,710,320			$	8,364,811

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Dollars in thousands, except per share data
Unaudited

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Interest Income
Loans, including fees		$	82,674			$	90,825			$	165,914			$	167,234
Securities:
Taxable			12,546				12,499				25,577				22,929
Nontaxable			1,659				1,580				3,428				3,186
Dividends			42				112				87				179
Other			113				281				130				294
Total Interest Income			97,034				105,297				195,136				193,822
Interest Expense
Deposits			22,533				28,219				46,772				55,811
Short-term borrowings			2,011				3,024				4,297				7,031
Long-term debt			4,564				5,436				9,412				10,658
Junior subordinated debt owed to unconsolidated subsidiary trusts			2,594				3,061				5,241				5,800
Total Interest Expense			31,702				39,740				65,722				79,300
Net Interest Income			65,332				65,557				129,414				114,522
Provision for loan losses			13,909				10,976				24,423				14,559
Net Interest Income After Provision for Loan Losses			51,423				54,581				104,991				99,963
Non-Interest Income
Impairment losses on securities			(1,429	)			(456	)			(1,632	)			(466	)
Non-credit related losses on securities not expected to be sold (recognized in other comprehensive income)			689				—				689				—
Net impairment losses on securities			(740	)			(456	)			(943	)			(466	)
Service charges			14,596				14,860				28,195				25,046
Insurance commissions and fees			3,837				4,183				8,918				8,105
Securities commissions and fees			2,008				2,098				3,796				3,618
Trust fees			3,013				3,575				5,930				5,799
Gain on sale of securities			66				41				344				795
Gain on sale of residential mortgage loans			1,139				530				1,675				981
Bank owned life insurance			1,444				1,739				3,046				2,883
Other			3,087				886				5,668				2,863
Total Non-Interest Income			28,450				27,456				56,629				49,624
Non-Interest Expense
Salaries and employee benefits			31,617				32,320				63,719				57,576
Net occupancy			5,051				4,761				10,777				8,577
Equipment			4,406				4,367				8,771				7,482
Amortization of intangibles			1,813				1,219				3,628				2,292
Outside services			6,415				5,804				11,819				10,121
FDIC insurance			6,643				200				8,588				386
Other			10,320				13,343				19,935				19,943
Total Non-Interest Expense			66,265				62,014				127,237				106,377
Income Before Income Taxes			13,608				20,023				34,383				43,210
Income taxes			3,010				5,518				8,134				12,214
Net Income			10,598				14,505				26,249				30,996
Preferred stock dividends and discount amortization			1,469				—				2,812				—
Net Income Available to Common Stockholders		$	9,129			$	14,505			$	23,437			$	30,996

F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (continued)
Dollars in thousands, except per share data
Unaudited

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Net Income per Common Share
Basic		$	0.10			$	0.17			$	0.26			$	0.43
Diluted			0.10				0.17				0.26				0.42
Cash Dividends per Common Share			0.12				0.24				0.24				0.48

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Dollars in thousands
Unaudited

																						Accumulated
		Compre-												Additional								Other
		hensive				Preferred				Common				Paid-In				Retained				Comprehensive				Treasury
		Income				Stock				Stock				Capital				Earnings				Loss				Stock				Total
Balance at January 1, 2009						$	—			$	894			$	953,200			$	(1,143	)		$	(26,505	)		$	(462	)		$	925,984
Net income		$	26,249																26,249												26,249
Change in other comprehensive (loss)			(8,243	)																			(8,243	)							(8,243	)
Comprehensive income		$	18,006
Common stock dividends ($0.24/share)																			(21,595	)											(21,595	)
Preferred stock dividends and amortization of discount							437												(2,812	)											(2,375	)
Issuance of preferred stock and common stock warrant							95,025								4,723																99,748
Issuance of common stock											243				126,745												(1,151	)			125,837
Restricted stock compensation															1,137																1,137
Tax benefit of stock-based compensation															(158	)															(158	)
Cumulative effect of applying FSP 115-2 and 124-2																			4,563												4,563
Balance at June 30, 2009						$	95,462			$	1,137			$	1,085,647			$	5,262			$	(34,748	)		$	(1,613	)		$	1,151,147
Balance at January 1, 2008							—			$	602			$	508,891			$	42,426			$	(6,738	)		$	(824	)		$	544,357
Net income		$	30,996																30,996												30,996
Change in other comprehensive (loss)			(10,275	)																			(10,275	)							(10,275	)
Comprehensive income		$	20,721
Common stock dividends ($0.48/share)																			(35,271	)											(35,271	)
Issuance of common stock											255				388,988				(213	)							39				389,069
Restricted stock compensation															1,236																1,236
Tax benefit of stock-based compensation															(48	)															(48	)
Initial adjustment to apply EITF 06-04 and 06-10																			(606	)											(606	)
Balance at June 30, 2008							—			$	857			$	899,067			$	37,332			$	(17,013	)		$	(785	)		$	919,458

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands
Unaudited

		Six Months Ended
		June 30,
		2009				2008
Operating Activities
Net income		$	26,249			$	30,996
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization and accretion			14,340				11,364
Provision for loan losses			24,423				14,559
Deferred taxes			(11,570	)			(1,111	)
Gain on sale of securities			599				(329	)
Tax benefit of stock-based compensation			158				48
Net change in:
Interest receivable			1,625				3,280
Interest payable			(1,380	)			1,270
Residential mortgage loans held for sale			(15,999	)			(12,374	)
Trading securities			—				185,416
Bank owned life insurance			(453	)			(1,807	)
Other, net			18,084				(15,149	)
Net cash flows provided by operating activities			56,076				216,163
Investing Activities
Net change in:
Interest bearing deposits with banks			667				3,176
Federal funds sold			—				(14,000	)
Loans			10,343				(185,929	)
Securities available for sale:
Purchases			(334,496	)			(230,775	)
Sales			272				1,977
Maturities			172,741				140,491
Securities held to maturity:
Purchases			(53,066	)			(186,335	)
Maturities			129,873				82,519
Purchase of bank owned life insurance			(8	)			(22	)
Withdrawal/surrender of bank owned life insurance			13,700				—
Increase in premises and equipment			(4,375	)			(8,812	)
Acquisitions, net of cash acquired			47				50,441
Net cash flows used in investing activities			(64,302	)			(347,269	)
Financing Activities
Net change in:
Non-interest bearing deposits, savings and NOW accounts			289,849				234,909
Time deposits			(55,779	)			(45,412	)
Short-term borrowings			(55,690	)			10,942
Increase in long-term debt			16,596				92,088
Decrease in long-term debt			(70,251	)			(68,210	)
Decrease in junior subordinated debt			(338	)			(169	)
Issuance of preferred stock and common stock warrant			99,748				—
Issuance of common stock			131,198				1,376
Tax benefit of stock-based compensation			(158	)			(48	)
Cash dividends paid			(23,970	)			(35,271	)
Net cash flows provided by financing activities			331,205				190,205
Net Increase in Cash and Due from Banks			322,979				59,099
Cash and due from banks at beginning of period			169,224				130,235
Cash and Due from Banks at End of Period		$	492,203			$	189,334

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2009

BUSINESS

          F.N.B. Corporation (the Corporation) is a diversified financial services company headquartered in Hermitage, Pennsylvania. Its primary businesses include community banking, consumer finance, wealth management and insurance. The Corporation also conducts leasing and merchant banking activities. The Corporation operates its community banking business through a full service branch network in Pennsylvania and Ohio and loan production offices in Pennsylvania, Florida and Tennessee. The Corporation operates its wealth management and insurance businesses within the existing branch network. It also conducts selected consumer finance business in Pennsylvania, Ohio and Tennessee.

BASIS OF PRESENTATION

          The Corporation’s accompanying consolidated financial statements and these notes to the financial statements include subsidiaries in which the Corporation has a controlling financial interest. Companies in which the Corporation controls operating and financing decisions (principally defined as owning a voting or economic interest greater than 50%) are also consolidated. Variable interest entities are consolidated if the Corporation is exposed to the majority of the variable interest entity’s expected losses and/or residual returns (i.e., the Corporation is considered to be the primary beneficiary). The Corporation owns and operates First National Bank of Pennsylvania (FNBPA), First National Trust Company, First National Investment Services Company, LLC, F.N.B. Investment Advisors, Inc., First National Insurance Agency, LLC, Regency Finance Company (Regency), F.N.B. Capital Corporation, LLC and Bank Capital Services, and results for each of these entities are included in the accompanying consolidated financial statements.

          The accompanying consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly reflect the Corporation’s financial position and results of operations. All significant intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. Events occurring subsequent to the date of the balance sheet have been evaluated for potential recognition or disclosure in the consolidated financial statements through August 10, 2009, the date of the filing of the consolidated financial statements with the Securities and Exchange Commission (SEC).

          Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the SEC. The interim operating results are not necessarily indicative of operating results the Corporation expects for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K filed with the SEC on March 2, 2009.

USE OF ESTIMATES

          The accounting and reporting policies of the Corporation conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Material estimates that are particularly susceptible to significant changes include the allowance for loan losses, securities valuations, goodwill and other intangible assets and income taxes.

PREFERRED STOCK AND STOCK WARRANT

          In connection with the United States Treasury Department’s (UST) Capital Purchase Program (CPP), on January 9, 2009, the Corporation voluntarily issued to the UST 100,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series C (Preferred Series C Stock) and a warrant to purchase up to 1,302,083 shares (pursuant to Section 13(H) of the Warrant to Purchase Common Stock, the number of shares of common stock purchasable upon exercise of the warrant was reduced in half to 651,041.5 shares as of June 16, 2009, the date of the Corporation’s recently completed public offering) of the Corporation’s common stock, for an aggregate purchase price of $100.0 million.

          The Preferred Series C Stock and the warrant are classified in equity on the balance sheet. The Preferred Series C Stock has similar characteristics of an “increasing rate security” as described by Staff Accounting Bulletin (SAB) No. 68, Increasing Rate Preferred Stock. The proceeds received in conjunction with the issuance of the Preferred Series C Stock and the warrant were allocated to preferred stock based on their relative fair values. Discounts on the Preferred Series C Stock are amortized over the expected life of five years, by charging the imputed dividend and issuance costs against retained earnings and increasing the carrying amount of preferred stock by a corresponding amount.

          The Corporation calculated the fair value of the Preferred Series C Stock as its net present value by discounting quarterly dividend payments expected to be paid on the shares over a 60-year period using an estimated prevailing rate of interest. The Corporation determined that a market discount rate of 12% was reasonable based on the Corporation’s best estimate of what similar securities would most likely yield when issued by entities comparable to the Corporation.

          The warrant, which has a term of ten years and is immediately exercisable, in whole or in part, is carried in equity until exercised or expired based on the SEC and Financial Accounting Standards Board (FASB) view that they would not object to the classification of such a warrant as permanent equity. This view is consistent with the objective of the CPP that equity in these securities should be considered part of equity for regulatory reporting purposes.

          The fair value of the warrant used in allocating total proceeds received was determined based on a binomial option pricing model. The binomial model allowed for the use of a discrete dividend, varying interest rates and estimates of expected volatility that market participants would likely use in determining an exchange price. The Corporation estimated the expected dividend payments at $0.12 per share per quarter for the first year and increased it 5% annually thereafter over the ten-year contractual term of the warrant. The risk free interest rates used to value the warrant were based on the one-year forward rates implied by the U.S. Treasury Yield curve. Volatility used to value the warrant was based on a time-frame equal to the ten-year contractual term of the warrant. Equal weighting was given to all pre-2008 periods. Lower weighting was given to 2008 due to unprecedented levels of market volatility occurring throughout the year.

COMMON STOCK

          On June 16, 2009, the Corporation completed its public offering of 24,150,000 shares of common stock at a price of $5.50 per share, including 3,150,000 shares of common stock purchased by the underwriters pursuant to an over-allotment option, which the underwriters exercised in full. The net proceeds of the offering after deducting underwriting discounts and commissions and estimated offering expenses were $125.8 million.

MERGERS AND ACQUISITIONS

          On August 16, 2008, the Corporation completed its acquisition of Iron and Glass Bancorp, Inc. (IRGB), a bank holding company based in Pittsburgh, Pennsylvania. On the acquisition date, IRGB had $301.7 million in assets, which included $168.8 million in loans and $252.3 million in deposits. The transaction, valued at $83.7 million, resulted in the Corporation paying $36.7 million in cash and issuing 3,176,990 shares of its common stock in exchange for 1,125,026 shares of IRGB common stock. The assets and liabilities of IRGB were recorded on the Corporation’s balance sheet at their fair values as of August 16, 2008, the acquisition date, and IRGB’s results of operations have been included in the Corporation’s consolidated statement of income since then. IRGB’s banking subsidiary, Iron and Glass Bank, was merged into FNBPA on August 16, 2008. Based on the purchase price allocation, the Corporation recorded $47.7 million in goodwill and $3.6 million in core deposit intangibles as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

          On April 1, 2008, the Corporation completed its acquisition of Omega Financial Corporation (Omega), a diversified financial services company based in State College, Pennsylvania. On the acquisition date, Omega had $1.8 billion in assets, which included $1.1 billion in loans and $1.3 billion in deposits. The all-stock transaction, valued at approximately $388.2 million, resulted in the Corporation issuing 25,362,525 shares of its common stock in exchange for 12,544,150 shares of Omega common stock. The assets and liabilities of Omega were recorded on the Corporation’s balance sheet at their fair values as of April 1, 2008, the acquisition date, and Omega’s results of operations have been included in the Corporation’s consolidated statement of income since then. Omega’s banking subsidiary, Omega Bank, was merged into FNBPA on April 1, 2008. Based on the purchase price allocation, the Corporation recorded $239.2 million in goodwill and $29.7 million in core deposit and other intangibles as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

NEW ACCOUNTING STANDARDS

Determining Whether Impairment of a Debt Security is Other-Than-Temporary

          In January 2009, the FASB issued FASB Staff Position (FSP) Emerging Issues Task Force (EITF) 99-20-1, which amends EITF 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to align the impairment guidance in EITF 99-20 with that in FAS 115, Accounting for Certain Investments in Debt and Equity Securities, and related implementation guidance.

          Prior to the issuance of FSP EITF 99-20-1, GAAP had two different models for determining whether the impairment of a debt security is other-than-temporary. The differences are summarized as follows:

	a.		EITF 99-20 requires the use of market participant assumptions about future cash flows. These assumptions cannot be overcome by management judgment of the probability of collecting all cash flows previously projected.
	b.		FAS 115 does not require exclusive reliance on market participant assumptions about future cash flows. Rather, FAS 115 permits the use of reasonable management judgment of the probability that the holder will be unable to collect all contractual amounts due.

          Eliminating the key distinctions between the two models promotes a more consistent determination of whether other-than-temporary impairment (OTTI) has occurred. Specifically, FSP EITF 99-20-1 removes the requirement to use market participant assumptions when determining whether there has been an adverse change in estimated cash flows. The provisions of FSP EITF 99-20-1 are effective for interim and annual reporting periods ending after December 15, 2008, and are to be applied prospectively. The Corporation adopted the FSP beginning October 1, 2008 and considered this guidance in determining OTTI beginning December 31, 2008.

Pensions and Other Postretirement Benefits

          In December 2008, the FASB issued FSP Financial Accounting Standards Board Statement (FAS) 132(R)-1, Employers’ Disclosures about Pensions and Other Postretirement Benefits, to require more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. FAS 132(R)-1 is effective for fiscal years ending after December 15, 2009. Adoption of FAS 132(R)-1 will not have a material impact on the Corporation’s consolidated financial statements.

Disclosures about Derivative Instruments and Hedging Activities

          In March 2008, the FASB issued FAS 161, Disclosures about Derivative Instruments and Hedging Activities — an Amendment of FASB Statement No. 133, which amends and expands the disclosure requirements of FAS 133, Accounting for Derivative Instruments and Hedging Activities, with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative instruments. The Corporation adopted FAS 161 effective January 1, 2009. FAS 161 relates to disclosures only and its adoption did not have any effect on the financial condition, results of operations or liquidity of the Corporation.

Business Combinations

          In December 2007, the FASB issued FAS 141R, Business Combinations, which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. FAS 141R also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination.

FAS 141R is effective for the Corporation for acquisitions made after January 1, 2009 and, accordingly, was not used by the Corporation in recognizing and measuring the Omega and IRGB acquisitions in 2008.

Noncontrolling Interests in Consolidated Financial Statements

          In December 2007, the FASB issued FAS 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of Accounting Research Bulletin (ARB) No. 51. FAS 160 establishes accounting and reporting standards for ownership interests in a subsidiary and for the deconsolidation of a subsidiary. The Corporation adopted FAS 160 effective January 1, 2009. The adoption of the standard did not have a material effect on the financial condition, results of operations or liquidity of the Corporation.

Fair Value Measurements

          In September 2006, the FASB issued FAS 157, Fair Value Measurements, which replaces the different definitions of fair value in existing accounting literature with a single definition, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. The statement clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The Corporation adopted the provisions of FAS 157 on January 1, 2008. For additional information regarding FAS 157, see the Fair Value Measurements footnote included in this Report.

          In October 2008, the FASB issued FSP 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of FAS 157 in an inactive market and illustrates how an entity would determine fair value when the market for a financial asset is not active. The FSP states that an entity should not automatically conclude that a particular transaction price is determinative of fair value. In a dislocated market, judgment is required to evaluate whether individual transactions are forced liquidations or distressed sales. When relevant observable market information is not available, a valuation approach that incorporates management’s judgments about the assumptions that market participants would use in pricing the asset in a current sale transaction would be acceptable. The FSP also indicates that quotes from brokers or pricing services may be relevant inputs when measuring fair value, but are not necessarily determinative in the absence of an active market for the asset. In weighing a broker quote as an input to a fair value measurement, an entity should place less reliance on quotes that do not reflect the result of market transactions. Further, the nature of the quote (for example, whether the quote is an indicative price or a binding offer) should be considered when weighing the available evidence. The Corporation considered this guidance in determining its fair value measurements at June 30, 2009.

          In April 2009, the FASB issued FSP 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, which amends FAS 157 to provide additional guidance on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly. This statement clarifies that there may be increased instances of transactions that are not orderly in situations where there has been a significant reduction in volume and activity in relation to normal market activity. FSP 157-4 provides additional guidance on when multiple valuation techniques may be warranted and considerations for determining the weight that should be applied to the various techniques. FSP 157-4 is effective for interim and annual periods ending after June 15, 2009. The Corporation considered this guidance in determining fair value measurements at June 30, 2009.

          In April 2009, the FASB issued FSP 107-1, Interim Disclosures about Fair Value of Financial Instruments, which extends disclosure requirements of FAS 107, Disclosures About Fair Value of Financial Instruments, to interim financial statements. With certain exceptions, FAS 107 requires disclosures of the fair value of all financial instruments (recognized or unrecognized), when practicable to do so, and specifies the manner of disclosure. FSP 107-1 is effective for interim and annual periods ending after June 15, 2009. The Corporation’s adoption of FAS 107-1 as of June 30, 2009 did not have any effect on the financial condition, results of operations or liquidity of the Corporation.

Other-Than-Temporary Impairment (OTTI)

          Effective April 1, 2009, the Corporation adopted FSP 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. FSP 115-2 significantly changes requirements for recognizing OTTI on debt securities, presentation of OTTI losses, and modifies and expands disclosures about OTTI for debt and equity securities.

          Under FSP 115-2, a debt security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. When OTTI exists, if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings.

          Upon adoption of FSP 115-2, the Corporation recorded a cumulative effect adjustment of $4.6 million (after-tax) to reclassify from retained earnings to accumulated other comprehensive income the non-credit portion of OTTI loss previously recognized on debt securities it holds that it does not intend to sell, and it is more-likely-than-not it will not be required to sell, before recovery of the security’s amortized cost basis.

Subsequent Events

          In May 2009, the FASB issued FAS 165, Subsequent Events, which establishes standards under which an entity shall recognize and disclose events that occur after a balance sheet date but before the related financial statements are issued or are available to be issued. FAS 165 is effective for fiscal years and interim periods ending after June 15, 2009. Adoption of FAS 165 as of June 30, 2009 had no impact on the Corporation’s consolidated financial position or results of operations.

Accounting for Transfers of Financial Assets

          In June 2009, the FASB issued FAS 166, Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140. FAS 166 amends FAS 140 to improve the relevance and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and the transferor’s continuing involvement, if any, in transferred financial assets. FAS 166 is effective for interim and annual reporting periods that begin after November 15, 2009. The Corporation does not expect the adoption of FAS 166 to have a material impact on its consolidated financial statements.

Consolidation of Variable Interest Entities

          In June 2009, the FASB issued FAS 167, Amendments to FASB Interpretation No. 46(R). FAS 167 significantly changes the criteria for determining whether the consolidation of a variable interest entity is required. FAS 167 also addresses the effect of changes required by FAS 166 on FIN 46(R), Consolidation of Variable Interest Entities, and concerns regarding the application of certain provisions of FIN 46(R), including concerns that the accounting and disclosures under the Interpretation do not always provide timely and useful information about an entity’s involvement in a variable interest entity. FAS 167 is effective for interim and annual reporting periods that begin after November 15, 2009. The Corporation does not expect the adoption of FAS 167 to have a material impact on its consolidated financial statements.

Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

          In June 2009, the FASB also issued FAS 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162. Upon the effective date of FAS 168, the codification will become the sole source of authoritative GAAP recognized by the FASB. FAS 168 is effective for fiscal years and interim periods ending after September 15, 2009. Adoption of FAS 168 as of September 30, 2009 is not expected to have a material impact on the Corporation’s consolidated financial position or results of operations as it does not alter existing GAAP.

SECURITIES

          The amortized cost and fair value of securities are as follows (in thousands):

Securities Available For Sale:

						Gross				Gross
		Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value
June 30, 2009
U.S. Treasury and other U.S. government agencies and corporations		$	217,932			$	2,252			$	(175	)		$	220,009
Residential mortgage-backed securities			319,444				4,303				(1,233	)			322,514
States of the U.S. and political subdivisions			75,478				395				(2,004	)			73,869
Collateralized debt obligations (CDO)			27,697				—				(19,153	)			8,544
Other debt securities			13,285				59				(5,052	)			8,292
Total debt securities			653,836				7,009				(27,617	)			633,228
Equity securities			2,977				143				(166	)			2,954
		$	656,813			$	7,152			$	(27,783	)		$	636,182
December 31, 2008
U.S. Treasury and other U.S. government agencies and corporations		$	249,370			$	3,925			$	—			$	253,295
Residential mortgage-backed securities			131,390				1,972				(306	)			133,056
States of the U.S. and political subdivisions			71,065				254				(2,138	)			69,181
Collateralized debt obligations			20,869				—				(6,242	)			14,627
Other debt securities			13,350				—				(4,737	)			8,613
Total debt securities			486,044				6,151				(13,423	)			478,772
Equity securities			3,609				157				(268	)			3,498
		$	489,653			$	6,308			$	(13,691	)		$	482,270

Securities Held To Maturity:

						Gross				Gross
		Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value
June 30, 2009
U.S. Treasury and other U.S. government agencies and corporations		$	5,661			$	56			$	(14	)		$	5,703
Residential mortgage-backed securities			652,982				21,052				(7,808	)			666,226
States of the U.S. and political subdivisions			102,061				898				(1,121	)			101,838
Collateralized debt obligations			3,718				—				(1,036	)			2,682
Other debt securities			2,121				1				(388	)			1,734
		$	766,543			$	22,007			$	(10,367	)		$	778,183
December 31, 2008
U.S. Treasury and other U.S. government agencies and corporations		$	506			$	154			$	—			$	660
Residential mortgage-backed securities			721,682				15,915				(7,442	)			730,155
States of the U.S. and political subdivisions			115,766				376				(928	)			115,214
Collateralized debt obligations			3,785				—				(572	)			3,213
Other debt securities			2,124				—				(115	)			2,009
		$	843,863			$	16,445			$	(9,057	)		$	851,251

          The Corporation classifies securities as trading securities when management intends to resell such securities in the near term and are carried at fair value, with unrealized gains (losses) reflected through the consolidated statement of income. The Corporation acquired securities in conjunction with the Omega acquisition that the Corporation classified

as trading securities. The Corporation both acquired and sold these trading securities during the second quarter of 2008. As of June 30, 2009 and December 31, 2008, the Corporation did not hold any trading securities.

          The Corporation recognized a gain of $0.2 million for the six months ended June 30, 2009 relating to the acquisition of a company in which the Corporation owned stock. Also, the Corporation sold $0.2 million of equity securities at a gain of $0.1 million for the six months ended June 30, 2009 and sold $1.3 million of equity securities at a gain of less than $0.1 million during the first six months of 2008. Additionally, the Corporation recognized a gain of $0.7 million relating to the VISA, Inc. initial public offering during the first six months of 2008. No security sales were at a loss.

          As of June 30, 2009, the amortized cost and fair value of securities, by contractual maturities, were as follows (in thousands):

		Available for Sale								Held to Maturity
		Amortized				Fair				Amortized				Fair
		Cost				Value				Cost				Value
Due in one year or less		$	5,248			$	5,182			$	1,222			$	1,223
Due from one to five years			216,365				218,651				40,859				41,401
Due from five to ten years			13,286				13,478				28,707				28,991
Due after ten years			99,493				73,403				42,773				40,342
			333,392				310,714				113,561				111,957
Residential mortgage-backed securities			319,444				322,514				652,982				666,226
Equity securities			2,977				2,954				—				—
		$	656,813			$	636,182			$	766,543			$	778,183

          Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on mortgage-backed securities based on the payment patterns of the underlying collateral.

          Following are summaries of the fair values and unrealized losses of securities, segregated by length of impairment (in thousands):

Securities available for sale:

		Less than 12 Months								Greater than 12 Months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
June 30, 2009
U.S. Treasury and other U.S. government agencies and corporations		$	21,945			$	(175	)		$	—			$	—			$	21,945			$	(175	)
Residential mortgage-backed securities			134,938				(1,233	)			—				—				134,938				(1,233	)
States of the U.S. and political subdivisions			54,810				(1,857	)			2,037				(147	)			56,847				(2,004	)
Collateralized debt obligations			5,781				(11,384	)			2,763				(7,769	)			8,544				(19,153	)
Other debt securities			—				—				8,154				(5,052	)			8,154				(5,052	)
Equity securities			1,013				(117	)			156				(49	)			1,169				(166	)
		$	218,487			$	(14,766	)		$	13,110			$	(13,017	)		$	231,597			$	(27,783	)
December 31, 2008
Residential mortgage-backed securities		$	33,856			$	(306	)		$	—			$	—			$	33,856			$	(306	)
States of the U.S. and political subdivisions			54,230				(2,138	)			—				—				54,230				(2,138	)
Collateralized debt obligations			—				—				4,181				(6,242	)			4,181				(6,242	)
Other debt securities			4,797				(1,375	)			3,678				(3,362	)			8,475				(4,737	)
Equity securities			1,053				(258	)			32				(10	)			1,085				(268	)
		$	93,936			$	(4,077	)		$	7,891			$	(9,614	)		$	101,827			$	(13,691	)

Securities held to maturity:

		Less than 12 Months								Greater than 12 Months								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
June 30, 2009
U.S. Treasury and other U.S. government agencies and corporations		$	5,142			$	(14	)		$	—			$	—			$	5,142			$	(14	)
Residential mortgage-backed securities			9,194				(149	)			46,110				(7,659	)			55,304				(7,808	)
States of the U.S. and political subdivisions			27,941				(966	)			1,850				(155	)			29,791				(1,121	)
Collateralized debt obligations			—				—				2,682				(1,036	)			2,682				(1,036	)
Other debt securities			252				(5	)			955				(383	)			1,207				(388	)
		$	42,529			$	(1,134	)		$	51,597			$	(9,233	)		$	94,126			$	(10,367	)
December 31, 2008
Residential mortgage-backed securities		$	96,213			$	(6,531	)		$	7,832			$	(911	)		$	104,045			$	(7,442	)
States of the U.S. and political subdivisions			44,555				(928	)			—				—				44,555				(928	)
Collateralized debt obligations			—				—				3,213				(572	)			3,213				(572	)
Other debt securities			277				(7	)			1,232				(108	)			1,509				(115	)
		$	141,045			$	(7,466	)		$	12,277			$	(1,591	)		$	153,322			$	(9,057	)

          As of June 30, 2009, securities with unrealized losses for less than 12 months include 3 investments in U.S. Treasury and other U.S. government agencies and corporations, 17 investments in residential mortgage-backed securities, 103 investments in states of the U.S. and political subdivision securities, 12 investments in corporate and other debt securities and 11 investments in equity securities. Securities with unrealized losses of greater than 12 months include 11 investments in residential mortgage-backed securities, 6 investments in states of the U.S. and political subdivisions, 14 investments in corporate and other debt securities and 2 investments in equity securities.

          The Corporation’s unrealized losses on corporate debt securities primarily relate to investments in trust preferred securities. The Corporation’s portfolio of trust preferred securities consists of single-issuer and pooled securities. The single-issuer securities are primarily from money-center and large regional banks. The pooled securities consist of securities issued primarily by banks, with some of the pools including a limited number of insurance companies. Investments in pooled securities are all in mezzanine tranches except for one investment in a senior tranche, and are secured by over-collateralization or default protection provided by subordinated tranches. Unrealized losses on investments in trust preferred securities are attributable to temporary illiquidity and the uncertainty affecting these markets, as well as changes in interest rates.

Other-Than-Temporary Impairment

          The Corporation evaluates its investment securities portfolio for OTTI on a quarterly basis. Impairment is assessed at the individual security level. The Corporation considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis.

          When impairment of an equity security is considered to be other-than-temporary, the security is written down to its fair value and an impairment loss is recorded as a loss within non-interest income in the consolidated statement of income. When impairment of a debt security is considered to be other-than-temporary, the amount of the OTTI recorded as a loss within non-interest income and thereby recognized in earnings depends on whether the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis.

          If the Corporation intends to (has decided to) sell the debt security or more likely than not will be required to sell the security before recovery of its amortized cost basis, OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value.

          If the Corporation does not intend to sell the debt security and it is not more likely than not the Corporation will be required to sell the security before recovery of its amortized cost basis, OTTI shall be separated into the amount representing credit loss and the amount related to all other factors. The amount related to credit loss shall be recognized in earnings. The amount related to other factors shall be recognized in other comprehensive income, net of applicable taxes.

          The Corporation’s performs its OTTI evaluation process in a consistent and systematic manner and includes an evaluation of all available evidence. Documentation of the process is extensive as necessary to support a conclusion as to whether a decline in fair value below cost or amortized cost is other-than-temporary and includes documentation supporting both observable and unobservable inputs and a rationale for conclusions reached. In making these determinations for pooled trust preferred securities, the Corporation consults with a third-party advisory firm to provide additional valuation assistance.

          This process considers factors such as the severity, length of time and anticipated recovery period of the impairment, recoveries or additional declines in fair value subsequent to the balance sheet date, recent events specific to the issuer, including investment downgrades by rating agencies and economic conditions of its industry, and the issuer’s financial condition, capital strength and near-term prospects.

          For debt securities, the Corporation also considers the payment structure of the debt security, the likelihood of the issuer being able to make payments that increase in the future, failure of the issuer of the security to make scheduled interest and principal payments, whether the Corporation has made a decision to sell the security and whether the Corporation’s cash or working capital requirements or contractual or regulatory obligations indicate that the debt security will be required to be sold before a forecasted recovery occurs. For equity securities, the Corporation also considers its intent and ability to retain the security for a period of time sufficient to allow for a recovery in fair value. Among the factors that are considered in determining the Corporation’s intent and ability to retain the security is a review of its capital adequacy, interest rate risk position and liquidity.

          The assessment of a security’s ability to recover any decline in fair value, the ability of the issuer to meet contractual obligations, the Corporation’s intent and ability to retain the security, and whether it is more likely than not the Corporation will be required to sell the security before recovery of its amortized cost basis require considerable judgment.

          Debt securities with credit ratings below AA at the time of purchase that are repayment-sensitive securities are evaluated using the guidance of FAS 115 and the related guidance of EITF 99-20 and FSP EITF 99-20-1, as amended by FSP 115-2. All other securities are required to be evaluated under FAS 115, as amended by FAS 115-2, and related implementation guidance.

          The Corporation recognized losses of $0.9 million and $0.5 million during the six months ended June 30, 2009 and 2008, respectively, due to the write-down to fair value of securities that the Corporation deemed to be other-than-temporarily impaired. The impairment losses for 2009 consisted of $0.6 million related to bank stocks and $0.3 million related to investments in pooled trust preferred securities. Under FSP 115-2, total OTTI charges on pooled trust preferred securities amounted to $1.0 million, which includes $0.3 million of credit-related impairment charges and $0.7 million recorded directly to other comprehensive income for non-credit related impairment on securities.

          The $0.6 million OTTI charge for bank stocks relates to securities that have been in an unrealized loss position for an extended period of time or the percentage of unrealized loss is such that management believes it will be unlikely to recover in the near term. In accordance with GAAP, management has deemed these impairments to be other-than-temporary given the low likelihood that they will recover in value in the foreseeable future. At June 30, 2009, the Corporation held 28 bank stocks with an adjusted cost basis of $3.0 million and a fair value of $2.9 million.

          The Corporation invests in trust preferred securities issued by special purpose vehicles (SPVs) which hold pools of collateral consisting of trust preferred and subordinated debt securities issued by banks, bank holding companies and insurance companies. The securities issued by the SPVs are generally segregated into several classes known as tranches. Typically, the structure includes senior, mezzanine and equity tranches. The equity tranche represents the first loss position. The Corporation generally holds interests in mezzanine tranches. Interest and principal collected from the collateral held by the SPVs are distributed with a priority that provides the highest level of protection to the senior-most tranches. In order to provide a high level of protection to the senior tranches, cash flows are diverted to higher-level tranches if certain tests are not met.

          The Corporation prices its holdings of trust preferred securities using Level 3 inputs in accordance with FAS 157 and guidance issued by the SEC and FASB. In this regard, the Corporation evaluates current available information

in estimating the future cash flows of these securities and determines whether there have been favorable or adverse changes in estimated cash flows from the cash flows previously projected. The Corporation considers the structure and term of the pool and the financial condition of the underlying issuers. Specifically, the evaluation incorporates factors such as over-collateralization and interest coverage tests, interest rates and appropriate risk premiums, the timing and amount of interest and principal payments and the allocation of payments to the various tranches. Current estimates of cash flows are based on the most recent trustee reports, announcements of deferrals or defaults, and assumptions regarding expected future default rates, prepayment and recovery rates and other relevant information. In constructing these assumptions, the Corporation considers the following:

	•		that current defaults would have minimal, if any, recovery,
	•		that current deferrals would default and exhibit minimal recovery,
	•		recent historical performance metrics, including profitability, capital ratios, loan charge-offs and loan reserve ratios, for the underlying institutions that would indicate a higher probability of default by the institution,
	•		that institutions identified as possessing a higher probability of default would recover at a rate of 10% for banks and 15% for insurance companies,
	•		that financial performance of the financial sector continues to be affected by the economic environment resulting in an expectation of additional deferrals and defaults in the future,
	•		whether the security is currently deferring interest, and
	•		the external rating of the security and recent changes to its external rating.

          The primary evidence utilized by the Corporation is the level of current deferrals and defaults, the level of excess subordination that allows for receipt of full principal and interest, the credit rating for each security and the likelihood that future deferrals and defaults will occur at a level that will fully erode the excess subordination based on an assessment of the underlying collateral. The Corporation combines the results of these factors considered in estimating the future cash flows of these securities to determine whether there has been an adverse change in estimated cash flows from the cash flows previously projected.

          The Corporation’s portfolio of trust preferred collateralized debt obligations consists of 13 pooled issues and seven single issue securities. One of the pooled issues is a senior tranche; the remaining 12 are mezzanine tranches. At June 30, 2009, the 13 pooled trust preferred securities had an estimated fair value of $11.2 million while the single-issuer trust preferred securities had an estimated fair value of $9.0 million. The Corporation has concluded from the analysis performed at June 30, 2009 that it is probable that the Corporation will collect all contractual principal and interest payments on all of its single-issuer and pooled trust preferred securities, except for those on which OTTI was recognized.

          In 2008, the Corporation concluded that it was probable that there had been an adverse change in estimated cash flows for eight of the 13 pooled trust preferred security investments. Accordingly, the Corporation recognized OTTI on these securities of $15.9 million at December 31, 2008. At June 30, 2009, these securities are classified as non-performing investments. Upon adoption of FSP 115-2, the Corporation determined that $7.0 million of those OTTI charges were non-credit related. As such, a $4.6 million (net of $2.4 million of taxes) increase to retained earnings and a corresponding decrease to accumulated other comprehensive income was recorded as the cumulative effect impact of adopting FSP 115-2 as of April 1, 2009.

          The following table presents a summary of the cumulative credit related OTTI charges recognized as components of earnings for securities still held by the Corporation at June 30, 2009 (in thousands):

Beginning balance of cumulative credit losses on pooled trust preferred securities, April 1, 2009 (1)		$	(8,953	)
Additions for credit losses recorded during the second quarter of 2009 which were not previously recognized as components of earnings			(312	)
Ending balance of cumulative credit losses on pooled trust preferred securities, June 30, 2009		$	(9,265	)

          Trust preferred securities continue to experience price declines due to uncertainties surrounding these securities in the current market environment and the currently limited secondary market for such securities, in addition to issue-specific credit deterioration. Write-downs were based on the individual securities’ credit performance and its ability to make its contractual principal and interest payments. Should credit quality continue to deteriorate, it is possible that additional write-downs may be required. The Corporation monitors actual deferrals and defaults as well as expected future deferrals and defaults to determine if there is a high probability for expected losses and contractual shortfalls of interest or principal, which could warrant further impairment. The Corporation evaluates its entire portfolio each quarter to determine if additional write-downs are warranted.

          The following table provides information relating to the Corporation’s trust preferred securities as of June 30, 2009 (dollars in thousands):

																										Number of				Actual Deferrals/				Expected Deferrals/				Excess
																						Lowest				Issuers				Defaults (as				Defaults (as a % of				Subordination (as
										Amortized				Fair				Unrealized				Credit				Currently				a % of original				remaining performing				a % of current
Deal Name		Type				Class				Cost				Value				Loss				Ratings				Performing				collateral)				collateral) (1)				collateral) (2)
Pooled Trust Preferred Securities:
P1		Pooled					C1			$	3,458			$	1,240			$	(2,218	)		Ca					54				22.8	%			21.9	%			0.0	%
P2		Pooled					C1				3,448				1,076				(2,372	)		Ca					58				14.4	%			23.1	%			0.0	%
P3		Pooled					C1				4,062				1,216				(2,846	)		Ca					61				15.2	%			18.0	%			0.0	%
P4		Pooled					C1				2,831				718				(2,113	)		Ca					60				17.0	%			20.2	%			0.0	%
P5		Pooled				MEZ					396				247				(149	)		Caa1					29				14.5	%			15.6	%			4.4	%
P6		Pooled				MEZ					1,413				608				(805	)		Ca					28				22.3	%			15.9	%			0.0	%
P7		Pooled				MEZ					913				240				(673	)		Ca					25				34.4	%			17.9	%			0.0	%
P8		Pooled					A4L				644				436				(208	)		Ca					38				17.5	%			20.0	%			0.0	%
Total Other-Than-Temporarily Impaired										$	17,165			$	5,781			$	(11,384	)											19.4	%			19.6	%
P9		Pooled					B1			$	3,011			$	914			$	(2,097	)		Ca					61				17.3	%			17.0	%			0.5	%
P10		Pooled					C				5,026				1,225				(3,801	)		Ca					50				18.5	%			16.5	%			2.6	%
P11		Pooled					C				501				140				(361	)		Ca					63				13.7	%			17.7	%			11.0	%
P12		Pooled					C				1,994				484				(1,510	)		Ca					60				13.7	%			21.6	%			9.5	%
P13		Pooled				SNR					3,718				2,682				(1,036	)			A3				26				8.8	%			15.5	%			52.2	%
Total Not Other-Than-Temporarily Impaired										$	14,250			$	5,445			$	(8,805	)											15.0	%			18.0	%
Total Pooled Trust Preferred Securities										$	31,415			$	11,226			$	(20,189	)											17.7	%			18.9	%
Single Issuer Trust Preferred Securities:
S1		Single								$	1,943			$	1,001			$	(942	)			B				1				0.0	%			0.0	%
S2		Single									1,902				1,004				(898	)		BBB+					1				0.0	%			0.0	%
S3		Single									2,061				1,442				(619	)			B+				1				0.0	%			0.0	%
S4		Single									2,000				1,113				(887	)			B+				1				0.0	%			0.0	%
S5		Single									4,102				2,936				(1,166	)			A				1				0.0	%			0.0	%
S6		Single									999				530				(469	)			B				1				0.0	%			0.0	%
S7		Single									1,338				955				(383	)			B				1				0.0	%			0.0	%
Total Single Issuer Trust Preferred Securities										$	14,345			$	8,981			$	(5,364	)											0.0	%			0.0	%
Total Trust Preferred Securities										$	45,711			$	20,207			$	(25,504	)