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PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2011

12. PREMISES AND EQUIPMENT

Premises and equipment consists of the following:

	December 31,

	2011			2010
	(In thousands)
Land	$	15,545		$	15,545
Office buildings		92,041			108,131
Leasehold improvements		25,084			24,534
Furniture, fixtures and equipment		45,918			48,430

Total cost		178,588			196,640
Accumulated depreciation and amortization		(59,662	)		(60,721	)

Net book value	$	118,926		$	135,919

Depreciation expense on premises and equipment was $12.1 million, $13.8 million and $7.5 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Capitalized assets are depreciated or amortized on a straight-line basis in accordance with the estimated useful life for each fixed asset class. The estimated useful life for furniture and fixtures is seven years, office equipment is for five years, and twenty-five years for buildings and improvements. Leasehold improvements are amortized over the shorter of term of the lease or useful life.

In May 2011, the Bank completed the sale of a building in an effort to consolidate properties acquired through the UCB acquisition. The property was sold for $18.5 million, a portion of which was mortgaged by the buyer, and resulted in a $4.4 million gain on sale after consideration of $0.8 thousand in selling costs. The gain on sale is accounted for using the installment method which apportions the buyer's cash payments and principal payments on the mortgage between cost recovered and profit. Accordingly, $1.8 million of the gain on sale was recognized as noninterest income in the year ended December 31, 2011, and the remaining $2.6 million of the gain on sale will be recognized as the buyer makes principal payments on the mortgage.

Also in May 2011, the Bank sold an additional property for $2.6 million which resulted in a gain on sale of $0.4 million.

During 2011, the Bank purchased new ATM machines with a total net value of $2.5 million.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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