PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2012

11. PREMISES AND EQUIPMENT

Premises and equipment consists of the following:

	December 31,
	2012			2011
	(In thousands)
Land	$	15,545		$	15,545
Office buildings	82,418			92,041
Leasehold improvements	29,635			25,084
Furniture, fixtures and equipment	44,122			45,918

Total cost	171,720			178,588
Accumulated depreciation and amortization	(64,203		)	(59,662		)

Net book value	$	107,517		$	118,926

Depreciation expense on premises and equipment was $13.2 million, $12.1 million and $13.8 million for the years ended December 31, 2012, 2011 and 2010, 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 December 2012, the Bank completed the sale of a building, acquired through the UCB acquisition, for $20.0 million which resulted in a $10.4 million gain on sale after consideration of $1.1 million in selling costs. The Bank leased back the branch located within the building, with a ten year lease agreement. The gain on sale is accounted for using the full accrual method which apportions the buyer’s cash payments between cost recovered and profit. Accordingly, $4.1 million of the gain on sale was recognized as noninterest income in the year ended December 31, 2012, and the remaining $6.3 million of the gain on sale will be recognized over the life of the lease term.

- 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.

+ References+ Details