PORTFOLIO LOANS COVERED BY LOSS SHARE ("Covered loans")

Below is a summary of Covered loans by category at September 30, 2013, and December 31, 2012:



	September 30, 2013			December 31, 2012
(in thousands)	Weighted- Average Risk Rating	Recorded Investment Covered Loans		Weighted- Average Risk Rating	Recorded Investment Covered Loans
Real Estate Loans:
Construction and Land Development	6.96		$15,332	7.06		$30,537
Commercial real estate - Investor Owned	6.54	51,842		6.08	57,602
Commercial real estate - Owner Occupied	6.87	43,252		6.65	47,140
Residential real estate	5.95	37,446		5.68	42,531
Total real estate loans			$147,872			$177,810
Commercial and industrial	6.99	9,095		6.57	22,034
Consumer & other	6.43	1,845		4.19	1,274
Portfolio Loans			$158,812			$201,118

The aging of the recorded investment in past due Covered loans by portfolio class and category at September 30, 2013, and December 31, 2012, is shown below.



	September 30, 2013
(in thousands)	30-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total
Commercial & Industrial	$	1,642	$	1,166	$	2,808	$	6,287	$	9,095
Real Estate:
Commercial - Owner Occupied	3,323		5,024		8,347		34,905		43,252
Commercial - Investor Owned	1,653		4,465		6,118		45,724		51,842
Construction and Land Development	—		3,886		3,886		11,446		15,332
Residential	673		6,591		7,264		30,182		37,446
Consumer & Other	—		—		—		1,845		1,845
Total	$	7,291	$	21,132	$	28,423	$	130,389	$	158,812



	December 31, 2012
(in thousands)	30-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total
Commercial & Industrial	$	319	$	3,925	$	4,244	$	17,790	$	22,034
Real Estate:
Commercial - Owner Occupied	887		5,144		6,031		41,109		47,140
Commercial - Investor Owned	308		665		973		56,629		57,602
Construction and Land Development	36		13,532		13,568		16,969		30,537
Residential	1,232		2,907		4,139		38,392		42,531
Consumer & Other	1		2		3		1,271		1,274
Total	$	2,783	$	26,175	$	28,958	$	172,160	$	201,118

The following table is a rollforward of Covered loans, net of the allowance for loan losses, for the nine months ended September 30, 2013 and 2012.



(In thousands)	Contractual Cashflows			Less: Non-accretable Difference			Less: Accretable Yield			Carrying Amount
Balance January 1, 2013	$	386,966		$	118,627		$	78,768		$	189,571
Principal reductions and interest payments	(37,421		)	—			—			(37,421		)
Accretion of loan discount	—			—			(19,987		)	19,987
Changes in contractual and expected cash flows due to remeasurement	9,216			(10,858		)	14,233			5,841
Reductions due to disposals	(68,953		)	(23,867		)	(12,288		)	(32,798		)
Balance September 30, 2013	$	289,808		$	83,902		$	60,726		$	145,180

Balance January 1, 2012	$	618,791		$	256,481		$	63,335		$	298,975
Principal reductions and interest payments	(68,783		)	—			—			(68,783		)
Accretion of loan discount	—			—			(22,231		)	22,231
Changes in contractual and expected cash flows due to remeasurement	1,671			(67,401		)	67,178			1,894
Reductions due to disposals	(107,669		)	(50,846		)	(12,837		)	(43,986		)
Balance September 30, 2012	$	444,010		$	138,234		$	95,445		$	210,331

The accretable yield is accreted into interest income over the estimated life of the acquired loans using the effective

yield method.

A summary of activity in the FDIC loss share receivable for the nine months ended September 30, 2013 is as follows:



(In thousands)	September 30, 2013
Balance at beginning of period	$	61,475
Adjustments not reflected in income:
Cash received from the FDIC for covered assets	(9,654		)
FDIC reimbursable losses, net	1,880
Adjustments reflected in income:
Amortization, net	(9,574		)
Loan impairment (recapture)	2,205
Reductions for payments on covered assets in excess of expected cash flows	(6,278		)
Balance at end of period	$	40,054

Due to continued favorable projections in the expected cash flows of its Covered loans, the Company continues to anticipate that it will be required to pay the FDIC at the end of one of the loss share agreements. Accordingly, a liability of $1.4 million has been recorded at September 30, 2013. As part of the remeasurement process, the Company recorded a $62,000 adjustment to increase the liability through Other noninterest expense during the quarter ended September 30, 2013. The liability will continue to be adjusted as part of the quarterly remeasurement process through the end of the loss share agreement.