Loan and Lease Finance Receivables and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Components of Loan and Lease Finance Receivables

The following tables provide a summary of the components of loan and lease finance receivables:


	March 31, 2013
	Non-Covered Loans			Covered Loans			Total
	(Dollars in thousands)
Commercial and industrial	$	532,941		$	25,314		$	558,255
Real estate:		—
Construction		55,703			1,061			56,764
Commercial real estate		1,996,198			160,069			2,156,267
SFR mortgage		162,022			1,321			163,343
Consumer		44,116			5,967			50,083
Municipal lease finance receivables		109,727			—			109,727
Auto and equipment leases, net of unearned discount		12,422			—			12,422
Dairy and livestock		278,502			—			278,502
Agribusiness		5,370			5,870			11,240

Gross loans		3,197,001			199,602			3,396,603
Less:
Purchase accounting discount		—			(20,908	)		(20,908	)
Deferred loan fees, net		(7,487	)		—			(7,487	)

Gross loans, net of deferred loan fees and discount		3,189,514			178,694			3,368,208
Less: Allowance for credit losses		(92,218	)		—			(92,218	)

Net loans	$	3,097,296		$	178,694		$	3,275,990


	December 31, 2012
	Non-Covered Loans			Covered Loans			Total
	(Dollars in thousands)
Commercial and industrial	$	547,422		$	26,149		$	573,571
Real estate:		—
Construction		59,721			1,579			61,300
Commercial real estate		1,990,107			179,428			2,169,535
SFR mortgage		159,288			1,415			160,703
Consumer		47,557			6,337			53,894
Municipal lease finance receivables		105,767			—			105,767
Auto and equipment leases, net of unearned discount		12,716			—			12,716
Dairy and livestock		327,579			—			327,579
Agribusiness		9,081			5,651			14,732

Gross loans		3,259,238			220,559			3,479,797
Less:
Purchase accounting discount		—			(25,344	)		(25,344	)
Deferred loan fees, net		(6,925	)		—			(6,925	)

Gross loans, net of deferred loan fees and discount		3,252,313			195,215			3,447,528
Less: Allowance for credit losses		(92,441	)		—			(92,441	)

Net loans	$	3,159,872		$	195,215		$	3,355,087

Summary of Internal Risk Grouping by Loan Class

The following table summarizes our internal risk grouping by loan class as of March 31, 2013 and December 31, 2012:

Credit Quality Indicators


	March 31, 2013
	Pass		Watch List		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial & industrial	$	338,974	$	119,560	$	48,081	$	24,931	$	1,395	$	532,941
Construction - speculative		3,756		—		13,599		18,272		—		35,627
Construction - non-speculative		6,540		4,317		—		9,219		—		20,076
Commercial real estate - owner occupied		374,300		142,436		88,461		85,950		—		691,147
Commercial real estate - non-owner occupied		926,150		215,660		94,016		69,225		—		1,305,051
Residential real estate (SFR 1-4)		131,708		11,158		4,273		14,883		—		162,022
Dairy and livestock		48,015		64,557		80,048		81,822		4,060		278,502
Agribusiness		3,630		1,050		690		—		—		5,370
Municipal lease finance receivables		65,673		21,249		14,535		8,270		—		109,727
Consumer		37,625		3,206		1,914		1,367		4		44,116
Auto and equipment leases		8,527		2,983		776		136		—		12,422

Total non-covered loans		1,944,898		586,176		346,393		314,075		5,459		3,197,001
Covered loans		47,139		69,482		22,465		60,516		—		199,602

Total gross loans	$	1,992,037	$	655,658	$	368,858	$	374,591	$	5,459	$	3,396,603


	December 31, 2012
	Pass		Watch List		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial & industrial	$	347,275	$	131,186	$	44,466	$	22,901	$	1,594	$	547,422
Construction - speculative		1,417		—		15,163		21,314		—		37,894
Construction - non-speculative		9,841		2,767		—		9,219		—		21,827
Commercial real estate - owner occupied		382,111		159,653		78,087		84,116		—		703,967
Commercial real estate - non-owner occupied		888,777		214,901		105,121		77,341		—		1,286,140
Residential real estate (SFR 1-4)		129,730		10,215		3,107		16,236		—		159,288
Dairy and livestock		67,144		108,087		74,510		77,721		117		327,579
Agribusiness		4,969		3,306		806		—		—		9,081
Municipal lease finance receivables		72,432		20,237		11,124		1,974		—		105,767
Consumer		40,650		3,538		1,976		1,339		54		47,557
Auto and equipment leases		8,671		3,225		738		82		—		12,716

Total non-covered loans		1,953,017		657,115		335,098		312,243		1,765		3,259,238
Covered loans		52,637		72,803		31,689		63,354		76		220,559

Total gross loans	$	2,005,654	$	729,918	$	366,787	$	375,597	$	1,841	$	3,479,797

Summary of Allowance for Credit Losses and Recorded Investment in Held-For-Investment Loans by Portfolio Segment

The following table presents the balance and activity in the allowance for credit losses; and the recorded investment in held-for-investment loans by portfolio segment and based upon our impairment method as of March 31, 2013, and 2012:

Allowance for Credit Losses and Recorded Investment in Financing Receivables


	As of and For the Three Months Ended March 31, 2013
	Commercial and Industrial			Construction			Real Estate			Municipal Lease Finance Receivables		Dairy, Livestock / Agribusiness			Consumer, Auto & Other			Covered Loans (1)		Unallocated		Total
	(Dollars in thousands)

Allowance for loan losses:
Beginning balance, January 1, 2013	$	11,652		$	2,291		$	50,905		$	1,588	$	18,696		$	1,170		$	—	$	6,139	$	92,441
Charge-offs		(357	)		—			(142	)		—		—			(47	)		—		—		(546	)
Recoveries		99			126			71			—		14			13			—		—		323
Provision / reallocation of ALLL		919			(293	)		(503	)		1,044		(2,139	)		(3	)		—		975		—

Ending balance, March 31, 2013	$	12,313		$	2,124		$	50,331		$	2,632	$	16,571		$	1,133		$	—	$	7,114	$	92,218


Individually evaluated for impairment	$	1,055		$	—		$	429		$	—	$	2,560		$	27		$	—	$	—	$	4,071
Collectively evaluated for impairment	$	11,258		$	2,124		$	49,902		$	2,632	$	14,011		$	1,106		$	—	$	7,114	$	88,147

Loans and financing receivables (2):
Ending balance, March 31, 2013	$	532,941		$	55,703		$	2,158,220		$	109,727	$	283,872		$	56,538		$	178,694	$	—	$	3,375,695
Individually evaluated for impairment	$	4,579		$	27,491		$	55,098		$	—	$	25,327		$	226		$	—	$	—	$	112,721
Collectively evaluated for impairment	$	528,362		$	28,212		$	2,103,122		$	109,727	$	258,545		$	56,312		$	—	$	—	$	3,084,280
Acquired loans with deteriorated credit quality, net of discount	$	—		$	—		$	—		$	—	$	—		$	—		$	178,694	$	—	$	178,694


	As of and For the Three Months Ended March 31, 2012
	Commercial and Industrial			Construction			Real Estate			Municipal Lease Finance Receivables			Dairy, Livestock / Agribusiness			Consumer, Auto & Other			Covered Loans (1)			Unallocated			Total
	(Dollars in thousands)

Allowance for loan losses:
Beginning balance, January 1, 2012	$	10,654		$	4,947		$	51,873		$	2,403		$	17,278		$	1,590		$	—		$	5,219		$	93,964
Charge-offs		(560	)		—			(530	)		—			(1,150	)		(85	)		(31	)		—			(2,356	)
Recoveries		62			27			221			—			—			4			—			—			314
Provision / reallocation of ALLL		1,751			(651	)		371			(383	)		(48	)		(20	)		31			(1,051	)		—

Ending balance, March 31, 2012	$	11,907		$	4,323		$	51,935		$	2,020		$	16,080		$	1,489		$	—		$	4,168		$	91,922


Individually evaluated for impairment	$	421		$	—		$	787		$	—		$	221		$	81		$	—		$	—		$	1,510
Collectively evaluated for impairment	$	11,486		$	4,323		$	51,148		$	2,020		$	15,859		$	1,408		$	—		$	4,168		$	90,412

Loans and financing receivables (2):
Ending balance, March 31, 2012	$	497,625		$	67,382		$	2,153,345		$	114,724		$	290,578		$	67,862		$	241,943		$	—		$	3,433,459
Individually evaluated for impairment	$	7,820		$	29,354		$	51,153		$	—		$	8,470		$	389			—		$	—		$	97,186
Collectively evaluated for impairment	$	489,805		$	38,028		$	2,102,192		$	114,724		$	282,108		$	67,473			—		$	—		$	3,094,330
Acquired loans with deteriorated credit quality, net of discount	$	—		$	—		$	—		$	—		$	—		$	—		$	241,943		$	—		$	241,943

(1)	Represents the allowance and related loan balance in accordance with ASC 310-30.

(2)	Net of purchase accounting discount.

Schedule of Recorded Investment in Non-Covered Past Due and Nonaccrual Loans and Loans Past Due by Class of Loans

The following table presents the recorded investment in non-covered past due and nonaccrual loans and loans past due by class of loans as of March 31, 2013, and December 31, 2012:

Non-Covered Past Due and Nonaccrual Loans


	March 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due and Accruing		Total Past Due and Accruing		Nonaccrual		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial and industrial	$	1,893	$	133	$	—	$	2,026	$	3,387	$	527,528	$	532,941
Construction - speculative		—		—		—		—		10,620		25,007		35,627
Construction - non-speculative		—		—		—		—		—		20,076		20,076
Commercial real estate - owner occupied		945		—		—		945		1,658		688,544		691,147
Commercial real estate - non-owner occupied		875		—		—		875		18,306		1,285,870		1,305,051
Residential real estate (SFR 1-4)		824		—		—		824		11,561		149,637		162,022
Dairy and livestock		—		—		—		—		9,371		269,131		278,502
Agribusiness		—		—		—		—		—		5,370		5,370
Municipal lease finance receivables		—		—		—		—		—		109,727		109,727
Consumer		63		—		—		63		161		43,892		44,116
Auto and equipment leases		—		—		—		—		65		12,357		12,422

Total non-covered gross loans	$	4,600	$	133	$	—	$	4,733	$	55,129	$	3,137,139	$	3,197,001


	December 31, 2012
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due and Accruing		Total Past Due and Accruing		Nonaccrual		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial and industrial	$	233	$	457	$	—	$	690	$	3,136	$	543,596	$	547,422
Construction - speculative		—		—		—		—		10,663		27,231		37,894
Construction - non-speculative		—		—		—		—		—		21,827		21,827
Commercial real estate - owner occupied		—		—		—		—		5,415		698,552		703,967
Commercial real estate - non-owner occupied		—		—		—		—		15,624		1,270,516		1,286,140
Residential real estate (SFR 1-4)		107		—		—		107		13,102		146,079		159,288
Dairy and livestock		—		—		—		—		9,842		317,737		327,579
Agribusiness		—		—		—		—		—		9,081		9,081
Municipal lease finance receivables		—		—		—		—		—		105,767		105,767
Consumer		74		8		—		82		215		47,260		47,557
Auto and equipment leases		8		—		—		8		—		12,708		12,716

Total non-covered gross loans	$	422	$	465	$	—	$	887	$	57,997	$	3,200,354	$	3,259,238

Schedule of Held-for-Investment and Held-for-Sale Loans, Individually Evaluated for Impairment by Class of Loans

The following table presents held-for-investment, individually evaluated for impairment by class of loans, as of March 31, 2013 and December 31, 2012:

Non-Covered Impaired Loans


	March 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	2,873	$	3,617	$	—	$	2,899	$	18
Construction - speculative		18,272		18,607		—		18,272		77
Construction - non-speculative		9,219		9,219		—		9,219		141
Commercial real estate - owner occupied		13,616		14,827		—		13,630		122
Commercial real estate - non-owner occupied		27,877		38,306		—		28,092		202
Residential real estate (SFR 1-4)		10,184		12,821		—		10,319		16
Dairy and livestock		20,843		21,874		—		19,170		98
Municipal lease finance receivables		—		—		—		—		—
Consumer		141		196		—		141		—
Auto and equipment leases		—		—		—		—		—

Total		103,025		119,467		—		101,742		674
With a related allowance recorded:
Commercial and industrial		1,706		1,871		1,055		1,723		—
Construction - speculative		—		—		—		—		—
Construction - non-speculative		—		—		—		—		—
Commercial real estate - owner occupied		12		14		1		16		—
Commercial real estate - non-owner occupied		—		—		—		—		—
Residential real estate (SFR 1-4)		3,409		4,040		428		3,415		—
Dairy and livestock		4,484		4,944		2,560		4,603		—
Municipal lease finance receivables		—		—		—		—		—
Consumer		20		22		7		21		—
Auto and equipment leases		65		65		20		22		—

Total		9,696		10,956		4,071		9,800		—

Total non-covered impaired loans	$	112,721	$	130,423	$	4,071	$	111,542	$	674


	December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	3,385	$	4,215	$	—	$	3,766	$	43
Construction - speculative		21,314		21,607		—		21,650		311
Construction - non-speculative		9,219		9,219		—		9,219		574
Commercial real estate - owner occupied		13,478		14,569		—		14,459		397
Commercial real estate - non-owner occupied		28,639		38,633		—		29,801		670
Residential real estate (SFR 1-4)		11,079		14,342		—		11,292		54
Dairy and livestock		12,406		13,756		—		11,834		173
Municipal lease finance receivables		263		263		—		443		5
Consumer		142		196		—		145		—
Auto and equipment leases		—		—		—		—		—

Total		99,925		116,800		—		102,609		2,227
With a related allowance recorded:
Commercial and industrial		304		327		289		387		—
Construction - speculative		—		—		—		—		—
Construction - non-speculative		—		—		—		—		—
Commercial real estate - owner occupied		19		19		2		28		—
Commercial real estate - non-owner occupied		—		—		—		—		—
Residential real estate (SFR 1-4)		3,766		4,071		434		3,363		—
Dairy and livestock		4,303		4,340		1,596		4,017		73
Municipal lease finance receivables		—		—		—		—		—
Consumer		73		74		11		75		—
Auto and equipment leases		—		—		—		—		—

Total		8,465		8,831		2,332		7,870		73

Total non-covered impaired loans	$	108,390	$	125,631	$	2,332	$	110,479	$	2,300

Loans Modified as Troubled Debt Restructurings

The following are the loans modified as troubled debt restructuring during the three months ended March 31, 2013, and 2012:

Modifications


	For the Three Months Ended March 31, 2013
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at March 31, 2013
	(Dollars in thousands)
Commercial and industrial		2	$	204	$	204	$	193
Construction - speculative		—		—		—		—
Construction - non-speculative		—		—		—		—
Commercial real estate - owner occupied		1		168		168		168
Commercial real estate - non-owner occupied		—		—		—		—
Residential real estate (SFR 1-4)		—		—		—		—
Dairy and livestock		8		9,973		9,973		9,855
Municipal lease finance receivables		—		—		—		—

Total non-covered loans		11		10,345		10,345		10,216
Covered loans		—		—		—		—

Total gross loans		11	$	10,345	$	10,345	$	10,216


	For the Three Months Ended March 31, 2012
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at March 31, 2012
	(Dollars in thousands)
Commercial and industrial		2	$	2,534	$	2,534	$	2,532
Construction - speculative		—		—		—		—
Construction - non-speculative		—		—		—		—
Commercial real estate - owner occupied		1		307		307		304
Commercial real estate - non-owner occupied		1		513		513		513
Residential real estate (SFR 1-4)		—		—		—		—
Dairy and livestock		—		—		—		—
Municipal lease finance receivables		—		—		—		—

Total non-covered loans		4		3,354		3,354		3,349
Covered loans		—		—		—		—

Total gross loans		4	$	3,354	$	3,354	$	3,349