Note 7—Receivable from FDIC for Loss Share Agreements
The following table provides changes in the receivable from the FDIC for the periods ended September 30, 2012 and 2011:
|
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
(Dollars in thousands) |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
Balance at beginning of period |
|
$ |
262,651 |
|
$ |
212,103 |
|
FDIC loss share receivable recorded for Habersham agreement |
|
— |
|
87,418 |
|
FDIC loss share receivable recorded for BankMeridian agreement |
|
— |
|
50,753 |
|
Increase (decrease) in expected losses on loans |
|
(710 |
) |
28,375 |
|
Additional losses on OREO |
|
8,324 |
|
11,076 |
|
Reimbursable expenses |
|
7,055 |
|
9,803 |
|
Amortization of discounts and premiums, net |
|
(14,226 |
) |
(7,049 |
) |
Reimbursements from FDIC |
|
(88,773 |
) |
(117,821 |
) |
Balance at end of period |
|
$ |
174,321 |
|
$ |
274,658 |
|
The FDIC receivable for loss share agreements is measured separately from the related covered assets. At September 30, 2012, the projected cash flows related to the FDIC receivable for losses on assets acquired was approximately $49.1 million less than the current carrying value. This amount is being recognized as negative accretion (in non-interest income) over the shorter of the underlying asset’s remaining life or remaining term of the loss share agreements. In October and November of 2012, the Company expects to receive $20.6 million from loss share claims filed, including reimbursable expenses.
Included in the FDIC indemnification asset is an expected “true up” with the FDIC related to the BankMeridian acquisition. This amount is determined each reporting period and at September 30, 2012, is estimated to be approximately $2.7 million at the end of the loss share agreement (in ten years). The actual payment will be determined at the end of the loss sharing agreement term for each of the three FDIC-assisted acquisitions and is based on the negative bid, expected losses, intrinsic loss estimate, and assets covered under loss share. There was no true up expected from the CBT or Habersham Bank FDIC-assisted transactions as of September 30, 2012.
|