FDIC SHARED-LOSS RECEIVABLE AND PAYABLE

BancShares completed six FDIC-assisted transactions with shared-loss agreements during the period beginning in 2009 through 2011. Prior to its merger into BancShares, Bancorporation completed three FDIC-assisted transactions with shared-loss agreements: Georgian Bank (acquired in 2009); Williamsburg First National Bank (acquired in 2010); and Atlantic Bank & Trust (acquired in 2011).

In 2016 and 2017, FCB entered into agreements with the FDIC to terminate the shared-loss agreements for Venture Bank, Temecula Valley Bank, Sun American Bank, Williamsburg First National Bank, Atlantic Bank & Trust and Colorado Capital Bank. As of March 31, 2018, shared-loss agreements are still active for First Regional Bank (FRB), Georgian Bank (GB) and United Western Bank (UWB). Shared-loss protection remains for single family residential loans acquired from UWB and GB in the amount of $65.5 million. FRB remained in a recovery period, where any recoveries were shared with the FDIC, through March 2018.

BancShares has a receivable from the FDIC for the expected reimbursement of losses on assets covered under the various shared-loss agreements. The shared-loss agreements are subject to interpretation by both the FDIC and BancShares, and disagreements may arise regarding coverage of losses, expenses and contingencies and requests for reimbursement may be delayed or disallowed for noncompliance.

The following table provides changes in the FDIC shared-loss receivable for the three months ended March 31, 2018 and March 31, 2017.



	Three months ended March 31
(Dollars in thousands)	2018			2017
Beginning balance	$	2,223		$	4,172
Accretion	(421		)	(600		)
Net cash payments to FDIC	—			2,760
Post-acquisition adjustments	1,834			(2,591		)
Termination of FDIC shared-loss agreements	—			240
Ending balance	$	3,636		$	3,981

The shared-loss agreements for two FDIC-assisted transactions, FRB and UWB, include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability). The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition and is recorded in the Consolidated Balance Sheets as a payable to the FDIC under the relevant shared-loss agreements. As of March 31, 2018 and December 31, 2017, the estimated clawback liability was $102.5 million and $101.3 million, respectively. The clawback liability payment dates for FRB and UWB are March 2020 and March 2021, respectively.

The following table provides changes in the FDIC shared-loss payable for the three months ended March 31, 2018 and March 31, 2017



	Three months ended March 31
(Dollars in thousands)	2018		2017
Beginning balance	$	101,342	$	97,008
Accretion	992		954
Adjustments related to changes in assumptions	132		51
Ending balance	$	102,466	$	98,013