Covered Assets and FDIC Loss-sharing Asset (Tables)

9 Months Ended

Sep. 30, 2012

The following is an analysis of our covered loans, net of related allowance for losses as of September 30, 2012 and December 31, 2011:



	September 30, 2012		December 31, 2011
Covered loans:	(dollars in thousands)
Commercial business	$	141,094	$	195,737
Real estate:
One-to-four family residential	62,959		79,328
Commercial and multifamily residential	257,279		311,308
Total real estate	320,238		390,636
Real estate construction:
One-to-four family residential	29,774		54,402
Commercial and multifamily residential	16,694		23,661
Total real estate construction	46,468		78,063
Consumer	46,532		56,877
Subtotal of covered loans	554,332		721,313
Less:
Valuation discount resulting from acquisition accounting	95,889		184,440
Allowance for loan losses	29,157		4,944
Covered loans, net of allowance for loan losses	$	429,286	$	531,929

The following table shows the changes in accretable yield for acquired loans for the three and nine months ended September 30, 2012 and 2011:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Balance at beginning of period	$	214,061		$	314,333		$	259,669		$	256,572
Accretion	(19,571		)	(23,608		)	(69,045		)	(60,369		)
Disposals	(3,146		)	(8,594		)	(8,218		)	(24,134		)
Reclassifications from (to) nonaccretable difference	(2,861		)	69			6,077			50,320
Balance at end of period	$	188,483		$	282,200		$	188,483		$	282,200

The following is an analysis of the credit quality of our covered loan portfolio as of December 31, 2012 and 2011:



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	81,399	$	1,990	$	50,526	$	—	$	—	$	133,915
Unsecured	4,899		—		2,280		—		—		7,179
Real estate:
One-to-four family residential	47,369		1,493		14,097		—		—		62,959
Commercial and multifamily residential:
Commercial land	17,464		—		13,259		—		—		30,723
Income property multifamily	92,829		3,337		23,171		—		—		119,337
Owner occupied	87,809		3,229		16,181		—		—		107,219
Real estate construction:
One-to-four family residential:
Land and acquisition	4,733		1,422		8,258		—		—		14,413
Residential construction	6,504		—		8,857		—		—		15,361
Commercial and multifamily residential:
Income property multifamily	4,702		—		8,652		—		—		13,354
Owner occupied	1,114		—		2,226		—		—		3,340
Consumer	40,940		177		5,415		—		—		46,532
Total	$	389,762	$	11,648	$	152,922	$	—	$	—	554,332
Less:
Valuation discount resulting from acquisition accounting											95,889
Allowance for loan losses											29,157
Covered loans, net											$	429,286



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2011	(in thousands)
Covered loans:
Commercial business:
Secured	$	103,472	$	6,239	$	73,793	$	1,209	$	1	$	184,714
Unsecured	7,608		741		2,659		15		—		11,023
Real estate:
One-to-four family residential	56,948		2,210		20,170		—		—		79,328
Commercial and multifamily residential:
Commercial land	21,947		1,213		21,027		—		—		44,187
Income property multifamily	109,339		4,013		35,567		—		—		148,919
Owner occupied	89,555		3,673		24,974		—		—		118,202
Real estate construction:
One-to-four family residential:
Land and acquisition	4,834		1,535		17,646		1,289		—		25,304
Residential construction	8,264		371		20,463		—		—		29,098
Commercial and multifamily residential:
Income property multifamily	2,928		2,779		13,657		—		—		19,364
Owner occupied	1,142		—		3,155		—		—		4,297
Consumer	48,067		255		8,150		357		48		56,877
Total	$	454,104	$	23,029	$	241,261	$	2,870	$	49	721,313
Less:
Valuation discount resulting from acquisition accounting											184,440
Allowance for loan losses											4,944
Covered loans, net											$	531,929

The following table sets forth activity in covered OREO at carrying value for the three and nine months ended September 30, 2012 and 2011:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Covered OREO:
Balance at beginning of period	$	19,079		$	23,730		$	28,126		$	14,443
Established through acquisitions	—			—			—			10,387
Transfers in	3,096			2,979			8,497			8,071
Additional OREO write-downs	(730		)	(189		)	(2,769		)	(302		)
Proceeds from sale of OREO property	(6,822		)	(3,523		)	(25,202		)	(14,604		)
Gain on sale of OREO	1,888			1,838			7,859			6,840
Total covered OREO at end of period	$	16,511		$	24,835		$	16,511		$	24,835

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three and nine months ended September 30, 2012 and 2011:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Balance at beginning of period	$	140,003		$	209,694		$	175,071		$	205,991
Adjustments not reflected in income
Established through acquisitions	—			—			—			68,734
Cash received from the FDIC	(14,881		)	(6,108		)	(49,194		)	(51,000		)
FDIC reimbursable losses, net	(494		)	1,138			587			2,192
Adjustments reflected in income
Amortization, net	(9,694		)	(10,928		)	(33,418		)	(32,556		)
Loan impairment (recapture)	(3,193		)	921			18,705			2,424
Sale of other real estate	(1,315		)	(1,471		)	(4,881		)	(3,487		)
Write-downs of other real estate	1,141			467			4,503			911
Other	110			156			304			660
Balance at end of period	$	111,677		$	193,869		$	111,677		$	193,869

Covered Loans [Member]

The changes in the ALLL for covered loans for the three and nine months ended September 30, 2012 and 2011 are summarized as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in thousands)
Balance at beginning of period	$	31,784		$	7,948		$	4,944		$	6,055
Loans charged off	(977		)	(312		)	(2,574		)	(368		)
Recoveries	2,342			258			3,406			328
Provision (recapture) charged to expense	(3,992		)	433			23,381			2,312
Balance at end of period	$	29,157		$	8,327		$	29,157		$	8,327