Covered Assets and FDIC Loss-sharing Asset (Tables)

3 Months Ended

Mar. 31, 2013

The following is an analysis of our covered loans, net of related allowance for losses as of March 31, 2013 and December 31, 2012:



	March 31, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	113,876	$	125,373
Real estate:
One-to-four family residential	49,639		57,150
Commercial and multifamily residential	220,037		233,106
Total real estate	269,676		290,256
Real estate construction:
One-to-four family residential	22,165		25,398
Commercial and multifamily residential	14,032		15,251
Total real estate construction	36,197		40,649
Consumer	42,103		44,516
Subtotal of covered loans	461,852		500,794
Less:
Valuation discount resulting from acquisition accounting	69,150		79,401
Allowance for loan losses	29,489		30,056
Covered loans, net of allowance for loan losses	$	363,213	$	391,337

The following table shows the changes in accretable yield for acquired loans for the three months ended March 31, 2013 and 2012:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	166,888		$	259,669
Accretion	(14,477		)	(27,658		)
Disposals	(774		)	(1,799		)
Reclassifications from nonaccretable difference	7,149			9,465
Balance at end of period	$	158,786		$	239,677

The following is an analysis of the credit quality of our covered loan portfolio as of March 31, 2013 and 2012:



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,555	$	1,672	$	34,476	$	—	$	—	$	107,703
Unsecured	4,502		—		1,671		—		—		6,173
Real estate:
One-to-four family residential	40,030		331		9,278		—		—		49,639
Commercial and multifamily residential:
Commercial land	16,047		—		9,456		—		—		25,503
Income property	82,120		3,232		16,189		—		—		101,541
Owner occupied	76,454		398		16,141		—		—		92,993
Real estate construction:
One-to-four family residential:
Land and acquisition	6,449		2,796		4,892		—		—		14,137
Residential construction	2,812		—		5,216		—		—		8,028
Commercial and multifamily residential:
Income property	4,374		—		7,079		—		—		11,453
Owner occupied	1,099		—		1,480		—		—		2,579
Consumer	37,255		419		4,402		27		—		42,103
Total	$	342,697	$	8,848	$	110,280	$	27	$	—	461,852
Less:
Valuation discount resulting from acquisition accounting											69,150
Allowance for loan losses											29,489
Covered loans, net											$	363,213



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,621	$	1,823	$	45,150	$	—	$	—	$	118,594
Unsecured	4,988		—		1,791		—		—		6,779
Real estate:
One-to-four family residential	44,782		1,344		11,024		—		—		57,150
Commercial and multifamily residential:
Commercial land	16,336		—		10,292		—		—		26,628
Income property	81,205		864		23,315		—		—		105,384
Owner occupied	82,222		3,318		15,554		—		—		101,094
Real estate construction:
One-to-four family residential:
Land and acquisition	4,817		3,273		5,743		—		—		13,833
Residential construction	6,050		—		5,515		—		—		11,565
Commercial and multifamily residential:
Income property	4,419		—		7,901		—		—		12,320
Owner occupied	1,107		—		1,824		—		—		2,931
Consumer	38,973		381		5,162		—		—		44,516
Total	$	356,520	$	11,003	$	133,271	$	—	$	—	500,794
Less:
Valuation discount resulting from acquisition accounting											79,401
Allowance for loan losses											30,056
Covered loans, net											$	391,337

The following table sets forth activity in covered OREO at carrying value for the three months ended March 31, 2013 and 2012:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	16,311		$	28,126
Transfers in	1,405			2,468
Additional OREO write-downs	(65		)	(1,505		)
Proceeds from sale of OREO property	(6,438		)	(8,025		)
Net gain on sale of OREO	2,598			3,366
Total covered OREO at end of period	$	13,811		$	24,430

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three months ended March 31, 2013 and 2012:



	Three Months Ended March 31,
	2013			2012 (1)
	(in thousands)
Balance at beginning of period	$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(3,119		)	(14,804		)
FDIC reimbursable losses, net	363			462
Adjustments reflected in income
Amortization, net	(9,779		)	(13,873		)
Loan impairment	784			12,548
Sale of other real estate	(1,346		)	(2,067		)
Write-downs of other real estate	52			1,629
Other	(194		)	95
Balance at end of period	$	83,115		$	159,061

__________

(1) Reclassified to conform to the current period’s presentation.

Covered Loans [Member]

The changes in the ALLL for covered loans for the three months ended March 31, 2013 and 2012 are summarized as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	30,056		$	4,944
Loans charged off	(2,382		)	(562		)
Recoveries	835			437
Provision charged to expense	980			15,685
Balance at end of period	$	29,489		$	20,504