COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables)

6 Months Ended

Jun. 30, 2014

COVERED ASSETS AND FDIC INDEMNIFICATION ASSET

	June 30,			December 31,
	2014			2013
	(In thousands)
Residential:
Residential single-family	$	259,438		$	290,095
Residential multifamily	361,472			403,508
Total residential	620,910			693,603
Commercial Real Estate (“CRE”):
Commercial and industrial real estate	895,140			1,103,530
Construction and land	73,216			163,833
Total CRE	968,356			1,267,363
Other Loans:
Commercial business	331,117			426,621
Other consumer	68,944			73,973
Total other loans	400,061			500,594
Total covered loans receivable	1,989,327		(1)	2,461,560		(2)
Covered discount	(181,357		)	(265,917		)
Net valuation of loans	1,807,970			2,195,643
Allowance on covered loans	(4,880		)	(7,745		)
Total covered loans, net	$	1,803,090		$	2,187,898
Collectively evaluated for impairment	$	252,205	(1)	$	320,185	(2)
Acquired with deteriorated credit quality	1,555,765			1,875,458
	$	1,807,970		$	2,195,643

(1) Includes $252.2 million of covered advances comprised of $202.5 million, $29.0 million, $11.7 million and $9.0 million of commercial and industrial, consumer, residential and commercial real estate loans, respectively.

(2) Includes $320.2 million of covered advances comprised of $230.6 million, $46.7 million, $30.9 million and $12.0 million of commercial and industrial, commercial real estate, consumer and residential loans, respectively.

Allowance for loan losses disclosures

Schedule of credit risk rating categories for the covered loans by portfolio segments

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
June 30, 2014
Residential:
Residential single-family	$	252,121	$	757	$	6,560	$	—	$	259,438
Residential multifamily	327,990		786		32,696		—		361,472
Total residential	580,111		1,543		39,256		—		620,910
Commercial Real Estate (“CRE”):
Commercial and industrial real estate	755,244		3,255		130,173		6,468		895,140
Construction and land	25,628		9,235		37,461		892		73,216
Total CRE	780,872		12,490		167,634		7,360		968,356
Other Loans:
Commercial business	282,018		7,171		41,928		—		331,117
Other consumer	67,320		100		1,524		—		68,944
Total other loans	349,338		7,271		43,452		—		400,061
Total principal balance	$	1,710,321	$	21,304	$	250,342	$	7,360	$	1,989,327

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2013
Residential:
Residential single-family	$	281,246	$	733	$	8,116	$	—	$	290,095
Residential multifamily	373,024		785		29,699		—		403,508
Total residential	654,270		1,518		37,815		—		693,603
Commercial Real Estate (“CRE”):
Commercial and industrial real estate	857,376		27,851		211,835		6,468		1,103,530
Construction and land	41,847		9,472		111,616		898		163,833
Total CRE	899,223		37,323		323,451		7,366		1,267,363
Other Loans:
Commercial business	378,086		4,635		43,797		103		426,621
Other consumer	72,053		128		1,792		—		73,973
Total other loans	450,139		4,763		45,589		103		500,594
Total principal balance	$	2,003,632	$	43,604	$	406,855	$	7,469	$	2,461,560

Covered nonperforming assets

	June 30,		December 31,
	2014		2013
	(In thousands)
Covered nonaccrual loans(1) (2) (3)	$	86,771	$	126,895
Other real estate owned covered, net	24,779		21,373
Total covered nonperforming assets	$	111,550	$	148,268

(1) Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30. All losses on covered loans are 80% reimbursed by the FDIC.

(2) Net of discount.

(3) Includes $14.3 million and $17.7 million of covered advances as of June 30, 2014 and December 31, 2013, respectively; and $72.5 million and $109.2 million of PCI loans as of June 30, 2014 and December 31, 2013, respectively.

Schedule of troubled debt restructurings loan activity

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	73,234		$	141,923		$	116,007		$	157,736
Additions	704			3,709			787			25,793
Transfers to covered OREO	—			—			(1,230		)	—
Charge-offs	(500		)	(3,762		)	(1,323		)	(7,466		)
Paydowns/ Reductions	(13,414		)	(21,622		)	(54,217		)	(55,815		)
Balance at end of period	$	60,024		$	120,248		$	60,024		$	120,248

Changes in the accretable yield for the PCI covered loans

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	424,005		$	503,476		$	461,545		$	556,986
Additions	—			—			—			—
Accretion	(64,114		)	(84,811		)	(125,304		)	(166,438		)
Changes in expected cash flows	27,236			40,052			50,886			68,169
Balance at end of period	$	387,127		$	458,717		$	387,127		$	458,717

FDIC indemnification asset liabilities activity

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	27,552		$	276,834		$	74,708		$	316,313
Amortization	(29,303		)	(12,696		)	(57,793		)	(21,382		)
Reductions (1)	(14,111		)	(28,820		)	(25,953		)	(52,055		)
Estimate of FDIC repayment (2)	(8,475		)	(15,376		)	(15,299		)	(22,934		)
Balance at end of period	$	(24,337	)	$	219,942		$	(24,337	)	$	219,942

(1) Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset.

(2) This represents the change in the calculated estimate the Company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses.

Summary of FDIC receivable activity

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In thousands)
Balance at beginning of period	$	19,644		$	46,762		$	30,261		$	73,091
Net (reduction) addition due to recovery or eligible expense/loss	(5,669		)	8,967			(12,147		)	16,528
Payments to (received from) the FDIC	1,772			(8,604		)	(2,367		)	(42,494		)
Balance at end of period	$	15,747		$	47,125		$	15,747		$	47,125

Covered loans

Allowance for loan losses disclosures

Summary of the activity in the allowance for loan losses

	Three Months Ended June 30,
	2014									2013
	Covered			PCI Covered						Covered			PCI Covered
	Advances			Loans			Total			Advances			Loans		Total
	(In thousands)
Beginning balance	$	4,316		$	2,202		$	6,518		$	8,118		$	1,992	$	10,110
Provision for (reversal of) loan losses	70			(1,014		)	(944		)	186			537		723
Charge-offs	(694		)	—			(694		)	(1,204		)	—		(1,204		)
Ending balance	$	3,692	(1)	$	1,188		$	4,880		$	7,100	(2)	$	2,529	$	9,629
Ending balance allocated to:
Collectively evaluated for impairment	3,692		(1)	—			3,692		(1)	7,100		(2)	—		7,100
Acquired with deteriorated credit quality	—			1,188			1,188			—			2,529		2,529
Ending balance	$	3,692	(1)	$	1,188		$	4,880		$	7,100	(2)	$	2,529	$	9,629

	Six Months Ended June 30,
	2014									2013
	Covered			PCI Covered						Covered			PCI Covered
	Advances			Loans			Total			Advances			Loans		Total
	(In thousands)
Beginning balance	$	5,476		$	2,269		$	7,745		$	5,153		$	—	$	5,153
(Reversal of) provision for loan losses	(884		)	(1,081		)	(1,965		)	3,283			2,529		5,812
Charge-offs	(900		)	—			(900		)	(1,336		)	—		(1,336		)
Ending balance	$	3,692	(1)	$	1,188		$	4,880		$	7,100	(2)	$	2,529	$	9,629
Ending balance allocated to:
Collectively evaluated for impairment	3,692		(1)	—			3,692		(1)	7,100		(2)	—		7,100
Acquired with deteriorated credit quality	—			1,188			1,188			—			2,529		2,529
Ending balance	$	3,692	(1)	$	1,188		$	4,880		$	7,100	(2)	$	2,529	$	9,629

(1) $2.6 million, $666 thousand, $282 thousand and $167 thousand of allowance for loan losses are allocated to commercial and industrial, commercial real estate, consumer and residential loans, respectively.

(2) $4.1 million, $2.4 million, $407 thousand and $174 thousand of allowance for loan losses are allocated to commercial and industrial, commercial real estate, consumer and residential loans, respectively.