The composition of the Company's allowance for loan and lease losses at March 31, 2014 and December 31, 2013 was as follows:

	March 31,		December 31,
	2014		2013
	(In thousands)
Allowance for loans and lease losses on non-covered loans:
Originated and other loans and leases held for investment:
Mortgage	$	19,511	$	19,937
Commercial		13,994		14,897
Consumer		7,135		6,006
Auto and leasing		8,731		7,866
Unallocated		136		375
		49,507		49,081
Acquired loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		867		926
Consumer		504		-
Auto		2,247		1,428
		3,618		2,354
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Commercial		2,653		1,713
Consumer		405		418
Auto		-		732
		3,058		2,863
		56,183		54,298
Allowance for loans and lease losses on covered loans:
Loans secured by 1-4 family residential properties		14,221		12,495
Commercial and other construction		39,562		39,619
Consumer		615		615
		54,398		52,729
Total allowance for loan and lease losses	$	110,581	$	107,027

The Company maintains an allowance for loan and lease losses at a level that management considers adequate to provide for probable losses based upon an evaluation of known and inherent risks. The Company's allowance for loan and lease losses policy provides for a detailed quarterly analysis of probable losses. The analysis includes a review of historical loan loss experience, value of underlying collateral, current economic conditions, financial condition of borrowers and other pertinent factors. While management uses available information in estimating probable loan losses, future additions to the allowance may be required based on factors beyond the Company's control. We also maintain an allowance for loan losses on acquired loans when: (i) for loans accounted for under ASC 310-30, there is deterioration in credit quality subsequent to acquisition, and (ii) for loans accounted for under ASC 310-20, the inherent losses in the loans exceed the remaining credit discount recorded at the time of acquisition. As part of the Company's continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March 31, 2014. As a result, the period was changed to 24 months from the previously determined 12 months. This change in the allowance for loan and lease losses' look back period for the consumer and auto and leasing portfolios is considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively.

The following tables present the activity in our allowance for loan and lease losses and the related recorded investment of the associated loans for our originated and other loans held for investment portfolio by segment for the periods indicated:

	Quarter Ended March 31, 2014
							Auto and
	Mortgage		Commercial		Consumer		Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Charge-offs		(1,214)		(419)		(838)		(4,645)		-		(7,116)
Recoveries		148		98		147		1,524		-		1,917
Provision for non-covered originated and other loan and lease losses		640		(582)		1,820		3,986		(239)		5,625
Balance at end of period	$	19,511	$	13,994	$	7,135	$	8,731	$	136	$	49,507

	March 31, 2014
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses on non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,001	$	1,704	$	-	$	-	$	-	$	9,705
Collectively evaluated for impairment		11,510		12,290		7,135		8,731		136		39,802
Total ending allowance balance	$	19,511	$	13,994	$	7,135	$	8,731	$	136	$	49,507
Loans:
Individually evaluated for impairment	$	87,744	$	27,767	$	-	$	-	$	-	$	115,511
Collectively evaluated for impairment		694,406		1,142,378		142,492		447,940		-		2,427,216
Total ending loan balance	$	782,150	$	1,170,145	$	142,492	$	447,940	$	-	$	2,542,727

	Quarter Ended March 31, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Balance at beginning of period	$	21,092	$	17,072	$	856	$	533	$	368	$	39,921
Charge-offs		(2,588)		(557)		(246)		(91)		-		(3,482)
Recoveries		-		28		65		7		-		100
Provision for (recapture of) non-covered originated and other loan and lease losses		4,385		(229)		638		1,292		(291)		5,795
Balance at end of period	$	22,889	$	16,314	$	1,313	$	1,741	$	77	$	42,334

	December 31, 2013
	Mortgage		Commercial		Consumer		Auto and Leasing		Unallocated		Total
	(In thousands)
Allowance for loan and lease losses for non-covered originated and other loans:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,708	$	1,431	$	-	$	-	$	-	$	10,139
Collectively evaluated for impairment		11,229		13,466		6,006		7,866		375		38,942
Total ending allowance balance	$	19,937	$	14,897	$	6,006	$	7,866	$	375	$	49,081
Loans:
Individually evaluated for impairment	$	84,494	$	28,145	$	-	$	-	$	-	$	112,639
Collectively evaluated for impairment		681,771		1,099,512		127,744		379,874		-		2,288,901
Total ending loans balance	$	766,265	$	1,127,657	$	127,744	$	379,874	$	-	$	2,401,540

Acquired Loans Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium)

The following tables present the activity in our allowance for loan losses and related recorded investment of the associated loans in our non-covered acquired loan portfolio, excluding loans accounted for under ASC 310-30, for the quarter ended March 31, 2014:

	Quarter Ended March 31, 2014
	Commercial			Consumer		Auto		Unallocated		Total

Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	926	$ 1	$	-	$	1,428	$	-	$	2,354
Charge-offs		(174)			(2,058)		(1,296)		-		(3,528)
Recoveries		-			100		450		-		550
Provision for non-covered acquired loan and lease losses accounted for under ASC 310-20		115			2,462		1,665		-		4,242
Balance at end of period	$	867		$	504	$	2,247	$	-	$	3,618

	March 31, 2014
	Commercial		Consumer		Auto		Unallocated		Total

Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		867		504		2,247		-		3,618
Total ending allowance balance	$	867	$	504	$	2,247	$	-	$	3,618
Loans:
Collectively evaluated for impairment		71,577		52,049		268,865		-		392,491
Total ending loan balance	$	71,577	$	52,049	$	268,865	$	-	$	392,491

	Quarter Ended March 31, 2013
	Commercial			Consumer		Auto		Unallocated		Total

Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20:
Balance at beginning of period	$	-	$ 1	$	-	$	-	$	-	$	-
Charge-offs		-			(1,456)		(1,715)		-		(3,171)
Recoveries		-			207		1,230		-		1,437
Provision for non-covered acquired loan and lease losses accounted for under ASC 310-20		386			1,249		485		-		2,120
Balance at end of period	$	386		$	-	$	-	$	-	$	386

	December 31, 2013
	Commercial		Consumer		Auto		Unallocated		Total

Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20:
Ending allowance balance attributable to loans:
Collectively evaluated for impairment		926		-		1,428		-		2,354
Total ending allowance balance	$	926	$	-	$	1,428	$	-	$	2,354
Loans:
Collectively evaluated for impairment		77,681		56,174		301,584		-		435,439
Total ending loan balance	$	77,681	$	56,174	$	301,584	$	-	$	435,439

Acquired Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

The following tables present the activity in our allowance for loan losses and related recorded investment of the associated loans in our non-covered acquired loan portfolio accounted for under ASC 310-30, for the quarter ended March 31, 2014:

	Quarter Ended March 31, 2014
	Mortgage			Commercial			Construction			Consumer		Auto		Total

Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30:
Balance at beginning of period	$	-	$ 1	$	1,713	$ 1	$	-	$ 1	$	418	$	732	$	2,863
Provision for non-covered acquired loan and lease losses accounted for under ASC 310-30		-			940			-			(13)		(732)		195
Balance at end of period	$	-		$	2,653		$	-		$	405	$	-	$	3,058

Non-covered loans acquired accounted for under ASC 310-30 were recognized at fair value as of December 18, 2012, which included the impact of expected credit losses and, therefore, no allowance for credit losses was recorded during the quarter ended March 31, 2013.

The Company evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans was $27.8 million and $28.1 million at March 31, 2014 and December 31, 2013, respectively. The impaired commercial loans were measured based on the fair value of collateral or the present value of cash flows, including those identified as troubled-debt restructurings. The valuation allowance for impaired commercial loans amounted to approximately $1.4 million at March 31, 2014 and December 31, 2013. The total investment in impaired mortgage loans was $87.7 million and $84.5 million at March 31, 2014 and December 31, 2013, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The valuation allowance for impaired mortgage loans amounted to approximately $8.0 million and $8.7 million at March 31, 2014 and December 31, 2013, respectively.

The Company's recorded investment in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30, and the related allowance for loan and lease losses at March 31, 2014 and December 31, 2013 are as follows:

Acquired Loans Accounted for under ASC-310-20 (Loans with revolving feature and/or acquired at a premium)

	March 31, 2014
	Unpaid		Recorded		Related
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%


	December 31, 2013
	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial		208		208		N/A	N/A
Total investment in impaired loans	$	208	$	208	$	-	0%

Acquired Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

The Company's recorded investment in non-covered acquired loan pools accounted for under ASC 310-30 and their related allowance for non-covered loan and lease losses at March 31, 2014 and December 31, 2013 are as follows:

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30, for the quarters ended March 31, 2014 and 2013:

	Quarter Ended March 31,
	2014				2013
	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
	(In thousands)

Impaired loans with specific allowance
Commercial	$	24	$	6,259	$	4	$	15,472
Residential troubled-debt restructuring		645		87,052		443		78,748
Impaired loans with no specific allowance
Commercial		78		21,629		293		30,360
Total interest income from impaired loans	$	747	$	114,940	$	740	$	124,580

The following table presents the troubled-debt restructurings during the quarters ended March 31, 2014 and 2013:

	Quarter Ended March 31, 2014
	Number of contracts	Pre-Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	34	$	4,009	6.43%	347	$	3,910	4.35%	375
Consumer	5		42	12.97%	67		44	12.95%	66

	Quarter Ended March 31, 2013
	Number of contracts	Pre- Modification Outstanding Recorded Investment		Pre-Modification Weighted Average Rate	Pre-Modification Weighted Average Term (in Months)	Post-Modification Outstanding Recorded Investment		Post-Modification Weighted Average Rate	Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	57	$	7,518	6.28%	331	$	8,040	4.35%	409

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month period ended March 31, 2014 and 2013:

The Company categorizes non-covered originated and acquired loans accounted for under ASC 310-20 into risk categories based on relevant information about the ability of borrowers to service their debt, such as economic conditions, portfolio risk characteristics, prior loss experience, and the results of periodic credit reviews of individual loans.

Special Mention: Loans classified as “special mention” have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard: Loans classified as “substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as “doubtful” have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, questionable and improbable.

Loss: Loans classified as “loss” are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be effected in the future.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of March 31, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of gross non-covered originated and other loans and acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	March 31, 2014
	Risk Ratings
											Individually
	Balance				Special						Measured for
	Outstanding		Pass		Mention		Substandard		Doubtful		Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	62,935	$	62,935	$	-	$	-	$	-	$	-
Institutional		9,833		9,833		-		-		-		-
Middle market		169,753		141,537		16,619		-		-		11,597
Retail		156,694		139,971		1,929		1,892		-		12,902
Floor plan		1,699		1,699		-		-		-		-
Real estate		11,837		11,837		-		-		-		-
		412,751		367,812		18,548		1,892		-		24,499
Other commercial and industrial:
Corporate		28,475		28,475		-		-		-		-
Institutional		553,249		553,249		-		-		-		-
Middle market		82,933		77,566		3,336		771		-		1,260
Retail		67,055		63,366		119		1,562		-		2,008
Floor plan		25,682		25,372		202		108		-		-
		757,394		748,028		3,657		2,441		-		3,268
Total		1,170,145		1,115,840		22,205		4,333		-		27,767

Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		11,079		11,079		-		-		-		-
Retail		4,301		3,490		245		566		-		-
Floor plan		2,752		2,651		-		101		-		-
		18,132		17,220		245		667		-		-
Other commercial and industrial:
Corporate		2,947		2,851		-		96		-		-
Institutional		221		221		-		-		-		-
Retail		17,216		16,460		100		656		-		-
Floor plan		33,061		32,998		63		-		-		-
		53,445		52,530		163		752		-		-
Total		71,577		69,750		408		1,419		-		-
Total	$	1,241,722	$	1,185,590	$	22,613	$	5,752	$	-	$	27,767

	December 31, 2013
	Risk Ratings
											Individually
	Balance				Special						Measured for
	Outstanding		Pass		Mention		Substandard		Doubtful		Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	54,796	$	54,796	$	-	$	-	$	-	$	-
Institutional		4,050		4,050		-		-		-		-
Middle market		161,583		133,061		16,627		118		-		11,777
Retail		166,642		149,018		2,182		2,258		-		13,184
Floor plan		1,835		1,835		-		-		-		-
Real estate		11,655		11,655		-		-		-		-
		400,561		354,415		18,809		2,376		-		24,961
Other commercial and industrial:
Corporate		32,598		32,598		-		-		-		-
Institutional		536,445		536,445		-		-		-		-
Middle market		58,897		53,868		3,466		198		-		1,365
Retail		61,510		58,742		257		691		-		1,820
Floor plan		37,646		37,350		188		108		-		-
		727,096		719,003		3,911		997		-		3,185
Total		1,127,657		1,073,418		22,720		3,373		-		28,146

Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Corporate		10,166		10,166		-		-		-		-
Retail		5,770		4,378		443		949		-		-
Floor plan		2,677		2,576		-		101		-		-
		18,613		17,120		443		1,050		-		-
Other commercial and industrial:
Corporate		9,793		9,696		-		97		-		-
Retail		27,338		26,044		150		1,144		-		-
Floor plan		21,937		21,769		168		-		-		-
		59,068		57,509		318		1,241		-		-
Total		77,681		74,629		761		2,291		-		-
Total	$	1,205,338	$	1,148,047	$	23,481	$	5,664	$	-	$	28,146

At March 31, 2014 and December 31, 2013, we had approximately $766.7 million and $763.4 million, respectively, of credit facilities granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, of which $718.8 million and $696.0, respectively, were outstanding as of such dates. A substantial portion of our credit exposure to the government of Puerto Rico consists of collateralized loans or obligations that have a specific source of income or revenues identified for its repayment. Some of these obligations consist of senior and subordinated loans to public corporations that obtain revenues from rates charged for services, such as water and electric power utilities. Public corporations have varying degrees of independence from the central government and many receive appropriations or other payments from it. We also have loans to various municipalities for which the good faith, credit and unlimited taxing power of the applicable municipality has been pledged to their repayment. These municipalities are required by law to levy special property taxes in such amounts as shall be required for the payment of all their general obligation bonds and notes. Another portion of these loans consists of special obligations of various municipalities that are payable from the basic real and personal property taxes collected within such municipalities. The good faith and credit obligations of the municipalities have a first lien on the basic property taxes.

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of March 31, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of non-covered gross originated and other loans and acquired loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	March 31, 2014
	Delinquency
																Individually
	Balance															Measured for
	Outstanding		0-29 days		30-59 days		60-89 days			90-119 days		120-364 days		365+ days		Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	72,096	$	61,268	$	5,230	$	2,621		$	382	$	1,037	$	1,459	$	99
Years 2003 and 2004		63,515		53,170		5,494		2,445			484		1,246		612		64
Year 2005		87,818		72,414		6,448		2,288			1,233		3,576		1,324		535
Year 2006		116,904		97,822		10,151		4,376			1,169		2,410		850		126
Years 2007, 2008 and 2009		97,840		87,065		3,807		2,025			223		3,619		875		226
Years 2010, 2011, 2012 2013 and 2014		182,167		164,134		2,126		721			1,070		1,004		1,064		12,048
		620,340		535,873		33,256		14,476			4,561		12,892		6,184		13,098
Non-traditional		39,790		35,078		1,744		470			-		1,439		986		73
Loss mitigation program		86,005		8,366		1,001		171			219		779		896		74,573
		746,135		579,317		36,001		15,117			4,780		15,110		8,066		87,744
Home equity secured personal loans		733		595		-		-	-		-		126		12		-
GNMA's buy-back option program		35,282		-		-		-	-		5,529		16,742		13,011		-
		782,150		579,912		36,001		15,117			10,309		31,978		21,089		87,744
Consumer
Credit cards		15,490		14,701		263		171			136		219		-		-
Overdrafts		331		289		28		11			1		2		-		-
Unsecured personal lines of credit		1,934		1,718		60		99			15		35		7		-
Unsecured personal loans		108,037		105,369		1,397		512			195		42		12		510
Cash collateral personal loans		16,700		16,263		375		46			13		3		-		-
		142,492		138,340		2,123		839			360		301		19		510
Auto and Leasing		447,940		399,721		33,788		8,559			3,461		2,411		-		-
		1,372,582		1,117,973		71,912		24,515			14,130		34,690		21,108		88,254
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		48,381		44,111		1,413		781			743		1,333		-		-
Personal loans		3,668		3,423		105		83			4		53		-		-
		52,049		47,534		1,518		864			747		1,386		-		-
Auto		268,865		250,840		13,161		3,522			804		538		-		-
		320,914		298,374		14,679		4,386			1,551		1,924		-		-
Total	$	1,693,496	$	1,416,347	$	86,591	$	28,901		$	15,681	$	36,614	$	21,108	$	88,254

	December 31, 2013
	Delinquency
																Individually
	Balance															Measured for
	Outstanding		0-29 days		30-59 days		60-89 days			90-119 days		120-364 days		365+ days		Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	76,512	$	64,743	$	6,594	$	1,634		$	868	$	1,082	$	1,458	$	133
Years 2003 and 2004		65,117		56,283		4,722		1,938			56		1,437		352		329
Year 2005		89,541		74,016		8,414		2,119			1,198		3,037		573		184
Year 2006		120,322		99,243		12,055		4,312			1,148		2,755		515		294
Years 2007, 2008 and 2009		101,150		91,920		3,464		1,104			1,264		2,844		554		-
Years 2010, 2011, 2012 and 2013		149,546		134,577		3,192		1,609			115		974		989		8,090
		602,188		520,782		38,441		12,716			4,649		12,129		4,441		9,030
Non-traditional		42,102		35,168		3,217		1,162			-		1,324		833		398
Loss mitigation program		86,318		7,762		1,376		149			624		312		1,029		75,066
		730,608		563,712		43,034		14,027			5,273		13,765		6,303		84,494
Home equity secured personal loans		736		598		-		-	-		-		126		12		-
GNMA's buy-back option program		34,921		-		-		-	-		7,670		14,425		12,826		-
		766,265		564,310		43,034		14,027			12,943		28,316		19,141		84,494
Consumer
Credit cards		15,241		14,555		287		168			118		113		-		-
Overdrafts		372		322		46		4			-		-		-		-
Unsecured personal lines of credit		1,981		1,844		33		38			25		34		7		-
Unsecured personal loans		94,560		92,102		1,272		399			300		39		13		435
Cash collateral personal loans		15,590		15,223		324		43			-		-		-		-
		127,744		124,046		1,962		652			443		186		20		435
Auto and Leasing		379,874		339,817		25,532		9,437			3,397		1,691		-		-
		1,273,883		1,028,173		70,528		24,116			16,783		30,193		19,161		84,929
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		52,199		46,713		2,217		1,200			828		1,241		-		-
Personal loans		3,975		3,681		196		7			60		31		-		-
		56,174		50,394		2,413		1,207			888		1,272		-		-
Auto		301,584		283,825		12,534		3,616			1,095		514		-		-
		357,758		334,219		14,947		4,823			1,983		1,786		-		-
Total	$	1,631,641	$	1,362,392	$	85,475	$	28,939		$	18,766	$	31,979	$	19,161	$	84,929

For covered loans, as part of the evaluation of actual versus expected cash flows, the Company assesses on a quarterly basis the credit quality of these loans based on delinquency, severity factors and risk ratings, among other assumptions. Migration and credit quality trends are assessed at the pool level, by comparing information from the latest evaluation period through the end of the reporting period.

The changes in the allowance for loan and lease losses on covered loans for the quarters ended March 31, 2014 and 2013 were as follows:

FDIC shared-loss portion of provision for (recapture of) covered loans and lease losses net, represents the credit impairment losses to be covered under the FDIC loss-share agreement which is increasing (decreasing) the FDIC loss-share indemnification asset.

Net provision for covered loans includes both additional reserves and reserve releases for different pools. The pools for which there were releases are also subject to a reduction to the FDIC shared-loss indemnification asset because of lower expected losses which are recognized as recaptures.

The Company's recorded investment in covered loan pools that have recorded impairments and their related allowance for covered loan and lease losses as of March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014

	Unpaid		Recorded
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired covered loan pools:
Loans secured by 1-4 family residential properties	$	147,597	$	111,410	$	14,221	13%
Construction and development secured by 1-4 family residential properties		65,747		18,254		6,866	38%
Commercial and other construction		192,095		111,679		32,696	29%
Consumer		9,671		5,503		615	11%
Total investment in impaired covered loan pools	$	415,110	$	246,846	$	54,398	22%

	December 31, 2013

	Unpaid		Recorded		Specific
	Principal		Investment		Allowance		Coverage
	(In thousands)
Impaired covered loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	52,142	$	38,179	$	12,495	33%
Construction and development secured by 1-4 family residential properties		66,037		17,304		6,866	40%
Commercial and other construction		209,566		111,946		32,753	29%
Consumer		10,512		5,857		615	11%
Total investment in impaired covered loan pools	$	338,257	$	173,286	$	52,729	30%