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Note 4: Acquired Loans, Loss Sharing Agreements and FDIC Indemnification Assets | 12 Months Ended
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Dec. 31, 2013
Notes |
Note 4: Acquired Loans, Loss Sharing Agreements and FDIC Indemnification Assets | Note 4: Acquired Loans, Loss Sharing Agreements and FDIC Indemnification Assets TeamBank On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. The loans, commitments and foreclosed assets purchased in the TeamBank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank. Under the loss sharing agreement, the Bank shares in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $115.0 million, the FDIC agreed to reimburse the Bank for 80% of the losses. On losses exceeding $115.0 million, the FDIC agreed to reimburse the Bank for 95% of the losses. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. The Bank recorded a preliminary one-time gain of $27.8 million (pre-tax) based upon the initial estimated fair value of the assets acquired and liabilities assumed in accordance with FASB ASC 805, Business Combinations. FASB ASC 805 allows a measurement period of up to one year to adjust initial fair value estimates as of the acquisition date. Subsequent to the initial fair value estimate calculations in the first quarter of 2009, additional information was obtained about the fair value of assets acquired and liabilities assumed as of March 20, 2009, which resulted in adjustments to the initial fair value estimates. Most significantly, additional information was obtained on the credit quality of certain loans as of the acquisition date which resulted in increased fair value estimates of the acquired loan pools. The fair values of these loan pools were adjusted and the provisional fair values finalized. These adjustments resulted in a $16.1 million increase to the initial one-time gain of $27.8 million. Thus, the final gain was $43.9 million related to the fair value of the acquired assets and assumed liabilities. This gain was included in Noninterest Income in the Company’s Consolidated Statement of Income for the year ended December 31, 2009. The Bank originally recorded the fair value of the acquired loans at their preliminary fair value of $222.8 million and the related FDIC indemnification asset was originally recorded at its preliminary fair value of $153.6 million. As discussed above, these initial fair values were adjusted during the measurement period, resulting in a final fair value at the acquisition date of $264.4 million for acquired loans and $128.3 million for the FDIC indemnification asset. A discount was recorded in conjunction with the fair value of the acquired loans and the amount accreted to yield during 2013, 2012 and 2011 was $134,000, $1.2 million and $2.5 million, respectively. In addition to the loan and FDIC indemnification assets noted above, the acquisition consisted of other assets with a fair value of approximately $235.5 million, including $111.8 million of investment securities, $83.4 million of cash and cash equivalents, $2.9 million of foreclosed assets and $3.9 million of FHLB stock. Liabilities with a fair value of $610.2 million were also assumed, including $515.7 million of deposits, $80.9 million of FHLB advances and $2.3 million of repurchase agreements with a commercial bank. A customer-related core deposit intangible asset of $2.9 million was also recorded. In addition to the excess of liabilities over assets, the Bank received approximately $42.4 million in cash from the FDIC and entered into the loss sharing agreement with the FDIC. Vantus Bank On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. The loans, commitments and foreclosed assets purchased in the Vantus Bank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank. Under the loss sharing agreement, the Bank shares in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $102.0 million, the FDIC agreed to reimburse the Bank for 80% of the losses. On losses exceeding $102.0 million, the FDIC agreed to reimburse the Bank for 95% of the losses. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value of $62.2 million on the acquisition date. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a preliminary one-time gain of $45.9 million, which was included in Noninterest Income in the Company’s Consolidated Statement of Income for the year ended December 31, 2009. During 2010, the Company continued to analyze its estimates of the fair values of the loans acquired and the indemnification asset recorded. The Company finalized its analysis of these assets without adjustments to the initial fair value estimates. The Bank recorded the fair value of the acquired loans at their estimated fair value of $247.0 million and the related FDIC indemnification asset was recorded at its estimated fair value of $62.2 million. A discount was recorded in conjunction with the fair value of the acquired loans and the amount accreted to yield during 2013, 2012 and 2011 was $104,000, $399,000 and $928,000, respectively. In addition to the loan and FDIC indemnification assets noted above, the acquisition consisted of other assets with a fair value of approximately $47.2 million, including $23.1 million of investment securities, $12.8 million of cash and cash equivalents, $2.2 million of foreclosed assets and $5.9 million of FHLB stock. Liabilities with a fair value of $444.0 million were also assumed, including $352.7 million of deposits, $74.6 million of FHLB advances, $10.0 million of borrowings from the Federal Reserve Bank and $3.2 million of repurchase agreements with a commercial bank. A customer-related core deposit intangible asset of $2.2 million was also recorded. In addition to the excess of liabilities over assets, the Bank received approximately $131.3 million in cash from the FDIC and entered into the loss sharing agreement with the FDIC. Sun Security Bank On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri. The loans and foreclosed assets purchased in the Sun Security Bank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank. Under the loss sharing agreement, the FDIC has agreed to cover 80% of the losses on the loans (excluding approximately $4 million of consumer loans) and foreclosed assets purchased subject to certain limitations. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value of $67.4 million on the acquisition date. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a preliminary one-time gain of $16.5 million, which was included in Noninterest Income in the Company’s Consolidated Statement of Income for the year ended December 31, 2011. During 2012, the Company continued to analyze its estimates of the fair values of the loans acquired and the indemnification asset recorded. The Company finalized its analysis of these assets without adjustments to the initial fair value estimates. The Bank recorded the fair value of the acquired loans at their estimated fair value of $163.7 million and the related FDIC indemnification asset was recorded at its estimated fair value of $67.4 million. A discount was recorded in conjunction with the fair value of the acquired loans and the amount accreted to yield during 2013, 2012 and 2011 was $974,000, $1.6 million and $140,000, respectively. In addition to the loan and FDIC indemnification assets noted above, the acquisition consisted of other assets with a fair value of approximately $85.2 million, including $45.3 million of investment securities, $26.1 million of cash and cash equivalents, $9.1 million of foreclosed assets, $3.0 million of FHLB stock and $1.8 million of other assets. Liabilities with a fair value of $345.8 million were also assumed, including $280.9 million of deposits, $64.3 million of FHLB advances and $632,000 of other liabilities. A customer-related core deposit intangible asset of $2.5 million was also recorded. Net of the excess of assets over liabilities, the Bank received approximately $40.8 million in cash from the FDIC and entered into the loss sharing agreement with the FDIC. InterBank On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (“InterBank”), a full service bank headquartered in Maple Grove, Minnesota. The loans and foreclosed assets purchased in the InterBank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank. Under the loss sharing agreement, the FDIC has agreed to cover 80% of the losses on the loans (excluding approximately $60,000 of consumer loans) and foreclosed assets purchased subject to certain limitations. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value of $84.0 million on the acquisition date. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a preliminary one-time gain of $31.3 million, which was included in Noninterest Income in the Company’s Consolidated Statement of Income for the year ended December 31, 2012. During 2012, the Company continued to analyze its estimates of the fair values of the loans acquired and the indemnification asset recorded. The Company finalized its analysis of these assets without adjustments to the initial fair value estimates. The Bank recorded the fair value of the acquired loans at their estimated fair value of $285.5 million and the related FDIC indemnification asset was recorded at its estimated fair value of $84.0 million. A premium was recorded in conjunction with the fair value of the acquired loans and the amount amortized to yield during 2013 and 2012 was $636,000 and $564,000, respectively. In addition to the loan and FDIC indemnification assets noted above, the acquisition consisted of other assets with a fair value of approximately $79.8 million, including $34.9 million of investment securities, $34.5 million of cash and cash equivalents, $6.2 million of foreclosed assets, $585,000 of FHLB stock and $2.6 million of other assets. Liabilities with a fair value of $458.7 million were also assumed, including $456.3 million of deposits and $2.4 million of other liabilities. A customer-related core deposit intangible asset of $1.0 million was also recorded. Net of the excess of assets over liabilities, the Bank received approximately $40.8 million in cash from the FDIC and entered into the loss sharing agreement with the FDIC. Fair Value and Expected Cash Flows At the time of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For nonperforming loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. This valuation of the acquired loans is a significant component leading to the valuation of the loss sharing assets recorded. The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield. The accretable yield is recognized as interest income over the estimated lives of the loans. The Company continues to evaluate the fair value of the loans including cash flows expected to be collected. Increases in the Company’s cash flow expectations are recognized as increases to the accretable yield while decreases are recognized as impairments through the allowance for loan losses. During the years ended December 31, 2013, 2012 and 2011, increases in expected cash flows related to the acquired loan portfolios resulted in adjustments to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis. The increases in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements. This resulted in corresponding adjustments during the years ended December 31, 2013, 2012 and 2011, to the indemnification assets to be amortized on a level-yield basis over the remainder of the loss sharing agreements or the remaining expected lives of the loan pools, whichever is shorter. The amounts of these adjustments were as follows:
| Year Ended
| December 31, |  | December 31, |  | December 31,
| 2013 |  | 2012 |  | 2011
(In Thousands) |  |  |  |  |
Increase in accretable yield due to increased |  |  |  |  |
cash flow expectations | $40,947 |  | $42,567 |  | $27,069
Decrease in FDIC indemnification asset |  |  |  |  |
as a result of accretable yield increase | (32,597) |  | (34,054) |  | (23,821)
The adjustments, along with those made in previous years, impacted the Company’s Consolidated Statements of Income as follows:
| Year Ended
| December 31, |  | December 31, |  | December 31,
| 2013 |  | 2012 |  | 2011
(In Thousands) |  |  |  |  |
Interest income | $35,211 |  | $36,186 |  | $49,208
Noninterest income | (29,451) |  | (29,864) |  | (43,835)
Net impact to pre-tax income | $5,760 |  | $6,322 |  | $5,373
Prior to January 1, 2010, the Company’s estimate of cash flows expected to be received from the acquired loan pools related to TeamBank and Vantus Bank had not materially changed, other than the adjustment of the provisional fair value measurements of the former TeamBank loan portfolio. On an on-going basis the Company estimates the cash flows expected to be collected from the acquired loan pools. For the loan pools acquired in 2012 and 2011, the cash flow estimates have increased, beginning in 2012. For the loan pools acquired in 2009, the cash flow estimates have increased, beginning with the fourth quarter of 2010, based on payment histories and reduced loss expectations of the loan pools. This resulted in increased income that was spread on a level-yield basis over the remaining expected lives of the loan pools. The loss sharing asset is measured separately from the loan portfolio because it is not contractually embedded in the loans and is not transferable with the loans should the Bank choose to dispose of them. Fair value was estimated using projected cash flows available for loss sharing based on the credit adjustments estimated for each loan pool (as discussed above) and the loss sharing percentages outlined in the Purchase and Assumption Agreement with the FDIC. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. The loss sharing asset is also separately measured from the related foreclosed real estate. The loss sharing agreement on the InterBank transaction includes a clawback provision whereby if credit loss performance is better than certain pre-established thresholds, then a portion of the monetary benefit is shared with the FDIC. The pre-established threshold for credit losses is $115.7 million for this transaction. The monetary benefit required to be paid to the FDIC under the clawback provision, if any, will occur shortly after the termination of the loss sharing agreement, which in the case of InterBank is 10 years from the acquisition date. At December 31, 2013 and 2012, the Bank’s internal estimate of credit performance is expected to be better than the threshold set by the FDIC in the loss sharing agreement. Therefore, a separate clawback liability totaling $3.7 million and $1.1 million was recorded at December 31, 2013 and 2012, respectively. As changes in the fair values of the loans and foreclosed assets are determined due to changes in expected cash flows, changes in the amount of the clawback liability will occur. TeamBank FDIC Indemnification Asset The following tables present the balances of the FDIC indemnification asset related to the TeamBank transaction at December 31, 2013 and 2012. Gross loan balances (due from the borrower) were reduced approximately $382.6 million since the transaction date because of $248.6 million of repayments by the borrower, $61.5 million of transfers to foreclosed assets and $72.5 million of charge-downs to customer loan balances. Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations. As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.
| December 31, 2013
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $53,553 |  | $664
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (2,882) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (49,862) |  | (647)
Expected loss remaining | 809 |  | 17
Assumed loss sharing recovery percentage | 82% |  | 76%
Expected loss sharing value | 665 |  | 13
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 593 |  | --
Accretable discount on FDIC indemnification asset | (10) |  | --
FDIC indemnification asset | $1,248 |  | $13
| December 31, 2012
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $86,657 |  | $9,056
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | (134) |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (5,120) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (77,615) |  | (7,669)
Expected loss remaining | 3,788 |  | 1,387
Assumed loss sharing recovery percentage | 81% |  | 82%
Expected loss sharing value | 3,051 |  | 1,141
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 4,036 |  | --
Accretable discount on FDIC indemnification asset | (332) |  | --
FDIC indemnification asset | $6,755 |  | $1,141
Vantus Bank FDIC Indemnification Asset The following tables present the balances of the FDIC indemnification asset related to the Vantus Bank transaction at December 31, 2013 and 2012. Gross loan balances (due from the borrower) were reduced approximately $271.5 million since the transaction date because of $226.6 million of repayments by the borrower, $16.3 million of transfers to foreclosed assets and $28.6 million of charge-downs to customer loan balances. Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations. As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.
| December 31, 2013
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $60,011 |  | $1,986
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (1,202) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (57,920) |  | (1,092)
Expected loss remaining | 889 |  | 894
Assumed loss sharing recovery percentage | 78% |  | 80%
Expected loss sharing value | 690 |  | 716
Indemnification asset to be amortized resulting from | 919 |  |
change in expected losses | 919 |  | --
Accretable discount on FDIC indemnification asset | (32) |  | --
FDIC indemnification asset | $1,577 |  | $716
| December 31, 2012
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $103,910 |  | $4,383
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | (104) |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (5,429) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (95,483) |  | (3,214)
Expected loss remaining | 2,894 |  | 1,169
Assumed loss sharing recovery percentage | 78% |  | 80%
Expected loss sharing value | 2,270 |  | 935
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 4,343 |  | --
Accretable discount on FDIC indemnification asset | (240) |  | --
FDIC indemnification asset | $6,373 |  | $935
Sun Security Bank FDIC Indemnification Asset The following tables present the balances of the FDIC indemnification asset related to the Sun Security Bank transaction at December 31, 2013 and 2012. Gross loan balances (due from the borrower) were reduced approximately $155.9 million since the transaction date because of $98.7 million of repayments by the borrower, $26.1 million of transfers to foreclosed assets and $31.1 million of charge-downs to customer loan balances. Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations. As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above. Of the $8.5 million expected loss remaining, $540,000 is non-loss share discount.
| December 31, 2013
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $78,524 |  | $3,582
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | (105) |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (5,062) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (64,843) |  | (2,193)
Expected loss remaining | 8,514 |  | 1,389
Assumed loss sharing recovery percentage | 70% |  | 80%
Expected loss sharing value | 5,974 |  | 1,111
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 4,049 |  | ----
Accretable discount on FDIC indemnification asset | (680) |  | (93)
FDIC indemnification asset | $9,343 |  | $1,018
| December 31, 2012
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $126,933 |  | $10,980
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | (1,079) |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (4,182) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (91,519) |  | (6,227)
Expected loss remaining | 30,153 |  | 4,753
Assumed loss sharing recovery percentage | 76% |  | 80%
Expected loss sharing value | 23,017 |  | 3,785
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 3,345 |  | --
Accretable discount on FDIC indemnification asset | (2,867) |  | (561)
FDIC indemnification asset | $23,495 |  | $3,224
InterBank FDIC Indemnification Asset The following tables present the balances of the FDIC indemnification asset related to the InterBank transaction at December 31, 2012. Gross loan balances (due from the borrower) were reduced approximately $108.3 million since the transaction date because of $79.9 million of repayments by the borrower, $9.2 million of transfers to foreclosed assets and $19.2 million of charge-offs to customer loan balances. Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations. As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.
| December 31, 2013
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $284,975 |  | $6,543
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | 1,905 |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (21,218) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (213,539) |  | (5,073)
Expected loss remaining | 52,123 |  | 1,470
Assumed loss sharing recovery percentage | 82% |  | 80%
Expected loss sharing value | 42,654 |  | 1,176
FDIC loss share clawback | 2,893 |  | --
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 16,974 |  | --
Accretable discount on FDIC indemnification asset | (4,874) |  | (33)
FDIC indemnification asset | $57,647 |  | $1,143
| December 31, 2012
|  |  | Foreclosed
| Loans |  | Assets
(In Thousands) |  |  |
Initial basis for loss sharing determination, |  |  |
net of activity since acquisition date | $356,844 |  | $2,001
Noncredit premium/(discount), net of |  |  |
activity since acquisition date | 2,541 |  | --
Reclassification from nonaccretable discount |  |  |
to accretable discount due to change in |  |  |
expected losses (net of accretion to date) | (9,897) |  | --
Original estimated fair value of assets, net of |  |  |
activity since acquisition date | (259,232) |  | (1,620)
Expected loss remaining | 90,256 |  | 381
Assumed loss sharing recovery percentage | 81% |  | 80%
Expected loss sharing value | 73,151 |  | 304
FDIC loss share clawback | 1,000 |  | --
Indemnification asset to be amortized resulting from |  |  |
change in expected losses | 7,871 |  | --
Accretable discount on FDIC indemnification asset | (6,893) |  | (93)
FDIC indemnification asset | $75,129 |  | $211
Changes in the accretable yield for acquired loan pools were as follows for the years ended December 31, 2013, 2012 and 2011:
|  |  |  |  | Sun |  |
|  |  | Vantus |  | Security |  |
| TeamBank |  | Bank |  | Bank |  | InterBank
(In Thousands) |  |  |  |  |  |  |
Balance, January 1, 2011 | $36,765 |  | $35,796 |  | $-- |  | $--
Additions | -- |  | -- |  | 14,990 |  | --
Accretion | (40,010) |  | (30,908) |  | (2,221) |  | --
Reclassification from nonaccretable difference(1) | 17,907 |  | 17,079 |  | -- |  | --
Balance, December 31, 2011 | 14,662 |  | 21,967 |  | 12,769 |  | --
Additions | -- |  | -- |  | -- |  | 46,078
Accretion | (20,129) |  | (21,437) |  | (15,851) |  | (11,998)
Reclassification from nonaccretable difference(1) | 17,595 |  | 13,008 |  | 14,341 |  | 8,494
Balance, December 31, 2012 | 12,128 |  | 13,538 |  | 11,259 |  | 42,574
Accretion | (9,473) |  | (8,940) |  | (16,885) |  | (28,667)
Reclassification from nonaccretable difference(1) | 4,747 |  | 1,127 |  | 16,739 |  | 26,188
Balance, December 31, 2013 | $7,402 |  | $5,725 |  | $11,113 |  | $40,095
| (1) Represents increases in estimated cash flows expected to be received from the acquired loan pools, primarily due to lower estimated credit losses. The numbers also include changes in expected accretion of the loan pools for TeamBank, Vantus Bank, Sun Security Bank and InterBank for the year ended December 31, 2013, totaling $2.3 million, $611,000, $4.8 million and $146,000, respectively; for TeamBank, Vantus Bank, Sun Security Bank and InterBank for the year ended December 31, 2012, totaling $5.2 million, $4.4 million, $3.6 million and $2.4 million, respectively; and for TeamBank and Vantus Bank for the year ended December 31, 2011, totaling $3.5 million and $4.4 million, respectively.

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