Loans

6 Months Ended

Jun. 30, 2011

Loans

Loans

(6) Loans

The following table shows the Company's loan portfolio by category as of the dates shown:

(Dollars in thousands)	June 30, 2011			December 31, 2010			June 30, 2010
Balance:
Commercial	$	2,132,436		$	2,049,326		$	1,827,618
Commercial real-estate		3,374,668			3,338,007			3,347,823
Home equity		880,702			914,412			922,305
Residential real-estate		329,381			353,336			332,673
Premium finance receivables — commercial		1,429,436			1,265,500			1,346,985
Premium finance receivables — life insurance		1,619,668			1,521,886			1,378,657
Indirect consumer		57,718			51,147			69,011
Consumer and other		101,068			106,272			99,091
Total loans, net of unearned income, excluding covered loans	$	9,925,077		$	9,599,886		$	9,324,163
Covered loans		408,669			334,353			275,563
Total loans	$	10,333,746		$	9,934,239		$	9,599,726
Mix:
Commercial		20	%		21	%		19	%
Commercial real-estate		33			34			35
Home equity		8			9			10
Residential real-estate		3			3			3
Premium finance receivables — commercial		14			13			14
Premium finance receivables — life insurance		16			15			14
Indirect consumer		1			1			1
Consumer and other		1			1			1
Total loans, net of unearned income, excluding covered loans		96	%		97	%		97	%
Covered loans		4			3			3
Total loans		100	%		100	%		100	%

Certain premium finance receivables are recorded net of unearned income. The unearned income portions of such premium finance receivables were $37.3 million at June 30, 2011, $32.3 million at December 31, 2010 and $36.9 million at June 30, 2010. Certain life insurance premium finance receivables attributable to the life insurance premium finance loan acquisition in 2009 as well as the covered loans acquired in the FDIC-assisted acquisitions during 2010 and 2011 are recorded net of credit discounts. See "Acquired Loan Information at Acquisition" below.

Indirect consumer loans include auto, boat and other indirect consumer loans. Total loans, excluding loans acquired with evidence of credit quality deterioration since origination, include net deferred loan fees and costs and fair value purchase accounting adjustments totaling $12.9 million at June 30, 2011, $12.5 million at December 31, 2010 and $11.7 million at June 30, 2010.

The Company's loan portfolio is generally comprised of loans to consumers and small to medium-sized businesses located within the geographic market areas that the Company serves. The premium finance receivables portfolios are made to customers on a national basis and the majority of the indirect consumer loans were generated through a network of local automobile dealers. As a result, the Company strives to maintain a loan portfolio that is diverse in terms of loan type, industry, borrower and geographic concentrations. Such diversification reduces the exposure to economic downturns that may occur in different segments of the economy or in different industries.

It is the policy of the Company to review each prospective credit in order to determine the appropriateness and, when required, the adequacy of security or collateral necessary to obtain when making a loan. The type of collateral, when required, will vary from liquid assets to real estate. The Company seeks to ensure access to collateral, in the event of default, through adherence to state lending laws and the Company's credit monitoring procedures.

Acquired Loan Information at Acquisition — Loans with evidence of credit quality deterioration since origination

As part of our acquisition of a portfolio of life insurance premium finance loans in 2009 as well as the FDIC-assisted bank acquisitions in 2010 and 2011, we acquired loans for which there was evidence of credit quality deterioration since origination and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments.

The following table presents the unpaid principal balance and carrying value for these acquired loans:

	June 30, 2011				December 31, 2010
(Dollars in thousands)	Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance		Carrying Value
Acquisitions during 2011:
The Bank of Commerce	$	119,273	$	64,097	$	—	$	—
Community First Bank — Chicago		17,701		13,425		—		—
Acquisitions during prior periods:
Covered loans from FDIC-assisted acquisitions		358,726		310,452		432,566		331,295
Life insurance premium finance loans		695,088		652,739		752,129		695,587

For the loans acquired as a result of acquisitions during the six months ended June 30, 2011, the following table provides estimated details on these loans at the date of each acquisition:

(Dollars in thousands)	The Bank of Commerce		Community First Bank - Chicago
Contractually required payments including interest	$	127,122	$	22,178
Less: Nonaccretable difference		56,257		6,313
Cash flows expected to be collected (1)		70,865		15,865
Less: Accretable yield		4,414		688
Fair value of loans acquired with evidence of credit quality deterioration since origination	$	66,451	$	15,177

(1) Represents undiscounted expected principal and interest cash flows at acquisition.

See Note 7 — Allowance for Loan Losses, Allowance for Losses on Lending-Related Commitments and Impaired Loans for further discussion regarding the allowance for loan losses associated with the covered loan portfolio at June 30, 2011.

Accretable Yield Activity

The following table provides activity for the accretable yield of loans acquired with evidence of credit quality deterioration since origination:

	Three Months Ended June 30, 2011						Six Months Ended June 30, 2011
(Dollars in thousands)	FDIC-Assisted Acquisitions			Life Insurance Premium Finance Loans			FDIC-Assisted Acquisitions			Life Insurance Premium Finance Loans
Accretable yield, beginning balance	$	91,332		$	25,543		$	39,809		$	33,315
Acquisitions		—			—			7,107			—
Accretable yield amortized to interest income		(13,568	)		(5,122	)		(27,727	)		(14,174	)
Increase in expected cash flows (1)		2,984			4,470			61,559			5,750
Accretable yield, ending balance	$	80,748		$	24,891		$	80,748		$	24,891

(1) Represents reclassifications to/from non-accretable difference, increases/decreases in interest cash flows due to prepayments and/or changes in interest rates.