Covered Assets and FDIC Indemnification Asset (Tables)

6 Months Ended

Jun. 30, 2012

Covered Assets and FDIC Indemnification Asset [Abstract]

Schedule of Covered Loans by Type and Covering Bank

The following table presents the major types of covered loans at June 30, 2012 and December 31, 2011. The classification of covered loan balances presented is reported in accordance with the regulatory reporting requirements.

(dollars in thousands)	June 30, 2012
	City Bank			North County Bank			Total
Commercial	$	16,439		$	19,456		$	35,895
Real estate mortgages:
One-to-four family residential		3,876			10,860			14,736
Multi-family residential and commercial		149,005			59,822			208,827
Total real estate mortgages		152,881			70,682			223,563
Real estate construction:
One-to-four family residential		7,092			4,610			11,702
Multi-family and commercial		15,821			14,474			30,295
Total real estate construction		22,913			19,084			41,997
Consumer - direct		3,043			3,051			6,094
Subtotal		195,276			112,273			307,549
Fair value discount		(37,922	)		(26,903	)		(64,825	)
Total covered loans		157,354			85,370			242,724
Allowance for loan losses		(792	)		(215	)		(1,007	)
Total covered loans, net	$	156,562		$	85,155		$	241,717

(dollars in thousands)	December 31, 2011
	City Bank			North County Bank			Total
Commercial	$	17,380		$	26,208		$	43,588
Real estate mortgages:
One-to-four family residential		4,673			11,080			15,753
Multi-family residential and commercial		163,028			67,282			230,310
Total real estate mortgages		167,701			78,362			246,063
Real estate construction:
One-to-four family residential		6,102			5,773			11,875
Multi-family and commercial		21,479			12,991			34,470
Total real estate construction		27,581			18,764			46,345
Consumer - direct		3,562			11,206			14,768
Subtotal		216,224			134,540			350,764
Fair value discount		(46,099	)		(35,584	)		(81,683	)
Total covered loans		170,125			98,956			269,081
Allowance for loan losses		(655	)		(215	)		(870	)
Total covered loans, net	$	169,470		$	98,741		$	268,211

Schedule of Changes in Accretable Yield

The following table presents the changes in the accretable yield for the three and six months ended June 30, 2012 and 2011, for each respective acquired loan portfolio:

(dollars in thousands)	Three Months Ended June 30,
	2012						2011
	City Bank			North County Bank			City Bank			North County Bank
Balance, beginning of period	$	71,017		$	23,637		$	45,804		$	25,463
Accretion to interest income		(5,555	)		(3,841	)		(5,961	)		(2,188	)
Disposals		(1,508	)		(691	)		(5,480	)		-
Reclassification (to) from nonaccretable difference		(331	)		7,740			36,726			-
Balance, end of period	$	63,623		$	26,845		$	71,089		$	23,275

(dollars in thousands)	Six Months Ended June 30,
	2012						2011
	City Bank			North County Bank			City Bank			North County Bank
Balance, beginning of period	$	78,004		$	29,574		$	56,079		$	27,880
Accretion to interest income		(11,305	)		(7,749	)		(12,025	)		(4,605	)
Disposals		(2,723	)		(2,721	)		(9,691	)		-
Reclassification (to) from nonaccretable difference		(353	)		7,741			36,726			-
Balance, end of period	$	63,623		$	26,845		$	71,089		$	23,275

Schedule of Covered Other Real Estate Owned

The following tables summarize the activity related to covered OREO for the three and six months ended June 30, 2012 and 2011:

(dollars in thousands)	Three Months Ended June 30, 2012
	City Bank			North County Bank			Total
Balance, beginning of period	$	18,295		$	7,678		$	25,973
Additions to covered OREO		(676	)		2,324			1,648
Dispositions of covered OREO, net		(4,039	)		(582	)		(4,621	)
Balance, end of period	$	13,580		$	9,420		$	23,000

(dollars in thousands)	Three Months Ended June 30, 2011
	City Bank			North County Bank			Total
Balance, beginning of period	$	17,463		$	11,363		$	28,826
Additions to covered OREO		5,919			2,105			8,024
Capitalized improvements		-			673			673
Dispositions of covered OREO, net		(2,092	)		(2,741	)		(4,833	)
Balance, end of period	$	21,290		$	11,400		$	32,690

(dollars in thousands)	Six Months Ended June 30, 2012
	City Bank			North County Bank			Total
Balance, beginning of period	$	19,341		$	7,281		$	26,622
Additions to covered OREO		(1,002	)		5,376			4,374
Dispositions of covered OREO, net		(4,759	)		(3,237	)		(7,996	)
Balance, end of period	$	13,580		$	9,420		$	23,000

(dollars in thousands)	Six Months Ended June 30, 2011
	City Bank			North County Bank			Total
Balance, beginning of period	$	17,906		$	11,860		$	29,766
Additions to covered OREO		11,927			2,695			14,622
Capitalized improvements		-			746			746
Dispositions of covered OREO, net		(8,543	)		(3,901	)		(12,444	)
Balance, end of period	$	21,290		$	11,400		$	32,690

Schedule of FDIC Indemnification Asset

(c) FDIC Indemnification Asset:The following table summarizes the activity related to the FDIC indemnification asset for the three and six months ended June 30, 2012 and 2011:

(dollars in thousands)	Three Months Ended June 30, 2012
	City Bank			North County Bank			Total
Balance, beginning of period	$	40,976		$	19,922		$	60,898
Change in FDIC indemnification asset		(2,898	)		(247	)		(3,145	)
Reduction due to loans paid in full		(751	)		(420	)		(1,171	)
Transfers to (due from) FDIC		260			(1,975	)		(1,715	)
Balance, end of period	$	37,587		$	17,280		$	54,867

(dollars in thousands)	Three Months Ended June 30, 2011
	City Bank			North County Bank			Total
Balance, beginning of period	$	62,008		$	35,266		$	97,274
Change in FDIC indemnification asset		(1,867	)		425			(1,442	)
Reduction due to loans paid in full		(2,441	)		-			(2,441	)
Transfers to (due from) FDIC		(1,057	)		(2,428	)		(3,485	)
Balance, end of period	$	56,643		$	33,263		$	89,906

(dollars in thousands)	Six Months Ended June 30, 2012
	City Bank			North County Bank			Total
Balance, beginning of period	$	43,235		$	22,351		$	65,586
Change in FDIC indemnification asset		(5,763	)		(373	)		(6,136	)
Reduction due to loans paid in full		(1,324	)		(2,300	)		(3,624	)
Transfers to (due from) FDIC		1,439			(2,398	)		(959	)
Balance, end of period	$	37,587		$	17,280		$	54,867

(dollars in thousands)	Six Months Ended June 30, 2011
	City Bank			North County Bank			Total
Balance, beginning of period	$	66,560		$	39,507		$	106,067
Change in FDIC indemnification asset		(3,888	)		844			(3,044	)
Reduction due to loans paid in full		(5,927	)		-			(5,927	)
Transfers to (due from) FDIC		(102	)		(7,088	)		(7,190	)
Balance, end of period	$	56,643		$	33,263		$	89,906