COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables)

12 Months Ended

Dec. 31, 2011

COVERED ASSETS AND FDIC INDEMNIFICATION ASSET

Carrying amounts and composition of covered loans

	December 31,
	2011			2010
	(In thousands)
Real estate loans:
Residential single-family	$	442,732		$	553,541
Residential multifamily		918,941			1,093,331
Commercial and industrial real estate		1,773,760			2,085,674
Construction and land		653,045			1,043,717
Total real estate loans		3,788,478			4,776,263
Other loans:
Commercial business		831,762			1,072,020
Other consumer		97,844			107,490
Total other loans		929,606			1,179,510
Total principal balance		4,718,084			5,955,773
Covered discount		(788,295	)		(1,150,672	)
Net valuation of loans		3,929,789			4,805,101
Allowance on covered loans		(6,647	)		(4,225	)
Total covered loans, net	$	3,923,142		$	4,800,876

Covered nonperforming assets, by credit quality indicators

	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2011
Real estate loans:
Residential single-family	$	427,918	$	1,085	$	13,729	$	—	$	442,732
Residential multifamily		779,694		26,124		113,123		—		918,941
Commercial and industrial real estate		1,249,781		43,810		472,003		8,166		1,773,760
Construction and land		242,996		40,859		362,958		6,232		653,045
Total real estate loans		2,700,389		111,878		961,813		14,398		3,788,478
Other loans:
Commercial business		643,117		34,707		149,253		4,685		831,762
Other consumer		96,342		—		1,502		—		97,844
Total other loans		739,459		34,707		150,755		4,685		929,606
Total principal balance	$	3,439,848	$	146,585	$	1,112,568	$	19,083	$	4,718,084

	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2010
Real estate loans:
Residential single-family	$	525,979	$	2,153	$	25,157	$	252	$	553,541
Residential multifamily		1,008,274		15,114		67,366		2,577		1,093,331
Commercial and industrial real estate		1,520,135		89,870		466,588		9,081		2,085,674
Construction and land		328,214		125,688		556,070		33,745		1,043,717
Total real estate loans		3,382,602		232,825		1,115,181		45,655		4,776,263
Other loans:
Commercial business		834,252		64,702		161,401		11,665		1,072,020
Other consumer		106,232		336		922		—		107,490
Total other loans		940,484		65,038		162,323		11,665		1,179,510
Total principal balance	$	4,323,086	$	297,863	$	1,277,504	$	57,320	$	5,955,773

Covered nonperforming assets

	December 31, 2011		December 31, 2010
	(In thousands)
Covered nonaccrual loans(1)(2)	$	194,506	$	379,797
Covered loans past due 90 days or more but not on nonaccrual		—		—
Total nonperforming loans		194,506		379,797
Other real estate owned covered, net		63,624		123,902
Total covered nonperforming assets	$	258,130	$	503,699

⁽¹⁾

Covered nonaccrual loans meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30.

⁽²⁾

Represents principal balance net of the associated discount.

Changes in the accretable yield for the covered loans

	2011			2010
	(In thousands)
Balance at beginning of period	$	1,153,272		$	983,107
Additions(1)		—			82,997
Accretion		(208,887	)		(183,835	)
Changes in expected cash flows		(159,220	)		271,003
Balance at end of period	$	785,165		$	1,153,272

⁽¹⁾

The additions included above for the twelve months ended December 31, 2010, resulted from the June 11, 2010 acquisition of WFIB.

FDIC indemnification asset activity

	2011			2010
	(In thousands)
Balance at beginning of period	$	785,035		$	1,091,814
Addition due to WFIB acquisition		—			41,131
(Amortization) Accretion		(59,929	)		14,678
Reductions(1)(2)		(210,365	)		(355,490	)
Estimate of FDIC repayment(3)		(3,606	)		(7,098	)
Balance at end of period	$	511,135		$	785,035

⁽¹⁾

Reductions relate to higher cash flows received from principal amortization, partial prepayments, loan payoffs and loan sales.

⁽²⁾

For the twelve months ended December 31, 2011, the reduction amount of $210.4 million also includes charge-offs, of which $126.4 million of these charge-offs are recoverable from the FDIC and recorded in other assets until reimbursement is received. For the twelve months ended December 31, 2010, the reduction amount of $355.5 million also includes charge-offs, of which $227.6 million are recoverable from the FDIC and recorded in other assets. Reductions relate to higher cash flows received from principal amortization, partial prepayments, loan payoffs and loan sales and the reduction of the credit discount.

⁽³⁾

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.