COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables)

6 Months Ended

Jun. 30, 2013

COVERED ASSETS AND FDIC INDEMNIFICATION ASSET

Carrying amounts and composition of covered loans

	June 30,			December 31,
	2013			2012
	(In thousands)
Real estate loans:
Residential single-family	$	314,483		$	362,345
Residential multifamily	513,141			647,440
Commercial and industrial real estate	1,190,964			1,348,556
Construction and land	329,397			417,631
Total real estate loans	2,347,985			2,775,972
Other loans:
Commercial business	481,255			587,333
Other consumer	79,533			87,651
Total other loans	560,788			674,984
Total principal balance	2,908,773			3,450,956
Covered discount	(394,829		)	(510,208		)
Net valuation of loans	2,513,944			2,940,748
Allowance on covered loans	(9,629		)	(5,153		)
Total covered loans, net	$	2,504,315		$	2,935,595

Covered nonperforming assets, by credit quality indicators

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
June 30, 2013
Real estate loans:
Residential single-family	$	300,876	$	1,253	$	12,354	$	—	$	314,483
Residential multifamily	466,014		2,868		44,259		—		513,141
Commercial and industrial real estate	884,924		8,031		291,368		6,641		1,190,964
Construction and land	140,619		9,554		178,325		899		329,397
Total real estate loans	1,792,433		21,706		526,306		7,540		2,347,985
Other loans:
Commercial business	399,075		11,880		70,105		195		481,255
Other consumer	78,207		128		1,198		—		79,533
Total other loans	477,282		12,008		71,303		195		560,788
Total principal balance	$	2,269,715	$	33,714	$	597,609	$	7,735	$	2,908,773

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2012
Real estate loans:
Residential single-family	$	345,568	$	982	$	15,795	$	—	$	362,345
Residential multifamily	571,061		8,074		68,305		—		647,440
Commercial and industrial real estate	963,069		10,777		367,869		6,841		1,348,556
Construction and land	170,548		15,135		230,776		1,172		417,631
Total real estate loans	2,050,246		34,968		682,745		8,013		2,775,972
Other loans:
Commercial business	434,138		22,533		130,467		195		587,333
Other consumer	85,534		515		1,602		—		87,651
Total other loans	519,672		23,048		132,069		195		674,984
Total principal balance	$	2,569,918	$	58,016	$	814,814	$	8,208	$	3,450,956

Covered nonperforming assets

	June 30,		December 31,
	2013		2012
	(In thousands)
Covered nonaccrual loans(1) (2) (3)	$	178,431	$	204,310
Covered loans past due 90 days or more but not on nonaccrual	—		—
Total nonperforming loans	178,431		204,310
Other real estate owned covered, net	29,836		26,808
Total covered nonperforming assets	$	208,267	$	231,118

(1) Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC.

(2) Represents principal balance net of discount.

(3) Includes $31.1 million and $29.6 million of loans at June 30, 2013 and December 31, 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30.

Changes in the accretable yield for the covered loans

	Three Months Ended June 30,
	2013			2012
	(In thousands)
Balance at beginning of period	$	503,476		$	696,666
Additions	—			—
Accretion	(84,811		)	(105,416		)
Changes in expected cash flows	40,052			29,218
Balance at end of period	$	458,717		$	620,468

	Six Months Ended June 30,
	2013			2012
	(In thousands)
Balance at beginning of period	$	556,986		$	785,165
Additions	—			—
Accretion	(166,438		)	(184,822		)
Changes in expected cash flows	68,169			20,125
Balance at end of period	$	458,717		$	620,468

FDIC indemnification asset activity

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Balance at beginning of period	$	276,834		$	457,265		$	316,313		$	511,135
(Amortization)	(12,696		)	(7,787		)	(21,382		)	(17,858		)
Reductions (1)	(28,820		)	(36,050		)	(52,055		)	(77,018		)
Estimate of FDIC repayment (2)	(15,376		)	(4,141		)	(22,934		)	(6,972		)
Balance at end of period	$	219,942		$	409,287		$	219,942		$	409,287

(1) Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset.

(2) 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.