COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables)

9 Months Ended

Sep. 30, 2013

COVERED ASSETS AND FDIC INDEMNIFICATION ASSET

Carrying amounts and composition of covered loans

	September 30,			December 31,
	2013			2012
	(In thousands)
Real estate loans:
Residential single-family	$	305,357		$	362,345
Residential multifamily	456,185			647,440
Commercial and industrial real estate	1,110,227			1,348,556
Construction and land	288,303			417,631
Total real estate loans	2,160,072			2,775,972
Other loans:
Commercial business	454,973			587,333
Other consumer	76,024			87,651
Total other loans	530,997			674,984
Total principal balance	2,691,069			3,450,956
Covered discount	(322,900		)	(510,208		)
Net valuation of loans	2,368,169			2,940,748
Allowance on covered loans	(8,665		)	(5,153		)
Total covered loans, net	$	2,359,504		$	2,935,595

Covered nonperforming assets, by credit quality indicators

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
September 30, 2013
Real estate loans:
Residential single-family	$	293,549	$	701	$	11,107	$	—	$	305,357
Residential multifamily	414,872		785		40,528		—		456,185
Commercial and industrial real estate	814,378		13,155		276,140		6,554		1,110,227
Construction and land	128,397		11,495		147,514		897		288,303
Total real estate loans	1,651,196		26,136		475,289		7,451		2,160,072
Other loans:
Commercial business	381,222		13,282		60,306		163		454,973
Other consumer	74,176		128		1,720		—		76,024
Total other loans	455,398		13,410		62,026		163		530,997
Total principal balance	$	2,106,594	$	39,546	$	537,315	$	7,614	$	2,691,069

			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

	September 30,		December 31,
	2013		2012
	(In thousands)
Covered nonaccrual loans(1) (2) (3)	$	164,303	$	204,310
Covered loans past due 90 days or more but not on nonaccrual	—		—
Total nonperforming loans	164,303		204,310
Other real estate owned covered, net	26,940		26,808
Total covered nonperforming assets	$	191,243	$	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 $26.8 million and $29.6 million of loans at September 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.

Schedule of covered TDR loan activity

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Balance at beginning of period	$	120,248		$	155,388		$	157,736		$	146,709
Additions	3,453			24,532			29,246			62,859
Sales	—			—			—			—
Transfers to OREO	—			—			—			—
Charge-offs	—			(4,314		)	(7,466		)	(6,469		)
Paydowns/ Reductions	(4,839		)	(1,712		)	(60,654		)	(29,205		)
Balance at end of period	$	118,862		$	173,894		$	118,862		$	173,894

Changes in the accretable yield for the covered loans

	Three Months Ended
	September 30,
	2013			2012
	(In thousands)
Balance at beginning of period	$	458,717		$	620,468
Additions	—			—
Accretion	(100,596		)	(92,704		)
Changes in expected cash flows	122,140			10,452
Balance at end of period	$	480,261		$	538,216

	Nine Months Ended
	September 30,
	2013			2012
	(In thousands)
Balance at beginning of period	$	556,986		$	785,165
Additions	—			—
Accretion	(267,035		)	(277,526		)
Changes in expected cash flows	190,310			30,577
Balance at end of period	$	480,261		$	538,216

FDIC indemnification asset activity

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Balance at beginning of period	$	219,942		$	409,287		$	316,313		$	511,135
(Amortization)	(39,109		)	(7,060		)	(60,491		)	(24,918		)
Reductions (1)	(20,606		)	(30,918		)	(72,661		)	(107,936		)
Estimate of FDIC repayment (2)	(15,193		)	(2,836		)	(38,127		)	(9,808		)
Balance at end of period	$	145,034		$	368,473		$	145,034		$	368,473

(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.

Schedule of FDIC receivable activity

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Balance at beginning of period	$	47,125		$	69,649		$	73,091		$	76,646
Net addition due to eligible expense/loss	467			14,011			16,995			70,091
Payment received from the FDIC	(9,396		)	(20,724		)	(51,890		)	(83,801		)
Balance at end of period	$	38,196		$	62,936		$	38,196		$	62,936