NOTE 8 - NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a summary of loans receivable, excluding covered loans (“non-covered loans”) for the periods indicated:

	June 30, 2011			December 31, 2010
	(In thousands)
Residential:
Single-family	$	1,286,235		$	1,119,024
Multifamily		950,981			974,745
Total residential		2,237,216			2,093,769
Commercial Real Estate ("CRE"):
Income producing		3,408,560			3,392,984
Construction		216,689			278,047
Land		203,380			235,707
Total CRE		3,828,629			3,906,738
Commercial and Industrial ("C&I"):
Commercial business		2,283,917			1,674,698
Trade finance		400,555			308,657
Total C&I		2,684,472			1,983,355
Consumer:
Student loans		358,378			490,314
Other consumer		230,562			243,212
Total consumer		588,940			733,526
Total gross loans receivable, excluding covered loans		9,339,257			8,717,388
Unearned fees, premiums, and discounts, net		(24,258	)		(56,781	)
Allowance for loan losses, excluding covered loans		(213,825	)		(230,408	)
Loans receivable, excluding covered loans, net	$	9,101,174		$	8,430,199

Accrued interest on covered and non-covered loans receivable amounted to $68.7 million and $65.6 million at June 30, 2011 and December 31, 2010, respectively.

At June 30, 2011 and December 31, 2010, covered and non-covered loans receivable totaling $8.13 billion and $8.14 billion, respectively, were pledged to secure borrowings from the FHLB and the Federal Reserve Bank.

The Bank offers both fixed and adjustable rate (“ARM”) first mortgage loans secured by one-to-four unit residential properties located in its primary lending areas. The Bank originated $294.7 million and $181.1 million in new residential single-family loans during the six months ended June 30, 2011 and 2010, respectively.

The Bank also offers both fixed and ARM residential multifamily loan programs. For the six months ended June 30, 2011 and 2010, the Bank originated $23.9 million and $10.3 million, respectively, in multifamily residential loans. The Bank primarily offers ARM multifamily loan programs that have six-month, three-year, or five-year initial fixed periods. The Bank considers all of the single-family and multifamily loans originated to be prime loans and underwriting criteria include minimum FICO scores, maximum loan-to-value ratios and minimum debt coverage ratios, as applicable. The Bank does have some single-family loans with interest-only features. Single-family loans with interest-only features totaled $7.1 million or 1% and $7.8 million or 1% of total single-family loans at June 30, 2011 and December 31, 2010, respectively. Additionally, the Bank owns residential loans that were purchased several years ago that permit different repayment options. For these loans, there is the potential for negative amortization if the borrower chooses so. These residential loans that permit different repayment options totaled $16.4 million, or 1%, and $16.9 million, or 1%, of total residential loans at June 30, 2011 and December 31, 2010, respectively. None of these loans were negatively amortizing as of June 30, 2011 and December 31, 2010.

In addition to residential lending, the Bank's lending activities also include commercial real estate, commercial and industrial, and consumer lending. Our CRE lending activities include loans to finance income producing properties and also construction and land loans. Our C&I lending activities include commercial business financing for small and middle-market businesses in a wide spectrum of industries. Included in commercial business loans are loans for working capital, accounts receivable lines, inventory lines, small business administration loans, and lease financing. We also offer a variety of international trade finance services and products, including letters of credit, revolving lines of credit, import loans, bankers' acceptances, working capital lines, domestic purchase financing, and pre-export financing. Consumer loans are primarily comprised of fully guaranteed student loans, home equity lines of credit, and auto loans.

All of the loans that the Bank originates are subject to its underwriting guidelines and loan origination standards. Management believes that the Bank's underwriting criteria and procedures adequately consider the unique risks which may come from these products. The Bank conducts a variety of quality control procedures and periodic audits to ensure compliance with its origination standards, including criteria for lending and legal requirements.

Credit Risk and Concentrations-The real estate market in California, including the areas of Los Angeles, Riverside, San Bernardino, and Orange counties, where a majority of the Company's loan customers are based, has been negatively impacted over the past few years. As of June 30, 2011, the Company had $3.83 billion in non-covered commercial real estate loans and $2.24 billion in non-covered residential loans, of which approximately 94% are secured by real properties located in California. Potential further deterioration in the real estate market generally and residential building in particular could result in additional loan charge-offs and provisions for loan losses in the future, which could have a material adverse effect on the Company's financial condition, net income and capital. In addition, although most of the Company's trade finance activities are related to trade with Asian countries, the majority of our loans are made to companies domiciled in the United States. A substantial portion of this business involves California based customers engaged in import activities. We also offer export-import financing to various domestic and foreign customers; the export loans are guaranteed by the Export-Import Bank of the United States.

Purchased Loans-During the first half of 2011, the Company purchased various portfolios with a carrying amount of $464.0 million, including student loans with a carrying amount of $426.2 million. These student loans are guaranteed by the U.S. Department of Education and pose limited credit risk.

Loans Held for Sale-Loans held for sale totaled $326.8 million and $220.1 million as of June 30, 2011 and December 31, 2010, respectively. Loans held for sale are recorded at the lower of cost or fair market value. Fair market value, if lower than cost, is determined based on valuations obtained from market participants or the value of the underlying collateral. As of June 30, 2011, approximately 91% of these loans were student loans. These loans were purchased by the Company with the intent to be held for investment; however, subsequent to their purchase, the Company's intent for these loans changed and they were consequently reclassified to loans held for sale. Proceeds from sales of loans held for sale were $376.6 million in the first half of 2011, resulting in net gains on sale of $10.2 million. Proceeds from sales of loans held for sale were $260.7 million in June 2010 with $8.1 million net gains on sale. As of June 30, 2011 $235.1 million of the $326.8 million loans held for sale were in a short-term call option to sell with a financial institution.

Credit Quality Indicators-Loans are risk rated based on analysis of the current state of the borrower's credit quality. The analysis of credit quality includes review of all sources of repayment, the borrower's current financial and liquidity status, and all other relevant information. The Company utilizes an eight grade risk rating system, where a higher grade represents a higher level of credit risk. The eight grade risk rating system can be generally classified by the following categories: Pass or Watch, Special Mention, Substandard, Doubtful, and Loss. The risk ratings reflect the relative strength of the sources of repayment.

Pass or Watch loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. These borrowers may have some credit risk that requires monitoring, but full repayment is expected. Special Mention loans are considered to have potential weaknesses that warrant close attention by management. Special Mention is considered a transitory grade and, generally, the Company does not grade a loan as Special Mention for longer than six months. If any potential weaknesses are resolved, the loan is upgraded to a Pass or Watch grade. If negative trends in the borrower's financial status or other information is presented that indicates the repayment sources may become inadequate, the loan is downgraded to a Substandard grade. Substandard loans are considered to have well-defined weaknesses that jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. Additionally, when management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan is still classified as Substandard. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are considered to be uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted due to changes in borrower status and likelihood of loan repayment. The tables below present the non-covered loan portfolio by credit quality indicator as of June 30, 2011 and December 31, 2010. As of June 30, 2011, non-covered loans graded Substandard and Doubtful have decreased by a net $118.4 million, or 17% from December 31, 2010. There were no Loss grade loans as of June 30, 2011 and December 31, 2010.

	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
June 30, 2011
Residential:
Single-family	$	1,239,576	$	12,477	$	34,182	$	-	$	1,286,235
Multifamily		813,053		21,776		116,152		-		950,981
CRE:
Income producing		3,128,465		79,514		200,581		-		3,408,560
Construction		155,593		-		61,096		-		216,689
Land		124,456		8,039		70,885		-		203,380
C&I:
Commercial business		2,165,099		45,284		68,502		5,032		2,283,917
Trade finance		377,930		11,662		10,963		-		400,555
Consumer:
Student loans		358,378		-		-		-		358,378
Other consumer		225,470		2,064		3,028		-		230,562
Total	$	8,588,020	$	180,816	$	565,389	$	5,032	$	9,339,257

	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2010
Residential:
Single-family	$	1,076,281	$	12,376	$	30,367	$	-	$	1,119,024
Multifamily		789,631		42,887		142,227		-		974,745
CRE:
Income producing		3,054,197		80,714		258,073		-		3,392,984
Construction		202,385		-		75,662		-		278,047
Land		146,499		4,656		84,552		-		235,707
C&I:
Commercial business		1,553,218		34,449		81,185		5,846		1,674,698
Trade finance		296,430		4,069		8,158		-		308,657
Consumer:
Student loans		490,314		-		-		-		490,314
Other consumer		238,964		1,486		2,762		-		243,212
Total	$	7,847,919	$	180,637	$	682,986	$	5,846	$	8,717,388

Nonaccrual and Past Due Loans-Loans are tracked by the number of days borrower payments are past due. The tables below present an aging analysis of nonaccrual loans and past due non-covered loans and loans held for sale, segregated by class of loans, as of June 30, 2011 and December 31, 2010:

	Accruing Loans 30-59 Days Past Due		Accruing Loans 60-89 Days Past Due		Total Accruing Past Due Loans		Nonaccrual Loans Less Than 90 Days Past Due		Nonaccrual Loans 90 or More Days Past Due		Total Nonaccrual Past Due Loans		Current Loans		Total
	(In thousands)
June 30, 2011
Residential:
Single-family	$	9,617	$	2,588	$	12,205	$	-	$	13,326	$	13,326	$	1,260,704	$	1,286,235
Multifamily		6,250		637		6,887		3,708		11,174		14,882		929,212		950,981
CRE:
Income producing		13,289		4,084		17,373		3,432		25,699		29,131		3,362,056		3,408,560
Construction		2,859		-		2,859		16,231		17,296		33,527		180,303		216,689
Land		13,410		2,758		16,168		4,782		19,368		24,150		163,062		203,380
C&I:
Commercial business		6,773		5,619		12,392		5,091		17,969		23,060		2,248,465		2,283,917
Trade finance		-		-		-		-		1,109		1,109		399,446		400,555
Consumer:
Student loans		-		-		-		-		-		-		358,378		358,378
Other consumer		1,057		2,064		3,121		-		1,077		1,077		226,364		230,562
Loans held for sale		-		-		-		-		24,471		24,471		302,370		326,841
Total	$	53,255	$	17,750	$	71,005	$	33,244	$	131,489	$	164,733	$	9,430,360		9,666,098
Unearned fees, premiums and discounts, net																(24,258	)
Total recorded investment in non-covered loans and loans held for sale															$	9,641,840

	Accruing Loans 30-59 Days Past Due		Accruing Loans 60-89 Days Past Due		Total Accruing Past Due Loans		Nonaccrual Loans Less Than 90 Days Past Due		Nonaccrual Loans 90 or More Days Past Due		Total Nonaccrual Past Due Loans		Current Loans		Total
	(In thousands)
December 31, 2010
Residential:
Single-family	$	5,449	$	5,432	$	10,881	$	355	$	7,058	$	7,413	$	1,100,730	$	1,119,024
Multifamily		18,894		4,368		23,262		7,694		9,687		17,381		934,102		974,745
CRE:
Income producing		27,002		6,034		33,036		7,962		38,454		46,416		3,313,532		3,392,984
Construction		-		1,486		1,486		25,688		9,778		35,466		241,095		278,047
Land		479		-		479		20,761		8,138		28,899		206,329		235,707
C&I:
Commercial business		3,216		1,086		4,302		14,437		8,235		22,672		1,647,724		1,674,698
Trade finance		-		-		-		-		-		-		308,657		308,657
Consumer:
Student loans		-		-		-		-		-		-		490,314		490,314
Other consumer		781		1,485		2,266		-		620		620		240,326		243,212
Loans held for sale		-		-		-		-		14,062		14,062		205,993		220,055
Total	$	55,821	$	19,891	$	75,712	$	76,897	$	96,032	$	172,929	$	8,688,802		8,937,443
Unearned fees, premiums and discounts, net																(56,781	)
Total recorded investment in non-covered loans and loans held for sale															$	8,880,662

Generally, loans 90 or more days past due are placed on nonaccrual status, at which point interest accrual is discontinued and all unpaid accrued interest is reversed against interest income. Additionally, loans that are not 90 or more days past due but have identified deficiencies are also put on nonaccrual status. Nonaccrual loans totaled $164.7 million and $172.9 million at June 30, 2011 and December 31, 2010, respectively. Loans not 90 or more days past due totaled $33.2 million and $76.9 million as of June 30, 2011 and December 31, 2010, respectively, and were included in non-covered nonaccrual loans.

The following is a summary of interest income foregone on nonaccrual loans:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)
Interest income that would have been recognized had nonaccrual loans performed in accordance with their original terms	$	2,798		$	3,656		$	5,563		$	7,522
Less: Interest income recognized on nonaccrual loans on a cash basis(1)		(415	)		(1,085	)		(830	)		(2,202	)
Interest income foregone on nonaccrual loans	$	2,383		$	2,571		$	4,733		$	5,320

_______________________

(1)	Includes interest income recognized on nonaccrual loans held for sale.

Impaired Loans-A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all scheduled payments of principal or interest due according to the contractual terms of the loan agreement. The Bank's loans are grouped into heterogeneous and homogeneous (mostly consumer loans) categories. Classified loans (graded Substandard or Doubtful) in the heterogeneous category are selected and evaluated for impairment on an individual basis. The Bank considers loans individually reviewed to be impaired if, based on current information and events, it is probable the Bank will not be able to collect all amounts due according to the contractual terms of the loan agreement. For loans determined to be impaired, the bank utilizes the most applicable asset valuation method for the loan from the following valuation methods: fair value of collateral less costs to sell, present value of expected future cash flows, or the loan's observable market price. When the value of an impaired loan is less than the recorded investment in the loan, the deficiency is charged-off against the allowance for loan losses. Individually evaluated impaired loans are excluded from receiving any additional general valuation allowance because specific reserves have been established for them. All other loans, including individually evaluated loans determined not to be impaired, are included in groups of loans that are evaluated for general reserves.

All Doubtful loans and loans that are past due or matured in excess of 90 days, on nonaccrual status and loans restructured in a troubled debt restructuring are considered impaired regardless of the collateral coverage. Modified or restructured loans and Substandard loans over $5.0 million are also reviewed for possible impairment.

At June 30, 2011 and December 31, 2010, all impaired loans were on nonaccrual status including $33.2 million and $76.9 million, respectively, of loans not 90 or more days past due. At June 30, 2011 and December 31, 2010, there were no commitments to lend additional funds to borrowers whose loans are impaired. Impaired non-covered loans as of June 30, 2011 and December 31, 2010 are set forth in the following tables. The interest income recognized on impaired loans is recognized on a cash basis when received.

											As of and for the three months ended June 30, 2011				As of and for the six months ended June 30, 2011
	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
As of and for the three and six months ended June 30, 2011
Residential:
Single-family	$	9,089	$	8,539	$	-	$	8,539	$	-	$	8,648	$	3	$	8,884	$	6
Multifamily		17,002		14,479		404		14,883		91		15,257		44		15,542		87
CRE:
Income producing		53,805		27,680		1,451		29,131		342		29,983		68		30,333		137
Construction		52,704		30,831		2,695		33,526		1,187		42,360		54		45,325		108
Land		37,932		17,954		6,196		24,150		552		24,808		89		26,807		178
C&I:
Commercial business		34,295		20,371		2,689		23,060		1,574		24,196		141		25,635		283
Trade finance		2,998		1,109		-		1,109		-		2,055		15		2,370		30
Consumer:
Student loans		-		1,077		-		1,077		-		-		-		-		-
Other consumer		1,688		-		-		-		-		1,078		1		1,137		1
Total	$	209,513	$	122,040	$	13,435	$	135,475	$	3,746	$	148,385	$	415	$	156,033	$	830

	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
As of and for the year ended December 31, 2010
Residential:
Single-family	$	8,272	$	7,058	$	355	$	7,413	$	219	$	9,046	$	209
Multifamily		19,065		16,751		631		17,382		90		18,835		540
CRE:
Income producing		53,615		40,062		6,354		46,416		1,557		53,678		2,174
Construction		41,200		33,030		2,436		35,466		1,366		39,076		1,728
Land		39,840		21,979		6,920		28,899		4,324		32,722		1,326
C&I:
Commercial business		32,273		18,774		3,897		22,671		2,468		22,800		1,199
Trade finance		-		-		-		-		-		-		-
Consumer:
Student loans		-		-		-		-		-		-		-
Other consumer		1,261		620		-		620		-		1,072		28
Total	$	195,526	$	138,274	$	20,593	$	158,867	$	10,024	$	177,229	$	7,204

Restructured Loans-The Company had $60.1 million and $122.1 million in total performing restructured loans as of June 30, 2011 and December 31, 2010, respectively. Performing restructured loans were returned to accrual status after exhibiting at least six months of current payment history. Nonperforming restructured loans were $11.9 million and $42.1 million at June 30, 2011 and December 31, 2010, respectively.

Allowance for Loan Losses

The allowance consists of specific reserves and a general reserve. The Bank's loans fall into heterogeneous and homogeneous (mostly consumer loans) categories. Impaired loans in the heterogeneous category are subject to specific reserves. Loans in the homogeneous category, as well as non-impaired loans in the heterogeneous category, are evaluated as part of the general reserve. The general reserve is calculated by utilizing both quantitative and qualitative factors. There are different qualitative risks for the loans in each portfolio segment. As of June 30, 2011, the Residential and CRE segments' predominant risk characteristic is the collateral and the geographic location of the property collateralizing the loan. The risk is qualitatively assessed based on the change in the real estate market in those geographic areas. The C&I segment's predominant risk characteristics are global cash flows of the guarantors and businesses we lend to and economic and market conditions. Consumer loans, excluding the student loan portfolio guaranteed by the U.S. Department of Education, are largely comprised of home equity lines of credit, for which the predominant risk characteristic is the real estate collateral securing the loan.

Our methodology to determine the overall appropriateness of the allowance is based on a classification migration model and qualitative considerations. The migration analysis examines pools of loans having similar characteristics and analyzes their loss rates over a historical period. We utilize historical loss factors derived from trends and losses associated with each pool over a specified period of time. Based on this process, we assign loss factors to each loan grade within each pool of loans. Loss rates derived by the migration model are based predominantly on historical loss trends that may not be indicative of the actual or inherent loss potential. As such, we utilize qualitative and environmental factors as adjusting mechanisms to supplement the historical results of the classification migration model. Qualitative considerations include, but are not limited to, prevailing economic or market conditions, relative risk profiles of various loan segments, volume concentrations, growth trends, delinquency and nonaccrual status, problem loan trends, and geographic concentrations. Qualitative and environmental factors are reflected as percentage adjustments and are added to the historical loss rates derived from the classified asset migration model to determine the appropriate allowance amount for each loan pool.

Covered Loans-As of the respective acquisition dates, WFIB's and UCB's loan portfolios included unfunded commitments for commercial lines of credit, construction draws and other lending activity. The total commitment outstanding as of the respective acquisition dates is covered under the shared-loss agreements. However, any additional advances on these loans subsequent to acquisition date are not accounted for under ASC 310-30. As additional advances on these commitments have occurred, the Bank has considered these amounts in the allowance for loan losses calculation. As of June 30, 2011 and December 31, 2010, $6.7 million, or 3.1% and $4.2 million, or 1.8%, respectively, of the total allowance is allocated to the allowance for loan losses on covered loans. The covered loans acquired are, and will continue to be, subject to the Bank's internal and external credit review and monitoring. Credit deterioration, if any, beyond the respective acquisition date fair value amounts of the covered loans under ASC 310-30 will be separately measured and accounted for under ASC 310-30. If required, the establishment of an allowance for covered loans accounted for under ASC 310-30 will result in a charge to earnings with a partially offsetting noninterest income item reflected in the increase to the FDIC indemnification asset or receivable. As of June 30, 2011 and December 31, 2010, there is no allowance for the covered loans accounted for under ASC 310-30 due to deterioration of credit quality.

The Company recorded $53.0 million in loan loss provisions for the six months ended June 30, 2011, as compared to $131.7 million for the six months ended June 30, 2010. It is the Company's policy to promptly charge-off the amount of impairment on a loan which represents the difference in the outstanding loan balance and the fair value of the collateral or discounted cash flow. Recoveries are recorded when payment is received on loans that were previously charged-off through the allowance for loan losses. For the six months ended June 30, 2011, the Company recorded $65.8 million in net charge-offs in comparison to $119.1 million for the six months ended June 30, 2010. The following tables detail activity in the allowance for loan losses, for both non-covered and covered loans, by portfolio segment for the six months ended June 30, 2011 and the year ended December 31, 2010. Allocation of a portion of the allowance to one segment of the loan portfolio does not preclude its availability to absorb losses in other segments.

	Residential			CRE			C&I			Consumer			Covered Loans Subject to Allowance for Loan Losses(1)		Unallocated			Total
	(In thousands)
Six months ended June 30, 2011
Beginning balance	$	49,491		$	117,752		$	59,737		$	3,428		$	4,225	$	-		$	234,633
Provision for loan losses		446			9,668			37,752			1,389			2,506		1,245			53,006
Allowance for unfunded loan commitments and letters of credit		-			-			-			-			-		(1,245	)		(1,245	)
Charge-offs		(5,553	)		(44,385	)		(21,808	)		(1,384	)		-		-			(73,130	)
Recoveries		246			2,651			4,304			91			-		-			7,292
Net charge-offs		(5,307	)		(41,734	)		(17,504	)		(1,293	)		-		-			(65,838	)
Ending balance	$	44,630		$	85,686		$	79,985		$	3,524		$	6,731	$	-		$	220,556

	Residential			CRE			C&I			Consumer			Covered Loans Subject to Allowance for Loan Losses(1)		Unallocated			Total
	(In thousands)
Three Months Ended June 30, 2011
Beginning balance	$	47,309		$	96,221		$	73,104		$	3,768		$	5,759	$	-		$	226,161
Provision for loan losses		(478	)		9,772			15,725			22			972		487			26,500
Allowance for unfunded loan commitments and letters of credit		-			-			-			-			-		(487	)		(487	)
Charge-offs		(2,216	)		(21,985	)		(11,090	)		(304	)		-		-			(35,595	)
Recoveries		15			1,678			2,246			38			-		-			3,977
Net charge-offs		(2,201	)		(20,307	)		(8,844	)		(266	)		-		-			(31,618	)
Ending balance	$	44,630		$	85,686		$	79,985		$	3,524		$	6,731	$	-		$	220,556


Ending balance allocated to:
Loans individually evaluated for impairment	$	91		$	2,081		$	1,574		$	-		$	-	$	-		$	3,746
Loans collectively evaluated for impairment		44,539			83,605			78,411			3,524			6,731		-			216,810
Loans acquired with deteriorated credit quality(2)		-			-			-			-			-		-			-
Ending balance	$	44,630		$	85,686		$	79,985		$	3,524		$	6,731	$	-		$	220,556

	Residential			CRE			C&I			Consumer			Covered Loans Subject to Allowance for Loan Losses(1)		Unallocated			Total
	(In thousands)
Year ended December 31, 2010
Beginning balance	$	38,025		$	147,591		$	50,487		$	2,730		$	-	$	-		$	238,833
Provision for loan losses		59,525			97,548			34,613			2,415			4,225		1,833			200,159
Allowance for unfunded loan commitments and letters of credit		-			-			-			-			-		(1,833	)		(1,833	)
Charge-offs		(49,685	)		(137,460	)		(35,479	)		(2,579	)		-		-			(225,203	)
Recoveries		1,626			10,073			10,116			862			-		-			22,677
Net charge-offs		(48,059	)		(127,387	)		(25,363	)		(1,717	)		-		-			(202,526	)
Ending balance	$	49,491		$	117,752		$	59,737		$	3,428		$	4,225	$	-		$	234,633

Ending balance allocated to:
Loans individually evaluated for impairment	$	309		$	7,247		$	2,468		$	-		$	-	$	-		$	10,024
Loans collectively evaluated for impairment		49,182			110,505			57,269			3,428			4,225		-			224,609
Loans acquired with deteriorated credit quality(2)		-			-			-			-			-		-			-
Ending balance	$	49,491		$	117,752		$	59,737		$	3,428		$	4,225	$	-		$	234,633

_______________________

(1)	This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses.

(2)	The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30.

The Company's recorded investment in total loans receivable as of June 30, 2011 and December 31, 2010 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company's impairment methodology is as follows:

	Residential		CRE		C&I		Consumer		Covered Loans Subject to Allowance for Loan Losses		Total
	(In thousands)
June 30, 2011
Loans individually evaluated for impairment	$	23,421	$	86,808	$	24,169	$	1,077	$	-	$	135,475
Loans collectively evaluated for impairment		2,213,795		3,741,821		2,660,303		587,863		607,475		9,811,257
Loans acquired with deteriorated credit quality(1)		1,473,275		2,634,131		519,949		74,797		-		4,702,152
Ending balance	$	3,710,491	$	6,462,760	$	3,204,421	$	663,737	$	607,475	$	14,648,884

	Residential		CRE		C&I		Consumer		Covered Loans Subject to Allowance for Loan Losses		Total
	(In thousands)
December 31, 2010
Loans individually evaluated for impairment	$	24,795	$	110,781	$	22,671	$	620	$	-	$	158,867
Loans collectively evaluated for impairment		2,068,974		3,795,957		1,960,685		732,905		561,725		9,120,246
Loans acquired with deteriorated credit quality(1)		1,614,732		3,059,133		634,560		85,623		-		5,394,048
Ending balance	$	3,708,501	$	6,965,871	$	2,617,916	$	819,148	$	561,725	$	14,673,161

_______________________

(1)	The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The total principal balance is presented and excludes the purchase discount and any additional advances subsequent to acquisition date.

Allowance for Unfunded Loan Commitments, Off-Balance Sheet Credit Exposures and Recourse Provisions-The allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to these unfunded credit facilities. The determination of the adequacy of the allowance is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. As of June 30, 2011 and December 31, 2010, the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions amounted to $11.2 million and $10.0 million, respectively. Net adjustments to the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions are included in the provision for loan losses.

Loans serviced for others amounted to $1.66 billion and $1.81 billion at June 30, 2011 and December 31, 2010, respectively. These represent loans that have either been sold or securitized for which the Bank continues to provide servicing and has limited recourse. The majority of these loans are residential and CRE at June 30, 2011 and December 31, 2010. Of the total allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions, $4.5 million and $4.7 million pertain to these loans as of June 30, 2011 and December 31, 2010, respectively. These loans are maintained off-balance sheet and are not included in the loans receivable balance.