FDIC SHARED-LOSS RECEIVABLE AND PAYABLE

BancShares completed six FDIC-assisted transactions with shared-loss agreements during the period beginning in 2009 through 2011. Prior to its merger into BancShares, First Citizens Bancorporation, Inc. (Bancorporation) completed three FDIC-assisted transactions with shared-loss agreements: Georgian Bank (acquired in 2009); Williamsburg First National Bank (acquired in 2010); and Atlantic Bank & Trust (acquired in 2011).

During the first quarter of 2017, FCB entered into an agreement with the FDIC to terminate the shared-loss agreement for Venture

Bank (VB). Under the terms of the agreement, FCB made a payment of $285 thousand to the FDIC as consideration for early termination of the shared-loss agreement. The early termination resulted in an adjustment of $240 thousand to the FDIC shared-loss receivable and a $45 thousand loss on the termination of the shared-loss agreement. In addition to the shared-loss agreement termination for VB, FCB terminated five shared-loss agreements in 2016, including Temecula Valley Bank, Sun American Bank, Williamsburg First National Bank, Atlantic Bank & Trust and Colorado Capital Bank.

As of September 30, 2017, shared-loss agreements are still active for First Regional Bank (FRB), Georgian Bank (GB) and United Western Bank (UWB). Shared-loss protection remains for single family residential loans acquired from UWB and GB in the amount of $70.4 million. FRB remains in a recovery period, where any recoveries are shared with the FDIC, until March 2020.

The following table provides changes in the receivable from the FDIC for the three and nine months ended September 30, 2017 and September 30, 2016.



	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2017			2016			2017			2016
Beginning balance	$	3,766		$	5,281		$	4,172		$	4,054
Amortization	(421		)	(1,017		)	(1,443		)	(4,259		)
Net cash payments to FDIC	2,243			3,199			7,440			16,701
Post-acquisition adjustments	(978		)	(4,355		)	(5,799		)	(11,926		)
Termination of FDIC shared-loss agreements	—			—			240			(1,462		)
Ending balance	$	4,610		$	3,108		$	4,610		$	3,108

The shared-loss agreements for two FDIC-assisted transactions, FRB and UWB, include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability). The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition and is recorded in the Consolidated Balance Sheets as a payable to the FDIC under the relevant shared-loss agreements. As of September 30, 2017 and December 31, 2016, the estimated clawback liability was $100.2 million and $97.0 million, respectively. The clawback liability payment dates for FRB and UWB are March 2020 and March 2021, respectively.