COLUMBIA BANKING SYSTEM, INC., 10-K filed on 2/29/2012
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2011
Jan. 31, 2012
Jun. 30, 2011
Document Information [Line Items]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 31, 2011 
 
 
Document Fiscal Year Focus
2011 
 
 
Document Fiscal Period Focus
FY 
 
 
Entity Registrant Name
COLUMBIA BANKING SYSTEM INC 
 
 
Entity Central Index Key
0000887343 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
39,522,884 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 667,249,601 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
ASSETS
 
 
Cash and due from banks
$ 91,364 
$ 55,492 
Interest-earning deposits with banks
202,925 
458,638 
Total cash and cash equivalents
294,289 
514,130 
Securities available for sale at fair value (amortized cost of $987,560 and $743,928, respectively)
1,028,110 
763,866 
Federal Home Loan Bank stock at cost
22,215 
17,908 
Loans held for sale
2,148 
754 
Loans, net
2,827,259 
2,371,822 
FDIC loss sharing asset
175,071 
205,991 
Interest receivable
15,287 
11,164 
Premises and equipment, net
107,899 
93,108 
Other real estate owned ($28,126 and $14,443 covered by FDIC loss share, respectively)
51,019 
45,434 
Goodwill
115,554 
109,639 
Core deposit intangible, net
20,166 
18,696 
Other assets
126,928 
103,851 
Total Assets
4,785,945 
4,256,363 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
Noninterest-bearing
1,156,610 
895,671 
Interest-bearing
2,658,919 
2,431,598 
Total deposits
3,815,529 
3,327,269 
Federal Home Loan Bank advances
119,009 
119,405 
Securities sold under agreements to repurchase
25,000 
25,000 
Other borrowings
0 
642 
Long-term subordinated debt
0 
25,735 
Other liabilities
67,069 
51,434 
Total liabilities
4,026,607 
3,549,485 
Commitments and contingent liabilities
   
   
Shareholders' equity:
 
 
Authorized shares
63,033 
63,033 
Common Stock Shares Issued And Outstanding
39,506 
39,338 
Common Stock (no par value)
579,136 
576,905 
Retained earnings
155,069 
117,692 
Accumulated other comprehensive income
25,133 
12,281 
Total shareholders' equity
759,338 
706,878 
Total Liabilities and Shareholders' Equity
4,785,945 
4,256,363 
Noncovered Loans [Member]
 
 
ASSETS
 
 
Loans held for sale
2,148 
754 
Loans, excluding covered loans, net of unearned income of ($16,217) and ($3,490), respectively
2,348,371 
1,915,754 
Less: allowance for loan and lease losses
53,041 
60,993 
Loans, net
2,295,330 
1,854,761 
Other real estate owned ($28,126 and $14,443 covered by FDIC loss share, respectively)
22,893 
30,991 
Covered Loans [Member]
 
 
ASSETS
 
 
Less: allowance for loan and lease losses
4,944 
6,055 
Loans, net
531,929 
517,061 
Other real estate owned ($28,126 and $14,443 covered by FDIC loss share, respectively)
$ 28,126 
$ 14,443 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Securities available-for-sale, amortized cost
$ 987,560 
$ 743,928 
Other real estate owned covered by FDIC loss share
51,019 
45,434 
Common stock, par value
   
   
Common stock, shares authorized
63,033 
63,033 
Common stock, outstanding
39,506 
39,338 
Noncovered Loans [Member]
 
 
Unearned income on loans
(16,217)
(3,490)
Allowance for losses
(53,041)
(60,993)
Other real estate owned covered by FDIC loss share
22,893 
30,991 
Covered Loans [Member]
 
 
Allowance for losses
(4,944)
(6,055)
Other real estate owned covered by FDIC loss share
$ 28,126 
$ 14,443 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Interest Income
 
 
 
Loans
$ 218,420 
$ 157,292 
$ 117,062 
Taxable securities
21,870 
18,276 
17,300 
Tax-exempt securities
10,142 
9,348 
8,458 
Federal funds sold and deposits in banks
839 
963 
215 
Total interest income
251,271 
185,879 
143,035 
Interest Expense
 
 
 
Deposits
10,478 
16,733 
23,250 
Federal Home Loan Bank and Federal Reserve Bank borrowings
2,980 
2,841 
2,759 
Long-term obligations
579 
1,029 
1,197 
Other borrowings
498 
489 
477 
Total interest expense
14,535 
21,092 
27,683 
Net Interest Income
236,736 
164,787 
115,352 
Provision (recapture) for loan and lease losses
5,752 
47,346 
63,500 
Net interest income after provision (recapture) for loan and lease losses
230,984 
117,441 
51,852 
Noninterest Income (Loss)
 
 
 
Service charges and other fees
26,632 
24,698 
15,181 
Gain on bank acquisitions, net of tax
1,830 
9,818 
0 
Merchant services fees
7,385 
7,502 
7,321 
Redemption of Visa and MasterCard shares
0 
0 
49 
Gain on sale of investment securities, net
134 
58 
1,077 
Impairment charge on investment securities
(2,950)
0 
0 
Bank owned life insurance
2,188 
2,041 
2,023 
Change in FDIC loss sharing asset
(49,496)
4,908 
0 
Other
4,994 
3,756 
4,039 
Total noninterest income (loss)
(9,283)
52,781 
29,690 
Noninterest Expense
 
 
 
Compensation and employee benefits
81,552 
69,780 
47,275 
Occupancy
18,963 
16,814 
12,128 
Merchant processing
3,698 
4,364 
3,449 
Advertising and promotion
3,686 
3,081 
1,943 
Data processing
8,484 
8,769 
5,482 
Legal and professional fees
6,486 
5,684 
3,871 
Taxes, licenses and fees
4,446 
2,858 
2,478 
Regulatory premiums
4,337 
6,485 
5,777 
Net cost (benefit) of operation of other real estate owned
(1,022)
787 
861 
Amortization of intangibles
4,319 
3,922 
1,045 
FDIC clawback liability
3,656 
0 
0 
Other
17,154 
14,603 
10,179 
Total noninterest expense
155,759 
137,147 
94,488 
Income (loss) before income taxes
65,942 
33,075 
(12,946)
Provision (benefit) for income taxes
17,905 
2,291 
(8,978)
Net Income (Loss)
48,037 
30,784 
(3,968)
Net Income (Loss) Applicable to Common Shareholders
48,037 
25,837 
(8,371)
Per Common Share
 
 
 
Earnings (loss) basic (dollars per share)
$ 1.22 1
$ 0.73 1
$ (0.38)
Earnings (loss) diluted (dollars per share)
$ 1.21 1
$ 0.72 1
$ (0.38)
Dividends paid per common share ($ per share)
$ 0.27 
$ 0.04 
$ 0.07 
Weighted average number of common shares outstanding
39,103 
35,209 
21,854 
Weighted average number of diluted common shares outstanding
39,180 
35,392 
21,854 
Noncovered Loans [Member]
 
 
 
Interest Expense
 
 
 
Provision (recapture) for loan and lease losses
7,400 
41,291 
63,500 
Covered Loans [Member]
 
 
 
Interest Expense
 
 
 
Provision (recapture) for loan and lease losses
$ (1,648)
$ 6,055 
$ 0 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Net income (loss)
$ 48,037 
$ 30,784 
$ (3,968)
Unrealized gain from securities:
 
 
 
Net unrealized holding gain from available for sale securities arising during the period, net of tax of ($7,462), ($1,047) and ($5,197)
13,285 
1,587 
9,435 
Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $48, $20 and $383
(85)
(38)
(695)
Net unrealized gain from securities, net of reclassification adjustment
13,200 
1,549 
8,740 
Cash flow hedging instruments:
 
 
 
Reclassification adjustment of net gain included in income, net of tax of $79, $625, and $913
(143)
(1,134)
(1,657)
Net change in cash flow hedging instruments
(143)
(1,134)
(1,657)
Pension plan liability adjustment:
 
 
 
Unrecognized net actuarial gain (loss) during the period, net of tax of $154, ($12) and $379
(260)
23 
(689)
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($31), ($15) and ($18)
55 
27 
33 
Pension plan liability adjustment, net
(205)
50 
(656)
Other comprehensive income
12,852 
465 
6,427 
Comprehensive income
$ 60,889 
$ 31,249 
$ 2,459 
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Net unrealized holding gain from available for sale securities arising during the period, tax
$ 7,462 
$ 1,047 
$ 5,197 
Reclassification adjustment of net gain from sale of available for sale securities included in income, tax
48 
20 
383 
Reclassification adjustment of net gain included in income, tax
79 
625 
913 
Net unrealized gain from unfunded defined benefit plan liability arising during the period, tax
154 
(12)
379 
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, tax
$ (31)
$ (15)
$ (18)
Consolidated Statements of Changes in Shareholders' Equity (USD $)
In Thousands, except Share data
Total
Preferred Stock [Member]
Common Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income [Member]
Balance, value at Dec. 31, 2008
$ 415,385 
$ 73,743 
$ 233,192 
$ 103,061 
$ 5,389 
Balance (in shares) at Dec. 31, 2008
 
77,000 
18,151,000 
 
 
Net income (loss)
(3,968)
 
 
(3,968)
 
Other comprehensive income
6,427 
 
 
 
6,427 
Accretion of preferred stock discount
0 
558 
 
(558)
 
Issuance of common stock, net of offering costs, value
113,537 
 
113,537 
 
 
Issuance of common stock, net of offering costs, shares
 
 
9,775,000 
 
 
Issuance of common stock - stock option and other plans, value
1,085 
 
1,085 
 
 
Issuance of common stock - stock option and other plans, shares
 
 
100,000 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, value
1,038 
 
1,038 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, shares
 
 
103,000 
 
 
Tax benefit deficiency associated with share-based compensation
(146)
 
(146)
 
 
Preferred dividends
(3,845)
 
 
(3,845)
 
Cash dividends paid on common stock
(1,374)
 
 
(1,374)
 
Balance, value at Dec. 31, 2009
528,139 
74,301 
348,706 
93,316 
11,816 
Balance (in shares) at Dec. 31, 2009
 
77,000 
28,129,000 
 
 
Net income (loss)
30,784 
 
 
30,784 
 
Other comprehensive income
465 
 
 
 
465 
Accretion of preferred stock discount
0 
2,597 
 
(2,597)
 
Redemption of preferred stock and common stock warrant
(80,200)
(76,898)
(3,302)
 
 
Redemption of preferred stock and common stock warrant (in shares)
 
(77,000)
 
 
 
Issuance of common stock, net of offering costs, value
229,129 
 
229,129 
 
 
Issuance of common stock, net of offering costs, shares
 
 
11,040,000 
 
 
Issuance of common stock - stock option and other plans, value
923 
 
923 
 
 
Issuance of common stock - stock option and other plans, shares
 
 
69,000 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, value
1,424 
 
1,424 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, shares
 
 
100,000 
 
 
Tax benefit deficiency associated with share-based compensation
25 
 
25 
 
 
Preferred dividends
(2,350)
 
 
(2,350)
 
Cash dividends paid on common stock
(1,461)
 
 
(1,461)
 
Balance, value at Dec. 31, 2010
706,878 
0 
576,905 
117,692 
12,281 
Balance (in shares) at Dec. 31, 2010
 
0 
39,338,000 
 
 
Net income (loss)
48,037 
 
 
48,037 
 
Other comprehensive income
12,852 
 
 
 
12,852 
Issuance of common stock - stock option and other plans, value
848 
 
848 
 
 
Issuance of common stock - stock option and other plans, shares
12,126 
 
51,000 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, value
1,635 
 
1,635 
 
 
Issuance of common stock - restricted stock awards, net of canceled awards, shares
 
 
119,000 
 
 
Tax benefit deficiency associated with share-based compensation
(220)
 
(220)
 
 
Purchase and retirement of common stock (in shares)
 
 
(2,000)
 
 
Purchase and retirement of common stock, value
(32)
 
(32)
 
 
Cash dividends paid on common stock
(10,660)
 
 
(10,660)
 
Balance, value at Dec. 31, 2011
$ 759,338 
$ 0 
$ 579,136 
$ 155,069 
$ 25,133 
Balance (in shares) at Dec. 31, 2011
 
0 
39,506,000 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Cash Flows From Operating Activities
 
 
 
Net Income (Loss)
$ 48,037 
$ 30,784 
$ (3,968)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Provision for loan and lease losses and losses on covered loans
5,752 
47,346 
63,500 
Stock-based compensation expense
1,635 
1,424 
1,038 
Depreciation, amortization and accretion
46,121 
11,352 
7,540 
Net realized gain on FDIC assisted bank acquisitions
(1,830)
(9,818)
0 
Net realized gain on sale of securities
(134)
(58)
(1,077)
Net realized (gain) loss on sale of other assets
79 
(33)
(94)
Net realized (gain) loss on sale of other real estate owned
(9,310)
(5,253)
183 
Gain on termination of cash flow hedging instruments
(222)
(1,759)
(2,570)
Write-down on other real estate owned
6,307 
5,144 
119 
Deferred income tax expense (benefit)
(3,783)
15,838 
(85)
Impairment charge on investment securities
2,950 
0 
0 
Net change in:
 
 
 
Loans held for sale
(1,394)
(754)
1,964 
Interest receivable
(1,243)
4,472 
1,311 
Interest payable
(403)
(784)
(2,327)
Other assets
(19,248)
18,419 
(21,560)
Other liabilities
13,110 
7,816 
(6,717)
Net cash provided by operating activities
86,424 
124,136 
37,257 
Cash Flows From Investing Activities
 
 
 
Loans originated and acquired, net of principal collected
(110,577)
164,084 
146,698 
Purchases of securities available for sale
(453,043)
(179,332)
(162,412)
Purchases of premises and equipment
(15,088)
(36,503)
(6,281)
Proceeds from FDIC reimbursement on loss-sharing asset
54,200 
0 
0 
Proceeds from sales of securities available for sale
72,523 
69,328 
16,665 
Proceeds from principal repayments and maturities of securities available for sale
148,583 
92,840 
67,682 
Proceeds from disposal of premises and equipment
46 
902 
42 
Proceeds from sales of covered other real estate owned
20,619 
17,890 
0 
Proceeds from sales of other real estate and other personal property owned
12,278 
4,800 
8,098 
Proceeds from termination of trust subsidiaries
774 
0 
0 
Capital improvements on other real estate properties
(735)
(1,720)
(1,165)
(Decrease) increase in Small Business Administration secured borrowings
(642)
642 
0 
Net cash acquired in business combinations
247,792 
145,534 
0 
Net cash (used in) provided by investing activities
(23,270)
278,465 
69,327 
Cash Flows From Financing Activities
 
 
 
Net increase (decrease) in deposits
(204,586)
(302,758)
100,554 
Proceeds from issuance of common stock
0 
229,129 
113,537 
Proceeds from exercise of stock options
848 
923 
939 
Proceeds from excess tax benefit from stock-based compensation
98 
25 
0 
Proceeds from Federal Home Loan Bank advances
100 
0 
324,000 
Proceeds from Federal Reserve Bank borrowings
100 
0 
415,000 
Repayment of Federal Home Loan Bank advances
(42,989)
(36,276)
(374,000)
Repayment of Federal Reserve Bank borrowings
(100)
0 
(465,000)
Payment of preferred stock dividends
0 
(2,841)
(3,781)
Payment of common stock dividends
(10,660)
(1,461)
(1,374)
Repayment of long-term subordinated debt
(25,774)
0 
0 
Repurchase of preferred stock and common stock warrant
0 
(80,200)
0 
Payment for purchase and retirement of common stock
(32)
0 
0 
Net decrease in other borrowings
0 
(86)
(115)
Net cash used in financing activities
(282,995)
(193,545)
109,760 
Increase (decrease) in cash and cash equivalents
(219,841)
209,056 
216,344 
Cash and cash equivalents at beginning of period
514,130 
305,074 
88,730 
Cash and cash equivalents at end of period
294,289 
514,130 
305,074 
Supplemental Information:
 
 
 
Cash paid for interest
14,938 
21,876 
30,010 
Cash paid for income tax
23,025 
6,895 
500 
Non-cash investing activities
 
 
 
Assets acquired in FDIC assisted acquisitions (excluding cash and cash equivalents)
485,870 
1,075,166 
0 
Liabilities assumed in FDIC assisted acquisitions
731,832 
1,210,882 
0 
Loans transferred to other real estate owned
$ 24,357 
$ 29,864 
$ 23,398 
Summary of Significant Accounting Policies (Notes)
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Organization
Columbia Banking System, Inc. (the “Corporation”) is the holding company for Columbia State Bank (the “Bank”). The Bank provides a full range of financial services through 102 branch locations, including 77 in the State of Washington and 25 in Oregon. Because the Bank comprises substantially all of the business of the Corporation, references to the “Company” mean the Corporation and the Bank together. The Corporation is approved as a bank holding company pursuant to the Gramm-Leach-Bliley Act of 1999.
The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying our estimates and assumptions could cause actual financial results to differ from our estimates. The most significant estimates included in the financial statements relate to the allowance for loan and lease losses, business combinations, acquired impaired loans, Federal Deposit Insurance Corporation loss sharing asset and goodwill impairment.
The Company has applied its accounting policies and estimation methods consistently in all periods presented in these financial statements (to the periods in which they applied), except for certain estimates related to the measurement of expected future cash flows on acquired impaired loans. For those certain estimates, in 2011 the Company began utilizing actual historical loan data rather than industry data, which had been utilized in 2010. The results of operations reflect any adjustments, all of which are of a normal recurring nature, and which, in the opinion of management, are necessary for a fair presentation of the results of the periods presented.
Consolidation
The consolidated financial statements of the Company include the accounts of the Corporation and the Bank. Intercompany balances and transactions have been eliminated in consolidation.
Cash and cash equivalents
Cash and cash equivalents include cash and due from banks, and interest bearing balances due from correspondent banks and the Federal Reserve Bank. Cash and cash equivalents have a maturity of 90 days or less at the time of purchase.
Securities
Securities are classified based on management’s intention on the date of purchase. All securities are classified as available for sale and are presented at fair value. Unrealized gains or losses on securities available for sale are excluded from net income but are included as separate components of other comprehensive income, net of taxes. Purchase premiums or discounts on securities available for sale are amortized or accreted into income using the interest method over the terms of the individual securities. The Company performs a quarterly assessment to determine whether a decline in fair value below amortized cost is other-than-temporary. Amortized cost includes adjustments made to the cost of an investment for accretion, amortization, collection of cash and previous other-than temporary impairment recognized in earnings. Other-than-temporary impairment exists when it is probable that the Company will be unable to recover the entire amortized cost basis of the security. If the decline in fair value is judged to be other than temporary, the security is written down to fair value which becomes the new cost basis and an impairment loss is recognized.
In performing the quarterly assessment for debt securities, management considers whether or not the Company expects to recover the entire amortized cost basis of the security. In addition, management must determine its position with respect to its intent to sell the security and whether it is more likely than not that it will not have to sell the security before recovery of its cost basis. The total amount recognized in earnings when there are credit losses associated with an impaired debt security and management asserts that it does not have the intent to sell the security and it is more likely than not that it will not have to sell the security before recovery of its cost basis is separated into (a) the amount representing a credit loss and (b) the amount related to non-credit factors. The amount of impairment related to credit losses is recognized in earnings. The credit loss component of other-than-temporary impairment, representing an increase in credit risk, is determined by the Company using its best estimate of the present value of cash flows expected to be collected from the debt security. The amount of impairment related to non-credit factors is recognized in other comprehensive income. The previous cost basis less impairment recognized in earnings becomes the new cost basis of the security and is not adjusted for subsequent recoveries in fair value. However, the difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income. The total other-than-temporary impairment is presented in the consolidated statements of income with a reduction for the amount of other-than-temporary impairment that is recognized in other comprehensive income, if any.
Realized gains or losses on sales of securities available for sale are recorded using the specific identification method.
Federal Home Loan Bank Stock
The Company’s investment in Federal Home Loan Bank (“FHLB”) stock is carried at par value because the shares can only be redeemed with the FHLB at par. The Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages and FHLB advances. Stock redemptions are at the discretion of the FHLB or of the Company, upon five years’ prior notice for FHLB Class B stock or six months notice for FHLB Class A stock to the FHLB. FHLB stock is carried at cost and is subject to recoverability testing per the Financial Services—Depository and Lending topic of the FASB Accounting Standards Codification (“ASC”).
Loans
Loans are generally carried at the unpaid principal balance, net of premiums, unearned discounts and net deferred loan fees. Net deferred loan fees include deferred unamortized fees less direct incremental loan origination costs. Net deferred loan fees, premiums and unearned discounts on loans are recognized in interest income using either the interest method or straight-line method over the terms of the loans, adjusted for actual prepayments. Interest income is accrued as earned. Fees related to lending activities other than the origination or purchase of loans are recognized as noninterest income during the period the related services are performed.
Nonaccrual loans—Loans are placed on nonaccrual status when a loan becomes contractually past due 90 days with respect to interest or principal unless the loan is both well secured and in the process of collection, or if full collection of interest or principal becomes uncertain. When a loan is placed on nonaccrual status, any accrued and unpaid interest receivable is reversed and the recognition of net deferred loan fees, premiums and unearned discounts ceases. Thereafter, interest collected on the loan is accounted for on the cash collection or cost recovery method until qualifying for return to accrual status. Generally, a loan may be returned to accrual status when the delinquent principal and interest are brought current in accordance with the terms of the loan agreement and future payments are reasonably assured.
Impaired loans—Loans are considered impaired when based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when a loan has been modified in a troubled debt restructuring. The assessment for impairment occurs when and while such loans are designated as classified per the Company’s internal risk rating system or when and while such loans are on nonaccrual. All nonaccrual loans greater than $250,000 are considered impaired and analyzed individually on a quarterly basis. Classified loans with an outstanding balance greater than $250,000 are evaluated for potential impairment on a quarterly basis.
When a loan with unique risk characteristics has been identified as being impaired, the amount of impairment will be measured by the Company using discounted cash flows, except when it is determined that the primary (remaining) source of repayment for the loan is the operation or liquidation of the underlying collateral. In these cases, the current fair value of the collateral, reduced by costs to sell, will be used in place of discounted cash flows. As a final alternative, the observable market price of the debt may be used to assess impairment. Predominantly, the Company uses the fair value of collateral approach based upon a reliable valuation.
When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by recording a charge-off to the allowance for loan and lease losses or by designating a specific reserve. The Company’s policy is to record cash receipts received on impaired loans first as reductions to principal and then to interest income.
Restructured Loans—A loan is classified as a troubled debt restructuring when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants concessions to the borrower in the restructuring that it would not otherwise consider. These concessions may include interest rate reductions, principal forgiveness, extension of maturity date and other actions intended to minimize potential losses. Generally, a nonaccrual loan that is restructured remains on nonaccrual status for a period of six months to demonstrate that the borrower can meet the restructured terms. If the borrower's performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan.
Acquired Impaired Loans—Loans acquired with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, formerly SOP 03-3 Accounting for Certain Loans or Debt Securities Acquired in a Transfer. In addition, because of the significant discounts associated with certain of the acquired loan portfolios, the Company elected to account for those certain acquired loans under ASC 310-30.
In situations where such loans have similar risk characteristics, loans are aggregated into pools to estimate cash flows. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. Expected cash flows at the acquisition date in excess of the fair value of loans are considered to be accretable yield, which is recognized as interest income over the life of the loan pool using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, any increases in cash flow over those expected at purchase date in excess of fair value are recorded as interest income prospectively. Any subsequent decreases in cash flow over those expected at purchase date due to credit deterioration are recognized by recording an allowance for losses on covered loans. Any disposals of loans, including sales of loans, payments in full or foreclosures result in the removal of the loan from the loan pool at the carrying amount.
Covered Loans—The term covered loans refers to acquired loans that are covered under a loss-sharing agreement with the FDIC. Substantially all covered loans are accounted for under ASC 310-30. See Acquired Impaired Loans for further discussion.
Unfunded loan commitments—Unfunded commitments are generally related to providing credit facilities to clients of the Bank and are not actively traded financial instruments. These unfunded commitments are disclosed as financial instruments with off-balance sheet risk in Note 17 in the Notes to Consolidated Financial Statements.
Allowance for Loan and Lease Losses
The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses and provision for loan and lease losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology procedures. The provision for loan and lease losses reflects management’s judgment of the adequacy of the allowance for loan and lease losses. Loan and lease losses are charged against the allowance when management believes the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan and lease losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
The allowance consists of general, specific, and unallocated components. The general component covers loans not specifically measured for impairment and is based on historical loss experience adjusted for qualitative factors. The specific component relates to loans that are impaired. For impaired loans an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The unallocated allowance provides for other credit losses inherent in the Company’s loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.
Allowance for Unfunded Commitments and Letters of Credit
The allowance for unfunded commitments 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. The allowance for unfunded commitments is included in other liabilities on the consolidated balance sheets, with changes to the balance charged against noninterest expense.
Allowance for Loan Losses on Covered Loans
The Company updates its cash flow projections for covered loans accounted for under ASC 310-30 on a quarterly basis. Assumptions utilized in this process include projections related to probability of default, loss severity, prepayment and recovery lag. Projections related to probability of default and prepayment are calculated utilizing a loan migration analysis. The loan migration analysis is a matrix of probability that specifies the probability of a loan pool transitioning into a particular delinquency state given its delinquency state at the re-measurement date. Loss severity factors are based upon actual charge-off data within the loan pools and recovery lags are based upon the collateral within the loan pools.
Any decreases in expected cash flows after the acquisition date and subsequent measurement periods are recognized by recording a provision for loan losses. See Acquired Impaired Loans for further discussion.
Premises and Equipment
Land, buildings, leasehold improvements and equipment are stated at cost less accumulated depreciation and amortization. Buildings and equipment are depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are amortized over the shorter of their useful lives or lease terms. Gains or losses on dispositions are reflected in current operations. Expenditures for improvements and major renewals are capitalized, and ordinary maintenance, repairs and small purchases are charged to operating expenses.
Software
Capitalized software is stated at cost, less accumulated amortization. Amortization is computed on a straight-line basis and charged to expense over the estimated useful life of the software which is generally three years. Capitalized software is included in Premises and equipment, net in the Consolidated Balance Sheets.
Other Real Estate Owned
Other real estate owned (“OREO”) is composed of real estate acquired in satisfaction of loans. Properties acquired by foreclosure or deed in lieu of foreclosure are transferred to OREO and are recorded at fair value less estimated costs to sell, at the date of transfer of the property. If the carrying value exceeds the fair value at the time of the transfer, the difference is charged to the allowance for loan and lease losses. The fair value of the OREO property is based upon current appraisal. Losses that result from the ongoing periodic valuation of these properties are charged to the net cost of operation of OREO in the period in which they are identified. Improvements to the OREO are capitalized and holding costs are charged to the net cost of operation of OREO as incurred.
Covered OREO—Covered OREO includes acquired OREO that is covered under a loss-sharing agreement with the FDIC. These assets were recorded at their fair value on acquisition date. Covered OREO is reported in Other real estate owned in the Consolidated Balance Sheets. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Upon transferring covered loan collateral to covered OREO status, valuation adjustments arising from acquisition accounting on the related loan are also transferred to covered OREO. Valuation adjustments arising from acquisition accounting on covered OREO result in a reduction of the covered OREO carrying amount and a corresponding increase in the expected FDIC reimbursement, with the estimated net loss to the Company, if any, charged against earnings.
FDIC Loss-sharing Asset
The acquisition date fair value of the reimbursement the Company expected to receive from the FDIC under loss-sharing agreements was recorded in the FDIC loss-sharing asset on the Consolidated Balance Sheet. Subsequent to initial recognition, the FDIC loss-sharing asset is reviewed quarterly and adjusted for any changes in expected cash flows. These adjustments are measured on the same basis as the related covered assets. Any decrease in expected cash flows due to an increase in expected credit losses will increase the FDIC loss-sharing asset and any increase in expected future cash flows due to a decrease in expected credit losses will decrease the FDIC loss-sharing asset. Increases and decreases to the FDIC loss-sharing asset are recorded as adjustments to noninterest income.
Goodwill and Intangibles
Net assets of companies acquired in purchase transactions are recorded at fair value at the date of acquisition. Identified intangibles are amortized on an accelerated basis over the period benefited. Goodwill is not amortized but is reviewed for potential impairment during the third quarter on an annual basis or, more frequently, if events or circumstances indicate a potential impairment, at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by management. If the fair value of the reporting unit, including goodwill, is determined to be less than the carrying amount of the reporting unit, a further test is required to measure the amount of impairment. If an impairment loss exists, the carrying amount of goodwill is adjusted to a new cost basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited.
Intangible assets are evaluated for impairment if events and circumstances indicate a possible impairment. Such evaluation of other intangible assets is based on undiscounted cash flow projections. At December 31, 2011, intangible assets included on the consolidated balance sheets consist of a core deposit intangible amortized using an accelerated method with an original estimated life of approximately 10 years.
Income Taxes
The provision for income taxes includes current and deferred income tax expense on net income adjusted for permanent and temporary differences such as interest income on state and municipal securities and affordable housing credits. Deferred tax assets and liabilities are recognized for the expected future tax consequences of existing temporary differences between the financial reporting and tax reporting basis of assets and liabilities using enacted tax laws and rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On a quarterly basis, management evaluates deferred tax assets to determine if these tax benefits are expected to be realized in future periods. This determination is based on facts and circumstances, including the Company’s current and future tax outlook. To the extent a deferred tax asset is no longer considered “more likely than not” to be realized, a valuation allowance is established.
Advertising
Advertising costs are generally expensed as incurred.
Earnings per Common Share
The Company calculates earnings per common share (“EPS”) using the two-class method in accordance with the Earnings per Share topic of the FASB ASC. The two-class method requires the Company to present EPS as if all of the earnings for the period are distributed to common shareholders and any participating securities, regardless of whether any actual dividends or distributions are made. Under authoritative guidance, all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities. The Company grants restricted shares under a share-based compensation plan that qualifies as participating securities. Restricted shares issued under the Company’s share-based compensation plan are entitled to dividends at the same rate as common stock.
Basic EPS are computed by dividing distributed and undistributed earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Distributed and undistributed earnings available to common shareholders represent net income reduced by preferred stock dividends and distributed and undistributed earnings available to participating securities. Common shares outstanding include common stock and vested restricted stock awards. Diluted EPS reflect the assumed conversion of all potential dilutive securities.
Share-Based Payment
The Company accounts for stock options and stock awards in accordance with the Compensation—Stock Compensation topic of the FASB ASC. Authoritative guidance requires the Company to measure the cost of employee services received in exchange for an award of equity instruments, such as stock options or stock awards, based on the fair value of the award on the grant date. This cost must be recognized in the consolidated statements of income over the vesting period of the award.
The Company issues restricted stock awards which generally vest over a four- or five-year period during which time the holder receives dividends and has full voting rights. Restricted stock is valued at the closing price of the Company’s stock on the date of an award.
Derivatives and Hedging Activities
In accordance with the Derivatives and Hedging topic of the FASB ASC, the Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction.
The Company enters into derivative contracts to add stability to interest income and to manage its exposure to changes in interest rates. On the date the Company enters into a derivative contract, the derivative instrument is designated as: (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (a “fair value” hedge); (2) a hedge of the variability in expected future cash flows associated with an existing recognized asset or liability or a probable forecasted transaction (a “cash flow” hedge); or (3) held for other economic purposes (an “economic” hedge) and not formally designated as part of qualifying hedging relationships under authoritative guidance.
In a fair value hedge, changes in the fair value of the hedging derivative are recognized in earnings and offset by recognizing changes in the fair value of the hedged item attributable to the risk being hedged. To the extent that the hedge is ineffective, the changes in fair value will not offset and the difference is reflected in earnings.
In a cash flow hedge, the effective portion of the change in the fair value of the hedging derivative is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings during the same period in which the hedged item affects earnings. The change in fair value of any ineffective portion of the hedging derivative is recognized immediately in earnings. When a cash flow hedge is discontinued, the net derivative gain or loss continues to be reported in accumulated other comprehensive income unless it is probable that the forecasted transactions will not occur by the end of the originally specified time period. The net derivative gain or loss from a discontinued cash flow hedge is reclassified into earnings during the originally specified time period in which the forecasted transactions were to occur.
The Company formally documents the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategy before initiating a hedge. To qualify for hedge accounting, the derivatives and related hedged items must be designated as a hedge. For hedging relationships in which effectiveness is measured, the correlations between the hedging instruments and hedged items are assessed at inception of the hedge and on an ongoing basis, which includes determining whether the hedge relationship is expected to be highly effective in offsetting changes in fair value or cash flows of hedged items.
Derivatives used for other economic purposes are used as economic hedges in which the Company has not attempted to achieve the highly effective hedge accounting standard under authoritative guidance. The changes in fair value of these instruments are recognized immediately in earnings.
Accounting Pronouncements
During the year ended December 31, 2011, the following Accounting Standards Updates (“ASU”) were issued or became effective:
In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities (Topic 210). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 is effective for interim and annual periods beginning on or after January 1, 2013 and should be applied retrospectively for all comparative periods presented. The Company is evaluating the impact this ASU will have on its financial condition and results of operations.
In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (Topic 350). ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 is effective for interim and annual periods beginning after December 15, 2011. Early adoption is permitted. This ASU did not have any impact on the Company's financial condition or results of operations.
In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (Topic 220). ASU 2011-05 attempts to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The effective date of ASU 2011-05 will be the first interim or fiscal period beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted. In December 2011, the FASB issued ASU 2011-11, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2011-11 deferred the effective date for certain amendments related to the presentation of reclassification of items out of accumulated other comprehensive income. The Company adopted the remaining applicable amendments in ASU 2011-05 during the current period and the adoption of this ASU had no impact on the Company's financial condition or results of operations.
In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles (“GAAP”) and International Financial Reporting Standards (“IFRS”) (Topic 820). ASU 2011-04 developed common requirements between GAAP and IFRS for measuring fair value and for disclosing information about fair value measurements. The effective date of ASU 2011-04 will be during interim or annual period beginning after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company is evaluating the impact this ASU will have on its financial condition and results of operations.
In April 2011, the FASB issued Accounting Standards Update ("ASU") 2011-03, Reconsideration of Effective Control for Repurchase Agreements (Topic 860). ASU 2011-03 attempts to improve the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before maturity. The effective date of ASU 2011-03 will be the first interim or annual period beginning after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company is evaluating the impact this ASU will have on its financial condition and results of operations.
In April 2011, the Financial Accounting Standards Board issued ASU 2011-02, A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring (Topic 310). ASU 2011-02 clarifies the criteria for a restructuring to be classified as a Troubled Debt Restructuring ("TDR"). The Company adopted this ASU during the current period as well as the related disclosure requirements which were included in ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (Topic 310). Adoption of this ASU had no impact on the Company's financial condition or results of operations. See Note 5 for expanded disclosure requirements related to TDR.
Business Combinations
Business Combinations
Business Combinations
Bank of Whitman
On August 5, 2011 the Bank acquired certain assets and assumed certain liabilities of the Bank of Whitman from the FDIC in an FDIC-assisted transaction. The Bank and the FDIC entered into a modified whole bank purchase and assumption agreement without loss share. 
The Bank of Whitman was a full service community bank headquartered in Colfax, Washington.  We entered into this transaction to acquire nine branches total in Adams, Asotin, Grant, Spokane, Walla Walla, and Whitman counties to assist us with filling in our geographic footprint in eastern Washington. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching.
 The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method).  The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the August 5, 2011 acquisition date.  The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain, net of tax, of $1.8 million, which is included in the Gain on bank acquisition line item in the Consolidated Statements of Income, and a core deposit intangible of $3.9 million. The bargain purchase gain represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed and is influenced significantly by the FDIC-assisted transaction process. The core deposit intangible asset recognized is deductible for income tax purposes.
The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period August 6, 2011 to December 31, 2011. Due to the exclusion of the majority of the non-performing loans and 11 branch locations, as well as the significant amount of fair value adjustments, historical results of the Bank of Whitman are not meaningful to the Company's results and thus no proforma information is presented.
The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
August 5, 2011
 
 
(in thousands)
Assets
 

Cash and due from banks
 
$
52,072

Investment securities
 
16,298

Federal Reserve Bank and Federal Home Loan Bank stock
 
3,977

Acquired loans
 
200,041

Accrued interest receivable
 
1,975

Premises and equipment
 
86

FDIC receivable
 
156,710

Core deposit intangible
 
3,943

Other assets
 
2,447

Total assets acquired
 
$
437,549

Liabilities
 


Deposits
 
$
401,127

Federal Home Loan Bank advances
 
32,949

Accrued interest payable
 
213

Deferred tax liability
 
1,034

Other liabilities
 
396

Total liabilities assumed
 
435,719

Net assets acquired (after tax gain)
 
$
1,830


First Heritage Bank
On May 27, 2011 the Bank acquired certain assets and assumed certain liabilities of First Heritage Bank from the FDIC in an FDIC-assisted transaction. As part of the Purchase and Assumption Agreement, the Bank and the FDIC entered into loss-sharing agreements (each, a “loss-sharing agreement” and collectively, the “loss-sharing agreements”), whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded commitments), OREO and certain accrued interest on loans for up to 90 days. We refer to the acquired loans and OREO subject to the loss-sharing agreements collectively as “covered assets.” Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single family residential mortgage loans are in effect for five years and ten years, respectively, from the May 27, 2011 acquisition date and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition date.
First Heritage Bank was a full service community bank headquartered in Snohomish, Washington that operated five branch locations in King and Snohomish Counties. We entered into this transaction to assist us with filling in our geographic footprint between Seattle and Bellingham, Washington and to support our recently expanded Bellingham banking team. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching.
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were initially provisionally recorded at their estimated fair values as of the May 27, 2011 acquisition date pending completion of valuation adjustments related to acquired loans, OREO, the indemnification asset, and other assets. The initial amounts recorded for acquired loans, OREO, the indemnification asset, and other assets were $81.9 million, $8.3 million, $38.1 million, and $1.7 million, respectively. At December 31, 2011 these amounts were retrospectively adjusted resulting in a $369 thousand decrease to acquired loans, a $61 thousand decrease to OREO, a $427 thousand increase to the indemnification asset, and a $1.9 million increase to other assets. The application of the acquisition method of accounting resulted in the recognition of $4.0 million of goodwill and a core deposit intangible of $1.3 million. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired and is influenced significantly by the FDIC-assisted transaction process.
The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period May 28, 2011 to December 31, 2011. Due primarily to the significant amount of fair value adjustments and the FDIC loss-sharing agreements put in place, historical results of First Heritage Bank are not meaningful to the Company’s results and thus no proforma information is presented.
The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
 
May 27, 2011
 
 
(in thousands)
Assets
 

Cash and due from banks
 
$
4,688

Interest-earning deposits with banks
 
6,689

Investment securities
 
5,303

Federal Home Loan Bank stock
 
477

Acquired loans
 
81,488

Accrued interest receivable
 
476

Premises and equipment
 
5,339

FDIC receivable
 
4,751

Other real estate owned covered by loss sharing
 
8,225

Goodwill
 
4,023

Core deposit intangible
 
1,337

FDIC indemnification asset
 
38,531

Other assets
 
3,657

Total assets acquired
 
$
164,984

Liabilities
 

Deposits
 
$
159,525

Federal Home Loan Bank advances
 
5,003

Accrued interest payable
 
421

Other liabilities
 
35

Total liabilities assumed
 
$
164,984


Summit Bank
On May 20, 2011 the Bank acquired certain assets and assumed certain liabilities of Summit Bank from the Federal Deposit Insurance Corporation (“FDIC”) in an FDIC-assisted transaction. As part of the Purchase and Assumption Agreement, the Bank and the FDIC entered into loss-sharing agreements (each, a “loss-sharing agreement” and collectively, the “loss-sharing agreements”), whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded commitments), OREO and certain accrued interest on loans for up to 90 days. We refer to the acquired loans and OREO subject to the loss-sharing agreements collectively as “covered assets.” Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single family residential mortgage loans are in effect for five years and ten years, respectively, from the May 20, 2011 acquisition date and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition date.
Summit Bank was a full service community bank headquartered in Burlington, Washington that operated three branch locations in Skagit County. We entered into this transaction to assist us with filling in our geographic footprint between Seattle and Bellingham, Washington and to support our recently expanded Bellingham banking team. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching.
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were initially provisionally recorded at their estimated fair values as of the May 20, 2011 acquisition date pending completion of valuation adjustments related to acquired loans, OREO, the indemnification asset, and other assets. The initial amounts recorded for acquired loans, OREO, the indemnification asset, and other assets were $71.4 million, $2.7 million, $27.2 million, and $786 thousand, respectively. At December 31, 2011 these amounts were retrospectively adjusted resulting in a $1.7 million decrease to acquired loans, a $509 thousand decrease to OREO, a $3.0 million increase to the indemnification asset, and a $1.0 million increase to other assets. The application of the acquisition method of accounting resulted in the recognition of $1.9 million of goodwill and a core deposit intangible of $509 thousand. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired and is influenced significantly by the FDIC-assisted transaction process.
The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period May 21, 2011 to December 31, 2011. Due primarily to the significant amount of fair value adjustments and the FDIC loss-sharing agreements put in place, historical results of Summit Bank are not meaningful to the Company’s results and thus no pro forma information is presented.
The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
 
May 20, 2011
 
 
(in thousands)
Assets
 
 
Cash and due from banks
 
$
1,837

Interest-earning deposits with banks and federal funds sold
 
14,198

Investment securities
 
871

Federal Home Loan Bank stock
 
406

Acquired loans
 
69,783

Accrued interest receivable
 
429

Premises and equipment
 
42

FDIC receivable
 
6,984

Other real estate owned covered by loss sharing
 
2,162

Goodwill
 
1,892

Core deposit intangible
 
509

FDIC indemnification asset
 
30,203

Other assets
 
1,813

Total assets acquired
 
$
131,129

Liabilities
 
 
Deposits
 
$
123,279

Federal Home Loan Bank advances
 
7,772

Accrued interest payable
 
71

Other liabilities
 
7

Total liabilities assumed
 
$
131,129

Cash and Cash Equivalents
Cash and Cash Equivalents
Cash and Cash Equivalents
The Company is required to maintain an average reserve balance with the Federal Reserve Bank or maintain such reserve balance in the form of cash. The average required reserve balance for the years ended December 31, 2011 and 2010 was approximately $27.0 million and $18.8 million, respectively, and was met by holding cash and maintaining an average balance with the Federal Reserve Bank.
Securities
Securities
Securities
At December 31, 2011 the Company's securities portfolio primarily consisted of securities issued by U.S. government agencies, U.S. government-sponsored enterprises and state and municipalities. All of the Company’s mortgage-backed securities and collateralized mortgage obligations are issued by U.S. government agencies and U.S. government-sponsored enterprises and are implicitly guaranteed by the U.S. government. The Company did not have any other issuances in its portfolio which exceeded ten percent of shareholders’ equity.
The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
December 31, 2011
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
678,631

 
$
19,323

 
$
(2,000
)
 
$
695,954

State and municipal securities
 
263,075

 
22,746

 
(58
)
 
285,763

U.S. government agency and government-sponsored enterprise securities
 
42,558

 
505

 
—

 
43,063

Other securities
 
3,296

 
64

 
(30
)
 
3,330

Total
 
$
987,560

 
$
42,638

 
$
(2,088
)
 
$
1,028,110

December 31, 2010
 

 

 

 

U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
491,530

 
$
16,139

 
$
(1,027
)
 
$
506,642

State and municipal securities
 
249,117

 
7,247

 
(2,383
)
 
253,981

Other securities
 
3,281

 
—

 
(38
)
 
3,243

Total
 
$
743,928

 
$
23,386

 
$
(3,448
)
 
$
763,866


Gross realized losses amounted to $250 thousand, $148 thousand, and $10 thousand for the years ended December 31, 2011, 2010 and 2009, respectively. Gross realized gains amounted to $384 thousand, $206 thousand, and $1.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. The following table summarizes the amortized cost and fair value of securities available for sale by contractual maturity groups:
 
 
December 31, 2011
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
18,310

 
$
18,610

Due after one year through five years
 
52,418

 
54,635

Due after five years through ten years
 
204,470

 
212,605

Due after ten years
 
709,066

 
738,930

Total investment securities available-for-sale
 
$
984,264

 
$
1,024,780


The following table summarizes, as of December 31, 2011 and 2010, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law: 
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
To Washington and Oregon State to secure public deposits
 
$
225,345

 
$
153,328

To Federal Home Loan Bank to secure advances
 
91,097

 
110,780

To Federal Reserve Bank to secure borrowings
 
56,347

 
149,315

Other securities pledged
 
47,454

 
45,109

Total securities pledged as collateral
 
$
420,243

 
$
458,532

The following tables show the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011 and 2010:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
December 31, 2011
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
238,875

 
$
(1,999
)
 
$
196

 
$
(1
)
 
$
239,071

 
(2,000
)
State and municipal securities
 
3,820

 
(24
)
 
950

 
(34
)
 
4,770

 
(58
)
Other securities
 
—

 
—

 
970

 
(30
)
 
970

 
(30
)
Total
 
$
242,695

 
$
(2,023
)
 
$
2,116

 
$
(65
)
 
$
244,811

 
$
(2,088
)
December 31, 2010
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
86,529

 
$
(1,025
)
 
$
588

 
$
(2
)
 
$
87,117

 
$
(1,027
)
State and municipal securities
 
74,755

 
(2,099
)
 
2,792

 
(284
)
 
77,547

 
(2,383
)
Other securities
 
2,275

 
(6
)
 
968

 
(32
)
 
3,243

 
(38
)
Total
 
$
163,559

 
$
(3,130
)
 
$
4,348

 
$
(318
)
 
$
167,907

 
$
(3,448
)

At December 31, 2011, there were eight state and municipal government securities in an unrealized loss position, of which one was in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of December 31, 2011 none of the rated obligations of state and local government entities held by the Company had an adverse credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2011.
At December 31, 2011, there were 35 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which two were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2011.
At December 31, 2011, there was one other security, a mortgage-backed securities fund in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at December 31, 2011 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.
Securities Deemed to be Other-Than-Temporarily Impaired
During 2011, the Company determined that one of its state and municipal securities with a par amount of $3.0 million was other-than-temporarily impaired due to it maturing during the period without repaying the principal amount. The defaulted security was issued in 2008 by a municipality located in the state of Washington. In accordance with ASC 320-10-35, the Company determined that the entire amount of the other-than-temporary impairment was credit-related as the present value of the expected future cash flows for the defaulted security was zero. The significant inputs used to determine the expected future cash flows were the default on principal repayment and there being no insurance on the defaulted security. The credit-related other-than-temporary impairment of $3.0 million was recorded in the consolidated statements of income.
Noncovered Loans
Noncovered Loans
Noncovered Loans
Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans that are not subject to FDIC loss share, including the loans acquired in the Bank of Whitman transaction described in Note 2.
The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):
 
 
December 31,
2011
 
December 31,
2010
 
 
(in thousands)
Noncovered loans:
 
 
 
 
Commercial business
 
$
1,031,721

 
$
795,369

Real estate:
 
 
 
 
One-to-four family residential
 
64,491

 
49,383

Commercial and multifamily residential
 
998,165

 
794,329

Total real estate
 
1,062,656

 
843,712

Real estate construction:
 
 
 
 
One-to-four family residential
 
50,208

 
67,961

Commercial and multifamily residential
 
36,768

 
30,185

Total real estate construction
 
86,976

 
98,146

Consumer
 
183,235

 
182,017

Less: Net unearned income
 
(16,217
)
 
(3,490
)
Total noncovered loans, net of unearned income
 
2,348,371

 
1,915,754

Less: Allowance for loan and lease losses
 
(53,041
)
 
(60,993
)
Total noncovered loans, net
 
$
2,295,330

 
$
1,854,761

Loans held for sale
 
$
2,148

 
$
754


At December 31, 2011 and 2010, the Company had no loans to foreign domiciled businesses or foreign countries, or loans related to highly leveraged transactions. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.
The Company and its banking subsidiary have granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $9.0 million and $12.9 million at December 31, 2011 and 2010, respectively. During 2011, advances on related party loans were $3.7 million and repayments totaled $7.6 million.
At December 31, 2011 and 2010, $462.0 million and $426.6 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank advances.
Non-accrual loans totaled $53.5 million and $89.2 million at December 31, 2011 and 2010, respectively. The amount of interest income foregone as a result of these loans being placed on non-accrual status totaled $5.3 million for 2011, $6.4 million for 2010 and $7.6 million for 2009. There were no loans 90 days past due and still accruing interest as of December 31, 2011 and there was one loan totaling $1 thousand 90 days past due still accruing interest as of December 31, 2010. At December 31, 2011 and 2010, there were $2.0 million and $5.6 million, respectively, of commitments of additional funds for loans accounted for on a non-accrual basis.
The following is an analysis of noncovered, nonaccrual loans as of December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Recorded
Investment
Nonaccrual
Loans
 
Unpaid Principal
Balance
Nonaccrual
Loans
 
Recorded
Investment
Nonaccrual
Loans
 
Unpaid Principal
Balance
Nonaccrual
Loans
 
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
Secured
 
$
10,124

 
$
16,820

 
$
32,368

 
$
44,316

Unsecured
 
119

 
719

 
—

 
327

Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
2,696

 
3,011

 
2,999

 
3,353

Commercial and multifamily residential
 
 
 
 
 
 
 
 
Commercial land
 
3,739

 
7,230

 
4,093

 
6,279

Income property multifamily
 
6,775

 
9,265

 
11,716

 
12,737

Owner occupied
 
8,971

 
10,932

 
7,407

 
8,990

Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
Land and acquisition
 
7,799

 
16,703

 
11,608

 
21,344

Residential construction
 
2,986

 
5,316

 
6,503

 
11,547

Commercial and multifamily residential
 
 
 
 
 
 
 
 
Income property multifamily
 
7,067

 
14,912

 
7,585

 
12,916

Owner occupied
 
—

 
—

 
—

 
—

Consumer
 
3,207

 
3,960

 
5,022

 
5,192

Total
 
$
53,483

 
$
88,868

 
$
89,301

 
$
127,001


 
The following is an analysis of the recorded investment of the aged loan portfolio as of December 31, 2011 and 2010:
 
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2011
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
966,563

 
$
1,741

 
$
2,989

 
$
—

 
$
4,730

 
$
10,124

 
$
981,417

Unsecured
 
46,880

 
407

 
—

 
—

 
407

 
119

 
47,406

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
60,764

 
603

 
—

 
—

 
603

 
2,696

 
64,063

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
46,161

 
781

 
—

 
—

 
781

 
3,739

 
50,681

Income property multifamily
 
524,225

 
2,872

 
121

 
—

 
2,993

 
6,775

 
533,993

Owner occupied
 
394,691

 
829

 
298

 
—

 
1,127

 
8,971

 
404,789

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,249

 
153

 
—

 
—

 
153

 
7,799

 
25,201

Residential construction
 
19,555

 
1,390

 
—

 
—

 
1,390

 
2,986

 
23,931

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
13,810

 
—

 
—

 
—

 
—

 
7,067

 
20,877

Owner occupied
 
12,790

 
—

 
—

 
—

 
—

 
—

 
12,790

Consumer
 
179,753

 
141

 
122

 
—

 
263

 
3,207

 
183,223

Total
 
$
2,282,441

 
$
8,917

 
$
3,530

 
$
—

 
$
12,447

 
$
53,483

 
$
2,348,371

 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2010
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
720,926

 
$
919

 
$
692

 
$
1

 
$
1,612

 
$
31,919

 
$
754,457

Unsecured
 
40,455

 
9

 
—

 
—

 
9

 
448

 
40,912

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
46,167

 
220

 
—

 
—

 
220

 
2,996

 
49,383

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
18,979

 
—

 
1,752

 
—

 
1,752

 
4,091

 
24,822

Income property multifamily
 
426,320

 
1,208

 
121

 
—

 
1,329

 
10,745

 
438,394

Owner occupied
 
318,508

 
497

 
3,752

 
—

 
4,249

 
8,356

 
331,113

Real Estate Construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
24,883

 
214

 
205

 
—

 
419

 
11,604

 
36,906

Residential construction
 
24,655

 
—

 
—

 
—

 
—

 
6,400

 
31,055

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
10,666

 
—

 
—

 
—

 
—

 
7,584

 
18,250

Owner occupied
 
11,935

 
—

 
—

 
—

 
—

 
—

 
11,935

Consumer
 
176,005

 
397

 
595

 
—

 
992

 
5,020

 
182,017

Total
 
$
1,819,499

 
$
3,464

 
$
7,117

 
$
1

 
$
10,582

 
$
89,163

 
$
1,919,244



The following is an analysis of impaired loans (see Note 1) as of December 31, 2011 and 2010: 
 
 
Recorded Investment
of Loans
Collectively Measured
for Contingency
Provision
 
Recorded Investment
of Loans
Individually
Measured for
Specific
Impairment
 
Impaired Loans With
Recorded Allowance
 
Impaired Loans Without
Recorded Allowance
 
Average Recorded
Investment
Impaired Loans 
 
Interest Recognized
on
Impaired Loans
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
December 31, 2011
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
972,531

 
$
8,886

 
$
2,926

 
$
2,927

 
$
954

 
$
5,960

 
$
12,109

 
$
15,578

 
$
511

Unsecured
 
47,309

 
97

 
97

 
97

 
97

 
—

 
—

 
138

 
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
61,584

 
2,479

 
582

 
590

 
96

 
1,897

 
2,136

 
2,494

 
—

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
46,882

 
3,799

 
—

 
—

 
—

 
3,799

 
6,773

 
4,263

 
—

Income property multifamily
 
527,362

 
6,631

 
687

 
759

 
63

 
5,944

 
7,700

 
8,881

 
59

Owner occupied
 
390,225

 
14,564

 
274

 
274

 
185

 
14,290

 
18,524

 
15,254

 
18

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,813

 
7,388

 
450

 
948

 
—

 
6,938

 
11,978

 
8,972

 
116

Residential construction
 
18,847

 
5,084

 
59

 
1,509

 
59

 
5,025

 
5,116

 
4,535

 
—

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
13,810

 
7,067

 
—

 
—

 
—

 
7,067

 
14,947

 
7,065

 
—

Owner occupied
 
12,790

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
180,930

 
2,293

 
151

 
225

 
30

 
2,142

 
2,639

 
3,880

 
15

Total
 
$
2,290,083

 
$
58,288

 
$
5,226

 
$
7,329

 
$
1,484

 
$
53,062

 
$
81,922

 
$
71,060

 
$
719

 
 
 
Recorded Investment
of Loans
Collectively Measured
for Contingency
Provision
 
Recorded Investment
of Loans
Individually
Measured for
Specific
Impairment
 
Impaired Loans With
Recorded Allowance
 
Impaired Loans Without
Recorded Allowance
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
December 31, 2010
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
724,665

 
$
29,793

 
$
2,717

 
$
2,758

 
$
600

 
$
27,081

 
$
26,913

Unsecured
 
40,808

 
104

 
75

 
75

 
75

 
29

 
30

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
46,728

 
2,655

 
—

 
—

 
—

 
2,658

 
2,949

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
20,959

 
3,863

 
3,062

 
5,225

 
—

 
804

 
826

Income property multifamily
 
427,799

 
10,595

 
3,094

 
3,139

 
59

 
10,292

 
12,253

Owner occupied
 
317,010

 
14,103

 
—

 
—

 
—

 
14,152

 
17,099

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
25,362

 
11,543

 
533

 
549

 
3

 
11,013

 
20,718

Residential construction
 
24,655

 
6,400

 
915

 
1,723

 
62

 
5,585

 
9,824

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
10,666

 
7,584

 
6,792

 
10,515

 
175

 
792

 
2,401

Owner occupied
 
11,935

 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
177,484

 
4,533

 
—

 
—

 
—

 
4,533

 
4,691

Total
 
$
1,828,071

 
$
91,173

 
$
17,188

 
$
23,984

 
$
974

 
$
76,939

 
$
97,703



The following is an analysis of loans classified as Troubled Debt Restructurings ("TDR") for the year ended December 31, 2011:
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial business:
 
 
 
 
 
 
Secured
 
6

 
$
659

 
$
659

Real estate: One-to-four family residential
 
1

 
369

 
369

Real estate: Commercial and multifamily residential:
 
 
 
 
 
 
Income property multifamily
 
2

 
1,280

 
1,280

Real estate construction: One-to-four family residential:
 
 
 
 
 
 
Residential construction
 
1

 
36

 
36

Total
 
10

 
$
2,344

 
$
2,344


The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties, that if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $535 thousand of additional funds on loans classified as TDR as of December 31, 2011. The TDR modifications or concessions are made to increase the likelihood these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured the same as impaired loans. For impaired loans, an allowance is established when the collateral value (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan. The Company did not have any loans modified as TDR that have defaulted during the year ended December 31, 2011.
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit
Allowance for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit
We maintain an allowance for loan and lease losses (“ALLL”) to absorb losses inherent in the loan portfolio. The size of the ALLL is determined through quarterly assessments of the probable estimated losses in the loan portfolio. Our methodology for making such assessments and determining the adequacy of the ALLL includes the following key elements:
1.
General valuation allowance consistent with the Contingencies topic of the FASB ASC.
2.
Classified loss reserves on specific relationships. Specific allowances for identified problem loans are determined in accordance with the Receivables topic of the FASB ASC.
3.
The unallocated allowance provides for other factors inherent in our loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed quarterly based on trends in credit losses, the results of credit reviews and overall economic trends.
The general valuation allowance is systematically calculated quarterly using quantitative and qualitative information about specific loan classes. The minimum required level an entity develops a methodology to determine its allowance for loan and lease losses is by general categories of loans, such as commercial business, real estate, and consumer. However, the Company’s methodology in determining its allowance for loan and lease losses is prepared in a more detailed manner at the loan class level, utilizing specific categories such as commercial business secured, commercial business unsecured, real estate commercial land, and real estate income property multifamily. The quantitative information uses historical losses from a specific loan class and incorporates the loan’s risk rating migration from origination to the point of loss.
A loan’s risk rating is primarily determined based upon the borrower’s ability to fulfill its debt obligation from a cash flow perspective. In the event there is financial deterioration of the borrower, the borrower’s other sources of income or repayment are also considered, including recent appraisal values for collateral dependent loans. The qualitative information takes into account general economic and business conditions affecting our market place, seasoning of the loan portfolio, duration of the business cycle, etc. to ensure our methodologies reflect the current economic environment and other factors as using historical loss information exclusively may not give an accurate estimate of inherent losses within the Company’s loan portfolio.
When a loan is deemed to be impaired, the Company has to determine if a specific valuation allowance is required for that loan. The specific valuation allowance is a reserve, calculated at the individual loan level, for each loan determined to be both, impaired and containing a value less than its recorded investment. The Company measures the impairment based on the discounted expected future cash flows, observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent or if foreclosure is probable. The specific reserve for each loan is equal to the difference between the recorded investment in the loan and its determined impairment value.
The ALLL is increased by provisions for loan and lease losses (“provision”) charged to expense, and is reduced by loans charged off, net of recoveries. While the Company’s management believes the best information available is used to determine the ALLL, changes in market conditions could result in adjustments to the ALLL, affecting net income, if circumstances differ from the assumptions used in determining the ALLL.
We have used the same methodology for ALLL calculations during 2011, 2010 and 2009. Adjustments to the percentages of the ALLL allocated to loan categories are made based on trends with respect to delinquencies and problem loans within each class of loans. The Company reviews the ALLL quantitative and qualitative methodology on a quarterly basis and makes adjustments when appropriate. The Company continues to strive towards maintaining a conservative approach to credit quality and will continue to prudently adjust our ALLL as necessary in order to maintain adequate reserves. The Company carefully monitors the loan portfolio and continues to emphasize the importance of credit quality while continuously strengthening loan monitoring systems and controls.
The following table shows a detailed analysis of the allowance for loan and lease losses for noncovered loans for the years ended December 31, 2011 and 2010: 
 
 
Beginning
Balance
 
Charge-offs
 
Recoveries
 
Provision (Recovery)
 
Ending
Balance
 
Specific
Reserve
 
General
Allocation
Year ended December 31, 2011
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
21,811

 
$
(7,270
)
 
$
1,154

 
$
9,050

 
$
24,745

 
$
954

 
$
23,791

Unsecured
 
738

 
(639
)
 
1,444

 
(854
)
 
689

 
97

 
592

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
1,100

 
(717
)
 
80

 
191

 
654

 
96

 
558

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
634

 
(660
)
 
12

 
502

 
488

 
—

 
488

Income property multifamily
 
15,210

 
(1,407
)
 
414

 
(4,666
)
 
9,551

 
63

 
9,488

Owner occupied
 
9,692

 
(1,620
)
 
33

 
1,501

 
9,606

 
185

 
9,421

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
3,769

 
(1,419
)
 
1,978

 
(1,997
)
 
2,331

 
—

 
2,331

Residential construction
 
2,292

 
(1,068
)
 
113

 
(473
)
 
864

 
59

 
805

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
274

 
(2,213
)
 
—

 
2,604

 
665

 
—

 
665

Owner occupied
 
70

 
—

 
—

 
(35
)
 
35

 
—

 
35

Consumer
 
2,120

 
(3,918
)
 
351

 
4,166

 
2,719

 
30

 
2,689

Unallocated
 
3,283

 
—

 
—

 
(2,589
)
 
694

 
—

 
694

Total
 
$
60,993

 
$
(20,931
)
 
$
5,579

 
$
7,400

 
$
53,041

 
$
1,484

 
$
51,557

 
 
Beginning
Balance
 
Charge-offs
 
Recoveries
 
Provision
 
Ending
Balance
 
Specific
Reserve
 
General
Allocation
Year ended December 31, 2010
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
20,409

 
$
(12,779
)
 
$
1,218

 
$
12,963

 
$
21,811

 
$
600

 
$
21,211

Unsecured
 
1,560

 
(2,100
)
 
1,171

 
107

 
738

 
75

 
663

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
1,072

 
(406
)
 
15

 
419

 
1,100

 
—

 
1,100

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
664

 
(2,165
)
 
—

 
2,135

 
634

 
—

 
634

Income property multifamily
 
9,860

 
(1,969
)
 
124

 
7,195

 
15,210

 
59

 
15,151

Owner occupied
 
6,690

 
(2,039
)
 
2

 
5,039

 
9,692

 
—

 
9,692

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
5,711

 
(8,409
)
 
1,199

 
5,268

 
3,769

 
3

 
3,766

Residential construction
 
2,304

 
(2,447
)
 
474

 
1,961

 
2,292

 
62

 
2,230

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
2,453

 
(3,107
)
 
775

 
153

 
274

 
175

 
99

Owner occupied
 
36

 
—

 
—

 
34

 
70

 
—

 
70

Consumer
 
1,282

 
(3,982
)
 
649

 
4,171

 
2,120

 
—

 
2,120

Unallocated
 
1,437

 
—

 
—

 
1,846

 
3,283

 
—

 
3,283

Total
 
$
53,478

 
$
(39,403
)
 
$
5,627

 
$
41,291

 
$
60,993

 
$
974

 
$
60,019


The 2009 changes in the ALLL for noncovered loans are summarized as follows:
 
 
 
Years Ended December 31,
 
 
2009
 
 
(in thousands)
Balance at beginning of year
 
$
42,747

Loans charged off
 
(54,521
)
Recoveries
 
1,752

Net chargeoffs
 
(52,769
)
Provision charged to expense
 
63,500

Balance at end of year
 
$
53,478


Changes in the allowance for unfunded commitments and letters of credit are summarized as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Beginning balance
 
$
1,165

 
$
775

 
$
500

Net changes in the allowance for unfunded commitments and letters of credit
 
370

 
390

 
275

Ending balance
 
$
1,535

 
$
1,165

 
$
775


Risk Elements
The extension of credit in the form of loans to individuals and businesses is one of our principal commerce activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry, type of borrower and by limiting the aggregation of debt to a single borrower.
The monitoring process for the loan portfolio includes periodic reviews of individual loans with risk ratings assigned to each loan. Based on the analysis, loans are given a risk rating of 1-10 based on the following criteria:

•
ratings of 1-3 indicate minimal to low credit risk,
•
ratings of 4-5 indicate an average credit risk with adequate repayment capacity when prolonged periods of adversity do not exist,
•
rating of 6 indicates higher than average risk requiring greater than routine attention by bank personnel due to conditions affecting the borrower, the borrower's industry or economic environment,
•
rating of 7 indicates potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date,
•
rating of 8 indicates a loss is possible if loan weaknesses are not corrected,
•
rating of 9 indicates loss is highly probable; however, the amount of loss has not yet been determined,
•
and a rating of 10 indicates the loan is uncollectable, and when identified is charged-off.
Loans with a risk rating of 1-6 are considered Pass loans and loans with risk ratings of 7, 8, 9 and 10 are considered Special Mention, Substandard, Doubtful and Loss, respectively. Loans with a risk rating of Substandard or worse are reported as classified loans in our allowance for loan and lease losses analysis. We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of loss on the loan increases. In the event full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on non-accrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an impairment of a loan warrants specific reserves or a write-down of the loan.
The following is an analysis of the credit quality of our noncovered loan portfolio as of December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Weighted-
Average
Risk Rating
 
Recorded
Investment
Noncovered
Loans
 
Weighted-
Average
Risk Rating
 
Recorded
Investment
Noncovered
Loans
 
 
(dollars in thousands)
Commercial business:
 
 
 
 
 
 
 
 
Secured
 
4.89

 
$
981,417

 
4.96

 
$
757,372

Unsecured
 
4.25

 
47,406

 
4.23

 
41,175

Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
4.81

 
64,063

 
4.96

 
49,436

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
Commercial land
 
5.22

 
50,681

 
5.75

 
24,956

Income property multifamily
 
4.94

 
533,993

 
5.07

 
406,711

Owner occupied
 
5.05

 
404,789

 
5.12

 
366,284

Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
Land and acquisition
 
6.43

 
25,201

 
6.79

 
37,054

Residential construction
 
5.94

 
23,931

 
6.63

 
31,293

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
Income property multifamily
 
5.49

 
20,877

 
6.38

 
18,296

Owner occupied
 
4.55

 
12,790

 
4.93

 
11,990

Consumer
 
4.24

 
183,223

 
4.31

 
182,624

Total recorded investment of noncovered loans
 
$
2,348,371

 
 
 
$
1,927,191

Noncovered Other Real Estate Owned
Noncovered Other Real Estate Owned
Noncovered Other Real Estate Owned
The following table sets forth activity in noncovered OREO for the period:
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
Noncovered OREO:
 
 
 
 
Balance, beginning of period
 
$
30,991

 
$
19,037

Transfers in, net of write-downs ($315 and $193, respectively)
 
8,834

 
19,006

OREO improvements
 
730

 
1,635

Additional OREO write-downs
 
(5,641
)
 
(3,962
)
Proceeds from sale of OREO property
 
(12,278
)
 
(4,800
)
Gain (loss) on sale of OREO
 
257

 
75

Total noncovered OREO, end of period
 
$
22,893

 
$
30,991

Covered Assets and FDIC Loss-sharing Asset
Covered Assets and FDIC Loss sharing Asset
Covered Assets and FDIC Loss-sharing Asset
Covered Assets
Covered assets consist of loans and OREO acquired in FDIC-assisted acquisitions during 2010 and 2011, for which the Bank entered into loss-sharing agreements, whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded loan commitments), OREO and certain accrued interest on loans. Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries up to specified amounts and, with respect to loss-sharing agreements for two acquisitions completed in 2010, will absorb 95% of losses and share in 95% of loss recoveries thereafter. The loss-sharing provisions of the agreements for commercial and single-family mortgage loans are in effect for five and ten years, respectively, from the acquisition dates and the loss recovery provisions are in effect for eight and ten years, respectively, from the acquisition dates.
Ten years and forty-five days after the acquisition dates, the Bank shall pay to the FDIC a clawback in the event the losses from the acquisitions fail to reach stated levels. This clawback shall be in the amount of 50% of the excess, if any, of 20% of the stated threshold amounts, less the sum of 25% of the asset premium (discount), 20% or 25% of the cumulative loss-sharing payments (depending on the particular agreement), and the cumulative servicing amount. As of December 31, 2011 and 2010, the net present value of the Bank’s estimated clawback liability is $3.7 million and $0, respectively, which is included in other liabilities on the Consolidated Balance Sheet.
The following is an analysis of our covered loans, net of related allowance for losses on covered loans as of December 31, 2011 and 2010:
 
 
December 31, 2011
 
December 31, 2010
 
 
Covered Loans
 
Weighted-
Average
Risk Rating
 
Allowance
for Loan
Losses
 
Covered Loans
 
Weighted-
Average
Risk Rating
 
Allowance
for Loan
Losses
 
 
(dollars in thousands)
Commercial business
 
$
195,737

 
6.05
 
$
977

 
$
165,255

 
5.74
 
$
2,903

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
79,328

 
5.32
 
678

 
68,700

 
4.77
 
1,013

Commercial and multifamily residential
 
311,308

 
5.65
 
2,683

 
341,063

 
5.70
 
821

Total real estate
 
390,636

 
 
 
3,361

 
409,763

 
 
 
1,834

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
54,402

 
7.32
 
136

 
39,754

 
7.29
 
98

Commercial and multifamily residential
 
23,661

 
7.32
 
86

 
41,624

 
6.79
 
469

Total real estate construction
 
78,063

 
 
 
222

 
81,378

 
 
 
567

Consumer
 
56,877

 
4.84
 
384

 
58,337

 
4.49
 
751

Subtotal of covered loans
 
721,313

 
 
 
$
4,944

 
714,733

 
 
 
$
6,055

Less:
 
 
 
 
 
 
 
 
 
 
 
 
Valuation discount resulting from acquisition accounting
 
184,440

 
 
 
 
 
191,617

 
 
 
 
Allowance for loan losses
 
4,944

 
 
 
 
 
6,055

 
 
 
 
Covered loans, net of valuation discounts and allowance for loan losses
 
$
531,929

 
 
 
 
 
$
517,061

 
 
 
 

Certain acquired loans are accounted for under ASC 310-30 and initially measured at fair value based on expected future cash flows over the life of the loans. Acquired loans that have common risk characteristics are aggregated into pools. The Company re-measures contractual and expected cash flows, at the pool-level, on a quarterly basis.
Contractual cash flows are calculated based upon the loan pool terms after applying a prepayment factor. Calculation of the applied prepayment factor for contractual cash flows is the same as described below for expected cash flows.
Inputs to the determination of expected cash flows include cumulative default and prepayment data as well as loss severity and recovery lag information. Cumulative default and prepayment data are calculated via a transition matrix. The transition matrix is a matrix of probability values that specifies the probability of a loan pool transitioning into a particular delinquency state (e.g. 0-30 days past due, 31 to 60 days, etc.) given its delinquency state at the re-measurement date. Loss severity factors are based upon actual charge-off data within the loan pools and recovery lags are based upon experience with the collateral within the loan pools.
Acquired loans are also subject to the Company’s internal and external credit review and are risk rated using the same criteria as loans originated by the Company. However, risk ratings are not a clear indicator of losses on acquired loans as a majority of the losses are recoverable from the FDIC under the loss-sharing agreements.
Draws on acquired loans, advanced subsequent to the loan acquisition date, are accounted for under ASC 450-20 and those amounts are also subject to the Company’s internal and external credit review. An allowance for loan losses is estimated in a similar manner as the originated loan portfolio, and a provision for loan losses is charged to earnings as necessary.
The excess of cash flows expected to be collected over the initial fair value of acquired impaired loans is referred to as the accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. Other adjustments to the accretable yield include changes in the estimated remaining life of the acquired loans, changes in expected cash flows and changes of indices for acquired loans with variable interest rates.
The following table shows the changes in accretable yield for acquired loans for the years ended December 31, 2011 and 2010:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of period
 
$
256,572

 
$
—

Additions resulting from acquisitions
 
59,810

 
122,705

Accretion
 
(90,378
)
 
(45,956
)
Disposals
 
(31,483
)
 
(9,014
)
Reclassifications from nonaccretable difference
 
65,148

 
188,837

Balance at end of period
 
$
259,669

 
$
256,572


During the year ended December 31, 2011, the Company recorded a provision recapture for losses on covered loans of $1.6 million. Of this amount, $589 thousand was impairment recapture calculated in accordance with ASC 310-30 and $1.0 million was a provision recapture to adjust the allowance for loss calculated under ASC 450-20 for draws on acquired loans. The impact to earnings of the $1.6 million of provision recapture for covered loans was partially offset through noninterest income by a decrease in the FDIC loss-sharing asset. For the year ended December 31, 2010, the Company recorded a provision for loan losses of $6.1 million which was partially offset by an increase to the FDIC loss-sharing asset. The Company did not have covered loans in 2009.
The 2011 and 2010 changes in the ALLL for covered loans are summarized as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of year
 
$
6,055

 
$
—

Loans charged off
 
(1,488
)
 
—

Recoveries
 
2,025

 
—

Provision charged to expense
 
(1,648
)
 
6,055

Balance at end of year
 
$
4,944

 
$
6,055


The following table shows loans acquired during 2011 and 2010 for which it was probable at acquisition that all contractually required payments would not be collected:
 
 
First Heritage Bank
 
Summit Bank
 
American Marine Bank
 
Columbia River Bank
 
 
May 27, 2011
 
May 20, 2011
 
January 29, 2010
 
January 22, 2010
 
 
(in thousands)
Contractually required payments of interest and principal
 
$
151,611

 
$
127,823

 
$
263,371

 
$
799,244

Nonaccretable difference
 
(34,052
)
 
(34,301
)
 
(65,470
)
 
(217,856
)
Cash flows expected to be collected(1)
 
117,559

 
93,522

 
197,901

 
581,388

Accretable yield
 
(36,071
)
 
(23,739
)
 
(21,623
)
 
(101,082
)
Carrying value of acquired loans
 
$
81,488

 
$
69,783

 
$
176,278

 
$
480,306

_________
(1) Represents undiscounted expected principal and interest cash flows

The following table sets forth activity in covered OREO at carrying value for the years ended December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
Covered OREO:
 
 
 
 
Balance, beginning of period
 
$
14,443

 
$
—

Established through acquisitions
 
10,387

 
17,394

Transfers in, net of write-downs ($2,564 and $2,087, respectively)
 
15,522

 
10,858

OREO improvements
 
5

 
85

Additional OREO write-downs
 
(666
)
 
(1,182
)
Proceeds from sale of OREO property
 
(20,619
)
 
(17,890
)
Gain on sale of OREO
 
9,054

 
5,178

Total covered OREO, end of period
 
$
28,126

 
$
14,443


The covered OREO is covered by loss-sharing agreements with the FDIC in which the FDIC will assume 80% of additional write-downs and losses on covered OREO sales, or 95%, if applicable, of additional write-downs and losses on covered OREO sales if the minimum loss share thresholds are met.
FDIC Loss-sharing Asset
At December 31, 2011 and 2010, the FDIC loss-sharing asset is comprised of an FDIC indemnification asset of $157.5 million and $170.7 million, respectively, and an FDIC receivable of $17.6 million and $35.3 million, respectively. The indemnification represents the cash flows the Company expects to collect from the FDIC under the loss-sharing agreements and the FDIC receivable represents the reimbursable amounts from the FDIC that have not yet been received.
For covered loans, the Company re-measures contractual and expected cash flows on a quarterly basis. When the quarterly re-measurement process results in a decrease in expected cash flows due to an increase in expected credit losses, impairment is recorded. As a result of this impairment, the indemnification asset is increased to reflect anticipated future cash to be received from the FDIC. Consistent with the loss-sharing agreements between the Company and the FDIC, the amount of the increase to the indemnification asset is measured as 80% of the resulting impairment.
Alternatively, when the quarterly re-measurement results in an increase in expected future cash flows due to a decrease in expected credit losses, the nonaccretable difference decreases and the effective yield of the related loan portfolio is increased. As a result of the improved expected cash flows, the indemnification asset would be reduced first by the amount of any impairment previously recorded and, second, by increased amortization over the remaining life of the related loan pool.
The following table shows a detailed analysis of the FDIC-loss sharing asset for the years ending December 31, 2011 and 2010:
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of period
 
$
205,991

 
$
—

Adjustments not reflected in income:
 
 
 
 
Established through acquisitions
 
68,734

 
210,405

Cash received from the FDIC
 
(54,200
)
 
(11,198
)
FDIC reimbursable losses, net
 
4,042

 
1,876

Adjustments reflected in income:
 
 
 
 
Amortization, net
 
(46,049
)
 
1,139

Impairment
 
(1,318
)
 
4,844

Sale of other real estate
 
(4,346
)
 
(1,148
)
Other
 
2,217

 
73

Balance at end of period
 
$
175,071

 
$
205,991

Premises and Equipment
Premises and Equipment
Premises and Equipment
Land, buildings, and furniture and equipment, less accumulated depreciation and amortization, were as follows:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Land
 
$
34,240

 
$
29,368

Buildings
 
78,165

 
67,373

Leasehold improvements
 
2,735

 
2,918

Furniture and equipment
 
23,097

 
21,801

Vehicles
 
428

 
352

Computer software
 
12,043

 
10,070

Total Cost
 
150,708

 
131,882

Less accumulated depreciation and amortization
 
(42,809
)
 
(38,774
)
Total
 
$
107,899

 
$
93,108


Total depreciation and amortization expense was $5.7 million, $5.2 million, and $4.7 million, for the years ended December 31, 2011, 2010, and 2009, respectively.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment annually during the third quarter and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. The Company completed its annual analysis of goodwill during the third quarter of 2011 and determined the fair value of the Company's single reporting unit was greater than its carrying amount.
The core deposit intangible (“CDI”) is evaluated for impairment if events and circumstances indicate a possible impairment. The CDI is amortized on an accelerated basis over an estimated life of approximately 10 years.
The following table sets forth activity for goodwill and intangible assets for the period:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Total goodwill, beginning of period
 
$
109,639

 
$
95,519

 
$
95,519

Established through acquisitions
 
5,915

 
14,120

 
—

Total goodwill, end of period
 
115,554

 
109,639

 
95,519

Gross core deposit intangible balance, beginning of period
 
26,652

 
8,896

 
8,896

Accumulated amortization, beginning of period
 
(7,956
)
 
(4,033
)
 
(2,988
)
Core deposit intangible, net, beginning of period
 
18,696

 
4,863

 
5,908

Established through acquisitions
 
5,789

 
17,755

 
—

CDI current period amortization
 
(4,319
)
 
(3,922
)
 
(1,045
)
Total core deposit intangible, end of period
 
20,166

 
18,696

 
4,863

Total goodwill and intangible assets, end of period
 
$
135,720

 
$
128,335

 
$
100,382


The following table provides the estimated future amortization expense of core deposit intangibles for the succeeding five years:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
4,445

2013
 
3,964

2014
 
3,397

2015
 
2,645

2016
 
2,184

Deposits
Deposits
Deposits
Year-end deposits are summarized in the following table:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Core deposits:
 
 
 
 
Demand and other noninterest-bearing
 
$
1,156,610

 
$
895,671

Interest-bearing demand
 
735,340

 
672,307

Money market
 
1,031,664

 
920,831

Savings
 
283,416

 
210,995

Certificates of deposit less than $100,000
 
303,405

 
298,678

Total core deposits
 
3,510,435

 
2,998,482

Certificates of deposit greater than $100,000
 
262,731

 
266,708

Certificates of deposit insured by CDARS®
 
42,080

 
38,312

Wholesale certificates of deposit
 
—

 
23,155

Subtotal
 
3,815,246

 
3,326,657

Valuation adjustment resulting from acquisition accounting
 
283

 
612

Total deposits
 
$
3,815,529

 
$
3,327,269


Overdrafts of $10.1 million and $409 thousand were reclassified as loan balances at December 31, 2011 and 2010, respectively.
The following table shows the amount and maturity of time deposits that had balances of $100,000 or greater:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
233,819

2013
 
37,918

2014
 
10,112

2015
 
13,042

2016
 
7,777

Thereafter
 
327

Total
 
$
302,995

Federal Home Loan Bank and Federal Reserve Bank Borrowings
Federal Home Loan Bank and Federal Reserve Bank Borrowings
Federal Home Loan Bank and Federal Reserve Bank Borrowings
FEDERAL HOME LOAN BANK
The Company has entered into borrowing arrangements with the FHLB of Seattle to borrow funds under a short-term floating rate cash management advance program and fixed-term loan agreements. All borrowings are secured by stock of the FHLB, certain pledged available for sale investment securities and a blanket pledge of qualifying loans receivable. At December 31, 2011 FHLB advances were scheduled to mature as follows:
 
 
 
Federal Home Loan Bank Advances
Fixed rate advances
 
 
Wtd Avg Rate
 
Amount
 
 
(dollars in thousands)
Within 1 year
 
4.22
%
 
$
8,000

Over 1 through 5 years
 
2.54
%
 
103,694

Over 5 through 10 years
 
5.30
%
 
1,416

Due after 10 years
 
5.37
%
 
5,000

Total
 
118,110

Valuation adjustment from acquisition accounting
 
899

Total
 
$
119,009


The maximum, average outstanding and year-end balances and average interest rates on advances from the FHLB were as follows for the years ended December 31, 2011, 2010 and 2009:
 
 
 
Years ended December 31,
 
 
2011
 
2010
 
2009
 
 
(dollars in thousands)
Balance at end of year
 
$
119,009

 
$
119,405

 
$
100,000

Average balance during the year
 
$
120,419

 
$
123,685

 
$
111,211

Maximum month-end balance during the year
 
$
127,426

 
$
154,916

 
$
178,000

Weighted average rate during the year
 
2.76
%
 
2.75
%
 
2.38
%
Weighted average rate at December 31
 
2.81
%
 
2.81
%
 
2.49
%

FHLB advances are collateralized by the following:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Fair value of investment securities
 
$
77,414

 
$
96,496

Recorded value of blanket pledge on loans receivable
 
462,040

 
426,555

Total
 
$
539,454

 
$
523,051

FHLB Borrowing Capacity
 
$
419,115

 
$
402,048


FEDERAL RESERVE BANK
The Company is also eligible to borrow under the Federal Reserve Bank’s primary credit program, including the Term Auction Facility (“TAF”) auctions. All borrowings are secured by certain pledged available for sale investment securities.
The maximum, average outstanding and year-end balances and average interest rates on advances from the Federal Reserve Bank were as follows for the years ended December 31, 2011, 2010 and 2009:
 
 
 
Years ended December 31,
 
 
2011
 
2010
 
2009
 
 
(dollars in thousands)
Balance at end of year
 
$
—

 
$
—

 
$
—

Average balance during the year
 
$
—

 
$
—

 
$
38,205

Maximum month-end balance during the year
 
$
—

 
$
—

 
$
100,000

Weighted average rate during the year
 
—
%
 
—
%
 
0.30
%
Weighted average rate at December 31
 
N/A

 
N/A

 
N/A


_________
N/A Not applicable
Federal Reserve Bank advances are collateralized by the following:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Fair value of investment securities
 
$
53,122

 
$
135,966

Recorded value of pledged commercial loans
 
351,322

 
313,452

Total
 
$
404,444

 
$
449,418

Federal Reserve Bank borrowing capacity
 
$
404,444

 
$
449,418

Other Borrowings
Other Borrowings
Other Borrowings
Securities Sold Under Agreements to Repurchase
The Company has entered into wholesale repurchase agreements with certain brokers. At December 31, 2011, the Company held $25.0 million in wholesale repurchase agreements with an interest rate of 1.88%. Securities available for sale with a carrying amount of $28.9 million were pledged as collateral for the repurchase agreement borrowings. The broker holds the securities while the Company continues to receive the principal and interest payments from the securities. Upon maturity of the agreement, the pledged securities will be returned to the Company.
Long-term Subordinated Debt (Subordinated Debt [Member])
Long-term Subordinated Debt
Long-term Subordinated Debt
In July 2011, the Company elected to redeem the junior subordinated debentures and terminated Columbia (WA) Statutory Trust I and Town Center Bancorp Trust I with a cash payment of $22.9 million and $3.1 million, respectively which consisted of principal, interest and fees. The trust preferred obligations were classified as long-term subordinated debt on the Company's balance sheet and the decision to redeem was based upon the Company's cash and capital positions, rates on the debentures and the absence of a prepayment penalty.
Derivatives and Hedging Activities
Derivatives and Hedging Activities
Derivatives and Hedging Activities
The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at December 31, 2011 and 2010 were $160.3 million and $141.3 million, respectively.
The following table presents the fair value and balance sheet classification of derivative instruments at December 31, 2011 and 2010:
 
Asset Derivatives
 
Liability Derivatives
 
2011
 
2010
 
2011
 
2010
(in thousands)
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
Other assets
 
$
16,302

 
Other assets
 
$
10,167

 
Other liabilities
 
$
16,302

 
Other liabilities
 
$
10,167


Termination of Hedging Activities: On January 7, 2008, the Company discontinued its three prime rate floor derivative instruments that were previously utilized to hedge the variable cash flows associated with existing variable-rate loan assets based on the prime rate. The Company received $8.1 million as a result of the termination transaction resulting in a net derivative gain of $6.2 million. The interest rate floors had an original maturity date of April 4, 2011. In accordance with the Derivatives and Hedging topic of the FASB ASC, the net derivative gain related to a discontinued cash flow hedge was reported in accumulated other comprehensive income and is reclassified into earnings in the same periods during which the originally hedged forecasted transactions affect earnings. For the year ended December 31, 2011, $143 thousand of the net derivative gain was reclassified into earnings. At December 31, 2011, there are no remaining amounts to be reclassified into earnings related to these discontinued derivative instruments.
Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans
401(k) Plan
The Company maintains defined contribution and profit sharing plans in conformity with the provisions of section 401(k) of the Internal Revenue Code at Columbia Bank. The Columbia Bank 401(k) and Profit Sharing Plan (the “401(k) Plan”), permits eligible Columbia Bank employees, those who are at least 18 years of age and have completed six months of service, to contribute up to 75% of their eligible compensation to the 401(k) Plan. On a per pay period basis the Company is required to match 50% of employee contributions up to 3% of each employee’s eligible compensation. Additionally, as determined annually by the Board of Directors of the Company, the 401(k) Plan provides for a non-matching discretionary profit sharing contribution. The Company contributed $1.2 million during 2011, $866 thousand during 2010, and $748 thousand during 2009, in matching funds to the 401(k) Plan. The Company’s discretionary profit sharing contributions were $2.6 million during 2011, $1.2 million during 2010 and $0 during 2009.
Employee Stock Purchase Plan
The Company maintains an “Employee Stock Purchase Plan” (the “ESP Plan”) in which substantially all employees of the Company are eligible to participate. The ESP Plan provides participants the opportunity to purchase common stock of the Company at a discounted price. Under the ESP Plan, participants can purchase common stock of the Company for 90% of the lowest price on either the first or last day in each of two six month look-back periods. The look-back periods are January 1st through June 30th and July 1st through December 31st of each calendar year. The 10% discount is recognized by the Company as compensation expense and does not have a material impact on net income or earnings per common share. Participants of the ESP Plan purchased 39,989 shares for $690 thousand in 2011, 35,806 shares for $614 thousand in 2010 and 55,443 shares for $578 thousand in 2009. At December 31, 2011 there were 647,903 shares available for purchase under the ESP plan.
Supplemental Compensation Plan
The Company maintains supplemental compensation arrangements (“Unit Plans”) to provide benefits for certain employees. The Unit Plans generally vest over a 4-10 year period and provide a fixed annual benefit over a 5-10 year period. At December 31, 2011 and 2010 the liability associated with these plans was $4.4 million and $4.0 million, respectively. Expense associated with these plans for the years ended December 31, 2011, 2010 and 2009 was $655 thousand, $750 thousand and $530 thousand, respectively.
Supplemental Executive Retirement Plan
The Company maintains a supplemental executive retirement plan (the “SERP”), a nonqualified deferred compensation plan that provides retirement benefits to certain highly compensated executives. The SERP is unsecured and unfunded and there are no program assets. The SERP projected benefit obligation, which represents the vested net present value of future payments to individuals under the plan is accrued over the estimated remaining term of employment of the participants and has been determined by actuarial valuation using the “RP-2000 Annuity Mortality Table” for the mortality assumptions and discount rates of 5.30% and 5.90% in 2011 and 2010, respectively. Additional assumptions and features of the plan are a normal retirement age of 65 and a 2% annual cost of living benefit adjustment. The projected benefit obligation is included in other liabilities on the Consolidated Balance Sheets.
The following table reconciles the accumulated liability for the projected benefit obligation:
 
 
 
December 31,
2011
 
2010
 
 
(in thousands)
Balance at beginning of year
 
$
10,363

 
$
9,947

Change in actuarial loss
 
329

 
(78
)
Benefit expense
 
987

 
928

Benefit payments
 
(442
)
 
(434
)
Balance at end of year
 
$
11,237

 
$
10,363


The benefits expected to be paid in conjunction with the SERP are presented in the following table:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
510

2013
 
526

2014
 
555

2015
 
572

2016
 
803

2017 through 2021
 
5,864

Total
 
$
8,830

Commitments and Contingent Liabilities
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities
Lease Commitments: The Company leases locations as well as equipment under various non-cancellable operating leases that expire between 2012 and 2045. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule. As of December 31, 2011, minimum future rental payments, exclusive of taxes and other charges, of these leases were: 
Years Ending December 31,
 
(in thousands)
2012
 
$
4,077

2013
 
3,927

2014
 
3,615

2015
 
3,046

2016
 
1,604

Thereafter
 
5,678

Total minimum payments
 
$
21,947


Total rental expense on buildings and equipment, net of rental income of $655 thousand, $591 thousand and $602 thousand, was $4.6 million, $4.5 million and $3.5 million, for the years ended December 31, 2011, 2010 and 2009, respectively.
On September 30, 2004, the Company sold its Broadway and Longview locations. The Company maintains a substantial continuing involvement in the locations through various non-cancellable operating leases that do not contain renewal options. The resulting gain on sale of $1.3 million was deferred using the financing method in accordance with the Leases topic of the FASB ASC and is being amortized over the life of the respective leases. At December 31, 2011 and 2010, the deferred gain was $234 thousand and $317 thousand, respectively, and is included in “Other liabilities” on the Consolidated Balance Sheets.
Financial Instruments with Off-Balance Sheet Risk: In the normal course of business, the Company makes loan commitments (typically unfunded loans and unused lines of credit) and issues standby letters of credit to accommodate the financial needs of its customers.
Standby letters of credit commit the Company to make payments on behalf of customers under specified conditions. Historically, no significant losses have been incurred by the Company under standby letters of credit. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including collateral requirements, where appropriate. At December 31, 2011 and 2010, the Company’s loan commitments amounted to $709.9 million and $622.8 million, respectively. Standby letters of credit were $30.9 million and $31.2 million at December 31, 2011 and 2010, respectively. In addition, commitments under commercial letters of credit used to facilitate customers’ trade transactions amounted to $243 thousand and $0 at December 31, 2011 and 2010, respectively.
Legal Proceedings: The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from their regular business activities. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the financial statements of the Company.
Shareholders' Equity
Shareholders' Equity
Shareholders’ Equity
Preferred Stock. On August 11, 2010, the Company redeemed all 76,898 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (“Preferred Stock”) originally issued to the U.S. Department of Treasury (“the Treasury”) on November 21, 2008 for approximately $76.9 million in capital under its Capital Purchase Program (“CPP”). The Company paid a total of $77.8 million to the Treasury, consisting of $76.9 million in principal and $919 thousand in accrued and unpaid dividends. Earnings available to the common shareholders were reduced by $2.3 million upon repayment of the Preferred Stock, which represented the remaining unamortized discount on the Preferred Stock. Additionally, on September 1, 2010, the Company repurchased the common stock warrant issued to the Treasury pursuant to the Troubled Asset Relief Program (“TARP”) CPP for $3.3 million. The warrant repurchase, together with the Company’s redemption of its entire Preferred Stock issued to the Treasury, represents full repayment of all TARP obligations and cancellation of all equity interests in the Company held by the Treasury.
Common Stock. On February 3, 2011, the Company declared a quarterly cash dividend of $0.03 per share, payable on March 3, 2011 to shareholders of record as of the close of business on February 17, 2011. On April 27, 2011 the Company declared a quarterly cash dividend of $0.05 per share, payable on May 25, 2011 to shareholders of record at the close of business May 11, 2011. On July 28, 2011 the Company declared a quarterly cash dividend of $0.06 per share, payable on August 24, 2011 to shareholders of record at the close of business August 10, 2011. On October 27, 2011 the Company declared a quarterly cash dividend of $0.08 per share and a special, one-time cash dividend of $0.05 per share, both payable on November 23, 2011 to shareholders of record at the close of business November 9, 2011. Subsequent to year end, on January 26, 2012 the Company declared a quarterly cash dividend of $0.08 per share and a special, one-time cash dividend of $0.29 per share, both payable on February 22, 2012, to shareholders of record at the close of business on February 8, 2012.
The payment of cash dividends is subject to Federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both Federal and State regulatory requirements.
Stock Repurchase Program
In October 2011, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 2 million shares of its outstanding shares of common stock. The Company intends to purchase the shares from time to time in the open market or in private transactions, under conditions which allow such repurchases to be accretive to earnings per share while maintaining capital ratios that exceed the guidelines for a well-capitalized financial institution. This newly authorized repurchase program supersedes and replaces the prior stock repurchase program adopted in February 2002. No shares were repurchased under the prior stock repurchase program or the new stock repurchase program during 2011. As of December 31, 2011 the Company had repurchased a total of 64,788 shares of common stock under the prior program.
Public offering
On May 5, 2010, the Company completed an underwritten public offering of 11,040,000 shares of our common stock at a purchase price to the public of $21.75 per share, resulting in gross proceeds of approximately $240.1 million and net proceeds to us of approximately $229.1 million.
Fair Value Accounting and Measurement
Fair Value Accounting and Measurement
Fair Value Accounting and Measurement
The Fair Value Measurements and Disclosures topic of the FASB ASC defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value. We hold fixed and variable rate interest-bearing securities, investments in marketable equity securities and certain other financial instruments, which are carried at fair value. Fair value is determined based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available.
The valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy:
Level 1 – Quoted prices for identical instruments in active markets that are accessible at the measurement date.
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
Fair values are determined as follows:
Securities at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors. These fair value calculations are considered a Level 2 input method under the provisions of the Fair Value Measurements and Disclosures topic of the FASB ASC.
Interest rate contract positions are valued in models, which use as their basis, readily observable market parameters and are classified within Level 2 of the valuation hierarchy.
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2011 and 2010 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
 
Fair value at
December 31, 2011
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
U.S. government agency and sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
695,954

 
$
—

 
$
695,954

 
$
—

State and municipal securities
 
285,763

 
—

 
285,763

 
—

U.S. government agency and government-sponsored enterprise securities
 
43,063

 
—

 
43,063

 
—

Other securities
 
3,330

 
—

 
3,330

 
—

Total securities available for sale
 
$
1,028,110

 
$
—

 
$
1,028,110

 
$
—

Other assets (Interest rate contracts)
 
$
16,302

 
$
—

 
$
16,302

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities (Interest rate contracts)
 
$
16,302

 
$
—

 
$
16,302

 
$
—

 
 
Fair value  at
December 31, 2010
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
U.S. government agency and sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
506,642

 
$
—

 
$
506,642

 
$
—

State and municipal debt securities
 
253,981

 
—

 
253,981

 
—

Other securities
 
3,243

 
—

 
3,243

 
—

Total securities available for sale
 
$
763,866

 
$
—

 
$
763,866

 
$
—

Other assets (Interest rate contracts)
 
$
10,167

 
$
—

 
$
10,167

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities (Interest rate contracts)
 
$
10,167

 
$
—

 
$
10,167

 
$
—


Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and OREO. The following methods were used to estimate the fair value of each such class of financial instrument:
Impaired loans—A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, a loan’s observable market price, or the fair market value of the collateral if the loan is collateral-dependent loan. Generally, the Company utilizes the fair market value of the collateral to measure impairment.
Other real estate owned—OREO is real property that the Bank has taken ownership of in partial or full satisfaction of a loan or loans. OREO is recorded at the lower of the carrying amount of the loan or fair value less estimated costs to sell. This amount becomes the property’s new basis. Any write-downs based on the property fair value less estimated cost to sell at the date of acquisition are charged to the allowance for loan and lease losses. Management periodically reviews OREO in an effort to ensure the property is carried at the lower of its new basis or fair value, net of estimated costs to sell. Any write-downs subsequent to acquisition are charged to earnings.
The following table sets forth the Company’s assets that were measured using fair value estimates on a nonrecurring basis at December 31, 2011 and 2010:
 
 
Fair value  at
December 31, 2011
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Year Ended
December 31, 2011
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Impaired loans
 
$
17,755

 
$
—

 
$
—

 
$
17,755

 
$
5,841

Noncovered OREO
 
11,233

 
—

 
—

 
11,233

 
3,089

Covered OREO
 
2,442

 
—

 
—

 
2,442

 
644

 
 
$
31,430

 
$
—

 
$
—

 
$
31,430

 
$
9,574

 
 
Fair value  at
December 31, 2010
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Year Ended
December 31, 2010
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Impaired loans
 
$
65,226

 
$
—

 
$
—

 
$
65,226

 
$
13,906

Noncovered OREO
 
18,266

 
—

 
—

 
18,266

 
4,155

Covered OREO
 
1,422

 
—

 
—

 
1,422

 
263

 
 
$
84,914

 
$
—

 
$
—

 
$
84,914

 
$
18,324


The losses on impaired loans disclosed above represent the amount of the specific reserve and/or charge-offs during the period applicable to loans held at period end. The amount of the specific reserve is included in the allowance for loan and lease losses. The losses on noncovered OREO disclosed above represent the write-downs taken at foreclosure that were charged to the allowance for loan and lease losses, as well as subsequent write-downs from updated appraisals that were charged to earnings.
At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Activity in Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2011 is summarized in the following table:
 
 
Securities available for sale - State and municipal securities
 
 
(in thousands)
Beginning balance, January 1, 2011
 
$
—

Transfers into Level 3 (1)
 
2,950

Impairment loss included in earnings
 
(2,950
)
Ending Balance, December 31, 2011
 
$
—

_____________
(1) Transfers into Level 3 were due to a municipal security that had been categorized previously at a higher level, but the inputs to the fair value calculation for the municipal security became unobservable as the security defaulted on its principal repayment and was no longer actively traded.
Fair value of financial instruments
Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and due from banks and interest-earning deposits with banks—The fair value of financial instruments that are short-term or reprice frequently and that have little or no risk are considered to have a fair value that approximates carrying value.
Securities available for sale—Securities at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors.
Federal Home Loan Bank stock—The fair value is based upon the par value of the stock which equates to its carrying value.
Loans—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. For most performing loans, fair value is estimated using expected duration and lending rates that would have been offered on December 31, 2011 for loans which mirror the attributes of the loans with similar rate structures and average maturities. The fair values resulting from these calculations are reduced by an amount representing the change in estimated fair value attributable to changes in borrowers’ credit quality since the loans were originated. For nonperforming loans, fair value is estimated by applying a valuation discount based upon loan sales data from the FDIC. For covered loans, fair value is estimated by discounting the expected future cash flows using a lending rate that would have been offered on December 31, 2011.
FDIC loss-sharing asset —The fair value of the FDIC loss-sharing asset is estimated based on discounting the expected future cash flows using an estimated market rate.
Interest rate contracts—Interest rate contracts are valued in models, which use as their basis, readily observable market parameters.
Deposits—For deposits with no contractual maturity, the fair value is equal to the carrying value. The fair value of fixed maturity deposits is based on discounted cash flows using the difference between the deposit rate and current market rates for deposits of similar remaining maturities.
FHLB advances—The fair value of FHLB advances is estimated based on discounting the future cash flows using the market rate currently offered.

Repurchase agreements—The fair value of securities sold under agreement to repurchase is estimated based on discounting the future cash flows using the market rate currently offered.
Long-term subordinated debt—The fair value of long-term subordinated debt is estimated based on discounting the future cash flows using an estimated market rate.
Other Financial Instruments—The majority of our commitments to extend credit and standby letters of credit carry current market interest rates if converted to loans, as such, carrying value is assumed to equal fair value.
The following table summarizes carrying amounts and estimated fair values of selected financial instruments:
 
 
 
December 31,
2011
 
December 31,
2010
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
91,364

 
$
91,364

 
$
55,492

 
$
55,492

Interest-earning deposits with banks
 
202,925

 
202,925

 
458,638

 
458,638

Securities available for sale
 
1,028,110

 
1,028,110

 
763,866

 
763,866

FHLB stock
 
22,215

 
22,215

 
17,908

 
17,908

Loans held for sale
 
2,148

 
2,148

 
754

 
754

Loans
 
2,827,259

 
2,957,345

 
2,371,822

 
2,525,113

FDIC loss-sharing asset
 
175,071

 
71,788

 
205,991

 
205,991

Interest rate contracts
 
16,302

 
16,302

 
10,167

 
10,167

Liabilities
 
 
 
 
 
 
 
 
Deposits
 
$
3,815,529

 
$
3,817,013

 
$
3,327,269

 
$
3,330,616

FHLB advances
 
119,009

 
119,849

 
119,405

 
122,722

Repurchase agreements
 
25,000

 
26,580

 
25,000

 
27,251

Other borrowings
 
—

 
—

 
642

 
642

Long-term subordinated debt
 
—

 
—

 
25,735

 
20,156

Interest rate contracts
 
16,302

 
16,302

 
10,167

 
10,167

Earnings Per Common Share
Earnings Per Common Share
Earnings per Common Share
Basic earnings per share (“EPS”) is computed by dividing income applicable to common shareholders by the weighted average number of common shares outstanding for the period. Common shares outstanding include common stock and vested restricted stock awards where recipients have satisfied the vesting terms. Diluted EPS reflects the assumed conversion of all dilutive securities, applying the treasury stock method. The Company calculates earnings per share using the two-class method as described in the Earnings per Share topic of the FASB ASC.
The following table sets forth the computation of basic and diluted earnings per share for the periods indicated:
 
 
Year Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands except per share)
Basic EPS:
 
 
 
 
 
 
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)
Less: Preferred dividends and accretion of issuance discount for preferred stock
 
—

 
(4,947)

 
(4,403
)
Net income (loss) applicable to common shareholders
 
$
48,037

 
$
25,837

 
$
(8,371
)
Less: Earnings allocated to participating securities
 
(450
)
 
(244)

 
(16)

Earnings (loss) allocated to common shareholders
 
$
47,587

 
$
25,593

 
$
(8,387
)
Weighted average common shares outstanding
 
39,103

 
35,209

 
21,854

Basic earnings (loss) per common share
 
$
1.22

 
$
0.73

 
$
(0.38
)
Diluted EPS:
 
 
 
 
 
 
Earnings (loss) allocated to common shareholders (1)
 
$
47,588

 
$
25,593

 
$
(8,410
)
Weighted average common shares outstanding
 
39,103

 
35,209

 
21,854

Dilutive effect of equity awards and warrants
 
77

 
183

 
—

Weighted average diluted common shares outstanding (2)
 
39,180

 
35,392

 
21,854

Diluted earnings (loss) per common share
 
$
1.21

 
$
0.72

 
$
(0.38
)
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive.
 
53

 
54

 
754

Share-Based Payments
Share-Based Payments
Share-Based Payments
At December 31, 2011, the Company had one equity compensation plan (the “Plan”), which is shareholder approved, that provides for the granting of share options and shares to eligible employees and directors up to 2,891,482 shares.
Share Awards: Restricted share awards provide for the immediate issuance of shares of Company common stock to the recipient, with such shares held in escrow until certain service conditions are met, generally four years of continual service. Recipients of restricted shares do not pay any cash consideration to the Company for the shares, have the right to vote all shares subject to such grant, and receive all dividends with respect to such shares, whether or not the shares have vested. The fair value of share awards is equal to the fair market value of the Company’s common stock on the date of grant.
A summary of changes in the Company’s nonvested shares and related information for the years ended December 31, 2011, 2010 and 2009 is presented below:
 
Nonvested Shares
 
Shares
 
Weighted
Average
Grant-Date
Fair Value
Nonvested at January 1, 2009
 
191,320

 
$
29.41

Granted
 
122,097

 
$
9.92

Vested
 
(15,763
)
 
$
27.67

Forfeited
 
(19,150
)
 
$
24.03

Nonvested at December 31, 2009
 
278,504

 
$
21.34

Granted
 
108,075

 
$
20.68

Vested
 
(25,521
)
 
$
21.38

Forfeited
 
(7,775
)
 
$
20.77

Nonvested at December 31, 2010
 
353,283

 
$
21.14

Granted
 
133,350

 
$
19.45

Vested
 
(109,033
)
 
$
25.72

Forfeited
 
(14,925
)
 
$
18.86

Nonvested at December 31, 2011
 
362,675

 
$
19.24


As of December 31, 2011, there was $5.0 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.5 years. The total fair value of shares vested during the years ended December 31, 2011, 2010, and 2009 was $2.2 million, $546 thousand, and $404 thousand, respectively.
Share Options: Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on three years of continual service and are exercisable for a five-year period after vesting. Option awards granted have a 10-year maximum term.
The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of all options is amortized on a straight-line basis over the requisite service periods, which are generally the vesting periods. The expected life of options granted represents the period of time that they are expected to be outstanding. The expected life is determined based on historical experience with similar awards, giving consideration to the contractual terms and vesting schedules. Expected volatilities of our common stock are estimated at the date of grant based on the historical volatility of the stock. The volatility factor is based on historical stock prices over the most recent period commensurate with the estimated expected life of the award. The risk-free interest rate is based on the U.S. Treasury curve in effect at the time of the award. The expected dividend yield is based on dividend trends and the market value of the Company’s stock price at the time of the award.

A summary of option activity under the Plan as of December 31, 2011, and changes during the year then ended is presented below:
 
Options
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
($000)
Balance at December 31, 2010
 
93,964

 
$
21.26

 
 
 
 
Granted
 
—

 
$
—

 
 
 
 
Forfeited
 
(9,576
)
 
$
23.96

 
 
 
 
Expired
 
(7,350
)
 
$
17.25

 
 
 
 
Exercised
 
(12,126
)
 
$
13.50

 
 
 
 
Balance at December 31, 2011
 
64,912

 
$
22.76

 
1.4

 
$
52

Total Exercisable at December 31, 2011
 
64,912

 
$
22.76

 
1.4

 
$
52


The total intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009 was $65 thousand, $154 thousand, and $123 thousand, respectively. No options were granted in 2011, 2010 and 2009.
As of December 31, 2011, outstanding stock options consist of the following:
 
Ranges of
Exercise Prices
 
Number of
Option
Shares
 
Weighted Average
Remaining
Contractual Life
 
Weighted Average
Exercise Price of
Option Shares
 
Number of
Exercisable
Option Shares
 
Weighted Average
Exercise Price of
Exercisable Option
Shares
9.26 - 12.34
 
516

 
0.3

 
$
12.21

 
516

 
$
12.21

12.35 - 15.43
 
6,395

 
1.8

 
$
14.04

 
6,395

 
$
14.04

15.44 - 18.51
 
5,184

 
1.5

 
$
17.36

 
5,184

 
$
17.36

18.52 - 21.60
 
7,266

 
2.3

 
$
18.61

 
7,266

 
$
18.61

21.61 - 24.68
 
12,000

 
0.8

 
$
22.61

 
12,000

 
$
22.61

24.69 - 27.77
 
29,500

 
0.8

 
$
25.75

 
29,500

 
$
25.75

27.78 - 30.86
 
4,051

 
5.1

 
$
30.86

 
4,051

 
$
30.86

 
 
64,912

 
1.4

 
$
22.76

 
64,912

 
$
22.76


It is the Company’s policy to issue new shares for share option exercises and share awards. The Company expenses awards of share options and shares on a straight-line basis over the related vesting term of the award. For the 12 months ended December 31, 2011, 2010 and 2009, the Company recognized pre-tax share-based compensation expense for nonvested share awards of $1.6 million, $1.4 million and $1.0 million, respectively.
Income Tax
Income Tax
Income Tax
The components of income tax expense (benefit) are as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Current tax (benefit) expense
 
$
21,688

 
$
(13,547
)
 
$
(8,893
)
Deferred tax expense (benefit)
 
(3,783
)
 
15,838

 
(85
)
Total
 
$
17,905

 
$
2,291

 
$
(8,978
)

Significant components of the Company’s deferred tax assets and liabilities are as follows:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Deferred tax assets:
 
 
 
 
Allowance for loan and lease losses
 
$
20,910

 
$
22,942

Supplemental executive retirement plan
 
6,564

 
6,185

Stock option and restricted stock
 
989

 
1,295

OREO costs
 
3,209

 
1,910

AMT credit carryforwards
 
—

 
2,318

Nonaccrual interest
 
222

 
310

Security impairment
 
1,041

 
—

Other
 
632

 
1,890

Total deferred tax assets
 
33,567

 
36,850

Deferred tax liabilities:
 
 
 
 
Asset purchase tax basis difference
 
(14,812
)
 
(22,559
)
FHLB stock dividends
 
(1,977
)
 
(2,019
)
Purchase accounting
 
(1,030
)
 
(1,373
)
Deferred loan fees
 
(1,517
)
 
(1,214
)
Unrealized gain on investment securities
 
(14,291
)
 
(7,186
)
Depreciation
 
(1,517
)
 
(646
)
Total deferred tax liabilities
 
(35,144
)
 
(34,997
)
Net deferred tax asset (liability)
 
$
(1,577
)
 
$
1,853


A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
 
 
(dollars in thousands)
Income tax based on statutory rate
 
$
23,080

 
35
 %
 
$
11,576

 
35
 %
 
$
(4,531
)
 
35
%
Reduction resulting from:
 
 
 
 
 
 
 
 
 
 
 
 
Tax credits
 
(608
)
 
(1
)%
 
(808
)
 
(2
)%
 
(687
)
 
5
%
Tax exempt instruments
 
(3,824
)
 
(6
)%
 
(3,744
)
 
(11
)%
 
(3,072
)
 
24
%
Life insurance proceeds
 
(766
)
 
(1
)%
 
(735
)
 
(2
)%
 
(708
)
 
5
%
Bargain purchase
 
(1,036
)
 
(2
)%
 
(5,383
)
 
(16
)%
 
—

 
—
%
Other, net
 
1,059

 
2
 %
 
1,385

 
3
 %
 
20

 
—
%
Income tax provision (benefit)
 
$
17,905

 
27
 %
 
$
2,291

 
7
 %
 
$
(8,978
)
 
69
%

As of December 31, 2011 and 2010, we had no unrecognized tax positions. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income. There were no amounts related to interest and penalties recognized for the years ended December 31, 2011 and 2010. The tax years subject to examination by federal and state taxing authorities are the years ending December 31, 2010, 2009, and 2008.
Regulatory Capital Requirements
Regulatory Capital Requirements
Regulatory Capital Requirements
The Company (on a consolidated basis) and its banking subsidiary are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and its subsidiary's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and its banking subsidiary must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
Quantitative measures established by regulation to ensure capital adequacy require the Company and its banking subsidiary to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital to risk-weighted assets (as defined in the regulations) and of Tier 1 capital to average assets (as defined in the regulations). Management believes, as of December 31, 2011 and 2010, that the Company and Columbia Bank met all capital adequacy requirements to which they are subject.
As of December 31, 2011, the most recent notification from the Federal Deposit Insurance Corporation categorized Columbia Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed Columbia Bank’s category. The Company and its banking subsidiary’s actual capital amounts and ratios as of December 31, 2011 and 2010, are also presented in the following table.

 
 
Actual
 
For Capital
Adequacy
Purposes
 
To Be Well
Capitalized Under
Prompt
Corrective Action
Provision
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
 
(dollars in thousands)
As of December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
Total Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
636,559

 
21.05
%
 
$
241,955

 
8.0
%
 
N/A

 
N/A

Columbia Bank
 
$
561,216

 
18.55
%
 
$
242,028

 
8.0
%
 
$
302,535

 
10.0
%
Tier 1 Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
598,485

 
19.79
%
 
$
120,978

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
523,131

 
17.29
%
 
$
121,014

 
4.0
%
 
$
181,521

 
6.0
%
Tier 1 Capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
598,485

 
12.96
%
 
$
184,780

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
523,131

 
11.45
%
 
$
182,747

 
4.0
%
 
$
228,434

 
5.0
%
As of December 31, 2010
 
 
 
 
 
 
 
 
 
 
 
 
Total Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
623,526

 
24.47
%
 
$
203,871

 
8.0
%
 
N/A

 
N/A

Columbia Bank
 
$
463,587

 
18.20
%
 
$
203,789

 
8.0
%
 
$
254,736

 
10.0
%
Tier 1 Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
591,263

 
23.20
%
 
$
101,936

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
431,337

 
16.93
%
 
$
101,894

 
4.0
%
 
$
152,841

 
6.0
%
Tier 1 Capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
591,263

 
13.99
%
 
$
169,062

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
431,337

 
10.33
%
 
$
166,961

 
4.0
%
 
$
208,702

 
5.0
%
Parent Company Financial Information
Parent Company Financial Information
Parent Company Financial Information
Condensed Statements of Income—Parent Company Only
 
 
Years Ended December 31,
2011
 
2010
 
2009
(in thousands)
Income
 
 
 
 
 
 
Dividend from banking subsidiary
 
$
—

 
$
—

 
$
200

Interest-earning deposits
 
712

 
1,319

 
1,095

Other income
 
17

 
31

 
36

Total income
 
729

 
1,350

 
1,331

Expense
 
 
 
 
 
 
Compensation and employee benefits
 
88

 
96

 
512

Long-term obligations
 
579

 
1,029

 
1,196

Other expense
 
1,114

 
1,066

 
1,104

Total expenses
 
1,781

 
2,191

 
2,812

Loss before income tax expense (benefit) and equity in undistributed net income of subsidiaries
 
(1,052
)
 
(841
)
 
(1,481
)
Income tax expense (benefit)
 
91

 
(778
)
 
(580
)
Income before equity in undistributed net income (loss) of subsidiaries
 
(1,143
)
 
(63
)
 
(901
)
Equity in undistributed net income (loss) of subsidiaries
 
49,180

 
30,847

 
(3,067
)
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)

Condensed Balance Sheets—Parent Company Only
 
 
December 31,
2011
 
2010
 
 
(in thousands)
Assets
 
 
 
 
Cash and due from banking subsidiary
 
$
3,220

 
$
673

Interest-earning deposits
 
72,014

 
158,500

Total cash and cash equivalents
 
75,234

 
159,173

Investment in banking subsidiary
 
683,977

 
571,945

Investment in other subsidiaries
 
—

 
774

Other assets
 
510

 
1,160

Total assets
 
$
759,721

 
$
733,052

Liabilities and Shareholders’ Equity
 
 
 
 
Long-term subordinated debt
 
$
—

 
$
25,736

Other liabilities
 
383

 
438

Total liabilities
 
383

 
26,174

Shareholders’ equity
 
759,338

 
706,878

Total liabilities and shareholders’ equity
 
$
759,721

 
$
733,052


Condensed Statements of Cash Flows—Parent Company Only
 
 
Years Ended December 31,
2011
 
2010
 
2009
(in thousands)
Operating Activities
 
 
 
 
 
 
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Equity in undistributed earnings of subsidiaries
 
(49,180
)
 
(30,847
)
 
3,067

Stock-based compensation expense
 
1,635

 
1,424

 
1,038

Net changes in other assets and liabilities
 
315

 
(769
)
 
1,783

Net cash provided by operating activities
 
807

 
592

 
1,920

Investing Activities
 
 
 
 
 
 
Proceeds from termination of trust subsidiaries
 
774

 
—

 
—

Net cash provided by investing activities
 
774

 
—

 
—

Financing Activities
 
 
 
 
 
 
Net decrease in short-term borrowings
 
—

 
—

 
(100
)
Cash dividends paid
 
(10,660
)
 
(4,302
)
 
(5,155
)
Repayment of long-term subordinated debt
 
(25,774
)
 
—

 
—

Issuance of common stock, net of offering costs
 
—

 
229,129

 
113,537

Purchase and retirement of common stock
 
(32
)
 
—

 
—

Proceeds from exercise of stock options
 
848

 
948

 
939

Downstream stock offering proceeds to the Bank
 
(50,000
)
 
(70,000
)
 
(105,000
)
Excess tax benefit associated with share-based compensation
 
98

 
—

 
—

Purchase and retirement of preferred stock
 
—

 
(80,200
)
 
—

Net cash provided by financing activities
 
(85,520
)
 
75,575

 
4,221

Increase (decrease) in cash and cash equivalents
 
(83,939
)
 
76,167

 
6,141

Cash and cash equivalents at beginning of year
 
159,173

 
83,006

 
76,865

Cash and cash equivalents at end of year
 
$
75,234

 
$
159,173

 
$
83,006

Summary Of Quarterly Financial Information (Unaudited)
Summary of Quarterly Financial Information (Unaudited)
Summary of Quarterly Financial Information (Unaudited)
Quarterly financial information for the years ended December 31, 2011 and 2010 is summarized as follows:
 
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Year Ended
December 31,
 
 
(in thousands, except per share amounts)
2011
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
54,611

 
$
53,309

 
$
68,432

 
$
74,919

 
$
251,271

Total interest expense
 
4,162

 
3,934

 
3,644

 
2,795

 
14,535

Net interest income
 
50,449

 
49,375

 
64,788

 
72,124

 
236,736

Provision for loan and lease losses
 
—

 
2,150

 
500

 
4,750

 
7,400

Provision (recapture) for losses on covered loans
 
(422
)
 
2,301

 
433

 
(3,960
)
 
(1,648
)
Noninterest income (loss)
 
(5,419
)
 
3,542

 
2,196

 
(9,602
)
 
(9,283
)
Noninterest expense
 
37,346

 
37,164

 
39,935

 
41,314

 
155,759

Income before income taxes
 
8,106

 
11,302

 
26,116

 
20,418

 
65,942

Provision for income taxes
 
2,327

 
2,670

 
7,244

 
5,664

 
17,905

Net income
 
$
5,779

 
$
8,632

 
$
18,872

 
$
14,754

 
$
48,037

Net income applicable to common shareholders
 
$
5,779

 
$
8,632

 
$
18,872

 
$
14,754

 
$
48,037

Per common share (1)
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.15

 
$
0.22

 
$
0.48

 
$
0.37

 
$
1.22

Earnings (diluted)
 
$
0.15

 
$
0.22

 
$
0.48

 
$
0.37

 
$
1.21

2010
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
44,287

 
$
46,148

 
$
52,075

 
$
43,369

 
$
185,879

Total interest expense
 
6,013

 
5,416

 
5,110

 
4,553

 
21,092

Net interest income
 
38,274

 
40,732

 
46,965

 
38,816

 
164,787

Provision for loan and lease losses
 
15,000

 
13,500

 
9,000

 
3,791

 
41,291

Provision for losses on covered loans
 
—

 
—

 
453

 
5,602

 
6,055

Noninterest income
 
18,473

 
13,237

 
5,183

 
15,888

 
52,781

Noninterest expense
 
33,897

 
34,745

 
33,520

 
34,985

 
137,147

Income before income taxes
 
7,850

 
5,724

 
9,175

 
10,326

 
33,075

Provision (benefit) for income taxes
 
(66
)
 
668

 
3,971

 
(2,282
)
 
2,291

Net income
 
$
7,916

 
$
5,056

 
$
5,204

 
$
12,608

 
$
30,784

Less: Dividends on preferred stock
 
1,107

 
1,110

 
2,730

 
—

 
4,947

Net income applicable to common shareholders
 
$
6,809

 
$
3,946

 
$
2,474

 
$
12,608

 
$
25,837

Per common share (1)
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.24

 
$
0.11

 
$
0.06

 
$
0.32

 
$
0.73

Earnings (diluted)
 
$
0.24

 
$
0.11

 
$
0.06

 
$
0.32

 
$
0.72

 __________
(1) Due to averaging of shares, quarterly earnings per share may not add up to the totals reported for the full year.
Summary of Significant Accounting Policies (Policies)
Cash and cash equivalents 
Cash and cash equivalents
Cash and cash equivalents include cash and due from banks, and interest bearing balances due from correspondent banks and the Federal Reserve Bank. Cash and cash equivalents have a maturity of 90 days or less at the time of purchase.
Securities 
Securities
Securities are classified based on management’s intention on the date of purchase. All securities are classified as available for sale and are presented at fair value. Unrealized gains or losses on securities available for sale are excluded from net income but are included as separate components of other comprehensive income, net of taxes. Purchase premiums or discounts on securities available for sale are amortized or accreted into income using the interest method over the terms of the individual securities. The Company performs a quarterly assessment to determine whether a decline in fair value below amortized cost is other-than-temporary. Amortized cost includes adjustments made to the cost of an investment for accretion, amortization, collection of cash and previous other-than temporary impairment recognized in earnings. Other-than-temporary impairment exists when it is probable that the Company will be unable to recover the entire amortized cost basis of the security. If the decline in fair value is judged to be other than temporary, the security is written down to fair value which becomes the new cost basis and an impairment loss is recognized.
In performing the quarterly assessment for debt securities, management considers whether or not the Company expects to recover the entire amortized cost basis of the security. In addition, management must determine its position with respect to its intent to sell the security and whether it is more likely than not that it will not have to sell the security before recovery of its cost basis. The total amount recognized in earnings when there are credit losses associated with an impaired debt security and management asserts that it does not have the intent to sell the security and it is more likely than not that it will not have to sell the security before recovery of its cost basis is separated into (a) the amount representing a credit loss and (b) the amount related to non-credit factors. The amount of impairment related to credit losses is recognized in earnings. The credit loss component of other-than-temporary impairment, representing an increase in credit risk, is determined by the Company using its best estimate of the present value of cash flows expected to be collected from the debt security. The amount of impairment related to non-credit factors is recognized in other comprehensive income. The previous cost basis less impairment recognized in earnings becomes the new cost basis of the security and is not adjusted for subsequent recoveries in fair value. However, the difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income. The total other-than-temporary impairment is presented in the consolidated statements of income with a reduction for the amount of other-than-temporary impairment that is recognized in other comprehensive income, if any.
Realized gains or losses on sales of securities available for sale are recorded using the specific identification method.
Federal Home Loan Bank Stock 
Federal Home Loan Bank Stock
The Company’s investment in Federal Home Loan Bank (“FHLB”) stock is carried at par value because the shares can only be redeemed with the FHLB at par. The Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages and FHLB advances. Stock redemptions are at the discretion of the FHLB or of the Company, upon five years’ prior notice for FHLB Class B stock or six months notice for FHLB Class A stock to the FHLB. FHLB stock is carried at cost and is subject to recoverability testing per the Financial Services—Depository and Lending topic of the FASB Accounting Standards Codification (“ASC”).
Loans 
Loans
Loans are generally carried at the unpaid principal balance, net of premiums, unearned discounts and net deferred loan fees. Net deferred loan fees include deferred unamortized fees less direct incremental loan origination costs. Net deferred loan fees, premiums and unearned discounts on loans are recognized in interest income using either the interest method or straight-line method over the terms of the loans, adjusted for actual prepayments. Interest income is accrued as earned. Fees related to lending activities other than the origination or purchase of loans are recognized as noninterest income during the period the related services are performed.
Nonaccrual loans—Loans are placed on nonaccrual status when a loan becomes contractually past due 90 days with respect to interest or principal unless the loan is both well secured and in the process of collection, or if full collection of interest or principal becomes uncertain. When a loan is placed on nonaccrual status, any accrued and unpaid interest receivable is reversed and the recognition of net deferred loan fees, premiums and unearned discounts ceases. Thereafter, interest collected on the loan is accounted for on the cash collection or cost recovery method until qualifying for return to accrual status. Generally, a loan may be returned to accrual status when the delinquent principal and interest are brought current in accordance with the terms of the loan agreement and future payments are reasonably assured.
Impaired loans—Loans are considered impaired when based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when a loan has been modified in a troubled debt restructuring. The assessment for impairment occurs when and while such loans are designated as classified per the Company’s internal risk rating system or when and while such loans are on nonaccrual. All nonaccrual loans greater than $250,000 are considered impaired and analyzed individually on a quarterly basis. Classified loans with an outstanding balance greater than $250,000 are evaluated for potential impairment on a quarterly basis.
When a loan with unique risk characteristics has been identified as being impaired, the amount of impairment will be measured by the Company using discounted cash flows, except when it is determined that the primary (remaining) source of repayment for the loan is the operation or liquidation of the underlying collateral. In these cases, the current fair value of the collateral, reduced by costs to sell, will be used in place of discounted cash flows. As a final alternative, the observable market price of the debt may be used to assess impairment. Predominantly, the Company uses the fair value of collateral approach based upon a reliable valuation.
When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by recording a charge-off to the allowance for loan and lease losses or by designating a specific reserve. The Company’s policy is to record cash receipts received on impaired loans first as reductions to principal and then to interest income.
Restructured Loans—A loan is classified as a troubled debt restructuring when a borrower is experiencing financial difficulties that lead to a restructuring of the loan, and the Company grants concessions to the borrower in the restructuring that it would not otherwise consider. These concessions may include interest rate reductions, principal forgiveness, extension of maturity date and other actions intended to minimize potential losses. Generally, a nonaccrual loan that is restructured remains on nonaccrual status for a period of six months to demonstrate that the borrower can meet the restructured terms. If the borrower's performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan.
Acquired Impaired Loans—Loans acquired with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, formerly SOP 03-3 Accounting for Certain Loans or Debt Securities Acquired in a Transfer. In addition, because of the significant discounts associated with certain of the acquired loan portfolios, the Company elected to account for those certain acquired loans under ASC 310-30.
In situations where such loans have similar risk characteristics, loans are aggregated into pools to estimate cash flows. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. Expected cash flows at the acquisition date in excess of the fair value of loans are considered to be accretable yield, which is recognized as interest income over the life of the loan pool using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, any increases in cash flow over those expected at purchase date in excess of fair value are recorded as interest income prospectively. Any subsequent decreases in cash flow over those expected at purchase date due to credit deterioration are recognized by recording an allowance for losses on covered loans. Any disposals of loans, including sales of loans, payments in full or foreclosures result in the removal of the loan from the loan pool at the carrying amount.
Covered Loans—The term covered loans refers to acquired loans that are covered under a loss-sharing agreement with the FDIC. Substantially all covered loans are accounted for under ASC 310-30. See Acquired Impaired Loans for further discussion.
Unfunded loan commitments—Unfunded commitments are generally related to providing credit facilities to clients of the Bank and are not actively traded financial instruments. These unfunded commitments are disclosed as financial instruments with off-balance sheet risk in Note 17 in the Notes to Consolidated Financial Statements.
Allowance for Loan and Lease Losses 
Allowance for Loan and Lease Losses
The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses and provision for loan and lease losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance to the levels deemed appropriate by management, as determined through application of the Company’s allowance methodology procedures. The provision for loan and lease losses reflects management’s judgment of the adequacy of the allowance for loan and lease losses. Loan and lease losses are charged against the allowance when management believes the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan and lease losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
The allowance consists of general, specific, and unallocated components. The general component covers loans not specifically measured for impairment and is based on historical loss experience adjusted for qualitative factors. The specific component relates to loans that are impaired. For impaired loans an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The unallocated allowance provides for other credit losses inherent in the Company’s loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.
Allowance for Unfunded Commitments and Letters of Credit 
Allowance for Unfunded Commitments and Letters of Credit
The allowance for unfunded commitments 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. The allowance for unfunded commitments is included in other liabilities on the consolidated balance sheets, with changes to the balance charged against noninterest expense.
Premises and Equipment 
Premises and Equipment
Land, buildings, leasehold improvements and equipment are stated at cost less accumulated depreciation and amortization. Buildings and equipment are depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are amortized over the shorter of their useful lives or lease terms. Gains or losses on dispositions are reflected in current operations. Expenditures for improvements and major renewals are capitalized, and ordinary maintenance, repairs and small purchases are charged to operating expenses.
Software 
Software
Capitalized software is stated at cost, less accumulated amortization. Amortization is computed on a straight-line basis and charged to expense over the estimated useful life of the software which is generally three years. Capitalized software is included in Premises and equipment, net in the Consolidated Balance Sheets.
Other Real Estate Owned—Noncovered 
Other Real Estate Owned
Other real estate owned (“OREO”) is composed of real estate acquired in satisfaction of loans. Properties acquired by foreclosure or deed in lieu of foreclosure are transferred to OREO and are recorded at fair value less estimated costs to sell, at the date of transfer of the property. If the carrying value exceeds the fair value at the time of the transfer, the difference is charged to the allowance for loan and lease losses. The fair value of the OREO property is based upon current appraisal. Losses that result from the ongoing periodic valuation of these properties are charged to the net cost of operation of OREO in the period in which they are identified. Improvements to the OREO are capitalized and holding costs are charged to the net cost of operation of OREO as incurred.
Covered Assets and Related FDIC Loss Sharing Asset 
Covered OREO—Covered OREO includes acquired OREO that is covered under a loss-sharing agreement with the FDIC. These assets were recorded at their fair value on acquisition date. Covered OREO is reported in Other real estate owned in the Consolidated Balance Sheets. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Upon transferring covered loan collateral to covered OREO status, valuation adjustments arising from acquisition accounting on the related loan are also transferred to covered OREO. Valuation adjustments arising from acquisition accounting on covered OREO result in a reduction of the covered OREO carrying amount and a corresponding increase in the expected FDIC reimbursement, with the estimated net loss to the Company, if any, charged against earnings.
FDIC Loss-sharing Asset
The acquisition date fair value of the reimbursement the Company expected to receive from the FDIC under loss-sharing agreements was recorded in the FDIC loss-sharing asset on the Consolidated Balance Sheet. Subsequent to initial recognition, the FDIC loss-sharing asset is reviewed quarterly and adjusted for any changes in expected cash flows. These adjustments are measured on the same basis as the related covered assets. Any decrease in expected cash flows due to an increase in expected credit losses will increase the FDIC loss-sharing asset and any increase in expected future cash flows due to a decrease in expected credit losses will decrease the FDIC loss-sharing asset. Increases and decreases to the FDIC loss-sharing asset are recorded as adjustments to noninterest income.
Goodwill and Intangibles 
Goodwill and Intangibles
Net assets of companies acquired in purchase transactions are recorded at fair value at the date of acquisition. Identified intangibles are amortized on an accelerated basis over the period benefited. Goodwill is not amortized but is reviewed for potential impairment during the third quarter on an annual basis or, more frequently, if events or circumstances indicate a potential impairment, at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by management. If the fair value of the reporting unit, including goodwill, is determined to be less than the carrying amount of the reporting unit, a further test is required to measure the amount of impairment. If an impairment loss exists, the carrying amount of goodwill is adjusted to a new cost basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited.
Intangible assets are evaluated for impairment if events and circumstances indicate a possible impairment. Such evaluation of other intangible assets is based on undiscounted cash flow projections. At December 31, 2011, intangible assets included on the consolidated balance sheets consist of a core deposit intangible amortized using an accelerated method with an original estimated life of approximately 10 years.
Income Taxes 
Income Taxes
The provision for income taxes includes current and deferred income tax expense on net income adjusted for permanent and temporary differences such as interest income on state and municipal securities and affordable housing credits. Deferred tax assets and liabilities are recognized for the expected future tax consequences of existing temporary differences between the financial reporting and tax reporting basis of assets and liabilities using enacted tax laws and rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On a quarterly basis, management evaluates deferred tax assets to determine if these tax benefits are expected to be realized in future periods. This determination is based on facts and circumstances, including the Company’s current and future tax outlook. To the extent a deferred tax asset is no longer considered “more likely than not” to be realized, a valuation allowance is established.
Earnings per Common Share 
Earnings per Common Share
The Company calculates earnings per common share (“EPS”) using the two-class method in accordance with the Earnings per Share topic of the FASB ASC. The two-class method requires the Company to present EPS as if all of the earnings for the period are distributed to common shareholders and any participating securities, regardless of whether any actual dividends or distributions are made. Under authoritative guidance, all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities. The Company grants restricted shares under a share-based compensation plan that qualifies as participating securities. Restricted shares issued under the Company’s share-based compensation plan are entitled to dividends at the same rate as common stock.
Basic EPS are computed by dividing distributed and undistributed earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Distributed and undistributed earnings available to common shareholders represent net income reduced by preferred stock dividends and distributed and undistributed earnings available to participating securities. Common shares outstanding include common stock and vested restricted stock awards. Diluted EPS reflect the assumed conversion of all potential dilutive securities.
Basic earnings per share (“EPS”) is computed by dividing income applicable to common shareholders by the weighted average number of common shares outstanding for the period. Common shares outstanding include common stock and vested restricted stock awards where recipients have satisfied the vesting terms. Diluted EPS reflects the assumed conversion of all dilutive securities, applying the treasury stock method. The Company calculates earnings per share using the two-class method as described in the Earnings per Share topic of the FASB ASC.
Advertising 
Advertising
Advertising costs are generally expensed as incurred.
Share-Based Payment 
Share-Based Payment
The Company accounts for stock options and stock awards in accordance with the Compensation—Stock Compensation topic of the FASB ASC. Authoritative guidance requires the Company to measure the cost of employee services received in exchange for an award of equity instruments, such as stock options or stock awards, based on the fair value of the award on the grant date. This cost must be recognized in the consolidated statements of income over the vesting period of the award.
The Company issues restricted stock awards which generally vest over a four- or five-year period during which time the holder receives dividends and has full voting rights. Restricted stock is valued at the closing price of the Company’s stock on the date of an award.
Derivatives and Hedging Activities 
Derivatives and Hedging Activities
In accordance with the Derivatives and Hedging topic of the FASB ASC, the Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction.
The Company enters into derivative contracts to add stability to interest income and to manage its exposure to changes in interest rates. On the date the Company enters into a derivative contract, the derivative instrument is designated as: (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (a “fair value” hedge); (2) a hedge of the variability in expected future cash flows associated with an existing recognized asset or liability or a probable forecasted transaction (a “cash flow” hedge); or (3) held for other economic purposes (an “economic” hedge) and not formally designated as part of qualifying hedging relationships under authoritative guidance.
In a fair value hedge, changes in the fair value of the hedging derivative are recognized in earnings and offset by recognizing changes in the fair value of the hedged item attributable to the risk being hedged. To the extent that the hedge is ineffective, the changes in fair value will not offset and the difference is reflected in earnings.
In a cash flow hedge, the effective portion of the change in the fair value of the hedging derivative is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings during the same period in which the hedged item affects earnings. The change in fair value of any ineffective portion of the hedging derivative is recognized immediately in earnings. When a cash flow hedge is discontinued, the net derivative gain or loss continues to be reported in accumulated other comprehensive income unless it is probable that the forecasted transactions will not occur by the end of the originally specified time period. The net derivative gain or loss from a discontinued cash flow hedge is reclassified into earnings during the originally specified time period in which the forecasted transactions were to occur.
The Company formally documents the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategy before initiating a hedge. To qualify for hedge accounting, the derivatives and related hedged items must be designated as a hedge. For hedging relationships in which effectiveness is measured, the correlations between the hedging instruments and hedged items are assessed at inception of the hedge and on an ongoing basis, which includes determining whether the hedge relationship is expected to be highly effective in offsetting changes in fair value or cash flows of hedged items.
Derivatives used for other economic purposes are used as economic hedges in which the Company has not attempted to achieve the highly effective hedge accounting standard under authoritative guidance. The changes in fair value of these instruments are recognized immediately in earnings.
Allowance for Loan and Lease Losses 
Allowance for Loan Losses on Covered Loans
The Company updates its cash flow projections for covered loans accounted for under ASC 310-30 on a quarterly basis. Assumptions utilized in this process include projections related to probability of default, loss severity, prepayment and recovery lag. Projections related to probability of default and prepayment are calculated utilizing a loan migration analysis. The loan migration analysis is a matrix of probability that specifies the probability of a loan pool transitioning into a particular delinquency state given its delinquency state at the re-measurement date. Loss severity factors are based upon actual charge-off data within the loan pools and recovery lags are based upon the collateral within the loan pools.
Any decreases in expected cash flows after the acquisition date and subsequent measurement periods are recognized by recording a provision for loan losses. See Acquired Impaired Loans for further discussion.
Business Combinations (Tables)
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
August 5, 2011
 
 
(in thousands)
Assets
 

Cash and due from banks
 
$
52,072

Investment securities
 
16,298

Federal Reserve Bank and Federal Home Loan Bank stock
 
3,977

Acquired loans
 
200,041

Accrued interest receivable
 
1,975

Premises and equipment
 
86

FDIC receivable
 
156,710

Core deposit intangible
 
3,943

Other assets
 
2,447

Total assets acquired
 
$
437,549

Liabilities
 


Deposits
 
$
401,127

Federal Home Loan Bank advances
 
32,949

Accrued interest payable
 
213

Deferred tax liability
 
1,034

Other liabilities
 
396

Total liabilities assumed
 
435,719

Net assets acquired (after tax gain)
 
$
1,830

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
 
May 27, 2011
 
 
(in thousands)
Assets
 

Cash and due from banks
 
$
4,688

Interest-earning deposits with banks
 
6,689

Investment securities
 
5,303

Federal Home Loan Bank stock
 
477

Acquired loans
 
81,488

Accrued interest receivable
 
476

Premises and equipment
 
5,339

FDIC receivable
 
4,751

Other real estate owned covered by loss sharing
 
8,225

Goodwill
 
4,023

Core deposit intangible
 
1,337

FDIC indemnification asset
 
38,531

Other assets
 
3,657

Total assets acquired
 
$
164,984

Liabilities
 

Deposits
 
$
159,525

Federal Home Loan Bank advances
 
5,003

Accrued interest payable
 
421

Other liabilities
 
35

Total liabilities assumed
 
$
164,984

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
he table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
 
 
 
May 20, 2011
 
 
(in thousands)
Assets
 
 
Cash and due from banks
 
$
1,837

Interest-earning deposits with banks and federal funds sold
 
14,198

Investment securities
 
871

Federal Home Loan Bank stock
 
406

Acquired loans
 
69,783

Accrued interest receivable
 
429

Premises and equipment
 
42

FDIC receivable
 
6,984

Other real estate owned covered by loss sharing
 
2,162

Goodwill
 
1,892

Core deposit intangible
 
509

FDIC indemnification asset
 
30,203

Other assets
 
1,813

Total assets acquired
 
$
131,129

Liabilities
 
 
Deposits
 
$
123,279

Federal Home Loan Bank advances
 
7,772

Accrued interest payable
 
71

Other liabilities
 
7

Total liabilities assumed
 
$
131,129

Securities (Tables)
Securities Available for Sale 
The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value
December 31, 2011
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
678,631

 
$
19,323

 
$
(2,000
)
 
$
695,954

State and municipal securities
 
263,075

 
22,746

 
(58
)
 
285,763

U.S. government agency and government-sponsored enterprise securities
 
42,558

 
505

 
—

 
43,063

Other securities
 
3,296

 
64

 
(30
)
 
3,330

Total
 
$
987,560

 
$
42,638

 
$
(2,088
)
 
$
1,028,110

December 31, 2010
 

 

 

 

U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
491,530

 
$
16,139

 
$
(1,027
)
 
$
506,642

State and municipal securities
 
249,117

 
7,247

 
(2,383
)
 
253,981

Other securities
 
3,281

 
—

 
(38
)
 
3,243

Total
 
$
743,928

 
$
23,386

 
$
(3,448
)
 
$
763,866

Schedule of Contractual Maturities of Investment Securities Available for Sale 
The following table summarizes the amortized cost and fair value of securities available for sale by contractual maturity groups:
 
 
December 31, 2011
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
18,310

 
$
18,610

Due after one year through five years
 
52,418

 
54,635

Due after five years through ten years
 
204,470

 
212,605

Due after ten years
 
709,066

 
738,930

Total investment securities available-for-sale
 
$
984,264

 
$
1,024,780

Carrying Value of Securities Pledged As Collateral 
The following table summarizes, as of December 31, 2011 and 2010, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law: 
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
To Washington and Oregon State to secure public deposits
 
$
225,345

 
$
153,328

To Federal Home Loan Bank to secure advances
 
91,097

 
110,780

To Federal Reserve Bank to secure borrowings
 
56,347

 
149,315

Other securities pledged
 
47,454

 
45,109

Total securities pledged as collateral
 
$
420,243

 
$
458,532

Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses 
The following tables show the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011 and 2010:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
December 31, 2011
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
238,875

 
$
(1,999
)
 
$
196

 
$
(1
)
 
$
239,071

 
(2,000
)
State and municipal securities
 
3,820

 
(24
)
 
950

 
(34
)
 
4,770

 
(58
)
Other securities
 
—

 
—

 
970

 
(30
)
 
970

 
(30
)
Total
 
$
242,695

 
$
(2,023
)
 
$
2,116

 
$
(65
)
 
$
244,811

 
$
(2,088
)
December 31, 2010
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
86,529

 
$
(1,025
)
 
$
588

 
$
(2
)
 
$
87,117

 
$
(1,027
)
State and municipal securities
 
74,755

 
(2,099
)
 
2,792

 
(284
)
 
77,547

 
(2,383
)
Other securities
 
2,275

 
(6
)
 
968

 
(32
)
 
3,243

 
(38
)
Total
 
$
163,559

 
$
(3,130
)
 
$
4,348

 
$
(318
)
 
$
167,907

 
$
(3,448
)
Noncovered Loans (Tables) (Noncovered Loans [Member])
Analysis of Loan Portfolio by Major Types of Loans 
The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):
 
 
December 31,
2011
 
December 31,
2010
 
 
(in thousands)
Noncovered loans:
 
 
 
 
Commercial business
 
$
1,031,721

 
$
795,369

Real estate:
 
 
 
 
One-to-four family residential
 
64,491

 
49,383

Commercial and multifamily residential
 
998,165

 
794,329

Total real estate
 
1,062,656

 
843,712

Real estate construction:
 
 
 
 
One-to-four family residential
 
50,208

 
67,961

Commercial and multifamily residential
 
36,768

 
30,185

Total real estate construction
 
86,976

 
98,146

Consumer
 
183,235

 
182,017

Less: Net unearned income
 
(16,217
)
 
(3,490
)
Total noncovered loans, net of unearned income
 
2,348,371

 
1,915,754

Less: Allowance for loan and lease losses
 
(53,041
)
 
(60,993
)
Total noncovered loans, net
 
$
2,295,330

 
$
1,854,761

Loans held for sale
 
$
2,148

 
$
754

Analysis of Nonaccrual Loans 
The following is an analysis of noncovered, nonaccrual loans as of December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Recorded
Investment
Nonaccrual
Loans
 
Unpaid Principal
Balance
Nonaccrual
Loans
 
Recorded
Investment
Nonaccrual
Loans
 
Unpaid Principal
Balance
Nonaccrual
Loans
 
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
Secured
 
$
10,124

 
$
16,820

 
$
32,368

 
$
44,316

Unsecured
 
119

 
719

 
—

 
327

Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
2,696

 
3,011

 
2,999

 
3,353

Commercial and multifamily residential
 
 
 
 
 
 
 
 
Commercial land
 
3,739

 
7,230

 
4,093

 
6,279

Income property multifamily
 
6,775

 
9,265

 
11,716

 
12,737

Owner occupied
 
8,971

 
10,932

 
7,407

 
8,990

Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
Land and acquisition
 
7,799

 
16,703

 
11,608

 
21,344

Residential construction
 
2,986

 
5,316

 
6,503

 
11,547

Commercial and multifamily residential
 
 
 
 
 
 
 
 
Income property multifamily
 
7,067

 
14,912

 
7,585

 
12,916

Owner occupied
 
—

 
—

 
—

 
—

Consumer
 
3,207

 
3,960

 
5,022

 
5,192

Total
 
$
53,483

 
$
88,868

 
$
89,301

 
$
127,001

Analysis of the Aged Loan Portfolio 
The following is an analysis of the recorded investment of the aged loan portfolio as of December 31, 2011 and 2010:
 
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2011
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
966,563

 
$
1,741

 
$
2,989

 
$
—

 
$
4,730

 
$
10,124

 
$
981,417

Unsecured
 
46,880

 
407

 
—

 
—

 
407

 
119

 
47,406

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
60,764

 
603

 
—

 
—

 
603

 
2,696

 
64,063

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
46,161

 
781

 
—

 
—

 
781

 
3,739

 
50,681

Income property multifamily
 
524,225

 
2,872

 
121

 
—

 
2,993

 
6,775

 
533,993

Owner occupied
 
394,691

 
829

 
298

 
—

 
1,127

 
8,971

 
404,789

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,249

 
153

 
—

 
—

 
153

 
7,799

 
25,201

Residential construction
 
19,555

 
1,390

 
—

 
—

 
1,390

 
2,986

 
23,931

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
13,810

 
—

 
—

 
—

 
—

 
7,067

 
20,877

Owner occupied
 
12,790

 
—

 
—

 
—

 
—

 
—

 
12,790

Consumer
 
179,753

 
141

 
122

 
—

 
263

 
3,207

 
183,223

Total
 
$
2,282,441

 
$
8,917

 
$
3,530

 
$
—

 
$
12,447

 
$
53,483

 
$
2,348,371

 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2010
 
(in thousands)
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
720,926

 
$
919

 
$
692

 
$
1

 
$
1,612

 
$
31,919

 
$
754,457

Unsecured
 
40,455

 
9

 
—

 
—

 
9

 
448

 
40,912

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
46,167

 
220

 
—

 
—

 
220

 
2,996

 
49,383

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
18,979

 
—

 
1,752

 
—

 
1,752

 
4,091

 
24,822

Income property multifamily
 
426,320

 
1,208

 
121

 
—

 
1,329

 
10,745

 
438,394

Owner occupied
 
318,508

 
497

 
3,752

 
—

 
4,249

 
8,356

 
331,113

Real Estate Construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
24,883

 
214

 
205

 
—

 
419

 
11,604

 
36,906

Residential construction
 
24,655

 
—

 
—

 
—

 
—

 
6,400

 
31,055

Commercial and multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
10,666

 
—

 
—

 
—

 
—

 
7,584

 
18,250

Owner occupied
 
11,935

 
—

 
—

 
—

 
—

 
—

 
11,935

Consumer
 
176,005

 
397

 
595

 
—

 
992

 
5,020

 
182,017

Total
 
$
1,819,499

 
$
3,464

 
$
7,117

 
$
1

 
$
10,582

 
$
89,163

 
$
1,919,244

Impaired Financing Receivables 
The following is an analysis of impaired loans (see Note 1) as of December 31, 2011 and 2010: 
 
 
Recorded Investment
of Loans
Collectively Measured
for Contingency
Provision
 
Recorded Investment
of Loans
Individually
Measured for
Specific
Impairment
 
Impaired Loans With
Recorded Allowance
 
Impaired Loans Without
Recorded Allowance
 
Average Recorded
Investment
Impaired Loans 
 
Interest Recognized
on
Impaired Loans
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
December 31, 2011
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
972,531

 
$
8,886

 
$
2,926

 
$
2,927

 
$
954

 
$
5,960

 
$
12,109

 
$
15,578

 
$
511

Unsecured
 
47,309

 
97

 
97

 
97

 
97

 
—

 
—

 
138

 
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
61,584

 
2,479

 
582

 
590

 
96

 
1,897

 
2,136

 
2,494

 
—

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
46,882

 
3,799

 
—

 
—

 
—

 
3,799

 
6,773

 
4,263

 
—

Income property multifamily
 
527,362

 
6,631

 
687

 
759

 
63

 
5,944

 
7,700

 
8,881

 
59

Owner occupied
 
390,225

 
14,564

 
274

 
274

 
185

 
14,290

 
18,524

 
15,254

 
18

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,813

 
7,388

 
450

 
948

 
—

 
6,938

 
11,978

 
8,972

 
116

Residential construction
 
18,847

 
5,084

 
59

 
1,509

 
59

 
5,025

 
5,116

 
4,535

 
—

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
13,810

 
7,067

 
—

 
—

 
—

 
7,067

 
14,947

 
7,065

 
—

Owner occupied
 
12,790

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
180,930

 
2,293

 
151

 
225

 
30

 
2,142

 
2,639

 
3,880

 
15

Total
 
$
2,290,083

 
$
58,288

 
$
5,226

 
$
7,329

 
$
1,484

 
$
53,062

 
$
81,922

 
$
71,060

 
$
719

 
 
 
Recorded Investment
of Loans
Collectively Measured
for Contingency
Provision
 
Recorded Investment
of Loans
Individually
Measured for
Specific
Impairment
 
Impaired Loans With
Recorded Allowance
 
Impaired Loans Without
Recorded Allowance
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
December 31, 2010
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
724,665

 
$
29,793

 
$
2,717

 
$
2,758

 
$
600

 
$
27,081

 
$
26,913

Unsecured
 
40,808

 
104

 
75

 
75

 
75

 
29

 
30

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
46,728

 
2,655

 
—

 
—

 
—

 
2,658

 
2,949

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
20,959

 
3,863

 
3,062

 
5,225

 
—

 
804

 
826

Income property multifamily
 
427,799

 
10,595

 
3,094

 
3,139

 
59

 
10,292

 
12,253

Owner occupied
 
317,010

 
14,103

 
—

 
—

 
—

 
14,152

 
17,099

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
25,362

 
11,543

 
533

 
549

 
3

 
11,013

 
20,718

Residential construction
 
24,655

 
6,400

 
915

 
1,723

 
62

 
5,585

 
9,824

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
10,666

 
7,584

 
6,792

 
10,515

 
175

 
792

 
2,401

Owner occupied
 
11,935

 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
177,484

 
4,533

 
—

 
—

 
—

 
4,533

 
4,691

Total
 
$
1,828,071

 
$
91,173

 
$
17,188

 
$
23,984

 
$
974

 
$
76,939

 
$
97,703

Analysis of loans classified as Troubled Debt Restructurings (“TDR”) 
The following is an analysis of loans classified as Troubled Debt Restructurings ("TDR") for the year ended December 31, 2011:
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial business:
 
 
 
 
 
 
Secured
 
6

 
$
659

 
$
659

Real estate: One-to-four family residential
 
1

 
369

 
369

Real estate: Commercial and multifamily residential:
 
 
 
 
 
 
Income property multifamily
 
2

 
1,280

 
1,280

Real estate construction: One-to-four family residential:
 
 
 
 
 
 
Residential construction
 
1

 
36

 
36

Total
 
10

 
$
2,344

 
$
2,344

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Tables)
Changes in the Allowance for Unfunded Commitments and Letters of Credit 
Changes in the allowance for unfunded commitments and letters of credit are summarized as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Beginning balance
 
$
1,165

 
$
775

 
$
500

Net changes in the allowance for unfunded commitments and letters of credit
 
370

 
390

 
275

Ending balance
 
$
1,535

 
$
1,165

 
$
775

Changes in the Allowance for Loan and Lease Losses 
The following table shows a detailed analysis of the allowance for loan and lease losses for noncovered loans for the years ended December 31, 2011 and 2010: 
 
 
Beginning
Balance
 
Charge-offs
 
Recoveries
 
Provision (Recovery)
 
Ending
Balance
 
Specific
Reserve
 
General
Allocation
Year ended December 31, 2011
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
21,811

 
$
(7,270
)
 
$
1,154

 
$
9,050

 
$
24,745

 
$
954

 
$
23,791

Unsecured
 
738

 
(639
)
 
1,444

 
(854
)
 
689

 
97

 
592

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
1,100

 
(717
)
 
80

 
191

 
654

 
96

 
558

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
634

 
(660
)
 
12

 
502

 
488

 
—

 
488

Income property multifamily
 
15,210

 
(1,407
)
 
414

 
(4,666
)
 
9,551

 
63

 
9,488

Owner occupied
 
9,692

 
(1,620
)
 
33

 
1,501

 
9,606

 
185

 
9,421

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
3,769

 
(1,419
)
 
1,978

 
(1,997
)
 
2,331

 
—

 
2,331

Residential construction
 
2,292

 
(1,068
)
 
113

 
(473
)
 
864

 
59

 
805

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
274

 
(2,213
)
 
—

 
2,604

 
665

 
—

 
665

Owner occupied
 
70

 
—

 
—

 
(35
)
 
35

 
—

 
35

Consumer
 
2,120

 
(3,918
)
 
351

 
4,166

 
2,719

 
30

 
2,689

Unallocated
 
3,283

 
—

 
—

 
(2,589
)
 
694

 
—

 
694

Total
 
$
60,993

 
$
(20,931
)
 
$
5,579

 
$
7,400

 
$
53,041

 
$
1,484

 
$
51,557

 
 
Beginning
Balance
 
Charge-offs
 
Recoveries
 
Provision
 
Ending
Balance
 
Specific
Reserve
 
General
Allocation
Year ended December 31, 2010
 
(in thousands)
Commercial business:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
20,409

 
$
(12,779
)
 
$
1,218

 
$
12,963

 
$
21,811

 
$
600

 
$
21,211

Unsecured
 
1,560

 
(2,100
)
 
1,171

 
107

 
738

 
75

 
663

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
1,072

 
(406
)
 
15

 
419

 
1,100

 
—

 
1,100

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
664

 
(2,165
)
 
—

 
2,135

 
634

 
—

 
634

Income property multifamily
 
9,860

 
(1,969
)
 
124

 
7,195

 
15,210

 
59

 
15,151

Owner occupied
 
6,690

 
(2,039
)
 
2

 
5,039

 
9,692

 
—

 
9,692

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
5,711

 
(8,409
)
 
1,199

 
5,268

 
3,769

 
3

 
3,766

Residential construction
 
2,304

 
(2,447
)
 
474

 
1,961

 
2,292

 
62

 
2,230

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
2,453

 
(3,107
)
 
775

 
153

 
274

 
175

 
99

Owner occupied
 
36

 
—

 
—

 
34

 
70

 
—

 
70

Consumer
 
1,282

 
(3,982
)
 
649

 
4,171

 
2,120

 
—

 
2,120

Unallocated
 
1,437

 
—

 
—

 
1,846

 
3,283

 
—

 
3,283

Total
 
$
53,478

 
$
(39,403
)
 
$
5,627

 
$
41,291

 
$
60,993

 
$
974

 
$
60,019


The 2009 changes in the ALLL for noncovered loans are summarized as follows:
 
 
 
Years Ended December 31,
 
 
2009
 
 
(in thousands)
Balance at beginning of year
 
$
42,747

Loans charged off
 
(54,521
)
Recoveries
 
1,752

Net chargeoffs
 
(52,769
)
Provision charged to expense
 
63,500

Balance at end of year
 
$
53,478

Analysis of Credit Quality of Noncovered Loan Portfolio 
The following is an analysis of the credit quality of our noncovered loan portfolio as of December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
Weighted-
Average
Risk Rating
 
Recorded
Investment
Noncovered
Loans
 
Weighted-
Average
Risk Rating
 
Recorded
Investment
Noncovered
Loans
 
 
(dollars in thousands)
Commercial business:
 
 
 
 
 
 
 
 
Secured
 
4.89

 
$
981,417

 
4.96

 
$
757,372

Unsecured
 
4.25

 
47,406

 
4.23

 
41,175

Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
4.81

 
64,063

 
4.96

 
49,436

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
Commercial land
 
5.22

 
50,681

 
5.75

 
24,956

Income property multifamily
 
4.94

 
533,993

 
5.07

 
406,711

Owner occupied
 
5.05

 
404,789

 
5.12

 
366,284

Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential:
 
 
 
 
 
 
 
 
Land and acquisition
 
6.43

 
25,201

 
6.79

 
37,054

Residential construction
 
5.94

 
23,931

 
6.63

 
31,293

Commercial and multifamily residential:
 
 
 
 
 
 
 
 
Income property multifamily
 
5.49

 
20,877

 
6.38

 
18,296

Owner occupied
 
4.55

 
12,790

 
4.93

 
11,990

Consumer
 
4.24

 
183,223

 
4.31

 
182,624

Total recorded investment of noncovered loans
 
$
2,348,371

 
 
 
$
1,927,191

Noncovered Other Real Estate Owned (Tables)
Summary of Noncovered Other Real Estate Owned
The following table sets forth activity in noncovered OREO for the period:
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
Noncovered OREO:
 
 
 
 
Balance, beginning of period
 
$
30,991

 
$
19,037

Transfers in, net of write-downs ($315 and $193, respectively)
 
8,834

 
19,006

OREO improvements
 
730

 
1,635

Additional OREO write-downs
 
(5,641
)
 
(3,962
)
Proceeds from sale of OREO property
 
(12,278
)
 
(4,800
)
Gain (loss) on sale of OREO
 
257

 
75

Total noncovered OREO, end of period
 
$
22,893

 
$
30,991

Covered Assets and FDIC Loss-sharing Asset (Tables)
Analysis and Allowance for Losses on Covered Loans 
The following is an analysis of our covered loans, net of related allowance for losses on covered loans as of December 31, 2011 and 2010:
 
 
December 31, 2011
 
December 31, 2010
 
 
Covered Loans
 
Weighted-
Average
Risk Rating
 
Allowance
for Loan
Losses
 
Covered Loans
 
Weighted-
Average
Risk Rating
 
Allowance
for Loan
Losses
 
 
(dollars in thousands)
Commercial business
 
$
195,737

 
6.05
 
$
977

 
$
165,255

 
5.74
 
$
2,903

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
79,328

 
5.32
 
678

 
68,700

 
4.77
 
1,013

Commercial and multifamily residential
 
311,308

 
5.65
 
2,683

 
341,063

 
5.70
 
821

Total real estate
 
390,636

 
 
 
3,361

 
409,763

 
 
 
1,834

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
54,402

 
7.32
 
136

 
39,754

 
7.29
 
98

Commercial and multifamily residential
 
23,661

 
7.32
 
86

 
41,624

 
6.79
 
469

Total real estate construction
 
78,063

 
 
 
222

 
81,378

 
 
 
567

Consumer
 
56,877

 
4.84
 
384

 
58,337

 
4.49
 
751

Subtotal of covered loans
 
721,313

 
 
 
$
4,944

 
714,733

 
 
 
$
6,055

Less:
 
 
 
 
 
 
 
 
 
 
 
 
Valuation discount resulting from acquisition accounting
 
184,440

 
 
 
 
 
191,617

 
 
 
 
Allowance for loan losses
 
4,944

 
 
 
 
 
6,055

 
 
 
 
Covered loans, net of valuation discounts and allowance for loan losses
 
$
531,929

 
 
 
 
 
$
517,061

 
 
 
 
Changes in Accretable Yield for Acquired Loans 
The following table shows the changes in accretable yield for acquired loans for the years ended December 31, 2011 and 2010:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of period
 
$
256,572

 
$
—

Additions resulting from acquisitions
 
59,810

 
122,705

Accretion
 
(90,378
)
 
(45,956
)
Disposals
 
(31,483
)
 
(9,014
)
Reclassifications from nonaccretable difference
 
65,148

 
188,837

Balance at end of period
 
$
259,669

 
$
256,572

Schedule of Carrying Amounts for Acquired Loans at Acquisition Date 
The following table shows loans acquired during 2011 and 2010 for which it was probable at acquisition that all contractually required payments would not be collected:
 
 
First Heritage Bank
 
Summit Bank
 
American Marine Bank
 
Columbia River Bank
 
 
May 27, 2011
 
May 20, 2011
 
January 29, 2010
 
January 22, 2010
 
 
(in thousands)
Contractually required payments of interest and principal
 
$
151,611

 
$
127,823

 
$
263,371

 
$
799,244

Nonaccretable difference
 
(34,052
)
 
(34,301
)
 
(65,470
)
 
(217,856
)
Cash flows expected to be collected(1)
 
117,559

 
93,522

 
197,901

 
581,388

Accretable yield
 
(36,071
)
 
(23,739
)
 
(21,623
)
 
(101,082
)
Carrying value of acquired loans
 
$
81,488

 
$
69,783

 
$
176,278

 
$
480,306

_________
(1) Represents undiscounted expected principal and interest cash flows

Covered OREO at Carrying Value 
The following table sets forth activity in covered OREO at carrying value for the years ended December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
Covered OREO:
 
 
 
 
Balance, beginning of period
 
$
14,443

 
$
—

Established through acquisitions
 
10,387

 
17,394

Transfers in, net of write-downs ($2,564 and $2,087, respectively)
 
15,522

 
10,858

OREO improvements
 
5

 
85

Additional OREO write-downs
 
(666
)
 
(1,182
)
Proceeds from sale of OREO property
 
(20,619
)
 
(17,890
)
Gain on sale of OREO
 
9,054

 
5,178

Total covered OREO, end of period
 
$
28,126

 
$
14,443

FDIC Loss-sharing Asset 
The following table shows a detailed analysis of the FDIC-loss sharing asset for the years ending December 31, 2011 and 2010:
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of period
 
$
205,991

 
$
—

Adjustments not reflected in income:
 
 
 
 
Established through acquisitions
 
68,734

 
210,405

Cash received from the FDIC
 
(54,200
)
 
(11,198
)
FDIC reimbursable losses, net
 
4,042

 
1,876

Adjustments reflected in income:
 
 
 
 
Amortization, net
 
(46,049
)
 
1,139

Impairment
 
(1,318
)
 
4,844

Sale of other real estate
 
(4,346
)
 
(1,148
)
Other
 
2,217

 
73

Balance at end of period
 
$
175,071

 
$
205,991

Changes in the Allowance for Loan and Lease Losses 
The 2011 and 2010 changes in the ALLL for covered loans are summarized as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
 
(in thousands)
Balance at beginning of year
 
$
6,055

 
$
—

Loans charged off
 
(1,488
)
 
—

Recoveries
 
2,025

 
—

Provision charged to expense
 
(1,648
)
 
6,055

Balance at end of year
 
$
4,944

 
$
6,055

Premises and Equipment (Tables)
Property, Plant and Equipment
Land, buildings, and furniture and equipment, less accumulated depreciation and amortization, were as follows:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Land
 
$
34,240

 
$
29,368

Buildings
 
78,165

 
67,373

Leasehold improvements
 
2,735

 
2,918

Furniture and equipment
 
23,097

 
21,801

Vehicles
 
428

 
352

Computer software
 
12,043

 
10,070

Total Cost
 
150,708

 
131,882

Less accumulated depreciation and amortization
 
(42,809
)
 
(38,774
)
Total
 
$
107,899

 
$
93,108

Goodwill and Intangible Assets (Tables)
Schedule of Goodwill and Intangible Assets 
The following table sets forth activity for goodwill and intangible assets for the period:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Total goodwill, beginning of period
 
$
109,639

 
$
95,519

 
$
95,519

Established through acquisitions
 
5,915

 
14,120

 
—

Total goodwill, end of period
 
115,554

 
109,639

 
95,519

Gross core deposit intangible balance, beginning of period
 
26,652

 
8,896

 
8,896

Accumulated amortization, beginning of period
 
(7,956
)
 
(4,033
)
 
(2,988
)
Core deposit intangible, net, beginning of period
 
18,696

 
4,863

 
5,908

Established through acquisitions
 
5,789

 
17,755

 
—

CDI current period amortization
 
(4,319
)
 
(3,922
)
 
(1,045
)
Total core deposit intangible, end of period
 
20,166

 
18,696

 
4,863

Total goodwill and intangible assets, end of period
 
$
135,720

 
$
128,335

 
$
100,382

Estimated Future Amortization Expense of Core Deposit Intangibles 

The following table provides the estimated future amortization expense of core deposit intangibles for the succeeding five years:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
4,445

2013
 
3,964

2014
 
3,397

2015
 
2,645

2016
 
2,184

Deposits (Tables)
Schedule Of Deposits 
Year-end deposits are summarized in the following table:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Core deposits:
 
 
 
 
Demand and other noninterest-bearing
 
$
1,156,610

 
$
895,671

Interest-bearing demand
 
735,340

 
672,307

Money market
 
1,031,664

 
920,831

Savings
 
283,416

 
210,995

Certificates of deposit less than $100,000
 
303,405

 
298,678

Total core deposits
 
3,510,435

 
2,998,482

Certificates of deposit greater than $100,000
 
262,731

 
266,708

Certificates of deposit insured by CDARS®
 
42,080

 
38,312

Wholesale certificates of deposit
 
—

 
23,155

Subtotal
 
3,815,246

 
3,326,657

Valuation adjustment resulting from acquisition accounting
 
283

 
612

Total deposits
 
$
3,815,529

 
$
3,327,269

Schedule Of Time Deposits Maturity 
The following table shows the amount and maturity of time deposits that had balances of $100,000 or greater:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
233,819

2013
 
37,918

2014
 
10,112

2015
 
13,042

2016
 
7,777

Thereafter
 
327

Total
 
$
302,995

Federal Home Loan Bank and Federal Reserve Bank Borrowings (Tables)
Schedule of Financial Instruments Owned and Pledged as Collateral 
The following table summarizes, as of December 31, 2011 and 2010, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law: 
 
 
December 31, 2011
 
December 31, 2010
 
 
(in thousands)
To Washington and Oregon State to secure public deposits
 
$
225,345

 
$
153,328

To Federal Home Loan Bank to secure advances
 
91,097

 
110,780

To Federal Reserve Bank to secure borrowings
 
56,347

 
149,315

Other securities pledged
 
47,454

 
45,109

Total securities pledged as collateral
 
$
420,243

 
$
458,532

Debt Instrument Activity For Year 
The maximum, average outstanding and year-end balances and average interest rates on advances from the FHLB were as follows for the years ended December 31, 2011, 2010 and 2009:
 
 
 
Years ended December 31,
 
 
2011
 
2010
 
2009
 
 
(dollars in thousands)
Balance at end of year
 
$
119,009

 
$
119,405

 
$
100,000

Average balance during the year
 
$
120,419

 
$
123,685

 
$
111,211

Maximum month-end balance during the year
 
$
127,426

 
$
154,916

 
$
178,000

Weighted average rate during the year
 
2.76
%
 
2.75
%
 
2.38
%
Weighted average rate at December 31
 
2.81
%
 
2.81
%
 
2.49
%
Schedule of Financial Instruments Owned and Pledged as Collateral 
FHLB advances are collateralized by the following:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Fair value of investment securities
 
$
77,414

 
$
96,496

Recorded value of blanket pledge on loans receivable
 
462,040

 
426,555

Total
 
$
539,454

 
$
523,051

FHLB Borrowing Capacity
 
$
419,115

 
$
402,048

Schedule of Maturities of Long-term Debt 
At December 31, 2011 FHLB advances were scheduled to mature as follows:
 
 
 
Federal Home Loan Bank Advances
Fixed rate advances
 
 
Wtd Avg Rate
 
Amount
 
 
(dollars in thousands)
Within 1 year
 
4.22
%
 
$
8,000

Over 1 through 5 years
 
2.54
%
 
103,694

Over 5 through 10 years
 
5.30
%
 
1,416

Due after 10 years
 
5.37
%
 
5,000

Total
 
118,110

Valuation adjustment from acquisition accounting
 
899

Total
 
$
119,009

Debt Instrument Activity For Year 
The maximum, average outstanding and year-end balances and average interest rates on advances from the Federal Reserve Bank were as follows for the years ended December 31, 2011, 2010 and 2009:
 
 
 
Years ended December 31,
 
 
2011
 
2010
 
2009
 
 
(dollars in thousands)
Balance at end of year
 
$
—

 
$
—

 
$
—

Average balance during the year
 
$
—

 
$
—

 
$
38,205

Maximum month-end balance during the year
 
$
—

 
$
—

 
$
100,000

Weighted average rate during the year
 
—
%
 
—
%
 
0.30
%
Weighted average rate at December 31
 
N/A

 
N/A

 
N/A

Schedule of Financial Instruments Owned and Pledged as Collateral 
Federal Reserve Bank advances are collateralized by the following:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Fair value of investment securities
 
$
53,122

 
$
135,966

Recorded value of pledged commercial loans
 
351,322

 
313,452

Total
 
$
404,444

 
$
449,418

Federal Reserve Bank borrowing capacity
 
$
404,444

 
$
449,418

Derivatives and Hedging Activities (Tables) (Not Designated as Hedging Instrument [Member])
Schedule of Fair Value Derivative Instruments
The following table presents the fair value and balance sheet classification of derivative instruments at December 31, 2011 and 2010:
 
Asset Derivatives
 
Liability Derivatives
 
2011
 
2010
 
2011
 
2010
(in thousands)
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
Other assets
 
$
16,302

 
Other assets
 
$
10,167

 
Other liabilities
 
$
16,302

 
Other liabilities
 
$
10,167

Employee Benefit Plans (Tables)
Schedule of Accumulated and Projected Benefit Obligations 
The following table reconciles the accumulated liability for the projected benefit obligation:
 
 
 
December 31,
2011
 
2010
 
 
(in thousands)
Balance at beginning of year
 
$
10,363

 
$
9,947

Change in actuarial loss
 
329

 
(78
)
Benefit expense
 
987

 
928

Benefit payments
 
(442
)
 
(434
)
Balance at end of year
 
$
11,237

 
$
10,363

Schedule of Expected Benefit Payments 
The benefits expected to be paid in conjunction with the SERP are presented in the following table:
 
Years Ending December 31,
 
(in thousands)
2012
 
$
510

2013
 
526

2014
 
555

2015
 
572

2016
 
803

2017 through 2021
 
5,864

Total
 
$
8,830

Commitments and Contingent Liabilities (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases
As of December 31, 2011, minimum future rental payments, exclusive of taxes and other charges, of these leases were: 
Years Ending December 31,
 
(in thousands)
2012
 
$
4,077

2013
 
3,927

2014
 
3,615

2015
 
3,046

2016
 
1,604

Thereafter
 
5,678

Total minimum payments
 
$
21,947

Fair Value Accounting and Measurement (Tables)
Financial Assets And Liabilities Accounted For Fair Value On Recurring Basis 
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2011 and 2010 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
 
Fair value at
December 31, 2011
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
U.S. government agency and sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
695,954

 
$
—

 
$
695,954

 
$
—

State and municipal securities
 
285,763

 
—

 
285,763

 
—

U.S. government agency and government-sponsored enterprise securities
 
43,063

 
—

 
43,063

 
—

Other securities
 
3,330

 
—

 
3,330

 
—

Total securities available for sale
 
$
1,028,110

 
$
—

 
$
1,028,110

 
$
—

Other assets (Interest rate contracts)
 
$
16,302

 
$
—

 
$
16,302

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities (Interest rate contracts)
 
$
16,302

 
$
—

 
$
16,302

 
$
—

 
 
Fair value  at
December 31, 2010
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
U.S. government agency and sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
506,642

 
$
—

 
$
506,642

 
$
—

State and municipal debt securities
 
253,981

 
—

 
253,981

 
—

Other securities
 
3,243

 
—

 
3,243

 
—

Total securities available for sale
 
$
763,866

 
$
—

 
$
763,866

 
$
—

Other assets (Interest rate contracts)
 
$
10,167

 
$
—

 
$
10,167

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities (Interest rate contracts)
 
$
10,167

 
$
—

 
$
10,167

 
$
—

Financial Assets Accounted For Fair Value On Nonrecurring Basis 
The following table sets forth the Company’s assets that were measured using fair value estimates on a nonrecurring basis at December 31, 2011 and 2010:
 
 
Fair value  at
December 31, 2011
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Year Ended
December 31, 2011
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Impaired loans
 
$
17,755

 
$
—

 
$
—

 
$
17,755

 
$
5,841

Noncovered OREO
 
11,233

 
—

 
—

 
11,233

 
3,089

Covered OREO
 
2,442

 
—

 
—

 
2,442

 
644

 
 
$
31,430

 
$
—

 
$
—

 
$
31,430

 
$
9,574

 
 
Fair value  at
December 31, 2010
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Year Ended
December 31, 2010
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Impaired loans
 
$
65,226

 
$
—

 
$
—

 
$
65,226

 
$
13,906

Noncovered OREO
 
18,266

 
—

 
—

 
18,266

 
4,155

Covered OREO
 
1,422

 
—

 
—

 
1,422

 
263

 
 
$
84,914

 
$
—

 
$
—

 
$
84,914

 
$
18,324

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation 
At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Activity in Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2011 is summarized in the following table:
 
 
Securities available for sale - State and municipal securities
 
 
(in thousands)
Beginning balance, January 1, 2011
 
$
—

Transfers into Level 3 (1)
 
2,950

Impairment loss included in earnings
 
(2,950
)
Ending Balance, December 31, 2011
 
$
—

_____________
(1) Transfers into Level 3 were due to a municipal security that had been categorized previously at a higher level, but the inputs to the fair value calculation for the municipal security became unobservable as the security defaulted on its principal repayment and was no longer actively traded.
Fair Value, by Balance Sheet Grouping 
The following table summarizes carrying amounts and estimated fair values of selected financial instruments:
 
 
 
December 31,
2011
 
December 31,
2010
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
91,364

 
$
91,364

 
$
55,492

 
$
55,492

Interest-earning deposits with banks
 
202,925

 
202,925

 
458,638

 
458,638

Securities available for sale
 
1,028,110

 
1,028,110

 
763,866

 
763,866

FHLB stock
 
22,215

 
22,215

 
17,908

 
17,908

Loans held for sale
 
2,148

 
2,148

 
754

 
754

Loans
 
2,827,259

 
2,957,345

 
2,371,822

 
2,525,113

FDIC loss-sharing asset
 
175,071

 
71,788

 
205,991

 
205,991

Interest rate contracts
 
16,302

 
16,302

 
10,167

 
10,167

Liabilities
 
 
 
 
 
 
 
 
Deposits
 
$
3,815,529

 
$
3,817,013

 
$
3,327,269

 
$
3,330,616

FHLB advances
 
119,009

 
119,849

 
119,405

 
122,722

Repurchase agreements
 
25,000

 
26,580

 
25,000

 
27,251

Other borrowings
 
—

 
—

 
642

 
642

Long-term subordinated debt
 
—

 
—

 
25,735

 
20,156

Interest rate contracts
 
16,302

 
16,302

 
10,167

 
10,167

Earnings Per Common Share (Tables)
Schedule of Basic and Diluted Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share for the periods indicated:
 
 
Year Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands except per share)
Basic EPS:
 
 
 
 
 
 
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)
Less: Preferred dividends and accretion of issuance discount for preferred stock
 
—

 
(4,947)

 
(4,403
)
Net income (loss) applicable to common shareholders
 
$
48,037

 
$
25,837

 
$
(8,371
)
Less: Earnings allocated to participating securities
 
(450
)
 
(244)

 
(16)

Earnings (loss) allocated to common shareholders
 
$
47,587

 
$
25,593

 
$
(8,387
)
Weighted average common shares outstanding
 
39,103

 
35,209

 
21,854

Basic earnings (loss) per common share
 
$
1.22

 
$
0.73

 
$
(0.38
)
Diluted EPS:
 
 
 
 
 
 
Earnings (loss) allocated to common shareholders (1)
 
$
47,588

 
$
25,593

 
$
(8,410
)
Weighted average common shares outstanding
 
39,103

 
35,209

 
21,854

Dilutive effect of equity awards and warrants
 
77

 
183

 
—

Weighted average diluted common shares outstanding (2)
 
39,180

 
35,392

 
21,854

Diluted earnings (loss) per common share
 
$
1.21

 
$
0.72

 
$
(0.38
)
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive.
 
53

 
54

 
754

Share-Based Payments (Tables)
Schedule of Nonvested Share Activity 
A summary of changes in the Company’s nonvested shares and related information for the years ended December 31, 2011, 2010 and 2009 is presented below:
 
Nonvested Shares
 
Shares
 
Weighted
Average
Grant-Date
Fair Value
Nonvested at January 1, 2009
 
191,320

 
$
29.41

Granted
 
122,097

 
$
9.92

Vested
 
(15,763
)
 
$
27.67

Forfeited
 
(19,150
)
 
$
24.03

Nonvested at December 31, 2009
 
278,504

 
$
21.34

Granted
 
108,075

 
$
20.68

Vested
 
(25,521
)
 
$
21.38

Forfeited
 
(7,775
)
 
$
20.77

Nonvested at December 31, 2010
 
353,283

 
$
21.14

Granted
 
133,350

 
$
19.45

Vested
 
(109,033
)
 
$
25.72

Forfeited
 
(14,925
)
 
$
18.86

Nonvested at December 31, 2011
 
362,675

 
$
19.24

Schedule of Share-based Compensation, Stock Options, Activity 
A summary of option activity under the Plan as of December 31, 2011, and changes during the year then ended is presented below:
 
Options
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
($000)
Balance at December 31, 2010
 
93,964

 
$
21.26

 
 
 
 
Granted
 
—

 
$
—

 
 
 
 
Forfeited
 
(9,576
)
 
$
23.96

 
 
 
 
Expired
 
(7,350
)
 
$
17.25

 
 
 
 
Exercised
 
(12,126
)
 
$
13.50

 
 
 
 
Balance at December 31, 2011
 
64,912

 
$
22.76

 
1.4

 
$
52

Total Exercisable at December 31, 2011
 
64,912

 
$
22.76

 
1.4

 
$
52

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range 
As of December 31, 2011, outstanding stock options consist of the following:
 
Ranges of
Exercise Prices
 
Number of
Option
Shares
 
Weighted Average
Remaining
Contractual Life
 
Weighted Average
Exercise Price of
Option Shares
 
Number of
Exercisable
Option Shares
 
Weighted Average
Exercise Price of
Exercisable Option
Shares
9.26 - 12.34
 
516

 
0.3

 
$
12.21

 
516

 
$
12.21

12.35 - 15.43
 
6,395

 
1.8

 
$
14.04

 
6,395

 
$
14.04

15.44 - 18.51
 
5,184

 
1.5

 
$
17.36

 
5,184

 
$
17.36

18.52 - 21.60
 
7,266

 
2.3

 
$
18.61

 
7,266

 
$
18.61

21.61 - 24.68
 
12,000

 
0.8

 
$
22.61

 
12,000

 
$
22.61

24.69 - 27.77
 
29,500

 
0.8

 
$
25.75

 
29,500

 
$
25.75

27.78 - 30.86
 
4,051

 
5.1

 
$
30.86

 
4,051

 
$
30.86

 
 
64,912

 
1.4

 
$
22.76

 
64,912

 
$
22.76

Income Tax (Tables)
Schedule of Components of Income Tax Expense (Benefit) 
The components of income tax expense (benefit) are as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
(in thousands)
Current tax (benefit) expense
 
$
21,688

 
$
(13,547
)
 
$
(8,893
)
Deferred tax expense (benefit)
 
(3,783
)
 
15,838

 
(85
)
Total
 
$
17,905

 
$
2,291

 
$
(8,978
)
Schedule of Deferred Tax Assets and Liabilities 
Significant components of the Company’s deferred tax assets and liabilities are as follows:
 
 
 
December 31,
 
 
2011
 
2010
 
 
(in thousands)
Deferred tax assets:
 
 
 
 
Allowance for loan and lease losses
 
$
20,910

 
$
22,942

Supplemental executive retirement plan
 
6,564

 
6,185

Stock option and restricted stock
 
989

 
1,295

OREO costs
 
3,209

 
1,910

AMT credit carryforwards
 
—

 
2,318

Nonaccrual interest
 
222

 
310

Security impairment
 
1,041

 
—

Other
 
632

 
1,890

Total deferred tax assets
 
33,567

 
36,850

Deferred tax liabilities:
 
 
 
 
Asset purchase tax basis difference
 
(14,812
)
 
(22,559
)
FHLB stock dividends
 
(1,977
)
 
(2,019
)
Purchase accounting
 
(1,030
)
 
(1,373
)
Deferred loan fees
 
(1,517
)
 
(1,214
)
Unrealized gain on investment securities
 
(14,291
)
 
(7,186
)
Depreciation
 
(1,517
)
 
(646
)
Total deferred tax liabilities
 
(35,144
)
 
(34,997
)
Net deferred tax asset (liability)
 
$
(1,577
)
 
$
1,853

Schedule of Effective Income Tax Rate Reconciliation 
A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:
 
 
Years Ended December 31,
 
 
2011
 
2010
 
2009
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
 
 
(dollars in thousands)
Income tax based on statutory rate
 
$
23,080

 
35
 %
 
$
11,576

 
35
 %
 
$
(4,531
)
 
35
%
Reduction resulting from:
 
 
 
 
 
 
 
 
 
 
 
 
Tax credits
 
(608
)
 
(1
)%
 
(808
)
 
(2
)%
 
(687
)
 
5
%
Tax exempt instruments
 
(3,824
)
 
(6
)%
 
(3,744
)
 
(11
)%
 
(3,072
)
 
24
%
Life insurance proceeds
 
(766
)
 
(1
)%
 
(735
)
 
(2
)%
 
(708
)
 
5
%
Bargain purchase
 
(1,036
)
 
(2
)%
 
(5,383
)
 
(16
)%
 
—

 
—
%
Other, net
 
1,059

 
2
 %
 
1,385

 
3
 %
 
20

 
—
%
Income tax provision (benefit)
 
$
17,905

 
27
 %
 
$
2,291

 
7
 %
 
$
(8,978
)
 
69
%
Regulatory Capital Requirements (Tables)
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations
As of December 31, 2011, the most recent notification from the Federal Deposit Insurance Corporation categorized Columbia Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed Columbia Bank’s category. The Company and its banking subsidiary’s actual capital amounts and ratios as of December 31, 2011 and 2010, are also presented in the following table.

 
 
Actual
 
For Capital
Adequacy
Purposes
 
To Be Well
Capitalized Under
Prompt
Corrective Action
Provision
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
 
(dollars in thousands)
As of December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
Total Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
636,559

 
21.05
%
 
$
241,955

 
8.0
%
 
N/A

 
N/A

Columbia Bank
 
$
561,216

 
18.55
%
 
$
242,028

 
8.0
%
 
$
302,535

 
10.0
%
Tier 1 Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
598,485

 
19.79
%
 
$
120,978

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
523,131

 
17.29
%
 
$
121,014

 
4.0
%
 
$
181,521

 
6.0
%
Tier 1 Capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
598,485

 
12.96
%
 
$
184,780

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
523,131

 
11.45
%
 
$
182,747

 
4.0
%
 
$
228,434

 
5.0
%
As of December 31, 2010
 
 
 
 
 
 
 
 
 
 
 
 
Total Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
623,526

 
24.47
%
 
$
203,871

 
8.0
%
 
N/A

 
N/A

Columbia Bank
 
$
463,587

 
18.20
%
 
$
203,789

 
8.0
%
 
$
254,736

 
10.0
%
Tier 1 Capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
591,263

 
23.20
%
 
$
101,936

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
431,337

 
16.93
%
 
$
101,894

 
4.0
%
 
$
152,841

 
6.0
%
Tier 1 Capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
 
The Company
 
$
591,263

 
13.99
%
 
$
169,062

 
4.0
%
 
N/A

 
N/A

Columbia Bank
 
$
431,337

 
10.33
%
 
$
166,961

 
4.0
%
 
$
208,702

 
5.0
%
Parent Company Financial Information (Tables)
Condensed Statements of Income - Parent Company Only 
Condensed Statements of Income—Parent Company Only
 
 
Years Ended December 31,
2011
 
2010
 
2009
(in thousands)
Income
 
 
 
 
 
 
Dividend from banking subsidiary
 
$
—

 
$
—

 
$
200

Interest-earning deposits
 
712

 
1,319

 
1,095

Other income
 
17

 
31

 
36

Total income
 
729

 
1,350

 
1,331

Expense
 
 
 
 
 
 
Compensation and employee benefits
 
88

 
96

 
512

Long-term obligations
 
579

 
1,029

 
1,196

Other expense
 
1,114

 
1,066

 
1,104

Total expenses
 
1,781

 
2,191

 
2,812

Loss before income tax expense (benefit) and equity in undistributed net income of subsidiaries
 
(1,052
)
 
(841
)
 
(1,481
)
Income tax expense (benefit)
 
91

 
(778
)
 
(580
)
Income before equity in undistributed net income (loss) of subsidiaries
 
(1,143
)
 
(63
)
 
(901
)
Equity in undistributed net income (loss) of subsidiaries
 
49,180

 
30,847

 
(3,067
)
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)
Condensed Balance Sheets - Parent Company Only 
Condensed Balance Sheets—Parent Company Only
 
 
December 31,
2011
 
2010
 
 
(in thousands)
Assets
 
 
 
 
Cash and due from banking subsidiary
 
$
3,220

 
$
673

Interest-earning deposits
 
72,014

 
158,500

Total cash and cash equivalents
 
75,234

 
159,173

Investment in banking subsidiary
 
683,977

 
571,945

Investment in other subsidiaries
 
—

 
774

Other assets
 
510

 
1,160

Total assets
 
$
759,721

 
$
733,052

Liabilities and Shareholders’ Equity
 
 
 
 
Long-term subordinated debt
 
$
—

 
$
25,736

Other liabilities
 
383

 
438

Total liabilities
 
383

 
26,174

Shareholders’ equity
 
759,338

 
706,878

Total liabilities and shareholders’ equity
 
$
759,721

 
$
733,052

Condensed Statements of Cash Flows - Parent Company Only 
Condensed Statements of Cash Flows—Parent Company Only
 
 
Years Ended December 31,
2011
 
2010
 
2009
(in thousands)
Operating Activities
 
 
 
 
 
 
Net income (loss)
 
$
48,037

 
$
30,784

 
$
(3,968
)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
Equity in undistributed earnings of subsidiaries
 
(49,180
)
 
(30,847
)
 
3,067

Stock-based compensation expense
 
1,635

 
1,424

 
1,038

Net changes in other assets and liabilities
 
315

 
(769
)
 
1,783

Net cash provided by operating activities
 
807

 
592

 
1,920

Investing Activities
 
 
 
 
 
 
Proceeds from termination of trust subsidiaries
 
774

 
—

 
—

Net cash provided by investing activities
 
774

 
—

 
—

Financing Activities
 
 
 
 
 
 
Net decrease in short-term borrowings
 
—

 
—

 
(100
)
Cash dividends paid
 
(10,660
)
 
(4,302
)
 
(5,155
)
Repayment of long-term subordinated debt
 
(25,774
)
 
—

 
—

Issuance of common stock, net of offering costs
 
—

 
229,129

 
113,537

Purchase and retirement of common stock
 
(32
)
 
—

 
—

Proceeds from exercise of stock options
 
848

 
948

 
939

Downstream stock offering proceeds to the Bank
 
(50,000
)
 
(70,000
)
 
(105,000
)
Excess tax benefit associated with share-based compensation
 
98

 
—

 
—

Purchase and retirement of preferred stock
 
—

 
(80,200
)
 
—

Net cash provided by financing activities
 
(85,520
)
 
75,575

 
4,221

Increase (decrease) in cash and cash equivalents
 
(83,939
)
 
76,167

 
6,141

Cash and cash equivalents at beginning of year
 
159,173

 
83,006

 
76,865

Cash and cash equivalents at end of year
 
$
75,234

 
$
159,173

 
$
83,006

Summary Of Quarterly Financial Information (Unaudited) (Tables)
Schedule of Quarterly Financial Information
Quarterly financial information for the years ended December 31, 2011 and 2010 is summarized as follows:
 
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Year Ended
December 31,
 
 
(in thousands, except per share amounts)
2011
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
54,611

 
$
53,309

 
$
68,432

 
$
74,919

 
$
251,271

Total interest expense
 
4,162

 
3,934

 
3,644

 
2,795

 
14,535

Net interest income
 
50,449

 
49,375

 
64,788

 
72,124

 
236,736

Provision for loan and lease losses
 
—

 
2,150

 
500

 
4,750

 
7,400

Provision (recapture) for losses on covered loans
 
(422
)
 
2,301

 
433

 
(3,960
)
 
(1,648
)
Noninterest income (loss)
 
(5,419
)
 
3,542

 
2,196

 
(9,602
)
 
(9,283
)
Noninterest expense
 
37,346

 
37,164

 
39,935

 
41,314

 
155,759

Income before income taxes
 
8,106

 
11,302

 
26,116

 
20,418

 
65,942

Provision for income taxes
 
2,327

 
2,670

 
7,244

 
5,664

 
17,905

Net income
 
$
5,779

 
$
8,632

 
$
18,872

 
$
14,754

 
$
48,037

Net income applicable to common shareholders
 
$
5,779

 
$
8,632

 
$
18,872

 
$
14,754

 
$
48,037

Per common share (1)
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.15

 
$
0.22

 
$
0.48

 
$
0.37

 
$
1.22

Earnings (diluted)
 
$
0.15

 
$
0.22

 
$
0.48

 
$
0.37

 
$
1.21

2010
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
44,287

 
$
46,148

 
$
52,075

 
$
43,369

 
$
185,879

Total interest expense
 
6,013

 
5,416

 
5,110

 
4,553

 
21,092

Net interest income
 
38,274

 
40,732

 
46,965

 
38,816

 
164,787

Provision for loan and lease losses
 
15,000

 
13,500

 
9,000

 
3,791

 
41,291

Provision for losses on covered loans
 
—

 
—

 
453

 
5,602

 
6,055

Noninterest income
 
18,473

 
13,237

 
5,183

 
15,888

 
52,781

Noninterest expense
 
33,897

 
34,745

 
33,520

 
34,985

 
137,147

Income before income taxes
 
7,850

 
5,724

 
9,175

 
10,326

 
33,075

Provision (benefit) for income taxes
 
(66
)
 
668

 
3,971

 
(2,282
)
 
2,291

Net income
 
$
7,916

 
$
5,056

 
$
5,204

 
$
12,608

 
$
30,784

Less: Dividends on preferred stock
 
1,107

 
1,110

 
2,730

 
—

 
4,947

Net income applicable to common shareholders
 
$
6,809

 
$
3,946

 
$
2,474

 
$
12,608

 
$
25,837

Per common share (1)
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.24

 
$
0.11

 
$
0.06

 
$
0.32

 
$
0.73

Earnings (diluted)
 
$
0.24

 
$
0.11

 
$
0.06

 
$
0.32

 
$
0.72

 __________
(1) Due to averaging of shares, quarterly earnings per share may not add up to the totals reported for the full year.
Summary of Significant Accounting Policies (Details) (USD $)
12 Months Ended
Dec. 31, 2011
location
Accounting Policies [Line Items]
 
Number Of Branch Locations
102 
Number Of Days Used To Determine Treatment As Cash Equivalent
90 days 
Number of Days of Delinqunecy at Which Loans Are Categorized As Non Accrual Status
90 days 
Loans and Leases Receivable, Nonaccrual Loans Considered Impaired
$ 250,000 
Loans and Leases Receivable, Loans Evaluated For Impairment On Quarterly Basis, Outstanding
$ 250,000 
Core Deposits [Member]
 
Accounting Policies [Line Items]
 
Estimated life of CDI, in years
10 
WASHINGTON
 
Accounting Policies [Line Items]
 
Number Of Branch Locations
77 
OREGON
 
Accounting Policies [Line Items]
 
Number Of Branch Locations
25 
Business Combinations (Narrative) (Details) (USD $)
7 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2011
location
Dec. 31, 2011
location
Dec. 31, 2011
location
Dec. 31, 2010
Dec. 31, 2009
Aug. 5, 2011
Bank of Whitman [Member]
location
Dec. 31, 2011
Bank of Whitman [Member]
location
May 27, 2011
First Heritage Bank [Member]
location
years
Dec. 31, 2011
First Heritage Bank [Member]
May 20, 2011
First Heritage Bank [Member]
Maximum [Member]
May 20, 2011
Summit Bank [Member]
years
Dec. 31, 2011
Summit Bank [Member]
May 20, 2011
Summit Bank [Member]
Maximum [Member]
May 27, 2011
Scenario, Previously Reported [Member]
First Heritage Bank [Member]
May 20, 2011
Scenario, Previously Reported [Member]
Summit Bank [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition date
 
 
 
 
 
August 5, 2011 
 
May 27, 2011 
 
 
May 20, 2011 
 
 
 
 
Number Of Branch Locations To Be Acquired
 
 
 
 
 
9 
 
5 
 
 
 
 
 
 
 
Bargain purchase gain, net of tax
 
 
$ 1,830,000 
$ 9,818,000 
$ 0 
$ 1,830,000 
 
 
 
 
 
 
 
 
 
Goodwill
 
 
 
 
 
 
 
4,023,000 
 
 
1,892,000 
 
 
 
 
Core deposit intangible
 
 
 
 
 
3,943,000 
 
1,337,000 
 
 
509,000 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount
 
 
 
 
 
 
 
4,023,000 
 
 
1,892,000 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets, Expected Tax Deductible Amount
 
 
 
 
 
3,943,000 
 
1,337,000 
 
 
509,000 
 
 
 
 
Number Of Branch Locations Excluded From Operating Results
 
 
 
 
 
 
11 
 
 
 
 
 
 
 
 
Percentage of loss shared by FDIC
 
 
 
 
 
 
 
 
80.00% 
 
 
80.00% 
 
 
 
FDIC Percentage Of Loss Recoveries
 
 
 
 
 
 
 
 
80.00% 
 
 
80.00% 
 
 
 
Term of loss sharing agreements for commercial loans
 
 
 
 
 
 
 
5 
 
 
5 
 
 
 
 
Term of Loss sharing agreements for Single family residential mortgage loans
 
 
 
 
 
 
 
10 
 
 
10 
 
 
 
 
Commercial Loans Period Of Loss Recovery Provisions
 
 
 
 
 
 
 
8 
 
 
8 
 
 
 
 
Single Family Residential Mortgage Loans Period of Loss Recovery Provisions
 
 
 
 
 
 
 
10 
 
 
10 
 
 
 
 
FDIC Indemnification Asset, Accrued Interest On Loans, Period of Accrual
 
 
 
 
 
 
 
 
 
90 days 
 
 
90 days 
 
 
Number Of Branch Locations
102 
102 
102 
 
 
 
 
 
 
 
 
 
 
 
 
Acquired loans
 
 
 
 
 
200,041,000 
 
81,488,000 
 
 
69,783,000 
 
 
81,900,000 
71,400,000 
Other real estate owned covered by loss sharing
 
 
 
 
 
 
 
8,225,000 
 
 
2,162,000 
 
 
8,300,000 
2,700,000 
FDIC indemnification asset
 
 
 
 
 
 
 
38,531,000 
 
 
30,203,000 
 
 
38,100,000 
27,200,000 
Other assets
 
 
 
 
 
2,447,000 
 
3,657,000 
 
 
1,813,000 
 
 
1,700,000 
786,000 
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Acquired Loans
369,000 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Loans Covered By Loss Sharing
61,000 
509,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, FDIC Indemnification Asset
427,000 
3,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Other Assets
$ 1,900,000 
$ 1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combinations (Summary of the Amounts Recognized as of the Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified
Aug. 5, 2011
Bank of Whitman [Member]
May 27, 2011
First Heritage Bank [Member]
May 20, 2011
Summit Bank [Member]
Business Acquisition [Line Items]
 
 
 
Cash and due from banks
$ 52,072 
$ 4,688 
$ 1,837 
Interest-earning deposits with banks and federal funds sold
 
 
14,198 
Interest-earning deposits with banks
 
6,689 
 
Investment securities
16,298 
5,303 
871 
Federal Reserve Bank and Federal Home Loan Bank stock
3,977 
 
 
Federal Home Loan Bank stock
 
477 
406 
Acquired loans
200,041 
81,488 
69,783 
Accrued interest receivable
1,975 
476 
429 
Premises and equipment
86 
5,339 
42 
FDIC receivable
156,710 
4,751 
6,984 
Other real estate owned covered by loss sharing
 
8,225 
2,162 
Goodwill
 
4,023 
1,892 
Core deposit intangible
3,943 
1,337 
509 
FDIC indemnification asset
 
38,531 
30,203 
Other assets
2,447 
3,657 
1,813 
Total assets acquired
437,549 
164,984 
131,129 
Deposits
401,127 
159,525 
123,279 
Federal Home Loan Bank advances
32,949 
5,003 
7,772 
Accrued interest payable
213 
421 
71 
Deferred tax liability
1,034 
 
 
Other liabilities
396 
35 
7 
Total liabilities assumed
435,719 
164,984 
131,129 
Net assets acquired (after tax gain)
$ 1,830 
 
 
Cash and Cash Equivalents (Details) (Federal Reserve Bank [Member], USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Federal Reserve Bank [Member]
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Restricted Cash and Cash Equivalents
$ 27.0 
$ 18.8 
Securities (Securities Available for Sale) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Schedule of Available-for-sale Securities [Line Items]
 
 
 
Amortized Cost
$ 987,560 
$ 743,928 
 
Gross Unrealized Gains
42,638 
23,386 
 
Gross Unrealized Losses
(2,088)
(3,448)
 
Fair Value
1,028,110 
763,866 
 
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
 
 
 
Gross realized losses
250 
148 
10 
Gross realized gains
384 
206 
1,100 
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
Amortized Cost
678,631 
491,530 
 
Gross Unrealized Gains
19,323 
16,139 
 
Gross Unrealized Losses
(2,000)
(1,027)
 
Fair Value
695,954 
506,642 
 
State and Municipal Securities [Member]
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
Amortized Cost
263,075 
249,117 
 
Gross Unrealized Gains
22,746 
7,247 
 
Gross Unrealized Losses
(58)
(2,383)
 
Fair Value
285,763 
253,981 
 
U.S. Government Agency and Government-Sponsored Enterprise Securities [Member]
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
Amortized Cost
42,558 
 
 
Gross Unrealized Gains
505 
 
 
Gross Unrealized Losses
0 
 
 
Fair Value
43,063 
 
 
Other Securities [Member]
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
Amortized Cost
3,296 
3,281 
 
Gross Unrealized Gains
64 
0 
 
Gross Unrealized Losses
(30)
(38)
 
Fair Value
$ 3,330 
$ 3,243 
 
Securities (Schedule of Contractual Maturities of Investment Securities Available for Sale) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Available-for-sale Securities [Abstract]
 
Due within one year, Amortized Cost
$ 18,310 
Due after one year through five years, Amortized Cost
52,418 
Due after five years through ten years, Amortized Cost
204,470 
Due after ten years, Amortized Cost
709,066 
Total investment securities available-for-sale, Amortized Cost
984,264 
Due within one year, Fair Value
18,610 
Due after one year through five years, Fair Value
54,635 
Due after five years through ten years, Fair Value
212,605 
Due after ten years, Fair Value
738,930 
Total investment securities available-for-sale, Fair Value
$ 1,024,780 
Securities (Carrying Value of Securities Pledged as Collateral) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying amount of securities pledged as collateral
$ 420,243 
$ 458,532 
To Washington and Oregon State To Secure Public Deposits [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying amount of securities pledged as collateral
225,345 
153,328 
To Federal Home Loan Bank To Secure Advances [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying amount of securities pledged as collateral
91,097 
110,780 
To Federal Reserve Bank To Secure Borrowings [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying amount of securities pledged as collateral
56,347 
149,315 
Other Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying amount of securities pledged as collateral
$ 47,454 
$ 45,109 
Securities (Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months Fair Value
$ 242,695 
$ 163,559 
Less than 12 Months Unrealized Losses
(2,023)
(3,130)
12 Months or More Fair Value
2,116 
4,348 
12 Months or More Unrealized Losses
(65)
(318)
Total Fair Value
244,811 
167,907 
Total Unrealized Losses
(2,088)
(3,448)
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months Fair Value
238,875 
86,529 
Less than 12 Months Unrealized Losses
(1,999)
(1,025)
12 Months or More Fair Value
196 
588 
12 Months or More Unrealized Losses
(1)
(2)
Total Fair Value
239,071 
87,117 
Total Unrealized Losses
(2,000)
(1,027)
State and Municipal Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months Fair Value
3,820 
74,755 
Less than 12 Months Unrealized Losses
(24)
(2,099)
12 Months or More Fair Value
950 
2,792 
12 Months or More Unrealized Losses
(34)
(284)
Total Fair Value
4,770 
77,547 
Total Unrealized Losses
(58)
(2,383)
Other Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months Fair Value
0 
2,275 
Less than 12 Months Unrealized Losses
0 
(6)
12 Months or More Fair Value
970 
968 
12 Months or More Unrealized Losses
(30)
(32)
Total Fair Value
970 
3,243 
Total Unrealized Losses
$ (30)
$ (38)
Securities (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
security
U.S. Government and Government-Sponsored Enterprise Securities [Member]
 
Schedule of Available-for-sale Securities [Line Items]
 
Number Of Securities In Unrealized Loss Position
35 
Number Of Securities In Continuous Loss Position For Twelve Months or More
2 
Other Securities [Member]
 
Schedule of Available-for-sale Securities [Line Items]
 
Issuances Of Securities Exceeding Shareholders Equity Threshold, Percent
10.00% 
Number Of Securities In Continuous Loss Position For Twelve Months or More
1 
Number Of Issuances Of Securities Exceeding Shareholders Equity Threshold
0 
Municipal Bonds [Member]
 
Schedule of Available-for-sale Securities [Line Items]
 
Number Of Securities In Unrealized Loss Position
8 
Number Of Securities In Continuous Loss Position For Twelve Months or More
1 
Number Of Other Than Temporarily Impaired Securities
1 
Available-for-sale Securities, Par Value
$ 3,000,000 
Available-for-sale Securities, Present Value Of Expected Future Cash Flows
0 
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities
$ 3,000,000 
Noncovered Loans (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
contract
loan
Dec. 31, 2010
loan
Dec. 31, 2009
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans to related parties
$ 9,000,000 
$ 12,900,000 
 
Advances on related party loans
3,700,000 
 
 
Repayments on related party loans
7,600,000 
 
 
Commercial and residential real estate loans pledged as FHLB collateral
539,454,000 
523,051,000 
 
Loans and Leases Receivable, Impaired, Nonperforming, Nonaccrual of Interest
53,500,000 
89,200,000 
 
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans
5,300,000 
6,400,000 
7,600,000 
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing, Number of Loans
0 
1 
 
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
 
1,000 
 
Loans and Leases Receivable, Nonaccrual of Interest, Commitments of Additional Funds
2,000,000 
5,600,000 
 
Additional funds committed to lend on loans classified as TDR
535,000 
 
 
Financing Receivable, Modifications, Subsequent Default, Number of Contracts
0 
 
 
Loans Receivable [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Commercial and residential real estate loans pledged as FHLB collateral
$ 462,040,000 
$ 426,555,000 
 
Noncovered Loans (Analysis of Loan Portfolio by Major Types of Loans) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Loans, net
$ 2,827,259 
$ 2,371,822 
 
 
Loans held for sale
2,148 
754 
 
 
Noncovered Loans [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Less: Net unearned income
(16,217)
(3,490)
 
 
Total noncovered loans, net of unearned income
2,348,371 
1,915,754 
 
 
Less: Allowance for loan and lease losses
(53,041)
(60,993)
(53,478)
(42,747)
Loans, net
2,295,330 
1,854,761 
 
 
Loans held for sale
2,148 
754 
 
 
Noncovered Loans [Member] |
Commercial Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Commercial Business
1,031,721 
795,369 
 
 
Noncovered Loans [Member] |
Real Estate Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Total Real Estate
1,062,656 
843,712 
 
 
Noncovered Loans [Member] |
Real Estate Construction Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Total Real Estate Construction
86,976 
98,146 
 
 
Noncovered Loans [Member] |
Consumer Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Consumer
183,235 
182,017 
 
 
Total noncovered loans, net of unearned income
183,223 
 
 
 
Less: Allowance for loan and lease losses
(2,719)
(2,120)
(1,282)
 
Noncovered Loans [Member] |
One-to-Four Family Residential [Member] |
Real Estate Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Real Estate
64,491 
49,383 
 
 
Total noncovered loans, net of unearned income
64,063 
 
 
 
Less: Allowance for loan and lease losses
(654)
(1,100)
(1,072)
 
Noncovered Loans [Member] |
One-to-Four Family Residential [Member] |
Real Estate Construction Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Real Estate Construction
50,208 
67,961 
 
 
Noncovered Loans [Member] |
Commercial and Multifamily Residential [Member] |
Real Estate Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Real Estate
998,165 
794,329 
 
 
Noncovered Loans [Member] |
Commercial and Multifamily Residential [Member] |
Real Estate Construction Portfolio Segment [Member]
 
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
 
Real Estate Construction
$ 36,768 
$ 30,185 
 
 
Noncovered Loans (Analysis of Nonaccrual Loans) (Details) (Noncovered Loans [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
$ 53,483 
$ 89,163 
Unpaid Principal Balance Nonaccrual Loans
88,868 
127,001 
Recorded Investment Nonaccrual Loans
 
89,301 
Commercial Portfolio Segment [Member] |
Secured Loans [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
10,124 
31,919 
Unpaid Principal Balance Nonaccrual Loans
16,820 
44,316 
Recorded Investment Nonaccrual Loans
 
32,368 
Commercial Portfolio Segment [Member] |
Unsecured Loans [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
119 
448 
Unpaid Principal Balance Nonaccrual Loans
719 
327 
Recorded Investment Nonaccrual Loans
 
0 
Real Estate Portfolio Segment [Member] |
One-to-Four Family Residential [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
2,696 
2,996 
Unpaid Principal Balance Nonaccrual Loans
3,011 
3,353 
Recorded Investment Nonaccrual Loans
 
2,999 
Real Estate Portfolio Segment [Member] |
Commercial Land [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
3,739 
4,091 
Unpaid Principal Balance Nonaccrual Loans
7,230 
6,279 
Recorded Investment Nonaccrual Loans
 
4,093 
Real Estate Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
6,775 
10,745 
Unpaid Principal Balance Nonaccrual Loans
9,265 
12,737 
Recorded Investment Nonaccrual Loans
 
11,716 
Real Estate Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
8,971 
8,356 
Unpaid Principal Balance Nonaccrual Loans
10,932 
8,990 
Recorded Investment Nonaccrual Loans
 
7,407 
Real Estate Construction Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
7,067 
7,584 
Unpaid Principal Balance Nonaccrual Loans
14,912 
12,916 
Recorded Investment Nonaccrual Loans
 
7,585 
Real Estate Construction Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
0 
0 
Unpaid Principal Balance Nonaccrual Loans
0 
0 
Recorded Investment Nonaccrual Loans
 
0 
Real Estate Construction Portfolio Segment [Member] |
Land And Acquisition [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
7,799 
11,604 
Unpaid Principal Balance Nonaccrual Loans
16,703 
21,344 
Recorded Investment Nonaccrual Loans
 
11,608 
Real Estate Construction Portfolio Segment [Member] |
Residential Construction [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
2,986 
6,400 
Unpaid Principal Balance Nonaccrual Loans
5,316 
11,547 
Recorded Investment Nonaccrual Loans
 
6,503 
Consumer Portfolio Segment [Member]
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Recorded Investment Nonaccrual Loans
3,207 
5,020 
Unpaid Principal Balance Nonaccrual Loans
3,960 
5,192 
Recorded Investment Nonaccrual Loans
 
$ 5,022 
Noncovered Loans (Analysis of the Aged Loan Portfolio) (Details) (Noncovered Loans [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
$ 2,282,441 
$ 1,819,499 
30 - 59 Days Past Due
8,917 
3,464 
60 - 89 Days Past Due
3,530 
7,117 
Greater than 90 Days Past Due
0 
1 
Total Past Due
12,447 
10,582 
Nonaccrual Loans
53,483 
89,163 
Loans Receivable, Net
2,348,371 
1,919,244 
Commercial Portfolio Segment [Member] |
Secured Loans [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
966,563 
720,926 
30 - 59 Days Past Due
1,741 
919 
60 - 89 Days Past Due
2,989 
692 
Greater than 90 Days Past Due
0 
1 
Total Past Due
4,730 
1,612 
Nonaccrual Loans
10,124 
31,919 
Loans Receivable, Net
981,417 
754,457 
Commercial Portfolio Segment [Member] |
Unsecured Loans [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
46,880 
40,455 
30 - 59 Days Past Due
407 
9 
60 - 89 Days Past Due
0 
0 
Greater than 90 Days Past Due
0 
0 
Total Past Due
407 
9 
Nonaccrual Loans
119 
448 
Loans Receivable, Net
47,406 
40,912 
Real Estate Portfolio Segment [Member] |
One-to-Four Family Residential [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
60,764 
46,167 
30 - 59 Days Past Due
603 
220 
60 - 89 Days Past Due
0 
0 
Greater than 90 Days Past Due
0 
0 
Total Past Due
603 
220 
Nonaccrual Loans
2,696 
2,996 
Loans Receivable, Net
64,063 
49,383 
Real Estate Portfolio Segment [Member] |
Commercial Land [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
46,161 
18,979 
30 - 59 Days Past Due
781 
0 
60 - 89 Days Past Due
0 
1,752 
Greater than 90 Days Past Due
0 
0 
Total Past Due
781 
1,752 
Nonaccrual Loans
3,739 
4,091 
Loans Receivable, Net
50,681 
24,822 
Real Estate Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
394,691 
318,508 
30 - 59 Days Past Due
829 
497 
60 - 89 Days Past Due
298 
3,752 
Greater than 90 Days Past Due
0 
0 
Total Past Due
1,127 
4,249 
Nonaccrual Loans
8,971 
8,356 
Loans Receivable, Net
404,789 
331,113 
Real Estate Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
524,225 
426,320 
30 - 59 Days Past Due
2,872 
1,208 
60 - 89 Days Past Due
121 
121 
Greater than 90 Days Past Due
0 
0 
Total Past Due
2,993 
1,329 
Nonaccrual Loans
6,775 
10,745 
Loans Receivable, Net
533,993 
438,394 
Real Estate Construction Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
12,790 
11,935 
30 - 59 Days Past Due
0 
0 
60 - 89 Days Past Due
0 
0 
Greater than 90 Days Past Due
0 
0 
Total Past Due
0 
0 
Nonaccrual Loans
0 
0 
Loans Receivable, Net
12,790 
11,935 
Real Estate Construction Portfolio Segment [Member] |
Land And Acquisition [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
17,249 
24,883 
30 - 59 Days Past Due
153 
214 
60 - 89 Days Past Due
0 
205 
Greater than 90 Days Past Due
0 
0 
Total Past Due
153 
419 
Nonaccrual Loans
7,799 
11,604 
Loans Receivable, Net
25,201 
36,906 
Real Estate Construction Portfolio Segment [Member] |
Residential Construction [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
19,555 
24,655 
30 - 59 Days Past Due
1,390 
0 
60 - 89 Days Past Due
0 
0 
Greater than 90 Days Past Due
0 
0 
Total Past Due
1,390 
0 
Nonaccrual Loans
2,986 
6,400 
Loans Receivable, Net
23,931 
31,055 
Real Estate Construction Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
13,810 
10,666 
30 - 59 Days Past Due
0 
0 
60 - 89 Days Past Due
0 
0 
Greater than 90 Days Past Due
0 
0 
Total Past Due
0 
0 
Nonaccrual Loans
7,067 
7,584 
Loans Receivable, Net
20,877 
18,250 
Consumer Portfolio Segment [Member]
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
Current Loans
179,753 
176,005 
30 - 59 Days Past Due
141 
397 
60 - 89 Days Past Due
122 
595 
Greater than 90 Days Past Due
0 
0 
Total Past Due
263 
992 
Nonaccrual Loans
3,207 
5,020 
Loans Receivable, Net
$ 183,223 
$ 182,017 
Noncovered Loans (Analysis of Impaired Loans) (Details) (Noncovered Loans [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Recorded Investment of Loans Collectively Measured for Contingency Provision
$ 2,290,083 
$ 1,828,071 
Recorded Investment of Loans Individually Measured for Specific Impairment
58,288 
91,173 
Average Recorded Investment Impaired Loans
71,060 
 
Interest Recognized on Impaired Loans
719 
 
Impaired Loans Without Recorded Allowance [Member]
 
 
Recorded Investment
53,062 
76,939 
Unpaid Principal Balance
81,922 
97,703 
Impaired Loans With Recorded Allowance [Member]
 
 
Recorded Investment
5,226 
17,188 
Unpaid Principal Balance
7,329 
23,984 
Related Allowance
1,484 
974 
Commercial Portfolio Segment [Member] |
Secured Loans [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
972,531 
724,665 
Recorded Investment of Loans Individually Measured for Specific Impairment
8,886 
29,793 
Average Recorded Investment Impaired Loans
15,578 
 
Interest Recognized on Impaired Loans
511 
 
Commercial Portfolio Segment [Member] |
Unsecured Loans [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
47,309 
40,808 
Recorded Investment of Loans Individually Measured for Specific Impairment
97 
104 
Average Recorded Investment Impaired Loans
138 
 
Interest Recognized on Impaired Loans
0 
 
Commercial Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Secured Loans [Member]
 
 
Recorded Investment
5,960 
27,081 
Unpaid Principal Balance
12,109 
26,913 
Commercial Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Unsecured Loans [Member]
 
 
Recorded Investment
0 
29 
Unpaid Principal Balance
0 
30 
Commercial Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Secured Loans [Member]
 
 
Recorded Investment
2,926 
2,717 
Unpaid Principal Balance
2,927 
2,758 
Related Allowance
954 
600 
Commercial Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Unsecured Loans [Member]
 
 
Recorded Investment
97 
75 
Unpaid Principal Balance
97 
75 
Related Allowance
97 
75 
Real Estate Portfolio Segment [Member] |
One-to-Four Family Residential [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
61,584 
46,728 
Recorded Investment of Loans Individually Measured for Specific Impairment
2,479 
2,655 
Average Recorded Investment Impaired Loans
2,494 
 
Interest Recognized on Impaired Loans
0 
 
Real Estate Portfolio Segment [Member] |
Commercial Land [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
46,882 
20,959 
Recorded Investment of Loans Individually Measured for Specific Impairment
3,799 
3,863 
Average Recorded Investment Impaired Loans
4,263 
 
Interest Recognized on Impaired Loans
0 
 
Real Estate Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
527,362 
427,799 
Recorded Investment of Loans Individually Measured for Specific Impairment
6,631 
10,595 
Average Recorded Investment Impaired Loans
8,881 
 
Interest Recognized on Impaired Loans
59 
 
Real Estate Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
390,225 
317,010 
Recorded Investment of Loans Individually Measured for Specific Impairment
14,564 
14,103 
Average Recorded Investment Impaired Loans
15,254 
 
Interest Recognized on Impaired Loans
18 
 
Real Estate Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
One-to-Four Family Residential [Member]
 
 
Recorded Investment
1,897 
2,658 
Unpaid Principal Balance
2,136 
2,949 
Real Estate Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Commercial Land [Member]
 
 
Recorded Investment
3,799 
804 
Unpaid Principal Balance
6,773 
826 
Real Estate Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment
5,944 
10,292 
Unpaid Principal Balance
7,700 
12,253 
Real Estate Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Owner Occupied [Member]
 
 
Recorded Investment
14,290 
14,152 
Unpaid Principal Balance
18,524 
17,099 
Real Estate Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
One-to-Four Family Residential [Member]
 
 
Recorded Investment
582 
0 
Unpaid Principal Balance
590 
0 
Related Allowance
96 
0 
Real Estate Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Commercial Land [Member]
 
 
Recorded Investment
0 
3,062 
Unpaid Principal Balance
0 
5,225 
Related Allowance
0 
0 
Real Estate Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment
687 
3,094 
Unpaid Principal Balance
759 
3,139 
Related Allowance
63 
59 
Real Estate Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Owner Occupied [Member]
 
 
Recorded Investment
274 
0 
Unpaid Principal Balance
274 
0 
Related Allowance
185 
0 
Real Estate Construction Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
13,810 
10,666 
Recorded Investment of Loans Individually Measured for Specific Impairment
7,067 
7,584 
Average Recorded Investment Impaired Loans
7,065 
 
Interest Recognized on Impaired Loans
0 
 
Real Estate Construction Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
12,790 
11,935 
Recorded Investment of Loans Individually Measured for Specific Impairment
0 
0 
Average Recorded Investment Impaired Loans
0 
 
Interest Recognized on Impaired Loans
0 
 
Real Estate Construction Portfolio Segment [Member] |
Land And Acquisition [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
17,813 
25,362 
Recorded Investment of Loans Individually Measured for Specific Impairment
7,388 
11,543 
Average Recorded Investment Impaired Loans
8,972 
 
Interest Recognized on Impaired Loans
116 
 
Real Estate Construction Portfolio Segment [Member] |
Residential Construction [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
18,847 
24,655 
Recorded Investment of Loans Individually Measured for Specific Impairment
5,084 
6,400 
Average Recorded Investment Impaired Loans
4,535 
 
Interest Recognized on Impaired Loans
0 
 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment
7,067 
792 
Unpaid Principal Balance
14,947 
2,401 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Owner Occupied [Member]
 
 
Recorded Investment
0 
0 
Unpaid Principal Balance
0 
0 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Land And Acquisition [Member]
 
 
Recorded Investment
6,938 
11,013 
Unpaid Principal Balance
11,978 
20,718 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member] |
Residential Construction [Member]
 
 
Recorded Investment
5,025 
5,585 
Unpaid Principal Balance
5,116 
9,824 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Income Property Multifamily [Member]
 
 
Recorded Investment
0 
6,792 
Unpaid Principal Balance
0 
10,515 
Related Allowance
0 
175 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Owner Occupied [Member]
 
 
Recorded Investment
0 
0 
Unpaid Principal Balance
0 
0 
Related Allowance
0 
0 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Land And Acquisition [Member]
 
 
Recorded Investment
450 
533 
Unpaid Principal Balance
948 
549 
Related Allowance
0 
3 
Real Estate Construction Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member] |
Residential Construction [Member]
 
 
Recorded Investment
59 
915 
Unpaid Principal Balance
1,509 
1,723 
Related Allowance
59 
62 
Consumer Portfolio Segment [Member]
 
 
Recorded Investment of Loans Collectively Measured for Contingency Provision
180,930 
177,484 
Recorded Investment of Loans Individually Measured for Specific Impairment
2,293 
4,533 
Average Recorded Investment Impaired Loans
3,880 
 
Interest Recognized on Impaired Loans
15 
 
Consumer Portfolio Segment [Member] |
Impaired Loans Without Recorded Allowance [Member]
 
 
Recorded Investment
2,142 
4,533 
Unpaid Principal Balance
2,639 
4,691 
Consumer Portfolio Segment [Member] |
Impaired Loans With Recorded Allowance [Member]
 
 
Recorded Investment
151 
0 
Unpaid Principal Balance
225 
0 
Related Allowance
$ 30 
$ 0 
Noncovered Loans Noncovered Loans (Analysis of Troubled Debt Restructurings) (Details) (Noncovered Loans [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Modifications
Financing Receivable, Modifications [Line Items]
 
Number of TDR Modifications
10 
Pre-Modification Outstanding Recorded Investment
$ 2,344 
Post-Modification Outstanding Recorded Investment
2,344 
Secured Loans [Member]
 
Financing Receivable, Modifications [Line Items]
 
Number of TDR Modifications
6 
Pre-Modification Outstanding Recorded Investment
659 
Post-Modification Outstanding Recorded Investment
659 
One-to-Four Family Residential [Member]
 
Financing Receivable, Modifications [Line Items]
 
Number of TDR Modifications
1 
Pre-Modification Outstanding Recorded Investment
369 
Post-Modification Outstanding Recorded Investment
369 
Income Property Multifamily [Member]
 
Financing Receivable, Modifications [Line Items]
 
Number of TDR Modifications
2 
Pre-Modification Outstanding Recorded Investment
1,280 
Post-Modification Outstanding Recorded Investment
1,280 
Residential Construction [Member]
 
Financing Receivable, Modifications [Line Items]
 
Number of TDR Modifications
1 
Pre-Modification Outstanding Recorded Investment
36 
Post-Modification Outstanding Recorded Investment
$ 36 
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Narrative) (Details) (Maximum [Member])
12 Months Ended
Dec. 31, 2011
Maximum [Member]
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
Percentage of unallocated loan amount
5.00% 
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Allowance for Noncovered Loan and Lease Losses) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Provision (recapture) for loan and lease losses
$ 5,752 
$ 47,346 
$ 63,500 
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
60,993 
53,478 
42,747 
Charge-offs
(20,931)
(39,403)
(54,521)
Recoveries
5,579 
5,627 
1,752 
Provision (recapture) for loan and lease losses
7,400 
41,291 
63,500 
Net chargeoffs
 
 
(52,769)
Balance at the end of year
53,041 
60,993 
53,478 
Specific Reserve
1,484 
974 
 
General Allocation
51,557 
60,019 
 
Commercial Portfolio Segment [Member] |
Secured Loans [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
21,811 
20,409 
 
Charge-offs
(7,270)
(12,779)
 
Recoveries
1,154 
1,218 
 
Provision (recapture) for loan and lease losses
9,050 
12,963 
 
Balance at the end of year
24,745 
21,811 
 
Specific Reserve
954 
600 
 
General Allocation
23,791 
21,211 
 
Commercial Portfolio Segment [Member] |
Unsecured Loans [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
738 
1,560 
 
Charge-offs
(639)
(2,100)
 
Recoveries
1,444 
1,171 
 
Provision (recapture) for loan and lease losses
(854)
107 
 
Balance at the end of year
689 
738 
 
Specific Reserve
97 
75 
 
General Allocation
592 
663 
 
Real Estate Portfolio Segment [Member] |
One-to-Four Family Residential [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
1,100 
1,072 
 
Charge-offs
(717)
(406)
 
Recoveries
80 
15 
 
Provision (recapture) for loan and lease losses
191 
419 
 
Balance at the end of year
654 
1,100 
 
Specific Reserve
96 
0 
 
General Allocation
558 
1,100 
 
Real Estate Portfolio Segment [Member] |
Commercial Land [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
634 
664 
 
Charge-offs
(660)
(2,165)
 
Recoveries
12 
0 
 
Provision (recapture) for loan and lease losses
502 
2,135 
 
Balance at the end of year
488 
634 
 
Specific Reserve
0 
0 
 
General Allocation
488 
634 
 
Real Estate Portfolio Segment [Member] |
Income Property Multifamily [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
15,210 
9,860 
 
Charge-offs
(1,407)
(1,969)
 
Recoveries
414 
124 
 
Provision (recapture) for loan and lease losses
(4,666)
7,195 
 
Balance at the end of year
9,551 
15,210 
 
Specific Reserve
63 
59 
 
General Allocation
9,488 
15,151 
 
Real Estate Portfolio Segment [Member] |
Owner Occupied [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
9,692 
6,690 
 
Charge-offs
(1,620)
(2,039)
 
Recoveries
33 
2 
 
Provision (recapture) for loan and lease losses
1,501 
5,039 
 
Balance at the end of year
9,606 
9,692 
 
Specific Reserve
185 
0 
 
General Allocation
9,421 
9,692 
 
Real Estate Construction Portfolio Segment [Member] |
Income Property Multifamily [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
274 
2,453 
 
Charge-offs
(2,213)
(3,107)
 
Recoveries
0 
775 
 
Provision (recapture) for loan and lease losses
2,604 
153 
 
Balance at the end of year
665 
274 
 
Specific Reserve
0 
175 
 
General Allocation
665 
99 
 
Real Estate Construction Portfolio Segment [Member] |
Owner Occupied [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
70 
36 
 
Charge-offs
0 
0 
 
Recoveries
0 
0 
 
Provision (recapture) for loan and lease losses
(35)
34 
 
Balance at the end of year
35 
70 
 
Specific Reserve
0 
0 
 
General Allocation
35 
70 
 
Real Estate Construction Portfolio Segment [Member] |
Land And Acquisition [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
3,769 
5,711 
 
Charge-offs
(1,419)
(8,409)
 
Recoveries
1,978 
1,199 
 
Provision (recapture) for loan and lease losses
(1,997)
5,268 
 
Balance at the end of year
2,331 
3,769 
 
Specific Reserve
0 
3 
 
General Allocation
2,331 
3,766 
 
Real Estate Construction Portfolio Segment [Member] |
Residential Construction [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
2,292 
2,304 
 
Charge-offs
(1,068)
(2,447)
 
Recoveries
113 
474 
 
Provision (recapture) for loan and lease losses
(473)
1,961 
 
Balance at the end of year
864 
2,292 
 
Specific Reserve
59 
62 
 
General Allocation
805 
2,230 
 
Consumer Portfolio Segment [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
2,120 
1,282 
 
Charge-offs
(3,918)
(3,982)
 
Recoveries
351 
649 
 
Provision (recapture) for loan and lease losses
4,166 
4,171 
 
Balance at the end of year
2,719 
2,120 
 
Specific Reserve
30 
0 
 
General Allocation
2,689 
2,120 
 
Unallocated Financing Receivables [Member] |
Noncovered Loans [Member]
 
 
 
Allowance for Loan and Lease Losses [Roll Forward]
 
 
 
Balance at beginning of year
3,283 
1,437 
 
Charge-offs
0 
0 
 
Recoveries
0 
0 
 
Provision (recapture) for loan and lease losses
(2,589)
1,846 
 
Balance at the end of year
694 
3,283 
 
Specific Reserve
0 
0 
 
General Allocation
$ 694 
$ 3,283 
 
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Changes in the Allowance for Unfunded Commitments and Letters of Credit) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Allowance For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit
 
 
 
Beginning balance
$ 1,165 
$ 775 
$ 500 
Net changes in the allowance for unfunded commitments and letters of credit
370 
390 
275 
Ending balance
$ 1,535 
$ 1,165 
$ 775 
Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Analysis of Credit Quality of Noncovered Loan Portfolio) (Details) (Noncovered Loans [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
risk_rating
Dec. 31, 2010
risk_rating
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Recorded Investment Noncovered Loans
 
$ 1,927,191 
Total noncovered loans, net of unearned income
2,348,371 
1,915,754 
Commercial Portfolio Segment [Member] |
Secured Loans [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.89 
4.96 
Recorded Investment Noncovered Loans
 
757,372 
Total noncovered loans, net of unearned income
981,417 
 
Commercial Portfolio Segment [Member] |
Unsecured Loans [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.25 
4.23 
Recorded Investment Noncovered Loans
 
41,175 
Total noncovered loans, net of unearned income
47,406 
 
Real Estate Portfolio Segment [Member] |
One-to-Four Family Residential [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.81 
4.96 
Recorded Investment Noncovered Loans
 
49,436 
Total noncovered loans, net of unearned income
64,063 
 
Real Estate Portfolio Segment [Member] |
Commercial Land [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
5.22 
5.75 
Recorded Investment Noncovered Loans
 
24,956 
Total noncovered loans, net of unearned income
50,681 
 
Real Estate Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.94 
5.07 
Recorded Investment Noncovered Loans
 
406,711 
Total noncovered loans, net of unearned income
533,993 
 
Real Estate Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
5.05 
5.12 
Recorded Investment Noncovered Loans
 
366,284 
Total noncovered loans, net of unearned income
404,789 
 
Real Estate Construction Portfolio Segment [Member] |
Income Property Multifamily [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
5.49 
6.38 
Recorded Investment Noncovered Loans
 
18,296 
Total noncovered loans, net of unearned income
20,877 
 
Real Estate Construction Portfolio Segment [Member] |
Owner Occupied [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.55 
4.93 
Recorded Investment Noncovered Loans
 
11,990 
Total noncovered loans, net of unearned income
12,790 
 
Real Estate Construction Portfolio Segment [Member] |
Land And Acquisition [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
6.43 
6.79 
Recorded Investment Noncovered Loans
 
37,054 
Total noncovered loans, net of unearned income
25,201 
 
Real Estate Construction Portfolio Segment [Member] |
Residential Construction [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
5.94 
6.63 
Recorded Investment Noncovered Loans
 
31,293 
Total noncovered loans, net of unearned income
23,931 
 
Consumer Portfolio Segment [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Weighted-Average Risk Rating
4.24 
4.31 
Recorded Investment Noncovered Loans
 
182,624 
Total noncovered loans, net of unearned income
$ 183,223 
 
Noncovered Other Real Estate Owned (Summary of Noncovered Other Real Estate Owned) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Other Real Estate Owned [Line Items]
 
 
 
Balance, beginning of period
$ 45,434 
 
 
Transfers in, write-downs
2,564 
2,087 
 
Proceeds from sale of OREO property
(12,278)
(4,800)
(8,098)
Net realized gain on sale of other real estate owned
9,310 
5,253 
(183)
Balance, end of period
51,019 
45,434 
 
Noncovered Loans [Member]
 
 
 
Other Real Estate Owned [Line Items]
 
 
 
Balance, beginning of period
30,991 
19,037 
 
Transfers in, net of write-downs ($315 and $193, respectively)
8,834 
19,006 
 
Transfers in, write-downs
315 
193 
 
OREO improvements
730 
1,635 
 
Additional OREO write-downs
(5,641)
(3,962)
 
Proceeds from sale of OREO property
(12,278)
(4,800)
 
Net realized gain on sale of other real estate owned
257 
75 
 
Balance, end of period
$ 22,893 
$ 30,991 
 
Covered Assets and FDIC Loss-sharing Asset (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
Payment Of Clawback If Losses Less Than Stated Levels, Period After Acquisition
10 years 45 days 
 
 
Percentage of Clawback
50.00% 
 
 
Percentage of stated threshold
20.00% 
 
 
Percentage of assets premium
25.00% 
 
 
Amount of estimated clawback liability
$ 3,700,000 
$ 0 
 
Provision (recapture) for loan and lease losses
5,752,000 
47,346,000 
63,500,000 
Federal deposit insurance corporation loss-sharing indemnified assets
157,500,000 
170,700,000 
 
Federal deposit insurance corporation loss-sharing indemnified assets receivable
17,600,000 
35,300,000 
 
Maximum [Member]
 
 
 
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
Loss Recovery Provision Effective Years
10 years 
 
 
Loss Sharing Agreement Effective Years
10 years 
 
 
Percentage of cumulative loss-sharing
25.00% 
 
 
Minimum [Member]
 
 
 
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
Loss Recovery Provision Effective Years
8 years 
 
 
Loss Sharing Agreement Effective Years
5 years 
 
 
Percentage of cumulative loss-sharing
20.00% 
 
 
Covered Loans [Member]
 
 
 
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
Percentage of loss shared by FDIC When Loss Share Thresholds Met
 
95.00% 
 
Percentage of loss shared by FDIC
80.00% 
 
 
FDIC Percentage Of Loss Recoveries
80.00% 
95.00% 
 
Provision (recapture) for loan and lease losses
(1,648,000)
6,055,000 
0 
Impairment expenses
(589,000)
 
 
Negative provision to adjust allowance for loss
$ (1,000,000)
 
 
Covered Assets and FDIC Loss-sharing Asset (Analysis and Allowance for Losses on Covered Loans) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Covered Loans [Member]
Dec. 31, 2010
Covered Loans [Member]
Dec. 31, 2009
Covered Loans [Member]
Dec. 31, 2011
Covered Loans [Member]
Commercial Portfolio Segment [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Commercial Portfolio Segment [Member]
risk_rating
Dec. 31, 2011
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
Dec. 31, 2010
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
Dec. 31, 2011
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
One-to-Four Family Residential [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
One-to-Four Family Residential [Member]
risk_rating
Dec. 31, 2011
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
Commercial and Multifamily Residential [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Real Estate Portfolio Segment [Member]
Commercial and Multifamily Residential [Member]
risk_rating
Dec. 31, 2011
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
Dec. 31, 2010
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
Dec. 31, 2011
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
One-to-Four Family Residential [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
One-to-Four Family Residential [Member]
risk_rating
Dec. 31, 2011
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
Commercial and Multifamily Residential [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Real Estate Construction Portfolio Segment [Member]
Commercial and Multifamily Residential [Member]
risk_rating
Dec. 31, 2011
Covered Loans [Member]
Consumer Portfolio Segment [Member]
risk_rating
Dec. 31, 2010
Covered Loans [Member]
Consumer Portfolio Segment [Member]
risk_rating
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Covered Loans
 
 
$ 721,313 
$ 714,733 
 
$ 195,737 
$ 165,255 
$ 390,636 
$ 409,763 
$ 79,328 
$ 68,700 
$ 311,308 
$ 341,063 
$ 78,063 
$ 81,378 
$ 54,402 
$ 39,754 
$ 23,661 
$ 41,624 
$ 56,877 
$ 58,337 
Weighted-Average Risk Rating
 
 
 
 
 
6.05 
5.74 
 
 
5.32 
4.77 
5.65 
5.70 
 
 
7.32 
7.29 
7.32 
6.79 
4.84 
4.49 
Allowance for losses
 
 
4,944 
6,055 
0 
977 
2,903 
3,361 
1,834 
678 
1,013 
2,683 
821 
222 
567 
136 
98 
86 
469 
384 
751 
Valuation discount resulting from acquisition accounting
 
 
184,440 
191,617 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, net
$ 2,827,259 
$ 2,371,822 
$ 531,929 
$ 517,061 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Covered Assets and FDIC Loss-sharing Asset (Changes in Accretable Yield for Acquired Loans) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Covered Assets And FDIC Loss Sharing Asset
 
 
Balance at beginning of period
$ 256,572 
$ 0 
Additions resulting from acquisitions
59,810 
122,705 
Accretion
(90,378)
(45,956)
Disposals
(31,483)
(9,014)
Reclassifications from nonaccretable difference
65,148 
188,837 
Balance at end of period
$ 259,669 
$ 256,572 
Covered Assets and FDIC Loss-sharing Asset Covered Assets and FDIC Loss-sharing Asset (Changes in Allowance for Covered Loans) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Provision (recapture) for loan and lease losses
$ 5,752 
$ 47,346 
$ 63,500 
Covered Loans [Member]
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
Balance at beginning of year
6,055 
0 
 
Loans charged off
(1,488)
0 
 
Recoveries
(2,025)
0 
 
Provision (recapture) for loan and lease losses
(1,648)
6,055 
0 
Balance at the end of year
$ 4,944 
$ 6,055 
$ 0 
Covered Assets and FDIC Loss-sharing Asset (Carrying Amounts For Acquired Loans At Acquisition Date) (Details) (USD $)
In Thousands, unless otherwise specified
May 27, 2011
First Heritage Bank [Member]
May 20, 2011
Summit Bank [Member]
Jan. 29, 2010
American Marine Bank [Member]
Jan. 22, 2010
Columbia River Bank [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
 
 
Contractually required payments of interest and principal
$ 151,611 
$ 127,823 
$ 263,371 
$ 799,244 
Nonaccretable difference
(34,052)
(34,301)
(65,470)
(217,856)
Cash flows expected to be collected
117,559 1
93,522 1
197,901 1
581,388 1
Accretable yield
36,071 
23,739 
21,623 
101,082 
Carrying value of acquired loans
$ 81,488 
$ 69,783 
$ 176,278 
$ 480,306 
Covered Assets and FDIC Loss-sharing Asset (Covered OREO at Carrying Value) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
Balance, beginning of period
$ 45,434 
 
Transfers in, write-downs
2,564 
2,087 
Balance, end of period
51,019 
45,434 
Covered Loans [Member]
 
 
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
Balance, beginning of period
14,443 
0 
Established through acquisitions
10,387 
17,394 
Transfers in, net of write-downs ($2,564 and $2,087, respectively)
15,522 
10,858 
OREO improvements
5 
85 
Additional OREO write-downs
(666)
(1,182)
Proceeds from sale of OREO property
(20,619)
(17,890)
Gain on sale of OREO
9,054 
5,178 
Balance, end of period
$ 28,126 
$ 14,443 
Covered Assets and FDIC Loss-sharing Asset (FDIC Loss-sharing Asset) (Details) (FDIC Loss-sharing Asset [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
FDIC Loss-sharing Asset [Member]
 
 
Covered Assets And FDIC Loss Sharing Asset [Line Items]
 
 
Balance at beginning of period
$ 205,991 
$ 0 
Established through acquisitions
68,734 
210,405 
Cash received from the FDIC
(54,200)
(11,198)
FDIC reimbursable losses, net
4,042 
1,876 
Amortization, net
(46,049)
1,139 
Impairment
(1,318)
4,844 
Sale of other real estate
(4,346)
(1,148)
Other
2,217 
73 
Balance at end of period
$ 175,071 
$ 205,991 
Premises and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 150,708,000 
$ 131,882,000 
 
Less accumulated depreciation and amortization
(42,809,000)
(38,774,000)
 
Total
107,899,000 
93,108,000 
 
Depreciation and amortization expense
5,700,000 
5,200,000 
4,700,000 
Land [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
34,240,000 
29,368,000 
 
Building [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
78,165,000 
67,373,000 
 
Leasehold Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
2,735,000 
2,918,000 
 
Furniture and Fixtures [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
23,097,000 
21,801,000 
 
Vehicles [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
428,000 
352,000 
 
Software [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 12,043,000 
$ 10,070,000 
 
Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Goodwill and Intangible Assets [Roll Forward]
 
 
 
Total goodwill, beginning of period
$ 109,639 
$ 95,519 
$ 95,519 
Established through acquisitions
5,915 
14,120 
0 
Total goodwill, end of period
115,554 
109,639 
95,519 
Core deposit intangible, net, beginning of period
18,696 
 
 
Total core deposit intangible, end of period
20,166 
18,696 
 
Total goodwill and intangible assets, end of period
135,720 
128,335 
100,382 
Core Deposits [Member]
 
 
 
Goodwill and Intangible Assets [Roll Forward]
 
 
 
Gross core deposit intangible balance, beginning of period
26,652 
8,896 
8,896 
Accumulated amortization, beginning of period
(7,956)
(4,033)
(2,988)
Core deposit intangible, net, beginning of period
18,696 
4,863 
5,908 
Established through acquisitions
5,789 
17,755 
0 
CDI current period amortization
(4,319)
(3,922)
(1,045)
Total core deposit intangible, end of period
$ 20,166 
$ 18,696 
$ 4,863 
Estimated life of CDI, in years
10 
 
 
Goodwill and Intangible Assets (Summary of Estimated Future Amortization Expense of Core Deposit Intangibles) (Details) (Core Deposits [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Core Deposits [Member]
 
Future Amortization Expense For Core Deposit Intangibles
 
2012
$ 4,445 
2013
3,964 
2014
3,397 
2015
2,645 
2016
$ 2,184 
Deposits (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Deposits [Abstract]
 
 
Demand and other noninterest-bearing
$ 1,156,610 
$ 895,671 
Interest-bearing demand
735,340 
672,307 
Money market
1,031,664 
920,831 
Savings
283,416 
210,995 
Certificates of deposit less than $100,000
303,405 
298,678 
Total core deposits
3,510,435 
2,998,482 
Certificates of deposit greater than $100,000
262,731 
266,708 
Certificates of deposit insured by CDARS®
42,080 
38,312 
Wholesale certificates of deposit
0 
23,155 
Subtotal
3,815,246 
3,326,657 
Deposits, Valuation Adjustment From Acquisition Accounting
283 
612 
Total deposits
3,815,529 
3,327,269 
Deposit Liabilities Reclassified as Loans Receivable
10,100 
409 
Time Deposits, by Maturity [Abstract]
 
 
2012
233,819 
 
2013
37,918 
 
2014
10,112 
 
2015
13,042 
 
2016
7,777 
 
Thereafter
327 
 
Total
$ 302,995 
 
Federal Home Loan Bank and Federal Reserve Bank Borrowings (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
FHLB Fixed Rate Advances, Maturities Summary [Abstract]
 
 
 
FHLB Fixed Rate Advances, Weighted Average Interest Rate, Within 1 year
4.22% 
 
 
FHLB Fixed Rate Advances, Amount, Within 1 year
$ 8,000 
 
 
FHLB Fixed Rate Advances, Weighted Average Interest Rate, Over 1 through 5 years
2.54% 
 
 
FHLB Fixed Rate Advances, Over 1 through 5 years
103,694 
 
 
FHLB Fixed Rate Advances, Weighted Average Interest Rate, Over 5 through 10 years
5.30% 
 
 
FHLB Fixed Rate Advances, Over 5 through 10 years
1,416 
 
 
FHLB Fixed Rate Advances, Weighted Average Interest Rate, Due after 10 years
5.37% 
 
 
FHLB Fixed Rate Advances, Due after 10 years
5,000 
 
 
FHLB Fixed Rate Advances, Total Amount before valuation adjustment
118,110 
 
 
Valuation adjustment from acquisition accounting
899 
 
 
FHLB Fixed Rate Advances, Total Amount
119,009 
 
 
Federal Home Loan Bank, Advances, Activity for Year [Abstract]
 
 
 
FHLB Advances
119,009 
119,405 
100,000 
Average balance during the year
120,419 
123,685 
111,211 
Maximum month-end balance during the year
127,426 
154,916 
178,000 
Weighted average rate during the year
2.76% 
2.75% 
2.38% 
Weighted average rate at December 31
2.81% 
2.81% 
2.49% 
FHLB Advances, Collateral Pledged
539,454 
523,051 
 
FHLB Borrowing Capacity
419,115 
402,048 
 
Federal Reserve Bank, Advances, Activity for Year [Abstract]
 
 
 
Federal Reserve Bank Advances, Collateral Pledged
404,444 
449,418 
 
Federal Reserve Bank borrowing capacity
404,444 
449,418 
 
Securities Investment [Member]
 
 
 
Federal Home Loan Bank, Advances, Activity for Year [Abstract]
 
 
 
FHLB Advances, Collateral Pledged
77,414 
96,496 
 
Federal Reserve Bank, Advances, Activity for Year [Abstract]
 
 
 
Federal Reserve Bank Advances, Collateral Pledged
53,122 
135,966 
 
Loans Receivable [Member]
 
 
 
Federal Home Loan Bank, Advances, Activity for Year [Abstract]
 
 
 
FHLB Advances, Collateral Pledged
462,040 
426,555 
 
Commercial Loan [Member]
 
 
 
Federal Reserve Bank, Advances, Activity for Year [Abstract]
 
 
 
Federal Reserve Bank Advances, Collateral Pledged
351,322 
313,452 
 
Federal Reserve Bank Advances [Member]
 
 
 
Federal Reserve Bank, Advances, Activity for Year [Abstract]
 
 
 
Short-term Debt
0 
0 
0 
Short-term Debt, Average Outstanding Amount
0 
0 
38,205 
Short-term Debt, Maximum Month-end Outstanding Amount
$ 0 
$ 0 
$ 100,000 
Short-term Debt, Weighted Average Interest Rate
0.00% 
0.00% 
0.30% 
Other Borrowings (Details) (USD $)
Dec. 31, 2011
Dec. 31, 2010
Assets Sold under Agreements to Repurchase [Line Items]
 
 
Available-for-sale Securities Pledged as Collateral
$ 420,243,000 
$ 458,532,000 
Available-for-sale Securities [Member]
 
 
Assets Sold under Agreements to Repurchase [Line Items]
 
 
Assets Sold under Agreements to Repurchase, Carrying Amounts
 
25,000,000 
Assets Sold under Agreements to Repurchase, Interest Rate
 
1.88% 
Repurchase Agreements [Member]
 
 
Assets Sold under Agreements to Repurchase [Line Items]
 
 
Available-for-sale Securities Pledged as Collateral
$ 28,900,000 
 
Long-term Subordinated Debt (Details) (Junior Subordinated Debt [Member], USD $)
In Millions, unless otherwise specified
1 Months Ended
Jul. 31, 2011
Columbia (WA) Statutory Trust I [Member]
 
Debt Instrument [Line Items]
 
Payments for Repurchase of Trust Preferred Securities
$ 22.9 
Town Center Bancorp Trust I [Member]
 
Debt Instrument [Line Items]
 
Payments for Repurchase of Trust Preferred Securities
$ 3.1 
Derivatives and Hedging Activities (Details) (USD $)
12 Months Ended 0 Months Ended
Dec. 31, 2011
Jan. 7, 2008
Interest Rate Floor [Member]
Derivative_Instruments
Dec. 31, 2011
Derivatives Not Designated as Hedging Instruments [Member]
Interest Rate Contracts [Member]
Dec. 31, 2010
Derivatives Not Designated as Hedging Instruments [Member]
Interest Rate Contracts [Member]
Dec. 31, 2011
Derivatives Not Designated as Hedging Instruments [Member]
Other Assets [Member]
Interest Rate Contracts [Member]
Dec. 31, 2010
Derivatives Not Designated as Hedging Instruments [Member]
Other Assets [Member]
Interest Rate Contracts [Member]
Dec. 31, 2011
Derivatives Not Designated as Hedging Instruments [Member]
Other Liabilities [Member]
Interest Rate Contracts [Member]
Dec. 31, 2010
Derivatives Not Designated as Hedging Instruments [Member]
Other Liabilities [Member]
Interest Rate Contracts [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
Notional Amount of Interest Rate Derivative Instruments Not Designated as Hedging Instruments
 
 
$ 160,300,000 
$ 141,300,000 
 
 
 
 
Fair value of asset derivative instruments
 
 
 
 
16,302,000 
10,167,000 
 
 
Fair value of liability derivative instruments
 
 
 
 
 
 
16,302,000 
10,167,000 
Derivative, Number of Instruments Terminated
 
3 
 
 
 
 
 
 
Proceeds from Termination of Derivative Instruments
 
8,100,000 
 
 
 
 
 
 
Gain on Derivative Instruments, Pretax
 
6,200,000 
 
 
 
 
 
 
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net
143,000 
 
 
 
 
 
 
 
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net
$ 0 
 
 
 
 
 
 
 
Employee Benefit Plans (Details) (USD $)
12 Months Ended
Dec. 31, 2011
period
Dec. 31, 2010
Dec. 31, 2009
Employee Benefit [Line Items]
 
 
 
Number of Look-back Period Under Employee Stock Purchase Plan
2 
 
 
Look-back Period Under Employee Stock Purchase Plan
6 months 
 
 
Discount On Common Stock Under Employee Stock Purchase Plan, Percent
10.00% 
 
 
Stock Issued During Period, Shares, Employee Stock Purchase Plans
39,989 
35,806 
55,443 
Stock Issued During Period, Value, Employee Stock Purchase Plan
$ 690,000 
$ 614,000 
$ 578,000 
Shares Available For Purchase Under Employee Stock Purchase Plan
647,903 
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
Balance at beginning of year
10,363,000 
9,947,000 
 
Change in actuarial loss
329,000 
(78,000)
 
Benefit expense
987,000 
928,000 
 
Benefit payments
(442,000)
(434,000)
 
Balance at end of year
11,237,000 
10,363,000 
9,947,000 
Defined Contribution Pension [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Service Period
6 months 
 
 
Deferred Compensation Arrangement with Individual, Contribution To Plan By Employee, Percent Of Eligible Compensation
75.00% 
 
 
Deferred Compensation Arrangement with Individual, Contribution Requirements, Matching Percent
50.00% 
 
 
Deferred Compensation Arrangement with Individual, Employer Contribution
1,175,000 
866,000 
748,000 
Defined Contribution Pension [Member] |
Minimum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Eligible Age
18 
 
 
Defined Contribution Pension [Member] |
Maximum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Contribution Requirements, Percent Of Each Employee Compensation
3.00% 
 
 
Deferred Profit Sharing [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Service Period
6 months 
 
 
Deferred Compensation Arrangement with Individual, Contribution To Plan By Employee, Percent Of Eligible Compensation
75.00% 
 
 
Deferred Compensation Arrangement with Individual, Contribution Requirements, Matching Percent
50.00% 
 
 
Deferred Compensation Arrangement with Individual, Employer Contribution
2,600,000 
1,200,000 
0 
Deferred Profit Sharing [Member] |
Minimum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Eligible Age
18 
 
 
Deferred Profit Sharing [Member] |
Maximum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Contribution Requirements, Percent Of Each Employee Compensation
3.00% 
 
 
ESP Plan [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date
90.00% 
 
 
Unit Plans [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Recorded Liability
4,400,000 
4,000,000 
 
Deferred Compensation Arrangement with Individual, Compensation Expense
655,000 
750,000 
530,000 
Unit Plans [Member] |
Minimum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Vesting Period
4 years 
 
 
Deferred Compensation Arrangement with Individual, Benefit Period
5 years 
 
 
Unit Plans [Member] |
Maximum [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Deferred Compensation Arrangement with Individual, Vesting Period
10 years 
 
 
Deferred Compensation Arrangement with Individual, Benefit Period
10 years 
 
 
SERP [Member]
 
 
 
Employee Benefit [Line Items]
 
 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate
5.30% 
5.90% 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Normal Retirement Age
65 
 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Annual Cost Of Living Benefit Adjustment
2.00% 
 
 
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract]
 
 
 
2012
510,000 
 
 
2013
526,000 
 
 
2014
555,000 
 
 
2015
572,000 
 
 
2016
803,000 
 
 
2017 through 2021
5,864,000 
 
 
Total
$ 8,830,000 
 
 
Commitments and Contingent Liabilities (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Sep. 30, 2004
Minimum future rental payments:
 
 
 
 
2012
$ 4,077,000 
 
 
 
2013
3,927,000 
 
 
 
2014
3,615,000 
 
 
 
2015
3,046,000 
 
 
 
2016
1,604,000 
 
 
 
Thereafter
5,678,000 
 
 
 
Total minimum payments
21,947,000 
 
 
 
Operating Leases, Rent Expense, Sublease Rentals
655,000 
591,000 
602,000 
 
Operating Leases, Rent Expense, Net
4,600,000 
4,500,000 
3,500,000 
 
Deferred Gain on Sale of Property
234,000 
317,000 
 
1,300,000 
Commitments to Extend Credit [Member]
 
 
 
 
Minimum future rental payments:
 
 
 
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability
709,900,000 
622,800,000 
 
 
Standby Letters of Credit [Member]
 
 
 
 
Minimum future rental payments:
 
 
 
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability
30,900,000 
31,200,000 
 
 
Commercial Letter of Credit [Member]
 
 
 
 
Minimum future rental payments:
 
 
 
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability
$ 243,000 
$ 0 
 
 
Shareholders' Equity (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended
Oct. 27, 2011
Jul. 28, 2011
Apr. 27, 2011
Feb. 3, 2011
Aug. 11, 2010
May 5, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Oct. 31, 2011
Jan. 26, 2012
Dividend Declared [Member]
Aug. 11, 2010
Series A Preferred Stock [Member]
Sep. 1, 2010
Common Stock [Member]
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Redeemed or Called During Period, Shares
 
 
 
 
 
 
 
 
 
 
 
76,898 
 
Stock Redeemed or Called During Period, Value
 
 
 
 
 
 
 
$ 80,200,000 
 
 
 
$ 76,900,000 
$ 3,300,000 
Payments for Repurchase of Redeemable Preferred Stock
 
 
 
 
 
 
 
 
 
 
 
77,800,000 
 
Payments for Repurchase of Redeemable Preferred Stock, Accrued and Unpaid Dividends
 
 
 
 
 
 
 
 
 
 
 
919,000 
 
Reduction of Earnings Available to Common Stockholders Upon Repayment of Preferred Stock
 
 
 
 
2,300,000 
 
 
 
 
 
 
 
 
Declared quarterly cash dividend
$ 0.08 
$ 0.06 
$ 0.05 
$ 0.03 
 
 
 
 
 
 
$ 0.08 
 
 
Stock Repurchase Program, Number of Shares Authorized to be Repurchased
 
 
 
 
 
 
 
 
 
2,000,000 
 
 
 
Stock Repurchased During Period, Shares
 
 
 
 
 
 
0 
 
 
 
 
 
 
Stock Repurchase Program Number Of Shares Repurchased As Of Balance Sheet Date
 
 
 
 
 
 
64,788 
 
 
 
 
 
 
Special cash dividend payable
$ 0.05 
 
 
 
 
 
 
 
 
 
$ 0.29 
 
 
Stock Issued During Period, Shares, New Issues
 
 
 
 
 
11,040,000 
 
 
 
 
 
 
 
Stock Issued During Period, New Issues, Price Per Share
 
 
 
 
 
$ 21.75 
 
 
 
 
 
 
 
Stock Issued During Period, Value, New Issues
 
 
 
 
 
240,100,000 
 
229,129,000 
113,537,000 
 
 
 
 
Proceeds from Issuance of Common Stock
 
 
 
 
 
$ 229,100,000 
$ 0 
$ 229,129,000 
$ 113,537,000 
 
 
 
 
Fair Value Accounting and Measurement (Financial Assets And Liabilities Accounted for Fair Value On Recurring Basis) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
$ 1,028,110 
$ 763,866 
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
1,028,110 
763,866 
Other assets (Interest rate contracts)
16,302 
10,167 
Other liabilities (Interest rate contracts)
16,302 
10,167 
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
Other assets (Interest rate contracts)
0 
0 
Other liabilities (Interest rate contracts)
0 
0 
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
1,028,110 
763,866 
Other assets (Interest rate contracts)
16,302 
10,167 
Other liabilities (Interest rate contracts)
16,302 
10,167 
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
Other assets (Interest rate contracts)
0 
0 
Other liabilities (Interest rate contracts)
0 
0 
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
695,954 
506,642 
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
695,954 
506,642 
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
State and Municipal Securities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
285,763 
253,981 
State and Municipal Securities [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
State and Municipal Securities [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
285,763 
253,981 
State and Municipal Securities [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
U.S. Government Agency [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
43,063 
 
U.S. Government Agency [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
 
U.S. Government Agency [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
43,063 
 
U.S. Government Agency [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
 
Other Securities [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
3,330 
3,243 
Other Securities [Member] |
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
0 
0 
Other Securities [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
3,330 
3,243 
Other Securities [Member] |
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Securities available for sale
$ 0 
$ 0 
Fair Value Accounting and Measurement (Financial Assets Accounted For Fair Value On Nonrecurring Basis) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Impaired loans
$ 17,755 
$ 65,226 
Noncovered OREO
11,233 
18,266 
Covered OREO
2,442 
1,422 
Assets, Fair Value Disclosure
31,430 
84,914 
Losses During Period
9,574 
18,324 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Impaired loans
0 
0 
Noncovered OREO
0 
0 
Covered OREO
0 
0 
Assets, Fair Value Disclosure
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Impaired loans
0 
0 
Noncovered OREO
0 
0 
Covered OREO
0 
0 
Assets, Fair Value Disclosure
0 
0 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Impaired loans
17,755 
65,226 
Noncovered OREO
11,233 
18,266 
Covered OREO
2,442 
1,422 
Assets, Fair Value Disclosure
31,430 
84,914 
Impaired Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Losses During Period
5,841 
13,906 
Noncovered Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Losses During Period
3,089 
4,155 
Covered Loans [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Losses During Period
$ 644 
$ 263 
Fair Value Accounting and Measurement (Assets Measured on Recurring Basis, Unobservable Input Reconciliation) (Details) (State and Municipal Securities [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
State and Municipal Securities [Member]
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
Beginning balance
$ 0 
Transfers into Level 3 (1)
2,950 1
Impairment loss included in earnings
(2,950)
Ending balance
$ 0 
Fair Value Accounting and Measurement Fair Value Accounting and Measurement (Carrying Amounts and Estimated Fair Values of Selected Financial Instruments) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Assets
 
 
Interest-earning deposits with banks
$ 202,925 
$ 458,638 
Securities available for sale
1,028,110 
763,866 
Carrying (Reported) Amount, Fair Value Disclosure [Member]
 
 
Assets
 
 
Cash and due from banks
91,364 
55,492 
Interest-earning deposits with banks
202,925 
458,638 
Securities available for sale
1,028,110 
763,866 
FHLB stock
22,215 
17,908 
Loans held for sale
2,148 
754 
Loans
2,827,259 
2,371,822 
FDIC loss-sharing asset
175,071 
205,991 
Interest rate contracts
16,302 
10,167 
Liabilities
 
 
Deposits
3,815,529 
3,327,269 
FHLB Advances
119,009 
119,405 
Repurchase agreements
25,000 
25,000 
Other borrowings
0 
642 
Long-term subordinated debt
0 
25,735 
Interest rate contracts
16,302 
10,167 
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Assets
 
 
Cash and due from banks
91,364 
55,492 
Interest-earning deposits with banks
202,925 
458,638 
Securities available for sale
1,028,110 
763,866 
FHLB stock
22,215 
17,908 
Loans held for sale
2,148 
754 
Loans
2,957,345 
2,525,113 
FDIC loss-sharing asset
71,788 
205,991 
Interest rate contracts
16,302 
10,167 
Liabilities
 
 
Deposits
3,817,013 
3,330,616 
FHLB Advances
119,849 
122,722 
Repurchase agreements
26,580 
27,251 
Other borrowings
0 
642 
Long-term subordinated debt
0 
20,156 
Interest rate contracts
$ 16,302 
$ 10,167 
Earnings Per Common Share (Schedule of Basic and Diluted Earnings Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$ 14,754 
$ 18,872 
$ 8,632 
$ 5,779 
$ 12,608 
$ 5,204 
$ 5,056 
$ 7,916 
$ 48,037 
$ 30,784 
$ (3,968)
Less: Preferred dividends and accretion of issuance discount for preferred stock
 
 
 
 
 
 
 
 
0 
(4,947)
(4,403)
Net income applicable to common shareholders
14,754 
18,872 
8,632 
5,779 
12,608 
2,474 
3,946 
6,809 
48,037 
25,837 
(8,371)
Less: Earnings allocated to participating securities
 
 
 
 
 
 
 
 
(450)
(244)
(16)
Earnings allocated to common shareholders
 
 
 
 
 
 
 
 
47,587 
25,593 
(8,387)
Weighted average common shares outstanding
 
 
 
 
 
 
 
 
39,103 
35,209 
21,854 
Earnings (loss) basic (dollars per share)
$ 0.37 1
$ 0.48 1
$ 0.22 1
$ 0.15 1
$ 0.32 1
$ 0.06 1
$ 0.11 1
$ 0.24 1
$ 1.22 1
$ 0.73 1
$ (0.38)
Earnings allocated to common shareholders, Diluted
 
 
 
 
 
 
 
 
$ 47,588 
$ 25,593 
$ (8,410)
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
39,103 
35,209 
21,854 
Dilutive effect of equity awards and warrants
 
 
 
 
 
 
 
 
77 
183 
0 
Weighted average diluted common shares outstanding
 
 
 
 
 
 
 
 
39,180 
35,392 
21,854 
Earnings (loss) diluted (dollars per share)
$ 0.37 1
$ 0.48 1
$ 0.22 1
$ 0.15 1
$ 0.32 1
$ 0.06 1
$ 0.11 1
$ 0.24 1
$ 1.21 1
$ 0.72 1
$ (0.38)
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive.
 
 
 
 
 
 
 
 
53 
54 
754 
Share-Based Payments (Share Awards) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Share-based compensation, number authorized (in shares)
2,891,482 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
362,675 
353,283 
278,504 
191,320 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
$ 19.24 
$ 21.14 
$ 21.34 
$ 29.41 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period
133,350 
108,075 
122,097 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value
$ 19.45 
$ 20.68 
$ 9.92 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period
(109,033)
(25,521)
(15,763)
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value
$ 25.72 
$ 21.38 
$ 27.67 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period
(14,925)
(7,775)
(19,150)
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Grant Date Fair Value
$ 18.86 
$ 20.77 
$ 24.03 
 
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized
$ 5,000,000 
 
 
 
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition
2.5 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value
$ 2,200,000 
$ 546,000 
$ 404,000 
 
Share-Based Payments (Share Options) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Balance at beginning of year (in shares)
93,964 
 
 
Granted (in shares)
0 
0 
0 
Forfeited (in shares)
(9,576)
 
 
Expired (in shares)
(7,350)
 
 
Exercised (in shares)
(12,126)
 
 
Balance at end of year (in shares)
64,912 
93,964 
 
Total Exercisable Shares
64,912 
 
 
Weighted Average Exercise Price at beginning of year
$ 21.26 
 
 
Weighted Average Exercise Price, Granted
$ 0.00 
 
 
Weighted Average Exercise Price, Forfeited
$ 23.96 
 
 
Weighted Average Exercise Price, Expired
$ 17.25 
 
 
Weighted Average Exercise Price, Exercised
$ 13.50 
 
 
Weighted Average Exercise Price at end of year
$ 22.76 
$ 21.26 
 
Exercisable, Weighted Average Exercise Price
$ 22.76 
 
 
Weighted Average Remaining Contractual Term
1.4 
 
 
Aggregate Intrinsic Value
$ 52 
 
 
Exercisable, Weighted Average Remaining Contractual Term
1.4 
 
 
Exercisable, Aggregate Intrinsic Value
52 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value
65 
154 
123 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Number of Option Shares
64,912 
 
 
Weighted Average Remaining Contractual Life
1.4 
 
 
Weighted Average Exercise Price of Option Shares
$ 22.76 
 
 
Number of Exercisable Option Shares
64,912 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 22.76 
 
 
Stock-based compensation expense
$ 1,635 
$ 1,424 
$ 1,038 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 9.26 To 12.34 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 9.26 
 
 
Range of Exercise Prices, Upper Limit
$ 12.34 
 
 
Number of Option Shares
516 
 
 
Weighted Average Remaining Contractual Life
0.3 
 
 
Weighted Average Exercise Price of Option Shares
$ 12.21 
 
 
Number of Exercisable Option Shares
516 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 12.21 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 12.35 To 15.43 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 12.35 
 
 
Range of Exercise Prices, Upper Limit
$ 15.43 
 
 
Number of Option Shares
6,395 
 
 
Weighted Average Remaining Contractual Life
1.8 
 
 
Weighted Average Exercise Price of Option Shares
$ 14.04 
 
 
Number of Exercisable Option Shares
6,395 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 14.04 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 15.44 To 18.51 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 15.44 
 
 
Range of Exercise Prices, Upper Limit
$ 18.51 
 
 
Number of Option Shares
5,184 
 
 
Weighted Average Remaining Contractual Life
1.5 
 
 
Weighted Average Exercise Price of Option Shares
$ 17.36 
 
 
Number of Exercisable Option Shares
5,184 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 17.36 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 18.52 To 21.60 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 18.52 
 
 
Range of Exercise Prices, Upper Limit
$ 21.60 
 
 
Number of Option Shares
7,266 
 
 
Weighted Average Remaining Contractual Life
2.3 
 
 
Weighted Average Exercise Price of Option Shares
$ 18.61 
 
 
Number of Exercisable Option Shares
7,266 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 18.61 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 21.61 To 24.68 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 21.61 
 
 
Range of Exercise Prices, Upper Limit
$ 24.68 
 
 
Number of Option Shares
12,000 
 
 
Weighted Average Remaining Contractual Life
0.8 
 
 
Weighted Average Exercise Price of Option Shares
$ 22.61 
 
 
Number of Exercisable Option Shares
12,000 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 22.61 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 24.69 To 27.77 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 24.69 
 
 
Range of Exercise Prices, Upper Limit
$ 27.77 
 
 
Number of Option Shares
29,500 
 
 
Weighted Average Remaining Contractual Life
0.8 
 
 
Weighted Average Exercise Price of Option Shares
$ 25.75 
 
 
Number of Exercisable Option Shares
29,500 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 25.75 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range From 27.78 To 30.86 [Member]
 
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract]
 
 
 
Range of Exercise Prices, Lower Limit
$ 27.78 
 
 
Range of Exercise Prices, Upper Limit
$ 30.86 
 
 
Number of Option Shares
4,051 
 
 
Weighted Average Remaining Contractual Life
5.1 
 
 
Weighted Average Exercise Price of Option Shares
$ 30.86 
 
 
Number of Exercisable Option Shares
4,051 
 
 
Weighted Average Exercise Price of Exercisable Option Shares
$ 30.86 
 
 
Stock Option [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award, Exercisable Period
5 years 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
3 years 
 
 
Share Based Compensation Arrangement By Share Based Payment Award, Maximum Term
10 years 
 
 
Income Tax (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Components of income tax expense (benefit):
 
 
 
 
 
 
 
 
 
 
 
Current tax (benefit) expense
 
 
 
 
 
 
 
 
$ 21,688 
$ (13,547)
$ (8,893)
Deferred tax expense (benefit)
 
 
 
 
 
 
 
 
(3,783)
15,838 
(85)
Total
5,664 
7,244 
2,670 
2,327 
(2,282)
3,971 
668 
(66)
17,905 
2,291 
(8,978)
Deferred tax assets:
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses
20,910 
 
 
 
22,942 
 
 
 
20,910 
22,942 
 
Supplemental executive retirement plan
6,564 
 
 
 
6,185 
 
 
 
6,564 
6,185 
 
Stock option and restricted stock
989 
 
 
 
1,295 
 
 
 
989 
1,295 
 
OREO costs
3,209 
 
 
 
1,910 
 
 
 
3,209 
1,910 
 
AMT credit carryforwards
0 
 
 
 
2,318 
 
 
 
0 
2,318 
 
Nonaccrual interest
222 
 
 
 
310 
 
 
 
222 
310 
 
Security impairment
1,041 
 
 
 
0 
 
 
 
1,041 
0 
 
Other
632 
 
 
 
1,890 
 
 
 
632 
1,890 
 
Total deferred tax assets
33,567 
 
 
 
36,850 
 
 
 
33,567 
36,850 
 
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
Asset purchase tax basis difference
(14,812)
 
 
 
(22,559)
 
 
 
(14,812)
(22,559)
 
FHLB stock dividends
(1,977)
 
 
 
(2,019)
 
 
 
(1,977)
(2,019)
 
Purchase accounting
(1,030)
 
 
 
(1,373)
 
 
 
(1,030)
(1,373)
 
Deferred loan fees
(1,517)
 
 
 
(1,214)
 
 
 
(1,517)
(1,214)
 
Unrealized gain on investment securities
(14,291)
 
 
 
(7,186)
 
 
 
(14,291)
(7,186)
 
Depreciation
(1,517)
 
 
 
(646)
 
 
 
(1,517)
(646)
 
Total deferred tax liabilities
35,144 
 
 
 
34,997 
 
 
 
35,144 
34,997 
 
Net deferred tax (liability) asset
(1,577)
 
 
 
1,853 
 
 
 
(1,577)
1,853 
 
Reconciliation of effective income tax rate with federal statutory tax rate
 
 
 
 
 
 
 
 
 
 
 
Income tax based on statutory rate
 
 
 
 
 
 
 
 
23,080 
11,576 
(4,531)
Income tax based on statutory rate, percent
 
 
 
 
 
 
 
 
35.00% 
35.00% 
35.00% 
Tax credits
 
 
 
 
 
 
 
 
(608)
(808)
(687)
Tax credits, percent
 
 
 
 
 
 
 
 
(1.00%)
(2.00%)
5.00% 
Tax exempt instrument
 
 
 
 
 
 
 
 
(3,824)
(3,744)
(3,072)
Tax exempt instrument, percent
 
 
 
 
 
 
 
 
(6.00%)
(11.00%)
24.00% 
Life insurance proceeds
 
 
 
 
 
 
 
 
(766)
(735)
(708)
Life insurance proceeds, percent
 
 
 
 
 
 
 
 
(1.00%)
(2.00%)
5.00% 
Bargain purchase
 
 
 
 
 
 
 
 
(1,036)
(5,383)
0 
Bargain purchase, percent
 
 
 
 
 
 
 
 
(2.00%)
(16.00%)
0.00% 
Other, net
 
 
 
 
 
 
 
 
1,059 
1,385 
20 
Other, net, percent
 
 
 
 
 
 
 
 
2.00% 
3.00% 
0.00% 
Income tax provision (benefit)
 
 
 
 
 
 
 
 
17,905 
2,291 
(8,978)
Income tax provision (benefit), percent
 
 
 
 
 
 
 
 
27.00% 
7.00% 
69.00% 
Unrecognized tax position
0 
 
 
 
0 
 
 
 
0 
0 
 
Interest and penalties on unrecognized tax benefits
 
 
 
 
 
 
 
 
$ 0 
$ 0 
 
Regulatory Capital Requirements (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
 
 
Total Capital, Actual Amount
$ 636,559 
$ 623,526 
Total Capital (to risk-weighted assets), Ratio
21.05% 
24.47% 
Total Capital For Capital Adequacy Purposes, Amount
241,955 
203,871 
Total Capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio
8.00% 
8.00% 
Tier 1 Capital, Actual Amount
598,485 
591,263 
Tier 1 Capital (to risk-weighted assets), Ratio
19.79% 
23.20% 
Tier 1 Capital For Capital Adequacy Purposes, Amount
120,978 
101,936 
Tier 1 Capital (to risk-weighted assets) For Capital Adequacy Purposes, Ratio
4.00% 
4.00% 
Tier 1 Capital, Actual Amount
598,485 
591,263 
Tier 1 Capital (to average assets), Ratio
12.96% 
13.99% 
Tier 1 Capital For Capital Adequacy Purposes, Amount
184,780 
169,062 
Tier 1 Capital (to average assets) For Capital Adequacy Purposes, Ratio
4.00% 
4.00% 
Parent Company [Member]
 
 
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
 
 
Total Capital, Actual Amount
561,216 
463,587 
Total Capital (to risk-weighted assets), Ratio
18.55% 
18.20% 
Total Capital For Capital Adequacy Purposes, Amount
242,028 
203,789 
Total Capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio
8.00% 
8.00% 
Total Capital To Be Well Capitalized Under Prompt Corrective Action Provision, Amount
302,535 
254,736 
Total Capital (to risk-weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provision
10.00% 
10.00% 
Tier 1 Capital, Actual Amount
523,131 
431,337 
Tier 1 Capital (to risk-weighted assets), Ratio
17.29% 
16.93% 
Tier 1 Capital For Capital Adequacy Purposes, Amount
121,014 
101,894 
Tier 1 Capital (to risk-weighted assets) For Capital Adequacy Purposes, Ratio
4.00% 
4.00% 
Tier 1 Capital To Be Well Capitalized Under Prompt Corrective Action Provision, Amount
181,521 
152,841 
Tier 1 Capital (to risk-weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provision, Ratio
6.00% 
6.00% 
Tier 1 Capital, Actual Amount
523,131 
431,337 
Tier 1 Capital (to average assets), Ratio
11.45% 
10.33% 
Tier 1 Capital For Capital Adequacy Purposes, Amount
182,747 
166,961 
Tier 1 Capital (to average assets) For Capital Adequacy Purposes, Ratio
4.00% 
4.00% 
Tier 1 Capital To Be Well Capitalized Under Prompt Corrective Provision, Amount
$ 228,434 
$ 208,702 
Tier 1 Capital (to average assets) To Be Well Capitalized Under Prompt Corrective Provision, Ratio
5.00% 
5.00% 
Parent Company Financial Information (Condensed Statements of Income) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Expense
 
 
 
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
 
 
 
 
 
 
 
$ 81,552 
$ 69,780 
$ 47,275 
Long-term obligations
 
 
 
 
 
 
 
 
579 
1,029 
1,197 
Other expense
 
 
 
 
 
 
 
 
17,154 
14,603 
10,179 
Loss before income tax expense (benefit) and equity in undistributed net income of subsidiaries
20,418 
26,116 
11,302 
8,106 
10,326 
9,175 
5,724 
7,850 
65,942 
33,075 
(12,946)
Income tax expense (benefit)
5,664 
7,244 
2,670 
2,327 
(2,282)
3,971 
668 
(66)
17,905 
2,291 
(8,978)
Net Income (Loss)
14,754 
18,872 
8,632 
5,779 
12,608 
5,204 
5,056 
7,916 
48,037 
30,784 
(3,968)
Parent [Member]
 
 
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
 
Dividend from banking subsidiaries
 
 
 
 
 
 
 
 
0 
0 
200 
Interest-earning deposits
 
 
 
 
 
 
 
 
712 
1,319 
1,095 
Other income
 
 
 
 
 
 
 
 
17 
31 
36 
Total Income
 
 
 
 
 
 
 
 
729 
1,350 
1,331 
Expense
 
 
 
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
 
 
 
 
 
 
 
88 
96 
512 
Long-term obligations
 
 
 
 
 
 
 
 
579 
1,029 
1,196 
Other expense
 
 
 
 
 
 
 
 
1,114 
1,066 
1,104 
Total Expenses
 
 
 
 
 
 
 
 
1,781 
2,191 
2,812 
Loss before income tax expense (benefit) and equity in undistributed net income of subsidiaries
 
 
 
 
 
 
 
 
(1,052)
(841)
(1,481)
Income tax expense (benefit)
 
 
 
 
 
 
 
 
91 
(778)
(580)
Income before equity in undistributed net income (loss) of subsidiaries
 
 
 
 
 
 
 
 
(1,143)
(63)
(901)
Equity in undistributed net income (loss) of subsidiaries
 
 
 
 
 
 
 
 
49,180 
30,847 
(3,067)
Net Income (Loss)
 
 
 
 
 
 
 
 
$ 48,037 
$ 30,784 
$ (3,968)
Parent Company Financial Information (Condensed Balance Sheets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Assets
 
 
 
 
Interest-earning deposits
$ 202,925 
$ 458,638 
 
 
Total cash and cash equivalents
294,289 
514,130 
305,074 
88,730 
Other assets
126,928 
103,851 
 
 
Total Assets
4,785,945 
4,256,363 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Other liabilities
67,069 
51,434 
 
 
Total liabilities
4,026,607 
3,549,485 
 
 
Shareholders’ equity
759,338 
706,878 
528,139 
415,385 
Total liabilities and shareholders' equity
4,785,945 
4,256,363 
 
 
Parent [Member]
 
 
 
 
Assets
 
 
 
 
Cash and due from banking subsidiaries
3,220 
673 
 
 
Interest-earning deposits
72,014 
158,500 
 
 
Total cash and cash equivalents
75,234 
159,173 
83,006 
76,865 
Other assets
510 
1,160 
 
 
Total Assets
759,721 
733,052 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Long-term subordinated debt
0 
25,736 
 
 
Other liabilities
383 
438 
 
 
Total liabilities
383 
26,174 
 
 
Shareholders’ equity
759,338 
706,878 
 
 
Total liabilities and shareholders' equity
759,721 
733,052 
 
 
Banking Subsidiaries [Member] |
Parent [Member]
 
 
 
 
Assets
 
 
 
 
Investment in subsidiaries
683,977 
571,945 
 
 
Other Subsidiaries [Member] |
Parent [Member]
 
 
 
 
Assets
 
 
 
 
Investment in subsidiaries
$ 0 
$ 774 
 
 
Parent Company Financial Information (Condensed Statements of Cash Flows) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Operating Activities
 
 
 
Net Income (Loss)
$ 48,037 
$ 30,784 
$ (3,968)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Stock-based compensation expense
1,635 
1,424 
1,038 
Net cash provided by operating activities
86,424 
124,136 
37,257 
Investing Activities
 
 
 
Proceeds from termination of trust subsidiaries
774 
0 
0 
Net cash provided by investing activities
(23,270)
278,465 
69,327 
Financing Activities
 
 
 
Cash dividends paid
(10,660)
(1,461)
(1,374)
Repayment of long-term subordinated debt
(25,774)
0 
0 
Proceeds from issuance of common stock
0 
229,129 
113,537 
Purchase and retirement of common stock
(32)
0 
0 
Proceeds from exercise of stock options
848 
923 
939 
Excess tax benefit from stock-based compensation
98 
25 
0 
Net cash provided by financing activities
(282,995)
(193,545)
109,760 
Increase (decrease) in cash and cash equivalents
(219,841)
209,056 
216,344 
Cash and cash equivalents at beginning of period
514,130 
305,074 
88,730 
Cash and cash equivalents at end of period
294,289 
514,130 
305,074 
Parent [Member]
 
 
 
Operating Activities
 
 
 
Net Income (Loss)
48,037 
30,784 
(3,968)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Equity in undistributed earnings of subsidiaries
(49,180)
(30,847)
3,067 
Stock-based compensation expense
1,635 
1,424 
1,038 
Net changes in other assets and liabilities
315 
(769)
1,783 
Net cash provided by operating activities
807 
592 
1,920 
Investing Activities
 
 
 
Proceeds from termination of trust subsidiaries
774 
0 
0 
Net cash provided by investing activities
774 
0 
0 
Financing Activities
 
 
 
Net decrease in short-term borrowings
0 
0 
(100)
Cash dividends paid
(10,660)
(4,302)
(5,155)
Repayment of long-term subordinated debt
(25,774)
 
 
Proceeds from issuance of common stock
0 
229,129 
113,537 
Purchase and retirement of common stock
(32)
0 
0 
Proceeds from exercise of stock options
848 
948 
939 
Downstream stock offering proceeds to the Bank
(50,000)
(70,000)
(105,000)
Excess tax benefit from stock-based compensation
98 
0 
0 
Purchase and retirement of preferred stock
0 
(80,200)
0 
Net cash provided by financing activities
(85,520)
75,575 
4,221 
Increase (decrease) in cash and cash equivalents
(83,939)
76,167 
6,141 
Cash and cash equivalents at beginning of period
159,173 
83,006 
76,865 
Cash and cash equivalents at end of period
$ 75,234 
$ 159,173 
$ 83,006 
Summary Of Quarterly Financial Information (Unaudited) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
$ 74,919 
$ 68,432 
$ 53,309 
$ 54,611 
$ 43,369 
$ 52,075 
$ 46,148 
$ 44,287 
$ 251,271 
$ 185,879 
$ 143,035 
Total interest expense
2,795 
3,644 
3,934 
4,162 
4,553 
5,110 
5,416 
6,013 
14,535 
21,092 
27,683 
Net Interest Income
72,124 
64,788 
49,375 
50,449 
38,816 
46,965 
40,732 
38,274 
236,736 
164,787 
115,352 
Provision for loan and lease losses
4,750 
500 
2,150 
0 
3,791 
9,000 
13,500 
15,000 
7,400 
41,291 
 
Provision for losses on covered loans
(3,960)
433 
2,301 
(422)
5,602 
453 
0 
0 
(1,648)
6,055 
 
Noninterest income (loss)
(9,602)
2,196 
3,542 
(5,419)
15,888 
5,183 
13,237 
18,473 
(9,283)
52,781 
29,690 
Noninterest expense
41,314 
39,935 
37,164 
37,346 
34,985 
33,520 
34,745 
33,897 
155,759 
137,147 
94,488 
Income before income taxes
20,418 
26,116 
11,302 
8,106 
10,326 
9,175 
5,724 
7,850 
65,942 
33,075 
(12,946)
Provision (benefit) for income taxes
5,664 
7,244 
2,670 
2,327 
(2,282)
3,971 
668 
(66)
17,905 
2,291 
(8,978)
Net Income (Loss)
14,754 
18,872 
8,632 
5,779 
12,608 
5,204 
5,056 
7,916 
48,037 
30,784 
(3,968)
Less: Dividends on preferred stock
 
 
 
 
0 
2,730 
1,110 
1,107 
 
4,947 
 
Net Income (Loss) Applicable to Common Shareholders
$ 14,754 
$ 18,872 
$ 8,632 
$ 5,779 
$ 12,608 
$ 2,474 
$ 3,946 
$ 6,809 
$ 48,037 
$ 25,837 
$ (8,371)
Per Common Share
 
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
$ 0.37 1
$ 0.48 1
$ 0.22 1
$ 0.15 1
$ 0.32 1
$ 0.06 1
$ 0.11 1
$ 0.24 1
$ 1.22 1
$ 0.73 1
$ (0.38)
Earnings (diluted)
$ 0.37 1
$ 0.48 1
$ 0.22 1
$ 0.15 1
$ 0.32 1
$ 0.06 1
$ 0.11 1
$ 0.24 1
$ 1.21 1
$ 0.72 1
$ (0.38)