UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             .

Commission File Number 333-27641

BANK OF THE OZARKS, INC.

(Exact name of registrant as specified in its charter)

ARKANSAS	71-0556208
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
17901 CHENAL PARKWAY, LITTLE ROCK, ARKANSAS	72223
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (501) 978-2265

None

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   x     No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes   x     No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a smaller reporting company or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Check one:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).     Yes   ¨     No   x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practical date.

Class	Outstanding at March 31, 2012
Common Stock, $0.01 par value per share	34,570,630

BANK OF THE OZARKS, INC.

FORM 10-Q

March 31, 2012

INDEX

PART I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2012 and 2011 and December 31, 2011	1
	Consolidated Statements of Income for the Three Months Ended March 31, 2012 and 2011	2
	Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2012 and 2011	3
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2012 and 2011	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Selected and Supplemental Financial Data	68
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	71
PART II.	Other Information
Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	73
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	73
Signature		74
Exhibit Index		75

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BANK OF THE OZARKS, INC.

CONSOLIDATED BALANCE SHEETS

	Unaudited March 31,						December  31, 2011
	2012			2011
	(Dollars in thousands, except per share amounts)
ASSETS
Cash and due from banks	$	142,964		$	48,939		$	58,247
Interest earning deposits		798			604			680
Cash and cash equivalents		143,762			49,543			58,927
Investment securities - available for sale (“AFS”)		434,197			390,141			438,910
Loans and leases not covered by Federal Deposit Insurance Corporation (“FDIC”) loss share agreements		1,893,156			1,807,894			1,885,282
Loans covered by FDIC loss share agreements		755,761			536,748			806,922
Allowance for loan and lease losses		(38,632	)		(39,225	)		(39,169	)
Net loans and leases		2,610,285			2,305,417			2,653,035
FDIC loss share receivable		239,724			200,948			279,045
Premises and equipment, net		202,266			178,033			186,533
Foreclosed assets not covered by FDIC loss share agreements		17,825			39,820			31,762
Foreclosed assets covered by FDIC loss share agreements		71,950			46,132			72,907
Accrued interest receivable		11,714			12,351			12,868
Bank owned life insurance (“BOLI”)		62,654			60,339			62,078
Intangible assets, net		11,698			8,098			12,207
Other, net		31,307			35,801			33,379
Total assets	$	3,837,382		$	3,326,623		$	3,841,651
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	491,191		$	332,758		$	447,214
Savings and interest bearing transaction		1,576,861			1,361,076			1,578,449
Time		859,010			886,209			918,256
Total deposits		2,927,062			2,580,043			2,943,919
Repurchase agreements with customers		43,686			39,043			32,810
Other borrowings		280,786			282,689			301,847
Subordinated debentures		64,950			64,950			64,950
FDIC clawback payable		24,796			8,059			24,645
Accrued interest payable and other liabilities		50,033			13,573			45,507
Total liabilities		3,391,313			2,988,357			3,413,678
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares outstanding at March 31, 2012 and 2011 or at December 31, 2011		0			0			0
Common stock; $0.01 par value; 50,000,000 shares authorized; 34,570,630, 34,195,380 and 34,463,880 shares issued and outstanding at March 31, 2012, March 31, 2011 and December 31, 2011, respectively		346			342			345
Additional paid-in capital		53,784			46,943			51,145
Retained earnings		377,951			286,804			363,734
Accumulated other comprehensive income (loss)		10,565			741			9,327
Total stockholders’ equity before noncontrolling interest		442,646			334,830			424,551
Noncontrolling interest		3,423			3,436			3,422
Total stockholders’ equity		446,069			338,266			427,973
Total liabilities and stockholders’ equity	$	3,837,382		$	3,326,623		$	3,841,651

See accompanying notes to consolidated financial statements.

1

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

	Three Months Ended March 31,
	2012			2011
	(Dollars in thousands, except per share amounts)
Interest income:
Loans and leases not covered by FDIC loss share agreements	$	28,296		$	27,876
Loans covered by FDIC loss share agreements		16,695			11,424
Investment securities:
Taxable		715			427
Tax-exempt		4,235			4,292
Deposits with banks and federal funds sold		2			3
Total interest income		49,943			44,022
Interest expense:
Deposits		2,915			4,780
Repurchase agreements with customers		21			61
Other borrowings		2,700			2,672
Subordinated debentures		474			426
Total interest expense		6,110			7,939
Net interest income		43,833			36,083
Provision for loan and lease losses		3,076			2,250
Net interest income after provision for loan and lease losses		40,757			33,833
Non-interest income:
Service charges on deposit accounts		4,693			3,838
Mortgage lending income		1,101			681
Trust income		774			782
Bank owned life insurance income		576			568
Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable		2,305			1,998
Other loss share income, net		1,983			971
Gains on investment securities		1			152
Gains on sales of other assets		1,555			407
Gains on FDIC-assisted acquisitions		0			2,952
Other		822			641
Total non-interest income		13,810			12,990
Non-interest expense:
Salaries and employee benefits		14,052			11,647
Net occupancy and equipment		3,878			3,106
Other operating expenses		10,677			11,439
Total non-interest expense		28,607			26,192
Income before taxes		25,960			20,631
Provision for income taxes		7,950			6,004
Net income		18,010			14,627
Net (income) loss attributable to noncontrolling interest		(1	)		3
Net income available to common stockholders	$	18,009		$	14,630
Basic earnings per common share	$	0.52		$	0.43
Diluted earnings per common share	$	0.52		$	0.43
Dividends declared per common share	$	0.11		$	0.085

See accompanying notes to consolidated financial statements.

2

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

	Three Months Ended March 31,
	2012			2011
	(Dollars in thousands)
Net income	$	18,010		$	14,627
Unrealized gains and losses on investment securities AFS		2,039			1,645
Tax effect of unrealized gains and losses on investment securities AFS		(800	)		(645	)
Reclassification of gains and losses on investment securities AFS included in net income		(1	)		(152	)
Tax effect of reclassification of gains and losses on investment securities AFS included in net income		0			60
Total comprehensive income	$	19,248		$	15,535

See accompanying notes to consolidated financial statements.

3

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Unaudited

								Accumulated
			Additional					Other			Non-
	Common		Paid-In		Retained			Comprehensive			Controlling
	Stock		Capital		Earnings			Income (Loss)			Interest			Total
	(Dollars in thousands)
Balances – January 1, 2011	$	341	$	45,107	$	275,074		$	(167	)	$	3,415		$	323,770
Comprehensive income:
Net income		0		0		14,627			0			0			14,627
Net loss attributable to noncontrolling interest		0		0		3			0			(3	)		0
Other comprehensive income (loss):
Unrealized gains/losses on investment securities AFS, net of taxes		0		0		0			1,000			0			1,000
Reclassification of gains/losses included in net income, net of taxes		0		0		0			(92	)		0			(92	)
Total comprehensive income															15,535
Common stock dividends		0		0		(2,900	)		0			0			(2,900	)
Issuance of 89,700 split-adjusted shares of common stock for exercise of stock options		1		1,388		0			0			0			1,389
Tax benefit (expense) on exercise and forfeiture of stock options		0		148		0			0			0			148
Stock-based compensation expense		0		300		0			0			0			300
Forfeiture of 1,600 split-adjusted shares of unvested common stock under restricted stock plan		0		0		0			0			0			0
Proceeds received from noncontrolling interest		0		0		0			0			24			24
Balances – March 31, 2011	$	342	$	46,943	$	286,804		$	741		$	3,436		$	338,266
Balances – January 1, 2012	$	345	$	51,145	$	363,734		$	9,327		$	3,422		$	427,973
Comprehensive income:
Net income		0		0		18,010			0			0			18,010
Net income attributable to noncontrolling interest		0		0		(1	)		0			1			0
Other comprehensive income (loss):
Unrealized gains/losses on investment securities AFS, net of taxes		0		0		0			1,239			0			1,239
Reclassification of gains/losses included in net income, net of taxes		0		0		0			(1	)		0			(1	)
Total comprehensive income															19,248
Common stock dividends		0		0		(3,792	)		0			0			(3,792	)
Issuance of 106,750 shares of common stock for exercise of stock options		1		1,692		0			0			0			1,693
Tax benefit (expense) on exercise and forfeiture of stock options		0		394		0			0			0			394
Stock-based compensation expense		0		553		0			0			0			553
Balances – March 31, 2012	$	346	$	53,784	$	377,951		$	10,565		$	3,423		$	446,069

See accompanying notes to consolidated financial statements.

4

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Three Months Ended
	March 31,
	2012			2011
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	18,010		$	14,627
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation		1,678			1,264
Amortization		509			228
Net (income) loss attributable to noncontrolling interest		(1	)		3
Provision for loan and lease losses		3,076			2,250
Provision for losses on foreclosed assets		994			2,622
Net amortization (accretion) of investment securities AFS		36			(35	)
Net gains on investment securities AFS		(1	)		(152	)
Originations of mortgage loans for sale		(50,793	)		(28,532	)
Proceeds from sales of mortgage loans for sale		47,553			37,348
Accretion of loans covered by FDIC loss share agreements		(16,695	)		(11,424	)
Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable		(2,305	)		(1,998	)
Gains on sales of other assets		(1,555	)		(407	)
Gains on FDIC-assisted acquisitions		0			(2,952	)
Deferred income tax (benefit) expense		(217	)		2,505
Increase in cash surrender value of bank owned life insurance (“BOLI”)		(576	)		(568	)
Current tax benefit on exercise of stock options		(582	)		(220	)
Stock-based compensation expense		553			300
Changes in assets and liabilities:
Accrued interest receivable		1,155			1,664
Other assets, net		2,527			803
Accrued interest payable and other liabilities		(11,736	)		405
Net cash (used) provided by operating activities		(8,370)			17,731
Cash flows from investing activities:
Proceeds from sales of investment securities AFS		2,449			12,979
Proceeds from maturities/calls/paydowns of investment securities AFS		7,794			3,788
Purchases of investment securities AFS		(3,529	)		(6,528	)
Net paydowns of loans and leases not covered by FDIC loss share agreements		2,608			36,865
Payments received on covered loans		52,892			36,426
Payments received from FDIC under loss share agreements		46,117			9,404
Net decrease (increase) in covered assets and FDIC loss share receivable		2,012			(308	)
Purchases of premises and equipment		(1,438	)		(8,751	)
Proceeds from sales of other assets		12,859			4,441
Cash received from unconsolidated investments and noncontrolling interest		0			24
Net cash proceeds received in FDIC-assisted acquisition		0			55,242
Net cash provided by investing activities		121,764			143,582
Cash flows from financing activities:
Net decrease in deposits		(16,857	)		(155,777	)
Net repayments of other borrowings		(21,061	)		(4,281	)
Net increase in repurchase agreements with customers		10,876			550
Proceeds from exercise of stock options		1,693			1,389
Current tax benefit on exercise of stock options		582			220
Cash dividends paid on common stock		(3,792	)		(2,900	)
Net cash used by financing activities		(28,559	)		(160,799	)
Net increase in cash and cash equivalents		84,835			514
Cash and cash equivalents – beginning of period		58,927			49,029
Cash and cash equivalents – end of period	$	143,762		$	49,543

See accompanying notes to consolidated financial statements.

5

BANK OF THE OZARKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

1. Organization and Principles of Consolidation

Bank of the Ozarks, Inc. (the “Company”) is a bank holding company headquartered in Little Rock, Arkansas, which operates under the rules and regulations of the Board of Governors of the Federal Reserve System. The Company owns a wholly-owned state chartered bank subsidiary—Bank of the Ozarks (the “Bank”), four 100%-owned finance subsidiary business trusts—Ozark Capital Statutory Trust II (“Ozark II”), Ozark Capital Statutory Trust III (“Ozark III”), Ozark Capital Statutory Trust IV (“Ozark IV”) and Ozark Capital Statutory Trust V (“Ozark V”) (collectively, the “Trusts”) and, indirectly through the Bank, a subsidiary engaged in the development of real estate, a subsidiary that owns a private aircraft and various other entities that hold foreclosed assets or tax credits or engage in other activities. The Bank is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. The consolidated financial statements include the accounts of the Company, the Bank, the real estate subsidiary, the aircraft subsidiary and certain of those various other entities in accordance with accounting principles generally accepted in the United States (“GAAP”). Significant intercompany transactions and amounts have been eliminated in consolidation.

2. Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) in Article 10 of Regulation S-X and in accordance with the instructions to Form 10-Q and GAAP for interim financial information. Certain information, accounting policies and footnote disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2011.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, all adjustments considered necessary, consisting of normal recurring items, have been included for a fair presentation of the accompanying consolidated financial statements. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the full year or future periods.

On August 16, 2011, the Company completed a 2-for-1 stock split in the form of a stock dividend, effected by issuing one share of common stock for each share of such stock outstanding on August 5, 2011. All share and per share information in the consolidated financial statements and the notes to the consolidated financial statements has been adjusted to give effect to this stock split.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income. Additionally, as provided for under GAAP, management has up to 12 months following the date of a business combination transaction, including Federal Deposit Insurance Corporation (“FDIC”)-assisted acquisitions, to finalize the fair values of acquired assets and assumed liabilities. Once management has finalized the fair values of acquired assets and assumed liabilities within this 12-month period, management considers such values to be the day 1 fair values (“Day 1 Fair Values”). During 2011 and the first quarter of 2012, the Company has made adjustments to the acquired assets and assumed liabilities for certain of its FDIC-assisted acquisitions in the determination of such Day 1 Fair Values. As a result, certain amounts previously reported in the Company’s consolidated balance sheets have been recast.

3. Acquisitions

2011 Acquisitions

On January 14, 2011, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Oglethorpe Bank (“Oglethorpe”) with offices in Brunswick and St. Simons Island, Georgia.

On April 29, 2011, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former First Choice Community Bank (“First Choice”) with offices in Dallas, Newnan (2), Senoia, Sharpsburg, Douglasville and Carrollton, Georgia. On July 1, 2011, the Company closed one of the offices in Newnan, Georgia, and on October 26, 2011, the Company closed the office in Carrollton, Georgia.

6

On April 29, 2011, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former The Park Avenue Bank (“Park Avenue”) with offices in Valdosta (3), Bainbridge (2), Cairo, Lake Park, Stockbridge, McDonough, Oakwood and Athens, Georgia and in Ocala, Florida. On October 21, 2011, the Company closed the office in Stockbridge, Georgia.

Subsequent to the reporting of the assets acquired and the liabilities assumed in the Oglethorpe, First Choice and Park Avenue acquisitions, the Company made certain adjustments to these values in order to finalize the Day 1 Fair Values. As a result of those adjustments, the Company has recast the assets acquired and liabilities assumed in the Oglethorpe, First Choice and Park Avenue acquisitions to reflect the Day 1 Fair Values. The following tables provide a summary of the Day 1 Fair Values of assets acquired and liabilities assumed, including recast adjustments, for the Company’s 2011 FDIC-assisted acquisitions.

A summary of the assets acquired and liabilities assumed in the Oglethorpe acquisition, including recast adjustments, is as follows:

	January 14, 2011
	As Recorded by Oglethorpe			Fair Value Adjustments				Recast Adjustments			As Recorded by the Company (1)
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	14,710		$	0			$	0		$	14,710
Loans not covered by FDIC loss share agreements		6,532			(3,447	)	b		0			3,085
Loans covered by FDIC loss share agreements		154,018			(73,342	)	b		758			81,434
FDIC loss share receivable		0			52,395		c		(1,292	)		51,103
Foreclosed assets covered by FDIC loss share agreements		16,554			(9,410	)	d		(59	)		7,085
Core deposit intangible		0			401		e		0			401
Other assets		1,054			(621	)	f		726			1,159
Total assets acquired		192,868			(34,024	)			133			158,977
Liabilities assumed:
Deposits		195,067			0		i		0			195,067
FDIC clawback payable		0			924		h		133			1,057
Other liabilities		333			100		f		0			433
Total liabilities assumed		195,400			1,024				133			196,557
Net assets acquired		(2,532	)	$	(35,048	)		$	0			(37,580	)
Asset discount bid		(38,000	)
Cash received from FDIC	$	40,532										40,532
Pre-tax gain											$	2,952

(1) Represents the Day 1 Fair Values of assets acquired and liabilities assumed in the Oglethorpe acquisition.

(The remainder of this page intentionally left blank)

7

A summary of the assets acquired and liabilities assumed in the First Choice acquisition, including recast adjustments, is as follows:

	April 29, 2011
	As Recorded by First Choice			Fair Value Adjustments				Recast Adjustments			As Recorded by the Company (1)
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	38,018		$	0			$	0		$	38,018
Investment securities available for sale (“AFS”)		4,588			(20	)	a		0			4,568
Loans not covered by FDIC loss share agreements		1,973			(419	)	b		0			1,554
Loans covered by FDIC loss share agreements		246,451			(96,557	)	b		(1,382	)		148,512
FDIC loss share receivable		0			59,544		c		460			60,004
Foreclosed assets covered by FDIC loss share agreements		2,773			(1,102	)	d		0			1,671
Core deposit intangible		0			495		e		0			495
Other assets		931			(861	)	f		884			954
Total assets acquired		294,734			(38,920	)			(38	)		255,776
Liabilities assumed:
Deposits		293,344			0		i		0			293,344
Federal Home Loan Bank of Atlanta (“FHLB-Atlanta”) advances		4,000			0		g		0			4,000
FDIC clawback payable		0			930		h		(38	)		892
Other liabilities		478			100		f		0			578
Total liabilities assumed		297,822			1,030				(38	)		298,814
Net assets acquired		(3,088	)	$	(39,950	)		$	0			(43,038	)
Asset discount bid		(42,900	)
Cash received from FDIC	$	45,988										45,988
Pre-tax gain											$	2,950

(1) Represents the Day 1 Fair Values of assets acquired and liabilities assumed in the First Choice acquisition.

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8

A summary of the assets acquired and liabilities assumed in the Park Avenue acquisition, including recast adjustments, is as follows:

	April 29, 2011
	As Recorded by Park  Avenue			Fair Value Adjustments				Recast Adjustments			As Recorded by the Company (1)
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	66,825		$	0			$	0		$	66,825
Investment securities AFS		132,737			(947	)	a		0			131,790
Loans not covered by FDIC loss share agreements		23,664			(5,968	)	b		0			17,696
Loans covered by FDIC loss share agreements		408,069			(145,152	)	b		1,380			264,297
FDIC loss share receivable		0			113,683		c		2,571			116,254
Foreclosed assets covered by FDIC loss share agreements		91,442			(59,812	)	d		(450	)		31,180
Core deposit intangible		0			5,063		e		0			5,063
Other assets		5,012			(2,035	)	f		(1,799	)		1,178
Total assets acquired		727,749			(95,168	)			1,702			634,283
Liabilities assumed:
Deposits		626,321			0		i		0			626,321
FHLB-Atlanta advances		84,260			4,559		g		0			88,819
FDIC clawback payable		0			14,868		h		77			14,945
Other liabilities		1,588			500		f		1,625			3,713
Total liabilities assumed		712,169			19,927				1,702			733,798
Net assets acquired		15,580		$	(115,095	)		$	0			(99,515	)
Asset discount bid		(174,900	)
Cash received from FDIC	$	159,320										159,320
Pre-tax gain											$	59,805

(1) Represents the Day 1 Fair Values of the assets acquired and liabilities assumed in the Park Avenue acquisition.

Explanation of fair value adjustments in the above tables:

a- Adjustment reflects the fair value adjustment based on the Company’s pricing of investment securities AFS.

b- Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio.

c- Adjustment reflects the estimated fair value of payments the Company expects to receive from the FDIC under the loss share agreements.

d- Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired foreclosed assets covered by FDIC loss share agreements.

e- Adjustment reflects the estimated fair value of the core deposit intangible.

f- Adjustment reflects the amount needed to adjust the carrying value of other assets and other liabilities to estimated fair value.

g- Adjustment reflects the amount of the prepayment penalty, if any, assessed on early payoff of FHLB-Atlanta advances.

h- Adjustment reflects the estimated fair value of payments the Company expects to make to the FDIC under the clawback provisions of the loss share agreements at the conclusion of the term of the loss share agreements.

i- Because the Company reset deposit rates for these assumed deposits, as provided for under the purchase and assumption agreement, to reflect an appropriate market rate of interest, there was no fair value adjustment for such assumed deposits.

The Company’s results of operations include the operating results of the acquired assets and assumed liabilities from the respective dates of acquisition through the end of the reporting period. Due to the significant fair value adjustments and the nature of the loss sharing agreements with the FDIC, the Company believes pro forma information that would include pre-acquisition historical results of the acquired assets and assumed liabilities is not relevant. Accordingly, no pro forma information is included in these consolidated financial statements.

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9

2010 Acquisitions

On March 26, 2010, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Unity National Bank (“Unity”) with offices in Cartersville (2), Rome, Adairsville and Calhoun, Georgia.

On July 16, 2010, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Woodlands Bank (“Woodlands”) with offices in South Carolina (2), North Carolina (2), Georgia and Alabama (3). On October 26, 2010, the Company closed four of the Woodlands offices. As a result, the Company now operates one office each in Bluffton, South Carolina; Wilmington, North Carolina; Savannah, Georgia; and Mobile, Alabama.

On September 10, 2010, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Horizon Bank (“Horizon”) with offices in Bradenton (2), Palmetto and Brandon, Florida. On December 23, 2010, the Company closed the office in Brandon, Florida.

On December 17, 2010, the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Chestatee State Bank (“Chestatee”) with offices in Dawsonville (2), Cumming and Marble Hill, Georgia.

Purchase Accounting Adjustments

All recast adjustments to the acquired assets and assumed liabilities for each of the Company’s FDIC-assisted acquisitions were made subsequent to the acquisition, but prior to their one-year anniversaries and, as provided for under GAAP, were considered to be purchase accounting adjustments in deriving the Day 1 Fair Values for the acquired assets and assumed liabilities. These adjustments impacted the net assets acquired and the resulting pre-tax gains on these acquisitions. However, because the net effect on net assets acquired and resulting pre-tax gains was not material, management recorded the impact of such adjustments as an increase or decrease to non-interest income during the quarter in which the adjustments were determined.

As a result of the recast adjustments, certain amounts previously reported in the Company’s consolidated financial statements have been recast. The following is a summary of those financial statement captions that have been impacted by these recast adjustments.

	As Previously		Recast			As
	Reported		Adjustments			Recast
	(Dollars in thousands)
March 31, 2011:
Loans covered by FDIC loss share agreements	$	544,067	$	(7,319	)	$	536,748
FDIC loss share receivable		197,214		3,734			200,948
Foreclosed assets covered by FDIC loss share agreements		46,191		(59	)		46,132
Other assets		32,412		3,389			35,801
FDIC clawback payable		8,314		(255	)		8,059
December 31, 2011:
Loans covered by FDIC loss share agreements	$	806,924	$	(2	)	$	806,922
FDIC loss share receivable		278,263		782			279,045
Other assets		32,495		884			33,379
FDIC clawback payable		24,606		39			24,645
Accrued interest payable and other liabilities		43,882		1,625			45,507

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10

4. Earnings Per Common Share (“EPS”)

Basic EPS is computed by dividing reported earnings available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing reported earnings available to common stockholders by the weighted-average number of common shares outstanding after consideration of the dilutive effect, if any, of the Company’s outstanding common stock options using the treasury stock method. No options to purchase shares of the Company’s common stock for the three-months ended March 31, 2012 and 2011 were excluded from the diluted EPS calculation as all options were dilutive for the respective periods.

Basic and diluted EPS are computed as follows:

	Three Months Ended
	March 31,
	2012		2011
	(In thousands, except per share amounts)
Numerator:
Distributed earnings allocated to common stock	$	3,792	$	2,900
Undistributed earnings allocated to common stock		14,217		11,730
Net earnings allocated to common stock	$	18,009	$	14,630
Denominator:
Denominator for basic EPS – weighted-average common shares		34,537		34,150
Effect of dilutive securities – stock options		289		216
Denominator for diluted EPS – weighted-average common shares and assumed conversions		34,826		34,366
Basic EPS	$	0.52	$	0.43
Diluted EPS	$	0.52	$	0.43

5. Investment Securities

At March 31, 2012 and 2011 and at December 31, 2011, the Company classified all of its investment securities portfolio as AFS. Accordingly, its investment securities are stated at estimated fair value in the consolidated financial statements with unrealized gains and losses, net of related income tax, reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income (loss).

The following table presents the amortized cost and estimated fair value of investment securities as of the dates indicated. The Company’s holdings of “other equity securities” include Federal Home Loan Bank of Dallas (“FHLB – Dallas”), FHLB – Atlanta and First National Banker’s Bankshares, Inc. (“FNBB”) shares, which do not have readily determinable fair values and are carried at cost.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in thousands)
March 31, 2012:
Obligations of state and political subdivisions	$	355,113	$	15,847	$	(552	)	$	370,408
U.S. Government agency residential mortgage-backed securities		43,860		2,088		0			45,948
Other equity securities		17,841		0		0			17,841
Total	$	416,814	$	17,935	$	(552	)	$	434,197
December 31, 2011:
Obligations of state and political subdivisions	$	359,667	$	14,359	$	(979	)	$	373,047
U.S. Government agency residential mortgage-backed securities		46,068		1,967		0			48,035
Other equity securities		17,828		0		0			17,828
Total	$	423,563	$	16,326	$	(979	)	$	438,910
March 31, 2011:
Obligations of state and political subdivisions	$	363,502	$	6,870	$	(5,607	)	$	364,765
U.S. Government agency residential mortgage-backed securities		6,525		0		(43	)		6,482
Other equity securities		18,894		0		0			18,894
Total	$	388,921	$	6,870	$	(5,650	)	$	390,141

11

The following table shows estimated fair value of investment securities AFS having gross unrealized losses and the amount of such unrealized losses, aggregated by investment category and length of time that individual investment securities have been in a continuous unrealized loss position, as of the dates indicated.

	Less than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
March 31, 2012:
Obligations of state and political subdivisions	$	7,737	$	178	$	6,533	$	374	$	14,270	$	552
Total temporarily impaired securities	$	7,737	$	178	$	6,533	$	374	$	14,270	$	552
December 31, 2011:
Obligations of states and political subdivisions	$	6,035	$	248	$	16,582	$	731	$	22,617	$	979
Total temporarily impaired securities	$	6,035	$	248	$	16,582	$	731	$	22,617	$	979
March 31, 2011:
Obligations of state and political subdivisions	$	138,379	$	4,087	$	16,323	$	1,520	$	154,702	$	5,607
U.S. Government agency residential mortgage-backed securities		6,473		43		0		0		6,473		43
Total temporarily impaired securities	$	144,852	$	4,130	$	16,323	$	1,520	$	161,175	$	5,650

In evaluating the Company’s unrealized loss positions for other-than-temporary impairment for the investment securities portfolio, management considers the credit quality of the issuer, the nature and cause of the unrealized loss, the severity and duration of the impairments and other factors. At March 31, 2012 and 2011 and December 31, 2011, management determined the unrealized losses were the result of fluctuations in interest rates and did not reflect deteriorations of the credit quality of the investments. Accordingly, management considers these unrealized losses to be temporary in nature. The Company does not have the intent to sell these investment securities with unrealized losses and, more likely than not, will not be required to sell these investment securities before fair value recovers to amortized cost.

The following table shows the amortized cost and estimated fair value of investment securities AFS by maturity or estimated date of repayment as of the dates indicated.

	March 31, 2012				December 31, 2011
Maturity or Estimated Repayment	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
One year or less	$	22,024	$	22,676	$	12,216	$	12,624
After one year to five years		33,473		34,633		37,392		38,539
After five years to ten years		36,342		37,698		35,935		37,241
After ten years		324,975		339,190		338,020		350,506
Total	$	416,814	$	434,197	$	423,563	$	438,910

For purposes of this maturity distribution, all investment securities AFS are shown based on their contractual maturity date, except (i) FHLB – Dallas, FHLB – Atlanta and FNBB stock with no contractual maturity date are shown in the longest maturity category, (ii) U.S. Government agency residential mortgage-backed securities are allocated among various maturities based on an estimated repayment schedule utilizing Bloomberg median prepayment speeds and interest rate levels at the measurement dates and (iii) mortgage-backed securities issued by housing authorities of states and political subdivisions are allocated among various maturities based on an estimated repayment schedule projected by management at the measurement dates. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

12

Sales activities in the Company’s investment securities AFS were as follows:

	Three Months Ended March  31,
	2012		2011
	(Dollars in thousands)
Sales proceeds	$	2,449	$	12,979
Gross realized gains	$	1	$	202
Gross realized losses		0		(50	)
Net gains on investment securities	$	1	$	152

6. Allowance for Loan and Lease Losses (“ALLL”)

The following table is a summary of activity within the ALLL.

	Three Months Ended March  31,
	2012			2011
	(Dollars in thousands)
Beginning balance	$	39,169		$	40,230
Non-covered loans and leases charged off		(2,214	)		(3,349	)
Recoveries of non-covered loans and leases previously charged off		127			94
Net non-covered loans and leases charged off		(2,087	)		(3,255	)
Covered loans charged off		(1,526	)		0
Net charge-offs – toal loans and leases		(3,613	)		(3,255	)
Provision for loan and lease losses		3,076			2,250
Ending balance	$	38,632		$	39,225

As of March 31, 2012 and December 31, 2011, the Company identified purchased loans covered by FDIC loss share agreements acquired in its FDIC-assisted acquisitions where the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values. As a result the Company recorded partial charge-offs, net of adjustments to the FDIC loss share receivable and the FDIC clawback payable, totaling $1.5 million for such loans during the first quarter of 2012 and $0.3 million for such loans during the fourth quarter of 2011 (none during the first quarter of 2011). The Company also recorded $1.5 million and $0.3 million, respectively, of provision for loan and lease losses during the first quarter of 2012 and during the fourth quarter of 2011 (none during the first quarter of 2011) to cover such charge-offs. In addition to those net charge-offs, the Company also transferred certain of these covered loans to covered foreclosed assets. As a result of these actions, the Company had $10.3 million and $1.9 million, respectively, of impaired covered loans at March 31, 2012 and December 31, 2011 (none at March 31, 2011).

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13

The following table is a summary of the Company’s ALLL as of and for the periods indicated.

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Three months ended March 31, 2012:
Real estate:
Residential 1-4 family	$	3,848	$	(383	)	$	14	$	1,480		$	4,959
Non-farm/non-residential		12,203		(591	)		8		(1,269	)		10,351
Construction/land development		9,478		(305	)		7		1,864			11,064
Agricultural		3,383		0			8		(265	)		3,106
Multifamily residential		2,564		0			0		(565	)		1,999
Commercial and industrial		4,591		(540	)		5		(109	)		3,947
Consumer		1,209		(147	)		47		39			1,148
Direct financing leases		1,632		(124	)		0		309			1,817
Other		261		(124	)		38		66			241
Covered loans		0		(1,526	)		0		1,526			0
Total	$	39,169	$	(3,740	)	$	127	$	3,076		$	38,632
Year ended December 31, 2011:
Real estate:
Residential 1-4 family	$	2,999	$	(2,743	)	$	64	$	3,528		$	3,848
Non-farm/non-residential		8,313		(1,033	)		16		4,907			12,203
Construction/land development		10,565		(5,651	)		30		4,534			9,478
Agricultural		2,569		(771	)		0		1,585			3,383
Multifamily residential		1,320		0			0		1,244			2,564
Commercial and industrial		4,142		(1,465	)		142		1,772			4,591
Consumer		2,051		(825	)		166		(183	)		1,209
Direct financing leases		1,726		(413	)		5		314			1,632
Other		201		(87	)		4		143			261
Covered loans		0		(275	)		0		275			0
Unallocated		6,344		0			0		(6,344	)		0
Total	$	40,230	$	(13,263	)	$	427	$	11,775		$	39,169
Three months ended March 31, 2011:
Real estate:
Residential 1-4 family	$	2,999	$	(225	)	$	4	$	(505	)	$	2,273
Non-farm/non-residential		8,313		(245	)		2		1,225			9,295
Construction/land development		10,565		(1,722	)		5		277			9,125
Agricultural		2,569		(91	)		0		175			2,653
Multifamily residential		1,320		0			0		242			1,562
Commercial and industrial		4,142		(672	)		38		285			3,793
Consumer		2,051		(168	)		18		(534	)		1,367
Direct financing leases		1,726		(91	)		0		(226	)		1,409
Other		201		(135	)		27		90			183
Unallocated		6,344		0			0		1,221			7,565
Total	$	40,230	$	(3,349	)	$	94	$	2,250		$	39,225

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14

The following table is a summary of the Company’s ALLL and recorded investment in loans and leases, excluding loans covered by FDIC loss share agreements, as of the dates indicated.

	Allowance for Loan and Lease Losses						Loans and Leases not Covered by FDIC Loss Share Agreements
	ALLL for Individually Evaluated Impaired Loans and Leases		ALLL for All Other Loans and Leases		Total ALLL		Individually Evaluated Impaired Loans and Leases		All Other Loans and Leases		Total Loans and Leases
	(Dollars in thousands)
March 31, 2012:
Real estate:
Residential 1-4 family	$	421	$	4,538	$	4,959	$	3,646	$	258,647	$	262,293
Non-farm/non-residential		72		10,279		10,351		2,840		741,508		744,348
Construction/land development		0		11,064		11,064		1,108		487,643		488,751
Agricultural		8		3,098		3,106		373		56,667		57,040
Multifamily residential		0		1,999		1,999		0		126,959		126,959
Commercial and industrial		768		3,179		3,947		1,625		107,334		108,959
Consumer		3		1,145		1,148		56		37,103		37,159
Direct financing leases		0		1,817		1,817		0		56,691		56,691
Other		2		239		241		20		10,936		10,956
Total	$	1,274	$	37,358	$	38,632	$	9,668	$	1,883,488	$	1,893,156
December 31, 2011:
Real estate:
Residential 1-4 family (1)	$	415	$	3,433	$	3,848	$	3,239	$	257,234	$	260,473
Non-farm/non-residential		410		11,793		12,203		3,837		704,929		708,766
Construction/land development		31		9,447		9,478		3,001		475,105		478,106
Agricultural		0		3,383		3,383		737		70,421		71,158
Multifamily residential		0		2,564		2,564		0		142,131		142,131
Commercial and industrial		868		3,723		4,591		1,390		119,289		120,679
Consumer		57		1,152		1,209		87		40,075		40,162
Direct financing leases		0		1,632		1,632		0		54,745		54,745
Other		2		259		261		11		9,051		9,062
Total	$	1,783	$	37,386	$	39,169	$	12,302	$	1,872,980	$	1,885,282
March 31, 2011:
Real estate:
Residential 1-4 family	$	93	$	2,180	$	2,273	$	1,179	$	250,707	$	251,886
Non-farm/non-residential		242		9,053		9,295		3,318		664,073		667,391
Construction/land development		500		8,625		9,125		4,562		456,119		460,681
Agricultural		395		2,258		2,653		2,170		75,819		77,989
Multifamily residential		0		1,562		1,562		77		129,537		129,614
Commercial and industrial		887		2,906		3,793		909		113,526		114,435
Consumer		13		1,354		1,367		105		49,616		49,721
Direct financing leases		0		1,409		1,409		0		45,844		45,844
Other		3		180		183		17		10,316		10,333
Unallocated		0		7,565		7,565		0		0		0
Total	$	2,133	$	37,092	$	39,225	$	12,337	$	1,795,557	$	1,807,894

(1) Includes one individually evaluated loan classified as a troubled debt restructuring at December 31, 2011 totaling $1.0 million with an ALLL of $0.3 million allocated for such loan. This loan was placed on nonaccrual status during the first quarter of 2012 and is included in nonaccrual loans and leases at March 31, 2012.

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15

The following table is a summary of credit quality indicators for the Company’s total loans and leases, including non-covered loans and leases and covered loans, as of March 31, 2012.

	Non-covered Loans and Leases										Covered Loans
	Satisfactory		Moderate		Watch		Substandard		Total Non-covered Loans and Leases		FV 1		FV 2		Total Covered Loans		Total Loans and Leases
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	254,042	$	0	$	2,025	$	6,226	$	262,293	$	187,960	$	1,902	$	189,862	$	452,155
Non-farm/non-residential		568,098		104,520		54,920		16,810		744,348		356,939		3,651		360,590		1,104,938
Construction/land development		281,536		159,588		40,861		6,766		488,751		132,741		4,690		137,431		626,182
Agricultural		30,397		11,826		7,491		7,326		57,040		23,435		70		23,505		80,545
Multifamily residential		79,165		43,271		3,734		789		126,959		15,876		0		15,876		142,835
Commercial and industrial		86,092		15,190		3,472		4,205		108,959		26,606		0		26,606		135,565
Consumer		36,180		0		496		483		37,159		854		0		854		38,013
Direct financing leases		54,699		1,673		24		295		56,691		0		0		0		56,691
Other		8,686		1,826		296		148		10,956		1,037		0		1,037		11,993
Total	$	1,398,895	$	337,894	$	113,319	$	43,048	$	1,893,156	$	745,448	$	10,313	$	755,761	$	2,648,917

The following table is a summary of credit quality indicators for the Company’s total loans and leases, including non-covered loans and leases and covered loans, as of December 31, 2011.

	Non-covered Loans and Leases										Covered Loans
	Satisfactory		Moderate		Watch		Substandard		Total Non-covered Loans and Leases		FV 1		FV 2		Total Covered Loans		Total Loans and Leases
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	256,267	$	0	$	2,449	$	1,757	$	260,473	$	202,620	$	0	$	202,620	$	463,094
Non-farm/non-residential		541,830		96,341		53,976		16,619		708,766		368,555		1,201		369,756		1,078,523
Construction/land development		263,149		164,500		41,741		8,716		478,106		160,737		135		160,872		638,978
Agricultural		45,276		11,549		7,328		7,005		71,158		24,104		0		24,104		95,262
Multifamily residential		94,049		43,622		3,673		787		142,131		15,376		518		15,894		158,025
Commercial and industrial		82,174		30,996		3,093		4,416		120,679		29,749		0		29,749		150,428
Consumer		38,851		0		1,032		279		40,162		958		0		958		41,120
Direct financing leases		52,329		2,070		26		320		54,745		0		0		0		54,745
Other		6,827		1,724		385		126		9,062		2,969		0		2,969		12,031
Total	$	1,380,752	$	350,802	$	113,703	$	40,025	$	1,885,282	$	805,068	$	1,854	$	806,922	$	2,692,206

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16

The following table is a summary of credit quality indicators for the Company’s total loans and leases, including non-covered loans and leases and covered loans, as of March 31, 2011.

	Non-covered Loans and Leases										Covered Loans
	Satisfactory		Moderate		Watch		Substandard		Total Non-covered Loans and Leases		FV 1		FV 2		Total Covered Loans		Total Loans and Leases
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	244,531	$	0	$	3,116	$	4,239	$	251,886	$	154,168	$	0	$	154,168	$	406,054
Non-farm/non-residential		496,447		118,920		32,359		19,665		667,391		228,713		0		228,713		896,104
Construction/land development		239,888		186,995		20,014		13,784		460,681		109,095		0		109,095		569,776
Agricultural		55,849		9,662		3,691		8,787		77,989		10,690		0		10,690		88,679
Multifamily residential		116,534		8,513		3,699		868		129,614		10,919		0		10,919		140,533
Commercial and industrial		75,916		32,623		1,559		4,337		114,435		20,884		0		20,884		135,319
Consumer		48,519		0		772		430		49,721		1,463		0		1,463		51,184
Direct financing leases		42,131		3,007		646		60		45,844		0		0		0		45,844
Other		8,211		1,821		167		134		10,333		816		0		816		11,149
Total	$	1,328,026	$	361,541	$	66,023	$	52,304	$	1,807,894	$	536,748	$	0	$	536,748	$	2,344,642

The Company’s credit quality indicators consist of an internal grading system used to assign grades to all loans and leases except residential 1-4 family loans, consumer loans and purchased loans including covered loans. The grade for each individual loan or lease is determined by the account officer and other approving officers at the time the loan or lease is made and changed from time to time to reflect an ongoing assessment of loan or lease risk. Grades are reviewed on specific loans and leases from time to time by senior management and as part of the Company’s internal loan review process. These risk elements include the following: (1) for non-farm/non-residential, multifamily residential, and agricultural real estate loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan repayment requirements), operating results of the owner in the case of owner-occupied properties, the loan-to-value ratio, the age, condition, value, nature and marketability of the collateral and the specific risks and volatility of income, property value and operating results typical of properties of that type; (2) for construction and land development loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or ability to lease property constructed for lease, the quality and nature of contracts for presale or preleasing, if any, experience and ability of the developer and loan-to-value ratios; (3) for commercial and industrial loans and leases, the operating results of the commercial, industrial or professional enterprise, the borrower’s or lessee’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in the applicable industry and the age, condition, value, nature and marketability of collateral; and (4) for other loans and leases, the operating results, experience and ability of the borrower or lessee, historical and expected market conditions and the age, condition, value, nature and marketability of collateral. In addition, for each category the Company considers secondary sources of income and the financial strength of the borrower or lessee and any guarantors. The following categories of credit quality indicators are used by the Company.

Satisfactory – Loans and leases in this category are considered to be a satisfactory credit risk and are generally considered to be collectible in full.

Moderate – Loans and leases in this category are considered to be a marginally satisfactory credit risk and are generally considered to be collectible in full.

Watch – Loans and leases in this category are presently protected from apparent loss, however weaknesses exist which could cause future impairment of repayment of principal or interest.

Substandard – Loans and leases in this category are characterized by deterioration in quality exhibited by a number of weaknesses requiring corrective action and posing risk of some loss.

The Company does not risk rate its residential 1-4 family loans, its consumer loans, and certain “other” loans. However, for purposes of the above credit quality tables, the Company considers such loans to be (i) satisfactory – if they are performing and less than 30 days past due, (ii) watch – if they are performing and 30 to 89 days past due or (iii) substandard – if they are nonperforming or 90 days or more past due.

17

For purchased loans, including covered loans, management separately monitors this portfolio and periodically reviews loans contained within this portfolio against the factors and assumptions used in determining the Day 1 Fair Values. To the extent that a loan is performing in accordance with management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV 1, is not included in any of the Company’s credit quality ratios, is not considered to be an impaired loan and is not considered in the determination of the required allowance for loan and lease losses. To the extent that a loan’s performance has deteriorated from management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV 2, is included in certain of the Company’s credit quality metrics, may be considered an impaired loan, and is considered in the determination of the required level of allowance for loan and lease losses. At March 31, 2012 and 2011 and at December 31, 2011, the Company had no allowance for its covered loans because all identified losses had been charged off on covered loans whose performance had deteriorated from management’s expectations established in conjunction with the determination of the Day 1 Fair Values.

The following table is a summary of impaired loans and leases, excluding loans covered by FDIC loss share agreements, as of and for the three months ended March 31, 2012.

	Principal Balance		Net Charge- offs to Date			Principal Balance, Net of Charge- offs		Specific Allowance		Weighted Average Carrying Value
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,101	$	(1,651	)	$	1,450	$	421	$	1,488
Non-farm/non-residential		273		0			273		72		1,528
Construction/land development		171		(171	)		0		0		74
Agricultural		94		(12	)		82		8		41
Commercial and industrial		2,475		(1,767	)		708		768		1,003
Consumer		54		(32	)		22		3		48
Other		46		(35	)		11		2		10
Total impaired loans and leases with a related ALLL		6,214		(3,668	)		2,546		1,274		4,192
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		3,001		(805	)		2,196		0		1,955
Non-farm/non-residential		3,143		(576	)		2,567		0		1,810
Construction/land development		3,583		(2,475	)		1,108		0		1,980
Agricultural		471		(180	)		291		0		514
Multifamily residential		133		(133	)		0		0		0
Commercial and industrial		1,478		(561	)		917		0		505
Consumer		91		(57	)		34		0		24
Other		29		(20	)		9		0		5
Total impaired loans and leases without a related ALLL		11,929		(4,807	)		7,122		0		6,793
Total impaired loans and leases	$	18,143	$	(8,475	)	$	9,668	$	1,274	$	10,985

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18

The following table is a summary of impaired loans and leases, excluding loans covered by FDIC loss share agreements, as of and for the year ended December 31, 2011.

	Principal Balance		Net Charge- offs to Date			Principal Balance, Net of Charge-offs		Specific Allowance		Weighted Average Carrying Value
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,200	$	(1,675	)	$	1,525	$	415	$	504
Non-farm/non-residential		2,931		(146	)		2,785		410		1,173
Construction/land development		238		(90	)		148		31		882
Agricultural		9		(9	)		0		0		575
Commercial and industrial		3,071		(1,775	)		1,296		868		844
Consumer		101		(28	)		73		57		81
Other		46		(35	)		11		2		30
Total impaired loans and leases with a related ALLL		9,596		(3,758	)		5,838		1,783		4,089
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		2,121		(407	)		1,714		0		1,239
Non-farm/non-residential		1,159		(107	)		1,052		0		1,633
Construction/land development		6,254		(3,401	)		2,853		0		5,833
Agricultural		842		(105	)		737		0		1,000
Multifamily residential		133		(133	)		0		0		15
Commercial and industrial		294		(200	)		94		0		194
Consumer		47		(33	)		14		0		15
Other		0		0			0		0		5
Total impaired loans and leases without a related ALLL		10,850		(4,386	)		6,464		0		9,934
Total impaired loans and leases	$	20,446	$	(8,144	)	$	12,302	$	1,783	$	14,023

The following table is a summary of impaired loans and leases, excluding loans covered by FDIC loss share agreements, as of and for the three months ended March 31, 2011.

	Principal Balance		Net Charge- offs to Date			Principal Balance, Net of Charge-offs		Specific Allowance		Weighted Average Carrying Value
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	530	$	(184	)	$	346	$	93	$	284
Non-farm/non-residential		2,224		(649	)		1,575		242		1,009
Construction/land development		1,053		(553	)		500		500		1,122
Agricultural		789		(82	)		707		395		955
Commercial and industrial		1,441		(730	)		711		887		707
Consumer		181		(83	)		98		13		122
Other		39		(22	)		17		3		53
Total impaired loans and leases with a related ALLL		6,257		(2,303	)		3,954		2,133		4,252
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		921		(88	)		833		0		778
Non-farm/non-residential		2,090		(346	)		1,744		0		2,198
Construction/land development		9,079		(5,018	)		4,061		0		3,202
Agricultural		1,646		(182	)		1,464		0		1,358
Multifamily residential		210		(133	)		77		0		38
Commercial and industrial		911		(714	)		197		0		221
Consumer		9		(2	)		7		0		22
Other		0		0			0		0		13
Total impaired loans and leases without a related ALLL		14,866		(6,483	)		8,383		0		7,830
Total impaired loans and leases	$	21,123	$	(8,786	)	$	12,337	$	2,133	$	12,082

19

Interest income on impaired loans and leases, excluding loans covered by FDIC loss share agreements, is recognized on a cash basis when and if actually collected. Total interest income recognized on impaired loans and leases not covered by FDIC loss share agreements for the three months ended March 31, 2012 and 2011 and for the year ended December 31, 2011 was not material.

The following table is an aging analysis of past due loans and leases, excluding loans covered by FDIC loss share agreements, as of the dates indicated.

	30-89 Days Past Due  (1)		90 Days or More (2)		Total Past Due		Current (3)		Total Loans and Leases
	(Dollars in thousands)
March 31, 2012:
Real estate:
Residential 1-4 family	$	2,442	$	2,225	$	4,667	$	257,626	$	262,293
Non-farm/non-residential		3,006		2,678		5,684		738,664		744,348
Construction/land development		691		907		1,598		487,153		488,751
Agricultural		612		235		847		56,193		57,040
Multifamily residential		318		0		318		126,641		126,959
Commercial and industrial		1,619		347		1,966		106,993		108,959
Consumer		558		220		778		36,381		37,159
Direct financing leases		18		277		295		56,396		56,691
Other		50		0		50		10,906		10,956
Total	$	9,314	$	6,889	$	16,203	$	1,876,953	$	1,893,156
December 31, 2011:
Real estate:
Residential 1-4 family	$	2,449	$	1,757	$	4,206	$	256,267	$	260,473
Non-farm/non-residential		3,448		3,448		6,896		701,870		708,766
Construction/land development		10,453		2,827		13,280		464,826		478,106
Agricultural		275		727		1,002		70,156		71,158
Multifamily residential		319		0		319		141,812		142,131
Commercial and industrial		1,477		469		1,946		118,733		120,679
Consumer		1,032		279		1,311		38,851		40,162
Direct financing leases		42		277		319		54,426		54,745
Other		79		0		79		8,983		9,062
Total	$	19,574	$	9,784	$	29,358	$	1,855,924	$	1,885,282
March 31, 2011:
Real estate:
Residential 1-4 family	$	3,528	$	1,112	$	4,640	$	247,246