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 June 30, 2013

¨ 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 June 30, 2013
Common Stock, $0.01 par value per share	35,437,924

BANK OF THE OZARKS, INC.

FORM 10-Q

June 30, 2013

INDEX

PART I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2013 and 2012 and December 31, 2012	1
	Consolidated Statements of Income for the Three Months ended June 30, 2013 and 2012 and the Six Months Ended June 30, 2013 and 2012	2
	Consolidated Statements of Comprehensive Income for the Three Months ended June 30, 2013 and 2012 and the Six Months Ended June 30, 2013 and 2012	3
	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2013 and 2012	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
	Selected and Supplemental Financial Data	69
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71
Item 4.	Controls and Procedures	72
PART II.	Other Information
Item 1.	Legal Proceedings	73
Item 1A.	Risk Factors	75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits	75
Signature		76
Exhibit Index		77

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BANK OF THE OZARKS, INC.

CONSOLIDATED BALANCE SHEETS

	Unaudited June 30,						December 31,
	2013			2012			2012
	(Dollars in thousands, except per share amounts)
ASSETS
Cash and due from banks	$	59,245		$	65,232		$	206,500
Interest earning deposits		1,647			1,125			1,467
Cash and cash equivalents		60,892			66,357			207,967
Investment securities - available for sale (“AFS”)		490,748			414,898			494,266
Loans and leases		2,443,342			1,978,701			2,115,834
Purchased loans not covered by Federal Deposit Insurance Corporation (“FDIC”) loss share agreements (“purchased non-covered loans”)		31,027			2,983			41,534
Loans covered by FDIC loss share agreements (“covered loans”)		480,752			711,723			596,239
Allowance for loan and lease losses		(39,372	)		(38,862	)		(38,738	)
Net loans and leases		2,915,749			2,654,545			2,714,869
FDIC loss share receivable		112,716			208,758			152,198
Premises and equipment, net		225,838			219,867			225,754
Foreclosed assets not covered by FDIC loss share agreements		10,451			13,898			13,924
Foreclosed assets covered by FDIC loss share agreements		46,157			65,405			52,951
Accrued interest receivable		13,837			11,754			13,201
Bank owned life insurance (“BOLI”)		126,031			63,221			123,846
Intangible assets, net		10,690			11,189			11,827
Other, net		30,523			34,968			29,404
Total assets	$	4,043,632		$	3,764,860		$	4,040,207
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	591,879		$	505,940		$	578,528
Savings and interest bearing transaction		1,665,789			1,561,684			1,741,678
Time		726,961			741,362			780,849
Total deposits		2,984,629			2,808,986			3,101,055
Repurchase agreements with customers		24,704			31,600			29,550
Other borrowings		391,690			339,703			280,763
Subordinated debentures		64,950			64,950			64,950
FDIC clawback payable		25,596			24,788			25,169
Accrued interest payable and other liabilities		17,493			31,825			27,614
Total liabilities		3,509,062			3,301,852			3,529,101
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares outstanding at June 30, 2013 and 2012 or at December 31, 2012		0			0			0
Common stock; $0.01 par value; 50,000,000 shares authorized; 35,437,924, 34,594,080 and 35,271,724 shares issued and outstanding at June 30, 2013, June 30, 2012 and December 31, 2012, respectively		354			346			353
Additional paid-in capital		79,101			54,897			73,043
Retained earnings		452,568			392,895			423,485
Accumulated other comprehensive income (loss)		(898	)		11,452			10,783
Total stockholders’ equity before noncontrolling interest		531,125			459,590			507,664
Noncontrolling interest		3,445			3,418			3,442
Total stockholders’ equity		534,570			463,008			511,106
Total liabilities and stockholders’ equity	$	4,043,632		$	3,764,860		$	4,040,207

See accompanying notes to consolidated financial statements.

1

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands, except per share amounts)
Interest income:
Loans and leases	$	30,719		$	27,415		$	60,598		$	55,712
Purchased non-covered loans		724			0			1,713			0
Covered loans		11,480			15,668			24,344			32,362
Investment securities:
Taxable		1,183			705			2,468			1,420
Tax-exempt		3,849			3,983			7,593			8,219
Deposits with banks and federal funds sold		2			1			10			3
Total interest income		47,957			47,772			96,726			97,716
Interest expense:
Deposits		1,374			2,311			2,920			5,226
Repurchase agreements with customers		6			12			13			33
Other borrowings		2,684			2,691			5,332			5,391
Subordinated debentures		428			460			857			934
Total interest expense		4,492			5,474			9,122			11,584
Net interest income		43,465			42,298			87,604			86,132
Provision for loan and lease losses		(2,666	)		(3,055	)		(5,394	)		(6,131	)
Net interest income after provision for loan and lease losses		40,799			39,243			82,210			80,001
Non-interest income:
Service charges on deposit accounts		5,074			4,908			9,796			9,601
Mortgage lending income		1,643			1,328			3,384			2,429
Trust income		865			888			1,748			1,662
BOLI income		1,104			567			2,186			1,143
Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable		2,481			2,035			4,873			4,340
Other income from loss share and purchased non-covered loans, net		3,689			3,197			5,844			5,180
Net gains on investment securities		0			402			156			403
Gains on sales of other assets		3,110			1,397			5,084			2,952
Other		1,021			988			2,273			1,810
Total non-interest income		18,987			15,710			35,344			29,520
Non-interest expense:
Salaries and employee benefits		15,294			14,574			30,989			28,626
Net occupancy and equipment		4,370			3,650			8,884			7,528
Other operating expenses		10,237			9,058			19,259			19,735
Total non-interest expense		29,901			27,282			59,132			55,889
Income before taxes		29,885			27,671			58,422			53,632
Provision for income taxes		9,506			8,584			18,032			16,534
Net income		20,379			19,087			40,390			37,098
Net income (loss) attributable to noncontrolling interest		8			5			(3	)		4
Net income available to common stockholders	$	20,387		$	19,092		$	40,387		$	37,102
Basic earnings per common share	$	0.58		$	0.55		$	1.14		$	1.07
Diluted earnings per common share	$	0.57		$	0.55		$	1.13		$	1.06
Dividends declared per common share	$	0.17		$	0.12		$	0.32		$	0.23

See accompanying notes to consolidated financial statements.

2

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Net income	$	20,379		$	19,087		$	40,390		$	37,098
Other comprehensive income (loss):
Unrealized gains and losses on investment securities AFS		(16,335	)		1,862			(19,063	)		3,899
Tax effect of unrealized gains and losses on investment securities AFS		6,408			(731	)		7,476			(1,529	)
Reclassification of gains and losses on investment securities AFS included in net income		0			(402	)		(156	)		(403	)
Tax effect of reclassification of gains and losses on investment securities AFS included in net income		0			158			62			158
Total other comprehensive income (loss)		(9,927	)		887			(11,681	)		2,125
Total comprehensive income	$	10,452		$	19,974		$	28,709		$	39,223

See accompanying notes to consolidated financial statements.

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3

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Unaudited

	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income			Non- Controlling Interest			Total
	(Dollars in thousands)
Balances – January 1, 2012	$	345	$	51,145	$	363,734		$	9,327		$	3,422		$	427,973
Net income		0		0		37,098			0			0			37,098
Net loss attributable to noncontrolling interest		0		0		4			0			(4	)		0
Total other comprehensive income		0		0		0			2,125			0			2,125
Common stock dividends		0		0		(7,941	)		0			0			(7,941	)
Issuance of 130,200 shares of common stock for exercise of stock options		1		2,060		0			0			0			2,061
Tax benefit on exercise and forfeiture of stock options		0		480		0			0			0			480
Stock-based compensation expense		0		1,212		0			0			0			1,212
Balances – June 30, 2012	$	346	$	54,897	$	392,895		$	11,452		$	3,418		$	463,008
Balances – January 1, 2013		353		73,043		423,485			10,783			3,442			511,106
Net income		0		0		40,390			0			0			40,390
Net income attributable to noncontrolling interest		0		0		(3	)		0			3			0
Total other comprehensive income (loss)		0		0		0			(11,681	)		0			(11,681	)
Common stock dividends		0		0		(11,304	)		0			0			(11,304	)
Issuance of 166,200 shares of common stock for exercise of stock options		1		2,438		0			0			0			2,439
Tax benefit on exercise and forfeiture of stock options		0		1,374		0			0			0			1,374
Stock-based compensation expense		0		2,246		0			0			0			2,246
Balances – June 30, 2013	$	354	$	79,101	$	452,568		$	(898	)	$	3,445		$	534,570

See accompanying notes to consolidated financial statements

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4

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Six Months Ended June 30,
	2013			2012
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	40,390		$	37,098
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation		3,530			3,116
Amortization		1,429			1,019
Net income (loss) attributable to noncontrolling interest		(3	)		4
Provision for loan and lease losses		5,394			6,131
Provision for losses on foreclosed assets		191			1,073
Net amortization of investment securities AFS		379			45
Net gains on investment securities AFS		(156	)		(403	)
Originations of mortgage loans held for sale		(121,484	)		(106,257	)
Proceeds from sales of mortgage loans held for sale		138,764			105,146
Accretion of purchased non-covered loans and covered loans		(26,057	)		(32,362	)
Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable		(4,873	)		(4,340	)
Gains on sales of other assets		(5,084	)		(2,952	)
Deferred income tax benefit		(245	)		(491	)
Increase in cash surrender value of BOLI		(2,186	)		(1,143	)
Tax benefit on exercise of stock options		(1,374	)		(720	)
Stock-based compensation expense		2,246			1,212
Changes in assets and liabilities:
Accrued interest receivable		(635	)		1,114
Other assets, net		(363	)		2,585
Accrued interest payable and other liabilities		3,677			(20,282	)
Net cash provided (used) by operating activities		33,540			(10,407	)
Cash flows from investing activities:
Proceeds from sales of investment securities AFS		999			8,526
Proceeds from maturities/calls/paydowns of investment securities AFS		52,322			30,136
Purchases of investment securities AFS		(74,659	)		(9,449	)
Net advances on loans and leases not covered by FDIC loss share agreements		(333,279	)		(91,181	)
Payments received on covered loans		110,257			95,393
Payments received from FDIC under loss share agreements		45,745			86,472
Other net decreases in covered assets and FDIC loss share receivable		14,665			8,739
Purchases of premises and equipment		(5,939	)		(36,371	)
Proceeds from sales of other assets		27,216			28,818
Cash (invested in) received from unconsolidated investments and noncontrolling interest		(104	)		202
Net cash (used) provided by investing activities		(162,777	)		121,285
Cash flows from financing activities:
Net decrease in deposits		(116,426	)		(134,933	)
Net advances from other borrowings		110,926			37,856
Net decrease in repurchase agreements with customers		(4,846	)		(1,210	)
Proceeds from exercise of stock options		2,438			2,060
Tax benefit on exercise of stock options		1,374			720
Cash dividends paid on common stock		(11,304	)		(7,941	)
Net cash used by financing activities		(17,838	)		(103,448	)
Net (decrease) increase in cash and cash equivalents		(147,075	)		7,430
Cash and cash equivalents – beginning of period		207,967			58,927
Cash and cash equivalents – end of period	$	60,892		$	66,357

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 private aircraft and various other entities that hold foreclosed assets or tax credits or engage in other activities. The Company and Bank are subject to the regulation of certain federal and state agencies and undergo 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, 2012.

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 quarter or six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the full year or future periods.

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 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”).

3. 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 and six months ended June 30, 2013 and June 30, 2012 were excluded from the diluted EPS calculation as all options were dilutive.

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6

Basic and diluted EPS are computed as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands, except per share amounts)
Numerator:
Distributed earnings allocated to common stock	$	6,013	$	4,149	$	11,304	$	7,941
Undistributed earnings allocated to common stock		14,374		14,943		29,083		29,161
Net earnings allocated to common stock	$	20,387	$	19,092	$	40,387	$	37,102
Denominator:
Denominator for basic EPS – weighted-average common shares		35,403		34,588		35,363		34,562
Effect of dilutive securities – stock options		338		299		308		289
Denominator for diluted EPS – weighted-average common shares and assumed conversions		35,741		34,887		35,671		34,851
Basic EPS	$	0.58	$	0.55	$	1.14	$	1.07
Diluted EPS	$	0.57	$	0.55	$	1.13	$	1.06

4. Investment Securities

At June 30, 2013 and 2012 and at December 31, 2012, 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.

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”), Federal Home Loan Bank of Atlanta (“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)
June 30, 2013:
Obligations of state and political subdivisions	$	390,509	$	8,372	$	(7,435	)	$	391,446
U.S. Government agency securities		85,449		860		(3,274	)		83,035
Corporate obligations		747		0		0			747
Other equity securities		15,520		0		0			15,520
Total	$	492,225	$	9,232	$	(10,709	)	$	490,748
December 31, 2012:
Obligations of state and political subdivisions	$	345,224	$	16,586	$	(293	)	$	361,517
U.S. Government agency securities		116,835		1,466		(17	)		118,284
Corporate obligations		776		0		0			776
Other equity securities		13,689		0		0			13,689
Total	$	476,524	$	18,052	$	(310	)	$	494,266
June 30, 2012:
Obligations of state and political subdivisions	$	335,001	$	16,872	$	(319	)	$	351,554
U.S. Government agency securities		46,458		2,308		(18	)		48,748
Other equity securities		14,596		0		0			14,596
Total	$	396,055	$	19,180	$	(337	)	$	414,898

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7

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)
June 30, 2013:
Obligations of state and political subdivisions	$	105,258	$	7,004	$	6,942	$	431	$	112,200	$	7,435
U.S. Government agency securities		60,685		3,274		0		0		60,685		3,274
Total temporarily impaired securities	$	165,943	$	10,278	$	6,942	$	431	$	172,885	$	10,709
December 31, 2012:
Obligations of states and political subdivisions	$	14,085	$	188	$	7,324	$	105	$	21,409	$	293
U.S. Government agency securities		14,320		17		0		0		14,320		17
Total temporarily impaired securities	$	28,405	$	205	$	7,324	$	105	$	35,729	$	310
June 30, 2012:
Obligations of state and political subdivisions	$	5,473	$	111	$	5,324	$	208	$	10,797	$	319
U.S. Government agency securities		3,893		18		0		0		3,893		18
Total temporarily impaired securities	$	9,366	$	129	$	5,324	$	208	$	14,690	$	337

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 June 30, 2013 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 date indicated.

	June 30, 2013
Maturity or Estimated Repayment	Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
One year or less	$	19,377	$	19,441
After one year to five years		31,308		31,412
After five years to ten years		84,162		82,918
After ten years		357,378		356,977
Total	$	492,225	$	490,748

For purposes of this maturity distribution, all investment securities AFS are shown based on their contractual maturity date, except (i) FHLB – Dallas and FNBB stock with no contractual maturity date are shown in the longest maturity category and (ii) U.S. Government agency securities backed by residential mortgages are allocated among various maturities based on an estimated repayment schedule utilizing Bloomberg median prepayment speeds and interest rate levels at the measurement date. 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.

8

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

	Three Months Ended June  30,				Six Months Ended June  30,
	2013		2012		2013		2012
	(Dollars in thousands)
Sales proceeds	$	0	$	6,077	$	999	$	8,526
Gross realized gains	$	0	$	402	$	156	$	403
Gross realized losses		0		0		0		0
Net gains on investment securities	$	0	$	402	$	156	$	403

5. Allowance for Loan and Lease Losses (“ALLL”) and Credit Quality Indicators

Allowance for loan and lease losses

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Beginning balance	$	38,422		$	38,632		$	38,738		$	39,169
Non-covered loans and leases charged off		(1,101	)		(1,119	)		(2,449	)		(3,333	)
Recoveries of non-covered loans and leases previously charged off		451			249			783			376
Net non-covered loans and leases charged off		(650	)		(870	)		(1,666	)		(2,957	)
Covered loans charged off		(1,066	)		(1,955	)		(3,094	)		(3,481	)
Net charge-offs – total loans and leases		(1,716	)		(2,825	)		(4,760	)		(6,438	)
Provision for loan and lease losses:
Non-covered loans and leases		1,600			1,100			2,300			2,650
Covered loans		1,066			1,955			3,094			3,481
Total provision		2,666			3,055			5,394			6,131
Ending balance	$	39,372		$	38,862		$	39,372		$	38,862

At June 30, 2013 and 2012, the Company identified covered loans 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 $1.1 million for such loans during the second quarter of 2013 and $3.1 million for such loans during the first six months of 2013 compared to $2.0 million during the second quarter of 2012 and $3.5 million during the first six months of 2012. The Company also recorded provision for loan and lease losses of $1.1 million during the second quarter of 2013 and $3.1 million during the first six months of 2013 to cover such charge-offs compared to $2.0 million during the second quarter of 2012 and $3.5 million during the first six months of 2012. In addition to those net charge-offs, the Company also transferred certain of these covered loans to covered foreclosed assets. As a result, the Company had $52.6 million and $22.8 million, respectively, of impaired covered loans at June 30, 2013 and 2012.

As of and for the six months ended June 30, 2013 and 2012, the Company had no impaired purchased non-covered loans and recorded no charge-offs, partial charge-offs or provision for such loans.

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9

The following table is a summary of the Company’s allowance for loan and lease losses for the three months and six months ended June 30, 2013.

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Three months ended June 30, 2013:
Real estate:
Residential 1-4 family	$	4,557	$	(136	)	$	6	$	226		$	4,653
Non-farm/non-residential		11,061		(552	)		16		1,939			12,464
Construction/land development		11,316		(71	)		3		42			11,290
Agricultural		2,903		0			2		(310	)		2,595
Multifamily residential		1,990		0			0		(136	)		1,854
Commercial and industrial		3,061		(116	)		366		(382	)		2,929
Consumer		1,034		(58	)		13		4			993
Direct financing leases		2,140		(106	)		11		(4	)		2,041
Other		360		(62	)		34		221			553
Covered loans		0		(1,066	)		0		1,066			0
Total	$	38,422	$	(2,167	)	$	451	$	2,666		$	39,372
Six months ended June 30, 2013:
Real estate:
Residential 1-4 family	$	4,820	$	(417	)	$	102	$	148		$	4,653
Non-farm/non-residential		10,107		(593	)		118		2,832			12,464
Construction/land development		12,000		(129	)		8		(589	)		11,290
Agricultural		2,878		0			4		(287	)		2,595
Multifamily residential		2,030		0			0		(176	)		1,854
Commercial and industrial		3,655		(832	)		375		(269	)		2,929
Consumer		1,015		(119	)		71		26			993
Direct financing leases		2,050		(186	)		20		157			2,041
Other		183		(173	)		85		458			553
Covered loans		0		(3,094	)		0		3,094			0
Total	$	38,738	$	(5,543	)	$	783	$	5,394		$	39,372

The following table is a summary of the Company’s allowance for loan and lease losses for the year ended December 31, 2012.

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Year ended December 31, 2012:
Real estate:
Residential 1-4 family	$	3,848	$	(1,312	)	$	107	$	2,177		$	4,820
Non-farm/non-residential		12,203		(1,226	)		18		(888	)		10,107
Construction/land development		9,478		(466	)		106		2,882			12,000
Agricultural		3,383		(997	)		141		351			2,878
Multifamily residential		2,564		0			0		(534	)		2,030
Commercial and industrial		4,591		(1,323	)		35		352			3,655
Consumer		1,209		(732	)		238		300			1,015
Direct financing leases		1,632		(361	)		2		777			2,050
Other		261		(219	)		8		133			183
Covered loans		0		(6,195	)		0		6,195			0
Total	$	39,169	$	(12,831	)	$	655	$	11,745		$	38,738

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10

The following table is a summary of the Company’s allowance for loan and lease losses for the three months and six months ended June 30, 2012.

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Three months ended June 30, 2012:
Real estate:
Residential 1-4 family	$	4,959	$	(248	)	$	43	$	203		$	4,957
Non-farm/non-residential		10,351		(115	)		4		(324	)		9,916
Construction/land development		11,064		(38	)		24		755			11,805
Agricultural		3,106		(218	)		118		(47	)		2,959
Multifamily residential		1,999		0			0		(129	)		1,870
Commercial and industrial		3,947		(250	)		16		423			4,136
Consumer		1,148		(63	)		19		(15	)		1,089
Direct financing leases		1,817		(70	)		0		139			1,886
Other		241		(117	)		25		95			244
Covered loans		0		(1,955	)		0		1,955			0
Total	$	38,632	$	(3,074	)	$	249	$	3,055		$	38,862
Six months ended June 30, 2012:
Real estate:
Residential 1-4 family	$	3,848	$	(631	)	$	57	$	1,683		$	4,957
Non-farm/non-residential		12,203		(706	)		12		(1,593	)		9,916
Construction/land development		9,478		(343	)		31		2,639			11,805
Agricultural		3,383		(218	)		126		(332	)		2,959
Multifamily residential		2,564		0			0		(694	)		1,870
Commercial and industrial		4,591		(790	)		21		314			4,136
Consumer		1,209		(210	)		66		24			1,089
Direct financing leases		1,632		(194	)		0		448			1,886
Other		261		(241	)		63		161			244
Covered loans		0		(3,481	)		0		3,481			0
Total	$	39,169	$	(6,814	)	$	376	$	6,131		$	38,862

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11

The following table is a summary of the Company’s ALLL and recorded investment in loans and leases, excluding purchased non-covered loans and covered loans, as of the dates indicated.

	Allowance for Loan and Lease Losses						Loans and Leases Excluding Purchased Non-Covered Loans and Covered Loans
	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)
June 30, 2013:
Real estate:
Residential 1-4 family	$	428	$	4,225	$	4,653	$	2,728	$	258,840	$	261,568
Non-farm/non-residential		11		12,453		12,464		10,390		1,006,817		1,017,207
Construction/land development		0		11,290		11,290		272		680,557		680,829
Agricultural		194		2,401		2,595		663		48,216		48,879
Multifamily residential		0		1,854		1,854		312		145,371		145,683
Commercial and industrial		622		2,307		2,929		710		138,363		139,073
Consumer		0		993		993		7		28,282		28,289
Direct financing leases		0		2,041		2,041		0		76,953		76,953
Other		1		553		553		12		44,849		44,861
Total	$	1,256	$	38,117	$	39,372	$	15,094	$	2,428,248	$	2,443,342
December 31, 2012:
Real estate:
Residential 1-4 family	$	518	$	4,302	$	4,820	$	2,906	$	269,146	$	272,052
Non-farm/non-residential		53		10,054		10,107		2,898		805,008		807,906
Construction/land development		7		11,993		12,000		542		578,234		578,776
Agricultural		254		2,624		2,878		985		49,634		50,619
Multifamily residential		0		2,030		2,030		0		141,243		141,243
Commercial and industrial		649		3,006		3,655		761		159,043		159,804
Consumer		0		1,015		1,015		33		29,748		29,781
Direct financing leases		0		2,050		2,050		0		68,022		68,022
Other		2		181		183		22		7,609		7,631
Total	$	1,483	$	37,255	$	38,738	$	8,147	$	2,107,687	$	2,115,834
June 30, 2012:
Real estate:
Residential 1-4 family	$	510	$	4,447	$	4,957	$	3,599	$	260,701	$	264,300
Non-farm/non-residential		55		9,861		9,916		2,405		785,787		788,192
Construction/land development		0		11,805		11,805		580		522,458		523,038
Agricultural		8		2,951		2,959		208		54,042		54,250
Multifamily residential		0		1,870		1,870		0		115,848		115,848
Commercial and industrial		711		3,425		4,136		937		129,234		130,171
Consumer		1		1,088		1,089		32		32,327		32,359
Direct financing leases		0		1,886		1,886		0		60,928		60,928
Other		26		218		244		82		9,533		9,615
Total	$	1,311	$	37,551	$	38,862	$	7,843	$	1,970,858	$	1,978,701

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12

The following table is a summary of impaired loans and leases, excluding purchased non-covered loans and covered loans, as of and for the three months and six months ended June 30, 2013.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net  of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months  Ended June 30, 2013		Weighted Average Carrying Value – Six Months  Ended June 30, 2013
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	2,960	$	(1,650	)	$	1,310	$	428	$	1,334	$	1,445
Non-farm/non-residential		19		(8	)		11		11		89		127
Construction/land development		90		(90	)		0		0		0		17
Agricultural		466		(42	)		424		194		561		561
Commercial and industrial(1)		2,290		(1,731	)		559		622		580		574
Consumer		52		(52	)		0		0		0		1
Other		179		(171	)		8		1		9		9
Total impaired loans and leases with a related ALLL		6,056		(3,744	)		2,312		1,256		2,573		2,734
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		1,738		(320	)		1,418		0		1,371		1,327
Non-farm/non-residential		11,443		(1,064	)		10,379		0		6,690		5,358
Construction/land development		465		(193	)		272		0		303		366
Agricultural		250		(11	)		239		0		323		357
Multifamily residential		445		(133	)		312		0		156		104
Commercial and industrial		566		(415	)		151		0		202		201
Consumer		19		(12	)		7		0		28		29
Other		24		(20	)		4		0		5		7
Total impaired loans and leases without a related ALLL		14,950		(2,168	)		12,782		0		9,078		7,749
Total impaired loans and leases	$	21,006	$	(5,912	)	$	15,094	$	1,256	$	11,651	$	10,483

(1) Includes $81,000 of specific allowance related to the unfunded portion of an unexpired letter of credit for a previous customer of the Bank.

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13

The following table is a summary of impaired loans and leases, excluding purchased non-covered loans and covered loans, as of and for the year ended December 31, 2012.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net  of Charge-offs		Specific ALLL		Weighted Average Carrying  Value – Year Ended December 31, 2012
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,316	$	(1,648	)	$	1,668	$	518	$	1,622
Non-farm/non-residential		203		0			203		53		234
Construction/land development		141		(90	)		51		7		38
Agricultural		632		(73	)		559		254		291
Commercial and industrial(1)		2,085		(1,523	)		562		649		620
Consumer		15		(12	)		3		0		8
Other		223		(213	)		10		2		24
Total impaired loans and leases with a related ALLL		6,615		(3,559	)		3,056		1,483		2,837
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		1,531		(293	)		1,238		0		1,721
Non-farm/non-residential		3,363		(668	)		2,695		0		2,432
Construction/land development		628		(137	)		491		0		600
Agricultural		733		(307	)		426		0		374
Multifamily residential		133		(133	)		0		0		0
Commercial and industrial		614		(415	)		199		0		426
Consumer		50		(20	)		30		0		31
Other		65		(53	)		12		0		13
Total impaired loans and leases without a related ALLL		7,117		(2,026	)		5,091		0		5,597
Total impaired loans and leases	$	13,732	$	(5,585	)	$	8,147	$	1,483	$	8,434

(1) Includes $95,000 of specific allowance related to the unfunded portion of an unexpired letter of credit for a previous customer of the Bank.

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14

The following table is a summary of impaired loans and leases, excluding purchased non-covered loans and covered loans, as of and for the three months and six months ended June 30, 2012.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended June 30, 2012		Weighted Average Carrying Value – Six Months Ended June 30, 2012
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,462	$	(1,717	)	$	1,745	$	510	$	1,597	$	1,573
Non-farm/non-residential		257		0			257		55		265		1,105
Construction/land development		90		(90	)		0		0		0		49
Agricultural		125		(43	)		82		8		82		54
Commercial and industrial(1)		2,264		(1,670	)		594		711		651		866
Consumer		23		(20	)		3		1		13		33
Other		125		(60	)		65		26		38		29
Total impaired loans and leases with a related ALLL		6,346		(3,600	)		2,746		1,311		2,646		3,709
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		2,200		(346	)		1,854		0		2,025		1,921
Non-farm/non-residential		2,691		(543	)		2,148		0		2,358		1,922
Construction/land development		687		(107	)		580		0		844		1,513
Agricultural		293		(167	)		126		0		208		385
Multifamily residential		133		(133	)		0		0		0		0
Commercial and industrial		862		(519	)		343		0		630		451
Consumer		48		(19	)		29		0		32		26
Other		47		(30	)		17		0		13		9
Total impaired loans and leases without a related ALLL		6,961		(1,864	)		5,097		0		6,110		6,227
Total impaired loans and leases	$	13,307	$	(5,464	)	$	7,843	$	1,311	$	8,756	$	9,936

(1) Includes $119,000 of specific allowance related to the unfunded portion of an unexpired letter of credit for a previous customer of the Bank.

Management has determined that certain of the Company’s impaired loans and leases do not require any specific allowance at June 30, 2013 and 2012 or at December 31, 2012 because (i) management’s analysis of such individual loans and leases resulted in no impairment or (ii) all identified impairment on such loans and leases has previously been charged off.

Interest income on impaired loans and leases is recognized on a cash basis when and if actually collected. Total interest income recognized on impaired loans and leases for the three months and six months ended June 30, 2013 and 2012 and for the year ended December 31, 2012 was not material.

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15

Credit Quality Indicators

Loans and Leases, Excluding Purchased Non-Covered Loans and Covered Loans

The following table is a summary of credit quality indicators for the Company’s total loans and leases as of the dates indicated.

	Satisfactory		Moderate		Watch		Substandard		Total
	(Dollars in thousands)
June 30, 2013:
Real estate:
Residential 1-4 family (1)	$	253,479	$	0	$	2,242	$	5,847	$	261,568
Non-farm/non-residential		814,428		132,680		51,107		18,992		1,017,207
Construction/land development		498,398		135,166		32,634		14,631		680,829
Agricultural		25,400		10,940		9,836		2,703		48,879
Multifamily residential		115,313		28,886		396		1,088		145,683
Commercial and industrial		104,876		30,323		1,608		2,266		139,073
Consumer (1)		27,716		0		168		405		28,289
Direct financing leases		75,696		1,202		0		55		76,953
Other (1)		41,475		3,102		225		59		44,861
Total	$	1,956,781	$	342,299	$	98,216	$	46,046	$	2,443,342
December 31, 2012:
Real estate:
Residential 1-4 family (1)	$	263,737	$	0	$	3,146	$	5,169	$	272,052
Non-farm/non-residential		649,494		109,429		38,231		10,752		807,906
Construction/land development		395,821		130,057		37,069		15,829		578,776
Agricultural		25,854		12,105		9,509		3,151		50,619
Multifamily residential		112,360		24,092		4,009		782		141,243
Commercial and industrial		121,898		31,338		3,950		2,618		159,804
Consumer (1)		29,079		0		424		278		29,781
Direct financing leases		66,657		1,365		0		0		68,022
Other (1)		6,116		1,204		239		72		7,631
Total	$	1,671,016	$	309,590	$	96,577	$	38,651	$	2,115,834
June 30, 2012:
Real estate:
Residential 1-4 family(1)	$	256,829	$	0	$	921	$	6,550	$	264,300
Non-farm/non-residential		625,411		115,713		35,775		11,293		788,192
Construction/land development		309,859		167,485		39,863		5,831		523,038
Agricultural		27,592		11,805		11,239		3,614		54,250
Multifamily residential		68,978		42,365		3,718		787		115,848
Commercial and industrial		88,443		35,160		3,028		3,540		130,171
Consumer(1)		31,500		0		488		371		32,359
Direct financing leases		59,131		1,690		22		85		60,928
Other(1)		7,636		1,532		277		170		9,615
Total	$	1,475,379	$	375,750	$	95,331	$	32,241	$	1,978,701

(1) 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 table, 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.

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 certain other 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. The risk elements considered by management in its determination of the appropriate grade for individual loans and leases include the following, among others: (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 and

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loan-to-cost 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 the 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.

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The following table is an aging analysis of past due loans and leases as of the dates indicated.

	30-89 Days Past Due (1)		90 Days or More (2)		Total Past Due		Current (3)		Total
	(Dollars in thousands)
June 30, 2013:
Real estate:
Residential 1-4 family	$	2,483	$	1,460	$	3,943	$	257,625	$	261,568
Non-farm/non-residential		8,536		3,369		11,905		1,005,302		1,017,207
Construction/land development		385		84		469		680,360		680,829
Agricultural		315		331		646		48,233		48,879
Multifamily residential		0		0		0		145,683		145,683
Commercial and industrial		548		203		751		138,322		139,073
Consumer		230		23		253		28,036		28,289
Direct financing leases		89		15		104		76,849		76,953
Other		0		0		0		44,861		44,861
Total	$	12,586	$	5,485	$	18,071	$	2,425,271	$	2,443,342
December 31, 2012:
Real estate:
Residential 1-4 family	$	3,656	$	1,160	$	4,816	$	267,236	$	272,052
Non-farm/non-residential		3,284		2,524		5,808		802,098		807,906
Construction/land development		868		329		1,197		577,579		578,776
Agricultural		952		570		1,522		49,097		50,619
Multifamily residential		312		0		312		140,931		141,243
Commercial and industrial		1,091		185		1,276		158,528		159,804
Consumer		425		57		482		29,299		29,781
Direct financing leases		0		0		0		68,022		68,022
Other		9		0		9		7,622		7,631
Total	$	10,597	$	4,825	$	15,422	$	2,100,412	$	2,115,834
June 30, 2012:
Real estate:
Residential 1-4 family	$	2,168	$	1,577	$	3,745	$	260,555	$	264,300
Non-farm/non-residential		4,559		2,035		6,594		781,598		788,192
Construction/land development		1,657		243		1,900		521,138		523,038
Agricultural		801		381		1,182		53,068		54,250
Multifamily residential		0		0		0		115,848		115,848
Commercial and industrial		325		225		550		129,621		130,171
Consumer		580		111		691		31,668		32,359
Direct financing leases		44		85		129		60,799		60,928
Other		85		8		93		9,522		9,615
Total	$	10,219	$	4,665	$	14,884	$	1,963,817	$	1,978,701

(1) Includes $7.4 million, $1.0 million and $2.1 million at June 30, 2013, December 31, 2012 and June 30, 2012, respectively, of loans and leases, excluding purchased non-covered loans and covered loans, on nonaccrual status.

(2) All loans and leases greater than 90 days past due, excluding purchased non-covered loans and covered loans, were on nonaccrual status at June 30, 2013 and 2012 and December 31, 2012.

(3) Includes $3.2 million, $3.3 million and $3.1 million of loans and leases, excluding purchased non-covered loans and covered loans, on nonaccrual status at June 30, 2013, December 31, 2012 and June 30, 2012, respectively.

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Covered Loans

The following table is a summary of credit quality indicators for the Company’s covered loans as of the dates indicated.

	FV 1		FV 2		Total Covered Loans
	(Dollars in thousands)
June 30, 2013:
Real estate:
Residential 1-4 family	$	126,659	$	6,507	$	133,166
Non-farm/non-residential		207,789		25,817		233,606
Construction/land development		58,370		18,045		76,415
Agricultural		14,016		1,889		15,905
Multifamily residential		9,408		285		9,693
Commercial and industrial		11,601		0		11,601
Consumer		164		43		207
Other		159		0		159
Total	$	428,166	$	52,586	$	480,752
December 31, 2012:
Real estate:
Residential 1-4 family	$	146,687	$	5,661	$	152,348
Non-farm/non-residential		271,705		16,399		288,104
Construction/land development		90,321		14,766		105,087
Agricultural		18,937		753		19,690
Multifamily residential		9,871		830		10,701
Commercial and industrial		18,495		1		18,496
Consumer		123		53		176
Other		1,637		0		1,637
Total	$	557,776	$	38,463	$	596,239
June 30, 2012:
Real estate:
Residential 1-4 family	$	176,101	$	2,237	$	178,338
Non-farm/non-residential		333,955		9,951		343,906
Construction/land development		115,709		9,994		125,703
Agricultural		22,216		72		22,288
Multifamily residential		14,417		421		14,838
Commercial and industrial		25,009		0		25,009
Consumer		558		83		641
Other		1,000		0		1,000
Total	$	688,965	$	22,758	$	711,723

For 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, is generally considered an impaired loan, and is considered in the determination of the required level of allowance for loan and lease losses. At June 30, 2013 and 2012 and December 31, 2012, the Company had no allowance for its covered loans because all 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.

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The following table is an aging analysis of past due covered loans as of the dates indicated.

	30-89 Days Past Due		90 Days or More		Total Past Due		Current		Total Covered Loans
	(Dollars in thousands)
June 30, 2013:
Real estate:
Residential 1-4 family	$	6,989	$	19,230	$	26,219	$	106,947	$	133,166
Non-farm/non-residential		15,059		44,768		59,827		173,779		233,606
Construction/land development		6,425		30,629		37,054		39,361		76,415
Agricultural		829		4,284		5,113		10,792		15,905
Multifamily residential		1,926		2,728		4,654		5,039		9,693
Commercial and industrial		260		3,505		3,765		7,836		11,601
Consumer		0		43		43		164		207
Other		0		0		0		159		159
Total	$	31,488	$	105,187	$	136,675	$	344,077	$	480,752
December 31, 2012:
Real estate:
Residential 1-4 family	$	9,539	$	20,958	$	30,497	$	121,851	$	152,348
Non-farm/non-residential		18,476		55,753		74,229		213,875		288,104
Construction/land development		6,693		42,604		49,297		55,790		105,087
Agricultural		1,063		3,338		4,401		15,289		19,690
Multifamily residential		0		3,345		3,345		7,356		10,701
Commercial and industrial		901		4,133