Acquired Loans (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of covered and noncovered acquired loans by type

At December 31, 2014 and 2013, acquired loans consisted of the following ($ in thousands):

	December 31, 2014				December 31, 2013
	Noncovered		Covered		Noncovered		Covered
Loans secured by real estate:
Construction, land development and other land	$	58,309	$	1,197	$	98,928	$	2,363
Secured by 1-4 family residential properties		116,920		13,180		157,914		16,416
Secured by nonfarm, nonresidential properties		202,323		7,672		287,136		10,945
Other		27,813		1,096		33,948		2,644
Commercial and industrial loans		88,256		277		149,495		394
Consumer loans		9,772		-		18,428		119
Other loans		22,390		204		24,141		1,335
Acquired loans		525,783		23,626		769,990		34,216
Less allowance for loan losses, acquired loans		10,541		1,518		7,249		2,387
Net acquired loans	$	515,242	$	22,108	$	762,741	$	31,829

Fair value of acquired loans

The following table presents the adjusted fair value of loans acquired as of the date of the BancTrust merger ($ in thousands):

At acquisition date:	February 15, 2013
Contractually required principal and interest	$	1,256,669
Nonaccretable difference		201,324
Cash flows expected to be collected		1,055,345
Accretable yield		98,394
FASB ASC Topic 310-20 discount		12,716
Fair value of loans at acquisition	$	944,235

Changes in the carrying value of acquired loans

The following table presents changes in the net carrying value of the acquired loans for the periods presented ($ in thousands):

	Noncovered						Covered
	Acquired Impaired			Acquired Not ASC 310-30 (1)			Acquired Impaired			Acquired Not ASC 310-30 (1)
Carrying value, net at January 1, 2013	$	72,942		$	6,696		$	45,391		$	2,460
Loans acquired (2)		790,335			153,900			-			-
Accretion to interest income		35,538			2,628			5,150			159
Payments received, net		(229,618	)		(39,281	)		(18,976	)		(819	)
Other (3)		(24,177	)		(858	)		(3,202	)		(137	)
Less change in allowance for loan losses, acquired loans		(5,364	)		-			1,803			-
Carrying value, net at December 31, 2013		639,656			123,085			30,166			1,663
Accretion to interest income		44,575			1,706			4,052			1
Payments received, net		(216,378	)		(42,284	)		(12,396	)		(30	)
Other (3)		(29,724	)		(2,102	)		(1,733	)		(484	)
Less change in allowance for loan losses, acquired loans		(3,978	)		686			415			454
Carrying value, net at December 31, 2014	$	434,151		$	81,091		$	20,504		$	1,604

(1) "Acquired Not ASC 310-30" loans consist of revolving credit agreements and commercial leases that are not in scope for FASB ASC Topic 310-30.

(2) Adjusted fair value of loans acquired from BancTrust on February 15, 2013.

(3) Includes acquired loan terminations through foreclosure, charge-off, pool recovery and other terminations.

Changes in accretable yield of acquired loans

The following table presents changes in the accretable yield for the years ended December 31, 2014 and 2013 ($ in thousands):

	Years Ended December 31,
	2014			2013
Accretable yield at beginning of period	$	(109,006	)	$	(26,383	)
Additions due to acquisition (1)		-			(98,394	)
Accretion to interest income		48,627			40,688
Disposals		16,383			18,438
Reclassification to / (from) nonaccretable difference (2)		(33,153	)		(43,355	)
Accretable yield at end of period	$	(77,149	)	$	(109,006	)

(1) Accretable yield on loans acquired from BancTrust on February 15, 2013, including measurement period adjustments.

(2) Reclassifications from nonaccretable difference are due to lower loss expectations and improvements in expected cashflows.

Components of the allowance for loan losses on acquired impaired loans

The following tables present the components of the allowance for loan losses on acquired impaired loans for the years ended December 31, 2014, 2013 and 2012 ($ in thousands):

	Noncovered			Covered			Total
Balance at January 1, 2014	$	7,249		$	2,387		$	9,636
Provision for loan losses, acquired loans		7,149			(978	)		6,171
Loans charged-off		(6,274	)		127			(6,147	)
Recoveries		2,417			(18	)		2,399
Net (charge-offs) recoveries		(3,857	)		109			(3,748	)
Balance at December 31, 2014	$	10,541		$	1,518		$	12,059

	Noncovered			Covered			Total
Balance at January 1, 2013	$	1,885		$	4,190		$	6,075
Provision for loan losses, acquired loans		7,367			(1,328	)		6,039
Loans charged-off		(3,634	)		(460	)		(4,094	)
Recoveries		1,631			(15	)		1,616
Net charge-offs		(2,003	)		(475	)		(2,478	)
Balance at December 31, 2013	$	7,249		$	2,387		$	9,636

	Noncovered			Covered			Total
Balance at January 1, 2012	$	-		$	502		$	502
Provision for loan losses, acquired loans		1,916			3,612			5,528
Loans charged-off		(290	)		(81	)		(371	)
Recoveries		259			157			416
Net (charge-offs) recoveries		(31	)		76			45
Balance at December 31, 2012	$	1,885		$	4,190		$	6,075

Carrying amount of acquired loans by credit quality indicator

The tables below illustrate the carrying amount of acquired loans by credit quality indicator at December 31, 2014 and 2013 ($ in thousands):

	December 31, 2014
			Commercial Loans
			Pass -		Special Mention -		Substandard -		Doubtful -
			Categories 1-6		Category 7		Category 8		Category 9		Subtotal
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land			$	20,224	$	280	$	28,339	$	5,821	$	54,664
Secured by 1-4 family residential properties				30,796		760		8,466		388		40,410
Secured by nonfarm, nonresidential properties				157,753		3,452		39,408		1,710		202,323
Other				22,754		92		4,864		95		27,805
Commercial and industrial loans				64,720		17		19,706		3,813		88,256
Consumer loans				-		-		-		-		-
Other loans				19,706		45		2,617		-		22,368
Total noncovered loans				315,953		4,646		103,400		11,827		435,826

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land				-		-		955		102		1,057
Secured by 1-4 family residential properties				194		235		1,045		-		1,474
Secured by nonfarm, nonresidential properties				4,419		88		2,879		-		7,386
Other				-		108		426		2		536
Commercial and industrial loans				145		24		108		-		277
Consumer loans				-		-		-		-		-
Other loans				204		-		-		-		204
Total covered loans				4,962		455		5,413		104		10,934
Total acquired loans			$	320,915	$	5,101	$	108,813	$	11,931	$	446,760

	Consumer Loans
			Past Due		Past Due						Total
	Current		30-89 Days		90 Days or More		Nonaccrual		Subtotal		Acquired Loans
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land		3,338		25		282	$	-	$	3,645	$	58,309
Secured by 1-4 family residential properties		71,316		2,335		2,742		117		76,510		116,920
Secured by nonfarm, nonresidential properties		-		-		-		-		-		202,323
Other		8		-		-		-		8		27,813
Commercial and industrial loans		-		-		-		-		-		88,256
Consumer loans		9,634		114		24		-		9,772		9,772
Other loans		22		-		-		-		22		22,390
Total noncovered loans		84,318		2,474		3,048		117		89,957		525,783

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land		140		-		-		-		140		1,197
Secured by 1-4 family residential properties		10,925		473		308		-		11,706		13,180
Secured by nonfarm, nonresidential properties		286		-		-		-		286		7,672
Other		525		-		35		-		560		1,096
Commercial and industrial loans		-		-		-		-		-		277
Consumer loans		-		-		-		-		-		-
Other loans		-		-		-		-		-		204
Total covered loans		11,876		473		343		-		12,692		23,626
Total acquired loans	$	96,194	$	2,947	$	3,391	$	117	$	102,649	$	549,409

(1) Total dollar balances are presented in this table; however, these loans are covered by the loss-share agreement with the FDIC.

TNB is at risk for only 20% of the losses incurred on these loans.

	December 31, 2013
			Commercial Loans
			Pass -		Special Mention -		Substandard -		Doubtful -
			Categories 1-6		Category 7		Category 8		Category 9		Subtotal
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land			$	39,075	$	2,506	$	42,486	$	8,445	$	92,512
Secured by 1-4 family residential properties				33,810		2,983		17,422		538		54,753
Secured by nonfarm, nonresidential properties				184,594		9,027		88,952		4,563		287,136
Other				28,156		1,437		4,071		184		33,848
Commercial and industrial loans				116,818		2,248		24,084		6,039		149,189
Consumer loans				21		-		-		-		21
Other loans				21,881		-		882		1,306		24,069
Total noncovered loans				424,355		18,201		177,897		21,075		641,528

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land				228		-		1,126		771		2,125
Secured by 1-4 family residential properties				1,629		430		1,798		-		3,857
Secured by nonfarm, nonresidential properties				5,446		109		4,723		-		10,278
Other				832		134		717		2		1,685
Commercial and industrial loans				254		28		112		-		394
Consumer loans				-		-		-		-		-
Other loans				271		-		414		646		1,331
Total covered loans				8,660		701		8,890		1,419		19,670
Total acquired loans			$	433,015	$	18,902	$	186,787	$	22,494	$	661,198

	Consumer Loans
			Past Due		Past Due						Total
	Current		30-89 Days		90 Days or More		Nonaccrual		Subtotal		Acquired Loans
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land	$	5,813	$	108	$	495	$	-	$	6,416	$	98,928
Secured by 1-4 family residential properties		95,987		3,599		3,466		109		103,161		157,914
Secured by nonfarm, nonresidential properties		-		-		-		-		-		287,136
Other		100		-		-		-		100		33,948
Commercial and industrial loans		306		-		-		-		306		149,495
Consumer loans		18,076		239		92		-		18,407		18,428
Other loans		72		-		-		-		72		24,141
Total noncovered loans		120,354		3,946		4,053		109		128,462		769,990

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land		133		77		28		-		238		2,363
Secured by 1-4 family residential properties		11,179		428		952		-		12,559		16,416
Secured by nonfarm, nonresidential properties		495		-		172		-		667		10,945
Other		617		342		-		-		959		2,644
Commercial and industrial loans		-		-		-		-		-		394
Consumer loans		119		-		-		-		119		119
Other loans		4		-		-		-		4		1,335
Total covered loans		12,547		847		1,152		-		14,546		34,216
Total acquired loans	$	132,901	$	4,793	$	5,205	$	109	$	143,008	$	804,206

(1)	Total dollar balances are presented in this table; however, these loans are covered by the loss-share agreement with the FDIC. TNB is at risk for only 20% of the losses incurred on these loans.

Aging analysis of past due and nonaccrual acquired loans, by class

The following tables provide an aging analysis of contractually past due and nonaccrual acquired loans, by class at December 31, 2014 and 2013 ($ in thousands):

	December 31, 2014
	Past Due
	30-59 Days		60-89 Days		90 Days or More (1)		Total		Nonaccrual (2)		Current Loans		Total Acquired Loans
Noncovered loans:
Loans secured by real estate:
Construction, land development and other land	$	246	$	7	$	21,985	$	22,238	$	194	$	35,877	$	58,309
Secured by 1-4 family residential properties		2,576		981		5,162		8,719		422		107,779		116,920
Secured by nonfarm, nonresidential properties		89		865		13,275		14,229		-		188,094		202,323
Other		-		-		604		604		-		27,209		27,813
Commercial and industrial loans		334		128		1,099		1,561		461		86,234		88,256
Consumer loans		86		29		24		139		-		9,633		9,772
Other loans		-		-		-		-		-		22,390		22,390
Total noncovered loans		3,331		2,010		42,149		47,490		1,077		477,216		525,783

Covered loans:
Loans secured by real estate:
Construction, land development and other land		-		-		376		376		-		821		1,197
Secured by 1-4 family residential properties		253		296		477		1,026		-		12,154		13,180
Secured by nonfarm, nonresidential properties		239		488		-		727		-		6,945		7,672
Other		-		-		368		368		-		728		1,096
Commercial and industrial loans		-		-		42		42		67		168		277
Consumer loans		-		-		-		-		-		-		-
Other loans		-		-		-		-		-		204		204
Total covered loans		492		784		1,263		2,539		67		21,020		23,626
Total acquired loans	$	3,823	$	2,794	$	43,412	$	50,029	$	1,144	$	498,236	$	549,409

(1) Past due 90 days or more but still accruing interest.

(2) Acquired loans not accounted for under FASB ASC Topic 310-30.

	December 31, 2013
	Past Due
	30-59 Days		60-89 Days		90 Days or More (1)		Total		Nonaccrual (2)		Current Loans		Total Acquired Loans
Noncovered loans:
Loans secured by real estate:
Construction, land development and other land	$	1,648	$	468	$	31,744	$	33,860	$	67	$	65,001	$	98,928
Secured by 1-4 family residential properties		3,901		1,166		7,589		12,656		116		145,142		157,914
Secured by nonfarm, nonresidential properties		4,851		3,127		15,421		23,399		461		263,276		287,136
Other		40		-		1,922		1,962		33		31,953		33,948
Commercial and industrial loans		526		217		3,387		4,130		1,170		144,195		149,495
Consumer loans		205		34		92		331		-		18,097		18,428
Other loans		-		-		153		153		20		23,968		24,141
Total noncovered loans		11,171		5,012		60,308		76,491		1,867		691,632		769,990

Covered loans:
Loans secured by real estate:
Construction, land development and other land		87		-		553		640		445		1,278		2,363
Secured by 1-4 family residential properties		515		358		1,142		2,015		-		14,401		16,416
Secured by nonfarm, nonresidential properties		243		1,662		793		2,698		-		8,247		10,945
Other		571		139		2		712		-		1,932		2,644
Commercial and industrial loans		13		-		-		13		41		340		394
Consumer loans		-		-		-		-		-		119		119
Other loans		-		-		646		646		-		689		1,335
Total covered loans		1,429		2,159		3,136		6,724		486		27,006		34,216
Total acquired loans	$	12,600	$	7,171	$	63,444	$	83,215	$	2,353	$	718,638	$	804,206

(1) Past due 90 days or more but still accruing interest.

(2) Acquired loans not accounted for under FASB ASC Topic 310-30.