Acquired Loans (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of covered and noncovered acquired loans by type

At September 30, 2015 and December 31, 2014, acquired loans consisted of the following ($ in thousands):

	September 30, 2015				December 31, 2014
	Noncovered		Covered		Noncovered		Covered
Loans secured by real estate:
Construction, land development and other land	$	45,299	$	966	$	58,309	$	1,197
Secured by 1-4 family residential properties		96,870		10,546		116,920		13,180
Secured by nonfarm, nonresidential properties		146,614		5,363		202,323		7,672
Other real estate secured		23,816		1,511		27,813		1,096
Commercial and industrial loans		57,748		205		88,256		277
Consumer loans		6,295		-		9,772		-
Other loans		23,886		54		22,390		204
Acquired loans		400,528		18,645		525,783		23,626
Less allowance for loan losses, acquired loans		11,417		768		10,541		1,518
Net acquired loans	$	389,111	$	17,877	$	515,242	$	22,108

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, 2014	$	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 (2)		(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
Accretion to interest income		23,054			477			1,853			-
Payments received, net		(135,701	)		(14,259	)		(6,790	)		(50	)
Other (2)		1,174			-			6			-
Less change in allowance for loan losses, acquired loans		(876	)		-			750			-
Carrying value, net at September 30, 2015	$	321,802		$	67,309		$	16,323		$	1,554

(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, "Loans and Debt Securities Acquired with Deteriorated Credit Quality."

(2)	Includes miscellaneous timing adjustments as well as 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 periods presented ($ in thousands):

	Nine Months Ended September 30,
	2015			2014
Accretable yield at beginning of period	$	(77,149	)	$	(109,006	)
Accretion to interest income		24,907			38,433
Disposals		8,194			14,520
Reclassification to / (from) nonaccretable difference (1)		(12,215	)		(26,826	)
Accretable yield at end of period	$	(56,263	)	$	(82,879	)

(1)	Reclassifications from nonaccretable difference are due to lower loss expectations and improvements in expected cash flows.

Components of the allowance for loan losses on acquired loans

The following tables present the components of the allowance for loan losses on acquired loans for the periods presented ($ in thousands):

	Noncovered			Covered			Total
Balance at January 1, 2015	$	10,541		$	1,518		$	12,059
Provision for loan losses, acquired loans		2,797			(369	)		2,428
Loans charged-off		(5,024	)		(560	)		(5,584	)
Recoveries		3,103			179			3,282
Net charge-offs		(1,921	)		(381	)		(2,302	)
Balance at September 30, 2015	$	11,417		$	768		$	12,185

	Noncovered			Covered			Total
Balance at January 1, 2014	$	7,249		$	2,387		$	9,636
Provision for loan losses, acquired loans		5,603			(611	)		4,992
Loans charged-off		(3,310	)		(917	)		(4,227	)
Recoveries		1,594			(46	)		1,548
Net charge-offs		(1,716	)		(963	)		(2,679	)
Balance at September 30, 2014	$	11,136		$	813		$	11,949

Carrying amount of acquired loans by credit quality indicator

The tables below illustrate the carrying amount of acquired loans by credit quality indicator at September 30, 2015 and December 31, 2014 ($ in thousands):

	September 30, 2015
			Commercial Loans
			Pass - Categories 1-6		Special Mention - Category 7		Substandard - Category 8		Doubtful - Category 9		Subtotal
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land			$	17,936	$	149	$	20,709	$	3,844	$	42,638
Secured by 1-4 family residential properties				25,726		613		5,168		363		31,870
Secured by nonfarm, nonresidential properties				114,731		2,523		28,674		686		146,614
Other real estate secured				19,603		87		3,364		756		23,810
Commercial and industrial loans				40,560		325		14,700		2,163		57,748
Consumer loans				-		-		-		-		-
Other loans				16,332		-		7,554		-		23,886
Total noncovered loans				234,888		3,697		80,169		7,812		326,566

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land				248		-		320		119		687
Secured by 1-4 family residential properties				1,103		114		331		-		1,548
Secured by nonfarm, nonresidential properties				4,489		131		668		-		5,288
Other real estate secured				752		2		293		-		1,047
Commercial and industrial loans				161		22		22		-		205
Other loans				54		-		-		-		54
Total covered loans				6,807		269		1,634		119		8,829
Total acquired loans			$	241,695	$	3,966	$	81,803	$	7,931	$	335,395

	Consumer Loans
	Current		Past Due 30-89 Days		Past Due 90 Days or More		Nonaccrual (2)		Subtotal		Total Acquired Loans
Noncovered Loans:
Loans secured by real estate:
Construction, land development and other land	$	2,617	$	34	$	10	$	-	$	2,661	$	45,299
Secured by 1-4 family residential properties		60,252		2,234		2,349		165		65,000		96,870
Secured by nonfarm, nonresidential properties		-		-		-		-		-		146,614
Other real estate secured		6		-		-		-		6		23,816
Commercial and industrial loans		-		-		-		-		-		57,748
Consumer loans		6,076		217		2		-		6,295		6,295
Other loans		-		-		-		-		-		23,886
Total noncovered loans		68,951		2,485		2,361		165		73,962		400,528

Covered Loans: (1)
Loans secured by real estate:
Construction, land development and other land		-		10		269		-		279		966
Secured by 1-4 family residential properties		8,195		778		25		-		8,998		10,546
Secured by nonfarm, nonresidential properties		75		-		-		-		75		5,363
Other real estate secured		464		-		-		-		464		1,511
Commercial and industrial loans		-		-		-		-		-		205
Other loans		-		-		-		-		-		54
Total covered loans		8,734		788		294		-		9,816		18,645
Total acquired loans	$	77,685	$	3,273	$	2,655	$	165	$	83,778	$	419,173

(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.

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

	December 31, 2014
			Commercial Loans
			Pass - Categories 1-6		Special Mention - Category 7		Substandard - Category 8		Doubtful - 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 real estate secured				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 real estate secured				-		108		426		2		536
Commercial and industrial loans				145		24		108		-		277
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
	Current		Past Due 30-89 Days		Past Due 90 Days or More		Nonaccrual (2)		Subtotal		Total 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 real estate secured		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 real estate secured		525		-		35		-		560		1,096
Commercial and industrial loans		-		-		-		-		-		277
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.

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

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 September 30, 2015 and December 31, 2014 ($ in thousands):

	September 30, 2015
	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	$	34	$	-	$	13,606	$	13,640	$	-	$	31,659	$	45,299
Secured by 1-4 family residential properties		1,183		1,431		3,242		5,856		418		90,596		96,870
Secured by nonfarm, nonresidential properties		497		182		7,465		8,144		129		138,341		146,614
Other real estate secured		-		-		729		729		-		23,087		23,816
Commercial and industrial loans		6		13		245		264		448		57,036		57,748
Consumer loans		195		23		2		220		-		6,075		6,295
Other loans		-		-		-		-		-		23,886		23,886
Total noncovered loans		1,915		1,649		25,289		28,853		995		370,680		400,528

Covered loans:
Loans secured by real estate:
Construction, land development and other land		10		-		119		129		-		837		966
Secured by 1-4 family residential properties		679		163		323		1,165		-		9,381		10,546
Secured by nonfarm, nonresidential properties		34		-		-		34		-		5,329		5,363
Other real estate secured		-		-		153		153		-		1,358		1,511
Commercial and industrial loans		-		-		-		-		73		132		205
Other loans		-		-		-		-		-		54		54
Total covered loans		723		163		595		1,481		73		17,091		18,645
Total acquired loans	$	2,638	$	1,812	$	25,884	$	30,334	$	1,068	$	387,771	$	419,173

(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, 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 real estate secured		-		-		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 real estate secured		-		-		368		368		-		728		1,096
Commercial and industrial loans		-		-		42		42		67		168		277
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.