NOTE 4. Loans and Leases

Legacy loans and leases is defined to exclude loans acquired in business combinations since September 30, 2011, and purchased loans and leases is defined to include those loans and leases excluded from the definition of legacy loans.

Loans and Leases, Net of Deferred Costs and Fees


	September 30, 2012		December 31, 2011
Commercial, financial, and agricultural	$	2,168,708	$	1,871,027
Real estate – construction		904,285		829,221
Real estate secured – residential		4,047,761		3,212,562
Real estate secured – commercial		3,947,447		3,136,887
Consumer		829,760		722,329
Leases		777,646		675,904

Total loans and leases	$	12,675,607	$	10,447,930


Legacy loans and leases	$	10,399,602	$	9,833,296
Purchased loans and leases		2,276,005		614,634

Total loans and leases	$	12,675,607	$	10,447,930


Nonaccrual loans and leases	$	118,448	$	156,478
Loans and leases contractually past due 90 days and still accruing		8,451		10,077
Troubled debt restructurings		56,823		72,852
Deferred origination costs and fees		16,941		13,857
All overdrawn deposit accounts, reclassified as loans and evaluated for collectability		2,596		3,390

Net Investment in Direct Financing Leases


	September 30, 2012			December 31, 2011
Minimum lease payments receivable	$	528,773		$	489,574
Estimated residual value of leases		319,588			255,152
Unearned income under lease contracts		(70,715	)		(68,822	)

Total leases	$	777,646		$	675,904

In establishing the allowance for credit losses, Susquehanna estimates losses attributable to specific impaired credits identified through the credit review processes and also estimates losses inherent in other loans and leases on a collective basis. For purposes of determining the level of the allowance for credit losses, Susquehanna evaluates its loan and lease portfolio by loan type. The losses provisioned for in Susquehanna’s allowance for loan loss is determined through a loan by loan analysis of larger balance commercial and commercial real estate loans that show signs of credit deterioration and by applying loss factors to groups of loan balances based on loan type and management’s classification of such loans under the Susquehanna’s loan grading system, adjusted for qualitative considerations. In determining the allowance for credit losses, Susquehanna utilizes an internal loan grading system for its commercial portfolio. The internal loan gradings are monitored by Susquehanna’s loan review department. Additionally, loans that are significant and have a rating of substandard, special mention, and pass that are on the company’s watch list, are reviewed on a quarterly basis at Susquehanna’s Loan Quality Review Committee. Factors considered at the Loan Quality Review meetings include the financial statements of the borrower, the borrower’s global cash flow, guarantees, and underlying collateral valuations.

Allowance for Credit Losses and Recorded Investment in Financing Receivables


	Three Months Ended September 30, 2012
	Commercial			Real Estate - Construction			Real Estate Secured - Residential			Real Estate Secured - Commercial			Consumer			Leases			Unallocated			Total
Allowance for credit losses:
Balance at July 1, 2012	$	30,062		$	31,670		$	33,794		$	78,500		$	3,314		$	12,857		$	431		$	190,628
Charge-offs		(7,003	)		(3,280	)		(2,896	)		(9,833	)		(616	)		(955	)		0			(24,583	)
Recoveries		3,246			371			426			394			168			247			0			4,852
Provision		962			1,144			8,649			4,278			553			674			(261	)		16,000

Balance at September 30, 2012	$	27,267		$	29,905		$	39,973		$	73,339		$	3,419		$	12,823		$	170		$	186,897


	Nine Months Ended September 30, 2012
	Commercial			Real Estate - Construction			Real Estate Secured - Residential			Real Estate Secured - Commercial			Consumer			Leases			Unallocated			Total
Allowance for credit losses:
Balance at January 1, 2012	$	28,567		$	36,868		$	28,839		$	78,414		$	3,297		$	10,561		$	1,554		$	188,100
Charge-offs		(20,572	)		(12,795	)		(10,338	)		(32,910	)		(2,341	)		(2,946	)		0			(81,902	)
Recoveries		7,562			2,069			1,663			16,715			912			778			0			29,699
Provision		11,710			3,763			19,809			11,120			1,551			4,430			(1,384	)		51,000

Balance at September 30, 2012	$	27,267		$	29,905		$	39,973		$	73,339		$	3,419		$	12,823		$	170		$	186,897


Balance at September 30, 2012
Individually evaluated for impairment:
Legacy loans and leases	$	907		$	1,309		$	4,872		$	8,672		$	117		$	0					$	15,877
Purchased loans and leases		0			528			965			254			0			0						1,747

Total	$	907		$	1,837		$	5,837		$	8,926		$	117		$	0					$	17,624


Collectively evaluated for impairment:
Legacy loans and leases	$	26,360		$	28,068		$	34,136		$	64,413		$	3,302		$	12,823		$	170		$	169,273
Purchased loans and leases		0			0			0			0			0			0			0			0

Total	$	26,360		$	28,068		$	34,136		$	64,413		$	3,302		$	12,823		$	170		$	169,273


Financing receivables:
Balance at September 30, 2012	$	2,168,708		$	904,285		$	4,047,761		$	3,947,447		$	829,760		$	777,646					$	12,675,607


Balance at September 30, 2012
Individually evaluated for impairment:
Legacy loans and leases	$	13,532		$	21,157		$	22,432		$	59,619		$	306		$	0					$	117,046
Purchased loans and leases		17,438			27,734			26,363			96,366			117			0						168,018

Total	$	30,970		$	48,891		$	48,795		$	155,985		$	423		$	0					$	285,064


Collectively evaluated for impairment:
Legacy loans and leases	$	1,943,900		$	652,551		$	3,151,668		$	2,939,893		$	816,898		$	777,646					$	10,282,556
Purchased loans and leases		193,838			202,843			847,298			851,569			12,439			0						2,107,987

Total	$	2,137,738		$	855,394		$	3,998,966		$	3,791,462		$	829,337		$	777,646					$	12,390,543


	Three Months Ended September 30, 2011
	Commercial			Real Estate - Construction			Real Estate Secured - Residential			Real Estate Secured - Commercial			Consumer			Leases			Unallocated			Total
Allowance for credit losses:
Balance at July 1, 2011	$	29,358		$	44,432		$	29,990		$	72,554		$	2,755		$	10,091		$	112		$	189,292
Charge-offs		(6,445	)		(7,227	)		(5,476	)		(6,712	)		(483	)		(1,084	)		0			(27,427	)
Recoveries		1,123			738			214			1,100			582			338			0			4,095
Provision		4,557			3,015			4,991			11,072			634			774			(43	)		25,000

Balance at September 30, 2011	$	28,593		$	40,958		$	29,719		$	78,014		$	3,488		$	10,119		$	69		$	190,960


	Nine Months Ended September 30, 2011
	Commercial			Real Estate - Construction			Real Estate Secured - Residential			Real Estate Secured - Commercial			Consumer			Leases			Unallocated			Total
Allowance for credit losses:
Balance at January 1, 2011	$	31,608		$	50,250		$	28,320		$	70,137		$	2,841		$	8,643		$	35		$	191,834
Charge-offs		(21,386	)		(27,189	)		(15,604	)		(33,446	)		(3,175	)		(4,224	)		0			(105,024	)
Recoveries		3,226			6,194			1,497			2,925			1,128			1,180			0			16,150
Provision		15,145			11,703			15,506			38,398			2,694			4,520			34			88,000

Balance at September 30, 2011	$	28,593		$	40,958		$	29,719		$	78,014		$	3,488		$	10,119		$	69		$	190,960


Balance at September 30, 2011:
Individually evaluated for impairment	$	3,064		$	1,478		$	2,550		$	10,368		$	148		$	0					$	17,608

Collectively evaluated for impairment	$	25,528		$	39,481		$	27,169		$	67,646		$	3,340		$	10,119		$	69		$	173,352


Financing receivables:
Balance at September 30, 2011	$	1,810,664		$	771,734		$	2,728,934		$	3,013,787		$	698,804		$	678,746					$	9,702,669


Balance at September 30, 2011:
Individually evaluated for impairment	$	18,041		$	37,296		$	27,836		$	86,330		$	148		$	0					$	169,651

Collectively evaluated for impairment	$	1,792,623		$	734,438		$	2,701,098		$	2,927,457		$	698,656		$	678,746					$	9,533,018

The following tables present Susquehanna’s credit quality indicators by internally assigned grading and by payment activity at September 30, 2012 and December 31, 2011.

Credit Quality Indicators, at September 30, 2012

Commercial Credit Exposure

Credit-risk Profile by Internally Assigned Grade


	Commercial		Real Estate - Construction ⁽¹⁾		Real Estate - Secured - Commercial ⁽²⁾		Total Commercial Credit Exposure
Legacy loans and leases
Grade:
Pass ⁽³⁾	$	1,886,558	$	471,757	$	3,307,504	$	5,665,819
Special mention ⁽⁴⁾		61,405		53,735		167,093		282,233
Substandard ⁽⁵⁾		45,746		59,912		206,185		311,843

Total		1,993,709		585,404		3,680,782		6,259,895

Purchased loans and leases
Grade:
Pass ⁽³⁾		150,567		121,716		949,378		1,221,661
Special mention ⁽⁴⁾		6,085		42,137		84,932		133,154
Substandard ⁽⁵⁾		18,347		63,730		147,517		229,594

Total		174,999		227,583		1,181,827		1,584,409

Total loans and leases
Grade:
Pass ⁽³⁾		2,037,125		593,473		4,256,882		6,887,480
Special mention ⁽⁴⁾		67,490		95,872		252,025		415,387
Substandard ⁽⁵⁾		64,093		123,642		353,702		541,437

Total	$	2,168,708	$	812,987	$	4,862,609	$	7,844,304

Other Credit Exposure

Credit-risk Profile based on Payment Activity


	Real Estate - Secured - Residential		Consumer		Leases		Total Other Credit Exposure
Legacy loans and leases
Performing	$	2,520,680	$	816,293	$	775,807	$	4,112,780
Nonperforming ⁽⁶⁾		24,176		911		1,839		26,926

Total		2,544,856		817,204		777,646		4,139,706

Purchased loans and leases
Performing		667,092		12,541		0		679,633
Nonperforming ⁽⁶⁾		11,949		15		0		11,964

Total		679,041		12,556		0		691,597

Total loans and leases
Performing		3,187,772		828,834		775,807		4,792,413
Nonperforming ⁽⁶⁾		36,125		926		1,839		38,890

Total	$	3,223,897	$	829,760	$	777,646	$	4,831,303

Credit Quality Indicators, at December 31, 2011

Commercial Credit Exposure

Credit-risk Profile by Internally Assigned Grade


					Real Estate -		Total
			Real Estate -		Secured -		Commercial
	Commercial		Construction ⁽¹⁾		Commercial ⁽²⁾		Credit Exposure
Legacy loans and leases
Grade:
Pass ⁽³⁾	$	1,752,161	$	552,897	$	3,204,963	$	5,510,021
Special mention ⁽⁴⁾		54,902		60,945		173,308		289,155
Substandard ⁽⁵⁾		59,978		60,096		219,737		339,811

Total		1,867,041		673,938		3,598,008		6,138,987

Purchased loans and leases
Grade:
Pass ⁽³⁾		2,222		8,639		116,334		127,195
Special mention ⁽⁴⁾		1,164		36,307		17,363		54,834
Substandard ⁽⁵⁾		600		34,659		28,236		63,495

Total		3,986		79,605		161,933		245,524

Total loans and leases
Grade:
Pass ⁽³⁾		1,754,383		561,536		3,321,297		5,637,216
Special mention ⁽⁴⁾		56,066		97,252		190,671		343,989
Substandard ⁽⁵⁾		60,578		94,755		247,973		403,306

Total	$	1,871,027	$	753,543	$	3,759,941	$	6,384,511

Other Credit Exposure

Credit-risk Profile based on Payment Activity


	Real Estate -
	Secured -						Total Other
	Residential		Consumer		Leases		Credit Exposure
Legacy loans and leases
Performing	$	2,264,551	$	720,438	$	674,510	$	3,659,499
Nonperforming ⁽⁶⁾		31,809		1,607		1,394		34,810

Total		2,296,360		722,045		675,904		3,694,309

Purchased loans and leases
Performing		367,923		282		0		368,205
Nonperforming ⁽⁶⁾		903		2		0		905

Total		368,826		284		0		369,110

Total loans and leases
Performing		2,632,475		720,720		674,510		4,027,704
Nonperforming ⁽⁶⁾		32,712		1,609		1,394		35,715

Total	$	2,665,187	$	722,329	$	675,904	$	4,063,419

⁽¹⁾	Includes only construction loans granted to commercial customers. Construction loans for individuals are included in Real Estate – Secured – Residential below.

⁽²⁾	Includes loans obtained for commercial purposes that are also secured by residential real estate.

⁽³⁾	Includes loans identified as having acceptable risk, which are loans for which the possibility of loss is considered unlikely.

⁽⁴⁾	Includes loans considered potentially weak; however, no loss of principal or interest is anticipated.

⁽⁵⁾	Includes loans that are inadequately protected by the current net-worth and paying capacity of the borrower or by the collateral pledged, if any. Loss of principal or interest is considered reasonably possible or likely.

⁽⁶⁾	Includes loans that are on non-accrual status or past due ninety days or more.

The following tables detail the age analysis of Susquehanna’s past due financing receivables as of September 30, 2012 and December 31, 2011.

Age Analysis of Past Due Financing Receivables, as of September 30, 2012

Financing Receivables that are Accruing


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Financing Receivables
Commercial	$	6,334	$	1,833	$	663	$	8,830	$	2,149,305	$	2,158,135
Real estate – construction		954		1,543		167		2,664		879,087		881,751
Real estate secured – residential		11,202		4,228		5,833		21,263		3,995,758		4,017,021
Real estate secured – commercial		16,910		9,314		696		26,920		3,868,138		3,895,058
Consumer		5,732		1,781		700		8,213		821,336		829,549
Leases		1,818		870		392		3,080		772,565		775,645

Total	$	42,950	$	19,569	$	8,451	$	70,970	$	12,486,189	$	12,557,159


Legacy loans and leases	$	36,893	$	17,558	$	7,478	$	61,929	$	10,226,189	$	10,288,118
Purchased loans and leases		6,057		2,011		973		9,041		2,260,000		2,269,041

Total	$	42,950	$	19,569	$	8,451	$	70,970	$	12,486,189	$	12,557,159

Financing Receivables that are Nonaccruing


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Financing Receivables
Commercial	$	86	$	76	$	8,031	$	8,193	$	2,380	$	10,573
Real estate – construction		159		0		20,801		20,960		1,574		22,534
Real estate secured – residential		756		529		21,044		22,329		8,411		30,740
Real estate secured – commercial		1,454		5,963		28,408		35,825		16,564		52,389
Consumer		0		0		211		211		0		211
Leases		0		578		668		1,246		755		2,001

Total	$	2,455	$	7,146	$	79,163	$	88,764	$	29,684	$	118,448


Legacy loans and leases	$	2,117	$	7,146	$	74,414	$	83,677	$	27,807	$	111,484
Purchased loans and leases		338		0		4,749		5,087		1,877		6,964

Total	$	2,455	$	7,146	$	79,163	$	88,764	$	29,684	$	118,448

Age Analysis of Past Due Financing Receivables, as of December 31, 2011

Financing Receivables that are Accruing


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Financing Receivables
Commercial	$	7,843	$	2,473	$	778	$	11,094	$	1,845,548	$	1,856,642
Real estate – construction		342		416		56		814		790,680		791,494
Real estate secured – residential		21,330		7,247		6,303		34,880		3,135,760		3,170,640
Real estate secured – commercial		4,011		1,043		884		5,938		3,069,452		3,075,390
Consumer		7,688		1,442		1,609		10,739		711,590		722,329
Leases		4,014		867		447		5,328		669,629		674,957

Total	$	45,228	$	13,488	$	10,077	$	68,793	$	10,222,659	$	10,291,452


Legacy loans and leases	$	44,439	$	12,325	$	9,732	$	66,495	$	9,617,812	$	9,684,307
Purchased loans and leases		789		1,163		345		2,298		604,847		607,145

Total	$	45,228	$	13,488	$	10,077	$	68,793	$	10,222,659	$	10,291,452

Financing Receivables that are Nonaccruing


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Financing Receivables
Commercial	$	454	$	1,032	$	6,319	$	7,805	$	6,580	$	14,385
Real estate – construction		122		7,443		27,292		34,857		2,870		37,727
Real estate secured – residential		2,569		517		27,603		30,689		11,233		41,922
Real estate secured – commercial		2,946		1,722		32,020		36,688		24,809		61,497
Consumer		0		0		0		0		0		0
Leases		0		59		413		472		475		947

Total	$	6,091	$	10,773	$	93,647	$	110,511	$	45,967	$	156,478


Legacy loans and leases	$	6,091	$	10,332	$	86,635	$	103,059	$	45,930	$	148,989
Purchased loans and leases		0		441		7,012		7,452		37		7,489

Total	$	6,091	$	10,773	$	93,647	$	110,511	$	45,967	$	156,478

The following tables present Susquehanna’s impaired loans and reserve positions at September 30, 2012 and December 31, 2011.

Impaired Loans at September 30, 2012


	Unpaid Principal Balance		Recorded Investment in Impaired Loans			Related Charge-offs		Related Allowance		Average Recorded Investment in Impaired Loans ⁽²⁾		Interest Income Recognized
Impaired loans without a related reserve:
Commercial, financial, and agricultural	$	26,184	$	25,299		$	885			$	24,678	$	294
Real estate – construction		40,510		34,025			6,485				35,075		461
Real estate secured – residential		26,649		26,288			361				21,639		394
Real estate secured – commercial		128,203		111,955			16,248				128,181		1,971
Consumer		117		117			0				120		3

Total impaired loans without a related reserve		221,663		197,684	⁽¹⁾		23,979				209,693		3,123

Impaired loans with a related reserve:
Commercial, financial, and agricultural		7,380		5,672			1,708	$	907		5,779		25
Real estate – construction		28,922		14,865			14,057		1,837		15,581		0
Real estate secured – residential		23,181		22,506			675		5,837		22,524		253
Real estate secured – commercial		53,507		44,031			9,476		8,926		44,155		369
Consumer		306		306			0		117		458		6

Total impaired loans with a related reserve		113,296		87,380			25,916		17,624		88,497		653

Total impaired loans:
Commercial, financial, and agricultural		33,564		30,971			2,593		907		30,457		319
Real estate – construction		69,432		48,890			20,542		1,837		50,656		461
Real estate secured – residential		49,830		48,794			1,036		5,837		44,163		647
Real estate secured – commercial		181,709		155,985			25,724		8,926		172,336		2,340
Consumer		423		423			0		117		578		9

Total impaired loans	$	334,959	$	285,064		$	49,895	$	17,624	$	298,190	$	3,776


Impaired loans without a related reserve:
Legacy loans and leases	$	60,053	$	36,074		$	23,979			$	50,704	$	395
Purchased loans and leases		161,610		161,610			0				158,989		2,728

Total impaired loans without a related reserve		221,663		197,684			23,979				209,693		3,123

Impaired loans with a related reserve:
Legacy loans and leases		106,888		80,972			25,916	$	15,877		82,067		542
Purchased loans and leases		6,408		6,408			0		1,747		6,430		111

Total impaired loans with a related reserve		113,296		87,380			25,916		17,624		88,497		653

Total impaired loans:
Legacy loans and leases		166,941		117,046			49,895		15,877		132,771		937
Purchased loans and leases ⁽³⁾		168,018		168,018			0		1,747		165,419		2,839

Total impaired loans	$	334,959	$	285,064		$	49,895	$	17,624	$	298,190	$	3,776

⁽¹⁾	$21,912 of the $197,684 total impaired loans without a related reserve represents loans that had been written down to the fair value of the underlying collateral through direct charge-offs of $23,979.

⁽²⁾	Average recorded investment in impaired loans is calculated on a quarterly basis using daily balances.

⁽³⁾	$6,408 of the $168,018 purchased impaired loans were subsequently impaired after being acquired.

Impaired Loans at December 31, 2011


	Unpaid Principal Balance		Recorded Investment in Impaired Loans			Related Charge-offs		Related Allowance		Average Recorded Investment in Impaired Loans ⁽²⁾		Interest Income Recognized
Impaired loans without a related reserve:
Commercial, financial, and agricultural	$	6,621	$	6,621		$	0			$	11,159	$	291
Real estate – construction		52,801		25,968			26,833				29,464		761
Real estate secured – residential		20,411		17,540			2,871				16,473		788
Real estate secured – commercial		69,469		35,490			33,979				41,612		1,479
Consumer		0		0			0				37		4

Total impaired loans without a related reserve		149,302		85,619	⁽¹⁾		63,683				98,745		3,323

Impaired loans with a related reserve:
Commercial, financial, and agricultural		6,870		6,870			0	$	3,421		9,085		239
Real estate – construction		21,613		15,015			6,598		2,243		22,022		307
Real estate secured – residential		17,311		16,227			1,084		2,807		15,733		558
Real estate secured – commercial		72,482		53,288			19,194		11,871		59,222		2,224
Consumer		658		658			0		654		202		8

Total impaired loans with a related reserve		118,934		92,058			26,876		20,996		106,264		3,336

Total impaired loans:
Commercial, financial, and agricultural		13,491		13,491			0		3,421		20,244		530
Real estate – construction		74,414		40,983			33,431		2,243		51,486		1,068
Real estate secured – residential		37,722		33,767			3,955		2,807		32,206		1,346
Real estate secured – commercial		141,951		88,778			53,173		11,871		100,834		3,703
Consumer		658		658			0		654		239		12

Total impaired loans	$	268,236	$	177,677		$	90,559	$	20,996	$	205,009	$	6,659


Impaired loans without a related reserve:
Legacy loans and leases	$	109,075	$	45,442		$	63,633			$	88,262	$	2,713
Purchased loans and leases		40,227		40,177			50				10,483		610

Total impaired loans without a related reserve		149,302		85,619			63,683				98,745		3,323

Impaired loans with a related reserve:
Legacy loans and leases		118,934		92,058			26,876	$	20,996		106,264		3,336
Purchased loans and leases		0		0			0		0		0		0

Total impaired loans with a related reserve		118,934		92,058			26,876		20,996		106,264		3,336

Total impaired loans:
Legacy loans and leases		228,009		137,500			90,559		20,996		194,526		6,049
Purchased loans and leases		40,227		40,177			0		0		10,483		610

Total impaired loans	$	268,236	$	177,677		$	90,559	$	20,996	$	205,009	$	6,659

⁽¹⁾	$48,234 of the $85,619 total impaired loans without a related reserve represents loans that had been written down to the fair value of the underlying collateral through direct charge-offs of $63,683.

⁽²⁾	Average recorded investment in impaired loans is calculated on a quarterly basis using daily balances.

The following table presents Troubled Debt Restructurings (TDR’s), by class segment:


	September 30, 2012			December 31, 2011
Commercial, financial, and agricultural	$	7,254		$	12,181
Real estate – construction		943			3,902
Real estate secured – residential		20,828			17,634
Real estate secured – commercial		27,192			38,565
Consumer		606			570

Total performing TDRs		56,823			72,852
Non-performing TDRs ⁽¹⁾		17,895			14,346

Total TDRs	$	74,718		$	87,198


Performing TDRs		76	%		84	%
Non-performing TDRs		24	%		16	%

⁽¹⁾	These loans are included in the 90 day past due and non-accrual categories.

The following table provides detail of TDR balance and activity for the periods presented:


	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Performing TDRs, beginning of period	$	66,777		$	62,143		$	72,852		$	114,566
New TDR Status ⁽¹⁾		7,635			6,639			12,958			11,143
Paydowns		(992	)		(1,955	)		(7,805	)		(24,886	)
Charge-offs post modification		(112	)		(3,852	)		(623	)		(15,654	)
Transfer to nonaccrual, past due 90 days or greater		(614	)		(644	)		(4,822	)		(4,783	)
Transfer to accrual status		0			0			(11,004	)		(18,055	)
Removal of PCI loans ⁽²⁾		(15,786	)		0			(4,648	)		0
Other, net ⁽³⁾		(85	)		0			(85	)		0

Performing TDRs, end of period	$	56,823		$	62,331		$	56,823		$	62,331


Non-performing TDRs⁽⁴⁾, end of period	$	17,895		$	15,079		$	17,895		$	15,079


Performing TDRs		76	%		81	%		76	%		81	%
Non-performing TDRs		24	%		19	%		24	%		19	%

⁽¹⁾

Includes $7,209 of additional loans in accordance with recent regulatory guidance requiring loans discharged under bankruptcy proceedings and not reaffirmed by the borrower to be charged-off to their collateral value and to be considered troubled debt restructurings regardless of their payment delinquency status.

⁽²⁾	Purchased credit impaired loans at acquistion are not considered TDR’s at acquisition.

⁽³⁾	Transfer to Other Real Estate Owned.

⁽⁴⁾	Included in Age Analysis of Past Due Financing Receivables.

The following four tables present detail on new TDRs during the three and nine month periods end September 30, 2012 and 2011.


	Recorded Investment						Financial Effect of Modification on Recorded Investment⁽¹⁾
Three months ended September 30, 2012	Number of Loans		Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Financial Effect of Modification on Recorded Investment⁽¹⁾
Troubled Debt Restructurings
Commercial, financial, and agricultural
Other ⁽²⁾		6	$	457	$	457	$	0
Real estate – construction
Other ⁽²⁾		2		343		343		0
Real estate secured – residential
Other ⁽²⁾		57		4,766		4,766		0
Combination of modification types		3		230		230		0
Real estate secured – commercial
Principal deferral		0		0		0		0
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		6		1,539		1,539		0
Combination of modification types		0		0		0		0
Consumer
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		35		300		300		0

Total		109	$	7,635	$	7,635	$	0


Legacy loans and leases		87	$	5,370	$	5,370	$	0
Purchased loans and leases		22		2,265		2,265		0

Total		109	$	7,635	$	7,635	$	0

⁽¹⁾	Financial effects impacting the recorded investment include principal payments, advances, charge-offs, and capitalized past-due amounts.

⁽²⁾	Bankruptcies and maturity date extensions.


	Number of Loans		Recorded Investment
Troubled Debt Restructurings that Subsequently Defaulted during the current period
Commercial, financial, and agricultural		1	$	351
Real estate – construction		0		0
Real estate secured – residential		4		641
Real estate secured – commercial		1		199
Consumer		0		0

Total		6	$	1,191


Legacy loans and leases		5	$	817
Purchased loans and leases		1		374

Total		6	$	1,191


	Recorded Investment						Financial Effect of Modification on Recorded Investment⁽¹⁾
Three months ended September 30, 2011	Number of Loans		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Troubled Debt Restructurings
Commercial, financial, and agricultural
Other ⁽²⁾		1	$	331	$	331	$	0
Real estate – construction
Other ⁽²⁾		0		0		0		0
Real estate secured – residential
Other ⁽²⁾		4		285		285		0
Combination of modification types		2		803		803		0
Real estate secured – commercial
Principal deferral		0		0		0		0
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		0		0		0		0
Combination of modification types		3		5,220		5,220		0
Consumer
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		0		0		0		0

Total		10	$	6,639	$	6,639	$	0

⁽¹⁾	Financial effects impacting the recorded investment include principal payments, advances, charge-offs, and capitalized past-due amounts.

⁽²⁾	Maturity date extensions.


	Number of Loans		Recorded Investment
Troubled Debt Restructurings that Subsequently Defaulted during the current period
Commercial, financial, and agricultural		2	$	2,081
Real estate – construction		0		0
Real estate secured – residential		0		0
Real estate secured – commercial		1		1,600
Consumer		0		0

Total		3	$	3,681


Nine months ended September 30, 2012	Recorded Investment						Financial Effect of Modification on Recorded Investment⁽¹⁾
Nine months ended September 30, 2012	Number of Loans		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Troubled Debt Restructurings
Commercial, financial, and agricultural
Other ⁽²⁾		8	$	787	$	787	$	0
Real estate – construction
Other ⁽²⁾		2		343		343		0
Real estate secured – residential
Other ⁽²⁾		59		5,776		5,776		0
Combination of modification types		17		4,213		4,213		0
Real estate secured – commercial
Principal deferral		0		0		0		0
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		6		1,539		1,539		0
Combination of modification types		0		0		0		0
Consumer
Interest Rate reduction		0		0		0		0
Other ⁽²⁾		35		300		300		0

Total		127	$	12,958	$	12,958	$	0


Legacy loans and leases		97	$	8,255	$	8,255	$	0
Purchased loans and leases		30		4,703		4,703		0

Total		127	$	12,958	$	12,958	$	0

⁽¹⁾	Financial effects impacting the recorded investment include principal payments, advances, charge-offs, and capitalized past-due amounts.

⁽²⁾	Bankruptcies and maturity date extensions.


	Number of Loans		Recorded Investment
Troubled Debt Restructurings that Subsequently Defaulted during the current period
Commercial, financial, and agricultural		1	$	351
Real estate – construction		0		0
Real estate secured – residential		7		1,981
Real estate secured – commercial		1		199
Consumer		0		0

Total		9	$	2,531


Legacy loans and leases		8	$	2,157
Purchased loans and leases		1		374

Total		9	$	2,531


	Recorded Investment						Financial Effect of Modification on Recorded Investment⁽¹⁾
Nine months ended September 30, 2011	Number of Loans		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Troubled Debt Restructurings
Commercial, financial, and agricultural
Other ⁽²⁾		7	$	2,165	$	2,165	$	0
Real estate – construction
Other ⁽²⁾		0		0		0		0
Real estate secured – residential
Other ⁽²⁾		9		1,275		1,275		0
Combination of modification types		23		5,142		5,142		0
Real estate secured – commercial
Principal deferral		1		199		199		0
Interest Rate reduction		1		336		336		0
Other ⁽²⁾		0		0		0		0
Combination of modification types		1		1,877		1,877		0
Consumer
Interest Rate reduction		1		88		88		0
Other ⁽²⁾		1		61		61		0

Total		44	$	11,143	$	11,143	$	0

⁽¹⁾	Financial effects impacting the recorded investment include principal payments, advances, charge-offs, and capitalized past-due amounts.

⁽²⁾	Maturity date extensions.


	Number of Loans		Recorded Investment
Troubled Debt Restructurings that Subsequently Defaulted during the current period
Commercial, financial, and agricultural		3	$	2,543
Real estate – construction		2		354
Real estate secured – residential		1		118
Real estate secured – commercial		6		17,051
Consumer		1		484

Total		13	$	20,550

The unpaid principal balance and the related carrying amount of acquired loans are as follows:


	September 30, 2012		December 31, 2011
Credit impaired purchased loans evaluated individually for incurred credit losses
Unpaid principal balance	$	256,520	$	60,259
Carrying amount		168,018		40,177

Other purchased loans evaluated collectively for incurred credit losses
Unpaid principal balance		2,118,935		557,708
Carrying amount		2,107,987		574,457

Total purchased loans
Unpaid principal balance		2,375,455		617,967
Carrying amount		2,276,005		614,634

The changes in the accretable discount related to the purchased credit impaired loans are as follows:


	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
Balance – beginning of period	$	50,527		$	4,881
Tower acquisition		0			54,418
Accretion recognized during the period		(4,902	)		(13,674	)
Net reclassification from non-accretable to accretable		12,299			12,299

Balance – end of period	$	57,924		$	57,924