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Loans and the Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2013
Receivables [Abstract]  
Summary of loans
The following is a summary of loans as of the dates presented:
 
 
June 30,
2013
 
December 31, 2012
Commercial, financial, agricultural
$
318,001

 
$
317,050

Lease financing
105

 
195

Real estate – construction
118,987

 
105,706

Real estate – 1-4 family mortgage
920,293

 
903,423

Real estate – commercial mortgage
1,464,522

 
1,426,643

Installment loans to individuals
62,605

 
57,241

Gross loans
2,884,513

 
2,810,258

Unearned income
(2
)
 
(5
)
Loans, net of unearned income
2,884,511

 
2,810,253

Allowance for loan losses
(47,034
)
 
(44,347
)
Net loans
$
2,837,477

 
$
2,765,906
Past due and nonaccrual loans
The following table provides an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
 
 
Accruing Loans
 
Nonaccruing Loans
 
 
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
Total
Loans
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
405

 
$
—

 
$
313,942

 
$
314,347

 
$
390

 
$
3,094

 
$
170

 
$
3,654

 
$
318,001

Lease financing
—

 
—

 
105

 
105

 
—

 
—

 
—

 
—

 
105

Real estate – construction
—

 
—

 
117,339

 
117,339

 
—

 
1,648

 
—

 
1,648

 
118,987

Real estate – 1-4 family mortgage
6,497

 
943

 
891,322

 
898,762

 
1,827

 
8,184

 
11,520

 
21,531

 
920,293

Real estate – commercial mortgage
2,068

 
1,075

 
1,420,485

 
1,423,628

 
222

 
32,521

 
8,151

 
40,894

 
1,464,522

Installment loans to individuals
280

 
91

 
62,126

 
62,497

 
—

 
108

 
—

 
108

 
62,605

Unearned income
—

 
—

 
(2
)
 
(2
)
 
—

 
—

 
—

 
—

 
(2
)
Total
$
9,250

 
$
2,109

 
$
2,805,317

 
$
2,816,676

 
$
2,439

 
$
45,555

 
$
19,841

 
$
67,835

 
$
2,884,511

December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
484

 
$
15

 
$
312,943

 
$
313,442

 
$
215

 
$
3,131

 
$
262

 
$
3,608

 
$
317,050

Lease financing
—

 
—

 
195

 
195

 
—

 
—

 
—

 
—

 
195

Real estate – construction
80

 
—

 
103,978

 
104,058

 
—

 
1,648

 
—

 
1,648

 
105,706

Real estate – 1-4 family mortgage
6,685

 
1,992

 
867,053

 
875,730

 
1,249

 
13,417

 
13,027

 
27,693

 
903,423

Real estate – commercial mortgage
5,084

 
1,250

 
1,373,470

 
1,379,804

 
325

 
38,297

 
8,217

 
46,839

 
1,426,643

Installment loans to individuals
197

 
50

 
56,715

 
56,962

 
7

 
265

 
7

 
279

 
57,241

Unearned income
—

 
—

 
(5
)
 
(5
)
 
—

 
—

 
—

 
—

 
(5
)
Total
$
12,530

 
$
3,307

 
$
2,714,349

 
$
2,730,186

 
$
1,796

 
$
56,758

 
$
21,513

 
$
80,067

 
$
2,810,253
Impaired loans
Impaired loans recognized in conformity with Financial Accounting Standards Board Accounting Standards Codification Topic ("ASC") 310, “Receivables” (“ASC 310”), segregated by class, were as follows as of the dates presented:
 
 
Unpaid
Contractual
Principal
Balance
 
Recorded
Investment
With
Allowance
 
Recorded
Investment
With No
Allowance
 
Total
Recorded
Investment
 
Related
Allowance
June 30, 2013
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
6,895

 
$
1,515

 
$
2,120

 
$
3,635

 
$
834

Lease financing
—

 
—

 
—

 
—

 
—

Real estate – construction
2,447

 
—

 
1,648

 
1,648

 
—

Real estate – 1-4 family mortgage
42,185

 
26,596

 
6,172

 
32,768

 
7,843

Real estate – commercial mortgage
101,581

 
25,275

 
36,266

 
61,541

 
7,267

Installment loans to individuals
—

 
—

 
—

 
—

 
—

Total
$
153,108

 
$
53,386

 
$
46,206

 
$
99,592

 
$
15,944

December 31, 2012
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
5,142

 
$
1,620

 
$
1,620

 
$
3,240

 
$
708

Lease financing
—

 
—

 
—

 
—

 
—

Real estate – construction
2,447

 
—

 
1,648

 
1,648

 
—

Real estate – 1-4 family mortgage
80,022

 
28,848

 
10,094

 
38,942

 
9,201

Real estate – commercial mortgage
118,167

 
34,400

 
39,450

 
73,850

 
7,688

Installment loans to individuals
—

 
—

 
—

 
—

 
—

Totals
$
205,778

 
$
64,868

 
$
52,812

 
$
117,680

 
$
17,597
Investment and interest income recognized on impaired loans
The following table presents the average recorded investment and interest income recognized on impaired loans for the periods presented:
 
 
Three Months Ended
 
Three Months Ended
 
June 30, 2013
 
June 30, 2012
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
5,601

 
$
—

 
$
3,667

 
$
7

Lease financing
—

 
—

 
—

 
—

Real estate – construction
1,650

 
—

 
6,093

 
—

Real estate – 1-4 family mortgage
34,732

 
108

 
48,109

 
274

Real estate – commercial mortgage
69,168

 
123

 
89,510

 
558

Installment loans to individuals
—

 
—

 
—

 
—

Total
$
111,151

 
$
231

 
$
147,379

 
$
839

 
(1)
Includes interest income recognized using the cash-basis method of income recognition of $100. No interest income was recognized using the cash-basis method of income recognition during the three months ended June 30, 2013.

 
Six Months Ended
 
Six Months Ended
 
June 30, 2013
 
June 30, 2012
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
5,551

 
$
—

 
$
3,730

 
$
15

Lease financing
—

 
—

 
—

 
—

Real estate – construction
1,650

 
—

 
6,141

 
—

Real estate – 1-4 family mortgage
34,874

 
291

 
48,755

 
598

Real estate – commercial mortgage
69,579

 
466

 
90,995

 
1,077

Installment loans to individuals
—

 
—

 
—

 
—

Total
$
111,654

 
$
757

 
$
149,621

 
$
1,690


(1)
Includes interest income recognized using the cash-basis method of income recognition of $314. No interest income was recognized using the cash-basis method of income recognition during the six months ended June 30, 2013.
Restructured loans
The following table presents restructured loans segregated by class as of the dates presented:
 
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
June 30, 2013
 
 
 
 
 
Commercial, financial, agricultural
—

 
$
—

 
$
—

Lease financing
—

 
—

 
—

Real estate – construction
—

 
—

 
—

Real estate – 1-4 family mortgage
20

 
18,353

 
9,929

Real estate – commercial mortgage
15

 
13,646

 
12,608

Installment loans to individuals
1

 
184

 
172

Total
36

 
$
32,183

 
$
22,709

December 31, 2012
 
 
 
 
 
Commercial, financial, agricultural
—

 
$
—

 
$
—

Lease financing
—

 
—

 
—

Real estate – construction
—

 
—

 
—

Real estate – 1-4 family mortgage
19

 
18,450

 
10,853

Real estate – commercial mortgage
16

 
18,985

 
18,409

Installment loans to individuals
1

 
184

 
174

Total
36

 
$
37,619

 
$
29,436
Changes in restructured loans
Changes in the Company’s restructured loans are set forth in the table below:
 
 
Number of
Loans
 
Recorded
Investment
Totals at January 1, 2013
36

 
$
29,436

Additional loans with concessions
6

 
1,277

Reductions due to:
 
 
 
Reclassified as nonperforming
1

 
(620
)
Charge-offs
1

 
(374
)
Transfer to other real estate owned
—

 
—

Principal paydowns
 
 
(1,269
)
Lapse of concession period
4

 
(5,741
)
Totals at June 30, 2013
36

 
$
22,709
Loan portfolio by risk-rating grades
The following table presents the Company’s loan portfolio by risk-rating grades as of the dates presented:
 
 
Pass
 
Watch
 
Substandard
 
Total
June 30, 2013
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
228,692

 
$
3,086

 
$
1,923

 
$
233,701

Real estate – construction
84,121

 
659

 
11

 
84,791

Real estate – 1-4 family mortgage
102,217

 
13,716

 
31,419

 
147,352

Real estate – commercial mortgage
1,042,788

 
33,049

 
36,438

 
1,112,275

Installment loans to individuals
—

 
—

 
—

 
—

Total
$
1,457,818

 
$
50,510

 
$
69,791

 
$
1,578,119

December 31, 2012
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
226,540

 
$
1,939

 
$
3,218

 
$
231,697

Real estate – construction
71,633

 
651

 
—

 
72,284

Real estate – 1-4 family mortgage
96,147

 
24,138

 
32,589

 
152,874

Real estate – commercial mortgage
989,095

 
46,148

 
37,996

 
1,073,239

Installment loans to individuals
7

 
—

 
—

 
7

Total
$
1,383,422

 
$
72,876

 
$
73,803

 
$
1,530,101
Loan portfolio not subject to risk rating
The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
 
 
Performing
 
Non-
Performing
 
Total
June 30, 2013
 
 
 
 
 
Commercial, financial, agricultural
$
73,510

 
$
386

 
$
73,896

Lease financing
103

 
—

 
103

Real estate – construction
32,548

 
—

 
32,548

Real estate – 1-4 family mortgage
706,724

 
3,397

 
710,121

Real estate – commercial mortgage
215,780

 
931

 
216,711

Installment loans to individuals
60,766

 
166

 
60,932

Total
$
1,089,431

 
$
4,880

 
$
1,094,311

December 31, 2012
 
 
 
 
 
Commercial, financial, agricultural
$
74,003

 
$
210

 
$
74,213

Lease financing
195

 
—

 
195

Real estate – construction
31,774

 
—

 
31,774

Real estate – 1-4 family mortgage
670,074

 
5,328

 
675,402

Real estate – commercial mortgage
195,086

 
449

 
195,535

Installment loans to individuals
54,918

 
91

 
55,009

Total
$
1,026,050

 
$
6,078

 
$
1,032,128
Loans acquired with deteriorated credit quality
Loans acquired in business combinations that exhibited, at the date of acquisition, evidence of deterioration of the credit quality since origination, such that it was probable that all contractually required payments would not be collected, were as follows as of the dates presented:
 
 
Impaired
Covered
Loans
 
Other
Covered
Loans
 
Not
Covered
Loans
 
Total
June 30, 2013
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
—

 
$
10,282

 
$
122

 
$
10,404

Lease financing
—

 
—

 
—

 
—

Real estate – construction
—

 
1,648

 
—

 
1,648

Real estate – 1-4 family mortgage
1,046

 
59,364

 
2,410

 
62,820

Real estate – commercial mortgage
24,324

 
104,796

 
6,416

 
135,536

Installment loans to individuals
—

 
34

 
1,639

 
1,673

Total
$
25,370

 
$
176,124

 
$
10,587

 
$
212,081

December 31, 2012
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
—

 
$
10,800

 
$
340

 
$
11,140

Lease financing
—

 
—

 
—

 
—

Real estate – construction
—

 
1,648

 
—

 
1,648

Real estate – 1-4 family mortgage
6,122

 
67,326

 
1,699

 
75,147

Real estate – commercial mortgage
25,782

 
125,379

 
6,708

 
157,869

Installment loans to individuals
—

 
31

 
2,194

 
2,225

Total
$
31,904

 
$
205,184

 
$
10,941

 
$
248,029
Fair value of loans determined to be impaired and not to be impaired at the time of acquisition
The following table presents the fair value of loans determined to be impaired at the time of acquisition and determined not to be impaired at the time of acquisition at June 30, 2013:
 
 
Impaired
Covered
Loans
 
Other
Covered
Loans
 
Not
Covered
Loans
 
Total
Contractually-required principal and interest
$
66,879

 
$
209,442

 
$
12,685

 
$
289,006

Nonaccretable difference(1)
(41,507
)
 
(29,413
)
 
(1,095
)
 
(72,015
)
Cash flows expected to be collected
25,372

 
180,029

 
11,590

 
216,991

Accretable yield(2)
(2
)
 
(3,905
)
 
(1,003
)
 
(4,910
)
Fair value
$
25,370

 
$
176,124

 
$
10,587

 
$
212,081

 
(1)
Represents contractual principal and interest cash flows of $276,704 and $12,302, respectively, not expected to be collected.
(2)
Represents contractual interest payments of $3,980 expected to be collected and purchase discount of $930.
Changes in accretable yield of loans acquired with deteriorated credit quality
Changes in the accretable yield of loans acquired with deteriorated credit quality were as follows:
 
 
Impaired
Covered
Loans
 
Other
Covered
Loans
 
Not
Covered
Loans
 
Total
Balance at January 1, 2013
$
(13
)
 
$
(6,705
)
 
$
(1,130
)
 
$
(7,848
)
Reclasses from nonaccretable difference
(87
)
 
(3,021
)
 
(529
)
 
(3,637
)
Accretion
98

 
5,821

 
656

 
6,575

Balance at June 30, 2013
$
(2
)
 
$
(3,905
)
 
$
(1,003
)
 
$
(4,910
)
Rollforward of the allowance for loan losses
The following table provides a roll forward of the allowance for loan losses and a breakdown of the ending balance of the allowance based on the Company’s impairment methodology for the periods presented:
 
 
Commercial
 
Real Estate -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and  Other(1)
 
Total
Three Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,942

 
$
676

 
$
19,737

 
$
22,096

 
$
1,054

 
$
46,505

Charge-offs
(46
)
 
—

 
(652
)
 
(2,527
)
 
(288
)
 
(3,513
)
Recoveries
90

 
47

 
132

 
756

 
17

 
1,042

Net recoveries (charge-offs)
44

 
47

 
(520
)
 
(1,771
)
 
(271
)
 
(2,471
)
Provision for loan losses
563

 
140

 
521

 
1,962

 
239

 
3,425

Benefit attributable to FDIC loss-share agreements
(83
)
 
—

 
(369
)
 
(50
)
 
—

 
(502
)
Recoveries payable to FDIC
12

 
—

 
63

 
2

 
—

 
77

Provision for loan losses charged to operations
492

 
140

 
215

 
1,914

 
239

 
3,000

Ending balance
$
3,478

 
$
863

 
$
19,432

 
$
22,239

 
$
1,022

 
$
47,034

Six Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,307

 
$
711

 
$
18,347

 
$
21,416

 
$
566

 
$
44,347

Charge-offs
(280
)
 
—

 
(1,266
)
 
(3,120
)
 
(352
)
 
(5,018
)
Recoveries
247

 
63

 
471

 
847

 
27

 
1,655

Net (charge-offs) recoveries
(33
)
 
63

 
(795
)
 
(2,273
)
 
(325
)
 
(3,363
)
Provision for loan losses
510

 
88

 
1,718

 
3,787

 
781

 
6,884

Benefit attributable to FDIC loss-share agreements
(330
)
 
—

 
(630
)
 
(711
)
 
—

 
(1,671
)
Recoveries payable to FDIC
24

 
1

 
792

 
20

 
—

 
837

Provision for loan losses charged to operations
204

 
89

 
1,880

 
3,096

 
781

 
6,050

Ending balance
$
3,478

 
$
863

 
$
19,432

 
$
22,239

 
$
1,022

 
$
47,034

Period-End Amount Allocated to:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
834

 
$
—

 
$
7,843

 
$
7,267

 
$
—

 
$
15,944

Collectively evaluated for impairment
2,644

 
863

 
11,589

 
14,972

 
1,022

 
31,090

Acquired with deteriorated credit quality
—

 
—

 
—

 
—

 
—

 
—

Ending balance
$
3,478

 
$
863

 
$
19,432

 
$
22,239

 
$
1,022

 
$
47,034

 
 
Commercial
 
Real Estate -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and  Other(1)
 
Total
Three Months Ended June 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,220

 
$
882

 
$
18,892

 
$
20,379

 
$
803

 
$
44,176

Charge-offs
(645
)
 
(38
)
 
(2,674
)
 
(1,144
)
 
(132
)
 
(4,633
)
Recoveries
156

 
3

 
172

 
172

 
33

 
536

Net charge-offs
(489
)
 
(35
)
 
(2,502
)
 
(972
)
 
(99
)
 
(4,097
)
Provision for loan losses
613

 
119

 
6,900

 
2,475

 
124

 
10,231

Benefit attributable to FDIC loss-share agreements
(164
)
 
—

 
(4,505
)
 
(1,456
)
 
—

 
(6,125
)
Recoveries payable to FDIC
55

 
—

 
195

 
339

 
5

 
594

Provision for loan losses charged to operations
504

 
119

 
2,590

 
1,358

 
129

 
4,700

Ending balance
$
3,235

 
$
966

 
$
18,980

 
$
20,765

 
$
833

 
$
44,779

Six Months Ended June 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
4,197

 
$
1,073

 
$
17,191

 
$
20,979

 
$
900

 
$
44,340

Charge-offs
(2,033
)
 
(42
)
 
(4,548
)
 
(3,026
)
 
(203
)
 
(9,852
)
Recoveries
178

 
3

 
333

 
224

 
53

 
791

Net charge-offs
(1,855
)
 
(39
)
 
(4,215
)
 
(2,802
)
 
(150
)
 
(9,061
)
Provision for loan losses
1,217

 
(51
)
 
11,843

 
5,758

 
78

 
18,845

Benefit attributable to FDIC loss-share agreements
(381
)
 
(17
)
 
(6,054
)
 
(3,532
)
 
—

 
(9,984
)
Recoveries payable to FDIC
57

 
—

 
215

 
362

 
5

 
639

Provision for loan losses charged to operations
893

 
(68
)
 
6,004

 
2,588

 
83

 
9,500

Ending balance
$
3,235

 
$
966

 
$
18,980

 
$
20,765

 
$
833

 
$
44,779

Period-End Amount Allocated to:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
727

 
$
—

 
$
5,666

 
$
7,296

 
$
—

 
$
13,689

Collectively evaluated for impairment
2,508

 
966

 
13,314

 
13,469

 
833

 
31,090

Acquired with deteriorated credit quality
—

 
—

 
—

 
—

 
—

 
—

Ending balance
$
3,235

 
$
966

 
$
18,980

 
$
20,765

 
$
833

 
$
44,779


(1)
Includes lease financing receivables.
Investment in loans, net of unearned income on impairment methodology
The following table provides the recorded investment in loans, net of unearned income, based on the Company’s impairment methodology as of the dates presented:
 
 
Commercial
 
Real Estate  -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and  Other(1)
 
Total
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,515

 
$
—

 
$
26,596

 
$
25,275

 
$
—

 
$
53,386

Collectively evaluated for impairment
306,082

 
117,339

 
830,877

 
1,303,711

 
61,035

 
2,619,044

Acquired with deteriorated credit quality
10,404

 
1,648

 
62,820

 
135,536

 
1,673

 
212,081

Ending balance
$
318,001

 
$
118,987

 
$
920,293

 
$
1,464,522

 
$
62,708

 
$
2,884,511

December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,620

 
$
—

 
$
28,848

 
$
34,400

 
$
—

 
$
64,868

Collectively evaluated for impairment
304,290

 
104,058

 
799,428

 
1,234,374

 
55,206

 
2,497,356

Acquired with deteriorated credit quality
11,140

 
1,648

 
75,147

 
157,869

 
2,225

 
248,029

Ending balance
$
317,050

 
$
105,706

 
$
903,423

 
$
1,426,643

 
$
57,431

 
$
2,810,253

 
(1)
Includes lease financing receivables.