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Loans and the Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2014
Receivables [Abstract]  
Summary of loans
The following is a summary of loans as of the dates presented:
 
 
June 30,
2014
 
December 31, 2013
Commercial, financial, agricultural
$
447,826

 
$
468,963

Lease financing
1,814

 
53

Real estate – construction
176,577

 
161,436

Real estate – 1-4 family mortgage
1,221,288

 
1,208,233

Real estate – commercial mortgage
2,015,319

 
1,950,572

Installment loans to individuals
94,753

 
91,762

Gross loans
3,957,577

 
3,881,019

Unearned income
(47
)
 
(1
)
Loans, net of unearned income
3,957,530

 
3,881,018

Allowance for loan losses
(47,304
)
 
(47,665
)
Net loans
$
3,910,226

 
$
3,833,353
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, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
630

 
$
972

 
$
443,663

 
$
445,265

 
$
137

 
$
1,139

 
$
1,285

 
$
2,561

 
$
447,826

Lease financing
—

 
—

 
1,814

 
1,814

 
—

 
—

 
—

 
—

 
1,814

Real estate – construction
713

 
11

 
174,205

 
174,929

 
—

 
1,648

 
—

 
1,648

 
176,577

Real estate – 1-4 family mortgage
9,437

 
5,047

 
1,193,582

 
1,208,066

 
336

 
7,306

 
5,580

 
13,222

 
1,221,288

Real estate – commercial mortgage
10,581

 
2,603

 
1,955,117

 
1,968,301

 
1,785

 
35,136

 
10,097

 
47,018

 
2,015,319

Installment loans to individuals
279

 
39

 
94,318

 
94,636

 
—

 
102

 
15

 
117

 
94,753

Unearned income
—

 
—

 
(47
)
 
(47
)
 
—

 
—

 
—

 
—

 
(47
)
Total
$
21,640

 
$
8,672

 
$
3,862,652

 
$
3,892,964

 
$
2,258

 
$
45,331

 
$
16,977

 
$
64,566

 
$
3,957,530

December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
2,067

 
$
607

 
$
463,521

 
$
466,195

 
$
138

 
$
1,959

 
$
671

 
$
2,768

 
$
468,963

Lease financing
—

 
—

 
53

 
53

 
—

 
—

 
—

 
—

 
53

Real estate – construction
664

 
—

 
159,124

 
159,788

 
—

 
1,648

 
—

 
1,648

 
161,436

Real estate – 1-4 family mortgage
10,168

 
2,206

 
1,179,703

 
1,192,077

 
1,203

 
6,041

 
8,912

 
16,156

 
1,208,233

Real estate – commercial mortgage
8,870

 
1,286

 
1,888,745

 
1,898,901

 
966

 
37,439

 
13,266

 
51,671

 
1,950,572

Installment loans to individuals
706

 
88

 
90,880

 
91,674

 
—

 
80

 
8

 
88

 
91,762

Unearned income
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
—

 
—

 
(1
)
Total
$
22,475

 
$
4,187

 
$
3,782,025

 
$
3,808,687

 
$
2,307

 
$
47,167

 
$
22,857

 
$
72,331

 
$
3,881,018
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, 2014
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
6,933

 
$
701

 
$
2,648

 
$
3,349

 
$
248

Real estate – construction
2,832

 
—

 
1,877

 
1,877

 
—

Real estate – 1-4 family mortgage
28,062

 
15,270

 
3,989

 
19,259

 
3,009

Real estate – commercial mortgage
122,322

 
42,531

 
40,934

 
83,465

 
11,726

Installment loans to individuals
—

 
—

 
—

 
—

 
—

Total
$
160,149

 
$
58,502

 
$
49,448

 
$
107,950

 
$
14,983

December 31, 2013
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
6,575

 
$
743

 
$
2,043

 
$
2,786

 
$
260

Real estate – construction
2,447

 
—

 
1,648

 
1,648

 
—

Real estate – 1-4 family mortgage
42,868

 
25,374

 
8,542

 
33,916

 
7,353

Real estate – commercial mortgage
108,963

 
30,624

 
38,517

 
69,141

 
7,036

Installment loans to individuals
620

 
183

 
77

 
260

 
1

Totals
$
161,473

 
$
56,924

 
$
50,827

 
$
107,751

 
$
14,650
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, 2014
 
June 30, 2013
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
5,279

 
$
—

 
$
5,601

 
$
—

Real estate – construction
2,034

 
—

 
1,650

 
—

Real estate – 1-4 family mortgage
21,747

 
170

 
34,732

 
108

Real estate – commercial mortgage
93,402

 
752

 
69,168

 
123

Installment loans to individuals
—

 
—

 
—

 
—

Total
$
122,462

 
$
922

 
$
111,151

 
$
231

 
(1)
Includes interest income recognized using the cash-basis method of income recognition of $0. No interest income was recognized using the cash-basis method of income recognition during the three months ended June 30, 2014.

 
Six Months Ended
 
Six Months Ended
 
June 30, 2014
 
June 30, 2013
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
5,382

 
$
—

 
$
5,551

 
$
—

Real estate – construction
2,036

 
2

 
1,650

 
—

Real estate – 1-4 family mortgage
22,122

 
204

 
34,874

 
291

Real estate – commercial mortgage
94,641

 
816

 
69,579

 
466

Installment loans to individuals
—

 
—

 
—

 
—

Total
$
124,181

 
$
1,022

 
$
111,654

 
$
757


(1)
Includes interest income recognized using the cash-basis method of income recognition of $0. No interest income was recognized using the cash-basis method of income recognition during the six months ended June 30, 2014.
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, 2014
 
 
 
 
 
Commercial, financial, agricultural
—

 
$
—

 
$
—

Real estate – construction
—

 
—

 
—

Real estate – 1-4 family mortgage
19

 
15,768

 
5,884

Real estate – commercial mortgage
18

 
17,112

 
14,955

Installment loans to individuals
—

 
—

 
—

Total
37

 
$
32,880

 
$
20,839

December 31, 2013
 
 
 
 
 
Commercial, financial, agricultural
1

 
$
20

 
$
19

Real estate – construction
—

 
—

 
—

Real estate – 1-4 family mortgage
23

 
19,371

 
10,354

Real estate – commercial mortgage
16

 
12,785

 
10,934

Installment loans to individuals
1

 
182

 
171

Total
41

 
$
32,358

 
$
21,478
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, 2014
41

 
$
21,478

Additional loans with concessions
1

 
1,289

Reductions due to:
 
 
 
Reclassified as nonperforming
(1
)
 
(331
)
Paid in full
(4
)
 
(335
)
Charge-offs
—

 
—

Transfer to other real estate owned
—

 
—

Principal paydowns
 
 
(1,259
)
Lapse of concession period
—

 
—

Totals at June 30, 2014
37

 
$
20,842
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, 2014
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
319,948

 
$
4,500

 
$
1,447

 
$
325,895

Real estate – construction
123,503

 
1,141

 
—

 
124,644

Real estate – 1-4 family mortgage
130,837

 
10,329

 
10,067

 
151,233

Real estate – commercial mortgage
1,414,585

 
29,749

 
48,178

 
1,492,512

Installment loans to individuals
1,677

 
—

 
—

 
1,677

Total
$
1,990,550

 
$
45,719

 
$
59,692

 
$
2,095,961

December 31, 2013
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
328,959

 
$
10,588

 
$
4,266

 
$
343,813

Real estate – construction
114,428

 
588

 
—

 
115,016

Real estate – 1-4 family mortgage
126,916

 
13,864

 
23,370

 
164,150

Real estate – commercial mortgage
1,338,340

 
32,892

 
35,121

 
1,406,353

Installment loans to individuals
19

 
—

 
—

 
19

Total
$
1,908,662

 
$
57,932

 
$
62,757

 
$
2,029,351
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, 2014
 
 
 
 
 
Commercial, financial, agricultural
$
93,449

 
$
133

 
$
93,582

Lease financing
1,767

 
—

 
1,767

Real estate – construction
50,045

 
11

 
50,056

Real estate – 1-4 family mortgage
973,910

 
3,935

 
977,845

Real estate – commercial mortgage
249,378

 
436

 
249,814

Installment loans to individuals
87,439

 
81

 
87,520

Total
$
1,455,988

 
$
4,596

 
$
1,460,584

December 31, 2013
 
 
 
 
 
Commercial, financial, agricultural
$
89,490

 
$
176

 
$
89,666

Lease financing
53

 
—

 
53

Real estate – construction
43,535

 
—

 
43,535

Real estate – 1-4 family mortgage
938,994

 
2,527

 
941,521

Real estate – commercial mortgage
242,363

 
666

 
243,029

Installment loans to individuals
84,855

 
79

 
84,934

Total
$
1,399,290

 
$
3,448

 
$
1,402,738
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, 2014
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
—

 
$
7,677

 
$
20,672

 
$
28,349

Lease financing
—

 
—

 
—

 
—

Real estate – construction
—

 
1,648

 
229

 
1,877

Real estate – 1-4 family mortgage
1,255

 
48,361

 
42,594

 
92,210

Real estate – commercial mortgage
19,044

 
89,122

 
164,827

 
272,993

Installment loans to individuals
—

 
22

 
5,534

 
5,556

Total
$
20,299

 
$
146,830

 
$
233,856

 
$
400,985

December 31, 2013
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
—

 
$
9,546

 
$
25,938

 
$
35,484

Lease financing
—

 
—

 
—

 
—

Real estate – construction
—

 
1,648

 
1,237

 
2,885

Real estate – 1-4 family mortgage
835

 
53,631

 
48,096

 
102,562

Real estate – commercial mortgage
23,684

 
92,302

 
185,204

 
301,190

Installment loans to individuals
—

 
28

 
6,781

 
6,809

Total
$
24,519

 
$
157,155

 
$
267,256

 
$
448,930
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, 2014:
 
 
Impaired
Covered
Loans
 
Other
Covered
Loans
 
Not
Covered
Loans
 
Total
Contractually-required principal and interest
$
57,279

 
$
183,328

 
$
317,561

 
$
558,168

Nonaccretable difference(1)
(36,979
)
 
(33,251
)
 
(50,579
)
 
(120,809
)
Cash flows expected to be collected
20,300

 
150,077

 
266,982

 
437,359

Accretable yield(2)
(1
)
 
(3,247
)
 
(33,126
)
 
(36,374
)
Fair value
$
20,299

 
$
146,830

 
$
233,856

 
$
400,985

 
(1)
Represents contractual principal and interest cash flows of $112,523 and $8,286, respectively, not expected to be collected.
(2)
Represents contractual interest payments of $3,387 expected to be collected and purchase discount of $32,987.
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, 2014
$
(1
)
 
$
(3,758
)
 
$
(36,191
)
 
$
(39,950
)
Reclasses from nonaccretable difference
(50
)
 
(3,389
)
 
(355
)
 
(3,794
)
Accretion
50

 
3,900

 
3,420

 
7,370

Balance at June 30, 2014
$
(1
)
 
$
(3,247
)
 
$
(33,126
)
 
$
(36,374
)
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, 2014
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,128

 
$
1,109

 
$
18,478

 
$
24,147

 
$
1,186

 
$
48,048

Charge-offs
—

 
—

 
(1,985
)
 
(483
)
 
(61
)
 
(2,529
)
Recoveries
75

 
3

 
206

 
28

 
23

 
335

Net (charge-offs) recoveries
75

 
3

 
(1,779
)
 
(455
)
 
(38
)
 
(2,194
)
Provision for loan losses
(95
)
 
154

 
(5,187
)
 
7,522

 
57

 
2,451

Benefit attributable to FDIC loss-share agreements
—

 
—

 
(66
)
 
(1,476
)
 
—

 
(1,542
)
Recoveries payable to FDIC
156

 
1

 
351

 
33

 
—

 
541

Provision for loan losses charged to operations
61

 
155

 
(4,902
)
 
6,079

 
57

 
1,450

Ending balance
$
3,264

 
$
1,267

 
$
11,797

 
$
29,771

 
$
1,205

 
$
47,304

Six Months Ended June 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,090

 
$
1,091

 
$
18,629

 
$
23,688

 
$
1,167

 
$
47,665

Charge-offs
(119
)
 
—

 
(2,872
)
 
(543
)
 
(292
)
 
(3,826
)
Recoveries
112

 
8

 
357

 
58

 
30

 
565

Net (charge-offs) recoveries
(7
)
 
8

 
(2,515
)
 
(485
)
 
(262
)
 
(3,261
)
Provision for loan losses
88

 
167

 
(4,691
)
 
8,002

 
300

 
3,866

Benefit attributable to FDIC loss-share agreements
(68
)
 
—

 
(135
)
 
(1,471
)
 
—

 
(1,674
)
Recoveries payable to FDIC
161

 
1

 
509

 
37

 
—

 
708

Provision for loan losses charged to operations
181

 
168

 
(4,317
)
 
6,568

 
300

 
2,900

Ending balance
$
3,264

 
$
1,267

 
$
11,797

 
$
29,771

 
$
1,205

 
$
47,304

Period-End Amount Allocated to:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
245

 
$
—

 
$
2,062

 
$
8,584

 
$
—

 
$
10,891

Collectively evaluated for impairment
3,019

 
1,267

 
9,735

 
21,187

 
1,205

 
36,413

Acquired with deteriorated credit quality
—

 
—

 
—

 
—

 
—

 
—

Ending balance
$
3,264

 
$
1,267

 
$
11,797

 
$
29,771

 
$
1,205

 
$
47,304

 
 
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 (charge-offs) recoveries
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


(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, 2014
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
701

 
$
—

 
$
15,270

 
$
42,531

 
$
—

 
$
58,502

Collectively evaluated for impairment
418,776

 
174,700

 
1,113,808

 
1,699,795

 
90,964

 
3,498,043

Acquired with deteriorated credit quality
28,349

 
1,877

 
92,210

 
272,993

 
5,556

 
400,985

Ending balance
$
447,826

 
$
176,577

 
$
1,221,288

 
$
2,015,319

 
$
96,520

 
$
3,957,530

December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
743

 
$
—

 
$
25,374

 
$
30,624

 
$
183

 
$
56,924

Collectively evaluated for impairment
432,736

 
158,551

 
1,080,297

 
1,618,758

 
84,822

 
3,375,164

Acquired with deteriorated credit quality
35,484

 
2,885

 
102,562

 
301,190

 
6,809

 
448,930

Ending balance
$
468,963

 
$
161,436

 
$
1,208,233

 
$
1,950,572

 
$
91,814

 
$
3,881,018

 
(1)
Includes lease financing receivables.