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Loans and the Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2014
Receivables [Abstract]  
Summary of loans
The following is a summary of loans as of the dates presented:
 
 
September 30,
2014
 
December 31, 2013
Commercial, financial, agricultural
$
450,559

 
$
468,963

Lease financing
5,564

 
53

Real estate – construction
197,066

 
161,436

Real estate – 1-4 family mortgage
1,221,579

 
1,208,233

Real estate – commercial mortgage
1,991,052

 
1,950,572

Installment loans to individuals
91,806

 
91,762

Gross loans
3,957,626

 
3,881,019

Unearned income
(187
)
 
(1
)
Loans, net of unearned income
3,957,439

 
3,881,018

Allowance for loan losses
(44,569
)
 
(47,665
)
Net loans
$
3,912,870

 
$
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
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
1,056

 
$
599

 
$
446,907

 
$
448,562

 
$
650

 
$
953

 
$
394

 
$
1,997

 
$
450,559

Lease financing
—

 
—

 
5,564

 
5,564

 
—

 
—

 
—

 
—

 
5,564

Real estate – construction
237

 
281

 
194,900

 
195,418

 
—

 
1,648

 
—

 
1,648

 
197,066

Real estate – 1-4 family mortgage
6,739

 
5,248

 
1,193,594

 
1,205,581

 
208

 
6,197

 
9,593

 
15,998

 
1,221,579

Real estate – commercial mortgage
7,966

 
11,381

 
1,937,174

 
1,956,521

 
2,641

 
20,803

 
11,087

 
34,531

 
1,991,052

Installment loans to individuals
250

 
22

 
91,431

 
91,703

 
—

 
90

 
13

 
103

 
91,806

Unearned income
—

 
—

 
(187
)
 
(187
)
 
—

 
—

 
—

 
—

 
(187
)
Total
$
16,248

 
$
17,531

 
$
3,869,383

 
$
3,903,162

 
$
3,499

 
$
29,691

 
$
21,087

 
$
54,277

 
$
3,957,439

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
September 30, 2014
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
5,513

 
$
349

 
$
2,383

 
$
2,732

 
$
229

Real estate – construction
2,723

 
—

 
1,768

 
1,768

 
48

Real estate – 1-4 family mortgage
31,657

 
15,576

 
8,440

 
24,016

 
2,316

Real estate – commercial mortgage
105,441

 
30,921

 
32,373

 
63,294

 
10,681

Installment loans to individuals
433

 
50

 
56

 
106

 
—

Total
$
145,767

 
$
46,896

 
$
45,020

 
$
91,916

 
$
13,274

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
 
September 30, 2014
 
September 30, 2013
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
4,167

 
$
160

 
$
5,183

 
$
4

Real estate – construction
1,997

 
96

 
1,650

 
—

Real estate – 1-4 family mortgage
26,378

 
808

 
32,274

 
158

Real estate – commercial mortgage
74,648

 
3,110

 
75,312

 
379

Installment loans to individuals
141

 
13

 
—

 
—

Total
$
107,331

 
$
4,187

 
$
114,419

 
$
541

 
(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 September 30, 2014.

 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2014
 
September 30, 2013
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
Commercial, financial, agricultural
$
4,399

 
$
165

 
$
5,123

 
$
4

Real estate – construction
2,023

 
98

 
1,650

 
—

Real estate – 1-4 family mortgage
27,122

 
843

 
33,181

 
449

Real estate – commercial mortgage
80,402

 
3,174

 
75,997

 
845

Installment loans to individuals
147

 
13

 
—

 
—

Total
$
114,093

 
$
4,293

 
$
115,951

 
$
1,298


(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 nine months ended September 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
September 30, 2014
 
 
 
 
 
Commercial, financial, agricultural
—

 
$
—

 
$
—

Real estate – construction
—

 
—

 
—

Real estate – 1-4 family mortgage
32

 
6,739

 
5,165

Real estate – commercial mortgage
16

 
11,686

 
10,439

Installment loans to individuals
—

 
—

 
—

Total
48

 
$
18,425

 
$
15,604

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
17

 
2,622

Reductions due to:
 
 
 
Reclassified as nonperforming
(3
)
 
(1,895
)
Paid in full
(7
)
 
(6,008
)
Charge-offs
—

 
—

Transfer to other real estate owned
—

 
—

Principal paydowns
—

 
(593
)
Lapse of concession period
—

 
—

Totals at September 30, 2014
48

 
$
15,604
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
September 30, 2014
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
314,774

 
$
5,156

 
$
1,383

 
$
321,313

Real estate – construction
131,329

 
1,173

 
—

 
132,502

Real estate – 1-4 family mortgage
125,625

 
10,020

 
8,226

 
143,871

Real estate – commercial mortgage
1,402,321

 
30,728

 
42,649

 
1,475,698

Installment loans to individuals
2,537

 
—

 
—

 
2,537

Total
$
1,976,586

 
$
47,077

 
$
52,258

 
$
2,075,921

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
September 30, 2014
 
 
 
 
 
Commercial, financial, agricultural
$
103,391

 
$
159

 
$
103,550

Lease financing
5,377

 
—

 
5,377

Real estate – construction
62,635

 
161

 
62,796

Real estate – 1-4 family mortgage
987,332

 
3,512

 
990,844

Real estate – commercial mortgage
258,092

 
938

 
259,030

Installment loans to individuals
84,798

 
68

 
84,866

Total
$
1,501,625

 
$
4,838

 
$
1,506,463

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
September 30, 2014
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
—

 
$
7,699

 
$
17,997

 
$
25,696

Lease financing
—

 
—

 
—

 
—

Real estate – construction
—

 
1,648

 
120

 
1,768

Real estate – 1-4 family mortgage
1,254

 
45,100

 
40,510

 
86,864

Real estate – commercial mortgage
11,986

 
87,594

 
156,744

 
256,324

Installment loans to individuals
—

 
38

 
4,365

 
4,403

Total
$
13,240

 
$
142,079

 
$
219,736

 
$
375,055

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 September 30, 2014:
 
 
Impaired
Covered
Loans
 
Other
Covered
Loans
 
Not
Covered
Loans
 
Total
Contractually-required principal and interest
$
52,678

 
$
176,021

 
$
256,592

 
$
485,291

Nonaccretable difference(1)
(39,437
)
 
(30,500
)
 
(32,676
)
 
(102,613
)
Cash flows expected to be collected
13,241

 
145,521

 
223,916

 
382,678

Accretable yield(2)
(1
)
 
(3,442
)
 
(4,180
)
 
(7,623
)
Fair value
$
13,240

 
$
142,079

 
$
219,736

 
$
375,055

 
(1)
Represents contractual principal and interest cash flows of $93,738 and $8,875, respectively, not expected to be collected.
(2)
Represents contractual interest payments of $5,182 expected to be collected and purchase discount of $3,336.
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
$
(13
)
 
$
(6,705
)
 
$
(3,010
)
 
$
(9,728
)
Reclasses from nonaccretable difference
(63
)
 
(2,511
)
 
(10,899
)
 
(13,473
)
Accretion
75

 
5,774

 
9,729

 
15,578

Balance at September 30, 2014
$
(1
)
 
$
(3,442
)
 
$
(4,180
)
 
$
(7,623
)
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 September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,264

 
$
1,267

 
$
11,797

 
$
29,771

 
$
1,205

 
$
47,304

Charge-offs
(1,206
)
 
—

 
(1,271
)
 
(3,513
)
 
(112
)
 
(6,102
)
Recoveries
103

 
6

 
751

 
267

 
23

 
1,150

Net (charge-offs) recoveries
(1,103
)
 
6

 
(520
)
 
(3,246
)
 
(89
)
 
(4,952
)
Provision for loan losses
1,007

 
109

 
(491
)
 
4,043

 
107

 
4,775

Benefit attributable to FDIC loss-share agreements
(19
)
 
—

 
(189
)
 
(3,169
)
 
—

 
(3,377
)
Recoveries payable to FDIC
22

 
—

 
16

 
781

 
—

 
819

Provision for loan losses charged to operations
1,010

 
109

 
(664
)
 
1,655

 
107

 
2,217

Ending balance
$
3,171

 
$
1,382

 
$
10,613

 
$
28,180

 
$
1,223

 
$
44,569

Nine Months Ended September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,090

 
$
1,091

 
$
18,629

 
$
23,688

 
$
1,167

 
$
47,665

Charge-offs
(1,325
)
 
—

 
(4,143
)
 
(4,056
)
 
(404
)
 
(9,928
)
Recoveries
215

 
14

 
1,108

 
325

 
53

 
1,715

Net (charge-offs) recoveries
(1,110
)
 
14

 
(3,035
)
 
(3,731
)
 
(351
)
 
(8,213
)
Provision for loan losses
1,095

 
276

 
(5,182
)
 
12,045

 
407

 
8,641

Benefit attributable to FDIC loss-share agreements
(87
)
 
—

 
(324
)
 
(4,640
)
 
—

 
(5,051
)
Recoveries payable to FDIC
183

 
1

 
525

 
818

 
—

 
1,527

Provision for loan losses charged to operations
1,191

 
277

 
(4,981
)
 
8,223

 
407

 
5,117

Ending balance
$
3,171

 
$
1,382

 
$
10,613

 
$
28,180

 
$
1,223

 
$
44,569

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

 
$
—

 
$
1,260

 
$
6,820

 
$
—

 
$
8,080

Collectively evaluated for impairment
3,171

 
1,382

 
9,353

 
21,360

 
1,223

 
36,489

Acquired with deteriorated credit quality
—

 
—

 
—

 
—

 
—

 
—

Ending balance
$
3,171

 
$
1,382

 
$
10,613

 
$
28,180

 
$
1,223

 
$
44,569

 
 
Commercial
 
Real Estate -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and  Other(1)
 
Total
Three Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,478

 
$
863

 
$
19,432

 
$
22,239

 
$
1,022

 
$
47,034

Charge-offs
(887
)
 
—

 
(1,251
)
 
(1,107
)
 
(81
)
 
(3,326
)
Recoveries
54

 
7

 
120

 
38

 
23

 
242

Net (charge-offs) recoveries
(833
)
 
7

 
(1,131
)
 
(1,069
)
 
(58
)
 
(3,084
)
Provision for loan losses
364

 
44

 
370

 
1,976

 
14

 
2,768

Benefit attributable to FDIC loss-share agreements
(67
)
 
—

 
(326
)
 
(129
)
 
—

 
(522
)
Recoveries payable to FDIC
5

 
—

 
45

 
4

 
—

 
54

Provision for loan losses charged to operations
302

 
44

 
89

 
1,851

 
14

 
2,300

Ending balance
$
2,947

 
$
914

 
$
18,390

 
$
23,021

 
$
978

 
$
46,250

Nine Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,307

 
$
711

 
$
18,347

 
$
21,416

 
$
566

 
$
44,347

Charge-offs
(1,167
)
 
—

 
(2,517
)
 
(4,226
)
 
(434
)
 
(8,344
)
Recoveries
301

 
70

 
591

 
885

 
50

 
1,897

Net (charge-offs) recoveries
(866
)
 
70

 
(1,926
)
 
(3,341
)
 
(384
)
 
(6,447
)
Provision for loan losses
874

 
132

 
2,088

 
5,762

 
796

 
9,652

Benefit attributable to FDIC loss-share agreements
(397
)
 
—

 
(956
)
 
(840
)
 
—

 
(2,193
)
Recoveries payable to FDIC
29

 
1

 
837

 
24

 
—

 
891

Provision for loan losses charged to operations
506

 
133

 
1,969

 
4,946

 
796

 
8,350

Ending balance
$
2,947

 
$
914

 
$
18,390

 
$
23,021

 
$
978

 
$
46,250

Period-End Amount Allocated to:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
260

 
$
—

 
$
7,569

 
$
7,079

 
$
—

 
$
14,908

Collectively evaluated for impairment
2,687

 
914

 
10,821

 
15,942

 
978

 
31,342

Acquired with deteriorated credit quality
—

 
—

 
—

 
—

 
—

 
—

Ending balance
$
2,947

 
$
914

 
$
18,390

 
$
23,021

 
$
978

 
$
46,250


(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
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
349

 
$
—

 
$
15,576

 
$
30,921

 
$
50

 
$
46,896

Collectively evaluated for impairment
424,514

 
195,298

 
1,119,139

 
1,703,807

 
92,730

 
3,535,488

Acquired with deteriorated credit quality
25,696

 
1,768

 
86,864

 
256,324

 
4,403

 
375,055

Ending balance
$
450,559

 
$
197,066

 
$
1,221,579

 
$
1,991,052

 
$
97,183

 
$
3,957,439

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.