4. Loans and Allowance for Loan Losses

Loans, net of unearned income, consisted of the following:


	March 31,		December 31,
	2013		2012
	(In thousands)
Originated loans:
Commerical non-real estate	$	2,900,855	$	2,713,385
Construction and land development		697,989		665,673
Commercial real estate		1,562,383		1,548,402
Residential mortgages		886,232		827,985
Consumer		1,331,477		1,351,776

Total originated loans	$	7,378,936	$	7,107,221

Acquired loans:
Commerical non-real estate	$	1,500,137	$	1,690,643
Construction and land development		269,727		295,151
Commercial real estate		1,226,854		1,279,546
Residential mortgages		449,500		486,444
Consumer		180,632		202,974

Total acquired loans	$	3,626,850	$	3,954,758

Covered loans:
Commerical non-real estate	$	24,294	$	29,260
Construction and land development		25,104		28,482
Commercial real estate		84,166		95,146
Residential mortgages		251,787		263,515
Consumer		91,625		99,420

Total covered loans	$	476,976	$	515,823

Total loans:
Commerical non-real estate	$	4,425,286	$	4,433,288
Construction and land development		992,820		989,306
Commercial real estate		2,873,403		2,923,094
Residential mortgages		1,587,519		1,577,944
Consumer		1,603,734		1,654,170

Total loans	$	11,482,762	$	11,577,802

The following briefly describes the distinction between originated, acquired and covered loans and certain significant accounting policies relevant to each category.

Originated loans

Loans originated for investment are reported at the principal balance outstanding net of unearned income. Interest on loans and accretion of unearned income are computed in a manner that approximates a level yield on recorded principal. Interest on loans is recorded as income as earned. The accrual of interest on an originated loan is discontinued when it is probable that the borrower will not be able to meet payment obligations as they become due. The Company maintains an allowance for loan losses on originated loans that represents management’s estimate of probable losses inherent in this portfolio category. The methodology for estimating the allowance is described in Note 1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. As actual losses are incurred, they are charged against the allowance. Subsequent recoveries are added back to the allowance when collected.

Acquired loans

Acquired loans are those purchased in the Whitney Holding Corporation acquisition on June 4, 2011. These loans were recorded at estimated fair value at the acquisition date with no carryover of the related allowance for loan losses. The acquired loans were segregated between those considered to be performing (“acquired performing”) and those with evidence of credit deterioration (“acquired impaired”), and then further segregated into loan pools designed to facilitate the development of expected cash flows. The factors considered in segregating the acquired portfolio are detailed in Note 1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The fair value estimate for each pool of acquired performing and acquired impaired loans was based on the estimate of expected cash flows, both principal and interest, from that pool, discounted at prevailing market interest rates.

The difference between the fair value of an acquired performing loan pool and the contractual amounts due at the acquisition date (the “fair value discount”) is accreted into income over the estimated life of the pool. Management estimates an allowance for loan losses for acquired performing loans using a methodology similar to that used for originated loans. The allowance determined for each loan pool is compared to the remaining fair value discount for that pool. If the allowance is greater, the excess is added to the reported allowance through a provision for loan losses. If the allowance is less, no additional allowance or provision is recognized. Actual losses first reduce any remaining fair value discount for the loan pool. Once the discount is fully depleted, losses are applied against the allowance established for that pool. Acquired performing loans are placed on nonaccrual status and considered and reported as nonperforming or past due using the same criteria applied to the originated portfolio.

The excess of cash flows expected to be collected from an acquired impaired loan pool over the pool’s estimated fair value at acquisition is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the pool. Each pool of acquired impaired loans is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Acquired impaired loans in pools with an accretable yield and expected cash flows that are reasonably estimable are considered to be accruing and performing even though collection of contractual payments on loans within the pool may be in doubt, because the pool is the unit of accounting. Management recasts the estimate of cash flows expected to be collected on each acquired impaired loan pool at each reporting date. If the present value of expected cash flows for a pool is less than its carrying value, an impairment is recognized by an increase in the allowance for loan losses and a charge to the provision for loan losses. If the present value of expected cash flows for a pool is greater than its carrying value, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into interest income over the remaining life of the loan pool. Acquired impaired loans are generally not subject to individual evaluation for impairment and are not reported with impaired loans or troubled debt restructurings, even if they would otherwise qualify for such treatment.

Covered loans and the related loss share receivable

The loans purchased in the 2009 acquisition of Peoples First Community Bank (Peoples First) are covered by two loss share agreements between the FDIC and the Company that afford the Company significant loss protection. These covered loans are accounted for as acquired impaired loans as described above. The loss share receivable is measured separately from the related covered loans as it is not contractually embedded in the loans and is not transferable should the loans be sold. The fair value of the loss share receivable at acquisition was estimated by discounting projected cash flows related to the loss share agreements based on the expected reimbursements for losses using the applicable loss share percentages, including appropriate consideration of possible true-up payments to the FDIC at the expiration of the agreements. The discounted amount is accreted into non-interest income over the remaining life of the covered loan pool or the life of the loss share agreement.

The loss share receivable is reviewed and updated prospectively as loss estimates related to the covered loans change. Increases in expected reimbursements from a covered loan pool will lead to an increase in the loss share receivable. A decrease in expected reimbursements is reflected first as a reversal of any previously recorded increase in the loss share receivable on the covered loan pool with the remainder reflected as a reduction in the loss share receivable’s accretion rate. Increases and decreases in the loss share receivable can result in reductions in or additions to the provision for loan losses, which serve to offset the impact on the provision from impairment recognized on the underlying covered loan pool and reversals of previously recognized impairment. The impact on operations of a reduction in the loss share receivable’s accretion rate is associated with an increase in the accretable yield on the underlying loan pool.

The following schedule shows activity in the loss share receivable for the three months ended March 31, 2013 and 2012 (in thousands):


	March 31, 2013			March 31, 2012
Balance, January 1	$	177,844		$	231,085
Discount accretion		—			3,000
Charge-offs, write-downs and other losses		1,272			30,285
External expenses qualifying under loss share agreement		3,490			2,887
Payments received from the FDIC		(29,875	)		(23,600	)

Ending balance	$	152,731		$	243,656

In the following discussion and tables, commercial loans include the commercial non-real estate, construction and land development and commercial real estate loans categories shown in the previous table.

The following schedule shows activity in the allowance for loan losses, by portfolio segment for the three months ended March 31, 2013 and March 31, 2012 as well as the corresponding recorded investment in loans at the end of each period.


Originated loans:	Commercial			Residential mortgages			Consumer			Total
(In thousands)	Three Months Ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	59,149		$	6,406		$	13,219		$	78,774
Charge-offs		(7,027	)		(135	)		(4,075	)		(11,237	)
Recoveries		2,723			487			1,394			4,604
Net provision for loan losses		2,754			(1,502	)		2,103			3,355

Ending balance	$	57,599		$	5,256		$	12,641		$	75,496

Ending balance:
Individually evaluated for impairment	$	2,174		$	—		$	—		$	2,174
Collectively evaluated for impairment	$	55,425		$	5,256		$	12,641		$	73,322
Loans:
Ending balance:	$	5,161,227		$	886,232		$	1,331,477		$	7,378,936
Individually evaluated for impairment	$	56,702		$	1,664		$	—		$	58,366
Collectively evaluated for impairment	$	5,104,525		$	884,568		$	1,331,477		$	7,320,570

Acquired loans:	Commercial			Residential mortgages			Consumer			Total
Allowance for loan losses:
Beginning balance	$	788		$	—		$	—		$	788
Charge-offs		—			—			—			—
Recoveries		—			—			—			—
Net provision for loan losses		(639	)		267			—			(372	)

Ending balance	$	149		$	267		$	—		$	416

Ending balance:
Individually evaluated for impairment	$	149		$	267		$	—		$	416
Collectively evaluated for impairment	$	—		$	—		$	—		$	—
Loans:
Ending balance:	$	2,996,718		$	449,500		$	180,632		$	3,626,850
Individually evaluated for impairment	$	11,354		$	4,228		$	—		$	15,582
Collectively evaluated for impairment	$	2,985,364		$	445,272		$	180,632		$	3,611,268


Covered loans:	Commercial			Residential mortgages			Consumer			Total
Allowance for loan losses:
Beginning balance	$	18,032		$	32,674		$	5,903		$	56,609
Charge-offs		(3,569	)		(24	)		(539	)		(4,132	)
Recoveries		523			24			363			910
Net provision for loan losses (a)		3,544			1,861			1,190			6,595
Increase in FDIC loss share receivable (a)		431			1,246			206			1,883

Ending balance	$	18,961		$	35,781		$	7,123		$	61,865

Ending balance:
Individually evaluated for impairment	$	—		$	—		$	—		$	—
Collectively evaluated for impairment	$	18,961		$	35,781		$	7,123		$	61,865
Loans:
Ending balance:	$	133,564		$	251,787		$	91,625		$	476,976
Individually evaluated for impairment	$	3,828		$	393		$	—		$	4,221
Collectively evaluated for impairment	$	129,736		$	251,394		$	91,625		$	472,755

				Residential
Total loans:	Commercial			mortgages			Consumer			Total
Allowance for loan losses:
Beginning balance	$	77,969		$	39,080		$	19,122		$	136,171
Charge-offs		(10,596	)		(159	)		(4,614	)		(15,369	)
Recoveries		3,246			511			1,757			5,514
Net provision for loan losses (a)		5,659			626			3,293			9,578
Increase in FDIC loss share receivable (a)		431			1,246			206			1,883

Ending balance	$	76,709		$	41,304		$	19,764		$	137,777
Ending balance:
Individually evaluated for impairment	$	2,323		$	267		$	—		$	2,590
Collectively evaluated for impairment	$	74,386		$	41,037		$	19,764		$	135,187
Loans:
Ending balance:	$	8,291,509		$	1,587,519		$	1,603,734		$	11,482,762
Individually evaluated for impairment	$	71,884		$	6,285		$	—		$	78,169
Collectively evaluated for impairment	$	8,219,625		$	1,581,234		$	1,603,734		$	11,404,593

(a)	The $6.6 million provision expense for impairment on certain pools of covered loans is reported net of the benefit attributable to the FDIC loss share agreement as reflected by the related increase in the loss share receivable.


Originated loans:	Commercial			Residential mortgages			Consumer			Total
(In thousands)	Three Months Ended March 31, 2012
Allowance for loan losses:
Beginning balance	$	60,211		$	4,894		$	18,141		$	83,246
Charge-offs		(5,757	)		(791	)		(3,118	)		(9,666	)
Recoveries		1,479			70			1,063			2,612
Net provision for loan losses		9,559			2,986			(4,242	)		8,303

Ending balance	$	65,492		$	7,159		$	11,844		$	84,495

Ending balance:
Individually evaluated for impairment	$	10,634		$	565		$	—		$	11,199
Collectively evaluated for impairment	$	54,858		$	6,594		$	11,844		$	73,296
Loans:
Ending balance:	$	3,702,528		$	564,218		$	1,184,261		$	5,451,007
Individually evaluated for impairment	$	48,338		$	8,084		$	—		$	56,422
Collectively evaluated for impairment	$	3,654,190		$	556,134		$	1,184,261		$	5,394,585

				Residential
Covered loans:	Commercial			mortgages			Consumer			Total
Allowance for loan losses:
Beginning balance	$	18,203		$	9,024		$	14,408		$	41,635
Charge-offs		(16,429	)		—			—			(16,429	)
Recoveries		—			—			—			—
Net provision for loan losses (a)		914			653			145			1,712
Increase in FDIC loss share receivable (a)		15,758			12,397			2,769			30,924

Ending balance	$	18,446		$	22,074		$	17,322		$	57,842

Ending balance:
Individually evaluated for impairment	$	—		$	—		$	—		$	—
Collectively evaluated for impairment	$	18,446		$	22,074		$	17,322		$	57,842
Loans:
Ending balance:	$	224,523		$	275,856		$	133,405		$	633,784
Individually evaluated for impairment	$	—		$	—		$	—		$	—
Collectively evaluated for impairment	$	224,523		$	275,856		$	133,405		$	633,784

				Residential
Total loans:	Commercial			mortgages			Consumer			Total
Allowance for loan losses:
Beginning balance	$	78,414		$	13,918		$	32,549		$	124,881
Charge-offs		(22,186	)		(791	)		(3,118	)		(26,095	)
Recoveries		1,479			70			1,063			2,612
Net provision for loan losses (a)		10,473			3,639			(4,097	)		10,015
Increase in FDIC loss share receivable (a)		15,758			12,397			2,769			30,924

Ending balance	$	83,938		$	29,233		$	29,166		$	142,337

Ending balance:
Individually evaluated for impairment	$	10,634		$	565		$	—		$	11,199
Collectively evaluated for impairment	$	73,304		$	28,668		$	29,166		$	131,138
Loans:
Ending balance:	$	7,992,375		$	1,511,349		$	1,626,549		$	11,130,273
Individually evaluated for impairment	$	48,338		$	8,084		$	—		$	56,422
Collectively evaluated for impairment	$	7,944,037		$	1,503,265		$	1,626,549		$	11,073,851
Ending balance:
Acquired loans (b)	$	4,065,324		$	671,275		$	308,883		$	5,045,482

(a)	The $1.7 million provision expense for impairment on certain pools of covered loans is reported net of the benefit attributable to the FDIC loss share agreement as reflected by the related increase in the loss share receivable.

(b)

In accordance with purchase accounting rules, the Whitney loans were recorded at their fair value at the time of the acquisition, and the prior allowance for loan losses was eliminated. No allowance has been established on these acquired loans since the acquisition date through March 31, 2012. These loans are included in the ending balance of loans collectively evaluated for impairment.

The following table shows the composition of non-accrual loans by portfolio segment and class. Acquired impaired and certain covered loans are considered to be performing due to the application of the accretion method and are excluded from the table. Covered loans accounted for using the cost recovery method do not have an accretable yield and are disclosed below as non-accrual loans. Acquired performing loans that have subsequently been placed on non-accrual status are also disclosed below.


	March 31,		December 31,
	2013		2012
	(In thousands)
Originated loans:
Commercial	$	84,049	$	91,908
Residential mortgages		9,522		7,705
Consumer		4,476		3,815

Total originated loans	$	98,047	$	103,428

Acquired loans:
Commercial	$	20,603	$	16,902
Residential mortgages		11,303		10,551
Consumer		2,176		2,634

Total acquired loans	$	34,082	$	30,087

Covered loans:
Commercial	$	3,828	$	3,707
Residential mortgages		393		393
Consumer		—		—

Total covered loans	$	4,221	$	4,100

Total loans:
Commercial	$	108,480	$	112,517
Residential mortgages		21,218		18,649
Consumer		6,652		6,449

Total loans	$	136,350	$	137,615

The amount of interest that would have been recorded on nonaccrual loans and taken into income for the three months ended March 31, 2013 was approximately $1.9 million. Interest actually received on nonaccrual loans during the three months ended March 31, 2013 was $0.6 million.

Included in nonaccrual loans at March 31, 2013 is $19.8 million in restructured commercial loans. Total troubled debt restructurings (TDRs) as of March 31, 2013 were $34.4 million and $32.2 million at December 31, 2012. Acquired and covered impaired loans modified post-acquisition are not removed from their accounting pool and accounted for as TDRs, even if those loans would otherwise be deemed TDRs.

The table below details TDRs that occurred during the three months ended March 31, 2013 and March 31, 2012 by portfolio segment (dollar amounts in thousands). During these periods, no loan modified as a TDR defaulted within twelve months of its modification date. All troubled debt restructurings are rated substandard and are considered impaired in calculating the allowance for loan losses.


	Three Months Ended
	March 31, 2013						March 31, 2012
Troubled Debt Restructurings:	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Originated loans:
Commercial		2	$	602	$	594		1	$	790	$	790
Residential mortgages		—		—		—		1		672		669
Consumer		—		—		—		—		—		—

Total originated loans		2	$	602	$	594		2	$	1,462	$	1,459

Aquired loans:
Commercial		1	$	512	$	511		—	$	—	$	—
Residential mortgages		1		514		514		—		—		—
Consumer		—		—		—		—		—		—

Total acquired loans		2	$	1,026	$	1,025		—	$	—	$	—

Covered loans:
Commercial		—	$	—	$	—		—	$	—	$	—
Residential mortgages		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

Total covered loans		—	$	—	$	—		—	$	—	$	—

Total loans:
Commercial		3	$	1,114	$	1,105		1	$	790	$	790
Residential mortgages		1		514		514		1		672		669
Consumer		—		—		—		—		—		—

Total loans		4	$	1,628	$	1,619		2	$	1,462	$	1,459

*	Amounts for the three months ended March 31, 2012 were restated to reflect TDRs that occurred during the period rather than the period end balance that was reported in the March 31, 2012 10Q.

The Banks’ loans that are risk rated Substandard and Doubtful are reviewed for impairment. However, for ASC 310-10 analysis used in the ALLL methodology, only loans greater than $1 million are included in the impairment review. This information is the source for the following impaired table. For the credit quality indicator tables presented later in this note, all loans are included. The tables below present impaired loans disaggregated by class at March 31, 2013 and December 31, 2012:


March 31, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Originated loans:
With no related allowance recorded:
Commercial	$	15,082	$	17,774	$	—	$	24,894	$	80
Residential mortgages		1,664		1,693		—		2,193		—
Consumer		—		—		—		—		—

		16,746		19,467		—		27,087		80
With an allowance recorded:
Commercial		41,620		43,502		2,174		38,735		140
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		41,620		43,502		2,174		38,735		140
Total:
Commercial		56,702		61,276		2,174		63,629		220
Residential mortgages		1,664		1,693		—		2,193		—
Consumer		—		—		—		—		—

Total originated loans	$	58,366	$	62,969	$	2,174	$	65,822	$	220

Acquired loans:
With no related allowance recorded:
Commercial		2,223		4,378		—		1,112		—
Residential mortgages		514		514		—		257		—
Consumer		—		—		—		—		—

		2,737		4,892		—		1,369		—
With an allowance recorded:
Commercial		9,131		9,197		149		7,667		—
Residential mortgages		3,714		4,541		267		1,857		—
Consumer		—		—		—		—		—

		12,845		13,738		416		9,524		—
Total:
Commercial		11,354		13,575		149		8,779		—
Residential mortgages		4,228		5,055		267		2,114		—
Consumer		—		—		—		—		—

Total acquired loans	$	15,582	$	18,630	$	416	$	10,893	$	—

Covered loans:
With no related allowance recorded:
Commercial		3,828		10,049		—		3,767		—
Residential mortgages		393		787		—		393		—
Consumer		—		—		—		—		—

		4,221		10,836		—		4,160		—
With an allowance recorded:
Commercial		—		—		—		—		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		—		—		—		—		—
Total:
Commercial		3,828		10,049		—		3,767		—
Residential mortgages		393		787		—		393		—
Consumer		—		—		—		—		—

Total covered loans	$	4,221	$	10,836	$	—	$	4,160	$	—

Total loans:
With no related allowance recorded:
Commercial		21,133		32,201		—		29,773		80
Residential mortgages		2,571		2,994		—		2,843		—
Consumer		—		—		—		—		—

		23,704		35,195		—		32,616		80
With an allowance recorded:
Commercial		50,751		52,699		2,323		46,402		140
Residential mortgages		3,714		4,541		267		1,857		—
Consumer		—		—		—		—		—

		54,465		57,240		2,590		48,259		140
Total:
Commercial		71,884		84,900		2,323		76,175		220
Residential mortgages		6,285		7,535		267		4,700		—
Consumer		—		—		—		—		—

Total loans	$	78,169	$	92,435	$	2,590	$	80,875	$	220


December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Originated loans:
With no related allowance recorded:
Commercial	$	34,705	$	55,101	$	—	$	23,793	$	464
Residential mortgages		2,721		4,874		—		3,255		155
Consumer		—		—		—		—		—

		37,426		59,975		—		27,048		619
With an allowance recorded:
Commercial		35,850		37,917		6,377		41,232		703
Residential mortgages		—		—		—		4,619		—
Consumer		—		—		—		—		—

		35,850		37,917		6,377		45,851		703
Total:
Commercial		70,555		93,018		6,377		65,025		1,167
Residential mortgages		2,721		4,874		—		7,874		155
Consumer		—		—		—		—		—

Total originated loans	$	73,276	$	97,892	$	6,377	$	72,899	$	1,322

Acquired loans:
With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	—	$	—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		—		—		—		—		—
With an allowance recorded:
Commercial		6,202		6,386		788		1,551		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		6,202		6,386		788		1,551		—
Total:
Commercial		6,202		6,386		788		1,551		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

Total acquired loans	$	6,202	$	6,386	$	788	$	1,551	$	—

Covered loans:
With no related allowance recorded:
Commercial	$	3,707	$	10,208	$	—	$	6,008	$	—
Residential mortgages		393		787		—		446		—
Consumer		—		—		—		—		—

		4,100		10,995		—		6,454		—
With an allowance recorded:
Commercial		—		—		—		—		—
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

		—		—		—		—		—
Total:
Commercial		3,707		10,208		—		6,008		—
Residential mortgages		393		787		—		446		—
Consumer		—		—		—		—		—

Total covered loans	$	4,100	$	10,995	$	—	$	6,454	$	—

Total loans:
With no related allowance recorded:
Commercial	$	38,412	$	65,309	$	—	$	29,801	$	464
Residential mortgages		3,114		5,661		—		3,701		155
Consumer		—		—		—		—		—

		41,526		70,970		—		33,502		619
With an allowance recorded:
Commercial		42,052		44,303		7,165		42,783		703
Residential mortgages		—		—		—		4,619		—
Consumer		—		—		—		—		—

		42,052		44,303		7,165		47,402		703
Total:
Commercial		80,464		109,612		7,165		72,584		1,167
Residential mortgages		3,114		5,661		—		8,320		155
Consumer		—		—		—		—		—

Total loans	$	83,578	$	115,273	$	7,165	$	80,904	$	1,322

Covered loans and loans acquired with existing credit impairment with an accretable yield are considered to be current in the following delinquency table. Certain covered loans accounted for using the cost recovery method are disclosed according to their contractual payment status below. The following table presents the age analysis of past due loans at March 31, 2013 and December 31, 2012:


March 31, 2013	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and accruing
	(In thousands)
Originated loans:
Commercial	$	20,750	$	7,017	$	43,808	$	71,575	$	5,089,652	$	5,161,227	$	4,854
Residential mortgages		10,991		1,234		3,666		15,891		870,341		886,232		—
Consumer		3,284		1,486		3,654		8,424		1,323,053		1,331,477		1,259

Total	$	35,025	$	9,737	$	51,128	$	95,890	$	7,283,046	$	7,378,936	$	6,113

Acquired loans:
Commercial	$	7,006	$	4,082	$	6,174	$	17,262	$	2,979,456	$	2,996,718	$	1,649
Residential mortgages		6,216		1,161		6,956		14,333		435,167		449,500		314
Consumer		519		371		1,569		2,459		178,173		180,632		—

Total	$	13,741	$	5,614	$	14,699	$	34,054	$	3,592,796	$	3,626,850	$	1,963

Covered loans:
Commercial	$	—	$	—	$	3,828	$	3,828	$	129,736	$	133,564	$	—
Residential mortgages		—		—		393		393		251,394		251,787		—
Consumer		—		—		—		—		91,625		91,625		—

Total	$	—	$	—	$	4,221	$	4,221	$	472,755	$	476,976	$	—

Total loans:
Commercial	$	27,756	$	11,099	$	53,810	$	92,665	$	8,198,844	$	8,291,509	$	6,503
Residential mortgages		17,207		2,395		11,015		30,617		1,556,902		1,587,519		314
Consumer		3,803		1,857		5,223		10,883		1,592,851		1,603,734		1,259

Total	$	48,766	$	15,351	$	70,048	$	134,165	$	11,348,597	$	11,482,762	$	8,076


December 31, 2012	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and accruing
	(In thousands)
Originated loans:
Commercial	$	24,398	$	16,508	$	46,355	$	87,261	$	4,840,199	$	4,927,460	$	5,262
Residential mortgages		11,500		3,303		4,100		18,903		809,082		827,985		—
Consumer		10,348		2,150		4,231		16,729		1,335,047		1,351,776		2,474

Total	$	46,246	$	21,961	$	54,686	$	122,893	$	6,984,328	$	7,107,221	$	7,736

Acquired loans:
Commercial	$	28,791	$	4,666	$	15,774	$	49,231	$	3,216,109	$	3,265,340	$	4,354
Residential mortgages		9,641		1,290		8,996		19,927		466,517		486,444		1,106
Consumer		1,282		430		2,170		3,882		199,092		202,974		47

Total	$	39,714	$	6,386	$	26,940	$	73,040	$	3,881,718	$	3,954,758	$	5,507

Covered loans:
Commercial	$	—	$	—	$	3,707	$	3,707	$	149,181	$	152,888	$	—
Residential mortgages		—		—		393		393		263,122		263,515		—
Consumer		—		—		—		—		99,420		99,420		—

Total	$	—	$	—	$	4,100	$	4,100	$	511,723	$	515,823	$	—

Total loans:
Commercial	$	53,189	$	21,174	$	65,836	$	140,199	$	8,205,489	$	8,345,688	$	9,616
Residential mortgages		21,141		4,593		13,489		39,223		1,538,721		1,577,944		1,106
Consumer		11,630		2,580		6,401		20,611		1,633,559		1,654,170		2,521

Total	$	85,960	$	28,347	$	85,726	$	200,033	$	11,377,769	$	11,577,802	$	13,243

The following table presents the credit quality indicators of the Company’s various classes of loans at March 31, 2013 and December 31, 2012.

Commercial Credit Exposure

Credit Risk Profile by Internally Assigned Grade


	March 31, 2013								December 31, 2012
	Originated		Acquired		Covered		Total		Originated		Acquired		Covered		Total
	(In thousands)								(In thousands)
Grade:
Pass	$	4,754,597	$	2,756,779	$	10,108	$	7,521,484	$	4,521,932	$	3,011,320	$	21,881	$	7,555,133
Pass-Watch		95,595		68,070		21,277		184,942		82,605		71,405		21,117		175,127
Special Mention		80,776		38,730		6,218		125,724		83,985		39,631		7,433		131,049
Substandard		230,100		132,958		45,178		408,236		238,486		142,618		49,041		430,145
Doubtful		159		181		50,783		51,123		452		366		53,416		54,234
Loss		—		—		—		—		—		—		—		—

Total	$	5,161,227	$	2,996,718	$	133,564	$	8,291,509	$	4,927,460	$	3,265,340	$	152,888	$	8,345,688

Residential Mortgage Credit Exposure Credit Risk Profile by Internally Assigned Grade
	March 31, 2013								December 31, 2012
	Originated		Acquired		Covered		Total		Originated		Acquired		Covered		Total
	(In thousands)								(In thousands)
Grade:
Pass	$	860,956	$	410,478	$	126,677	$	1,398,111	$	804,007	$	444,571	$	124,605	$	1,373,183
Pass-Watch		3,719		3,913		14,453		22,085		3,794		5,096		15,420		24,310
Special Mention		693		1,953		3,034		5,680		701		5,251		3,195		9,147
Substandard		20,864		33,115		86,894		140,873		19,483		31,478		95,137		146,098
Doubtful		—		41		20,729		20,770		—		48		25,158		25,206
Loss		—		—		—		—		—		—		—		—

Total	$	886,232	$	449,500	$	251,787	$	1,587,519	$	827,985	$	486,444	$	263,515	$	1,577,944

Consumer Credit Exposure Credit Risk Profile Based on Payment Activity
	March 31, 2013								December 31, 2012
	Originated		Acquired		Covered		Total		Originated		Acquired		Covered		Total
	(In thousands)								(In thousands)
Performing	$	1,325,742	$	178,456	$	91,625	$	1,595,823	$	1,345,487	$	200,292	$	99,420	$	1,645,199
Nonperforming		5,735		2,176		—		7,911		6,289		2,682		—		8,971

Total	$	1,331,477	$	180,632	$	91,625	$	1,603,734	$	1,351,776	$	202,974	$	99,420	$	1,654,170

Loan review uses a risk-focused continuous monitoring program that provides for an independent, objective and timely review of credit risk within the company.

Below are the definitions of the Company’s internally assigned grades:

Commercial:

•

Pass - loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.

•

Pass - Watch - Credits in this category are of sufficient risk to cause concern. This category is reserved for credits that display negative performance trends. The “Watch” grade should be regarded as a transition category.

•

Special Mention - These credits exhibit some signs of “Watch,” but to a greater magnitude. These credits constitute an undue and unwarranted credit risk, but not to a point of justifying a classification of “Substandard.” They have weaknesses that, if not checked or corrected, weaken the asset or inadequately protect the bank.

•

Substandard - These credits constitute an unacceptable risk to the bank. They have recognized credit weaknesses that jeopardize the repayment of the debt. Repayment sources are marginal or unclear.

•

Doubtful - A Doubtful credit has all of the weaknesses inherent in one classified “Substandard” with the added characteristic that weaknesses make collection in full highly questionable or improbable.

•

Loss - Credits classified as Loss are considered uncollectable and are charged off promptly once so classified.

Consumer:

•

Performing – Loans on which payments of principal and interest are less than 90 days past due.

•

Non-performing – Loans on which payments of principal and interest are more than 90 days past due. All loans rated on non-accrual status are also reported as non-performing.

Changes in the carrying amount of acquired impaired loans and accretable yield are presented in the following table for the three months ended March 31, 2013 and the year ended December 31, 2012:


	March 31, 2013												December 31, 2012
	Covered						Non-covered						Covered						Non-covered
	Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield
(In thousands)
Balance at beginning of period	$	515,823		$	115,594		$	141,201		$	203,186		$	671,443		$	153,137		$	339,452		$	130,691
Additions		—			—			—			—			—			—			—			—
Payments received, net		(48,448	)		(72	)		(17,795	)		(13,572	)		(200,719	)		—			(250,338	)		—
Accretion		9,601			(9,601	)		8,675			(8,675	)		45,099			(45,099	)		52,087			(52,087	)
Increase (decrease) in expected cash flows based on actual cash flow and changes in cash flow assumptions		—			4,896			—			7,723			—			(19,326	)		—			23,688
Net transfers from (to) nonaccretable difference to accretable yield		—			10,952			—			(10,098	)		—			26,882			—			100,894

Balance at end of period	$	476,976		$	121,769		$	132,081		$	178,564		$	515,823		$	115,594		$	141,201		$	203,186