10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________

FORM 10-Q

____________________________________________________

xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2014

or

¨Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-16715

____________________________________________________

First Citizens BancShares, Inc.

(Exact name of Registrant as specified in its charter)

____________________________________________________

Delaware	56-1528994
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
4300 Six Forks Road, Raleigh, North Carolina	27609
(Address of principle executive offices)	(Zip code)

(919) 716-7000

(Registrant’s telephone number, including area code)

____________________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.    Yes  x   No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the Registrant was required to submit and post such files)    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of ‘accelerated filer’ and ‘large accelerated filer’ in Rule 12b-2 of the Exchange Act:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Class A Common Stock—$1 Par Value—8,586,058 shares

Class B Common Stock—$1 Par Value—1,032,883 shares

(Number of shares outstanding, by class, as of August 8, 2014)

INDEX

		Page(s)
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets at June 30, 2014 and December 31, 2013	3
	Consolidated Statements of Income for the three- and six-month periods ended June 30, 2014 and June 30, 2013	4
	Consolidated Statements of Comprehensive Income for the three- and six-month periods ended June 30, 2014 and June 30, 2013	5
	Consolidated Statements of Changes in Shareholders’ Equity for the six-month periods ended June 30, 2014 and June 30, 2013	6
	Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2014 and June 30, 2013	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	62
Item 4.	Controls and Procedures	62
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 6.	Exhibits	67

2

PART I

Item 1. Financial Statements

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, unaudited)	June 30, 2014			December 31, 2013
Assets
Cash and due from banks	$	566,952		$	533,599
Overnight investments	1,118,474			859,324
Investment securities available for sale	5,538,166			5,387,703
Investment securities held to maturity	693			907
Loans held for sale	49,851			47,271
Loans and leases:
Acquired	1,109,933			1,029,426
Originated	12,415,023			12,104,298
Allowance for loan and lease losses	(206,246		)	(233,394		)
Net loans and leases	13,318,710			12,900,330
Premises and equipment	883,303			876,522
Other real estate owned:
Covered under loss share agreements	40,136			47,081
Not covered under loss share agreements	35,151			36,898
Income earned not collected	49,019			48,390
FDIC loss share receivable	49,959			93,397
Goodwill	127,140			102,625
Other intangible assets	3,821			1,247
Other assets	281,465			263,797
Total assets	$	22,062,840		$	21,199,091
Liabilities
Deposits:
Noninterest-bearing	$	5,775,322		$	5,241,817
Interest-bearing	12,781,436			12,632,249
Total deposits	18,556,758			17,874,066
Short-term borrowings	788,540			511,418
Long-term obligations	314,529			510,769
FDIC loss share payable	114,281			109,378
Other liabilities	139,587			116,785
Total liabilities	19,913,695			19,122,416
Shareholders’ Equity
Common stock:
Class A - $1 par value (11,000,000 shares authorized; 8,586,058 shares issued and outstanding at June 30, 2014 and December 31, 2013)	8,586			8,586
Class B - $1 par value (2,000,000 shares authorized; 1,032,883 shares issued and outstanding at June 30, 2014 and December 31, 2013)	1,033			1,033
Surplus	143,766			143,766
Retained earnings	1,991,703			1,948,558
Accumulated other comprehensive income (loss)	4,057			(25,268		)
Total shareholders’ equity	2,149,145			2,076,675
Total liabilities and shareholders’ equity	$	22,062,840		$	21,199,091

See accompanying Notes to Consolidated Financial Statements.

3

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Income

	Three months ended June 30						Six months ended June 30
(Dollars in thousands, except per share data, unaudited)	2014			2013			2014			2013
Interest income
Loans and leases	$	164,108		$	185,151		$	325,142		$	396,914
Investment securities interest and dividend income	12,447			8,119			24,195			16,603
Overnight investments	756			656			1,368			1,013
Total interest income	177,311			193,926			350,705			414,530
Interest expense
Deposits	6,006			8,997			12,831			19,310
Short-term borrowings	1,551			680			2,136			1,384
Long-term obligations	4,056			4,721			9,109			9,426
Total interest expense	11,613			14,398			24,076			30,120
Net interest income	165,698			179,528			326,629			384,410
Provision (credit) for loan and lease losses	(7,299		)	(13,242		)	(9,202		)	(31,848		)
Net interest income after provision (credit) for loan and lease losses	172,997			192,770			335,831			416,258
Noninterest income
Cardholder services	13,257			12,026			25,089			23,097
Merchant services	15,035			15,245			28,556			27,731
Service charges on deposit accounts	15,265			14,883			29,705			29,882
Wealth management services	15,815			15,097			30,695			29,612
Fees from processing services	5,682			5,051			10,543			10,670
Other service charges and fees	4,250			3,966			8,194			7,732
Mortgage income	1,210			3,669			2,165			7,457
Insurance commissions	2,253			2,394			5,540			5,374
ATM income	1,260			1,314			2,462			2,482
Adjustments to FDIC loss share receivable	(15,295		)	(14,439		)	(27,644		)	(38,492		)
Other	6,650			5,789			11,258			16,963
Total noninterest income	65,382			64,995			126,563			122,508
Noninterest expense
Salaries and wages	82,683			75,802			162,557			151,921
Employee benefits	19,772			23,228			39,872			48,247
Occupancy expense	20,937			18,464			41,362			37,273
Equipment expense	19,686			18,698			38,477			37,644
FDIC insurance expense	2,640			2,423			5,276			5,089
Foreclosure-related expenses	3,858			3,467			9,268			7,772
Other	49,444			46,485			93,238			94,976
Total noninterest expense	199,020			188,567			390,050			382,922
Income before income taxes	39,359			69,198			72,344			155,844
Provision for income taxes	12,809			25,292			23,428			56,353
Net income	$	26,550		$	43,906		$	48,916		$	99,491
Average shares outstanding	9,618,941			9,618,941			9,618,941			9,618,963
Net income per share	$	2.76		$	4.56		$	5.09		$	10.34

See accompanying Notes to Consolidated Financial Statements.

4

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

	Three months ended June 30						Six months ended June 30
(Dollars in thousands, unaudited)	2014			2013			2014			2013
Net income	$	26,550		$	43,906		$	48,916		$	99,491
Other comprehensive income (loss)
Unrealized gains (losses) on securities:
Change in unrealized securities gains (losses) arising during period	31,550			(38,992		)	43,449			(40,468		)
Tax effect	(12,225		)	15,269			(16,868		)	15,834
Total change in unrealized gains (losses) on securities, net of tax	19,325			(23,723		)	26,581			(24,634		)
Change in fair value of cash flow hedges:
Change in unrecognized gain on cash flow hedges	568			1,388			1,287			2,202
Tax effect	(218		)	(548		)	(496		)	(869		)
Total change in unrecognized gain on cash flow hedges, net of tax	350			840			791			1,333
Change in pension obligation:
Reclassification adjustment for gains included in income before income taxes	1,598			4,294			3,197			8,598
Tax effect	(622		)	(1,682		)	(1,244		)	(3,367		)
Total change in pension obligation, net of tax	976			2,612			1,953			5,231
Other comprehensive income (loss)	20,651			(20,271		)	29,325			(18,070		)
Total comprehensive income	$	47,201		$	23,635		$	78,241		$	81,421

See accompanying Notes to Consolidated Financial Statements.

5

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in thousands, unaudited)	Class A Common Stock			Class B Common Stock		Surplus		Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders’ Equity
Balance at December 31, 2012	$	8,588		$	1,033	$	143,766	$	1,792,726		$	(82,106	)	$	1,864,007
Net income	—			—		—		99,491			—			99,491
Other comprehensive loss, net of tax	—			—		—		—			(18,070		)	(18,070		)
Repurchase of 1,973 shares of Class A common stock	(2		)	—		—		(319		)	—			(321		)
Cash dividends ($0.60 per share)	—			—		—		(5,777		)	—			(5,777		)
Balance at June 30, 2013	$	8,586		$	1,033	$	143,766	$	1,886,121		$	(100,176	)	$	1,939,330
Balance at December 31, 2013	$	8,586		$	1,033	$	143,766	$	1,948,558		$	(25,268	)	$	2,076,675
Net income	—			—		—		48,916			—			48,916
Other comprehensive income, net of tax	—			—		—		—			29,325			29,325
Cash dividends ($0.60 per share)	—			—		—		(5,771		)	—			(5,771		)
Balance at June 30, 2014	$	8,586		$	1,033	$	143,766	$	1,991,703		$	4,057		$	2,149,145

See accompanying Notes to Consolidated Financial Statements.

6

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Six months ended June 30
(Dollars in thousands, unaudited)	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	48,916		99,491
Adjustments to reconcile net income to cash provided by operating activities:
Provision (credit) for loan and lease losses	(9,202		)	(31,848		)
Deferred tax (benefit) expense	(2,744		)	2,360
Change in current taxes payable	5,973			(20,649		)
Depreciation	35,455			35,545
Change in accrued interest payable	560			(145		)
Change in income earned not collected	(629		)	2,099
Gain on sale of processing services, net	—			(4,085		)
Origination of loans held for sale	(123,144		)	(223,128		)
Proceeds from sale of loans held for sale	123,967			254,087
Gain on sale of loans	(2,220		)	(7,123		)
Net writedowns/losses on other real estate	6,993			1,480
Net amortization of premiums and discounts	(18,172		)	(74,175		)
FDIC receivable for loss share agreements	17,121			20,464
FDIC payable for loss share agreements	4,903			95
Net change in other assets	(31,249		)	68,587
Net change in other liabilities	35,033			21,365
Net cash provided by operating activities	91,561			144,420
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans outstanding	(57,271		)	325,057
Purchases of investment securities available for sale	(1,409,878		)	(1,375,766		)
Proceeds from maturities/calls of investment securities held to maturity	214			212
Proceeds from maturities/calls of investment securities available for sale	1,529,687			1,365,287
Net change in overnight investments	(259,150		)	(596,745		)
Cash (paid to) received from the FDIC for loss share agreements	(4,350		)	46,534
Proceeds from sale of other real estate	38,370			80,010
Additions to premises and equipment	(39,550		)	(26,696		)
Business acquisition, net of cash acquired	18,194			—
Net cash used by investing activities	(183,734		)	(182,107		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in time deposits	(219,297		)	(390,329		)
Net change in demand and other interest-bearing deposits	270,118			322,319
Net change in short-term borrowings	81,716			13,432
Repayment of long-term obligations	(1,240		)	(1,608		)
Repurchase of common stock	—			(321		)
Cash dividends paid	(5,771		)	(2,891		)
Net cash provided (used) by financing activities	125,526			(59,398		)
Change in cash and due from banks	33,353			(97,085		)
Cash and due from banks at beginning of period	533,599			639,730
Cash and due from banks at end of period	$	566,952		$	542,645
CASH PAYMENTS FOR:
Interest	$	23,516		$	30,265
Income taxes	47,962			75,917
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to other real estate	25,080			57,175
Dividends declared but not paid	2,886			2,886
Reclassification of long-term obligations to short-term borrowings	195,000			—

See accompanying Notes to Consolidated Financial Statements.

7

First Citizens BancShares, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

NOTE A - ACCOUNTING POLICIES AND BASIS OF PRESENTATION

First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina.

General

These consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes included in BancShares' Annual Report on Form 10-K for the year ended December 31, 2013.

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported shareholders' equity or net income.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and different assumptions in the application of these policies could result in material changes in BancShares' consolidated financial position, the consolidated results of its operations or related disclosures. Material estimates that are particularly susceptible to significant change include the determination of the allowance for loan and lease losses; determination of the fair value of financial instruments; pension plan assumptions; cash flow estimates on acquired loans; the receivable from and payable to the Federal Deposit Insurance Corporation (FDIC) for loss share agreements; purchase accounting-related adjustments; and income tax assets, liabilities and expense.

Recent Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period)”

This ASU requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. A reporting entity should apply FASB ASC Topic 718, Compensation—Stock Compensation, to awards with performance conditions that affect vesting.

The guidance in this ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. This update may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. BancShares will adopt the standard effective the first quarter of 2016. Since BancShares does not currently have any share-based stock compensation plans, adoption of Topic 718 is not projected to have an impact on BancShares' consolidated financial position or consolidated results of operations.

8

FASB ASU 2014-11, “Transfers and Servicing (Topic 860)”

This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. The ASU requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The ASU also requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.

The accounting changes in this ASU are effective for fiscal years beginning after December 15, 2014. In addition, the disclosure for certain transactions accounted for as a sale is effective for the fiscal period beginning after December 15, 2014, the disclosure for transactions accounted for as secured borrowings is required to be presented for fiscal periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted. We will adopt the guidance effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”

In May 2014, the FASB issued a standard on the recognition of revenue from contracts with customers with the core principle being for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also results in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.

The guidance in this ASU is effective for fiscal periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Early adoption is not permitted. We are currently evaluating the impact of the new standard and we will adopt during the first quarter of 2017.

FASB ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”

This ASU limits presentation of discontinued operations and disclosure of disposals to disposals representing a strategic shift in operations in which the strategic shifts should have a major effect on the organization's operations and financial results. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting.

The new standard is effective in the first quarter of 2015 for public companies with a calendar year end. We will adopt the standard effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40)”

This ASU clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.

The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. BancShares will adopt the guidance effective in the first quarter of 2015, and is currently evaluating the impact of the new standard on the financial statement disclosures. BancShares does not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

9

FASB ASU 2014-01 "Investments - Equity Method and Joint Ventures (Topic 323) - Accounting for Investments in Qualified Affordable Housing Projects”

This ASU permits an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit).

For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323.

The decision to apply the proportional amortization method of accounting will be applied consistently to all qualifying affordable housing project investments rather than a decision to be applied to individual investments.

The amendments in this ASU should be applied retrospectively to all periods presented and are effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.

BancShares is currently evaluating the impact of the new standard and is targeting a December 31, 2014, adoption and implementation for qualifying affordable housing project investments.

FASB ASU 2013-11, “Income Taxes (Topic 740)”

This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require BancShares to use, and BancShares does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date.

The provisions of this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. BancShares adopted the guidance effective in the first quarter of 2014. The initial adoption had no effect on our consolidated financial position or consolidated results of operations.

FASB ASU 2013-04, “Liabilities”

This ASU provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in GAAP.

The amendments in this update are effective for fiscal years beginning after December 31, 2013. BancShares adopted the guidance effective first quarter of 2014. The initial adoption did not have any effect on our consolidated financial position or consolidated results of operations.

NOTE B - BUSINESS COMBINATIONS

Merger Agreement with First Citizens Bancorporation, Inc.

On June 10, 2014, BancShares and First Citizens Bancorporation, Inc. (Bancorporation) entered into an Agreement and Plan of Merger (the Merger Agreement). Pursuant to the Merger Agreement, Bancorporation will merge with and into BancShares, whereupon the separate corporate existence of Bancorporation will cease and BancShares will continue (the Merger). The Merger is expected to be completed during the fourth quarter of 2014. Sometime thereafter, First Citizens Bank and Trust Company, Inc. (FCB-SC), a wholly-owned subsidiary of Bancorporation, will merge with and into FCB, whereupon the separate corporate existence of FCB-SC will cease and FCB will continue.

Under the terms of the Merger Agreement, each share of Bancorporation common stock will be converted into the right to receive 4.00 shares of BancShares' Class A common stock and $50.00 cash, unless the holder elects for each share to be converted into the right to receive 3.58 shares of BancShares' Class A common stock and 0.42 shares of BancShares' Class B common stock.

10

Consummation of the Merger is subject to customary conditions, including, among others, approval of the shareholders of each company and receipt of regulatory approvals.

The Merger Agreement includes certain termination rights for both BancShares and Bancorporation and under specified circumstances Bancorporation may be required to pay BancShares a termination fee equal to $6.5 million, $10.0 million or $22.6 million, depending on the circumstances of the termination.

1st Financial Services Corporation Merger

On January 1, 2014, FCB completed its merger with 1st Financial Services Corporation (1st Financial) of Hendersonville, NC and its wholly-owned subsidiary, Mountain 1st Bank & Trust Company (Mountain 1st). The merger allowed FCB to expand its presence in Western North Carolina. Mountain 1st had twelve branches located in Asheville, Brevard, Columbus, Etowah, Fletcher, Forest City, Hendersonville, Hickory, Marion, Shelby and Waynesville. FCB requested and received approval from the North Carolina Commissioner of Banks and the FDIC to close seven Mountain 1st branches due to their proximity to legacy FCB branches. The branches in Asheville, Brevard, Fletcher, Forest City, Hendersonville, Hickory and Marion were closed in May. All customer relationships assigned to those branches were transferred to the nearest FCB branch.

FCB paid $10.0 million to acquire 1st Financial, including payments of $8.0 million to the U.S. Treasury to acquire and subsequently retire 1st Financial's Troubled Asset Relief Program (TARP) obligation and $2.0 million paid to the shareholders of 1st Financial. As a result of the merger, FCB recorded $24.5 million in goodwill and $3.8 million in core deposit intangibles.

The 1st Financial transaction was accounted for under the acquisition method of accounting, and the purchased assets, assumed liabilities and identifiable intangible assets were recorded at their estimated fair values as of the acquisition date. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. During the second quarter of 2014, no adjustments were deemed necessary.

The following table provides the carrying value of acquired assets and assumed liabilities, as recorded by 1st Financial, the fair value adjustments calculated at the time of the merger and the resulting fair value recorded by FCB.

	January 1, 2014
(Dollars in thousands)	As recorded by 1st Financial			Fair value adjustments			As recorded by FCB
Assets
Cash and cash equivalents	$	28,194		$	—		$	28,194
Investment securities	246,890			(9,452		)	237,438
Loans held for sale	1,183			—			1,183
Restricted equity securities	3,105			671			3,776
Loans	338,170			(21,843		)	316,327
Less: allowance for loan losses	(7,796		)	7,796			—
Premises and equipment	3,871			(1,185		)	2,686
Other real estate owned	12,896			(1,305		)	11,591
Intangible asset	—			3,780			3,780
Other assets	16,811			(465		)	16,346
Total assets acquired	$	643,324		$	(22,003	)	$	621,321
Liabilities
Deposits:
Noninterest-bearing	$	152,444		$	—		$	152,444
Interest-bearing	477,881			1,546			479,427
Total deposits	630,325			1,546			631,871
Short-term borrowings	406			—			406
Other liabilities	3,392			167			3,559
Total liabilities assumed	$	634,123		$	1,713		635,836
Fair value of net liabilities assumed							14,515
Cash paid to shareholders							2,000
Cash paid to acquire TARP securities							8,000
Goodwill recorded for 1st Financial							$	24,515

11

Goodwill recorded for 1st Financial represents future revenues to be derived from the existing customer base, including efficiencies that will result from combining operations and other non-identifiable intangible assets. The 1st Financial transaction is a taxable asset acquisition, and goodwill resulting from the transaction is deductible for income tax purposes.

Merger costs related to the 1st Financial transaction are estimated to be between $5.5 million and $6.0 million. Loan related interest income generated from 1st Financial was approximately $4.2 million for the second quarter of 2014 and $8.6 million for the year to date.

All loans acquired with the 1st Financial transaction are accounted for under the expected cash flow method (ASC 310-30).

For loans acquired from 1st Financial, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the merger date were:

(Dollars in thousands)	January 1, 2014
Contractually required payments	$	414,233
Cash flows expected to be collected	400,622
Fair value at acquisition date	316,327

The recorded fair values of loans acquired in the 1st Financial transaction as of the merger date were as follows:

(Dollars in thousands)	January 1, 2014
Commercial:
Construction and land development	$	41,516
Commercial mortgage	123,925
Other commercial real estate	6,698
Commercial and industrial	29,126
Total commercial loans	201,265
Noncommercial:
Residential mortgage	113,177
Consumer	1,885
Total noncommercial loans	115,062
Total loans acquired from 1st Financial	$	316,327

12

NOTE C - INVESTMENTS

The amortized cost and fair value of investment securities classified as available for sale and held to maturity at June 30, 2014 and December 31, 2013, are as follows:

	June 30, 2014
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,623,564	$	2,084	$	18	$	1,625,630
Government agency	1,281,724		2,020		178		1,283,566
Mortgage-backed securities	2,605,333		8,251		17,298		2,596,286
Equity securities	543		31,955		—		32,498
Municipal securities	185		1		—		186
Total investment securities available for sale	$	5,511,349	$	44,311	$	17,494	$	5,538,166
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury	$	373,223	$	259	$	45	$	373,437
Government agency	2,543,223		1,798		792		2,544,229
Mortgage-backed securities	2,486,297		4,526		43,950		2,446,873
Equity securities	543		21,604		—		22,147
Municipal securities	186		1		—		187
Other	863		—		33		830
Total investment securities available for sale	$	5,404,335	$	28,188	$	44,820	$	5,387,703
	June 30, 2014
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities held to maturity
Mortgage-backed securities	$	693	$	36	$	—	$	729
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Mortgage-backed securities	$	907	$	67	$	—	$	974

A single subordinated debt security, previously classified within other, was called during the second quarter of 2014.

Investments in mortgage-backed securities primarily represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation.

13

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	683,598	$	684,265	$	839,956	$	840,883
One through five years	2,221,875		2,225,117		2,077,539		2,077,800
Mortgage-backed securities	2,605,333		2,596,286		2,486,297		2,446,873
Equity securities	543		32,498		543		22,147
Total investment securities available for sale	$	5,511,349	$	5,538,166	$	5,404,335	$	5,387,703
Investment securities held to maturity
Mortgage-backed securities held to maturity	$	693	$	729	$	907	$	974

There were no realized securities gains (losses) during any period presented.

The following table provides information regarding securities with unrealized losses as of June 30, 2014 and December 31, 2013.

	June 30, 2014
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	135,712	$	18	$	—	$	—	$	135,712	$	18
Government agency	242,563		178		—		—		242,563		178
Mortgage-backed securities	728,997		2,163		1,109,829		15,135		1,838,826		17,298
Total	$	1,107,272	$	2,359	$	1,109,829	$	15,135	$	2,217,101	$	17,494
	December 31, 2013
	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	102,105	$	45	$	—	$	—	$	102,105	$	45
Government agency	780,552		761		29,969		31		810,521		792
Mortgage-backed securities	2,221,213		42,876		26,861		1,074		2,248,074		43,950
Other	830		33		—		—		830		33
Total	$	3,104,700	$	43,715	$	56,830	$	1,105	$	3,161,530	$	44,820

Investment securities with an aggregate fair value of $1.11 billion and $56.8 million have had continuous unrealized losses for more than 12 months as of June 30, 2014 and December 31, 2013, with an aggregate unrealized loss of $15.1 million and $1.1 million, respectively. As of June 30, 2014, all 104 of these investments are U.S. government agency and government sponsored enterprise-issued mortgage-backed securities. None of the unrealized losses identified as of June 30, 2014 or December 31, 2013 relate to the marketability of the securities or the issuer’s ability to honor redemption obligations. For all periods presented, BancShares had the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Investment securities having an aggregate carrying value of $2.85 billion at June 30, 2014 and $2.75 billion at December 31, 2013 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

14

NOTE D - LOANS AND LEASES

BancShares reports acquired and originated loan portfolios separately, and each portfolio is further divided into commercial and non-commercial based on the type of borrower, purpose, collateral, and/or our underlying credit management processes. Additionally, loans are assigned to loan classes, which further disaggregate loans based upon common risk characteristics.

Commercial –Commercial loans include construction and land development, mortgage, other commercial real estate, commercial and industrial, lease financing and other.

Construction and land development – Construction and land development consists of loans to finance land for development, investment, and use in a commercial business enterprise, multifamily apartments and other commercial building that may be owner-occupied or income generating investments for the owner.

Commercial mortgage – Commercial mortgage consists of loans to purchase or refinance owner-occupied nonresidential and investment properties. Investment properties include office buildings and other facilities that are rented or leased to unrelated parties.

Other commercial real estate – Other commercial real estate consists of loans secured by farmland (including farm residential and other improvements) and multifamily (5 or more) residential properties.

Commercial and industrial – Commercial and industrial loans consists of lines of credit to finance corporate credit cards, accounts receivable, inventory and other general business purposes.

Lease financing – Lease financing consists solely of lease financing agreements.

Other – Other loans consists of all other commercial loans not classified in one of the preceding classes. These typically include loans to non-profit organizations such as churches, hospitals, educational and charitable organizations.

Noncommercial – Noncommercial loans consist of residential and revolving mortgage, construction and land development, and consumer.

Residential mortgage – Residential real estate consists of loans to purchase, construct or refinance the borrower's primary dwelling, second residence or vacation home.

Revolving mortgage – Revolving mortgage consists of home equity lines of credit that are secured by first or second liens on the borrower's primary residence.

Construction and land development – Construction and land development consists of loans to construct the borrower's primary or secondary residence or vacant land upon which the owner intends to construct a dwelling at a future date.

Consumer – Consumer loans consist of installment loans to finance purchases of vehicles, unsecured home improvements and revolving lines of credit that can be secured or unsecured, including personal credit cards.

15

Loans and leases outstanding include the following at June 30, 2014 and December 31, 2013:

(Dollars in thousands)	June 30, 2014		December 31, 2013
Acquired loans
Commercial:
Construction and land development	$	80,827	$	78,915
Commercial mortgage	637,481		642,891
Other commercial real estate	34,688		41,381
Commercial and industrial	33,851		17,254
Other	1,270		866
Total commercial loans	788,117		781,307
Noncommercial:
Residential mortgage	270,688		213,851
Revolving mortgage	20,129		30,834
Construction and land development	28,759		2,583
Consumer	2,240		851
Total noncommercial loans	321,816		248,119
Total acquired loans	1,109,933		1,029,426
Originated loans and leases:
Commercial:
Construction and land development	342,021		319,847
Commercial mortgage	6,367,096		6,362,490
Other commercial real estate	178,899		178,754
Commercial and industrial	1,292,213		1,081,158
Lease financing	413,422		381,763
Other	131,051		175,336
Total commercial loans	8,724,702		8,499,348
Noncommercial:
Residential mortgage	1,071,089		982,421
Revolving mortgage	2,122,675		2,113,285
Construction and land development	119,420		122,792
Consumer	377,137		386,452
Total noncommercial loans	3,690,321		3,604,950
Total originated loans and leases	12,415,023		12,104,298
Total loans and leases	$	13,524,956	$	13,133,724

At June 30, 2014, $816.3 million in acquired loans were covered under loss share agreements, compared to $1.03 billion at December 31, 2013. The remaining acquired loans as of June 30, 2014 are primarily from the 1st Financial merger. The loss share protection will expire for non-single family residential loans acquired from Temecula Valley Bank (TVB) and Venture Bank (VB) during the third quarter of 2014. The acquired loan balance at June 30, 2014 for the expiring agreements from TVB and VB is $195.4 million and $73.3 million, respectively.

At June 30, 2014, $2.65 billion in originated loans were pledged to secure debt obligations, compared to $2.56 billion at December 31, 2013.

Credit quality indicators

Loans and leases are monitored for credit quality on a recurring basis. The credit quality indicators used are dependent on the portfolio segment to which the loan relates. Originated commercial loans and leases, originated noncommercial loans and leases and acquired loans have different credit quality indicators as a result of the unique characteristics relative to each loan segment being evaluated.

The credit quality indicators for commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Each commercial loan is evaluated annually with more frequent evaluation of more severely criticized loans or leases. The credit quality indicators for noncommercial loans are based on the delinquency status of the borrower. As the

16

borrower becomes more delinquent, the likelihood of loss increases. Acquired loans are bifurcated into commercial and noncommercial segments and credit quality indicators are assigned in the same manner as the originated portfolio. The indicators represent the rating for loans or leases as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass – A pass rated asset is one in which repayment is considered highly likely and there are no observable weaknesses in the asset. Such an asset does not meet any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full charge-off even though partial recovery may be effected in the future.

Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of originated, ungraded loans at June 30, 2014 and December 31, 2013 relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage loans and other commercial real estate loans. As of December 31, 2013, ungraded loans also included tobacco buyout loans classified as commercial and industrial loans. Final payment from the Commodity Credit Corporation was received during January 2014 for tobacco buyout loans held by FCB. As of June 30, 2014, ungraded also includes $94.7 million of loans resulting from the 1st Financial merger.

17

Originated loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Originated commercial loans and leases
Grade:	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	330,946	$	6,102,219	$	175,413	$	1,178,124	$	405,495	$	130,997	$	8,323,194
Special mention	7,901		121,824		1,370		25,606		4,324		8		161,033
Substandard	3,174		138,451		1,966		6,474		3,122		46		153,233
Doubtful	—		3,296		—		460		481		—		4,237
Ungraded	—		1,306		150		81,549		—		—		83,005
Total	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	8,724,702
	December 31, 2013
	Originated commercial loans and leases
	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	308,231	$	6,094,505	$	174,913	$	964,840	$	375,371	$	174,314	$	8,092,174
Special mention	8,620		119,515		1,362		14,686		2,160		982		147,325
Substandard	2,944		141,913		2,216		6,352		3,491		40		156,956
Doubtful	52		5,159		75		144		592		—		6,022
Ungraded	—		1,398		188		95,136		149		—		96,871
Total	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	8,499,348

	June 30, 2014
	Originated noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	1,047,270	$	2,107,889	$	118,078	$	373,579	$	3,646,816
30-59 days past due	11,219		7,690		949		1,949		21,807
60-89 days past due	4,693		2,434		229		843		8,199
90 days or greater past due	7,907		4,662		164		766		13,499
Total	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	3,690,321
	December 31, 2013
	Originated noncommercial loans and leases
	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	955,300	$	2,095,480	$	121,026	$	382,710	$	3,554,516
30-59 days past due	12,885		10,977		1,193		2,114		27,169
60-89 days past due	4,658		2,378		317		955		8,308
90 days or greater past due	9,578		4,450		256		673		14,957
Total	$	982,421	$	2,113,285	$	122,792	$	386,452	$	3,604,950

18

Acquired loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Acquired loans
Grade:	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	14,193	$	349,009	$	11,422	$	26,313	$	138,836	$	15,238	$	112	$	1,469	$	556,592
Special mention	10,957		106,582		16,014		3,869		5,543		2,375		—		—		145,340
Substandard	49,746		148,880		7,252		3,221		44,396		1,696		1,237		2		256,430
Doubtful	2,214		32,503		—		431		1,401		612		295		—		37,456
Ungraded	3,717		507		—		17		80,512		208		27,115		2,039		114,115
Total	$	80,827	$	637,481	$	34,688	$	33,851	$	270,688	$	20,129	$	28,759	$	3,510	$	1,109,933
	December 31, 2013
	Acquired loans
	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	2,619	$	296,824	$	22,225	$	8,021	$	135,326	$	26,322	$	149	$	1,345	$	492,831
Special mention	15,530		125,295		3,431		2,585		6,301		2,608		—		—		155,750
Substandard	52,228		179,657		7,012		5,225		52,774		1,013		2,139		—		300,048
Doubtful	7,436		40,471		8,713		1,257		2,058		891		295		—		61,121
Ungraded	1,102		644		—		166		17,392		—		—		372		19,676
Total	$	78,915	$	642,891	$	41,381	$	17,254	$	213,851	$	30,834	$	2,583	$	1,717	$	1,029,426

19

The aging of the outstanding loans and leases, by class, at June 30, 2014 and December 31, 2013 (excluding loans and leases acquired with deteriorated credit quality) is provided in the table below.

The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	June 30, 2014
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	657	$	40	$	462	$	1,159	$	340,862	$	342,021
Commercial mortgage	11,755		3,089		10,501		25,345		6,341,751		6,367,096
Other commercial real estate	149		—		52		201		178,698		178,899
Commercial and industrial	5,459		805		593		6,857		1,285,356		1,292,213
Lease financing	1,110		8		97		1,215		412,207		413,422
Other	343		—		—		343		130,708		131,051
Residential mortgage	11,219		4,693		7,907		23,819		1,047,270		1,071,089
Revolving mortgage	7,690		2,434		4,662		14,786		2,107,889		2,122,675
Construction and land development - noncommercial	949		229		164		1,342		118,078		119,420
Consumer	1,949		843		766		3,558		373,579		377,137
Total originated loans and leases	$	41,280	$	12,141	$	25,204	$	78,625	$	12,336,398	$	12,415,023
	December 31, 2013
	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	1,603	$	9	$	457	$	2,069	$	317,778	$	319,847
Commercial mortgage	11,131		3,601		14,407		29,139		6,333,351		6,362,490
Other commercial real estate	139		210		470		819		177,935		178,754
Commercial and industrial	3,336		682		436		4,454		1,076,704		1,081,158
Lease financing	789		1,341		101		2,231		379,532		381,763
Other	—		85		—		85		175,251		175,336
Residential mortgage	12,885		4,658		9,578		27,121		955,300		982,421
Revolving mortgage	10,977		2,378		4,450		17,805		2,095,480		2,113,285
Construction and land development - noncommercial	1,193		317		256		1,766		121,026		122,792
Consumer	2,114		955		673		3,742		382,710		386,452
Total originated loans and leases	$	44,167	$	14,236	$	30,828	$	89,231	$	12,015,067	$	12,104,298

20

The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at June 30, 2014 and December 31, 2013 (excluding acquired loans and leases) are as follows:

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Originated loans and leases:
Construction and land development - commercial	$	659	$	—	$	544	$	—
Other commercial real estate	1,385		41		1,610		—
Commercial mortgage	28,591		1,802		33,529		1,113
Commercial and industrial	1,367		502		1,428		294
Lease financing	624		5		832		—
Residential mortgage	13,836		1,930		14,701		1,998
Revolving mortgage	—		4,662		—		4,450
Construction and land development - noncommercial	—		164		457		256
Consumer	23		766		69		673
Total originated loans and leases	$	46,485	$	9,872	$	53,170	$	8,784

Acquired Loans

The following table provides changes in the recorded investment of acquired loans during the six months ended June 30, 2014 and June 30, 2013:

(Dollars in thousands)	2014			2013
Balance at January 1	$	1,029,426		$	1,809,235
Fair value of acquired loans	316,327			—
Accretion	60,660			131,909
Payments received and other changes, net	(296,480		)	(497,808		)
Balance at June 30	$	1,109,933		$	1,443,336
Outstanding principal balance at June 30	$	1,888,475		$	2,456,347

The recorded investment of acquired loans on the cost recovery method was $54.0 million at June 30, 2014 and $28.5 million at December 31, 2013. This increase is primarily driven by one large acquired loan relationship that was moved to cost recovery during the first quarter. The cost recovery method is applied to loans when the timing of future cash flows is not reasonably estimable due to borrower nonperformance or uncertainty in the timing and amount of ultimate disposition of the asset.

The following table documents changes to the amount of accretable yield for the first six months of 2014 and 2013.

(Dollars in thousands)	2014			2013
Balance at January 1	$	439,990		$	539,564
Additions	84,295			—
Accretion	(60,660		)	(131,909		)
Reclassifications from nonaccretable difference	9,992			72,149
Changes in expected cash flows that do not affect nonaccretable difference	(17,126		)	42,402
Balance at June 30	$	456,491		$	522,206

21

NOTE E - ALLOWANCE FOR LOAN AND LEASE LOSSES

The following tables present the activity in the allowance for originated loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Originated Loans
Allowance for loan and lease losses:
Balance at April 1	$	12,246		$	94,217		$	945		$	24,021		$	4,183		$	454		$	10,944		$	16,408		$	1,249		$	13,282		$	—		$	177,949
Provision	(1,135		)	(1,961		)	(155		)	3,033			176			163			(1,557		)	1,252			(323		)	2,737			—			2,230
Charge-offs	—			(272		)	—			(531		)	(14		)	(5		)	(234		)	(1,064		)	(23		)	(2,628		)	—			(4,771		)
Recoveries	5			145			16			386			20			—			148			201			2			584			—			1,507
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Three months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at April 1	$	4,311		$	82,119		$	1,915		$	13,661		$	3,543		$	1,490		$	3,790		$	24,499		$	1,419		$	24,027		$	15,772		$	176,546
Provision	3,296			(4,976		)	(51		)	(1,203		)	1,775			155			878			907			(244		)	1,694			—			2,231
Charge-offs	(1,286		)	(213		)	(18		)	(988		)	(92		)	—			(450		)	(878		)	—			(2,569		)	—			(6,494		)
Recoveries	270			491			26			288			19			3			61			307			23			643			—			2,131
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782
	Six months ended June 30, 2014
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	10,335		$	100,257		$	1,009		$	22,362		$	4,749		$	190		$	10,511		$	16,239		$	681		$	13,541		$	—		$	179,874
Provision	750			(8,940		)	(229		)	5,009			(348		)	435			(948		)	2,605			254			4,012			—			2,600
Charge-offs	—			(440		)	—			(1,027		)	(72		)	(13		)	(418		)	(2,324		)	(94		)	(4,805		)	—			(9,193		)
Recoveries	31			1,252			26			565			36			—			156			277			64			1,227			—			3,634
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Six months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	6,031		$	80,229		$	2,059		$	14,050		$	3,521		$	1,175		$	3,836		$	25,185		$	1,721		$	25,389		$	15,850		$	179,046
Provision	1,462			(2,438		)	(151		)	(703		)	1,797			476			1,611			2,338			(357		)	2,290			(78		)	6,247
Charge-offs	(1,540		)	(869		)	(72		)	(2,246		)	(92		)	(6		)	(1,268		)	(3,066		)	(245		)	(5,157		)	—			(14,561		)
Recoveries	638			499			36			657			19			3			100			378			79			1,273			—			3,682
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782

⁽¹⁾Reclassification results from enhancements to the ALLL calculation during the second quarter of 2013 that resulted in the allocation of $15.8 million previously designated as 'non-specific' to other loan classes and the absorption of $7.4 million of the reserve for unfunded commitments related to unfunded, revocable loan commitments into the ALLL.

The provision for construction and land development - commercial was a credit of $1.1 million for the quarter ended June 30, 2014 compared to expense of $3.3 million for the same period in the prior year. Provision expense for the six month periods ended June 30, 2014 and June 30, 2013 was $0.8 million and $1.5 million, respectively. The decrease in provision expense for both comparative periods is due to improvements in credit risk rating and lower credit default trends.

22

The commercial mortgage loan class had a net credit provision of $2.0 million and $8.9 million for the three and six months ended June 30, 2014, respectively. The net credit provision for the three and six months ended June 30, 2013 was $5.0 million and $2.4 million, respectively. The net credit provision for all periods was primarily the result of improvements in the credit risk rating mix and lower credit default trends within this loan class. 

The provision for commercial and industrial loans totaled $3.0 million and $5.0 million for the three and six months ended June 30, 2014, respectively. The 2014 provision expense was a result of increased loans during the respective periods. Conversely, the three and six months ended June 30, 2013 credit provisions of $1.2 million and $0.7 million, respectively, resulted from a decline in the outstanding loan balances.

The residential mortgage loan class had a net credit provision of $1.6 million and $0.9 million for the three and six months ended June 30, 2014, respectively. Provision expense for the three and six months ended June 30, 2013 was $0.9 million and $1.6 million. The decrease in provision expense can be attributed to a decline in past due residential mortgage loans.

The following tables present the allowance for originated loan losses and the recorded investment in originated loans, by loan class, based on impairment method as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	155	$	7,704	$	179	$	1,425	$	297	$	—	$	1,613	$	1,024	$	201	$	653	$	13,251
ALLL for loans and leases collectively evaluated for impairment	10,961		84,425		627		25,484		4,068		612		7,688		15,773		704		13,322		163,664
Total allowance for loan and lease losses	$	11,116	$	92,129	$	806	$	26,909	$	4,365	$	612	$	9,301	$	16,797	$	905	$	13,975	$	176,915
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,573	$	87,046	$	1,962	$	10,811	$	376	$	46	$	15,448	$	3,754	$	1,934	$	937	$	124,887
Loans and leases collectively evaluated for impairment	339,448		6,280,050		176,937		1,281,402		413,046		131,005		1,055,641		2,118,921		117,486		376,200		12,290,136
Total loan and leases	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	12,415,023
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	103	$	6,873	$	209	$	771	$	54	$	—	$	1,586	$	372	$	72	$	121	$	10,161
ALLL for loans and leases collectively evaluated for impairment	10,232		93,384		800		21,591		4,695		190		8,925		15,867		609		13,420		169,713
Total allowance for loan and lease losses	$	10,335	$	100,257	$	1,009	$	22,362	$	4,749	$	190	$	10,511	$	16,239	$	681	$	13,541	$	179,874
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,272	$	97,111	$	1,878	$	9,300	$	188	$	—	$	15,539	$	3,596	$	1,108	$	1,154	$	132,146
Loans and leases collectively evaluated for impairment	317,575		6,265,379		176,876		1,071,858		381,575		175,336		966,882		2,109,689		121,684		385,298		11,972,152
Total loan and leases	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	982,421	$	2,113,285	$	122,792	$	386,452	$	12,104,298

The total reserves for individually impaired loans increased during the second quarter of 2014 due to enhancements in the TDR impairment calculation. TDR impairment evaluation, for performing TDRs, has historically been calculated on pools of homogeneous loan groups, as determined by loan type with similar risk characteristics and performance trends, using a discounted cash flow analysis. Management enhanced

23

this process during the second quarter to include individual loan level impairment analysis for performing TDRs which resulted in higher impairment estimates for some TDR loans.

The following tables show the activity in the allowance for acquired loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013.

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Acquired Loans
Allowance for loan and lease losses:
Balance at April 1	$	4,476		$	23,003		$	1,204		$	2,256		$	9,764		$	3,493		$	583		$	214		$	44,993
Provision	(77		)	(1,185		)	(797		)	(1,729		)	(2,176		)	(3,031		)	(583		)	49			(9,529		)
Charge-offs	(596		)	(4,503		)	—			(152		)	(495		)	(381		)	—			(6		)	(6,133		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Three months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at April 1	$	13,306		$	38,293		$	5,172		$	11,876		$	17,603		$	7,135		$	2,756		$	332		$	96,473
Provision	(5,091		)	(2,522		)	(576		)	(4,936		)	55			(869		)	(1,524		)	(10		)	(15,473		)
Charge-offs	(626		)	(2,183		)	—			(1,004		)	(386		)	(235		)	—			(32		)	(4,466		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534
	Six months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	1,320		$	29,906		$	1,354		$	5,275		$	11,802		$	2,959		$	682		$	222		$	53,520
Provision	3,278			(4,571		)	(947		)	(2,065		)	(4,476		)	(2,397		)	(682		)	58			(11,802		)
Charge-offs	(795		)	(8,020		)	—			(2,835		)	(233		)	(481		)	—			(23		)	(12,387		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Six months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	31,186		$	50,275		$	11,234		$	8,897		$	19,837		$	9,754		$	8,287		$	502		$	139,972
Provision	(18,238		)	(4,606		)	(5,707		)	(704		)	(1,450		)	(3,373		)	(3,837		)	(180		)	(38,095		)
Charge-offs	(5,359		)	(12,081		)	(931		)	(2,257		)	(1,115		)	(350		)	(3,218		)	(32		)	(25,343		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534

24

The following tables show the ending balances of acquired loans and leases and related allowance by class of loans as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	3,803	$	17,315	$	407	$	375	$	7,093	$	81	$	—	$	257	$	29,331
Loans and leases acquired with deteriorated credit quality	80,827		637,481		34,688		33,851		270,688		20,129		28,759		3,510		1,109,933
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	1,320	$	29,906	$	1,354	$	5,275	$	11,802	$	2,959	$	682	$	222	$	53,520
Loans and leases acquired with deteriorated credit quality	78,915		642,891		41,381		17,254		213,851		30,834		2,583		1,717		1,029,426

As of June 30, 2014 and December 31, 2013, $454.8 million and $459.9 million, respectively, in acquired loans experienced an adverse change in expected cash flows since the date of acquisition.

25

The following tables provide information on originated loans and leases that are individually evaluated for impairment as of June 30, 2014 and December 31, 2013.

	June 30, 2014
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,305	$	1,268	$	2,573	$	3,539	$	155
Commercial mortgage	58,223		28,823		87,046		92,164		7,704
Other commercial real estate	741		1,221		1,962		2,361		179
Commercial and industrial	8,371		2,440		10,811		11,939		1,425
Lease financing	376		—		376		376		297
Other	—		46		46		46		—
Residential mortgage	10,016		5,432		15,448		15,903		1,613
Revolving mortgage	3,537		217		3,754		4,801		1,024
Construction and land development - noncommercial	1,934		—		1,934		1,934		201
Consumer	936		1		937		968		653
Total impaired originated loans and leases	$	85,439	$	39,448	$	124,887	$	134,031	$	13,251
	December 31, 2013
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,025	$	1,247	$	2,272	$	7,306	$	103
Commercial mortgage	57,819		39,292		97,111		103,522		6,873
Other commercial real estate	783		1,095		1,878		2,279		209
Commercial and industrial	7,197		2,103		9,300		10,393		771
Lease financing	133		55		188		188		54
Residential mortgage	11,534		4,005		15,539		15,939		1,586
Revolving mortgage	3,382		214		3,596		3,596		372
Construction and land development - noncommercial	651		457		1,108		1,108		72
Consumer	1,154		—		1,154		1,154		121
Total impaired originated loans and leases	$	83,678	$	48,468	$	132,146	$	145,485	$	10,161

26

The following tables show the average impaired originated loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014				Three months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	2,592	$	28	$	8,541	$	101
Commercial mortgage	87,687		799		102,356		1,413
Other commercial real estate	1,981		7		2,647		37
Commercial and industrial	11,208		113		10,298		139
Lease financing	384		4		531		9
Other	48		1		—		—
Residential mortgage	15,592		107		13,855		184
Revolving mortgage	3,779		29		6,976		47
Construction and land development - noncommercial	2,061		26		913		13
Consumer	986		17		1,587		25
Average impaired originated loans and leases	$	126,318	$	1,131	$	147,704	$	1,968
	Six months ended June 30, 2014				Six months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	1,413	$	31	$	8,899	$	213
Commercial mortgage	84,359		1,716		103,032		2,838
Other commercial real estate	2,731		60		3,028		82
Commercial and industrial	15,690		353		14,465		406
Lease financing	732		21		408		14
Other	24		1		—		—
Residential mortgage	15,824		284		15,003		412
Revolving mortgage	4,262		76		6,390		72
Construction and land development - noncommercial	1,946		50		783		25
Consumer	2,058		51		1,611		29
Average impaired originated loans and leases	$	129,039	$	2,643	$	153,619	$	4,091

27

Troubled Debt Restructurings

BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (TDRs). In general, the modification or restructuring of a loan is considered a TDR if, for economic reasons or legal reasons related to a borrower's financial difficulties, a concession is granted to the borrower that creditors would not otherwise grant. Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. In accordance with GAAP, loans acquired under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are not initially considered to be TDRs, but can be classified as such if a modification is made subsequent to acquisition. Modifications of acquired loans that are part of a pool are not designated as TDRs. The following table provides a summary of total TDRs by accrual status.

	June 30, 2014						December 31, 2013
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans
Construction and land development - commercial	$	5,946	$	2,248	$	8,194	$	21,032	$	1,002	$	22,034
Commercial mortgage	99,843		32,019		131,862		113,323		23,387		136,710
Other commercial real estate	3,203		1,277		4,480		3,470		1,150		4,620
Commercial and industrial	10,935		818		11,753		9,838		1,142		10,980
Lease	233		144		377		49		—		49
Other	46		—		46		—		—		—
Total commercial TDRs	120,206		36,506		156,712		147,712		26,681		174,393
Noncommercial
Residential	29,598		2,919		32,517		23,343		3,663		27,006
Revolving mortgage	3,821		—		3,821		3,095		—		3,095
Construction and land development - noncommercial	1,934		—		1,934		651		457		1,108
Consumer and other	937		—		937		1,154		—		1,154
Total noncommercial TDRs	36,290		2,919		39,209		28,243		4,120		32,363
Total TDRs	$	156,496	$	39,425	$	195,921	$	175,955	$	30,801	$	206,756

The following table shows the accrual status of acquired and originated TDRs.

(Dollars in thousands)	June 30, 2014		December 31, 2013
Accruing TDRs:
Acquired	$	62,592	$	90,829
Originated	93,904		85,126
Total accruing TDRs	156,496		175,955
Nonaccruing TDRs:
Acquired	17,861		11,479
Originated	21,564		19,322
Total nonaccruing TDRs	39,425		30,801
All TDRs:
Acquired	80,453		102,308
Originated	115,468		104,448
Total TDRs	$	195,921	$	206,756

All TDRs are impaired loans. TDRs are, therefore, evaluated for impairment on a quarterly basis or more frequently as needed. The impairment evaluations for performing TDRs has historically been performed by pools of homogeneous loan groups, as determined by loan type with similar risk characteristics and performance trends, using a discounted cash flow analysis. Management enhanced this process during the second quarter to include individual loan level impairment analyses for all performing TDRs.

Impairment is evaluated using one of three approved valuation methodologies: discounted cash flows, market prices or collateral values. Based on the accrual status and credit grade, management determines the most appropriate method to reasonably assess expectations for recovery of the investment. Expected cash flows are discounted at the loan’s original effective interest rate. Specific valuation allowances are established for discounted cash flows or partial charge-offs and are recorded for TDRs in the amount equal to the calculated impairment.

28

The majority of TDRs are included in the special mention, substandard or doubtful grading categories. When a restructured loan subsequently defaults, it is evaluated and downgraded if appropriate. The more severely graded the loan, the lower the estimated expected cash flows and the greater the allowance recorded.

The following tables provide the types of TDRs made during the three and six months ended June 30, 2014 and June 30, 2013 for originated loans, as well as a summary of originated loans that were modified as a TDR during the 12 months ended June 30, 2014 and June 30, 2013 that subsequently defaulted during the three and six months ended June 30, 2014 and June 30, 2013. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	2	$	720	1	$	494	1	$	71	—	$	—
Other commercial real estate	—	—		—	—		1	100		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	3	766		1	494		2	171		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	—	—		—	—		1	242		1	223
Commercial and industrial	4	2,069		—	—		—	—		1	22
Residential mortgage	6	260		—	—		—	—		1	106
Consumer	1	10		—	—		1	46		—	—
Total loan term extension	13	2,530		—	—		2	288		3	351
Below market interest rate
Commercial mortgage	3	1,991		5	1,563		7	2,035		—	—
Commercial and industrial	—	—		—	—		3	831		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	10	427		—	—		6	885		1	99
Revolving mortgage	—	—		—	—		1	99		—	—
Construction and land development - noncommercial	—	—		—	—		2	521		—	—
Total below market interest rate	14	2,783		5	1,563		22	5,124		1	99
Discharged from bankruptcy
Residential mortgage	1	13		—	—		2	87		—	—
Revolving mortgage	2	39		—	—		9	727		—	—
Consumer	2	8		—	—		—	—		—	—
Total discharged from bankruptcy	5	60		—	—		11	814		—	—
Total originated restructurings	35	$	6,139	6	$	2,057	37	$	6,397	4	$	450

29

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	6	$	2,600	2	$	708	8	$	3,406	—	$	—
Commercial and industrial	1	196		—	—		—	—		—	—
Other commercial real estate	—	—		—	—		1	100		—	—
Residential mortgage	—	—		—	—		1	630		—	—
Lease financing	2	144		—	—		—	—		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	10	2,986		2	708		10	4,136		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	5	2,584		—	—		5	1,972		1	223
Commercial and industrial	4	2,069		—	—		1	229		1	22
Lease financing	2	224		—	—		—	—		—	—
Residential mortgage	11	593		—	—		3	51		1	106
Consumer	3	44		—	—		1	46		—	—
Total loan term extension	27	5,705		—	—		10	2,298		3	351
Below market interest rate
Construction and land development - commercial	10	363		—	—		1	224		—	—
Commercial mortgage	15	6,591		6	2,011		12	5,819		—	—
Commercial and industrial	6	143		—	—		4	846		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	18	820		1	140		14	1,579		1	99
Revolving mortgage	5	274		—	—		1	99		—	—
Construction & land development - noncommercial	8	1,248		—	—		2	521		—	—
Consumer	—	—		—	—		3	235		—	—
Total below market interest rate	63	9,804		7	2,151		40	10,076		1	99
Discharged from bankruptcy
Commercial mortgage	1	983		—	—		—	—		—	—
Residential mortgage	8	649		2	85		3	352		—	—
Revolving mortgage	7	442		—	—		30	2,383		3	93
Construction & land development - noncommercial	1	62		—	—		—	—		—	—
Consumer	3	26		—	—		—	—		—	—
Total discharged from bankruptcy	20	2,162		2	85		33	2,735		3	93
Total originated restructurings	120	$	20,657	11	$	2,944	93	$	19,245	7	$	543

30

The following tables provide the types of TDRs made during the three and six months ended June 30, 2014 and June 30, 2013 for acquired loans, as well as a summary of acquired loans that were modified as a TDR during the 12 months ended June 30, 2014 and June 30, 2013 that subsequently defaulted during the three and six months ended June 30, 2014 and June 30, 2013. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	—	—		—	—		—	—		1	1,699
Residential mortgage	—	—		—	—		1	134		—	—
Total interest only	—	—		—	—		1	134		2	1,803
Loan term extension
Residential mortgage	1	53		1	53		—	—		—	—
Total loan term extension	1	53		1	53		—	—		—	—
Below market interest rate
Construction and land development - commercial	1	273		—	—		—	—		—	—
Commercial mortgage	5	1,811		—	—		1	813		—	—
Commercial and industrial	1	23		—	—		—	—		—	—
Residential mortgage	23	2,963		1	23		2	997		1	224
Total below market interest rate	30	5,070		1	23		3	1,810		1	224
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	57	$	6,951	4	$	170	4	$	1,944	3	$	2,027

31

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	2	—		2	44		1	290		2	1,989
Residential mortgage	—	—		—	—		2	177		—	—
Total interest only	2	—		2	44		3	467		3	2,093
Loan term extension
Construction and land development - commercial	1	276		—	—		—	—		—	—
Residential mortgage	1	53		1	53		1	199		—	—
Total loan term extension	2	329		1	53		1	199		—	—
Below market interest rate
Construction and land development - commercial	2	308		—	—		4	3,331		—	—
Commercial mortgage	9	5,060		1	39		5	11,871		3	3,145
Commercial and industrial	1	23		—	—		2	435		—	—
Residential mortgage	25	3,066		2	23		7	2,484		3	931
Total below market interest rate	37	8,457		3	62		18	18,121		6	4,076
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	67	$	10,614	8	$	253	22	$	18,787	9	$	6,169

For the three and six months ended June 30, 2014 and June 30, 2013, the recorded investment in TDRs subsequent to modification was not materially impacted by the modification since forgiveness of principal is not a restructuring option frequently used by BancShares.

NOTE F - OTHER REAL ESTATE OWNED (OREO)

The following table explains changes in other real estate owned during the six months ended June 30, 2014 and June 30, 2013.

(Dollars in thousands)	Covered			Noncovered			Total
Balance at December 31, 2012	$	102,577		$	43,513		$	146,090
Additions	41,315			16,615			57,930
Sales	(53,676		)	(21,026		)	(74,702		)
Writedowns	(5,383		)	(2,160		)	(7,543		)
Balance at June 30, 2013	$	84,833		$	36,942		$	121,775
Balance at December 31, 2013	$	47,081		$	36,898		$	83,979
Additions 1	16,186			20,485			36,671
Sales	(18,522		)	(19,150		)	(37,672		)
Writedowns	(4,609		)	(3,082		)	(7,691		)
Balance at June 30, 2014	$	40,136		$	35,151		$	75,287

¹ Noncovered additions include $11.6 million from the 1st Financial merger.

32

NOTE G - FDIC LOSS SHARE RECEIVABLE

The following table provides changes in the receivable from the FDIC for the three-month and six-month periods ended June 30, 2014 and June 30, 2013.

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Beginning balance	$	74,784		$	195,942		$	93,397		$	270,192
Amortization	(12,922		)	(19,069		)	(30,667		)	(45,181		)
Cash payments to (from) FDIC	859			(4,015		)	4,350			(46,534		)
Post-acquisition adjustments	(12,762		)	(14,845		)	(17,121		)	(20,464		)
Ending balance	$	49,959		$	158,013		$	49,959		$	158,013

The receivable from the FDIC for loss share agreements is measured separately from the related covered assets and is recorded at fair value at the acquisition date using projected cash flows based on the expected reimbursements for losses and the applicable loss share percentages. See Note Jfor information related to FCB's recorded payable to the FDIC for loss share agreements.

Cash payments to (from) FDIC represent the net impact of loss share loan recoveries, charge-offs and related expenses as calculated and reported in FDIC loss share certificates. Post-acquisition adjustments represent the net change in loss estimates related to acquired loans and covered OREO as a result of changes in expected cash flows and the allowance for loan and lease losses related to those covered loans. For loans covered by loss share agreements, subsequent decreases in the amount expected to be collected from the borrower or collateral liquidation result in a provision for loan and lease losses, an increase in the allowance for loan and lease losses and a proportional adjustment to the receivable from the FDIC for the estimated amount to be reimbursed. Subsequent increases in the amount expected to be collected from the borrower or collateral liquidation result in the reversal of some or all previously recorded provision for loan and lease losses, a decrease in the related allowance for loan and lease losses and a proportional adjustment to the receivable from the FDIC, or prospective adjustment to the accretable yield and the related receivable from the FDIC if no provision for loan and lease losses had been recorded previously. Two of the loss share agreements expire during the third quarter of 2014, and two expire during the first quarter of 2015.

NOTE H - ESTIMATED FAIR VALUES

Fair value estimates are intended to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Where there is no active market for a financial instrument, BancShares has made estimates using discounted cash flows or other valuation techniques. Inputs to these valuation methods are subjective in nature, involve uncertainties and require significant judgment and therefore cannot be determined with precision. Accordingly, the derived fair value estimates presented below are not necessarily indicative of the amounts BancShares could realize in a current market exchange.

Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the highest level of input that is significant to the fair value measurement (with level 1 considered highest and level 3 considered lowest). A brief description of each level follows:

• Level 1 values are based on quoted prices for identical instruments in active markets.

• Level 2 values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 values are generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques.

The methodologies used to estimate the fair value of financial assets and financial liabilities are discussed below:

Investment securities available for sale. U.S.Treasury, government agency, mortgage-backed securities and municipal securities are generally measured at fair value using a third party pricing service and are classified as level 2 instruments. Equity securities are measured at fair value using observable closing prices. Management also considers the amount of market activity by examining the trade volume of each security. Due to the relatively inactive nature of the markets for the existing equity securities at BancShares, the inputs used for these equity securities are considered level 2 inputs.

33

Loans held for sale. Loans held for sale are carried at the lower of aggregate cost or fair value and are, therefore, carried at fair value only when fair value is less than the asset cost. These loans are generally traded in active secondary markets and are priced using current market pricing for similar securities adjusted for servicing, interest rate risk and credit risk. Accordingly, the inputs used to calculate fair value of residential real estate loans are classified as Level 2 inputs.

Net loans and leases (acquired and originated). Fair value is estimated based on discounted future cash flows using the current interest rates at which loans with similar terms would be made to borrowers of similar credit quality. An additional valuation adjustment is made for liquidity. The inputs used in the fair value measurements for loans and leases are considered level 3 inputs.

Receivable from the FDIC for loss share agreements. Fair value is estimated based on discounted future cash flows using current discount rates. Due to post-acquisition improvements in expected losses, significant portions of the FDIC receivable will be recovered through amortization of the receivable over the remaining life of the loss share agreement rather than by cash flows from the FDIC. The estimated amounts to be amortized in future periods have no fair value. The inputs used in the fair value measurement for the FDIC receivable are considered level 3 inputs. The FDIC loss share agreements are not transferable and, accordingly, there is no market for this receivable.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares believes its investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered level 2 inputs.

Preferred stock issued under the TARP program and other acquired financial assets. Preferred securities issued under the Troubled Asset Recovery Program are recorded at cost and are evaluated quarterly for impairment based on the ultimate recoverability of the purchase price. The fair value of these securities is derived from a third-party proprietary model that is considered to be a level 3 input. Other acquired financial assets represent acquired investments in various entities for Community Reinvestment Act and correspondent banking purposes. These investments were recorded at fair value at acquisition date based on level 2 inputs.

Deposits. For non-time deposits, carrying value is a reasonable estimate of fair value. The fair value of time deposits is estimated by discounting future cash flows using the interest rates currently offered for deposits of similar remaining maturities. The inputs used in the fair value measurement for deposits are considered level 2 inputs.    

Long-term obligations. For fixed rate trust preferred securities, the fair values are determined based on recent trades of the actual security. For other long-term obligations, fair values are estimated by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for long-term obligations are considered level 2 inputs.

Payable to the FDIC for loss share agreements. The fair value of the payable to the FDIC for loss share agreements is determined by the projected cash flows based on expected payments to the FDIC in accordance with the loss share agreements. Cash flows are discounted using current discount rates to reflect the timing of the estimated amounts due to the FDIC. The inputs used in the fair value measurement for the payable to the FDIC are considered level 3 inputs. See Note J for more information on the payable to the FDIC.

Interest rate swap. Under the terms of the existing cash flow hedge, BancShares pays a fixed payment to the counterparty in exchange for receipt of a variable payment that is determined based on the three-month LIBOR rate. The fair value of the cash flow hedge is, therefore, based on projected LIBOR rates for the duration of the hedge, values that, while observable in the market, are subject to adjustment due to pricing considerations for the specific instrument. The inputs used in the fair value measurement of the interest rate swap are considered level 2 inputs.

Off-balance-sheet commitments and contingencies. Carrying amounts are reasonable estimates of the fair values for such financial instruments. Carrying amounts include unamortized fee income and, in some cases, reserves for any credit losses from those financial instruments. These amounts are not material to BancShares' financial position.

For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of June 30, 2014 and December 31, 2013. The carrying value and fair value for these assets and liabilities are equivalent because they are

34

relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value.

(Dollars in thousands)	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	566,952	$	566,952	$	533,599	$	533,599
Overnight investments	1,118,474		1,118,474		859,324		859,324
Investment securities available for sale	5,538,166		5,538,166		5,387,703		5,387,703
Investment securities held to maturity	693		729		907		974
Loans held for sale	49,851		50,675		47,271		47,956
Net loans and leases	13,318,710		12,846,888		12,900,330		12,545,537
Receivable from the FDIC for loss share agreements (1)	49,959		22,741		93,397		38,438
Income earned not collected	49,019		49,019		48,390		48,390
Federal Home Loan Bank stock	32,878		32,878		40,819		40,819
Preferred stock and other acquired financial assets	15,462		16,199		33,564		34,786
Deposits	18,556,758		18,113,243		17,874,066		17,898,570
Short-term borrowings	788,540		788,540		511,418		511,418
Long-term obligations	314,529		324,874		510,769		526,037
Payable to the FDIC for loss share agreements	114,281		119,465		109,378		111,941
Accrued interest payable	7,297		7,297		6,737		6,737
Interest rate swap	5,933		5,933		7,220		7,220

⁽¹⁾ The fair value of the FDIC receivable excludes amortization expected to be recognized in prospective periods.

35

Among BancShares’ assets and liabilities, investment securities available for sale and interest rate swaps accounted for as cash flow hedges are reported at their fair values on a recurring basis. Certain other assets are adjusted to their fair value on a nonrecurring basis, including loans held for sale, which are carried at the lower of cost or fair value, and impaired loans, OREO, goodwill and other intangible assets, which are periodically tested for impairment. Non-impaired loans held for investment, deposits, short-term borrowings and long-term obligations are not reported at fair value. BancShares did not elect to voluntarily report any assets or liabilities at fair value.

For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,625,630	$	—	$	1,625,630	$	—
Government agency	1,283,566		—		1,283,566		—
Mortgage-backed securities	2,596,286		—		2,596,286		—
Equity securities	32,498		—		32,498		—
Municipal securities	186		—		186		—
Total	$	5,538,166	$	—	$	5,538,166	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	5,933	$	—	$	5,933	$	—
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	373,437	$	—	$	373,437	$	—
Government agency	2,544,229		—		2,544,229		—
Mortgage-backed securities	2,446,873		—		2,446,873		—
Equity securities	22,147		—		22,147		—
Municipal securities	187		—		187		—
Other	830		—		830		—
Total	$	5,387,703	$	—	$	5,387,703	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	7,220	$	—	$	7,220	$	—

There were no transfers between levels during the six months ended June 30, 2014. A single subordinated debt security, previously classified within other, was called during the second quarter of 2014.

Certain financial assets and liabilities are carried at fair value on a nonrecurring basis, including loans held for sale, impaired loans and OREO.

Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 10 and 14 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Impaired loans are assigned to an asset manager and monitored monthly for significant changes since the last valuation. If significant changes are noted, the asset manager orders a new valuation or adjusts the valuation accordingly. Expected cash flows are determined using expected loss rates developed from historic experience for loans with similar risk characteristics, discounted using the effective interest rate.

OREO is measured and reported at fair value using collateral valuations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 10 and 14 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. The asset manager uses the information gathered from brokers

36

and other market sources to identify any significant changes in the market or the subject property as they occur. Valuations are then adjusted or new appraisals are ordered to ensure the reported values reflect the most current information. OREO that has been recently remeasured is deemed to be at fair value and included in the table below.

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	$	32,551	$	—	$	32,551	$	—
Originated impaired loans	73,881		—		—		73,881
Other real estate not covered under loss share agreements remeasured during current year	9,101		—		—		9,101
Other real estate covered under loss share agreements remeasured during current year	22,927		—		—		22,927
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	29,389		—		29,389		—
Originated impaired loans	77,817		—		—		77,817
Other real estate not covered under loss share agreements remeasured during current year	20,526		—		—		20,526
Other real estate covered under loss share agreements remeasured during current year	37,587		—		—		37,587

No financial liabilities were carried at fair value on a nonrecurring basis as of June 30, 2014 and December 31, 2013.

NOTE I - EMPLOYEE BENEFIT PLANS

Pension expense is a component of employee benefits expense. For the three and six months ended June 30, 2014 and 2013, the components of pension expense are as follows:

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Service cost	$	2,785		$	4,261		$	6,166		$	8,483
Interest cost	6,251			6,409			12,807			12,304
Expected return on assets	(8,340		)	(7,474		)	(16,152		)	(14,405		)
Amortization of prior service cost	52			53			105			105
Amortization of net actuarial loss	1,546			4,241			3,092			8,493
Total pension expense	$	2,294		$	7,490		$	6,018		$	14,980

The assumed discount rate for 2014 is 4.90 percent, the expected long-term rate of return on plan assets is 7.50 percent and the assumed rate of salary increases is 4.00 percent. For 2013, the assumed discount rate was 4.00 percent, expected long-term rate of return was 7.25 percent and the assumed rate of salary increases was 4.00 percent.

NOTE J - COMMITMENTS AND CONTINGENCIES

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit, standby letters of credit and recourse obligations on mortgage loans sold. These instruments involve elements of credit, interest rate or liquidity risk.

Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires that collateral be pledged to secure the commitment, including cash deposits, securities and other assets. At June 30, 2014, BancShares had unused commitments totaling $6.20 billion, compared to $5.84 billion at December 31, 2013.

37

Standby letters of credit are commitments guaranteeing performance of a customer to a third party. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ follows its credit policies in the issuance of standby letters of credit. At June 30, 2014 and December 31, 2013, BancShares had standby letters of credit amounting to $61.4 million and $54.8 million, respectively. The credit risk related to the issuance of these letters of credit is essentially the same as that involved in extending loans to clients and, therefore, these letters of credit are collateralized when necessary.

Pursuant to standard representations and warranties relating to residential mortgage loan sales, contingent obligations exist for various events that may occur following the loan sale. If underwriting or documentation deficiencies are discovered at any point in the life of the loan or if the loan becomes nonperforming within 120 days of its sale, the investor may require BancShares to repurchase the loan or to repay a portion of the sale proceeds. Other liabilities included reserves of $3.3 million and $3.6 million as of June 30, 2014 and December 31, 2013, respectively, for estimated losses arising from these standard representation and warranty provisions.

BancShares has recorded a receivable from the FDIC totaling $50.0 million and $93.4 million as of June 30, 2014 and December 31, 2013, respectively, for the expected reimbursement of losses on assets covered under the various loss share agreements. These loss share agreements impose certain obligations on us that, in the event of noncompliance, could result in the delay or disallowance of some or all of our rights under those agreements. Requests for reimbursement are subject to FDIC review and may be delayed or disallowed for noncompliance. The loss share agreements are subject to interpretation by both the FDIC and BancShares, and disagreements may arise regarding coverage of losses, expenses and contingencies.

The loss share agreements for four FDIC-assisted transactions include provisions related to contingent payments that may be owed to the FDIC at the termination of the agreements (clawback liability).The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition. The clawback liability is estimated by discounting estimated future payments and is recorded in the Consolidated Balance Sheets as a payable to the FDIC under the relevant loss share agreements. As of June 30, 2014 and December 31, 2013, the estimated clawback liability was $114.3 million and $109.4 million, respectively.

Following announcement of the proposed merger with Bancorporation, BancShares received a shareholder demand from the City of Providence, Rhode Island, pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”) for access to certain books and records of BancShares. The purported basis for the demand was to investigate potential breaches of fiduciary duty and other wrongdoing by BancShares’ officers and directors in connection with the merger. The City of Providence concurrently filed a putative class action lawsuit in the Delaware Court of Chancery against BancShares and its directors challenging Article X, Section 8 of BancShares’ Bylaws, which requires certain litigation to be brought only in North Carolina courts to the fullest extent permitted by law. The Delaware complaint alleges that the Bylaw violates the DGCL and that adoption of the Bylaw constituted a breach of fiduciary duty by BancShares' directors. While not directly challenging the merger, the complaint contains allegations referencing the merger and seeks a declaration that any stockholder action regarding the merger may be brought in the Delaware Court of Chancery. On July 31, 2014, the City of Providence filed a second litigation in Delaware Court of Chancery challenging the merger and seeking to enjoin the BancShares stockholder vote. Any potential claim for damages is not reasonably calculable at this time. BancShares and its directors have moved to dismiss both complaints.

BancShares and various subsidiaries have been named as defendants in legal actions arising from their normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed in the various FDIC-assisted transactions. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements.

NOTE K - DERIVATIVES

At June 30, 2014, BancShares had an interest rate swap entered into during 2011 that qualifies as a cash flow hedge under GAAP. For all periods presented, the fair value of the outstanding derivative is included in other liabilities in the consolidated balance sheets, and the net change in fair value is included in the consolidated statements of cash flows under the caption net change in other liabilities.

The interest rate swap is used for interest rate risk management purposes and converts variable-rate exposure on outstanding debt to a fixed rate. The 2011 interest rate swap has a notional amount of $93.5 million, representing the amount of variable rate trust preferred capital securities issued during 2006 and still outstanding at the swap inception date. The 2011 interest rate

38

swap hedges interest payments through June 2016 and requires fixed-rate payments by BancShares at 5.50 percent in exchange for variable-rate payments of 175 basis points above the three-month LIBOR, which is equal to the interest paid to the holders of the trust preferred capital securities. Settlement of the swap occurs quarterly. As of June 30, 2014, collateral with a fair value of $7.0 million was pledged to secure the existing obligation under the interest rate swap.

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Notional  amount		Estimated fair value of liability		Notional  amount		Estimated fair value of liability
2011 interest rate swap hedging variable rate exposure on trust preferred securities 2011-2016	$	93,500	$	5,933	$	93,500	$	7,220

For cash flow hedges, the effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument is included in other comprehensive income, while the ineffective portion, representing the excess of the cumulative change in the fair value of the derivative over the cumulative change in expected future discounted cash flows on the hedged transaction, is recorded in the consolidated income statement. BancShares’ interest rate swap has been fully effective since inception. Therefore, changes in the fair value of the interest rate swap has had no impact on net income. For the three months ended June 30, 2014 and 2013, BancShares recognized interest expense of $0.8 million during both periods, resulting from incremental interest paid to the interest rate swap counterparty, none of which related to ineffectiveness. For the six months ended June 30, 2014 and 2013, BancShares recognized interest expense of $1.7 million and $1.6 million, respectively, resulting from incremental interest paid to the interest rate swap counterparty, none of which related to ineffectiveness. BancShares monitors the credit risk of the interest rate swap counterparty.

NOTE L - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) included the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014									December 31, 2013
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive loss			Deferred tax benefit			Accumulated other comprehensive loss, net of tax
Unrealized gains (losses) on investment securities available for sale, net	$	26,817		$	10,327		$	16,490		$	(16,632	)	$	(6,541	)	$	(10,091	)
Unrealized loss on cash flow hedge	(5,933		)	(2,290		)	(3,643		)	(7,220		)	(2,786		)	(4,434		)
Funded status of defined benefit plan	(14,385		)	(5,595		)	(8,790		)	(17,582		)	(6,839		)	(10,743		)
Total	$	6,499		$	2,442		$	4,057		$	(41,434	)	$	(16,166	)	$	(25,268	)

39

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(2,835	)	$	(3,993	)	$	(9,766	)	$	(16,594	)
Other comprehensive income before reclassifications	19,325			350			—			19,675
Amounts reclassified from accumulated other comprehensive loss	—			—			976			976
Net current period other comprehensive income	19,325			350			976			20,651
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Three months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	19,606		$	(5,799	)	$	(93,712	)	$	(79,905	)
Other comprehensive (loss) income before reclassifications	(23,723		)	840			—			(22,883		)
Amounts reclassified from accumulated other comprehensive loss	—			—			2,612			2,612
Net current period other comprehensive (loss) income	(23,723		)	840			2,612			(20,271		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)
	Six months ended June 30, 2014
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(10,091	)	$	(4,434	)	$	(10,743	)	$	(25,268	)
Other comprehensive income before reclassifications	26,581			791			—			27,372
Amounts reclassified from accumulated other comprehensive loss	—			—			1,953			1,953
Net current period other comprehensive income	26,581			791			1,953			29,325
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Six months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	20,517		$	(6,292	)	$	(96,331	)	$	(82,106	)
Other comprehensive (loss) income before reclassifications	(24,634		)	1,333			—			(23,301		)
Amounts reclassified from accumulated other comprehensive loss	—			—			5,231			5,231
Net current period other comprehensive (loss) income	(24,634		)	1,333			5,231			(18,070		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)

¹ All amounts are net of tax.

40

The following table presents the amounts reclassified from accumulated other comprehensive income (loss) and the line item affected in the statement where net income is presented for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(52	)	Employee benefits
Actuarial losses	(1,546		)	Employee benefits
	(1,598		)	Income before income taxes
	622			Provision for income taxes
	$	(976	)	Net income
Total reclassifications for the period	$	(976	)
	Three months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(53	)	Employee benefits
Actuarial losses	(4,241		)	Employee benefits
	(4,294		)	Income before income taxes
	1,682			Provision for income taxes
	$	(2,612	)	Net income
Total reclassifications for the period	$	(2,612	)
	Six months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(3,092		)	Employee benefits
	(3,197		)	Income before income taxes
	1,244			Provision for income taxes
	$	(1,953	)	Net income
Total reclassifications for the period	$	(1,953	)
	Six months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(8,493		)	Employee benefits
	(8,598		)	Income before income taxes
	3,367			Provision for income taxes
	$	(5,231	)	Net income
Total reclassifications for the period	$	(5,231	)

NOTE M - SUBSEQUENT EVENTS

During July, BancShares purchased $25.0 million of FCB/SC Capital Trust II's outstanding Trust Preferred Securities from an unaffiliated third party. BancShares paid approximately $23.0 million, plus unpaid accrued distributions on the securities for the current distribution period, for the Trust Preferred Securities.  FCB/SC Capital Trust II is a trust subsidiary of First Citizens Bancorporation, Inc. (Bancorporation).  The Trust Preferred Securities pay interest at a floating rate based on three month LIBOR plus 2.25 percent, reset quarterly, and mature on June 15, 2034. The securities represent preferred beneficial interests in

41

a junior subordinated deferrable interest debenture in a like principal amount issued by Bancorporation and held by FCB/SC Capital Trust II.

BancShares historically has considered Bancorporation and its subsidiaries to be related persons for purposes of BancShares' related person transaction approval policy. BancShares' Audit Committee reviewed and approved BancShares' purchase of Trust Preferred Securities described above.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

Management’s discussion and analysis (MD&A) of earnings and related financial data are presented to assist in understanding the financial condition and results of operations of First Citizens BancShares, Inc. and Subsidiaries (BancShares). This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes presented within this report along with our financial statements and related MD&A of financial condition and results of operations included in our 2013 Annual Report on Form 10-K. In the MD&A, asset yields and net interest margin are presented on a fully taxable equivalent (FTE) basis. Intercompany accounts and transactions have been eliminated. Although certain amounts for prior years have been reclassified to conform to statement presentations for 2014, the reclassifications have no material effect on shareholders’ equity or net income as previously reported. Unless otherwise noted, the terms "we," "us" and "BancShares" refer to the consolidated financial position and consolidated results of operations for BancShares.

BancShares is a financial holding company headquartered in Raleigh, North Carolina, that offers full-service banking through its wholly-owned banking subsidiary, First-Citizens Bank & Trust Company (FCB). FCB is a state-chartered bank organized under the laws of the state of North Carolina. As of August 8, 2014, FCB operated 397 branches in North Carolina, Virginia, West Virginia, Maryland, Tennessee, Washington, California, Florida, Georgia, Texas, Arizona, New Mexico, Oregon, Colorado, Oklahoma, Kansas, Missouri, and Washington, DC.

BancShares’ earnings and cash flows are primarily derived from its commercial banking activities. We gather deposits from retail and commercial customers and also secure funding through various non-deposit sources. We invest the liquidity generated from these funding sources in interest-earning assets, including loans and leases, investment securities and overnight investments. We also invest in bank premises, hardware, software, furniture and equipment used to conduct our commercial banking business. We provide treasury services products, cardholder and merchant services, wealth management services and various other products and services typically offered by commercial banks.

EXECUTIVE OVERVIEW

Recent Economic and Industry Developments

Various external factors influence the focus of our business efforts, and the results of our operations can change significantly based on those external factors. Based on the latest real gross domestic product (GDP) information available, the Bureau of Economic Analysis’ first estimate of second quarter GDP indicated growth of 4.0 percent, a significant rebound from the 2.1 percent contraction during the first quarter of the year. This advancement is primarily due to increases in personal consumption expenditures, inventory investments, exports, and residential and nonresidential fixed investments. Second quarter results indicate improvements in labor market conditions, with the unemployment rate declining further. However, housing activity, while continuing to improve, is behind last year's trends as a result of higher rates, low housing inventory and new regulations.

The Federal Reserve’s Federal Open Market Committee (FOMC) indicated in the second quarter that “there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions.” In light of this cumulative progress, the FOMC decided to make further reductions in its stimulus program and is on pace to end its monthly asset purchase program in October 2014.

The FOMC stated it will maintain its target range for the federal funds rate and reiterated it would assess the appropriate timing of the first increase in the target rate based on progress toward its objectives of maximum employment and 2 percent inflation. The FOMC stated that it expects to maintain the current target range for a considerable time after the asset purchase program ends.

The trends in the banking industry are similar to those of the broader economy as shown in the latest national banking results from the first quarter of 2014. FDIC-insured institutions reported a decline in aggregate net income of 7.6 percent compared to the first quarter of 2013. Net income fell as banks are experiencing lower noninterest income due to reduced mortgage revenue and declining trading income. Noninterest expense remained relatively unchanged from the same quarter in 2013. Average net interest margin decreased to 3.17 percent from 3.27 percent in the same quarter in 2013. Nonetheless, 54 percent of banks reported higher net interest margins during the same period. Credit improvement remains key to earnings growth.

42

Net charge-offs and delinquent loans and lease balances continue to decline, with the largest declines in residential mortgage loans and home equity lines.

Other industry trends noted based on review of first quarter 2014 data, in comparison to the same quarter in 2013 unless otherwise specified, include the following:

•The largest positive contribution to the year-over-year change in net income is due to lower provision for loan and lease losses. This is the 18th consecutive quarter the provision for loan and lease losses has declined year-over-year.

•Earnings declined as a reduction in noninterest income outweighed growth in net interest income; however, 54 percent of FDIC-insured banks reported year-over-year improvements in earnings.

•Total assets increased by 1.2 percent in the first quarter of 2014, compared to the fourth quarter of 2013, with increases in loans and leases of 0.5 percent and investment securities of 1.8 percent. Deposit balances increased 1.1 percent during the quarter, compared to the fourth quarter of 2013, with the primarily increase in domestic deposits.

•Asset quality indicators continued to show improvement. This is the 15th consecutive quarter that net charge-offs have posted a year-over-year decline, and is the lowest quarterly total since second quarter 2007.

Financial Performance Highlights for Second Quarter 2014

Improved economic stability and operational execution has contributed to organic loan growth as well as improved credit quality in comparison to March 31, 2014 and the same quarter in the prior year. However, low interest rates, competitive loan and deposit pricing, and continued reduction in the acquired loan portfolio, continue to constrain interest margins and earnings.

BancShares’ consolidated net income during the second quarter of 2014 equaled $26.6 million, or $2.76 per share, compared to $22.4 million, or $2.33 per share in the first quarter and compared to $43.9 million, or $4.56 per share in the second quarter of 2013. The annualized returns on average assets and equity amounted to 0.48 percent and 5.01 percent, respectively, during the second quarter of 2014, compared to 0.83 percent and 9.13 percent during the second quarter of 2013. Net interest margin for the second quarter of 2014 was 3.29 percent, compared to 3.74 percent for the second quarter of the prior year. Net interest margin excluding acquired loans was 2.85 percent in comparison to 2.88 percent for the same quarter in 2013.

For the first six months of 2014, consolidated net income totaled $48.9 million, compared to $99.5 million for the same period of 2013.The annualized return on average assets was 0.45 percent for the first six months of 2014, compared to 0.95 percent for the same period of 2013. The annualized return on average shareholders' equity was 4.67 percent and 10.55 percent for the respective periods.

Noninterest income for the second quarter of 2014 totaled $65.4 million, compared to $65.0 million in the comparable period of 2013. For the six-month period, noninterest income totaled $126.6 million for 2014, compared to $122.5 million for 2013. Noninterest expense totaled $199.0 million for the second quarter of 2014 , an increase of $10.5 million from the sequential quarter. For the six-month period, noninterest expense totaled $390.1 million, compared to $382.9 million for 2013.

Income tax expense totaled $12.8 million and $25.3 million for the second quarter of 2014 and 2013, respectively, and totaled $23.4 million and $56.4 million for the six months ended June 30, 2014, and 2013, respectively.

Loans for the second quarter of 2014 totaled $13.5 billion, an increase of $53.9 million, or 0.4 percent, compared to the first quarter of 2014, and an increase of $426.2 million, or 3.3 percent, compared to the same quarter of 2013. Loans increased $391.2 million, or 3.0 percent from December 31, 2013 to June 30, 2014. Investment securities available for sale equaled $5.5 billion at June 30, 2014, compared to $5.7 billion and $5.2 billion at March 31, 2014 and June 30, 2013, respectively. Investment securities as of June 30, 2014 increased $150.5 million, or 2.8 percent, from December 31, 2013.

The allowance for loan and lease losses as a percentage of total loans was 1.52 percent for the second quarter of 2014 compared to 1.65 percent for the first quarter of 2014 and 1.97 percent for the second quarter of 2013. Provision credit for acquired loans totaled $9.5 million for the second quarter of 2014 compared to a provision credit of $2.3 million for the first quarter of 2014. The increase in the net credit was partially offset by the originated provision expense increase of $1.9 million.

Annualized net charge-offs as a percentage of average originated loans remained relatively consistent during the second quarter of 2014 at 0.11 percent compared to 0.08 percent and 0.15 percent for the first quarter of 2014 and second quarter of 2013, respectively. Total nonperforming assets as a percent of total loans and leases plus other real estate totaled 1.29 percent at June 30, 2014 compared to 1.37 percent and 1.80 percent at March 31, 2014 and June 30, 2013.

43

At June 30, 2014, total deposits equaled $18.6 billion, a decrease of $206.8 million, or 1.1 percent, when compared to the prior quarter, and an increase of $538.7 million, or 3.0 percent, when compared to the second quarter of 2013. Total deposits increased $682.7 million, or 3.8 percent, compared to December 31, 2013.

BancShares remains well-capitalized with a tier 1 leverage capital ratio of 9.71 percent, tier 1 risk-based capital ratio of 14.61 percent and total risk-based capital ratio of 15.95 percent at June 30, 2014.

BUSINESS COMBINATIONS

Merger Agreement with First Citizens Bancorporation, Inc.

On June 10, 2014, BancShares entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Citizens Bancorporation, Inc., a South Carolina corporation (“Bancorporation”), pursuant to which Bancorporation will merge with and into BancShares. The Merger Agreement provides that each share of Bancorporation common stock will be converted into the right to receive 4.00 shares of BancShares' Class A common stock and $50.00 cash, unless the holder elects for each share of such holder’s Bancorporation common stock to be converted into the right to receive 3.58 shares of BancShares' Class A common stock and 0.42 shares of BancShares' Class B common stock.

The Merger Agreement has been approved by the independent members of the Board of Directors of each company following a recommendation by a special committee of independent members of the board of each company. Subject to certain conditions, including receipt of shareholder and regulatory approvals, the merger is expected to be completed in the fourth quarter of 2014 with the subsidiary banks merging sometime thereafter.

See Note B to the Consolidated Financial Statements, "Business Combinations," for additional information related to the Merger.

1st Financial Services Corporation Merger

On January 1, 2014, FCB completed its merger with 1^st Financial Services Corporation (1^st Financial) and its wholly-owned banking subsidiary Mountain 1^st Bank & Trust Company. FCB paid $10.0 million to acquire 1^st Financial, including $8.0 million to acquire and subsequently retire the 1^st Financial securities that had been issued under the Troubled Asset Relief Program. In accordance with the acquisition method of accounting, all assets and liabilities were recorded at their fair value as of the acquisition date. As a result of the 1^st Financial transaction, during the first quarter of 2014, FCB recorded loans with a fair value of $316.3 million, investment securities with a fair value of $237.4 million and other real estate with a fair value of $11.6 million. The fair value of deposits assumed totaled $631.9 million. FCB also recorded $24.5 million of goodwill and $3.8 million in core deposit intangibles.

44

Table 1

FAIR VALUE OF 1^ST FINANCIAL SERVICES ACQUIRED ASSETS AND LIABILITIES

(Dollars in thousands)	January 1, 2014
Assets
Cash and cash equivalents	$	28,194
Investment securities	237,438
Loans and leases	316,327
Other real estate owned	11,591
Intangible assets	3,780
Other assets	23,991
Total assets acquired	$	621,321
Liabilities
Deposits:
Noninterest-bearing	$	152,444
Interest-bearing	479,427
Total deposits	631,871
Short-term borrowings	406
Other liabilities	3,559
Total liabilities assumed	635,836
Fair value of net liabilities assumed	14,515
Cash paid to shareholders	2,000
Cash paid to acquire TARP securities	8,000
Goodwill recorded	$	24,515

FDIC-Assisted Transactions

We participated in six FDIC-assisted transactions between 2009 and 2011 that provided significant growth opportunities and continue to provide significant contributions to our results of operations. These transactions allowed us to increase our presence in existing markets and to expand our banking presence to adjacent markets. Each of the FDIC-assisted transactions included loss share agreements that, for the term of the loss share agreement, protect us from a substantial portion of the credit and asset quality risk we would otherwise incur. Two of the loss share agreements expire during the third quarter of 2014, and two expire during the first quarter of 2015. We will process all necessary filings in accordance with the agreements before expiration to collect the earned loss share receivables. Going forward, we will continue to manage these loans and loan relationships in accordance with our standard credit administration policies and procedures.

Income Statement Impact of Business Combinations

The 1st Financial merger was accretive to net interest income during the three and six months ended June 30, 2014 and is expected to continue to be accretive going forward. The nonrecurring merger related costs totaled approximately $5.2 million. Loan related interest income generated from 1st Financial was approximately $4.2 million for the second quarter of 2014 and $8.6 million for the first six months of 2014.

When comparing the current quarter of 2014 to the second quarter of 2013, acquired loans had an unfavorable impact on earnings. Unfavorable variances were noted in interest income and provision for loan and lease losses, partially offset by favorable adjustments to the FDIC receivable. The decrease in interest income, and overall earnings, for the second quarter and first six months of 2014 compared to the same quarter and six months in the prior year is primarily driven by sustained runoff in the acquired loan portfolio. The unfavorable six-month comparison is affected by nonrecurring FDIC-assisted acquisition accounting adjustments recorded during the the first quarter of 2013. Due to various factors that affect income or expense related to acquired loans recognized in a given period, these components of net income are not easily predictable for future periods. Variations among these items may affect the comparability of various components of net income.

Acquired loan accretion income, which is included in interest income, may be accelerated in the event of unscheduled repayments and various other post-acquisition events. During the three months ended June 30, 2014, accretion income on acquired loans equaled $30.5 million, compared to $52.0 million during the second quarter of 2013. Accretion income for the six months ended June 30, 2014 and June 30, 2013 was $60.7 million and $131.9 million, respectively. The decrease during both the second quarter and the six-month periods of 2014 is attributed to accelerated repayments, loan portfolio runoff and a decrease in cash basis income. Cash basis income is generated when a loan pays off outside of expectations.

45

During the three months ended June 30, 2014, we recorded a credit to provision for loan and lease losses for acquired loans totaling $9.5 million compared to a credit of $15.5 million during the same period of 2013. For the six months ended June 30, 2014 and June 30, 2013, the credit to provision expense was $11.8 million and $38.1 million, respectively. For all periods, accelerated loan payments resulted in the reversal of previously-recognized impairment, although as expected, the volume of repayments during 2014 was significantly less than repayments during 2013.

During the three-month period ended June 30, 2014, the net adjustment to the FDIC receivable resulted in a reduction to noninterest income of $15.3 million, compared to a corresponding reduction in noninterest income of $14.4 million during the same period of 2013. The six months ended June 30, 2014 and June 30, 2013 saw reductions to noninterest income of $27.6 million and $38.5 million. The changes result from lower amortization expense of the FDIC receivable as the expiration dates of the loss share agreements approach.

FDIC Loss Share Receivable

The various terms of each loss share agreement and the components of the receivable from the FDIC are provided in Table 2. As of June 30, 2014, the FDIC receivable included $22.7 million of expected FDIC cash receipts and $27.2 million we expect to recover through prospective amortization of the asset due to post-acquisition improvements in the related loans. Generally, losses on single family residential loans are covered for ten years. All other loans are generally covered for five years. During the third quarter of 2014, loss share protection will expire for non-single family residential loans acquired from Temecula Valley Bank (TVB) and Venture Bank (VB). During the first quarter of 2015, loss share protection will expire for loans acquired from First Regional Bank (FRB) and for non-single family residential loans acquired from Sun American Bank (SAB). Protection for all other covered assets extends beyond December 31, 2015.

Table 2

	Fair value at acquisition date		Losses/expenses incurred through 6/30/2014		Cumulative amount reimbursed by FDIC through 6/30/2014		Carrying value at June 30, 2014				Current portion of receivable due from (to) FDIC for 6/30/2014 filings			Prospective amortization (accretion)
(Dollars in thousands)							Receivable from FDIC		Payable to FDIC
Entity
TVB - combined losses	$	103,558	$	199,226	$	1,858	$	3,090	$	—	$	2,913		$	1,505
VB - combined losses	138,963		156,155		125,184		1,357		—		(260		)	(316		)
FRB - combined losses	378,695		244,889		165,661		2,289		78,891		(3,203		)	5,766
SAB - combined losses	89,734		97,197		78,211		8,793		2,036		(454		)	6,490
United Western
Non-single family residential losses	112,672		111,785		88,880		12,138		17,529		225			4,711
Single family residential losses	24,781		4,884		3,744		10,645		—		164			2,813
Colorado Capital - combined losses	155,070		185,857		149,364		11,647		15,825		(514		)	6,250
Total	$	1,003,473	$	999,993	$	612,902	$	49,959	$	114,281	$	(1,129	)	$	27,219
Fair value at acquisition date represents the initial fair value of the receivable from FDIC, excluding the payable to FDIC. Prospective amortization (accretion) reflects balances that, due to post-acquisition credit quality improvement, will be amortized over the shorter of the covered asset's life or the term of the loss share period.

46

Table 3

SELECTED QUARTERLY DATA

	2014								2013											Six months ended June 30
	Second				First				Fourth			Third				Second
(Dollars in thousands, except share data)	Quarter				Quarter				Quarter			Quarter				Quarter				2014				2013
SUMMARY OF OPERATIONS
Interest income	$	177,311			$	173,394			$	189,640		$	192,634			$	193,926			$	350,705			$	414,530
Interest expense	11,613				12,463				13,047			13,451				14,398				24,076				30,120
Net interest income	165,698				160,931				176,593			179,183				179,528				326,629				384,410
Provision (credit) for loan and lease losses	(7,299		)		(1,903		)		7,276			(7,683		)		(13,242		)		(9,202		)		(31,848		)
Net interest income after provision for loan and lease losses	172,997				162,834				169,317			186,866				192,770				335,831				416,258
Noninterest income	65,382				61,181				69,177			71,918				64,995				126,563				122,508
Noninterest expense	199,020				191,030				196,315			192,143				188,567				390,050				382,922
Income before income taxes	39,359				32,985				42,179			66,641				69,198				72,344				155,844
Income taxes	12,809				10,619				14,953			25,659				25,292				23,428				56,353
Net income	$	26,550			$	22,366			$	27,226		$	40,982			$	43,906			$	48,916			$	99,491
Net interest income, taxable equivalent	$	166,570			$	161,694			$	177,280		$	179,823			$	180,188			$	328,263			$	385,743
PER SHARE DATA
Net income	$	2.76			$	2.33			$	2.83		$	4.26			$	4.56			$	5.09			$	10.34
Cash dividends	0.30				0.30				0.30			0.30				0.30				0.60				0.60
Market price at period end (Class A)	245.00				240.75				222.63			205.60				192.05				245.00				192.05
Book value at period end	223.43				218.82				215.89			206.06				201.62				223.43				201.62
SELECTED PERIOD AVERAGE BALANCES
Total assets	$	22,022,465			$	21,872,343			$	21,562,920		$	21,260,384			$	21,224,412			$	21,947,818			$	21,187,274
Investment securities	5,629,467				5,606,723				5,285,783			5,177,729				5,162,893				5,618,157				5,179,818
Loans and leases (acquired and originated)	13,566,612				13,459,945				13,088,636			13,111,710				13,167,580				13,513,580				13,228,367
Interest-earning assets	20,304,777				20,139,131				19,787,236			19,428,949				19,332,679				20,222,418				19,256,916
Deposits	18,561,927				18,492,310				18,102,752			17,856,882				17,908,705				18,527,311				18,014,058
Long-term obligations	398,615				500,805				510,871			449,013				443,804				449,428				444,170
Interest-bearing liabilities	14,020,480				14,189,227				13,790,088			13,757,983				13,958,137				14,104,388				14,048,820
Shareholders' equity	$	2,125,239			$	2,094,557			$	2,010,191		$	1,953,128			$	1,929,621			$	2,110,533			$	1,902,217
Shares outstanding	9,618,941				9,618,941				9,618,941			9,618,941				9,618,941				9,618,941				9,618,963
SELECTED PERIOD-END BALANCES
Total assets	$	22,062,840			$	22,154,997			$	21,199,091		$	21,511,352			$	21,308,822			$	22,062,840			$	21,308,822
Investment securities	5,538,859				5,677,019				5,388,610			5,162,598				5,186,106				5,538,859				5,186,106
Loans and leases:
Acquired	1,109,933				1,270,818				1,029,426			1,188,281				1,443,336				1,109,933				1,443,336
Originated	12,415,023				12,200,226				12,104,298			11,884,585				11,655,469				12,415,023				11,655,469
Deposits	18,556,758				18,763,545				17,874,066			18,063,319				18,018,015				18,556,758				18,018,015
Long-term obligations	314,529				440,300				510,769			510,963				443,313				314,529				443,313
Shareholders' equity	$	2,149,145			$	2,104,830			$	2,076,675		$	1,982,057			$	1,939,330			$	2,149,145			$	1,939,330
Shares outstanding	9,618,941				9,618,941				9,618,941			9,618,941				9,618,941				9,618,941				9,618,941
SELECTED RATIOS AND OTHER DATA
Rate of return on average assets (annualized)	0.48			%	0.41			%	0.50		%	0.76			%	0.83			%	0.45			%	0.95			%
Rate of return on average shareholders' equity (annualized)	5.01				4.33				5.37			8.32				9.13				4.67				10.55
Net yield on interest-earning assets (taxable equivalent)	3.29				3.26				3.55			3.67				3.74				3.27				4.04
Allowance for loan and lease losses to total loans and leases:
Acquired	2.64				3.54				5.20			5.01				5.30				2.64				5.30
Originated	1.43				1.46				1.49			1.50				1.56				1.43				1.56
Nonperforming assets to total loans and leases and other real estate at period end:
Acquired covered	10.97				9.34				7.02			7.05				8.62				10.97				8.62
Acquired not covered	3.12				3.36				—			—				—				3.12				—
Originated	0.58				0.66				0.74			0.90				0.91				0.58				0.91
Tier 1 risk-based capital ratio	14.61				14.56				14.92			15.04				14.91				14.61				14.91
Total risk-based capital ratio	15.95				16.05				16.42			16.54				16.41				15.95				16.41
Leverage capital ratio	9.71				9.66				9.82			9.84				9.68				9.71				9.68
Dividend payout ratio	10.87				12.88				10.60			7.04				6.58				11.79				5.80
Average loans and leases to average deposits	73.09				72.79				72.30			73.43				73.53				72.94				73.43

Average loan and lease balances include nonaccrual loans and leases.

47

Table 4

CONSOLIDATED TAXABLE EQUIVALENT RATE/VOLUME VARIANCE ANALYSIS - THREE MONTHS

	2014							2013							Increase (decrease) due to:
				Interest							Interest
	Average			Income/		Yield/		Average			Income/		Yield/					Yield/			Total
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate		Volume			Rate			Change
Assets
Loans and leases	$	13,566,612		$	164,794	4.87	%	$	13,167,580		$	185,661	5.66	%	$	5,349		$	(26,216	)	$	(20,867	)
Investment securities:
U. S. Treasury	1,481,051			2,435		0.66		681,893			486		0.29		949			1,000			1,949
Government agency	1,559,337			2,160		0.55		2,947,308			3,197		0.43		(1,703		)	666			(1,037		)
Mortgage-backed securities	2,565,403			7,813		1.22		1,512,268			4,506		1.20		3,191			116			3,307
State, county and municipal	186			4		8.60		187			4		8.58		—			—			—
Other	23,490			220		3.76		21,237			76		1.44		15			129			144
Total investment securities	5,629,467			12,632		0.90		5,162,893			8,269		0.64		2,452			1,911			4,363
Overnight investments	1,108,698			756		0.27		1,002,206			656		0.26		72			28			100
Total interest-earning assets	20,304,777			$	178,182	3.52	%	19,332,679			$	194,586	4.04	%	$	7,873		$	(24,277	)	$	(16,404	)
Cash and due from banks	464,877							482,821
Premises and equipment	882,256							873,503
Receivable from FDIC for loss share agreements	67,574							182,766
Allowance for loan and lease losses	(216,337		)					(264,978		)
Other real estate owned	81,074							128,152
Other assets	438,244							489,469
Total assets	$	22,022,465						$	21,224,412
Liabilities
Interest-bearing deposits:
Checking with interest	$	2,553,941		$	125	0.02	%	$	2,378,178		$	166	0.03	%	$	16		$	(57	)	$	(41	)
Savings	1,200,145			152		0.05		965,801			120		0.05		31			1			32
Money market accounts	6,182,997			1,540		0.10		6,295,031			2,490		0.16		(27		)	(923		)	(950		)
Time deposits	2,999,262			4,189		0.56		3,285,435			6,221		0.76		(468		)	(1,564		)	(2,032		)
Total interest-bearing deposits	12,936,345			6,006		0.19		12,924,445			8,997		0.32		(448		)	(2,543		)	(2,991		)
Short-term borrowings	685,520			1,551		0.91		589,888			680		0.46		159			712			871
Long-term obligations	398,615			4,055		4.07		443,804			4,721		4.26		(337		)	(329		)	(666		)
Total interest-bearing liabilities	14,020,480			$	11,612	0.33	%	13,958,137			$	14,398	0.41	%	$	(626	)	$	(2,160	)	$	(2,786	)
Demand deposits	5,625,582							4,984,260
Other liabilities	251,164							352,394
Shareholders' equity	2,125,239							1,929,621
Total liabilities and shareholders' equity	$	22,022,465						$	21,224,412
Interest rate spread						3.19	%						3.63	%
Net interest income and net yield
on interest-earning assets				$	166,570	3.29	%				$	180,188	3.74	%	$	8,499		$	(22,117	)	$	(13,618	)

Loans and leases include acquired loans, originated loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming statutory federal income tax rates of 35.0 percent for each period and state income tax rates of 6.2 percent and 6.9 percent for 2014 and 2013, respectively. The taxable-equivalent adjustment was $872 and $660 for 2014 and 2013, respectively. The rate/volume variance is allocated equally between the changes in volume and rate.

48

Table 5

CONSOLIDATED TAXABLE EQUIVALENT RATE/VOLUME VARIANCE ANALYSIS - YEAR TO DATE

	2014							2013							Increase (decrease) due to:
				Interest							Interest
	Average			Income/		Yield/		Average			Income/		Yield/					Yield/			Total
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate		Volume			Rate			Change
Assets
Loans and leases	$	13,513,580		$	326,430	4.87	%	$	13,228,367		$	397,932	6.07	%	$	7,900		$	(79,402	)	$	(71,502	)
Investment securities:
U.S. Treasury	1,131,539			3,521		0.63		742,511			1,004		0.27		856			1,661			2,517
Government agency	1,917,664			5,122		0.53		3,021,622			6,663		0.44		(2,649		)	1,108			(1,541		)
Mortgage-backed securities	2,545,457			15,576		1.22		1,396,026			9,085		1.31		7,290			(799		)	6,491
State, county and municipal	186			7		7.53		367			13		7.14		(7		)	1			(6		)
Other	23,311			316		2.73		19,292			153		1.60		43			120			163
Total investment securities	5,618,157			24,542		0.87		5,179,818			16,918		0.65		5,533			2,091			7,624
Overnight investments	1,090,681			1,368		0.25		848,731			1,013		0.24		300			55			355
Total interest-earning assets	20,222,418			$	352,340	3.51	%	19,256,916			$	415,863	4.36	%	$	13,733		$	(77,256	)	$	(63,523	)
Cash and due from banks	471,424							495,548
Premises and equipment	879,849							877,242
Receivable from FDIC for loss share agreements	77,507							208,575
Allowance for loan and lease losses	(220,714		)					(273,927		)
Other real estate owned	85,960							139,448
Other assets	431,374							483,472
Total assets	$	21,947,818						$	21,187,274
Liabilities
Interest-bearing deposits:
Checking with interest	$	2,524,474		$	278	0.02	%	$	2,331,192		$	309	0.03	%	$	57		$	(88	)	$	(31	)
Savings	1,190,250			443		0.08		947,246			234		0.05		64			145			209
Money market accounts	6,268,862			3,429		0.11		6,378,644			5,675		0.18		(65		)	(2,181		)	(2,246		)
Time deposits	3,056,296			8,682		0.57		3,372,716			13,092		0.78		(1,061		)	(3,349		)	(4,410		)
Total interest-bearing deposits	13,039,882			12,832		0.20		13,029,798			19,310		0.30		(1,005		)	(5,473		)	(6,478		)
Short-term borrowings	615,078			2,136		0.70		574,852			1,384		0.49		126			626			752
Long-term obligations	449,428			9,109		4.05		444,170			9,426		4.24		106			(423		)	(317		)
Total interest-bearing liabilities	14,104,388			$	24,077	0.34	%	14,048,820			$	30,120	0.43	%	$	(773	)	$	(5,270	)	$	(6,043	)
Demand deposits	5,487,429							4,984,260
Other liabilities	245,468							251,977
Shareholders' equity	2,110,533							1,902,217
Total liabilities and shareholders' equity	$	21,947,818						$	21,187,274
Interest rate spread						3.17	%						3.93	%
Net interest income and net yield
on interest-earning assets				$	328,263	3.27	%				$	385,743	4.04	%	$	14,506		$	(71,986	)	$	(57,480	)

Loans and leases include acquired loans, originated loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming statutory federal income tax rates of 35.0 percent for each period and state income tax rates of 6.2 percent and 6.9 percent for 2014 and 2013, respectively. The taxable-equivalent adjustment was $1,634 and $1,333 for 2014 and 2013, respectively. The rate/volume variance is allocated equally between the changes in volume and rate.

49

RESULTS OF OPERATIONS

Net Interest Income and Margins

Second Quarter 2014

The second quarter results were good but show notable differences when compared to the first quarter of 2014 and the same quarter of 2013. The most significant impact on net interest income, net interest margin, and average asset yields resulted from changes in the acquired loan portfolio including loan resolutions, acceleration of payments, and overall portfolio run-off throughout the second quarter, albeit at a slower pace than prior quarters. Other significant drivers for quarterly changes are specifically noted below.

Net interest income increased $4.8 million, or 3.0 percent, compared to the first quarter of 2014, principally due to increased loan and investment income and reduced deposit costs. Conversely, net interest income decreased $13.8 million, or 7.7 percent, compared to the same period of 2013. Accretion income on acquired loans totaled $30.5 million when compared to $52.0 million during the second quarter of 2013. This reduction was partially offset by increases in loan interest income from the 1st Financial loan portfolio of $4.2 million and $4.3 million from improved investment interest income. Net interest income also benefited from decreased interest expense of $2.8 million in comparison to the same quarter of the prior year, due to reduction in funding costs.

Net interest margin improved 3 basis points (bps) compared to the first quarter of 2014 primarily due to improvements in acquired loan yields and investment yields as well as reduced deposit costs over the same period. The increase in net interest margin and net income during the current quarter in comparison to the first quarter was primarily due to reduced acquired loan impact, and improvements in investment yields and deposits costs over the same period. Originated loan growth, increased provision credit, improved investment yields, and lower interest expense contributed to higher net interest income after provision in comparison to the first quarter. While the non-acquired bank operations are helping earnings, our traditional banking products have much tighter margins; therefore, in a neutral interest rate environment, we anticipate continued pressure to replace the yield from the acquired portfolio runoff.

Net interest margin for the second quarter of 2014 was 3.29 percent, a decrease of 45 basis points from 3.74 percent recorded in the second quarter of 2013. The decrease was partially offset by modest improvements in investment yields and funding costs. While margin compression is a continuing concern in the current interest rate environment, the majority of BancShares' quarter-to-date margin compression was directly related to the acquired loan portfolio runoff. Net interest margin excluding acquired loans was 2.85 percent in comparison to 2.88 percent for the same quarter in 2013.

Average quarter-to-date interest earning assets increased $165.6 million, or 0.8 percent, compared to the first quarter of 2014 which was primarily driven by the $106.7 million increase in average outstanding loans. Interest-earning assets averaged $20.3 billion, an increase of $972.1 million compared to the second quarter of 2013. The increase is primarily the result of organic loan growth and the 1st Financial acquisition, offset by reductions in the acquired loan portfolios, while the increase in average investments is principally driven by the addition of the 1st Financial investment portfolio and redeployment of excess cash. Average loans and leases increased $106.7 million and $399.0 million when compared to the first quarter of 2014 and the second quarter of 2013, respectively.

Interest income totaled $177.3 million, a $3.9 million increase from the first quarter of 2014, and a $16.6 million decrease from the second quarter of 2013. The taxable-equivalent yield for total loans remained unchanged when compared to the first quarter of 2014, but decreased by 79 basis points when compared to the same quarter in the prior year. The taxable-equivalent yield on earning assets was 3.52 percent, relatively unchanged in comparison to the first quarter of 2014, and a decline of 52 basis points in comparison to the second quarter of 2013.

Average investment securities increased $22.7 million in comparison to the first quarter of 2014, with a 5 basis point increase in the taxable-equivalent yield. Average investment securities increased $466.6 million in comparison to the second quarter of 2013, with a 26 basis point increase in the taxable-equivalent yield. Interest income earned on the investment securities portfolio totaled $12.4 million when compared to $11.7 million and $8.1 million during the first quarter of 2014 and the same quarter of 2013, respectively. Average overnight investments increased $106.5 million compared to the same quarter in the prior year. Interest income earned on overnight investments totaled $0.8 million during the second quarter compared to $0.7 million during the second quarter of 2013. Average investment and overnight investment balances continue to increase as cash provided by acquired loan repayments and increased deposits are redeployed.

Average interest-bearing liabilities decreased $168.7 million when compared to the first quarter of 2014. Conversely, average interest-bearing liabilities totaled $14.0 billion, an increase of $62.3 million when compared to the second quarter of 2013. Interest expense totaled $11.6 million, a $0.9 million and $2.8 million decrease from the first quarter of 2014 and same quarter of 2013, respectively. The rate on interest-bearing liabilities was 0.33 percent, a decrease of 2 basis points and 8 basis points from the first quarter of 2014 and the second quarter of 2013, respectively. Average interest-bearing deposits equaled $12.9

50

billion, a decrease of $208.2 million from the first quarter of 2014, and an increase of $11.9 million from the second quarter of 2013.

Year to Date 2014

Similar to the quarter over quarter comparison, the year-to-date 2014 results were good, but show notable differences when compared to the same period of 2013. The most significant impact on net interest income, net interest margin, and average asset yields resulted from changes in the acquired loan portfolio including loan resolutions, acceleration of payments, and overall portfolio run-off throughout the period ending June 30, 2014, albeit at a slower pace than prior periods. Other significant drivers for changes during the period are specifically noted below.

Net interest income for the first six months of 2014 totaled $326.6 million, a decrease of $57.8 million, or 15.0 percent, compared to the same period of 2013. Similar to quarter-to-date results, this reduction was partially offset by organic loan growth and $8.6 million of interest income from the 1st Financial loan portfolio and improved investment interest income. Accretion income on acquired loans totaled $60.7 million compared to $131.9 million during the same period of 2013. Net interest income also benefited from decreased interest expense of $6.0 million in comparison to the same six-month period of the prior year, due to reduction in funding costs.

The net interest margin amounted to 3.27 percent, compared to 4.04 percent for the same six-month period in 2013. The decrease in the year-to-date margin is predominately driven by reductions in the acquired loan portfolio yields, partially offset by modest improvements in investment yields and funding costs. Although the acquired loan portfolio performance and runoff continue to create margin volatility, the overall impact is expected to become less significant as that portfolio continues to decrease. Net interest margin excluding acquired loans was 2.84 percent in comparison to 2.89 percent for the same six-month period in 2013.

Interest-earning assets averaged $20.2 billion, an increase of $965.5 million in comparison to the same period of 2013 primarily due to increases in loans and investments. Average loans and leases increased $285.2 million in comparison to the first six months of 2013 as a result of organic loan growth and the 1st Financial acquisition, offset by reductions in the acquired loan portfolios. Interest income earned from loans and leases decreased $71.8 million as the taxable-equivalent yield for total loans also decreased by 120 basis points compared to the first six months in the prior year. As the acquired portfolio yield is being replaced with higher quality, lower yielding loan instruments, the yield on interest-earning assets declined in proportion, reaching 3.51 percent, compared to 4.36 percent for the same period of 2013. Interest income totaled $350.7 million, a $63.8 million decrease from the same period of 2013. The increase in average investments is primarily driven by the addition of the 1st Financial investment portfolio.

The repositioning of the investment portfolio during the year has helped improve overall investment yields helping to offset the decrease in loan yields. Average investment securities increased $438.3 million in comparison to the first six months of 2013, with a 22 basis point increase in the taxable-equivalent yield. Interest income earned on the investment securities portfolio totaled $24.2 million compared to $16.6 million during the same period of 2013. Average overnight investments increased $242.0 million compared to the year-to-date average in the prior year. Interest income earned on overnight investments totaled $1.4 million during the first six months compared to $1.0 million during the same period of 2013. Average investment and overnight investment balances continue to increase as cash provided by acquired loan repayments and increased deposits are redeployed.

Average interest-bearing liabilities totaled $14.1 billion, an increase of $55.6 million when compared to the same period of 2013. Interest expense totaled $24.1 million, a $6.0 million decrease from the same period of 2013. The rate on interest-bearing liabilities fell 9 basis points from year-to-date 2013 to 0.34 percent during the six months ended June 30, 2014. Average interest-bearing deposits equaled $13.0 billion, an increase of $10.1 million from the same period of 2013. This increase includes deposits acquired in the 1st Financial merger, as well as recurring seasonal trends.

Noninterest Income

The primary sources of noninterest income have traditionally consisted of cardholder services income, merchant services income, service charges on deposit accounts and revenues derived from wealth management services.

FDIC-assisted acquired loan recoveries and related adjustments in the FDIC receivable and payable is another source of noninterest income. As the loss share agreements begin to expire in the third quarter of 2014, we expect the impact on noninterest income to be reduced going forward.

51

Table 6

Noninterest Income

	Three months ended June 30						Three-month change						Six months ended June 30						Six-month change
(Dollars in thousands)	2014			2013			$			%			2014			2013			$			%
Cardholder services	$	13,257		$	12,026		$	1,231		10.2		%	$	25,089		$	23,097		$	1,992		8.6		%
Merchant services	15,035			15,245			(210		)	(1.4	)		28,556			27,731			825			3.0
Service charges on deposit accounts	15,265			14,883			382			2.6			29,705			29,882			(177		)	(0.6	)
Wealth management services	15,815			15,097			718			4.8			30,695			29,612			1,083			3.7
Fees from processing services	5,682			5,051			631			12.5			10,543			10,670			(127		)	(1.2	)
Other service charges and fees	4,250			3,966			284			7.2			8,194			7,732			462			6.0
Mortgage income	1,210			3,669			(2,459		)	(67.0	)		2,165			7,457			(5,292		)	(71.0	)
Insurance commissions	2,253			2,394			(141		)	(5.9	)		5,540			5,374			166			3.1
ATM income	1,260			1,314			(54		)	(4.1	)		2,462			2,482			(20		)	(0.8	)
Adjustments to FDIC receivable for loss share agreements	(15,295		)	(14,439		)	(856		)	5.9			(27,644		)	(38,492		)	10,848			(28.2	)
Recoveries of acquired loans previously charged off	5,400			4,219			1,181			28.0			8,869			5,850			3,019			51.6
Other	1,250			1,570			(320		)	(20.4	)		2,389			11,113			(8,724		)	(78.5	)
Total noninterest income	$	65,382		$	64,995		$	387		0.6		%	$	126,563		$	122,508		$	4,055		3.3		%

Noninterest income for the second quarter of 2014 equaled $65.4 million, compared to $65.0 million in the comparable period of 2013. The $0.4 million increase during 2014 is primarily related to improvements in cardholder services resulting from higher volume, higher service charges on deposits due to seasonality, higher wealth management services income from trust asset management and annuity fees, and increases in recoveries of acquired loans previously charged off. These improvements are partially offset by a decline in mortgage income due to reduced mortgage originations and a decline in adjustments to the FDIC receivable for loss share agreements as a result of acquired portfolio performance.

For the six-month period, noninterest income equaled $126.6 million for 2014, compared to $122.5 million for 2013, primarily due to a $2.8 million increase in cardholder and merchant services income, a $10.8 million reduction in unfavorable adjustments to the FDIC loss share receivable, and a $3.0 million increase in recoveries of acquired loans previously charged off. These increases are partially offset by a $5.3 million decline in mortgage income as a result of reduced mortgage originations due to economic conditions, and a decrease in other resulting from a $7.5 million gain generated from the sale of various service agreements during the first quarter of 2013.

During 2014, substantially all fees from processing services relate to payments received from FCB-SC. Following the proposed merger of BancShares and Bancorporation, anticipated to occur during the fourth quarter of 2014, no further fees from processing services will be recorded from Bancorporation. However, this reduction is not expected to have an impact on earnings as the associated processing expenses recorded by Bancorporation will also be eliminated upon consolidation.

52

Noninterest Expense

The primary components of noninterest expense are salaries and related employee benefits, occupancy costs and support facilities and equipment and software costs and our technology and operations infrastructure.

Table 7

Noninterest Expense

	Three months ended June 30				Three-month change						Six months ended June 30				Six-month change
(Dollars in thousands)	2014		2013		$			%			2014		2013		$			%
Salaries and wages	$	82,683	$	75,802	$	6,881		9.1		%	$	162,557	$	151,921	$	10,636		7.0		%
Employee benefits	19,772		23,228		(3,456		)	(14.9	)		39,872		48,247		(8,375		)	(17.4	)
Occupancy expense	20,937		18,464		2,473			13.4			41,362		37,273		4,089			11.0
Equipment expense	19,686		18,698		988			5.3			38,477		37,644		833			2.2
FDIC insurance expense	2,640		2,423		217			9.0			5,276		5,089		187			3.7
Foreclosure-related expenses	3,858		3,467		391			11.3			9,268		7,772		1,496			19.2
Merchant processing	9,755		9,114		641			7.0			18,236		17,347		889			5.1
Processing fees paid to third parties	4,564		3,846		718			18.7			9,690		8,227		1,463			17.8
Card processing	3,033		3,682		(649		)	(17.6	)		5,630		6,759		(1,129		)	(16.7	)
Consultant	3,921		2,465		1,456			59.1			6,152		4,091		2,061			50.4
Collection	2,647		5,104		(2,457		)	(48.1	)		4,482		10,379		(5,897		)	(56.8	)
Advertising	1,773		1,107		666			60.2			3,062		1,405		1,657			(a)
Other	23,751		21,167		2,584			12.2			45,986		46,768		(782		)	(1.7	)
Total noninterest expense	$	199,020	$	188,567	$	10,453		5.5		%	$	390,050	$	382,922	$	7,128		1.9		%

(a) not meaningful

Noninterest expense increased $10.4 million in the second quarter of 2014 to $199.0 million, compared to $188.6 million in the second quarter of 2013. The second quarter2014 increase is a result of higher salaries and wages of $6.9 million, occupancy expenses of $2.5 million, and consultant and other expenses which increased $1.5 million and $2.6 million, respectively, primarily due to merger-related consultant services expenses. This increase is partially offset by lower employee benefits of $3.5 million primarily due to lower health care costs and pension expenses and reduced collection expenses of $2.5 million due to lower nonperforming assets.

For the six-month period, noninterest expense totaled $390.1 million, compared to $382.9 million for the six-month period of 2013. The increase results from higher salaries and wages of $10.6 million, higher occupancy expense of $4.1 million, increases in foreclosure-related expenses of $1.5 million, higher processing fees of $1.5 million, a $2.1 million increase in consultant fees resulting from merger-related expenses, and higher advertising expenses of $1.7 million. The increase in salaries and wages is primarily related to annual merit increases and the increase in foreclosure-related expenses is due to increased resolutions of other real estate properties leading to the reduction in other real estate owned (OREO) property balance of $46.5 million when compared to June 30, 2013. These increases are partially offset by lower employee benefit expenses of $8.4 million reflecting lower pension costs resulting from a higher discount rate used to calculate pension expense during 2014, lower card processing fees of $1.1 million, and reduced collection expenses of $5.9 million associated with managing reduced nonperforming assets. The lower card processing fees in the first six months of 2014 are related to card incentive commissions recorded throughout the year, which offset the noninterest expense recognized during the period, whereas these commissions were recorded as a one-time adjustment in the third quarter of the prior year.

Income Taxes

We monitor and evaluate the potential impact of current events on the estimates used to establish income tax expenses and income tax liabilities. On a periodic basis, we evaluate our income tax positions based on current tax law, positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors.

Income tax expense totaled $12.8 million and $25.3 million for the second quarter of 2014 and 2013, representing effective tax rates of 32.5 percent and 36.6 percent during the respective periods. Income tax expense totaled $23.4 million and $56.4 million for the six months ended June 30, 2014, and 2013, respectively. The effective tax rates were 32.4 percent and 36.2

53

percent for the respective six-month periods. The decreased effective tax rate is the result of the impact of permanent differences on lower pre-tax earnings.

BALANCE SHEET ANALYSIS

We focus on maintaining high-asset quality, which results in a loan and lease portfolio subjected to strenuous underwriting and monitoring procedures and corresponding tighter margins. We avoid high-risk industry concentrations, but we do maintain a concentration of owner-occupied real estate loans to borrowers in medical and medical-related fields. The credit department actively monitors all loan concentrations to ensure potential risks are identified timely and managed accordingly. Our focus on asset quality also influences the composition of our investment securities portfolio. At June 30, 2014, mortgage-backed securities represented 46.9 percent of investment securities available for sale, compared to U.S. Treasury and government agency securities, which represented 29.4 percent and 23.2 percent, respectively, of the portfolio. Investments in mortgage-backed securities primarily represent securities issued by government entities. The balance of the available-for-sale portfolio includes common stock of other financial institutions and municipal securities. Overnight investments include interest-bearing deposits at the Federal Reserve Bank and other financial institutions and federal funds sold.

Investment Securities

Investment securities available for sale equaled $5.54 billion at June 30, 2014, compared to $5.39 billion and $5.19 billion at December 31, 2013 and June 30, 2013, respectively. Available for sale securities are reported at their aggregate fair value, and unrealized gains and losses are included as a component of other comprehensive income, net of deferred taxes. As of June 30, 2014, investment securities available for sale had a net unrealized gain of $26.8 million, compared to a net unrealized loss of $16.6 million and $6.7 million as of December 31, 2013 and June 30, 2013, respectively. In determining whether we had any other than temporary impairment for securities with unrealized losses we consider the amount and duration of the impairment, whether the impairment is industry wide or specific to the financial condition of the issuer, our ability to hold the investment for recovery, adverse actions by rating agencies, discontinuation of dividends on equity securities and deferred interest payments on debt securities. Management concluded that no other than temporary impairment existed as of June 30, 2014.

Changes in the amount of our investment securities portfolio result from balance sheet trends including loans and leases, deposits and short-term borrowings. When inflows arising from deposit and treasury services products exceed loan and lease demand, we invest excess funds in the securities portfolio. Conversely, when loan demand exceeds growth in deposits and short-term borrowings, we allow overnight investments to decline and use proceeds from maturing securities to fund loan demand.

Table 8

Investment Securities

	June 30, 2014				December 31, 2013				June 30, 2013
(Dollars in thousands)	Cost		Fair value		Cost		Fair value		Cost		Fair Value
Investment securities available for sale:
U.S. Treasury	$	1,623,564	$	1,625,630	$	373,223	$	373,437	$	598,625	$	598,666
Government agency	1,281,724		1,283,566		2,543,223		2,544,229		2,725,227		2,721,379
Mortgage-backed securities	2,605,333		2,596,286		2,486,297		2,446,873		1,866,204		1,843,323
Equity securities	543		32,498		543		22,147		543		20,593
Municipal securities	185		186		186		187		186		187
Other	—		—		863		830		850		828
Total investment securities available for sale	5,511,349		5,538,166		5,404,335		5,387,703		5,191,635		5,184,976
Investment securities held to maturity:
Mortgage-backed securities	693		729		907		974		1,130		1,200
Total investment securities	$	5,512,042	$	5,538,895	$	5,405,242	$	5,388,677	$	5,192,765	$	5,186,176

Since December 31, 2013, the proceeds from maturing government agency securities were primarily reinvested into U.S. Treasury securities at higher-yielding rates. As of June 30, 2014, equity securities included our investment in Bancorporation stock of $0.5 million and $32.0 million at cost and fair value, respectively. Pursuant to the Merger Agreement, the capital stock of Bancorporation will be retired.

54

Loans and Leases

We report our acquired and originated loan portfolios separately, and each portfolio is further divided into commercial and non-commercial based on the type of borrower, purpose, collateral, and/or our underlying credit management processes. Additionally, we have identified loan classes, which further disaggregate loans based upon common risk characteristics. See Note D to the Consolidated Financial Statements, "Loans and Leases," for definitions of each loan class.

Table 9

Loans and Leases

(Dollars in thousands)	June 30, 2014		December 31, 2013		June 30, 2013
Acquired loans:
Commercial:
Construction and land development	$	80,827	$	78,915	$	160,733
Commercial mortgage	637,481		642,891		859,038
Other commercial real estate	34,688		41,381		81,904
Commercial and industrial	33,851		17,254		37,336
Other	1,270		866		1,018
Total commercial loans	788,117		781,307		1,140,029
Noncommercial:
Residential mortgage	270,688		213,851		256,972
Revolving mortgage	20,129		30,834		36,153
Construction and land development	28,759		2,583		9,009
Consumer	2,240		851		1,173
Total noncommercial loans	321,816		248,119		303,307
Total acquired loans	1,109,933		1,029,426		1,443,336
Originated loans and leases:
Commercial:
Construction and land development	342,021		319,847		305,789
Commercial mortgage	6,367,096		6,362,490		6,135,068
Other commercial real estate	178,899		178,754		176,031
Commercial and industrial	1,292,213		1,081,158		997,504
Lease financing	413,422		381,763		352,818
Other	131,051		175,336		172,861
Total commercial loans	8,724,702		8,499,348		8,140,071
Noncommercial:
Residential mortgage	1,071,089		982,421		884,020
Revolving mortgage	2,122,675		2,113,285		2,123,814
Construction and land development	119,420		122,792		119,253
Consumer	377,137		386,452		388,311
Total noncommercial loans	3,690,321		3,604,950		3,515,398
Total originated loans and leases	12,415,023		12,104,298		11,655,469
Total loans and leases	$	13,524,956	$	13,133,724	$	13,098,805

At June 30, 2014, total acquired loans increased $80.5 million, or 7.8 percent, compared to December 31, 2013 and decreased $333.4 million, or 23.1 percent compared to June 30, 2013. The increase in acquired loans from December 31, 2013 is attributable to the 1st Financial merger, which resulted in additional acquired loans totaling $291.7 million at June 30, 2014, and is partially offset by continued loan run off. The decrease in the acquired portfolio from June 30, 2013 is due to continued loan run off.

Total originated loans increased $310.7 million, or 2.6 percent, and $759.6 million, or 6.5 percent compared to December 31, 2013 and June 30, 2013, respectively. The increases are primarily driven by increases in commercial mortgage, commercial and industrial and residential mortgage loans.

While the current economic conditions continue to suppress loan demand, we believe the 2014 growth to date points to general improvement in consumer confidence, and we expect originated loan growth to continue for the remainder of 2014.

55

Allowance for Loan and Lease Losses

At June 30, 2014, the allowance for loan and lease losses allocated to originated loans totaled $176.9 million, or 1.43 percent of originated loans and leases, compared to $179.9 million, or 1.49 percent, and $181.8 million, or 1.56 percent, at December 31, 2013 and June 30, 2013, respectively. An additional allowance of $29.3 million relates to acquired loans at June 30, 2014, compared to $53.5 million at December 31, 2013 and $76.5 million at June 30, 2013.

Management considers the allowance adequate to absorb estimated inherent losses that relate to loans and leases outstanding at June 30, 2014, although future adjustments may be necessary based on changes in economic conditions and other factors. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan and lease losses. Such agencies may require adjustments to the allowance based on information available to them at the time of their examination.

BancShares recorded a $7.3 million credit to provision for loan and lease losses during the second quarter of 2014, compared to a credit to provision expense of $13.2 million in the same quarter of 2013. For the six months ended June 30, 2014, the credit to provision for loan and lease losses totaled $9.2 million in comparison to $31.8 million credit for the same period of 2013. The credit for acquired loans totaled $9.5 million and $11.8 million during the second quarter and first six months of 2014, respectively, compared to credits of $15.5 million and $38.1 million for the same periods of 2013. The quarter over quarter and year-to-date change is the result of loan runoff and repayments. Provision expense for originated loans totaled $2.2 million and $2.6 million during the second quarter and first six months of 2014, respectively, compared to $2.2 million and $6.2 million during the same periods of 2013, the result of credit quality improvements in the originated loan portfolio and a reduction in net charge-offs.

Net charge-offs for originated loans equaled $3.3 million and $5.6 million during the second quarter and first six months of 2014, respectively, compared to $4.4 million and $10.9 million during the same periods of 2013. On an annualized basis, net charge-offs represented 0.11 percent and 0.09 percent of average originated loans and leases during the second quarter and first six months of 2014, respectively, compared to 0.15 percent and 0.19 percent during the same periods of 2013. Net charge-offs on acquired loans equaled $6.1 million and $12.4 million in the second quarter and first six months of 2014, respectively, compared to $4.5 million and $25.3 million recorded in the same periods of 2013. Loss estimates for most acquired loans are made at the individual loan level using loan-specific information. Therefore, fluctuations in charge-off levels on acquired loans are indicative of updated cash flow information but are not indicative of future performance of other acquired loans.

56

Table 10

Allowance for Loan and Lease Losses (ALLL)

	2014						2013									Six months ended June 30
	Second			First			Fourth			Third			Second
(Dollars in thousands)	Quarter			Quarter			Quarter			Quarter			Quarter			2014			2013
ALLL at beginning of period	$	222,942		$	233,394		$	237,799		$	258,316		$	273,019		$	233,394		$	319,018
Reclassification of reserve due to implementation of enhanced model (1)	—			—			—			—			7,368			—			7,368
Provision (credit) for loan and lease losses:
Acquired loans	(9,529		)	(2,273		)	(834		)	(12,615		)	(15,473		)	(11,802		)	(38,095		)
Originated loans	2,230			370			8,110			4,932			2,231			2,600			6,247
Net charge-offs of loans and leases:
Charge-offs	(10,904		)	(10,676		)	(13,494		)	(14,628		)	(10,960		)	(21,580		)	(39,904		)
Recoveries	1,507			2,127			1,813			1,794			2,131			3,634			3,682
Net charge-offs of loans and leases	(9,397		)	(8,549		)	(11,681		)	(12,834		)	(8,829		)	(17,946		)	(36,222		)
ALLL at end of period	$	206,246		$	222,942		$	233,394		$	237,799		$	258,316		$	206,246		$	258,316
ALLL at end of period allocated to loans and leases:
Acquired	$	29,331		$	44,993		$	53,520		$	59,517		$	76,534		$	29,331		$	76,534
Originated	176,915			177,949			179,874			178,282			181,782			176,915			181,782
ALLL at end of period	$	206,246		$	222,942		$	233,394		$	237,799		$	258,316		$	206,246		$	258,316
Net charge-offs of loans and leases:
Acquired	$	6,133		$	6,254		$	5,163		$	4,402		$	4,466		$	12,387		$	25,343
Originated	3,264			2,295			6,518			8,432			4,363			5,559			10,879
Total net charge-offs	$	9,397		$	8,549		$	11,681		$	12,834		$	8,829		$	17,946		$	36,222
Reserve for unfunded commitments (1)	$	380		$	324		$	357		$	375		$	376		$	380		$	376
Average loans and leases:
Acquired	$	1,183,464		$	1,282,816		$	1,086,469		$	1,310,010		$	1,535,796		$	1,249,989		$	1,616,348
Originated	12,383,148			12,177,129			12,002,167			11,801,700			11,631,784			12,263,591			11,612,019
Loans and leases at period-end:
Acquired	1,109,933			1,270,818			1,029,426			1,188,281			1,443,336			1,109,933			1,443,336
Originated	12,415,023			12,200,226			12,104,298			11,884,585			11,655,469			12,415,023			11,655,469

Ratios
Net charge-offs (annualized) to average loans and leases:
Acquired	2.08	%	1.98	%	1.89	%	1.33	%	1.17	%	2.00	%	3.16	%
Originated	0.11		0.08		0.22		0.28		0.15		0.09		0.19
ALLL to total loans and leases:
Acquired	2.64		3.54		5.20		5.01		5.30		2.64		5.30
Originated	1.43		1.46		1.49		1.50		1.56		1.43		1.56

⁽¹⁾ During the second quarter of 2013, BancShares enhanced its ALLL model that included estimated losses on unfunded commitments. As a result of these modifications, $7.4 million of the balance previously reported as a reserve of unfunded commitments was reclassified to the ALLL.

Asset Quality

Asset quality continues to be very strong as we continue to ensure appropriate underwriting standards are followed and all nonperforming assets are managed appropriately. Nonperforming assets include nonaccrual loans and leases and OREO resulting from both acquired and originated loans.

As of June 30, 2014, BancShares’ nonperforming assets amounted to $175.8 million, a decrease of $62.0 million from $237.8 million at June 30, 2013. Nonperforming assets as a percentage of total loans and leases plus OREO amounted to 1.29 percent, compared to 1.80 percent at June 30, 2013. Of the $175.8 million in nonperforming assets at June 30, 2014, $94.2 million related to acquired covered loans and OREO, $9.4 million related to acquired non-covered loans and OREO, and $72.2 million relates to originated loans and OREO. Acquired nonperforming assets for the second quarter decreased $28.1 million, or 21.4 percent, when compared to the second quarter of 2013. Acquired covered nonperforming assets represent 10.97 percent of acquired covered loans and OREO, compared to 7.02 percent and 8.62 percent as of December 31, 2013 and June 30, 2013,

57

respectively. Originated nonperforming assets represented 0.58 percent of originated loans and leases plus OREO as of June 30, 2014, in comparison to 0.74 percent and 0.91 percent as of December 31, 2013 and June 30, 2013, respectively, due to a reduction in originated nonaccrual loans.

Nonperforming assets as a percentage of total loans and leases plus OREO amounted to 1.29 percent at June 2014 compared to 1.25 percent at December 31, 2013. Total originated nonperforming assets decreased $17.8 million during the second quarter of 2014 in comparison to December 31, 2013. Originated nonperforming assets represented 0.58 percent of originated loans and leases plus OREO as of June 30, 2014, in comparison to 0.74 percent at December 31, 2013. The change is primarily a result of overall reduction in originated OREO balances. Acquired covered nonperforming assets represented 10.97 percent of originated loans and leases plus OREO as of June 30, 2014, in comparison to 7.02 percent at December 31, 2013.

Table 11

Nonperforming Assets

	2014				2013
	Second		First		Fourth		Third		Second
(Dollars in thousands)	Quarter		Quarter		Quarter		Quarter		Quarter
Risk Elements
Nonaccrual loans and leases:
Acquired	$	54,036	$	52,108	$	28,493	$	29,194	$	46,892
Originated	46,485		46,952		53,170		66,840		69,133
Other real estate:
Acquired covered	40,136		41,855		47,081		58,769		84,833
Acquired not covered	9,406		10,664		—		—		—
Originated	25,745		33,840		36,898		40,338		36,942
Total nonperforming assets	$	175,808	$	185,419	$	165,642	$	195,141	$	237,800
Nonperforming assets:
Acquired covered	$	94,172	$	93,963	$	75,574	$	87,963	$	131,725
Acquired not covered	9,406		10,664		—		—		—
Originated	72,230		80,792		90,068		107,178		106,075
Total nonperforming assets	$	175,808	$	185,419	$	165,642	$	195,141	$	237,800
Accruing loans and leases greater than 90 days past due:
Acquired	$	69,660	$	137,102	$	193,892	$	205,847	$	253,935
Originated	9,872		9,471		8,784		9,363		11,187

Nonperforming assets to total loans and leases plus other real estate:
Acquired covered	10.97	%	9.34	%	7.02	%	7.05	%	8.62	%
Acquired not covered	3.12		3.36		—		—		—
Originated	0.58		0.66		0.74		0.90		0.91
Total	1.29		1.37		1.25		1.48		1.80

58

Troubled Debt Restructurings

Troubled debt restructurings (TDRs) are selectively made to provide relief to customers experiencing liquidity challenges or other circumstances that could affect their ability to meet their debt obligations. Typical modifications include short-term deferral of interest or modification of payment terms. Nonperforming TDRs are not accruing interest and are included as nonperforming assets within nonaccrual loans and leases. TDRs, which are accruing at the time of restructure and continue to perform based on the restructured terms, are considered performing.

Table 12

Troubled Debt Restructurings

(Dollars in thousands)	June 30, 2014		December 31, 2013		June 30, 2013
Accruing TDRs:
Acquired	$	62,592	$	90,829	$	131,156
Originated	93,904		85,126		84,617
Total accruing TDRs	156,496		175,955		215,773
Nonaccruing TDRs:
Acquired	17,861		11,479		27,338
Originated	21,564		19,322		34,490
Total nonaccruing TDRs	39,425		30,801		61,828
All TDRs:
Acquired	80,453		102,308		158,494
Originated	115,468		104,448		119,107
Total TDRs	$	195,921	$	206,756	$	277,601

Interest-Bearing Liabilities

Interest-bearing liabilities include interest-bearing deposits, short-term borrowings and long-term obligations. Interest-bearing liabilities totaled $13.88 billion as of June 30, 2014, and June 30, 2013, and an increase of $230.1 million since December 31, 2013. The increase from December 31, 2013 is primarily due to the increase in interest-bearing deposits as a result of organic growth and the 1st Financial acquisition.

Deposits

At June 30, 2014, total deposits equaled $18.56 billion, an increase of $682.7 million, or 3.8 percent, since December 31, 2013 and an increase of $538.7 million, or 3.0 percent, since June 30, 2013. The increase from both periods resulted from the 1^st Financial merger and additional organic growth in legacy markets.

Due to our focus on maintaining a strong liquidity position, core deposit retention remains a key business objective. We believe that traditional bank deposit products remain an attractive option for many customers, but as economic conditions improve, we recognize that our liquidity position could be adversely affected as bank deposits are withdrawn and invested elsewhere. Our ability to fund future loan growth is dependent on our success at retaining existing deposits and generating new deposits at a reasonable cost.

Short-Term Borrowings

At June 30, 2014, short-term borrowings totaled $788.5 million compared to $581.9 million and $511.4 million as of June 30, 2013 and December 31, 2013, respectively. The increase in short-term borrowings is due to subordinated debt with maturities less than one year being reclassified from long-term obligations.

Long-Term Obligations

Long-term obligations equaled $314.5 million at June 30, 2014, down $128.8 million and $196.2 million from June 30, 2013 and December 31, 2013, respectively. The decrease is primarily the result of subordinated debt of $125.0 million with maturities less than one year being reclassified to short-term borrowings.

At June 30, 2014, December 31, 2013 and June 30, 2013, long-term obligations included $96.4 million in junior subordinated debentures representing obligations to FCB/NC Capital Trust III, a special purpose entity and the grantor trust for $93.5 million of trust preferred securities. FCB/NC Capital Trust III's trust preferred securities mature in 2036 and may be redeemed at par in whole or in part at any time. BancShares has guaranteed all obligations of FCB/NC Capital Trust III. The proceeds from the trust preferred securities were used to purchase the junior subordinated debentures issued by BancShares.

Shareholders' Equity and Capital Adequacy

BancShares and FCB are required to meet minimum requirements imposed by regulatory authorities. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our consolidated financial statements.

In accordance with accounting principles generally accepted in the United States of America (GAAP), unrealized gains and losses on certain assets and liabilities and adjustment for pension funded status, net of deferred taxes, are included in accumulated other comprehensive income within shareholder's equity and directly impact the calculation of our capital ratios. In the aggregate, these items represented a net increase in shareholders' equity of $4.1 million at June 30, 2014, compared to net reductions of $100.2 million at June 30, 2013. The $104.2 million favorable impact on shareholders' equity from June 30, 2013, reflects the combined impact of changes in the funded status of the pension plan and unrealized gains on investment securities available for sale.

Table 13

Analysis of Capital Adequacy

	June 30, 2014		December 31, 2013		June 30, 2013		Regulatory minimum		Well-capitalized requirement
BancShares
Risk-based capital ratios
Tier 1 capital	14.61	%	14.92	%	14.91	%	4.00	%	6.00	%
Total capital	15.95		16.42		16.41		8.00		10.00
Tier 1 leverage ratio	9.71		9.82		9.68		3.00		5.00
Bank
Risk-based capital ratios
Tier 1 capital	13.88	%	14.14	%	14.42	%	4.00	%	6.00	%
Total capital	15.13		15.57		15.86		8.00		10.00
Tier 1 leverage ratio	9.28		9.36		9.43		3.00		5.00

BancShares continues to exceed minimum capital standards and FCB remains well-capitalized.

In July 2013, Bank regulatory agencies approved new global regulatory capital guidelines (Basel) aimed at strengthening existing capital requirements for bank holding companies through a combination of higher minimum capital requirements, new capital conservation buffers and more conservative definitions of capital and balance sheet exposure. BancShares will be subject to the requirements of Basel effective January 1, 2015, subject to a transition period for several aspects of the rule.

Under the revised rules, BancShares' tier 1 common equity ratio based on the current tier 1 capital and risk-weighted assets calculations, excluding trust preferred securities, would be 13.96 percent at June 30, 2014, compared to the fully phased-in, well-capitalized minimum of 9.0 percent, which includes the 2.5 percent minimum conservation buffer. Management continues to monitor Basel developments and remains committed to managing our capital levels in a prudent manner. The proposed tier 1 common equity ratio is calculated in Table 14.

Table 14

Tier 1 Common Equity

(Dollars in thousands)	June 30, 2014
Tier 1 capital	$	2,125,528
Less: restricted core capital	93,500
Tier 1 common equity	$	2,032,028
Risk-adjusted assets	$	14,551,757
Tier 1 common equity ratio	13.96		%

59

Table 15

BASEL Capital Requirements

This table describes the minimum and well-capitalized requirements for the transitional period beginning during 2016 and the fully phased-in requirements that become effective during 2019.

Basel final rules	Basel minimum requirement 2016		Basel well-capitalized 2016		Basel minimum requirement 2019		Basel well-capitalized 2019
Leverage ratio	4.00	%	5.00	%	4.00	%	5.00	%
Common equity tier 1	4.50		6.50		4.50		6.50
Common equity plus conservation buffer	5.13		7.13		7.00		9.00
Tier 1 capital ratio	6.00		8.00		6.00		8.00
Total capital ratio	8.00		10.00		8.00		10.00
Total capital ratio plus conservation buffer	8.63		10.63		10.50		12.50

RISK MANAGEMENT

Effective risk management is critical to our success. The board of directors has established a Risk Committee that provides oversight of enterprise-wide risk management. The Risk Committee is responsible for establishing risk appetite and supporting tolerances for credit, market and operational risk and ensuring that risk is managed within those tolerances, monitoring compliance with laws and regulations, reviewing the investment securities portfolio to ensure that portfolio returns are managed within market risk tolerance and monitoring our legal activity and associated risk. With guidance from and oversight by the Risk Committee, management continually refines and enhances its risk management policies and procedures to maintain effective risk management programs and processes.

Mortgage reform rules mandated by the Dodd-Frank Act became effective in January 2014, requiring lenders to make a reasonable, good faith determination of a borrower's ability to repay any consumer credit transaction secured by a dwelling and to limit prepayment penalties. Increased risks of legal challenge, private right of action and regulatory enforcement are presented by these rules. BancShares implemented the required system, process, procedural and product changes prior to the effective date of the new rules. We have also modified our underwriting standards to ensure compliance with the ability to repay requirements and have determined that we will continue to offer both qualified and non-qualified mortgage products. Historical performance and conservative underwriting of impacted loan portfolios mitigates the risks of non-compliance.

Credit risk management. Credit risk is the risk of not collecting payments pursuant to the contractual terms of loans, leases and investment securities. Loans and leases not covered by loss share agreements with the FDIC were underwritten in accordance with our credit policies and procedures and are subject to periodic ongoing reviews. Acquired loans were recorded at fair value as of the acquisition date and are subject to periodic reviews to identify any further credit deterioration. Our independent credit review function conducts risk reviews and analyses of both acquired and originated loans to ensure compliance with credit policies and to monitor asset quality trends. The risk reviews include portfolio analysis by geographic location, industry, collateral type and product. We strive to identify potential problem loans as early as possible, to record charge-offs or write-downs as appropriate and to maintain adequate allowances for loan and lease losses that are inherent in the loan and lease portfolio.

Interest rate risk management. Interest rate risk (IRR) results principally from assets and liabilities maturing or repricing at different points in time, from assets and liabilities repricing at the same point in time but in different amounts and from short-term and long-term interest rates changing in different magnitudes.

We assess our short term interest rate risk by forecasting net interest income under various interest rate scenarios and comparing those results to forecast net interest income assuming stable rates. Rate shock scenarios represent an instantaneous and parallel shift in rates, up or down, from a base yield curve. Due to the existence of contractual floors on certain loans, competitive pressures that constrain our ability to reduce deposit interest rates and the extraordinarily low current level of interest rates, it is unlikely that the rates on most interest-earning assets and interest-bearing liabilities can decline materially from current levels. Our shock projections incorporate assumptions of likely customer migration of short-term deposit instruments to long-term, higher rate instruments as rates rise. Various other IRR scenarios are modeled to supplement shock scenarios. This may include interest rate ramps, changes in the shape of the yield curve and changes in the relationships of FCB rates to market rates.

60

Table 16

Net Interest Income Sensitivity Simulation Analysis

This table provides the impact on net interest income resulting from various interest rate shock scenarios as of June 30, 2014 and December 31, 2013.

	Estimated increase in net interest income
Change in interest rate (basis point)	June 30, 2014		December 31, 2013
+100	3.37	%	2.95	%
+200	4.33		4.56
+300	1.22		3.62

Table 17

Economic Value of Equity Modeling Analysis

Long-term interest rate risk exposure is measured using the economic value of equity (EVE) sensitivity analysis to study the impact of long-term cash flows on earnings and capital. EVE involves discounting cash flows of balance sheet items under different interest rate scenarios. EVE represents the difference between the sum of the present value of all asset cash flows and the sum of the present value of the liability cash flows. Cash flows will vary by interest rate scenario, resulting in variations in EVE. The amount of base-case measurement and its sensitivity to shifts in the yield curve allow management to measure longer-term repricing and option risk in the balance sheet. This table presents the EVE profile as of June 30, 2014 and December 31, 2013.

	Estimated increase (decrease) in EVE
Change in interest rate (basis point)	June 30, 2014		December 31, 2013
+100	3.55	%	2.68	%
+200	2.84		0.70
+300	(1.13	)	(3.05	)

We do not typically utilize interest rate swaps, floors, collars or other derivative financial instruments to attempt to hedge our overall balance sheet rate sensitivity and interest rate risk. However, we have entered into an interest rate swap to synthetically convert the variable rate on $93.5 million of junior subordinated debentures to a fixed rate of 5.50 percent through June 2016. The interest rate swap qualifies as a hedge under GAAP. See Note K to the Consolidated Financial Statements, "Derivatives," for additional discussion of this interest rate swap.

Liquidity risk management. Liquidity risk is the risk that an institution is unable to generate or obtain sufficient cash or its equivalents on a cost-effective basis to meet commitments as they fall due. The most common sources of liquidity risk arise from mismatches in the timing and value of on-balance sheet and off-balance sheet cash inflows and outflows. In general, on-balance sheet mismatches generate liquidity risk when the effective maturity of assets exceeds the effective maturity of liabilities. A commonly cited example of a balance sheet liquidity mismatch is when long-term loans (assets) are funded with short-term deposits (liabilities). Other forms of liquidity risk include market constraints on the ability to convert assets into cash at expected levels, an inability to access funding sources at sufficient levels at a reasonable cost, and changes in economic conditions or exposure to credit, market, operation, legal and reputation risks that can affect an institution’s liquidity risk profile.

We utilize various limit-based measures to monitor, measure and control liquidity risk across three different types of liquidity:

• Tactical liquidity measures the risk of a negative cash flow position whereby cash outflows exceed cash inflows over a short-term horizon out to nine weeks;

• Structural liquidity measures the amount by which illiquid assets are supported by long-term funding; and

• Contingent liquidity utilizes cash flow stress testing across three crisis scenarios to determine the adequacy of our liquidity.

We aim to maintain a diverse mix of existing and potential liquidity sources to support the liquidity management function. At its core is a reliance on the retail deposit book, due to the generally stable balances and low cost it offers. Other sources of liquidity include asset-based liquidity in the form of cash and unencumbered securities, as well as access to wholesale funding from external counterparties, primarily FHLB advances and Federal Funds lines. We aim to avoid funding concentrations by diversifying our external funding with respect to maturities, counterparties and nature (i.e. secured versus unsecured).

61

One of our principal sources of noncore funding is advances from the Federal Home Loan Bank (FHLB) of Atlanta. Outstanding FHLB advances equaled $250.3 million as of June 30, 2014, and we had sufficient collateral pledged to secure $1.11 billion of additional borrowings. Additionally, we maintain Federal Funds lines and other borrowing facilities. At June 30, 2014, BancShares had access to $665.0 million in unsecured borrowings through various sources.

Free liquidity includes cash on deposit at various banks, overnight investments and the unpledged portion of investment securities available for sale, all of which can be easily converted to cash. Free liquidity totaled $3.73 billion at June 30, 2014 compared to $3.39 billion at December 31, 2013.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes in our Critical Accounting Policies as described in our 2013 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

Statements in this Report and exhibits relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents filed by us from time to time with the Securities and Exchange Commission.

Forward-looking statements may be identified by terms such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “forecasts,” “projects,” “potential” or “continue,” or similar terms or the negative of these terms, or other statements concerning opinions or judgments of BancShares’ management about future events.

Factors that could influence the accuracy of those forward-looking statements include, but are not limited to, the financial success or changing strategies of our customers, customer acceptance of our services, products and fee structure, the competitive nature of the financial services industry, our ability to compete effectively against other financial institutions in our banking markets, actions of government regulators, the level of market interest rates and our ability to manage our interest rate risk, changes in general economic conditions that affect our loan and lease portfolio, the abilities of our borrowers to repay their loans and leases, the values of real estate and other collateral, the impact of the FDIC-assisted transactions and other developments or changes in our business that we do not expect.

Actual results may differ materially from those expressed in or implied by any forward-looking statements. Except to the extent required by applicable law or regulation, BancShares undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential economic loss resulting from changes in market prices and interest rates. This risk can either result in diminished current fair values of financial instruments or reduced net interest income in future periods. As of June 30, 2014, BancShares’ market risk profile has not changed significantly from December 31, 2013, as discussed in the Form 10-K. Changes in fair value that result from movement in market rates cannot be predicted with any degree of certainty. Therefore, the impact that future changes in market rates will have on the fair values of financial instruments is uncertain.

Item 4. Controls and Procedures

BancShares' management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of BancShares' disclosure controls and procedures as of the end of the period covered by this Quarterly Report, in accordance with Rule 13a-15 of the Securities Exchange Act of 1934 (Exchange Act). Based upon that evaluation, as of the end of the period covered by this report, the Chief Executive Officer and the Chief Financial Officer concluded that BancShares' disclosure controls and procedures were effective to provide reasonable assurance that it is able to record, process, summarize and report in a timely manner the information required to be disclosed in the reports it files under the Exchange Act.

No change in BancShares' internal control over financial reporting occurred during the second quarter of 2014 that had materially affected or is reasonably likely to materially affect, BancShares' internal control over financial reporting.

62

PART II

Item 1. Legal Proceedings

BancShares and various subsidiaries have been named as defendants in various legal actions arising from our normal business activities in which damages in various amounts are claimed. Although the amount of any ultimate liability with respect to those other matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements.

Additional information relating to legal proceedings is set forth in Note J of BancShares' Notes to Unaudited Consolidated Financial Statements.

Item 1A. Risk Factors

Except as discussed below, there have been no material changes from the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2013.

Additional risks and uncertainties that are not currently known or that management does not currently deem to be material could also have a material adverse impact on our financial condition, the results of our operations or our business. If such risks and uncertainties were to become reality or the likelihood of those risks was to increase, the market price of our common stock could decline significantly.

Proposed merger with First Citizens Bancorporation, Inc.

On June 10, 2014, BancShares entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Citizens Bancorporation, Inc., a Bancorporation Carolina corporation (“Bancorporation”), pursuant to which Bancorporation will merge with and into BancShares. The Merger Agreement provides that each share of Bancorporation common stock will be converted into the right to receive 4.00 shares of BancShares' Class A common stock and $50.00 cash, unless the holder elects for each share of such holder’s Bancorporation common stock to be converted into the right to receive 3.58 shares of BancShares' Class A common stock and 0.42 shares of BancShares' Class B common stock.

The Merger Agreement has been approved by the independent members of the Board of Directors of each company following a recommendation by a special committee of independent members the board of each company. Subject to certain conditions, including the receipt of shareholder and regulatory approvals, the merger is expected to be completed in the fourth quarter of 2014.

On July 17, 2014, as amended August 6, 2014, BancShares filed a Registration Statement on Form S-4 with the Securities and Exchange Commission. Within that Form S-4, BancShares has identified various risk factors that are related to the proposed Merger.

Certain Risk Factors Relating to the Proposed Merger

The market price of BancShares common stock may fluctuate, which could affect the approval of the merger by Bancorporation's shareholders.Under the terms of the Merger Agreement, each share of Bancorporation common stock outstanding immediately prior to the effective time of the merger (with certain exceptions) will be converted into the right to receive 4.0 shares of BancShares Class A common stock and $50.00 in cash, unless the holder of such share elects, pursuant to a letter of transmittal that will be delivered after closing of the merger, for each share of such holder’s Bancorporation common stock to be converted into the right to receive 3.58 shares of BancShares Class A common stock and 0.42 shares of BancShares Class B common stock. Cash will be paid in lieu of issuing fractional shares of BancShares common stock. The value of the shares of BancShares Class A common stock and BancShares Class B common stock to be issued to Bancorporation shareholders in the merger may fluctuate between now and the closing date of the merger due to a variety of factors, including general market and economic conditions, changes in the parties’ respective businesses, operations and prospects, and regulatory considerations, among other things. Many of these factors are beyond the control of BancShares and Bancorporation. A decrease in the value of BancShares' common stock could cause Bancorporation's shareholders to withhold their approval of the merger. There can be no assurance as to whether or when the merger will be completed.

63

BancShares may fail to realize all of the anticipated benefits and cost savings of the merger.

The success of the merger will depend on, among other things, BancShares’ ability to realize anticipated cost savings and to combine the businesses of BancShares and Bancorporation in a manner that does not materially disrupt the existing customer relationships of either BancShares or Bancorporation or result in decreased revenues from customers of either of them. If BancShares is not able to successfully achieve these objectives, then the anticipated benefits and cost savings of the merger may not be realized fully, if at all, or may take longer to realize than expected.

BancShares and Bancorporation have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of either BancShares’ or Bancorporation’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of BancShares or Bancorporation to maintain relationships with their respective clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. The loss of key employees could adversely affect BancShares’ ability to successfully conduct its business in the markets in which Bancorporation now operates, which could have an adverse effect on BancShares’ financial results and the value of its stock. Integration efforts by BancShares and Bancorporation will also divert management attention and resources. These integration matters could have an adverse effect on each of BancShares and Bancorporation during the transition period and on the combined company for an undetermined period following completion of the merger. Additionally, the actual benefits and cost savings of the merger could be less than anticipated.

Completion of the merger is subject to many conditions and if these conditions are not satisfied or, where permissible, waived, the merger will not be completed.

The obligations of BancShares and Bancorporation to complete the merger are subject to satisfaction or, where permissible, waiver of a number of conditions, including, among others: (i) the adoption of the merger agreement by BancShares stockholders and Bancorporation shareholders, (ii) the approval of the BancShares charter amendment proposal by BancShares stockholders, (iii) receipt of approval of various governmental authorities without the imposition of a burdensome condition, (iv) the authorization for listing on the NASDAQ Global Select Market of the shares of BancShares Class A common stock to be issued in the merger, (v) the effectiveness of the Registration Statement on Form S-4 filed by BancShares and the absence of any stop order suspending the effectiveness of that Registration Statement (or proceedings for that purpose initiated or threatened by the SEC and not withdrawn), (vi) the absence of any order, injunction or decree by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger, the bank merger or any of the other material transactions contemplated by the merger agreement, (vii) the absence of any statute, rule, regulation, order, injunction or decree enacted, entered, promulgated or enforced by any governmental entity that prohibits or makes illegal consummation of the merger, the bank merger or any of the other material transactions contemplated by the merger agreement, (viii) the accuracy of the representations and warranties of each other party in the merger agreement as of the day on which the merger is completed, subject to the materiality standards provided in the merger agreement and the performance of the other party in all material respects of all obligations required to be performed by it at or prior to the effective time of the merger under the merger agreement (and the receipt by each party of certificates from the other party to such effect), (ix) receipt by each party of an opinion of legal counsel as to certain tax matters, (x) the absence of any events or occurrences that, individually or in the aggregate, have had or would reasonably be expected to have a material adverse effect on the other party, and (xi) a majority of the shares held by the minority holders of Bancorporation common stock must not have voted against the merger. There can be no assurance that the conditions to closing of the merger will be satisfied or, where permissible, waived, or that the merger will be completed. Further, it is possible that one or more of the conditions to closing the merger will not be met and that the board of directors of the party for whom the condition exists will waive the condition, allowing the merger to be completed.

Termination of the merger agreement or failure to complete the merger after approval by Bancorporation shareholders could negatively impact BancShares or Bancorporation.

If the merger agreement is terminated, there may be various consequences. For example, BancShares’ or Bancorporation’s businesses may have been affected adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of BancShares’ or Bancorporation’s common stock could decline to the extent that the current market prices reflect a market assumption that the merger will be completed. If the merger agreement is terminated under specified circumstances, Bancorporation has agreed to pay BancShares a termination fee of $6,450,000, $10,000,000 or $22,574,000 (and in certain instances, BancShares’ documented expenses), depending on the timing and circumstances of the termination.

64

BancShares and Bancorporation will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on BancShares and/or Bancorporation. These uncertainties may impair BancShares and/or Bancorporation’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Bancorporation to seek to change existing business relationships with Bancorporation. Retention of certain employees by Bancshares or Bancorporation may be challenging while the merger is pending, as certain employees may experience uncertainty about their future roles with Bancorporation or BancShares. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Bancorporation or BancShares, Bancorporation’s and/or BancShares' businesses could be harmed.

BancShares and Bancorporation will incur significant transaction and merger-related costs in connection with the merger.

BancShares expects to incur a number of costs associated with the merger and combining the operations of the two companies. The substantial majority of expenses will be comprised of transaction costs related to the merger. The significant costs associated with the merger include, among others, fees and expenses of financial advisors and other advisors and representatives, certain employment-related costs relating to employees of Bancorporation, filing fees and printing costs required by applicable law and regulations. Some of these costs have already been incurred or may be incurred regardless of whether the merger is consummated, including a portion of the fees and expenses of financial advisors and other advisors and representatives and filing fees. BancShares also will incur transaction fees and costs related to formulating and implementing integration plans with respect to the two companies, including facilities and systems consolidation costs. BancShares continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the merger and the integration of the two companies’ businesses. Although BancShares expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow BancShares to offset integration-related costs over time, this net benefit may not be achieved in the near term or at all.

The merger will result in an increase in the number of shares of BancShares Class A common stock and BancShares Class B common stock available for trading, which could depress the price of such shares and increase the volatility of the price of such shares, both before and after completion of the merger.

The merger will increase the number of shares of BancShares Class A common stock and BancShares Class B common stock available for sale in the public markets. As of June 30, 2014, approximately 8,586,058 shares of BancShares Class A common stock and 1,032,883 shares of BancShares Class B common stock were outstanding.

Because Bancorporation shareholders are entitled to elect whether to exchange their shares of Bancorporation common stock for BancShares Class A common stock and cash or a combination of BancShares Class A common stock and BancShares Class B common stock, the number of new shares of BancShares Class A common stock and new shares of BancShares Class B common stock that will be issued to holders of Bancorporation common stock and become immediately available for sale following the merger is unknown.

Sales of large amounts of shares of BancShares Class A common stock or BancShares Class B common stock could depress the market price of BancShares Class A common stock or BancShares Class B common stock, respectively. In addition, the potential that such sales may occur could depress prices, even in advance of such sales. Neither BancShares nor Bancorporation can predict the effects that any such sales, or the perception that such sales could occur, will have on the price of BancShares common stock, either before or after completion of the merger.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the merger agreement, including the BancShares and Bancorporation merger and the bank merger, may be completed, various approvals must be obtained from bank regulatory authorities. These governmental entities may impose conditions on the granting of such approvals. Such conditions and the process of obtaining regulatory approvals could have the effect of delaying consummation of the merger(s) or of imposing additional costs or limitations on BancShares following the merger(s). The regulatory approvals may not be received at all, may not be received in a timely fashion, and may contain conditions on the completion of the merger that are not anticipated or cannot be met. If the consummation of the merger(s) is delayed, including by a delay in receipt of necessary governmental approvals, the business, financial condition and results of operations of each company may also be materially adversely affected.

65

BancShares is, and Bancorporation may be, subject to litigation in connection with the merger; an adverse ruling in any such lawsuit may prevent the merger from being completed.

BancShares and Bancorporation, and their respective directors and officers, may be subject to lawsuits challenging the merger. Following announcement of the merger, BancShares received a shareholder demand from the City of Providence pursuant to Section 220 of the Delaware General Corporation Law ("DGCL") for access to certain books and records of BancShares. The purported basis for the demand was to investigate potential breaches of fiduciary duty and other wrongdoing by BancShares’ officers and directors in connection with the merger. The City of Providence concurrently filed a putative class action lawsuit in the Delaware Court of Chancery against BancShares and its directors challenging Article X, Section 8 of BancShares’ bylaws, which requires certain litigation to be brought only in North Carolina courts to the fullest extent permitted by law. That Delaware complaint, captioned City of Providence v. First Citizens BancShares, Inc., et al., C. A. No. 9795, alleges that the bylaw violates the DGCL and that adoption of the bylaw constituted a breach of fiduciary duty by BancShares’ directors. While not directly challenging the merger, the complaint contains allegations referencing the merger and seeks a declaration that any stockholder action regarding the merger may be brought in the Delaware Court of Chancery. On July 31, 2014, the City of Providence filed a second litigation in Delaware Court of Chancery challenging the merger and seeking to enjoin the BancShares stockholder vote, captioned City of Providence V. Holding, et al., C. A. No. 9988. BancShares and its directors have moved to dismiss both complaints.

If any litigation challenging the merger is successful, the relevant court may issue an order enjoining completion of the merger, which could prevent the merger from being completed or from being completed within the expected time-frame. Regardless of whether any claims are successful, such litigation is often expensive and diverts management’s attention and resources, which could adversely affect the operation of BancShares' and/or Bancorporation’s businesses.

Risk Factors Relating to Technology:

Certain information security risks continue to receive attention from regulators and financial statement users and therefore have been included in the 10-Q.

We are subject to information security risks

We maintain and transmit large amounts of sensitive information electronically, including personal and financial information of our customers. In addition to our own systems, we also rely on external vendors to provide certain services and are, therefore, exposed to their information security risk. While we seek to mitigate internal and external information security risks, the volume of business conducted through electronic devices continues to grow, and our computer systems and network infrastructure, as well as the systems of external vendors and customers, present security risks and could be susceptible to hacking or identity theft.

We are also subject to risks arising from a broad range of attacks by doing business on the Internet, which arise from both domestic and international sources and seek to obtain customer information for fraudulent purposes or, in some cases, to disrupt business activities. Information security risks could result in reputational damage and lead to a material adverse impact on our business, financial condition and financial results of operations.

We continue to encounter technological change for which we expect to incur significant expense

The financial services industry continues to experience an increase in technological complexity required to provide a competitive array of products and services to customers. Our future success requires that we maintain technology and associated facilities that will support our ability to provide products and services that satisfactorily meet the banking and other financial needs of our customers. In 2013, we undertook projects to modernize our systems and associated facilities, strengthen our business continuity and disaster recovery efforts and reduce operational risk. As the projects have evolved over time, we have identified other areas that require infrastructure improvement. As a result of the expanded scope, BancShares has increased the total projected spend to approximately $130 million. The projects will be implemented in phases over the next several years. If the projects’ objectives are not achieved or if the cost of the projects is materially in excess of the estimate, our business, financial condition and financial results could be adversely impacted.

We rely on external vendors

Third party vendors provide key components of our business infrastructure, including certain data processing and information services. A number of our vendors are large national entities with dominant market presence in their respective fields, and their services could be difficult to quickly replace in the event of failure or other interruption in service. Failures of certain vendors to provide services for any reason could adversely affect our ability to deliver products and services to our customers. External

66

vendors also present information security risk. We monitor vendor risks, including the financial stability of critical vendors. The failure of a critical external vendor could disrupt our business and cause us to incur significant expense.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

PURCHASES OF COMMON STOCK

During the second quarter of 2013, our board granted authority to purchase up to 100,000 and 25,000 shares of Class A and Class B common stock, respectively, beginning on July 1, 2013 and continuing through June 30, 2014. As of June 30, 2014, no purchases had occurred pursuant to that authorization. This authorization terminated on June 30, 2014 and was not extended.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer (filed herewith)
31.2	Certification of Chief Financial Officer (filed herewith)
32.1	Certification of Chief Executive Officer (filed herewith)
32.2	Certification of Chief Financial Officer (filed herewith)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

67

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	August 8, 2014		FIRST CITIZENS BANCSHARES, INC.
			(Registrant)
		By:	/s/ GLENN D. MCCOY
			Glenn D. McCoy
			Vice President and Chief Financial Officer

68

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Frank B. Holding, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Citizens BancShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2014

/s/ Frank B. Holding, Jr.

Frank B. Holding, Jr.

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Glenn D. McCoy, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Citizens BancShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2014

/s/ Glenn D. McCoy

Glenn D. McCoy

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

The undersigned hereby certifies that (i) the Form 10-Q filed by First Citizens BancShares, Inc. (the “Issuer”) for the period ended June 30, 2014, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

August 8, 2014

/s/ Frank B. Holding, Jr.

Frank B. Holding, Jr.

Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

The undersigned hereby certifies that (i) the Form 10-Q filed by First Citizens BancShares, Inc. (the “Issuer”) for the period ended June 30, 2014, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

August 8, 2014

/s/ Glenn D. McCoy

Glenn D. McCoy

Chief Financial Officer

XML

Loans and Leases (Narrative) (Details) (USD $)	3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Noncovered loans pledged to secure debt obligations	$ 2,650,000,000	$ 2,560,000,000
Charge off of past due business credit card loans (days)	120 days
Acquired	1,109,933,000	1,029,426,000
Ungraded
Financing Receivable, Recorded Investment [Line Items]
Acquired	114,115,000	19,676,000
1st Financial | Ungraded
Financing Receivable, Recorded Investment [Line Items]
Acquired	$ 94,700,000

XML

Estimated Fair Values (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Estimated Fair Values [Line Items]
Total investment securities available for sale, fair value	$ 5,538,166	$ 5,387,703
Liability transfers between Level 1 and Level 2	0
Asset transfers between Level 1 and Level 2	0
Liability transfers between Level 2 and Level 1	0
Asset transfers between Level 2 and Level 1	0
Fair Value, Measurements, Nonrecurring
Estimated Fair Values [Line Items]
Liability measured at fair value on nonrecurring basis	$ 0	$ 0
Minimum
Estimated Fair Values [Line Items]
Discounts for collateral value estimates due to estimated holding and selling costs (percent)	10.00%	10.00%
Maximum
Estimated Fair Values [Line Items]
Discounts for collateral value estimates due to estimated holding and selling costs (percent)	14.00%	14.00%

XML

Allowance for Loan and Lease Losses (Allocation of Allowance for Loan and Lease Losses) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	$ 206,246,000		$ 206,246,000		$ 233,394,000
Originated Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	134,031,000		134,031,000		145,485,000
ALLL for loans and leases individually evaluated for impairment	13,251,000		13,251,000		10,161,000
Financing Receivable, Individually Evaluated for Impairment	124,887,000		124,887,000		132,146,000
Average balance	126,318,000	147,704,000	129,039,000	153,619,000
Interest income recognized	1,131,000	1,968,000	2,643,000	4,091,000
Originated Loans | Commercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	3,539,000		3,539,000		7,306,000
ALLL for loans and leases individually evaluated for impairment	155,000		155,000		103,000
Financing Receivable, Individually Evaluated for Impairment	2,573,000		2,573,000		2,272,000
Average balance	2,592,000	8,541,000	1,413,000	8,899,000
Interest income recognized	28,000	101,000	31,000	213,000
Originated Loans | Commercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	92,164,000		92,164,000		103,522,000
ALLL for loans and leases individually evaluated for impairment	7,704,000		7,704,000		6,873,000
Financing Receivable, Individually Evaluated for Impairment	87,046,000		87,046,000		97,111,000
Average balance	87,687,000	102,356,000	84,359,000	103,032,000
Interest income recognized	799,000	1,413,000	1,716,000	2,838,000
Originated Loans | Commercial | Other commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	2,361,000		2,361,000		2,279,000
ALLL for loans and leases individually evaluated for impairment	179,000		179,000		209,000
Financing Receivable, Individually Evaluated for Impairment	1,962,000		1,962,000		1,878,000
Average balance	1,981,000	2,647,000	2,731,000	3,028,000
Interest income recognized	7,000	37,000	60,000	82,000
Originated Loans | Commercial | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	11,939,000		11,939,000		10,393,000
ALLL for loans and leases individually evaluated for impairment	1,425,000		1,425,000		771,000
Financing Receivable, Individually Evaluated for Impairment	10,811,000		10,811,000		9,300,000
Average balance	11,208,000	10,298,000	15,690,000	14,465,000
Interest income recognized	113,000	139,000	353,000	406,000
Originated Loans | Commercial | Lease financing
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	376,000		376,000		188,000
ALLL for loans and leases individually evaluated for impairment	297,000		297,000		54,000
Financing Receivable, Individually Evaluated for Impairment	376,000		376,000		188,000
Average balance	384,000	531,000	732,000	408,000
Interest income recognized	4,000	9,000	21,000	14,000
Originated Loans | Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	46,000		46,000
ALLL for loans and leases individually evaluated for impairment	0		0		0
Financing Receivable, Individually Evaluated for Impairment	46,000		46,000		0
Average balance	48,000	0	24,000	0
Interest income recognized	1,000	0	1,000	0
Originated Loans | Noncommerical | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	15,903,000		15,903,000		15,939,000
ALLL for loans and leases individually evaluated for impairment	1,613,000		1,613,000		1,586,000
Financing Receivable, Individually Evaluated for Impairment	15,448,000		15,448,000		15,539,000
Average balance	15,592,000	13,855,000	15,824,000	15,003,000
Interest income recognized	107,000	184,000	284,000	412,000
Originated Loans | Noncommerical | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	1,934,000		1,934,000		1,108,000
ALLL for loans and leases individually evaluated for impairment	201,000		201,000		72,000
Financing Receivable, Individually Evaluated for Impairment	1,934,000		1,934,000		1,108,000
Average balance	2,061,000	913,000	1,946,000	783,000
Interest income recognized	26,000	13,000	50,000	25,000
Originated Loans | Noncommerical | Revolving mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	4,801,000		4,801,000		3,596,000
ALLL for loans and leases individually evaluated for impairment	1,024,000		1,024,000		372,000
Financing Receivable, Individually Evaluated for Impairment	3,754,000		3,754,000		3,596,000
Average balance	3,779,000	6,976,000	4,262,000	6,390,000
Interest income recognized	29,000	47,000	76,000	72,000
Originated Loans | Noncommerical | Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	968,000		968,000		1,154,000
ALLL for loans and leases individually evaluated for impairment	653,000		653,000		121,000
Financing Receivable, Individually Evaluated for Impairment	937,000		937,000		1,154,000
Average balance	986,000	1,587,000	2,058,000	1,611,000
Interest income recognized	17,000	25,000	51,000	29,000
Originated Loans | With A Recorded Allowance
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	85,439,000		85,439,000		83,678,000
Originated Loans | With A Recorded Allowance | Commercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,305,000		1,305,000		1,025,000
Originated Loans | With A Recorded Allowance | Commercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	58,223,000		58,223,000		57,819,000
Originated Loans | With A Recorded Allowance | Commercial | Other commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	741,000		741,000		783,000
Originated Loans | With A Recorded Allowance | Commercial | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	8,371,000		8,371,000		7,197,000
Originated Loans | With A Recorded Allowance | Commercial | Lease financing
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	376,000		376,000		133,000
Originated Loans | With A Recorded Allowance | Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0		0
Originated Loans | With A Recorded Allowance | Noncommerical | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	10,016,000		10,016,000		11,534,000
Originated Loans | With A Recorded Allowance | Noncommerical | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,934,000		1,934,000		651,000
Originated Loans | With A Recorded Allowance | Noncommerical | Revolving mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	3,537,000		3,537,000		3,382,000
Originated Loans | With A Recorded Allowance | Noncommerical | Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	936,000		936,000		1,154,000
Originated Loans | With No Recorded Allowance
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	39,448,000		39,448,000		48,468,000
Originated Loans | With No Recorded Allowance | Commercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,268,000		1,268,000		1,247,000
Originated Loans | With No Recorded Allowance | Commercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	28,823,000		28,823,000		39,292,000
Originated Loans | With No Recorded Allowance | Commercial | Other commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,221,000		1,221,000		1,095,000
Originated Loans | With No Recorded Allowance | Commercial | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	2,440,000		2,440,000		2,103,000
Originated Loans | With No Recorded Allowance | Commercial | Lease financing
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0		0		55,000
Originated Loans | With No Recorded Allowance | Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	46,000		46,000
Originated Loans | With No Recorded Allowance | Noncommerical | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	5,432,000		5,432,000		4,005,000
Originated Loans | With No Recorded Allowance | Noncommerical | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0		0		457,000
Originated Loans | With No Recorded Allowance | Noncommerical | Revolving mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	217,000		217,000		214,000
Originated Loans | With No Recorded Allowance | Noncommerical | Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,000		1,000		0
Acquired Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Acquired loans which have adverse change in expected cash flows	$ 454,800,000		$ 454,800,000		$ 459,900,000

XML

Estimated Fair Values (Assets And Liabilities Carried At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 5,538,166	$ 5,387,703
Fair Value, Measurements, Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	5,538,166	5,387,703
Interest rate swaps accounted for as cash flow hedges	5,933	7,220
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Interest rate swaps accounted for as cash flow hedges	0	0
Fair Value, Measurements, Recurring | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	5,538,166	5,387,703
Interest rate swaps accounted for as cash flow hedges	5,933	7,220
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Interest rate swaps accounted for as cash flow hedges	0	0
Fair Value, Measurements, Recurring | U.S. Treasury | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	1,625,630	373,437
Fair Value, Measurements, Recurring | U.S. Treasury | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | U.S. Treasury | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	1,625,630	373,437
Fair Value, Measurements, Recurring | U.S. Treasury | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Government Agency | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	1,283,566	2,544,229
Fair Value, Measurements, Recurring | Government Agency | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Government Agency | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	1,283,566	2,544,229
Fair Value, Measurements, Recurring | Government Agency | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Mortgage Backed Securities, Other [Member] | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	2,596,286	2,446,873
Fair Value, Measurements, Recurring | Mortgage Backed Securities, Other [Member] | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Mortgage Backed Securities, Other [Member] | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	2,596,286	2,446,873
Fair Value, Measurements, Recurring | Mortgage Backed Securities, Other [Member] | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Other Debt Obligations | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		830
Fair Value, Measurements, Recurring | Other Debt Obligations | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		0
Fair Value, Measurements, Recurring | Other Debt Obligations | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		830
Fair Value, Measurements, Recurring | Other Debt Obligations | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		0
Fair Value, Measurements, Recurring | Equity Securities | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	32,498	22,147
Fair Value, Measurements, Recurring | Equity Securities | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Equity Securities | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	32,498	22,147
Fair Value, Measurements, Recurring | Equity Securities | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | State, County, Municipal | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	186	187
Fair Value, Measurements, Recurring | State, County, Municipal | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | State, County, Municipal | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	186	187
Fair Value, Measurements, Recurring | State, County, Municipal | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 0	$ 0

XML

Loans and Leases (Changes In Carrying Amount Of Accretable Yield) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Changes in Amount of Accretable Yield [Roll Forward]
Beginning balance	$ 439,990	$ 539,564
Additions	84,295	0
Accretion	(60,660)	(131,909)
Reclassifications from nonaccretable difference	9,992	72,149
Ending balance	456,491	522,206
Changes in expected cash flows that do not affected nonaccretable difference	$ (17,126)	$ 42,402

XML

Business Combinations (Details) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended
	Jan. 02, 2014	Jun. 30, 2014	Jun. 30, 2014
Business Acquisition [Line Items]
Business Acquisition, Termination Fee			$ 10,000,000
Minimum
Business Acquisition [Line Items]
Business Acquisition, Termination Fee			6,500,000
Maximum
Business Acquisition [Line Items]
Business Acquisition, Termination Fee			22,600,000
1st Financial
Business Acquisition [Line Items]
Consideration transferred	10,000,000
Cash and cash equivalents	28,194,000
Investment securities available for sale	237,438,000
Loans held for sale	1,183,000
Restricted equity securities	3,776,000
Loans	316,327,000
Less: allowance for loan losses	0
Premises and equipment	2,686,000
Other real estate owned	11,591,000
Intangible asset	3,780,000
Other assets	16,346,000
Total assets acquired	621,321,000
Noninterest-bearing	152,444,000
Interest-bearing	479,427,000
Total deposits	631,871,000
Short-term borrowings	406,000
Other liabilities	3,559,000
Total liabilities assumed	635,836,000
Net assets acquired	14,515,000
Cash paid to shareholders	(2,000,000)
Cash paid to acquire TARP securities	(8,000,000)
Goodwill recorded for 1st Financial	24,515,000
Revenue generated		4,200,000	8,600,000
1st Financial | Minimum
Business Acquisition [Line Items]
Estimated merger costs	5,500,000
1st Financial | Maximum
Business Acquisition [Line Items]
Estimated merger costs	6,000,000
1st Financial | As recorded by 1st Financial
Business Acquisition [Line Items]
Cash and cash equivalents	28,194,000
Investment securities available for sale	246,890,000
Loans held for sale	1,183,000
Restricted equity securities	3,105,000
Loans	338,170,000
Less: allowance for loan losses	(7,796,000)
Premises and equipment	3,871,000
Other real estate owned	12,896,000
Intangible asset	0
Other assets	16,811,000
Total assets acquired	643,324,000
Noninterest-bearing	152,444,000
Interest-bearing	477,881,000
Total deposits	630,325,000
Short-term borrowings	406,000
Other liabilities	3,392,000
Total liabilities assumed	634,123,000
1st Financial | Fair value adjustments
Business Acquisition [Line Items]
Cash and cash equivalents	0
Investment securities available for sale	(9,452,000)
Loans held for sale	0
Restricted equity securities	671,000
Loans	(21,843,000)
Less: allowance for loan losses	7,796,000
Premises and equipment	(1,185,000)
Other real estate owned	(1,305,000)
Intangible asset	3,780,000
Other assets	(465,000)
Total assets acquired	(22,003,000)
Noninterest-bearing	0
Interest-bearing	1,546,000
Total deposits	1,546,000
Short-term borrowings	0
Other liabilities	167,000
Total liabilities assumed	1,713,000
Shares and Cash [Member]
Business Acquisition [Line Items]
Business Acquisition Equity Interests Issued or Issuable Cash Per Share			$ 50.00
Shares and Cash [Member] | Class A Common Stock
Business Acquisition [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares			4.00
Shares Only [Member] | Class A Common Stock
Business Acquisition [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares			3.58
Shares Only [Member] | Class B Common Stock
Business Acquisition [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares			0.42

XML

Employee Benefit Plans (Components Of Pension Expense) (Details) (Defined Benefit Pension, USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Defined Benefit Pension
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 2,785	$ 4,261	$ 6,166	$ 8,483
Interest cost	6,251	6,409	12,807	12,304
Expected return on assets	(8,340)	(7,474)	(16,152)	(14,405)
Amortization of prior service cost	52	53	105	105
Amortization of net actuarial loss	1,546	4,241	3,092	8,493
Total pension expense	$ 2,294	$ 7,490	$ 6,018	$ 14,980

XML

Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Loans And Leases Outstanding

Loans and leases outstanding include the following at June 30, 2014 and December 31, 2013:

(Dollars in thousands)	June 30, 2014		December 31, 2013
Acquired loans
Commercial:
Construction and land development	$	80,827	$	78,915
Commercial mortgage	637,481		642,891
Other commercial real estate	34,688		41,381
Commercial and industrial	33,851		17,254
Other	1,270		866
Total commercial loans	788,117		781,307
Noncommercial:
Residential mortgage	270,688		213,851
Revolving mortgage	20,129		30,834
Construction and land development	28,759		2,583
Consumer	2,240		851
Total noncommercial loans	321,816		248,119
Total acquired loans	1,109,933		1,029,426
Originated loans and leases:
Commercial:
Construction and land development	342,021		319,847
Commercial mortgage	6,367,096		6,362,490
Other commercial real estate	178,899		178,754
Commercial and industrial	1,292,213		1,081,158
Lease financing	413,422		381,763
Other	131,051		175,336
Total commercial loans	8,724,702		8,499,348
Noncommercial:
Residential mortgage	1,071,089		982,421
Revolving mortgage	2,122,675		2,113,285
Construction and land development	119,420		122,792
Consumer	377,137		386,452
Total noncommercial loans	3,690,321		3,604,950
Total originated loans and leases	12,415,023		12,104,298
Total loans and leases	$	13,524,956	$	13,133,724

Composition Of The Loans And Leases Outstanding By Credit Quality Indicator

Originated loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Originated commercial loans and leases
Grade:	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	330,946	$	6,102,219	$	175,413	$	1,178,124	$	405,495	$	130,997	$	8,323,194
Special mention	7,901		121,824		1,370		25,606		4,324		8		161,033
Substandard	3,174		138,451		1,966		6,474		3,122		46		153,233
Doubtful	—		3,296		—		460		481		—		4,237
Ungraded	—		1,306		150		81,549		—		—		83,005
Total	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	8,724,702
	December 31, 2013
	Originated commercial loans and leases
	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	308,231	$	6,094,505	$	174,913	$	964,840	$	375,371	$	174,314	$	8,092,174
Special mention	8,620		119,515		1,362		14,686		2,160		982		147,325
Substandard	2,944		141,913		2,216		6,352		3,491		40		156,956
Doubtful	52		5,159		75		144		592		—		6,022
Ungraded	—		1,398		188		95,136		149		—		96,871
Total	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	8,499,348

	June 30, 2014
	Originated noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	1,047,270	$	2,107,889	$	118,078	$	373,579	$	3,646,816
30-59 days past due	11,219		7,690		949		1,949		21,807
60-89 days past due	4,693		2,434		229		843		8,199
90 days or greater past due	7,907		4,662		164		766		13,499
Total	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	3,690,321
	December 31, 2013
	Originated noncommercial loans and leases
	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	955,300	$	2,095,480	$	121,026	$	382,710	$	3,554,516
30-59 days past due	12,885		10,977		1,193		2,114		27,169
60-89 days past due	4,658		2,378		317		955		8,308
90 days or greater past due	9,578		4,450		256		673		14,957
Total	$	982,421	$	2,113,285	$	122,792	$	386,452	$	3,604,950

Acquired loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Acquired loans
Grade:	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	14,193	$	349,009	$	11,422	$	26,313	$	138,836	$	15,238	$	112	$	1,469	$	556,592
Special mention	10,957		106,582		16,014		3,869		5,543		2,375		—		—		145,340
Substandard	49,746		148,880		7,252		3,221		44,396		1,696		1,237		2		256,430
Doubtful	2,214		32,503		—		431		1,401		612		295		—		37,456
Ungraded	3,717		507		—		17		80,512		208		27,115		2,039		114,115
Total	$	80,827	$	637,481	$	34,688	$	33,851	$	270,688	$	20,129	$	28,759	$	3,510	$	1,109,933
	December 31, 2013
	Acquired loans
	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	2,619	$	296,824	$	22,225	$	8,021	$	135,326	$	26,322	$	149	$	1,345	$	492,831
Special mention	15,530		125,295		3,431		2,585		6,301		2,608		—		—		155,750
Substandard	52,228		179,657		7,012		5,225		52,774		1,013		2,139		—		300,048
Doubtful	7,436		40,471		8,713		1,257		2,058		891		295		—		61,121
Ungraded	1,102		644		—		166		17,392		—		—		372		19,676
Total	$	78,915	$	642,891	$	41,381	$	17,254	$	213,851	$	30,834	$	2,583	$	1,717	$	1,029,426

Aging Of The Outstanding Loans And Leases By Class Excluding Loans Impaired At Acquisition Date

The aging of the outstanding loans and leases, by class, at June 30, 2014 and December 31, 2013 (excluding loans and leases acquired with deteriorated credit quality) is provided in the table below.

The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	June 30, 2014
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	657	$	40	$	462	$	1,159	$	340,862	$	342,021
Commercial mortgage	11,755		3,089		10,501		25,345		6,341,751		6,367,096
Other commercial real estate	149		—		52		201		178,698		178,899
Commercial and industrial	5,459		805		593		6,857		1,285,356		1,292,213
Lease financing	1,110		8		97		1,215		412,207		413,422
Other	343		—		—		343		130,708		131,051
Residential mortgage	11,219		4,693		7,907		23,819		1,047,270		1,071,089
Revolving mortgage	7,690		2,434		4,662		14,786		2,107,889		2,122,675
Construction and land development - noncommercial	949		229		164		1,342		118,078		119,420
Consumer	1,949		843		766		3,558		373,579		377,137
Total originated loans and leases	$	41,280	$	12,141	$	25,204	$	78,625	$	12,336,398	$	12,415,023
	December 31, 2013
	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	1,603	$	9	$	457	$	2,069	$	317,778	$	319,847
Commercial mortgage	11,131		3,601		14,407		29,139		6,333,351		6,362,490
Other commercial real estate	139		210		470		819		177,935		178,754
Commercial and industrial	3,336		682		436		4,454		1,076,704		1,081,158
Lease financing	789		1,341		101		2,231		379,532		381,763
Other	—		85		—		85		175,251		175,336
Residential mortgage	12,885		4,658		9,578		27,121		955,300		982,421
Revolving mortgage	10,977		2,378		4,450		17,805		2,095,480		2,113,285
Construction and land development - noncommercial	1,193		317		256		1,766		121,026		122,792
Consumer	2,114		955		673		3,742		382,710		386,452
Total originated loans and leases	$	44,167	$	14,236	$	30,828	$	89,231	$	12,015,067	$	12,104,298

Recorded Investment, By Class, In Loans And Leases On Nonaccrual Status And Loans And Leases Greater Than 90 Days Past Due And Still Accruing

The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at June 30, 2014 and December 31, 2013 (excluding acquired loans and leases) are as follows:

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Originated loans and leases:
Construction and land development - commercial	$	659	$	—	$	544	$	—
Other commercial real estate	1,385		41		1,610		—
Commercial mortgage	28,591		1,802		33,529		1,113
Commercial and industrial	1,367		502		1,428		294
Lease financing	624		5		832		—
Residential mortgage	13,836		1,930		14,701		1,998
Revolving mortgage	—		4,662		—		4,450
Construction and land development - noncommercial	—		164		457		256
Consumer	23		766		69		673
Total originated loans and leases	$	46,485	$	9,872	$	53,170	$	8,784

Changes In Carrying Value Of Acquired Impaired Loans

The following table provides changes in the recorded investment of acquired loans during the six months ended June 30, 2014 and June 30, 2013:

(Dollars in thousands)	2014			2013
Balance at January 1	$	1,029,426		$	1,809,235
Fair value of acquired loans	316,327			—
Accretion	60,660			131,909
Payments received and other changes, net	(296,480		)	(497,808		)
Balance at June 30	$	1,109,933		$	1,443,336
Outstanding principal balance at June 30	$	1,888,475		$	2,456,347

Changes In The Amount Of Accretable Yield

For loans acquired from 1st Financial, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the merger date were:

(Dollars in thousands)	January 1, 2014
Contractually required payments	$	414,233
Cash flows expected to be collected	400,622
Fair value at acquisition date	316,327

The following table documents changes to the amount of accretable yield for the first six months of 2014 and 2013.

(Dollars in thousands)	2014			2013
Balance at January 1	$	439,990		$	539,564
Additions	84,295			—
Accretion	(60,660		)	(131,909		)
Reclassifications from nonaccretable difference	9,992			72,149
Changes in expected cash flows that do not affect nonaccretable difference	(17,126		)	42,402
Balance at June 30	$	456,491		$	522,206

XML

Allowance for Loan and Lease Losses (Note Restructurings During Period) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014 loans	Jun. 30, 2013 loans	Jun. 30, 2014 loans	Jun. 30, 2013 loans
Originated Loans
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	35	37	120	93
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 6,139	$ 6,397	$ 20,657	$ 19,245
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	6	4	11	7
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	2,057	450	2,944	543
Originated Loans | Interest Only Loan
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	3	2	10	10
Financing Receivable, Modifications, Post-Modification Recorded Investment	766	171	2,986	4,136
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	0	2	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	494	0	708	0
Originated Loans | Loan Term Extension
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	13	2	27	10
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,530	288	5,705	2,298
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	3	0	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	351	0	351
Originated Loans | Below Market Interest Rate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	14	22	63	40
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,783	5,124	9,804	10,076
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	5	1	7	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	1,563	99	2,151	99
Originated Loans | Discharge of Debt
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	5	11	20	33
Financing Receivable, Modifications, Post-Modification Recorded Investment	60	814	2,162	2,735
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	2	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	85	93
Originated Loans | Commercial | Interest Only Loan | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	2	1	6	8
Financing Receivable, Modifications, Post-Modification Recorded Investment	720	71	2,600	3,406
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	0	2	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	494	0	708	0
Originated Loans | Commercial | Interest Only Loan | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	1	0	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	100	0	100
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Commercial | Interest Only Loan | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			1	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			196	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Commercial | Interest Only Loan | Lease financing
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			2	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			144	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0
Originated Loans | Commercial | Interest Only Loan | Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	0	1	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	46	0	46	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Commercial | Loan Term Extension | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	2	0	2	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	191	0	191	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Commercial | Loan Term Extension | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	1	5	5
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	242	2,584	1,972
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	0	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	223	0	223
Originated Loans | Commercial | Loan Term Extension | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	4	0	4	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,069	0	2,069	229
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	0	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	22	0	22
Originated Loans | Commercial | Loan Term Extension | Lease financing
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			2	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			224	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Commercial | Below Market Interest Rate | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			10	1
Financing Receivable, Modifications, Post-Modification Recorded Investment			363	224
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Commercial | Below Market Interest Rate | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	3	7	15	12
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,991	2,035	6,591	5,819
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	5	0	6	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	1,563	0	2,011	0
Originated Loans | Commercial | Below Market Interest Rate | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	3	1	3
Financing Receivable, Modifications, Post-Modification Recorded Investment	365	753	365	753
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0		0
Originated Loans | Commercial | Below Market Interest Rate | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	3	6	4
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	831	143	846
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Commercial | Discharge of Debt | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			1	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			983	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Noncommerical | Interest Only Loan | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			0	1
Financing Receivable, Modifications, Post-Modification Recorded Investment			0	630
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Noncommerical | Interest Only Loan | Lease financing
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Subsequent Default, Recorded Investment				0
Originated Loans | Noncommerical | Loan Term Extension | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	6	0	11	3
Financing Receivable, Modifications, Post-Modification Recorded Investment	260	0	593	51
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	0	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	106	0	106
Originated Loans | Noncommerical | Loan Term Extension | Consumer
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	1	3	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	10	46	44	46
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Noncommerical | Below Market Interest Rate | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	10	6	18	14
Financing Receivable, Modifications, Post-Modification Recorded Investment	427	885	820	1,579
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	1	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	99	140	99
Originated Loans | Noncommerical | Below Market Interest Rate | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0
Originated Loans | Noncommerical | Below Market Interest Rate | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	2	8	2
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	521	1,248	521
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Noncommerical | Below Market Interest Rate | Revolving mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	1	5	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	99	274	99
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Originated Loans | Noncommerical | Below Market Interest Rate | Consumer
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			0	3
Financing Receivable, Modifications, Post-Modification Recorded Investment			0	235
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Noncommerical | Discharge of Debt | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	2	8	3
Financing Receivable, Modifications, Post-Modification Recorded Investment	13	87	649	352
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	2	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	85	0
Originated Loans | Noncommerical | Discharge of Debt | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			1	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			62	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Originated Loans | Noncommerical | Discharge of Debt | Revolving mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	2	9	7	30
Financing Receivable, Modifications, Post-Modification Recorded Investment	39	727	442	2,383
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	93
Originated Loans | Noncommerical | Discharge of Debt | Consumer
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	2	0	3	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	8	0	26	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Acquired Loans
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	57	4	67	22
Financing Receivable, Modifications, Post-Modification Recorded Investment	6,951	1,944	10,614	18,787
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	4	3	8	9
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	170	2,027	253	6,169
Acquired Loans | Interest Only Loan
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	1	2	3
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	134	0	467
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	2	2	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	1,803	44	2,093
Acquired Loans | Loan Term Extension
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	0	2	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	53	0	329	199
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	0	1	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	53	0	53	0
Acquired Loans | Below Market Interest Rate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	30	3	37	18
Financing Receivable, Modifications, Post-Modification Recorded Investment	5,070	1,810	8,457	18,121
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	1	3	6
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	23	224	62	4,076
Acquired Loans | Discharge of Debt
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	26	0	26	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,828	0	1,828	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	2	0	2	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	94	0	94	0
Acquired Loans | Commercial | Interest Only Loan | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	0	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	104	0	104
Acquired Loans | Commercial | Interest Only Loan | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	0	2	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	0	0	290
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1	2	2
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	1,699	44	1,989
Acquired Loans | Commercial | Loan Term Extension | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			1	0
Financing Receivable, Modifications, Post-Modification Recorded Investment			276	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0	0
Acquired Loans | Commercial | Below Market Interest Rate | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	0	2	4
Financing Receivable, Modifications, Post-Modification Recorded Investment	273	0	308	3,331
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Acquired Loans | Commercial | Below Market Interest Rate | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	5	1	9	5
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,811	813	5,060	11,871
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	1	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	39	3,145
Acquired Loans | Commercial | Below Market Interest Rate | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	0	1	2
Financing Receivable, Modifications, Post-Modification Recorded Investment	23	0	23	435
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Acquired Loans | Noncommerical | Interest Only Loan | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	0	1	0	2
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	134	0	177
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	0	0	0	0
Acquired Loans | Noncommerical | Loan Term Extension | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	1	0	1	1
Financing Receivable, Modifications, Post-Modification Recorded Investment	53	0	53	199
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	0	1	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	53	0	53	0
Acquired Loans | Noncommerical | Below Market Interest Rate | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	23	2	25	7
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,963	997	3,066	2,484
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1	1	2	3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	23	224	23	931
Acquired Loans | Noncommerical | Discharge of Debt | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts	26	0	26	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,828	0	1,828	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	2	0	2	0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 94	$ 0	$ 94	$ 0

XML

Loans and Leases (Composition of the Loans and Leases Outstanding By Credit Quality Indicator) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	$ 1,109,933	$ 1,029,426
Total Originated Loans and Leases	12,415,023	12,104,298
Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	556,592	492,831
Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	145,340	155,750
Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	256,430	300,048
Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	37,456	61,121
Ungraded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	114,115	19,676
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	788,117	781,307
Total Originated Loans and Leases	8,724,702	8,499,348
Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	80,827	78,915
Total Originated Loans and Leases	342,021	319,847
Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	637,481	642,891
Total Originated Loans and Leases	6,367,096	6,362,490
Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	34,688	41,381
Total Originated Loans and Leases	178,899	178,754
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	33,851	17,254
Total Originated Loans and Leases	1,292,213	1,081,158
Commercial | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	413,422	381,763
Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,270	866
Total Originated Loans and Leases	131,051	175,336
Commercial | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	8,323,194	8,092,174
Commercial | Pass | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	14,193	2,619
Total Originated Loans and Leases	330,946	308,231
Commercial | Pass | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	349,009	296,824
Total Originated Loans and Leases	6,102,219	6,094,505
Commercial | Pass | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	11,422	22,225
Total Originated Loans and Leases	175,413	174,913
Commercial | Pass | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	26,313	8,021
Total Originated Loans and Leases	1,178,124	964,840
Commercial | Pass | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	405,495	375,371
Commercial | Pass | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	130,997	174,314
Commercial | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	161,033	147,325
Commercial | Special Mention | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	10,957	15,530
Total Originated Loans and Leases	7,901	8,620
Commercial | Special Mention | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	106,582	125,295
Total Originated Loans and Leases	121,824	119,515
Commercial | Special Mention | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	16,014	3,431
Total Originated Loans and Leases	1,370	1,362
Commercial | Special Mention | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	3,869	2,585
Total Originated Loans and Leases	25,606	14,686
Commercial | Special Mention | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	4,324	2,160
Commercial | Special Mention | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	8	982
Commercial | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	153,233	156,956
Commercial | Substandard | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	49,746	52,228
Total Originated Loans and Leases	3,174	2,944
Commercial | Substandard | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	148,880	179,657
Total Originated Loans and Leases	138,451	141,913
Commercial | Substandard | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	7,252	7,012
Total Originated Loans and Leases	1,966	2,216
Commercial | Substandard | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	3,221	5,225
Total Originated Loans and Leases	6,474	6,352
Commercial | Substandard | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	3,122	3,491
Commercial | Substandard | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	46	40
Commercial | Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	4,237	6,022
Commercial | Doubtful | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	2,214	7,436
Total Originated Loans and Leases	0	52
Commercial | Doubtful | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	32,503	40,471
Total Originated Loans and Leases	3,296	5,159
Commercial | Doubtful | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	0	8,713
Total Originated Loans and Leases	0	75
Commercial | Doubtful | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	431	1,257
Total Originated Loans and Leases	460	144
Commercial | Doubtful | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	481	592
Commercial | Doubtful | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	0	0
Commercial | Ungraded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	83,005	96,871
Commercial | Ungraded | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	3,717	1,102
Total Originated Loans and Leases	0	0
Commercial | Ungraded | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	507	644
Total Originated Loans and Leases	1,306	1,398
Commercial | Ungraded | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	0	0
Total Originated Loans and Leases	150	188
Commercial | Ungraded | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	17	166
Total Originated Loans and Leases	81,549	95,136
Commercial | Ungraded | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	0	149
Commercial | Ungraded | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Originated Loans and Leases	0	0
Noncommerical
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	321,816	248,119
Total Originated Loans and Leases	3,690,321	3,604,950
Noncommerical | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	270,688	213,851
Total Originated Loans and Leases	1,071,089	982,421
Noncommerical | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	20,129	30,834
Total Originated Loans and Leases	2,122,675	2,113,285
Noncommerical | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	28,759	2,583
Total Originated Loans and Leases	119,420	122,792
Noncommerical | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	2,240	851
Total Originated Loans and Leases	377,137	386,452
Noncommerical | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	3,510	1,717
Noncommerical | Pass | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	138,836	135,326
Noncommerical | Pass | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	15,238	26,322
Noncommerical | Pass | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	112	149
Noncommerical | Pass | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,469	1,345
Noncommerical | Special Mention | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	5,543	6,301
Noncommerical | Special Mention | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	2,375	2,608
Noncommerical | Special Mention | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	0	0
Noncommerical | Special Mention | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	0	0
Noncommerical | Substandard | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	44,396	52,774
Noncommerical | Substandard | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,696	1,013
Noncommerical | Substandard | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,237	2,139
Noncommerical | Substandard | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	2	0
Noncommerical | Doubtful | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,401	2,058
Noncommerical | Doubtful | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	612	891
Noncommerical | Doubtful | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	295	295
Noncommerical | Doubtful | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	0	0
Noncommerical | Ungraded | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	80,512	17,392
Noncommerical | Ungraded | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	208	0
Noncommerical | Ungraded | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	27,115	0
Noncommerical | Ungraded | Consumer and Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	2,039	372
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	12,336,398	12,015,067
Total Originated Loans and Leases	12,415,023	12,104,298
30-59 Days Past Due	41,280	44,167
60-89 Days Past Due	12,141	14,236
90 Days or Greater	25,204	30,828
Originated Loans | Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	340,862	317,778
Total Originated Loans and Leases	342,021	319,847
30-59 Days Past Due	657	1,603
60-89 Days Past Due	40	9
90 Days or Greater	462	457
Originated Loans | Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	6,341,751	6,333,351
Total Originated Loans and Leases	6,367,096	6,362,490
30-59 Days Past Due	11,755	11,131
60-89 Days Past Due	3,089	3,601
90 Days or Greater	10,501	14,407
Originated Loans | Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	178,698	177,935
Total Originated Loans and Leases	178,899	178,754
30-59 Days Past Due	149	139
60-89 Days Past Due	0	210
90 Days or Greater	52	470
Originated Loans | Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	1,285,356	1,076,704
Total Originated Loans and Leases	1,292,213	1,081,158
30-59 Days Past Due	5,459	3,336
60-89 Days Past Due	805	682
90 Days or Greater	593	436
Originated Loans | Commercial | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	412,207	379,532
Total Originated Loans and Leases	413,422	381,763
30-59 Days Past Due	1,110	789
60-89 Days Past Due	8	1,341
90 Days or Greater	97	101
Originated Loans | Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	130,708	175,251
Total Originated Loans and Leases	131,051	175,336
30-59 Days Past Due	343	0
60-89 Days Past Due	0	85
90 Days or Greater	0	0
Originated Loans | Noncommerical
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	3,646,816	3,554,516
Total Originated Loans and Leases	3,690,321	3,604,950
30-59 Days Past Due	21,807	27,169
60-89 Days Past Due	8,199	8,308
90 Days or Greater	13,499	14,957
Originated Loans | Noncommerical | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	1,047,270	955,300
Total Originated Loans and Leases	1,071,089	982,421
30-59 Days Past Due	11,219	12,885
60-89 Days Past Due	4,693	4,658
90 Days or Greater	7,907	9,578
Originated Loans | Noncommerical | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	2,107,889	2,095,480
Total Originated Loans and Leases	2,122,675	2,113,285
30-59 Days Past Due	7,690	10,977
60-89 Days Past Due	2,434	2,378
90 Days or Greater	4,662	4,450
Originated Loans | Noncommerical | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	118,078	121,026
Total Originated Loans and Leases	119,420	122,792
30-59 Days Past Due	949	1,193
60-89 Days Past Due	229	317
90 Days or Greater	164	256
Originated Loans | Noncommerical | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current	373,579	382,710
Total Originated Loans and Leases	377,137	386,452
30-59 Days Past Due	1,949	2,114
60-89 Days Past Due	843	955
90 Days or Greater	$ 766	$ 673

XML

Investments (Unrealized Losses) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investment securities available for sale:
Fair Value, Less than 12 months	$ 1,107,272	$ 3,104,700
Unrealized Losses, Less than 12 months	2,359	43,715
Fair Value, 12 months or more	1,109,829	56,830
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments	15,135	1,105
Fair Value, Total	2,217,101	3,161,530
Unrealized Losses, Total	17,494	44,820
U. S. Treasury
Investment securities available for sale:
Fair Value, Less than 12 months	135,712	102,105
Unrealized Losses, Less than 12 months	18	45
Fair Value, 12 months or more	0	0
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments	0	0
Fair Value, Total	135,712	102,105
Unrealized Losses, Total	18	45
Government Agency
Investment securities available for sale:
Fair Value, Less than 12 months	242,563	780,552
Unrealized Losses, Less than 12 months	178	761
Fair Value, 12 months or more	0	29,969
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments	0	31
Fair Value, Total	242,563	810,521
Unrealized Losses, Total	178	792
Mortgage Backed Securities, Other [Member]
Investment securities available for sale:
Fair Value, Less than 12 months	728,997	2,221,213
Unrealized Losses, Less than 12 months	2,163	42,876
Fair Value, 12 months or more	1,109,829	26,861
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments	15,135	1,074
Fair Value, Total	1,838,826	2,248,074
Unrealized Losses, Total	17,298	43,950
Other Debt Obligations
Investment securities available for sale:
Fair Value, Less than 12 months		830
Unrealized Losses, Less than 12 months		33
Fair Value, 12 months or more		0
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments		0
Fair Value, Total		830
Unrealized Losses, Total		33
State, County and Municipal
Investment securities available for sale:
Unrealized Losses, Total	$ 0	$ 0

XML

Receivable from FDIC for Loss Share Agreements (Changes in Receivable from FDIC) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Receivable From FDIC For Loss Share Agreements [Abstract]
FDIC Indemnification Asset	$ 49,959	$ 158,013	$ 49,959	$ 158,013	$ 74,784	$ 93,397	$ 195,942	$ 270,192
Receivable From FDIC For Loss Share Agreements [Roll Forward]
Accretion of discounts and premiums, net	(12,922)	(19,069)	(30,667)	(45,181)
Receipt of payments from FDIC	859	(4,015)	4,350	(46,534)
Post-acquisition and other adjustments, net	$ (12,762)	$ (14,845)	$ (17,121)	$ (20,464)

XML

Derivatives (Schedule Of Interest Rate Swaps) (Details) (2011 Interest Rate Swap, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
2011 Interest Rate Swap
Derivative [Line Items]
Estimated fair value of liability	$ 5,933	$ 7,220
Derivative, Notional Amount	$ 93,500	$ 93,500

XML

Allowance for Loan and Lease Losses (Summary of Activity In Allowance for Loan and Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Loans and Leases Evaluated for Impairment [Abstract]
Net loans and leases	$ 13,318,710		$ 13,318,710		$ 12,900,330
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
Allowance for loan and lease losses	206,246		206,246		233,394
Noncommerical | Non-specific
Allowance for Loan and Lease Losses [Roll Forward]
Reclassification				(15,772)
Originated Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	177,949	176,546	179,874	179,046
Provisions	2,230	2,231	2,600	6,247
Charge-offs	(4,771)	(6,494)	(9,193)	(14,561)
Recoveries	1,507	2,131	3,634	3,682
Reclassification		7,368		7,368
Ending balance	176,915	181,782	176,915	181,782
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	13,251		13,251		10,161
ALLL for loans and leases collectively evaluated for impairment	163,664		163,664		169,713
Total allowance for loan and lease losses	176,915	181,782	176,915	181,782
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	124,887		124,887		132,146
Loans and leases collectively evaluated for impairment	12,290,136		12,290,136		11,972,152
Net loans and leases	12,415,023		12,415,023		12,104,298
Originated Loans | Commercial | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	12,246	4,311	10,335	6,031
Provisions	(1,135)	3,296	750	1,462
Charge-offs	0	(1,286)	0	(1,540)
Recoveries	5	270	31	638
Reclassification		5,141		5,141
Ending balance	11,116	11,732	11,116	11,732
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	155		155		103
ALLL for loans and leases collectively evaluated for impairment	10,961		10,961		10,232
Total allowance for loan and lease losses	11,116	11,732	11,116	11,732
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	2,573		2,573		2,272
Loans and leases collectively evaluated for impairment	339,448		339,448		317,575
Net loans and leases	342,021		342,021		319,847
Originated Loans | Commercial | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	94,217	82,119	100,257	80,229
Provisions	(1,961)	(4,976)	(8,940)	(2,438)
Charge-offs	(272)	(213)	(440)	(869)
Recoveries	145	491	1,252	499
Reclassification		27,421		27,421
Ending balance	92,129	104,842	92,129	104,842
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	7,704		7,704		6,873
ALLL for loans and leases collectively evaluated for impairment	84,425		84,425		93,384
Total allowance for loan and lease losses	92,129	104,842	92,129	104,842
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	87,046		87,046		97,111
Loans and leases collectively evaluated for impairment	6,280,050		6,280,050		6,265,379
Net loans and leases	6,367,096		6,367,096		6,362,490
Originated Loans | Commercial | Other commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	945	1,915	1,009	2,059
Provisions	(155)	(51)	(229)	(151)
Charge-offs	0	(18)	0	(72)
Recoveries	16	26	26	36
Reclassification		(815)		(815)
Ending balance	806	1,057	806	1,057
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	179		179		209
ALLL for loans and leases collectively evaluated for impairment	627		627		800
Total allowance for loan and lease losses	806	1,057	806	1,057
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	1,962		1,962		1,878
Loans and leases collectively evaluated for impairment	176,937		176,937		176,876
Net loans and leases	178,899		178,899		178,754
Originated Loans | Commercial | Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	24,021	13,661	22,362	14,050
Provisions	3,033	(1,203)	5,009	(703)
Charge-offs	(531)	(988)	(1,027)	(2,246)
Recoveries	386	288	565	657
Reclassification		7,551		7,551
Ending balance	26,909	19,309	26,909	19,309
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	1,425		1,425		771
ALLL for loans and leases collectively evaluated for impairment	25,484		25,484		21,591
Total allowance for loan and lease losses	26,909	19,309	26,909	19,309
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	10,811		10,811		9,300
Loans and leases collectively evaluated for impairment	1,281,402		1,281,402		1,071,858
Net loans and leases	1,292,213		1,292,213		1,081,158
Originated Loans | Commercial | Lease financing
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,183	3,543	4,749	3,521
Provisions	176	1,775	(348)	1,797
Charge-offs	(14)	(92)	(72)	(92)
Recoveries	20	19	36	19
Reclassification		(253)		(253)
Ending balance	4,365	4,992	4,365	4,992
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	297		297		54
ALLL for loans and leases collectively evaluated for impairment	4,068		4,068		4,695
Total allowance for loan and lease losses	4,365	4,992	4,365	4,992
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	376		376		188
Loans and leases collectively evaluated for impairment	413,046		413,046		381,575
Net loans and leases	413,422		413,422		381,763
Originated Loans | Commercial | Other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	454	1,490	190	1,175
Provisions	163	155	435	476
Charge-offs	(5)	0	(13)	(6)
Recoveries	0	3	0	3
Reclassification		(1,288)		(1,288)
Ending balance	612	360	612	360
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	0		0		0
ALLL for loans and leases collectively evaluated for impairment	612		612		190
Total allowance for loan and lease losses	612	360	612	360
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	46		46		0
Loans and leases collectively evaluated for impairment	131,005		131,005		175,336
Net loans and leases	131,051		131,051		175,336
Originated Loans | Noncommerical | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	10,944	3,790	10,511	3,836
Provisions	(1,557)	878	(948)	1,611
Charge-offs	(234)	(450)	(418)	(1,268)
Recoveries	148	61	156	100
Reclassification		5,717		5,717
Ending balance	9,301	9,996	9,301	9,996
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	1,613		1,613		1,586
ALLL for loans and leases collectively evaluated for impairment	7,688		7,688		8,925
Total allowance for loan and lease losses	9,301	9,996	9,301	9,996
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	15,448		15,448		15,539
Loans and leases collectively evaluated for impairment	1,055,641		1,055,641		966,882
Net loans and leases	1,071,089		1,071,089		982,421
Originated Loans | Noncommerical | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,249	1,419	681	1,721
Provisions	(323)	(244)	254	(357)
Charge-offs	(23)	0	(94)	(245)
Recoveries	2	23	64	79
Reclassification		(478)		(478)
Ending balance	905	720	905	720
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	201		201		72
ALLL for loans and leases collectively evaluated for impairment	704		704		609
Total allowance for loan and lease losses	905	720	905	720
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	1,934		1,934		1,108
Loans and leases collectively evaluated for impairment	117,486		117,486		121,684
Net loans and leases	119,420		119,420		122,792
Originated Loans | Noncommerical | Revolving mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	16,408	24,499	16,239	25,185
Provisions	1,252	907	2,605	2,338
Charge-offs	(1,064)	(878)	(2,324)	(3,066)
Recoveries	201	307	277	378
Reclassification		(9,838)		(9,838)
Ending balance	16,797	14,997	16,797	14,997
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	1,024		1,024		372
ALLL for loans and leases collectively evaluated for impairment	15,773		15,773		15,867
Total allowance for loan and lease losses	16,797	14,997	16,797	14,997
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	3,754		3,754		3,596
Loans and leases collectively evaluated for impairment	2,118,921		2,118,921		2,109,689
Net loans and leases	2,122,675		2,122,675		2,113,285
Originated Loans | Noncommerical | Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	13,282	24,027	13,541	25,389
Provisions	2,737	1,694	4,012	2,290
Charge-offs	(2,628)	(2,569)	(4,805)	(5,157)
Recoveries	584	643	1,227	1,273
Reclassification		(10,018)		(10,018)
Ending balance	13,975	13,777	13,975	13,777
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
ALLL for loans and leases individually evaluated for impairment	653		653		121
ALLL for loans and leases collectively evaluated for impairment	13,322		13,322		13,420
Total allowance for loan and lease losses	13,975	13,777	13,975	13,777
Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment	937		937		1,154
Loans and leases collectively evaluated for impairment	376,200		376,200		385,298
Net loans and leases	377,137		377,137		386,452
Originated Loans | Noncommerical | Non-specific
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	0	15,772	0	15,850
Provisions	0	0	0	(78)
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Reclassification		(15,772)		(15,772)
Ending balance	0	0	0	0
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	0	0	0	0
Acquired Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	44,993	96,473	53,520	139,972
Provisions	(9,529)	(15,473)	(11,802)	(38,095)
Charge-offs	(6,133)	(4,466)	(12,387)	(25,343)
Recoveries	0	0	0	0
Ending balance	29,331	76,534	29,331	76,534
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	29,331	76,534	29,331	76,534
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	29,331		29,331		53,520
Loans and leases acquired with deteriorated credit quality	1,109,933		1,109,933		1,029,426
Acquired Loans | Commercial | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,476	13,306	1,320	31,186
Provisions	(77)	(5,091)	3,278	(18,238)
Charge-offs	(596)	(626)	(795)	(5,359)
Recoveries	0	0	0	0
Ending balance	3,803	7,589	3,803	7,589
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	3,803	7,589	3,803	7,589
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	3,803		3,803		1,320
Loans and leases acquired with deteriorated credit quality	80,827		80,827		78,915
Acquired Loans | Commercial | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	23,003	38,293	29,906	50,275
Provisions	(1,185)	(2,522)	(4,571)	(4,606)
Charge-offs	(4,503)	(2,183)	(8,020)	(12,081)
Recoveries	0	0	0	0
Ending balance	17,315	33,588	17,315	33,588
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	17,315	33,588	17,315	33,588
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	17,315		17,315		29,906
Loans and leases acquired with deteriorated credit quality	637,481		637,481		642,891
Acquired Loans | Commercial | Other commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,204	5,172	1,354	11,234
Provisions	(797)	(576)	(947)	(5,707)
Charge-offs	0	0	0	(931)
Recoveries	0	0	0	0
Ending balance	407	4,596	407	4,596
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	407	4,596	407	4,596
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	407		407		1,354
Loans and leases acquired with deteriorated credit quality	34,688		34,688		41,381
Acquired Loans | Commercial | Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,256	11,876	5,275	8,897
Provisions	(1,729)	(4,936)	(2,065)	(704)
Charge-offs	(152)	(1,004)	(2,835)	(2,257)
Recoveries	0	0	0	0
Ending balance	375	5,936	375	5,936
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	375	5,936	375	5,936
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	375		375		5,275
Loans and leases acquired with deteriorated credit quality	33,851		33,851		17,254
Acquired Loans | Noncommerical | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	9,764	17,603	11,802	19,837
Provisions	(2,176)	55	(4,476)	(1,450)
Charge-offs	(495)	(386)	(233)	(1,115)
Recoveries	0	0	0	0
Ending balance	7,093	17,272	7,093	17,272
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	7,093	17,272	7,093	17,272
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	7,093		7,093		11,802
Loans and leases acquired with deteriorated credit quality	270,688		270,688		213,851
Acquired Loans | Noncommerical | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	583	2,756	682	8,287
Provisions	(583)	(1,524)	(682)	(3,837)
Charge-offs	0	0	0	(3,218)
Recoveries	0	0	0	0
Ending balance	0	1,232	0	1,232
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	0	1,232	0	1,232
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	0		0		682
Loans and leases acquired with deteriorated credit quality	28,759		28,759		2,583
Acquired Loans | Noncommerical | Revolving mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	3,493	7,135	2,959	9,754
Provisions	(3,031)	(869)	(2,397)	(3,373)
Charge-offs	(381)	(235)	(481)	(350)
Recoveries	0	0	0	0
Ending balance	81	6,031	81	6,031
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	81	6,031	81	6,031
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	81		81		2,959
Loans and leases acquired with deteriorated credit quality	20,129		20,129		30,834
Acquired Loans | Noncommerical | Consumer and Other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	214	332	222	502
Provisions	49	(10)	58	(180)
Charge-offs	(6)	(32)	(23)	(32)
Recoveries	0	0	0	0
Ending balance	257	290	257	290
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	257	290	257	290
Loan and Lease Acquired with Deteriorated Credit Quality [Abstract]
ALLL for loans and leases acquired with deteriorated credit quality	257		257		222
Loans and leases acquired with deteriorated credit quality	$ 3,510		$ 3,510		$ 1,717

XML

Accounting Policies and Basis of Presentation

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Accounting Policies and Basis of Presentation

ACCOUNTING POLICIES AND BASIS OF PRESENTATION

First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina.

General

These consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes included in BancShares' Annual Report on Form 10-K for the year ended December 31, 2013.

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported shareholders' equity or net income.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and different assumptions in the application of these policies could result in material changes in BancShares' consolidated financial position, the consolidated results of its operations or related disclosures. Material estimates that are particularly susceptible to significant change include the determination of the allowance for loan and lease losses; determination of the fair value of financial instruments; pension plan assumptions; cash flow estimates on acquired loans; the receivable from and payable to the Federal Deposit Insurance Corporation (FDIC) for loss share agreements; purchase accounting-related adjustments; and income tax assets, liabilities and expense.

Recent Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period)”

This ASU requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. A reporting entity should apply FASB ASC Topic 718, Compensation—Stock Compensation, to awards with performance conditions that affect vesting.

The guidance in this ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. This update may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. BancShares will adopt the standard effective the first quarter of 2016. Since BancShares does not currently have any share-based stock compensation plans, adoption of Topic 718 is not projected to have an impact on BancShares' consolidated financial position or consolidated results of operations.

FASB ASU 2014-11, “Transfers and Servicing (Topic 860)”

This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. The ASU requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The ASU also requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.

The accounting changes in this ASU are effective for fiscal years beginning after December 15, 2014. In addition, the disclosure for certain transactions accounted for as a sale is effective for the fiscal period beginning after December 15, 2014, the disclosure for transactions accounted for as secured borrowings is required to be presented for fiscal periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted. We will adopt the guidance effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”

In May 2014, the FASB issued a standard on the recognition of revenue from contracts with customers with the core principle being for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also results in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.

The guidance in this ASU is effective for fiscal periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Early adoption is not permitted. We are currently evaluating the impact of the new standard and we will adopt during the first quarter of 2017.

FASB ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”

This ASU limits presentation of discontinued operations and disclosure of disposals to disposals representing a strategic shift in operations in which the strategic shifts should have a major effect on the organization's operations and financial results. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting.

The new standard is effective in the first quarter of 2015 for public companies with a calendar year end. We will adopt the standard effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40)”

This ASU clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.

The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. BancShares will adopt the guidance effective in the first quarter of 2015, and is currently evaluating the impact of the new standard on the financial statement disclosures. BancShares does not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-01 "Investments - Equity Method and Joint Ventures (Topic 323) - Accounting for Investments in Qualified Affordable Housing Projects”

This ASU permits an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit).

For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323.

The decision to apply the proportional amortization method of accounting will be applied consistently to all qualifying affordable housing project investments rather than a decision to be applied to individual investments.

The amendments in this ASU should be applied retrospectively to all periods presented and are effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.

BancShares is currently evaluating the impact of the new standard and is targeting a December 31, 2014, adoption and implementation for qualifying affordable housing project investments.

FASB ASU 2013-11, “Income Taxes (Topic 740)”

This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require BancShares to use, and BancShares does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date.

The provisions of this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. BancShares adopted the guidance effective in the first quarter of 2014. The initial adoption had no effect on our consolidated financial position or consolidated results of operations.

FASB ASU 2013-04, “Liabilities”

This ASU provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in GAAP.

The amendments in this update are effective for fiscal years beginning after December 31, 2013. BancShares adopted the guidance effective first quarter of 2014. The initial adoption did not have any effect on our consolidated financial position or consolidated results of operations.

XML

Accumulated Other Comprehensive Loss (Schedule Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013		Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss), before Tax	$ 6,499				$ 6,499						$ (41,434)
Deferred tax expense (benefit)	2,442				2,442						(16,166)
Accumulated other comprehensive income (loss), net of tax	4,057		(100,176)		4,057		(100,176)		(16,594)		(25,268)		(79,905)		(82,106)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(976)		(2,612)		(1,953)		(5,231)
Reclassification adjustment for gains included in income before income taxes	1,598		4,294		3,197		8,598
Unrealized Gains on Investment Securities Available for Sale
Accumulated Other Comprehensive Income (Loss), before Tax	26,817				26,817						(16,632)
Deferred tax expense (benefit)	10,327				10,327						(6,541)
Accumulated other comprehensive income (loss), net of tax	16,490	[1]	(4,117)	[1]	16,490	[1]	(4,117)	[1]	(2,835)	[1]	(10,091)	[1]	19,606	[1]	20,517	[1]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	0	[1]	0	[1]	0	[1]	0	[1]
Funded Status of Defined Benefit Plan
Accumulated Other Comprehensive Income (Loss), before Tax	(14,385)				(14,385)						(17,582)
Deferred tax expense (benefit)	(5,595)				(5,595)						(6,839)
Accumulated other comprehensive income (loss), net of tax	(8,790)	[1]	(91,100)	[1]	(8,790)	[1]	(91,100)	[1]	(9,766)	[1]	(10,743)	[1]	(93,712)	[1]	(96,331)	[1]
Income taxes	622		1,682		1,244		3,367
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(976)	[1]	(2,612)	[1]	(1,953)	[1]	(5,231)	[1]
Employee Benefits, prior service costs	(52)		(53)		(105)		(105)
Reclassification adjustment for gains included in income before income taxes	(1,546)		(4,241)		(3,092)		(8,493)
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, before Tax	(1,598)		(4,294)		(3,197)		(8,598)
Unrealized Loss on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss), before Tax	(5,933)				(5,933)						(7,220)
Deferred tax expense (benefit)	(2,290)				(2,290)						(2,786)
Accumulated other comprehensive income (loss), net of tax	(3,643)	[1]	(4,959)	[1]	(3,643)	[1]	(4,959)	[1]	(3,993)	[1]	(4,434)	[1]	(5,799)	[1]	(6,292)	[1]
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	$ 0	[1]	$ 0	[1]	$ 0	[1]	$ 0	[1]

[1] All amounts are net of tax.

XML

Loans and Leases (Aging Of The Outstanding Loans and Leases By Class Excluding Loans Impaired At Acquisition Date) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	$ 12,415,023	$ 12,104,298
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	8,724,702	8,499,348
Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	342,021	319,847
Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	6,367,096	6,362,490
Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	178,899	178,754
Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	1,292,213	1,081,158
Commercial | Lease financing
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	413,422	381,763
Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	131,051	175,336
Noncommerical
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	3,690,321	3,604,950
Noncommerical | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	1,071,089	982,421
Noncommerical | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	2,122,675	2,113,285
Noncommerical | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	119,420	122,792
Noncommerical | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Originated Loans and Leases	377,137	386,452
Originated Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	41,280	44,167
60-89 Days Past Due	12,141	14,236
90 Days or Greater	25,204	30,828
Total	78,625	89,231
Current	12,336,398	12,015,067
Total Originated Loans and Leases	12,415,023	12,104,298
Originated Loans | Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	657	1,603
60-89 Days Past Due	40	9
90 Days or Greater	462	457
Total	1,159	2,069
Current	340,862	317,778
Total Originated Loans and Leases	342,021	319,847
Originated Loans | Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	11,755	11,131
60-89 Days Past Due	3,089	3,601
90 Days or Greater	10,501	14,407
Total	25,345	29,139
Current	6,341,751	6,333,351
Total Originated Loans and Leases	6,367,096	6,362,490
Originated Loans | Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	149	139
60-89 Days Past Due	0	210
90 Days or Greater	52	470
Total	201	819
Current	178,698	177,935
Total Originated Loans and Leases	178,899	178,754
Originated Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	5,459	3,336
60-89 Days Past Due	805	682
90 Days or Greater	593	436
Total	6,857	4,454
Current	1,285,356	1,076,704
Total Originated Loans and Leases	1,292,213	1,081,158
Originated Loans | Commercial | Lease financing
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	1,110	789
60-89 Days Past Due	8	1,341
90 Days or Greater	97	101
Total	1,215	2,231
Current	412,207	379,532
Total Originated Loans and Leases	413,422	381,763
Originated Loans | Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	343	0
60-89 Days Past Due	0	85
90 Days or Greater	0	0
Total	343	85
Current	130,708	175,251
Total Originated Loans and Leases	131,051	175,336
Originated Loans | Noncommerical
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	21,807	27,169
60-89 Days Past Due	8,199	8,308
90 Days or Greater	13,499	14,957
Current	3,646,816	3,554,516
Total Originated Loans and Leases	3,690,321	3,604,950
Originated Loans | Noncommerical | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	11,219	12,885
60-89 Days Past Due	4,693	4,658
90 Days or Greater	7,907	9,578
Total	23,819	27,121
Current	1,047,270	955,300
Total Originated Loans and Leases	1,071,089	982,421
Originated Loans | Noncommerical | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	7,690	10,977
60-89 Days Past Due	2,434	2,378
90 Days or Greater	4,662	4,450
Total	14,786	17,805
Current	2,107,889	2,095,480
Total Originated Loans and Leases	2,122,675	2,113,285
Originated Loans | Noncommerical | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	949	1,193
60-89 Days Past Due	229	317
90 Days or Greater	164	256
Total	1,342	1,766
Current	118,078	121,026
Total Originated Loans and Leases	119,420	122,792
Originated Loans | Noncommerical | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	1,949	2,114
60-89 Days Past Due	843	955
90 Days or Greater	766	673
Total	3,558	3,742
Current	373,579	382,710
Total Originated Loans and Leases	$ 377,137	$ 386,452

XML

Estimated Fair Values (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Estimated Fair Values For Certain Financial Assets And Financial Liabilities

For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of June 30, 2014 and December 31, 2013. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value.

(Dollars in thousands)	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	566,952	$	566,952	$	533,599	$	533,599
Overnight investments	1,118,474		1,118,474		859,324		859,324
Investment securities available for sale	5,538,166		5,538,166		5,387,703		5,387,703
Investment securities held to maturity	693		729		907		974
Loans held for sale	49,851		50,675		47,271		47,956
Net loans and leases	13,318,710		12,846,888		12,900,330		12,545,537
Receivable from the FDIC for loss share agreements (1)	49,959		22,741		93,397		38,438
Income earned not collected	49,019		49,019		48,390		48,390
Federal Home Loan Bank stock	32,878		32,878		40,819		40,819
Preferred stock and other acquired financial assets	15,462		16,199		33,564		34,786
Deposits	18,556,758		18,113,243		17,874,066		17,898,570
Short-term borrowings	788,540		788,540		511,418		511,418
Long-term obligations	314,529		324,874		510,769		526,037
Payable to the FDIC for loss share agreements	114,281		119,465		109,378		111,941
Accrued interest payable	7,297		7,297		6,737		6,737
Interest rate swap	5,933		5,933		7,220		7,220

⁽¹⁾ The fair value of the FDIC receivable excludes amortization expected to be recognized in prospective periods.

Assets And Liabilities Carried At Fair Value On A Recurring Basis

For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,625,630	$	—	$	1,625,630	$	—
Government agency	1,283,566		—		1,283,566		—
Mortgage-backed securities	2,596,286		—		2,596,286		—
Equity securities	32,498		—		32,498		—
Municipal securities	186		—		186		—
Total	$	5,538,166	$	—	$	5,538,166	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	5,933	$	—	$	5,933	$	—
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	373,437	$	—	$	373,437	$	—
Government agency	2,544,229		—		2,544,229		—
Mortgage-backed securities	2,446,873		—		2,446,873		—
Equity securities	22,147		—		22,147		—
Municipal securities	187		—		187		—
Other	830		—		830		—
Total	$	5,387,703	$	—	$	5,387,703	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	7,220	$	—	$	7,220	$	—

Assets And Liabilities Carried At Fair Value On A Nonrecurring Basis

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	$	32,551	$	—	$	32,551	$	—
Originated impaired loans	73,881		—		—		73,881
Other real estate not covered under loss share agreements remeasured during current year	9,101		—		—		9,101
Other real estate covered under loss share agreements remeasured during current year	22,927		—		—		22,927
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	29,389		—		29,389		—
Originated impaired loans	77,817		—		—		77,817
Other real estate not covered under loss share agreements remeasured during current year	20,526		—		—		20,526
Other real estate covered under loss share agreements remeasured during current year	37,587		—		—		37,587

XML

Receivable from FDIC for Loss Share Agreements (Tables)

6 Months Ended

Jun. 30, 2014

Receivable From FDIC For Loss Share Agreements [Abstract]

Changes in Receivable From FDIC

The following table provides changes in the receivable from the FDIC for the three-month and six-month periods ended June 30, 2014 and June 30, 2013.

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Beginning balance	$	74,784		$	195,942		$	93,397		$	270,192
Amortization	(12,922		)	(19,069		)	(30,667		)	(45,181		)
Cash payments to (from) FDIC	859			(4,015		)	4,350			(46,534		)
Post-acquisition adjustments	(12,762		)	(14,845		)	(17,121		)	(20,464		)
Ending balance	$	49,959		$	158,013		$	49,959		$	158,013

XML

Estimated Fair Values (Assets And Liabilities Carried At Fair Value On A Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Not covered under loss share agreements in other real estate owned	$ 35,151	[1]	$ 36,898	$ 36,942	$ 43,513
Covered under loss share agreements in other real estate owned	40,136		47,081	84,833	102,577
Fair Value, Measurements, Nonrecurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	32,551		29,389
Impaired loans not covered by loss share agreements	73,881		77,817
Not covered under loss share agreements in other real estate owned	9,101		20,526
Covered under loss share agreements in other real estate owned	22,927		37,587
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	0		0
Impaired loans not covered by loss share agreements	0		0
Not covered under loss share agreements in other real estate owned	0		0
Covered under loss share agreements in other real estate owned	0		0
Fair Value, Measurements, Nonrecurring | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	32,551		29,389
Impaired loans not covered by loss share agreements	0		0
Not covered under loss share agreements in other real estate owned	0		0
Covered under loss share agreements in other real estate owned	0		0
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	0		0
Impaired loans not covered by loss share agreements	73,881		77,817
Not covered under loss share agreements in other real estate owned	9,101		20,526
Covered under loss share agreements in other real estate owned	$ 22,927		$ 37,587

[1] Noncovered additions include $11.6 million from the 1st Financial merger.

XML

Loans and Leases (Recorded Investment, By Class, In Loans And Leases On Nonaccrual Status And Loans And Leases Greater Than 90 Days Past Due And Still Accruing) (Details) (Originated Loans, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	$ 46,485	$ 53,170
Loans and leases greater than 90 days and accruing	9,872	8,784
Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	659	544
Loans and leases greater than 90 days and accruing	0	0
Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	28,591	33,529
Loans and leases greater than 90 days and accruing	1,802	1,113
Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	1,385	1,610
Loans and leases greater than 90 days and accruing	41	0
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	1,367	1,428
Loans and leases greater than 90 days and accruing	502	294
Commercial | Lease financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	624	832
Loans and leases greater than 90 days and accruing	5	0
Noncommerical | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	13,836	14,701
Loans and leases greater than 90 days and accruing	1,930	1,998
Noncommerical | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	0	457
Loans and leases greater than 90 days and accruing	164	256
Noncommerical | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	0	0
Loans and leases greater than 90 days and accruing	4,662	4,450
Noncommerical | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	23	69
Loans and leases greater than 90 days and accruing	$ 766	$ 673

XML

Employee Benefit Plans (Tables) (Defined Benefit Pension)

6 Months Ended

Jun. 30, 2014

Defined Benefit Pension

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs

For the three and six months ended June 30, 2014 and 2013, the components of pension expense are as follows:

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Service cost	$	2,785		$	4,261		$	6,166		$	8,483
Interest cost	6,251			6,409			12,807			12,304
Expected return on assets	(8,340		)	(7,474		)	(16,152		)	(14,405		)
Amortization of prior service cost	52			53			105			105
Amortization of net actuarial loss	1,546			4,241			3,092			8,493
Total pension expense	$	2,294		$	7,490		$	6,018		$	14,980

XML

Derivatives (Tables) (Interest Rate Swap)

6 Months Ended

Jun. 30, 2014

Interest Rate Swap

Derivative [Line Items]

Schedule Of Interest Rate Swaps

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Notional  amount		Estimated fair value of liability		Notional  amount		Estimated fair value of liability
2011 interest rate swap hedging variable rate exposure on trust preferred securities 2011-2016	$	93,500	$	5,933	$	93,500	$	7,220

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
OPERATING ACTIVITIES
Net income	$ 48,916	$ 99,491
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan and lease losses	(9,202)	(31,848)
Deferred tax expense (benefit)	(2,744)	2,360
Change in current taxes payable	5,973	(20,649)
Depreciation	35,455	35,545
Change in accrued interest payable	560	(145)
Change in income earned not collected	(629)	2,099
Gain on sale of other assets	0	(4,085)
Origination of loans held for sale	(123,144)	(223,128)
Proceeds from sale of loans held for sale	123,967	254,087
Gain on sale of loans	(2,220)	(7,123)
Loss on sale of other real estate	6,993	1,480
Net amortization of premiums and discounts	(18,172)	(74,175)
FDIC receivable for loss share agreements	17,121	20,464
FDIC payable for loss share agreements	4,903	95
Net change in other assets	(31,249)	68,587
Net change in other liabilities	35,033	21,365
Net cash provided by operating activities	91,561	144,420
INVESTING ACTIVITIES
Net change in loans outstanding	(57,271)	325,057
Purchases of investment securities available for sale	(1,409,878)	(1,375,766)
Proceeds from maturities of investment securities held to maturity	214	212
Proceeds from maturities of investment securities available for sale	1,529,687	1,365,287
Net change in overnight investments	(259,150)	(596,745)
Cash received from the FDIC for loss share agreements	(4,350)	46,534
Proceeds from sale of other real estate	38,370	80,010
Additions to premises and equipment	(39,550)	(26,696)
Business acquisition, net of cash acquired	18,194	0
Net cash (used) provided by investing activities	(183,734)	(182,107)
FINANCING ACTIVITIES
Net change in time deposits	(219,297)	(390,329)
Net change in demand and other interest-bearing deposits	270,118	322,319
Net change in short-term borrowings	81,716	13,432
Repayment of long-term obligations	(1,240)	(1,608)
Repurchase of common stock	0	(321)
Cash dividends paid	(5,771)	(2,891)
Net cash provided (used) by financing activities	125,526	(59,398)
Change in cash and due from banks	33,353	(97,085)
Cash and due from banks at beginning of period	533,599	639,730
Cash and due from banks at end of period	566,952	542,645
CASH PAYMENTS FOR:
Interest	23,516	30,265
Income taxes	47,962	75,917
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to other real estate	25,080	57,175
Dividends declared but not paid	2,886	2,886
Reclassification of Long-Term Obligations to Short-Term Borrowings	$ 195,000	$ 0

XML

Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule Of Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) included the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014									December 31, 2013
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive loss			Deferred tax benefit			Accumulated other comprehensive loss, net of tax
Unrealized gains (losses) on investment securities available for sale, net	$	26,817		$	10,327		$	16,490		$	(16,632	)	$	(6,541	)	$	(10,091	)
Unrealized loss on cash flow hedge	(5,933		)	(2,290		)	(3,643		)	(7,220		)	(2,786		)	(4,434		)
Funded status of defined benefit plan	(14,385		)	(5,595		)	(8,790		)	(17,582		)	(6,839		)	(10,743		)
Total	$	6,499		$	2,442		$	4,057		$	(41,434	)	$	(16,166	)	$	(25,268	)

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(2,835	)	$	(3,993	)	$	(9,766	)	$	(16,594	)
Other comprehensive income before reclassifications	19,325			350			—			19,675
Amounts reclassified from accumulated other comprehensive loss	—			—			976			976
Net current period other comprehensive income	19,325			350			976			20,651
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Three months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	19,606		$	(5,799	)	$	(93,712	)	$	(79,905	)
Other comprehensive (loss) income before reclassifications	(23,723		)	840			—			(22,883		)
Amounts reclassified from accumulated other comprehensive loss	—			—			2,612			2,612
Net current period other comprehensive (loss) income	(23,723		)	840			2,612			(20,271		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)
	Six months ended June 30, 2014
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(10,091	)	$	(4,434	)	$	(10,743	)	$	(25,268	)
Other comprehensive income before reclassifications	26,581			791			—			27,372
Amounts reclassified from accumulated other comprehensive loss	—			—			1,953			1,953
Net current period other comprehensive income	26,581			791			1,953			29,325
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Six months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	20,517		$	(6,292	)	$	(96,331	)	$	(82,106	)
Other comprehensive (loss) income before reclassifications	(24,634		)	1,333			—			(23,301		)
Amounts reclassified from accumulated other comprehensive loss	—			—			5,231			5,231
Net current period other comprehensive (loss) income	(24,634		)	1,333			5,231			(18,070		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)

¹ All amounts are net of tax.

Reclassification out of Accumulated Other Comprehensive Income

	Three months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(52	)	Employee benefits
Actuarial losses	(1,546		)	Employee benefits
	(1,598		)	Income before income taxes
	622			Provision for income taxes
	$	(976	)	Net income
Total reclassifications for the period	$	(976	)
	Three months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(53	)	Employee benefits
Actuarial losses	(4,241		)	Employee benefits
	(4,294		)	Income before income taxes
	1,682			Provision for income taxes
	$	(2,612	)	Net income
Total reclassifications for the period	$	(2,612	)
	Six months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(3,092		)	Employee benefits
	(3,197		)	Income before income taxes
	1,244			Provision for income taxes
	$	(1,953	)	Net income
Total reclassifications for the period	$	(1,953	)
	Six months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(8,493		)	Employee benefits
	(8,598		)	Income before income taxes
	3,367			Provision for income taxes
	$	(5,231	)	Net income
Total reclassifications for the period	$	(5,231	)

XML

Loans and Leases (Loans and Leases Outstanding) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Acquired	$ 1,109,933	$ 1,029,426
Originated	12,415,023	12,104,298
Total loans and leases	13,524,956	13,133,724
Commercial
Acquired	788,117	781,307
Originated	8,724,702	8,499,348
Commercial | Construction and land development
Acquired	80,827	78,915
Originated	342,021	319,847
Commercial | Mortgage
Acquired	637,481	642,891
Originated	6,367,096	6,362,490
Commercial | Commercial and industrial
Acquired	33,851	17,254
Originated	1,292,213	1,081,158
Commercial | Lease financing
Originated	413,422	381,763
Commercial | Other commercial real estate
Acquired	34,688	41,381
Originated	178,899	178,754
Commercial | Other
Acquired	1,270	866
Originated	131,051	175,336
Noncommerical
Acquired	321,816	248,119
Originated	3,690,321	3,604,950
Noncommerical | Mortgage
Acquired	270,688	213,851
Originated	1,071,089	982,421
Noncommerical | Construction and land development
Acquired	28,759	2,583
Originated	119,420	122,792
Noncommerical | Revolving mortgage
Acquired	20,129	30,834
Originated	2,122,675	2,113,285
Noncommerical | Consumer
Acquired	2,240	851
Originated	377,137	386,452
Loss Share Agreement [Member]
Acquired	816,300
Temecula Valley Bank [Member] | Loss Share Agreement [Member]
Acquired	195,400
Venture Bank [Member] | Loss Share Agreement [Member]
Acquired	$ 73,300

XML

Estimated Fair Values (Estimated Fair Values For Certain Financial Assets And Financial Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Mar. 31, 2014	Dec. 31, 2013		Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	$ 566,952			$ 533,599
Overnight investments	1,118,474			859,324
Investment securities available for sale	5,538,166			5,387,703
Investment securities held to maturity	693			907
Loans held for sale	49,851			47,271
Loans and Leases Receivable, Net Amount	13,318,710			12,900,330
FDIC Indemnification Asset	49,959		74,784	93,397		158,013	195,942	270,192
Income earned not collected	49,019			48,390
Deposits	18,556,758			17,874,066
FDIC loss share payable	114,281			109,378
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	566,952			533,599
Overnight investments	1,118,474			859,324
Investment securities available for sale	5,538,166			5,387,703
Investment securities held to maturity	693			907
Loans held for sale	49,851			47,271
Loans and Leases Receivable, Net Amount	13,318,710			12,900,330
FDIC Indemnification Asset	49,959	[1]		93,397	[1]
Income earned not collected	49,019			48,390
Stock issued by Federal Home Loan Bank	32,878			40,819
Preferred stock	15,462			33,564
Deposits	18,556,758			17,874,066
Short-term borrowings	788,540			511,418
Long-term obligations	314,529			510,769
FDIC loss share payable	114,281			109,378
Accrued interest payable	7,297			6,737
Derivative Liability, Fair Value, Gross Liability	5,933			7,220
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	566,952			533,599
Overnight investments	1,118,474			859,324
Investment securities available for sale	5,538,166			5,387,703
Investment securities held to maturity	729			974
Loans held for sale	50,675			47,956
Loans and Leases Receivable, Net Amount	12,846,888			12,545,537
FDIC Indemnification Asset	22,741	[1]		38,438	[1]
Income earned not collected	49,019			48,390
Stock issued by Federal Home Loan Bank	32,878			40,819
Preferred stock	16,199			34,786
Deposits	18,113,243			17,898,570
Short-term borrowings	788,540			511,418
Long-term obligations	324,874			526,037
FDIC loss share payable	119,465			111,941
Accrued interest payable	7,297			6,737
Derivative Liability, Fair Value, Gross Liability	$ 5,933			$ 7,220

[1] The fair value of the FDIC receivable excludes amortization expected to be recognized in prospective periods.

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Assets
Cash and due from banks	$ 566,952		$ 533,599
Overnight investments	1,118,474		859,324
Investment securities available for sale	5,538,166		5,387,703
Investment securities held to maturity	693		907
Loans held for sale	49,851		47,271
Loans and leases:
Acquired	1,109,933		1,029,426
Originated	12,415,023		12,104,298
Less allowance for loan and lease losses	(206,246)		(233,394)
Net loans and leases	13,318,710		12,900,330
Premises and equipment	883,303		876,522
Other real estate owned:
Covered under loss share agreements in other real estate owned	40,136		47,081
Not covered under loss share agreements in other real estate owned	35,151	[1]	36,898
Income earned not collected	49,019		48,390
FDIC Indemnification Asset	49,959		93,397
Goodwill	127,140		102,625
Other intangible assets	3,821		1,247
Other assets	281,465		263,797
Total assets	22,062,840		21,199,091
Liabilities
Noninterest-bearing	5,775,322		5,241,817
Interest-bearing	12,781,436		12,632,249
Total deposits	18,556,758		17,874,066
Short-term borrowings	788,540		511,418
Long-term obligations	314,529		510,769
FDIC loss share payable	114,281		109,378
Other liabilities	139,587		116,785
Total liabilities	19,913,695		19,122,416
Shareholders' Equity
Surplus	143,766		143,766
Retained earnings	1,991,703		1,948,558
Accumulated other comprehensive loss	4,057		(25,268)
Total shareholders' equity	2,149,145		2,076,675
Total liabilities and shareholders' equity	22,062,840		21,199,091
Class A Common Stock
Shareholders' Equity
Common stock	8,586		8,586
Class B Common Stock
Shareholders' Equity
Common stock	$ 1,033		$ 1,033

[1] Noncovered additions include $11.6 million from the 1st Financial merger.

XML

Loans and Leases (Changes In Carrying Value Of Acquired Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Loans on the Cost Recovery Method	Dec. 31, 2013 Loans on the Cost Recovery Method
Carrying Value of Acquired Impaired Loans [Roll Forward]
Beginning balance	$ 1,029,426	$ 1,809,235	$ 54,000	$ 28,500
Fair value of acquired impaired loans	316,327	0
Accretion	60,660	131,909
Reductions for repayments, foreclosures and changes in carrying value, net of accretion	(296,480)	(497,808)
Ending balance	1,109,933	1,443,336	54,000	28,500
Outstanding principal balance	$ 1,888,475	$ 2,456,347

XML

Consolidated Statements of Changes In Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2012	$ 1,864,007	$ 8,588	$ 1,033	$ 143,766	$ 1,792,726	$ (82,106)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	99,491	0	0	0	99,491	0
Net current period other comprehensive income	(18,070)	0	0	0	0	(18,070)
Repurchase of common stock shares	(321)	(2)			(319)
Cash dividends	(5,777)	0	0	0	(5,777)	0
Ending balance at Jun. 30, 2013	1,939,330	8,586	1,033	143,766	1,886,121	(100,176)
Beginning balance at Dec. 31, 2013	2,076,675	8,586	1,033	143,766	1,948,558	(25,268)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	48,916	0	0	0	48,916	0
Net current period other comprehensive income	29,325	0	0	0	0	29,325
Cash dividends	(5,771)	0	0	0	(5,771)	0
Ending balance at Jun. 30, 2014	$ 2,149,145	$ 8,586	$ 1,033	$ 143,766	$ 1,991,703	$ 4,057

XML

Commitments and Contingencies (Details) (USD $)											6 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2014 Commitments to Extend Credit	Dec. 31, 2013 Commitments to Extend Credit	Jun. 30, 2014 Standby Letters of Credit	Dec. 31, 2013 Standby Letters of Credit	Jun. 30, 2014 Recourse Obligation on Mortgage Loans Sold	Jun. 30, 2014 Obligation to Repurchase Receivables Sold	Dec. 31, 2013 Obligation to Repurchase Receivables Sold
Guarantor Obligations [Line Items]
Unused commitments							$ 6,200,000,000	$ 5,840,000,000
Guarantor obligations amount									61,400,000	54,800,000
Reserve for estimated losses arising from repurchase of loans												3,300,000	3,600,000
FDIC Indemnification Asset	49,959,000	74,784,000	93,397,000	158,013,000	195,942,000	270,192,000
Recourse Period, Maximum1											120 days
FDIC loss share payable	$ 114,281,000		$ 109,378,000

XML

Investments (Aggregate Values and Unrealized Gains and Losses) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investment securities available for sale
Cost	$ 5,511,349	$ 5,404,335
Gross Unrealized Gains	44,311	28,188
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	17,494	44,820
Fair Value	5,538,166	5,387,703
Investment securities held to maturity
Cost	693	907
U. S. Treasury
Investment securities available for sale
Cost	1,623,564	373,223
Gross Unrealized Gains	2,084	259
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	18	45
Fair Value	1,625,630	373,437
Government Agency
Investment securities available for sale
Cost	1,281,724	2,543,223
Gross Unrealized Gains	2,020	1,798
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	178	792
Fair Value	1,283,566	2,544,229
Mortgage Backed Securities, Other [Member]
Investment securities available for sale
Cost	2,605,333	2,486,297
Gross Unrealized Gains	8,251	4,526
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	17,298	43,950
Fair Value	2,596,286	2,446,873
Investment securities held to maturity
Cost	693	907
Held To Maturity Securities Accumulated Unrecognized Holding Gain	36	67
Held To Maturity Securities Accumulated Unrecognized Holding Loss	0	0
Fair Value	729	974
Equity Securities
Investment securities available for sale
Cost	543	543
Gross Unrealized Gains	31,955	21,604
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	0	0
Fair Value	32,498	22,147
State, County and Municipal
Investment securities available for sale
Cost	185	186
Gross Unrealized Gains	1	1
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments	0	0
Fair Value	186	187
Other Debt Obligations
Investment securities available for sale
Cost		863
Gross Unrealized Gains		0
Available For Sale Securities Gross Unrealized Loss Accumulated In Investments		33
Fair Value		$ 830

XML

Subsequent Events (Details) (Subsequent Event [Member], USD $) In Millions, unless otherwise specified	0 Months Ended
	Jul. 25, 2014	Jul. 25, 2014
Subsequent Event [Member]
Subsequent Event [Line Items]
Acquisition of Trust Preferred Investments, Principal Balance		$ 25.0
Payments to Acquire Trust Preferred Investments	$ 23.0
Acquisition of Trust Preferred Investments, Interest Rate		2.25%

XML

Accounting Policies and Basis of Presentation Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Reclassification, Policy [Policy Text Block]

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported shareholders' equity or net income.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and different assumptions in the application of these policies could result in material changes in BancShares' consolidated financial position, the consolidated results of its operations or related disclosures. Material estimates that are particularly susceptible to significant change include the determination of the allowance for loan and lease losses; determination of the fair value of financial instruments; pension plan assumptions; cash flow estimates on acquired loans; the receivable from and payable to the Federal Deposit Insurance Corporation (FDIC) for loss share agreements; purchase accounting-related adjustments; and income tax assets, liabilities and expense.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period)”

This ASU requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. A reporting entity should apply FASB ASC Topic 718, Compensation—Stock Compensation, to awards with performance conditions that affect vesting.

The guidance in this ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. This update may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. BancShares will adopt the standard effective the first quarter of 2016. Since BancShares does not currently have any share-based stock compensation plans, adoption of Topic 718 is not projected to have an impact on BancShares' consolidated financial position or consolidated results of operations.

FASB ASU 2014-11, “Transfers and Servicing (Topic 860)”

This ASU aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. The ASU requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The ASU also requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.

The accounting changes in this ASU are effective for fiscal years beginning after December 15, 2014. In addition, the disclosure for certain transactions accounted for as a sale is effective for the fiscal period beginning after December 15, 2014, the disclosure for transactions accounted for as secured borrowings is required to be presented for fiscal periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early adoption is not permitted. We will adopt the guidance effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”

In May 2014, the FASB issued a standard on the recognition of revenue from contracts with customers with the core principle being for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also results in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.

The guidance in this ASU is effective for fiscal periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Early adoption is not permitted. We are currently evaluating the impact of the new standard and we will adopt during the first quarter of 2017.

FASB ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”

This ASU limits presentation of discontinued operations and disclosure of disposals to disposals representing a strategic shift in operations in which the strategic shifts should have a major effect on the organization's operations and financial results. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting.

The new standard is effective in the first quarter of 2015 for public companies with a calendar year end. We will adopt the standard effective in the first quarter of 2015, and we do not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40)”

This ASU clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.

The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. BancShares will adopt the guidance effective in the first quarter of 2015, and is currently evaluating the impact of the new standard on the financial statement disclosures. BancShares does not anticipate any effect on our consolidated financial position or consolidated results of operations as a result of adoption.

FASB ASU 2014-01 "Investments - Equity Method and Joint Ventures (Topic 323) - Accounting for Investments in Qualified Affordable Housing Projects”

This ASU permits an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit).

For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with Subtopic 970-323.

The decision to apply the proportional amortization method of accounting will be applied consistently to all qualifying affordable housing project investments rather than a decision to be applied to individual investments.

The amendments in this ASU should be applied retrospectively to all periods presented and are effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted.

BancShares is currently evaluating the impact of the new standard and is targeting a December 31, 2014, adoption and implementation for qualifying affordable housing project investments.

FASB ASU 2013-11, “Income Taxes (Topic 740)”

This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require BancShares to use, and BancShares does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date.

The provisions of this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. BancShares adopted the guidance effective in the first quarter of 2014. The initial adoption had no effect on our consolidated financial position or consolidated results of operations.

FASB ASU 2013-04, “Liabilities”

This ASU provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in GAAP.

The amendments in this update are effective for fiscal years beginning after December 31, 2013. BancShares adopted the guidance effective first quarter of 2014. The initial adoption did not have any effect on our consolidated financial position or consolidated results of operations.

XML

Investments (Maturity Information) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investment securities available for sale
Total investment securities available for sale, cost	$ 5,511,349	$ 5,404,335
Total investment securities available for sale, fair value	5,538,166	5,387,703
Investment securities held to maturity
Investment securities held to maturity	693	907
Debt Securities
Investment securities available for sale
Maturing in one year or less, cost	683,598	839,956
Maturing in one through five years, cost	2,221,875	2,077,539
Maturing in one year or less, fair value	684,265	840,883
Maturing in one through five years, fair value	2,225,117	2,077,800
Equity Securities
Investment securities available for sale
Total investment securities available for sale, cost	543	543
Total investment securities available for sale, fair value	32,498	22,147
Mortgage Backed Securities, Other [Member]
Investment securities available for sale
Total investment securities available for sale, cost	2,605,333	2,486,297
Total investment securities available for sale, fair value	2,596,286	2,446,873
Investment securities held to maturity
Investment securities held to maturity	693	907
Fair Value	$ 729	$ 974

XML

Investments (Tables)

6 Months Ended

Jun. 30, 2014

Investments [Abstract]

Aggregate Values And Unrealized Gains And Losses Of Investment Securities

The amortized cost and fair value of investment securities classified as available for sale and held to maturity at June 30, 2014 and December 31, 2013, are as follows:

	June 30, 2014
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,623,564	$	2,084	$	18	$	1,625,630
Government agency	1,281,724		2,020		178		1,283,566
Mortgage-backed securities	2,605,333		8,251		17,298		2,596,286
Equity securities	543		31,955		—		32,498
Municipal securities	185		1		—		186
Total investment securities available for sale	$	5,511,349	$	44,311	$	17,494	$	5,538,166
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury	$	373,223	$	259	$	45	$	373,437
Government agency	2,543,223		1,798		792		2,544,229
Mortgage-backed securities	2,486,297		4,526		43,950		2,446,873
Equity securities	543		21,604		—		22,147
Municipal securities	186		1		—		187
Other	863		—		33		830
Total investment securities available for sale	$	5,404,335	$	28,188	$	44,820	$	5,387,703
	June 30, 2014
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities held to maturity
Mortgage-backed securities	$	693	$	36	$	—	$	729
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Mortgage-backed securities	$	907	$	67	$	—	$	974

Investment Securities Maturity Information

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	683,598	$	684,265	$	839,956	$	840,883
One through five years	2,221,875		2,225,117		2,077,539		2,077,800
Mortgage-backed securities	2,605,333		2,596,286		2,486,297		2,446,873
Equity securities	543		32,498		543		22,147
Total investment securities available for sale	$	5,511,349	$	5,538,166	$	5,404,335	$	5,387,703
Investment securities held to maturity
Mortgage-backed securities held to maturity	$	693	$	729	$	907	$	974

Investment Securities With Unrealized Losses

The following table provides information regarding securities with unrealized losses as of June 30, 2014 and December 31, 2013.

	June 30, 2014
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	135,712	$	18	$	—	$	—	$	135,712	$	18
Government agency	242,563		178		—		—		242,563		178
Mortgage-backed securities	728,997		2,163		1,109,829		15,135		1,838,826		17,298
Total	$	1,107,272	$	2,359	$	1,109,829	$	15,135	$	2,217,101	$	17,494
	December 31, 2013
	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	102,105	$	45	$	—	$	—	$	102,105	$	45
Government agency	780,552		761		29,969		31		810,521		792
Mortgage-backed securities	2,221,213		42,876		26,861		1,074		2,248,074		43,950
Other	830		33		—		—		830		33
Total	$	3,104,700	$	43,715	$	56,830	$	1,105	$	3,161,530	$	44,820

XML

Consolidated Statements of Changes In Shareholders' Equity (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)		$ 0.60
Class A Common Stock
Statement of Stockholders' Equity [Abstract]
Repurchase of common stock (in shares)	0	1,973
Class B Common Stock
Statement of Stockholders' Equity [Abstract]
Repurchase of common stock (in shares)	0	0

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Class A Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shared authorized	11,000,000	11,000,000
Common stock, shares issued	8,586,058	8,586,058
Common stock, shares outstanding	8,586,058	8,586,058
Class B Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shared authorized	2,000,000	2,000,000
Common stock, shares issued	1,032,883	1,032,883
Common stock, shares outstanding	1,032,883	1,032,883

XML

Employee Benefit Plans

6 Months Ended

Jun. 30, 2014

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Pension expense is a component of employee benefits expense. For the three and six months ended June 30, 2014 and 2013, the components of pension expense are as follows:

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Service cost	$	2,785		$	4,261		$	6,166		$	8,483
Interest cost	6,251			6,409			12,807			12,304
Expected return on assets	(8,340		)	(7,474		)	(16,152		)	(14,405		)
Amortization of prior service cost	52			53			105			105
Amortization of net actuarial loss	1,546			4,241			3,092			8,493
Total pension expense	$	2,294		$	7,490		$	6,018		$	14,980

The assumed discount rate for 2014 is 4.90 percent, the expected long-term rate of return on plan assets is 7.50 percent and the assumed rate of salary increases is 4.00 percent. For 2013, the assumed discount rate was 4.00 percent, expected long-term rate of return was 7.25 percent and the assumed rate of salary increases was 4.00 percent.

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 08, 2014 Class A Common Stock	Aug. 08, 2014 Class B Common Stock
Entity Registrant Name	FIRST CITIZENS BANCSHARES INC /DE/
Entity Central Index Key	0000798941
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		8,586,058	1,032,883

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit, standby letters of credit and recourse obligations on mortgage loans sold. These instruments involve elements of credit, interest rate or liquidity risk.

Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires that collateral be pledged to secure the commitment, including cash deposits, securities and other assets. At June 30, 2014, BancShares had unused commitments totaling $6.20 billion, compared to $5.84 billion at December 31, 2013.

Standby letters of credit are commitments guaranteeing performance of a customer to a third party. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ follows its credit policies in the issuance of standby letters of credit. At June 30, 2014 and December 31, 2013, BancShares had standby letters of credit amounting to $61.4 million and $54.8 million, respectively. The credit risk related to the issuance of these letters of credit is essentially the same as that involved in extending loans to clients and, therefore, these letters of credit are collateralized when necessary.

Pursuant to standard representations and warranties relating to residential mortgage loan sales, contingent obligations exist for various events that may occur following the loan sale. If underwriting or documentation deficiencies are discovered at any point in the life of the loan or if the loan becomes nonperforming within 120 days of its sale, the investor may require BancShares to repurchase the loan or to repay a portion of the sale proceeds. Other liabilities included reserves of $3.3 million and $3.6 million as of June 30, 2014 and December 31, 2013, respectively, for estimated losses arising from these standard representation and warranty provisions.

BancShares has recorded a receivable from the FDIC totaling $50.0 million and $93.4 million as of June 30, 2014 and December 31, 2013, respectively, for the expected reimbursement of losses on assets covered under the various loss share agreements. These loss share agreements impose certain obligations on us that, in the event of noncompliance, could result in the delay or disallowance of some or all of our rights under those agreements. Requests for reimbursement are subject to FDIC review and may be delayed or disallowed for noncompliance. The loss share agreements are subject to interpretation by both the FDIC and BancShares, and disagreements may arise regarding coverage of losses, expenses and contingencies.

The loss share agreements for four FDIC-assisted transactions include provisions related to contingent payments that may be owed to the FDIC at the termination of the agreements (clawback liability).The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition. The clawback liability is estimated by discounting estimated future payments and is recorded in the Consolidated Balance Sheets as a payable to the FDIC under the relevant loss share agreements. As of June 30, 2014 and December 31, 2013, the estimated clawback liability was $114.3 million and $109.4 million, respectively.

Following announcement of the proposed merger with Bancorporation, BancShares received a shareholder demand from the City of Providence, Rhode Island, pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”) for access to certain books and records of BancShares. The purported basis for the demand was to investigate potential breaches of fiduciary duty and other wrongdoing by BancShares’ officers and directors in connection with the merger. The City of Providence concurrently filed a putative class action lawsuit in the Delaware Court of Chancery against BancShares and its directors challenging Article X, Section 8 of BancShares’ Bylaws, which requires certain litigation to be brought only in North Carolina courts to the fullest extent permitted by law. The Delaware complaint alleges that the Bylaw violates the DGCL and that adoption of the Bylaw constituted a breach of fiduciary duty by BancShares' directors. While not directly challenging the merger, the complaint contains allegations referencing the merger and seeks a declaration that any stockholder action regarding the merger may be brought in the Delaware Court of Chancery. On July 31, 2014, the City of Providence filed a second litigation in Delaware Court of Chancery challenging the merger and seeking to enjoin the BancShares stockholder vote. Any potential claim for damages is not reasonably calculable at this time. BancShares and its directors have moved to dismiss both complaints.

BancShares and various subsidiaries have been named as defendants in legal actions arising from their normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed in the various FDIC-assisted transactions. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements.

XML

Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Interest income
Loans and leases	$ 164,108	$ 185,151	$ 325,142	$ 396,914
Investment securities:
Total investment securities interest and dividend income	12,447	8,119	24,195	16,603
Overnight investments	756	656	1,368	1,013
Total interest income	177,311	193,926	350,705	414,530
Interest expense
Deposits	6,006	8,997	12,831	19,310
Short-term borrowings	1,551	680	2,136	1,384
Long-term obligations	4,056	4,721	9,109	9,426
Total interest expense	11,613	14,398	24,076	30,120
Net interest income	165,698	179,528	326,629	384,410
Provision for loan and lease losses	(7,299)	(13,242)	(9,202)	(31,848)
Net interest income after provision for loan and lease losses	172,997	192,770	335,831	416,258
Noninterest income
Cardholder services	13,257	12,026	25,089	23,097
Merchant services	15,035	15,245	28,556	27,731
Service charges on deposit accounts	15,265	14,883	29,705	29,882
Wealth management services	15,815	15,097	30,695	29,612
Fees from processing services	5,682	5,051	10,543	10,670
Other service charges and fees	4,250	3,966	8,194	7,732
Mortgage income	1,210	3,669	2,165	7,457
Insurance commissions	2,253	2,394	5,540	5,374
ATM income	1,260	1,314	2,462	2,482
Adjustments for FDIC receivable for loss share agreements	(15,295)	(14,439)	(27,644)	(38,492)
Other	6,650	5,789	11,258	16,963
Total noninterest income	65,382	64,995	126,563	122,508
Noninterest expense
Salaries and wages	82,683	75,802	162,557	151,921
Employee benefits	19,772	23,228	39,872	48,247
Occupancy expense	20,937	18,464	41,362	37,273
Equipment expense	19,686	18,698	38,477	37,644
FDIC insurance expense	2,640	2,423	5,276	5,089
Foreclosure-related expenses	3,858	3,467	9,268	7,772
Other	49,444	46,485	93,238	94,976
Total noninterest expense	199,020	188,567	390,050	382,922
Income before income taxes	39,359	69,198	72,344	155,844
Income taxes	12,809	25,292	23,428	56,353
Net income	$ 26,550	$ 43,906	$ 48,916	$ 99,491
Average shares outstanding (in shares)	9,618,941	9,618,941	9,618,941	9,618,963
Net income per share	$ 2.76	$ 4.56	$ 5.09	$ 10.34

XML

Loans and Leases

6 Months Ended

Jun. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

LOANS AND LEASES

BancShares reports acquired and originated loan portfolios separately, and each portfolio is further divided into commercial and non-commercial based on the type of borrower, purpose, collateral, and/or our underlying credit management processes. Additionally, loans are assigned to loan classes, which further disaggregate loans based upon common risk characteristics.

Commercial –Commercial loans include construction and land development, mortgage, other commercial real estate, commercial and industrial, lease financing and other.

Construction and land development – Construction and land development consists of loans to finance land for development, investment, and use in a commercial business enterprise, multifamily apartments and other commercial building that may be owner-occupied or income generating investments for the owner.

Commercial mortgage – Commercial mortgage consists of loans to purchase or refinance owner-occupied nonresidential and investment properties. Investment properties include office buildings and other facilities that are rented or leased to unrelated parties.

Other commercial real estate – Other commercial real estate consists of loans secured by farmland (including farm residential and other improvements) and multifamily (5 or more) residential properties.

Commercial and industrial – Commercial and industrial loans consists of lines of credit to finance corporate credit cards, accounts receivable, inventory and other general business purposes.

Lease financing – Lease financing consists solely of lease financing agreements.

Other – Other loans consists of all other commercial loans not classified in one of the preceding classes. These typically include loans to non-profit organizations such as churches, hospitals, educational and charitable organizations.

Noncommercial – Noncommercial loans consist of residential and revolving mortgage, construction and land development, and consumer.

Residential mortgage – Residential real estate consists of loans to purchase, construct or refinance the borrower's primary dwelling, second residence or vacation home.

Revolving mortgage – Revolving mortgage consists of home equity lines of credit that are secured by first or second liens on the borrower's primary residence.

Construction and land development – Construction and land development consists of loans to construct the borrower's primary or secondary residence or vacant land upon which the owner intends to construct a dwelling at a future date.

Consumer – Consumer loans consist of installment loans to finance purchases of vehicles, unsecured home improvements and revolving lines of credit that can be secured or unsecured, including personal credit cards.

Loans and leases outstanding include the following at June 30, 2014 and December 31, 2013:

(Dollars in thousands)	June 30, 2014		December 31, 2013
Acquired loans
Commercial:
Construction and land development	$	80,827	$	78,915
Commercial mortgage	637,481		642,891
Other commercial real estate	34,688		41,381
Commercial and industrial	33,851		17,254
Other	1,270		866
Total commercial loans	788,117		781,307
Noncommercial:
Residential mortgage	270,688		213,851
Revolving mortgage	20,129		30,834
Construction and land development	28,759		2,583
Consumer	2,240		851
Total noncommercial loans	321,816		248,119
Total acquired loans	1,109,933		1,029,426
Originated loans and leases:
Commercial:
Construction and land development	342,021		319,847
Commercial mortgage	6,367,096		6,362,490
Other commercial real estate	178,899		178,754
Commercial and industrial	1,292,213		1,081,158
Lease financing	413,422		381,763
Other	131,051		175,336
Total commercial loans	8,724,702		8,499,348
Noncommercial:
Residential mortgage	1,071,089		982,421
Revolving mortgage	2,122,675		2,113,285
Construction and land development	119,420		122,792
Consumer	377,137		386,452
Total noncommercial loans	3,690,321		3,604,950
Total originated loans and leases	12,415,023		12,104,298
Total loans and leases	$	13,524,956	$	13,133,724

At June 30, 2014, $816.3 million in acquired loans were covered under loss share agreements, compared to $1.03 billion at December 31, 2013. The remaining acquired loans as of June 30, 2014 are primarily from the 1st Financial merger. The loss share protection will expire for non-single family residential loans acquired from Temecula Valley Bank (TVB) and Venture Bank (VB) during the third quarter of 2014. The acquired loan balance at June 30, 2014 for the expiring agreements from TVB and VB is $195.4 million and $73.3 million, respectively.

At June 30, 2014, $2.65 billion in originated loans were pledged to secure debt obligations, compared to $2.56 billion at December 31, 2013.

Credit quality indicators

Loans and leases are monitored for credit quality on a recurring basis. The credit quality indicators used are dependent on the portfolio segment to which the loan relates. Originated commercial loans and leases, originated noncommercial loans and leases and acquired loans have different credit quality indicators as a result of the unique characteristics relative to each loan segment being evaluated.

The credit quality indicators for commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Each commercial loan is evaluated annually with more frequent evaluation of more severely criticized loans or leases. The credit quality indicators for noncommercial loans are based on the delinquency status of the borrower. As the borrower becomes more delinquent, the likelihood of loss increases. Acquired loans are bifurcated into commercial and noncommercial segments and credit quality indicators are assigned in the same manner as the originated portfolio. The indicators represent the rating for loans or leases as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass – A pass rated asset is one in which repayment is considered highly likely and there are no observable weaknesses in the asset. Such an asset does not meet any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full charge-off even though partial recovery may be effected in the future.

Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of originated, ungraded loans at June 30, 2014 and December 31, 2013 relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage loans and other commercial real estate loans. As of December 31, 2013, ungraded loans also included tobacco buyout loans classified as commercial and industrial loans. Final payment from the Commodity Credit Corporation was received during January 2014 for tobacco buyout loans held by FCB. As of June 30, 2014, ungraded also includes $94.7 million of loans resulting from the 1st Financial merger.

Originated loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Originated commercial loans and leases
Grade:	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	330,946	$	6,102,219	$	175,413	$	1,178,124	$	405,495	$	130,997	$	8,323,194
Special mention	7,901		121,824		1,370		25,606		4,324		8		161,033
Substandard	3,174		138,451		1,966		6,474		3,122		46		153,233
Doubtful	—		3,296		—		460		481		—		4,237
Ungraded	—		1,306		150		81,549		—		—		83,005
Total	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	8,724,702
	December 31, 2013
	Originated commercial loans and leases
	Construction  and land development		Commercial mortgage		Other commercial real estate		Commercial  and industrial		Lease financing		Other		Total originated commercial loans and leases
Pass	$	308,231	$	6,094,505	$	174,913	$	964,840	$	375,371	$	174,314	$	8,092,174
Special mention	8,620		119,515		1,362		14,686		2,160		982		147,325
Substandard	2,944		141,913		2,216		6,352		3,491		40		156,956
Doubtful	52		5,159		75		144		592		—		6,022
Ungraded	—		1,398		188		95,136		149		—		96,871
Total	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	8,499,348

	June 30, 2014
	Originated noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	1,047,270	$	2,107,889	$	118,078	$	373,579	$	3,646,816
30-59 days past due	11,219		7,690		949		1,949		21,807
60-89 days past due	4,693		2,434		229		843		8,199
90 days or greater past due	7,907		4,662		164		766		13,499
Total	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	3,690,321
	December 31, 2013
	Originated noncommercial loans and leases
	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total originated noncommercial loans
Current	$	955,300	$	2,095,480	$	121,026	$	382,710	$	3,554,516
30-59 days past due	12,885		10,977		1,193		2,114		27,169
60-89 days past due	4,658		2,378		317		955		8,308
90 days or greater past due	9,578		4,450		256		673		14,957
Total	$	982,421	$	2,113,285	$	122,792	$	386,452	$	3,604,950

Acquired loans and leases outstanding at June 30, 2014 and December 31, 2013 by credit quality indicator are provided below:

	June 30, 2014
(Dollars in thousands)	Acquired loans
Grade:	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	14,193	$	349,009	$	11,422	$	26,313	$	138,836	$	15,238	$	112	$	1,469	$	556,592
Special mention	10,957		106,582		16,014		3,869		5,543		2,375		—		—		145,340
Substandard	49,746		148,880		7,252		3,221		44,396		1,696		1,237		2		256,430
Doubtful	2,214		32,503		—		431		1,401		612		295		—		37,456
Ungraded	3,717		507		—		17		80,512		208		27,115		2,039		114,115
Total	$	80,827	$	637,481	$	34,688	$	33,851	$	270,688	$	20,129	$	28,759	$	3,510	$	1,109,933
	December 31, 2013
	Acquired loans
	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total acquired loans
Pass	$	2,619	$	296,824	$	22,225	$	8,021	$	135,326	$	26,322	$	149	$	1,345	$	492,831
Special mention	15,530		125,295		3,431		2,585		6,301		2,608		—		—		155,750
Substandard	52,228		179,657		7,012		5,225		52,774		1,013		2,139		—		300,048
Doubtful	7,436		40,471		8,713		1,257		2,058		891		295		—		61,121
Ungraded	1,102		644		—		166		17,392		—		—		372		19,676
Total	$	78,915	$	642,891	$	41,381	$	17,254	$	213,851	$	30,834	$	2,583	$	1,717	$	1,029,426

The aging of the outstanding loans and leases, by class, at June 30, 2014 and December 31, 2013 (excluding loans and leases acquired with deteriorated credit quality) is provided in the table below.

The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	June 30, 2014
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	657	$	40	$	462	$	1,159	$	340,862	$	342,021
Commercial mortgage	11,755		3,089		10,501		25,345		6,341,751		6,367,096
Other commercial real estate	149		—		52		201		178,698		178,899
Commercial and industrial	5,459		805		593		6,857		1,285,356		1,292,213
Lease financing	1,110		8		97		1,215		412,207		413,422
Other	343		—		—		343		130,708		131,051
Residential mortgage	11,219		4,693		7,907		23,819		1,047,270		1,071,089
Revolving mortgage	7,690		2,434		4,662		14,786		2,107,889		2,122,675
Construction and land development - noncommercial	949		229		164		1,342		118,078		119,420
Consumer	1,949		843		766		3,558		373,579		377,137
Total originated loans and leases	$	41,280	$	12,141	$	25,204	$	78,625	$	12,336,398	$	12,415,023
	December 31, 2013
	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Originated loans and leases:
Construction and land development - commercial	$	1,603	$	9	$	457	$	2,069	$	317,778	$	319,847
Commercial mortgage	11,131		3,601		14,407		29,139		6,333,351		6,362,490
Other commercial real estate	139		210		470		819		177,935		178,754
Commercial and industrial	3,336		682		436		4,454		1,076,704		1,081,158
Lease financing	789		1,341		101		2,231		379,532		381,763
Other	—		85		—		85		175,251		175,336
Residential mortgage	12,885		4,658		9,578		27,121		955,300		982,421
Revolving mortgage	10,977		2,378		4,450		17,805		2,095,480		2,113,285
Construction and land development - noncommercial	1,193		317		256		1,766		121,026		122,792
Consumer	2,114		955		673		3,742		382,710		386,452
Total originated loans and leases	$	44,167	$	14,236	$	30,828	$	89,231	$	12,015,067	$	12,104,298

The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at June 30, 2014 and December 31, 2013 (excluding acquired loans and leases) are as follows:

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Originated loans and leases:
Construction and land development - commercial	$	659	$	—	$	544	$	—
Other commercial real estate	1,385		41		1,610		—
Commercial mortgage	28,591		1,802		33,529		1,113
Commercial and industrial	1,367		502		1,428		294
Lease financing	624		5		832		—
Residential mortgage	13,836		1,930		14,701		1,998
Revolving mortgage	—		4,662		—		4,450
Construction and land development - noncommercial	—		164		457		256
Consumer	23		766		69		673
Total originated loans and leases	$	46,485	$	9,872	$	53,170	$	8,784

Acquired Loans

The following table provides changes in the recorded investment of acquired loans during the six months ended June 30, 2014 and June 30, 2013:

(Dollars in thousands)	2014			2013
Balance at January 1	$	1,029,426		$	1,809,235
Fair value of acquired loans	316,327			—
Accretion	60,660			131,909
Payments received and other changes, net	(296,480		)	(497,808		)
Balance at June 30	$	1,109,933		$	1,443,336
Outstanding principal balance at June 30	$	1,888,475		$	2,456,347

The recorded investment of acquired loans on the cost recovery method was $54.0 million at June 30, 2014 and $28.5 million at December 31, 2013. This increase is primarily driven by one large acquired loan relationship that was moved to cost recovery during the first quarter. The cost recovery method is applied to loans when the timing of future cash flows is not reasonably estimable due to borrower nonperformance or uncertainty in the timing and amount of ultimate disposition of the asset.

The following table documents changes to the amount of accretable yield for the first six months of 2014 and 2013.

(Dollars in thousands)	2014			2013
Balance at January 1	$	439,990		$	539,564
Additions	84,295			—
Accretion	(60,660		)	(131,909		)
Reclassifications from nonaccretable difference	9,992			72,149
Changes in expected cash flows that do not affect nonaccretable difference	(17,126		)	42,402
Balance at June 30	$	456,491		$	522,206

XML

Investments

6 Months Ended

Jun. 30, 2014

Investments [Abstract]

Investments

INVESTMENTS

The amortized cost and fair value of investment securities classified as available for sale and held to maturity at June 30, 2014 and December 31, 2013, are as follows:

	June 30, 2014
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,623,564	$	2,084	$	18	$	1,625,630
Government agency	1,281,724		2,020		178		1,283,566
Mortgage-backed securities	2,605,333		8,251		17,298		2,596,286
Equity securities	543		31,955		—		32,498
Municipal securities	185		1		—		186
Total investment securities available for sale	$	5,511,349	$	44,311	$	17,494	$	5,538,166
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury	$	373,223	$	259	$	45	$	373,437
Government agency	2,543,223		1,798		792		2,544,229
Mortgage-backed securities	2,486,297		4,526		43,950		2,446,873
Equity securities	543		21,604		—		22,147
Municipal securities	186		1		—		187
Other	863		—		33		830
Total investment securities available for sale	$	5,404,335	$	28,188	$	44,820	$	5,387,703
	June 30, 2014
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities held to maturity
Mortgage-backed securities	$	693	$	36	$	—	$	729
	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Mortgage-backed securities	$	907	$	67	$	—	$	974

A single subordinated debt security, previously classified within other, was called during the second quarter of 2014.

Investments in mortgage-backed securities primarily represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation.

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	683,598	$	684,265	$	839,956	$	840,883
One through five years	2,221,875		2,225,117		2,077,539		2,077,800
Mortgage-backed securities	2,605,333		2,596,286		2,486,297		2,446,873
Equity securities	543		32,498		543		22,147
Total investment securities available for sale	$	5,511,349	$	5,538,166	$	5,404,335	$	5,387,703
Investment securities held to maturity
Mortgage-backed securities held to maturity	$	693	$	729	$	907	$	974

There were no realized securities gains (losses) during any period presented.

The following table provides information regarding securities with unrealized losses as of June 30, 2014 and December 31, 2013.

	June 30, 2014
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	135,712	$	18	$	—	$	—	$	135,712	$	18
Government agency	242,563		178		—		—		242,563		178
Mortgage-backed securities	728,997		2,163		1,109,829		15,135		1,838,826		17,298
Total	$	1,107,272	$	2,359	$	1,109,829	$	15,135	$	2,217,101	$	17,494
	December 31, 2013
	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale:
U.S. Treasury	$	102,105	$	45	$	—	$	—	$	102,105	$	45
Government agency	780,552		761		29,969		31		810,521		792
Mortgage-backed securities	2,221,213		42,876		26,861		1,074		2,248,074		43,950
Other	830		33		—		—		830		33
Total	$	3,104,700	$	43,715	$	56,830	$	1,105	$	3,161,530	$	44,820

Investment securities with an aggregate fair value of $1.11 billion and $56.8 million have had continuous unrealized losses for more than 12 months as of June 30, 2014 and December 31, 2013, with an aggregate unrealized loss of $15.1 million and $1.1 million, respectively. As of June 30, 2014, all 104 of these investments are U.S. government agency and government sponsored enterprise-issued mortgage-backed securities. None of the unrealized losses identified as of June 30, 2014 or December 31, 2013 relate to the marketability of the securities or the issuer’s ability to honor redemption obligations. For all periods presented, BancShares had the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Investment securities having an aggregate carrying value of $2.85 billion at June 30, 2014 and $2.75 billion at December 31, 2013 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

XML

Business Combinations (Tables)

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Schedule of assets acquired and liabilities assumed

The following table provides the carrying value of acquired assets and assumed liabilities, as recorded by 1st Financial, the fair value adjustments calculated at the time of the merger and the resulting fair value recorded by FCB.

	January 1, 2014
(Dollars in thousands)	As recorded by 1st Financial			Fair value adjustments			As recorded by FCB
Assets
Cash and cash equivalents	$	28,194		$	—		$	28,194
Investment securities	246,890			(9,452		)	237,438
Loans held for sale	1,183			—			1,183
Restricted equity securities	3,105			671			3,776
Loans	338,170			(21,843		)	316,327
Less: allowance for loan losses	(7,796		)	7,796			—
Premises and equipment	3,871			(1,185		)	2,686
Other real estate owned	12,896			(1,305		)	11,591
Intangible asset	—			3,780			3,780
Other assets	16,811			(465		)	16,346
Total assets acquired	$	643,324		$	(22,003	)	$	621,321
Liabilities
Deposits:
Noninterest-bearing	$	152,444		$	—		$	152,444
Interest-bearing	477,881			1,546			479,427
Total deposits	630,325			1,546			631,871
Short-term borrowings	406			—			406
Other liabilities	3,392			167			3,559
Total liabilities assumed	$	634,123		$	1,713		635,836
Fair value of net liabilities assumed							14,515
Cash paid to shareholders							2,000
Cash paid to acquire TARP securities							8,000
Goodwill recorded for 1st Financial							$	24,515

Loans acquired, cash flows expected

For loans acquired from 1st Financial, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the merger date were:

(Dollars in thousands)	January 1, 2014
Contractually required payments	$	414,233
Cash flows expected to be collected	400,622
Fair value at acquisition date	316,327

The following table documents changes to the amount of accretable yield for the first six months of 2014 and 2013.

(Dollars in thousands)	2014			2013
Balance at January 1	$	439,990		$	539,564
Additions	84,295			—
Accretion	(60,660		)	(131,909		)
Reclassifications from nonaccretable difference	9,992			72,149
Changes in expected cash flows that do not affect nonaccretable difference	(17,126		)	42,402
Balance at June 30	$	456,491		$	522,206

Fair value of loans acquired

The recorded fair values of loans acquired in the 1st Financial transaction as of the merger date were as follows:

(Dollars in thousands)	January 1, 2014
Commercial:
Construction and land development	$	41,516
Commercial mortgage	123,925
Other commercial real estate	6,698
Commercial and industrial	29,126
Total commercial loans	201,265
Noncommercial:
Residential mortgage	113,177
Consumer	1,885
Total noncommercial loans	115,062
Total loans acquired from 1st Financial	$	316,327

XML

Derivatives

6 Months Ended

Jun. 30, 2014

Summary of Derivative Instruments [Abstract]

Derivatives

DERIVATIVES

At June 30, 2014, BancShares had an interest rate swap entered into during 2011 that qualifies as a cash flow hedge under GAAP. For all periods presented, the fair value of the outstanding derivative is included in other liabilities in the consolidated balance sheets, and the net change in fair value is included in the consolidated statements of cash flows under the caption net change in other liabilities.

The interest rate swap is used for interest rate risk management purposes and converts variable-rate exposure on outstanding debt to a fixed rate. The 2011 interest rate swap has a notional amount of $93.5 million, representing the amount of variable rate trust preferred capital securities issued during 2006 and still outstanding at the swap inception date. The 2011 interest rate swap hedges interest payments through June 2016 and requires fixed-rate payments by BancShares at 5.50 percent in exchange for variable-rate payments of 175 basis points above the three-month LIBOR, which is equal to the interest paid to the holders of the trust preferred capital securities. Settlement of the swap occurs quarterly. As of June 30, 2014, collateral with a fair value of $7.0 million was pledged to secure the existing obligation under the interest rate swap.

	June 30, 2014				December 31, 2013
(Dollars in thousands)	Notional  amount		Estimated fair value of liability		Notional  amount		Estimated fair value of liability
2011 interest rate swap hedging variable rate exposure on trust preferred securities 2011-2016	$	93,500	$	5,933	$	93,500	$	7,220

For cash flow hedges, the effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument is included in other comprehensive income, while the ineffective portion, representing the excess of the cumulative change in the fair value of the derivative over the cumulative change in expected future discounted cash flows on the hedged transaction, is recorded in the consolidated income statement. BancShares’ interest rate swap has been fully effective since inception. Therefore, changes in the fair value of the interest rate swap has had no impact on net income. For the three months ended June 30, 2014 and 2013, BancShares recognized interest expense of $0.8 million during both periods, resulting from incremental interest paid to the interest rate swap counterparty, none of which related to ineffectiveness. For the six months ended June 30, 2014 and 2013, BancShares recognized interest expense of $1.7 million and $1.6 million, respectively, resulting from incremental interest paid to the interest rate swap counterparty, none of which related to ineffectiveness. BancShares monitors the credit risk of the interest rate swap counterparty.

XML

Receivable from FDIC for Loss Share Agreements

6 Months Ended

Jun. 30, 2014

Receivable From FDIC For Loss Share Agreements [Abstract]

Receivable from FDIC for Loss Share Agreements

FDIC LOSS SHARE RECEIVABLE

The following table provides changes in the receivable from the FDIC for the three-month and six-month periods ended June 30, 2014 and June 30, 2013.

	Three months ended June 30						Six months ended June 30
(Dollars in thousands)	2014			2013			2014			2013
Beginning balance	$	74,784		$	195,942		$	93,397		$	270,192
Amortization	(12,922		)	(19,069		)	(30,667		)	(45,181		)
Cash payments to (from) FDIC	859			(4,015		)	4,350			(46,534		)
Post-acquisition adjustments	(12,762		)	(14,845		)	(17,121		)	(20,464		)
Ending balance	$	49,959		$	158,013		$	49,959		$	158,013

The receivable from the FDIC for loss share agreements is measured separately from the related covered assets and is recorded at fair value at the acquisition date using projected cash flows based on the expected reimbursements for losses and the applicable loss share percentages. See Note Jfor information related to FCB's recorded payable to the FDIC for loss share agreements.

Cash payments to (from) FDIC represent the net impact of loss share loan recoveries, charge-offs and related expenses as calculated and reported in FDIC loss share certificates. Post-acquisition adjustments represent the net change in loss estimates related to acquired loans and covered OREO as a result of changes in expected cash flows and the allowance for loan and lease losses related to those covered loans. For loans covered by loss share agreements, subsequent decreases in the amount expected to be collected from the borrower or collateral liquidation result in a provision for loan and lease losses, an increase in the allowance for loan and lease losses and a proportional adjustment to the receivable from the FDIC for the estimated amount to be reimbursed. Subsequent increases in the amount expected to be collected from the borrower or collateral liquidation result in the reversal of some or all previously recorded provision for loan and lease losses, a decrease in the related allowance for loan and lease losses and a proportional adjustment to the receivable from the FDIC, or prospective adjustment to the accretable yield and the related receivable from the FDIC if no provision for loan and lease losses had been recorded previously. Two of the loss share agreements expire during the third quarter of 2014, and two expire during the first quarter of 2015.

XML

Derivatives (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 2011 Interest Rate Swap	Dec. 31, 2013 2011 Interest Rate Swap
Derivative [Line Items]
Notional amount of interest rate derivatives					$ 93.5
Fixed rate payments, interest rate					5.50%	5.50%
Variable rate payment rate					1.75%	1.75%
Fair value of collateral pledged to secure interest rate contracts	7.0		7.0
Incremental interest expense paid to interest rate swap counterparties	$ 0.8	$ 0.8	$ 1.7	$ 1.6

XML

Allowance for Loan and Lease Losses

6 Months Ended

Jun. 30, 2014

Allowance for Loan and Lease Losses, Adjustments, Net [Abstract]

Allowance

ALLOWANCE FOR LOAN AND LEASE LOSSES

The following tables present the activity in the allowance for originated loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Originated Loans
Allowance for loan and lease losses:
Balance at April 1	$	12,246		$	94,217		$	945		$	24,021		$	4,183		$	454		$	10,944		$	16,408		$	1,249		$	13,282		$	—		$	177,949
Provision	(1,135		)	(1,961		)	(155		)	3,033			176			163			(1,557		)	1,252			(323		)	2,737			—			2,230
Charge-offs	—			(272		)	—			(531		)	(14		)	(5		)	(234		)	(1,064		)	(23		)	(2,628		)	—			(4,771		)
Recoveries	5			145			16			386			20			—			148			201			2			584			—			1,507
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Three months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at April 1	$	4,311		$	82,119		$	1,915		$	13,661		$	3,543		$	1,490		$	3,790		$	24,499		$	1,419		$	24,027		$	15,772		$	176,546
Provision	3,296			(4,976		)	(51		)	(1,203		)	1,775			155			878			907			(244		)	1,694			—			2,231
Charge-offs	(1,286		)	(213		)	(18		)	(988		)	(92		)	—			(450		)	(878		)	—			(2,569		)	—			(6,494		)
Recoveries	270			491			26			288			19			3			61			307			23			643			—			2,131
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782
	Six months ended June 30, 2014
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	10,335		$	100,257		$	1,009		$	22,362		$	4,749		$	190		$	10,511		$	16,239		$	681		$	13,541		$	—		$	179,874
Provision	750			(8,940		)	(229		)	5,009			(348		)	435			(948		)	2,605			254			4,012			—			2,600
Charge-offs	—			(440		)	—			(1,027		)	(72		)	(13		)	(418		)	(2,324		)	(94		)	(4,805		)	—			(9,193		)
Recoveries	31			1,252			26			565			36			—			156			277			64			1,227			—			3,634
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Six months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	6,031		$	80,229		$	2,059		$	14,050		$	3,521		$	1,175		$	3,836		$	25,185		$	1,721		$	25,389		$	15,850		$	179,046
Provision	1,462			(2,438		)	(151		)	(703		)	1,797			476			1,611			2,338			(357		)	2,290			(78		)	6,247
Charge-offs	(1,540		)	(869		)	(72		)	(2,246		)	(92		)	(6		)	(1,268		)	(3,066		)	(245		)	(5,157		)	—			(14,561		)
Recoveries	638			499			36			657			19			3			100			378			79			1,273			—			3,682
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782

⁽¹⁾Reclassification results from enhancements to the ALLL calculation during the second quarter of 2013 that resulted in the allocation of $15.8 million previously designated as 'non-specific' to other loan classes and the absorption of $7.4 million of the reserve for unfunded commitments related to unfunded, revocable loan commitments into the ALLL.

The provision for construction and land development - commercial was a credit of $1.1 million for the quarter ended June 30, 2014 compared to expense of $3.3 million for the same period in the prior year. Provision expense for the six month periods ended June 30, 2014 and June 30, 2013 was $0.8 million and $1.5 million, respectively. The decrease in provision expense for both comparative periods is due to improvements in credit risk rating and lower credit default trends.

The commercial mortgage loan class had a net credit provision of $2.0 million and $8.9 million for the three and six months ended June 30, 2014, respectively. The net credit provision for the three and six months ended June 30, 2013 was $5.0 million and $2.4 million, respectively. The net credit provision for all periods was primarily the result of improvements in the credit risk rating mix and lower credit default trends within this loan class. 

The provision for commercial and industrial loans totaled $3.0 million and $5.0 million for the three and six months ended June 30, 2014, respectively. The 2014 provision expense was a result of increased loans during the respective periods. Conversely, the three and six months ended June 30, 2013 credit provisions of $1.2 million and $0.7 million, respectively, resulted from a decline in the outstanding loan balances.

The residential mortgage loan class had a net credit provision of $1.6 million and $0.9 million for the three and six months ended June 30, 2014, respectively. Provision expense for the three and six months ended June 30, 2013 was $0.9 million and $1.6 million. The decrease in provision expense can be attributed to a decline in past due residential mortgage loans.

The following tables present the allowance for originated loan losses and the recorded investment in originated loans, by loan class, based on impairment method as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	155	$	7,704	$	179	$	1,425	$	297	$	—	$	1,613	$	1,024	$	201	$	653	$	13,251
ALLL for loans and leases collectively evaluated for impairment	10,961		84,425		627		25,484		4,068		612		7,688		15,773		704		13,322		163,664
Total allowance for loan and lease losses	$	11,116	$	92,129	$	806	$	26,909	$	4,365	$	612	$	9,301	$	16,797	$	905	$	13,975	$	176,915
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,573	$	87,046	$	1,962	$	10,811	$	376	$	46	$	15,448	$	3,754	$	1,934	$	937	$	124,887
Loans and leases collectively evaluated for impairment	339,448		6,280,050		176,937		1,281,402		413,046		131,005		1,055,641		2,118,921		117,486		376,200		12,290,136
Total loan and leases	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	12,415,023
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	103	$	6,873	$	209	$	771	$	54	$	—	$	1,586	$	372	$	72	$	121	$	10,161
ALLL for loans and leases collectively evaluated for impairment	10,232		93,384		800		21,591		4,695		190		8,925		15,867		609		13,420		169,713
Total allowance for loan and lease losses	$	10,335	$	100,257	$	1,009	$	22,362	$	4,749	$	190	$	10,511	$	16,239	$	681	$	13,541	$	179,874
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,272	$	97,111	$	1,878	$	9,300	$	188	$	—	$	15,539	$	3,596	$	1,108	$	1,154	$	132,146
Loans and leases collectively evaluated for impairment	317,575		6,265,379		176,876		1,071,858		381,575		175,336		966,882		2,109,689		121,684		385,298		11,972,152
Total loan and leases	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	982,421	$	2,113,285	$	122,792	$	386,452	$	12,104,298

The total reserves for individually impaired loans increased during the second quarter of 2014 due to enhancements in the TDR impairment calculation. TDR impairment evaluation, for performing TDRs, has historically been calculated on pools of homogeneous loan groups, as determined by loan type with similar risk characteristics and performance trends, using a discounted cash flow analysis. Management enhanced this process during the second quarter to include individual loan level impairment analysis for performing TDRs which resulted in higher impairment estimates for some TDR loans.

The following tables show the activity in the allowance for acquired loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013.

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Acquired Loans
Allowance for loan and lease losses:
Balance at April 1	$	4,476		$	23,003		$	1,204		$	2,256		$	9,764		$	3,493		$	583		$	214		$	44,993
Provision	(77		)	(1,185		)	(797		)	(1,729		)	(2,176		)	(3,031		)	(583		)	49			(9,529		)
Charge-offs	(596		)	(4,503		)	—			(152		)	(495		)	(381		)	—			(6		)	(6,133		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Three months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at April 1	$	13,306		$	38,293		$	5,172		$	11,876		$	17,603		$	7,135		$	2,756		$	332		$	96,473
Provision	(5,091		)	(2,522		)	(576		)	(4,936		)	55			(869		)	(1,524		)	(10		)	(15,473		)
Charge-offs	(626		)	(2,183		)	—			(1,004		)	(386		)	(235		)	—			(32		)	(4,466		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534
	Six months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	1,320		$	29,906		$	1,354		$	5,275		$	11,802		$	2,959		$	682		$	222		$	53,520
Provision	3,278			(4,571		)	(947		)	(2,065		)	(4,476		)	(2,397		)	(682		)	58			(11,802		)
Charge-offs	(795		)	(8,020		)	—			(2,835		)	(233		)	(481		)	—			(23		)	(12,387		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Six months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	31,186		$	50,275		$	11,234		$	8,897		$	19,837		$	9,754		$	8,287		$	502		$	139,972
Provision	(18,238		)	(4,606		)	(5,707		)	(704		)	(1,450		)	(3,373		)	(3,837		)	(180		)	(38,095		)
Charge-offs	(5,359		)	(12,081		)	(931		)	(2,257		)	(1,115		)	(350		)	(3,218		)	(32		)	(25,343		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534

The following tables show the ending balances of acquired loans and leases and related allowance by class of loans as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	3,803	$	17,315	$	407	$	375	$	7,093	$	81	$	—	$	257	$	29,331
Loans and leases acquired with deteriorated credit quality	80,827		637,481		34,688		33,851		270,688		20,129		28,759		3,510		1,109,933
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	1,320	$	29,906	$	1,354	$	5,275	$	11,802	$	2,959	$	682	$	222	$	53,520
Loans and leases acquired with deteriorated credit quality	78,915		642,891		41,381		17,254		213,851		30,834		2,583		1,717		1,029,426

As of June 30, 2014 and December 31, 2013, $454.8 million and $459.9 million, respectively, in acquired loans experienced an adverse change in expected cash flows since the date of acquisition.

The following tables provide information on originated loans and leases that are individually evaluated for impairment as of June 30, 2014 and December 31, 2013.

	June 30, 2014
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,305	$	1,268	$	2,573	$	3,539	$	155
Commercial mortgage	58,223		28,823		87,046		92,164		7,704
Other commercial real estate	741		1,221		1,962		2,361		179
Commercial and industrial	8,371		2,440		10,811		11,939		1,425
Lease financing	376		—		376		376		297
Other	—		46		46		46		—
Residential mortgage	10,016		5,432		15,448		15,903		1,613
Revolving mortgage	3,537		217		3,754		4,801		1,024
Construction and land development - noncommercial	1,934		—		1,934		1,934		201
Consumer	936		1		937		968		653
Total impaired originated loans and leases	$	85,439	$	39,448	$	124,887	$	134,031	$	13,251
	December 31, 2013
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,025	$	1,247	$	2,272	$	7,306	$	103
Commercial mortgage	57,819		39,292		97,111		103,522		6,873
Other commercial real estate	783		1,095		1,878		2,279		209
Commercial and industrial	7,197		2,103		9,300		10,393		771
Lease financing	133		55		188		188		54
Residential mortgage	11,534		4,005		15,539		15,939		1,586
Revolving mortgage	3,382		214		3,596		3,596		372
Construction and land development - noncommercial	651		457		1,108		1,108		72
Consumer	1,154		—		1,154		1,154		121
Total impaired originated loans and leases	$	83,678	$	48,468	$	132,146	$	145,485	$	10,161

The following tables show the average impaired originated loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014				Three months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	2,592	$	28	$	8,541	$	101
Commercial mortgage	87,687		799		102,356		1,413
Other commercial real estate	1,981		7		2,647		37
Commercial and industrial	11,208		113		10,298		139
Lease financing	384		4		531		9
Other	48		1		—		—
Residential mortgage	15,592		107		13,855		184
Revolving mortgage	3,779		29		6,976		47
Construction and land development - noncommercial	2,061		26		913		13
Consumer	986		17		1,587		25
Average impaired originated loans and leases	$	126,318	$	1,131	$	147,704	$	1,968
	Six months ended June 30, 2014				Six months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	1,413	$	31	$	8,899	$	213
Commercial mortgage	84,359		1,716		103,032		2,838
Other commercial real estate	2,731		60		3,028		82
Commercial and industrial	15,690		353		14,465		406
Lease financing	732		21		408		14
Other	24		1		—		—
Residential mortgage	15,824		284		15,003		412
Revolving mortgage	4,262		76		6,390		72
Construction and land development - noncommercial	1,946		50		783		25
Consumer	2,058		51		1,611		29
Average impaired originated loans and leases	$	129,039	$	2,643	$	153,619	$	4,091

Troubled Debt Restructurings

BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (TDRs). In general, the modification or restructuring of a loan is considered a TDR if, for economic reasons or legal reasons related to a borrower's financial difficulties, a concession is granted to the borrower that creditors would not otherwise grant. Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. In accordance with GAAP, loans acquired under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, are not initially considered to be TDRs, but can be classified as such if a modification is made subsequent to acquisition. Modifications of acquired loans that are part of a pool are not designated as TDRs. The following table provides a summary of total TDRs by accrual status.

	June 30, 2014						December 31, 2013
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans
Construction and land development - commercial	$	5,946	$	2,248	$	8,194	$	21,032	$	1,002	$	22,034
Commercial mortgage	99,843		32,019		131,862		113,323		23,387		136,710
Other commercial real estate	3,203		1,277		4,480		3,470		1,150		4,620
Commercial and industrial	10,935		818		11,753		9,838		1,142		10,980
Lease	233		144		377		49		—		49
Other	46		—		46		—		—		—
Total commercial TDRs	120,206		36,506		156,712		147,712		26,681		174,393
Noncommercial
Residential	29,598		2,919		32,517		23,343		3,663		27,006
Revolving mortgage	3,821		—		3,821		3,095		—		3,095
Construction and land development - noncommercial	1,934		—		1,934		651		457		1,108
Consumer and other	937		—		937		1,154		—		1,154
Total noncommercial TDRs	36,290		2,919		39,209		28,243		4,120		32,363
Total TDRs	$	156,496	$	39,425	$	195,921	$	175,955	$	30,801	$	206,756

The following table shows the accrual status of acquired and originated TDRs.

(Dollars in thousands)	June 30, 2014		December 31, 2013
Accruing TDRs:
Acquired	$	62,592	$	90,829
Originated	93,904		85,126
Total accruing TDRs	156,496		175,955
Nonaccruing TDRs:
Acquired	17,861		11,479
Originated	21,564		19,322
Total nonaccruing TDRs	39,425		30,801
All TDRs:
Acquired	80,453		102,308
Originated	115,468		104,448
Total TDRs	$	195,921	$	206,756

All TDRs are impaired loans. TDRs are, therefore, evaluated for impairment on a quarterly basis or more frequently as needed. The impairment evaluations for performing TDRs has historically been performed by pools of homogeneous loan groups, as determined by loan type with similar risk characteristics and performance trends, using a discounted cash flow analysis. Management enhanced this process during the second quarter to include individual loan level impairment analyses for all performing TDRs.

Impairment is evaluated using one of three approved valuation methodologies: discounted cash flows, market prices or collateral values. Based on the accrual status and credit grade, management determines the most appropriate method to reasonably assess expectations for recovery of the investment. Expected cash flows are discounted at the loan’s original effective interest rate. Specific valuation allowances are established for discounted cash flows or partial charge-offs and are recorded for TDRs in the amount equal to the calculated impairment.

The majority of TDRs are included in the special mention, substandard or doubtful grading categories. When a restructured loan subsequently defaults, it is evaluated and downgraded if appropriate. The more severely graded the loan, the lower the estimated expected cash flows and the greater the allowance recorded.

The following tables provide the types of TDRs made during the three and six months ended June 30, 2014 and June 30, 2013 for originated loans, as well as a summary of originated loans that were modified as a TDR during the 12 months ended June 30, 2014 and June 30, 2013 that subsequently defaulted during the three and six months ended June 30, 2014 and June 30, 2013. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	2	$	720	1	$	494	1	$	71	—	$	—
Other commercial real estate	—	—		—	—		1	100		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	3	766		1	494		2	171		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	—	—		—	—		1	242		1	223
Commercial and industrial	4	2,069		—	—		—	—		1	22
Residential mortgage	6	260		—	—		—	—		1	106
Consumer	1	10		—	—		1	46		—	—
Total loan term extension	13	2,530		—	—		2	288		3	351
Below market interest rate
Commercial mortgage	3	1,991		5	1,563		7	2,035		—	—
Commercial and industrial	—	—		—	—		3	831		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	10	427		—	—		6	885		1	99
Revolving mortgage	—	—		—	—		1	99		—	—
Construction and land development - noncommercial	—	—		—	—		2	521		—	—
Total below market interest rate	14	2,783		5	1,563		22	5,124		1	99
Discharged from bankruptcy
Residential mortgage	1	13		—	—		2	87		—	—
Revolving mortgage	2	39		—	—		9	727		—	—
Consumer	2	8		—	—		—	—		—	—
Total discharged from bankruptcy	5	60		—	—		11	814		—	—
Total originated restructurings	35	$	6,139	6	$	2,057	37	$	6,397	4	$	450

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	6	$	2,600	2	$	708	8	$	3,406	—	$	—
Commercial and industrial	1	196		—	—		—	—		—	—
Other commercial real estate	—	—		—	—		1	100		—	—
Residential mortgage	—	—		—	—		1	630		—	—
Lease financing	2	144		—	—		—	—		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	10	2,986		2	708		10	4,136		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	5	2,584		—	—		5	1,972		1	223
Commercial and industrial	4	2,069		—	—		1	229		1	22
Lease financing	2	224		—	—		—	—		—	—
Residential mortgage	11	593		—	—		3	51		1	106
Consumer	3	44		—	—		1	46		—	—
Total loan term extension	27	5,705		—	—		10	2,298		3	351
Below market interest rate
Construction and land development - commercial	10	363		—	—		1	224		—	—
Commercial mortgage	15	6,591		6	2,011		12	5,819		—	—
Commercial and industrial	6	143		—	—		4	846		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	18	820		1	140		14	1,579		1	99
Revolving mortgage	5	274		—	—		1	99		—	—
Construction & land development - noncommercial	8	1,248		—	—		2	521		—	—
Consumer	—	—		—	—		3	235		—	—
Total below market interest rate	63	9,804		7	2,151		40	10,076		1	99
Discharged from bankruptcy
Commercial mortgage	1	983		—	—		—	—		—	—
Residential mortgage	8	649		2	85		3	352		—	—
Revolving mortgage	7	442		—	—		30	2,383		3	93
Construction & land development - noncommercial	1	62		—	—		—	—		—	—
Consumer	3	26		—	—		—	—		—	—
Total discharged from bankruptcy	20	2,162		2	85		33	2,735		3	93
Total originated restructurings	120	$	20,657	11	$	2,944	93	$	19,245	7	$	543

The following tables provide the types of TDRs made during the three and six months ended June 30, 2014 and June 30, 2013 for acquired loans, as well as a summary of acquired loans that were modified as a TDR during the 12 months ended June 30, 2014 and June 30, 2013 that subsequently defaulted during the three and six months ended June 30, 2014 and June 30, 2013. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	—	—		—	—		—	—		1	1,699
Residential mortgage	—	—		—	—		1	134		—	—
Total interest only	—	—		—	—		1	134		2	1,803
Loan term extension
Residential mortgage	1	53		1	53		—	—		—	—
Total loan term extension	1	53		1	53		—	—		—	—
Below market interest rate
Construction and land development - commercial	1	273		—	—		—	—		—	—
Commercial mortgage	5	1,811		—	—		1	813		—	—
Commercial and industrial	1	23		—	—		—	—		—	—
Residential mortgage	23	2,963		1	23		2	997		1	224
Total below market interest rate	30	5,070		1	23		3	1,810		1	224
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	57	$	6,951	4	$	170	4	$	1,944	3	$	2,027

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	2	—		2	44		1	290		2	1,989
Residential mortgage	—	—		—	—		2	177		—	—
Total interest only	2	—		2	44		3	467		3	2,093
Loan term extension
Construction and land development - commercial	1	276		—	—		—	—		—	—
Residential mortgage	1	53		1	53		1	199		—	—
Total loan term extension	2	329		1	53		1	199		—	—
Below market interest rate
Construction and land development - commercial	2	308		—	—		4	3,331		—	—
Commercial mortgage	9	5,060		1	39		5	11,871		3	3,145
Commercial and industrial	1	23		—	—		2	435		—	—
Residential mortgage	25	3,066		2	23		7	2,484		3	931
Total below market interest rate	37	8,457		3	62		18	18,121		6	4,076
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	67	$	10,614	8	$	253	22	$	18,787	9	$	6,169

For the three and six months ended June 30, 2014 and June 30, 2013, the recorded investment in TDRs subsequent to modification was not materially impacted by the modification since forgiveness of principal is not a restructuring option frequently used by BancShares.

XML

Other Real Estate Owned

6 Months Ended

Jun. 30, 2014

Banking and Thrift [Abstract]

Other Real Estate Owned

OTHER REAL ESTATE OWNED (OREO)

The following table explains changes in other real estate owned during the six months ended June 30, 2014 and June 30, 2013.

(Dollars in thousands)	Covered			Noncovered			Total
Balance at December 31, 2012	$	102,577		$	43,513		$	146,090
Additions	41,315			16,615			57,930
Sales	(53,676		)	(21,026		)	(74,702		)
Writedowns	(5,383		)	(2,160		)	(7,543		)
Balance at June 30, 2013	$	84,833		$	36,942		$	121,775
Balance at December 31, 2013	$	47,081		$	36,898		$	83,979
Additions 1	16,186			20,485			36,671
Sales	(18,522		)	(19,150		)	(37,672		)
Writedowns	(4,609		)	(3,082		)	(7,691		)
Balance at June 30, 2014	$	40,136		$	35,151		$	75,287

¹ Noncovered additions include $11.6 million from the 1st Financial merger.

XML

Estimated Fair Values

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Estimated Fair Values

ESTIMATED FAIR VALUES

Fair value estimates are intended to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Where there is no active market for a financial instrument, BancShares has made estimates using discounted cash flows or other valuation techniques. Inputs to these valuation methods are subjective in nature, involve uncertainties and require significant judgment and therefore cannot be determined with precision. Accordingly, the derived fair value estimates presented below are not necessarily indicative of the amounts BancShares could realize in a current market exchange.

Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the highest level of input that is significant to the fair value measurement (with level 1 considered highest and level 3 considered lowest). A brief description of each level follows:

• Level 1 values are based on quoted prices for identical instruments in active markets.

• Level 2 values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 values are generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques.

The methodologies used to estimate the fair value of financial assets and financial liabilities are discussed below:

Investment securities available for sale. U.S.Treasury, government agency, mortgage-backed securities and municipal securities are generally measured at fair value using a third party pricing service and are classified as level 2 instruments. Equity securities are measured at fair value using observable closing prices. Management also considers the amount of market activity by examining the trade volume of each security. Due to the relatively inactive nature of the markets for the existing equity securities at BancShares, the inputs used for these equity securities are considered level 2 inputs.

Loans held for sale. Loans held for sale are carried at the lower of aggregate cost or fair value and are, therefore, carried at fair value only when fair value is less than the asset cost. These loans are generally traded in active secondary markets and are priced using current market pricing for similar securities adjusted for servicing, interest rate risk and credit risk. Accordingly, the inputs used to calculate fair value of residential real estate loans are classified as Level 2 inputs.

Net loans and leases (acquired and originated). Fair value is estimated based on discounted future cash flows using the current interest rates at which loans with similar terms would be made to borrowers of similar credit quality. An additional valuation adjustment is made for liquidity. The inputs used in the fair value measurements for loans and leases are considered level 3 inputs.

Receivable from the FDIC for loss share agreements. Fair value is estimated based on discounted future cash flows using current discount rates. Due to post-acquisition improvements in expected losses, significant portions of the FDIC receivable will be recovered through amortization of the receivable over the remaining life of the loss share agreement rather than by cash flows from the FDIC. The estimated amounts to be amortized in future periods have no fair value. The inputs used in the fair value measurement for the FDIC receivable are considered level 3 inputs. The FDIC loss share agreements are not transferable and, accordingly, there is no market for this receivable.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares believes its investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered level 2 inputs.

Preferred stock issued under the TARP program and other acquired financial assets. Preferred securities issued under the Troubled Asset Recovery Program are recorded at cost and are evaluated quarterly for impairment based on the ultimate recoverability of the purchase price. The fair value of these securities is derived from a third-party proprietary model that is considered to be a level 3 input. Other acquired financial assets represent acquired investments in various entities for Community Reinvestment Act and correspondent banking purposes. These investments were recorded at fair value at acquisition date based on level 2 inputs.

Deposits. For non-time deposits, carrying value is a reasonable estimate of fair value. The fair value of time deposits is estimated by discounting future cash flows using the interest rates currently offered for deposits of similar remaining maturities. The inputs used in the fair value measurement for deposits are considered level 2 inputs.    

Long-term obligations. For fixed rate trust preferred securities, the fair values are determined based on recent trades of the actual security. For other long-term obligations, fair values are estimated by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for long-term obligations are considered level 2 inputs.

Payable to the FDIC for loss share agreements. The fair value of the payable to the FDIC for loss share agreements is determined by the projected cash flows based on expected payments to the FDIC in accordance with the loss share agreements. Cash flows are discounted using current discount rates to reflect the timing of the estimated amounts due to the FDIC. The inputs used in the fair value measurement for the payable to the FDIC are considered level 3 inputs. See Note J for more information on the payable to the FDIC.

Interest rate swap. Under the terms of the existing cash flow hedge, BancShares pays a fixed payment to the counterparty in exchange for receipt of a variable payment that is determined based on the three-month LIBOR rate. The fair value of the cash flow hedge is, therefore, based on projected LIBOR rates for the duration of the hedge, values that, while observable in the market, are subject to adjustment due to pricing considerations for the specific instrument. The inputs used in the fair value measurement of the interest rate swap are considered level 2 inputs.

Off-balance-sheet commitments and contingencies. Carrying amounts are reasonable estimates of the fair values for such financial instruments. Carrying amounts include unamortized fee income and, in some cases, reserves for any credit losses from those financial instruments. These amounts are not material to BancShares' financial position.

For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of June 30, 2014 and December 31, 2013. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value.

(Dollars in thousands)	June 30, 2014				December 31, 2013
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	566,952	$	566,952	$	533,599	$	533,599
Overnight investments	1,118,474		1,118,474		859,324		859,324
Investment securities available for sale	5,538,166		5,538,166		5,387,703		5,387,703
Investment securities held to maturity	693		729		907		974
Loans held for sale	49,851		50,675		47,271		47,956
Net loans and leases	13,318,710		12,846,888		12,900,330		12,545,537
Receivable from the FDIC for loss share agreements (1)	49,959		22,741		93,397		38,438
Income earned not collected	49,019		49,019		48,390		48,390
Federal Home Loan Bank stock	32,878		32,878		40,819		40,819
Preferred stock and other acquired financial assets	15,462		16,199		33,564		34,786
Deposits	18,556,758		18,113,243		17,874,066		17,898,570
Short-term borrowings	788,540		788,540		511,418		511,418
Long-term obligations	314,529		324,874		510,769		526,037
Payable to the FDIC for loss share agreements	114,281		119,465		109,378		111,941
Accrued interest payable	7,297		7,297		6,737		6,737
Interest rate swap	5,933		5,933		7,220		7,220

⁽¹⁾ The fair value of the FDIC receivable excludes amortization expected to be recognized in prospective periods.

Among BancShares’ assets and liabilities, investment securities available for sale and interest rate swaps accounted for as cash flow hedges are reported at their fair values on a recurring basis. Certain other assets are adjusted to their fair value on a nonrecurring basis, including loans held for sale, which are carried at the lower of cost or fair value, and impaired loans, OREO, goodwill and other intangible assets, which are periodically tested for impairment. Non-impaired loans held for investment, deposits, short-term borrowings and long-term obligations are not reported at fair value. BancShares did not elect to voluntarily report any assets or liabilities at fair value.

For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,625,630	$	—	$	1,625,630	$	—
Government agency	1,283,566		—		1,283,566		—
Mortgage-backed securities	2,596,286		—		2,596,286		—
Equity securities	32,498		—		32,498		—
Municipal securities	186		—		186		—
Total	$	5,538,166	$	—	$	5,538,166	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	5,933	$	—	$	5,933	$	—
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	373,437	$	—	$	373,437	$	—
Government agency	2,544,229		—		2,544,229		—
Mortgage-backed securities	2,446,873		—		2,446,873		—
Equity securities	22,147		—		22,147		—
Municipal securities	187		—		187		—
Other	830		—		830		—
Total	$	5,387,703	$	—	$	5,387,703	$	—
Liabilities measured at fair value
Interest rate swaps accounted for as cash flow hedges	$	7,220	$	—	$	7,220	$	—

There were no transfers between levels during the six months ended June 30, 2014. A single subordinated debt security, previously classified within other, was called during the second quarter of 2014.

Certain financial assets and liabilities are carried at fair value on a nonrecurring basis, including loans held for sale, impaired loans and OREO.

Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 10 and 14 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Impaired loans are assigned to an asset manager and monitored monthly for significant changes since the last valuation. If significant changes are noted, the asset manager orders a new valuation or adjusts the valuation accordingly. Expected cash flows are determined using expected loss rates developed from historic experience for loans with similar risk characteristics, discounted using the effective interest rate.

OREO is measured and reported at fair value using collateral valuations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 10 and 14 percent applied for estimated holding and selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. The asset manager uses the information gathered from brokers and other market sources to identify any significant changes in the market or the subject property as they occur. Valuations are then adjusted or new appraisals are ordered to ensure the reported values reflect the most current information. OREO that has been recently remeasured is deemed to be at fair value and included in the table below.

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of June 30, 2014 and December 31, 2013.

	June 30, 2014
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	$	32,551	$	—	$	32,551	$	—
Originated impaired loans	73,881		—		—		73,881
Other real estate not covered under loss share agreements remeasured during current year	9,101		—		—		9,101
Other real estate covered under loss share agreements remeasured during current year	22,927		—		—		22,927
	December 31, 2013
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Loans held for sale	29,389		—		29,389		—
Originated impaired loans	77,817		—		—		77,817
Other real estate not covered under loss share agreements remeasured during current year	20,526		—		—		20,526
Other real estate covered under loss share agreements remeasured during current year	37,587		—		—		37,587

No financial liabilities were carried at fair value on a nonrecurring basis as of June 30, 2014 and December 31, 2013.

XML

Accumulated Other Comprehensive Loss (Reclassifications out of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification adjustment for gains included in income before income taxes	$ 1,598		$ 4,294		$ 3,197		$ 8,598
Amounts reclassified from accumulated other comprehensive income, net of tax	976		2,612		1,953		5,231
Unrealized Loss on Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from accumulated other comprehensive income, net of tax	0	[1]	0	[1]	0	[1]	0	[1]
Unrealized Gains on Investment Securities Available for Sale
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from accumulated other comprehensive income, net of tax	0	[1]	0	[1]	0	[1]	0	[1]
Defined Benefit Pension Items
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Employee Benefits, prior service costs	(52)		(53)		(105)		(105)
Reclassification adjustment for gains included in income before income taxes	(1,546)		(4,241)		(3,092)		(8,493)
Total before taxes	(1,598)		(4,294)		(3,197)		(8,598)
Income taxes	622		1,682		1,244		3,367
Amounts reclassified from accumulated other comprehensive income, net of tax	$ 976	[1]	$ 2,612	[1]	$ 1,953	[1]	$ 5,231	[1]

[1] All amounts are net of tax.

XML

Accumulated Other Comprehensive Loss (Components of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (16,594)		$ (79,905)		$ (25,268)		$ (82,106)
Other comprehensive income before reclassifications	19,675		(22,883)		27,372		(23,301)
Amounts reclassified from accumulated other comprehensive loss	976		2,612		1,953		5,231
Net current period other comprehensive income	20,651		(20,271)		29,325		(18,070)
Ending balance	4,057		(100,176)		4,057		(100,176)
Unrealized Loss on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(3,993)	[1]	(5,799)	[1]	(4,434)	[1]	(6,292)	[1]
Other comprehensive income before reclassifications	350	[1]	840	[1]	791	[1]	1,333	[1]
Amounts reclassified from accumulated other comprehensive loss	0	[1]	0	[1]	0	[1]	0	[1]
Net current period other comprehensive income	350	[1]	840	[1]	791	[1]	1,333	[1]
Ending balance	(3,643)	[1]	(4,959)	[1]	(3,643)	[1]	(4,959)	[1]
Unrealized Gains on Investment Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(2,835)	[1]	19,606	[1]	(10,091)	[1]	20,517	[1]
Other comprehensive income before reclassifications	19,325	[1]	(23,723)	[1]	26,581	[1]	(24,634)	[1]
Amounts reclassified from accumulated other comprehensive loss	0	[1]	0	[1]	0	[1]	0	[1]
Net current period other comprehensive income	19,325	[1]	(23,723)	[1]	26,581	[1]	(24,634)	[1]
Ending balance	16,490	[1]	(4,117)	[1]	16,490	[1]	(4,117)	[1]
Defined Benefit Pension Items
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(9,766)	[1]	(93,712)	[1]	(10,743)	[1]	(96,331)	[1]
Other comprehensive income before reclassifications	0	[1]	0	[1]	0	[1]	0	[1]
Amounts reclassified from accumulated other comprehensive loss	976	[1]	2,612	[1]	1,953	[1]	5,231	[1]
Net current period other comprehensive income	976	[1]	2,612	[1]	1,953	[1]	5,231	[1]
Ending balance	$ (8,790)	[1]	$ (91,100)	[1]	$ (8,790)	[1]	$ (91,100)	[1]

[1] All amounts are net of tax.

XML

Business Combinations (Loans Acquired) (Details) (1st Financial, USD $) In Thousands, unless otherwise specified	Jan. 02, 2014
Business Acquisition [Line Items]
Contractually required payments	$ 414,233
Cash flows expected to be collected	400,622
Loans	316,327
Commercial
Business Acquisition [Line Items]
Loans	201,265
Commercial | Construction and land development
Business Acquisition [Line Items]
Loans	41,516
Commercial | Mortgage
Business Acquisition [Line Items]
Loans	123,925
Commercial | Other commercial real estate
Business Acquisition [Line Items]
Loans	6,698
Commercial | Commercial and industrial
Business Acquisition [Line Items]
Loans	29,126
Noncommerical
Business Acquisition [Line Items]
Loans	115,062
Noncommerical | Mortgage
Business Acquisition [Line Items]
Loans	113,177
Noncommerical | Consumer
Business Acquisition [Line Items]
Loans	$ 1,885

XML

Other Real Estate Owned (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013
Covered
Beginning balance	$ 47,081		$ 102,577
Additions	16,186		41,315
Sales	(18,522)		(53,676)
Writedowns	(4,609)		(5,383)
Ending balance	40,136		84,833
Noncovered
Beginning balance	36,898		43,513
Additions	20,485	[1]	16,615
Sales	(19,150)		(21,026)
Writedowns	(3,082)		(2,160)
Ending balance	35,151	[1]	36,942
Total
Beginning balance	83,979		146,090
Additions	36,671	[1]	57,930
Sales	(37,672)		(74,702)
Writedowns	(7,691)		(7,543)
Ending balance	75,287	[1]	121,775
1st Financial
Noncovered
Additions	$ 11,600	[1]

[1] Noncovered additions include $11.6 million from the 1st Financial merger.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

During July, BancShares purchased $25.0 million of FCB/SC Capital Trust II's outstanding Trust Preferred Securities from an unaffiliated third party. BancShares paid approximately $23.0 million, plus unpaid accrued distributions on the securities for the current distribution period, for the Trust Preferred Securities.  FCB/SC Capital Trust II is a trust subsidiary of First Citizens Bancorporation, Inc. (Bancorporation).  The Trust Preferred Securities pay interest at a floating rate based on three month LIBOR plus 2.25 percent, reset quarterly, and mature on June 15, 2034. The securities represent preferred beneficial interests in a junior subordinated deferrable interest debenture in a like principal amount issued by Bancorporation and held by FCB/SC Capital Trust II.

BancShares historically has considered Bancorporation and its subsidiaries to be related persons for purposes of BancShares' related person transaction approval policy. BancShares' Audit Committee reviewed and approved BancShares' purchase of Trust Preferred Securities described above.

XML

Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2014

Allowance for Loan and Lease Losses, Adjustments, Net [Abstract]

Allowance for Loan and Lease Losses

The following tables provide information on originated loans and leases that are individually evaluated for impairment as of June 30, 2014 and December 31, 2013.

	June 30, 2014
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,305	$	1,268	$	2,573	$	3,539	$	155
Commercial mortgage	58,223		28,823		87,046		92,164		7,704
Other commercial real estate	741		1,221		1,962		2,361		179
Commercial and industrial	8,371		2,440		10,811		11,939		1,425
Lease financing	376		—		376		376		297
Other	—		46		46		46		—
Residential mortgage	10,016		5,432		15,448		15,903		1,613
Revolving mortgage	3,537		217		3,754		4,801		1,024
Construction and land development - noncommercial	1,934		—		1,934		1,934		201
Consumer	936		1		937		968		653
Total impaired originated loans and leases	$	85,439	$	39,448	$	124,887	$	134,031	$	13,251
	December 31, 2013
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Impaired originated loans and leases
Construction and land development - commercial	$	1,025	$	1,247	$	2,272	$	7,306	$	103
Commercial mortgage	57,819		39,292		97,111		103,522		6,873
Other commercial real estate	783		1,095		1,878		2,279		209
Commercial and industrial	7,197		2,103		9,300		10,393		771
Lease financing	133		55		188		188		54
Residential mortgage	11,534		4,005		15,539		15,939		1,586
Revolving mortgage	3,382		214		3,596		3,596		372
Construction and land development - noncommercial	651		457		1,108		1,108		72
Consumer	1,154		—		1,154		1,154		121
Total impaired originated loans and leases	$	83,678	$	48,468	$	132,146	$	145,485	$	10,161

The following tables show the average impaired originated loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014				Three months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	2,592	$	28	$	8,541	$	101
Commercial mortgage	87,687		799		102,356		1,413
Other commercial real estate	1,981		7		2,647		37
Commercial and industrial	11,208		113		10,298		139
Lease financing	384		4		531		9
Other	48		1		—		—
Residential mortgage	15,592		107		13,855		184
Revolving mortgage	3,779		29		6,976		47
Construction and land development - noncommercial	2,061		26		913		13
Consumer	986		17		1,587		25
Average impaired originated loans and leases	$	126,318	$	1,131	$	147,704	$	1,968
	Six months ended June 30, 2014				Six months ended June 30, 2013
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Impaired originated loans and leases:
Construction and land development - commercial	$	1,413	$	31	$	8,899	$	213
Commercial mortgage	84,359		1,716		103,032		2,838
Other commercial real estate	2,731		60		3,028		82
Commercial and industrial	15,690		353		14,465		406
Lease financing	732		21		408		14
Other	24		1		—		—
Residential mortgage	15,824		284		15,003		412
Revolving mortgage	4,262		76		6,390		72
Construction and land development - noncommercial	1,946		50		783		25
Consumer	2,058		51		1,611		29
Average impaired originated loans and leases	$	129,039	$	2,643	$	153,619	$	4,091

The following tables show the activity in the allowance for acquired loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013.

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Acquired Loans
Allowance for loan and lease losses:
Balance at April 1	$	4,476		$	23,003		$	1,204		$	2,256		$	9,764		$	3,493		$	583		$	214		$	44,993
Provision	(77		)	(1,185		)	(797		)	(1,729		)	(2,176		)	(3,031		)	(583		)	49			(9,529		)
Charge-offs	(596		)	(4,503		)	—			(152		)	(495		)	(381		)	—			(6		)	(6,133		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Three months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at April 1	$	13,306		$	38,293		$	5,172		$	11,876		$	17,603		$	7,135		$	2,756		$	332		$	96,473
Provision	(5,091		)	(2,522		)	(576		)	(4,936		)	55			(869		)	(1,524		)	(10		)	(15,473		)
Charge-offs	(626		)	(2,183		)	—			(1,004		)	(386		)	(235		)	—			(32		)	(4,466		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534
	Six months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	1,320		$	29,906		$	1,354		$	5,275		$	11,802		$	2,959		$	682		$	222		$	53,520
Provision	3,278			(4,571		)	(947		)	(2,065		)	(4,476		)	(2,397		)	(682		)	58			(11,802		)
Charge-offs	(795		)	(8,020		)	—			(2,835		)	(233		)	(481		)	—			(23		)	(12,387		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	3,803		$	17,315		$	407		$	375		$	7,093		$	81		$	—		$	257		$	29,331
	Six months ended June 30, 2013
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	31,186		$	50,275		$	11,234		$	8,897		$	19,837		$	9,754		$	8,287		$	502		$	139,972
Provision	(18,238		)	(4,606		)	(5,707		)	(704		)	(1,450		)	(3,373		)	(3,837		)	(180		)	(38,095		)
Charge-offs	(5,359		)	(12,081		)	(931		)	(2,257		)	(1,115		)	(350		)	(3,218		)	(32		)	(25,343		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at June 30	$	7,589		$	33,588		$	4,596		$	5,936		$	17,272		$	6,031		$	1,232		$	290		$	76,534

The following tables present the activity in the allowance for originated loan and lease losses by loan class for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Originated Loans
Allowance for loan and lease losses:
Balance at April 1	$	12,246		$	94,217		$	945		$	24,021		$	4,183		$	454		$	10,944		$	16,408		$	1,249		$	13,282		$	—		$	177,949
Provision	(1,135		)	(1,961		)	(155		)	3,033			176			163			(1,557		)	1,252			(323		)	2,737			—			2,230
Charge-offs	—			(272		)	—			(531		)	(14		)	(5		)	(234		)	(1,064		)	(23		)	(2,628		)	—			(4,771		)
Recoveries	5			145			16			386			20			—			148			201			2			584			—			1,507
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Three months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at April 1	$	4,311		$	82,119		$	1,915		$	13,661		$	3,543		$	1,490		$	3,790		$	24,499		$	1,419		$	24,027		$	15,772		$	176,546
Provision	3,296			(4,976		)	(51		)	(1,203		)	1,775			155			878			907			(244		)	1,694			—			2,231
Charge-offs	(1,286		)	(213		)	(18		)	(988		)	(92		)	—			(450		)	(878		)	—			(2,569		)	—			(6,494		)
Recoveries	270			491			26			288			19			3			61			307			23			643			—			2,131
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782
	Six months ended June 30, 2014
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	10,335		$	100,257		$	1,009		$	22,362		$	4,749		$	190		$	10,511		$	16,239		$	681		$	13,541		$	—		$	179,874
Provision	750			(8,940		)	(229		)	5,009			(348		)	435			(948		)	2,605			254			4,012			—			2,600
Charge-offs	—			(440		)	—			(1,027		)	(72		)	(13		)	(418		)	(2,324		)	(94		)	(4,805		)	—			(9,193		)
Recoveries	31			1,252			26			565			36			—			156			277			64			1,227			—			3,634
Balance at June 30	$	11,116		$	92,129		$	806		$	26,909		$	4,365		$	612		$	9,301		$	16,797		$	905		$	13,975		$	—		$	176,915
	Six months ended June 30, 2013
	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Non- specific			Total
Balance at January 1	$	6,031		$	80,229		$	2,059		$	14,050		$	3,521		$	1,175		$	3,836		$	25,185		$	1,721		$	25,389		$	15,850		$	179,046
Provision	1,462			(2,438		)	(151		)	(703		)	1,797			476			1,611			2,338			(357		)	2,290			(78		)	6,247
Charge-offs	(1,540		)	(869		)	(72		)	(2,246		)	(92		)	(6		)	(1,268		)	(3,066		)	(245		)	(5,157		)	—			(14,561		)
Recoveries	638			499			36			657			19			3			100			378			79			1,273			—			3,682
Reclassification (1)	5,141			27,421			(815		)	7,551			(253		)	(1,288		)	5,717			(9,838		)	(478		)	(10,018		)	(15,772		)	7,368
Balance at June 30	$	11,732		$	104,842		$	1,057		$	19,309		$	4,992		$	360		$	9,996		$	14,997		$	720		$	13,777		$	—		$	181,782

⁽¹⁾Reclassification results from enhancements to the ALLL calculation during the second quarter of 2013 that resulted in the allocation of $15.8 million previously designated as 'non-specific' to other loan classes and the absorption of $7.4 million of the reserve for unfunded commitments related to unfunded, revocable loan commitments into the ALLL.

Allocation of Allowance for Loan and Lease Losses

The following tables show the ending balances of acquired loans and leases and related allowance by class of loans as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	3,803	$	17,315	$	407	$	375	$	7,093	$	81	$	—	$	257	$	29,331
Loans and leases acquired with deteriorated credit quality	80,827		637,481		34,688		33,851		270,688		20,129		28,759		3,510		1,109,933
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	1,320	$	29,906	$	1,354	$	5,275	$	11,802	$	2,959	$	682	$	222	$	53,520
Loans and leases acquired with deteriorated credit quality	78,915		642,891		41,381		17,254		213,851		30,834		2,583		1,717		1,029,426

The following tables present the allowance for originated loan losses and the recorded investment in originated loans, by loan class, based on impairment method as of June 30, 2014 and December 31, 2013:

	June 30, 2014
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	155	$	7,704	$	179	$	1,425	$	297	$	—	$	1,613	$	1,024	$	201	$	653	$	13,251
ALLL for loans and leases collectively evaluated for impairment	10,961		84,425		627		25,484		4,068		612		7,688		15,773		704		13,322		163,664
Total allowance for loan and lease losses	$	11,116	$	92,129	$	806	$	26,909	$	4,365	$	612	$	9,301	$	16,797	$	905	$	13,975	$	176,915
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,573	$	87,046	$	1,962	$	10,811	$	376	$	46	$	15,448	$	3,754	$	1,934	$	937	$	124,887
Loans and leases collectively evaluated for impairment	339,448		6,280,050		176,937		1,281,402		413,046		131,005		1,055,641		2,118,921		117,486		376,200		12,290,136
Total loan and leases	$	342,021	$	6,367,096	$	178,899	$	1,292,213	$	413,422	$	131,051	$	1,071,089	$	2,122,675	$	119,420	$	377,137	$	12,415,023
	December 31, 2013
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	103	$	6,873	$	209	$	771	$	54	$	—	$	1,586	$	372	$	72	$	121	$	10,161
ALLL for loans and leases collectively evaluated for impairment	10,232		93,384		800		21,591		4,695		190		8,925		15,867		609		13,420		169,713
Total allowance for loan and lease losses	$	10,335	$	100,257	$	1,009	$	22,362	$	4,749	$	190	$	10,511	$	16,239	$	681	$	13,541	$	179,874
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,272	$	97,111	$	1,878	$	9,300	$	188	$	—	$	15,539	$	3,596	$	1,108	$	1,154	$	132,146
Loans and leases collectively evaluated for impairment	317,575		6,265,379		176,876		1,071,858		381,575		175,336		966,882		2,109,689		121,684		385,298		11,972,152
Total loan and leases	$	319,847	$	6,362,490	$	178,754	$	1,081,158	$	381,763	$	175,336	$	982,421	$	2,113,285	$	122,792	$	386,452	$	12,104,298

Troubled Debt Restructurings on Financing Receivables

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	2	$	720	1	$	494	1	$	71	—	$	—
Other commercial real estate	—	—		—	—		1	100		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	3	766		1	494		2	171		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	—	—		—	—		1	242		1	223
Commercial and industrial	4	2,069		—	—		—	—		1	22
Residential mortgage	6	260		—	—		—	—		1	106
Consumer	1	10		—	—		1	46		—	—
Total loan term extension	13	2,530		—	—		2	288		3	351
Below market interest rate
Commercial mortgage	3	1,991		5	1,563		7	2,035		—	—
Commercial and industrial	—	—		—	—		3	831		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	10	427		—	—		6	885		1	99
Revolving mortgage	—	—		—	—		1	99		—	—
Construction and land development - noncommercial	—	—		—	—		2	521		—	—
Total below market interest rate	14	2,783		5	1,563		22	5,124		1	99
Discharged from bankruptcy
Residential mortgage	1	13		—	—		2	87		—	—
Revolving mortgage	2	39		—	—		9	727		—	—
Consumer	2	8		—	—		—	—		—	—
Total discharged from bankruptcy	5	60		—	—		11	814		—	—
Total originated restructurings	35	$	6,139	6	$	2,057	37	$	6,397	4	$	450

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Originated loans
Interest only period provided
Commercial mortgage	6	$	2,600	2	$	708	8	$	3,406	—	$	—
Commercial and industrial	1	196		—	—		—	—		—	—
Other commercial real estate	—	—		—	—		1	100		—	—
Residential mortgage	—	—		—	—		1	630		—	—
Lease financing	2	144		—	—		—	—		—	—
Other	1	46		—	—		—	—		—	—
Total interest only	10	2,986		2	708		10	4,136		—	—
Loan term extension
Construction and land development - commercial	2	191		—	—		—	—		—	—
Commercial mortgage	5	2,584		—	—		5	1,972		1	223
Commercial and industrial	4	2,069		—	—		1	229		1	22
Lease financing	2	224		—	—		—	—		—	—
Residential mortgage	11	593		—	—		3	51		1	106
Consumer	3	44		—	—		1	46		—	—
Total loan term extension	27	5,705		—	—		10	2,298		3	351
Below market interest rate
Construction and land development - commercial	10	363		—	—		1	224		—	—
Commercial mortgage	15	6,591		6	2,011		12	5,819		—	—
Commercial and industrial	6	143		—	—		4	846		—	—
Other commercial real estate	1	365		—	—		3	753		—	—
Residential mortgage	18	820		1	140		14	1,579		1	99
Revolving mortgage	5	274		—	—		1	99		—	—
Construction & land development - noncommercial	8	1,248		—	—		2	521		—	—
Consumer	—	—		—	—		3	235		—	—
Total below market interest rate	63	9,804		7	2,151		40	10,076		1	99
Discharged from bankruptcy
Commercial mortgage	1	983		—	—		—	—		—	—
Residential mortgage	8	649		2	85		3	352		—	—
Revolving mortgage	7	442		—	—		30	2,383		3	93
Construction & land development - noncommercial	1	62		—	—		—	—		—	—
Consumer	3	26		—	—		—	—		—	—
Total discharged from bankruptcy	20	2,162		2	85		33	2,735		3	93
Total originated restructurings	120	$	20,657	11	$	2,944	93	$	19,245	7	$	543

The following tables provide the types of TDRs made during the three and six months ended June 30, 2014 and June 30, 2013 for acquired loans, as well as a summary of acquired loans that were modified as a TDR during the 12 months ended June 30, 2014 and June 30, 2013 that subsequently defaulted during the three and six months ended June 30, 2014 and June 30, 2013. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2014						Three months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	—	—		—	—		—	—		1	1,699
Residential mortgage	—	—		—	—		1	134		—	—
Total interest only	—	—		—	—		1	134		2	1,803
Loan term extension
Residential mortgage	1	53		1	53		—	—		—	—
Total loan term extension	1	53		1	53		—	—		—	—
Below market interest rate
Construction and land development - commercial	1	273		—	—		—	—		—	—
Commercial mortgage	5	1,811		—	—		1	813		—	—
Commercial and industrial	1	23		—	—		—	—		—	—
Residential mortgage	23	2,963		1	23		2	997		1	224
Total below market interest rate	30	5,070		1	23		3	1,810		1	224
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	57	$	6,951	4	$	170	4	$	1,944	3	$	2,027

	Six months ended June 30, 2014						Six months ended June 30, 2013
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
Acquired loans
Interest only period provided
Construction and land development - commercial	—	$	—	—	$	—	—	$	—	1	$	104
Commercial mortgage	2	—		2	44		1	290		2	1,989
Residential mortgage	—	—		—	—		2	177		—	—
Total interest only	2	—		2	44		3	467		3	2,093
Loan term extension
Construction and land development - commercial	1	276		—	—		—	—		—	—
Residential mortgage	1	53		1	53		1	199		—	—
Total loan term extension	2	329		1	53		1	199		—	—
Below market interest rate
Construction and land development - commercial	2	308		—	—		4	3,331		—	—
Commercial mortgage	9	5,060		1	39		5	11,871		3	3,145
Commercial and industrial	1	23		—	—		2	435		—	—
Residential mortgage	25	3,066		2	23		7	2,484		3	931
Total below market interest rate	37	8,457		3	62		18	18,121		6	4,076
Discharged from bankruptcy
Residential mortgage	26	1,828		2	94		—	—		—	—
Total discharged from bankruptcy	26	1,828		2	94		—	—		—	—
Total acquired restructurings	67	$	10,614	8	$	253	22	$	18,787	9	$	6,169

The following table provides a summary of total TDRs by accrual status.

	June 30, 2014						December 31, 2013
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans
Construction and land development - commercial	$	5,946	$	2,248	$	8,194	$	21,032	$	1,002	$	22,034
Commercial mortgage	99,843		32,019		131,862		113,323		23,387		136,710
Other commercial real estate	3,203		1,277		4,480		3,470		1,150		4,620
Commercial and industrial	10,935		818		11,753		9,838		1,142		10,980
Lease	233		144		377		49		—		49
Other	46		—		46		—		—		—
Total commercial TDRs	120,206		36,506		156,712		147,712		26,681		174,393
Noncommercial
Residential	29,598		2,919		32,517		23,343		3,663		27,006
Revolving mortgage	3,821		—		3,821		3,095		—		3,095
Construction and land development - noncommercial	1,934		—		1,934		651		457		1,108
Consumer and other	937		—		937		1,154		—		1,154
Total noncommercial TDRs	36,290		2,919		39,209		28,243		4,120		32,363
Total TDRs	$	156,496	$	39,425	$	195,921	$	175,955	$	30,801	$	206,756

The following table shows the accrual status of acquired and originated TDRs.

(Dollars in thousands)	June 30, 2014		December 31, 2013
Accruing TDRs:
Acquired	$	62,592	$	90,829
Originated	93,904		85,126
Total accruing TDRs	156,496		175,955
Nonaccruing TDRs:
Acquired	17,861		11,479
Originated	21,564		19,322
Total nonaccruing TDRs	39,425		30,801
All TDRs:
Acquired	80,453		102,308
Originated	115,468		104,448
Total TDRs	$	195,921	$	206,756

XML

Allowance for Loan and Lease Losses (Troubled Debt Restructuring) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
TDRs
Financing Receivable, Modifications [Line Items]
Accruing	$ 156,496	$ 175,955
Nonaccruing	39,425	30,801
Financing Receivable, Modifications, Recorded Investment	195,921	206,756
Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	46,485	53,170
Originated Loans | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	93,904	85,126
Nonaccruing	21,564	19,322
Financing Receivable, Modifications, Recorded Investment	115,468	104,448
Acquired Loans | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	62,592	90,829
Nonaccruing	17,861	11,479
Financing Receivable, Modifications, Recorded Investment	80,453	102,308
Commercial | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	120,206	147,712
Nonaccruing	36,506	26,681
Financing Receivable, Modifications, Recorded Investment	156,712	174,393
Commercial | Construction and land development | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	5,946	21,032
Nonaccruing	2,248	1,002
Financing Receivable, Modifications, Recorded Investment	8,194	22,034
Commercial | Construction and land development | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	659	544
Commercial | Mortgage | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	99,843	113,323
Nonaccruing	32,019	23,387
Financing Receivable, Modifications, Recorded Investment	131,862	136,710
Commercial | Mortgage | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	28,591	33,529
Commercial | Other commercial real estate | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	3,203	3,470
Nonaccruing	1,277	1,150
Financing Receivable, Modifications, Recorded Investment	4,480	4,620
Commercial | Other commercial real estate | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	1,385	1,610
Commercial | Commercial and industrial | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	10,935	9,838
Nonaccruing	818	1,142
Financing Receivable, Modifications, Recorded Investment	11,753	10,980
Commercial | Commercial and industrial | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	1,367	1,428
Commercial | Lease financing | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	233	49
Nonaccruing	144	0
Financing Receivable, Modifications, Recorded Investment	377	49
Commercial | Lease financing | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	624	832
Commercial | Other | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	46	0
Nonaccruing	0	0
Financing Receivable, Modifications, Recorded Investment	46	0
Noncommerical | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	36,290	28,243
Nonaccruing	2,919	4,120
Financing Receivable, Modifications, Recorded Investment	39,209	32,363
Noncommerical | Mortgage | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	29,598	23,343
Nonaccruing	2,919	3,663
Financing Receivable, Modifications, Recorded Investment	32,517	27,006
Noncommerical | Mortgage | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	13,836	14,701
Noncommerical | Construction and land development | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	1,934	651
Nonaccruing	0	457
Financing Receivable, Modifications, Recorded Investment	1,934	1,108
Noncommerical | Construction and land development | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	0	457
Noncommerical | Revolving mortgage | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	3,821	3,095
Nonaccruing	0	0
Financing Receivable, Modifications, Recorded Investment	3,821	3,095
Noncommerical | Revolving mortgage | Originated Loans
Financing Receivable, Modifications [Line Items]
Nonaccruing	0	0
Noncommerical | Consumer and Other | TDRs
Financing Receivable, Modifications [Line Items]
Accruing	937	1,154
Nonaccruing	0	0
Financing Receivable, Modifications, Recorded Investment	$ 937	$ 1,154

XML

Loans and Leases (Loans Acquired By Loan Class) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	$ 1,109,933	$ 1,029,426
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	788,117	781,307
Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	80,827	78,915
Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	637,481	642,891
Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	34,688	41,381
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	33,851	17,254
Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	1,270	866
Noncommerical
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	321,816	248,119
Noncommerical | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	270,688	213,851
Noncommerical | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	20,129	30,834
Noncommerical | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	28,759	2,583
Noncommerical | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Acquired	$ 2,240	$ 851

XML

Consolidated Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 26,550	$ 43,906	$ 48,916	$ 99,491
Unrealized gains and losses on securities:
Change in unrealized securities gains (losses) arising during period	31,550	(38,992)	43,449	(40,468)
Tax effect	(12,225)	15,269	(16,868)	15,834
Total change in unrealized gains and losses on securities, net of tax	19,325	(23,723)	26,581	(24,634)
Change in fair value of cash flow hedges:
Change in unrecognized loss on cash flow hedges	568	1,388	1,287	2,202
Tax effect	(218)	(548)	(496)	(869)
Total change in unrecognized loss on cash flow hedges, net of tax	350	840	791	1,333
Change in pension obligation:
Reclassification adjustment for gains included in income before income taxes	1,598	4,294	3,197	8,598
Tax effect	(622)	(1,682)	(1,244)	(3,367)
Total change in pension obligation, net of tax	976	2,612	1,953	5,231
Net current period other comprehensive income	20,651	(20,271)	29,325	(18,070)
Total comprehensive income	$ 47,201	$ 23,635	$ 78,241	$ 81,421

XML

Business Combinations

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combinations

NOTE B - BUSINESS COMBINATIONS

Merger Agreement with First Citizens Bancorporation, Inc.

On June 10, 2014, BancShares and First Citizens Bancorporation, Inc. (Bancorporation) entered into an Agreement and Plan of Merger (the Merger Agreement). Pursuant to the Merger Agreement, Bancorporation will merge with and into BancShares, whereupon the separate corporate existence of Bancorporation will cease and BancShares will continue (the Merger). The Merger is expected to be completed during the fourth quarter of 2014. Sometime thereafter, First Citizens Bank and Trust Company, Inc. (FCB-SC), a wholly-owned subsidiary of Bancorporation, will merge with and into FCB, whereupon the separate corporate existence of FCB-SC will cease and FCB will continue.

Under the terms of the Merger Agreement, each share of Bancorporation common stock will be converted into the right to receive 4.00 shares of BancShares' Class A common stock and $50.00 cash, unless the holder elects for each share to be converted into the right to receive 3.58 shares of BancShares' Class A common stock and 0.42 shares of BancShares' Class B common stock.

Consummation of the Merger is subject to customary conditions, including, among others, approval of the shareholders of each company and receipt of regulatory approvals.

The Merger Agreement includes certain termination rights for both BancShares and Bancorporation and under specified circumstances Bancorporation may be required to pay BancShares a termination fee equal to $6.5 million, $10.0 million or $22.6 million, depending on the circumstances of the termination.

1st Financial Services Corporation Merger

On January 1, 2014, FCB completed its merger with 1st Financial Services Corporation (1st Financial) of Hendersonville, NC and its wholly-owned subsidiary, Mountain 1st Bank & Trust Company (Mountain 1st). The merger allowed FCB to expand its presence in Western North Carolina. Mountain 1st had twelve branches located in Asheville, Brevard, Columbus, Etowah, Fletcher, Forest City, Hendersonville, Hickory, Marion, Shelby and Waynesville. FCB requested and received approval from the North Carolina Commissioner of Banks and the FDIC to close seven Mountain 1st branches due to their proximity to legacy FCB branches. The branches in Asheville, Brevard, Fletcher, Forest City, Hendersonville, Hickory and Marion were closed in May. All customer relationships assigned to those branches were transferred to the nearest FCB branch.

FCB paid $10.0 million to acquire 1st Financial, including payments of $8.0 million to the U.S. Treasury to acquire and subsequently retire 1st Financial's Troubled Asset Relief Program (TARP) obligation and $2.0 million paid to the shareholders of 1st Financial. As a result of the merger, FCB recorded $24.5 million in goodwill and $3.8 million in core deposit intangibles.

The 1st Financial transaction was accounted for under the acquisition method of accounting, and the purchased assets, assumed liabilities and identifiable intangible assets were recorded at their estimated fair values as of the acquisition date. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. During the second quarter of 2014, no adjustments were deemed necessary.

The following table provides the carrying value of acquired assets and assumed liabilities, as recorded by 1st Financial, the fair value adjustments calculated at the time of the merger and the resulting fair value recorded by FCB.

	January 1, 2014
(Dollars in thousands)	As recorded by 1st Financial			Fair value adjustments			As recorded by FCB
Assets
Cash and cash equivalents	$	28,194		$	—		$	28,194
Investment securities	246,890			(9,452		)	237,438
Loans held for sale	1,183			—			1,183
Restricted equity securities	3,105			671			3,776
Loans	338,170			(21,843		)	316,327
Less: allowance for loan losses	(7,796		)	7,796			—
Premises and equipment	3,871			(1,185		)	2,686
Other real estate owned	12,896			(1,305		)	11,591
Intangible asset	—			3,780			3,780
Other assets	16,811			(465		)	16,346
Total assets acquired	$	643,324		$	(22,003	)	$	621,321
Liabilities
Deposits:
Noninterest-bearing	$	152,444		$	—		$	152,444
Interest-bearing	477,881			1,546			479,427
Total deposits	630,325			1,546			631,871
Short-term borrowings	406			—			406
Other liabilities	3,392			167			3,559
Total liabilities assumed	$	634,123		$	1,713		635,836
Fair value of net liabilities assumed							14,515
Cash paid to shareholders							2,000
Cash paid to acquire TARP securities							8,000
Goodwill recorded for 1st Financial							$	24,515

Goodwill recorded for 1st Financial represents future revenues to be derived from the existing customer base, including efficiencies that will result from combining operations and other non-identifiable intangible assets. The 1st Financial transaction is a taxable asset acquisition, and goodwill resulting from the transaction is deductible for income tax purposes.

Merger costs related to the 1st Financial transaction are estimated to be between $5.5 million and $6.0 million. Loan related interest income generated from 1st Financial was approximately $4.2 million for the second quarter of 2014 and $8.6 million for the year to date.

All loans acquired with the 1st Financial transaction are accounted for under the expected cash flow method (ASC 310-30).

For loans acquired from 1st Financial, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the merger date were:

(Dollars in thousands)	January 1, 2014
Contractually required payments	$	414,233
Cash flows expected to be collected	400,622
Fair value at acquisition date	316,327

The recorded fair values of loans acquired in the 1st Financial transaction as of the merger date were as follows:

(Dollars in thousands)	January 1, 2014
Commercial:
Construction and land development	$	41,516
Commercial mortgage	123,925
Other commercial real estate	6,698
Commercial and industrial	29,126
Total commercial loans	201,265
Noncommercial:
Residential mortgage	113,177
Consumer	1,885
Total noncommercial loans	115,062
Total loans acquired from 1st Financial	$	316,327

XML

Employee Benefit Plans (Narrative) (Details) (Defined Benefit Pension)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Defined Benefit Pension
Defined Benefit Plan Disclosure [Line Items]
Assumed discount rate (percent)	4.90%	4.00%
Expected long-term rate of return on plan assets (percent)	7.50%	7.25%
Assumed rate of salary increases (percent)	4.00%	4.00%

XML

Other Real Estate Owned (Tables)

6 Months Ended

Jun. 30, 2014

Banking and Thrift [Abstract]

Changes in other real estate owned

The following table explains changes in other real estate owned during the six months ended June 30, 2014 and June 30, 2013.

(Dollars in thousands)	Covered			Noncovered			Total
Balance at December 31, 2012	$	102,577		$	43,513		$	146,090
Additions	41,315			16,615			57,930
Sales	(53,676		)	(21,026		)	(74,702		)
Writedowns	(5,383		)	(2,160		)	(7,543		)
Balance at June 30, 2013	$	84,833		$	36,942		$	121,775
Balance at December 31, 2013	$	47,081		$	36,898		$	83,979
Additions 1	16,186			20,485			36,671
Sales	(18,522		)	(19,150		)	(37,672		)
Writedowns	(4,609		)	(3,082		)	(7,691		)
Balance at June 30, 2014	$	40,136		$	35,151		$	75,287

¹ Noncovered additions include $11.6 million from the 1st Financial merger.

XML

Investments (Narrative) (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2014 investments	Jun. 30, 2014 investments	Dec. 31, 2013
Investments [Abstract]
Securities gains (losses)	$ 0	$ 0
Unrealized Losses Related to Marketability of Securities or Issuer's Ability to Honor Redemption Obligations	0	0	0
Fair Value, 12 months or more in unrealized loss position	1,109,829,000	1,109,829,000	56,830,000
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Acumulated In Investments	15,135,000	15,135,000	1,105,000
Number of investments in continuous unrealized loss position for more than twelve months	104	104
Investment value deemed to be OTTI	0	0
Investment securities, aggregate carrying value, pledged as collateral	$ 2,850,000,000	$ 2,850,000,000	$ 2,750,000,000

XML

Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) included the following as of June 30, 2014 and December 31, 2013:

	June 30, 2014									December 31, 2013
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive loss			Deferred tax benefit			Accumulated other comprehensive loss, net of tax
Unrealized gains (losses) on investment securities available for sale, net	$	26,817		$	10,327		$	16,490		$	(16,632	)	$	(6,541	)	$	(10,091	)
Unrealized loss on cash flow hedge	(5,933		)	(2,290		)	(3,643		)	(7,220		)	(2,786		)	(4,434		)
Funded status of defined benefit plan	(14,385		)	(5,595		)	(8,790		)	(17,582		)	(6,839		)	(10,743		)
Total	$	6,499		$	2,442		$	4,057		$	(41,434	)	$	(16,166	)	$	(25,268	)

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
(Dollars in thousands)	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(2,835	)	$	(3,993	)	$	(9,766	)	$	(16,594	)
Other comprehensive income before reclassifications	19,325			350			—			19,675
Amounts reclassified from accumulated other comprehensive loss	—			—			976			976
Net current period other comprehensive income	19,325			350			976			20,651
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Three months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	19,606		$	(5,799	)	$	(93,712	)	$	(79,905	)
Other comprehensive (loss) income before reclassifications	(23,723		)	840			—			(22,883		)
Amounts reclassified from accumulated other comprehensive loss	—			—			2,612			2,612
Net current period other comprehensive (loss) income	(23,723		)	840			2,612			(20,271		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)
	Six months ended June 30, 2014
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	(10,091	)	$	(4,434	)	$	(10,743	)	$	(25,268	)
Other comprehensive income before reclassifications	26,581			791			—			27,372
Amounts reclassified from accumulated other comprehensive loss	—			—			1,953			1,953
Net current period other comprehensive income	26,581			791			1,953			29,325
Ending balance	$	16,490		$	(3,643	)	$	(8,790	)	$	4,057
	Six months ended June 30, 2013
	Unrealized gains (losses) on available for sale securities1			Gains (losses) on cash flow hedges1			Defined benefit pension items1			Total
Beginning balance	$	20,517		$	(6,292	)	$	(96,331	)	$	(82,106	)
Other comprehensive (loss) income before reclassifications	(24,634		)	1,333			—			(23,301		)
Amounts reclassified from accumulated other comprehensive loss	—			—			5,231			5,231
Net current period other comprehensive (loss) income	(24,634		)	1,333			5,231			(18,070		)
Ending balance	$	(4,117	)	$	(4,959	)	$	(91,100	)	$	(100,176	)

¹ All amounts are net of tax.

The following table presents the amounts reclassified from accumulated other comprehensive income (loss) and the line item affected in the statement where net income is presented for the three and six months ended June 30, 2014 and June 30, 2013:

	Three months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(52	)	Employee benefits
Actuarial losses	(1,546		)	Employee benefits
	(1,598		)	Income before income taxes
	622			Provision for income taxes
	$	(976	)	Net income
Total reclassifications for the period	$	(976	)
	Three months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(53	)	Employee benefits
Actuarial losses	(4,241		)	Employee benefits
	(4,294		)	Income before income taxes
	1,682			Provision for income taxes
	$	(2,612	)	Net income
Total reclassifications for the period	$	(2,612	)
	Six months ended June 30, 2014
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(3,092		)	Employee benefits
	(3,197		)	Income before income taxes
	1,244			Provision for income taxes
	$	(1,953	)	Net income
Total reclassifications for the period	$	(1,953	)
	Six months ended June 30, 2013
Details about accumulated other comprehensive income (loss)	Amount reclassified from accumulated other comprehensive income (loss)1			Affected line item in the statement where net income is presented
Amortization of defined benefit pension items
Prior service costs	$	(105	)	Employee benefits
Actuarial losses	(8,493		)	Employee benefits
	(8,598		)	Income before income taxes
	3,367			Provision for income taxes
	$	(5,231	)	Net income
Total reclassifications for the period	$	(5,231	)