Loans

The following table presents loans by class as of the dates indicated:



	March 31, 2012		December 31, 2011
Real estate loans:
Commercial	$	1,533,624	$	1,553,155
Construction:
Land acquisition & development	272,874		278,613
Residential	50,332		61,106
Commercial	65,196		61,054
Total construction loans	388,402		400,773
Residential	562,588		571,943
Agricultural	171,685		175,302
Total real estate loans	2,656,299		2,701,173
Consumer:
Indirect consumer	407,389		407,651
Other consumer	142,144		147,487
Credit card	56,540		60,933
Total consumer loans	606,073		616,071
Commercial	708,397		693,261
Agricultural	128,599		119,710
Other, including overdrafts	568		2,813
Loans held for investment	4,099,936		4,133,028
Mortgage loans held for sale	58,680		53,521
Total loans	$	4,158,616	$	4,186,549

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of March 31, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	18,492	$	2,956	$	1,044	$	22,492	$	1,450,034	$	61,098	$	1,533,624
Construction:
Land acquisition & development	3,445		290		402		4,137		210,261		58,476		272,874
Residential	—		1,185		137		1,322		45,047		3,963		50,332
Commercial	1,556		150		—		1,706		41,198		22,292		65,196
Total construction loans	5,001		1,625		539		7,165		296,506		84,731		388,402
Residential	2,995		1,079		1,919		5,993		541,219		15,376		562,588
Agricultural	6,007		435		—		6,442		160,573		4,670		171,685
Total real estate loans	32,495		6,095		3,502		42,092		2,448,332		165,875		2,656,299
Consumer:
Indirect consumer	2,024		128		—		2,152		404,831		406		407,389
Other consumer	722		157		128		1,007		140,243		894		142,144
Credit card	507		194		660		1,361		55,154		25		56,540
Total consumer loans	3,253		479		788		4,520		600,228		1,325		606,073
Commercial	13,709		1,460		629		15,798		680,391		12,208		708,397
Agricultural	1,026		13		366		1,405		125,692		1,502		128,599
Other, including overdrafts	—		—		—		—		568		—		568
Loans held for investment	50,483		8,047		5,285		63,815		3,855,211		180,910		4,099,936
Mortgage loans originated for sale	—		—		—		—		58,680		—		58,680
Total loans	$	50,483	$	8,047	$	5,285	$	63,815	$	3,913,891	$	180,910	$	4,158,616



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2011	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	22,124	$	7,871	$	630	$	30,625	$	1,455,139	$	67,391	$	1,553,155
Construction:
Land acquisition & development	5,251		2,448		867		8,566		208,134		61,913		278,613
Residential	415		—		—		415		56,219		4,472		61,106
Commercial	1,698		—		—		1,698		34,820		24,536		61,054
Total construction loans	7,364		2,448		867		10,679		299,173		90,921		400,773
Residential	4,669		973		1,798		7,440		546,278		18,225		571,943
Agricultural	4,103		1,831		—		5,934		166,119		3,249		175,302
Total real estate loans	38,260		13,123		3,295		54,678		2,466,709		179,786		2,701,173
Consumer:
Indirect consumer	3,078		370		45		3,493		403,695		463		407,651
Other consumer	1,479		436		60		1,975		144,625		887		147,487
Credit card	604		375		585		1,564		59,343		26		60,933
Total consumer loans	5,161		1,181		690		7,032		607,663		1,376		616,071
Commercial	13,721		3,464		405		17,590		657,609		18,062		693,261
Agricultural	476		215		110		801		118,150		759		119,710
Other, including overdrafts	—		2		—		2		2,811		—		2,813
Loans held for investment	57,618		17,985		4,500		80,103		3,852,942		199,983		4,133,028
Mortgage loans originated for sale	—		—		—		—		53,521		—		53,521
Total loans	$	57,618	$	17,985	$	4,500	$	80,103	$	3,906,463	$	199,983	$	4,186,549

If interest on non-accrual loans had been accrued, such income would have approximated $2,702 and $2,838 for the three months ended March 31, 2012 and 2011, respectively.

The Company considers impaired loans to include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:



	As of March 31, 2012
	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	99,746	$	64,702	$	23,742	$	88,444	$	7,083
Construction:
Land acquisition & development	72,504		23,982		36,379		60,361		12,632
Residential	5,212		2,203		1,760		3,963		276
Commercial	24,403		11,218		11,074		22,292		3,978
Total construction loans	102,119		37,403		49,213		86,616		16,886
Residential	17,272		8,318		7,627		15,945		2,451
Agricultural	7,526		7,028		—		7,028		—
Total real estate loans	226,663		117,451		80,582		198,033		26,420
Commercial	20,200		5,737		7,822		13,559		4,122
Agricultural	1,566		1,028		486		1,514		491
Total	$	248,429	$	124,216	$	88,890	$	213,106	$	31,033



	As of December 31, 2011
	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	97,745	$	62,769	$	23,218	$	85,987	$	6,741
Construction:
Land acquisition & development	73,258		22,300		39,131		61,431		12,084
Residential	13,721		10,427		2,044		12,471		312
Commercial	26,647		3,510		21,026		24,536		5,042
Total construction loans	113,626		36,237		62,201		98,438		17,438
Residential	18,305		2,678		15,626		18,304		3,844
Agricultural	8,018		7,470		—		7,470		—
Total real estate loans	237,694		109,154		101,045		210,199		28,023
Commercial	26,348		7,354		12,284		19,638		4,664
Agricultural	759		496		263		759		151
Total	$	264,801	$	117,004	$	113,592	$	230,596	$	32,838

The following table presents the average recorded investment in and income recognized on impaired loans for the periods indicated:



	Three months ended March 31, 2012				Three months ended March 31, 2011
	Average				Average
	Recorded		Income		Recorded	Income
	Investment		Recognized		Investment	Recognized
Real estate:
Commercial	$	88,657	$	351	74,768	$	92
Construction:
Land acquisition & development	62,227		16		45,552	45
Residential	9,208		—		18,121	19
Commercial	24,265		—		19,321	—
Total construction loans	95,700		16		82,994	64
Residential	18,072		9		21,070	—
Agricultural	7,268		32		3,677	2
Total real estate loans	209,697		408		182,509	158
Commercial	17,885		22		34,397	42
Agricultural	1,234		4		920	—
Total	$	228,816	$	434	217,826	$	200

The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principle. Interest income is subsequently recognized only to the extent cash payments are received in excess of principle due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $2,683 and $2,810 for the three months ended March 31, 2012 and 2011, respectively.

Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.

Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume.

The Company had loans renegotiated in troubled debt restructurings of $88,949 as of March 31, 2012, of which $52,111 were included in non-accrual loans and $36,838 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $94,827 as of December 31, 2011, of which $57,451 were included in non-accrual loans and $37,376 were on accrual status.

The following table presents information on the Company's troubled debt restructurings that occurred during the three months ended March 31, 2012:



	Number of Notes	Type of Concession								Principle Balance at Restructure Date
	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principle Balance at Restructure Date
Real estate:
Commercial	9	$	—	$	—	$	1,089	$	8,463	$	9,552
Construction:
Land acquisition & development	2	—		—		—		623		623
Commercial	1	—		—		—		3,155		3,155
Total construction loans	3	—		—		—		3,778		3,778
Residential	2	568		25		—		—		593
Total real estate loans	14	568		25		1,089		12,241		13,923
Commercial	5	13		98		—		80		191
Total	19	$	581	$	123	$	1,089	$	12,321	$	14,114


(1)	Other includes concessions that reduce or defer payments for a specified period of time and/or extend amortization schedules.

For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principle loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three months ended March 31, 2012.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the three month period ended March 31, 2012. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification. Four of the five troubled debt restructurings with payment defaults in the following table are on non-accrual status.



	As of March 31, 2012
	Number of Notes	Balance
Real estate:
Land acquisition & development	1	505
Total construction loans	1	505
Agriculture	2	1,624
Total real estate loans	3	2,129
Agricultural	2	328
Total	5	$	2,457

At March 31, 2012, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:



	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
As of March 31, 2012
Real estate:
Commercial	$	117,979	$	149,852	$	25,252	$	293,083
Construction:
Land acquisition & development	34,909		34,806		35,878		105,593
Residential	1,536		5,428		1,760		8,724
Commercial	55		11,061		11,234		22,350
Total construction loans	36,500		51,295		48,872		136,667
Residential	8,963		18,587		7,141		34,691
Agricultural	22,993		16,128		395		39,516
Total real estate loans	186,435		235,862		81,660		503,957
Consumer:
Indirect consumer	1,033		1,755		202		2,990
Other consumer	825		1,461		585		2,871
Credit card	—		558		2,757		3,315
Total consumer loans	1,858		3,774		3,544		9,176
Commercial	45,730		33,714		7,906		87,350
Agricultural	8,048		2,815		486		11,349
Total	$	242,071	$	276,165	$	93,596	$	611,832



	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
As of December 31, 2011
Real estate:
Commercial	$	129,046	$	153,320	$	25,087	$	307,453
Construction:
Land acquisition & development	37,294		31,873		38,761		107,928
Residential	9,448		5,528		2,044		17,020
Commercial	—		2,620		21,916		24,536
Total construction loans	46,742		40,021		62,721		149,484
Residential	8,149		15,706		15,140		38,995
Agricultural	16,037		18,498		395		34,930
Total real estate loans	199,974		227,545		103,343		530,862
Consumer:
Indirect consumer	1,141		1,729		247		3,117
Other consumer	745		1,361		674		2,780
Credit card	—		486		2,789		3,275
Total consumer loans	1,886		3,576		3,710		9,172
Commercial	34,698		33,478		12,849		81,025
Agricultural	4,345		5,195		263		9,803
Total	$	240,903	$	269,794	$	120,165	$	630,862

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.