Loans

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



	September 30, 2012		December 31, 2011
Real estate loans:
Commercial	$	1,513,784	$	1,553,155
Construction:
Land acquisition & development	233,082		278,613
Residential	50,895		61,106
Commercial	56,097		61,054
Total construction loans	340,074		400,773
Residential	639,235		571,943
Agricultural	175,395		175,302
Total real estate loans	2,668,488		2,701,173
Consumer:
Indirect consumer	431,449		407,651
Other consumer	139,984		147,487
Credit card	58,324		60,933
Total consumer loans	629,757		616,071
Commercial	672,100		693,261
Agricultural	135,467		119,710
Other, including overdrafts	1,359		2,813
Loans held for investment	4,107,171		4,133,028
Mortgage loans held for sale	72,880		53,521
Total loans	$	4,180,051	$	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 September 30, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	15,120	$	3,061	$	643	$	18,824	$	1,443,893	$	51,067	$	1,513,784
Construction:
Land acquisition & development	3,518		326		—		3,844		199,991		29,247		233,082
Residential	1,049		—		—		1,049		47,077		2,769		50,895
Commercial	1,875		—		—		1,875		43,703		10,519		56,097
Total construction loans	6,442		326		—		6,768		290,771		42,535		340,074
Residential	3,674		1,064		2,382		7,120		621,601		10,514		639,235
Agricultural	6,419		22		217		6,658		163,943		4,794		175,395
Total real estate loans	31,655		4,473		3,242		39,370		2,520,208		108,910		2,668,488
Consumer:
Indirect consumer	2,792		385		47		3,224		427,774		451		431,449
Other consumer	822		129		24		975		137,904		1,105		139,984
Credit card	368		280		528		1,176		57,125		23		58,324
Total consumer loans	3,982		794		599		5,375		622,803		1,579		629,757
Commercial	5,185		1,808		823		7,816		652,420		11,864		672,100
Agricultural	234		146		—		380		134,509		578		135,467
Other, including overdrafts							—		1,359		—		1,359
Loans held for investment	41,056		7,221		4,664		52,941		3,931,299		122,931		4,107,171
Mortgage loans originated for sale	—		—		—		—		72,880		—		72,880
Total loans	$	41,056	$	7,221	$	4,664	$	52,941	$	4,004,179	$	122,931	$	4,180,051



							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 $456 and $819 for the three months ended September 30, 2012 and 2011, respectively, and approximated $1,701 and $2,283 for the nine months ended September 30, 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 September 30, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	88,185	$	61,509	$	17,143	$	78,652	$	4,453
Construction:
Land acquisition & development	43,595		19,660		12,558		32,218		4,137
Residential	3,333		1,257		1,744		3,001		276
Commercial	13,071		1,379		9,140		10,519		588
Total construction loans	59,999		22,296		23,442		45,738		5,001
Residential	12,044		5,570		5,070		10,640		1,736
Agricultural	5,929		3,293		2,137		5,430		158
Total real estate loans	166,157		92,668		47,792		140,460		11,348
Commercial	13,824		8,338		5,070		13,408		2,924
Agricultural	642		178		412		590		412
Total	$	180,623	$	101,184	$	53,274	$	154,458	$	14,684



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 tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:



	Three Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment	Income Recognized


Real estate:
Commercial	$	81,313	$	366	86,347	$	188
Construction:
Land acquisition & development	36,206		30		66,470	3
Residential	3,151		—		17,627	18
Commercial	10,817		—		23,441	—
Total construction loans	50,174		30		107,538	21
Residential	12,416		1		22,972	160
Agricultural	5,173		9		7,694	56
Total real estate loans	149,076		406		224,551	425
Commercial	15,992		21		33,634	31
Agricultural	748		4		885	—
Total	$	165,816	$	431	259,070	$	456



	Nine Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized


Real estate:
Commercial	$	82,689	$	1,037	$	83,479	$	390
Construction:
Land acquisition & development	49,528		76		54,494		90
Residential	8,591		—		17,248		55
Commercial	18,601		—		20,371		—
Total construction loans	76,720		76		92,113		145
Residential	14,667		22		19,101		257
Agricultural	7,090		41		6,392		98
Total real estate loans	181,166		1,176		201,085		890
Commercial	16,129		65		32,634		96
Agricultural	1,039		19		925		—
Total	$	198,334	$	1,260	$	234,644	$	986

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 principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $452 and $812 for the three months ended September 30, 2012 and 2011, respectively, and approximately $1,688 and $2,263 for the nine months ended September 30, 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 $90,410 as of September 30, 2012, of which $54,982 were included in non-accrual loans and $35,428 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 tables present information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2012:



		Type of Concession
Three Months Ended September 30, 2012	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Real estate:
Commercial	2	$	—	$	432	$	628	$	—	$	1,060
Construction:
Residential	1	—		—		233		—		233
Total construction loans	1	—		—		233		—		233
Agricultural	1	—		154		—		—		154
Total real estate loans	4	—		586		861		—		1,447
Commercial	1	—		—		—		35		35
Total loans restructured during period	5	$	—	$	586	$	861	$	35	$	1,482



	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2012		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	14	$	—	$	432	$	4,504	$	8,612	$	13,548
Construction:
Land acquisition & development	3	—		229		—		623		852
Residential	1	—		—		233		—		233
Commercial	1	—		—		—		3,155		3,155
Total construction loans	5	—		229		233		3,778		4,240
Residential	2	568		25		—		—		593
Agricultural	1	—		154		—		—		154
Total real estate loans	22	568		840		4,737		12,390		18,535
Consumer:
Other	1	—		69		—		—		69
Total consumer loans	1	—		69		—		—		69
Commercial	6	13		98		—		115		226
Total loans restructured during period	29	$	581	$	1,007	$	4,737	$	12,505	$	18,830


(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 principal 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 and nine months ended September 30, 2012 or 2011.

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 periods indicated. 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.



	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	—	$	—	2	$	507
Construction:
Land acquisition & development	—	—		1	468
Total construction loans	—	—		1	468
Residential	2	599		2	599
Total real estate loans	2	599		5	1,574
Total	2	$	599	5	$	1,574

At September 30, 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:



As of September 30, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	115,540	$	143,023	$	19,401	$	277,964
Construction:
Land acquisition & development	33,362		25,369		16,198		74,929
Residential	1,444		3,148		1,392		5,984
Commercial	—		799		9,757		10,556
Total construction loans	34,806		29,316		27,347		91,469
Residential	6,901		11,246		8,295		26,442
Agricultural	16,824		11,220		2,532		30,576
Total real estate loans	174,071		194,805		57,575		426,451
Consumer:
Indirect consumer	964		1,682		96		2,742
Other consumer	853		1,583		552		2,988
Credit card	—		358		2,319		2,677
Total consumer loans	1,817		3,623		2,967		8,407
Commercial	43,282		29,318		5,225		77,825
Agricultural	4,136		2,080		412		6,628
Total	$	223,306	$	229,826	$	66,179	$	519,311



As of December 31, 2011	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
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.