Loans

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



	March 31, 2014		December 31, 2013
Real estate loans:
Commercial	$	1,452,967	$	1,449,174
Construction:
Land acquisition & development	197,582		205,911
Residential	81,411		76,488
Commercial	75,356		69,236
Total construction loans	354,349		351,635
Residential	868,836		867,912
Agricultural	160,570		173,534
Total real estate loans	2,836,722		2,842,255
Consumer:
Indirect consumer	481,482		476,012
Other consumer	130,614		133,039
Credit card	58,310		62,536
Total consumer loans	670,406		671,587
Commercial	707,237		676,544
Agricultural	108,376		111,872
Other, including overdrafts	3,626		1,734
Loans held for investment	4,326,367		4,303,992
Mortgage loans held for sale	38,471		40,861
Total loans	$	4,364,838	$	4,344,853

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 dates indicated:



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of March 31, 2014	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	12,692	$	142	$	231	$	13,065	$	1,395,474	$	44,428	$	1,452,967
Construction:
Land acquisition & development	249		—		38		287		184,664		12,631		197,582
Residential	403		—		—		403		79,932		1,076		81,411
Commercial	8,389		—		—		8,389		66,747		220		75,356
Total construction loans	9,041		—		38		9,079		331,343		13,927		354,349
Residential	2,722		449		628		3,799		858,698		6,339		868,836
Agricultural	2,221		4,903		—		7,124		144,692		8,754		160,570
Total real estate loans	26,676		5,494		897		33,067		2,730,207		73,448		2,836,722
Consumer:
Indirect consumer	2,193		302		10		2,505		478,631		346		481,482
Other consumer	758		73		25		856		129,182		576		130,614
Credit card	183		244		363		790		57,502		18		58,310
Total consumer loans	3,134		619		398		4,151		665,315		940		670,406
Commercial	3,544		679		303		4,526		689,319		13,392		707,237
Agricultural	770		118		103		991		107,051		334		108,376
Other, including overdrafts	—		—		—		—		3,626		—		3,626
Loans held for investment	34,124		6,910		1,701		42,735		4,195,518		88,114		4,326,367
Mortgage loans originated for sale	—		—		—		—		38,471		—		38,471
Total loans	$	34,124	$	6,910	$	1,701	$	42,735	$	4,233,989	$	88,114	$	4,364,838



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2013	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,924	$	2,472	$	22	$	8,418	$	1,391,823	$	48,933	$	1,449,174
Construction:
Land acquisition & development	1,062		468		38		1,568		188,074		16,269		205,911
Residential	933		250		—		1,183		73,933		1,372		76,488
Commercial	584		—		—		584		68,427		225		69,236
Total construction loans	2,579		718		38		3,335		330,434		17,866		351,635
Residential	3,630		206		1,162		4,998		856,800		6,114		867,912
Agricultural	328		646		—		974		163,986		8,574		173,534
Total real estate loans	12,461		4,042		1,222		17,725		2,743,043		81,487		2,842,255
Consumer:
Indirect consumer	3,303		430		9		3,742		471,906		364		476,012
Other consumer	925		130		1		1,056		131,508		475		133,039
Credit card	364		187		515		1,066		61,451		19		62,536
Total consumer loans	4,592		747		525		5,864		664,865		858		671,587
Commercial	2,791		1,186		563		4,540		660,035		11,969		676,544
Agricultural	453		672		—		1,125		110,622		125		111,872
Other, including overdrafts	—		—		—		—		1,734		—		1,734
Loans held for investment	20,297		6,647		2,310		29,254		4,180,299		94,439		4,303,992
Mortgage loans originated for sale	—		—		—		—		40,861		—		40,861
Total loans	$	20,297	$	6,647	$	2,310	$	29,254	$	4,221,160	$	94,439	$	4,344,853

If interest on non-accrual loans had been accrued, such income would have been approximately $1,121 and $1,352 for the three months ended March 31, 2014 and 2013.

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, 2014	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	58,383	$	29,901	$	26,701	$	56,602	$	4,617
Construction:
Land acquisition & development	17,776		8,679		4,642		13,321		597
Residential	1,519		1,076		—		1,076		—
Commercial	390		274		83		357		83
Total construction loans	19,685		10,029		4,725		14,754		680
Residential	9,894		5,536		901		6,437		380
Agricultural	9,075		6,663		2,316		8,979		275
Total real estate loans	97,037		52,129		34,643		86,772		5,952
Commercial	16,178		11,579		2,885		14,464		1,458
Agricultural	745		609		84		693		84
Total	$	113,960	$	64,317	$	37,612	$	101,929	$	7,494



As of December 31, 2013	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	64,780	$	29,216	$	33,937	$	63,153	$	5,210
Construction:
Land acquisition & development	23,906		9,901		7,226		17,127		1,434
Residential	1,816		1,095		277		1,372		26
Commercial	397		279		84		363		85
Total construction loans	26,119		11,275		7,587		18,862		1,545
Residential	9,448		5,081		967		6,048		249
Agricultural	8,895		6,429		2,370		8,799		335
Total real estate loans	109,242		52,001		44,861		96,862		7,339
Commercial	15,448		10,684		2,901		13,585		1,504
Agricultural	177		39		86		125		86
Total	$	124,867	$	62,724	$	47,848	$	110,572	$	8,929

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



	Three Months Ended March 31,
	2014				2013
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized


Real estate:
Commercial	$	62,312	$	216	$	73,936	$	338
Construction:
Land acquisition & development	15,553		11		22,641		441
Residential	1,320		—		2,259		—
Commercial	360		2		7,898		—
Total construction loans	17,233		13		32,798		441
Residential	6,128		2		10,519		4
Agricultural	9,233		4		4,948		4
Total real estate loans	94,906		235		122,201		787
Commercial	14,268		14		12,746		18
Agricultural	288		6		632		4
Total	$	109,462	$	255	$	135,579	$	809

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 $1,111 and $1,335 for the three months ended March 31, 2014 and 2013, 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 $58,320 as of March 31, 2014, of which $38,633 were included in non-accrual loans and $19,687 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $59,792 as of December 31, 2013, of which $38,011 were included in non-accrual loans and $21,781 were on accrual status.

The following tables present information on the Company's troubled debt restructurings that occurred during the three months ended March 31, 2014:



	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended March 31, 2014	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Real estate:
Commercial	4	$	2,473	$	—	$	—	$	243	$	2,716
Total real estate loans	4	2,473		—		—		243		2,716
Commercial	2	226		—		—		30		256
Total loans restructured during period	6	$	2,699	$	—	$	—	$	273	$	2,972
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories.

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 months ended March 31, 2014 or 2013.

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. The Company had no troubled debt restructurings during the previous 12 months for which there was a payment default during the three months ended March 31, 2014.

At March 31, 2014, 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 loan 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 March 31, 2014	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	85,017	$	83,404	$	18,834	$	187,255
Construction:
Land acquisition & development	12,249		19,994		2,966		35,209
Residential	2,386		1,594		—		3,980
Commercial	272		461		82		815
Total construction loans	14,907		22,049		3,048		40,004
Residential	10,586		10,498		1,137		22,221
Agricultural	13,717		10,865		2,316		26,898
Total real estate loans	124,227		126,816		25,335		276,378
Consumer:
Indirect consumer	949		1,654		112		2,715
Other consumer	504		804		377		1,685
Credit card			239		1,671		1,910
Total consumer loans	1,453		2,697		2,160		6,310
Commercial	37,291		29,513		3,853		70,657
Agricultural	11,863		2,077		324		14,264
Total	$	174,834	$	161,103	$	31,672	$	367,609



As of December 31, 2013	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	79,747	$	86,426	$	24,840	$	191,013
Construction:
Land acquisition & development	13,211		19,677		7,329		40,217
Residential	1,859		1,649		277		3,785
Commercial	—		409		84		493
Total construction loans	15,070		21,735		7,690		44,495
Residential	7,500		7,188		4,184		18,872
Agricultural	13,597		10,245		2,370		26,212
Total real estate loans	115,914		125,594		39,084		280,592
Consumer:
Indirect consumer	875		1,524		115		2,514
Other consumer	573		969		268		1,810
Credit card	—		392		2,010		2,402
Total consumer loans	1,448		2,885		2,393		6,726
Commercial	33,318		23,833		3,745		60,896
Agricultural	8,401		1,788		86		10,275
Total	$	159,081	$	154,100	$	45,308	$	358,489

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.