NOTE 2 – LOANS AND LEASES

The Company's loan and lease portfolio is disaggregated into the following segments: commercial and industrial; real estate; credit card; and all other loans and leases. The real estate segment is further disaggregated into the following classes: consumer mortgage; home equity; agricultural; commercial and industrial-owner occupied; construction, acquisition and development; and commercial real estate. A summary of gross loans and leases by segment and class as of the dates indicated follows:

	March 31,				December 31,
	2012		2011		2011
	(In thousands)

Commercial and industrial	$	1,452,492	$	1,497,380	$	1,484,967
Real estate
Consumer mortgages		1,937,997		1,958,367		1,945,190
Home equity		501,331		531,406		514,362
Agricultural		256,683		250,393		239,487
Commercial and industrial-owner occupied		1,287,542		1,316,824		1,301,575
Construction, acquisition and development		858,110		1,117,335		908,362
Commercial real estate		1,742,001		1,831,226		1,754,022
Credit cards		100,527		100,732		106,281
All other		640,855		651,946		657,012
Total	$	8,777,538	$	9,255,609	$	8,911,258

The following table shows the Company's loans and leases, net of unearned income, as of March 31, 2012 by segment, class and geographical location:

	Alabama and Florida Panhandle		Arkansas*		Mississippi*		Missouri		Greater Memphis Area		Tennessee*		Texas and Louisiana		Other		Total
	(In thousands)
Commercial and industrial	$	56,958	$	165,503	$	333,153	$	51,881	$	16,991	$	78,288	$	249,569	$	489,384	$	1,441,727
Real estate
Consumer mortgages		108,285		270,476		757,160		55,566		82,585		166,615		444,094		53,216		1,937,997
Home equity		57,995		39,922		170,628		24,849		67,484		75,894		62,253		2,306		501,331
Agricultural		5,775		83,839		72,900		3,937		9,262		13,199		62,470		5,301		256,683
Commercial and industrial-owner occupied		114,985		166,065		453,201		68,002		95,874		95,133		244,967		49,315		1,287,542
Construction, acquisition and development		104,362		69,566		244,459		48,115		95,198		92,608		185,781		18,021		858,110
Commercial real estate		203,365		342,591		342,816		219,999		115,186		101,142		362,700		54,202		1,742,001
Credit cards		-		-		-		-		-		-		-		100,527		100,527
All other		31,347		88,646		195,309		5,662		57,105		47,204		95,521		91,211		612,005
Total	$	683,072	$	1,226,608	$	2,569,626	$	478,011	$	539,685	$	670,083	$	1,707,355	$	863,483	$	8,737,923
* Excludes the Greater Memphis Area.

The Company's loan concentrations which exceed 10% of total loans are reflected in the preceding tables. A substantial portion of construction, acquisition and development loans are secured by real estate in markets in which the Company is located. The Company's general loan policy prohibits the use of interest reserves on loans originated after March 2010. Certain of the construction, acquisition and development loans were structured with interest-only terms. A portion of the consumer mortgage and commercial real estate portfolios originated through the permanent financing of construction, acquisition and development loans. The prolonged economic downturn has negatively impacted many borrowers' and guarantors' ability to make payments under the terms of the loans as their liquidity has been depleted. Accordingly, the ultimate collectability of a substantial portion of these loans and the recovery of a substantial portion of the carrying amount of other real estate owned are susceptible to changes in real estate values in the corresponding market areas. Continued economic distress could negatively impact additional borrowers' and guarantors' ability to repay their debt which would make more of the Company's loans collateral dependent.

The following tables provide details regarding the aging of the Company's loan and lease portfolio, net of unearned income, by segment and class at March 31, 2012 and December 31, 2011:

	March 31, 2012
	30-59 Days Past Due	60-89 Days Past Due	90+ Days Past Due	Total Past Due	Current	Total Outstanding	90+ Days Past Due still Accruing
	(In thousands)
Commercial and industrial	$3,831	$1,511	$3,392	$8,734	$1,432,993	$1,441,727	$10
Real estate
Consumer mortgages	10,482	4,776	17,830	33,088	1,904,909	1,937,997	1,314
Home equity	1,832	769	288	2,889	498,442	501,331	-
Agricultural	638	25	1,518	2,181	254,502	256,683	-
Commercial and industrial-owner occupied	2,493	1,601	8,603	12,697	1,274,845	1,287,542	-
Construction, acquisition and development	9,860	331	16,142	26,333	831,777	858,110	-
Commercial real estate	5,165	1,540	8,979	15,684	1,726,317	1,742,001	-
Credit cards	377	360	587	1,324	99,203	100,527	228
All other	1,740	359	372	2,471	609,534	612,005	146
Total	$36,418	$11,272	$57,711	$105,401	$8,632,522	$8,737,923	$1,698

	December 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Outstanding		90+ Days Past Due still Accruing
	(In thousands)
Commercial and industrial	$	5,571	$	4,209	$	4,193	$	13,973	$	1,459,755	$	1,473,728	$	12
Real estate
Consumer mortgages		15,740		6,485		14,569		36,794		1,908,396		1,945,190		2,974
Home equity		1,837		265		594		2,696		511,666		514,362		-
Agricultural		666		54		719		1,439		238,048		239,487		-
Commercial and industrial-owner occupied		2,199		844		12,977		16,020		1,285,555		1,301,575		-
Construction, acquisition and development		4,826		4,955		33,584		43,365		864,997		908,362		-
Commercial real estate		3,778		2,702		9,397		15,877		1,738,145		1,754,022		-
Credit cards		595		303		697		1,595		104,686		106,281		299
All other		2,124		390		1,579		4,093		623,211		627,304		149
Total	$	37,336	$	20,207	$	78,309	$	135,852	$	8,734,459	$	8,870,311	$	3,434

The Company utilizes an internal loan classification system to grade loans according to certain credit quality indicators. These credit quality indicators include, but are not limited to, recent credit performance, delinquency, liquidity, cash flows, debt coverage ratios, collateral type and loan-to-value ratio. The Company's internal loan classification system is compatible with classifications used by the Federal Deposit Insurance Corporation, as well as other regulatory agencies. Loans may be classified as follows:

Pass: Loans which are performing as agreed with few or no signs of weakness. These loans show sufficient cash flow, capital and collateral to repay the loan as agreed. Borrowers for these loans include well capitalized public corporations.

Special Mention: Loans where potential weaknesses have developed which could cause a more serious problem if not corrected.

Substandard: Loans where well-defined weaknesses exist that require corrective action to prevent further deterioration.

Doubtful: Loans having all the characteristics of Substandard and which have deteriorated to a point where collection and liquidation in full is highly questionable.

Loss: Loans that are considered uncollectible or with limited possible recovery.

Impaired: Loans for which it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement and for which a specific impairment reserve has been considered.

The following tables provide details of the Company's loan and lease portfolio, net of unearned income, by segment, class and internally assigned grade at March 31, 2012 and December 31, 2011:

	March 31, 2012
	Pass	Special Mention	Substandard	Doubtful	Loss	Impaired	Total
	(In thousands)
Commercial and industrial	$1,376,983	$6,449	$47,783	$4,159	$247	$6,106	$1,441,727
Real estate
Consumer mortgage	1,729,187	23,918	151,679	4,351	446	28,416	1,937,997
Home equity	476,300	2,793	19,626	754	275	1,583	501,331
Agricultural	229,865	1,936	21,763	20	-	3,099	256,683
Commercial and industrial-owner occupied	1,151,368	24,662	83,041	230	89	28,152	1,287,542
Construction, acquisition and development	601,396	22,939	121,556	956	-	111,263	858,110
Commercial real estate	1,491,021	47,535	171,891	72	-	31,482	1,742,001
Credit Cards	100,527	-	-	-	-	-	100,527
All other	575,399	16,685	18,222	678	10	1,011	612,005
Total	$7,732,046	$146,917	$635,561	$11,220	$1,067	$211,112	$8,737,923

	December 31, 2011
	Pass	Special Mention	Substandard	Doubtful	Loss	Impaired	Total
	(In thousands)
Commercial and industrial	$1,415,731	$4,947	$43,549	$1,263	$405	$7,833	$1,473,728
Real estate
Consumer mortgage	1,742,593	17,914	148,267	4,434	189	31,793	1,945,190
Home equity	492,235	2,775	17,050	1,134	493	675	514,362
Agricultural	213,280	3,795	19,296	20	-	3,096	239,487
Commercial and industrial-owner occupied	1,167,220	18,280	90,778	496	-	24,801	1,301,575
Construction, acquisition and development	619,497	23,429	136,412	845	-	128,179	908,362
Commercial real estate	1,501,196	37,409	179,295	-	-	36,122	1,754,022
Credit Cards	105,867	41	175	188	10	-	106,281
All other	587,970	16,104	20,263	470	73	2,424	627,304
Total	$7,845,589	$124,694	$655,085	$8,850	$1,170	$234,923	$8,870,311

The following tables provide details regarding impaired loans and leases, net of unearned income, by segment and class at March 31, 2012 and December 31, 2011:

	March 31, 2012
	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance:
Commercial and industrial	$	4,931	$	5,684	$	-	$	3,466	$	38
Real estate
Consumer mortgage		14,610		18,635		-		13,178		88
Home equity		874		1,017		-		711		2
Agricultural		1,718		2,895		-		1,602		17
Commercial and industrial-owner occupied		16,390		21,261		-		9,438		98
Construction, acquisition and development		64,770		90,905		-		60,417		348
Commercial real estate		16,947		27,306		-		16,122		154
All other		723		1,035		-		788		6
Total	$	120,963	$	168,738	$	-	$	105,722	$	751

With an allowance:
Commercial and industrial	$	1,175	$	1,293	$	1,548	$	3,783	$	36
Real estate
Consumer mortgage		13,806		14,867		3,977		17,469		170
Home equity		709		709		178		258		-
Agricultural		1,381		1,422		386		1,483		-
Commercial and industrial-owner occupied		11,762		12,299		3,051		16,334		73
Construction, acquisition and development		46,493		51,180		11,736		60,877		500
Commercial real estate		14,535		15,616		4,410		18,416		148
All other		288		359		260		327		6
Total	$	90,149	$	97,745	$	25,546	$	118,947	$	933

Total:
Commercial and industrial	$	6,106	$	6,977	$	1,548	$	7,249	$	74
Real estate
Consumer mortgage		28,416		33,502		3,977		30,647		258
Home equity		1,583		1,726		178		969		2
Agricultural		3,099		4,317		386		3,085		17
Commercial and industrial-owner occupied		28,152		33,560		3,051		25,772		171
Construction, acquisition and development		111,263		142,085		11,736		121,294		848
Commercial real estate		31,482		42,922		4,410		34,538		302
All other		1,011		1,394		260		1,115		12
Total	$	211,112	$	266,483	$	25,546	$	224,669	$	1,684

	December 31, 2011
	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance:
Commercial and industrial	$	4,874	$	6,854	$	-	$	3,879	$	78
Real estate
Consumer mortgage		16,883		19,538		-		19,628		397
Home equity		627		771		-		541		1
Agricultural		1,549		2,676		-		2,502		20
Commercial and industrial-owner occupied		6,973		9,191		-		11,598		185
Construction, acquisition and development		69,843		89,782		-		107,596		941
Commercial real estate		15,184		24,198		-		20,702		311
All other		1,284		1,668		-		1,169		67
Total	$	117,217	$	154,678	$	-	$	167,615	$	2,000

With an allowance:
Commercial and industrial	$	2,959	$	3,301	$	4,071	$	3,558	$	49
Real estate
Consumer mortgage		14,910		16,224		4,386		14,960		323
Home equity		48		276		48		504		3
Agricultural		1,547		1,547		380		3,164		18
Commercial and industrial-owner occupied		17,828		21,085		3,601		10,329		146
Construction, acquisition and development		58,336		67,426		21,581		80,957		1,651
Commercial real estate		20,938		21,422		5,324		27,210		851
All other		1,140		1,140		317		1,307		8
Total	$	117,706	$	132,421	$	39,708	$	141,989	$	3,049

Total:
Commercial and industrial	$	7,833	$	10,155	$	4,071	$	7,437	$	127
Real estate
Consumer mortgage		31,793		35,762		4,386		34,588		720
Home equity		675		1,047		48		1,045		4
Agricultural		3,096		4,223		380		5,666		38
Commercial and industrial-owner occupied		24,801		30,276		3,601		21,927		331
Construction, acquisition and development		128,179		157,208		21,581		188,553		2,592
Commercial real estate		36,122		45,620		5,324		47,912		1,162
All other		2,424		2,808		317		2,476		75
Total	$	234,923	$	287,099	$	39,708	$	309,604	$	5,049

The following tables provide details regarding impaired real estate construction, acquisition and development loans and leases, net of unearned income, by collateral type at March 31, 2012 and December 31, 2011:

	March 31, 2012
	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		8,174		11,563		-		6,703		56
Recreation and all other loans		367		539		-		368		7
Commercial construction		3,241		4,088		-		1,522		34
Commercial acquisition and development		11,927		14,213		-		12,845		77
Residential acquisition and development		41,061		60,502		-		38,979		174
Total	$	64,770	$	90,905	$	-	$	60,417	$	348

With an allowance:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		3,085		3,085		441		5,550		35
Recreation and all other loans		-		-		-		-		-
Commercial construction		318		839		95		2,395		8
Commercial acquisition and development		9,888		10,028		1,598		10,346		71
Residential acquisition and development		33,202		37,228		9,602		42,586		386
Total	$	46,493	$	51,180	$	11,736	$	60,877	$	500

Total:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		11,259		14,648		441		12,253		91
Recreation and all other loans		367		539		-		368		7
Commercial construction		3,559		4,927		95		3,917		42
Commercial acquisition and development		21,815		24,241		1,598		23,191		148
Residential acquisition and development		74,263		97,730		9,602		81,565		560
Total	$	111,263	$	142,085	$	11,736	$	121,294	$	848

	December 31, 2011
	Recorded Investment in Impaired Loans		Unpaid Principal Balance of Impaired Loans		Related Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance:
Multi-family construction	$	1,067	$	2,259	$	-	$	5,474	$	18
One-to-four family construction		7,931		9,313		-		9,269		94
Recreation and all other loans		372		545		-		491		9
Commercial construction		633		917		-		9,663		83
Commercial acquisition and development		17,130		19,855		-		20,640		99
Residential acquisition and development		42,710		56,893		-		62,059		638
Total	$	69,843	$	89,782	$	-	$	107,596	$	941

With an allowance:
Multi-family construction	$	-	$	-	$	-	$	571	$	-
One-to-four family construction		5,313		6,083		1,589		5,334		108
Recreation and all other loans		-		-		-		271		2
Commercial construction		4,387		5,128		886		7,289		126
Commercial acquisition and development		5,091		7,728		1,418		12,965		429
Residential acquisition and development		43,545		48,487		17,688		54,527		986
Total	$	58,336	$	67,426	$	21,581	$	80,957	$	1,651

Total:
Multi-family construction	$	1,067	$	2,259	$	-	$	6,045	$	18
One-to-four family construction		13,244		15,396		1,589		14,603		202
Recreation and all other loans		372		545		-		762		11
Commercial construction		5,020		6,045		886		16,952		209
Commercial acquisition and development		22,221		27,583		1,418		33,605		528
Residential acquisition and development		86,255		105,380		17,688		116,586		1,624
Total	$	128,179	$	157,208	$	21,581	$	188,553	$	2,592

Loans considered impaired under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310, Receivables (“FASB ASC 310”), are loans for which, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company's recorded investment in loans considered impaired at March 31, 2012 and December 31, 2011 was $211.1 million and $234.9 million, respectively. At March 31, 2012 and December 31, 2011, $90.1 million and $117.7 million, respectively, of those impaired loans had a valuation allowance of $25.5 million and $39.7 million, respectively. The remaining balance of impaired loans of $121.0 million and $117.2 million at March 31, 2012 and December 31, 2011, respectively, were charged down to fair value, less estimated selling costs which approximated net realizable value. Therefore, such loans did not have an associated valuation allowance. Impaired loans that were characterized as troubled debt restructurings (“TDRs”) totaled $51.9 million and $58.0 million at March 31, 2012 and December 31, 2011, respectively. The average recorded investment in impaired loans was $224.7 million and $309.6 million for the quarter ended March 31, 2012 and the year ended December 31, 2011, respectively.

Non-performing loans and leases (“NPLs”) consist of non-accrual loans and leases, loans and leases 90 days or more past due and still accruing, and loans and leases that have been restructured because of the borrower's weakened financial condition. The following table presents information concerning NPLs as of the dates indicated:

	March 31,				December 31,
	2012		2011		2011
	(In thousands)

Non-accrual loans and leases	$	253,227	$	370,726	$	276,798
Loans and leases 90 days or more past due, still accruing		1,698		4,829		3,434
Restructured loans and leases still accruing		30,311		49,472		42,018
Total non-performing loans and leases	$	285,236	$	425,027	$	322,250

The Bank's policy for all loan classifications provides that loans and leases are generally placed in non-accrual status if, in management's opinion, payment in full of principal or interest is not expected or payment of principal or interest is more than 90 days past due, unless such loan or lease is both well-secured and in the process of collection. At March 31, 2012, the Company's geographic NPL distribution was concentrated primarily in its Alabama, Texas, Louisiana and Tennessee markets, including the greater Memphis, Tennessee area, a portion of which is in northwest Mississippi and Arkansas. The following table presents the Company's nonaccrual loans and leases by segment and class as of the dates indicated:

	March 31,				December 31,
	2012		2011		2011
	(In thousands)
Commercial and industrial	$	11,025	$	14,655	$	12,260
Real estate
Consumer mortgages		46,562		58,748		47,878
Home equity		2,687		1,543		2,036
Agricultural		4,254		7,597		4,179
Commercial and industrial-owner occupied		32,842		24,638		33,112
Construction, acquisition and development		115,649		202,124		133,110
Commercial real estate		35,715		58,945		40,616
Credit cards		509		617		594
All other		3,984		1,859		3,013
Total	$	253,227	$	370,726	$	276,798

In the normal course of business, management will sometimes grant concessions, which would not otherwise be considered, to borrowers that are experiencing financial difficulty. Loans identified as meeting the criteria set out in FASB ASC 310 are identified as TDRs. The concessions granted most frequently for TDRs involve reductions or delays in required payments of principal and interest for a specified period, the rescheduling of payments in accordance with a bankruptcy plan or the charge-off of a portion of the loan. In most cases, the conditions of the credit also warrant nonaccrual status, even after the restructure occurs. As part of the credit approval process, the restructured loans are evaluated for adequate collateral protection in determining the appropriate accrual status at the time of restructure. TDRs recorded as nonaccrual loans may be returned to accrual status in years after the restructure if there has been at least a six-month period of sustained repayment performance by the borrower under the restructured loan terms and the interest rate at the time of restructure was at or above market for a comparable loan. During the first quarter of 2012, the most common concessions that were granted involved rescheduling payments of principal and interest over a longer amortization period, granting a period of reduced principal payment or interest only payment for a limited time period, or the rescheduling of payments in accordance with a bankruptcy plan.

The following tables summarize the financial effect of TDRs for the periods indicated:

	Three months ended March 31, 2012
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars in thousands)
Commercial and industrial		5	$	1,010	$	674
Real estate
Consumer mortgages		13		3,265		3,211
Agricultural		1		407		404
Commercial and industrial-owner occupied		8		2,128		2,117
Construction, acquisition and development		11		7,280		6,956
Commercial real estate		6		3,180		3,172
All other		5		639		637
Total		49	$	17,909	$	17,171

	Year ended December 31, 2011
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars in thousands)
Commercial and industrial		7	$	3,142	$	2,374
Real estate
Consumer mortgages		35		6,901		6,424
Agricultural		4		2,650		1,479
Commercial and industrial-owner occupied		29		13,330		11,740
Construction, acquisition and development		30		23,863		19,228
Commercial real estate		24		16,121		15,046
All other		7		2,957		2,406
Total		136	$	68,964	$	58,697

The following tables summarize TDRs within the previous 12 months for which there was a payment default during the period indicated (i.e., 30 days or more past due at any given time during the period indicated):

	Three months ended March 31, 2012
	Number of Contracts		Recorded Investment
	(Dollars in thousands)
Commercial and industrial		1	$	129
Real estate
Consumer mortgages		6		518
Agricultural		1		170
Commercial and industrial-owner occupied		3		1,362
Commercial real estate		2		1,514
Total		13	$	3,693

	Year ended December 31, 2011
	Number of Contracts		Recorded Investment
	(Dollars in thousands)
Commercial and industrial		4	$	1,506
Real estate
Consumer mortgages		4		1,563
Agricultural		3		1,382
Commercial and industrial-owner occupied		6		1,683
Construction, acquisition and development		13		3,622
Commercial real estate		3		2,946
All other		1		302
Total		34	$	13,004