(5) 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. A summary of gross loans and leases by segment and class at December 31, 2012 and 2011 follows:

	2012		2011
	(In thousands)
Commercial and industrial	$	1,484,788	$	1,484,967
Real estate
Consumer mortgage		1,873,875		1,945,190
Home equity		486,074		514,362
Agricultural		256,196		239,487
Commercial and industrial-owner occupied		1,333,103		1,301,575
Construction, acquisition and development		735,808		908,362
Commercial		1,748,881		1,754,022
Credit Cards		104,884		106,281
All other		649,143		657,012
Total	$	8,672,752	$	8,911,258

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

	Alabama								Greater
	and Florida								Memphis				Texas and
	Panhandle		Arkansas*		Mississippi*		Missouri		Area		Tennessee*		Louisiana		Other		Total
	(In thousands)
Commercial and industrial	$	70,132	$	149,418	$	386,799	$	35,240	$	17,170	$	74,300	$	249,405	$	494,147	$	1,476,611
Real estate
Consumer mortgages		109,585		262,899		709,251		44,513		79,221		160,906		454,607		52,893		1,873,875
Home equity		60,037		38,082		164,019		22,520		64,710		73,351		62,649		706		486,074
Agricultural		7,461		79,269		68,298		3,782		11,948		13,941		66,979		4,518		256,196
Commercial and industrial-owner occupied		120,318		155,015		494,957		77,951		88,980		89,935		253,088		52,859		1,333,103
Construction, acquisition and development		92,454		68,034		217,763		35,880		77,091		93,414		141,206		9,966		735,808
Commercial		208,676		331,575		353,067		189,993		104,101		98,811		392,027		70,631		1,748,881
Credit cards**		-		-		-		-		-		-		-		104,884		104,884
All other		32,122		82,825		180,836		8,210		54,332		50,815		97,473		114,944		621,557
Total	$	700,785	$	1,167,117	$	2,574,990	$	418,089	$	497,553	$	655,473	$	1,717,434	$	905,548	$	8,636,989

*	Excludes the Greater Memphis Area

**	Credit card receivables are spread across all geographic regions but are not viewed by the Company's management as part of the geographic breakdown.

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 loan policy generally prohibits the use of interest reserves on loans made 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 these areas. Continued economic distress could negatively impact additional borrowers' and guarantors' ability to repay their debt which will make more of the Company's loans collateral dependent.

The following table provides details regarding the aging of the Company's loan and lease portfolio, net of unearned income, at December 31, 2012:

	2012
													90+ Days
	30-59 Days		60-89 Days		90+ Days		Total				Total		Past Due still
	Past Due		Past Due		Past Due		Past Due		Current		Outstanding		Accruing
	(In thousands)
Commercial and industrial	$	3,531	$	476	$	4,118	$	8,125	$	1,468,486	$	1,476,611	$	414
Real estate
Consumer mortgages		11,308		3,643		13,821		28,772		1,845,103		1,873,875		512
Home equity		1,337		371		350		2,058		484,016		486,074		-
Agricultural		400		287		3,946		4,633		251,563		256,196		10
Commercial and industrial-owner occupied		2,629		3,587		2,933		9,149		1,323,954		1,333,103		19
Construction, acquisition and development		2,547		2,472		14,790		19,809		715,999		735,808		-
Commercial		4,673		56		10,469		15,198		1,733,683		1,748,881		-
Credit cards		536		379		473		1,388		103,496		104,884		228
All other		2,354		253		445		3,052		618,505		621,557		27
Total	$	29,315	$	11,524	$	51,345	$	92,184	$	8,544,805	$	8,636,989	$	1,210

	2011
													90+ Days
	30-59 Days		60-89 Days		90+ Days		Total				Total		Past Due still
	Past Due		Past Due		Past Due		Past Due		Current		Outstanding		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		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 FDIC, 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 loan show sufficient cash flow, capital and collateral to repay the loan as agreed.

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 table provides details of the Company's loan and lease portfolio, net of unearned income, by segment, class and internally assigned grade at December 31, 2012 and 2011:

	December 31, 2012
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Impaired		Total
	(In thousands)
Commercial and industrial	$	1,426,498	$	14,663	$	29,876	$	729	$	-	$	4,845	$	1,476,611
Real estate
Consumer mortgage		1,691,682		32,840		131,141		2,907		198		15,107		1,873,875
Home equity		461,151		4,791		17,619		1,057		76		1,380		486,074
Agricultural		227,138		5,729		17,947		-		-		5,382		256,196
Commercial and industrial-owner occupied		1,202,111		31,087		82,816		369		-		16,720		1,333,103
Construction, acquisition and development		567,881		30,846		75,031		715		-		61,335		735,808
Commercial		1,524,262		53,455		120,591		160		-		50,413		1,748,881
Credit cards		104,884		-		-		-		-		-		104,884
All other		600,807		8,397		10,196		601		10		1,546		621,557
Total	$	7,806,414	$	181,808	$	485,217	$	6,538	$	284	$	156,728	$	8,636,989

	December 31, 2011
			Special
	Pass		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		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

Loans considered impaired under 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 December 31, 2012 and 2011 was $156.7 million and $234.9 million, respectively. At December 31, 2012 and 2011, $41.0 million and $117.7 million, respectively, of those impaired loans had a valuation allowance of $10.5 million and $39.7 million, respectively. The remaining balance of impaired loans of $115.7 million and $117.2 million at December 31, 2012 and 2011, respectively, were charged down to the underlying collateral's 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 TDRs totaled $47.3 million and $58.0 million at December 31, 2012 and 2011, respectively. The average recorded investment in impaired loans during 2012 and 2011 was $196.9 million and $309.6 million, respectively.

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

	December 31, 2012
			Unpaid
	Recorded		Principal		Related
	Investment		Balance of		Allowance		Average		Interest
	in Impaired		Impaired		for Credit		Recorded		Income
	Loans		Loans		Losses		Investment		Recognized
	(In thousands)
With no related allowance:
Commercial and industrial	$	2,557	$	4,169	$	-	$	2,779	$	12
Real estate
Consumer mortgage		11,307		15,464		-		11,762		77
Home equity		934		1,078		-		858		6
Agricultural		4,435		6,292		-		3,527		8
Commercial and industrial-owner occupied		13,018		16,551		-		12,674		123
Construction, acquisition and development		47,982		69,331		-		54,085		324
Commercial		33,952		45,722		-		19,824		199
All other		1,544		2,165		-		848		9
Total	$	115,729	$	160,772	$	-	$	106,357	$	758

With an allowance:
Commercial and industrial	$	2,288	$	2,288	$	1,241	$	5,368	$	38
Real estate
Consumer mortgage		3,800		3,914		1,103		10,323		88
Home equity		446		446		111		569		5
Agricultural		947		947		92		1,468		12
Commercial and industrial-owner occupied		3,702		4,737		864		9,977		65
Construction, acquisition and development		13,353		16,257		4,350		45,582		377
Commercial		16,461		16,709		2,720		16,953		204
All other		2		2		60		324		3
Total	$	40,999	$	45,300	$	10,541	$	90,564	$	792

Total:
Commercial and industrial	$	4,845	$	6,457	$	1,241	$	8,147	$	50
Real estate
Consumer mortgage		15,107		19,378		1,103		22,085		165
Home equity		1,380		1,524		111		1,427		11
Agricultural		5,382		7,239		92		4,995		20
Commercial and industrial-owner occupied		16,720		21,288		864		22,651		188
Construction, acquisition and development		61,335		85,588		4,350		99,667		701
Commercial		50,413		62,431		2,720		36,777		403
All other		1,546		2,167		60		1,172		12
Total	$	156,728	$	206,072	$	10,541	$	196,921	$	1,550

	December 31, 2011
			Unpaid
	Recorded		Principal		Related
	Investment		Balance of		Allowance		Average		Interest
	in Impaired		Impaired		for Credit		Recorded		Income
	Loans		Loans		Losses		Investment		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		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		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		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 December 31, 2012 and 2011:

	December 31, 2012
			Unpaid
	Recorded		Principal		Related
	Investment		Balance of		Allowance		Average		Interest
	in Impaired		Impaired		for Credit		Recorded		Income
	Loans		Loans		Losses		Investment		Recognized
	(In thousands)
With no related allowance:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		8,475		13,586		-		8,070		53
Recreation and all other loans		1,117		1,335		-		623		5
Commercial construction		5,714		6,646		-		3,585		51
Commercial acquisition and development		13,753		15,786		-		12,145		63
Residential acquisition and development		18,923		31,978		-		29,662		152
Total	$	47,982	$	69,331	$	-	$	54,085	$	324

With an allowance:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		1,130		1,475		290		4,094		29
Recreation and all other loans		-		-		-		69		-
Commercial construction		-		-		0		1,255		15
Commercial acquisition and development		1,711		1,960		563		9,206		74
Residential acquisition and development		10,512		12,822		3,497		30,958		259
Total	$	13,353	$	16,257	$	4,350	$	45,582	$	377

Total:
Multi-family construction	$	-	$	-	$	-	$	-	$	-
One-to-four family construction		9,605		15,061		290		12,164		82
Recreation and all other loans		1,117		1,335		-		692		5
Commercial construction		5,714		6,646		-		4,840		66
Commercial acquisition and development		15,464		17,746		563		21,351		137
Residential acquisition and development		29,435		44,800		3,497		60,620		411
Total	$	61,335	$	85,588	$	4,350	$	99,667	$	701

	December 31, 2011
			Unpaid
	Recorded		Principal		Related
	Investment		Balance of		Allowance		Average		Interest
	in Impaired		Impaired		for Credit		Recorded		Income
	Loans		Loans		Losses		Investment		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

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 at December 31, 2012 and 2011:

	2012		2011
	(In thousands)
Non-accrual loans and leases	$	207,241	$	276,798
Loans and leases 90 days or more past due, still accruing		1,210		3,434
Restructured loans and leases still accruing		25,099		42,018
Total	$	233,550	$	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 the loan or lease is both well-secured and in the process of collection. At December 31, 2012, the Company's geographic NPL distribution was concentrated primarily in its Alabama, Mississippi 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 at December 31, 2012 and 2011:

	2012		2011
	(In thousands)
Commercial and industrial	$	9,311	$	12,260
Real estate
Consumer mortgages		36,133		47,878
Home equity		3,497		2,036
Agricultural		7,587		4,179
Commercial and industrial-owner occupied		20,910		33,112
Construction, acquisition and development		66,635		133,110
Commercial		57,656		40,616
Credit cards		415		594
All other		5,097		3,013
Total	$	207,241	$	276,798

The total amount of interest earned on NPLs was $4.3 million, $12.6 million and $11.2 million in 2012, 2011 and 2010, respectively. The gross interest income which would have been recorded under the original terms of those loans and leases amounted to $15.6 million, $18.7 million and $21.7 million in 2012, 2011 and 2010, respectively.

In the normal course of business, management will sometime grant concessions, which normally would not otherwise be considered, to borrowers that are experiencing financial difficulty. Restructured 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. TDR loans recorded as non-accrual 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 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 years ended December 31, 2012 and 2011:

	December 31, 2012
			Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		Investment
	(Dollars in thousands)
Commercial and industrial		8	$	1,686	$	1,348
Real estate
Consumer mortgages		38		9,875		9,109
Agricultural		2		853		861
Commercial and industrial-owner occupied		30		14,367		13,741
Construction, acquisition and development		37		21,583		21,159
Commercial		12		8,159		8,132
All other		9		1,855		1,692
Total		136	$	58,378	$	56,042

	December 31, 2011
			Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded
	Contracts		Investment		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		24		16,121		15,046
All other		7		2,957		2,406
Total		136	$	68,964	$	58,697

The following tables summarize TDRs modified during 2012 and 2011 for which there was a payment default (i.e., 30 days or more past due at any given time during 2012 or 2011):

	Year ended December 31, 2012
	Number of		Recorded
	Contracts		Investment
	(Dollars in thousands)
Commercial and industrial		2	$	179
Real estate
Consumer mortgages		18		2,096
Agricultural		1		170
Commercial and industrial-owner occupied		11		2,659
Construction, acquisition and development		21		5,503
Commercial		4		2,525
All other		1		7
Total		58	$	13,139

	Year ended December 31, 2011
	Number of		Recorded
	Contracts		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		3		2,946
All other		1		302
Total		34	$	13,004