Loans and Leases

Loans and leases outstanding include the following as of the dates indicated:



	March 31, 2013		December 31, 2012		March 31, 2012
Covered loans	$	1,621,327	$	1,809,235	$	2,183,869
Noncovered loans and leases:
Commercial:
Construction and land development	300,497		309,190		346,557
Commercial mortgage	5,352,594		5,341,839		5,127,948
Other commercial real estate	176,456		160,980		150,316
Commercial and industrial	1,662,124		1,726,126		1,739,724
Lease financing	336,329		330,679		315,704
Other	194,186		125,681		149,792
Total commercial loans	8,022,186		7,994,495		7,830,041
Noncommercial:
Residential mortgage	834,879		822,889		793,612
Revolving mortgage	2,150,800		2,210,133		2,282,138
Construction and land development	115,628		131,992		132,677
Consumer	385,587		416,606		451,061
Total noncommercial loans	3,486,894		3,581,620		3,659,488
Total noncovered loans and leases	11,509,080		11,576,115		11,489,529
Total loans and leases	$	13,130,407	$	13,385,350	$	13,673,398



	March 31, 2013						December 31, 2012						March 31, 2012
	Impaired at acquisition date		All other covered loans		Total		Impaired at acquisition date		All other covered loans		Total		Impaired at acquisition date		All other covered loans		Total
Covered loans:
Commercial:
Construction and land development	$	53,209	$	151,315	$	204,524	$	71,225	$	166,681	$	237,906	$	100,736	$	209,865	$	310,601
Commercial mortgage	101,397		847,055		948,452		107,281		947,192		1,054,473		122,876		1,072,665		1,195,541
Other commercial real estate	30,191		63,041		93,232		35,369		71,750		107,119		31,727		113,251		144,978
Commercial and industrial	6,149		39,544		45,693		3,932		45,531		49,463		17,397		75,864		93,261
Lease financing	—		—		—		—		—		—		—		45		45
Other	—		1,042		1,042		—		1,074		1,074		—		1,283		1,283
Total commercial loans	190,946		1,101,997		1,292,943		217,807		1,232,228		1,450,035		272,736		1,472,973		1,745,709
Noncommercial:
Residential mortgage	43,924		235,073		278,997		48,077		249,849		297,926		46,905		251,633		298,538
Revolving mortgage	9,788		27,351		37,139		9,606		29,104		38,710		14,125		35,891		50,016
Construction and land development	10,609		415		11,024		15,136		5,657		20,793		56,722		28,833		85,555
Consumer	—		1,224		1,224		—		1,771		1,771		1,453		2,598		4,051
Total noncommercial loans	64,321		264,063		328,384		72,819		286,381		359,200		119,205		318,955		438,160
Total covered loans	$	255,267	$	1,366,060	$	1,621,327	$	290,626	$	1,518,609	$	1,809,235	$	391,941	$	1,791,928	$	2,183,869

At March 31, 2013, $2,522,055 in noncovered loans were pledged to secure debt obligations, compared to $2,570,773 at December 31, 2012, and $2,398,476 at March 31, 2012.

Credit quality indicators

Loans and leases are monitored for credit quality on a recurring basis. The credit quality indicators used are dependent on the portfolio segment to which the loan relates. Commercial loans and leases, noncommercial loans and leases, and covered loans have different credit quality indicators as a result of the methods used to monitor each of these loan segments.

The credit quality indicators for commercial loans and leases and all covered loans and leases are developed through review of individual borrowers on an ongoing basis. Each borrower is evaluated at least annually with more frequent evaluation of more severely criticized loans or leases. The indicators represent the rating for loans or leases as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.

Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of noncovered, ungraded loans at March 31, 2013, relate to business credit cards and tobacco buyout loans classified as commercial and industrial loans. Business credit card loans with an outstanding balance of $78,041 at March 31, 2013, are subject to automatic charge off when they become 120 days past due in the same manner as unsecured consumer lines of credit. Tobacco buyout loans with an outstanding balance of $21,304 at March 31, 2013, are secured by assignments of receivables made pursuant to the Fair and Equitable Tobacco Reform Act of 2004. The credit risk associated with these loans is considered low as the payments that began in 2005 and continue through 2014 are made by the Commodity Credit Corporation, which is part of the United States Department of Agriculture.

The credit quality indicators for noncovered, noncommercial loans are based on the delinquency status of the borrower. As the borrower becomes more delinquent, the likelihood of loss increases.

The composition of the loans and leases outstanding at March 31, 2013, December 31, 2012, and March 31, 2012, by credit quality indicator is provided below:



	Commercial noncovered loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Total commercial noncovered loans and leases
March 31, 2013
Pass	$	274,917	$	5,050,073	$	168,885	$	1,519,890	$	332,790	$	192,489	$	7,539,044
Special mention	13,878		149,904		1,771		15,121		1,084		1,391		183,149
Substandard	11,501		139,262		5,158		24,176		1,689		17		181,803
Doubtful	73		9,600		98		1,252		728		—		11,751
Ungraded	128		3,755		544		101,685		38		289		106,439
Total	$	300,497	$	5,352,594	$	176,456	$	1,662,124	$	336,329	$	194,186	$	8,022,186
December 31, 2012
Pass	$	274,480	$	5,018,677	$	151,549	$	1,564,862	$	325,626	$	124,083	$	7,459,277
Special mention	14,666		161,789		2,812		18,368		1,601		837		200,073
Substandard	18,761		145,980		5,038		24,059		1,663		756		196,257
Doubtful	952		12,822		98		1,693		771		—		16,336
Ungraded	331		2,571		1,483		117,144		1,018		5		122,552
Total	$	309,190	$	5,341,839	$	160,980	$	1,726,126	$	330,679	$	125,681	$	7,994,495
March 31, 2012
Pass	$	303,018	$	4,744,063	$	136,776	$	1,554,112	$	309,681	$	147,767	$	7,195,417
Special mention	20,097		243,495		6,805		35,497		3,336		2,018		311,248
Substandard	21,297		130,815		6,068		27,057		2,453		—		187,690
Doubtful	1,821		6,588		365		1,676		—		—		10,450
Ungraded	324		2,987		302		121,382		234		7		125,236
Total	$	346,557	$	5,127,948	$	150,316	$	1,739,724	$	315,704	$	149,792	$	7,830,041



	Noncommercial noncovered loans and leases
	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total noncommercial noncovered loans
March 31, 2013
Current	$	802,439	$	2,130,189	$	114,077	$	381,769	$	3,428,474
30-59 days past due	19,663		14,022		217		1,815		35,717
60-89 days past due	789		2,998		63		968		4,818
90 days or greater past due	11,988		3,591		1,271		1,035		17,885
Total	$	834,879	$	2,150,800	$	115,628	$	385,587	$	3,486,894
December 31, 2012
Current	$	786,626	$	2,190,186	$	128,764	409,218		$	3,514,794
30-59 days past due	15,711		12,868		1,941		4,405		34,925
60-89 days past due	7,559		3,200		490		1,705		12,954
90 days or greater past due	12,993		3,879		797		1,278		18,947
Total	$	822,889	$	2,210,133	$	131,992	$	416,606	$	3,581,620
March 31, 2012
Current	$	763,411	$	2,274,091	$	130,561	$	446,421	$	3,614,484
30-59 days past due	14,001		2,349		808		1,885		19,043
60-89 days past due	2,812		1,212		446		1,028		5,498
90 days or greater past due	13,388		4,486		862		1,727		20,463
Total	$	793,612	$	2,282,138	$	132,677	$	451,061	$	3,659,488



	Covered loans
Grade:	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Residential mortgage		Revolving mortgage		Construction and land development noncommercial		Consumer and other		Total covered loans
March 31, 2013
Pass	$	11,396	$	343,535	$	31,031	$	17,131	$	—	$	163,937	$	27,657	$	262	$	1,492	$	596,441
Special mention	25,886		233,026		12,832		10,822		—		14,687		1,926		—		30		299,209
Substandard	94,938		298,647		37,862		12,060		—		75,082		7,556		9,326		240		535,711
Doubtful	69,782		72,572		11,507		5,366		—		3,255		—		1,436		—		163,918
Ungraded	2,522		672		—		314		—		22,036		—		—		504		26,048
Total	$	204,524	$	948,452	$	93,232	$	45,693	$	—	$	278,997	$	37,139	$	11,024	$	2,266	$	1,621,327
December 31, 2012
Pass	$	17,010	$	376,974	$	33,570	$	19,451	$	—	$	172,165	$	29,540	$	334	$	1,617	$	650,661
Special mention	25,734		259,264		17,518		12,465		—		14,863		1,736		—		34		331,614
Substandard	105,061		344,542		44,335		14,698		—		83,193		7,434		17,190		239		616,692
Doubtful	87,445		73,016		11,696		2,757		—		4,268		—		3,269		117		182,568
Ungraded	2,656		677		—		92		—		23,437		—		—		838		27,700
Total	$	237,906	$	1,054,473	$	107,119	$	49,463	$	—	$	297,926	$	38,710	$	20,793	$	2,845	$	1,809,235
March 31, 2012
Pass	$	31,445	$	392,233	$	56,689	$	31,768	$	45	$	173,640	$	35,684	$	7,020	$	2,478	$	731,002
Special mention	89,243		335,020		26,736		21,376		—		18,054		802		14,263		546		506,040
Substandard	86,750		382,134		51,918		24,905		—		70,545		11,153		53,919		1,082		682,406
Doubtful	99,747		85,993		9,635		15,212		—		9,934		2,377		10,353		816		234,067
Ungraded	3,416		161		—		—		—		26,365		—		—		412		30,354
Total	$	310,601	$	1,195,541	$	144,978	$	93,261	$	45	$	298,538	$	50,016	$	85,555	$	5,334	$	2,183,869

The aging of the outstanding loans and leases, by class, at March 31, 2013, December 31, 2012, and March 31, 2012, (excluding loans and leases acquired with deteriorated credit quality) is provided in the table below. The calculation of days past due begins on the day after payment is due and includes all days through which all required interest or principal has not been paid. Loans and leases 30 days or less past due are considered current due to various grace periods that allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.



	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
March 31, 2013
Noncovered loans and leases:
Construction and land development - commercial	$	782	$	7,943	$	1,082	$	9,807	$	290,690	$	300,497
Commercial mortgage	19,321		5,873		17,300		42,494		5,310,100		5,352,594
Other commercial real estate	346		503		1,282		2,131		174,325		176,456
Commercial and industrial	7,895		1,878		2,406		12,179		1,649,945		1,662,124
Lease financing	635		230		621		1,486		334,843		336,329
Other	42		—		—		42		194,144		194,186
Residential mortgage	19,663		789		11,988		32,440		802,439		834,879
Revolving mortgage	14,022		2,998		3,591		20,611		2,130,189		2,150,800
Construction and land development - noncommercial	217		63		1,271		1,551		114,077		115,628
Consumer	1,815		968		1,035		3,818		381,769		385,587
Total noncovered loans and leases	$	64,738	$	21,245	$	40,576	$	126,559	$	11,382,521	$	11,509,080
December 31, 2012
Noncovered loans and leases:
Construction and land development - commercial	$	927	$	—	$	7,878	$	8,805	$	300,385	$	309,190
Commercial mortgage	21,075		3,987		20,318		45,380		5,296,459		5,341,839
Other commercial real estate	387		1,240		1,034		2,661		158,319		160,980
Commercial and industrial	6,205		1,288		1,614		9,107		1,717,019		1,726,126
Lease financing	991		138		621		1,750		328,929		330,679
Other	18		13		—		31		125,650		125,681
Residential mortgage	15,711		7,559		12,993		36,263		786,626		822,889
Revolving mortgage	12,868		3,200		3,879		19,947		2,190,186		2,210,133
Construction and land development - noncommercial	1,941		490		797		3,228		128,764		131,992
Consumer	4,405		1,705		1,278		7,388		409,218		416,606
Total noncovered loans and leases	$	64,528	$	19,620	$	50,412	$	134,560	$	11,441,555	$	11,576,115
March 31, 2012
Noncovered loans and leases:
Construction and land development - commercial	$	2,030	$	1,366	$	3,288	$	6,684	$	339,873	$	346,557
Commercial mortgage	27,947		6,548		13,939		48,434		5,079,514		5,127,948
Other commercial real estate	787		43		193		1,023		149,293		150,316
Commercial and industrial	5,522		1,006		1,754		8,282		1,731,442		1,739,724
Lease financing	824		99		1,269		2,192		313,512		315,704
Other	—		—		—		—		149,792		149,792
Residential mortgage	14,001		2,812		13,388		30,201		763,411		793,612
Revolving mortgage	2,349		1,212		4,486		8,047		2,274,091		2,282,138
Construction and land development - noncommercial	808		446		862		2,116		130,561		132,677
Consumer	1,885		1,028		1,727		4,640		446,421		451,061
Total noncovered loans and leases	$	56,153	$	14,560	$	40,906	$	111,619	$	11,377,910	$	11,489,529

The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at March 31, 2013, December 31, 2012, and March 31, 2012, (excluding loans and leases acquired with deteriorated credit quality) are as follows:



	March 31, 2013				December 31, 2012				March 31, 2012
	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Noncovered loans and leases:
Construction and land development - commercial	$	8,506	$	158	$	14,930	$	541	$	11,995	$	182
Commercial mortgage	46,722		3,565		48,869		1,671		31,222		1,180
Commercial and industrial	10,419		1,154		8,635		466		8,148		599
Lease financing	1,182		3		1,075		—		146		1,268
Other commercial real estate	2,361		—		2,319		—		783		—
Construction and land development - noncommercial	848		423		668		111		—		862
Residential mortgage	12,509		2,380		12,603		3,337		14,069		3,542
Revolving mortgage	—		3,589		—		3,877		—		4,467
Consumer	36		1,029		746		1,269		—		1,728
Total noncovered loans and leases	$	82,583	$	12,301	$	89,845	$	11,272	$	66,363	$	13,828

Acquired Loans

The following table provides changes in the carrying value of acquired loans impaired at acquisition date and all other acquired loans during the three months ended March 31, 2013, and 2012:



	2013						2012
	Impaired at acquisition date			All other acquired loans			Impaired as acquisition date			All other acquired loans
Balance, January 1	$	290,626		$	1,518,609		$	458,305		$	1,903,847
Reductions for repayments, foreclosures and changes in carrying value, net of accretion	(35,359		)	(152,549		)	(66,364		)	(111,919		)
Balance, March 31	$	255,267		$	1,366,060		$	391,941		$	1,791,928
Outstanding principal balance at March 31	$	858,645		$	1,838,709		$	1,222,862		$	2,395,860

The carrying value of loans on the cost recovery method was $43,882 at March 31, 2013, $74,479 at December 31, 2012, and $171,951 at March 31, 2012. Prior to the third quarter of 2012, the cost recovery method was being applied to nonperforming loans acquired from four of the six FDIC-assisted transactions. During the third and fourth quarters of 2012, those loans were installed on an automated acquired loan accounting system that estimated cash flows for all loans. Based on these improved cash flow estimates, loans that were previously accounted for under the cost recovery method began to accrete yield. The cost recovery method continues to be applied to loans when the timing of the cash flows is no longer reasonably estimable due to subsequent nonperformance by the borrower or uncertainty in the ultimate disposition of the asset.

For acquired loans, improved cash flow estimates and receipt of unscheduled loan payments result in the reclassification of nonaccretable difference to accretable yield. During the third and fourth quarters of 2012, the improved ability to estimate cash flows due to expanded use of an acquired loan accounting system also contributed to significant increases in accretable yield. Accretable yield resulting from the improved ability to estimate future cash flows generally does not represent amounts previously identified as nonaccretable difference.

The following table documents changes to the amount of accretable yield for the first three months of 2013 and 2012. Other, net includes reclassifications from nonaccretable difference to accretable yield and changes to accretable yield attributable to revised cash flow estimates.



	2013			2012
Balance, January 1	$	539,564		$	276,690
Accretion	(79,886		)	(64,896		)
Disposals	(485		)	—
Other, net	26,742			73,150
Balance, March 31	$	485,935		$	284,944