Loans Receivable

12 Months Ended

Dec. 31, 2012

Loans Receivable

NOTE 6 – LOANS RECEIVABLE

Loans receivable at December 31, 2012 and December 31, 2011 consist of the following:

(Dollars in thousands)	2012		2011
Residential mortgage loans:
Residential 1-4 family	$	471,183	$	522,357
Construction/ Owner Occupied		6,021		16,143
Total residential mortgage loans		477,204		538,500
Commercial loans:
Real estate		3,631,543		3,363,891
Business		2,537,718		2,005,234
Total commercial loans		6,169,261		5,369,125
Consumer and other loans:
Indirect automobile		327,985		261,896
Home equity		1,251,125		1,019,110
Other		273,005		199,406
Total consumer and other loans		1,852,115		1,480,412
Total loans receivable	$	8,498,580	$	7,388,037

In 2009, the Company acquired substantially all of the assets and liabilities of CapitalSouth Bank (“CSB”), and certain assets and assumed certain deposit and other liabilities of Orion Bank (“Orion”) and Century Bank (“Century”). In 2010, the Company acquired certain assets and assumed certain deposit and other liabilities of Sterling Bank. The loans and foreclosed real estate that were acquired in these transactions are covered by loss share agreements between the FDIC and IBERIABANK, which afford IBERIABANK significant loss protection. Under the loss share agreements, the FDIC will cover 80% of covered loan and foreclosed real estate losses up to certain thresholds for all four acquisitions, 80% of losses that exceed the thresholds for Sterling Bank, and 95% of losses that exceed those thresholds for CSB, Orion, and Century only.

Because of the loss protection provided by the FDIC, the risks of the CSB, Orion, Century, and Sterling loans and foreclosed real estate are significantly different from those assets not covered under the loss share agreement. Accordingly, the Company presents loans subject to the loss share agreements as “covered loans” in the information below and loans that are not subject to the loss share agreement as “non-covered loans.”

Deferred loan origination fees were $14,040,000 and $9,422,000 and deferred loan expenses were $5,270,000 and $4,828,000 at December 31, 2012 and 2011, respectively. In addition to loans issued in the normal course of business, the Company considers overdrafts on customer deposit accounts to be loans and reclassifies these overdrafts as loans in its consolidated balance sheets. At December 31, 2012 and 2011, overdrafts of $3,231,000 and $1,646,000, respectively, have been reclassified to loans receivable.

Loans with carrying values of $1,504,512,000 and $1,112,214,000 were pledged to secure public deposits and other borrowings at December 31, 2012 and December 31, 2011, respectively.

Non-covered Loans

The following is a summary of the major categories of non-covered loans outstanding as of December 31, 2012 and 2011:

(Dollars in thousands)	2012		2011
Non-covered Loans:
Residential mortgage loans:
Residential 1-4 family	$	284,019	$	266,970
Construction/ Owner Occupied		6,021		16,143
Total residential mortgage loans		290,040		283,113
Commercial loans:
Real estate		2,990,700		2,591,014
Business		2,450,667		1,896,496
Total commercial loans		5,441,367		4,487,510
Consumer and other loans:
Indirect automobile		327,985		261,896
Home equity		1,076,913		826,463
Other		269,519		194,606
Total consumer and other loans		1,674,417		1,282,965
Total non-covered loans receivable	$	7,405,824	$	6,053,588

The following tables provide an analysis of the aging of non-covered loans as of December 31, 2012 and 2011. Because of the difference in the accounting for acquired loans, the tables below further segregate the Company’s non-covered loans receivable between loans acquired from Florida Gulf in 2012, as well as those acquired in 2011, and loans originated by the Company. For purposes of the following tables, subprime mortgage loans are defined as the Company’s loans that have FICO scores that are less than 620 at the time of origination or were purchased outside of a business combination.

	Non-covered loans excluding acquired loans
(Dollars in thousands)
	Past Due (1)
December 31, 2012	30-59 days		60-89 days		Greater than 90 days		Total past due		Current		Total non- covered  loans, net of unearned income		Recorded investment >  90 days and accruing
Residential
Prime	$	662	$	1,156	$	9,168	$	10,986	$	185,843	$	196,829	$	801
Subprime		—		—		—		—		60,454		60,454		—
Commercial
Real Estate - Construction		60		—		5,479		5,539		288,137		293,676		—
Real Estate - Other		3,590		—		23,559		27,149		2,224,495		2,251,644		83
Commercial Business		1,430		13		3,687		5,130		2,362,304		2,367,434		329
Consumer and Other
Indirect Automobile		1,624		326		868		2,818		320,148		322,966		—
Home Equity		2,283		796		5,793		8,872		991,766		1,000,638		158
Credit Card		130		51		424		605		51,117		51,722		—
Other		566		105		310		981		201,161		202,142		—
Total	$	10,345	$	2,447	$	49,288	$	62,080	$	6,685,425	$	6,747,505	$	1,371

	Non-covered loans excluding acquired loans
(Dollars in thousands)
	Past Due (1)
December 31, 2011	30-59 days		60-89 days		Greater than 90 days		Total past due		Current		Total loans, net of  unearned income		Recorded investment  > 90 days and accruing
Residential
Prime	$	731	$	325	$	6,009	$	7,065	$	271,534	$	278,599	$	1,099
Subprime		—		—		—		—		—		—		—
Commercial
Real Estate - Construction		266		—		2,582		2,848		273,824		276,672		—
Real Estate - Other		880		54		34,087		35,021		1,778,235		1,813,256		636
Commercial Business		302		277		6,642		7,221		1,793,959		1,801,180		20
Consumer and Other
Indirect Automobile		1,232		159		994		2,385		248,070		250,455		—
Home Equity		3,102		717		4,955		8,774		741,968		750,742		82
Credit Card		467		107		403		977		46,786		47,763		—
Other		349		147		623		1,119		129,640		130,759		4
Total	$	7,329	$	1,786	$	56,295	$	65,410	$	5,284,016	$	5,349,426	$	1,841

⁽¹⁾  Past due loans include loans on nonaccrual status as of the period indicated. Nonaccrual loans are presented separately in the “Nonaccrual Loans” section below.

(Dollars in thousands)	Non-covered acquired loans
	Past Due (1)
December 31, 2012	30-59 days		60-89 days		Greater than 90 days		Total past due		Current		Discount			Total non- covered  loans, net of unearned income		Recorded investment > 90 days and accruing (1)
Residential
Prime	$	—	$	—	$	779	$	779	$	30,663	$	1,315		$	32,757	$	779
Subprime		—		—		—		—		—		—			—		—
Commercial
Real Estate - Construction		369		—		4,067		4,436		29,098		(3,968	)		29,566		4,067
Real Estate - Other		5,971		1,572		38,987		46,530		426,339		(57,055	)		415,814		38,987
Commercial Business		1,410		524		3,953		5,887		89,490		(12,144	)		83,233		3,953
Consumer and Other
Indirect Automobile		171		4		146		321		4,698		—			5,019		146
Home Equity		2,379		382		4,354		7,115		73,658		(4,498	)		76,275		4,354
Credit Card		—		—		—		—		—		—			—		—
Other		202		17		495		714		21,746		(6,805	)		15,655		495
Total	$	10,502	$	2,499	$	52,781	$	65,782	$	675,692	$	(83,155	)	$	658,319	$	52,781

(Dollars in thousands)	Non-covered acquired loans
	Past Due (1)
December 31, 2011	30-59 days		60-89 days		Greater than 90 days		Total past due		Current		Discount			Total non- covered  loans, net of unearned income		Recorded investment > 90 days and accruing (1)
Residential
Prime	$	124	$	60	$	185	$	369	$	4,145	$	—		$	4,514	$	185
Subprime		—		—		—		—		—		—			—		—
Commercial
Real Estate - Construction		629		—		3,755		4,384		61,705		(6,458	)		59,631		3,755
Real Estate - Other		7,213		4,036		29,725		40,974		448,288		(47,808	)		441,454		29,725
Commercial Business		183		69		639		891		105,796		(11,371	)		95,316		639
Consumer and Other
Indirect Automobile		171		10		258		439		10,813		189			11,441		258
Home Equity		2,509		125		4,104		6,738		73,822		(4,839	)		75,721		4,104
Credit Card		—		—		—		—		—		—			—		—
Other		413		545		571		1,529		16,067		(1,511	)		16,085		571
Total	$	11,242	$	4,845	$	39,237	$	55,324	$	720,636	$	(71,798	)	$	704,162	$	39,237

⁽¹⁾  Past due information includes loans acquired from OMNI, Cameron, and Florida Gulf at the gross loan balance, prior to the application of discounts, at December 31, 2012 and OMNI and Cameron at December 31, 2011.

Nonaccrual Loans

The following table provides the recorded investment of non-covered loans on nonaccrual status at December 31, 2012 and 2011. Nonaccrual loans in the table exclude loans acquired.

(Dollars in thousands)	2012		2011
Residential
Prime	$	8,367	$	4,910
Subprime		—		—
Commercial
Real Estate - Construction		5,479		2,582
Real Estate - Other		23,475		33,451
Business		3,358		6,622
Consumer and Other
Indirect Automobile		868		994
Home Equity		5,635		4,873
Credit Card		424		403
Other		310		619
Total	$	47,916	$	54,454

The amount of interest income that would have been recorded in 2012, 2011, and 2010 if total nonaccrual loans had been current in accordance with their original terms was approximately $3,193,000, $4,113,000, and $2,198,000, respectively.

Covered Loans

The carrying amount of the acquired covered loans at December 31, 2012 and 2011 consisted of loans determined to be impaired at the time of acquisition, which are accounted for in accordance with ASC Topic 310-30, and loans that were considered to be performing at the acquisition date, accounted for by analogy to ASC Topic 310-30, as detailed in the following tables.

(Dollars in thousands)	December 31, 2012
Covered loans	Acquired Impaired  Loans		Acquired Performing Loans		Total Covered Loans
Residential mortgage loans:
Residential 1-4 family	$	20,232	$	166,932	$	187,164
Total residential mortgage loans		20,232		166,932		187,164
Commercial loans:
Real estate		167,742		473,101		640,843
Business		2,757		84,294		87,051
Total commercial loans		170,499		557,395		727,894
Consumer and other loans:
Home equity		22,094		152,117		174,211
Other		820		2,667		3,487
Total consumer and other loans		22,914		154,784		177,698
Total covered loans receivable	$	213,645	$	879,111	$	1,092,756

The Company has corrected its disclosure of historical covered loan balances by portfolio type for December 31, 2011 for the impact of an error in the allocation of loan discounts in its covered loan portfolio. The correction had no effect on the balance of total covered loans, total loans, total assets, or net income for the periods presented. The error was identified in 2012 through the operation of the Company’s internal controls over financial reporting as it related to the Company’s loan accounting. Using accounting guidance provided in ASC Topic 250, the Company assessed these items and determined the error, although immaterial to the consolidated financial statements for the year ended December 31, 2012, and immaterial to the overall financial statement presentation at December 31, 2011, would affect the comparability of the disclosures provided in these consolidated financial statements. As a result, the information included in these footnotes includes the effect this correction has on the previously reported disclosures for the December 31, 2011 period.

The following table presents the effect of this correction for the December 31, 2011 period.

(Dollars in thousands)	December 31, 2011
Covered loans	Acquired Impaired Loans							Acquired Performing Loans							Total Covered Loans
	As Previously Reported		Adjustment			As Adjusted		As Previously Reported		Adjustment			As Adjusted
Residential mortgage loans:
Residential 1-4 family	$	31,809	$	3,985		$	35,794	$	184,465		35,128		$	219,593	$	255,387
Total residential mortgage loans		31,809		3,985			35,794		184,465		35,128			219,593		255,387
Commercial loans:
Real estate		23,127		31,564			54,691		704,841		13,345			718,186		772,877
Business		4,053		116			4,169		144,825		(40,256	)		104,569		108,738
Total commercial loans		27,180		31,680			58,860		849,666		(26,911	)		822,755		881,615
Consumer and other loans:
Home equity		30,267		(794	)		29,473		204,707		(41,533	)		163,174		192,647
Other		116		(116	)		—		6,239		(1,439	)		4,800		4,800
Total consumer and other loans		30,383		(910	)		29,473		210,946		(42,972	)		167,974		197,447
Total covered loans receivable	$	89,372	$	34,755		$	124,127	$	1,245,077		(34,755	)	$	1,210,322	$	1,334,449

FDIC loss share receivable

The following is a summary of the year-to-date activity in the FDIC loss share receivable for the periods indicated.

(Dollars in thousands)	December 31,
	2012			2011
Balance, beginning of period	$	591,844		$	726,871
Increase due to credit loss provision recorded on FDIC covered loans		84,085			57,121
Amortization		(118,100	)		(72,086	)
Submission of reimbursable losses to the FDIC		(123,986	)		(117,939	)
Changes due to a change in cash flow assumptions on OREO		(10,774	)		781
Other		—			(2,904	)
Balance, end of period	$	423,069		$	591,844

The Company does not anticipate owing any consideration previously received under indemnification agreements to the FDIC under the “clawback” provisions of these agreements. Of the three agreements with the FDIC that contain clawback provisions, cumulative losses to date under two of these agreements have exceeded the calculated loss amounts which would result in clawback if not incurred. The sum of the historical and remaining projected losses under the remaining agreement is in excess of the clawback amount stated in that agreement.

ASC 310-30 loans

The Company acquired loans (both covered and non-covered) through previous acquisitions which are subject to ASC Topic 310-30.

The carrying amounts of the loans acquired from Florida Gulf in 2012 and OMNI and Cameron during 2011 are detailed in the following tables as of the purchase date.

(Dollars in thousands)
2012	Acquired Impaired  Loans			Acquired Performing Loans			Total Acquired Loan  Portfolio
Contractually required principal and interest at acquisition	$	10,203		$	231,695		$	241,898
Nonaccretable difference (expected losses and foregone interest)		(5,239	)		(40,431	)		(45,670	)
Cash flows expected to be collected at acquisition		4,964			191,264			196,228
Accretable yield		(1,190	)		(22,899	)		(24,089	)
Basis in acquired loans at acquisition	$	3,774		$	168,365		$	172,139

(Dollars in thousands)
2011	Acquired Impaired  Loans			Acquired Performing Loans			Total Acquired Loan  Portfolio
Contractually required principal and interest at acquisition	$	88,556		$	975,870		$	1,064,426
Nonaccretable difference (expected losses and foregone interest)		(34,824	)		(72,827	)		(107,651	)
Cash flows expected to be collected at acquisition		53,732			903,043			956,775
Accretable yield		(7,346	)		(139,163	)		(146,509	)
Basis in acquired loans at acquisition	$	46,386		$	763,880		$	810,226	(1)

(1) Excludes overdraft balances, credit card loans, and in-process accounts included in total loans at the acquisition date.

The following is a summary of changes in the accretable yields of acquired loans during the years ended December 31, 2012 and 2011.

(Dollars in thousands)
December 31, 2012	Acquired Impaired  Loans			Acquired Performing  Loans			Total Acquired Loan Portfolio
Balance, beginning of period	$	83,834		$	386,977		$	470,811
Acquisition		1,190			22,899			24,089
Net transfers from (to) nonaccretable difference to (from) accretable yield		22,016			88,786			110,802
Accretion		(30,417	)		(218,892	)		(249,309	)
Balance, end of period	$	76,623		$	279,770		$	356,393

(Dollars in thousands)
December 31, 2011	Acquired Impaired  Loans			Acquired Performing  Loans			Total Acquired Loan  Portfolio
Balance, beginning of period	$	82,381		$	626,190		$	708,571
Acquisition		7,346			139,163			146,509
Net transfers from (to) nonaccretable difference to (from) accretable yield		37,687			(216,551	)		(178,864	)
Accretion		(43,580	)		(161,825	)		(205,405	)
Balance, end of period	$	83,834		$	386,977		$	470,811

Accretable yield during 2012 decreased primarily as a result of the accretion recognized. Accretable yield during 2011 decreased primarily as a result of a change in expected cash flows on the Company’s covered loans during 2011.

Troubled Debt Restructurings

Information about the Company’s TDRs at December 31, 2012 and 2011 is presented in the following tables. The Company excludes as TDRs modifications of loans that are accounted for within a pool under Subtopic 310-30, which include the covered loans above, as well as the loans acquired in the OMNI and Cameron acquisitions completed during 2011 and those acquired from Florida Gulf in 2012. Accordingly, such modifications do not result in the removal of those loans from the pool, even if the modification of those loans would otherwise be considered a TDR. As a result, all covered loans and loans acquired from OMNI, Cameron, and Florida Gulf that would otherwise meet the criteria for classification as a troubled debt restructuring are excluded from the tables below.

	Total TDRs
(Dollars in thousands)	Accruing Loans
	Current		Past Due Greater than  30 Days		Nonaccrual TDRs		Total TDRs
December 31, 2012
Residential
Prime	$	—	$	—	$	—	$	—
Commercial
Real Estate		1,057		—		14,853		15,910
Business		1,204		—		281		1,485
Consumer and Other
Indirect Automobile		—		—		—		—
Home Equity		93		—		222		315
Credit Card		—		—		—		—
Other		—		—		—		—
Total	$	2,354	$	—	$	15,356	$	17,710
December 31, 2011
Residential
Prime	$	—	$	—	$	—	$	—
Commercial
Real Estate		55		—		21,696		21,751
Business		—		—		1,971		1,971
Consumer and Other
Indirect Automobile		—		—		—		—
Home Equity		—		—		231		231
Credit Card		—		—		—		—
Other		—		—		—		—
Total	$	55	$	—	$	23,898	$	23,953

Of the $17,710,000 in total TDRs, $4,649,000 occurred during the current year through modification of the original loan terms. Total TDRs of $23,953,000 at December 31, 2011 included $10,567,000 of TDRs that occurred during the year ended December 31, 2011. The following table provides information on how the TDRs were modified during the years ended December 31, 2012 and 2011.

(Dollars in thousands)	2012		2011
Extended maturities	$	412	$	—
Interest rate adjustment		277		231
Maturity and interest rate adjustment		1,249		—
Movement to or extension of interest-rate only payments		2,543		2,955
Forbearance		168		7,381
Covenant modifications		—		—
Other concession(s)(1)		—		—
Total	$	4,649	$	10,567

(1) Other concessions include concessions or a combination of concessions that do not consist of maturity extensions, interest rate adjustments, forbearance, and covenant modifications.

Information about the Company’s non-covered TDRs occurring in these periods, as well as non-covered TDRs that subsequently defaulted during the previous twelve months, is presented in the following tables. The Company has defined a default as any loan with a loan payment that is currently past due greater than 30 days, or was past due greater than 30 days at any point during the previous twelve months.

	December 31, 2012						December 31, 2011
(In thousands, except number of loans)	Number of Loans		Pre- modification Outstanding Recorded Investment		Post- modification Outstanding Recorded Investment  (1)		Number of Loans		Pre- modification Outstanding Recorded Investment		Post- modification Outstanding Recorded Investment  (1)
TDRs occurring during the year
Residential
Prime		—	$	—	$	—		—	$	—	$	—
Commercial
Real Estate		14		3,852		3,312		7		9,265		8,365
Business		4		1,215		1,188		5		3,001		1,971
Consumer and Other
Indirect Automobile		—		—		—		—		—		—
Home Equity		1		94		51		1		238		231
Credit Card		—		—		—		—		—		—
Other		1		—		—		—		—		—
Total		20	$	5,161	$	4,551		13	$	12,504	$	10,567

	December 31, 2012				December 31, 2011
Total TDRs that subsequently defaulted in the past 12 months	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Residential
Prime		—	$	—		—	$	—
Commercial
Real Estate		44		14,615		30		21,107
Business		9		1,469		6		1,877
Consumer and Other
Indirect Automobile		—		—		—		—
Home Equity		2		273		—		—
Credit Card		—		—		—		—
Other		1		—		—		—
Total		56	$	16,357		36	$	22,984

(1) Recorded investment includes any allowance for credit losses recorded on the TDRs at the dates indicated.