NOTE 5 – LOANS

Loans consist of the following, segregated into non-covered and covered loans, for the periods indicated:


	March 31, 2015
	Non-covered loans
(Dollars in thousands)	Legacy Loans		Acquired Loans		Covered Loans		Total
Commercial loans:
Real estate	$	3,832,598	$	1,299,564	$	25,508	$	5,157,670
Business		3,278,266		461,595		12,132		3,751,993

		7,110,864		1,761,159		37,640		8,909,663

Residential mortgage loans:
Residential 1-4 family		490,699		478,704		131,767		1,101,170
Construction / Owner Occupied		63,116		—		—		63,116

		553,815		478,704		131,767		1,164,286

Consumer and other loans:
Home equity		1,335,390		441,640		81,058		1,858,088
Indirect automobile		367,077		272		—		367,349
Other		482,270		91,150		655		574,075

		2,184,737		533,062		81,713		2,799,512

Total	$	9,849,416	$	2,772,925	$	251,120	$	12,873,461


	December 31, 2014
	Non-covered loans
(Dollars in thousands)	Legacy Loans		Acquired Loans		Covered Loans⁽¹⁾		Total
Commercial loans:
Real estate	$	3,718,058	$	497,949	$	189,126	$	4,405,133
Business		3,284,140		93,549		31,260		3,408,949

		7,002,198		591,498		220,386		7,814,082

Residential mortgage loans:
Residential 1-4 family		495,638		424,579		128,024		1,048,241
Construction / Owner Occupied		32,056		—		—		32,056

		527,694		424,579		128,024		1,080,297

Consumer and other loans:
Home equity		1,290,976		217,699		92,430		1,601,105
Indirect automobile		396,766		392		—		397,158
Other		451,080		93,618		3,704		548,402

		2,138,822		311,709		96,134		2,546,665

Total	$	9,668,714	$	1,327,786	$	444,544	$	11,441,044

(1)	Included as covered loans at December 31, 2014 is $174.7 million of assets whose reimbursable loss periods ended as of January 1, 2015.

In 2009, the Company acquired substantially all of the assets and liabilities of CapitalSouth Bank (“CSB”), and certain assets, deposits, and other liabilities of Orion Bank (“Orion”) and Century Bank (“Century”). In 2010, the Company acquired certain assets and assumed certain deposits and other liabilities of Sterling Bank (“Sterling”). Substantially all of the loans and foreclosed real estate that were acquired in these transactions are covered by loss sharing agreements between the FDIC and IBERIABANK, which afford IBERIABANK loss protection. Refer to Note 7 for additional information regarding the Company’s loss sharing agreements.

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 agreements. Accordingly, the Company presents loans subject to the loss share agreements as “covered loans” and loans that are not subject to the loss share agreements as “non-covered loans.”

Deferred loan origination fees were $20.9 million and $20.6 million and deferred loan expenses were $9.6 million and $9.4 million at March 31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014, overdrafts of $3.7 million and $5.6 million, respectively, have been reclassified to loans.

Loans with carrying values of $3.1 billion were pledged to secure public deposits and other borrowings at March 31, 2015 and December 31, 2014.

Non-covered Loans

The following tables provide an analysis of the aging of non-covered loans as of March 31, 2015 and December 31, 2014. Due to the difference in accounting for acquired loans, the tables below further segregate the Company’s non-covered loans between loans originated by the Company (“legacy loans”) and acquired loans. For purposes of the following tables, subprime mortgage loans are defined as the Company’s mortgage loans that have borrower FICO scores that are less than 620 at the time of origination or were purchased outside of a business combination.


	March 31, 2015
	Legacy loans
											Total Legacy Loans, Net of Unearned Income		Recorded
	Past Due ⁽¹⁾												Investment > 90 days
(Dollars in thousands)	30-59 days		60-89 days		> 90 days		Total		Current				and Accruing
Commercial real estate - Construction	$	—	$	—	$	126	$	126	$	521,859	$	521,985	$	—
Commercial real estate - Other		3,565		205		18,774		22,544		3,288,069		3,310,613		239
Commercial business		3,277		497		12,821		16,595		3,261,671		3,278,266		—

Residential mortgage - Prime		2,608		200		11,166		13,974		423,428		437,402		—
Residential mortgage - Subprime		—		—		3,982		3,982		112,431		116,413		—

Consumer - Home equity		2,251		437		9,853		12,541		1,322,849		1,335,390		—
Consumer - Indirect automobile		2,069		455		1,415		3,939		363,138		367,077		—
Consumer - Credit card		141		120		1,300		1,561		70,603		72,164		—
Consumer - Other		1,538		242		866		2,646		407,460		410,106		—

Total	$	15,449	$	2,156	$	60,303	$	77,908	$	9,771,508	$	9,849,416	$	239


	December 31, 2014
	Legacy loans
											Total Legacy		Recorded
	Past Due ⁽¹⁾										Loans, Net of		Investment > 90 days
(Dollars in thousands)	30-59 days		60-89 days		> 90 days		Total		Current		Unearned Income		and Accruing
Commercial real estate - Construction	$	507	$	—	$	69	$	576	$	483,663	$	484,239	$	—
Commercial real estate - Other		11,799		148		6,883		18,830		3,214,989		3,233,819		—
Commercial business		1,589		1,860		3,228		6,677		3,277,463		3,284,140		200

Residential mortgage - Prime		1,389		2,616		11,305		15,310		392,900		408,210		538
Residential mortgage - Subprime		—		—		3,595		3,595		115,889		119,484		—

Consumer - Home equity		4,096		595		7,420		12,111		1,278,865		1,290,976		16
Consumer - Indirect automobile		2,447		396		1,419		4,262		392,504		396,766		—
Consumer - Credit card		253		163		1,032		1,448		71,297		72,745		—
Consumer - Other		1,285		424		773		2,482		375,853		378,335		—

Total	$	23,365	$	6,202	$	35,724	$	65,291	$	9,603,423	$	9,668,714	$	754

⁽¹⁾	Past due loans greater than 90 days include all loans on nonaccrual status, regardless of past due satus, as of the period indicated. Nonaccrual loans are presented separately in the “Nonaccrual Loans” section below.


	March 31, 2015
	Non-covered acquired loans
	Past Due ⁽¹⁾													Total Non-covered Acquired Loans, Net of Unearned Income		Recorded Investment > 90 days and Accruing
(Dollars in thousands)	30-59 days		60-89 days		> 90 days		Total		Current		Discount/Premium					Recorded Investment > 90 days and Accruing
Commercial real estate - Construction	$	41	$	70	$	6,803	$	6,914	$	55,749	$	(987	)	$	61,676	$	6,713
Commercial real estate - Other		3,923		1,900		53,628		59,451		1,218,368		(39,931	)		1,237,888		51,695
Commercial business		326		864		4,453		5,643		459,595		(3,643	)		461,595		4,205
Residential mortgage - Prime		1,388		771		14,620		16,779		477,973		(16,048	)		478,704		13,472
Consumer - Home equity		1,514		120		12,873		14,507		438,938		(11,805	)		441,640		11,927
Consumer - Indirect automobile		3		—		22		25		277		(30	)		272		22
Consumer - Other		991		46		1,618		2,655		91,527		(3,032	)		91,150		1,549

Total	$	8,186	$	3,771	$	94,017	$	105,974	$	2,742,427	$	(75,476	)	$	2,772,925	$	89,583


	December 31, 2014
	Non-covered acquired loans
	Past Due ⁽¹⁾													Total Non-covered Acquired Loans, Net of Unearned Income		Recorded Investment > 90 days and Accruing
(Dollars in thousands)	30-59 days		60-89 days		> 90 days		Total		Current		Discount/Premium					Recorded Investment > 90 days and Accruing
Commercial real estate - Construction	$	2,740	$	57	$	1,284	$	4,081	$	26,667	$	(1,170	)	$	29,578	$	1,284
Commercial real estate - Other		4,419		840		26,480		31,739		475,751		(39,119	)		468,371		26,376
Commercial business		2,106		70		1,635		3,811		94,962		(5,224	)		93,549		1,635
Residential mortgage - Prime		152		2,367		9,339		11,858		418,552		(5,831	)		424,579		8,087
Consumer - Home equity		649		385		8,774		9,808		216,310		(8,419	)		217,699		8,383
Consumer - Indirect automobile		13		17		9		39		393		(40	)		392		9
Consumer - Other		1,458		113		1,949		3,520		94,315		(4,217	)		93,618		1,829

Total	$	11,537	$	3,849	$	49,470	$	64,856	$	1,326,950	$	(64,020	)	$	1,327,786	$	47,603

⁽¹⁾	Past due information presents acquired loans at the gross loan balance, prior to application of discounts.

Non-accrual Loans

The following table provides the recorded investment of legacy loans on non-accrual status at the periods indicated.


(Dollars in thousands)	March 31, 2015		December 31, 2014
Commercial real estate - Construction	$	126	$	69
Commercial real estate - Other		18,535		6,883
Commercial business		12,821		3,028

Residential mortgage - Prime		11,166		10,767
Residential mortgage - Subprime		3,982		3,595

Consumer - Home equity		9,853		7,404
Consumer - Indirect automobile		1,415		1,419
Consumer - Credit card		1,300		1,032
Consumer - Other		866		773

Total	$	60,064	$	34,970

Covered Loans

The carrying amount of the acquired covered loans at March 31, 2015 and December 31, 2014 consisted of loans determined to be impaired at the acquisition date, which are accounted for in accordance with ASC Topic 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, 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.


	March 31, 2015
(Dollars in thousands)	Acquired Impaired Loans		Acquired Performing Loans		Total Covered Loans
Commercial loans:
Real estate	$	2,740	$	22,768	$	25,508
Business		—		12,132		12,132

		2,740		34,900		37,640
Residential mortgage loans:
Residential 1-4 family		23,006		108,761		131,767

		23,006		108,761		131,767
Consumer and other loans:
Home equity		7,537		73,521		81,058
Other		—		655		655

		7,537		74,176		81,713

Total	$	33,283	$	217,837	$	251,120


	December 31, 2014
(Dollars in thousands)	Acquired Impaired Loans		Acquired Performing Loans		Total Covered Loans
Commercial loans:
Real estate	$	1,253	$	187,873	$	189,126
Business		—		31,260		31,260

		1,253		219,133		220,386
Residential mortgage loans:
Residential 1-4 family		22,918		105,106		128,024

		22,918		105,106		128,024
Consumer and other loans:
Home equity		12,872		79,558		92,430
Other		489		3,215		3,704

		13,361		82,773		96,134

Total	$	37,532	$	407,012	$	444,544

Loans Acquired

As discussed in Note 3, during the first three months of 2015, the Company acquired loans of $304.5 million from Florida Bank Group, and $1.1 billion from Old Florida. Of the total $1.4 billion of loans acquired, $1.3 billion were determined to have no evidence of deteriorated credit quality and are accounted for under ASC Topics 310-10 and 310-20. The remaining $21.2 million were determined to have deteriorated credit quality under ASC 310-30. The tables below show the balances acquired during the first three months of 2015 for these two subsections of the portfolio as of the acquisition date. These amounts are subject to change due to the finalization of purchase price accounting adjustments.


(Dollars in thousands)
Contractually required principal and interest at acquisition	$	1,586,694
Expected losses and foregone interest		(20,103	)

Cash flows expected to be collected at acquisition		1,566,591

Fair value of acquired loans at acquisition	$	1,347,040


(Dollars in thousands)	Acquired Impaired Loans			Acquired Performing Impaired Loans		Total Acquired Loans
Contractually required principal and interest at acquisition	$	23,678		$	—	$	23,678
Nonaccretable difference (expected losses and foregone interest)		(467	)		—		(467	)

Cash flows expected to be collected at acquisition		23,211			—		23,211
Accretable yield		(2,032	)		—		(2,032	)

Basis in acquired loans at acquisition	$	21,179		$	—	$	21,179

The following is a summary of changes in the accretable difference for loans accounted for under ASC 310-30 of acquired impaired loans during the three months ended March 31:


	2015
(Dollars in thousands)	Acquired Impaired Loans			Acquired Performing Impaired Loans			Total Acquired Loans
Balance at beginning of period	$	74,249		$	213,402		$	287,651
Acquisition		2,032			—			2,032
Transfers from nonaccretable difference to accretable yield		(409	)		408			(1	)
Accretion		(4,742	)		(18,076	)		(22,818	)
Changes in expected cash flows not affecting nonaccretable differences ⁽¹⁾		75			(1,990	)		(1,915	)

Balance at end of period	$	71,205		$	193,744		$	264,949


	2014
	Acquired Impaired Loans			Acquired Performing Impaired Loans			Total Acquired Loans
Balance at beginning of period	$	78,349		$	276,543		$	354,892
Acquisition		929			1,536			2,465
Transfers from nonaccretable difference to accretable yield		1,515			4,946			6,461
Accretion		(2,237	)		(26,068	)		(28,305	)
Changes in expected cash flows not affecting nonaccretable differences ⁽¹⁾		(6,097	)		6,592			495

Balance at end of period	$	72,459		$	263,549		$	336,008

⁽¹⁾	Includes changes in cash flows expected to be collected due to the impact of changes in actual or expected timing of liquidation events, modifications, changes in interest rates and changes in prepayment assumptions.

Troubled Debt Restructurings

Information about the Company’s troubled debt restructurings (“TDRs”) at March 31, 2015 and 2014 is presented in the following tables. Modifications of loans that are accounted for within a pool under ASC Topic 310-30, which include the covered loans above, as well as certain acquired loans are excluded as TDRs. 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 and certain acquired loans that would otherwise meet the criteria for classification as a TDR are excluded from the tables below.


	March 31, 2015								March 31, 2014
	Accruing Loans								Accruing Loans
(Dollars in thousands)	Current		Past Due > 30 days		Nonaccrual TDRs		Total TDRs		Current		Past Due > 30 days		Nonaccrual TDRs		Total TDRs
Commercial real estate - Construction	$	—	$	—	$	—	$	—	$	—		—		456		456
Commercial real estate - Other		344		—		1,925		2,269		389		—		3,662		4,051
Commercial business		1,042		—		14,890		15,932		894		—		3,152		4,046
Consumer - Home equity		—		—		233		233		—		—		253		253

Total	$	1,386	$	—	$	17,048	$	18,434	$	1,283	$	—	$	7,523	$	8,806

TDRs totaling $14.8 million occurred during the three-month period ended March 31, 2015 through modification of the original loan terms. No TDRs occurred during the three months ended March 31, 2014. The following table provides information on how the TDRs were modified during the three months ended March 31, 2015:


(Dollars in thousands)	2015
Extended maturities	$	—
Interest rate adjustment		—
Maturity and interest rate adjustment		14,812
Movement to or extension of interest-rate only payments		—
Forbearance		—
Other concession(s) ⁽¹⁾		—

Total	$	14,812

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

The Company had no residential mortgage or consumer TDRs that were added during the three months ended March 31, 2015 and 2014. The following tables present the end of period balance for loans modified in a TDR during the periods presented and the financial impact of those modifications.


	March 31, 2015						March 31, 2014
(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⁾
Commercial real estate		1	$	1,935	$	1,743		—	$	—	$	—
Commercial business		6		13,162		13,069		—		—		—

Total		7	$	15,097	$	14,812		—	$	—	$	—

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

Information detailing non-covered TDRs which defaulted during the three months ended March 31, 2015 and 2014, and which were modified in the previous twelve months (i.e., the twelve months prior to the default) is presented in the following table. 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, or since the date of modification, whichever is shorter.


	March 31, 2015				March 31, 2014
(In thousands, except number of loans)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Commercial real estate		31	$	—		31	$	4,118
Commercial business		9		372		17		2,729
Consumer - Home Equity		—		—		1		43
Consumer - Other		1		—		1		—

Total		41	$	372		50	$	6,890