Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting ~~company~~company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practical date.


	Unaudited									Unaudited
	September 30,						December 31,			June 30,						December 31, 2014
	2014			2013			2013			2015			2014			December 31, 2014
	(Dollars in thousands, except per share amounts)									(Dollars in thousands, except per share amounts)
ASSETS
Cash and due from banks	$	109,877		$	123,291		$	195,094		$	512,908		$	107,240		$	147,751
Interest earning deposits		2,207			1,167			881			1,982			3,448			2,452

Cash and cash equivalents		112,084			124,458			195,975			514,890			110,688			150,203
Investment securities - available for sale (“AFS”)		859,876			671,393			669,384			782,277			892,129			839,321
Non-purchased loans and leases		3,639,142			2,522,589			2,632,565			4,767,123			3,171,585			3,979,870
Purchased loans not covered by Federal Deposit Insurance Corporation (“FDIC”) loss share agreements (“purchased non-covered loans”)		1,030,988			399,058			372,723
Loans covered by FDIC loss share agreements (“covered loans”)		248,802			409,319			351,791
Purchased loans											1,826,848			1,404,069			1,147,947

Total loans and leases											6,593,971			4,575,654			5,127,817
Allowance for loan and lease losses		(49,606	)		(41,660	)		(42,945	)		(56,749	)		(46,958	)		(52,918	)

Net loans and leases		4,869,326			3,289,306			3,314,134			6,537,222			4,528,696			5,074,899
FDIC loss share receivable		36,583			89,642			71,854
Federal Deposit Insurance Corporation (“FDIC”) loss share receivable											0			50,679			0
Premises and equipment, net		267,888			245,055			245,472			285,087			265,061			273,591
Foreclosed assets not covered by FDIC loss share agreements		14,781			11,647			11,851
Foreclosed assets covered by FDIC loss share agreements		27,882			40,452			37,960
Foreclosed assets											25,973			56,356			37,775
Accrued interest receivable		20,966			15,227			14,359			26,345			21,143			20,192
Bank owned life insurance (“BOLI”)		180,667			142,311			143,473			269,311			179,277			182,052
Intangible assets, net		107,108			20,039			19,158			151,150			108,640			105,576
Other, net		83,199			61,037			67,550			118,180			85,306			82,890

Total assets	$	6,580,360		$	4,710,567		$	4,791,170		$	8,710,435		$	6,297,975		$	6,766,499


LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	1,089,415		$	724,413		$	746,320		$	1,320,779		$	1,058,210		$	1,145,454
Savings and interest bearing transaction		2,787,958			1,952,617			2,073,497			3,645,551			2,748,929			2,892,989
Time		1,262,332			977,656			897,210			2,120,969			1,176,758			1,457,939

Total deposits		5,139,705			3,654,686			3,717,027			7,087,299			4,983,897			5,496,382
Repurchase agreements with customers		73,942			50,254			53,103			70,011			55,999			65,578
Other borrowings		352,616			280,905			280,895			161,931			280,875			190,855
Subordinated debentures		64,950			64,950			64,950			117,403			64,950			64,950
FDIC clawback payable		26,676			25,705			25,897			0			26,533			0
Accrued interest payable and other liabilities		43,452			18,251			16,768			61,033			32,063			36,892

Total liabilities		5,701,341			4,094,751			4,158,640			7,497,677			5,444,317			5,854,657


Commitments and contingencies

Stockholders’ equity:
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares outstanding at September 30, 2014 and 2013 or at December 31, 2013		0			0			0
Common stock; $0.01 par value; 125,000,000 shares authorized; 79,704,950, 73,403,418 and 73,711,704 shares issued and outstanding at September 30, 2014, September 30, 2013 and December 31, 2013, respectively		797			735			737
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares outstanding at June 30, 2015 and 2014 or at December 31, 2014											0			0			0
Common stock; $0.01 par value; 125,000,000 shares authorized; 86,811,457, 79,662,150 and 79,924,350 shares issued at June 30, 2015, June 30, 2014 and December 31, 2014, respectively											868			797			799
Additional paid-in capital		317,390			139,768			143,017			566,320			315,267			324,354
Retained earnings		546,667			472,288			488,978			633,998			524,134			571,454
Accumulated other comprehensive income (loss)		10,724			(453	)		(3,672	)
Accumulated other comprehensive income											8,068			10,006			14,132
Treasury stock, at cost, none at June 30, 2015 or June 30, 2014, 72,268 shares at December 31, 2014											0			0			(2,349	)

Total stockholders’ equity before noncontrolling interest		875,578			612,338			629,060			1,209,254			850,204			908,390
Noncontrolling interest		3,441			3,478			3,470			3,504			3,454			3,452

Total stockholders’ equity		879,019			615,816			632,530			1,212,758			853,658			911,842

Total liabilities and stockholders’ equity	$	6,580,360		$	4,710,567		$	4,791,170		$	8,710,435		$	6,297,975		$	6,766,499


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
	(Dollars in thousands, except per share amounts)												(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans and leases	$	43,153		$	33,183		$	113,400		$	93,782		$	56,637		$	36,833		$	107,069		$	70,247
Purchased non-covered loans		18,056			5,653			39,534			7,366
Covered loans		10,630			10,501			31,166			34,845
Purchased loans														35,762			25,128			68,622			42,013
Investment securities:
Taxable		2,986			1,988			8,135			4,456			3,230			2,790			6,715			5,149
Tax-exempt		5,247			4,006			14,617			11,599			4,456			4,974			9,125			9,371
Deposits with banks and federal funds sold		11			11			50			21			18			35			27			38

Total interest income		80,083			55,342			206,902			152,069			100,103			69,760			191,558			126,818


Interest expense:
Deposits		2,285			1,537			5,693			4,457			3,917			1,827			7,454			3,408
Repurchase agreements with customers		15			7			40			21			19			13			36			25
Other borrowings		2,736			2,732			8,083			8,064			1,443			2,692			3,146			5,347
Subordinated debentures		426			433			1,267			1,290			968			427			1,676			840

Total interest expense		5,462			4,709			15,083			13,832			6,347			4,959			12,312			9,620


Net interest income		74,621			50,633			191,819			138,237			93,756			64,801			179,246			117,198
Provision for loan and lease losses		(3,687	)		(3,818	)		(10,574	)		(9,212	)		(4,308	)		(5,582	)		(10,623	)		(6,887	)

Net interest income after provision for loan and lease losses		70,934			46,815			181,245			129,025			89,448			59,219			168,623			110,311


Non-interest income:
Service charges on deposit accounts		7,356			5,817			19,601			15,613			7,088			6,605			13,715			12,244
Mortgage lending income		1,728			1,276			3,807			4,660			1,772			1,126			3,279			2,080
Trust income		1,419			1,060			4,099			2,808			1,463			1,364			2,895			2,681
BOLI income		1,390			1,179			3,799			3,365			1,785			1,278			5,407			2,408
Accretion (amortization) of FDIC loss share receivable, net of amortization of FDIC clawback payable		(562	)		1,396			(611	)		6,269
Other income from loss share and purchased non-covered loans, net		3,369			2,484			10,309			8,328
Net amortization of FDIC loss share receivable and FDIC clawback payable														0			(741	)		0			(49	)
Other income from purchased loans, net														6,971			3,629			15,879			6,940
Net gains on investment securities		43			0			67			156			85			18			2,618			23
Gains on sales of other assets		1,688			2,501			4,111			7,586			2,557			1,448			5,385			2,422
Gain on merger and acquisition transactions		0			5,163			4,667			5,163
Gain on merger and acquisition transaction														0			0			0			4,667
Other		2,817			1,226			7,147			3,498			1,549			2,661			3,159			4,333

Total non-interest income		19,248			22,102			56,996			57,446			23,270			17,388			52,337			37,749


Non-interest expense:
Salaries and employee benefits		20,876			16,456			57,396			47,445			22,646			18,831			45,243			36,520
Net occupancy and equipment		6,823			4,786			17,574			13,670			7,344			5,707			14,635			10,751
Other operating expenses		14,824			10,966			42,886			30,226			13,734			13,340			34,030			28,062

Total non-interest expense		42,523			32,208			117,856			91,341			43,724			37,878			93,908			75,333


Income before taxes		47,659			36,709			120,385			95,130			68,994			38,729			127,052			72,727
Provision for income taxes		15,579			10,224			36,559			28,255			24,190			12,251			42,330			20,981

Net income		32,080			26,485			83,826			66,875			44,804			26,478			84,722			51,746
Earnings attributable to noncontrolling interest		13			(33	)		29			(36	)		(28	)		8			(52	)		16

Net income available to common stockholders	$	32,093		$	26,452		$	83,855		$	66,839		$	44,776		$	26,486		$	84,670		$	51,762


Basic earnings per common share	$	0.40		$	0.36		$	1.09		$	0.94		$	0.52		$	0.35		$	0.99		$	0.69


Diluted earnings per common share	$	0.40		$	0.36		$	1.08		$	0.93		$	0.51		$	0.34		$	0.98		$	0.68


Dividends declared per common share	$	0.12		$	0.095		$	0.345		$	0.255		$	0.135		$	0.115		$	0.265		$	0.225


													Three Months Ended						Six Months Ended
	Three Months Ended						Nine Months Ended						June 30,						June 30,
	September 30,						September 30,						2015			2014			2015			2014
	2014			2013			2014			2013			(Dollars in thousands)
	(Dollars in thousands)
Net income	$	32,080		$	26,485		$	83,826		$	66,875		$	44,804		$	26,478		$	84,722		$	51,746
Other comprehensive income (loss):
Unrealized gains and losses on investment securities AFS		1,223			732			23,754			(18,333	)		(10,091	)		11,199			(7,600	)		22,529
Tax effect of unrealized gains and losses on investment securities AFS		(479	)		(287	)		(9,317	)		7,191			3,844			(4,393	)		3,157			(8,837	)
Reclassification of gains and losses on investment securities AFS included in net income		(43	)		0			(67	)		(156	)		(85	)		(18	)		(2,618	)		(23	)
Tax effect of reclassification of gains and losses on investment securities AFS included in net income		17			0			26			62			33			7			997			9

Total other comprehensive income (loss)		718			445			14,396			(11,236	)		(6,299	)		6,795			(6,064	)		13,678
									��
Total comprehensive income	$	32,798		$	26,930		$	98,222		$	55,639		$	38,505		$	33,273		$	78,658		$	65,424


	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2014			2013			2015			2014
	(Dollars in thousands)						(Dollars in thousands)
Cash flows from operating activities:
Net income	$	83,826		$	66,875		$	84,722		$	51,746
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		5,968			5,317			4,575			3,816
Amortization		3,464			1,924			3,236			1,932
Earnings attributable to noncontrolling interest		29			(36	)		(52	)		16
Provision for loan and lease losses		10,574			9,212			10,623			6,887
Provision for losses on foreclosed assets		862			1,072			2,427			863
Net amortization of investment securities AFS		431			450
Net (accretion) amortization of investment securities AFS								(51	)		301
Net gains on investment securities AFS		(67	)		(156	)		(2,618	)		(23	)
Originations of mortgage loans held for sale		(152,767	)		(172,210	)		(136,267	)		(90,110	)
Proceeds from sales of mortgage loans held for sale		154,409			191,570			127,302			83,337
Accretion of covered loans		(31,166	)		(34,845	)
Accretion of purchased non-covered loans		(39,534	)		(7,366	)
(Accretion)/amortization of FDIC loss share receivable, net of amortization of FDIC clawback payable		611			(6,269	)
Accretion of purchased loans								(68,622	)		(42,013	)
Net amortization of FDIC loss share receivable and FDIC clawback payable								0			49
Gains on sales of other assets		(4,111	)		(7,586	)		(5,385	)		(2,422	)
Gain on merger and acquisition transactions		(4,667	)		(5,163	)
Deferred income tax benefit		(6,625	)		(2,070	)
Gain on merger and acquisition transaction								0			(4,667	)
Prepayment penalty on Federal Home Loan Bank of Dallas advances								2,480			0
Deferred income tax expense (benefit)								2,252			(3,407	)
Increase in cash surrender value of BOLI		(3,799	)		(3,365	)		(3,119	)		(2,408	)
Excess tax benefit on exercise and forfeiture of stock options		(1,649	)		(1,458	)
BOLI death benefits in excess of cash surrender value								(2,289	)		0
Stock-based compensation expense		4,402			3,238			4,220			3,050
Excess tax benefit on stock-based compensation								(791	)		(1,373	)
Changes in assets and liabilities:
Accrued interest receivable		(1,872	)		(900	)		(4,420	)		(2,049	)
Other assets, net		5,496			2,473			28,658			3,449
Accrued interest payable and other liabilities		24,396			2,137			(1,951	)		13,094

Net cash provided by operating activities		48,211			42,844			44,930			20,068

Cash flows from investing activities:
Proceeds from sales of investment securities AFS		54,957			999			32,777			48,394
Proceeds from maturities/calls/paydowns of investment securities AFS		68,349			71,860			81,532			29,706
Purchases of investment securities AFS		(46,618	)		(124,193	)		(37,522	)		(35,109	)
Net advances on non-purchased loans and leases		(1,017,513	)		(428,273	)
Payments received on purchased non-covered loans		253,347			37,666
Payments received on covered loans		97,915			177,094
Net increase of non-purchased loans and leases								(800,061	)		(539,695	)
Payments received on purchased loans								462,027			207,403
Payments received from FDIC under loss share agreements		24,810			66,993			0			16,076
Other net decreases in covered assets and FDIC loss share receivable		15,267			21,634
Other net decreases in assets covered by FDIC loss share agreements and FDIC loss share receivable								0			9,246
Purchases of premises and equipment		(10,352	)		(7,815	)		(9,720	)		(4,586	)
Purchase of BOLI								(85,000	)		0
Proceeds from BOLI death benefits								3,149			0
Proceeds from sales of other assets		54,350			47,975			40,018			30,166
Cash received from (invested) in unconsolidated investments		1,320			(571	)
Cash invested in unconsolidated investments								(639	)		(2,320	)
Net cash received in merger and acquisition transactions		121,918			56,786			274,235			121,918

Net cash used by investing activities		(382,250	)		(79,845	)		(39,204	)		(118,801	)

Cash flows from financing activities:
Net increase (decrease) in deposits		196,998			(46,987	)
Net proceeds from other borrowings		71,276			142
Net increase in repurchase agreements with customers		4,324			14,298
Net increase in deposits								406,269			41,190
Net repayments of other borrowings								(31,404	)		(464	)
Net increase (decrease) in repurchase agreements with customers								4,434			(13,619	)
Proceeds from exercise of stock options		2,067			2,617			997			1,572
Excess tax benefit on exercise and forfeiture of stock options		1,649			1,458
Excess tax benefit on stock-based compensation								791			1,373
Cash dividends paid on common stock		(26,166	)		(18,036	)		(22,126	)		(16,606	)

Net cash provided (used) by financing activities		250,148			(46,508	)
Net cash provided by financing activities								358,961			13,446

Net decrease in cash and cash equivalents		(83,891	)		(83,509	)
Net increase (decrease) in cash and cash equivalents								364,687			(85,287	)
Cash and cash equivalents – beginning of period		195,975			207,967			150,203			195,975

Cash and cash equivalents – end of period	$	112,084		$	124,458		$	514,890		$	110,688

Bank of the Ozarks, Inc. (the “Company”) is a bank holding company headquartered in Little Rock, Arkansas, which operates under the rules and regulations of the Board of Governors of the Federal Reserve System. The Company owns a wholly-owned state chartered bank subsidiary – Bank of the Ozarks (the “Bank”), ~~four~~eight 100%-owned finance subsidiary business trusts – Ozark Capital Statutory Trust II (“Ozark II”), Ozark Capital Statutory Trust III (“Ozark III”), Ozark Capital Statutory Trust IV (“Ozark IV”) ~~and~~, Ozark Capital Statutory Trust V (“Ozark V”) (collectively, the “Ozark Trusts”), Intervest Statutory Trust II (“Intervest II”), Intervest Statutory Trust III (“Intervest III”), Intervest Statutory Trust IV (“Intervest IV”) and Intervest Statutory Trust V (“Intervest V”), (collectively, the “Intervest Trusts”; and together with Ozark Trusts, the “Trusts”) and, indirectly through the Bank, a subsidiary engaged in the development of real estate, a subsidiary that owns private aircraft and various other entities that hold foreclosed assets or tax credits or engage in other activities. The Company and Bank are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. The consolidated financial statements include the accounts of the Company, the Bank, the real estate subsidiary, the aircraft subsidiary and certain of those various other entities in accordance with accounting principles generally accepted in the United States (“GAAP”). Significant intercompany transactions and amounts have been eliminated in consolidation.

At ~~September~~June 30, ~~2014,~~2015, the Company had ~~165~~164 offices, including 8880 in Arkansas, 28 in Georgia, 21 in Texas, 1716 in North Carolina, ~~five~~11 in Florida, three in Alabama, ~~and one office~~two offices each in South Carolina and New York and one office in California.

The accompanying consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) in Article 10 of Regulation S-X and in accordance with the instructions to Form 10-Q and GAAP for interim financial information. Certain information, accounting policies and footnote disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, all adjustments considered necessary, consisting of normal recurring items, have been included for a fair presentation of the accompanying consolidated financial statements. Operating results for the ~~nine~~three months or six months ended ~~September~~June 30, ~~2014~~2015 are not necessarily indicative of the results that may be expected for the full year or future periods.

On June 23, 2014, the Company completed a two-for-one stock split in the form of a stock dividend, effected by issuing one share of common stock for each share of such stock outstanding on June 13, 2014. All share and per share information in the consolidated financial statements and the notes to the consolidated financial statements has been adjusted to give effect to this stock split.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income. ~~Additionally,~~

During the fourth quarter of 2014, the Bank and the Federal Deposit Insurance Corporation (“FDIC”) entered into agreements terminating the loss share agreements for all seven of its FDIC-assisted acquisitions. As a result of entering these termination agreements, the Company reclassified its loans previously reported as covered by FDIC loss share to purchased loans for all periods presented, and it has reclassified all interest income on loans previously reported as covered by FDIC loss share to interest income on purchased loans for all periods presented.

During the second quarter of 2015, the Company revised its initial estimates and assumptions regarding the recovery of certain acquired loans and acquired deferred tax assets from its acquisition of Intervest Bancshares Corporation (“Intervest”). As a result, certain amounts previously reported in the Company’s consolidated financial statements have been recast.

On February 10, 2015, the Company completed its previously announced acquisition of Intervest and its wholly-owned bank subsidiary Intervest National Bank, for an aggregate of 6,637,243 shares of its common stock (plus cash in lieu of fractional shares) in a transaction valued at approximately $238.5 million. The acquisition of Intervest provided the Company with a banking office in New York City and expanded its service area in Florida by adding five banking offices in Clearwater, Florida and one office in South Pasadena, Florida.

During the second quarter of 2015, management revised its initial estimates and assumptions regarding the recovery of certain acquired loans and acquired deferred tax assets. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of a change in circumstances, management has recast the first quarter 2015 consolidated financial statements to decrease the goodwill recorded in the Intervest acquisition by $2.7 million to reflect this change in estimate.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by Intervest, the estimates of the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, the recast adjustment described above and the estimates of the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of ~~a business combination transaction~~acquisition to finalize the fair values of the acquired assets and assumed liabilities. Once management has finalized the fair values of acquired assets and assumed liabilities within this 12-month period, management considers such values to be the day 1 fair values (“Day 1 Fair Values”). ~~During~~The fair value adjustments and the ~~second quarter~~resultant fair values shown in the following table continue to be evaluated by management and may be subject to further adjustment.

Explanation of 2014, the Company revised its initial estimates regarding the expected recovery of acquired assets with built-in losses in its July 31, 2013 acquisition of The First National Bank of Shelby (“First National Bank”). preliminary fair value adjustments

As a result of the recast adjustment described above, certain amounts previously reported in the Company’s consolidated financial statements as of March 31, 2015 have been recast. The following is a summary of those financial statement captions that have been impacted by the recast adjustment.

~~On July 31, 2014,~~Goodwill of $44.2 million, which is the Company entered into a definitive agreement and plan of merger (the “Intervest Agreement”) with Intervest Bancshares Corporation (“Intervest”), and its wholly-owned bank subsidiary Intervest National Bank (“INB”), headquartered in New York, New York, whereby the Company will acquire allexcess of the ~~outstanding common stock~~merger consideration over the fair value of net assets acquired, was recorded in the Intervest ~~in a transaction valued at approximately $228.5 million. INB operates seven~~acquisition and is the result of expected operational synergies, expansion of full service banking ~~offices including one~~ in New York City ~~five in Clearwater, Florida~~ and one in Pasadena, Florida. At September 30, 2014, INB reported approximately $1.51 billion in total assets, approximately $1.18 billion in loans, approximately $0.31 million in investment securities and approximately $1.21 billion in deposits.

~~Under~~other factors. This goodwill is not expected to be deductible for tax purposes. To the ~~terms~~extent that management further revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded in the Intervest ~~Agreement, each outstanding share~~acquisition may be subject to further adjustment.

The Company’s consolidated results of ~~common stock~~operations include the operating results of Intervest ~~will be converted into~~beginning February 11, 2015 through the ~~right to receive shares~~end of the ~~Company’s common stock, plus cash in lieu~~reporting period. For the three months ended June 30, 2015, Intervest contributed $14.9 million of ~~any fractional share, all subject~~net interest income and $8.6 million of net income to ~~certain conditions and~~

~~potential adjustments. The number of Company shares to be issued will be determined based on~~ the Company’s ~~10-day average closing stock price~~operating results. For the six months ended June 30, 2015, Intervest contributed $23.8 million of net interest income and $13.5 million of net income to the Company’s operating results.

The following unaudited supplemental pro forma information is presented to show the estimated results assuming Intervest was acquired as of the ~~fifth business day prior to the closing date, subject to a minimum price of $23.95 per share and a maximum price of $39.91 per share. Upon the closing~~beginning of the ~~transaction, Intervest will merge into~~earliest period presented, adjusted for estimated potential costs savings. These unaudited pro forma results are not necessarily indicative of the operating results that the Company would have achieved had it completed the acquisition as of January 1, 2014 or 2015 and ~~INB will merge into the Bank. Completion~~should not be considered as representative of ~~the transaction is subject to certain closing conditions, including receipt of customary regulatory approvals and the approval of Intervest’s stockholders.~~future operating results.

On May 16, 2014, the Company completed ~~its~~the acquisition of Summit Bancorp, Inc. (“Summit”) and Summit Bank, its wholly-owned bank subsidiary, for an aggregate of $42.5 million in cash and 5,765,846 ~~split-adjusted~~ shares of its common stock. The acquisition of Summit expanded ~~the Company’s~~its service area in Central, South and Western Arkansas by adding 23 banking locations and one loan production office in nine Arkansas counties. During the second quarter of 2014, the Company closed one of the banking offices and the one loan production office acquired in the Summit acquisition.

~~The following table provides~~ During the fourth quarter of 2014 and the second quarter of 2015, the Company closed eight additional banking offices, including six that were acquired from Summit, in markets where the Company had excess branches as a ~~summary~~result of the ~~assets acquired and liabilities assumed as recorded by~~ Summit the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, and the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The fair value adjustments and the resultant fair values shown in the following table continue to be evaluated by management and may be subject to further adjustment.

acquisition. Goodwill of $73.4 million, which is the excess of the merger consideration over the fair value of net assets acquired, was recorded in the Summit acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.

The Company’s consolidated results of operations include the operating results for Summit beginning May 16, 2014 through the end of the reporting period. Summit’s operating results contributed $10.9 million of net interest income and $5.0 million of net income to the Company’s results of operations for the three months ended September 30, 2014, and contributed $16.6 million of net interest income and $7.4 million of net income to the Company’s results of operations for the nine months ended September 30, 2014.

The following unaudited supplemental pro forma information is presented to show the estimated results assuming Summit was acquired as of the beginning of each period presented, adjusted for estimated potential costs savings. These unaudited pro forma results are not necessarily indicative of the operating results that the Company would have achieved had it completed the acquisition as of January 1, 2013 or 2014 and should not be considered as representative of future operating results.

On March 5, 2014, the Company completed its acquisition of Bancshares, Inc. (“Bancshares”) ~~of Houston, Texas~~ and OMNIBANK, N.A., its wholly-owned bank subsidiary, for an aggregate of $21.5 million in cash. The Company recognized a bargain purchase gain of $4.7 million during the first quarter of 2014 as a result of the Bancshares acquisition. The acquisition of Bancshares expanded the Company’s service area in South Texas by adding three offices in Houston and one office each in Austin, Cedar Park, Lockhart, and San Antonio.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by Bancshares, the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, and the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The fair value adjustments and the resultant fair values shown in the following table continue to be evaluated by management and may be subject to further adjustment.


g-		This adjustment reflects the differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes. Management has determined that acquired net operating loss carryforwards are expected to be settled in future periods where the realization of such benefits would be subject to limitations under section 382 of the Internal Revenue Code (“section 382 limitations”). Accordingly, as of the date of acquisition, the Company had established a deferred tax asset valuation allowance of approximately $0.5 million to reflect its assessment that the realization of the benefits from the settlement of these acquired net operating losses is expected to be subject to section 382 limitations. To the extent that additional information becomes available, management may be required to adjust its estimates and assumptions regarding the realization of the benefits associated with these acquired net operating losses by adjusting this deferred tax asset valuation allowance.
h-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired deposits.~~
i-		~~Adjustment reflects the amount needed to adjust other liabilities to estimated fair value and to record certain liabilities directly attributable to the acquisition of Bancshares.~~

The Company’s consolidated results of operations include the operating results for Bancshares beginning March 6, 2014 through the end of the reporting period. For the three months ended September 30, 2014, Bancshares’ operating results contributed $2.1 million of net interest income and $1.1 million of net income to the Company’s results of operations. For the nine months ended September 30, 2014, Bancshares’ operating results contributed $5.5 million of net interest income and $7.5 million of net income, including the $4.7 million of tax-exempt bargain purchase gain, to the Company’s results of operations.

On July 31, 2013, the Company completed the First National Bank acquisition whereby First National Bank merged with and into the Company’s wholly-owned bank subsidiary for an aggregate of $8.4 million in cash and 2,514,770 split-adjusted shares of its common stock. The Company also acquired certain real property from parties related to First National Bank and on which certain First National Bank offices are located for $3.8 million in cash.

The acquisition of First National Bank expanded the Company’s service area in North Carolina by adding 14 offices in Shelby, North Carolina and the surrounding communities. On September 24, 2013 the Company closed one of the acquired offices in Shelby, North Carolina.

During the second quarter of 2014, management revised its initial estimates and assumptions regarding the expected recovery of acquired assets with built-in losses, specifically the timing of expected charge-offs of purchased non-covered loans, in the First National Bank acquisition. As a result of such revision, management concluded that the deferred tax asset valuation allowance of $4.1 million was not necessary. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of changes in circumstances, management has recast the third quarter 2013 financial statements, along with all subsequent financial statements, to increase the bargain purchase gain on the First National Bank acquisition by $4.1 million to reflect this change in estimate.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by First National Bank, the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, the recast adjustment described above and the resultant fair values of those assets and liabilities as recorded by the Company.

~~Beginning August 1, 2013, First National Bank operations are included in the Company’s consolidated results of operations.~~

As a result of the recast adjustment described above, certain amounts previously reported in the Company’s consolidated financial statements have been recast. The following is a summary of those financial statement captions that have been impacted by this recast adjustment.

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding after consideration of the dilutive effect, if any, of ~~the Company’s~~ outstanding common stock options using the treasury stock method. No options to purchase shares of ~~the Company’s~~ common stock for the three months ended June 30, 2015 and ~~nine~~ 2014 or the six

months ended ~~September~~June 30, 2014 ~~and the three months ended September 30, 2013~~ were excluded from the diluted EPS calculations as all options were dilutive. ~~For the nine months ended September 30, 2013, options~~Options to purchase ~~4,000 split-adjusted~~531,500 shares of the Company’s common stock at a weighted-average exercise price of $40.34 were ~~excluded from~~outstanding but not included in the computation of diluted EPS ~~calculations as~~for the six months ended June 30, 2015 because the options exercise price was greater than the average market price of the common shares and inclusion ~~of these options~~ would have been ~~anti-dilutive.~~antidilutive.

The following table presents the computation of basic and diluted EPS for the periods indicated.


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2014		2013		2014		2013		2015		2014		2015		2014
	(In thousands, except per share amounts)								(In thousands, except per share amounts)
Numerator:
Distributed earnings allocated to common stock	$	9,560	$	6,732	$	26,166	$	18,036
Undistributed earnings allocated to common stock		22,533		19,720		57,689		48,803
Distributed earnings allocated to common stockholders									$	11,713	$	8,497	$	22,126	$	16,606
Undistributed earnings allocated to common stockholders										33,063		17,989		62,544		35,156

Net income available to common stock	$	32,093	$	26,452	$	83,855	$	66,839
Net income available to common stockholders									$	44,776	$	26,486	$	84,670	$	51,762


Denominator:
Denominator for basic EPS – weighted-average common shares		79,678		72,544		76,763		71,338		86,786		76,743		85,251		75,281
Effect of dilutive securities – stock options		767		752		706		650		729		723		750		700

Denominator for diluted EPS – weighted-average common shares and assumed conversions		80,445		73,296		77,469		71,988		87,515		77,466		86,001		75,981

Basic EPS	$	0.40	$	0.36	$	1.09	$	0.94	$	0.52	$	0.35	$	0.99	$	0.69

Diluted EPS	$	0.40	$	0.36	$	1.08	$	0.93	$	0.51	$	0.34	$	0.98	$	0.68

At ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 and at December 31, ~~2013,~~2014, the Company classified all of its investment securities portfolio as AFS. Accordingly, ~~its~~ investment securities are stated at estimated fair value in the consolidated financial statements with unrealized gains and losses, net of related income tax, reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income (loss).

The following table presents the amortized cost and estimated fair value of investment securities AFS as of the dates indicated. The Company’s investment in the “CRA qualified investment fund” includes shares held in a mutual fund that qualifies under the Community Reinvestment Act of 1977 for community reinvestment purposes. The Company’s holdings of ~~“other~~ equity ~~securities” include~~securities in Federal Home Loan Bank of Dallas (“~~FHLB – Dallas”~~FHLB”) and First National Banker’s Bankshares, Inc. (“FNBB”) ~~shares, which~~ do not have readily determinable fair values and are carried at cost.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in thousands)									(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Obligations of state and political subdivisions	$	572,070	$	16,610	$	(1,101	)	$	587,579	$	496,777	$	11,768	$	(1,630	)	$	506,915
U.S. Government agency securities		251,926		4,427		(2,291	)		254,062		257,849		4,627		(1,723	)		260,753
Corporate obligations		655		0		0			655		3,574		0		0			3,574
Other equity securities		17,580		0		0			17,580
CRA qualified investment fund											1,028		0		(8	)		1,020
FHLB and FNBB equity securities											10,015		0		0			10,015

Total	$	842,231	$	21,037	$	(3,392	)	$	859,876	$	769,243	$	16,395	$	(3,361	)	$	782,277

December 31, 2013:

December 31, 2014:
Obligations of state and political subdivisions	$	438,390	$	6,230	$	(8,631	)	$	435,989	$	555,335	$	18,267	$	(393	)	$	573,209
U.S. Government agency securities		222,510		2,352		(5,993	)		218,869		245,854		6,144		(765	)		251,233
Corporate obligations		716		0		0			716		654		0		0			654
Other equity securities		13,810		0		0			13,810
FHLB and FNBB equity securities											14,225		0		0			14,225

Total	$	675,426	$	8,582	$	(14,624	)	$	669,384	$	816,068	$	24,411	$	(1,158	)	$	839,321

September 30, 2013:

June 30, 2014:
Obligations of state and political subdivisions	$	432,362	$	7,423	$	(8,217	)	$	431,568	$	603,533	$	15,536	$	(2,504	)	$	616,565
U.S. Government agency securities		225,263		4,077		(4,029	)		225,311		254,878		5,613		(2,180	)		258,311
Corporate obligations		717		0		0			717		685		0		0			685
Other equity securities		13,797		0		0			13,797
FHLB and FNBB equity securities											16,568		0		0			16,568

Total	$	672,139	$	11,500	$	(12,246	)	$	671,393	$	875,664	$	21,149	$	(4,684	)	$	892,129

The following table shows estimated fair value of investment securities AFS having gross unrealized losses and the amount of such unrealized losses, aggregated by investment category and length of time that individual investment securities have been in a continuous unrealized loss position, as of the dates indicated.


	Less than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
June 30, 2015:
Obligations of state and political subdivisions	$	104,621	$	1,532	$	7,515	$	98	$	112,136	$	1,630
U.S. Government agency securities		76,252		1,534		7,181		189		83,433		1,723
CRA qualified investment fund		1,020		8		0		0		1,020		8

Total temporarily impaired securities	$	181,893	$	3,074	$	14,696	$	287	$	196,589	$	3,361


December 31, 2014:
Obligations of state and political subdivisions	$	29,174	$	75	$	34,414	$	318	$	63,588	$	393
U.S. Government agency securities		9,630		25		47,626		740		57,256		765

Total temporarily impaired securities	$	38,804	$	100	$	82,040	$	1,058	$	120,844	$	1,158


June 30, 2014:
Obligations of state and political subdivisions	$	60,769	$	386	$	79,000	$	2,118	$	139,769	$	2,504
U.S. Government agency securities		15,227		67		58,608		2,113		73,835		2,180

Total temporarily impaired securities	$	75,996	$	453	$	137,608	$	4,231	$	213,604	$	4,684

In evaluating the Company’s unrealized loss positions for other-than-temporary impairment of its investment securities portfolio, management considers the credit quality of the issuer, the nature and cause of the unrealized loss, the severity and duration of the impairments and other factors. At ~~September~~June 30, ~~2014~~2015 management determined the unrealized losses were the result of fluctuations in interest rates and did not reflect deteriorations of the credit quality of the investments. Accordingly, management considers these unrealized losses to be temporary in nature. The Company does not have the intent to sell these investment securities with unrealized losses and, more likely than not, will not be required to sell these investment securities before fair value recovers to amortized cost.

The following table shows the amortized cost and estimated fair value of investment securities AFS by maturity or estimated date of repayment as of the date indicated.


	September 30, 2014				June 30, 2015
Maturity or Estimated Repayment	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)				(Dollars in thousands)
One year or less	$	37,664	$	38,291	$	36,133	$	36,619
After one year to five years		138,870		140,563		139,079		140,690
After five years to ten years		194,325		196,655		189,702		192,251
After ten years		471,372		484,367		404,329		412,717

Total	$	842,231	$	859,876	$	769,243	$	782,277

For purposes of this maturity distribution, all investment securities AFS are shown based on their contractual maturity date or estimated date of repayment, except (i) FHLB ~~– Dallas~~ and FNBB ~~stock~~equity securities and the CRA qualified investment fund with no contractual maturity date are shown in the longest maturity category and (ii) U.S. Government agency securities and municipal housing authority securities backed by residential mortgages are allocated among various maturities based on an estimated repayment schedule utilizing Bloomberg median prepayment speeds or other estimates of prepayment speeds and interest rate levels at the measurement date. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table is a summary of sales activities in the Company’s investment securities AFS for the periods indicated.


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2014			2013		2014			2013		2015		2014		2015			2014
	(Dollars in thousands)										(Dollars in thousands)
Sales proceeds	$	6,563		$	0	$	54,957		$	999	$	2,660	$	47,170	$	32,777		$	48,394


Gross realized gains	$	58		$	0	$	82		$	156	$	85	$	18	$	2,619		$	23
Gross realized losses		(15	)		0		(15	)		0		0		0		(1	)		0

Net gains on investment securities	$	43		$	0	$	67		$	156	$	85	$	18	$	2,618		$	23

The following table is a summary of activity within the ALLL for the periods indicated.

~~At September~~As of June 30, ~~2014 and 2013,~~2015, the Company had identified ~~covered~~purchased loans ~~acquired in its FDIC-assisted acquisitions~~ where it had determined it was probable that the Company would be unable to collect all amounts according to the contractual terms thereof (for purchased loans without evidence of credit deterioration at date of acquisition) or the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values. As a result the Company recorded partial charge-offs, net of adjustments to the FDIC loss share receivable and the FDIC clawback payable, totaling $0.2 million for such loans during the third quarter of 2014 and $0.9 million for such loans during the first nine months of 2014 compared to $0.9 million for such loans during the third quarter of 2013 and $4.0 million for such loans during the first nine months of 2013. The Company also recorded provision for loan and lease losses of $0.2 million during the third quarter of 2014 and $0.9 million during the first nine months of 2014 compared to $0.9 million for such loans during the third quarter of 2013 and $4.0 million for such loans during the first nine months of 2013 to cover such charge-offs. In addition to those net charge-offs, the Company transferred certain of these covered loans to covered foreclosed assets. As a result, the Company had $13.6 million and $52.6 million, respectively, of impaired covered loans at September 30, 2014 and 2013.

~~As of September 30, 2014, the Company had identified purchased non-covered loans where the expected performance had deteriorated from management’s~~its performance expectations established in conjunction with the determination of the Day 1 Fair Values or ~~where current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereon.~~since our most recent review of such portfolio’s performance (for purchased loans with evidence of credit deterioration at date of acquisition). As a result, the Company recorded partial charge-offs totaling ~~$0.3~~$0.4 million and $1.1 million during the ~~third~~second quarter of 2015 and ~~$0.9~~2014, respectively, and $1.7 million and $1.3 million during the first ~~nine~~six months of 2015 and 2014, ~~compared to none for the comparable periods in 2013.~~respectively. The Company also recorded provision for loan and lease losses of ~~$0.3~~$0.4 million and $1.1 million during the ~~third~~second quarter of 2015 and ~~$0.9~~2014, respectively, and $1.7 million and $1.3 million during the first ~~nine~~six months of 2015 and 2014, ~~to cover such charge-offs compared to none during the third quarter and first nine months of 2013.~~respectively. At ~~September~~June 30, ~~2014,~~2015, the Company had ~~$1.7~~$12.3 million of impaired purchased ~~non-covered~~ loans compared to ~~none~~$21.2 million at ~~both September~~June 30, ~~2013~~2014 and $14.0 million at December 31, ~~2013.~~2014.

The following ~~table is~~tables are a summary of the Company’s ALLL for the periods indicated.


	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance		Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)												(Dollars in thousands)
Three months ended September 30, 2014:
Three months ended June 30, 2015:
Real estate:
Residential 1-4 family	$	4,760	$	(115	)	$	47	$	610		$	5,302	$	5,657	$	(92	)	$	10	$	26		$	5,601
Non-farm/non-residential		14,836		(90	)		15		3,267			18,028		17,766		(119	)		5		580			18,232
Construction/land development		15,464		0			4		(950	)		14,518		17,580		(469	)		0		2,037			19,148
Agricultural		2,908		(198	)		2		(98	)		2,614		2,526		0			0		(66	)		2,460
Multifamily residential		1,772		0			0		(161	)		1,611		2,423		(208	)		0		671			2,886
Commercial and industrial		2,848		(55	)		38		108			2,939		3,301		(93	)		23		18			3,249
Consumer		926		(29	)		14		(89	)		822		824		(24	)		21		4			825
Direct financing leases		2,572		(151	)		29		371			2,821		3,258		(155	)		7		444			3,554
Other		872		(99	)		36		142			951		812		(336	)		132		186			794
Covered loans		0		(205	)		0		205			0
Purchased non-covered loans		0		(282	)		0		282			0
Purchased loans														0		(408	)		0		408			0

Total	$	46,958	$	(1,224	)	$	185	$	3,687		$	49,606	$	54,147	$	(1,904	)	$	198	$	4,308		$	56,749

Nine months ended September 30, 2014:

Six months ended June 30, 2015:
Real estate:
Residential 1-4 family	$	4,701	$	(456	)	$	118	$	939		$	5,302	$	5,482	$	(621	)	$	21	$	719		$	5,601
Non-farm/non-residential		13,633		(1,344	)		19		5,720			18,028		17,190		(324	)		17		1,349			18,232
Construction/land development		12,306		(14	)		12		2,214			14,518		15,960		(771	)		37		3,922			19,148
Agricultural		3,000		(213	)		13		(186	)		2,614		2,558		(13	)		0		(85	)		2,460
Multifamily residential		2,504		0			0		(893	)		1,611		2,147		(208	)		0		947			2,886
Commercial and industrial		2,855		(477	)		801		(240	)		2,939		4,873		(2,540	)		39		877			3,249
Consumer		917		(126	)		50		(19	)		822		818		(69	)		42		34			825
Direct financing leases		2,266		(418	)		43		930			2,821		2,989		(341	)		13		893			3,554
Other		763		(258	)		111		335			951		901		(688	)		337		244			794
Covered loans		0		(925	)		0		925			0
Purchased non-covered loans		0		(849	)		0		849			0
Purchased loans														0		(1,723	)		0		1,723			0

Total	$	42,945	$	(5,080	)	$	1,167	$	10,574		$	49,606	$	52,918	$	(7,298	)	$	506	$	10,623		$	56,749


Year ended December 31, 2014:
Real estate:
Residential 1-4 family													$	4,701	$	(577	)	$	135	$	1,223		$	5,482
Non-farm/non-residential														13,633		(1,357	)		33		4,881			17,190
Construction/land development														12,306		(638	)		11		4,281			15,960
Agricultural														3,000		(214	)		14		(242	)		2,558
Multifamily residential														2,504		0			0		(357	)		2,147
Commercial and industrial														2,855		(720	)		808		1,930			4,873
Consumer														917		(222	)		80		43			818
Direct financing leases														2,266		(602	)		49		1,276			2,989
Other														763		(793	)		266		665			901
Purchased loans														0		(3,215	)		0		3,215			0

Total													$	42,945	$	(8,338	)	$	1,396	$	16,915		$	52,918

~~The following table is a summary of the Company’s ALLL for the periods indicated.~~


	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance		Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)												(Dollars in thousands)
Year ended December 31, 2013:
Three months ended June 30, 2014:
Real estate:
Residential 1-4 family	$	4,820	$	(837	)	$	106	$	612		$	4,701	$	4,622	$	(142	)	$	49	$	231		$	4,760
Non-farm/non-residential		10,107		(1,111	)		122		4,515			13,633		14,013		(1,181	)		1		2,003			14,836
Construction/land development		12,000		(137	)		174		269			12,306		12,828		(14	)		0		2,650			15,464
Agricultural		2,878		(261	)		14		369			3,000		3,018		0			6		(116	)		2,908
Multifamily residential		2,030		(4	)		4		474			2,504		2,429		0			0		(657	)		1,772
Commercial and industrial		3,655		(922	)		433		(311	)		2,855		2,738		(48	)		135		23			2,848
Consumer		1,015		(214	)		104		12			917		831		(56	)		18		133			926
Direct financing leases		2,050		(482	)		33		665			2,266		2,438		(121	)		8		247			2,572
Other		183		(359	)		144		795			763		944		(88	)		30		(14	)		872
Covered loans		0		(4,675	)		0		4,675			0
Purchased loans														0		(1,082	)		0		1,082			0

Total	$	38,738	$	(9,002	)	$	1,134	$	12,075		$	42,945	$	43,861	$	(2,732	)	$	247	$	5,582		$	46,958

Three months ended September 30, 2013:

Six months ended June 30, 2014:
Real estate:
Residential 1-4 family	$	4,653	$	(111	)	$	11	$	294		$	4,847	$	4,701	$	(341	)	$	71	$	329		$	4,760
Non-farm/non-residential		12,464		(19	)		0		304			12,749		13,633		(1,254	)		4		2,453			14,836
Construction/land development		11,290		(7	)		13		1,434			12,730		12,306		(14	)		8		3,164			15,464
Agricultural		2,595		(260	)		5		182			2,522		3,000		(15	)		11		(88	)		2,908
Multifamily residential		1,854		0			0		203			2,057		2,504		0			0		(732	)		1,772
Commercial and industrial		2,929		(55	)		56		(172	)		2,758		2,855		(422	)		763		(348	)		2,848
Consumer		993		(57	)		19		(13	)		942		917		(97	)		36		70			926
Direct financing leases		2,041		(152	)		9		262			2,160		2,266		(267	)		14		559			2,572
Other		553		(93	)		29		406			895		763		(159	)		75		193			872
Covered loans		0		(918	)		0		918			0
Purchased loans														0		(1,287	)		0		1,287			0

Total	$	39,372	$	(1,672	)	$	142	$	3,818		$	41,660	$	42,945	$	(3,856	)	$	982	$	6,887		$	46,958

Nine months ended September 30, 2013:
Real estate:
Residential 1-4 family	$	4,820	$	(528	)	$	113	$	442		$	4,847
Non-farm/non-residential		10,107		(612	)		118		3,136			12,749
Construction/land development		12,000		(136	)		21		845			12,730
Agricultural		2,878		(260	)		9		(105	)		2,522
Multifamily residential		2,030		0			0		27			2,057
Commercial and industrial		3,655		(887	)		431		(441	)		2,758
Consumer		1,015		(176	)		90		13			942
Direct financing leases		2,050		(338	)		29		419			2,160
Other		183		(266	)		114		864			895
Covered loans		0		(4,012	)		0		4,012			0

Total	$	38,738	$	(7,215	)	$	925	$	9,212		$	41,660

The following table is a summary of the Company’s ALLL and recorded investment in non-purchased loans and leases as of the dates indicated.


	Allowance for Non-Purchased Loan and Lease Losses						Non-Purchased Loans and Leases						ALLL						Non-Purchased Loans and Leases
	ALLL for Individually Evaluated Impaired Loans and Leases		ALLL for All Other Loans and Leases		Total ALLL		Individually Evaluated Impaired Loans and Leases		All Other Loans and Leases		Total Loans and Leases		ALLL for Individually Evaluated Impaired Loans and Leases		ALLL for All Other Loans and Leases		Total ALLL		Individually Evaluated Impaired Loans and Leases		All Other Loans and Leases		Total Loans and Leases
	(Dollars in thousands)												(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Real estate:
Residential 1-4 family	$	345	$	4,957	$	5,302	$	2,360	$	275,981	$	278,341	$	345	$	5,256	$	5,601	$	1,908	$	316,328	$	318,236
Non-farm/non-residential		24		18,004		18,028		2,300		1,370,994		1,373,294		3		18,229		18,232		809		1,687,994		1,688,803
Construction/land development		2		14,516		14,518		10,191		1,223,062		1,233,253		49		19,099		19,148		9,065		1,890,960		1,900,025
Agricultural		30		2,584		2,614		376		46,345		46,721		470		1,990		2,460		1,450		49,333		50,783
Multifamily residential		0		1,611		1,611		0		155,940		155,940		0		2,886		2,886		345		296,529		296,874
Commercial and industrial		606		2,333		2,939		578		312,714		313,292		487		2,762		3,249		547		259,073		259,620
Consumer		3		819		822		32		25,367		25,399		3		822		825		33		25,499		25,532
Direct financing leases		0		2,821		2,821		0		109,059		109,059		0		3,554		3,554		0		137,146		137,146
Other		0		951		951		8		103,835		103,843		0		794		794		7		90,097		90,104

Total	$	1,010	$	48,596	$	49,606	$	15,845	$	3,623,297	$	3,639,142	$	1,357	$	55,392	$	56,749	$	14,164	$	4,752,959	$	4,767,123

December 31, 2013:

December 31, 2014:
Real estate:
Residential 1-4 family	$	438	$	4,263	$	4,701	$	4,047	$	245,509	$	249,556	$	356	$	5,126	$	5,482	$	2,734	$	280,519	$	283,253
Non-farm/non-residential		15		13,618		13,633		2,159		1,101,955		1,104,114		18		17,172		17,190		2,507		1,501,034		1,503,541
Construction/land development		2		12,304		12,306		236		722,321		722,557		68		15,892		15,960		14,304		1,397,534		1,411,838
Agricultural		229		2,771		3,000		883		44,313		45,196		6		2,552		2,558		365		46,870		47,235
Multifamily residential		0		2,504		2,504		0		208,337		208,337		0		2,147		2,147		0		211,156		211,156
Commercial and industrial		652		2,203		2,855		686		123,382		124,068		644		4,229		4,873		623		287,084		287,707
Consumer		3		914		917		50		26,132		26,182		3		815		818		34		25,635		25,669
Direct financing leases		0		2,266		2,266		0		86,321		86,321		0		2,989		2,989		0		115,475		115,475
Other		2		761		763		26		66,208		66,234		0		901		901		8		93,988		93,996

Total	$	1,341	$	41,604	$	42,945	$	8,087	$	2,624,478	$	2,632,565	$	1,095	$	51,823	$	52,918	$	20,575	$	3,959,295	$	3,979,870

September 30, 2013:

June 30, 2014:
Real estate:
Residential 1-4 family	$	490	$	4,357	$	4,847	$	3,535	$	247,491	$	251,026	$	411	$	4,349	$	4,760	$	3,245	$	263,252	$	266,497
Non-farm/non-residential		6		12,743		12,749		3,572		1,032,046		1,035,618		13		14,823		14,836		2,363		1,287,811		1,290,174
Construction/land development		2		12,728		12,730		217		713,981		714,198		2		15,462		15,464		9,738		1,039,420		1,049,158
Agricultural		187		2,335		2,522		951		47,002		47,953		200		2,708		2,908		845		44,696		45,541
Multifamily residential		0		2,057		2,057		310		163,606		163,916		0		1,772		1,772		491		136,462		136,953
Commercial and industrial		613		2,145		2,758		739		121,424		122,163		553		2,295		2,848		689		166,195		166,884
Consumer		4		938		942		33		27,265		27,298		3		923		926		42		28,632		28,674
Direct financing leases		0		2,160		2,160		0		81,984		81,984		0		2,572		2,572		0		98,768		98,768
Other		1		894		895		20		78,413		78,433		0		872		872		9		88,927		88,936

Total	$	1,303	$	40,357	$	41,660	$	9,377	$	2,513,212	$	2,522,589	$	1,182	$	45,776	$	46,958	$	17,422	$	3,154,163	$	3,171,585

The following table is a summary of impaired non-purchased loans and leases as of and for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2014.~~2015.


	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended September 30, 2014		Weighted Average Carrying Value – Nine Months Ended September 30, 2014		Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended June 30, 2015		Weighted Average Carrying Value – Six Months Ended June 30, 2015
	(Dollars in thousands)													(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	2,984	$	(1,654	)	$	1,330	$	345	$	1,452	$	1,564	$	3,147	$	(1,859	)	$	1,288	$	345	$	1,299	$	1,362
Non-farm/non-residential		415		(216	)		199		24		121		87		145		(142	)		3		3		22		196
Construction/land development		36		(22	)		14		2		16		16		115		0			115		49		66		1,414
Agricultural		116		(12	)		104		30		214		311		1,148		0			1,148		470		574		413
Commercial and industrial		1,314		(764	)		550		606		555		571		672		(185	)		487		487		244		343
Consumer		101		(84	)		17		3		20		22		40		(23	)		17		3		18		18
Other		0		(0	)		0		0		0		4

Total impaired loans and leases with a related ALLL		4,966		(2,752	)		2,214		1,010		2,378		2,575		5,267		(2,209	)		3,058		1,357		2,223		3,746


Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		1,343		(313	)		1,030		0		1,352		1,802		731		(111	)		620		0		910		1,022
Non-farm/non-residential		2,826		(725	)		2,101		0		2,210		2,025		999		(193	)		806		0		651		1,089
Construction/land development		10,258		(81	)		10,177		0		9,949		5,107		9,440		(490	)		8,950		0		9,174		9,514
Agricultural		474		(202	)		272		0		397		419		518		(215	)		303		0		304		293
Multifamily residential		133		(133	)		0		0		246		123		686		(341	)		345		0		173		115
Commercial and industrial		187		(159	)		28		0		79		73		158		(98	)		60		0		95		90
Consumer		20		(5	)		15		0		17		21		19		(5	)		14		0		15		15
Other		8		(0	)		8		0		8		9		8		0			8		0		8		8

Total impaired loans and leases without a related ALLL		15,249		(1,618	)		13,631		0		14,258		9,579		12,559		(1,453	)		11,106		0		11,330		12,146

Total impaired loans and leases	$	20,215	$	(4,370	)	$	15,845	$	1,010	$	16,636	$	12,154	$	17,826	$	(3,662	)	$	14,164	$	1,357	$	13,553	$	15,892

The following table is a summary of impaired non-purchased loans and leases as of and for the year ended December 31, ~~2013.~~2014.


	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Year Ended December 31, 2013		Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Year Ended December 31, 2014
	(Dollars in thousands)											(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,609	$	(1,692	)	$	1,917	$	438	$	1,638	$	3,163	$	(1,674	)	$	1,489	$	356	$	1,457
Non-farm/non-residential		121		(75	)		46		15		93		762		(220	)		542		18		211
Construction/land development		38		(22	)		16		2		17		4,656		(545	)		4,111		68		1,040
Agricultural		511		(42	)		469		229		514		105		(12	)		93		6		217
Commercial and industrial		2,016		(1,405	)		611		652		578		1,233		(691	)		542		644		554
Consumer		178		(156	)		22		3		10		41		(23	)		18		3		20
Other		40		(25	)		15		2		10

Total impaired loans and leases with a related ALLL		6,513		(3,417	)		3,096		1,341		2,860		9,960		(3,165	)		6,795		1,095		3,499


Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		2,939		(808	)		2,131		0		1,541		1,373		(128	)		1,245		0		1,581
Non-farm/non-residential		3,234		(1,120	)		2,114		0		4,344		2,676		(711	)		1,965		0		1,988
Construction/land development		300		(81	)		219		0		303		10,378		(185	)		10,193		0		7,600
Agricultural		426		(12	)		414		0		404		474		(202	)		272		0		383
Multifamily residential		133		(133	)		0		0		124		133		(133	)		0		0		123
Commercial and industrial		85		(10	)		75		0		172		264		(183	)		81		0		75
Consumer		39		(12	)		27		0		24		81		(65	)		16		0		18
Other		31		(20	)		11		0		9		8		0			8		0		8

Total impaired loans and leases without a related ALLL		7,187		(2,196	)		4,991		0		6,921		15,387		(1,607	)		13,780		0		11,776

Total impaired loans and leases	$	13,700	$	(5,613	)	$	8,087	$	1,341	$	9,781	$	25,347	$	(4,772	)	$	20,575	$	1,095	$	15,275

The following table is a summary of impaired non-purchased loans and leases as of and for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2013.~~2014.


	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended September 30, 2013		Weighted Average Carrying Value – Nine Months Ended September 30, 2013			Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended June 30, 2014		Weighted Average Carrying Value – Six Months Ended June 30, 2014
	(Dollars in thousands)														(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,601	$	(1,662	)	$	1,939	$	490	$	1,624	$	1,569		$	3,294	$	(1,721	)	$	1,573	$	411	$	1,505	$	1,642
Non-farm/non-residential		37		0			37		6		24		105			186		(142	)		44		13		52		50
Construction/land development		129		(112	)		17		2		8		17			38		(22	)		16		2		16		16
Agricultural		459		(42	)		417		187		421		525			336		(12	)		324		200		336		380
Commercial and industrial		2,270		(1,713	)		557		613		558		570			838		(278	)		560		553		562		579
Consumer		39		(13	)		26		4		13		7			102		(79	)		23		3		23		23
Other		145		(137	)		8		1		8		9			0		0			0		0		0		5

Total impaired loans and leases with a related ALLL		6,680		(3,679	)		3,001		1,303		2,656		2,802			4,794		(2,254	)		2,540		1,182		2,494		2,695


Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		2,244		(648	)		1,596		0		1,507		1,394			2,094		(421	)		1,673		0		2,023		2,059
Non-farm/non-residential		4,645		(1,110	)		3,535		0		6,957		4,902			3,444		(1,125	)		2,319		0		1,942		1,999
Construction/land development		281		(81	)		200		0		236		324			9,803		(81	)		9,722		0		5,015		3,417
Agricultural		801		(267	)		534		0		386		401			554		(33	)		521		0		494		468
Multifamily residential		443		(133	)		310		0		311		155			624		(133	)		491		0		246		164
Commercial and industrial		397		(215	)		182		0		166		196			288		(159	)		129		0		95		88
Consumer		19		(12	)		7		0		7		23			33		(14	)		19		0		22		24
Other		32		(20	)		12		0		8		8			8		0			8		0		9		9

Total impaired loans and leases without a related ALLL		8,862		(2,486	)		6,376		0		9,578		7,403			16,848		(1,966	)		14,882		0		9,846		8,228
														��
Total impaired loans and leases	$	15,542	$	(6,165	)	$	9,377	$	1,303	$	12,234	$	10,205		$	21,642	$	(4,220	)	$	17,422	$	1,182	$	12,340	$	10,923

Management has determined that certain of the Company’s impaired non-purchased loans and leases do not require any specific allowance at ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 or at December 31, ~~2013~~2014 because (i) management’s analysis of such individual loans and leases resulted in no impairment or (ii) all identified impairment on such loans and leases has previously been charged off.

Interest income on impaired non-purchased loans and leases is recognized on a cash basis when and if actually collected. Total interest income recognized on impaired non-purchased loans and leases for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 and for the year ended December 31, ~~2013~~2014 was not material.

The following table is a summary of credit quality indicators for the Company’s non-purchased loans and leases as of the dates indicated.


	Satisfactory		Moderate		Watch		Substandard		Total		Satisfactory		Moderate		Watch		Substandard		Total
	(Dollars in thousands)										(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Real estate:
Residential 1-4 family⁽¹⁾	$	268,707	$	0	$	3,797	$	5,837	$	278,341	$	308,914	$	0	$	3,830	$	5,492	$	318,236
Non-farm/non-residential		1,170,334		141,395		54,078		7,487		1,373,294		1,442,958		169,776		67,722		8,347		1,688,803
Construction/land development		1,016,496		186,496		16,979		13,282		1,233,253		1,653,991		223,812		10,207		12,015		1,900,025
Agricultural		24,335		10,202		10,062		2,122		46,721		24,997		14,457		9,088		2,241		50,783
Multifamily residential		119,765		35,039		382		754		155,940		252,433		40,802		1,646		1,993		296,874
Commercial and industrial		267,178		43,286		1,347		1,481		313,292		185,737		70,305		2,092		1,486		259,620
Consumer⁽¹⁾		24,879		0		263		257		25,399		25,022		0		214		296		25,532
Direct financing leases		108,126		829		32		72		109,059		136,605		297		100		144		137,146
Other⁽¹⁾		99,786		3,853		180		24		103,843		84,271		5,648		93		92		90,104

Total	$	3,099,606	$	421,100	$	87,120	$	31,316	$	3,639,142	$	4,114,928	$	525,097	$	94,992	$	32,106	$	4,767,123

December 31, 2013:

December 31, 2014:
Real estate:
Residential 1-4 family⁽¹⁾	$	239,940	$	0	$	3,140	$	6,476	$	249,556	$	271,576	$	0	$	4,082	$	7,595	$	283,253
Non-farm/non-residential		916,304		128,624		52,388		6,798		1,104,114		1,300,582		142,688		53,863		6,408		1,503,541
Construction/land development		550,436		144,435		23,574		4,112		722,557		1,190,005		192,046		11,135		18,652		1,411,838
Agricultural		21,647		11,098		9,788		2,663		45,196		22,446		12,375		10,226		2,188		47,235
Multifamily residential		177,144		30,029		391		773		208,337		171,806		37,886		713		751		211,156
Commercial and industrial		87,568		33,071		1,664		1,765		124,068		208,054		59,967		18,310		1,376		287,707
Consumer⁽¹⁾		25,574		0		230		378		26,182		25,267		0		141		261		25,669
Direct financing leases		85,363		955		0		3		86,321		114,586		715		117		57		115,475
Other⁽¹⁾		63,799		2,237		119		79		66,234		89,364		4,312		286		34		93,996

Total	$	2,167,775	$	350,449	$	91,294	$	23,047	$	2,632,565	$	3,393,686	$	449,989	$	98,873	$	37,322	$	3,979,870

September 30, 2013:

June 30, 2014:
Real estate:
Residential 1-4 family⁽¹⁾	$	242,202	$	0	$	1,438	$	7,386	$	251,026	$	258,098	$	0	$	2,620	$	5,779	$	266,497
Non-farm/non-residential		839,345		134,754		51,589		9,930		1,035,618		1,090,525		139,080		53,478		7,091		1,290,174
Construction/land development		544,324		136,270		29,122		4,482		714,198		846,365		176,977		12,078		13,738		1,049,158
Agricultural		23,926		11,688		9,317		3,022		47,953		22,766		9,785		10,388		2,602		45,541
Multifamily residential		132,722		29,716		394		1,084		163,916		105,366		29,954		385		1,248		136,953
Commercial and industrial		91,913		26,843		1,210		2,197		122,163		127,935		35,769		1,768		1,412		166,884
Consumer⁽¹⁾		26,763		0		172		363		27,298		28,244		0		132		298		28,674
Direct financing leases		80,967		992		0		25		81,984		97,967		727		34		40		98,768
Other⁽¹⁾		74,221		4,005		132		75		78,433		85,684		3,036		189		27		88,936

Total	$	2,056,383	$	344,268	$	93,374	$	28,564	$	2,522,589	$	2,662,950	$	395,328	$	81,072	$	32,235	$	3,171,585

Satisfactory – Loans and leases in this category are considered to be a satisfactory credit risk and are generally considered to be collectible in full.

Moderate – Loans and leases in this category are considered to be a marginally satisfactory credit risk and are generally considered to be collectible in full.

Watch – Loans and leases in this category are presently protected from apparent loss; however, weaknesses exist which could cause future impairment of repayment of principal or interest.

Substandard – Loans and leases in this category are characterized by deterioration in quality exhibited by a number of weaknesses requiring corrective action and posing risk of some loss.

The following table is an aging analysis of past due non-purchased loans and leases as of the dates indicated.


	30-89 Days Past Due ⁽¹⁾		90 Days or More ⁽²⁾		Total Past Due		Current⁽³⁾		Total		30-89 Days Past Due ⁽¹⁾		90 Days or More ⁽²⁾		Total Past Due		Current⁽³⁾		Total
	(Dollars in thousands)										(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Real estate:
Residential 1-4 family	$	4,203	$	1,230	$	5,433	$	272,908	$	278,341	$	4,642	$	1,031	$	5,673	$	312,563	$	318,236
Non-farm/non-residential		879		1,432		2,311		1,370,983		1,373,294		2,672		1,180		3,852		1,684,951		1,688,803
Construction/land development		1,854		10,017		11,871		1,221,382		1,233,253		906		9,119		10,025		1,890,000		1,900,025
Agricultural		1,574		192		1,766		44,955		46,721		516		1,426		1,942		48,841		50,783
Multifamily residential		0		0		0		155,940		155,940		1,042		0		1,042		295,832		296,874
Commercial and industrial		813		28		841		312,451		313,292		737		115		852		258,768		259,620
Consumer		295		35		330		25,069		25,399		225		35		260		25,272		25,532
Direct financing leases		0		0		0		109,059		109,059		140		106		246		136,900		137,146
Other		12		0		12		103,831		103,843		98		85		183		89,921		90,104

Total	$	9,630	$	12,934	$	22,564	$	3,616,578	$	3,639,142	$	10,978	$	13,097	$	24,075	$	4,743,048	$	4,767,123

December 31, 2013:

December 31, 2014:
Real estate:
Residential 1-4 family	$	4,228	$	2,004	$	6,232	$	243,324	$	249,556	$	6,352	$	1,536	$	7,888	$	275,365	$	283,253
Non-farm/non-residential		2,093		1,867		3,960		1,100,154		1,104,114		2,708		1,445		4,153		1,499,388		1,503,541
Construction/land development		235		153		388		722,169		722,557		3,520		12,881		16,401		1,395,437		1,411,838
Agricultural		517		540		1,057		44,139		45,196		1,680		304		1,984		45,251		47,235
Multifamily residential		773		0		773		207,564		208,337		0		0		0		211,156		211,156
Commercial and industrial		418		31		449		123,619		124,068		586		94		680		287,027		287,707
Consumer		261		78		339		25,843		26,182		161		55		216		25,453		25,669
Direct financing leases		0		0		0		86,321		86,321		39		54		93		115,382		115,475
Other		18		24		42		66,192		66,234		58		12		70		93,926		93,996

Total	$	8,543	$	4,697	$	13,240	$	2,619,325	$	2,632,565	$	15,104	$	16,381	$	31,485	$	3,948,385	$	3,979,870

September 30, 2013:

June 30, 2014:
Real estate:
Residential 1-4 family	$	1,661	$	2,376	$	4,037	$	246,989	$	251,026	$	2,890	$	1,521	$	4,411	$	262,086	$	266,497
Non-farm/non-residential		2,321		3,312		5,633		1,029,985		1,035,618		1,714		1,693		3,407		1,286,767		1,290,174
Construction/land development		1,662		136		1,798		712,400		714,198		49		10,060		10,109		1,039,049		1,049,158
Agricultural		322		571		893		47,060		47,953		269		436		705		44,836		45,541
Multifamily residential		0		310		310		163,606		163,916		491		0		491		136,462		136,953
Commercial and industrial		349		131		480		121,683		122,163		674		0		674		166,210		166,884
Consumer		177		66		243		27,055		27,298		139		54		193		28,481		28,674
Direct financing leases		111		25		136		81,848		81,984		10		30		40		98,728		98,768
Other		17		0		17		78,416		78,433		0		0		0		88,936		88,936

Total	$	6,620	$	6,927	$	13,547	$	2,509,042	$	2,522,589	$	6,236	$	13,794	$	20,030	$	3,151,555	$	3,171,585

~~The following table is a summary of credit quality indicators for the Company’s covered loans as of the dates indicated.~~

For covered loans, management separately monitors this portfolio and periodically reviews loans contained within this portfolio against the factors and assumptions used in determining the Day 1 Fair Values. To the extent that a loan is performing in accordance with or exceeding management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV 1. For any loan that is exceeding management’s performance expectation established in conjunction with the determination of Day 1 Fair Values, the accretable yield on such loan is adjusted to reflect such increased performance. To the extent that a loan’s performance has deteriorated from management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV 2. At September 30, 2014 and 2013 and December 31, 2013, the Company had no allowance for its covered loans because all losses had been charged off on covered loans whose performance had deteriorated from management’s expectations established in conjunction with the determination of the Day 1 Fair Values.

~~The following table is an aging analysis of past due covered loans as of the dates indicated.~~

At September 30, 2014 and 2013 and December 31, 2013, significant portions of the Company’s covered loans were contractually past due, including many that were 90 days or more past due. However, the elevated level of delinquencies of covered loans at the dates of acquisition was considered in the Company’s performance expectations used in its determination of the Day 1 Fair Values for all covered loans. Accordingly, all covered loans continue to accrete interest income and all covered loans rated FV 1 continue to perform in accordance with or better than management’s expectations established in conjunction with the determination of the Day 1 Fair Values.

The following table is a summary of credit quality indicators for the Company’s purchased ~~non-covered~~ loans as of the dates indicated.


	Purchased Loans Without Evidence of Credit Deterioration at Acquisition										Purchased Loans With Evidence of Credit Deterioration at Acquisition				Total Purchased Loans
	FV 33		FV 44		FV 55		FV 36		FV 77		FV 66		FV 88		Total Purchased Loans
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family	$	61,886	$	88,824	$	30,228	$	58,905	$	83	$	85,917	$	1,888	$	327,731
Non-farm/non-residential		209,433		702,962		119,491		3,780		255		119,406		6,778		1,162,105
Construction/land development		18,084		9,638		3,397		8,724		0		19,420		2,695		61,958
Agricultural		6,903		13,465		1,901		865		108		6,377		0		29,619
Multifamily residential		23,260		117,586		25,968		706		65		12,555		0		180,140

Total real estate		319,566		932,475		180,985		72,980		511		243,675		11,361		1,761,553
Commercial and industrial		10,126		17,812		4,316		5,722		20		8,179		449		46,624
Consumer		793		261		213		7,775		2		310		4		9,358
Other		4,247		3,558		288		462		0		758		0		9,313

Total	$	334,732	$	954,106	$	185,802	$	86,939	$	533	$	252,922	$	11,814	$	1,826,848


December 31, 2014:
Real estate:
Residential 1-4 family	$	73,196	$	81,840	$	30,180	$	71,687	$	151	$	96,752	$	1,899	$	355,705
Non-farm/non-residential		166,754		180,522		32,157		4,906		505		114,217		5,828		504,889
Construction/land development		21,803		26,858		4,312		13,708		0		28,497		4,598		99,776
Agricultural		10,444		25,187		2,409		1,525		0		8,331		92		47,988
Multifamily residential		22,731		11,646		1,971		884		67		4,823		312		42,434

Total real estate		294,928		326,053		71,029		92,710		723		252,620		12,729		1,050,792
Commercial and industrial		20,340		23,048		4,900		10,659		22		9,297		559		68,825
Consumer		1,605		272		420		12,538		3		426		4		15,268
Other		4,845		5,830		597		945		0		845		0		13,062

Total	$	321,718	$	355,203	$	76,946	$	116,852	$	748	$	263,188	$	13,292	$	1,147,947


June 30, 2014:
Real estate:
Residential 1-4 family	$	81,102	$	84,839	$	32,286	$	79,449	$	10	$	111,106	$	2,306	$	391,098
Non-farm/non-residential		211,896		198,937		40,193		3,704		0		148,491		10,249		613,470
Construction/land development		32,850		37,840		12,447		10,878		9		36,031		6,032		136,087
Agricultural		15,058		29,337		3,185		1,744		0		10,984		323		60,631
Multifamily residential		10,505		13,418		7,453		1,030		67		8,754		1,090		42,317

Total real estate		351,411		364,371		95,564		96,805		86		315,366		20,000		1,243,603
Commercial and industrial		27,269		49,175		9,702		14,637		0		11,371		1,119		113,273
Consumer		3,215		1,165		670		20,204		0		615		0		25,869
Other		5,762		9,292		935		4,391		0		944		0		21,324

Total	$	387,657	$	424,003	$	106,871	$	136,037	$	86	$	328,296	$	21,119	$	1,404,069

The following grades are used for purchased ~~non-covered~~ loans without evidence of credit deterioration at the date of acquisition.

FV 33 – Loans in this category are considered to be satisfactory with minimal credit risk and are generally considered collectible.

FV 44 – Loans in this category are considered to be marginally satisfactory with minimal to moderate credit risk and are generally considered collectible.

FV 55 – Loans in this category exhibit weakness and are considered to have elevated credit risk and elevated risk of repayment.

FV 36 – Loans in this category were not individually reviewed at the date of purchase and are assumed to have characteristics similar to the characteristics of the aggregate acquired portfolio.

FV 77 – Loans in this category have deteriorated since the date of purchase and are considered impaired.

The following grades are used for purchased ~~non-covered~~ loans with evidence of credit deterioration at the date of acquisition.

FV 66 – Loans in this category are performing in accordance with or exceeding management’s performance expectations established in conjunction with the determination of Day 1 Fair Values.

FV 88 – Loans in this category have deteriorated from management’s performance expectations established in conjunction with the determination of Day 1 Fair Values.

The Company had no allowance ~~for its purchased non-covered loans~~ at ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 or December 31, ~~2013~~2014 for its (i) purchased loans without evidence of credit deterioration at the date of acquisition as ~~(i)~~management’s analysis of such individual loans resulted in no impairment or all identified impairment on such loans had been charged off, or (ii) purchased loans with evidence of credit deterioration at the date of acquisition as all such loans were performing in accordance with management’s expectations established in conjunction with the determination of the Day 1 Fair Values or ~~(ii)~~ all losses had been charged off on ~~purchased non-covered~~such loans whose performance had deteriorated from management’s expectations established in conjunction with the ~~deterioration~~determination of the Day 1 Fair ~~Values had been charged off.~~Values.

The following table is an aging analysis of past due purchased ~~non-covered~~ loans as of the dates indicated.


	30-89 Days Past Due		90 Days or More		Total Past Due		Current		Total Purchased Non-Covered Loans		30-89 Days Past Due		90 Days or More		Total Past Due		Current		Total Purchased Loans
	(Dollars in thousands)										(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Real estate:
Residential 1-4 family	$	6,026	$	6,220	$	12,246	$	267,027	$	279,273	$	6,476	$	5,975	$	12,451	$	315,280	$	327,731
Non-farm/non-residential		1,706		9,449		11,155		451,229		462,384		16,737		9,191		25,928		1,136,177		1,162,105
Construction/land development		855		1,476		2,331		92,006		94,337		1,045		2,715		3,760		58,198		61,958
Agriculture		211		146		357		44,051		44,408		291		166		457		29,162		29,619
Multifamily residential		0		1,228		1,228		33,451		34,679		408		709		1,117		179,023		180,140
Commercial and industrial		791		269		1,060		75,641		76,701		936		611		1,547		45,077		46,624
Consumer		196		159		355		20,106		20,461		111		68		179		9,179		9,358
Other		73		31		104		18,641		18,745		40		11		51		9,262		9,313

Total	$	9,858	$	18,978	$	28,836	$	1,002,152	$	1,030,988	$	26,044	$	19,446	$	45,490	$	1,781,358	$	1,826,848

December 31, 2013:

December 31, 2014:
Real estate:
Residential 1-4 family	$	6,615	$	4,703	$	11,318	$	119,767	$	131,085	$	8,088	$	9,043	$	17,131	$	338,574	$	355,705
Non-farm/non-residential		4,886		5,779		10,665		142,283		152,948		8,907		12,439		21,346		483,543		504,889
Construction/land development		265		4,045		4,310		21,323		25,633		1,197		5,464		6,661		93,115		99,776
Agriculture		134		25		159		9,359		9,518		237		875		1,112		46,876		47,988
Multifamily residential		421		1,225		1,646		15,564		17,210		515		67		582		41,852		42,434
Commercial and industrial		614		388		1,002		23,932		24,934		863		751		1,614		67,211		68,825
Consumer		411		237		648		6,207		6,855		199		103		302		14,966		15,268
Other		0		33		33		4,507		4,540		0		31		31		13,031		13,062

Total	$	13,346	$	16,435	$	29,781	$	342,942	$	372,723	$	20,006	$	28,773	$	48,779	$	1,099,168	$	1,147,947

September 30, 2013:

June 30, 2014:
Real estate:
Residential 1-4 family	$	4,026	$	3,647	$	7,673	$	129,050	$	136,723	$	10,866	$	14,074	$	24,940	$	366,158	$	391,098
Non-farm/non-residential		3,319		4,136		7,455		156,269		163,724		4,929		25,570		30,499		582,971		613,470
Construction/land development		4,601		7,367		11,968		14,810		26,778		1,146		9,766		10,912		125,175		136,087
Agriculture		0		101		101		9,979		10,080		165		2,260		2,425		58,206		60,631
Multifamily residential		177		1,326		1,503		16,499		18,002		0		2,594		2,594		39,723		42,317
Commercial and industrial		357		535		892		29,337		30,229		392		1,733		2,125		111,148		113,273
Consumer		310		223		533		8,643		9,176		170		183		353		25,516		25,869
Other		38		182		220		4,126		4,346		16		19		35		21,289		21,324

Total	$	12,828	$	17,517	$	30,345	$	368,713	$	399,058	$	17,684	$	56,199	$	73,883	$	1,330,186	$	1,404,069

At June 30, 2015 and 2014 and December 31, 2014, a portion of the Company’s purchased loans with evidence of credit deterioration at the date of acquisition were past due, including many that were 90 days or more past due. Such delinquencies were included in the Company’s performance expectations in determining the Day 1 Fair Values. Additionally, in accordance with GAAP, the Company continues to accrete into earnings income on such loans.

The following table is a summary of the types of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities and their approximate tax effects as of the dates indicated.


	September 30,					December 31,		June 30,						December 31,
	2014			2013		2013		2015			2014			2014
	(Dollars in thousands)							(Dollars in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	19,052		$	16,080	$	16,576	$	21,617		$	18,116		$	20,324
Differences in amounts reflected in financial statements and income tax basis of purchased non-covered loans		24,769			19,563		17,167
Differences in amounts reflected in the financial statements and income tax basis of purchased loans not previously covered by FDIC loss share agreements									28,605			26,024			20,444
Differences in amounts reflected in the financial statements and income tax basis for deposits assumed in acquisitions									7,703			2,405			1,337
Stock-based compensation		3,811			2,724		2,400		4,477			3,364			3,268
Deferred compensation		1,962			1,792		1,775		2,092			1,890			1,991
Foreclosed assets		5,195			3,318		3,165		3,111			5,624			3,503
Investment securities AFS		0			3,116		5,056
Differences in amounts reflected in financial statements and income tax basis of assets acquired and liabilities assumed in FDIC-assisted acquisitions		8,708			607		3,424
Deferred fees and costs on loans and leases									6,405			2,059			4,785
Differences in amounts reflected in the financial statements and income tax basis of assets acquired and liabilities assumed in FDIC-assisted acquisitions									8,032			7,397			8,098
Acquired net operating losses		13,976			7,905		7,509		13,456			13,662			13,332
Other, net		7,310			1,950		3,858		1,949			1,486			2,568

Total gross deferred tax assets		84,783			57,055		60,930		97,447			82,027			79,650
Less valuation allowance		(474	)		0		0		(474	)		(474	)		(474	)

Net deferred tax asset		84,309			57,055		60,930		96,973			81,553			79,176

Deferred tax liabilities:
Accelerated depreciation on premises and equipment		17,933			16,952		17,459		18,921			18,028			18,653
Investment securities AFS		5,499			0		0		3,798			5,022			7,692
Acquired intangible assets		10,466			4,390		4,227		10,407			10,847			9,743

Total gross deferred tax liabilities		33,898			21,342		21,686		33,126			33,897			36,088

Net deferred tax assets (liabilities)	$	50,411		$	35,713	$	39,244
Net deferred tax assets								$	63,847		$	47,656		$	43,088

Net operating losses were acquired ~~from~~in the Bancshares, Summit and Intervest acquisitions and the Company’s 2013 acquisition of The First National Bank ~~Bancshares and Summit transactions.~~of Shelby (“FNB Shelby”). The net operating losses ~~acquired from the First National Bank transaction totaled $20.0 million, of which $12.5 million will expire in 2032 and $7.5 million will expire in 2033. The net operating losses acquired~~ from the Bancshares transaction ~~totaled $16.4~~total $15.7 million ~~which~~at June 30, 2015 and will expire at various dates from 2030 through 2034. The net operating losses acquired from the Summit transaction were utilized during 2014. The net operating losses acquired in the Intervest transaction totaled ~~$6.5~~$6.3 million at June 30, 2015 and will expire ~~in 2019.~~

~~As a result of recording,~~ at fair value, acquired assets and assumed liabilities pursuant to business combinations, differences in amounts reported for financial statement purposes and their related basis for federal and state income tax purposes are created. Such differences are recorded as deferred tax assets and liabilities using enacted tax rates in effect for the year or years in which the differences are expected to be recovered or settled. Business combination transactions may result in the acquisition ofvarious dates from 2030 through 2035. The net operating ~~loss carryforwards and other assets with built-in~~ losses from the ~~realization~~FNB Shelby transaction totaled $20.0 million at June 30, 2015, of which ~~are subject to section 382 limitations. In determining~~$12.5 million will expire in 2032 and $7.5 million will expire in 2033.

At June 30, 2015 and 2014 and December 31, 2014, the section 382 limitation associated with a business combination, management must make a number of estimates and assumptions regarding the ability to utilize acquired net operating loss carryforwards and the expected timing of future recoveries or settlements of acquired assets with built-in losses. To the extent that information available as of the date of acquisition results in a determination by management that some portion of net operating loss carryforwards cannot be utilized or assets with built-in losses are expected to be settled or recovered in future periods in which the ability to realize the benefits will be subject to section 382 limitations,Company had a deferred tax asset valuation allowance is established for the estimated amount of the deferred tax assets subject to the section 382 limitation. To the extent that information becomes available, during the first 12 months following the consummation of a business combination transaction, that results in changes in management’s initial estimates and assumptions regarding the expected utilization of net operating loss carryforwards or the expected settlement or recovery of acquired assets with built-in losses subject to section 382 limitations, an increase or decrease of the deferred tax asset valuation allowance will be recorded as an adjustment to bargain purchase gain or goodwill. To the extent that such information becomes available 12 months or more after the consummation of a business combination transaction, or additional information becomes available during the first 12 months as a result of changes in circumstances since the date of the consummation of a business combination transaction, an increase or decrease of the deferred tax asset valuation allowance will be recorded as an adjustment to deferred income tax expense (benefit).

In connection with the acquisitions of First National Bank and Bancshares, management determined that net operating loss carryforwards and other assets with built-in losses are expected to be settled or otherwise recovered in future periods where the

~~realization of such benefits would be subject to section 382 limitations. Accordingly, the Company had established a deferred tax asset~~ valuation allowance of ~~$4.1 million on the date of acquisition of First National Bank and~~approximately $0.5 million ~~on the date of acquisition of Bancshares,~~ to reflect its ~~initial~~ assessment that the realization of the benefits from the ~~settlement or~~ recovery of certain ~~of these~~ acquired ~~assets and~~ net operating losses isare expected to be subject to limitations under section 382 ~~limitations.~~

~~As disclosed in~~of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, the fair value adjustments and the resultant fair values for the First National Bank acquisition continued to be evaluated by management and could be subject to further adjustment. During the second quarter of 2014, management revised its initial estimates and assumptions regarding the expected recovery of acquired assets with built-in losses, specifically the timing of expected charge-offs of purchased non-covered loans, in the First National Bank acquisition. As a result of such revision, management concluded that the deferred tax asset valuation allowance of $4.1 million was not necessary. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of changes in circumstances, management has recast the third quarter 2013 financial statements, along with all subsequent financial statements, to reflect this change in estimate.Internal Revenue Code.

To the extent that additional information becomes available regarding the settlement or recovery of acquired net operating loss carryforwards or assets with built-in losses acquired in ~~each~~any of ~~its~~the Company’s previous acquisitions, management may be required to make adjustments to its deferred tax asset valuation allowance, which adjustments could affect ~~bargain purchase gain,~~ goodwill or deferred income tax expense (benefit).

The following table provides supplemental cash flow information for the periods indicated.


	Nine Months Ended					Six Months Ended
	September 30,					June 30,
	2014		2013			2015			2014
	(Dollars in thousands)					(Dollars in thousands)
Cash paid during the period for:
Interest	$	15,450	$	14,038		$	13,031		$	9,808
Taxes		30,834		35,515			34,024			17,690
Supplemental schedule of non-cash investing and financing activities:
Net change in unrealized gains/losses on investment securities AFS		23,687		(18,488	)		(10,218	)		22,506
Loans and other assets transferred to foreclosed assets not covered by FDIC loss share agreements		9,112		4,497
Loans advanced for sales of foreclosed assets not covered by FDIC loss share agreements		258		2,942
Covered loans transferred to covered foreclosed assets		30,754		24,306
Loans and premises and equipment transferred to foreclosed assets							9,797			31,013
Loans advanced for sales of foreclosed assets							0			258
Unsettled AFS investment security purchases		0		730			4,453			1,465
Unsettled AFS investment security sales							0			1,815
Unsettled loan sales							14,361			0
Unsettled loan purchases							18,269			0
Common stock issued in merger and acquisition transactions		166,402		60,079			238,476			166,315

Outstanding standby letters of credit are contingent commitments issued by the Company generally to guarantee the performance of a customer in third party arrangements. The maximum amount of future payments the Company could be required to make under these guarantees at ~~September~~June 30, ~~2014~~2015 was ~~$9.3~~$13.3 million. The Company holds collateral to support guarantees when deemed necessary. Collateralized commitments at ~~September~~June 30, ~~2014~~2015 totaled ~~$9.1~~$13.2 million.

At ~~September~~June 30, ~~2014~~2015, the Company had outstanding commitments to extend credit, excluding mortgage interest rate lock commitments, totaling ~~$2.58~~$4.0 billion. ~~While many of these commitments are expected to be disbursed within the next 12 months, the~~The following table shows the contractual maturities of outstanding commitments to extend credit as of the date indicated.


Contractual Maturities at September 30, 2014
Contractual Maturities at June 30, 2015				Contractual Maturities at June 30, 2015
Maturity		Amount			Amount
(Dollars in thousands)	(Dollars in thousands)			(Dollars in thousands)
2014		$	89,808
2015			209,595		$	91,624
2016			492,517			358,317
2017			1,259,690			1,715,962
2018			485,222			1,356,777
2019						170,419
Thereafter			47,613			312,844

Total		$	2,584,445		$	4,005,943

At June 30, 2015, the Company had the following issues of trust preferred securities and subordinated debentures owed to the Trusts.

On February 10, 2015, in conjunction with the Intervest acquisition, the Company acquired the Intervest Trusts with outstanding subordinated debentures totaling $56.7 million and related trust preferred securities totaling $55.0 million. On the date of such acquisition, the Company recorded the assumed subordinated debentures owed to the Intervest Trusts at estimated fair value of $52.2 million, based on an independent third party valuation, to reflect a current market interest rate for comparable obligations. The fair value adjustment of $4.5 million is being amortized, using a level-yield methodology over the estimated holding period of approximately eight years, as an increase in interest expense of the subordinated debentures owed to the Intervest Trusts. In addition to the subordinated debentures of the Intervest Trusts, the Company also acquired $1.7 million of trust common equity issued by the Intervest Trusts.

The trust preferred securities issued by Intervest Trust II and the related subordinated debentures bear interest, adjustable quarterly, at 90-day London Interbank Offered Rates (“LIBOR”) plus 2.95% and contain a final maturity of September 17, 2033. The trust preferred securities issued by Intervest Trust III and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 2.79% and contain a final maturity of March 17, 2034. The trust preferred securities issued by Intervest Trust IV and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 2.40% and contain a final maturity of September 20, 2034. The trust preferred securities issued by Intervest Trust V and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 1.65% and contain a final maturity of December 15, 2036.

At June 30, 2015, the Company had an aggregate of $121.7 million of subordinated debentures outstanding (with an aggregate carrying value of $117.4 million) and had an asset of $3.7 million representing its investment in the common equity issued by the Trusts. The sole assets of the Trusts are the adjustable rate debentures and the liabilities of the Trusts are the trust preferred securities. At June 30, 2015 and 2014, the Trusts had aggregate common equity of $3.7 million and $1.9 million, respectively, and did not have any restricted net assets. The Company has, through various contractual arrangements or by operation of law, fully and unconditionally guaranteed all obligations of the Trusts with respect to the trust preferred securities. Additionally, there are no restrictions on the ability of the Trusts to transfer funds to the Company in the form of cash dividends, loans or advances. The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years. These trust preferred securities generally mature at or near the 30th anniversary date of each issuance. However, the trust preferred securities and related subordinated debentures may be prepaid at par, subject to regulatory approval.

The Company has a nonqualified stock option plan for certain employees of the Company. This plan provides for the granting of nonqualified options to purchase shares of common stock in the Company. No option may be granted under this plan for less than the fair market value of the common stock, defined by the plan as the average of the highest reported asked price and the lowest reported bid price, on the date of the grant. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under this plan will be determined in the sole discretion of the personnel and compensation committee of the Company’s board of ~~directors or its personnel and compensation committee.~~directors. While the vesting period and the termination date for the employee plan options are determined when options are granted, all such employee options outstanding at ~~September~~June 30, ~~2014~~2015 were issued with a vesting date three years after issuance and an expiration date seven years after issuance.

During the second quarter of 2015, the Company ~~also has a nonqualified~~adopted the Bank of the Ozarks, Inc. Non-Employee Director Stock Plan (the “Director Plan”) that provides for awards of common stock ~~option plan for~~to eligible non-employee directors. ~~This plan permits~~The Director Plan grants to each director who is not otherwise an employee of the Company, or any subsidiary, ~~to receive options to purchase 2,000~~ shares of ~~the Company’s~~ common stock on the day ~~following~~of his or her election as a director of the Company at each annual shareholders meeting, or any special meeting called for the purpose of ~~stockholders~~electing a director or directors of the Company, and ~~up to 2,000 shares~~ upon ~~election or~~ appointment for the first time as a director of the Company. ~~No option may be granted under this plan for less than the fair market value~~The number of ~~the~~shares of common stock ~~defined by~~to be awarded will be the ~~plan as~~equivalent of $25,000 worth of shares of common stock based on the average of the highest reported asked price and ~~the~~ lowest reported bid price on the ~~date~~grant date. The common stock awarded under this plan is fully vested on the grant date. The aggregate number of shares of common stock which may be issued as awards under this plan will not exceed 50,000 shares, subject to certain adjustments. For the three months ended June 30, 2015, the Company issued 7,657 shares of common stock and incurred $0.3 million in stock-based compensation expense related to common-stock awards issued under the Director Plan.

Prior to the adoption of the ~~grant. These~~Director Plan, the Company had a nonqualified stock option plan for non-employee directors. No options ~~are~~were granted under this plan during the six months ended June 30, 2015. All options previously granted under this plan were exercisable immediately and expire ten years after issuance.

All shares issued in connection with options exercised under both the employee and non-employee director stock option plans ~~are~~were in the form of newly issued shares.

The following table summarizes stock option activity for both the employee and non-employee director stock option plans for the period indicated.

Intrinsic value for stock options is defined as the amount by which the current market price of the underlying stock exceeds the exercise price. For those stock options where the exercise price exceeds the current market price of the underlying stock, the intrinsic value is zero. The total intrinsic value of options exercised during the ~~nine~~three months ended ~~September~~June 30, 2015 and 2014 ~~and 2013~~ was ~~$5.0~~$1.4 million and ~~$4.7~~$0.2 million, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2015 and 2014 was $2.8 million and $4.1 million, respectively.

Options to purchase ~~52,000 split-adjusted~~2,000 shares and ~~48,000~~52,000 split-adjusted shares of the Company’s stock were issued during the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. Stock-based compensation expense for stock options included in non-interest expense was ~~$0.4~~$0.6 million and $0.8 million for the three months ended June 30, 2015 and 2014, respectively, and $1.2 million for both ~~of the quarters~~six month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013 and $1.6 million and $1.3 million for the nine months ended September 30, 2014 and 2013, respectively.~~2014. Total unrecognized compensation cost related to non-vested stock option grants was ~~$2.2~~$3.7 million at ~~September~~June 30, ~~2014~~2015 and is expected to be recognized over a weighted-average period of ~~1.8~~2.0 years.

The Company has a restricted stock and incentive plan ~~that permits issuance of up to 1,600,000 shares of restricted stock or restricted stock units. All~~whereby all officers and employees of the Company are eligible to receive awards ~~under the~~of restricted stock, ~~plan.~~restricted stock units or performance awards. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under ~~the restricted stock~~this plan will be determined in the sole discretion of the Company’s board of directors or its personnel and compensation committee. Shares of common stock issued under the ~~restricted stock~~ plan may be shares of original issuance or shares held in treasury that have been reacquired by the Company. ~~All~~While the vesting period for awards under the plan is determined by the personnel and compensation committee at the time of grant, all restricted stock awards ~~outstanding at September 30, 2014 were issued with~~granted under the plan have a vesting date of three years after issuance.

The following table summarizes non-vested restricted stock activity for the period indicated.


	Nine Months Ended			Six Months Ended June 30, 2015
	September 30, 2014
Outstanding – January 1, 2014		616,100
Outstanding – January 1, 2015					444,700
Granted		0			245,300
Forfeited		(1,200	)		(29,875	)
Vested		0			0

Outstanding – September 30, 2014		614,900
Outstanding – June 30, 2015					660,125


Weighted-average grant date fair value	$	17.99		$	25.27

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period and is based on the market price of the Company’s common stock at the date of grant multiplied by the number of shares granted that are expected to vest. Stock-based compensation expense for restricted stock included in non-interest expense was ~~$0.9~~$1.4 million and ~~$0.6~~$0.9 million for the quarters ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, respectively, and ~~$2.8~~$2.7 million and ~~$1.9~~$1.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. Unrecognized compensation expense for non-vested restricted stock awards was ~~$5.1~~$9.5 million at ~~September~~June 30, ~~2014~~2015 and is expected to be recognized over a weighted-average period of ~~1.8~~2.2 years.

The Company measures certain of its assets and liabilities on a fair value basis using various valuation techniques and assumptions, depending on the nature of the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, fair value is used either annually or on a non-recurring basis to evaluate certain assets and liabilities for impairment or for disclosure purposes. The Company had no liabilities that were accounted for at fair value at June 30, 2015 or 2014 or at December 31, 2014.

The following table sets forth the Company’s assets, ~~for~~as of the dates indicated, that are accounted for at fair value.


	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)								(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Investment securities AFS⁽¹⁾:
Obligations of state and political subdivisions									$	0	$	488,158	$	18,757	$	506,915
U.S. Government agency securities										0		260,753		0		260,753
Corporate obligations										0		3,574		0		3,574
CRA qualified investment fund										1,020		0		0		1,020

Total investment securities AFS										1,020		752,485		18,757		772,262
Impaired non-purchased loans and leases										0		0		12,807		12,807
Impaired purchased loans										0		0		12,347		12,347
Foreclosed assets										0		0		25,973		25,973

Total assets at fair value									$	1,020	$	752,485	$	69,884	$	823,389


December 31, 2014:
Investment securities AFS⁽¹⁾:
Obligations of state and political subdivisions	$	0	$	568,021	$	19,558	$	587,579	$	0	$	553,808	$	19,401	$	573,209
U.S. Government agency securities		0		254,062		0		254,062		0		251,233		0		251,233
Corporate obligations		0		655		0		655		0		654		0		654

Total investment securities AFS		0		822,738		19,558	$	842,296		0		805,695		19,401		825,096
Impaired non-purchased loans and leases		0		0		14,835		14,835		0		0		19,480		19,480
Impaired covered loans		0		0		13,634		13,634
Impaired purchased non-covered loans		0		0		1,657		1,657
Foreclosed assets not covered by FDIC loss share agreements		0		0		14,781		14,781
Foreclosed assets covered by FDIC loss share agreements		0		0		27,882		27,882
Impaired purchased loans										0		0		14,040		14,040
Foreclosed assets										0		0		37,775		37,775

Total assets at fair value	$	0	$	822,738	$	92,347	$	915,085	$	0	$	805,695	$	90,696	$	896,391

December 31, 2013:

June 30, 2014:
Investment securities AFS⁽¹⁾:
Obligations of state and political subdivisions	$	0	$	417,307	$	18,682	$	435,989	$	0	$	595,965	$	20,600	$	616,565
U.S. Government agency securities		0		218,869		0		218,869		0		258,311		0		258,311
Corporate obligations		0		716		0		716		0		685		0		685

Total investment securities AFS		0		636,892		18,682		655,574		0		854,961		20,600		875,561
Impaired non-purchased loans and leases		0		0		6,746		6,746		0		0		16,240		16,240
Impaired covered loans		0		0		46,179		46,179
Foreclosed assets not covered by FDIC loss share agreements		0		0		11,851		11,851
Foreclosed assets covered by FDIC loss share agreements		0		0		37,960		37,960
Impaired purchased loans										0		0		21,205		21,205
Foreclosed assets										0		0		56,356		56,356

Total assets at fair value	$	0	$	636,892	$	121,418	$	758,310	$	0	$	854,961	$	114,401	$	969,362

September 30, 2013:
Investment securities AFS⁽¹⁾:
Obligations of state and political subdivisions	$	0	$	412,770	$	18,798	$	431,568
U.S. Government agency securities		0		225,311		0		225,311
Corporate obligations		0		717		0		717

Total investment securities AFS		0		638,798		18,798		657,596
Impaired non-purchased loans and leases		0		0		8,074		8,074
Impaired covered loans		0		0		52,575		52,575
Foreclosed assets not covered by FDIC loss share agreements		0		0		11,647		11,647
Foreclosed assets covered by FDIC loss share agreements		0		0		40,452		40,452

Total assets at fair value	$	0	$	638,798	$	131,546	$	770,344

The following table presents information related to Level 3 non-recurring fair value measurements as of the date indicated.

The following methods and assumptions are used to estimate the fair value of the Company’s assets and liabilities that are accounted for at fair value.

Investment securities – The Company utilizes independent third parties as its principal pricing sources for determining fair value of investment securities which are measured on a recurring basis. As a result, the Company receives estimates of fair values from at least two independent pricing sources for the majority of its individual securities within its investment portfolio. For investment securities traded in an active market, fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities, broker quotes, comprehensive interest rate tables and pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. All fair value estimates of the Company’s investment securities are reviewed and approved on a quarterly basis by ~~the Company’s~~its Investment Portfolio Manager and its Chief Financial Officer.

The Company has determined that certain of its investment securities had a limited to non-existent trading market at ~~September~~June 30, ~~2014.~~2015. As a result, the Company considers these investments as Level 3 in the fair value hierarchy. Specifically, the fair values of certain obligations of state and political subdivisions consisting primarily of certain unrated private placement bonds (the “private placement bonds”) in the amount of ~~$19.6~~$18.8 million at ~~September~~June 30, ~~2014~~2015 were calculated using Level 3 hierarchy inputs and assumptions as the trading market for such securities was determined to be “not active.” This determination was based on the limited number of trades or, in certain cases, the existence of no reported trades for the private placement bonds. The private placement bonds are generally prepayable at par value at the option of the issuer. As a result, management believes the private placement bonds should be individually valued at the lower of (i) the matrix pricing provided by the Company’s third party pricing services for comparable unrated municipal securities or (ii) par value. At ~~September~~June 30, ~~2014,~~2015, the

third parties’ pricing matrices valued the Company’s portfolio of private placement bonds at ~~$19.6~~$18.8 million which was equal to the aggregate par value of the private placement bonds. Accordingly, at ~~September~~June 30, ~~2014,~~2015, the Company reported the private placement bonds at ~~$19.6~~$18.8 million.

Impaired non-purchased loans and leases – Fair values are measured on a nonrecurring basis and are based on the underlying collateral value of the impaired loan or lease, net of holding and selling costs, or the estimated discounted cash flows for such loan or lease. At ~~September~~June 30, ~~2014~~2015 the Company had reduced the carrying value of its impaired ~~non-purchased~~ loans and leases (all of which are included in nonaccrual loans and leases) by ~~$5.4~~$5.0 million to the estimated fair value of ~~$14.8~~$12.8 million. The ~~$5.4~~$5.0 million adjustment to reduce the carrying value of impaired ~~non-purchased~~ loans and leases to estimated fair value consisted of ~~$4.4~~$3.6 million of partial charge-offs and ~~$1.0~~$1.4 million of specific loan and lease loss allocations.

Impaired ~~covered~~purchased loans – Impaired ~~covered~~purchased loans are measured at fair value on a non-recurring basis. In determining such fair value, management considers a number of factors including, among other things, the remaining life of the loan, estimated collateral value, estimated holding period and net present value of cash flows expected to be received. As a result, impaired covered loans include both a non-accretable difference (the credit component of the impaired loan) and an accretable difference (the yield component of the impaired loan). The non-accretable difference is the difference between the contractually required payments and the cash flows expected to be collected in accordance with management’s determination of the Day 1 Fair Values. The accretable difference is the difference between the expected cash flows and the net present value of expected cash flows and is accreted into earnings using the effective yield method. In determining the net present value of expected cash flows, the Company used discount rates ranging from 6.0% to 9.5% per annum. As of ~~September~~June 30, 2014, the Company identified purchased loans covered by FDIC loss share agreements acquired in its FDIC-assisted acquisitions where the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values. As a result the Company recorded partial charge-offs, net of adjustments to the FDIC loss share receivable and the FDIC clawback payable, totaling $0.2 million during the third quarter and $0.9 million during the first nine months of 2014 for such loans. The Company also recorded provision for loan and lease losses of $0.2 million during the third quarter and $0.9 million during the first nine months of 2014 to cover such charge-offs. At September 30, 2014, the Company had $13.6 million of impaired covered loans.

~~Impaired purchased non-covered loans~~ – Impaired purchased non-covered loans are measured at fair value on a non-recurring basis. In determining the Day 1 Fair Values of purchased non-covered loans without evidence of credit deterioration at the date of acquisition, management includes an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest, given the risk profile and grade assigned to each loan. In determining the estimated fair value of purchased non-covered loans with evidence of credit deterioration, management considers a number of factors including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods, and net present value of cash flows expected to be received. In determining the Day 1 Fair Values of purchased non-covered loans with evidence of credit deterioration, management calculates a non-accretable difference (the credit component of the purchased loans) and an accretable difference (the yield component of the purchased loans). The non-accretable difference is the difference between the contractually required payments and the cash flows expected to be collected in accordance with management’s determination of the Day 1 Fair Values. The accretable difference on purchased non-covered loans with evidence of credit deterioration is the difference between the expected cash flows and the net present value of expected cash flows. In determining the net present value of the expected cash flows for purposes of establishing the Day 1 Fair Values, the Company used discount rates ranging from 6.0% to 9.5% per annum depending on the risk characteristics of each individual loan.

~~As of September 30, 2014,~~2015, the Company had identified purchased ~~non-covered~~ loans where the expected performance had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values or where current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms ~~thereon.~~thereof (for purchased loans without evidence of credit deterioration at date of acquisition) or the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values or since management’s most recent review of such portfolio’s performance (for purchased loans with

evidence of credit deterioration at date of acquisition). As a result, the Company recorded partial charge-offs totaling ~~$0.3~~$0.4 million and $1.1 million during the ~~third~~second quarter of 2015 and ~~$0.9~~2014, respectively, and $1.7 million and $1.3 million during the first ~~nine~~six months of ~~2014.~~2015 and 2014, respectively. The Company also recorded provision for loan and lease losses of ~~$0.3~~$0.4 million and $1.1 million during the ~~third~~second quarter of 2015 and ~~$0.9~~2014, respectively, and $1.7 million and $1.3 million during the first ~~nine~~six months of 2015 and 2014, respectively, to cover such charge-offs. ~~At September~~In addition to these charge-offs, the Company transferred certain of these purchased loans to foreclosed assets. As a result of these actions, at June 30, ~~2014,~~2015, the Company had ~~$1.7~~$12.3 million of impaired purchased ~~non-covered~~ loans.

Foreclosed assets ~~not covered by FDIC loss share agreements~~ – Repossessed personal properties and real estate acquired through or in lieu of foreclosure are measured on a non-recurring basis and are initially recorded at the lesser of current principal investment or fair value less estimated cost to sell (generally 8% to 10%) at the date of repossession or foreclosure. Purchased foreclosed assets are initially recorded at Day 1 Fair Values. In estimating such Day 1 Fair Values, management considered a number of factors including, among others, appraised value, estimated selling price, estimated holding periods and net present value (calculated using discount rates ranging from 8.0% to 9.5% per annum) of cash flows expected to be received. Valuations of these assets are periodically reviewed by management with the carrying value of such assets adjusted to the then estimated fair value net of estimated selling costs, if lower, until disposition. Fair values of foreclosed and repossessed assets are generally based on third party appraisals, broker price opinions or other valuations of the property.

~~Foreclosed assets covered by FDIC loss share agreements~~ – Foreclosed assets covered by FDIC loss share agreements, or covered foreclosed assets are initially recorded at Day 1 Fair Values. In estimating the Day 1 Fair Values of covered foreclosed assets, management considers a number of factors including, among others, appraised value, estimated selling prices, estimated holding periods and net present value of cash flows expected to be received. Discount rates ranging from 8.0% to 9.5% per

annum were used to determine the net present value of covered foreclosed assets for purposes of establishing the Day 1 Fair Values. Valuations of these assets are periodically reviewed by management with the carrying value of such assets adjusted through non-interest income to the then estimated fair value net of estimated selling costs, if lower, until disposition. Fair values of foreclosed assets held for sale are generally based on third party appraisals, broker price opinions or other valuations of property, resulting in a Level 3 classification.

The following table presents additional information for the periods indicated about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value.


				Investment Securities AFS
				(Dollars in thousands)

Balance – January 1, 2015				$	19,401
Total realized gains (losses) included in earnings					0
Total unrealized gains (losses) included in comprehensive income					(271	)
Paydowns and maturities					(373	)
Sales					0
Transfers in and/or out of Level 3					0

Balance – June 30, 2015				$	18,757
	Investment Securities AFS
	(Dollars in thousands)
Balance – January 1, 2014	$	18,682		$	18,682
Total realized gains (losses) included in earnings		0			0
Total unrealized gains (losses) included in comprehensive income		497			403
Acquired		1,907			1,907
Paydowns and maturities		(672	)		(392	)
Sales		(856	)		0
Transfers in and/or out of Level 3		0			0

Balance – September 30, 2014	$	19,558
Balance – June 30, 2014				$	20,600

Balance – January 1, 2013	$	104,172
Total realized gains (losses) included in earnings		0
Total unrealized gains (losses) included in comprehensive income		(1,940	)
Paydowns and maturities		(32,647	)
Sales		0
Transfers in and/or out of Level 3		(50,787	)

Balance –September 30, 2013	$	18,798

The following methods and assumptions were used to estimate the fair value of financial instruments.

Cash and due from banks – For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Investment securities – The Company utilizes independent third parties as its principal pricing sources for determining fair value of investment securities which are measured on a recurring basis. As a result, the Company receives estimates of fair values from at least two independent pricing sources for the majority of its individual securities within its investment portfolio. For investment securities traded in an active market, fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities, broker quotes, comprehensive interest rate tables, pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. All fair value estimates of the Company’s investment securities are reviewed and approved on a quarterly basis by ~~the Company’s~~its Investment Portfolio Manager and its Chief Financial Officer. The Company’s investments in ~~the common stock of the~~ FHLB ~~– Dallas~~ and FNBB equity securities totaling ~~$17.6~~$10.0 million at ~~September~~June 30, ~~2014, $13.8~~2015, $14.2 million at December 31, ~~2013~~2014 and ~~$13.8~~$16.6 million at ~~September~~June 30, ~~2013,~~2014, do not have readily determinable fair values and are carried at cost.

Loans and leases – The fair value of loans and leases, including ~~covered loans and~~ purchased ~~non-covered~~ loans, is estimated by discounting the contractual cash flows to be received in future periods using the current rate at which similar loans or leases would be made to borrowers or lessees with similar credit ratings and for the same remaining maturities.

~~FDIC loss share receivable~~ – The fair value of the FDIC loss share receivable is based on the net present value of future cash proceeds expected to be received from the FDIC under the provisions of the loss share agreements using a discount rate that is based on current market rates.

Deposit liabilities – The fair value of demand deposits, savings accounts, money market deposits and other transaction accounts is the amount payable on demand at the reporting date. The fair value of fixed maturity time deposits is estimated using the rate currently available for deposits of similar remaining maturities.

Repurchase agreements – For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Other borrowed funds – For these short-term instruments, the carrying amount is a reasonable estimate of fair value. The fair value of long-term instruments is estimated based on the current rates available to the Company for borrowings with similar terms and remaining maturities.

~~Clawback payable~~ – The fair value of the FDIC clawback payable is based on the net present value of future cash payments expected to be remitted to the FDIC in accordance with the provisions of the loss share agreements using a discount rate that is based on current market rates.

Subordinated debentures – The fair values of these instruments are based primarily upon discounted cash flows using rates for securities with similar terms and remaining maturities.

Off-balance sheet instruments – The fair values of commercial loan commitments and letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, and were not material at ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 or at December 31, ~~2013.~~2014.

The fair values of certain of these instruments were calculated by discounting expected cash flows, which contain numerous uncertainties and involve significant judgments by management. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company ~~does~~did not know whether the fair values represent values at which the respective financial instruments could be sold individually or in the aggregate.

The following table presents the carrying amounts and estimated fair values for the dates indicated and the fair value hierarchy of the Company’s financial instruments.


		September 30,													June 30,
		2014				2013				December 31, 2013					2015				2014				December 31, 2014
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
		(Dollars in thousands)																	(Dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	112,084	$	112,084	$	124,458	$	124,458	$	195,975	$	195,975	Level 1	$	514,890	$	514,890	$	110,688	$	110,688	$	150,203	$	150,203
Investment securities AFS	Levels 2 and 3		859,876		859,876		671,393		671,393		669,384		669,384	Levels 1, 2 and 3		782,277		782,277		892,129		892,129		839,321		839,321
Loans and leases, net of ALLL	Level 3		4,869,329		4,822,383		3,289,306		3,263,428		3,314,134		3,286,600	Level 3		6,537,222		6,469,690		4,528,696		4,480,221		5,074,899		5,042,831
FDIC loss share receivable	Level 3		36,583		36,130		89,642		89,617		71,854		71,770	Level 3		0		0		50,679		50,600		0		0

Financial liabilities:
Demand, savings and interest bearing transaction deposits	Level 1	$	3,877,373	$	3,877,373	$	2,677,030	$	2,677,030	$	2,819,817	$	2,819,817	Level 1	$	4,966,330	$	4,966,330	$	3,807,139	$	3,807,139	$	4,038,443	$	4,038,443
Time deposits	Level 2		1,262,332		1,263,635		977,656		978,202		897,210		897,708	Level 2		2,120,969		2,142,807		1,176,758		1,177,108		1,457,939		1,463,590
Repurchase agreements with customers	Level 1		73,942		73,942		50,254		50,254		53,103		53,103	Level 1		70,011		70,011		55,999		55,999		65,578		65,578
Other borrowings	Level 2		352,616		373,696		280,905		322,171		280,895		319,650	Level 2		161,931		171,614		280,875		304,381		190,855		203,493
FDIC clawback payable	Level 3		26,676		26,676		25,705		25,705		25,897		25,897	Level 3		0		0		26,533		26,533		0		0
Subordinated debentures	Level 2		64,950		33,452		64,950		30,815		64,950		30,974	Level 2		117,403		66,679		64,950		32,554		64,950		39,103

At June 30, 2015 and 2014 and December 31, 2014, securities sold under agreements to repurchase (“repurchase agreements”) totaled $70.0 million, $56.0 million and $65.6 million, respectively. Securities utilized as collateral for repurchase agreements are primarily U.S. Government agency mortgage-backed securities and are maintained by the Company’s safekeeping agents. These securities are reviewed by the Company on a daily basis, and the Company may be required to provide additional collateral due to changes in the fair market value of these securities. The terms of the Company’s repurchase agreements are continuous but may be cancelled at any time by the Company or the customer.

The following table presents changes in AOCI for the ~~dates~~periods indicated.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
	(Dollars in thousands)												(Dollars in thousands)
Beginning balance of AOCI – unrealized gains and losses on investment securities AFS	$	10,006		$	(898	)	$	(3,672	)	$	10,783		$	14,367		$	3,211		$	14,132		$	(3,672	)
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassifications		744			445			14,437			(11,142	)
Unrealized gains and losses on investment securities AFS														(10,091	)		11,199			(7,600	)		22,529
Tax effect of unrealized gains and losses on investment securities AFS														3,844			(4,393	)		3,157			(8,837	)
Amounts reclassified from AOCI		(26	)		0			(41	)		(94	)		(84	)		(18	)		(2,618	)		(23	)
Tax effect of amounts reclassified from AOCI														32			7			997			9

Total other comprehensive income (loss)		718			445			14,396			(11,236	)		(6,299	)		6,795			(6,064	)		13,678

Ending balance of AOCI – unrealized gains and losses on investment securities AFS	$	10,724		$	(453	)	$	10,724		$	(453	)	$	8,068		$	10,006		$	8,068		$	10,006

Amounts reclassified from AOCI toare included in net gains on investment securities and the tax effect of amounts reclassified from AOCI are included in provision for income tax in the consolidated statements of ~~income related~~income. The amounts reclassified from AOCI relate entirely to unrealized gains/losses on investment securities AFS. For the three months ended September 30, 2014, amounts reclassified for net gains on investment securities were $43,000, with related tax effects of $17,000. For the three months ended September 30, 2013, there were no amounts reclassified from AOCI. For the nine months ended September 30, 2014 and 2013 amounts reclassified for net gains on investment securities were $67,000 and $156,000, respectively, with tax related tax effects of $26,000 and $62,000, respectively.

The following table is a summary of other operating expenses for the periods indicated.

On August 5, 2015, the Company completed the acquisition of Bank of the Carolinas Corporation (“BCAR”) and its wholly-owned subsidiary Bank of the Carolinas for an aggregate of approximately 1.4 million shares of common stock (plus cash in lieu of fractional shares) in a transaction valued at approximately $65.4 million. The acquisition of BCAR expands the Company’s operations in North Carolina by adding eight full service branch locations in Advance, Asheboro, Concord, Harrisburg, Landis, Lexington, Mocksville and Winston-Salem. At June 30, 2015, BCAR had approximately $345 million of total assets, $277 million of loans, $296 million of deposits and $48 million of total common stockholders’ equity.

In ~~January~~May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2014-04~~~~“Receivables – Troubled Debt Restructurings by Creditors (Sub topic 310-04) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure.”~~ The provisions of this ASU clarify when an in substance foreclosure occurs and require a creditor to reclassify a collateralized consumer mortgage loan to real estate owned upon obtaining legal title to the real estate collateral, or a deed in lieu of foreclosure, or similar legal agreement that is voluntarily provided by the borrower to satisfy the loan. ASU 2014-04 was effective for reporting periods beginning January 1, 2014. The provisions of ASU 2014-04 did not have a material impact on the Company’s financial position, results of operations, or liquidity.

~~In May 2014, the FASB issued ASU~~ 2014-09,“Revenue from Contracts with Customers.”ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, ~~2016.~~2017. The Company is currently evaluating the impact, if any, ASU 2014-09 will have on its financial position, results of operations, and its financial statement disclosures.

In June 2014, the FASB issued ASU 2014-11“Transfers and Servicing (Topic 860).”ASU 2014-11 amends the accounting guidance for repo-to-maturity transactions and requires such transactions to be accounted for as secured borrowings. In addition, ASU 2014-11 requires enhanced disclosures related to the collateral pledged, maturity and risk associated with repurchase agreements. The Company adopted the provision of ASU 2014-11 beginning April 1, 2015. The adoption of ASU 2014-11 had no significant impact on the Company’s financial position or results of operations; however, the additional disclosures required by ASU 2014-11 are included in Note 14-Repurchase Agreement with Customers.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) – Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from GAAP the concept of extraordinary items, which, among other things, required an entity to segregate extraordinary items considered to be unusual and infrequent from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. ASU 2015-01 is effective for interim and annual periods beginning after December 15, 2015. ASU 2015-01 is not expected to have a significant impact on the Company’s financial position, results of operations and its financial statement disclosures.

In February 2015, FASB issued ASU 2015-02,“Consolidation (Topic 810): Amendments to the Consolidation Analysis” which amends the consolidation requirements of ASU 810 by changing the consolidation analysis required under GAAP. The revised guidance amends the consolidation analysis based on certain fee arrangements or relationships to the reporting entity and, for limited partnerships, requires entities to consider the limited partner’s rights relative to the general partner. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015. The Company is currently evaluating the impact, if any, ASU 2015-02 will have on its financial position, results of operations, and its financial statement disclosures.

In April 2015, the FASB issued ASU 2015-03,“Interest – Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 is effective for interim and annual periods beginning after December 15, 2015. ASU 2015-03 is not expected to have a significant impact on the Company’s financial position, results of operations and its financial statement disclosures.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless this quarterly report on Form 10-Q indicates otherwise, or the context otherwise requires, the terms “we,” “our,” “us,” and “the Company,” as used herein refer to Bank of the Ozarks, Inc. and its subsidiaries, including Bank of the Ozarks, which we sometimes refer to as “Bank of the Ozarks,” “our bank subsidiary,” or “the Bank.”

This quarterly report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), other filings made by ~~the Company~~us with the ~~SEC~~Securities and Exchange Commission (“SEC”) and other oral and written statements or reports by ~~the Company~~us and ~~its~~our management include certain forward-looking statements that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Forward-looking statements include, without limitation, statements about economic, real estate market, competitive, employment, credit market and interest rate ~~conditions;~~conditions and our plans, goals, beliefs, expectations, thoughts, estimates and outlook for the ~~future;~~future with respect to our revenue growth; net income and earnings per common share; net interest margin; net interest income; non-interest income, including service charges on deposit accounts, mortgage lending and trust income, gains (losses) on investment securities and sales of other assets; gains on merger and acquisition transactions; ~~net FDIC loss share accretion income and amortization expenses;~~ other income from ~~loss share and~~ purchased ~~non-covered~~ loans; non-interest expense; efficiency ratio; anticipated future operating results and financial performance; asset quality and asset quality ratios, including the effects of current economic and real estate market conditions; nonperforming loans and leases; nonperforming assets; the impact from termination of the loss share agreement; net ~~charge-offs;~~charge-offs and net charge-off ~~ratio;~~ratios; provision and allowance for loan and lease losses; past due loans and leases; current or future litigation; interest rate sensitivity, including the effects of possible interest rate changes; future growth and expansion opportunities including plans for making additional acquisitions; problems with integrating or managing acquisitions; the effect of the announcements or completion of any pending or future mergers or acquisitions on customer relationships and operating results; plans for opening new offices or relocating or closing existing offices; opportunities and goals for future market share growth; expected capital expenditures; loan, lease and deposit growth, including growth from unfunded closed loans; changes in ~~covered assets; changes in~~ the volume, yield and value of ~~the Company’s~~our investment securities portfolio; ~~conversion of the Company’s core banking software;~~ availability of unused borrowings and other similar forecasts and statements of expectation. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “hope,” “intend,” “look,” “may,” “plan,” “project,” “seek,” “target,” “trend,” “will,” “would,” and similar expressions, as they relate to ~~the Company~~us or ~~its~~our management, identify forward-looking statements.

Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by ~~the Company~~us and ~~its~~our management due to certain risks, uncertainties and assumptions. Certain factors that may affect our future results ~~of the Company~~ include, but are not limited to, potential delays or other problems in implementing ~~the Company’s~~our growth and expansion strategy including delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating or managing acquisitions; the availability of capital; the ability to attract new or retain existing or acquired deposits; the ability to achieve growth in loans and leases, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates; competitive factors and pricing pressures, including their effect on ~~the Company’s~~our net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers and lessees, collateral values, the value of investment securities and asset recovery ~~values, including the value of the FDIC loss share receivable and related assets covered by FDIC loss share agreements;~~values; changes in legal and regulatory requirements; recently enacted and potential legislation and regulatory actions, and the costs and expenses to comply with new legislation and regulatory actions, including legislation and regulatory actions intended to stabilize economic conditions and credit markets, strengthen the capital of financial institutions, increase regulation of the financial services industry and protect homeowners or consumers; changes in U.S. government monetary and fiscal policy; possible further downgrade of U.S. Treasury securities; the ability to keep pace with technological changes, including changes regarding cyber security; an increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting ~~the Bank and its~~our bank subsidiary or our customers; adoption of new accounting standards or changes in existing standards; and adverse results in current or future litigation or regulatory examinations as well as other factors described in this quarterly report on Form 10-Q or as detailed from time to time in the other ~~Company~~ reports ~~filed~~we file with the SEC, including those factors included in the disclosures under the heading “Forward-Looking Information” and “Item 1A. Risk Factors” in ~~the Company’s~~our most recent Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in the forward-looking statements. ~~The Company disclaims~~We disclaim any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information or otherwise.

The following tables set forth selected unaudited consolidated financial data as of ~~the Company~~and for the three months and ~~nine~~six months ended ~~September~~June 30, 2015 and 2014 and ~~2013 and~~ supplemental unaudited quarterly financial data ~~of the Company~~ for each of the most recent eight quarters beginning with the ~~fourth quarter of 2012 through the~~ third quarter of ~~2014.~~2013 through the second quarter of 2015. These tables are qualified in their entirety by ~~the~~our consolidated financial statements and related notes presented elsewhere in this quarterly report on Form 10-Q. The calculations of our tangible book value per common share and our annualized returns on average tangible common stockholders’ equity and the reconciliations to generally accepted accounting principles (“GAAP”) are included in this MD&A under “Capital Resources and Liquidity” in this quarterly report on Form 10-Q.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
	(Dollars in thousands, except per share amounts)												(Dollars in thousands, except per share amounts)
Income statement data:
Interest income	$	80,083		$	55,342		$	206,902		$	152,069		$	100,103		$	69,760		$	191,558		$	126,818
Interest expense		5,462			4,709			15,083			13,832			6,347			4,959			12,312			9,620
Net interest income		74,621			50,633			191,819			138,237			93,756			64,801			179,246			117,198
Provision for loan and lease losses		3,687			3,818			10,574			9,212			4,308			5,582			10,623			6,887
Non-interest income		19,248			22,102			56,996			57,446			23,270			17,388			52,337			37,749
Non-interest expense		42,523			32,208			117,856			91,341			43,724			37,878			93,908			75,333
Net income available to common stockholders		32,093			26,452			83,855			66,839			44,776			26,486			84,670			51,762
*Common share and per common share data:**
Common share and per common share data:
Earnings – diluted	$	0.40		$	0.36		$	1.08		$	0.93		$	0.51		$	0.34		$	0.98		$	0.68
Book value		10.99			8.34			10.99			8.34			13.93			10.67			13.93			10.67
Tangible book value														12.19			9.31			12.19			9.31
Dividends		0.12			0.095			0.345			0.255			0.135			0.115			0.265			0.225
Weighted-average diluted shares outstanding (thousands)		80,445			73,296			77,469			71,988			87,515			77,466			86,001			75,981
End of period shares outstanding (thousands)		79,705			73,404			79,705			73,404			86,811			79,662			86,811			79,662
Balance sheet data at period end:
Total assets	$	6,580,360		$	4,710,567		$	6,580,360		$	4,710,567		$	8,710,435		$	6,297,975		$	8,710,435		$	6,297,975
Non-purchased loans and leases		3,639,142			2,522,589			3,639,142			2,522,589			4,767,123			3,171,585			4,767,123			3,171,585
Purchased non-covered loans		1,030,988			399,058			1,030,988			399,058
Covered loans		248,802			409,319			248,802			409,319
Purchased loans⁽¹⁾														1,826,848			1,404,069			1,826,848			1,404,069
Allowance for loan and lease losses		49,606			41,660			49,606			41,660			56,749			46,958			56,749			46,958
FDIC loss share receivable		36,583			89,642			36,583			89,642
Investment securities AFS		859,876			671,393			859,876			671,393
Covered foreclosed assets		27,882			40,452			27,882			40,452
Total deposits		5,139,705			3,654,686			5,139,705			3,654,686
Foreclosed assets⁽¹⁾														25,973			56,356			25,973			56,356
Investment securities														782,277			892,129			782,277			892,129
Deposits														7,087,299			4,983,897			7,087,299			4,983,897
Repurchase agreements with customers		73,942			50,254			73,942			50,254			70,011			55,999			70,011			55,999
Other borrowings		352,616			280,905			352,616			280,905			161,931			280,875			161,931			280,875
Subordinated debentures		64,950			64,950			64,950			64,950			117,403			64,950			117,403			64,950
Total common stockholders’ equity		875,578			612,338			875,578			612,338			1,209,254			850,204			1,209,254			850,204
Loan and lease (including covered loans and purchased non-covered loans) to deposit ratio		95.70	%		91.14	%		95.70	%		91.14	%
Loan and lease (including purchased loans) to deposit ratio														93.04	%		91.81	%		93.04	%		91.81	%
Average balance sheet data:
Total average assets	$	6,435,697		$	4,450,763		$	5,650,230		$	4,098,903		$	8,283,023		$	5,660,136		$	7,945,178		$	5,247,221
Total average common stockholders’ equity		860,240			578,382			751,602			540,382			1,191,798			749,692			1,121,225			696,360
Average common equity to average assets		13.37	%		13.00	%		13.30	%		13.18	%		14.39	%		13.25	%		14.11	%		13.27	%
Performance ratios:
Return on average assets**		1.98	%		2.36	%		1.98	%		2.18	%
Return on average common stockholders’ equity**		14.80			18.14			14.92			16.54
Return on average tangible common stockholders’ equity**		16.93			18.70			16.27			16.95
Net interest margin – FTE**		5.49			5.55			5.52			5.63
Return on average assets⁽²⁾														2.17	%		1.88	%		2.15	%		1.99	%
Return on average common stockholders’ equity⁽²⁾														15.07			14.17			15.23			14.99
Return on average tangible common stockholders’ equity⁽²⁾														17.27			15.41			17.43			15.90
Net interest margin – FTE⁽²⁾														5.37			5.62			5.39			5.55
Efficiency ratio		43.95			43.00			45.88			45.23			36.56			44.60			39.67			47.05
Common stock dividend payout ratio		29.79			30.12			31.20			28.75			26.20			33.82			26.10			33.09
Asset quality ratios:
Net charge-offs to average total loans and leases**⁽¹⁾		0.07	%		0.09	%		0.11	%		0.13	%
Nonperforming loans and leases to total loans and leases⁽²⁾		0.49			0.41			0.49			0.41
Nonperforming assets to total assets⁽²⁾		0.50			0.47			0.50			0.47
Net charge-offs to average total loans and leases^{(2) (3)}														0.12	%		0.19	%		0.24	%		0.11	%
Nonperforming loans and leases to total loans and leases⁽⁴⁾														0.34			0.58			0.34			0.58
Nonperforming assets to total assets⁽⁴⁾														0.49			0.62			0.49			0.62
Allowance for loan and lease losses as a percentage of:
Total loans and leases⁽²⁾		1.36	%		1.65	%		1.36	%		1.65	%
Nonperforming loans and leases⁽²⁾		276	%		400	%		276	%		400	%
Total loans and leases⁽⁴⁾														1.19	%		1.48	%		1.19	%		1.48	%
Nonperforming loans and leases⁽⁴⁾														349	%		255	%		349	%		255	%
Capital ratios at period end:
Tier 1 leverage		12.97	%		14.72	%		12.97	%		14.72	%		14.41	%		14.31	%		14.41	%		14.31	%
Tier 1 risk-based capital		12.28			15.94			12.28			15.94
Total risk-based capital		13.03			16.96			13.03			16.96
Common equity tier 1														11.18			N/A			11.18			N/A
Tier 1 capital														12.43			13.40			12.43			13.40
Total capital														13.03			14.19			13.03			14.19


	12/31/12			3/31/13			6/30/13			9/30/13			12/31/13			3/31/14			6/30/14			9/30/14
	(Dollars in thousands, except per share amounts)																								9/30/13			12/31/13			3/31/14			6/30/14			9/30/14			12/31/14			3/31/15			6/30/15
Earnings Summary:
Net interest income	$	43,771		$	44,139		$	43,465		$	50,633		$	55,282		$	52,396		$	64,801		$	74,621		$	50,633		$	55,282		$	52,396		$	64,801		$	74,621		$	78,675		$	85,489		$	93,756
Federal tax (FTE) adjustment		2,009			2,020			2,076			2,161			2,372			2,424			2,737			2,892			2,161			2,372			2,424			2,737			2,892			2,690			2,570			2,552

Net interest income (FTE)		45,780			46,159			45,541			52,794			57,654			54,820			67,538			77,513			52,794			57,654			54,820			67,538			77,513			81,365			88,059			96,308
Provision for loan and lease losses		(2,533	)		(2,728	)		(2,666	)		(3,818	)		(2,863	)		(1,304	)		(5,582	)		(3,687	)		(3,818	)		(2,863	)		(1,304	)		(5,582	)		(3,687	)		(6,341	)		(6,315	)		(4,308	)
Non-interest income		18,848			16,357			18,987			22,102			18,592			20,360			17,388			19,248			22,102			18,592			20,360			17,388			19,248			27,887			29,067			23,270
Non-interest expense		(29,891	)		(29,231	)		(29,901	)		(32,208	)		(34,728	)		(37,454	)		(37,878	)		(45,523	)		(32,208	)		(34,728	)		(37,454	)		(37,878	)		(42,523	)		(48,158	)		(50,184	)		(43,724	)

Pretax income (FTE)		32,204			30,557			31,961			38,870			38,655			36,422			41,466			50,551			38,870			38,655			36,422			41,466			50,551			54,753			60,627			71,546
FTE adjustment		(2,009	)		(2,020	)		(2,076	)		(2,161	)		(2,372	)		(2,424	)		(2,737	)		(2,892	)		(2,161	)		(2,372	)		(2,424	)		(2,737	)		(2,892	)		(2,690	)		(2,570	)		(2,552	)
Provision for income taxes		(9,519	)		(8,526	)		(9,506	)		(10,224	)		(11,893	)		(8,730	)		(12,251	)		(15,579	)		(10,224	)		(11,893	)		(8,730	)		(12,251	)		(15,579	)		(17,300	)		(18,139	)		(24,190	)
Noncontrolling interest		(9	)		(11	)		8			(33	)		8			8			8			13			(33	)		8			8			8			13			(11	)		(24	)		(28	)

Net income available to common stockholders	$	20,667		$	20,000		$	20,387		$	26,452		$	24,398		$	25,276		$	26,486		$	32,093		$	26,452		$	24,398		$	25,276		$	26,486		$	32,093		$	34,752		$	39,894		$	44,776

Earnings per common share – diluted*	$	0.29		$	0.28		$	0.29		$	0.36		$	0.33		$	0.34		$	0.34		$	0.40
Non-interest Income:
Earnings per common share – diluted⁽¹⁾																									$	0.36		$	0.33		$	0.34		$	0.34		$	0.40		$	0.43		$	0.47		$	0.51
Non-interest Income:
Service charges on deposit accounts	$	4,799		$	4,722		$	5,074		$	5,817		$	6,031		$	5,639		$	6,605		$	7,356		$	5,817		$	6,031		$	5,639		$	6,605		$	7,356		$	7,009		$	6,627		$	7,088
Mortgage lending income		1,483			1,741			1,643			1,276			967			954			1,126			1,728			1,276			967			954			1,126			1,728			1,379			1,507			1,772
Trust income		928			883			865			1,060			1,289			1,316			1,364			1,419			1,060			1,289			1,316			1,364			1,419			1,493			1,432			1,463
BOLI income		1,027			1,083			1,104			1,179			1,164			1,130			1,278			1,390			1,179			1,164			1,130			1,278			1,390			1,385			3,623			1,785
Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable		1,336			2,392			2,481			1,396			901			692			(741	)		(562	)
Other income from loss share and purchased non-covered loans, net		3,194			2,155			3,689			2,484			4,825			3,311			3,629			3,369
Net accretion (amortization) of FDIC loss share receivable and FDIC clawback payable																										1,396			901			692			(741	)		(562	)		—			—			—
Other income from purchased loans																										2,484			4,825			3,311			3,629			3,369			4,494			8,908			6,971
Gains on investment securities		55			156			—			—			4			5			18			43			—			4			5			18			43			78			2,534			85
Gains on sales of other assets		2,431			1,974			3,110			2,501			1,801			974			1,448			1,688			2,501			1,801			974			1,448			1,688			1,912			2,829			2,557
Gains on merger and acquisition transactions		2,403			—			—			5,163			—			4,667			—			—			5,163			—			4,667			—			—			—			—			—
Gain on termination of FDIC loss share agreements																										—			—			—			—			—			7,996			—			—
Other		1,192			1,251			1,021			1,226			1,610			1,672			2,661			2,817			1,226			1,610			1,672			2,661			2,817			2,141			1,607			1,549

Total non-interest income	$	18,848		$	16,357		$	18,987		$	22,102		$	18,592		$	20,360		$	17,388		$	19,248		$	22,102		$	18,592		$	20,360		$	17,388		$	19,248		$	27,887		$	29,067		$	23,270

Non-interest Expense:
Salaries and employee benefits	$	15,362		$	15,694		$	15,294		$	16,456		$	17,381		$	17,689		$	18,831		$	20,876		$	16,456		$	17,381		$	17,689		$	18,831		$	20,876		$	19,488		$	22,597		$	22,646
Net occupancy expense		4,160			4,514			4,370			4,786			5,039			5,044			5,707			6,823			4,786			5,039			5,044			5,707			6,823			6,528			7,291			7,344
Other operating expenses		9,860			8,455			9,669			10,178			11,427			13,908			12,221			13,292			10,178			11,427			13,908			12,221			13,292			20,610			18,700			12,094
Amortization of intangibles		509			568			568			788			881			813			1,119			1,532			788			881			813			1,119			1,532			1,532			1,596			1,640

Total non-interest expense	$	29,891		$	29,231		$	29,901		$	32,208		$	34,728		$	37,454		$	37,878		$	42,523		$	32,208		$	34,728		$	37,454		$	37,878		$	42,523		$	48,158		$	50,184		$	43,724

Allowance for Loan and Lease Losses:
Balance at beginning of period	$	38,672		$	38,738		$	38,422		$	39,372		$	41,660		$	42,945		$	43,861		$	46,958		$	39,372		$	41,660		$	42,945		$	43,861		$	46,958		$	49,606		$	52,918		$	54,147
Net charge-offs		(2,467	)		(3,044	)		(1,716	)		(1,530	)		(1,578	)		(388	)		(2,485	)		(1,039	)		(1,530	)		(1,578	)		(388	)		(2,485	)		(1,039	)		(3,029	)		(5,086	)		(1,706	)
Provision for loan and lease losses		2,533			2,728			2,666			3,818			2,863			1,304			5,582			3,687			3,818			2,863			1,304			5,582			3,687			6,341			6,315			4,308

Balance at end of period	$	38,738		$	38,422		$	39,372		$	41,660		$	42,945		$	43,861		$	46,958		$	49,606		$	41,660		$	42,945		$	43,861		$	46,958		$	49,606		$	52,918		$	54,147		$	56,749

Selected Ratios:
Net interest margin - FTE**		5.84	%		5.83	%		5.56	%		5.55	%		5.63	%		5.46	%		5.62	%		5.49	%
Net interest margin – FTE⁽²⁾																										5.55	%		5.63	%		5.46	%		5.62	%		5.49	%		5.53	%		5.42	%		5.37	%
Efficiency ratio		46.25			46.76			46.34			43.00			45.55			49.82			44.60			43.95			43.00			45.55			49.82			44.60			43.95			44.08			42.85			36.56
Net charge-offs to average loans and leases**(1)		0.28			0.19			0.11			0.09			0.12			0.02			0.21			0.07
Net charge-offs to average loans and leases⁽²⁾⁽³⁾																										0.10			0.14			0.03			0.19			0.06			0.17			0.37			0.12
Nonperforming loans and leases to total loans and leases~~(2)~~(4)		0.43			0.40			0.66			0.41			0.33			0.42			0.58			0.49			0.41			0.33			0.42			0.58			0.49			0.53			0.33			0.34
Nonperforming assets to total assets~~(2)~~(5)		0.57			0.50			0.66			0.47			0.43			0.57			0.62			0.50			1.33			1.22			1.44			1.19			0.92			0.87			0.56			0.49
Allowance for loan and lease losses to total loans and leases~~(2)~~(4)		1.83			1.78			1.61			1.65			1.63			1.58			1.48			1.36			1.65			1.63			1.58			1.48			1.36			1.33			1.26			1.19
Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases~~(2)~~(4)		0.73			0.56			0.74			0.54			0.45			0.75			0.63			0.63			0.54			0.45			0.75			0.63			0.63			0.79			0.57			0.50

The following discussion explains ~~the~~our financial condition and results of operations ~~of Bank of the Ozarks, Inc. (“the Company”)~~ as of and for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2014.~~2015. The purpose of this discussion is to focus on information about ~~the Company’s~~our financial condition and results of operations which is not otherwise apparent from the consolidated financial statements. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 previously filed with the ~~Securities and Exchange Commission (“SEC”).~~SEC. Annualized results for these interim periods may not be indicative of results for the full year or future periods.

~~The Company~~Bank of the Ozarks, Inc. is a bank holding company whose primary business is commercial banking conducted through its wholly-owned state chartered bank subsidiary – Bank of the ~~Ozarks (the “Bank”). The Company’s~~Ozarks. Our results of operations depend primarily on net interest income, which is the difference between the interest income from earning assets, such as ~~non-purchased~~ loans and leases purchased loans not covered by Federal Deposit Insurance Corporation (“FDIC”) loss share agreements (“purchased non-covered loans”), loans covered by FDIC loss share agreements (“covered loans”) and investments, and the interest expense incurred on interest bearing liabilities, such as deposits, borrowings and subordinated debentures. ~~The Company~~We also ~~generates~~generate non-interest income, including, among others, service charges on deposit accounts, mortgage lending income, trust income, bank owned life insurance (“BOLI”) income, ~~accretion/amortization of FDIC loss share receivable, net of amortization of FDIC clawback payable,~~ other income from ~~loss share and~~ purchased ~~non-covered~~ loans, gains on investment securities and from sales of other assets, and gains on merger and acquisition transactions.

~~The Company’s~~Our non-interest expense consists primarily of employee compensation and benefits, net occupancy and equipment expense and other operating expenses. ~~The Company’s~~Our results of operations are significantly affected by ~~its~~our provision for loan and lease losses and ~~its~~our provision for income taxes.

The preparation of financial statements in conformity with ~~accounting principles generally accepted in the United States (“GAAP”)~~GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements. ~~The Company’s~~Our determination of (i) the provisions to and the adequacy of the allowance for loan and lease losses (“ALLL”), (ii) the fair value of ~~its~~our investment securities portfolio, (iii) the fair value of foreclosed assets ~~not covered by FDIC loss share agreements~~ and (iv) the fair value of the assets acquired and liabilities assumed pursuant to business combination transactions all involve a higher degree of judgment and complexity than ~~its~~our other significant accounting policies. Accordingly, ~~the Company considers~~we consider the determination of (i) provisions to and the adequacy of the ALLL, (ii) the fair value of ~~its~~our investment securities portfolio, (iii) the fair value of foreclosed assets ~~not covered by FDIC loss share agreements~~ and (iv) the fair value of the assets acquired and liabilities assumed pursuant to business combination transactions to be critical accounting policies.

~~Provisions to and adequacy~~ A detailed discussion of ~~the ALLL.~~The ALLL is established through a provision for such losses charged against income. All or portions of non-purchased loans or leases deemed to be uncollectible are charged against the ALLL when management believes that collectability of all or some portion of outstanding principal is unlikely. Subsequent recoveries, if any, of non-purchased loans or leases previously charged off are credited to the ALLL.

The ALLL is maintained at a level management believes will be adequate to absorb probable incurred losses in the loan and lease portfolio. Provisions to and the adequacy of the ALLL are based on evaluations of the loan and lease portfolio utilizing objective and subjective criteria. The objective criteria primarily include an internal grading system and specific allowances. In addition to these objective criteria, the Company subjectively assesses the adequacy of the ALLL and the need for additions thereto, with consideration given to the nature and mix of the portfolio, including concentrations of credit; general economic and business conditions, including national, regional and local business and economic conditions that may affect borrowers’ or lessees’ ability to pay; expectations regarding the current business cycle; trends that could affect collateral values and other relevant factors. The Company also utilizes a peer group analysis and a historical analysis to validate the overall adequacy of its ALLL. Changes in anyeach of these criteria or the availability of new information could require adjustment of the ALLL in future periods. While a specific allowance has been calculated for impaired loans and leases and for loans and leases where the Company has otherwise determined a specific reserve is appropriate, no portion of the Company’s ALLL is restricted to any individual loan or lease or group of loans or leases, and the entire ALLL is available to absorb losses from any and all loans and leases.

The Company’s internal grading system assigns grades to all non-purchased loans and leases, except residential 1-4 family loans, consumer loans, and certain other loans, with each grade being assigned an allowance allocation percentage. The grade for each graded individual loan or lease is determined by the account officer and other approving officers at the time the loan or lease is made and changed from time to time to reflect an ongoing assessment of loan or lease risk. Grades are reviewed on specific loans and leases from time to time by senior management and as part of the Company’s internal loan review process. These risk elements include, among others, the following: (1) for non-farm/non-residential, multifamily residential, and agricultural real estate loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan repayment requirements),

operating results of the owner in the case of owner-occupied properties, the loan-to-value ratio, the age, condition, value, nature and marketability of the collateral and the specific risks and volatility of income, property value and operating results typical of properties of that type; (2) for construction and land development loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or ability to lease property constructed for lease, the quality and nature of contracts for presale or preleasing, if any, experience and ability of the developer and loan-to-cost and loan-to-value ratios; (3) for commercial and industrial loans and leases, the operating results of the commercial, industrial or professional enterprise, the borrower’s or lessee’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in the applicable industry and the age, condition, value, nature and marketability of collateral; and (4) for non-real estate agricultural loans and leases, the operating results, experience and ability of the borrower or lessee, historical and expected market conditions and the age, condition, value, nature and marketability of collateral. In addition, for each category the Company considers secondary sources of income and the financial strength of the borrower or lessee and any guarantors.

~~Residential 1-4 family, consumer loans and certain other loans are assigned an allowance allocation percentage based on past due status.~~

Allowance allocation percentages for the various risk grades and past due categories for residential 1-4 family, consumer loans and certain other loans are determined by management and are adjusted periodically. In determining these allowance allocation percentages, management considers, among other factors, historical loss percentages over various periods and a variety of subjective criteria in determining the allowance allocation percentages.

Assets acquired and liabilities assumed in business combinations are recorded at estimated fair value on their purchase date. As provided for under GAAP, management has up to 12 months following the date of the acquisition to finalize the fair values of acquired assets and assumed liabilities. Once management has finalized the fair values of acquired assets and assumed liabilities within this 12-month period, management considers such values to be the day 1 fair values (“Day 1 Fair Values”).

For purchased non-covered loans, management segregates this portfolio into loans that contain evidence of credit deterioration on the date of purchase and loans that do not contain evidence of credit deterioration on the date of purchase. Purchased non-covered loans with evidence of credit deterioration are regularly monitored and are periodically reviewed by management. To the extent that a loan’s performance has deteriorated from management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is considered in the determination of the required level of ALLL. To the extent that a revised loss estimate exceeds the loss estimate established in the determination of Day 1 Fair Values, such determination will result in an allowance allocation or a charge-off.

All other purchased non-covered loans are graded by management at the time of purchase. The grade on these purchased non-covered loans are reviewed regularly as part of the ongoing assessment of such loans. To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered in the determination of the required level of ALLL and may result in an allowance allocation or a charge-off.

At September 30, 2014 and 2013 and at December 31, 2013, the Company had no allowance for its purchased non-covered loans and its covered loans because all losses had been charged off on such loans whose performance had deteriorated from management’s expectations established in conjunction with the determination of the Day 1 Fair Values.

The Company generally places a loan or lease, excluding purchased non-covered loans with evidence of credit deterioration on the date of purchase and covered loans, on nonaccrual status when such loan or lease is (i) deemed impaired or (ii) 90 days or more past due, or earlier when doubt exists as to the ultimate collection of payments. The Company may continue to accrue interest on certain loans or leases contractually past due 90 days or more if such loans or leases are both well secured and in the process of collection. At the time a loan or lease is placed on nonaccrual status, interest previously accrued but uncollected is generally reversed and charged against interest income. Nonaccrual loans and leases are generally returned to accrual status when payments are less than 90 days past due and the Company reasonably expects to collect all payments. If a loan or lease is determined to be uncollectible, the portion of the principal determined to be uncollectible will be charged against the ALLL. Loans for which the terms have been modified and for which (i) the borrower is experiencing financial difficulties and (ii) a concession has been granted to the borrower by the Company are considered troubled debt restructurings (“TDRs”) and are included in impaired loans and leases. Income on nonaccrual loans or leases, including impaired loans and leases but excluding certain TDRs which continue to accrue interest, is recognized on a cash basis when and if actually collected. For the three months and nine months ended September 30, 2014, there were no defaults during the preceding 12 months on any loans that were considered TDRs.

All loans and leases deemed to be impaired are evaluated individually. The Company considers a loan or lease, excluding purchased non-covered loans with evidence of credit deterioration at the date of purchase and covered loans, to be impaired when 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 thereof. The Company considers a purchased non-covered loan with evidence of credit deterioration at the date of purchase and a covered loan to be impaired once a decrease in expected cash flows or other deterioration in the loan’s expected performance, subsequent to the determination of the Day 1 Fair Values, results in an allowance allocation, a partial or full charge-off or in a provision for loan and lease losses. Most of the Company’s nonaccrual loans and leases, excluding purchased non-covered loans and covered loans, and all TDRs are considered impaired. The majority of the Company’s impaired loans and leases are dependent upon collateral for repayment. For such loans and leases, impairment is measured by comparing collateral value, net of holding and selling costs, to the current investment in the loan or lease. For all other impaired loans and leases, the Company compares estimated discounted cash flows to the current investment in the loan or lease. To the extent that the Company’s current investment in a particular loan or lease exceeds its estimated net collateral value or its estimated discounted cash flows, the impaired amount is specifically considered in the determination of the ALLL or is charged off as a reduction of the ALLL. The Company’s practice is to charge off any estimated loss as soon as management is able to identify and reasonably quantify such potential loss. Accordingly, only a small portion of the Company’s ALLL is needed for potential losses on nonperforming loans and leases.

The Company also maintains an allowance for certain non-purchased loans and leases not considered impaired where (i) the customer is continuing to make regular payments, although payments may be past due, (ii) there is a reasonable basis to believe the customer may continue to make regular payments, although there is also an elevated risk that the customer may default, and (iii) the collateral or other repayment sources are likely to be insufficient to recover the current investment in the loan or lease if a default occurs. The Company evaluates such loans and leases to determine if an allowance is needed for these loans and leases. For the purpose of calculating the amount of such allowance, management assumes that (i) no further regular payments occur and (ii) all sums recovered will come from liquidation of collateral and collection efforts from other payment sources. To the extent that the Company’s current investment in a particular loan or lease evaluated for the need for such an allowance exceeds its net collateral value or its estimated discounted cash flows, such excess is considered allocated allowance for purposes of the determination of the ALLL.

The Company also maintains specific ALLL allocations for concentrations of credit to capture the risk associated with having a loan portfolio comprised of large individual credits. This ALLL allocation is applied to every large risk-rated loan that exceeds $10 million, and is based on the greater of the loan-to-value or loan-to-cost ratio for each large individual risk-rated loan.

The Company also includes specific ALLL allocations for qualitative factors including, (i) general economic and business conditions, (ii) trends that could affect collateral values and (iii) expectations regarding the current business cycle. The Company may also consider other qualitative factors in future periods for additional allowance allocations.

Changes in the criteria used in this evaluation or the availability of new information could cause the ALLL to be increased or decreased in future periods. In addition bank regulatory agencies, as part of their examination process, may require adjustments to the ALLL based on their judgments and estimates.

~~Fair value of the investment securities portfolio.~~ Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of each balance sheet date. At September 30, 2014 and 2013 and December 31, 2013, the Company has classified all of its investment securities as available for sale (“AFS”).

AFS investment securities are stated at estimated fair value, with the unrealized gains and losses determined on a specific identification basis. Such unrealized gains and losses, net of tax, are reported as a separate component of stockholders’ equity and included in other comprehensive income (loss). The Company utilizes independent third parties as its principal pricing sources for determining fair value of investment securities which are measured on a recurring basis. As a result, the Company receives estimates of fair values from at least two independent pricing sources for the majority of its individual securities within its investment portfolio. For investment securities traded in an active market, fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities, broker quotes or comprehensive interest rate tables, pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. Additionally, the valuation of investment securities acquired may include certain unobservable inputs. All fair value estimates received by the Company for its investment securities are reviewed and approved on a quarterly basis by the Company’s Investment Portfolio Manager and its Chief Financial Officer.

Declines in the fair value of investment securities below their amortized cost are reviewed at least quarterly by the Company for other-than-temporary impairment. Factors considered during such review include, among other things, the length of time and extent that fair value has been less than cost and the financial condition and near term prospects of the issuer. The Company also assesses whether it has the intent to sell the investment security or more likely than not would be required to sell the investment security before any anticipated recovery in fair value. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through the income statement. For securities that do not meet the aforementioned criteria, the amount of impairment is split into (i) other-than-temporary impairment related to credit loss, which must be recognized in the income statement, and (ii) other-than-temporary impairment related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

The fair values of the Company’s investment securities traded in both active and inactive markets can be volatile and may be influenced by a number of factors including market interest rates, prepayment speeds, discount rates, credit quality of the issuer, general market conditions including market liquidity conditions and other factors. Factors and conditions are constantly changing and fair values could be subject to material variations that may significantly impact the Company’s financial condition, results of operations and liquidity.

~~Fair value of foreclosed assets not covered by FDIC loss share agreements.~~ Repossessed personal properties and real estate acquired through or in lieu of foreclosure are initially recorded at the lesser of current principal investment or fair value less estimated cost to sell at the date of repossession or foreclosure. Valuations of these assets are periodically reviewed by management with the carrying value of such assets adjusted through non-interest expense to the then estimated fair value net of estimated selling costs, if lower, until disposition. Fair values of these assets are based on third party appraisals, broker price opinions or other valuations of the property.

~~Fair value of assets acquired and liabilities assumed pursuant to business combination transactions.~~ Loans covered by FDIC loss share agreements, or covered loans, are accounted for in accordance with the provisions of GAAP applicable to loans acquired with deteriorated credit quality and pursuant to the American Institute of Certified Public Accountants’ (“AICPA”) December 18, 2009 letter in which the AICPA summarized the SEC’s view regarding thecritical accounting in subsequent periods for discount accretion associated with non-credit impaired loans acquired in a business combination or asset purchase. Considering, among other factors, the general lack of adequate underwriting, proper documentation, appropriate loan structure and insufficient equity contributions for a large number of these acquired loans, and the uncertainty of the borrowers’ and/or guarantors’ ability or willingness to make contractually required (or any) principal and interest payments, management has determined that a significant portion of the loans acquired in FDIC-assisted acquisitions had evidence of credit deterioration since origination. Accordingly, management has elected to apply the provisions of GAAP applicable to loans acquired with deteriorated credit quality as provided by the AICPA’s December 18, 2009 letter, to all loans acquired in its FDIC-assisted acquisitions.

At the time such covered loans are acquired, management individually evaluates substantially all loans acquired in the transaction. This evaluation allows management to determine the estimated fair value of the covered loans (not considering any FDIC loss sharing agreements) and includes no carryover of any previously recorded ALLL. In determining the estimated fair value of covered loans, management considers a number of factors including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods, and net present value of cash flows expected to be received. To the extent that any covered loan is not specifically reviewed, management applies a loss estimate to that loan based on the average expected loss rates for the purchased loans that were individually reviewed in that covered loan portfolio.

In determining the Day 1 Fair Values of covered loans, management calculates a non-accretable difference (the credit component of the covered loans) and an accretable difference (the yield component of the covered loans). The non-accretable difference is the difference between the contractually required payments and the cash flows expected to be collected in accordance with management’s determination of the Day 1 Fair Values. Subsequent decreases to the expected cash flows will generally result in a provision for loan and lease losses. Subsequent increases in expected cash flows following any previous decrease will result in a reversal of the provision for loan and lease losses to the extent of prior charges and then an adjustment to accretable yield. Any such increase or decrease in expected cash flows will result in a corresponding adjustment of the FDIC loss share receivable and accretion or amortization thereof and the FDIC clawback payable or the amortization thereof for the portion of such reduced or additional loss expected to be collected from the FDIC.

The accretable difference on covered loans is the difference between the expected cash flows and the net present value of expected cash flows. Such difference is accreted into earnings using the effective yield method over the term of the loans. In determining the net present value of the expected cash flows for purposes of establishing the Day 1 Fair Values, the Company used discount rates ranging from 6.0% to 9.5% per annum depending on the risk characteristics of each individual loan.

Management separately monitors the covered loan portfolio and periodically reviews loans contained within this portfolio against the factors and assumptions used in determining the Day 1 Fair Values. A loan is typically reviewed (i) when it is modified or extended, (ii) when material information becomes available to the Company that provides additional insight regarding the loan’s performance, the status of the borrower, or the quality or value of the underlying collateral, or (iii) in conjunction with the annual review of projected cash flows which include a substantial portion of each acquired covered loan portfolio. Management separately reviews the performance of the portfolio of covered loans on an annual basis, or more frequently to the extent that material information becomes available regarding the performance of an individual loan, to make determinations of the constituent loans’ performance and to consider whether there has been any significant change in performance since management’s initial expectations established in conjunction with the determination of the Day 1 Fair Values or since management’s most recent review of such portfolio’s performance. To the extent that a loan is performing in accordance with or exceeding management’s expectation

established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV1, is not included in any of the Company’s credit quality ratios, is not considered to be an impaired loan, and is not considered in the determination of the required ALLL. For any loan that is exceeding management’s performance expectation established in conjunction with the determination of Day 1 Fair Values, the accretable yield on such loan is adjusted to reflect such increased performance. To the extent that a loan’s performance has deteriorated from management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV2,policies is included in certain of the Company’s credit quality metrics, is considered an impaired loan, and is considered in the determination of the required level of ALLL. Any improvement in the expected performance of a covered loan would result in a reversal of the provision for loan and lease losses to the extent of prior charges and then an adjustment to accretable yield.

Purchased non-covered loans include a small volume of non-covered loans acquired in FDIC-assisted acquisitions and all loans acquired in other acquisitions. Purchased non-covered loans are initially recorded at estimated fair valueour Annual Report on the date of purchase. Purchased non-covered loans that contain evidence of credit deterioration on the date of purchase are carried at the net present value of expected future proceeds. All other purchased non-covered loans are recorded at their initial estimated fair value, adjusted for subsequent advances, pay downs, amortization or accretion of any premium or discount on purchase, charge-offs and any other adjustment to carrying value.

At the time of acquisition of purchased non-covered loans, management individually evaluates substantially all loans acquired in the transaction. For those purchased loans without evidence of credit deterioration, management evaluates each reviewed loan using an internal grading system with a grade assigned to each loan at the date of acquisition. To the extent that any purchased non-covered loan without evidence of credit deterioration is not specifically reviewed, such loan is assumed to have characteristics similar to the characteristics of the aggregate acquired portfolio of purchased non-covered loans without evidence of credit deterioration. The grade for each purchased non-covered loan is reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to the Company that provides material insight regarding the loan’s performance, the borrower or the underlying collateral. To the extent that current information indicates it is probable that the Company will collect all amounts according to the contractual terms thereof, such loan is not considered impaired and is not considered in the determination of the required ALLL. To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered impaired and is considered in the determination of the required level of ALLL.

In determining the Day 1 Fair Values of purchased non-covered loans without evidence of credit deterioration at the date of acquisition, management includes (i) no carry-over of any previously recorded ALLL and (ii) an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest, given the risk profile and grade assigned to each loan. This adjustment is accreted into earnings as a yield adjustment, using the effective yield method, over the remaining life of each loan.

Purchased non-covered loans that contain evidence of credit deterioration on the date of purchase are accounted for in accordance with the provisions of GAAP applicable to loans acquired with deteriorated credit quality. At the time such purchased non-covered loans with evidence of credit deterioration are acquired, management individually evaluates each loan to determine the estimated fair value of each loan. This evaluation includes no carryover of any previously recorded ALLL. In determining the estimated fair value of purchased non-covered loans with evidence of credit deterioration, management considers a number of factors including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods, and net present value of cash flows expected to be received.

In determining the Day 1 Fair Values of purchased non-covered loans with evidence of credit deterioration, management calculates a non-accretable difference (the credit component of the purchased loans) and an accretable difference (the yield component of the purchased loans). The non-accretable difference is the difference between the contractually required payments and the cash flows expected to be collected in accordance with management’s determination of the Day 1 Fair Values. Subsequent increases in expected cash flows will result in an adjustment to accretable yield, which will have a positive impact on interest income. Subsequent decreases to the expected cash flows will generally result in a provision for loan and lease losses. Subsequent increases in expected cash flows following any previous decrease will result in a reversal of the provision for loan and lease losses to the extent of prior charges and then an adjustment to accretable yield.

The accretable difference on purchased non-covered loans with evidence of credit deterioration is the difference between the expected cash flows and the net present value of expected cash flows. Such difference is accreted into earnings using the effective yield method over the term of the loans. In determining the net present value of the expected cash flows for purposes of establishing the Day 1 Fair Values, the Company used discount rates ranging from 6.0% to 9.5% per annum depending on the risk characteristics of each individual loan.

Management separately monitors purchased non-covered loans with evidence of credit deterioration on the date of purchase and periodically reviews such loans contained within this portfolio against the factors and assumptions used in determining the Day 1 Fair Values. A loan is reviewed (i) any time it is renewed or extended, (ii) at any other time additional information becomes available to the Company that provides material additional insight regarding the loan’s performance, the status of the borrower, or the quality or

value of the underlying collateral, or (iii) in conjunction with the annual review of projected cash flows of a substantial portion of each acquired portfolio. Management separately reviews the performance of the portfolio of purchased non-covered loans with evidence of credit deterioration, on an annual basis, or more frequently to the extent that material information becomes available regarding the performance of an individual loan, to make determinations of the constituent loans’ performance and to consider whether there has been any significant change in performance since management’s initial expectations established in conjunction with the determination of the Day 1 Fair Values or since management’s most recent review of such portfolio’s performance. To the extent that a loan is performing in accordance with or exceeding management’s performance expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV66, is not included in any of the credit quality ratios, is not considered to be a nonaccrual or impaired loan, and is not considered in the determination of the required ALLL. For any loan that is exceeding management’s performance expectation established in conjunction with the determination of Day 1 Fair Values, the accretable yield on such loan is adjusted to reflect such increased performance. To the extent that a loan’s performance has deteriorated from management’s expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV88, is included in certain of the Company’s credit quality metrics, is considered an impaired loan, and is considered in the determination of the required level of ALLL. Any improvement in the expected performance of such loan would result in a reversal of the provision for loan and lease losses to the extent of prior charges and then an adjustment to accretable yield.

Foreclosed assets covered by FDIC loss share agreements, or covered foreclosed assets, are initially recorded at Day 1 Fair Values. In estimating the Day 1 Fair Values of covered foreclosed assets, management considers a number of factors including, among others, appraised value, estimated selling prices, estimated selling costs, estimated holding periods and net present value of cash flows expected to be received. Discount rates ranging from 8.0% to 9.5% per annum were used to determine the net present value of covered foreclosed assets for purposes of establishing the Day 1 Fair Values. Valuations of these assets are periodically reviewed by management with the carrying value of such assets adjusted through non-interest income to the then estimated fair value net of estimated selling costs, if lower, until disposition. Fair values of these assets are based on third party appraisals, broker price opinions or other valuations of the property.

In connection with the Company’s FDIC-assisted acquisitions, the Company has recorded an FDIC loss share receivable to reflect the indemnification provided by the FDIC. Currently, the expected losses on covered assets for each of the Company’s loss share agreements would result in expected recovery of approximately 80% of incurred losses. Since the indemnified items are covered loans and covered foreclosed assets, which are initially measured at Day 1 Fair Values, the FDIC loss share receivable is also initially measured and recorded at Day 1 Fair Values, and is calculated by discounting the cash flows expected to be received from the FDIC. A discount rate of 5.0% per annum was used to determine the Day 1 Fair Values of the FDIC loss share receivable. These cash flows are estimated by multiplying estimated losses by the reimbursement rates as set forth in the loss share agreements. The balance of the FDIC loss share receivable and the accretion or amortization thereof is adjusted periodically to reflect changes in expectations of discounted cash flows, expense reimbursements under the loss share agreements and other factors. The Company is accreting or amortizing its FDIC loss share receivable over the shorter of (i) the contractual term of the indemnification agreement (ten years for the single family loss share agreements, and five years for the non-single family loss share agreements) or (ii) the remaining life of the indemnified asset.

Pursuant to the clawback provisions of the loss share agreements for the Company’s FDIC-assisted acquisitions, the Company may be required to reimburse the FDIC should actual losses be less than certain thresholds established in each loss share agreement. The amount of the clawback provision for each acquisition is measured and recorded at Day 1 Fair Values. It is calculated as the difference between management’s estimated losses on covered loans and covered foreclosed assets and the loss threshold contained in each loss share agreement, multiplied by the applicable clawback provisions contained in each loss share agreement. This clawback amount, which is payable to the FDIC upon termination of the applicable loss share agreement, is then discounted back to net present value using a discount rate of 5.0% per annum. To the extent that actual losses on covered loans and covered foreclosed assets are less than estimated losses, the applicable clawback payable to the FDIC upon termination of the loss share agreements will increase. To the extent that actual losses on covered loans and covered foreclosed assets are more than estimated losses, the applicable clawback payable to the FDIC upon termination of the loss share agreements will decrease. The balance of the FDIC clawback payable and the amortization thereof are adjusted periodically to reflect changes in expected losses on covered assets and the impact of such changes on the clawback payable and other factors.

The Day 1 Fair Values of investment securities acquired in business combinations are generally based on quoted market prices, broker quotes, comprehensive interest rate tables or pricing matrices, or a combination thereof. Additionally, these valuations may include certain unobservable inputs. The Day 1 Fair Values of assumed liabilities in business combinations are generally the amounts payable by the Company necessary to completely satisfy the assumed obligations.

As a result of recording, at fair value, acquired assets and assumed liabilities pursuant to business combinations, differences in amounts reported for financial statement purposes and their related basis for federal and state income tax purposes are created. Such differences are recorded as deferred tax assets and liabilities using enacted tax rates in effectForm 10-K for the year ~~or years~~ended December 31, 2014. There has been no change in ~~which the differences are expected to be recovered or settled. Business combination transactions may result~~our critical accounting policies and no material change in the ~~acquisition~~application of net operating loss carryforwards and other assets with built-in losses, the realization of which is subject to limitations pursuant to section 382 (“section 382 limitations”) of the Internal Revenue Code (“IRC”). In determining the section 382 limitation associated with a business

combination, management must make a number of estimates and assumptions regarding the ability to utilize acquired net operating loss carryforwards and the expected timing of future recoveries or settlements of acquired assets with built-in losses. To the extent that information availablecritical accounting policies as ~~of the date of acquisition results~~presented in a determination by management that some portion of net operating loss carryforwards cannot be utilized or assets with built-in losses are expected to be settled or recovered in future periods in which the ability to realize the benefits will be subject to section 382 limitations, a deferred tax asset valuation allowance is establishedour Annual Report on Form 10-K for the estimated amount of the deferred tax assets subject to the section 382 limitation. To the extent that information becomes available, during the first 12 months following the consummation of a business combination transaction, that results in changes in management’s initial estimates and assumptions regarding the expected utilization of net operating loss carryforwards or the expected settlement or recovery of acquired assets with built-in losses subject to section 382 limitations, an increase or decrease of the deferred tax asset valuation allowance will be recorded as an adjustment to bargain purchase gain or goodwill. To the extent that such information becomes available 12 months or more after the consummation of a business combination transaction, or additional information becomes available during the first 12 months as a result of changes in circumstances since the date of the consummation of a business combination transaction, an increase or decrease of the deferred tax asset valuation allowance will be recorded as an adjustment to deferred income tax expense (benefit).year ended December 31, 2014.

~~On June 23,~~During the fourth quarter of 2014, we entered into agreements with the ~~Company completed~~Federal Deposit Insurance Corporation (“FDIC”) terminating the loss share agreements for all seven of our FDIC-assisted acquisitions. As a ~~two-for-one stock split in the form~~result of ~~a stock dividend, effected~~entering these termination agreements, we reclassified loans previously reported as covered by ~~using one~~FDIC loss share ~~of common stock~~to purchased loans for ~~each~~all periods presented. Additionally, we reclassified all interest income on loans previously reported as covered by FDIC loss share ~~of such stock outstanding~~to interest income on June 13, 2014. All share and per share information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) has been adjusted to give effect to this stock split.purchased loans for all periods presented.

Net income available to our common stockholders ~~for the Company~~ was ~~$32.1~~$44.8 million for the ~~third~~second quarter of ~~2014,~~2015, a ~~21.3%~~69.1% increase from $26.5 million for the ~~third~~second quarter of ~~2013.~~2014. Diluted earnings per common share were ~~$0.40~~$0.51 for the ~~third~~second quarter of ~~2014, an 11.1%~~2015, a 50.0% increase from ~~$0.36, on a split-adjusted basis,~~$0.34 for the ~~third~~second quarter of ~~2013.~~2014. For the first ~~nine~~six months of ~~2014,~~2015, net income available to common stockholders ~~totaled $83.9~~was $84.7 million, a ~~25.5%~~63.6% increase from ~~$66.8~~$51.8 million for the first ~~nine~~six months of ~~2013.~~2014. Diluted earnings per common share for the first ~~nine~~six months of ~~2014~~2015 were ~~$1.08,~~$0.98, a ~~16.1%~~44.1% increase from ~~$0.93, on a split-adjusted basis,~~$0.68 for the first ~~nine~~six months of ~~2013.~~2014.

~~The Company’s~~Our annualized return on average assets was ~~1.98%~~2.17% for the ~~third~~second quarter of ~~2014~~2015 compared to ~~2.36%~~1.88% for the ~~third~~second quarter of ~~2013. Its~~2014. Our annualized return on average common stockholders’ equity was ~~14.80%~~15.07% for the ~~third~~second quarter of ~~2014~~2015 compared to ~~18.14%~~14.17% for the ~~third~~second quarter of ~~2013. The Company’s~~2014. Our annualized return on average tangible common stockholders’ equity was ~~16.93%~~17.27% for the ~~third~~second quarter of ~~2014~~2015 compared to ~~18.70%~~15.41% for the ~~third~~second quarter of ~~2013. The Company’s~~2014. Our annualized return on average assets was ~~1.98%~~2.15% for the first ~~nine~~six months of ~~2014~~2015 compared to ~~2.18%~~1.99% for the first ~~nine~~six months of ~~2013. Its~~2014. Our annualized return on average common stockholders’ equity was ~~14.92%~~15.23% for the first ~~nine~~six months of ~~2014~~2015 compared to ~~16.54%~~14.99% for the first ~~nine~~six months of ~~2013. The Company’s~~2014. Our annualized return on average tangible common stockholders’ equity was ~~16.27%~~17.43% for the first ~~nine~~six months of ~~2014~~2015 compared to ~~16.95%~~15.90% for the first ~~nine~~six months of ~~2013.~~2014. The calculation of ~~the Company’s~~our return on average tangible common stockholders’ equity and the reconciliation to GAAP is included elsewhere in this MD&A.

Total assets were ~~$6.58~~$8.71 billion at ~~September~~June 30, ~~2014~~2015 compared to ~~$4.79~~$6.77 billion at December 31, ~~2013.~~2014. Non-purchased loans and leases were ~~$3.64~~$4.77 billion at ~~September~~June 30, ~~2014~~2015 compared to ~~$2.63~~$3.98 billion at December 31, ~~2013.~~2014. Purchased loans were $1.83 billion at June 30, 2015 compared to $1.15 billion at December 31, 2015. Total loans and leases were ~~$4.92~~$6.59 billion at ~~September~~June 30, ~~2014~~2015 compared to ~~$3.36~~$5.13 billion at December 31, ~~2013.~~2014. Deposits were ~~$5.14~~$7.09 billion at ~~September~~June 30, ~~2014~~2015 compared to ~~$3.72~~$5.50 billion at December 31, ~~2013.~~2014.

Common stockholders’ equity was ~~$876 million~~$1.21 billion at ~~September~~June 30, ~~2014~~2015 compared to ~~$629~~$908 million at December 31, ~~2013.~~2014. Tangible common stockholders’ equity was ~~$768 million~~$1.06 billion at ~~September 30, 2014~~June 20, 2015 compared to ~~$610~~$803 million at December 31, ~~2013.~~2014. Book value per common share was ~~$10.99~~$13.93 at ~~September~~June 30, ~~2014~~2015 compared to ~~$8.53, on a split-adjusted basis,~~$11.37 at December 31, ~~2013.~~2014. Tangible book value per common share was ~~$9.64~~$12.19 at ~~September~~June 30, ~~2014~~2015 compared to ~~$8.27, on a split-adjusted basis,~~$10.04 at December 31, ~~2013.~~2014. The calculation of ~~the Company’s~~our tangible common stockholders’ equity and tangible book value per common share and the reconciliation to GAAP is included elsewhere in this MD&A. Changes in common stockholders’ equity, tangible common stockholders’ equity, book value per common share and tangible book value per common share reflect earnings, dividends paid, stock option and stock grant transactions, changes in unrealized gains and losses on investment securities AFS, and, for tangible common stockholders’ equity and tangible book value per common share, changes in intangible assets.

On July 31, 2013, the Company completed its acquisition of The First National Bank of Shelby (“First National Bank”). Because the acquisition was effective on July 31, 2013, the Company’s consolidated results of operations for the three months ended September 30, 2013 include only two months of the acquired operations of First National Bank.

On March 5, 2014, ~~the Company~~we completed ~~its~~our acquisition of Bancshares, Inc. (“Bancshares”). ~~Because the acquisition was effective March 5, 2014, the Company’s~~Our consolidated results of operations for the three months and nine months ended September 30, 2013 do not include the acquired operations of Bancshares. The Company’s consolidated results of operations for the three months and nine months ended September 30, 2014 include the acquired operations of Bancshares beginning March 6, 2014.

On May 16, 2014, ~~the Company~~we completed ~~its~~our acquisition of Summit Bancorp, Inc. (“Summit”). ~~Because the acquisition was effective May 16, 2014, the Company’s~~Our consolidated results of operations for the three months and nine months ended September 30, 2013 do not include the acquired operations of Summit. The Company’s consolidated results of operations for the three months and nine months ended September 30, 2014 include the acquired operations of Summit beginning May 17, 2014.

On February 10, 2015, we completed our acquisition of Intervest Bancshares Corporation (“Intervest”). Our consolidated results of operations include the acquired operations of Intervest beginning February 11, 2015. During the second quarter of 2015, we revised our initial estimates regarding the recovery of certain acquired loans and acquired deferred tax assets in the Intervest acquisition. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of a change in circumstances, management has recast the consolidated financial statements as of and for the three months ended March 31, 2015 to decrease the goodwill recorded in the Intervest acquisition by $2.7 million to reflect this change in estimate. The fair value adjustments and resultant fair values recorded in the Intervest acquisition continue to be evaluated and may be subject to further adjustments.

A summary of the ~~assets acquired~~Bancshares, Summit and ~~liabilities assumed in the First National Bank, Bancshares, and Summit~~Intervest acquisitions is included in Note 3 to the Consolidated Financial Statements included elsewhere in this quarterly report on Form 10-Q.

~~During~~On August 5, 2015, we completed our acquisition of Bank of the ~~second quarter~~Carolinas Corporation (“BCAR”) and its wholly-owned subsidiary, Bank of ~~2014, management revised its initial estimates and assumptions regarding~~ the ~~expected recovery~~Carolinas. The acquired operations of ~~acquired assets with built-in losses, specifically the timing of expected charge-offs of purchased non-covered loans,~~BCAR will be included in the First National Bank acquisition. As a result of such revision, management concluded that the deferred tax asset valuation allowance of $4.1 million was not necessary. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of changes in circumstances, management has recast the third quarter 2013 financial statements, along with all subsequent financial statements, to increase the bargain purchase gain on the First National Bank acquisition by $4.1 million to reflect this change in estimate.our operating results beginning August 6, 2015.

Net interest income is a significant source of ~~the Company’s~~our earnings and represents the amount by which interest income on earning assets exceeds the interest expense paid on liabilities. The volume of interest earning assets and the related funding sources, the overall mix of these assets and liabilities, and the rates paid on each affect net interest income.

Net interest income isand net interest margin are analyzed in this discussion and the following tables on a fully taxable equivalent (“FTE”) basis. The adjustment to convert certain income to a FTE basis consists of dividing federal tax-exempt income by one minus ~~the Company’s~~our statutory federal income tax rate of 35%. The FTE adjustments to net interest income were ~~$2.9~~$2.6 million and ~~$2.2~~$2.7 million for the quarters ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, respectively, and ~~$8.1~~$5.1 million and ~~$6.3~~$5.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. No adjustments have been made in this analysis for income exempt from state income taxes or for interest expense deductions disallowed under the provisions of the ~~IRC~~Internal Revenue Code (the “Code”) as a result of investment in certain tax-exempt securities.

Net interest income for the ~~third~~second quarter of ~~2014~~2015 increased ~~46.8%~~42.6% to ~~$77.5~~$96.3 million compared to ~~$52.8~~$67.5 million for the ~~third~~second quarter of ~~2013.~~2014. Net interest income for the ~~nine~~first six months ~~ended September 30, 2014~~of 2015 increased ~~38.3%~~50.7% to ~~$199.9~~$184.4 million compared to ~~$144.5~~$122.4 million for the ~~nine~~first six months ~~ended September 30, 2013. The~~of 2014. This increase in net interest income for the ~~third~~second quarter and first ~~nine~~six months of ~~2014~~2015 compared to the same periods in ~~2013~~2014 was primarily due to the increase in average earning assets, which increased ~~48.5%~~49.2% to ~~$5.61~~$7.20 billion for the ~~third~~second quarter of 2015, and ~~41.0%~~55.0% to ~~$4.84~~$6.89 billion for the first ~~nine~~six months of ~~2014,~~2015, compared to ~~$3.78~~$4.82 billion for the ~~third~~second quarter and ~~$3.43~~$4.45 billion for the first ~~nine~~six months of ~~2013,~~2014, partially offset by decreases in ~~the Company’s~~our net interest margin.

~~The Company’s~~ Our net interest margin for the ~~third~~second quarter of ~~2014~~2015 decreased ~~six~~25 basis points (“bps”) to ~~5.49%~~5.37% compared to ~~5.55%~~5.62% for the ~~third~~second quarter in ~~2013.~~2014. This decrease was primarily due to a 1731 bps decrease in ~~yields~~the yield on ~~average~~ earning assets, partially offset by a 10seven bps reduction in rates paid on interest bearing liabilities. ~~The Company’s~~Our net interest margin for the first ~~nine~~six months of ~~2014~~2015 decreased 1116 bps to ~~5.52%~~5.39% compared to ~~5.63%~~5.55% for the first ~~nine~~six months of ~~2013.~~2014. This decrease was primarily due to a 23 bps decrease in the yield on ~~average~~ earning assets, partially offset by ~~an 11~~a nine bps reduction in the rates paid on interest bearing liabilities.

Yields on earning assets decreased to ~~5.87%~~5.72% for the ~~third~~second quarter and ~~5.94%~~5.75% for the first ~~nine~~six months of 2015 compared to 6.03% for the second quarter and 5.98% for the first six months of 2014 ~~compared~~primarily due to ~~6.04% for~~ the ~~third quarter~~decrease in yields on our purchased loan portfolio and ~~6.17% for~~decreases in the ~~first nine months of 2013.~~yield on our aggregate investment securities portfolio. The yield on ~~the Company’s~~our purchased loan portfolio ~~of non-purchased loans and leases~~ decreased 31173 bps for the ~~third~~second quarter and 44156 bps for the first ~~nine~~six months of ~~2014~~2015 compared to the same periods in ~~2013.~~2014. These decreases were partially offset by the increase in the average balance of purchased loans which comprised 27.0% and 26.2%, respectively, of average earning assets for the second quarter and six months ended June 30, 2015, compared to 22.9% and 20.7%, respectively, of average earnings assets for the same periods in 2014. The decreases in yield on purchased loans were primarily attributable to the loans acquired in the Summit and Intervest transactions, many of which did not contain evidence of credit deterioration on the date of purchase and were priced at a lower yield compared to the then existing yield on our purchased loan portfolio. This decrease in yield on purchased loans was partially offset by the ~~Company’s non-purchased loan and lease portfolio was primarily attributable~~increase in the yield on certain purchased loans with evidence of credit deterioration on the date of acquisition due to ~~the extremely low interest rate environment experienced in~~upward revisions of estimated cash flows as a result of recent ~~years and increased pricing competition from many~~evaluations of the ~~Company’s competitors.~~expected performance of such loans. The yield on ~~the Company’s~~our aggregate investment securities portfolio decreased 4313 bps for

the ~~third~~second quarter and 4415 bps for the first ~~nine~~six months of ~~2014~~2015 compared to the same periods in ~~2013.~~2014. This decrease ~~in the yield on the Company’s aggregate investment securities portfolio is~~was primarily the result of (i) a change in the composition of our investment securities portfolio to include a larger percentage of lower yielding taxable investment securities, which comprised 45.8% of total average investment securities for the second quarter of 2015 and 44.6% for the first six months of 2015 compared to 40.5% for the second quarter in 2014 and 40.6% for the first six months of 2014 and (ii) the current low interest rate environment which has resulted in many issuers of investment securities, particularly tax-exempt municipal bonds, calling higher-rate investment securities and refinancing such securities at lower interest rates. Assuming this current low interest rate environment continues, ~~the Company expects~~we expect additional tax-exempt investment securities to be called by their issuers and be refinanced at lower interest rates, likely resulting in continued decreases on the yield of ~~the Company’s~~our tax-exempt investment securities portfolio. Additionally, the yield on the Company’s purchased non-covered loan portfolio decreased 124 bps for the third quarter and 129 bps for the first nine months of 2014 compared to the same periods in 2013. This decrease was primarily attributable to the loans acquired in the Summit transaction, many of which did not contain evidence of credit deterioration on the date of purchase and were priced at a lower yield compared to the Company’s then existing yield on its purchased non-covered loan portfolio. These decreases were partially offset by the 679 bps increase in the yield on covered loans for the third quarter and 511 bps increase for the first nine months of 2014 compared to the same periods in 2013. The increase in yields on covered loans was

primarily due to upward revisions of estimated cash flows of certain covered loans as a result of recent evaluations of the expected performance of such loans. To the extent the Company makes additional upward revisions of estimated cash flow of certain covered loans in future periods to reflect improvement in the expected performance of such loans, these upward revisions of estimated cash flows are expected to result in increased yields on the covered loan portfolio in future periods.

The overall decrease in rates on average interest bearing liabilities was primarily due to a shift in the composition of ~~the Company’s~~total interest bearing ~~liabilities. For the three months and nine months ended September 30, 2014, the average balance~~liabilities to include a larger percentage of lower rate interest bearing deposits, which ~~are generally one of the cheapest interest bearing funding sources for the Company, increased to 90.4% and 89.4 %, respectively,~~comprised 94.0% of total average interest bearing liabilities for the second quarter and 93.6% for the first six months of 2015 compared to ~~86.8% and 86.5%, respectively,~~89.6% for the ~~three~~second quarter and 88.7% for the first six months of 2014, partially offset by an increase in rates on interest bearing time deposits. The increase in interest bearing deposits as a percentage of total interest bearing liabilities is primarily due to interest bearing deposits assumed in the Summit and ~~nine~~Intervest transactions, growth in interest bearing deposits as a result of increased deposit pricing in several target markets and the prepayment of $120 million of other borrowings, partially offset by the assumption of $52.2 million of subordinated debentures assumed in the Intervest transaction. The eight bps increase in rates on interest bearing time deposits for the second quarter of 2015 and first six months ~~ended September 30, 2013. During recent quarters,~~of 2015 compared to the ~~Company has~~second quarter of 2014 and first six months of 2014 is primarily due to a shift in the composition of interest bearing deposits to a larger percentage of higher rate time deposits as a result of the Intervest acquisition. The average balance of time deposits increased from 28.6% of total average interest bearing deposits for the second quarter of 2014 to 39.8% for the second quarter of 2015 and 28.6% for the first six months of 2014 to 38.8% for the first six months of 2015. Additionally, throughout much of 2014, we increased deposit pricing in several target markets to fund growth in loans and leases. To the extent ~~the Company has~~we have future growth in loans and leases, ~~the Company expects to continue~~we would expect to increase deposit pricing in ~~additional~~certain target markets to fund such growth. Any such increase in deposit pricing is expected to result in increased deposit costs in future periods.

~~The Company’s~~Our other borrowing sources include (i) repurchase agreements with customers (“repos”), (ii) other borrowings comprised primarily of Federal Home Loan Bank of Dallas (“~~FHLB – Dallas”~~FHLB”) advances, and, to a lesser extent, Federal Reserve Bank (“FRB”) borrowings and federal funds purchased and (iii) subordinated debentures. The rates on repos increased two bps for the ~~third~~second quarter ~~of 2014~~ and ~~one bps for~~ the first ~~nine~~six months of ~~2014~~2015 compared to the same periods of ~~2013.~~2014. The rates on our other borrowing sources, which consist primarily of fixed rate ~~on the Company’s other borrowings increased 12~~callable FHLB advances, decreased 26 bps in the ~~third~~second quarter and ~~seven~~22 bps for the first ~~nine~~six months of ~~2014~~2015 compared to the same periods of ~~2013.~~2014. This decrease in rates on other borrowings is primarily the result of our prepaying $90 million of fixed rate callable FHLB advances with a weighted average interest rate of 4.13% during the fourth quarter of 2014, and our prepaying $30 million of fixed rate callable FHLB advances with a weighted average interest rate of 4.07% during the first quarter of 2015. The weighted average interest rate on our remaining $160 million of fixed rate callable FHLB advances is approximately 3.54%. The rates paid on ~~the Company’s~~our subordinated debentures, which are tied to a spread over the 90-day London Interbank Offered Rate (“LIBOR”) and reset periodically, ~~decreased four~~increased 67 bps in ~~both~~ the ~~third~~second quarter and 60 bps for the first ~~nine~~six months of ~~2014~~2015 compared to the same periods of ~~2013.~~2014. This increase in rates on our subordinated debentures is primarily due to the $52.2 million of subordinated debentures assumed in the Intervest transaction, which, net of amortization of the discount of the purchase accounting adjustments, had a weighted average interest rate of 4.13% at June 30, 2015.

The increase in average earning assets for the ~~third~~second quarter and first ~~nine~~six months of ~~2014~~2015 compared to the same periods in ~~2013~~2014 was due to ~~increases~~an increase in the average balances of non-purchased loans and leases of ~~$940 million~~$1.56 billion for the ~~third~~second quarter and ~~$716 million~~$1.49 billion for the first ~~nine~~six months of ~~2014~~2015 compared to the same periods in ~~2013.~~2014. Additionally, the average balance of purchased ~~non-covered~~ loans increased ~~$789 million~~$0.84 billion for the ~~third~~second quarter and ~~$646 million for~~$0.89 billion during the first ~~nine~~six months of 2015 compared to the second quarter and first six months of 2014, ~~compared to the same periods for 2013,~~ primarily as a result of the First National Bank, Bancshares and Summit acquisitions. The average balances of investment securities increased $279 million for the third quarter and $257 million for the first nine months of 2014 compared to the same periods in 2013, primarily as a result of investment securities acquired in the First National Bank and Summit acquisitions. These increases were partially offset by a decrease in the average balance of covered loans of $180 million for the third quarter and $216 million for the first nine months of 2014 compared to the same periods in 2013.Intervest acquisition.

The following table sets forth certain information relating to ~~the Company’s~~our net interest income for the periods indicated. The yields and rates are derived by dividing interest income or interest expense by the average balance of the related assets or liabilities, respectively, for the periods shown. Average balances are derived from daily average balances for such assets and liabilities. The average ~~balance of loans and leases includes loans and leases on which the Company has discontinued accruing interest. The average~~ balances of investment securities are computed based on amortized cost adjusted for unrealized gains and losses on investment securities AFS and other-than-temporary impairment writedowns. The yields on ~~loans and leases include late fees and amortization of certain deferred fees and origination costs, which are considered adjustments to yields. The yields on~~ investment securities include amortization of premiums and accretion of discounts. The average balance of non-purchased loans and leases includes non-purchased loans and leases on which we have discontinued accruing interest. The yields on ~~covered~~non-purchased loans and leases and purchased ~~non-covered~~ loans without evidence of credit deterioration at date of acquisition include late fees and amortization of certain deferred fees, origination costs and, for such purchased loans, accretion or amortization of any purchase accounting yield adjustment, which are considered adjustments to yields. The yields on purchased loans with evidence of credit deterioration at date of acquisition consist of accretion of the net present value of expected future cash flows using the effective yield method over the term of the loans and include late fees. Interest expense and rates on other borrowings are presented net of interest capitalized on construction projects. The interest expense on the subordinated debentures assumed in the Intervest transaction includes the amortization of purchase accounting adjustments, using the level yield method, over the estimated holding period of eight years.


	Three Months Ended September 30,															Nine Months Ended September 30,
	2014							2013								2014							2013							Three Months Ended June 30,														Six Months Ended June 30,
	Average		Income/		Yield/			Average			Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/			2015							2014							2015							2014
	Balance		Expense		Rate			Balance			Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate
	(Dollars in thousands)																													(Dollars in thousands)
ASSETS
Earning assets:
Interest earning deposits and federal funds sold	$	2,165	$	11		2.08	%	$	1,223		$	11		3.63	%	$	5,218	$	50		1.27	%	$	1,135	$	21		2.47	%	$	2,898	$	18		2.51	%	$	12,398	$	35		1.14	%	$	2,716	$	27		2.01	%	$	6,770	$	38		1.14	%
Investment securities:
Taxable		352,281		2,986		3.36			235,216			1,988		3.35			316,658		8,135		3.43			176,793		4,456		3.37			358,907		3,230		3.61			320,298		2,790		3.49			358,163		6,715		3.78			298,551		5,149		3.48
Tax-exempt – FTE		519,546		8,072		6.16			357,438			6,163		6.84			465,059		22,488		6.47			348,054		17,844		6.85			424,553		6,856		6.48			471,001		7,652		6.52			444,781		14,038		6.36			437,364		14,416		6.65
Non-purchased loans and leases – FTE		3,399,681		43,220		5.04			2,459,427			33,187		5.35			2,992,573		113,577		5.07			2,276,801		93,794		5.51			4,468,971		56,789		5.10			2,913,816		36,892		5.08			4,280,175		107,278		5.05			2,785,645		70,358		5.09
Purchased non-covered loans		1,072,675		18,056		6.68			283,364			5,653		7.92			766,701		39,534		6.89			120,339		7,366		8.18
Covered loans		259,022		10,630		16.28			438,913			10,501		9.49			291,644		31,166		14.29			507,708		34,845		9.18
Purchased loans																															1,941,271		35,762		7.39			1,105,244		25,128		9.12			1,809,016		68,622		7.65			919,404		42,013		9.21

Total earning assets – FTE		5,605,370		82,975		5.87			3,775,581			57,503		6.04			4,837,853		214,950		5.94			3,430,830		158,326		6.17			7,196,600		102,655		5.72			4,822,757		72,497		6.03			6,894,851		196,680		5.75			4,447,734		131,974		5.98
Non-interest earning assets		830,327							675,182	��							812,377							668,073							1,086,423							837,379							1,050,327							799,487

Total assets	$	6,435,697						$	4,450,763							$	5,650,230						$	4,098,903						$	8,283,023						$	5,660,136						$	7,945,178						$	5,247,221

LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction	$	2,821,987	$	1,508		0.21	%	$	1,843,060		$	913		0.20	%	$	2,470,211	$	3,845		0.21	%	$	1,721,794	$	2,583		0.20	%	$	3,261,928	$	1,638		0.20	%	$	2,484,649	$	1,271		0.21	%	$	3,182,841	$	3,188		0.20	%	$	2,291,407	$	2,337		0.21	%
Time deposits of $100,00 or more		626,785		412		0.26			430,586			296		0.27			500,194		928		0.25			365,846		828		0.30			1,254,844		1,373		0.44			488,265		281		0.23			1,181,143		2,671		0.46			435,850		516		0.24
Other time deposits		564,445		365		0.26			465,759			328		0.28			509,709		920		0.24			432,436		1,046		0.32			900,283		906		0.40			505,260		275		0.22			835,968		1,595		0.38			481,887		555		0.23

Total interest bearing deposits		4,013,217		2,285		0.23			2,739,405			1,537		0.22			3,480,114		5,693		0.22			2,520,076		4,457		0.24			5,417,055		3,917		0.29			3,478,174		1,827		0.21			5,199,952		7,454		0.29			3,209,144		3,408		0.21
Repurchase agreements with customers		62,430		15		0.09			41,879			7		0.07			62,018		40		0.09			35,244		21		0.08			68,656		19		0.11			58,607		13		0.09			73,091		36		0.10			61,808		25		0.08
Other borrowings		299,436		2,736		3.63			308,875			2,732		3.51			287,191		8,083		3.76			292,221		8,064		3.69			161,652		1,443		3.58			281,009		2,692		3.84			175,148		3,146		3.62			280,968		5,347		3.84
Subordinated debentures		64,950		426		2.60			64,950			433		2.64			64,950		1,267		2.61			64,950		1,290		2.65			117,325		968		3.31			64,950		427		2.64			105,431		1,676		3.21			64,950		840		2.61

Total interest bearing liabilities		4,440,033		5,462		0.49			3,155,109			4,709		0.59			3,894,273		15,083		0.52			2,912,491		13,832		0.63			5,764,688		6,347		0.44			3,882,740		4,959		0.51			5,553,622		12,312		0.45			3,616,870		9,620		0.54
Non-interest bearing liabilities:
Non-interest bearing deposits		1,064,142							673,215								943,445							601,146							1,279,202							964,935							1,225,379							878,349
Other non-interest bearing liabilities		67,698							40,589								57,410							41,431							43,837							59,311							41,471							52,180

Total liabilities		5,571,873							3,868,913								4,895,128							3,555,068							7,087,727							4,906,986							6,820,472							4,547,399
Common stockholders’ equity		860,240							578,382								751,602							540,382							1,191,798							749,692							1,121,225							696,360
Noncontrolling interest		3,584							3,468								3,500							3,453							3,498							3,458							3,481							3,462

Total liabilities and stockholders’ equity	$	6,435,697						$	4,450,763							$	5,650,230						$	4,098,903						$	8,283,023						$	5,660,136						$	7,945,178						$	5,247,221

Net interest income – FTE			$	77,513							$	52,794						$	199,867						$	144,494						$	96,308						$	67,538						$	184,368						$	122,354

Net interest margin – FTE						5.49	%							5.55	%						5.52	%						5.63	%						5.37	%						5.62	%						5.39	%						5.55	%

The following table reflects how changes in the volume of interest earning assets and interest bearing liabilities and changes in interest rates have affected ~~the Company’s~~our interest income - FTE, interest expense and net interest income - FTE for the periods indicated. Information is provided in each category with respect to changes attributable to (1) changes in volume (changes in volume multiplied by prior yield/rate); (2) changes in yield/rate (changes in yield/rate multiplied by prior volume); and (3) changes in both yield/rate and volume (changes in yield/rate multiplied by changes in volume). The changes attributable to the combined impact of volume and yield/rate have all been allocated to the changes due to volume.

The Company’s non-interest income consists primarily of service charges on deposit accounts, mortgage lending income, trust income, BOLI income, accretion/amortization of FDIC loss share receivable, net of amortization of FDIC clawback payable, other income from loss share and purchased non-covered loans, gains on investment securities and on sales of other assets and gains on merger and acquisition transactions.

Non-interest income for the third quarter of 2014 decreased 12.9% to $19.2 million compared to $22.1 million for the third quarter of 2013. Non-interest income for the first nine months of 2014 decreased 0.8% to $57.0 million compared to $57.4 million for the first nine months of 2013. The Company’s results for the first nine months of 2014 included $4.6 million of tax-exempt bargain purchase gain from the acquisition of Bancshares. The Company’s results for the third quarter of 2014 included no bargain purchase gain. The Company’s results for the third quarter of 2013 and for the first nine months of 2013 included $5.2 million of tax-exempt bargain purchase gain from the acquisition of First National Bank.

Service charges on deposit accounts increased 26.5% to $7.4 million for the third quarter of 2014 compared to $5.8 million for the third quarter of 2013. Service charges on deposit accounts increased 25.5% to $19.6 million for the first nine months of 2014 compared to $15.6 million for the same period in 2013. The increase in service charges on deposit accounts was primarily a result of growth in the number of transaction accounts and the addition of deposit customers from the Company’s First National Bank, Bancshares and Summit acquisitions.

Mortgage lending income increased 35.0% to $1.7 million for the third quarter of 2014 compared to $1.3 million for the third quarter of 2013. Mortgage lending income decreased 18.3% to $3.8 million for the first nine months of 2014 compared to $4.7 million for the same period in 2013. The volume of originations of mortgage loans available for sale increased 23.5% to $62.7 million for the third quarter of 2014 compared to $50.7 million for the third quarter of 2013. The volume of originations of mortgage loans available for sale decreased 11.3% to $152.8 million for the first nine months of 2014 compared to $172.2 million for the first nine months of 2013. During the third quarter of 2014, approximately 29% of the

Company’s originations of mortgage loans available for sale were related to mortgage refinancings and approximately 71% were related to new home purchases, compared to approximately 40% for refinancings and approximately 60% for new home purchases in the third quarter of 2013. During the first nine months of 2014, approximately 30% of the Company’s originations of mortgage loans available for sale were related to mortgage refinancings and approximately 70% were related to new home purchases, compared to approximately 51% for refinancings and approximately 49% for new home purchases in the first nine months of 2014.

Trust income was $1.4 million in the third quarter of 2014, an increase of 33.9% from $1.1 million for the third quarter of 2013. Trust income was $4.1 million for the first nine months of 2014, an increase of 46.0% from $2.8 million for the same period in 2013. The increase in trust income was primarily due to new trust customers added as a result of the First National Bank acquisition.

The Company recognized $0.6 million of amortization expense of the FDIC loss share receivable, including amortization of the FDIC clawback payable, during the third quarter of 2014 compared to accretion income of $1.4 million during the third quarter of 2013. The Company recognized $0.6 million of amortization expense of the FDIC loss share receivables, including amortization of the FDIC clawback payable, during the first nine months of 2014 compared to accretion income of $6.3 million during the first nine months of 2013. The decrease in income from the accretion of the FDIC loss share receivable for the third quarter and first nine months of 2014 compared to the same periods in 2013 was primarily due to upward revisions of projected cash flows of certain loans whose performance is exceeding management’s expectations established in conjunction with the determination of the Day 1 Fair Values, resulting in reduced accretion and/or increased amortization of the related FDIC loss share receivable over the remaining term of the loan or the loss share agreement, whichever is shorter.

The FDIC loss share receivable reflects the indemnification provided by the FDIC in FDIC-assisted acquisitions, and the FDIC clawback payable represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds established in each loss share agreement. The FDIC loss share receivable and the FDIC clawback payable are both carried at net present value. To the extent the Company collects payments in future periods from the FDIC under the loss share agreements or otherwise has further upward revisions of projected cash flows of certain loans, the balance of the FDIC loss share receivable is expected to decline, resulting in a corresponding decrease in the accretion of, or increase in the amortization of, the FDIC loss share receivable. Because any amounts due under the FDIC clawback payable are due at the conclusion of the loss share agreements, absent any significant revision of the amounts expected to be paid to the FDIC under the clawback provisions of the loss share agreements, the amortization of this liability is not expected to change significantly over the next several quarters.

Other income from loss share and purchased non-covered loans was $3.4 million in the third quarter of 2014 compared to $2.5 million in the third quarter of 2013. Other income from loss share and purchased non-covered loans was $10.3 million in the first nine months of 2014 compared to $8.3 million in the first nine months of 2013.

Net gains on sales of other assets were $1.7 million in the third quarter of 2014 compared to $2.5 million in the third quarter of 2013. Net gains on sales of other assets were $4.1 million in the first nine months of 2014 compared to $7.6 million in the first nine months of 2013.

~~Non-Interest Expense~~Our non-interest income consists primarily of, among others, service charges on deposit accounts, mortgage lending income, trust income, BOLI income, other income from purchased loans, gains on investment securities and on sales of other assets and gains on merger and acquisition transactions.

~~The Company’s non-interest expense consists~~Non-interest income for the second quarter of ~~salaries and employee benefits, net occupancy and equipment and other operating expenses. Non-interest expense~~2015 increased ~~32.0%~~33.8% to ~~$42.5~~$23.3 million compared to $17.4 million for the ~~third~~second quarter of ~~2014~~2014. Non-interest income for the first six months of 2015 increased 38.6% to $52.3 million compared to ~~$32.2 million for the third quarter of 2013. Non-interest expense increased 29.0% to $117.9~~$37.7 million for the first ~~nine~~six months of 2014. Non-interest income for the first six months of 2014 included $4.7 million of tax-exempt bargain purchase gain from the acquisition of Bancshares. There were no bargain purchase gains during the first six months of 2015.

Service charges on deposit accounts increased 7.3% to $7.1 million for the second quarter of 2015 compared to ~~$91.3~~$6.6 million for the second quarter of 2014. Service charges on deposit accounts increased 12.0% to $13.7 million in the first six months of 2015 compared to $12.2 million in the first six months of 2014. The increase in service charges on deposit accounts was primarily a result of growth in the number of transaction accounts and the addition of deposit customers from our Summit acquisition, and, to a lesser extent, our Intervest acquisition.

Mortgage lending income increased 57.4% to $1.8 million for the second quarter of 2015 compared to $1.1 million for the second quarter of 2014. Mortgage lending income increased 57.6% to $3.3 million in the first six months of 2015 compared to $2.1 million in the first six months of 2014. The volume of originations of mortgage loans available for sale increased 43.5% to $73.8 million for the second quarter of 2015 compared to $51.4 million for the second quarter of 2014. The volume of originations of mortgage loans available for sale increased 51.2% to $136.3 million for the first ~~nine~~six months of ~~2013. During~~2015 compared to $90.1 million for the ~~third~~first six months of 2014.

Trust income increased 7.3% to $1.5 million for the second quarter of 2014, the Company incurred $0.5 million of software and other contract termination charges, $2.2 million of acquisition-related and systems conversion expenses and $0.6 million of fraud losses due to a large retailer’s system breach,2015 compared to $1.4 million ~~of acquisition related expenses during~~for the ~~third~~second quarter of ~~2013. During~~2014. Trust income increased 8.0% to $2.9 million for the first ~~nine~~six months of 2015, compared to $2.7 million for the first six months of 2014.

BOLI income increased 39.7% to $1.8 million for the second quarter of 2015 compared to $1.3 million for the second quarter of 2014, primarily due to $85 million of BOLI purchased in May 2015. BOLI income increased 124.5% to $5.4 million for the first six months of 2015 compared to $2.4 million for the first six months of 2014, primarily due to $2.3 million in BOLI death benefits received in the ~~Company incurred $5.6~~first quarter of 2015 and $85 million of ~~software~~BOLI purchased in May 2015.

During the fourth quarter of 2014, we entered into agreements with the FDIC terminating the loss share agreements for all seven of our FDIC-assisted acquisitions. As a result, we had no net accretion (amortization) of the FDIC loss share receivable and ~~other contract termination charges which are included~~FDIC clawback payable in ~~“Other” non-interest expense, $3.7~~the second quarter and first six months of 2015 compared to ($0.7) million of ~~acquisition-related expenses~~net amortization expense in the second quarter of 2014 and ~~$0.6~~($49,000) of net amortization expense for the first six months of 2014.

Other income from purchased loans was $7.0 million in the second quarter of ~~fraud losses as a result~~2015 compared to $3.6 million in the second quarter of ~~a large retailer’s system breach,~~2014 and $15.9 million during the first six months of 2015 compared to $6.9 million during the first six months of 2014. Net gains on sales of other assets were $2.6 million in the second quarter of 2015 compared to $1.4 million in the second quarter of ~~acquisition-related expenses~~2014 and $5.4 million during the first ~~nine~~six months of ~~2013.~~2015 compared to $2.4 million during the first six months of 2014. The increases in other income from purchased loans and net gains on sales of other assets are, in part, attributable to our having terminated the loss share agreements with the FDIC. Subsequent to the termination of such loss share agreements, all recoveries, gains, charge-offs, losses and expenses related to the previously covered assets are recognized entirely by us, since the FDIC no longer shares in such items. Accordingly, our earnings are positively impacted to the extent we recognize recoveries in excess of the carrying value of such assets and gains on any sales. Conversely, our earnings are negatively impacted to the extent we recognize charge-offs, losses on any sales and expenses related to such assets.

~~Salaries and employee benefits, the Company’s largest components of non-interest expense, increased 26.9% to $20.9 million~~Net gains on investment securities were $85,000 in the ~~third~~second quarter of 2015 compared to $18,000 in the second quarter of 2014 and $2.6 million during the first six months of 2015 compared to ~~$16.5 million in~~$23,000 during the ~~third~~first six months of 2014. During the first quarter of ~~2013. Salaries~~2015, we sold certain of our longer term municipal bonds resulting in proceeds of $30.1 million and ~~employee benefits increased 21.0%~~the net gains of $2.5 million. We utilized such proceeds to ~~$57.4~~prepay $30.0 million of our highest rate callable FHLB advances resulting in prepayment penalties of $2.5 million. These transactions were executed for ~~the first nine months~~various reasons, including reducing interest rate risk, increasing secondary sources of 2014 compared to $47.4 million for the first nine months of 2013. The Company had 1,513 full-time equivalent employees at September 30, 2014, a 21.4% increase compared to 1,246 full-time equivalent employees at September 30, 2013.

~~Net occupancy~~liquidity and equipment expense for the third quarter of 2014 increased 42.5% to $6.8 million compared to $4.8 million for the third quarter of 2013. Net occupancy and equipment expenses increased 28.6% to $17.6 million for the first nine months of 2014 compared to $13.7 million for the first nine months of 2013. At September 30, 2014 the Company had 165 offices, a 26.0% increase compared to 131 offices at September 30, 2013.more efficiently allocating capital.

The Company’s efficiency ratio (non-interest expense divided by the sum of net interest income – FTE and non-interest income) was 43.9% for the third quarter and 45.9% for the first nine months of 2014 compared to 43.0% for the third quarter and 45.2% for the first nine months of 2013.

The following table presents non-interest ~~expense~~income for the periods indicated.

Our non-interest expense consists of salaries and employee benefits, net occupancy and equipment and other operating expenses. Non-interest expense increased 15.4% to $43.7 million for the second quarter of 2015 compared to $37.9 million for the second quarter of 2014. Non-interest expense increased 24.7% to $93.9 million for the first six months of 2015 compared to $75.3 million for the first six months of 2014. During the second quarter of 2015, our non-interest expense included approximately $1.6 million of acquisition-related and systems conversion expenses. During the second quarter of 2014, our non-interest expense included approximately $0.8 million of acquisition-related and systems conversion expenses. During the first six months of 2015, our non-interest expense included $2.5 million in FHLB advance prepayment penalties, $2.8 million of acquisition-related and systems conversion expenses and $0.7 million of software and contract termination charges. During the first six months of 2014, our non-interest expense included $1.5 million of acquisition-related and systems conversion expenses and $5.0 million of software and contract termination charges. The software and contract termination charges are included in other non-interest expense in the table below.

Salaries and employee benefits, our largest component of non-interest expense, increased 20.3% to $22.6 million in the second quarter of 2015 compared to $18.8 million in the second quarter of 2014. Salaries and employee benefits increased 23.9% to $45.2 million for the first six months of 2015 compared to $36.5 million for the first six months of 2014. We had 1,572 full-time equivalent employees at June 30, 2015 compared to 1,528 full-time equivalent employees at June 30, 2014. The increase in our salaries and employee benefits for both the second quarter and first six months of 2015 compared to the same periods in 2014, despite the decrease in number of full-time equivalent employees at June 30, 2015 compared to June 30, 2014, is primarily attributable to the timing of acquisitions and subsequent reductions or eliminations of personnel upon completion of acquired systems conversions.

Net occupancy and equipment expense for the second quarter of 2015 increased 28.7% to $7.3 million compared to $5.7 million for the second quarter of 2014. Net occupancy and equipment expense for the first six months of 2015 increased 36.1% to $14.6 million compared to $10.8 million for the first six months of 2014. At June 30, 2015 and 2014, we had 164 offices. The increase in net occupancy and equipment expense for the second quarter and first six months of 2015 compared to the same periods in 2014, despite having the same number of offices at both June 30, 2015 and 2014, is primarily attributable to the timing of acquisitions, any subsequent office closures and the effect of such on net occupancy and equipment expense.

Our efficiency ratio (non-interest expense divided by the sum of net interest income – FTE and non-interest income) was 36.6% for the second quarter and 39.7% for the first six months of 2015 compared to 44.6% for the second quarter and 47.1% for the first six months of 2014.


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2014		2013		2014		2013		2015		2014		2015		2014
	(Dollars in thousands)								(Dollars in thousands)
Salaries and employee benefits	$	20,876	$	16,456	$	57,396	$	47,445	$	22,646	$	18,831	$	45,243	$	36,520
Net occupancy and equipment		6,822		4,786		17,574		13,670		7,344		5,707		14,635		10,751
Other operating expenses:
Postage and supplies		1,155		775		2,793		2,396		1,014		852		1,929		1,623
Advertising and public relations		887		559		1,923		1,424		586		636		1,169		1,036
Telecommunication services		971		825		3,177		2,529		1,616		1,191		2,964		2,207
Professional and outside services		3,000		2,212		7,446		4,963		2,526		2,353		6,912		4,526
Software and data processing		1,643		1,374		4,442		4,106		766		1,662		1,515		2,799
Travel and meals		772		788		1,941		2,159		821		629		1,617		1,169
FDIC insurance		600		450		1,658		1,305		900		555		1,650		1,105
FDIC and state assessments		234		174		712		521		331		218		641		431
ATM expense		370		282		886		723		543		307		1,251		516
Loan collection and repossession expense		1,212		861		3,227		2,534		1,020		1,528		2,753		1,987
Writedowns of foreclosed and other assets		41		502		862		1,072		235		798		2,427		877
Amortization of intangibles		1,532		788		3,464		1,924		1,640		1,119		3,236		1,932
FHLB prepayment penalties										—		—		2,480		—
Other		2,408		1,376		10,355		4,570		1,736		1,492		3,486		7,854

Total non-interest expense	$	42,523	$	32,208	$	117,856	$	91,341	$	43,724	$	37,878	$	93,908	$	75,333

The provision for income taxes was ~~$15.6~~$24.2 million for the ~~third~~second quarter and ~~$36.6~~$42.3 million for the first ~~nine~~six months of ~~2014~~2015 compared to ~~$10.2~~$12.3 million for the ~~third~~second quarter and ~~$28.3~~$21.0 million for the first ~~nine~~six months of ~~2013.~~2014. The effective income tax rate was ~~32.7%~~35.1% for the ~~third~~second quarter and ~~30.4%~~33.3% for the first ~~nine~~six months of ~~2014~~2015 compared to ~~27.9%~~31.6% for the ~~third~~second quarter and ~~29.7%~~28.8% for the first ~~nine~~six months of ~~2013.~~2014. The increase in the effective tax rate for the ~~third~~second quarter and first ~~nine~~six months of ~~2014~~2015 compared to the ~~same periods in 2013~~second quarter and first six months of 2014 was due primarily to the ~~decrease~~growth in ~~tax-exempt~~ income ~~as a percentage of total income.~~that is subject to federal and/or state income taxes. The effective tax rates were also affected by various other factors including non-taxable income and non-deductible expenses.

At ~~September~~June 30, ~~2014 the Company’s non-purchased~~2015, our total loan and lease portfolio was ~~$3.64~~$6.59 billion, including $4.76 billion of non-purchased loans and leases and $1.83 billion of purchased loans, compared to ~~$2.63~~$5.13 billion of total loans and leases at December 31, ~~2013~~2014, including $3.98 billion of non-purchased loans and ~~$2.52~~leases and $1.15 billion of purchased loans, and $4.57 billion of total loans and leases at ~~September~~June 30, ~~2013.~~2014, including $3.17 billion of non-purchased loans and leases and $1.40 billion of purchased loans. Real estate loans, ~~the Company’s~~our largest category of loans, consist of all loans secured by real estate as evidenced by mortgages or other liens, including all loans made to finance the development of real property construction projects, provided such loans are secured by real estate. Total real estate loans were ~~$3.09~~$6.02 billion at ~~September~~June 30, ~~2014,~~2015 compared to ~~$2.33~~$4.51 billion at December 31, ~~2013~~2014 and ~~$2.21~~$4.03 billion at ~~September~~June 30, ~~2013.~~2014. The amount and type of ~~non-purchased~~ loans and leases outstanding as of the dates indicated, and their respective percentage of the total ~~non-purchased~~ loan and lease portfolio are reflected in the following table.

The amount and percentage of the Company’s non-purchased loan and lease portfolio, by office of origination, as of the dates indicated, are reflected in the following table. This table shows the relative productivity of the Company’s offices in each state, but does not necessarily reflect the location of the borrower or collateral.

The amount and type of ~~the Company’s non-purchased~~our total real estate loans at ~~September~~June 30, ~~2014,~~2015, based on the metropolitan statistical area (“MSA”) and other geographic areas in which the principal collateral is located, are reflected in the following table. Data for individual states and MSAs is separately presented when aggregate ~~non-purchased~~ real estate loans in that state or MSA exceed $10.0 million.


	Residential 1-4 Family		Non-Farm/ Non-Residential		Construction /Land Development		Agricultural		Multifamily Residential		Total		Residential 1-4 Family		Non- Farm/Non- Residential		Construction /Land Development		Agricultural		Multifamily Residential		Total
	(Dollars in thousands)												(Dollars in thousands)
Arkansas:
Little Rock–North Little Rock–Conway, AR MSA	$	106,725	$	214,914	$	121,605	$	8,234	$	16,275	$	467,753	$	162,692	$	284,226	$	99,893	$	9,895	$	27,005	$	583,711
Northern Arkansas⁽¹⁾		39,594		14,068		4,845		13,464		1,255		73,226
Hot Springs, AR MSA														55,239		99,121		21,355		536		15,923		192,174
Fayetteville–Springdale–Rogers, AR–MO MSA														12,448		65,258		16,962		3,932		3,219		101,819
Fort Smith, AR–OK MSA		28,186		25,215		6,741		2,736		11,877		74,755		21,860		50,694		8,308		1,786		6,864		89,512
Southern Arkansas⁽¹⁾														35,714		32,340		3,901		10,750		2,180		84,885
Western Arkansas (2)		21,114		28,938		5,826		6,404		1,090		63,369		22,555		36,230		13,714		7,015		1,356		80,870
Fayetteville–Springdale–Rogers, AR–MO MSA		8,878		25,177		15,866		4,620		3,290		57,831
Hot Springs, AR MSA		9,496		27,597		7,819		0		754		45,666
All other Arkansas⁽³⁾		8,777		7,839		3,058		3,643		1,665		24,982
Northern Arkansas⁽³⁾														35,397		19,909		4,864		13,546		964		74,680
All other Arkansas⁽⁴⁾														17,309		20,371		7,996		15,932		2,877		64,485

Total Arkansas		222,770		343,748		165,757		39,101		36,206		807,582		363,214		608,149		176,993		63,392		60,388		1,272,136


New York:
New York–Newark–Jersey City, NY–NJ–PA MSA														2,742		589,518		343,962		—		147,943		1,084,165
All other New York⁽⁴⁾														102		3,882		—		—		1,796		5,780

Total New York														2,844		593,400		343,962		—		149,739		1,089,945


Texas:
Dallas–Fort Worth–Arlington, TX MSA		16,013		115,160		268,587		0		9,148		408,908		21,565		110,632		271,080		—		10,529		413,806
Houston–The Woodlands–Sugar Land, TX MSA		95		34,844		119,794		2,016		0		156,749		6,572		49,740		129,790		—		16,501		202,603
Austin–Round Rock, TX MSA														8,988		18,974		85,901		—		—		113,863
San Antonio–New Braunfels, TX MSA		1,137		0		20,336		0		0		21,473		1,620		5,814		27,614		—		1,209		36,257
Austin–Round Rock, TX MSA		1,377		3,899		49,867		1,275		49		56,467
Texarkana, TX–AR MSA		7,934		8,681		741		495		975		18,826		9,486		10,599		995		878		1,028		22,986
College Station–Bryan, TX MSA		0		0		0		0		17,704		17,704		169		—		—		—		17,350		17,519
Beaumont–Port Arthur, TX MSA		0		0		0		0		15,543		15,543		—		—		—		—		15,200		15,200
Midland, TX MSA		0		7,846		15,508		0		0		23,354
All other Texas⁽³⁾		510		12,396		2,733		0		234		15,873
Corpus Christi, TX MSA														—		5,813		9,345		—		—		15,158
All other Texas⁽⁴⁾														1,212		20,401		3,210		—		658		25,481

Total Texas		27,066		182,826		477,566		3,786		43,653		734,897		49,612		221,973		527,935		878		62,475		862,873


California:
Los Angeles–Long Beach–Anaheim, CA MSA		0		163,674		10,748		0		0		174,422		—		207,563		50,549		—		—		258,112
San Francisco–Oakland–Hayward, CA MSA		0		58,895		0		0		0		58,895		—		135,169		112,171		—		—		247,340
Sacramento–Roseville–Arden–Arcade, CA MSA		0		0		49,495		0		0		49,495
All other California⁽³⁾		0		9,740		15,585		0		0		25,325
Sacramento–Roseville– Arden–Arcade, CA MSA														—		—		52,935		—		—		52,935
Riverside–San Bernardino–Ontario, CA MSA														—		12,416		25,780		—		—		38,196
San Jose–Sunnyvale–Santa Clara, CA MSA														—		—		27,991		—		—		27,991
All other California⁽⁴⁾														414		4,969		15,276		—		—		20,659

Total California		0		232,309		75,828		0		0		308,137		414		360,117		284,702		—		—		645,233

New York–Newark–Jersey City, NY–NJ–PA MSA		0		106,029		135,634		0		43,979		285,642
North Carolina/South Carolina:
Charlotte–Concord–Gastonia, NC–SC MSA		6,413		68,548		33,913		303		8,231		117,408
Wilmington, NC MSA		2,386		16,909		6,174		439		271		26,179
Raleigh, NC MSA		503		1,564		23,763		0		0		25,830
Myrtle Beach-North Myrtle Beach-Conway, SC MSA		0		0		11,887		0		0		11,887
Carolina Foothills⁽⁴⁾		5,471		4,908		3,017		26		0		13,422
All other N. Carolina⁽³⁾		889		10,450		34,836		0		0		46,175
All other S. Carolina⁽³⁾		1,545		11,043		22,629		0		0		35,217

Total N. Carolina/S. Carolina		17,207		113,422		136,219		768		8,502		276,118


													Residential 1-4 Family		Non- Farm/Non- Residential		Construction /Land Development			Agricultural		Multifamily Residential		Total
													(Dollars in thousands)
Arizona:
Phoenix–Mesa–Scottsdale, AZ MSA														—		87,535		3			—		—		87,538
All other Arizona⁽⁴⁾														—		2,676		—			—		—		2,676

Total Arizona														—		90,211		3			—		—		90,214


Pennsylvania:
Philadelphia–Camden–Wilmington, PA–NJ–DE–MD MSA														—		—		—			—		57,731		57,731
All other Pennsylvania⁽⁴⁾														—		7,299		—			—		—		7,299

Total Pennsylvania														—		7,299		—			—		57,731		65,030


Colorado:
Denver–Aurora–Lakewood, CO MSA														13		12,111		17,153			—		1		29,278
All other Colorado⁽⁴⁾														1,405		—		22,644			—		—		24,049

Total Colorado														1,418		12,111		39,797			—		1		53,327


Las Vegas–Henderson–Paradise, NV MSA														—		—		52,621			—		—		52,621

Illinois:
Chicago–Naperville–Elgin, IL–IN–WI MSA														2,251		1,931		42,424			—		—		46,606
All other Illinois⁽⁴⁾														—		—		5,233			—		—		5,233

Total Illinois														2,251		1,931		47,657			—		—		51,839


Washington–Arlington–Alexandria, DC–VA–MD–WV														—		4,332		41,635			—		—		45,967

Missouri:
St. Louis, MO–IL MSA														242		425		6,511			—		19,333		26,511
All other Missouri⁽⁴⁾														524		6,567		7,163			979		—		15,233

Total Missouri														766		6,992		13,674			979		19,333		41,744
	Residential 1-4 Family		Non-Farm/ Non- Residential		Construction /Land Development		Agricultural		Multifamily Residential		Total
	(Dollars in thousands)
Alabama:
Mobile, AL MSA		111		9,895		80		0		296		10,382		3,133		13,372		735			—		1,907		19,147
All other Alabama⁽³⁾		1,939		969		1,187		873		3,697		8,665
All other Alabama⁽⁴⁾														8,689		4,498		4,793			825		3,558		22,363

Total Alabama		2,050		10,864		1,267		873		3,993		19,047		11,822		17,870		5,528			825		5,465		41,510

Baltimore–Columbia–Towson, MD MSA		0		17,310		0		0		0		17,310
All other states⁽⁵⁾		467		38,193		9,578		31		0		48,269

Seattle–Tacoma–Bellevue, WA MSA														—		—		40,451			—		—		40,451

Providence–Warwick, RI–MA MSA														—		26,669		—			—		—		26,669

Oklahoma														677		2,175		13,706			—		4,053		20,611

Portland–Vancouver–Hillsboro, OR–WA MSA														—		—		16,166			—		1		16,167

Kentucky														—		16,086		—			—		—		16,086

Ohio														—		6,655		6,729			—		—		13,384

Connecticut														—		12,397		—			—		728		13,125

All other states⁽⁶⁾														839		23,840		5,640			—		3,291		33,610

Total real estate loans	$	278,341	$	1,373,294	$	1,233,253	$	46,721	$	155,940	$	3,087,549	$	645,967	$	2,850,908	$	1,961,983		$	80,402	$	477,014	$	6,016,274
																			��

The amount and type of ~~non-purchased~~total non-farm/non-residential loans, as of the dates indicated, and their respective percentage of the total ~~non-purchased~~ non-farm/non-residential loan portfolio are reflected in the following table.


	September 30,								December 31, 2013				June 30,								December 31,
	2014				2013				December 31, 2013				2015				2014				2014
	(Dollars in thousands)												(Dollars in thousands)
Retail, including shopping centers and strip centers	$	279,273	20.3	%	$	308,121	29.8	%	$	290,092	26.3	%	$	527,343	18.5	%	$	386,362	20.3	%	$	346,925	17.3	%
Churches and schools		55,580	4.0			44,127	4.3			44,740	4.1			117,913	4.1			130,751	6.9			104,746	5.2
Office, including medical offices		391,812	28.5			245,698	23.7			263,986	23.9			788,346	27.7			484,970	25.5			621,729	31.0
Office warehouse, warehouse and mini-storage		122,109	8.9			45,220	4.4			113,317	10.3			215,629	7.6			172,283	9.1			169,176	8.4
Gasoline stations and convenience stores		11,234	0.8			7,498	0.7			8,150	0.7			46,076	1.6			55,528	2.9			47,465	2.4
Hotels and motels		247,585	18.0			209,127	20.2			192,527	17.4			379,285	13.3			290,184	15.2			328,507	16.4
Restaurants and bars		30,353	2.2			37,327	3.6			33,178	3.0			50,398	1.8			54,404	2.9			43,084	2.1
Manufacturing and industrial facilities		57,043	4.2			30,798	3.0			37,288	3.4			58,929	2.1			65,996	3.5			76,897	3.8
Nursing homes and assisted living centers		42,478	3.1			29,218	2.8			41,317	3.7			59,465	2.1			54,221	2.8			52,409	2.6
Hospitals, surgery centers and other medical		52,128	3.8			51,787	5.0			49,112	4.4			72,355	2.5			54,954	2.9			54,469	2.7
Golf courses, entertainment and recreational facilities		6,806	0.6			2,609	0.3			5,261	0.5			14,614	0.5			17,883	0.9			16,729	0.8
Other non-farm/non residential		76,893	5.6			24,088	2.2			25,146	2.3			520,555	18.2			136,108	7.1			146,294	7.3

Total	$	1,373,294	100.0	%	$	1,035,618	100.0	%	$	1,104,114	100.0	%	$	2,850,908	100.0	%	$	1,903,644	100.0	%	$	2,008,430	100.0	%

The amount and type of ~~non-purchased~~total construction/land development loans, as of the dates indicated, and their respective percentage of the total ~~non-purchased~~ construction/land development loan portfolio are reflected in the following table.


	June 30,								December 31,				June 30,								December 31,
	2014				2013				2013				2015				2014				2014
	(Dollars in thousands)												(Dollars in thousands)
Unimproved land	$	188,473	15.3	%	$	96,210	13.5	%	$	105,739	14.6	%	$	303,901	15.5	%	$	194,816	16.4	%	$	272,197	18.0	%
Land development and lots:
1-4 family residential and multifamily		259,293	21.0			173,554	24.3			176,893	24.5			387,568	19.8			277,195	23.4			322,698	21.3
Non-residential		84,953	6.9			70,084	9.8			68,376	9.5			143,197	7.3			102,799	8.7			133,137	8.8
Construction:
1-4 family residential:
Owner occupied		18,959	1.5			14,772	2.1			12,870	1.8			30,163	1.5			21,006	1.8			25,482	1.7
Non-owner occupied:
Pre-sold		14,742	1.2			6,392	0.9			8,206	1.1			35,946	1.8			13,908	1.2			19,664	1.3
Speculative		62,677	5.1			48,237	6.7			50,030	6.9			70,698	3.6			69,781	5.9			75,252	5.0
Multifamily		345,599	28.0			171,617	24.0			187,409	26.0			503,826	25.7			304,637	25.6			354,966	23.5
Industrial, commercial and other		258,559	21.0			133,332	18.7			113,034	15.6			486,684	24.8			201,103	17.0			308,218	20.4

Total	$	1,233,253	100.0	%	$	714,198	100.0	%	$	722,557	100.0	%	$	1,961,983	100.0	%	$	1,185,245	100.0	%	$	1,511,614	100.0	%

Many of ~~the Company’s non-purchased~~our construction and development loans provide for the use of interest reserves. When ~~the Company underwrites~~we underwrite construction and development loans, ~~it considers~~we consider the expected total project costs, including hard costs such as land, site work and construction costs and soft costs such as architectural and engineering fees, closing costs, leasing commissions and construction period interest. Based on the total project costs and other factors, ~~the Company determines~~we determine the required borrower cash equity contribution and the maximum amount ~~the Company is~~we are willing to loan. In the vast majority of cases, ~~the Company requires~~we require that all of the borrower’s cash equity contribution be contributed prior to any material loan advances. This ensures that the borrower’s cash equity required to complete the project will be available for such purposes. As a result of this practice, the borrower’s cash equity typically goes toward the purchase of the land and early stage hard costs and soft costs. This results in ~~the Company~~us funding the loan later as the project progresses, and accordingly, ~~the Company~~we typically ~~funds~~fund the majority of the construction period interest through loan advances. However, when ~~the Company~~we initially ~~determines~~determine the borrower’s cash equity requirement, ~~the Company~~we typically ~~requires~~require borrower’s cash equity in an amount to cover a majority, or all, of the soft costs, including an amount equal to construction period interest, and an appropriate portion of the hard costs. ~~The Company~~We advanced construction period interest on construction and development loans totaling ~~$7.0~~$12.2 million in the ~~third~~second quarter and $22.2 in the first six months of ~~2014.~~2015. While ~~the Company~~we advanced these sums as part of the funding process, ~~the Company believes~~we believe that the borrowers in effect had in most cases already provided for these sums as part of their initial equity contribution. Specifically, the maximum committed balance of all ~~non-purchased~~ construction and development loans which provide for the use of interest reserves at ~~September~~June 30, ~~2014~~2015 was approximately ~~$2.7~~$4.9 billion, of which ~~$1.0~~$1.7 billion was outstanding at ~~September~~June 30, ~~2014~~2015 and ~~$1.7~~$3.2 billion remained to be advanced. The weighted average loan-to-cost on such loans, assuming such loans are ultimately fully advanced, will be approximately ~~54.0%~~54%, which means that the weighted average cash equity contributed on such loans, assuming such loans are ultimately fully advanced, will be approximately ~~46.0%~~46%. The weighted average final loan-to-value ratio on such loans, based on the most recent appraisals and assuming such loans are ultimately fully advanced, is expected to be approximately ~~45.0%~~45%.

The following table reflects ~~non-purchased~~total loans and leases as of ~~September~~June 30, ~~2014~~2015 grouped by expected amortizations, expected paydowns or the earliest repricing opportunity for floating rate loans. This cash flow or repricing schedule approximates ~~the Company’s~~our ability to reprice the outstanding principal of ~~non-purchased~~total loans and leases either by adjusting rates on existing loans and leases or reinvesting principal cash flow in new loans and leases. For non-purchased loans and leases and purchased loans without evidence of credit deterioration on the date of purchase, the table below reflects the earliest contractual repricing period. For purchased loans with evidence of credit deterioration at the date of purchase, the table below reflects estimated cash flows based on the most recent evaluation of each individual loan. Because income on purchased loans with evidence of credit deterioration on the date of acquisition is recognized by accretion of the discount of estimated cash flows, such loans are not considered to be floating or adjustable rate loans and are reported below as fixed rate loans.


																			Over 1			Over 2
																1 Year			Through			Through			Over
	1 Year or Less			Over 1 Through 2 Years			Over 2 Through 3 Years			Over 3 Years			Total			or Less			2 Years			3 Years			3 Years			Total
	(Dollars in thousands)															(Dollars in thousands)
Fixed rate	$	290,507		$	151,709		$	185,123		$	468,806		$	1,096,145		$	397,973		$	389,435		$	506,604		$	1,456,184		$	2,750,196
Floating rate (not at a floor or ceiling rate)		150,579			188			132			8			150,907			830,196			6,816			1,916			3,721			842,649
Floating rate (at floor rate)⁽¹⁾		2,385,073			1,363			233			5,421			2,392,090			2,940,503			12,617			9,073			38,933			3,001,126
Floating rate (at ceiling rate)		—			—			—			—			—			—			—			—			—			—

Total	$	2,826,159		$	153,260		$	185,488		$	474,235		$	3,639,142		$	4,168,672		$	408,868		$	517,593		$	1,498,838		$	6,593,971


Percentage of total		77.7	%		4.2	%		5.1	%		13.0	%		100.0	%		63.2	%		6.2	%		7.8	%		22.8	%		100.0	%
Cumulative percentage of total		77.7			81.9			87.0			100.0						63.2			69.4			77.2			100.0

~~The amount and type of purchased non-covered loans outstanding, as of the dates indicated, are reflected in the following table.~~

The amount and percentage of the Company’s purchased non-covered loans, by state, as of the dates indicated, are reflected in the following table, but does not necessarily reflect the location of the borrower or collateral.

The following table presents the amount of unpaid principal balance, the valuation discount and the carrying value of purchased ~~non-covered~~ loans as of the dates indicated.


	September30,						December 31,			June 30,						December 31,
	2014			2013			2013			2015			2014			2014
	(Dollars in thousands)									(Dollars in thousands)
Loans without evidence of credit deterioration at date of purchase:
Unpaid principal balance	$	983,946		$	369,538		$	344,065		$	1,586,661		$	1,079,330		$	889,218
Valuation discount		(20,084	)		(13,962	)		(11,972	)		(24,549	)		(24,676	)		(17,751	)

Carrying value		963,862			355,576			332,093			1,562,112			1,054,654			871,467

Loans with evidence of credit deterioration at date of purchase:
Unpaid principal balance		104,210			75,936			70,857			355,028			482,272			374,001
Valuation discount		(37,084	)		(32,453	)		(30,227	)		(90,292	)		(132,857	)		(97,521	)

Carrying value		67,126			43,483			40,630			264,736			349,415			276,480

Total carrying value	$	1,030,988		$	399,059		$	372,723		$	1,826,848		$	1,404,069		$	1,147,947

~~The Company completed its acquisition of Bancshares on March 5, 2014 and its acquisition of Summit on May 16, 2014.~~ On February 10, 2015, the date ofwe closed our Intervest acquisition, each ~~acquisition, all~~ outstanding ~~purchased loans were~~loan in Intervest’s loan portfolio was categorized into ~~loans~~(i) a loan without evidence of credit deterioration ~~and loans~~or (ii) a loan with evidence of credit deterioration. The following table presents, by risk rating, the unpaid principal balance, fair value adjustment, Day 1 Fair Value and the weighted-average fair value adjustment applied to the purchased ~~non-covered~~ loans without evidence of credit deterioration in the ~~Company’s 2014 acquisitions.~~Intervest acquisition.


Risk Category										Unpaid Principal Balance		Fair Value Adjustment			Day 1 Fair Value		Weighted Average Fair Value Adjustment (in bps)
										(Dollars in thousands)
	Unpaid Principal Balance		Fair Value Adjustment			Day 1 Fair Value		Weighted Average Fair Value Adjustment (in bps)
	(Dollars in thousands)
Bancshares:
FV 33	$	35,541	$	(375	)	$	35,166		106	$	83,210	$	(690	)	$	82,520		83
FV 44		72,376		(852	)		71,524		118		804,604		(10,961	)		793,643		136
FV 55		29,210		(584	)		28,626		200		144,195		(3,109	)		141,086		216
FV 36		908		(222	)		686		2,445		—		—			—		—

Total	$	138,035	$	(2,033	)	$	136,002		147	$	1,032,009	$	(14,760	)	$	1,017,249		143

Summit:
FV 33	$	304,997	$	(7,312	)	$	297,685		240
FV 44		269,630		(5,202	)		264,428		193
FV 55		40,608		(1,091	)		39,517		269
FV 36		96,802		(2,595	)		94,207		268

Total	$	712,037	$	(16,200	)	$	695,837		228

The following grades are used for purchased ~~non-covered~~ loans without evidence of credit deterioration at date of acquisition.

FV 33 – Loans in this category are considered to be satisfactory with minimal credit risk and are generally considered collectible.

FV 44 – Loans in this category are considered to be marginally satisfactory with minimal to moderate credit risk and are generally considered collectible.

FV 55 – Loans in this category exhibit weakness and are considered to have elevated credit risk and elevated risk of repayment.

FV 36 – Loans, if any, in this category were not individually reviewed at the date of purchase and are assumed to have characteristics similar to the characteristics of the aggregate acquired portfolio.

The following table is a summary of the loans acquired in the ~~Bancshares and Summit acquisitions~~Intervest acquisition with evidence of credit deterioration at the date of acquisition.


							As of February 10, 2015
	Bancshares as of March 5, 2014			Summit as of May 16, 2014			(Dollars in thousands)
	(Dollars in thousands)
Contractually required principal and interest	$	30,453		$	31,525		$	88,490
Nonaccretable difference		(8,054	)		(7,157	)		(16,649	)

Cash flows expected to be collected		22,399			24,368			71,841
Accretable difference		(3,226	)		(3,506	)		(10,126	)

Day 1 Fair Value	$	19,173		$	20,862		$	61,715

The following table presents a summary, for the periods indicated, of the activity of our purchased loans with evidence of credit deterioration at the date of acquisition.

A summary of changes in the accretable difference on purchased ~~non-covered~~ loans with evidence of credit deterioration at the date of acquisition is shown below for the periods indicated.

The following table presents purchased non-covered loans grouped by remaining maturities at September 30, 2014 by type and by fixed or floating interest rates. This table is based on contractual maturities and does not reflect amortizations, projected paydowns, the earliest repricing for floating rate loans, accretion or management’s estimate of projected cash flows. Many loans have principal paydowns scheduled in periods prior to the period in which they mature, and many variable rate loans are subject to repricing in periods prior to the period in which they mature. Additionally, because income on purchased non-covered loans with evidence of credit deterioration on the date of acquisition is recognized by accretion of the discount of estimated cash flows, such loans are not considered to be floating or adjustable rate loans and are reported below as fixed rate loans.


	Six Months Ended June 30,
	2015			2014
	(Dollars in thousands)
Accretable difference at January 1	$	74,167		$	83,455
Transfer to foreclosed assets		(308	)		(771	)
Purchased loans paid off		(12,423	)		(8,479	)
Cash flow revisions as a result of renewals and/or modifications		19,212			31,125
Accretable difference acquired		10,126			6,732
Accretion		(21,496	)		(22,650	)
Other, net		—			(508	)

Accretable difference at June 30	$	69,278		$	88,904

During 2010 and 2011, the Company, through the Bank, acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of seven failed financial institutions in FDIC-assisted acquisitions. A summary of each acquisition is as follows:

Loans comprise the majority of the assets acquired in each of these FDIC–assisted acquisitions and, with the exception of Unity, all but a small amount of consumer loans are subject to loss share agreements with the FDIC whereby the Bank is indemnified against a portion of the losses on covered loans and covered foreclosed assets. In the Unity acquisition, all loans, including consumer loans, are subject to loss share agreement with the FDIC.

In conjunction with each of these acquisitions, the Bank entered into loss share agreements with the FDIC such that the Bank and the FDIC will share in the losses on assets covered under the loss share agreements. Pursuant to the terms of the loss share agreements for the Unity acquisition, on losses up to $65 million, the FDIC will reimburse the Bank for 80% of losses. On losses exceeding $65 million, the FDIC will reimburse the Bank for 95% of losses. Pursuant to the terms of the loss share agreements for the Woodlands, Chestatee, Oglethorpe and First Choice acquisitions, the FDIC will reimburse the Bank for 80% of losses. Pursuant to the terms of the loss share agreements for the Horizon acquisition, the FDIC will reimburse the Bank on single family residential loans and related foreclosed assets for (i) 80% of losses up to $11.8 million, (ii) 30% of losses between $11.8 million and $17.9 million and (iii) 80% of losses in excess of $17.9 million. For non-single family residential loans and related foreclosed assets, the FDIC will reimburse the Bank for (i) 80% of losses up to $32.3 million, (ii) 0% of losses between $32.3 million and $42.8 million and (iii) 80% of losses in excess of $42.8 million. Pursuant to the terms of the loss share agreements for the Park Avenue acquisition, the FDIC will reimburse the Bank for (i) 80% of losses up to $218.2 million, (ii) 0% of losses between $218.2 million and $267.5 million and (iii) 80% of losses in excess of $267.5 million.

The loss share agreements applicable to single family residential mortgage loans and related foreclosed assets provide for FDIC loss sharing and the Bank’s reimbursement to the FDIC for recoveries of covered losses for ten years from the date on which each applicable loss share agreement was entered. The loss share agreements applicable to commercial loans and related foreclosed assets provide for FDIC loss sharing for five years from the date on which each applicable loss share agreement was entered and the Bank’s reimbursement to the FDIC for recoveries of covered losses for an additional three years thereafter.

To the extent that actual losses incurred by the Bank are less than (i) $65 million on the Unity assets covered under the loss share agreements, (ii) $107 million on the Woodlands assets covered under the loss share agreements, (iii) $60 million on the Horizon assets covered under the loss share agreements, (iv) $66 million on the Chestatee assets covered under the loss share agreements, (v) $66 million on the Oglethorpe assets covered under the loss share agreements, (vi) $87 million on the First Choice assets covered under the loss share agreements or (vii) $269 million on the Park Avenue assets covered under loss share agreements, the Bank may be required to reimburse the FDIC under the clawback provisions of the loss share agreements.

The terms of the purchase and assumption agreements for the Unity, Woodlands, Horizon, Chestatee, Oglethorpe, First Choice and Park Avenue acquisitions provide for the FDIC to indemnify the Bank against certain claims, including claims with respect to assets, liabilities or any affiliate not acquired or otherwise assumed by the Bank and with respect to claims based on any action by directors, officers or employees of Unity, Woodlands, Horizon, Chestatee, Oglethorpe, First Choice or Park Avenue.

The covered loans and covered foreclosed assets (collectively “covered assets”) and the related FDIC loss share receivable and the FDIC clawback payable are reported at the net present value of expected future amounts to be paid or received.

~~The following is a summary of the covered assets, the FDIC loss share receivable and the FDIC clawback payable as of the dates indicated.~~

The Company is currently in discussion with the FDIC regarding the termination of one or more of its loss share agreements. Should an agreement or agreements be reached regarding such termination, loans and foreclosed assets covered by such loss share agreement(s) would be reclassified, respectively, to “purchased non-covered loans” and “foreclosed assets not covered by FDIC loss share agreements.” Any gain or loss on such termination would be determined by comparison of the net cash proceeds to be received or paid by the Company to the related amount of FDIC loss share receivable and FDIC clawback payable at the time of such transaction. The Company is currently unable to provide assurance as to whether or not it will be successful in negotiating the termination of any or all of its loss share agreements with the FDIC.

~~The following table presents a summary, by acquisition, of activity within covered loans during the periods indicated.~~

~~The following table presents a summary of the carrying value and type of covered loans as of the dates indicated.~~

The following table presents covered loans grouped by remaining maturities and by type at September 30, 2014. This table is based on contractual maturities and does not reflect accretion of the accretable difference or management’s estimate of projected cash flows. Most covered loans have scheduled accretion and/or cash flows projected by management to occur in periods prior to maturity. In addition, because income on covered loans is recognized by accretion of the accretable difference, none of the covered loans are considered to be floating or adjustable rate loans.

~~The following table presents a summary, by acquisition, of changes in the accretable difference on covered loans during the periods indicated.~~

~~The following table presents a summary, by acquisition, of activity within the FDIC loss share receivable during the periods indicated.~~

~~The following table presents a summary, by acquisition, of activity within covered foreclosed assets during the periods indicated.~~

~~The following table presents a summary of the carrying value and type of covered foreclosed assets as of the dates indicated.~~

~~The following table presents a summary, by acquisition, of activity within the FDIC clawback payable during the periods indicated.~~

~~Non-Purchased Loans and Leases and Foreclosed Assets Not Covered by FDIC Loss Share Agreements~~

Nonperforming assets consist of (1) nonaccrual loans and leases, (2) accruing loans and leases 90 days or more past due, (3) certain troubled and restructured loans for which a concession has been granted by the Company to the borrower because of a deterioration in the financial position of the borrower (TDRs) and (4) real estate or other assets that have been acquired in partial or full satisfaction of loan or lease obligations or upon foreclosure. Purchased non-covered loans, covered loans and covered foreclosed assets are not considered to be nonperforming by the Company for purposes of calculation of the nonperforming loans and leases to total loans and leases ratio and the nonperforming assets to total assets ratio, on the following page, except for their inclusion in total assets. Because purchased non-covered loans, covered loans and covered assets are not included in the calculations of the Company’s nonperforming loans and leases ratio and nonperforming assets ratio, the Company’s nonperforming loans and leases ratio and nonperforming assets ratio may not be comparable from period to period or with such ratios of other financial institutions, including institutions that have made FDIC-assisted or traditional acquisitions.

The following table presents information, excluding purchased non-covered loans and covered assets, concerning nonperforming assets, including nonaccrual loans and leases, TDRs, and foreclosed assets as of the dates indicated.

Our nonperforming assets consist of (1) nonaccrual loans and leases, (2) accruing loans and leases 90 days or more past due, (3) certain troubled and restructured loans for which a concession has been granted by us to the borrower because of a deterioration in the financial position of the borrower (TDRs) and (4) real estate or other assets that have been acquired in partial or full satisfaction of loan or lease obligations or upon foreclosure. Purchased loans are not included in the following table as nonperforming assets, except for their inclusion in total assets, but are analyzed and discussed separately elsewhere in this MD&A.

The accrual of interest on non-purchased loans and leases is discontinued when, in management’s opinion, the borrower or lessee may be unable to meet payments as they become due. We generally place a loan or lease on nonaccrual status when such loan or lease is (i) deemed impaired or (ii) 90 days or more past due, or earlier when doubt exists as to the ultimate collection of payments. We may continue to accrue interest on certain loans or leases contractually past due 90 days or more if such loans or leases are both well secured and in the process of collection. At the time a loan or lease is placed on nonaccrual status, interest previously accrued but uncollected is reversed and charged against interest income. Nonaccrual loans and leases are generally returned to accrual status when payments are less than 90 days past due and we reasonably expect to collect all payments. If a loan or lease is determined to be uncollectible, the portion of the principal determined to be uncollectible will be charged against the ALLL. Loans for which the terms have been modified and for which (i) the borrower is experiencing financial difficulties and (ii) we have granted a concession to the borrower are considered troubled debt restructurings (“TDRs”) and are included in impaired loans and leases. Income on nonaccrual loans or leases, including impaired loans and leases but excluding certain TDRs which continue to accrue interest, is recognized on a cash basis when and if actually collected.

The following table presents a summary of nonperforming assets, excluding purchased loans, as of the dates indicated.


	September 30,						December 31,			June 30,						December 31,
	2014			2013			2013			2015			2014			2014
	(Dollars in thousands)									(Dollars in thousands)
Nonaccrual non-purchased loans and leases	$	17,945		$	10,405		$	8,737		$	16,281		$	18,393		$	21,085
Accruing non-purchased loans and leases 90 days or more past due		—			—			—			—			—			—
TDRs		—			—			—			—			—			—

Total nonperforming non-purchased loans and leases		17,945			10,405			8,737			16,281			18,393			21,085
Foreclosed assets not covered by FDIC loss share agreements⁽¹⁾		14,781			11,647			11,851
Foreclosed assets^{(1) (2)}											25,973			20,581			37,775

Total nonperforming assets(2)	$	32,726		$	22,052		$	20,588		$	42,254		$	38,974		$	58,860

Nonperforming loans and leases to total loans and leases⁽²⁾		0.49	%		0.41	%		0.33	%
Nonperforming assets to total assets⁽²⁾		0.50			0.47			0.43

Nonperforming loans and leases to total loans and leases⁽³⁾											0.34	%		0.58	%		0.53	%
Nonperforming assets to total assets^{(2) (3)}											0.49			1.19			0.87

If an adequate current determination of collateral value has not been performed, once a loan or lease is considered impaired, ~~management seeks~~we seek to establish an appropriate value for the collateral. This assessment may include (i) obtaining an updated appraisal, (ii) obtaining one or more broker price opinions or comprehensive market analyses, (iii) internal evaluations or (iv) other methods deemed appropriate considering the size and complexity of the loan and the underlying collateral. On an ongoing basis, typically at least quarterly, ~~the Company evaluates~~we evaluate the underlying collateral on all impaired loans and leases and, if needed, due to changes in market or property conditions, the underlying collateral is reassessed and the estimated fair value is revised. The determination of collateral value includes any adjustments considered necessary related to estimated holding periods and estimated selling costs.

At ~~September~~June 30, ~~2014, the Company~~2015, we had reduced the carrying value of ~~its~~our non-purchased loans and leases deemed impaired (all of which were included in nonaccrual loans and leases) by ~~$5.4~~$5.0 million to the estimated fair value of such loans and leases of ~~$14.8~~$12.8 million. The adjustment to reduce the carrying value of such impaired loans and leases to estimated fair value consisted of ~~$4.4~~$3.6 million of partial charge-offs and ~~$1.0~~$1.4 million of specific loan and lease loss allocations. These amounts do not include ~~the Company’s $1.7~~our $12.3 million of impaired purchased ~~non-covered loans or $11.9 million of impaired covered~~ loans at ~~September~~June 30, ~~2014.~~2015.

The following table is a summary of the amount and type of foreclosed assets as of the dates indicated.

The following table presents information concerning the geographic location of nonperforming assets, excluding purchased ~~non-covered~~ loans, ~~and covered assets,~~ at ~~September~~June 30, ~~2014. Nonperforming non-purchased~~2015. Nonaccrual loans and leases are reported in the physical location of the principal collateral. Foreclosed assets are reported in the physical location of the asset. Repossessions are reported at the physical location where the borrower resided or had its principal place of business at the time of repossession.


							Nonperforming Loans and Leases		Foreclosed Assets and Repossessions		Total Nonperforming Assets
	Nonperforming Non-Purchased Loans and Leases		Foreclosed Assets		Total Nonperforming Assets		(Dollars in thousands)
	(Dollars in thousands)
Arkansas	$	16,296	$	7,603	$	23,899	$	12,893	$	10,095	$	22,988
Georgia								334		7,322		7,656
North Carolina								1,067		4,641		5,708
Florida								1,653		1,664		3,317
Texas		299		1,327		1,626		231		1,143		1,374
North Carolina		1,235		5,193		6,428
Alabama								20		778		798
South Carolina		—		128		128		—		310		310
Georgia		9		60		69
Alabama		5		445		450
Florida		—		—		—
All other		101		25		126		83		20		103

Total	$	17,945	$	14,781	$	32,726	$	16,281	$	25,973	$	42,254

Purchased loans without evidence of credit deterioration at the date of acquisition are reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to us that provides material insight regarding the loan’s performance, the borrower or the underlying collateral. To the extent that current information indicates it is probable that we will collect all amounts according to the contractual terms thereof, such loan is not considered impaired and is not considered in the determination of the required ALLL. To the extent that current information indicates it is probable that we will not be able to collect all amounts according to the contractual terms thereon, such loan is considered impaired and is considered in the determination of the required level of ALLL.

Purchased loans with evidence of credit deterioration on the date of purchase are reviewed (i) any time a loan is renewed or extended, (ii) at any other time additional information becomes available to us that provides material additional insight regarding a loan’s performance, the status of the borrower, or the quality or value of the underlying collateral, or (iii) in conjunction with the annual review of projected cash flows of each acquired portfolio. We separately review the performance of the portfolio of purchased loans with evidence of credit deterioration on an annual basis, or more frequently to the extent that material information becomes available regarding the performance of an individual loan, to make determinations of the constituent loans’ performance and to consider whether there has been any significant change in performance since our initial expectations established in conjunction with the determination of the Day 1 Fair Values or since our most recent review of such portfolio’s performance. To the extent that a purchased loan with evidence of credit deterioration on the date of purchase is performing in accordance with or exceeding our performance expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV66, is not included in any of the credit quality ratios, is not considered to be a nonaccrual, nonperforming or impaired loan, and is not considered in the determination of the required ALLL. To the extent that the performance of a purchased loan with evidence of credit deterioration on the date of purchase has deteriorated from our expectation established in conjunction with the determination of the Day 1 Fair Values, such loan is rated FV88, is included in certain of our credit quality metrics, is considered an impaired loan, and is considered in the determination of the required level of ALLL.

The following table ispresents a summary of ~~the amount and type of foreclosed assets not covered by FDIC loss share agreements.~~

~~The following table presents information concerning nonperforming~~our impaired purchased ~~non-covered~~ loans as of the dates indicated.

~~The Company’s ratio~~As of ~~nonperforming loans~~June 30, 2015 and leases, including nonperforming purchased non-covered loans but excluding covered loans, to total loans and leases, including purchased non-covered loans but excluding covered loans, was 0.47% and 0.41% at September 30, 2014 and ~~2013, respectively, and 0.35% at~~ December 31, ~~2013.~~

~~As of September 30,~~ 2014, ~~the Company~~we had identified purchased ~~non-covered~~ loans where we had determined it was probable that we would be unable to collect all amounts according to the contractual terms thereof (for purchased loans without evidence of credit deterioration at date of acquisition) or the expected performance of such loans had deteriorated from ~~management’s~~our performance expectations established in conjunction with the determination of the Day 1 Fair Values or ~~where current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereon.~~since our most recent review of such portfolio’s performance (for purchased loans with evidence of credit deterioration at date of acquisition). As a result, ~~the Company~~we recorded partial charge-offs totaling ~~$0.3~~$0.4 million for such loans during the second quarter and $1.7 million for the first six months of 2015 compared to $1.1 million during the ~~third~~second quarter and ~~$0.9 million during~~$1.3 for the first ~~nine~~six months of ~~2014 compared to none for the comparable periods in 2013. The Company~~2014. We also recorded provision for loan and lease losses of ~~$0.3~~$0.4 million during the ~~third~~second quarter and ~~$0.9~~$1.7 million during the first ~~nine~~six months of 2015 compared to $1.1 million during the second quarter and $1.3 million during the first six months of 2014 to cover such charge-offs. In addition to these charge-offs, ~~compared~~we transferred certain of these purchased loans to ~~none during the third quarter and first nine months~~foreclosed assets. As a result of ~~2013. At September 30, 2014, the Company~~these actions, we had ~~$1.7~~$12.3 million of impaired purchased ~~non-covered~~ loans at June 30, 2015, compared to ~~none~~$21.2 million at ~~both September 30, 2013 and December 31, 2013.~~

~~As of September~~June 30, 2014 the Company had identified covered loans where the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values. As a result the Company recorded partial charge-offs, net of adjustments to the FDIC loss share receivable and the FDIC clawback payable, totaling $0.2 million for such loans during the third quarter and $0.9 million during the first nine months of 2014 compared to $0.9 million during the third quarter and $4.0 million during the first nine months of 2013. The Company also recorded provision for loan and lease losses of $0.2 million during the third quarter and $0.9 million during the first nine months of 2014 to cover such charge-offs compared to $0.9 million during the third quarter and $4.0 million during the first nine months of 2013. The Company had $13.6 million of impaired covered loans at September 30, 2014 compared to $52.6 million at September 30, 2013 and $46.2$14.0 million at December 31, ~~2013.~~2014.

~~The Company’s~~Our ALLL was ~~$49.6~~$56.7 million, or ~~1.36%~~1.19% of total non-purchased loans and leases at ~~September~~June 30, ~~2014,~~2015, compared to ~~$42.9~~$52.9 million, or ~~1.63%~~1.33% of total non-purchased loans and leases at December 31, ~~2013~~2014 and ~~$41.7~~$47.0 million, or ~~1.65%~~1.48% of total non-purchased loans and leases at ~~September~~June 30, ~~2013. The Company~~2014. We had no ALLL ~~for purchased non-covered loans~~at June 30, 2015 and 2014 or ~~for covered loans at September 30, 2014,~~ December 31, ~~2013~~2014 for our (i) purchased loans without evidence of credit deterioration at the date of acquisition as management’s analysis of such individual loans resulted in no impairment or ~~September 30, 2013, because~~all identified impairment on such loans had been charged off, or (ii) purchased loans with evidence of credit deterioration at the date of acquisition as all such loans were performing in accordance with management’s expectations established in conjunction with the determination of the Day 1 Fair Values or all losses had been charged off on ~~purchased non-covered loans and covered~~such loans whose performance had deteriorated from management’s expectations established in conjunction with the determination of the Day 1 Fair Values. ~~The Company’s~~Our ALLL was equal to ~~276%~~349% of ~~its~~our total nonperforming non-purchased loans and leases at ~~September~~June 30, ~~2014~~2015, compared to ~~492%~~251% at December 31, ~~2013~~2014 and ~~400%~~255% at ~~September~~June 30, ~~2013.~~2014.

The amount of provision to the ALLL is based on ~~the Company’s~~our analysis of the adequacy of the ALLL utilizing the criteria discussed in the Critical Accounting Policies ~~caption~~section of ~~this MD&A.~~our Annual Report on Form 10-K for the year ended December 31, 2014. The provision for loan and lease losses for the ~~third~~second quarter of ~~2014~~2015 was ~~$3.7~~$4.3 million, including ~~$3.2~~$3.9 million for non-purchased loans and leases ~~$0.3~~and $0.4 million for purchased ~~non-covered loans and $0.2 million for covered~~ loans, compared to ~~$3.8~~$5.6 million for the ~~third~~second quarter of ~~2013,~~2014, including ~~$2.9~~$4.5 million for non-purchased loans and leases ~~none~~and $1.1 million for purchased ~~non-covered loans and $0.9 million for covered~~ loans. The provision for loan and lease losses for the first ~~nine~~six months of ~~2014~~2015 was $10.6 million, including ~~$8.8~~$8.9 million for non-purchased loans and ~~leases, $0.9~~$1.7 million for purchased ~~non-covered loans and $0.9 million for covered~~ loans, compared to ~~$9.2~~$6.9 million for the first ~~nine~~six months of ~~2013,~~2014, including ~~$5.2~~$5.6 million for non-purchased loans and ~~leases, none~~$1.3 million for purchased ~~non-covered loans~~loans. The decrease in the provision for loan and ~~$4.0 million~~lease loss during the second quarter of 2015 compared to the second quarter of 2014 was primarily due to a decrease in charge-offs associated with our non-purchased and purchased loans. The increase in the provision for ~~covered loans.~~loan and lease loss during the first six months of 2015 compared to the first six months of 2014 was due to an increase in charge-offs experienced during the first quarter of 2015 as well as the provision necessary to cover the growth of our non-purchased loan and lease portfolio.

~~The Company’s~~Our provision to the ALLL for non-purchased loans and leases for ~~both~~ the second quarter ~~and nine months ended September 30, 2014~~of 2015 is primarily the result of provision necessary to cover the growth of ~~the Company’s~~our non-purchased loan and lease portfolio, which increased ~~$468~~$456.0 million during the ~~third~~second quarter of 2015. Our practice is to charge off any estimated loss as soon as we are able to identify and ~~$1.01 billion during the first nine months~~reasonably quantify such potential loss. Accordingly, only a small portion of ~~2014 and~~our ALLL is needed for ~~specific ALLL allocations for concentrations of credit as a result of growth in both the number and volume of large borrower relationships. The Company’s~~potential losses on non-performing loans. Our ALLL to non-purchased loans and leases has decreased to ~~1.36%~~1.19% at ~~September~~June 30, ~~2014,~~2015, compared to ~~1.63%~~1.33% at December 31, ~~2013~~2014 and ~~1.65%~~1.48% at ~~September~~June 30, ~~2013~~2014 primarily as a result of the ~~generally decreasing~~low level of net charge-offs in recent quarters and due to generally improving economic conditions in many of ~~the Company’s~~our markets. While ~~the Company believes~~we believe the ALLL at ~~September~~June 30, ~~2014,~~2015 and related provision for ~~both~~ the ~~third~~second quarter ~~and first nine months~~ of ~~2014~~2015 were appropriate, changing economic and other conditions may require future adjustments to the ALLL or the amount of provision thereto.

An analysis of the allowance for loan and lease losses for the periods indicated is shown in the following table.


											Six Months Ended June 30,						Year Ended December 31,
	Nine Months Ended September 30,						Year Ended December 31,				2015			2014			2014
	2014			2013			2013				(Dollars in thousands)
	(Dollars in thousands)
Balance, beginning of period	$	42,945		$	38,738		$	38,738			$	52,918		$	42,945		$	42,945
Non-purchased loans and leases charged off:
Real estate:
Residential 1-4 family		(456	)		(528	)		(837	)			(621	)		(341	)		(577	)
Non-farm/non-residential		(1,344	)		(612	)		(1,111	)			(324	)		(1,254	)		(1,357	)
Construction/land development		(14	)		(136	)		(137	)			(771	)		(14	)		(638	)
Agricultural		(213	)		(260	)		(261	)			(13	)		(15	)		(214	)
Multifamily residential		—			—			(4	)			(208	)		—			—

Total real estate		(2,027	)		(1,536	)		(2,350	)			(1,937	)		(1,624	)		(2,786	)
Commercial and industrial		(477	)		(887	)		(922	)			(2,540	)		(422	)		(720	)
Consumer		(126	)		(176	)		(214	)			(69	)		(97	)		(222	)
Direct financing leases		(418	)		(338	)		(482	)			(341	)		(267	)		(602	)
Other		(258	)		(266	)		(359	)			(688	)		(159	)		(793	)

Total non-purchased loans and leases charged off		(3,306	)		(3,203	)		(4,327	)			(5,575	)		(2,569	)		(5,123	)

Recoveries of non-purchased loans and leases previously charged off:
Real estate:
Residential 1-4 family		118			113			106				21			71			135
Non-farm/non-residential		19			118			122				17			4			33
Construction/land development		12			21			174				37			8			11
Agricultural		13			9			14				—			11			14
Multifamily residential		—			—			4

Total real estate		162			261			420				75			94			193
Commercial and industrial		801			431			433				39			763			808
Consumer		50			90			104				42			36			80
Direct financing leases		43			29			33				13			14			49
Other		111			114			144				337			75			266

Total recoveries of non-purchased loans and leases previously charged off		1,167			925			1,134				506			982			1,396

Net non-purchased loans and leases charged off		(2,139	)		(2,278	)		(3,193	)			(5,069	)		(1,587	)		(3,727	)
Purchased non-covered loans charged off		(849	)		—			—
Covered loans charged off		(925	)		(4,012	)		(4,675	)
Purchased loans charged off, net												(1,723	)		(1,287	)		(3,215	)

Net charge-offs – total loans and leases		(3,913	)		(6,290	)		(7,868	)			(6,792	)		(2,874	)		(6,942	)
Provision for loan and lease losses:
Non-purchased loans and leases		8,800			5,200			7,400				8,900			5,600			13,700
Purchased non-covered loans		849			—			—
Covered loans		925			4,012			4,675
Purchased loans												1,723			1,287			3,215

Total provision		10,574			9,212			12,075				10,623			6,887			16,915
										��
Balance, end of period	$	49,606		$	41,660		$	42,945			$	56,749		$	46,958		$	52,918

ALLL to total loans and leases⁽¹⁾		1.36	%		1.65	%		1.63	%
ALLL to nonperforming loans and leases^{(1) (2)}		276	%		400	%		492	%
Net charge-offs of non-purchased loans and leases to average non-purchased loans and leases⁽¹⁾												0.24	%⁽²⁾		0.11	%⁽²⁾		0.12	%
Net charge-offs of purchased loans to average purchased loans												0.19	%⁽²⁾		0.28	%⁽²⁾		0.29	%
Net charge-offs of total loans and leases to average loans and leases												0.22	%⁽²⁾		0.16	%⁽²⁾		0.16	%
ALLL to non-purchased loans and leases⁽³⁾												1.19	%		1.48	%		1.33	%
ALLL to nonperforming loans and leases⁽³⁾												349	%		255	%		251	%

~~The following table provides a summary of the Company’s annualized~~Our net ~~charge-off ratios for its loan and lease portfolio~~charge-offs increased to $6.8 million for the ~~periods indicated.~~first six months of 2015, including $5.1 million for non-purchased loans and leases and $1.7 million for purchased loans, compared to $2.9 million for the first six months of 2014, including $1.6 million for non-purchased loans and leases and $1.3 million for purchased loans. The increase in our net charge-offs for non-purchased loans and leases was primarily due to our sale during the first quarter of 2015 of $15.9 million of performing loans, with deteriorating credit trends, from our Corporate Loan Specialty Group resulting in net charge-offs of $2.4 million. Our net charge-offs for purchased loans increased during the first six months of 2015, in part, due to our having previously terminated the loss share agreements on our FDIC-assisted acquisitions.

At September 30, 2014 and 2013 and at December 31, 2013, the Company classified all of its investment securities portfolio as AFS. Accordingly, its investment securities are stated at estimated fair value in the consolidated financial statements with the unrealized gains and losses, net of related income tax, reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income.

The following table presents the amortized cost and estimated fair value of investment securities AFS as of the dates indicated. The Company’s holdings of “other equity securities” include FHLB – Dallas and First National Banker’s Bankshares, Inc. (“FNBB”) shares which do not have readily determinable fair values and are carried at cost.

At June 30, 2015 and 2014 and at December 31, 2014, we classified all of our investment securities portfolio as AFS. Accordingly, our investment securities are stated at estimated fair value in the consolidated financial statements with the unrealized gains and losses, net of related income tax, reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income.

The following table presents the amortized cost and estimated fair value of investment securities AFS as of the dates indicated. The Company’s investment in the CRA qualified investment fund includes shares held in a mutual fund that qualifies under the Community Reinvestment Act of 1977 for community reinvestment purposes. Our holdings of equity securities in FHLB and First National Banker’s Bankshares, Inc. (“FNBB”) do not have readily determinable fair values and are carried at cost.


	September 30,								December 31,				June 30,								December 31,
	2014				2013				2013				2015				2014				2014
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(Dollars in thousands)												(Dollars in thousands)
Obligations of state and political subdivisions	$	572,070	$	587,579	$	432,362	$	431,568	$	438,390	$	435,989	$	496,777	$	506,915	$	603,533	$	616,565	$	555,335	$	573,209
U.S. Government agency securities		251,926		254,062		225,263		225,311		222,510		218,869		257,849		260,753		254,878		258,311		245,854		251,233
Corporate obligations		655		655		717		717		716		716		3,574		3,574		685		685		654		654
Other equity securities		17,580		17,580		13,797		13,797		13,810		13,810
CRA qualified investment fund														1,028		1,020		—		—		—		—
FHLB and FNBB equity securities														10,015		10,015		16,568		16,568		14,225		14,225

Total	$	842,231	$	859,876	$	672,139	$	671,393	$	675,426	$	669,384	$	769,243	$	782,277	$	875,664	$	892,129	$	816,068	$	839,321

~~The Company’s~~Our investment securities portfolio is reported at estimated fair value, which included gross unrealized gains of ~~$21.0~~$16.4 million and gross unrealized losses of $3.4 million at ~~September~~June 30, ~~2014;~~2015; gross unrealized gains of ~~$8.6~~$21.1 million and gross unrealized losses of ~~$14.6~~$4.7 million at ~~December 31, 2013;~~June 30, 2014; and gross unrealized gains of ~~$11.5~~$24.4 million and gross unrealized losses of ~~$12.2~~$1.2 million at ~~September 30, 2013.~~December 31, 2014. Management believes that all of its unrealized losses on individual investment securities at ~~September~~June 30, ~~2014~~2015 are the result of fluctuations in interest rates and do not reflect deterioration in the credit quality of these investments. Accordingly, management considers these unrealized losses to be temporary in nature. ~~The Company does~~We do not have the intent to sell these investment securities with unrealized losses and, more likely than not, will not be required to sell these investment securities before fair value recovers to amortized cost.

The following table presents unaccreted discounts and unamortized premiums of ~~the Company’s~~our investment securities as of the dates indicated.


	Amortized Cost		Unaccreted Discount		Unamortized Premium			Par Value		Amortized Cost		Unaccreted Discount		Unamortized Premium			Par Value
	(Dollars in thousands)									(Dollars in thousands)
September 30, 2014:
June 30, 2015:
Obligations of states and political subdivisions	$	572,070	$	8,218	$	(8,218	)	$	572,070	$	496,777	$	6,912	$	(6,539	)	$	497,150
U.S. Government agency securities		251,926		4,231		(4,167	)		251,990		257,849		3,177		(5,582	)		255,444
Corporate obligations		655		—		(14	)		641		3,574		48		(11	)		3,611
Other equity securities		17,580		—		—			17,580
CRA qualified investment fund											1,028		—		—			1,028
FHLB and FNBB equity securities											10,015		—		—			10,015

Total	$	842,231	$	12,449	$	(12,399	)	$	842,281	$	769,243	$	10,137	$	(12,132	)	$	767,248

December 31, 2013:

December 31, 2014:
Obligations of states and political subdivisions	$	438,390	$	8,298	$	(3,447	)	$	443,241	$	555,335	$	7,976	$	(7,662	)	$	555,649
U.S. Government agency securities		222,510		4,694		(4,436	)		222,768		245,854		3,916		(3,953	)		245,817
Corporate obligations		716		—		(18	)		698		654		—		(13	)		641
Other equity securities		13,810		—		—			13,810
FHLB and FNBB equity securities											14,225		—		—			14,225

Total	$	675,426	$	12,992	$	(7,901	)	$	680,517	$	816,068	$	11,892	$	(11,628	)	$	816,332

September 30, 2013:

June 30, 2014:
Obligations of states and political subdivisions	$	432,362	$	8,241	$	(3,264	)	$	437,339	$	603,533	$	8,625	$	(8,762	)	$	603,396
U.S. Government agency securities		225,263		4,956		(4,644	)		225,575		254,878		4,561		(4,191	)		255,248
Corporate obligations		717		—		(19	)		698		685		—		(15	)		670
Other equity securities		13,797		—		—			13,797
FHLB and FNBB equity securities											16,568		—		—			16,568

Total	$	672,139	$	13,197	$	(7,927	)	$	677,409	$	875,664	$	13,186	$	(12,968	)	$	875,882

We had net gains of ~~$43,000~~$0.1 million from the sale of ~~$6.6~~$2.6 million of investment securities in the ~~third~~second quarter of ~~2014~~2015 compared to ~~no sales~~net gains of $18,000 from the sale of $47.0 million of investment securities in the ~~third~~second quarter of ~~2013. The Company~~2014. We had net gains of ~~$67,000~~$2.6 million from the sale of ~~$55.0~~$30.2 million of investment securities in the first ~~nine~~six months of ~~2014~~2015 compared with net gains of ~~$0.2 million~~$23,000 from the sale of ~~$0.8~~$48.0 million of investment securities in the first ~~nine~~six months of ~~2013.~~2014. During the ~~third~~second quarter of ~~2014~~2015 and ~~2013,~~2014, respectively, investment securities totaling ~~$38.6~~$31.3 million and ~~$19.5~~$16.0 million matured, were called or were paid down by the issuer. During the first ~~nine~~six months of ~~2014~~2015 and ~~2013,~~2014, respectively, investment securities totaling ~~$68.3~~$81.5 million and ~~$71.9~~$29.7 million matured, were called or paid down by the issuer. ~~The Company~~We purchased ~~$10.0~~$37.5 million in investment securities during the second quarter of 2015 and ~~$49.5~~first six months of 2015 compared to $16.8 million of investment securities purchased during the ~~third~~second quarter of 2014 and ~~2013, respectively, and purchased $46.6 million and $124.1~~$35.1 million of investment securities during the first ~~nine~~six months of ~~2014 and 2013, respectively.~~2014. On ~~March 5, 2014, the Company~~February 10, 2015, we acquired ~~$1.9~~$21.8 million of investment securities as a result of ~~its acquisition of Bancshares, and on May 16, 2014, the Company acquired $242.9 million of investment securities as a result of its acquisition of Summit.~~our Intervest acquisition.

~~The Company invests~~We invest in securities ~~it believes~~we believe offer good relative value at the time of purchase, and itwe will, from time to time, reposition ~~its~~our investment securities portfolio. In making decisions to sell or purchase securities, ~~the Company considers~~we consider credit quality, call features, maturity dates, relative yields, current market factors, interest rate risk and other relevant factors.

The following table presents the types and estimated fair values of ~~the Company’s~~our investment securities at ~~September~~June 30, ~~2014~~2015 based on credit ratings by one or more nationally-recognized credit rating agency.


																			AAA⁽¹⁾			AA⁽²⁾			A⁽³⁾			BBB⁽⁴⁾			Non- Rated⁽⁵⁾			Total
	AAA⁽¹⁾			AA⁽²⁾			A⁽³⁾			BBB⁽⁴⁾			Non-Rated⁽⁵⁾			Total			(Dollars in thousands)
	(Dollars in thousands)
Obligations of states and political subdivisions	$	11,129		$	206,486		$	81,948		$	30,630		$	257,386		$	587,579		$	10,218		$	172,453		$	116,583		$	22,214		$	185,447		$	506,915
U.S. Government agency securities		—			254,011			51			—			—			254,062			—			260,753			—			—			—			260,753
Corporate obligations		—			—			655			—			—			655			—			—			621			—			2,953			3,574
Other equity securities		—			—			—			—			17,580			17,580
CRA qualified investment fund																				—			—			—			—			1,020			1,020
FHLB and FNBB equity securities																				—			—			—			—			10,015			10,015

Total	$	11,129		$	460,497		$	82,654		$	30,630		$	274,966		$	859,876		$	10,218		$	433,206		$	117,204		$	22,214		$	199,435		$	782,277

Percentage of total		1.2	%		53.6	%		9.6	%		3.6	%		32.0	%		100.0	%		1.3	%		55.4	%		15.0	%		2.8	%		25.5	%		100.0	%
Cumulative percentage of total		1.2	%		54.8	%		64.4	%		68.0	%		100.0	%					1.3	%		56.7	%		71.7	%		74.5	%		100.0	%

(3)	Includes securities rated A1 to A3 by Moody’s, A+ to A- by S&P or a comparable rating by other nationally-recognized credit rating agencies.

(4)	Includes securities rated Baa1 to Baa3 by Moody’s, BBB+ to BBB- by S&P or a comparable rating by other nationally-recognized credit rating agencies.

(5)

Includes all securities that are not rated or securities that are not rated but that have a rated credit enhancement where ~~the Company has~~we have ignored such credit enhancement. For these securities, ~~the Company has~~we have performed ~~its~~our own evaluation of the security and/or the underlying issuer and ~~believes~~believe that such security or its issuer has credit characteristics equivalent to those which would warrant a credit rating of investment grade (i.e., Baa3 or better by Moody’s or BBB- or better by S&P or a comparable rating by another nationally-recognized credit rating agency).

~~The Company’s~~Our lending and investment activities are funded primarily by deposits. The amount and type of deposits outstanding as of the dates indicated and their respective percentage of the total deposits are reflected in the following table. On February 10, 2015, we assumed $1.18 billion of deposits as a result of our acquisition of Intervest. On May 16, 2014, ~~the Company~~we assumed $970 million of deposits as a result of ~~its~~our acquisition of Summit. ~~On March 5, 2014,~~Additionally, we continued to grow our existing deposit base including growth in deposits of $406 million during the ~~Company assumed $256~~first six months of 2015, of which, $28 million and $378 million were added during the first and second quarters of ~~deposits as a result of its acquisition of Bancshares. On July 31, 2013, the Company assumed $601 million of deposits as a result of its acquisition of First National Bank.~~2015, respectively.


	September 30,										December 31,			June 30,								December 31,
	2014				2013						2013			2015				2014				2014
	(Dollars in thousands)													(Dollars in thousands)
Non-interest bearing	$	1,089,415	21.2	%	$	724,413	19.8	%	$	746,320		20.0	%	$	1,320,779	18.6	%	$	1,058,210	21.2	%	$	1,145,454	20.8	%
Interest bearing:
Transaction (NOW)		1,019,089	19.8			798,931	21.8			839,632		22.6			1,240,787	17.5			1,173,404	23.6			1,031,255	18.8
Savings and money market		1,768,869	34.4			1,153,686	31.5			1,233,865		33.2			2,404,764	33.9			1,575,525	31.6			1,861,734	33.9
Time deposits less than $100,000		591,119	11.5			502,322	13.8			471,052		12.7			930,640	13.1			557,632	11.2			660,711	12.0
Time deposits of $100,000 or more		671,213	13.1			475,334	13.1			426,158		11.5			1,190,329	16.9			619,126	12.4			797,228	14.5

Total deposits	$	5,139,705	100.0	%	$	3,654,686	100.0	%	$	3,717,027		100.0	%	$	7,087,299	100.0	%	$	4,983,897	100.0	%	$	5,496,382	100.0	%

The amount and percentage of ~~the Company’s~~our deposits attributable to offices, by state, as of the dates indicated, are reflected in the following table.

During recent quarters, the Company has increased deposit pricing in several target markets to fund growth in loans and leases. To the extent the Company has future growth in loans and leases, the Company expects to continue to increase deposit pricing in additional markets to fund such growth.


Deposits Attributable to Offices In	June 30,								December 31, 2014
Deposits Attributable to Offices In	2015				2014				December 31, 2014
	(Dollars in thousands)
Arkansas	$	3,335,900	47.1	%	$	2,736,653	54.9	%	$	2,912,291	53.0	%
Texas		1,151,556	16.3			728,073	14.6			996,908	18.1
Florida		738,494	10.4			120,677	2.4			124,469	2.3
Georgia		692,837	9.8			636,950	12.8			675,801	12.3
North Carolina		582,449	8.2			596,180	12.0			599,184	10.9
New York		419,037	5.9			—	—			—	—
Alabama		116,031	1.6			132,271	2.6			141,266	2.6
South Carolina		50,995	0.7			33,093	0.7			46,463	0.8

Total	$	7,087,299	100.0	%	$	4,983,897	100.0	%	$	5,496,382	100.0	%

~~The Company relies~~We rely on other interest bearing liabilities to supplement the funding of ~~its~~our lending and investing activities. Such liabilities consist of repurchase agreements with customers, other borrowings (FHLB ~~– Dallas~~ advances and, to a lesser extent, FRB borrowings and federal funds purchased) and subordinated debentures.

The following table reflects the average balance and rate paid for each category of other interest bearing liabilities for the periods indicated.


	Three Months Ended September 30,										Nine Months Ended September 30,											Three Months Ended June 30,										Six Months Ended June 30,
	2014					2013					2014						2013					2015					2014					2015					2014
	Average Balance		Rate Paid			Average Balance		Rate Paid			Average Balance			Rate Paid			Average Balance		Rate Paid			Average Balance		Rate Paid			Average Balance		Rate Paid			Average Balance		Rate Paid			Average Balance		Rate Paid
	(Dollars in thousands)																					(Dollars in thousands)
Repurchase agreements with customers	$	62,430		0.09	%	$	41,879		0.07	%	$	62,018			0.09	%	$	35,244		0.08	%	$	68,656		0.11	%	$	58,607		0.09	%	$	73,091		0.10	%	$	61,808		0.08	%
Other borrowings⁽¹⁾		299,436		3.63			308,875		3.51			287,191			3.76			292,221		3.69			161,652		3.58			281,009		3.84			175,148		3.62			280,968		3.84
Subordinated debentures		64,950		2.60			64,950		2.64			64,950			2.61			64,950		2.65			117,325		3.31			64,950		2.64			105,431		3.21			64,950		2.61

Total other interest bearing liabilities	$	426,816		2.95	%	$	415,704		3.03	%	$	414,159			3.03	%	$	392,415		3.19	%	$	347,633		2.80	%	$	404,566		3.11	%	$	353,670		2.77	%	$	407,726		3.10	%
													��

The decrease in other borrowings for the three and six months ended June 30, 2015 compared to the same period in 2014 is due to our prepaying $90 million of fixed rate callable FHLB advances during the fourth quarter of 2014 and prepaying $30 million of fixed rate callable FHLB advances during the first quarter of 2015. The increase in subordinated debentures is primarily due to the $52.2 million (net of purchase accounting adjustments) of subordinated debentures assumed in the Intervest transaction.

Subordinated Debentures. We own eight 100%-owned finance subsidiary business trusts – Ozark Capital Statutory Trust II (“Ozark II”), Ozark Capital Statutory Trust III (“Ozark III”), Ozark Capital Statutory Trust IV (“Ozark IV”), Ozark Capital Statutory Trust V (“Ozark V”) (collectively, the “Ozark Trusts”), Intervest Statutory Trust II (“Intervest II”), Intervest Statutory Trust III (“Intervest III”), Intervest Statutory Trust IV (“Intervest IV”) and Intervest Statutory Trust V (“Intervest V”), (collectively, the “Intervest Trusts”; and together with Ozark Trusts, the “Trusts”). At ~~September~~June 30, ~~2014,~~2015, we had the following issues of trust preferred securities and subordinated debentures owed to the Trusts.

On February 10, 2015, in conjunction with the Intervest acquisition, the Company ~~had an aggregate of $64.9 million of~~acquired the Intervest Trusts with outstanding subordinated debentures totaling $56.7 million and related trust preferred securities ~~outstanding consisting~~totaling $55.0 million. On the date of ~~(i) $20.6 million of~~such acquisition, the Company recorded the assumed subordinated debentures ~~and securities issued~~owed to the Intervest Trusts at estimated fair value of $52.2 million, based on an independent third party valuation, to reflect a current market interest rate for comparable obligations. The fair value adjustment of $4.5 million is being amortized, using a level-yield methodology over the estimated holding period of approximately eight years, as an increase in ~~2006 that bear~~ interest ~~adjustable quarterly, at LIBOR plus 1.60%; (ii) $15.4 million~~expense of the subordinated debentures and securities issued in 2004 that bear interest, adjustable quarterly, at LIBOR plus 2.22%; and (iii) $28.9 million of subordinated debentures and securities issued in 2003 that bear interest, adjustable quarterly, at a weighted-average rate of LIBOR plus 2.93%. owed to the Intervest Trusts.

These subordinated debentures and securities generally mature 30 years after issuance and may be prepaid at par, subject to regulatory approval, on or after approximately five years from the date of issuance, or at an earlier date upon certain changes in tax laws, investment company laws or regulatory capital requirements. These subordinated debentures and the related trust preferred securities provide ~~the Company~~us additional regulatory capital to support ~~its~~our expected future growth and expansion.

We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs. As a publicly traded company, a likely source of additional funds is the capital markets, which can provide us with funds through the public issuance of equity, both common and preferred stock, and the issuance of senior debt and/or subordinated debentures. We have an effective shelf registration statement on file with the SEC which provides us increased flexibility and more efficient access to the public debt and equity markets if needed. Our ability to raise additional capital, if needed, will depend on, among other things, conditions in the capital markets at that time, which are outside of our control, and our financial performance.

Common Stockholders’ Equity and ~~Tangible Common Stockholder’s Equity.~~Reconciliation of Non-GAAP Financial Measures.The Company uses its common stockholders’ equity ratio, its tangible common stockholders’ equity ratio, its book value per common share, its tangible book value per common share and its return on tangible common stockholders’ equity as the principalWe use non-GAAP financial measures, ~~of the strength of its capital and its ability to generate earnings on its tangible common equity invested by its shareholders. The following table reconciles the calculation of~~specifically tangible common stockholders’ equity to total tangible assets, ~~ratio~~tangible book value per common share and return on average tangible common stockholders’ equity as important measures of the strength of our capital and our ability to generate earnings on tangible common equity invested by our shareholders. We believe presentation of these non-GAAP financial measures provides useful supplemental information that contributes to a proper understanding of our financial results and capital levels. These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures ~~as reflected~~are included in the ~~Company’s consolidated financial statements as of the dates indicated.~~following tables.

~~The following table reconciles the tangible book value per common share to GAAP financial measures as reflected in the Company’s consolidated financial statements as~~Calculation of the ~~dates indicated.~~


	September 30,						December 31,			June 30,						December 31, 2014
	2014			2013			2013			2015			2014			December 31, 2014
	(In thousands, except per share amounts)									(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest	$	875,578		$	612,338		$	629,060		$	1,209,254		$	850,204		$	908,390
Less intangible assets:
Goodwill		(78,669	)		(5,243	)		(5,243	)		(122,884	)		(78,669	)		(78,669	)
Core deposit and bank charter intangibles, net of accumulated amortization		(28,439	)		(14,796	)		(13,915	)		(28,266	)		(29,971	)		(26,907	)

Total intangibles		(107,108	)		(20,039	)		(19,158	)		(151,150	)		(108,640	)		(105,576	)

Total tangible common stockholders’ equity	$	768,470		$	592,299		$	609,902		$	1,058,104		$	741,564		$	802,814

Shares of common stock outstanding⁽¹⁾		79,705			73,404			73,712

Shares of common stock outstanding											86,811			79,662			79,924

Book value per common share										$	13.93		$	10.67		$	11.37

Tangible book value per common share	$	9.64		$	8.07		$	8.27		$	12.19		$	9.31		$	10.04

The following table reconciles the calculation of the return on average tangible common stockholders’ equity to GAAP financial measures as reflected in the Company’ consolidated financial statements for the periods indicated.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
	(Dollars in thousands)												(Dollars in thousands)
Net income available to common stockholders	$	32,093		$	26,452		$	83,855		$	66,839		$	44,776		$	26,486		$	84,670		$	51,762


Average common stockholders’ equity before noncontrolling interest	$	860,240		$	578,382		$	751,602		$	540,382		$	1,191,798		$	749,692		$	1,121,225		$	696,360
Less average intangible assets:
Goodwill		(78,669	)		(5,243	)		(42,736	)		(5,243	)		(122,884	)		(44,083	)		(112,883	)		(24,770	)
Core deposit and bank charter intangibles, net of accumulated amortization		(29,363	)		(11,985	)		(19,770	)		(8,056	)		(29,161	)		(16,033	)		(28,996	)		(14,973	)

Average tangible common stockholders’ equity before noncontrolling interest	$	752,208		$	561,154		$	689,096		$	527,083

Total average intangibles														(152,045	)		(60,116	)		(141,879	)		(39,743	)

Average tangible common stockholders’ equity													$	1,039,753		$	689,576		$	979,346		$	656,617


Return on average common stockholders’ equity														15.07	%		14.17	%		15.23	%		14.99	%

Return on average tangible common stockholders’ equity		16.93	%		18.70	%		16.27	%		16.95	%		17.27	%		15.41	%		17.43	%		15.90	%

Common Stock Dividend Policy. During the quarter ended ~~September~~June 30, ~~2014, the Company~~2015, we paid a dividend of ~~$0.12~~$0.135 per ~~split-adjusted~~ common share compared to ~~$0.095~~$0.115 per ~~split-adjusted~~ common share in the quarter ended ~~September~~June 30, ~~2013.~~2014. On ~~October~~July 1, ~~2014, the Company’s~~2015, our board of directors approved a dividend of ~~$0.125~~$0.14 per common share that was paid on ~~October~~July 24, ~~2014.~~2015. The determination of future dividends on ~~the Company’s~~our common stock will depend on conditions existing at that time and approval of ~~the Company’s~~our board of directors.

~~Regulatory Capital Requirements.~~Bank and bank holding company regulatory authorities in the United States impose certain capital standards on all bank holding companies and banks. These capital standards require compliance with capital adequacy guidelines and prompt corrective action regulations and involve quantitative measures of assets, liabilities and certain minimum “risk-based capital ratios” and a minimum “leverage ratio.” The risk-based capital ratios consist of (1) Tier 1 capital (i.e. common stockholders’ equity excluding goodwill, certain intangibles and net unrealized gains and losses on AFS investment securities, and including,off-balance-sheet items, which are subject to ~~limitations, trust preferred securities (“TPS”), certain types of preferred stock~~risk weightings and various other qualifying items) to risk-weighted assets and (2) total capital (Tier 1 capital plus Tier 2 capital, including the qualifying portion of the allowance for loan and lease losses and the portion of TPS not counted as Tier 1 capital) to risk-weighted assets. The leverage ratio is measured as Tier 1 capital to adjusted quarterly average assets.

The Company’s and the Bank’s risk-based capital and leverage ratios exceeded these minimum requirements, as well as the minimum requirements to be considered “well capitalized,” at both September 30, 2014 and December 31, 2013, and are presented in the following tables.

~~Basel III.~~ On July 9, 2013, the FDIC and other federal banking regulators issued a final rule that ~~will~~ substantially ~~revise~~revised the risk-based capital requirements applicable to bank holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”) and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection ~~Act.~~Act (the “Basel III Rules”). The ~~final rule applies~~Basel III Rules became effective for the Company and the Bank on January 1, 2015 (subject to ~~all depository institutions, top-tier bank holding companies with total consolidated assets~~a phase-in period for certain provisions). The Basel III Rules require the maintenance of ~~$500 million or more~~minimum amounts and ~~top-tier savings and loan holding companies.~~

~~The rule establishes a new~~ratios (set forth in the table below) of common equity ~~Tier~~tier 1 ~~minimum~~ capital, ~~requirement (4.5%~~tier 1 capital and total capital (as defined in the regulations) to risk-weighted assets (as defined), and of ~~risk-weighted assets), increases~~tier 1 capital to adjusted quarterly average assets (as defined).

Under the ~~minimum~~ new Basel III Rules, common equity tier 1 capital consists of common stock and paid-in capital (net of treasury stock) and retained earnings. Common equity tier 1 capital is reduced by goodwill, certain intangible assets, net of associated deferred tax liabilities, deferred tax assets that arise from tax credit and net operating loss carryforwards, net of any valuation allowance, and certain other items as specified by the Basel III Rules.

Tier 1 capital includes common equity tier 1 capital and certain additional tier 1 items as provided under the Basel III Rules. The tier 1 capital for our holding company consists of common equity tier 1 capital and $118 million of trust preferred securities issued by the Trusts. The Basel III Rules include certain provisions that would require trust preferred securities to ~~risk-based~~be phased out of qualifying tier 1 capital. Currently, our trust preferred securities are grandfathered under the Basel III Rules and will continue to be included as tier 1 capital. However, should we continue to grow and exceed $15 billion in total assets, ~~requirement (from 4.0%~~the grandfather provisions applicable to 6.0% of risk-weighted assets) and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property.

The rule also includes changes in what constitutes regulatory capital, some of which are subject to a two-year transition period. These changes include the phasing-out of certain instruments as qualifying capital. In addition, Tier 2 capital isour trust preferred securities may no longer ~~limited to~~apply, depending on whether we cross the ~~amount of Tier~~$15 billion threshold through organic growth or by acquisition. The common equity tier 1 capital ~~included in total capital. Mortgage servicing rights, certain deferred tax assets~~ and ~~investments in unconsolidated subsidiaries over designated percentages of common stock will be required to be deducted from~~the tier 1 capital ~~subject to a two-year transition period. Finally,~~are the ~~new rules~~same for our bank subsidiary.

Basel III Rules allow for insured depository institutions to make a one-time election not to include most elements of accumulated other comprehensive income in regulatory capital and instead effectively use the existing treatment under the general risk-based capital rules. Insured depository institutions, including the Company and Bank, must make their accumulated

other comprehensive income opt-out election in the first Consolidated Reports of Condition and Income (“Call Report”), Consolidated Financial Statements for Bank Holding Companies (“FR Y-9C”) and Parent Company Only Financial Statements for Large Bank Holding Companies (“FR Y-9LP”) reports that are filed for the first quarter of 2015. We made this opt-out election in our Call Report, FR Y-9C and FR Y-9LP filed for the first quarter of 2015 to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of our investments securities portfolio.

Total capital includes tier 1 capital and tier 2 capital. Tier 2 capital includes, among other things, the allowable portion of the ALLL and any trust preferred securities that are excluded from tier 1 capital.

The ~~new capital requirements~~Basel III Rules also ~~include changes in~~changed the risk-weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and the unsecured portion of non-residential mortgage loans that are 90 days past due or otherwise on nonaccrual status; a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (up from 100%) for mortgage servicing rights and deferred tax assets that are not deducted from capital; and increased risk weights (from 0% to up to 600%) for equity exposures.

~~Finally,~~The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the ~~rule limits~~respective capital amounts by risk-weighted assets. The leverage ratio is calculated by dividing tier 1 capital by adjusted quarterly average total assets.

The Basel III Rules limit capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity ~~Tier~~tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet ~~its~~ minimum risk-based capital requirements.

~~The final rule becomes effective on January 1, 2015.~~ The capital conservation buffer ~~requirement~~ will be phased in beginning January 1, 2016, at 0.625% of risk-weighted assets, increasing each year until fully implemented at 2.5% on January 1, 2019. ~~While~~When fully phased in on January 1, 2019, the Basel III Rules will require us to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% capital conservation buffer, which effectively results in a minimum ratio of 7.0% upon full implementation, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer, which effectively results in a minimum ratio of 8.50% upon full implementation, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer, which effectively results in a minimum ratio of 10.5% upon full implementation and (iv) a minimum leverage ratio of 4.0%.

The following table presents actual and required capital ratios as of June 30, 2015 for the Company ~~continues~~and the Bank under the Basel III Rules. The minimum required capital amounts presented include the minimum required capital levels as of June 30, 2015 based on the phase-in provisions of the Basel III Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Rules have been fully phased-in. Capital levels required to ~~evaluate~~be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the ~~impact~~changes under the Basel III Rules.

The following table presents actual and required capital ratios as of ~~these rules, it does not believe the adoption of these new rules will result in~~December 31, 2014 for the Company orand the Bank ~~no longer being~~under the regulatory capital rules then in effect.

As of June 30, 2015, capital levels at both the Company and the Bank exceed all capital adequacy requirements under the Basel III Rules on a fully phased-in basis. Based on the ratios presented above, capital levels as of June 30, 2015 exceed the minimum levels necessary to be considered ~~well-capitalized.~~“well capitalized.”

Bank Liquidity.Liquidity represents an institution’s ability to provide funds to satisfy demands from depositors, borrowers and other creditors by either converting assets into cash or accessing new or existing sources of incremental funds. Liquidity risk arises from the possibility ~~the Company~~we may be unable to satisfy current or future funding requirements and needs. The ALCO and Investments Committee (“ALCO”), which reports to the board of directors, has primary responsibility for oversight of ~~the Company’s~~our liquidity, funds management, asset/liability (interest rate risk) position and investment portfolio functions.

The objective of managing liquidity risk is to ensure the cash flow requirements resulting from depositor, borrower and other creditor demands are met, as well as operating cash needs of the Company, and the cost of funding such requirements and needs is reasonable. ~~The Company maintains~~We maintain an interest rate risk, liquidity and funds management policy and a contingency funding plan that, among other things, include policies and procedures for managing liquidity risk. Generally ~~the Company relies~~we rely on deposits, repayments of loans ~~leases, covered loans~~ and ~~purchased non-covered loans,~~leases, and repayments of ~~its~~our investment securities as ~~its~~our primary sources of funds. ~~The~~Our principal deposit sources ~~utilized by the Company~~ include consumer, commercial and public funds customers in ~~the Company’s~~our markets. ~~The Company has~~We have used these funds, together with wholesale deposit sources such as brokered deposits, along with ~~FHLB-Dallas~~FHLB advances, federal funds purchased and other sources of short-term borrowings, to make loans and leases, acquire investment securities and other assets and to fund continuing operations.

Deposit levels may be affected by a number of factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions and other factors. Loan and lease repayments are generally a relatively stable source of funds but are subject to the borrowers’ and lessees’ ability to repay the loans and leases, which can be adversely affected by a number of factors including changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters and other factors. Furthermore, loans and leases generally are not readily convertible to cash. Accordingly, ~~the Company~~we may be required from time to time to rely on secondary sources of liquidity to meet growth in loans and leases and deposit withdrawal demands or otherwise fund operations. Such secondary sources include ~~FHLB-Dallas~~wholesale deposit sources, FHLB advances, secured and unsecured federal funds lines of credit from correspondent banks, ~~wholesale deposit sources and~~ FRB ~~borrowings.~~borrowings and/or accessing the capital markets.

At ~~September~~June 30, ~~2014 the Company~~2015, we had substantial unused borrowing availability. This availability was primarily comprised of the following four options: (1) ~~$984 million~~$1.66 billion of available blanket borrowing capacity with the ~~FHLB-Dallas,~~FHLB, (2) ~~$167~~$137 million of investment securities available to pledge for federal funds or other borrowings, (3) ~~$137~~$170 million of available unsecured federal funds borrowing lines and (4) up to ~~$133~~$149 million of available borrowing capacity from borrowing programs of the FRB.

~~The Company anticipates it~~We anticipate we will continue to rely primarily on deposits, repayments of loans and leases ~~covered loans and purchased non-covered loans,~~ and repayments of ~~its~~our investment securities to provide liquidity, as well as other funding sources as appropriate. Additionally, where necessary, the sources of borrowed funds described above will be used to augment ~~the Company’s~~our primary funding sources.

Sources and Uses of Funds.Operating activities provided ~~$48.2~~net cash of $44.9 million for the first ~~nine~~six months of ~~2014~~2015 and ~~$42.8~~$20.1 million for the first ~~nine~~six months of ~~2013.~~2014. Net cash used or provided by operating activities is comprised primarily of net income, adjusted for non-cash items and for changes in various operating assets and liabilities.

Investing activities used ~~$382.3 million and $79.8~~net cash of $39.2 million in the first ~~nine~~six months of 2015 and used $118.8 million in the first six months of 2014. The decrease in net cash used by investing activities of $79.6 million was primarily the result of the net cash of $274.3 million received in the Intervest acquisition. Additionally, the net activity in our investment securities portfolio provided $76.8 million during the first six months of 2015 compared to $43.0 million during the first six months of 2014. The current low interest rate environment has resulted in many issuers of investment securities, particularly tax-exempt municipal securities, to call higher rate securities and refinance such securities at lower interest rates. The investing cash flow provided by our Intervest transaction and investment securities portfolio was partially offset by investing activities cash flow used to purchase $85.0 million in BOLI policies during the first six months of 2015 compared to no BOLI purchases during the first six months of 2014 and ~~2013, respectively. Net activity~~investing activities cash flow used to fund the continued growth in ~~the Company’s investment securities~~our loan and lease portfolio, ~~provided $76.7 million and~~which used ~~$51.3~~$338.0 million in the first ~~nine~~six months of ~~2014 and 2013, respectively. Net non-purchased loans and leases used $1.0 billion and $428.3~~2015 compared to $332.3 million in the first ~~nine~~six months of ~~2014 and 2013, respectively. Payments received on purchased non-covered loans~~2014.

Financing activities provided ~~$253.3~~$359.0 million and $37.7 million for the first nine months of 2014 and 2013, respectively. Payments received on covered loans provided $97.9 million and $177.1 million for the first nine months of 2014 and 2013, respectively, and payments received from the FDIC under loss share agreements provided $24.8 million and $67.0 million for the first nine months of 2014 and 2013, respectively. Other loss share activity provided $15.3 million and $21.6 million for the first nine months of 2014 and 2013, respectively. The Company had proceeds from sales of other assets of $54.4 million and $48.0$13.4 million in the first ~~nine~~six months of 2015 and 2014, ~~and 2013,~~ respectively. ~~Purchases~~The increase in net cash provided by financing activities was primarily the result of ~~premises and equipment used $10.4~~an increase in net cash provided by our deposit activities, which provided $406.3 million ~~and $7.8 million in~~during the first ~~nine~~six months of ~~2014~~2015 to help fund our loan and ~~2013, respectively. Net~~lease growth compared to $41.2 million of net cash ~~invested in unconsolidated investments~~ provided ~~$1.3 million and used $0.6 million in~~during the first ~~nine~~six months of ~~2014 and 2013, respectively. Net~~2014. This increase in financing activities cash ~~received in merger and acquisition transactions totaled $121.9 million and $56.8 million for the first nine months of 2014 and 2013, respectively.~~

~~Financing~~flows provided by our deposit activities provided $250.1 million and used $46.5 million in the first nine months of 2014 and 2013, respectively. Net changes in deposit accounts provided $196.7 million and used $47.1 million in the first nine months of 2014 and 2013, respectively. Net repaymentswas partially offset by our repayment of other borrowings, ~~and repurchase agreements with customers provided $75.6~~which used $31.4 million ~~and $14.4 million in~~during the first ~~nine~~six months of 2014 and 2013, respectively. The Company paid common stock cash dividends of $26.2 million and $18.0 million in the first nine months of 2014 and 2013, respectively. Proceeds from and excess tax benefits on exercise and forfeiture of stock options provided $3.7 million and $4.1 million in the first nine months of 2014 and 2013, respectively.2015.

Off-Balance Sheet Commitments.~~The Company is~~We are party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of ~~its~~our customers. These financial instruments primarily include commitments to extend credit and standby letters of credit. See Note 9 to the Consolidated Financial Statements for more information about ~~the Company’s~~our outstanding guarantees and commitments as of ~~September~~June 30, ~~2014.~~2015.

~~The Company is continuing its growth and~~~~de novo~~De Novo Growth.~~branching strategy. On January 2,~~In 2014 ~~the Company~~we opened a loan production ~~office~~offices for ~~its~~our Real Estate Specialties Group, ~~(“RESG”)~~or RESG, in Houston, Texas and ~~on February 24, 2014, it opened an RESG loan production office~~ in Los Angeles, California. ~~On February 26, 2014, the Company relocated its Savannah, Georgia office from a leased facility to a bank-owned facility and on March 11, 2014,~~We also opened a third retail banking office in Bradenton, ~~Florida. On May 19, 2014, the Company opened~~Florida, a retail banking office in Cornelius, North Carolina and ~~on August 26, 2014, the Company opened a loan production office in Asheville, North Carolina. During the fourth quarter of 2014, it expects to open~~ a retail banking office in Hilton Head Island, South Carolina. In the second half of 2015, we expect to open our fourth retail banking office in Houston, Texas and a loan production office in Greensboro, North Carolina. During 2016, we expect to open our first retail banking office in Siloam Springs in northwest Arkansas, our second retail banking office in Springdale, Arkansas, our third retail banking office in Fayetteville, Arkansas and our first retail banking office in McKinney, Texas.

We intend to continue our growth andde novo branching strategy in the future years through the opening of additional branches and loan production offices. Opening new offices is subject to local banking market conditions, availability of suitable sites, hiring qualified personnel, obtaining regulatory and other approvals and many other conditions and contingencies that ~~the Company~~we cannot predict with certainty. ~~The Company~~We may increase or decrease ~~its~~our expected number of new office openings as a result of a variety of factors including ~~the Company’s~~our financial results, changes in economic or competitive conditions, strategic opportunities or other factors.

During the first ~~nine~~six months of ~~2014, the Company~~2015, we spent ~~$10.3~~$9.7 million on capital expenditures for premises and equipment. ~~The Company’s~~Our capital expenditures for ~~2014~~2015 are expected to be in the range of ~~$12~~$15 million to ~~$15~~$25 million, including progress payments on construction projects expected to be completed in ~~2014~~2015 and ~~2015,~~2016, furniture and equipment costs and acquisition of sites for future development. Actual expenditures may vary significantly from those expected, depending on the

number and cost of additional branch offices acquired or constructed and sites acquired for future development, progress or delays encountered on ongoing and new construction projects, delays in or inability to obtain required approvals, potential premises and equipment expenditures associated with acquisitions, if any, and other factors.

Acquisitions.We have shown substantial growth through a combination of organic growth and acquisitions. Since 2010, we have completed 13 acquisitions, including seven FDIC-assisted transactions.

On ~~March 5, 2014, the Company~~February 10, 2015, we completed ~~its~~our acquisition of Bancshares and its wholly-owned bank subsidiary OMNIBANK, N.A. The acquisition of Bancshares expanded the Company’s service area in south Texas by adding offices in Houston (3), San Antonio, Austin, Cedar Park and Lockhart.

On May 16, 2014, the Company completed its acquisition of Summit and its wholly-owned bank subsidiary, Summit Bank. The acquisition of Summit expanded the Company’s service area by adding 23 retail banking offices in central, western and southwestern Arkansas, and a loan production office in Ft. Smith, Arkansas. On May 19, 2014, the Company closed the loan production office in Ft. Smith, and on June 20, 2014, the Company closed one of the retail banking offices in Conway, Arkansas. The Company continues to evaluate its retail banking offices in Arkansas, including the offices acquired in the Summit acquisition, and expects to close up to an additional eight Arkansas offices in the remainder of 2014 or in the first half of 2015.

~~On July 31, 2014, the Company entered into a definitive agreement and plan of merger (the “Intervest Agreement”) with~~ Intervest ~~Bancshares Corporation (“Intervest”),~~ and its wholly-owned bank subsidiary Intervest National Bank, ~~(“INB”),~~ headquartered in New York, New ~~York, whereby the Company will acquire all of the outstanding common stock~~York. The acquisition of Intervest ~~in a transaction valued at approximately $228.5 million. INB operates~~added seven full service banking offices including one in New York City, five in Clearwater, Florida and one in Pasadena, Florida.

~~Under the terms~~On August 5, 2015, we completed our acquisition of Bank of the ~~Intervest Agreement, each outstanding share of common stock of Intervest will be converted into the right to receive shares~~Carolinas Corporation (“BCAR”) and its wholly-owned bank subsidiary Bank of the ~~Company’s common stock, plus cash~~Carolinas, headquartered in ~~lieu~~Mocksville, North Carolina. The acquisition of ~~any fractional share, all subject to certain conditions~~BCAR added eight full service banking offices in North Carolina, including one each in Advance, Asheboro, Concord, Harrisburg, Landis, Lexington, Mocksville and potential adjustments. The number of Company shares to be issued will be determined based on the Company’s 10-day average closing stock price as of the fifth business day prior to the closing date, subject to a minimum price of $23.95 per share and a maximum price of $39.91 per share. Upon the closing of the transaction, Intervest will merge into the Company and INB will merge into the Bank. Completion of the transaction is subject to certain closing conditions, including receipt of customary regulatory approvals and the approval of Intervest’s stockholders.Winston-Salem.

~~The Company expects~~We expect to continue growing through both ~~its~~ourde novo branching strategy and traditional acquisitions. With respect to ~~its~~ourde novo branching strategy, futurede novo branches are expected to be focused in ~~the seven~~ states ~~in which the Company has retail~~where we currently have banking offices ~~including Arkansas, Georgia, Texas, North Carolina, Florida, Alabama~~ and ~~South Carolina.~~we expect to begin focusing on larger markets and MSAs across the U.S. where we currently do not have offices. Future RESG loan production offices are expected to be focused in strategically important markets (most likely Washington, D.C., Seattle, Boston and Chicago). With respect to traditional acquisitions, the Company is focusing primarily on opportunities in the seven states in which it operates retail banking offices, although the Company may consider opportunities outside this seven state area. The Company iswe are seeking acquisitions that are either immediately accretive to book value, tangible book value, ~~net income~~ and diluted earnings per ~~common~~ share, or strategic in location, or both.

See Note 1418 to the Consolidated Financial Statements for a discussion of certain recently issued and recently adopted accounting pronouncements.

Interest rate risk results from timing differences in the repricing of assets and liabilities or from changes in relationships between interest rate indexes. ~~The Company’s~~Our interest rate risk management is the responsibility of ALCO, which reports to the board of directors.

~~The Company~~We regularly ~~reviews its~~review our exposure to changes in interest rates. Among the factors considered are changes in the mix of interest earning assets and interest bearing liabilities, interest rate spreads and repricing periods. Typically, ALCO reviews on at least a quarterly basis ~~the Company’s~~our relative ratio of rate sensitive assets (“RSA”) to rate sensitive liabilities (“RSL”) and the related cumulative gap for different time periods. However, the primary tool used by ALCO to analyze ~~the Company’s~~our interest rate risk and interest rate sensitivity is an earnings simulation model.

This earnings simulation modeling process projects a baseline net interest income (assuming no changes in interest rate levels) and estimates changes to that baseline net interest income resulting from changes in interest rate levels. ~~The Company relies~~We rely primarily on the results of this model in evaluating ~~its~~our interest rate risk. This model incorporates a number of additional factors including: (1) the expected exercise of call features on various assets and liabilities, (2) the expected rates at which various RSA and RSL will reprice, (3) the expected growth in various interest earning assets and interest bearing liabilities and the expected interest rates on new assets and liabilities, (4) the expected relative movements in different interest rate indexes which are used as the basis for pricing or repricing various assets and liabilities, (5) existing and expected contractual cap and floor rates on various assets and liabilities, (6) expected changes in administered rates on interest bearing transaction, savings, money market and time deposit accounts and the expected impact of competition on the pricing or repricing of such accounts, (7) the timing and amount of cash flows expected to be received on ~~covered~~purchased loans ~~purchased non-covered loans, and the FDIC loss share receivable~~ and (8) other relevant factors. Inclusion of these factors in the model is intended to more accurately project ~~the Company’s~~our expected changes in net interest income resulting from interest rate changes. ~~The Company~~We typically ~~models its~~model our change in net interest income assuming interest rates go up 100 bps, up 200 bps, up 300 bps, up 400 bps, down 100 bps, down 200 bps, down 300 bps and down 400 bps. Based on current conditions, ~~the Company believes~~we believe that modeling ~~its~~our change in net interest income assuming interest rates go down 100 bps, down 200 bps, down 300 bps and down 400 bps is not meaningful. For purposes of this model, ~~the Company has~~we have assumed that the change in interest rates phases in over a 12-month period. While ~~the Company believes~~we believe this model provides a reasonably accurate projection of ~~its~~our interest rate risk, the model includes a number of assumptions and predictions which may or may not be correct and may impact the model results. These assumptions and predictions include inputs to compute baseline net interest income, growth rates, expected changes in administered rates on interest bearing deposit accounts, competition and a variety of other factors that are difficult to accurately predict. Accordingly, there can be no assurance the earnings simulation model will accurately reflect future results.

The following table presents the earnings simulation model’s projected impact of a change in interest rates on the projected baseline net interest income for the 12-month period commencing ~~October~~July 1, ~~2014.~~2015. This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve or the impact of any possible future acquisitions.

In the event of a shift in interest rates, management may take certain actions intended to mitigate the negative impact to net interest income or to maximize the positive impact to net interest income. These actions may include, but are not limited to, restructuring of interest earning assets and interest bearing liabilities, seeking alternative funding sources or investment opportunities and modifying the pricing or terms of loans, leases and deposits.

An evaluation as of the end of the period covered by this quarterly report was carried out under the supervision and with the participation of ~~the Company’s~~our management, including ~~the Company’s~~our Chairman and Chief Executive Officer and ~~the Company’s~~our Chief Financial Officer and Chief Accounting Officer, of the effectiveness of the design and operation of ~~the Company’s~~our “disclosure controls and procedures,” which are defined under SEC rules as controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods. Based upon that evaluation, ~~the Company’s~~our Chairman and Chief Executive Officer and ~~its~~our Chief Financial Officer and Chief Accounting Officer concluded that ~~the Company’s~~our disclosure controls and procedures were effective.

~~The Company’s~~Our management, including ~~the Company’s~~our Chairman and Chief Executive Officer and ~~the Company’s~~our Chief Financial Officer and Chief Accounting Officer, has evaluated any changes in ~~the Company’s~~our internal control over financial reporting that occurred during the quarterly period covered by this ~~report. In the third quarter of 2014, the Company completed the conversion of its core banking system to Fiserv. Except for those changes,~~report and has concluded that there were no changes during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

On January 5, 2012, the Company and the Bank were served with a summons and complaint filed on December 19, 2011, in the Circuit Court of Lonoke County, Arkansas, Division III, styledRobert Walker, Ann B. Hines and Judith Belk vs. Bank of the Ozarks, Inc. and Bank of the Ozarks, Case No. CV-2011-777. In addition, on December 21, 2012, the Bank was served with a summons and complaint filed on December 20, 2012, in the Circuit Court of Pulaski County, Arkansas, Ninth Division, styledAudrey Muzingo v. Bank of the Ozarks, Case No. 60 ~~CV 12-6043.~~CV-12-6043. The complaint in each case alleges that the Company and/or Bank have harmed the plaintiffs, current or former customers of the Bank, by improper, unfair, and unconscionable assessment and collection of excessive overdraft fees from the plaintiffs. According to the complaints, plaintiffs claim that the Bank employs sophisticated software to automate its overdraft system, and that this system unfairly and inequitably manipulates and alters customers’ transaction records in order to maximize overdraft penalties, particularly utilizing a practice of posting of items in “high-to-low” order, despite the actual sequence in which such items are presented for payment. Plaintiffs claim that the Bank’s deposit agreements with customers do not adequately disclose the Bank’s overdraft assessment policies and are ambiguous, deceptive, unfair, and misleading. The complaint in each case alleges that these actions and omissions constitute breach of contract, breach of the implied covenant of good faith and fair dealing, unconscionable conduct, conversion, unjust enrichment, and violation of the Arkansas Deceptive Trade Practices Act. The complaint in theWalker case also includes a count for conversion. Each of the complaints seeks to have the cases certified by the court as a class action for all Bank account holders similarly situated, and seeks a declaratory judgment as to the wrongful nature of the Bank’s overdraft fee policies, restitution of overdraft fees paid by the plaintiffs and the putative class (defined as all Bank customers residing in Arkansas) as a result of the actions cited in the complaints, disgorgement of profits as a result of the alleged wrongful actions, and unspecified compensatory and statutory or punitive damages, together with pre-judgment interest, costs, and plaintiffs’ attorneys’ fees.

The Company and Bank filed a motion to dismiss and to compel arbitration in theWalker case. The trial court denied the motion and found that the arbitration provision contained in the controlling Consumer Deposit Account Agreement was unconscionable and thus unenforceable on the grounds that the provision was the result of unequal bargaining power. The Company and Bank appealed the trial court’s ruling to the Arkansas Court of Appeals on an interlocutory basis. On September 18, 2013, a three-judge panel of the Arkansas Court of Appeals reversed the trial court’s ruling and remanded the case to the trial court for the purpose of entering an order compelling arbitration. On October 7, 2013, the plaintiffs filed petitions for reconsideration and review before the Arkansas Court of Appeals and Arkansas Supreme Court, respectively. On October 30, 2013, the Arkansas Court of Appeals denied the plaintiffs’ petition for reconsideration. In January 2014, the Arkansas Supreme Court granted the plaintiff’s petition for review. Oral arguments were presented to the Arkansas Supreme Court on May 1, 2014. On May 15, 2014, the Arkansas Supreme Court vacated the Arkansas Court of Appeals’ decision, reversing and remanding the case to the trial court to determine, in the first instance, whether there is a valid agreement to arbitrate disputes between the named plaintiffs and the Bank.

~~At this stage, the trial court must determine (i) whether there is a valid and binding agreement to arbitrate between the named plaintiffs and the Bank, (ii) whether the dispute at issue in the~~~~Walker~~ ~~case falls within the scope of the agreement to arbitrate, and, then, (iii) whether the named plaintiffs have a defense, such as unconscionability, to invalidate the agreement to arbitrate.~~ An evidentiary hearing was conducted by the trial court on the arbitration issue on October 1, 2014, and the trial court ~~has taken~~took the matter under advisement. On October 30, 2014, the trial court issued an order once again denying the Company and Bank’s motion to dismiss and to compel arbitration. The trial court ruled that the Consumer Deposit Account Agreement containing the arbitration provision was not enforceable because of a lack of mutual agreement and lack of mutual obligation. The Company and Bank have appealed the trial court’s ruling to the Arkansas Supreme Court on an interlocutory basis. The Company and Bank filed their initial appellate brief on April 14, 2015. The plaintiffs filed their appellate brief on May 14, 2015, and the Company and the Bank filed their reply brief on May 29, 2015. The Arkansas Supreme Court has determined that oral arguments are unnecessary. A ruling from the Arkansas Supreme Court is expected in September or October of 2015.

The Plaintiff in theMuzingo case has agreed to stay the proceedings in that case pending the outcome of the ~~hearing~~appeal in theWalkercase. The Company and the Bank believe the Plaintiffs’ claims in each of these cases are unfounded and subject to meritorious defenses and intend to vigorously defend against these claims.

~~On August 7, 2014, a putative class action complaint, captioned~~~~Greentech Research LLC v. Callen, et al.~~ (the “Greentech Action”), was filed in the Supreme Court of the State of New York for New York County, by an entity purporting to be a stockholder of Intervest. On August 19, 2014, a putative class action complaint, captioned~~Sonnenberg v. Intervest Bancshares Corp., et al.~~, was filed in the Supreme Court of the State of New York for New York County, by an individual purporting to be a stockholder of Intervest. Each of the complaints alleges that the directors of Intervest breached their fiduciary duties to Intervest’s stockholders in connection with the proposed merger between Intervest and the Company by approving a transaction pursuant to an allegedly inadequate process that undervalues Intervest and includes preclusive deal protection provisions; and that Intervest and the Company allegedly aided and abetted the Intervest directors in breaching their duties to Intervest’s stockholders. The complaints seek court certification of the respective plaintiffs as class representatives and request that such proceedings proceed as stockholder class actions, and various remedies, including enjoining the merger from being consummated in accordance with its agreed-upon terms, rescission or an award of rescissory damages in the event that the merger is consummated, an accounting by the defendants to the plaintiff class for all damages caused by the defendants, recovery of plaintiffs’ costs and attorneys’ and experts’ fees relating to the lawsuit, and such further relief as the court deems just and proper. As of September 17, 2014, the individual plaintiffs and the defendants stipulated to the court that the two actions, as well

as any further actions brought in the same court, should be consolidated for further proceedings in the same court in order to minimize expense and promote a more efficient proceeding. On October 14, 2014, the plaintiff in the Greentech Action filed an amended complaint alleging, among other things, inadequacy of the disclosures contained in the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by the Company on September 29, 2014. The Company ~~and the Bank deny the allegations in the complaints and intend to vigorously defend against these lawsuits.~~

~~The Company and/or the Bank are parties~~is party to various other legal proceedings, as both plaintiff and defendant, arising in the ordinary course of business, including claims of lender liability, broken promises, and other similar lending-related claims. While the ultimate resolution of these various claims and proceedings cannot be determined at this time, management of the Company believes that such claims and proceedings, individually or in the aggregate, will not have a material adverse effect on the future results of operations, financial condition, or liquidity of the Company.

~~The discussion~~There were no material changes from the risk factors set forth under Part I, Item 1A of the Company’s ~~business and operations should be read together with the risk below and the risk factors contained in Item 1A of its~~ Annual Report on Form 10-K for the year ended December 31, 2013, which describes various risks and uncertainties to which the Company is or may be subject. These risks and uncertainties have the potential to affect the Company’s business, financial condition, results of operations, and prospects in a material adverse manner.

~~The Company May Be Subject to Claims and Litigation Pertaining to Fiduciary Responsibility.~~

From time to time as part of the Company’s normal course of business, customers may make claims and take legal action against the Company based on its actions or inactions related to the Bank’s fiduciary responsibilities of its Trust and Wealth Management Division. If such claims and legal actions are not resolved in a manner favorable to the Company, they may result in financial liability and/or adversely affect the market perception of the Company and its products and services. Any financial liability or reputation damage could have a material adverse effect on the Company’s business, which, in turn, could have a material adverse effect on its financial condition and results of operations.2014.

~~The Company~~We had no unregistered sales of equity securities and did not purchase any shares of ~~its~~our common stock during the period covered by this report.

Reference is made to the Exhibit Index set forth immediately following the signature page of this report.

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Definition Linkbase

101.LAB		XBRL Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase


ARKANSAS		71-0556208
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer
~~incorporation or organization)~~		Identification Number)


17901 CHENAL PARKWAY, LITTLE ROCK, ARKANSAS		72223
(Address of principal executive offices)		(Zip Code)


Class		Outstanding at ~~September 30, 2014~~July 31, 2015
Common Stock, $0.01 par value per share		~~79,704,950~~86,813,057



PART I.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheets as of ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 and December 31, ~~2013~~2014	1

	Consolidated Statements of Income for the Three Months Ended ~~September~~June 30, 2015 and 2014 and ~~2013 and~~for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014	2

	Consolidated Statements of Comprehensive Income for the Three Months Ended ~~September~~June 30, 2015 and 2014 and ~~2013 and~~for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014	3

	Consolidated Statements of Stockholders’ Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014	4

	Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3833

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8465

Item 4.	Controls and Procedures	8566

PART II.	Other Information

Item 1.	Legal Proceedings	8667

Item 1A.	Risk Factors	8768

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8768

Item 3.	Defaults Upon Senior Securities	8768

Item 4.	Mine Safety Disclosures	8768

Item 5.	Other Information	8768

Item 6.	Exhibits	8768

Signature		8869

Exhibit Index		8970


	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
	(Dollars in thousands)
Balances – January 1, 2013	$	706	$	72,690	$	423,485		$	10,783		$	3,442		$	511,106
Net income		0		0		66,875			0			0			66,875
Earnings attributable to noncontrolling interest		0		0		(36	)		0			36			0
Total other comprehensive loss		0		0		0			(11,236	)		0			(11,236	)
Common stock dividends		0		0		(18,036	)		0			0			(18,036	)
Issuance of 356,800 split-adjusted shares of common stock for exercise of stock options		4		2,613		0			0			0			2,617
Excess tax benefit on exercise and forfeiture of stock options		0		1,458		0			0			0			1,458
Issuance of 2,514,770 split-adjusted shares of common stock for acquisition of The First National Bank of Shelby, net of issuance costs of $285,000		25		59,769		0			0			0			59,794
Stock-based compensation expense		0		3,238		0			0			0			3,238

Balances – September 30, 2013, as recast	$	735	$	139,768	$	472,288		$	(453	)	$	3,478		$	615,816

Balances – January 1, 2014, as recast	$	737	$	143,017	$	488,978		$	(3,672	)	$	3,470		$	632,530
Net income		0		0		83,826			0			0			83,826
Earnings attributable to noncontrolling interest		0		0		29			0			(29	)		0
Total other comprehensive income		0		0		0			14,396			0			14,396
Common stock dividends		0		0		(26,166	)		0			0			(26,166	)
Issuance of 228,600 split-adjusted shares of common stock for exercise of stock options		2		2,065		0			0			0			2,067
Forfeiture of 1,200 split-adjusted shares of unvested common stock under restricted stock plan		0		0		0			0			0			0
Excess tax benefit on exercise and forfeiture of stock options		0		1,649		0			0			0			1,649
Stock-based compensation expense		0		4,402		0			0			0			4,402
Issuance of 5,765,846 split-adjusted shares of common stock for acquisition of Summit Bancorp, Inc., net of issuance costs of $87,000		58		166,257		0			0			0			166,315

Balances – September 30, 2014	$	797	$	317,390	$	546,667		$	10,724		$	3,441		$	879,019


	February 10, 2015
	As Recorded by Intervest			Fair Value Adjustments⁽¹⁾			Recast Adjustment			As Recorded by the Company⁽¹⁾
	(Dollars in thousands)
Assets acquired:
Cash, due from banks and interest earning deposits	$	274,343		$	0		$	0		$	274,343
Investment securities		21,495			321	a		0			21,816
Loans		1,108,439			(33,868	) b		4,393			1,078,964
Allowance for loan losses		(25,208	)		25,208	b		0			0
Premises and equipment		4,357			2,256	c		0			6,613
Foreclosed assets		2,350			(1,710	) d		0			640
Accrued interest receivable and other assets		34,076			(4,091	) e		(689	)		29,296
Core deposit intangible asset		0			4,595	f		0			4,595
Deferred income taxes		11,758			8,082	g		(985	)		18,855

Total assets acquired		1,431,610			793			2,719			1,435,122


Liabilities assumed:
Deposits		1,162,437			22,211	h		0			1,184,648
Subordinated debentures		56,702			(4,463	) i		0			52,239
Accrued interest payable and other liabilities		3,608			358	j		0			3,966

Total liabilities assumed		1,222,747			18,106			0			1,240,853

Net assets acquired	$	208,863		$	(17,313	)	$	2,719			194,269

Consideration paid:
Cash in lieu of fractional shares											(7	)
Stock											(238,476	)

Total consideration paid											(238,483	)

Goodwill										$	44,214


	As Previously Reported		Recast Adjustment			As Recast
	(Dollars in thousands)

Purchased loans	$	2,042,164	$	4,393		$	2,046,557
Net deferred tax asset		63,483		(985	)		62,498
Goodwill		125,603		(2,719	)		122,884
Income taxes receivable		689		(689	)		0


	May 16, 2014
	As Recorded by Summit			Fair Value Adjustments				As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash, due from banks and interest earning deposits	$	84,106		$	(304	)	a	$	83,802
Investment securities		242,149			765		b		242,914
Loans and leases		742,546			(24,718	)	c		717,828
Allowance for loan losses		(13,183	)		13,183		c		0
Premises and equipment		13,773			(1,108	)	d		12,665
Foreclosed assets		3,094			(1,088	)	e		2,006
Accrued interest receivable and other assets		11,016			1,461		f		12,477
Bank owned life insurance		33,398			0				33,398
Core deposit intangible asset		0			15,340		g		15,340
Deferred income taxes		3,878			953		h		4,831

Total assets acquired		1,120,777			4,484				1,125,261

Liabilities assumed:
Deposits		965,687			4,074		i		969,761
Repurchase agreements with customers		16,515			0				16,515
Accrued interest payable and other liabilities		2,352			1,206		j		3,558

Total liabilities assumed		984,554			5,280				989,834

Net assets acquired	$	136,223		$	(796	)			135,427

Consideration paid:
Cash									42,451
Stock									166,402

Total consideration paid									208,853

Goodwill								$	73,426


	March 5, 2014
	As Recorded by Bancshares			Fair Value Adjustments				As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash and due from banks	$	102,156		$	0			$	102,156
Investment securities		1,860			(1	)	a		1,859
Loans and leases		165,939			(10,764	)	b		155,175
Allowance for loan losses		(5,280	)		5,280		b		0
Premises and equipment		6,259			1,619		c		7,878
Foreclosed assets		7,634			(2,916	)	d		4,718
Accrued interest receivable and other assets		608			(294	)	e		314
Core deposit intangible asset		0			2,648		f		2,648
Deferred income taxes		7,110			1,881		g		8,991

Total assets acquired		286,286			(2,547	)			283,739

Liabilities assumed:
Deposits		255,798			121		h		255,919
Accrued interest payable and other liabilities		1,358			295		i		1,653

Total liabilities assumed		257,156			416				257,572

Net assets acquired	$	29,130		$	(2,963	)			26,167

Total cash consideration paid									(21,500	)

Gain on acquisition								$	4,667


	July 31, 2013
	As Recorded by First National Bank			Fair Value Adjustments				Recast Adjustment		As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash and due from banks	$	69,285		$	0			$	0	$	69,285
Investment securities		149,943			(599	)	a		0		149,344
Loans and leases		432,250			(44,183	)	b		0		388,067
Allowance for loan losses		(13,931	)		13,931		b		0		0
Premises and equipment		14,318			5,064		c		0		19,382
Foreclosed assets		3,073			(915	)	d		0		2,158
Accrued interest receivable		1,234			(110	)	e		0		1,124
BOLI		14,812			0				0		14,812
Core deposit intangible asset		0			10,136		f		0		10,136
Deferred income taxes		12,179			12,325		g		4,102		28,606
Other assets		4,277			(251	)	e		0		4,026

Total assets acquired		687,440			(4,602	)			4,102		686,940

Liabilities assumed:
Deposits		595,668			4,950		h		0		600,618
Repurchase agreements with customers		6,405			0				0		6,405
Accrued interest payable and other liabilities		1,296			1,164		i		0		2,460

Total liabilities assumed		603,369			6,114				0		609,483

Net assets acquired	$	84,071		$	(10,716	)		$	4,102		77,457

Consideration paid:
Cash											(12,215	)
Common stock											(60,079	)

Total consideration paid											(72,294	)

Gain on acquisition										$	5,163


a-		~~Adjustment reflects the fair value adjustment based on the Company’s pricing of the acquired investment securities portfolio.~~
b-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired loan portfolio and to eliminate the~~
		~~recorded allowance for loan losses.~~
c-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the premises and equipment acquired.~~
d-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired foreclosed assets.~~
e-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of accrued interest receivable and other assets.~~
f-		~~Adjustment reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.~~
g-		This adjustment reflects the differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes. Management initially determined that acquired net operating loss carryforwards and other acquired assets with built-in losses were expected to be settled or otherwise recovered in future periods where the realization of such benefits would be subject to section 382 limitations. Accordingly, at the date of acquisition, the Company established a deferred tax asset valuation allowance of approximately $4.1 million to reflect its initial assessment that the realization of the benefits from the settlement or recovery of certain of these acquired assets and net operating losses was expected to be subject to section 382 limitations. During the second quarter of 2014, management determined such valuation allowance was not necessary. Accordingly, the Company’s acquisition of
		~~First National Bank has been recast to reflect such determination.~~
h-		~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired deposits.~~
i-		~~Adjustment reflects the amount needed to adjust other liabilities to estimated fair value and to record certain liabilities directly attributable to the acquisition of First National Bank.~~


	As Previously Reported			Recast Adjustment		As Recast
	(Dollars in thousands, except per share amounts)
September 30, 2013:
Deferred income tax asset valuation allowance	$	(4,102	)	$	4,102	$	0
Total stockholders’ equity before noncontrolling interest		608,236			4,102		612,338
Gain on merger and acquisition transaction		1,061			4,102		5,163
Net income available to common stockholders		62,737			4,102		66,839
Diluted earnings per common share, split adjusted	$	0.87		$	0.06	$	0.93


	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(Dollars in thousands)
Beginning balance	$	46,958		$	39,372		$	42,945		$	38,738
Non-purchased loans and leases charged off		(737	)		(754	)		(3,306	)		(3,203	)
Recoveries of non-purchased loans and leases previously charged off		185			142			1,167			925

Net non-purchased loans and leases charged off		(552	)		(612	)		(2,139	)		(2,278	)
Covered loans charged off		(205	)		(918	)		(925	)		(4,012	)
Purchased non-covered loans charged off		(282	)		0			(849	)		0

Net charge-offs – total loans and leases		(1,039	)		(1,530	)		(3,913	)		(6,290	)
Provision for loan and lease losses:
Non-purchased loans and leases		3,200			2,900			8,800			5,200
Covered loans		205			918			925			4,012
Purchased non-covered loans		282			0			849			0

Total provision		3,687			3,818			10,574			9,212

Ending balance	$	49,606		$	41,660		$	49,606		$	41,660


	FV 1		FV 2		Total Covered Loans
	(Dollars in thousands)
September 30, 2014:
Real estate:
Residential 1-4 family	$	86,067	$	2,208	$	88,275
Non-farm/non-residential		107,046		6,587		113,633
Construction/land development		23,970		3,648		27,618
Agricultural		9,539		338		9,877
Multifamily residential		3,513		315		3,828
Commercial and industrial		4,819		535		5,354
Consumer		61		3		64
Other		153		0		153

Total	$	235,168	$	13,634	$	248,802

December 31, 2013:
Real estate:
Residential 1-4 family	$	105,218	$	5,835	$	111,053
Non-farm/non-residential		138,573		25,135		163,708
Construction/land development		33,475		14,267		47,742
Agricultural		10,807		343		11,150
Multifamily residential		8,709		457		9,166
Commercial and industrial		8,582		137		8,719
Consumer		106		5		111
Other		142		0		142

Total	$	305,612	$	46,179	$	351,791

September 30, 2013:
Real estate:
Residential 1-4 family	$	114,163	$	6,378	$	120,541
Non-farm/non-residential		171,886		25,566		197,452
Construction/land development		40,172		19,215		59,387
Agricultural		11,203		1,138		12,341
Multifamily residential		9,153		215		9,368
Commercial and industrial		9,877		57		9,934
Consumer		132		6		138
Other		158		0		158

Total	$	356,744	$	52,575	$	409,319


	Purchased Non-Covered Loans Without Evidence of Credit Deterioration at Acquisition										Purchased Non-Covered Loans With Evidence of Credit Deterioration at Acquisition				Total Purchased Non-Covered
	FV 33		FV 44		FV 55		FV 36		FV 77		FV 66		FV 88		Loans
	(Dollars in thousands)
September 30, 2014:
Real estate:
Residential 1-4 family	$	74,617	$	81,344	$	30,058	$	75,815	$	143	$	17,236	$	60	$	279,273
Non-farm/non-residential		200,653		194,295		32,819		3,283		505		30,742		87		462,384
Construction/land development		28,857		33,070		9,607		13,783		9		9,011		0		94,337
Agricultural		12,510		26,723		3,053		1,933		0		189		0		44,408
Multifamily residential		9,877		13,019		7,226		940		72		2,764		781		34,679

Total real estate		326,514		348,451		82,763		95,754		729		59,942		928		915,081
Commercial and industrial		23,424		27,645		7,282		13,284		0		5,066		0		76,701
Consumer		2,498		884		627		16,023		0		429		0		20,461
Other		5,105		8,369		735		3,776		0		760		0		18,745

Total	$	357,541	$	385,349	$	91,407	$	128,837	$	729	$	66,197	$	928	$	1,030,988

December 31, 2013:
Real estate:
Residential 1-4 family	$	27,111	$	32,259	$	21,035	$	35,733	$	0	$	14,947	$	0	$	131,085
Non-farm/non-residential		42,193		72,621		20,685		1,191		0		16,258		0		152,948
Construction/land development		5,930		8,106		2,137		4,553		0		4,907		0		25,633
Agricultural		1,547		6,619		823		164		0		365		0		9,518
Multifamily residential		3,531		5,565		5,268		959		0		1,887		0		17,210

Total real estate		80,312		125,170		49,948		42,600		0		38,364		0		336,394
Commercial and industrial		9,592		9,730		2,250		1,879		0		1,483		0		24,934
Consumer		1,013		141		171		4,794		0		736		0		6,855
Other		1,202		2,897		157		237		0		47		0		4,540

Total	$	92,119	$	137,938	$	52,526	$	49,510	$	0	$	40,630	$	0	$	372,723

September 30, 2013:
Real estate:
Residential 1-4 family	$	28,486	$	34,113	$	21,592	$	36,221	$	0	$	16,311	$	0	$	136,723
Non-farm/non-residential		46,201		71,637		25,591		3,509		0		16,786		0		163,724
Construction/land development		5,973		8,578		2,495		4,680		0		5,052		0		26,778
Agricultural		2,109		6,705		851		173		0		242		0		10,080
Multifamily residential		3,621		5,662		5,322		978		0		2,419		0		18,002

Total real estate		86,390		126,695		55,851		45,561		0		40,810		0		355,307
Commercial and industrial		10,684		10,793		3,150		4,004		0		1,598		0		30,229
Consumer		1,980		147		181		5,990		0		878		0		9,176
Other		1,333		2,323		163		329		0		198		0		4,346

Total	$	100,387	$	139,958	$	59,345	$	55,884	$	0	$	43,484	$	0	$	399,058


	Subordinated Debentures Owed to Trust		Unamortized Discount at June 30, 2015			Carrying Value of Subordinated Debentures at June 30, 2015		Trust Preferred Securities of the Trusts		Contractual Interest Rate at June 30, 2015
	(Dollars in thousands)
Ozark II	$	14,433	$	0		$	14,433	$	14,000		3.18	%
Ozark III		14,434		0			14,434		14,000		3.24
Ozark IV		15,464		0			15,464		15,000		2.50
Ozark V		20,619		0			20,619		20,000		1.89
Intervest II		15,464		(678	)		14,786		15,000		3.23
Intervest III		15,464		(785	)		14,679		15,000		3.07
Intervest IV		15,464		(1,428	)		14,036		15,000		2.68
Intervest V		10,310		(1,358	)		8,952		10,000		1.94

	$	121,652	$	(4,249	)	$	117,403	$	118,000


	Options			Weighted- Average Exercise Price/Share		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Nine Months Ended September 30, 2014:
Outstanding – January 1, 2014		1,766,600		$	15.84
Granted		52,000			29.05
Exercised		(228,600	)		9.05
Forfeited		(48,800	)		18.36

Outstanding – September 30, 2014		1,541,200			17.21		5.2	$	22,058	⁽¹⁾

Fully vested and exercisable – September 30, 2014		305,600			13.65		5.2	$	5,460	⁽¹⁾

Expected to vest in future periods		989,280

Fully vested and expected to vest – September 30, 2014⁽²⁾		1,294,880			17.04		5.2	$	18,744	⁽¹⁾


Level 1	–	Quoted prices for identical instruments in active markets.

Level 2	–	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable.

Level 3	–	Instruments whose inputs are unobservable.


~~Description~~	~~Fair Value at~~ ~~September 30, 2014~~	~~Technique~~	~~Unobservable Inputs~~
~~(Dollars in thousands)~~
~~Impaired non-purchased loans and leases~~	~~$14,835~~	~~Third party appraisal~~⁽¹⁾ ~~or discounted cash flows~~	~~1. Management discount based on underlying collateral characteristics and market conditions~~ ~~2. Life of loan~~
~~Impaired covered loans~~	~~$13,634~~	~~Third party appraisal~~⁽¹⁾ ~~and/or discounted cash flows~~	~~1. Management discount based on underlying collateral characteristics and market conditions~~ ~~2. Life of loan~~ ~~3. Discount rate~~
~~Impaired purchased non-covered loans~~	~~$1,657~~	~~Third party appraisal~~⁽¹⁾~~and/or discounted cash flows~~	~~1. Management discount based on underlying collateral characteristics and market conditions~~ ~~2. Discount rate~~ ~~3. Holding period~~
~~Foreclosed assets not covered by FDIC loss share agreements~~	~~$14,781~~	~~Third party appraisal,~~⁽¹⁾ ~~broker price opinions and/or discounted cash flows~~	~~1. Management discount based on asset characteristics and market conditions~~ ~~2. Discount rate~~ ~~3. Holding period~~
~~Foreclosed assets covered by FDIC loss share agreements~~	~~$27,882~~	~~Third party appraisal,~~⁽¹⁾ ~~broker price opinions and/or discounted cash flows~~	~~1. Management discount based on asset characteristics and market conditions~~ ~~2. Discount rate~~ ~~3. Holding period~~


Description	Fair Value at June 30, 2015		Technique	Unobservable Inputs
(Dollars in thousands)
Impaired non-purchased loans and leases	$	12,807	Third party appraisal⁽¹⁾ or discounted cash flows	1.	Management discount based on underlying collateral characteristics and market conditions
				2.	Life of loan

Impaired purchased loans	$	12,347	Third party appraisal⁽¹⁾and/or discounted cash flows	1.	Management discount based on underlying collateral characteristics and market conditions
				2.	Life of loan

Foreclosed assets	$	25,973	Third party appraisal,⁽¹⁾ broker price opinions and/or discounted cash flows	1.	Management discount based on asset characteristics and market conditions
				2.	Discount rate
				3.	Holding period


	Three Months Ended September 30, 2014 Over Three Months Ended September 30, 2013									Nine Months Ended September 30, 2014 Over Nine Months Ended September 30, 2013
				Yield/			Net						Yield/			Net
	Volume			Rate			Change			Volume			Rate			Change
	(Dollars in thousands)
Increase (decrease) in:
Interest income – FTE:
Interest earning deposits and federal funds sold	$	5		$	(5	)	$	—		$	38		$	(9	)	$	29
Investment securities:
Taxable		992			6			998			3,593			86			3,679
Tax-exempt – FTE		2,519			(610	)		1,909			5,658			(1,014	)		4,644
Non-purchased loans and leases – FTE		11,953			(1,920	)		10,033			27,166			(7,383	)		19,783
Purchased non-covered loans		13,286			(883	)		12,403			33,329			(1,161	)		32,168
Covered loans		(7,383	)		7,512			129			(23,089	)		19,410			(3,679	)

Total interest income – FTE		21,372			4,100			25,472			46,695			9,929			56,624

Interest expense:
Savings and interest bearing transaction		523			72			595			1,165			97			1,262
Time deposits of $100,000 or more		129			(13	)		116			249			(149	)		100
Other time deposits		64			(27	)		37			139			(265	)		(126	)
Repurchase agreements with customers		5			3			8			17			2			19
Other borrowings		(86	)		90			4			(142	)		161			19
Subordinated debentures		—			(7	)		(7	)		—			(23	)		(23	)

Total interest expense		635			118			753			1,428			(177	)		1,251

Increase in net interest income – FTE	$	20,737		$	3,982		$	24,719		$	45,267		$	10,106		$	55,373


	Three Months Ended June 30, 2015 Over Three Months Ended June 30, 2014									Six Months Ended June 30, 2015 Over Six Months Ended June 30, 2014
				Yield/			Net						Yield/			Net
	Volume			Rate			Change			Volume			Rate			Change
	(Dollars in thousands)
Increase (decrease) in:
Interest income – FTE:
Interest earning deposits and federal funds sold	$	(59	)	$	42		$	(17	)	$	(40	)	$	29		$	(11	)
Investment securities:
Taxable		347			93			440			1,118			448			1,566
Tax-exempt – FTE		(750	)		(46	)		(796	)		235			(613	)		(378	)
Non-purchased loans and leases – FTE		19,762			135			19,897			37,458			(538	)		36,920
Purchased loans		15,401			(4,767	)		10,634			33,745			(7,136	)		26,609

Total interest income – FTE		34,701			(4,543	)		30,158			72,516			(7,810	)		64,706


Interest expense:
Savings and interest bearing transaction		390			(23	)		367			893			(42	)		851
Time deposits of $100,000 or more		839			253			1,092			1,686			469			2,155
Other time deposits		398			233			631			675			365			1,040
Repurchase agreements with customers		3			4			7			6			5			11
Other borrowings		(1,065	)		(185	)		(1,250	)		(1,900	)		(301	)		(2,201	)
Subordinated debentures		432			109			541			642			194			836

Total interest expense		997			391			1,388			2,002			690			2,692

Increase (decrease) in net interest income – FTE	$	33,704		$	(4,934	)	$	28,770		$	70,514		$	(8,500	)	$	62,014


	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
	(Dollars in thousands)
Service charges on deposit accounts	$	7,356		$	5,817	$	19,601		$	15,613
Mortgage lending income		1,728			1,276		3,807			4,660
Trust income		1,419			1,060		4,099			2,808
BOLI income		1,390			1,179		3,799			3,365
Accretion (amortization) of FDIC loss share receivable, net of amortization of FDIC clawback payable		(562	)		1,396		(611	)		6,269
Other income from loss share and purchased non-covered loans, net		3,369			2,484		10,309			8,328
Gains on investment securities		43			—		67			156
Gains on sales of other assets		1,688			2,501		4,111			7,586
Gain on merger and acquisition transaction		—			5,163		4,667			5,163
Other		2,817			1,226		7,147			3,498

Total non-interest income	$	19,248		$	22,102	$	56,996		$	57,446


	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
	(Dollars in thousands)
Service charges on deposit accounts	$	7,088	$	6,605		$	13,715	$	12,244
Mortgage lending income		1,772		1,126			3,279		2,080
Trust income		1,463		1,364			2,895		2,681
BOLI income		1,785		1,278			5,407		2,408
Net accretion of FDIC loss share receivable and FDIC clawback payable		—		(741	)		—		(49	)
Other income from purchased loans, net		6,971		3,629			15,879		6,940
Gains on investment securities		85		18			2,618		23
Gains on sales of other assets		2,557		1,448			5,385		2,422
Gain on merger and acquisition transaction		—		—			—		4,667
Other		1,549		2,661			3,159		4,333

Total non-interest income	$	23,270	$	17,388		$	52,337	$	37,749


Non-Purchased Loans and Leases	September 30,								December 31,
Attributable to Offices In	2014				2013				2013
	(Dollars in thousands)
Texas	$	1,821,468	50.1	%	$	1,260,015	49.9	%	$	1,302,061	49.5	%
Arkansas		1,142,869	31.4			1,051,047	41.7			1,069,200	40.6
New York		276,128	7.6			—	—			30,837	1.2
North Carolina		233,043	6.4			138,093	5.5			157,938	6.0
Georgia		126,466	3.5			59,450	2.4			57,570	2.1
Alabama		16,062	0.4			12,885	0.5			13,073	0.5
California		15,656	0.4			—	—			—	—
South Carolina		5,325	0.1			864	0.0			1,703	0.1
Florida		2,125	0.1			235	0.0			183	0.0

Total	$	3,639,142	100.0	%	$	2,522,589	100.0	%	$	2,632,565	100.0	%


	Residential 1-4 Family		Non- Farm/ Non- Residential		Construction /Land Development		Agricultural		Multifamily Residential		Total
	(Dollars in thousands)
Georgia:
Atlanta–Sandy Springs–Roswell, GA MSA		3,039		102,731		39,528		275		0		145,573
All other Georgia⁽³⁾		2,320		21,185		1,481		938		212		26,136

Total Georgia		5,359		123,916		41,009		1,213		212		171,709

Florida:
Miami–Fort Lauderdale–West Palm Beach, FL MSA		0		23,568		54,736		0		0		78,304
All other Florida⁽³⁾		1,841		19,326		7,971		910		0		30,048

Total Florida		1,841		42,894		62,707		910		0		108,352

Phoenix–Mesa–Scottsdale, AZ MSA		0		67,172		18		0		0		67,190
Virginia:
Washington–Arlington– Alexandria, DC–VA–MD–WV MSA		0		12,835		32,915		0		0		45,750
All other Virginia⁽³⁾		0		0		2,557		0		0		2,557

Total Virginia		0		12,835		35,472		0		0		48,307

Missouri/Kansas:
St. Louis, MO–IL MSA		0		0		801		0		19,395		20,196
Kansas City, MO–KS MSA		114		90		21,549		39		0		21,792
All other Missouri⁽³⁾		497		1,070		172		0		0		1,739
All other Kansas⁽³⁾		0		0		1,878		0		0		1,878

Total Missouri/Kansas		611		1,160		24,400		39		19,395		45,605

Tennessee:
Nashville–Davidson–Murfreesboro–Franklin, TN MSA		180		19,122		0		0		0		19,302
Memphis, TN–MS–AR MSA		0		14,241		5,411		0		0		19,652

Total Tennessee		180		33,363		5,411		0		0		38,954

Oklahoma:
Lawton, OK MSA		0		0		23,368		0		0		23,368
All other Oklahoma⁽³⁾		171		8,427		4,696		0		0		13,294

Total Oklahoma		171		8,427		28,064		0		0		36,662

Colorado:
Denver–Aurora–Lakewood, CO MSA		15		11,289		1		0		0		11,305
All other Colorado⁽³⁾		604		6,353		8,760		0		0		15,717

Total Colorado		619		17,642		8,761		0		0		27,022

Las Vegas–Henderson–Paradise, NV MSA		0		0		25,562		0		0		25,562
Boston–Cambridge–Newton, MA–NH MSA		0		21,184		0		0		0		21,184


	1 Year		Over 1 Through		Over
	or Less		5 Years		5 Years		Total
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	45,053	$	151,138	$	83,082	$	279,273
Non-farm/non-residential		84,735		298,829		78,820		462,384
Construction/land development		46,097		40,646		7,594		94,337
Agricultural		7,770		29,674		6,964		44,408
Multifamily residential		13,136		20,050		1,493		34,679

Total real estate		196,791		540,337		177,953		915,081
Commercial and industrial		26,292		46,089		4,320		76,701
Consumer		5,099		14,838		524		20,461
Other		5,773		9,384		3,588		18,745

Total	$	233,955	$	610,648	$	186,385	$	1,030,988

Fixed rate	$	147,231	$	460,324	$	117,751	$	725,306
Floating rate		86,724		150,324		68,634		305,682

Total	$	233,955	$	610,648	$	186,385	$	1,030,988


~~Date of FDIC-Assisted Acquisition~~	~~Failed Financial Institution~~	~~Headquarters Location~~
~~March 26, 2010~~	~~Unity National Bank (“Unity”)~~	~~Cartersville, Georgia~~
~~July 16, 2010~~	~~Woodlands Bank (“Woodlands”)~~	~~Bluffton, South Carolina~~
~~September 10, 2010~~	~~Horizon Bank (“Horizon”)~~	~~Bradenton, Florida~~
~~December 17, 2010~~	~~Chestatee State Bank (“Chestatee”)~~	~~Dawsonville, Georgia~~
~~January 14, 2011~~	~~Oglethorpe Bank (“Oglethorpe”)~~	~~Brunswick, Georgia~~
~~April 29, 2011~~	~~First Choice Community Bank (“First Choice”)~~	~~Dallas, Georgia~~
~~April 29, 2011~~	~~The Park Avenue Bank (“Park Avenue”)~~	~~Valdosta, Georgia~~


	Unity			Woodlands			Horizon			Chestatee			Oglethorpe			First Choice			Park Avenue			Total
	(Dollars in thousands)
Carrying value at January 1, 2013	$	72,849		$	99,734		$	63,193		$	56,668		$	48,093		$	91,081		$	164,621		$	596,239
Accretion		4,415			5,756			3,499			3,114			3,153			5,433			9,475			34,845
Transfers to covered foreclosed assets		(2,588	)		(3,965	)		(2,809	)		(1,203	)		(4,774	)		(1,524	)		(7,443	)		(24,306	)
Payments received		(18,863	)		(27,551	)		(14,960	)		(21,630	)		(11,774	)		(22,277	)		(60,039	)		(177,094	)
Charge-offs		(2,739	)		(3,796	)		(2,713	)		(1,339	)		(542	)		(2,348	)		(5,443	)		(18,920	)
Other activity, net		(390	)		(90	)		(195	)		(142	)		9			(188	)		(449	)		(1,445	)

Carrying value at September 30, 2013	$	52,684		$	70,088		$	46,015		$	35,468		$	34,165		$	70,177		$	100,722		$	409,319

Carrying value at January 1, 2014	$	48,968		$	62,039		$	41,466		$	26,076		$	27,592		$	61,966		$	83,684		$	351,791
Accretion		4,635			4,660			2,624			2,098			2,498			6,806			7,845			31,166
Transfers to covered foreclosed assets		(6,520	)		(2,683	)		(2,029	)		(1,229	)		(804	)		(4,984	)		(12,505	)		(30,754	)
Payments received		(12,683	)		(17,851	)		(11,984	)		(10,082	)		(7,157	)		(10,703	)		(27,455	)		(97,915	)
Charge-offs		(1,479	)		(299	)		(372	)		0			(90	)		(1,583	)		(1,824	)		(5,647	)
Other activity, net		177			34			17			(27	)		86			(185	)		59			161

Carrying value at September 30, 2014	$	33,098		$	45,900		$	29,722		$	16,836		$	22,125		$	51,317		$	49,804		$	248,802


	1 Year or Less		Over 1 Through 5 Years		Over 5 Years		Total
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	25,460	$	40,550	$	22,265	$	88,275
Non-farm/non-residential		73,847		27,227		12,559		113,633
Construction/land development		24,005		2,677		936		27,618
Agricultural		6,584		2,801		492		9,877
Multifamily residential		1,984		1,629		215		3,828

Total real estate		131,880		74,884		36,467		243,231
Commercial and industrial		1,424		905		3,025		5,354
Consumer		10		54		0		64
Other		153		0		0		153

Total covered loans	$	133,467	$	75,843	$	39,492	$	248,802


Deposits Attributable	September 30,								December 31,
to Offices In	2014				2013				2013
	(Dollars in thousands)
Arkansas	$	2,793,040	54.3	%	$	1,705,560	46.7	%	$	1,671,498	45.0	%
Texas		808,535	15.7			395,646	10.8			492,069	13.2
Georgia		648,343	12.6			641,454	17.6			634,060	17.1
North Carolina		594,726	11.6			626,916	17.1			629,241	16.9
Alabama		124,593	2.4			137,141	3.8			137,345	3.7
Florida		129,112	2.5			123,591	3.4			124,894	3.4
South Carolina		41,356	0.9			24,378	0.6			27,920	0.7

Total	$	5,139,705	100.0	%	$	3,654,686	100.0	%	$	3,717,027	100.0	%


	September 30, 2014			December 31, 2013⁽¹⁾
	(Dollars in thousands)
Stockholders’ equity – Tier 1	$	784,987		$	659,895
Tier 1 leverage ratio		12.43	%		13.85	%
Tier 1 risk-based capital ratio		11.76			15.77
Total risk-based capital ratio		12.50			16.80


	Actual				Minimum Capital Required – Basel III Phase-In Schedule					Minimum Capital Required – Basel III Fully Phased-In					Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio			Capital Amount		Ratio			Capital Amount		Ratio
	(Dollars in thousands)

June 30, 2015:
Common equity tier 1 to risk-weighted assets:
Company	$	1,054,014		11.18		424,366	$	4.50	%	$	660,124		7.00	%		N/A		N/A
Bank		1,148,610		12.20		423,547		4.50			658,850		7.00		$	611,789		6.50	%

Tier 1 capital to risk-weighted assets:
Company		1,172,014		12.43		565,821		6.00			801,579		8.50			N/A		N/A
Bank		1,148,610		12.20		564,729		6.00			800,032		8.50			752,972		8.00

Total capital to risk-weighted assets:
Company		1,228,763		13.03		754,428		8.00			990,186		10.50			N/A		N/A
Bank		1,205,359		12.81		752,972		8.00			988,275		10.50			941,215		10.00

Tier 1 leverage to average assets:
Company		1,172,014		14.41		325,434		4.00			325,434		4.00			N/A		N/A
Bank		1,148,310		14.13		325,111		4.00			325,111		4.00			406,389		5.00


						Required
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
December 31, 2014:
Tier 1 capital to risk-weighted assets:
Company	$	851,682		11.74	%	$	290,213		4.00	%	$	435,319		6.00	%
Bank		824,120		11.37			290,130		4.00			435,194		6.00

Total capital to risk-weighted assets:
Company		904,600		12.47			580,425		8.00			725,532		10.00
Bank		877,038		12.10			580,259		8.00			725,324		10.00

Tier 1 leverage to average assets:
Company		851,681		12.92			197,711		3.00			329,518		5.00
Bank		824,120		12.52			197,465		3.00			329,108		5.00

Large accelerated filer

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Smaller reporting company