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Allowance For Loan Losses | 9 Months Ended
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Sep. 30, 2012
Loans and Leases Receivable, Allowance [Abstract] |
Allowance For Loan Losses | Allowance for Loan Losses The allowance for loan losses is that amount management believes is adequate to absorb probable incurred credit losses in the loan portfolio based on management’s evaluation of various factors including overall growth in the loan portfolio, an analysis of individual loans, prior and current loss experience, and current economic conditions. A provision for loan losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors as discussed within Note 1 of the Notes to Consolidated Financial Statements included in Park’s 2011 Annual Report. The activity in the allowance for loan losses for the three and nine months ended September 30, 2012 and September 30, 2011 is summarized below.
| Three Months Ended September 30, 2012
(In thousands) | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 15,220 |  |  | $ | 11,956 |  |  | $ | 11,693 |  |  | $ | 13,806 |  |  | $ | 6,021 |  |  | $ | — |  |  | $ | 58,696 |
Charge-offs | 16,515 |  |  | 953 |  |  | 2,969 |  |  | 1,159 |  |  | 1,282 |  |  | — |  |  | 22,878 |
Recoveries | 215 |  |  | 164 |  |  | 690 |  |  | 1,421 |  |  | 602 |  |  | — |  |  | 3,092 |
Net Charge-offs | 16,300 |  |  | 789 |  |  | 2,279 |  |  | (262 | ) |  | 680 |  |  | — |  |  | 19,786 |
Provision | 14,746 |  |  | (294 | ) |  | 1,596 |  |  | (179 | ) |  | 786 |  |  | — |  |  | 16,655 |
Ending balance | $ | 13,666 |  |  | $ | 10,873 |  |  | $ | 11,010 |  |  | $ | 13,889 |  |  | $ | 6,127 |  |  | $ | — |  |  | $ | 55,565 |
| Nine Months Ended September 30, 2012
(In thousands) | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 16,950 |  |  | $ | 15,539 |  |  | $ | 14,433 |  |  | $ | 15,692 |  |  | $ | 5,830 |  |  | $ | — |  |  | $ | 68,444 |
Charge-offs | 26,476 |  |  | 6,822 |  |  | 8,298 |  |  | 6,782 |  |  | 3,531 |  |  | — |  |  | 51,909 |
Recoveries | 807 |  |  | 503 |  |  | 2,456 |  |  | 3,217 |  |  | 1,816 |  |  | — |  |  | 8,799 |
Net Charge-offs | 25,669 |  |  | 6,319 |  |  | 5,842 |  |  | 3,565 |  |  | 1,715 |  |  | — |  |  | 43,110 |
Provision | 22,385 |  |  | 1,653 |  |  | 2,419 |  |  | 1,762 |  |  | 2,012 |  |  | — |  |  | 30,231 |
Ending balance | $ | 13,666 |  |  | $ | 10,873 |  |  | $ | 11,010 |  |  | $ | 13,889 |  |  | $ | 6,127 |  |  | $ | — |  |  | $ | 55,565 |
| Three Months Ended September 30, 2011
(In thousands) | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 16,709 |  |  | $ | 23,307 |  |  | $ | 40,113 |  |  | $ | 32,297 |  |  | $ | 7,744 |  |  | $ | 4 |  |  | $ | 120,174 |
Charge-offs | 5,199 |  |  | 6,505 |  |  | 12,587 |  |  | 5,886 |  |  | 1,682 |  |  | — |  |  | 31,859 |
Recoveries | 154 |  |  | 845 |  |  | 621 |  |  | 341 |  |  | 595 |  |  | 1 |  |  | 2,557 |
Net Charge-offs | 5,045 |  |  | 5,660 |  |  | 11,966 |  |  | 5,545 |  |  | 1,087 |  |  | (1 | ) |  | 29,302 |
Provision | 3,358 |  |  | 912 |  |  | 8,240 |  |  | 3,533 |  |  | 396 |  |  | (1 | ) |  | 16,438 |
Ending balance | $ | 15,022 |  |  | $ | 18,559 |  |  | $ | 36,387 |  |  | $ | 30,285 |  |  | $ | 7,053 |  |  | $ | 4 |  |  | $ | 107,310 |
| Nine Months Ended September 30, 2011
(In thousands) | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 11,555 |  |  | $ | 24,369 |  |  | $ | 70,462 |  |  | $ | 30,259 |  |  | $ | 6,925 |  |  | $ | 5 |  |  | $ | 143,575 |
Charge-offs | 12,370 |  |  | 14,855 |  |  | 39,686 |  |  | 13,162 |  |  | 5,597 |  |  | — |  |  | 85,670 |
Recoveries | 1,050 |  |  | 1,669 |  |  | 834 |  |  | 1,232 |  |  | 1,562 |  |  | 4 |  |  | 6,351 |
Net Charge-offs | 11,320 |  |  | 13,186 |  |  | 38,852 |  |  | 11,930 |  |  | 4,035 |  |  | (4 | ) |  | 79,319 |
Provision | 14,787 |  |  | 7,376 |  |  | 4,777 |  |  | 11,956 |  |  | 4,163 |  |  | (5 | ) |  | 43,054 |
Ending balance | $ | 15,022 |  |  | $ | 18,559 |  |  | $ | 36,387 |  |  | $ | 30,285 |  |  | $ | 7,053 |  |  | $ | 4 |  |  | $ | 107,310 |
The allowance for loan losses as of September 30, 2012 was $55.6 million, a decline of $51.7 million from the $107.3 million at September 30, 2011. The decline was primarily due to the the following:
▪ | The sale of the Vision business on February 16, 2012. As of September 30, 2011, the allowance for loan losses at Vision was $41.5 million. With the sale of the Vision business, all specific reserves established for impaired loans were charged off. Additionally, all general reserves related to performing loans retained by Vision were charged off.
▪ | Improvements in the credit quality of the Park Ohio commercial loan portfolio.
Loans collectively evaluated for impairment in the following tables include all performing loans at September 30, 2012 and December 31, 2011, as well as nonperforming loans internally classified as consumer loans. Nonperforming consumer loans are not typically individually evaluated for impairment, but receive a portion of the statistical allocation of the allowance for loan losses. Loans individually evaluated for impairment include all impaired loans internally classified as commercial loans at September 30, 2012 and December 31, 2011, which are evaluated for impairment in accordance with U.S. GAAP (see Note 1 of the Notes to Consolidated Financial Statements included in Park’s 2011 Annual Report). The composition of the allowance for loan losses at September 30, 2012 and December 31, 2011 was as follows:
| September 30, 2012
(In thousands) | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributed to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 2,005 |  |  | $ | 1,134 |  |  | $ | 3,334 |  |  | $ | 1,106 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,579 |
Collectively evaluated for impairment | 11,661 |  |  | 9,739 |  |  | 7,676 |  |  | 12,783 |  |  | 6,127 |  |  | — |  |  | 47,986 |
Total ending allowance balance | $ | 13,666 |  |  | $ | 10,873 |  |  | $ | 11,010 |  |  | $ | 13,889 |  |  | $ | 6,127 |  |  | $ | — |  |  | $ | 55,565 |
Loan balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment | $ | 22,072 |  |  | $ | 42,964 |  |  | $ | 40,650 |  |  | $ | 36,583 |  |  | $ | 19 |  |  | $ | — |  |  | $ | 142,288 |
Loans collectively evaluated for impairment | 750,701 |  |  | 1,038,641 |  |  | 148,429 |  |  | 1,670,420 |  |  | 646,593 |  |  | 3,438 |  |  | 4,258,222 |
Total ending loan balance | $ | 772,773 |  |  | $ | 1,081,605 |  |  | $ | 189,079 |  |  | $ | 1,707,003 |  |  | $ | 646,612 |  |  | $ | 3,438 |  |  | $ | 4,400,510 |
Allowance for loan losses as a percentage of loan balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment | 9.08 | % |  | 2.64 | % |  | 8.20 | % |  | 3.02 | % |  | — | % |  | — | % |  | 5.33 | %
Loans collectively evaluated for impairment | 1.55 | % |  | 0.94 | % |  | 5.17 | % |  | 0.77 | % |  | 0.95 | % |  | — | % |  | 1.13 | %
Total ending loan balance | 1.77 | % |  | 1.01 | % |  | 5.82 | % |  | 0.81 | % |  | 0.95 | % |  | — | % |  | 1.26 | %
Recorded investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment | $ | 22,103 |  |  | $ | 42,978 |  |  | $ | 40,679 |  |  | $ | 36,583 |  |  | $ | 19 |  |  | $ | — |  |  | $ | 142,362 |
Loans collectively evaluated for impairment | 754,054 |  |  | 1,042,996 |  |  | 148,895 |  |  | 1,674,518 |  |  | 649,344 |  |  | 3,486 |  |  | 4,273,293 |
Total ending loan balance | $ | 776,157 |  |  | $ | 1,085,974 |  |  | $ | 189,574 |  |  | $ | 1,711,101 |  |  | $ | 649,363 |  |  | $ | 3,486 |  |  | $ | 4,415,655 |
|  | December 31, 2011
(In thousands) |  | Commercial, financial and agricultural |  | Commercial real estate |  | Construction real estate |  | Residential real estate |  | Consumer |  | Leases |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributed to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 5,819 |  |  | $ | 4,431 |  |  | $ | 3,414 |  |  | $ | 2,271 |  |  | $ | — |  |  | $ | — |  |  | $ | 15,935 |
Collectively evaluated for impairment |  | 11,131 |  |  | 11,108 |  |  | 11,019 |  |  | 13,421 |  |  | 5,830 |  |  | — |  |  | 52,509 |
Total ending allowance balance |  | $ | 16,950 |  |  | $ | 15,539 |  |  | $ | 14,433 |  |  | $ | 15,692 |  |  | $ | 5,830 |  |  | $ | — |  |  | $ | 68,444 |
Loan balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | 40,621 |  |  | $ | 51,978 |  |  | $ | 50,240 |  |  | $ | 44,276 |  |  | $ | 20 |  |  | $ | — |  |  | $ | 187,135 |
Loans collectively evaluated for impairment |  | 703,176 |  |  | 1,056,596 |  |  | 167,306 |  |  | 1,584,342 |  |  | 616,485 |  |  | 2,059 |  |  | 4,129,964 |
Total ending loan balance |  | $ | 743,797 |  |  | $ | 1,108,574 |  |  | $ | 217,546 |  |  | $ | 1,628,618 |  |  | $ | 616,505 |  |  | $ | 2,059 |  |  | $ | 4,317,099 |
Allowance for loan losses as a percentage of loan balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | 14.33 | % |  | 8.52 | % |  | 6.80 | % |  | 5.13 | % |  | — | % |  | — | % |  | 8.52 | %
Loans collectively evaluated for impairment |  | 1.58 | % |  | 1.05 | % |  | 6.59 | % |  | 0.85 | % |  | 0.95 | % |  | — | % |  | 1.27 | %
Total ending loan balance |  | 2.28 | % |  | 1.40 | % |  | 6.63 | % |  | 0.96 | % |  | 0.95 | % |  | — | % |  | 1.59 | %
Recorded investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | 40,621 |  |  | $ | 51,978 |  |  | $ | 50,240 |  |  | $ | 44,276 |  |  | $ | 20 |  |  | $ | — |  |  | $ | 187,135 |
Loans collectively evaluated for impairment |  | 706,297 |  |  | 1,060,831 |  |  | 167,856 |  |  | 1,588,147 |  |  | 619,415 |  |  | 2,102 |  |  | 4,144,648 |
Total ending loan balance |  | $ | 746,918 |  |  | $ | 1,112,809 |  |  | $ | 218,096 |  |  | $ | 1,632,423 |  |  | $ | 619,435 |  |  | $ | 2,102 |  |  | $ | 4,331,783 |

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