6. ALLOWANCE FOR LOAN AND LEASE LOSSES

The following table presents the changes in the Allowance for the periods indicated:

	Three Months Ended
	March 31,
	2012			2011
	(Dollars in thousands)

Balance, beginning of period	$	122,093		$	192,854
Provision (credit) for loan and lease losses		(4,990	)		(1,575	)
		117,103			191,279

Charge-offs		(3,962	)		(18,131	)
Recoveries		1,181			4,862
Net charge-offs		(2,781	)		(13,269	)
Balance, end of period	$	114,322		$	178,010

Our Provision was a credit of $5.0 million in the three months ended March 31, 2012, compared to a credit of $1.6 million in the three months ended March 31, 2011. The decrease in both our Provision and Allowance is directly attributable to continued improvement in our credit risk profile as evidenced by declines in nonperforming assets and lower levels of net charge-offs.

The following table presents by class, the activity in the Allowance for the periods indicated:

	Commercial,			Real estate
	financial &						Mortgage -			Mortgage -
	agricultural			Construction			residential			commercial			Consumer			Leases			Unallocated		Total
	(Dollars in thousands)
Three Months Ended March 31, 2012
Beginning balance	$	6,110		$	28,630		$	32,736		$	47,729		$	2,335		$	553		$	4,000	$	122,093
Provision (credit) for loan
and lease losses		603			(6,049	)		792			(1,820	)		(170	)		(346	)		2,000		(4,990	)
		6,713			22,581			33,528			45,909			2,165			207			6,000		117,103
Charge-offs		(1,682	)		(1,626	)		(200	)		-			(426	)		(28	)		-		(3,962	)
Recoveries		270			425			117			2			366			1			-		1,181
Net charge-offs		(1,412	)		(1,201	)		(83	)		2			(60	)		(27	)		-		(2,781	)
Ending balance	$	5,301		$	21,380		$	33,445		$	45,911		$	2,105		$	180		$	6,000	$	114,322

Three Months Ended March 31, 2011
Beginning balance	$	13,426		$	76,556		$	31,830		$	64,308		$	3,155		$	1,579		$	2,000	$	192,854
Provision (credit) for loan
and lease losses		(1,318	)		(6,986	)		329			4,870			(424	)		(46	)		2,000		(1,575	)
		12,108			69,570			32,159			69,178			2,731			1,533			4,000		191,279
Charge-offs		(1,406	)		(13,858	)		(2,036	)		(226	)		(605	)		-			-		(18,131	)
Recoveries		432			3,366			700			39			325			-			-		4,862
Net charge-offs		(974	)		(10,492	)		(1,336	)		(187	)		(280	)		-			-		(13,269	)
Ending balance	$	11,134		$	59,078		$	30,823		$	68,991		$	2,451		$	1,533		$	4,000	$	178,010

In determining the amount of our Allowance, we rely on an analysis of our loan portfolio, our experience and our evaluation of general economic conditions, as well as regulatory requirements and input. If our assumptions prove to be incorrect, our current Allowance may not be sufficient to cover future loan losses and we may experience increases to our Provision.