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ALLOWANCE FOR LOAN AND LEASE LOSSES
 6 Months Ended
Jun. 30, 2012
ALLOWANCE FOR LOAN AND LEASE LOSSES  
ALLOWANCE FOR LOAN AND LEASE LOSSES

6.   ALLOWANCE FOR LOAN AND LEASE LOSSES

 

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 June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

5,301

 

$

21,380

 

$

33,445

 

$

45,911

 

$

2,105

 

$

180

 

$

6,000

 

$

114,322

 

Provision (credit) for loan and lease losses

 

1,523

 

(6,079

)

(3,713

)

1,649

 

22

 

(32

)

—

 

(6,630

)

 

 

6,824

 

15,301

 

29,732

 

47,560

 

2,127

 

148

 

6,000

 

107,692

 

Charge-offs

 

(1,394

)

(3,715

)

(173

)

(320

)

(323

)

—

 

—

 

(5,925

)

Recoveries

 

832

 

745

 

262

 

2

 

204

 

2

 

—

 

2,047

 

Net charge-offs

 

(562

)

(2,970

)

89

 

(318

)

(119

)

2

 

—

 

(3,878

)

Ending balance

 

$

6,262

 

$

12,331

 

$

29,821

 

$

47,242

 

$

2,008

 

$

150

 

$

6,000

 

$

103,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

11,134

 

$

59,078

 

$

30,823

 

$

68,991

 

$

2,451

 

$

1,533

 

$

4,000

 

$

178,010

 

Provision (credit) for loan and lease losses

 

1,094

 

(6,137

)

(1,365

)

(2,482

)

852

 

(746

)

—

 

(8,784

)

 

 

12,228

 

52,941

 

29,458

 

66,509

 

3,303

 

787

 

4,000

 

169,226

 

Charge-offs

 

(455

)

(3,000

)

(1,263

)

(879

)

(597

)

—

 

—

 

(6,194

)

Recoveries

 

854

 

2,549

 

231

 

3

 

265

 

—

 

—

 

3,902

 

Net charge-offs

 

399

 

(451

)

(1,032

)

(876

)

(332

)

—

 

—

 

(2,292

)

Ending balance

 

$

12,627

 

$

52,490

 

$

28,426

 

$

65,633

 

$

2,971

 

$

787

 

$

4,000

 

$

166,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 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

 

2,126

 

(12,128

)

(2,921

)

(171

)

(148

)

(378

)

2,000

 

(11,620

)

 

 

8,236

 

16,502

 

29,815

 

47,558

 

2,187

 

175

 

6,000

 

110,473

 

Charge-offs

 

(3,076

)

(5,341

)

(373

)

(320

)

(749

)

(28

)

—

 

(9,887

)

Recoveries

 

1,102

 

1,170

 

379

 

4

 

570

 

3

 

—

 

3,228

 

Net charge-offs

 

(1,974

)

(4,171

)

6

 

(316

)

(179

)

(25

)

—

 

(6,659

)

Ending balance

 

$

6,262

 

$

12,331

 

$

29,821

 

$

47,242

 

$

2,008

 

$

150

 

$

6,000

 

$

103,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 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

 

(224

)

(13,123

)

(1,036

)

2,388

 

428

 

(792

)

2,000

 

(10,359

)

 

 

13,202

 

63,433

 

30,794

 

66,696

 

3,583

 

787

 

4,000

 

182,495

 

Charge-offs

 

(1,861

)

(16,858

)

(3,299

)

(1,105

)

(1,202

)

—

 

—

 

(24,325

)

Recoveries

 

1,286

 

5,915

 

931

 

42

 

590

 

—

 

—

 

8,764

 

Net charge-offs

 

(575

)

(10,943

)

(2,368

)

(1,063

)

(612

)

—

 

—

 

(15,561

)

Ending balance

 

$

12,627

 

$

52,490

 

$

28,426

 

$

65,633

 

$

2,971

 

$

787

 

$

4,000

 

$

166,934

 

 

Our Provision was a credit of $6.6 million and $11.6 million in the second quarter and first half of 2012, respectively, compared to a credit of $8.8 million and $10.4 million in the second quarter and first half of 2011. The decrease in our Allowance is directly attributable to continued improvement in our credit risk profile as evidenced by the decline in nonperforming assets.

 

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.