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ALLOWANCE FOR LOAN AND LEASE LOSSES
 9 Months Ended
Sep. 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 September 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

6,262

 

$

12,331

 

$

29,821

 

$

47,242

 

$

2,008

 

$

150

 

$

6,000

 

$

103,814

 

Provision (credit) for loan and lease losses

 

(465

)

(3,127

)

2,981

 

(4,780

)

434

 

(25

)

—

 

(4,982

)

 

 

5,797

 

9,204

 

32,802

 

42,462

 

2,442

 

125

 

6,000

 

98,832

 

Charge-offs

 

(476

)

(1,813

)

(757

)

—

 

(398

)

—

 

—

 

(3,444

)

Recoveries

 

208

 

353

 

236

 

472

 

269

 

2

 

—

 

1,540

 

Net (charge-offs) recoveries

 

(268

)

(1,460

)

(521

)

472

 

(129

)

2

 

—

 

(1,904

)

Ending balance

 

$

5,529

 

$

7,744

 

$

32,281

 

$

42,934

 

$

2,313

 

$

127

 

$

6,000

 

$

96,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

12,627

 

$

52,490

 

$

28,426

 

$

65,633

 

$

2,971

 

$

787

 

$

4,000

 

$

166,934

 

Provision (credit) for loan and lease losses

 

(5,618

)

(9,720

)

2,888

 

(6,560

)

1

 

(107

)

—

 

(19,116

)

 

 

7,009

 

42,770

 

31,314

 

59,073

 

2,972

 

680

 

4,000

 

147,818

 

Charge-offs

 

(385

)

(4,431

)

(447

)

(193

)

(477

)

(10

)

—

 

(5,943

)

Recoveries

 

379

 

486

 

189

 

228

 

273

 

—

 

—

 

1,555

 

Net (charge-offs) recoveries

 

(6

)

(3,945

)

(258

)

35

 

(204

)

(10

)

—

 

(4,388

)

Ending balance

 

$

7,003

 

$

38,825

 

$

31,056

 

$

59,108

 

$

2,768

 

$

670

 

$

4,000

 

$

143,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 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

 

1,661

 

(15,255

)

60

 

(4,951

)

286

 

(403

)

2,000

 

(16,602

)

 

 

7,771

 

13,375

 

32,796

 

42,778

 

2,621

 

150

 

6,000

 

105,491

 

Charge-offs

 

(3,552

)

(7,154

)

(1,130

)

(320

)

(1,147

)

(28

)

—

 

(13,331

)

Recoveries

 

1,310

 

1,523

 

615

 

476

 

839

 

5

 

—

 

4,768

 

Net (charge-offs) recoveries

 

(2,242

)

(5,631

)

(515

)

156

 

(308

)

(23

)

—

 

(8,563

)

Ending balance

 

$

5,529

 

$

7,744

 

$

32,281

 

$

42,934

 

$

2,313

 

$

127

 

$

6,000

 

$

96,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 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

 

(5,842

)

(22,843

)

1,852

 

(4,172

)

429

 

(899

)

2,000

 

(29,475

)

 

 

7,584

 

53,713

 

33,682

 

60,136

 

3,584

 

680

 

4,000

 

163,379

 

Charge-offs

 

(2,246

)

(21,289

)

(3,746

)

(1,298

)

(1,679

)

(10

)

—

 

(30,268

)

Recoveries

 

1,665

 

6,401

 

1,120

 

270

 

863

 

—

 

—

 

10,319

 

Net charge-offs

 

(581

)

(14,888

)

(2,626

)

(1,028

)

(816

)

(10

)

—

 

(19,949

)

Ending balance

 

$

7,003

 

$

38,825

 

$

31,056

 

$

59,108

 

$

2,768

 

$

670

 

$

4,000

 

$

143,430

 

 

Our Provision was a credit of $5.0 million and $16.6 million in the third quarter and nine months ended September 30, 2012, respectively, compared to a credit of $19.1 million and $29.5 million in the third quarter and nine months ended September 30, 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.