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ALLOWANCE FOR LOAN AND LEASE LOSSES
 6 Months Ended
Jun. 30, 2014
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, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

12,786

 

$

14,940

 

$

17,812

 

$

25,925

 

$

5,687

 

$

12

 

$

6,000

 

$

83,162

 

Provision (credit) for loan and lease losses

 

405

 

243

 

959

 

988

 

1,402

 

(2

)

(2,000

)

1,995

 

 

 

13,191

 

15,183

 

18,771

 

26,913

 

7,089

 

10

 

4,000

 

85,157

 

Charge-offs

 

1,482

 

—

 

102

 

1,041

 

671

 

—

 

—

 

3,296

 

Recoveries

 

546

 

342

 

529

 

13

 

305

 

3

 

—

 

1,738

 

Net charge-offs (recoveries)

 

936

 

(342

)

(427

)

1,028

 

366

 

(3

)

—

 

1,558

 

Ending balance

 

$

12,255

 

$

15,525

 

$

19,198

 

$

25,885

 

$

6,723

 

$

13

 

$

4,000

 

$

83,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

8,641

 

$

3,946

 

$

27,964

 

$

37,316

 

$

2,864

 

$

75

 

$

6,000

 

$

86,806

 

Provision (credit) for loan and lease losses

 

2,439

 

1,044

 

(4,504

)

(268

)

1,069

 

(7

)

—

 

(227

)

 

 

11,080

 

4,990

 

23,460

 

37,048

 

3,933

 

68

 

6,000

 

86,579

 

Charge-offs

 

1,597

 

277

 

380

 

—

 

242

 

—

 

—

 

2,496

 

Recoveries

 

170

 

1,747

 

243

 

703

 

157

 

2

 

—

 

3,022

 

Net charge-offs (recoveries)

 

1,427

 

(1,470

)

137

 

(703

)

85

 

(2

)

—

 

(526

)

Ending balance

 

$

9,653

 

$

6,460

 

$

23,323

 

$

37,751

 

$

3,848

 

$

70

 

$

6,000

 

$

87,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

13,196

 

$

2,774

 

$

25,272

 

$

29,947

 

$

6,576

 

$

55

 

$

6,000

 

$

83,820

 

Provision (credit) for loan and lease losses

 

(538

)

12,007

 

(6,558

)

(3,047

)

854

 

(39

)

(2,000

)

679

 

 

 

12,658

 

14,781

 

18,714

 

26,900

 

7,430

 

16

 

4,000

 

84,499

 

Charge-offs

 

1,555

 

—

 

139

 

1,041

 

1,251

 

8

 

—

 

3,994

 

Recoveries

 

1,152

 

744

 

623

 

26

 

544

 

5

 

—

 

3,094

 

Net charge-offs (recoveries)

 

403

 

(744

)

(484

)

1,015

 

707

 

3

 

—

 

900

 

Ending balance

 

$

12,255

 

$

15,525

 

$

19,198

 

$

25,885

 

$

6,723

 

$

13

 

$

4,000

 

$

83,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

4,987

 

$

4,510

 

$

27,836

 

$

50,574

 

$

2,421

 

$

85

 

$

6,000

 

$

96,413

 

Provision (credit) for loan and lease losses

 

5,845

 

73

 

(4,193

)

(10,106

)

1,611

 

(18

)

—

 

(6,788

)

 

 

10,832

 

4,583

 

23,643

 

40,468

 

4,032

 

67

 

6,000

 

89,625

 

Charge-offs

 

1,841

 

355

 

794

 

3,674

 

557

 

—

 

—

 

7,221

 

Recoveries

 

662

 

2,232

 

474

 

957

 

373

 

3

 

—

 

4,701

 

Net charge-offs (recoveries)

 

1,179

 

(1,877

)

320

 

2,717

 

184

 

(3

)

—

 

2,520

 

Ending balance

 

$

9,653

 

$

6,460

 

$

23,323

 

$

37,751

 

$

3,848

 

$

70

 

$

6,000

 

$

87,105

 

 

In accordance with GAAP, loans held for sale and other real estate assets are not included in our assessment of the Allowance.

 

Our Provision was $2.0 million and $0.7 million in the second quarter and first half of 2014, respectively, compared to credits to the Provision of $0.2 million and $6.8 million in the second quarter and first half of 2013, respectively.

 

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 significant increases to our Provision.