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ALLOWANCE FOR LOAN AND LEASE LOSSES
 9 Months Ended
Sep. 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 September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

12,255

 

$

15,525

 

$

19,198

 

$

25,885

 

$

6,723

 

$

13

 

$

4,000

 

$

83,599

 

Provision (credit) for loan and lease losses

 

(760

)

(1,728

)

(173

)

(1,372

)

2,313

 

(2

)

—

 

(1,722

)

 

 

11,495

 

13,797

 

19,025

 

24,513

 

9,036

 

11

 

4,000

 

81,877

 

Charge-offs

 

408

 

—

 

—

 

—

 

991

 

—

 

—

 

1,399

 

Recoveries

 

777

 

1,100

 

244

 

14

 

224

 

1

 

—

 

2,360

 

Net charge-offs (recoveries)

 

(369

)

(1,100

)

(244

)

(14

)

767

 

(1

)

—

 

(961

)

Ending balance

 

$

11,864

 

$

14,897

 

$

19,269

 

$

24,527

 

$

8,269

 

$

12

 

$

4,000

 

$

82,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

9,653

 

$

6,460

 

$

23,323

 

$

37,751

 

$

3,848

 

$

70

 

$

6,000

 

$

87,105

 

Provision (credit) for loan and lease losses

 

3,385

 

(2,505

)

1,236

 

(6,581

)

1,292

 

(16

)

—

 

(3,189

)

 

 

13,038

 

3,955

 

24,559

 

31,170

 

5,140

 

54

 

6,000

 

83,916

 

Charge-offs

 

360

 

3

 

63

 

—

 

466

 

—

 

—

 

892

 

Recoveries

 

259

 

569

 

91

 

1,137

 

146

 

2

 

—

 

2,204

 

Net charge-offs (recoveries)

 

101

 

(566

)

(28

)

(1,137

)

320

 

(2

)

—

 

(1,312

)

Ending balance

 

$

12,937

 

$

4,521

 

$

24,587

 

$

32,307

 

$

4,820

 

$

56

 

$

6,000

 

$

85,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 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

 

(1,298

)

10,279

 

(6,731

)

(4,419

)

3,167

 

(41

)

(2,000

)

(1,043

)

 

 

11,898

 

13,053

 

18,541

 

25,528

 

9,743

 

14

 

4,000

 

82,777

 

Charge-offs

 

1,963

 

—

 

139

 

1,041

 

2,242

 

8

 

—

 

5,393

 

Recoveries

 

1,929

 

1,844

 

867

 

40

 

768

 

6

 

—

 

5,454

 

Net charge-offs (recoveries)

 

34

 

(1,844

)

(728

)

1,001

 

1,474

 

2

 

—

 

(61

)

Ending balance

 

$

11,864

 

$

14,897

 

$

19,269

 

$

24,527

 

$

8,269

 

$

12

 

$

4,000

 

$

82,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 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

 

9,230

 

(2,432

)

(2,957

)

(16,687

)

2,903

 

(34

)

—

 

(9,977

)

 

 

14,217

 

2,078

 

24,879

 

33,887

 

5,324

 

51

 

6,000

 

86,436

 

Charge-offs

 

2,201

 

358

 

857

 

3,674

 

1,023

 

—

 

—

 

8,113

 

Recoveries

 

921

 

2,801

 

565

 

2,094

 

519

 

5

 

—

 

6,905

 

Net charge-offs (recoveries)

 

1,280

 

(2,443

)

292

 

1,580

 

504

 

(5

)

—

 

1,208

 

Ending balance

 

$

12,937

 

$

4,521

 

$

24,587

 

$

32,307

 

$

4,820

 

$

56

 

$

6,000

 

$

85,228

 

 

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 credits of $1.7 million and $1.0 million in the third quarter and first nine months of 2014, respectively, compared to credits of $3.2 million and $10.0 million in the third quarter and first nine months 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.