6. Loans and Allowance for Loan Losses

Following is a summary of loans, net of unearned income:


December 31	2012						2011
	Originated Loans		Acquired Loans		Total Loans		Total Loans
Commercial real estate	$	2,448,471	$	258,575	$	2,707,046	$	2,495,727
Commercial and industrial		1,555,301		47,013		1,602,314		1,363,692
Commercial leases		130,133		—		130,133		110,795

Total commercial loans and leases		4,133,905		305,588		4,439,493		3,970,214
Direct installment		1,108,865		69,665		1,178,530		1,029,187
Residential mortgages		653,826		438,402		1,092,228		670,936
Indirect installment		568,324		13,713		582,037		540,789
Consumer lines of credit		732,534		72,960		805,494		607,280
Other		39,937		—		39,937		38,261

	$	7,237,391	$	900,328	$	8,137,719	$	6,856,667

The carrying amount of acquired loans at December 31, 2012 totaled $900,328, including purchased credit impaired (PCI) loans with a carrying amount of $16,623. The outstanding contractual balance receivable of acquired loans at December 31, 2012 totaled $956,091, including PCI loans with an outstanding contractual balance receivable of $41,134.

Acquired loans with a carrying amount of $307,347, including PCI loans with a carrying amount of $15,839, are included in 2011 total loans.

Commercial real estate includes both owner-occupied and non-owner-occupied loans secured by commercial properties. Commercial and industrial includes loans to businesses that are not secured by real estate. Commercial leases consist of loans for new or used equipment. Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans. Residential mortgages consist of conventional and jumbo mortgage loans for non-commercial properties. Indirect installment is comprised of loans originated by third parties and underwritten by the Corporation, primarily automobile loans. Consumer lines of credit include HELOC and consumer lines of credit that are either unsecured or secured by collateral other than home equity. Other is comprised primarily of mezzanine loans and student loans.

The loan portfolio consists principally of loans to individuals and small- and medium-sized businesses within the Corporation’s primary market area of Pennsylvania, northeastern Ohio and northern West Virginia. The commercial real estate portfolio also includes loans in Florida, which totaled $68,627 or 0.8% of total loans at December 31, 2012, compared to $154,081 or 2.2% of total loans at December 31, 2011. Additionally, the total loan portfolio contains consumer finance loans to individuals in Pennsylvania, Ohio, Tennessee and Kentucky, which equaled $170,999 or 2.1% of total loans at December 31, 2012, compared to $163,856 or 2.4% of total loans at December 31, 2011. Due to the relative size of the consumer finance loan portfolio, they are not segregated from other consumer loans.

As of December 31, 2012, 46.5% of the commercial real estate loans were owner-occupied, while the remaining 53.5% were non-owner-occupied, compared to 46.0% and 54.0%, respectively, as of December 31, 2011. As of December 31, 2012 and 2011, the Corporation had commercial construction loans of $190,206 and $210,098, respectively, representing 2.3% and 3.1% of total loans, respectively.

Certain directors and executive officers of the Corporation and its significant subsidiaries, as well as associates of such persons, are loan customers. Loans to such persons were made in the ordinary course of business under normal credit terms and do not have more than a normal risk of collection. Following is a summary of the aggregate amount of loans to any such persons who had loans in excess of $60 during 2012:


Total loans at December 31, 2011	$	66,057
New loans		14,914
Repayments		(7,446	)
Other		571

Total loans at December 31, 2012	$	74,096

Other represents the net change in loan balances resulting from changes in related parties during 2012.

ASC 310-30 Loans

All loans acquired in the Parkvale acquisition, except for revolving loans, are subject to ASC 310-30. Revolving loans are accounted for under ASC 310-20. The Corporation’s allowance for loan losses for acquired loans reflects only those losses incurred after acquisition.

The following table reflects amounts at acquisition for all purchased loans subject to ASC 310-30 (impaired and non-impaired) acquired from Parkvale in 2012:


	Acquired Impaired Loans			Acquired Performing Loans			Total
Acquired from Parkvale in 2012
Contractually required cash flows at acquisition	$	12,224		$	1,327,342		$	1,339,566
Non-accretable difference (expected losses and foregone interest)		(6,070	)		(214,541	)		(220,611	)

Cash flows expected to be collected at acquisition		6,154			1,112,801			1,118,955
Accretable yield		(589	)		(293,594	)		(294,183	)

Basis in acquired loans at acquisition	$	5,565		$	819,207		$	824,772

The following table provides a summary of change in accretable yield for all acquired loans:


	Acquired Impaired Loans			Acquired Performing Loans			Total
Year Ended December 31, 2012
Balance at beginning of year	$	2,477		$	49,229		$	51,706
Acquisitions		589			293,594			294,183
Reduction due to unexpected early payoffs		—			(57,840	)		(57,840	)
Reclass from non-accretable difference		3,539			10,915			14,454
Disposals/transfers		(49	)		(615	)		(664	)
Accretion		(5,778	)		(41,908	)		(47,686	)

Balance at end of year	$	778		$	253,375		$	254,153

Accretable yield decreased in 2012 primarily as a result of the accretion recognized and a change in prepayment speed assumptions during the year.

Purchased Credit-Impaired Loans

The Corporation has acquired loans for which there was evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected.

Following is information about PCI loans identified in the Corporation’s acquisition of Parkvale:


	At Acquisition		December 31, 2012
Outstanding balance	$	9,135	$	3,704
Carrying amount		5,565		2,552
Allowance for loan losses		n/a		103
Impairment recognized since acquisition		n/a		103
Allowance reduction recognized since acquisition		n/a		—

Following is information about the Corporation’s PCI loans:


	Contractual Receivable			Non-Accretable Difference			Expected Cash Flows			Accretable Yield			Carrying Amount
For the Year Ended December 31, 2012
Balance at beginning of year	$	51,693		$	(33,377	)	$	18,316		$	(2,477	)	$	15,839
Acquisitions		9,135			(2,981	)		6,154			(589	)		5,565
Accretion		—			—			—			5,778			5,778
Payments received		(9,556	)		—			(9,556	)		—			(9,556	)
Reclass from non-accretable difference		—			3,539			3,539			(3,539	)		—
Disposals/transfers		(12,494	)		11,442			(1,052	)		49			(1,003	)
Contractual interest		2,356			(2,356	)		—			—			—

Balance at end of year	$	41,134		$	(23,733	)	$	17,401		$	(778	)	$	16,623

For the Year Ended December 31, 2011
Balance at beginning of year	$	20,356		$	(15,589	)	$	4,767		$	(791	)	$	3,976
Acquisitions		38,890			(19,401	)		19,489			(2,025	)		17,464
Accretion		—			—			—			903			194
Payments received		(4,784	)		—			(4,784	)		—			(4,075	)
Reclass from non-accretable difference		—			709			709			(709	)		—
Disposals/transfers		(6,128	)		4,263			(1,865	)		145			(1,720	)
Contractual interest		3,359			(3,359	)		—			—			—

Balance at end of year	$	51,693		$	(33,377	)	$	18,316		$	(2,477	)	$	15,839

The accretion in the table above includes $3,539 in 2012 and $709 in 2011 that primarily represents payoffs received on certain loans in excess of expected cash flows.

Credit Quality

Management monitors the credit quality of the Corporation’s loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan.

Non-performing loans include non-accrual loans and non-performing TDRs. Past due loans are reviewed on a monthly basis to identify loans for non-accrual status. The Corporation places a loan on non-accrual status and discontinues interest accruals on originated loans generally when principal or interest is due and has remained unpaid for a certain number of days unless the loan is both well secured and in the process of collection. Commercial loans are placed on non-accrual at 90 days, installment loans are placed on non-accrual at 120 days and residential mortgages and consumer lines of credit are generally placed on non-accrual at 180 days. When a loan is placed on non-accrual status, all unpaid interest is reversed. Non-accrual loans may not be restored to accrual status until all delinquent principal and interest have been paid and the ultimate ability to collect the remaining principal and interest is reasonably assured. TDRs are loans in which the borrower has been granted a concession on the interest rate or the original repayment terms due to financial distress. Non-performing assets also include debt securities on which OTTI has been taken in the current or prior periods that have not been returned to accrual status.

Following is a summary of non-performing assets:


December 31	2012			2011
Non-accrual loans	$	66,004		$	94,335
Troubled debt restructurings		14,876			11,893

Total non-performing loans		80,880			106,228
Other real estate owned (OREO)		35,257			34,719

Total non-performing loans and OREO		116,137			140,947
Non-performing investments		2,809			8,972

Total non-performing assets	$	118,946		$	149,919

Asset quality ratios:
Non-performing loans as a percent of total loans		0.99	%		1.55	%
Non-performing loans + OREO as a percent of total loans + OREO		1.42	%		2.05	%
Non-performing assets as a percent of total assets		0.99	%		1.53	%

The following tables provide an analysis of the aging of loans by class segregated by loans originated and loans acquired as of December 31, 2012.

Originated loans:


	30-89 Days Past Due		³ 90 Days Past Due and Still Accruing		Non-Accrual		Total Past Due		Current		Total Loans
December 31, 2012
Commercial real estate	$	5,786	$	533	$	47,895	$	54,214	$	2,394,257	$	2,448,471
Commercial and industrial		7,310		456		6,017		13,783		1,541,518		1,555,301
Commercial leases		1,671		—		965		2,636		127,497		130,133

Total commercial loans and leases		14,767		989		54,877		70,633		4,063,272		4,133,905
Direct installment		8,834		2,717		3,342		14,893		1,093,972		1,108,865
Residential mortgages		15,821		2,365		2,891		21,077		632,749		653,826
Indirect installment		5,114		374		1,039		6,527		561,797		568,324
Consumer lines of credit		1,633		247		355		2,235		730,299		732,534
Other		36		15		3,500		3,551		36,386		39,937

	$	46,205	$	6,707	$	66,004	$	118,916	$	7,118,475	$	7,237,391

December 31, 2011
Commercial real estate	$	13,868	$	9,612	$	76,256	$	99,736	$	2,395,991	$	2,495,727
Commercial and industrial		2,164		690		6,956		9,810		1,353,882		1,363,692
Commercial leases		1,102		5		1,084		2,191		108,604		110,795

Total commercial loans and leases		17,134		10,307		84,296		111,737		3,858,477		3,970,214
Direct installment		8,228		3,614		2,525		14,367		1,014,820		1,029,187
Residential mortgages		14,492		3,342		2,443		20,277		650,659		670,936
Indirect installment		5,031		282		918		6,231		534,558		540,789
Consumer lines of credit		1,253		586		653		2,492		604,788		607,280
Other		36		—		3,500		3,536		34,725		38,261

	$	46,174	$	18,131	$	94,335	$	158,640	$	6,698,027	$	6,856,667

Acquired loans:


	30-89 Days Past Due		³ 90 Days Past Due and Still Accruing		Non- Accrual		Total Past Due (1)		Current		Discount			Total Loans
December 31, 2012
Commercial real estate	$	6,829	$	13,597		—	$	20,426	$	250,116	$	(11,967	)	$	258,575
Commercial and industrial		1,653		138		—		1,791		47,351		(2,129	)		47,013
Commercial leases		—		—		—		—		—		—			—

Total commercial loans and leases		8,482		13,735		—		22,217		297,467		(14,096	)		305,588
Direct installment		1,454		947		—		2,401		63,502		3,762			69,665
Residential mortgages		12,137		21,069		—		33,206		439,620		(34,424	)		438,402
Indirect installment		347		56		—		403		14,089		(779	)		13,713
Consumer lines of credit		379		778		—		1,157		75,800		(3,997	)		72,960
Other		—		—		—		—		—		—			—

	$	22,799	$	36,585		—	$	59,384	$	890,478	$	(49,534	)	$	900,328

(1)	Past due information includes loans acquired at the contractual balance outstanding at December 31, 2012.

The Corporation utilizes the following categories to monitor credit quality within its commercial loan portfolio:


Rating Category		Definition
Pass		in general, the condition of the borrower and the performance of the loan is satisfactory or better

Special Mention		in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring

Substandard		in general, the condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate if deficiencies are not corrected

Doubtful		in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable

The use of these internally assigned credit quality categories within the commercial loan portfolio permits management’s use of migration and roll rate analysis to estimate a quantitative portion of credit risk. The Corporation’s internal credit risk grading system is based on past experiences with similarly graded loans and conforms with regulatory categories. In general, loan risk ratings within each category are reviewed on an ongoing basis according to the Corporation’s policy for each class of loans. Each quarter, management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the commercial loan portfolio. Loans that migrate toward the Pass credit category or within the Pass credit category generally have a lower risk of loss and; therefore, a lower risk factor compared to loans that migrate toward the Substandard or Doubtful credit categories, which generally have a higher risk of loss and; therefore, a higher risk factor is applied to those related loan balances.

The following tables present a summary of the Corporation’s commercial loans by credit quality category segregated by loans originated and loans acquired as of December 31, 2012.

Originated loans:


	Commercial Loan Credit Quality Categories
	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2012
Commercial real estate	$	2,282,139	$	57,938	$	106,258	$	2,136	$	2,448,471
Commercial and industrial		1,472,598		32,227		49,814		662		1,555,301
Commercial leases		126,283		243		3,607		—		130,133

	$	3,881,020	$	90,408	$	159,679	$	2,798	$	4,133,905

December 31, 2011
Commercial real estate	$	2,198,136	$	89,703	$	206,855	$	1,033	$	2,495,727
Commercial and industrial		1,275,230		49,282		38,171		1,009		1,363,692
Commercial leases		105,631		3,362		1,802		—		110,795

	$	3,578,997	$	142,347	$	246,828	$	2,042	$	3,970,214

Acquired loans:


	Commercial Loan Credit Quality Categories
	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2012
Commercial real estate	$	204,300	$	14,713	$	39,093	$	469	$	258,575
Commercial and industrial		39,596		3,611		3,804		2		47,013
Commercial leases		—		—		—		—		—

	$	243,896	$	18,324	$	42,897	$	471	$	305,588

Credit quality information includes loans acquired at the contractual balance outstanding at December 31, 2012.

The Corporation uses payment status and delinquency migration analysis within the consumer and other loan classes to enable management to estimate a quantitative portion of credit risk. Each month, management analyzes payment and volume activity, as well as other external statistics and factors such as unemployment, to determine how consumer loans are performing.

Following is a table showing originated consumer and other loans by payment status:


	Consumer Loan Credit Quality by Payment Status
	Performing		Non-Performing		Total
December 31, 2012
Direct installment	$	1,100,324	$	8,541	$	1,108,865
Residential mortgages		642,406		11,420		653,826
Indirect installment		567,192		1,132		568,324
Consumer lines of credit		731,788		746		732,534
Other		36,437		3,500		39,937

December 31, 2011
Direct installment	$	1,022,025	$	7,162	$	1,029,187
Residential mortgages		661,392		9,544		670,936
Indirect installment		539,810		979		540,789
Consumer lines of credit		606,533		747		607,280
Other		34,761		3,500		38,261

Loans are designated as impaired when, in the opinion of management, based on current information and events, the collection of principal and interest in accordance with the loan contract is doubtful. Typically, the Corporation does not consider loans for impairment unless a sustained period of delinquency (i.e., 90-plus days) is noted or there are subsequent events that impact repayment probability (i.e., negative financial trends, bankruptcy filings, imminent foreclosure proceedings, etc.). Impairment is evaluated in the aggregate for consumer installment loans, residential mortgages, consumer lines of credit, commercial leases and commercial loan relationships less than $500. For loan relationships greater than or equal to $500, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using a market interest rate or at the fair value of collateral if repayment is expected solely from the collateral. Consistent with the Corporation’s existing method of income recognition for loans, interest on impaired loans, except those classified as non-accrual, is recognized as income using the accrual method. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Following is a summary of information pertaining to originated loans considered to be impaired, by class of loans:


At or For the Year Ended December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
With no specific allowance recorded:
Commercial real estate	$	37,119	$	50,234	$	—	$	36,426
Commercial and industrial		7,074		9,597		—		6,992
Commercial leases		965		—		—		1,053

Total commercial loans and leases		45,158		59,831		—		44,471
Direct installment		8,541		8,693		—		6,443
Residential mortgages		11,414		11,223		—		9,059
Indirect installment		1,132		2,381		—		1,133
Consumer lines of credit		746		792		—		591
Other		3,500		3,500		—		3,500
With a specific allowance recorded:
Commercial real estate		12,623		21,877		2,136		14,522
Commercial and industrial		590		590		590		592
Commercial leases		—		—		—		—

Total commercial loans and leases		13,213		22,467		2,726		15,114
Direct installment		—		—		—		—
Residential mortgages		—		—		—		—
Indirect installment		—		—		—		—
Consumer lines of credit		—		—		—		—
Other		—		—		—		—
Total:
Commercial real estate		49,742		72,111		2,136		50,948
Commercial and industrial		7,664		10,187		590		7,584
Commercial leases		965		—		—		1,053

Total commercial loans and leases		58,371		82,298		2,726		59,585
Direct installment		8,541		8,693		—		6,443
Residential mortgages		11,414		11,223		—		9,059
Indirect installment		1,132		2,381		—		1,133
Consumer lines of credit		746		792		—		591
Other		3,500		3,500		—		3,500


At or For the Year Ended December 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
With no specific allowance recorded:
Commercial real estate	$	56,884	$	78,638	$	—	$	61,062
Commercial and industrial		4,228		4,971		—		4,610
Commercial leases		1,084		1,084		—		1,217

Total commercial loans and leases		62,196		84,693		—		66,889
Direct installment		7,162		7,522		—		7,530
Residential mortgages		9,544		9,839		—		10,278
Indirect installment		979		1,071		—		973
Consumer lines of credit		747		761		—		947
Other		3,500		3,500		—		1,750
With a specific allowance recorded:
Commercial real estate		18,804		26,618		4,871		25,434
Commercial and industrial		3,588		3,750		2,276		3,603
Commercial leases		—		—		—		—

Total commercial loans and leases		22,392		30,368		7,147		29,037
Direct installment		—		—		—		—
Residential mortgages		—		—		—		—
Indirect installment		—		—		—		—
Consumer lines of credit		—		—		—		—
Other		—		—		—		—
Total:
Commercial real estate		75,688		105,256		4,871		86,496
Commercial and industrial		7,816		8,721		2,276		8,213
Commercial leases		1,084		1,084		—		1,217

Total commercial loans and leases		84,588		115,061		7,147		95,926
Direct installment		7,162		7,522		—		7,530
Residential mortgages		9,544		9,839		—		10,278
Indirect installment		979		1,071		—		973
Consumer lines of credit		747		761		—		947
Other		3,500		3,500		—		1,750

Interest income is generally no longer recognized once a loan becomes impaired.

The above tables do not include PCI loans totaling $16,623 and $15,839 at December 31, 2012 and 2011, respectively. These tables do not reflect the additional allowance for loan losses at December 31, 2012 relating to acquired loans in the following pools and categories: commercial real estate of $1,955; commercial and industrial of $1,140; direct installment of $657; residential mortgages of $69; and indirect installment of $359 totaling $4.180.

Troubled Debt Restructurings

TDRs are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from loss mitigation activities and could include the extension of a maturity date, interest rate reduction, principal forgiveness, deferral or decrease in payments for a period of time and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral.

Following is a summary of the composition of total TDRs:


December 31	2012		2011
Accruing:
Performing	$	12,659	$	10,131
Non-performing		14,876		11,893
Non-accrual		12,385		10,827

	$	39,920	$	32,851

TDRs that are accruing and performing include loans that met the criteria for non-accrual of interest prior to restructuring for which the Corporation can reasonably estimate the timing and amount of the expected cash flows on such loans and for which the Corporation expects to fully collect the new carrying value of the loans. During 2012, the Corporation returned to performing status $5,290 in restructured loans, the majority of which were secured by residential mortgages that have consistently met their modified obligations for more than six months. TDRs that are accruing and non-performing are comprised of consumer loans that have not demonstrated a consistent repayment pattern on the modified terms for more than six months, however it is expected that the Corporation will collect all future principal and interest payments. TDRs that are on non-accrual are not placed on accruing status until all delinquent principal and interest have been paid and the ultimate collectability of the remaining principal and interest is reasonably assured. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and result in potential incremental losses which are factored into the allowance for loan losses.

Excluding purchased impaired loans, commercial loans over $500 whose terms have been modified in a TDR are generally placed on non-accrual, individually analyzed and measured for estimated impairment based on the fair value of the underlying collateral. The Corporation’s allowance for loan losses included specific reserves for commercial TDRs of $41 at both December 31, 2012 and 2011 and pooled reserves for individual loans under $500 of $297 and $0 for those same periods, based on historical loss experience. Upon default, the amount of the recorded investment in the TDR in excess of the fair value of the collateral less estimated selling costs is generally considered a confirmed loss and is charged-off against the allowance for loan losses.

All other classes of loans, which are primarily secured by residential properties, whose terms have been modified in a TDR are pooled and measured for estimated impairment based on the expected net present value of the estimated future cash flows of the pool. The Corporation’s allowance for loan losses included pooled reserves for these classes of loans of $1,455 and $847 at December 31, 2012 and 2011, respectively. Upon default of an individual loan, the Corporation’s charge-off policy is followed accordingly for that class of loan.

The majority of TDRs are the result of interest rate concessions for a limited period of time. Following is a summary of loans, by class, that have been restructured:


Year Ended December 31	2012						2011
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial real estate		21	$	4,067	$	4,505		11	$	4,505	$	4,474
Commercial and industrial		8		389		257		9		428		404
Commercial leases		—		—		—		—		—		—

Total commercial loans and leases		29		4,456		4,762		20		4,933		4,878
Direct installment		362		3,876		3,763		351		3,771		3,695
Residential mortgages		56		2,232		2,814		71		3,384		3,384
Indirect installment		31		169		151		19		44		44
Consumer lines of credit		20		214		315		3		4		3
Other		—		—		—		—		—		—

		498	$	10,947	$	11,805		464	$	12,136	$	12,004

Following is a summary of TDRs, by class of loans, for which there was a payment default, excluding loans that were either charged-off or cured by period end. Default occurs when a loan is 90 days or more past due and is within 12 months of restructuring.


Year Ended December 31	2012				2011
	Number of Contracts		Recorded Investment (1)		Number of Contracts		Recorded Investment (1)
Commercial real estate		—	$	—		6	$	2,241
Commercial and industrial		—		—		1		—
Commercial leases		—		—		—		—

Total commercial loans and leases		—		—		7		2,241
Direct installment		38		249		25		147
Residential mortgages		5		229		3		159
Indirect installment		3		5		3		5
Consumer lines of credit		—		—		—		—
Other		—		—		—		—

		46	$	483		38	$	2,552

(1)	The recorded investment is as of period end.

Allowance for Loan Losses

The following tables provide a summary of changes in the allowance for loan losses:


December 31	2012									2011			2010
	Allowance on Originated Loans			Allowance on Acquired Loans			Total Allowance			Total Allowance			Total Allowance
Balance at beginning of year	$	100,662		$	—		$	100,662		$	106,120		$	104,655
Charge-offs		(32,322	)		(254	)		(32,576	)		(41,831	)		(48,589	)
Recoveries		4,671			315			4,986			2,732			2,731

Net charge-offs		(27,651	)		61			(27,590	)		(39,099	)		(45,858	)
Provision for loan losses		27,183			4,119			31,302			33,641			47,323

Balance at end of year	$	100,194		$	4,180		$	104,374		$	100,662		$	106,120

Following is a summary of changes in the allowance for loan losses, by loan class:


	Balance at Beginning of Year		Charge- Offs			Recoveries		Net Charge- Offs			Provision for Loan Losses			Balance at End of Year
Year Ended December 31, 2012
Commercial real estate	$	43,283	$	(8,688	)	$	1,765	$	(6,923	)	$	(1,550	)	$	34,810
Commercial and industrial		25,476		(8,098	)		693		(7,405	)		13,778			31,849
Commercial leases		1,556		(509	)		224		(285	)		473			1,744

Total commercial loans and leases		70,315		(17,295	)		2,682		(14,613	)		12,701			68,403
Direct installment		14,814		(7,875	)		942		(6,933	)		7,249			15,130
Residential mortgages		4,437		(1,050	)		194		(856	)		1,574			5,155
Indirect installment		5,503		(2,926	)		605		(2,321	)		2,267			5,449
Consumer lines of credit		5,447		(2,137	)		234		(1,903	)		2,513			6,057
Other		146		(1,039	)		14		(1,025	)		879			—

Total allowance on originated loans		100,662		(32,322	)		4,671		(27,651	)		27,183			100,194
Purchased credit-impaired loans		—		—			—		—			759			759
Other acquired loans		—		(254	)		315		61			3,360			3,421

	$	100,662	$	(32,576	)	$	4,986	$	(27,590	)	$	31,302		$	104,374


Year Ended December 31, 2011
Commercial real estate	$	49,924	$	(21,018	)	$	594	$	(20,424	)	$	13,783		$	43,283
Commercial and industrial		24,682		(3,642	)		368		(3,274	)		4,068			25,476
Commercial leases		1,070		(567	)		75		(492	)		978			1,556

Total commercial loans and leases		75,676		(25,227	)		1,037		(24,190	)		18,829			70,315
Direct installment		14,941		(8,874	)		876		(7,998	)		7,871			14,814
Residential mortgages		4,578		(1,261	)		67		(1,194	)		1,053			4,437
Indirect installment		5,941		(2,957	)		501		(2,456	)		2,018			5,503
Consumer lines of credit		4,743		(2,110	)		213		(1,897	)		2,601			5,447
Other		241		(1,194	)		31		(1,163	)		1,068			146
Purchased credit-impaired loans		—		(208	)		7		(201	)		201			—

	$	106,120	$	(41,831	)	$	2,732	$	(39,099	)	$	33,641		$	100,662

Following is a summary of the individual and collective originated allowance for loan losses and corresponding originated loan balances by class:


	Allowance				Loans Outstanding
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Originated Loans		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
December 31, 2012
Commercial real estate	$	2,136	$	32,674	$	2,448,471	$	35,024	$	2,413,447
Commercial and industrial		590		31,259		1,555,301		1,624		1,553,677
Commercial leases		—		1,744		130,133		—		130,133

Total commercial loans and leases		2,726		65,677		4,133,905		36,648		4,097,257
Direct installment		—		15,130		1,108,865		—		1,108,865
Residential mortgages		—		5,155		653,826		—		653,826
Indirect installment		—		5,449		568,324		—		568,324
Consumer lines of credit		—		6,057		732,534		—		732,534
Other		—		—		39,937		—		39,937

	$	2,726	$	97,468	$	7,237,391	$	36,648	$	7,200,743

December 31, 2011
Commercial real estate	$	4,871	$	38,412	$	2,495,727	$	75,688	$	2,420,039
Commercial and industrial		2,276		23,200		1,363,692		7,816		1,355,876
Commercial leases		—		1,556		110,795		—		110,795

Total commercial loans and leases		7,147		63,168		3,970,214		83,504		3,886,710
Direct installment		—		14,814		1,029,187		—		1,029,187
Residential mortgages		—		4,437		670,936		—		670,936
Indirect installment		—		5,503		540,789		—		540,789
Consumer lines of credit		—		5,447		607,280		—		607,280
Other		—		146		38,261		—		38,261

	$	7,147	$	93,515	$	6,856,667	$	83,504	$	6,773,163

The above table excludes acquired loans that were pooled into groups of loans for evaluating impairment.