ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is established as losses are estimated to have occurred through a provision charged to earnings. Losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for credit losses. Allowances for impaired commercial loans over $500 are generally determined based on collateral values or the present value of estimated cash flows. All other impaired loans and leases are evaluated in the aggregate based on loan segment loss given default. Changes in the allowance for credit losses related to impaired loans and leases are charged or credited to the provision for credit losses.

The allowance for credit losses is maintained at a level that, in management’s judgment, is believed adequate to absorb probable losses associated with specifically identified loans and leases, as well as estimated probable credit losses inherent in the remainder of the portfolio. Adequacy of the allowance for credit losses is based on management’s evaluation of potential losses in the portfolio, which includes an assessment of past experience, current economic conditions in specific industries and geographic areas, general economic conditions, known and inherent risks in the portfolio, the estimated value of underlying collateral and residuals and changes in the composition of the portfolio. Determination of the allowance for credit losses is inherently subjective as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans and leases, estimated losses on pools of homogeneous loans and leases based on transition matrices with predefined loss emergence periods and consideration of qualitative factors, all of which are susceptible to significant change.

Credit impaired loans obtained through acquisitions are accounted for under the provisions of ASC 310-30. The Corporation also accounts for certain acquired loans considered performing at the time of acquisition by analogy to ASC 310-30. ASC 310-30 requires the initial recognition of acquired loans at the present value of amounts expected to be received. Any deterioration in the credit quality of acquired loans subsequent to acquisition would be considered in the allowance for credit losses.

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


	Balance at Beginning of Period		Charge- Offs			Recoveries		Net Charge- Offs			Provision for credit losses			Balance at End of Period
Three Months Ended March 31, 2015
Commercial real estate	$	37,588	$	(1,001	)	$	209	$	(792	)	$	1,996		$	38,792
Commercial and industrial		32,645		(684	)		120		(564	)		722			32,803
Commercial leases		2,398		(93	)		10		(83	)		261			2,576

Total commercial loans and leases		72,631		(1,778	)		339		(1,439	)		2,979			74,171
Direct installment		20,538		(2,433	)		269		(2,164	)		2,830			21,204
Residential mortgages		8,024		(511	)		15		(496	)		943			8,471
Indirect installment		7,504		(1,280	)		302		(978	)		1,131			7,657
Consumer lines of credit		8,496		(410	)		40		(370	)		764			8,890
Other		759		(335	)		11		(324	)		419			854

Total allowance on originated loans and leases		117,952		(6,747	)		976		(5,771	)		9,066			121,247

Purchased credit-impaired loans		660		(64	)		19		(45	)		6			621
Other acquired loans		7,314		(77	)		330		253			(936	)		6,631

Total allowance on acquired loans		7,974		(141	)		349		208			(930	)		7,252

Total allowance	$	125,926	$	(6,888	)	$	1,325	$	(5,563	)	$	8,136		$	128,499

Three Months Ended March 31, 2014
Commercial real estate	$	32,548	$	(2,223	)	$	299	$	(1,924	)	$	7,910		$	38,534
Commercial and industrial		32,603		(513	)		370		(143	)		(2,489	)		29,971
Commercial leases		1,903		(87	)		29		(58	)		99			1,944

Total commercial loans and leases		67,054		(2,823	)		698		(2,125	)		5,520			70,449
Direct installment		17,824		(2,521	)		267		(2,254	)		1,060			16,630
Residential mortgages		5,836		(132	)		4		(128	)		(401	)		5,307
Indirect installment		6,409		(802	)		217		(585	)		676			6,500
Consumer lines of credit		7,231		(323	)		55		(268	)		695			7,658
Other		530		(262	)		5		(257	)		306			579

Total allowance on originated loans and leases		104,884		(6,863	)		1,246		(5,617	)		7,856			107,123

Purchased credit-impaired loans		1,000		(249	)		—		(249	)		(43	)		708
Other acquired loans		4,900		9			286		295			(807	)		4,388

Total allowance on acquired loans		5,900		(240	)		286		46			(850	)		5,096

Total allowance	$	110,784	$	(7,103	)	$	1,532	$	(5,571	)	$	7,006		$	112,219

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


	Allowance				Loans and Leases Outstanding
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans and Leases		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
March 31, 2015
Commercial real estate	$	735	$	38,057	$	3,082,385	$	12,865	$	3,069,520
Commercial and industrial		1,446		31,357		2,281,075		5,711		2,275,364
Commercial leases		—		2,576		180,207		—		180,207

Total commercial loans and leases		2,181		71,990		5,543,667		18,576		5,525,091
Direct installment		—		21,204		1,594,846		—		1,594,846
Residential mortgages		—		8,471		877,437		—		877,437
Indirect installment		—		7,657		903,780		—		903,780
Consumer lines of credit		—		8,890		953,569		—		953,569
Other		—		854		42,632		—		42,632

	$	2,181	$	119,066	$	9,915,931	$	18,576	$	9,897,355

December 31, 2014
Commercial real estate	$	399	$	37,189	$	3,031,810	$	13,952	$	3,017,858
Commercial and industrial		780		31,865		2,197,793		5,837		2,191,956
Commercial leases		—		2,398		177,824		—		177,824

Total commercial loans and leases		1,179		71,452		5,407,427		19,789		5,387,638
Direct installment		—		20,538		1,579,770		—		1,579,770
Residential mortgages		—		8,024		817,586		—		817,586
Indirect installment		—		7,504		873,645		—		873,645
Consumer lines of credit		—		8,496		946,427		—		946,427
Other		—		759		41,290		—		41,290

	$	1,179	$	116,773	$	9,666,145	$	19,789	$	9,646,356