Note 10 Loans and Allowance for Credit Losses

The following table provides outstanding balances related to each of our loan types:


	September 30, 2012		December 31, 2011
	September 30, 2012		December 31, 2011
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,087,019	$	996,739
Real estate construction		95,425		76,564
Residential real estate		1,228,328		1,137,059
Commercial real estate		1,217,249		1,267,432
Loans to individuals		586,278		565,849

Total loans and leases net of unearned income		4,214,299	$	4,043,643

During the nine-months ended September 30, 2012, all loan categories, except commercial real estate, increased with total loans increasing $170.7 million or 4% compared to balances outstanding at December 31, 2011. A majority of the loan growth was recognized in the residential real estate portfolio as a result of seasonal demand and an ongoing loan promotion. Increases in commercial, financial, agricultural and other portfolio can be attributed to growth in direct middle market lending and syndications in Pennsylvania and contiguous states, while loans to individuals increased due to growth in home equity installment loans and indirect auto lending.

Credit Quality Information

As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our loans:


Pass		Acceptable levels of risk exist in the relationship. Includes all loans not adversely classified as OAEM, substandard or doubtful.

Other Assets Especially Mentioned (OAEM)
		Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Bank’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.

Substandard		Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.

Doubtful		Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable.

The use of creditworthiness categories to grade loans permits management’s use of migration analysis to estimate a portion of credit risk. The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Movements between these rating categories provides a predictive measure of credit losses and therefore assists in determining the appropriate level for the loan loss reserves. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance. Loans that migrate towards higher risk rating levels generally have an increased risk of default, whereas, loans that migrate toward lower risk ratings generally will result in a lower risk factor being applied to those related loan balances.

The following tables represent our credit risk profile by creditworthiness:


	September 30, 2012
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Pass	$	987,376	$	71,995	$	1,212,272	$	1,087,424	$	586,191	$	3,945,258
Non-Pass
OAEM		27,334		939		5,568		63,563		3		97,407
Substandard		72,309		18,205		10,488		66,262		84		167,348
Doubtful		0		4,286		0		0		0		4,286

Total Non-Pass		99,643		23,430		16,056		129,825		87		269,041

Total	$	1,087,019	$	95,425	$	1,228,328	$	1,217,249	$	586,278	$	4,214,299


	December 31, 2011
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Pass	$	904,057	$	44,914	$	1,126,143	$	1,110,664	$	565,842	$	3,751,620
Non-Pass
OAEM		27,627		4,238		5,484		61,855		7		99,211
Substandard		60,114		21,701		5,432		94,913		0		182,160
Doubtful		4,941		5,711		0		0		0		10,652

Total Non-Pass		92,682		31,650		10,916		156,768		7		292,023

Total	$	996,739	$	76,564	$	1,137,059	$	1,267,432	$	565,849	$	4,043,643

Portfolio Risks

Credit quality measures at September 30, 2012 compared to December 31, 2011 indicate a decrease in criticized loans, or loans designated OAEM, substandard or doubtful, of $23.0 million, or 8%, a decrease in delinquency 30 days and over on accruing loans of $10.2 million, or 29%, and an $8.3 million increase in nonaccrual loans, excluding loans held-for-sale.

Charge-offs for the nine-months ended September 30, 2012 totaled $13.4 million compared to $30.1 million for the nine-months ended September 30, 2011. The most significant charge-offs during the nine-months ended September 30, 2012 were a $1.4 million charge taken on a Florida real estate construction loan with a remaining balance of $4.3 million and a $1.2 million charge taken on a $2.0 million commercial loan relationship. During the nine-months ended September 30, 2011, the most significant charge-off totaled $5.2 million and related to a central Pennsylvania development loan relationship. Other significant charge-offs during the nine-month period in 2011 totaled $10.8 million and related to six construction loan projects located in Florida, Nevada, Ohio and western and central Pennsylvania.

Criticized loans totaled $269.0 million at September 30, 2012 and represented 6% of the loan portfolio. This represents a $23.0 million decrease compared with the portfolio as of December 31, 2011. These loans have been evaluated when determining the appropriateness of the allowance for credit losses, which we believe is adequate at this time. However, changes in economic conditions, interest rates, borrower financial condition, delinquency trends or previously established fair values of collateral factors could significantly change those judgmental estimates.

The credit quality of our loan portfolio represents significant risk to our earnings, capital, regulatory agency relationships and shareholder returns. First Commonwealth devotes a substantial amount of resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting activities. Credit administration is independent of lending departments and oversight is provided by the Credit Committee of the First Commonwealth Board of Directors.

Risk factors associated with commercial real estate and construction related loans are monitored closely since this is an area that represents a significant portion of the loan portfolio and has experienced the most stress during the economic downturn.

In addition, during the first nine months of 2012, nine relationships consisting of fifteen loans, were classified as troubled debt restructuring. These loans increased the nonperforming loan balance by $10.3 million with a $3.2 million increase in specific reserves.

Age Analysis of Past Due Loans by Segment

The following tables delineate the aging analysis of the recorded investments in past due loans as of September 30, 2012 and December 31, 2011. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.


	September 30, 2012
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,440	$	679	$	221	$	28,827	$	31,167	$	1,055,852	$	1,087,019
Real estate construction		235		0		152		11,569		11,956		83,469		95,425
Residential real estate		7,642		1,986		1,277		8,910		19,815		1,208,513		1,228,328
Commercial real estate		6,651		169		162		37,340		44,322		1,172,927		1,217,249
Loans to individuals		2,684		820		1,186		84		4,774		581,504		586,278

Total	$	18,652	$	3,654	$	2,998	$	86,730	$	112,034	$	4,102,265	$	4,214,299

	December 31, 2011
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	5,433	$	824	$	287	$	33,459	$	40,003	$	956,736	$	996,739
Real estate construction		0		180		0		14,911		15,091		61,473		76,564
Residential real estate		7,144		2,100		8,767		3,153		21,164		1,115,895		1,137,059
Commercial real estate		3,671		1,241		157		26,953		32,022		1,235,410		1,267,432
Loans to individuals		2,952		962		1,804		0		5,718		560,131		565,849

Total	$	19,200	$	5,307	$	11,015	$	78,476	$	113,998	$	3,929,645	$	4,043,643

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans which are placed in nonaccrual status at 150 days past due. In periods prior to the third quarter of 2012, if a consumer loan was well secured and in the process of collection, it remained on accrual status, as delinquency was not a factor in moving it to nonaccrual status.

Nonaccrual Loans

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal become current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer doubtful.

Impaired Loans

Management considers loans to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Determination of impairment is treated the same across all loan categories. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source for repayment of the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the impaired loan is less than the recorded investment in the loan, impairment is recognized through an allowance estimate or a charge-off to the allowance. Troubled debt restructured loans on accrual status are considered to be impaired loans.

When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received, under the cash basis method.

Nonperforming loans, excluding loans held for sale, decreased $4.9 million to $93.9 million at September 30, 2012 compared to $98.8 million at December 31, 2011. Contributing to this decrease was an $11.3 million loan to a waste management company which was paid off in the first quarter and a $10.3 million loan to an information technology firm which was returned to accrual status in the second quarter. The most significant loans placed into nonperforming status during the first nine months of 2012 included $6.7 million to a western Pennsylvania in-patient facility, $4.9 million for a commercial real estate loan to a nonprofit institution, $2.5 million to a manufacturer of medical equipment and $2.8 million to a western Pennsylvania construction firm. During the third quarter of 2012, a $0.9 million payment was received on the aforementioned $4.9 million loan to a nonprofit, providing for a current balance on this loan of $3.9 million. Also impacting the balance of nonperforming loans for the period was the movement to nonaccrual status of $4.8 million in consumer loans which were 150 days or more past due. Beginning in the third quarter of 2012, consumer loans are moved to nonaccrual status once they reach 150 days past due, however, in prior periods, these loans were not placed in nonaccrual status if they were well secured and in the process of collection. The majority of the consumer loans moved to nonaccrual status in the third quarter, or $4.7 million of the $4.8 million, were residential real estate loans.

The specific allowance for nonperforming loans decreased by $0.3 million at September 30, 2012 compared to December 31, 2011, primarily due to the decrease in balances. Unfunded commitments related to nonperforming loans were $5.1 million at September 30, 2012 and after consideration of available collateral related to these commitments, an off balance sheet reserve of $44 thousand was established.

Loans held for sale totaled $13.4 million at December 31, 2011 and the entire balance represented nonperforming loans. As of September 30, 2012, the sale of all of these loans had been completed and provided for a $2.9 million gain. While these loans were considered to be nonperforming, they were not taken into consideration when determining the allowance for credit losses as they were carried at the lower of cost or fair value.

Significant nonaccrual loans as of September 30, 2012, include the following;

•

$19.3 million, the remaining portion of a $44.1 million unsecured loan to a western Pennsylvania real estate developer. This loan was originated in the second quarter of 2004 and was placed in nonaccrual status in the fourth quarter of 2009. A settlement plan with the borrower and three other lenders was reached in the fourth quarter of 2010 and resulted in an $8.0 million principal payment and a $15.4 million partial charge-off.

•

$16.0 million commercial real estate loan for a real estate developer in eastern Pennsylvania. This loan was originated in the third quarter of 2007 and restructured in the fourth quarter of 2011which resulted in a charge-off of $4.2 million. The most recent appraisal for the real estate collateral was completed in the third quarter of 2011.

•

$6.7 million commercial real estate loan to an in-patient facility in western Pennsylvania. This loan was originated in the fourth quarter of 2008 and placed in nonaccrual status in September 2012. Because this loan was not previously classified, the most recent appraisal for the real estate collateral was at loan origination. Therefore, the collateral valuation and resulting shortfall on this loan were determined using a real estate common level ratio.

•

$4.3 million, the remaining portion of a $20.8 million construction loan for a Florida condominium project. This loan was originated in the second quarter of 2007. Charge-offs of $16.5 million have been recorded on this loan. The most recent appraisal for the real estate collateral was completed in the second quarter of 2012.

•

$3.9 million real estate secured loan to a western Pennsylvania nonprofit corporation. This loan was originated in the fourth quarter of 2008 and placed in nonaccrual status in the second quarter of 2012. The most recent appraisals for the various real estate collateral were completed in the fourth quarter of 2011 and the first quarter of 2012.

The following tables include the recorded investment and unpaid principal balance for impaired loans with the associated allowance amount, if applicable, as of September 30, 2012 and December 31, 2011. Also presented are the average recorded investment in impaired loans and the related amount of interest recognized while the loan was considered impaired. Average balances are calculated based on month-end balances of the loans of the period reported.


	September 30, 2012						December 31, 2011
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
With no related .allowance recorded:
Commercial, financial, agricultural and other	$	6,762	$	7,716	$	0	$	2,010	$	3,418	$	0
Real estate construction		4,087		7,424		0		10,814		20,161		0
Residential real estate		7,087		7,556		0		3,125		3,513		0
Commercial real estate		29,394		31,055		0		36,777		41,974		0
Loans to individuals		84		84		0		0		0		0

Subtotal		47,414		53,835		0		52,726		69,066		0
With an allowance recorded:
Commercial, financial, agricultural and other		26,719		27,558		7,306		34,056		34,341		9,069
Real estate construction		7,482		30,312		973		6,298		21,402		2,960
Residential real estate		2,752		2,752		719		955		955		93
Commercial real estate		9,539		9,752		3,916		4,717		4,863		1,114
Loans to individuals		0		0		0		0		0		0

Subtotal		46,492		70,374		12,914		46,026		61,561		13,236

Total	$	93,906	$	124,209	$	12,914	$	98,752	$	130,627	$	13,236


	For the Nine-Months Ended September 30,
	2012				2011
	Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	9,281	$	116	$	3,695	$	11
Real estate construction		6,641		0		21,611		1
Residential real estate		7,604		17		2,519		4
Commercial real estate		27,869		50		27,322		246
Loans to individuals		9		0		13		0

Subtotal		51,404		183		55,160		262
With an allowance recorded:
Commercial, financial, agricultural and other		21,025		5		29,614		126
Real estate construction		7,381		0		19,858		0
Residential real estate		1,532		20		422		1
Commercial real estate		2,713		11		35,595		301
Loans to individuals		0		0		0		0

Subtotal		32,651		36		85,489		428

Total	$	84,055	$	219	$	140,649	$	690


	For the Three-Months Ended September 30,
	2012				2011
	Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	6,664	$	94	$	1,989	$	6
Real estate construction		4,954		0		16,465		(1	)
Residential real estate		4,374		6		3,131		3
Commercial real estate		29,878		14		19,676		228
Loans to individuals		28		0		7		0

Subtotal		45,898		114		41,268		236
With an allowance recorded:
Commercial, financial, agricultural and other		25,469		2		37,552		50
Real estate construction		8,848		0		20,237		(2	)
Residential real estate		2,130		6		669		1
Commercial real estate		4,754		11		51,677		124
Loans to individuals		0		0		0		0

Subtotal		41,201		19		110,135		173

Total	$	87,099	$	133	$	151,403	$	409

Impaired Loans (Continued)

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources.

The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans:


	September 30, 2012		December 31, 2011
	(dollars in thousands)
Troubled debt restructured loans
Accrual status	$	7,176	$	20,276
Nonaccrual status		46,026		44,841

Total	$	53,202	$	65,117

Commitments
Letters of credit	$	0	$	12,580
Unused lines of credit		1,342		42

Total	$	1,342	$	12,622

At September 30, 2012, troubled debt restructured loans on accruing status decreased $13.1 million compared to December 31, 2011 and commitments related to troubled debt restructured loans decreased $11.3 million for the same period. These decreases are primarily a result of the payoff of an $11.3 million loan to a waste management company in Pennsylvania as a result of the sale of the business. In addition, a $2.2 million loan to a retail development company in western Pennsylvania paid off during the first quarter. During 2012 and 2011 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

The following tables provide detail, including specific reserve and reasons for modification, related to loans identified as troubled debt restructurings:


	For the Nine-Months Ended September 30, 2012
			Type of Modification
	Number of Contracts		Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other		10	$	1,599	$	187	$	7,538	$	9,324	$	8,885	$	3,140
Real estate construction		1		823		0		0		823		791		0
Residential real estate		3		0		97		83		180		131		0
Commercial real estate		1		0		516		0		516		529		98

Total		15	$	2,422	$	800	$	7,621	$	10,843	$	10,336	$	3,238

Impaired Loans (Continued)


	For the Nine-Months Ended September 30, 2011
			Type of Modification
	Number of Contracts		Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other		10	$	100	$	105	$	2,218	$	2,423	$	2,402	$	606
Real estate construction		4		354		0		0		354		506		0
Residential real estate		5		0		100		179		279		274		7
Commercial real estate		18		17,202		199		1,978		19,379		19,237		1,551

Total		37	$	17,656	$	404	$	4,375	$	22,435	$	22,419	$	2,164

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate include loans that were modified for a change in rate as well as a reamortization of the principal and an extension of the maturity. For the nine-months ended September 30, 2012 and 2011, $0.8 million and $0.3 million, respectively, of total rate modifications represent loans with modifications to the rate as well as payment due to reamortization.

The following tables provide detail, including specific reserve and reasons for modification, related to loans identified as troubled debt restructurings:


	For the Three-Months Ended September 30, 2012
			Type of Modification
	Number of Contracts		Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other		6	$	1,153	$	169	$	1,509	$	2,831	$	3,004	$	746
Real estate construction		0		0		0		0		0		0		0
Residential real estate		0		0		0		0		0		0		0
Commercial real estate		1		0		516		0		516		529		98

Total		7	$	1,153	$	685	$	1,509	$	3,347	$	3,533	$	844

Impaired Loans (Continued)


	For the Three-Months Ended September 30, 2011
			Type of Modification
	Number of Contracts		Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other		1	$	0	$	0	$	50	$	50	$	46	$	0
Real estate construction		0		0		0		0		0		0		0
Residential real estate		2		0		73		104		177		175		7
Commercial real estate		3		39		0		481		520		517		0

Total		6	$	39	$	73	$	635	$	747	$	738	$	7

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate include loans that were modified for a change in rate as well as a reamortization of the principal and an extension of the maturity. For the three-months ended September 30, 2012, $0.7 million of total rate modifications represent loans with modifications to the rate as well as payment due to reamortization. There were no loans for the three-months ended September 30, 2011 with modifications to rate as well as payment.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. There were no loans restructured over the previous twelve months considered to default during the three-months ended September 30, 2012 and 2011. The following provides information related to restructured loans that were considered to default during the nine-months ended September 30:


	2012				2011
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
	(dollars in thousands)
Real estate construction		0	$	0		1	$	88

Total		0	$	0		1	$	88

Impaired Loans (Continued)

The following tables provide detail related to the allowance for credit losses:


	For the Nine-Months Ended September 30, 2012
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Unallocated		Total
	(dollars in thousands)
Allowance for credit losses:
Beginning Balance	$	18,200		$	6,756		$	8,237		$	18,961		$	4,244		$	4,836	$	61,234
Charge-offs		(4,939	)		(2,356	)		(2,984	)		(638	)		(2,494	)		0		(13,411	)
Recoveries		349			121			331			256			396			0		1,453
Provision		4,470			4,341			1,120			1,855			2,074			978		14,838

Ending Balance	$	18,080		$	8,862		$	6,704		$	20,434		$	4,220		$	5,814	$	64,114

Ending balance: individually evaluated for impaired	$	7,306		$	973		$	719		$	3,916		$	0		$	0	$	12,914
Ending balance: collectively evaluated for impaired		10,774			7,889			5,985			16,518			4,220			5,814		51,200
Loans:
Ending balance		1,087,019			95,425			1,228,328			1,217,249			586,278					4,214,299
Ending balance: individually evaluated for impaired		32,833			11,427			7,224			37,369			0					88,853
Ending balance: collectively evaluated for impaired		1,054,186			83,998			1,221,104			1,179,880			586,278					4,125,446


	For the Nine-Months Ended September 30, 2011
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Unallocated			Total
	(dollars in thousands)
Allowance for credit losses:
Beginning Balance	$	21,700		$	18,002		$	5,454		$	16,913		$	4,215		$	4,945		$	71,229
Charge-offs		(3,642	)		(14,570	)		(2,686	)		(6,918	)		(2,332	)		0			(30,148	)
Recoveries		335			0			118			239			440			0			1,132
Provision		196			11,984			3,770			12,443			1,708			(197	)		29,904

Ending Balance	$	18,589		$	15,416		$	6,656		$	22,677		$	4,031		$	4,748		$	72,117

Ending balance: individually evaluated for impaired	$	10,503		$	12,551		$	171		$	11,674		$	0		$	0		$	34,899
Ending balance: collectively evaluated for impaired		8,086			2,865			6,485			11,003			4,031			4,748			37,218
Loans:
Ending balance		950,547			97,354			1,096,339			1,284,720			544,763						3,973,723
Ending balance: individually evaluated for impaired		37,738			35,957			2,290			81,375			0						157,360
Ending balance: collectively evaluated for impaired		912,809			61,397			1,094,049			1,203,345			544,763						3,816,363

Impaired Loans (Continued)


	For the Three-Months Ended September 30, 2012
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Unallocated			Total
	(dollars in thousands)
Allowance for credit losses:
Beginning Balance	$	19,302		$	8,001		$	6,619		$	17,638		$	4,209		$	5,907		$	61,676
Charge-offs		(1,271	)		(2,016	)		(530	)		(97	)		(756	)		0			(4,670	)
Recoveries		74			29			49			70			132			0			354
Provision		(25	)		2,848			566			2,823			635			(93	)		6,754

Ending Balance	$	18,080		$	8,862		$	6,704		$	20,434		$	4,220		$	5,814		$	64,114


	For the Three-Months Ended September 30, 2011
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Unallocated			Total
	(dollars in thousands)
Allowance for credit losses:
Beginning Balance	$	23,175		$	17,701		$	6,870		$	18,780		$	3,870		$	4,770		$	75,166
Charge-offs		(685	)		(6,522	)		(986	)		(1,343	)		(810	)		0			(10,346	)
Recoveries		74			0			22			75			151			0			322
Provision		(3,975	)		4,237			750			5,165			820			(22	)		6,975

Ending Balance	$	18,589		$	15,416		$	6,656		$	22,677		$	4,031		$	4,748		$	72,117