The allowance for loan losses is that amount management believes is adequate to absorb probable incurred credit losses in the loan portfolio based on management’s evaluation of various factors including overall growth in the loan portfolio, an analysis of individual loans, prior and current loss experience, and current economic conditions. A provision for loan losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors as discussed within Note 1 of the Notes to Consolidated Financial Statements included in Park’s 2011 Annual Report.

The activity in the allowance for loan losses for the three months ended March 31, 2012 and March 31, 2011 is summarized below.

Three months ended March 31, 2012

Commercial, financial and agricultural

Commercial real estate

Construction real estate

Residential real estate

Consumer

Leases

Centennial loan put

Total

(In thousands)

Allowance for credit losses:

Beginning balance

$ 16,950

$ 15,539

$ 14,433

$ 15,692

$ 5,830

$ -

$ 68,444

Charge-offs

4,538

4,934

4,320

3,922

1,253

18,967

Recoveries

468

609

707

1,943

Net Charge-offs

4,070

4,842

4,253

3,313

546

17,024

Provision

5,448

1,309

(433)

1,489

525

8,338

Ending balance

$ 18,328

$ 12,006

$ 9,747

$ 13,868

$ 5,809

$ -

$ 59,758

Provision for Centennial

loan put

662

Allowance for Credit Losses

$ 18,328

$ 12,006

$ 9,747

$ 13,868

$ 5,809

$ -

$ 662

$ 60,420


	Three months ended March 31, 2011
	Commercial, financial and agricultural	Commercial real estate	Construction real estate	Residential real estate	Consumer	Leases	Total
(In thousands)

Allowance for credit losses:
Beginning balance	$ 11,555	$ 24,369	$ 70,462	$ 30,259	$ 6,925	$ 5	$ 143,575
Charge-offs	1,841	1,785	3,420	2,487	1,973	-	11,506
Recoveries	569	802	96	501	390	3	2,361
Net Charge-offs	1,272	983	3,324	1,986	1,583	(3)	9,145
Provision	1,508	1,834	4,697	4,142	1,923	(4)	14,100
Ending balance	$ 11,791	$ 25,220	$ 71,835	$ 32,415	$ 7,265	$ 4	$ 148,530

The composition of the allowance for loan losses at March 31, 2012 and December 31, 2011 was as follows:


	March 31, 2012
	Commercial, financial and agricultural	Commercial real estate	Construction real estate	Residential real estate	Consumer	Leases	Total
(In thousands)
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$4,704	$ 1,506	$ 2,096	$ 1,199	$ -	$ -	$ 9,505
Collectively evaluated for impairment	13,624	10,500	7,651	12,669	5,809	-	50,253
Total ending allowance balance	$ 18,328	$ 12,006	$ 9,747	$ 13,868	$ 5,809	$ -	$ 59,758

Loan balance:
Loans individually evaluated for impairment	$ 40,210	$ 43,265	$ 52,046	$ 43,752	$ 20	$ -	$ 179,293
Loans collectively evaluated for impairment	712,182	1,045,083	151,769	1,623,947	610,160	1,949	4,145,090
Total ending loan balance	$ 752,392	$ 1,088,348	$ 203,815	$ 1,667,699	$ 610,180	$ 1,949	$ 4,324,383

Allowance for loan losses as a percentage of loan balance:
Loans individually evaluated for impairment	11.70%	3.48%	4.03%	2.74%	-%	-%	5.30%
Loans collectively evaluated for impairment	1.91%	1.00%	5.04%	0.78%	0.95%	-%	1.21%
Total ending loan balance	2.44%	1.10%	4.78%	0.83%	0.95%	-%	1.38%

Recorded investment:
Loans individually evaluated for impairment	$ 40,241	$ 43,305	$ 52,106	$ 43,752	$ 20	$ -	$ 179,424
Loans collectively evaluated for impairment	715,590	1,048,838	152,282	1,627,708	612,740	2,001	4,159,159
Total ending loan balance	$ 755,831	$ 1,092,143	$ 204,388	$ 1,671,460	$ 612,760	$ 2,001	$ 4,338,583


	December 31, 2011
(In thousands)	Commercial, financial and agricultural	Commercial real estate	Construction real estate	Residential real estate	Consumer	Leases	Total

Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$5,819	$4,431	$3,414	$2,271	$-	$-	$15,935
Collectively evaluated for impairment	11,131	11,108	11,019	13,421	5,830	-	52,509
Total ending allowance balance	$ 16,950	$ 15,539	$ 14,433	$ 15,692	$ 5,830	$ -	$ 68,444

Loan balance:
Loans individually evaluated for impairment	$40,621	$51,978	$50,240	$44,276	$20	$-	$187,135
Loans collectively evaluated for impairment	703,176	1,056,596	167,306	1,584,342	616,485	2,059	4,129,964
Total ending loan balance	$743,797	$1,108,574	$217,546	$1,628,618	$616,505	$2,059	$4,317,099

Allowance for loan losses as a percentage of loan balance:
Loans individually evaluated for impairment	14.33%	8.52%	6.80%	5.13%	-%	-%	8.52%
Loans collectively evaluated for impairment	1.58%	1.05%	6.59%	0.85%	0.95%	-%	1.27%
Total ending loan balance	2.28%	1.40%	6.63%	0.96%	0.95%	-%	1.59%

Recorded investment:
Loans individually evaluated for impairment	$40,621	$51,978	$50,240	$44,276	$20	$-	$187,135
Loans collectively evaluated for impairment	706,297	1,060,831	167,856	1,588,147	619,415	2,102	4,144,648
Total ending loan balance	$746,918	$1,112,809	$218,096	$1,632,423	$619,435	$2,102	$4,331,783

Loans collectively evaluated for impairment above include all performing loans at March 31, 2012 and December 31, 2011, as well as nonperforming loans internally classified as consumer loans. Nonperforming consumer loans are not typically individually evaluated for impairment, but receive a portion of the statistical allocation of the allowance for loan losses. Loans individually evaluated for impairment include all impaired loans internally classified as commercial loans at March 31, 2012 and December 31, 2011, which are evaluated for impairment in accordance with GAAP (see Note 1 of the Notes to Consolidated Financial Statements included in Park’s 2011 Annual Report).