5. Allowance for Loan Losses

The Corporation's Credit Policy Division manages credit risk by establishing common credit policies for its subsidiary bank, participating in approval of its loans, conducting reviews of loan portfolios, providing centralized consumer underwriting, collections and loan operation services, and overseeing loan workouts. The Corporation's objective is to minimize losses from its commercial lending activities and to maintain consumer losses at acceptable levels that are stable and consistent with growth and profitability objectives.

The allowance for loan losses is Management's estimate of the amount of probable credit losses inherent in a loan portfolio at the balance sheet date. The following describes the distinctions in methodology used to estimate the allowance for loan losses of originated, acquired and covered loan portfolios as well as certain significant accounting policies relevant to each category.

Originated Allowance for Loan Losses

Management estimates credit losses based on originated individual loans determined to be impaired and on all other loans grouped based on similar risk characteristics. Management also considers internal and external factors such as economic conditions, loan management practices, portfolio monitoring, and other risks, collectively known as qualitative factors, or Q-factors, to estimate credit losses in the loan portfolio. Q-factors are used to reflect changes in the portfolio's collectability characteristics not captured by historical loss data.

The Corporation's historical loss component is the most significant of the allowance for loan losses components and is based on historical loss experience by credit-risk grade (for commercial loan pools) and payment status (for mortgage and consumer loan pools). The historical loss experience component of the allowance for loan losses represents the results of migration analysis of historical net charge-offs for portfolios of loans (including groups of commercial loans within each credit-risk grade and groups of consumer loans by payment status). For measuring loss exposure in a pool of loans, the historical net charge-off or migration experience is utilized to estimate expected losses to be realized from the pool of loans.

If a nonperforming, substandard loan has an outstanding balance of $0.3 million or greater or if a doubtful loan has an outstanding balance of $0.1 million or greater, as determined by the Corporation's credit-risk grading process, further analysis is performed to determine the probable loss content and assign a specific allowance to the loan, if deemed appropriate. The allowance for loan losses relating to originated loans that have become impaired is based on either expected cash flows discounted using the original effective interest rate, the observable market price, or the fair value of the collateral for certain collateral dependent loans.

Acquired Allowance for Loan Losses

An allowance for loan losses for non-impaired acquired loans is estimated using a methodology similar to that used for originated loans. The allowance determined for each non-impaired acquired loan is compared to the remaining fair value discount for that loan. If the allowance is greater, the excess is added to the allowance through a provision for loan losses. If the allowance is less, no additional allowance or provision is recognized. Actual losses first reduce any remaining fair value discount for the loan. Once the discount is fully depleted, losses are applied against the allowance established for that loan.

Management reforecasts the estimate of cash flows expected to be collected on each acquired impaired loan pool on a quarterly basis. If the present value of expected cash flows for a pool is less than its carrying value, impairment is recognized by an increase in the allowance for loan losses and a charge to the provision for loan losses. If the present value of expected cash flows for a pool is greater than its carrying value, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into interest income over the remaining life of the loan pool.

In accordance with purchase accounting, the Citizens' loans were recorded at their fair value as of the Acquisition Date and the prior allowance for loan losses was eliminated. No allowance for loan losses was necessary on these acquired loans as of June 30, 2013.

Covered Allowance for Loan Losses

The allowance for loan losses on covered loans is estimated similar to acquired loans as described above except any increase to the allowance and provision for loan losses is partially offset by an increase in the loss share receivable for the portion of the losses recoverable under the loss sharing agreements with the FDIC.

The following tables show activity in the originated allowance for loan losses, by portfolio segment for the three and six months ended June 30, 2013 and 2012, as well as the corresponding recorded investment in originated loans at the end of the period:



As of June 30, 2013
Originated Loans		C&I			CRE			Construction			Leases			Installment			Home Equity Lines			Credit Cards			Residential Mortgages			Total
Three Months Ended
Allowance for originated loan losses, beginning balance		$	40,427		$	18,399		$	2,741		$	1,129		$	9,151		$	14,568		$	7,069		$	5,359		$	98,843
Charge-offs		(2,000		)	(750		)	—			(1,237		)	(3,612		)	(1,497		)	(1,459		)	(414		)	(10,969		)
Recoveries		3,528			203			31			—			2,739			599			469			51			7,620
Provision for loan losses		3,212			(1,029		)	(728		)	1,017			447			(404		)	1,209			(573		)	3,151
Allowance for originated loan losses, ending balance		$	45,167		$	16,823		$	2,044		$	909		$	8,725		$	13,266		$	7,288		$	4,423		$	98,645
Six Months Ended
Allowance for originated loan losses, beginning balance		$	36,209		$	20,126		$	3,821		$	639		$	11,154		$	13,724		$	7,384		$	5,885		$	98,942
Charge-offs		(4,103		)	(803		)	(516		)	(1,237		)	(8,206		)	(3,334		)	(2,862		)	(684		)	(21,745		)
Recoveries		4,583			335			89			89			5,235			1,082			982			94			12,489
Provision for loan losses		8,478			(2,835		)	(1,350		)	1,418			542			1,794			1,784			(872		)	8,959
Allowance for originated loan losses, ending balance		$	45,167		$	16,823		$	2,044		$	909		$	8,725		$	13,266		$	7,288		$	4,423		$	98,645

Ending allowance for originated loan losses balance attributable to loans:
	Individually evaluated for impairment	$	3,169		$	1,010		$	—		$	—		$	557		$	197		$	255		$	1,280		$	6,468
	Collectively evaluated for impairment	41,998			15,813			2,044			909			8,168			13,069			7,033			3,143			92,177
Total ending allowance for originated loan losses balance		$	45,167		$	16,823		$	2,044		$	909		$	8,725		$	13,266		$	7,288		$	4,423		$	98,645
Originated loans:
	Originated loans individually evaluated for impairment	$	9,439		$	24,400		$	1,005		$	—		$	30,140		$	6,819		$	1,262		$	23,221		$	96,286
	Originated loans collectively evaluated for impairment	3,468,751			2,190,457			303,760			188,353			1,466,523			838,232			141,057			439,206			9,036,339
Total ending originated loan balance		$	3,478,190		$	2,214,857		$	304,765		$	188,353		$	1,496,663		$	845,051		$	142,319		$	462,427		$	9,132,625



As of June 30, 2012
Originated Loans		C&I			CRE			Construction			Leases			Installment			Home Equity Lines			Credit Cards			Residential Mortgages			Total
Three Months Ended
Allowance for originated loan losses, beginning balance		$	37,172		$	27,778		$	5,124		$	334		$	14,753		$	6,269		$	6,520		$	5,899		$	103,849
Charge-offs		(4,841		)	(2,100		)	—			—			(3,696		)	(1,854		)	(1,645		)	(878		)	(15,014		)
Recoveries		1,362			564			40			1			3,019			741			465			56			6,248
Provision for loan losses		6,634			944			(17		)	23			(1,047		)	293			1,350			586			8,766
Allowance for originated loan losses, ending balance		$	40,327		$	27,186		$	5,147		$	358		$	13,029		$	5,449		$	6,690		$	5,663		$	103,849
Six Months Ended
Allowance for originated loan losses, beginning balance		$	32,363		$	31,857		$	5,173		$	341		$	17,981		$	6,766		$	7,369		$	5,849		$	107,699
Charge-offs		(11,133		)	(2,769		)	(38		)	—			(8,934		)	(4,589		)	(3,228		)	(1,740		)	(32,431		)
Recoveries		1,712			645			303			38			6,221			1,581			1,095			91			11,686
Provision for loan losses		17,385			(2,547		)	(291		)	(21		)	(2,239		)	1,691			1,454			1,463			16,895
Allowance for originated loan losses, ending balance		$	40,327		$	27,186		$	5,147		$	358		$	13,029		$	5,449		$	6,690		$	5,663		$	103,849

Ending allowance for originated loan losses balance attributable to loans:
	Individually evaluated for impairment	$	5,327		$	1,977		$	115		$	—		$	1,773		$	22		$	128		$	1,649		$	10,991
	Collectively evaluated for impairment	35,000			25,209			5,032			358			11,256			5,427			6,562			4,014			92,858
Total ending allowance for originated loan losses balance		$	40,327		$	27,186		$	5,147		$	358		$	13,029		$	5,449		$	6,690		$	5,663		$	103,849
Originated loans:
	Originated loans individually evaluated for impairment	$	25,250		$	33,145		$	5,204		$	—		$	31,043		$	6,063		$	1,998		$	18,579		$	121,282
	Originated loans collectively evaluated for impairment	2,955,752			2,091,615			294,005			84,507			1,231,834			760,777			140,588			419,568			7,978,646
Total ending originated loan balance		$	2,981,002		$	2,124,760		$	299,209		$	84,507		$	1,262,877		$	766,840		$	142,586		$	438,147		$	8,099,928

The following table presents the originated allowance for loan loss and the recorded investment as of December 31, 2012:



As of December 31, 2012
	Originated Loans	C&I		CRE		Construction		Leases		Installment		Home Equity Lines		Credit Cards		Residential Mortgages		Total
Ending allowance for originated loan losses balance attributable to loans:
	Individually evaluated for impairment	$	577	$	913	$	105	$	—	$	1,526	$	34	$	127	$	1,722	$	5,004
	Collectively evaluated for impairment	35,632		19,213		3,716		639		9,628		13,690		7,257		4,163		93,938
Total ending allowance for originated loan losses balance		$	36,209	$	20,126	$	3,821	$	639	$	11,154	$	13,724	$	7,384	$	5,885	$	98,942
Originated loans:
	Loans individually evaluated for impairment	$	6,187	$	24,007	$	3,405	$	—	$	30,870	$	6,281	$	1,612	$	24,009	$	96,371
	Loans collectively evaluated for impairment	3,300,339		2,200,409		332,142		139,236		1,297,388		799,797		144,775		421,202		8,635,288
Total ending originated loan balance		$	3,306,526	$	2,224,416	$	335,547	$	139,236	$	1,328,258	$	806,078	$	146,387	$	445,211	$	8,731,659

The following table presents activity in the covered allowance for loan loss for the three and six months ended June 30, 2013 and 2012:



		Three Months Ended						Six Months Ended
Covered Allowance for Loan Losses		June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Balance at beginning of the period		$	47,945		$	41,070		$	43,255		$	36,417
	Provision for loan losses before benefit attributable to FDIC loss share agreements	6,477			9,648			16,154			20,479
	Benefit attributable to FDIC loss share agreements	(2,319		)	(6,218		)	(7,858		)	(11,117		)
Net provision for loan losses		4,158			3,430			8,296			9,362
Increase in indemnification asset		2,319			6,218			7,858			11,117
Loans charged-off		(5,353		)	(8,112		)	(10,340		)	(14,290		)
Balance at end of the period		$	49,069		$	42,606		$	49,069		$	42,606

In the three months ended June 30, 2013, the Corporation increased the covered allowance for loan losses to $49.1 million to reserve for estimated additional losses. The increase in the allowance was recorded by a charge to the provision for covered loan losses of $6.5 million that was partially offset by an increase of $2.3 million in the loss share receivable for the portion of the losses recoverable under the loss sharing agreements. In the three months ended June 30, 2012, the Corporation increased the covered allowance for loan losses to $42.6 million to reserve for estimated additional losses. The increase in the allowance was recorded by a charge to the provision for covered loan losses of $9.6 million that was partially offset by an increase of $6.2 million in the loss share receivable for the portion of the losses recoverable under the loss sharing agreements.

Credit Quality

A loan is considered to be impaired when, based on current events or information, it is probable the Corporation will be unable to collect all amounts due (principal and interest) per the contractual terms of the loan agreement. Acquired and covered impaired loans are not subject to individual evaluation for impairment and are not reported with impaired loans. Non-impaired acquired loans that are subsequently placed on non-accrual status are reported as impaired loans. Interest income recognized on impaired loans during the quarters ended June 30, 2013 and 2012 was not material.

Loan impairment for loans is measured based on either the present value of expected future cash flows discounted at the loan's effective interest rate, at the observable market price of the loan, or the fair value of the collateral for certain collateral dependent loans. Impaired loans include all nonaccrual commercial, agricultural, construction, and commercial real estate loans, and loans modified as troubled debt restructurings (“TDRs”).



As of June 30, 2013
Originated Loans				Unpaid				Average
		Recorded		Principal		Related		Recorded
		Investment		Balance		Allowance		Investment
Impaired loans with no related allowance
Commercial
	C&I	$	1,031	$	3,423	$	—	$	3,075
	CRE	17,021		23,892		—		19,143
	Construction	1,005		1,282		—		2,294
Consumer
	Installment	3,464		4,882		—		3,838
	Home equity line	1,158		1,481		—		1,217
	Credit card	57		57		—		76
	Residential mortgages	10,682		13,294		—		10,934
Subtotal		34,418		48,311		—		40,577
Impaired loans with a related allowance
Commercial
	C&I	8,408		11,553		3,169		10,469
	CRE	7,379		7,416		1,010		7,558
	Construction	—		—		—		—
Consumer
	Installment	26,676		26,772		557		27,032
	Home equity line	5,661		5,661		197		5,784
	Credit card	1,205		1,205		255		1,310
	Residential mortgages	12,539		12,611		1,280		12,578
Subtotal		61,868		65,218		6,468		64,731
	Total impaired loans	$	96,286	$	113,529	$	6,468	$	105,308

Note 1: These tables exclude loans fully charged off.

Note 2: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.



As of December 31, 2012
Originated Loans				Unpaid				Average
		Recorded		Principal		Related		Recorded
		Investment		Balance		Allowance		Investment
Impaired loans with no related allowance
Commercial
	C&I	$	3,098	$	14,473	$	—	$	12,533
	CRE	19,664		26,402		—		23,911
	Construction	2,684		3,306		—		3,861
Consumer
	Installment	2,527		3,947		—		4,251
	Home equity line	642		849		—		860
	Credit card	467		467		—		568
	Residential mortgages	9,578		12,142		—		10,645
Subtotal		38,660		61,586		—		56,629
Impaired loans with a related allowance
Commercial
	C&I	3,089		4,943		577		4,231
	CRE	4,343		4,927		913		3,834
	Construction	721		721		105		730
Consumer
	Installment	28,343		28,706		1,526		29,583
	Home equity line	5,639		5,639		34		5,924
	Credit card	1,145		1,145		127		1,311
	Residential mortgages	14,431		14,520		1,722		14,537
Subtotal		57,711		60,601		5,004		60,150
	Total impaired loans	$	96,371	$	122,187	$	5,004	$	116,779

Note 1: These tables exclude loans fully charged off.

Note 2: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.



As of June 30, 2012
Originated Loans				Unpaid				Average
		Recorded		Principal		Related		Recorded
		Investment		Balance		Allowance		Investment
Impaired loans with no related allowance
Commercial
	C&I	$	18,773	$	22,139	$	—	$	16,455
	CRE	20,426		26,942		—		21,586
	Construction	4,218		6,810		—		4,956
Consumer
	Installment	—		—		—		—
	Home equity line	—		—		—		—
	Credit card	—		—		—		—
	Residential mortgages	4,411		4,411		—		4,718
Subtotal		47,828		60,302		—		47,715
Impaired loans with a related allowance
Commercial
	C&I	6,477		10,511		5,327		6,641
	CRE	12,718		14,817		1,977		11,007
	Construction	987		987		115		991
Consumer
	Installment	31,043		31,043		1,773		31,581
	Home equity line	6,063		6,063		22		6,192
	Credit card	1,998		1,998		128		2,159
	Residential mortgages	14,168		14,168		1,649		14,192
Subtotal		73,454		79,587		10,991		72,763
	Total impaired loans	$	121,282	$	139,889	$	10,991	$	120,478

Note 1: These tables exclude loans fully charged off.

Note 2: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.

Troubled Debt Restructurings

In certain circumstances, the Corporation may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near term. In most cases the modification is either a concessionary reduction in interest rate, extension of the maturity date or modification of the adjustable rate provisions of the loan that would otherwise not be considered; however, forgiveness of principal is rarely granted. Concessionary modifications are classified as TDRs unless the modification is short-term, typically less than 90 days. TDRs accrue interest if the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms for a minimum of six consecutive payment cycles after the restructuring date. Acquired loans restructured after acquisition are not considered TDRs for purposes of the Corporation's accounting and disclosure if the loans evidenced credit deterioration as of the Acquisition Date and are accounted for in pools.

The substantial majority of the Corporation's residential mortgage TDRs involve reducing the client's loan payment through an interest rate reduction for a set period of time based on the borrower's ability to service the modified loan payment. As of June 30, 2013 and December 31, 2012, $9.4 million and $7.7 million, respectively, in consumer loans were identified as troubled debt restructurings whereby the borrower's obligation to the Corporation has been discharged in bankruptcy and the borrower has not reaffirmed the debt. Modifications of mortgages retained in portfolio are handled using proprietary modification guidelines, or the FDIC's Modification Program for residential first mortgages covered by loss share agreements (agreements between the Bank and the FDIC that afford the Bank significant protection against future losses). The Corporation participates in the U.S. Treasury's Home Affordable Modification Program for originated mortgages sold to and serviced for Fannie Mae and Freddie Mac.

Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial real estate and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. The Corporation has modified certain loans according to provisions in loss share agreements. Losses associated with modifications on these loans, including the economic impact of interest rate reductions, are generally eligible for reimbursement under the loss share agreements.

The following tables provide the number of loans modified in a TDR and the recorded investment and unpaid principal balance by loan portfolio as of June 30, 2013, December 31, 2012 and June 30, 2012.



			As of June 30, 2013
			Number of Loans	Recorded Investment		Unpaid Principal Balance
Originated loans
	Commercial
		C&I	31	$	7,806	$	11,489
		CRE	47	17,361		21,742
		Construction	31	1,005		1,282
		Total originated commercial	109	26,172		34,513
	Consumer
		Installment	1,757	30,140		31,654
		Home equity lines	239	6,819		7,142
		Credit card	329	1,262		1,262
		Residential mortgages	293	23,221		25,905
		Total originated consumer	2,618	61,442		65,963
Total originated loans			2,727	$	87,614	$	100,476
Covered loans
	Commercial
		C&I	3	$	1,635	$	1,880
		CRE	21	46,314		57,021
		Construction	10	6,082		26,155
		Total covered commercial	34	54,031		85,056
	Consumer
		Home equity lines	42	5,562		5,590
Total covered loans			76	$	59,593	$	90,646
Total loans
	Commercial
		C&I	34	$	9,441	$	13,369
		CRE	68	63,675		78,763
		Construction	41	7,087		27,437
		Total commercial	143	80,203		119,569
	Consumer
		Installment	1,757	30,140		31,654
		Home equity lines	281	12,381		12,732
		Credit card	329	1,262		1,262
		Residential mortgages	293	23,221		25,905
		Total consumer	2,660	67,004		71,553
Total loans			2,803	$	147,207	$	191,122

Note 1: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.



			As of December 31, 2012
			Number of Loans	Recorded Investment		Unpaid Principal Balance
Originated loans
	Commercial
		C&I	24	$	2,617	$	8,044
		CRE	40	16,305		20,701
		Construction	28	2,955		3,419
		Total originated commercial	92	21,877		32,164
	Consumer
		Installment	1,769	30,870		32,653
		Home equity lines	226	6,281		6,488
		Credit card	389	1,612		1,612
		Residential mortgages	298	24,009		26,662
		Total originated consumer	2,682	62,772		67,415
Total originated loans			2,774	$	84,649	$	99,579
Covered loans
	Commercial
		C&I	3	$	1,763	$	1,998
		CRE	20	50,272		57,483
		Construction	10	8,171		37,547
		Total covered commercial	33	60,206		97,028
	Consumer
		Home equity lines	35	5,632		5,666
Total covered loans			68	$	65,838	$	102,694
Total loans
	Commercial
		C&I	27	$	4,380	$	10,042
		CRE	60	66,577		78,184
		Construction	38	11,126		40,966
		Total commercial	125	82,083		129,192
	Consumer
		Installment	1,769	30,870		32,653
		Home equity lines	261	11,913		12,154
		Credit card	389	1,612		1,612
		Residential mortgages	298	24,009		26,662
		Total consumer	2,717	68,404		73,081
Total loans			2,842	$	150,487	$	202,273

Note 1: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.



			As of June 30, 2012
			Number of Loans	Recorded Investment		Unpaid Principal Balance
Originated loans
	Commercial
		C&I	19	$	4,074	$	10,584
		CRE	35	18,618		22,135
		Construction	27	3,970		4,542
		Total originated commercial	81	26,662		37,261
	Consumer
		Installment	1,485	31,043		31,043
		Home equity lines	194	6,063		6,063
		Credit card	461	1,998		1,998
		Residential mortgages	187	18,579		18,579
		Total originated consumer	2,327	57,683		57,683
Total originated loans			2,408	$	84,345	$	94,944
Covered loans
	Commercial
		C&I	11	$	5,099	$	6,668
		CRE	25	53,205		57,766
		Construction	10	15,351		43,427
		Total covered commercial	46	73,655		107,861
	Consumer		—	—		—
		Home equity lines	—	—		—
Total covered loans			46	$	73,655	$	107,861
Total loans
	Commercial
		C&I	30	$	9,173	$	17,252
		CRE	60	71,823		79,901
		Construction	37	19,321		47,969
		Total commercial	127	100,317		145,122
	Consumer
		Installment	1,485	31,043		31,043
		Home equity lines	194	6,063		6,063
		Credit card	461	1,998		1,998
		Residential mortgages	187	18,579		18,579
		Total consumer	2,327	57,683		57,683
Total loans			2,454	$	158,000	$	202,805

Note 1: The differences between the recorded investment and unpaid principal balance amounts represents partial charge offs.

The pre-modification and post-modification outstanding recorded investments of loans modified as TDRs during the quarters ended June 30, 2013 and 2012 were not materially different. Post-modification balances may include capitalization of unpaid accrued interest and fees associated with the modification as well as forgiveness of principal. Loans modified as TDRs during the quarters ended June 30, 2013 and 2012 did not involve the forgiveness of principal, accordingly, the Corporation did not record a charge-off at the modification date. Additionally, capitalization of any unpaid accrued interest and fees assessed to loans modified in the quarters ended June 30, 2013 and 2012 were not material to the accompanying consolidated financial statements. Specific allowances for loan losses are established for loans whose terms have been modified in a TDR. Specific reserve allocations are generally assessed prior to loans being modified in a TDR, as most of these loans migrate from the Corporation's internal watch list and have been specifically allocated for as part of the Corporation's normal loan loss provisioning methodology. At June 30, 2013, the Corporation had $0.2 million in commitments to lend additional funds to debtors owing receivables whose terms have been modified in a TDR.

The following tables provide a summary of the delinquency status of TDRs along with the specific allowance for loan loss, by loan type, as of June 30, 2013, December 31, 2012 and June 30, 2012, including TDRs that continue to accrue interest and TDRs included in nonperforming assets.



As of June 30, 2013
	Accruing TDRs						Nonaccruing TDRs						Total		Total
	Current		Delinquent		Total		Current		Delinquent		Total		TDRs		Allowance
Originated loans
Commercial
C&I	$	1,021	$	—	$	1,021	$	6,248	$	537	$	6,785	$	7,806	$	2,569
CRE	11,200		—		11,200		1,726		4,435		6,161		17,361		510
Construction	404		537		941		64		—		64		1,005		—
Total originated commercial	12,625		537		13,162		8,038		4,972		13,010		26,172		3,079
Consumer
Installment	25,800		913		26,713		3,227		200		3,427		30,140		557
Home equity lines	5,321		144		5,465		1,354		—		1,354		6,819		197
Credit card	1,222		40		1,262		—		—		—		1,262		255
Residential mortgages	13,514		2,147		15,661		4,518		3,042		7,560		23,221		1,280
Total originated consumer	45,857		3,244		49,101		9,099		3,242		12,341		61,442		2,289
Total originated TDRs	$	58,482	$	3,781	$	62,263	$	17,137	$	8,214	$	25,351	$	87,614	$	5,368
Covered loans
Commercial
C&I	$	897	$	738	$	1,635	$	—	$	—	$	—	$	1,635	$	518
CRE	5,269		41,045		46,314		—		—		—		46,314		3,749
Construction	1,542		4,540		6,082		—		—		—		6,082		900
Total covered commercial	7,708		46,323		54,031		—		—		—		54,031		5,167
Consumer
Home equity lines	5,065		497		5,562		—		—		—		5,562		—
Total covered TDRs	$	12,773	$	46,820	$	59,593	$	—	$	—	$	—	$	59,593	$	5,167
Total loans
Commercial
C&I	$	1,918	$	738	$	2,656	$	6,248	$	537	$	6,785	$	9,441	$	3,087
CRE	16,469		41,045		57,514		1,726		4,435		6,161		63,675		4,259
Construction	1,946		5,077		7,023		64		—		64		7,087		900
Total commercial	20,333		46,860		67,193		8,038		4,972		13,010		80,203		8,246
Consumer
Installment	25,800		913		26,713		3,227		200		3,427		30,140		557
Home equity lines	10,386		641		11,027		1,354		—		1,354		12,381		197
Credit card	1,222		40		1,262		—		—		—		1,262		255
Residential mortgages	13,514		2,147		15,661		4,518		3,042		7,560		23,221		1,280
Total consumer	50,922		3,741		54,663		9,099		3,242		12,341		67,004		2,289
Total TDRs	$	71,255	$	50,601	$	121,856	$	17,137	$	8,214	$	25,351	$	147,207	$	10,535



As of December 31, 2012
	Accruing TDRs						Nonaccruing TDRs						Total		Total
	Current		Delinquent		Total		Current		Delinquent		Total		TDRs		Allowance
Originated loans
Commercial
C&I	$	704	$	1,004	$	1,708	$	844	$	65	$	909	$	2,617	$	217
CRE	12,719		793		13,512		461		2,332		2,793		16,305		869
Construction	1,860		960		2,820		135		—		135		2,955		105
Total originated commercial	15,283		2,757		18,040		1,440		2,397		3,837		21,877		1,191
Consumer
Installment	27,085		1,547		28,632		2,064		174		2,238		30,870		1,526
Home equity lines	5,183		236		5,419		636		226		862		6,281		34
Credit card	1,483		118		1,601		—		11		11		1,612		127
Residential mortgages	12,510		3,413		15,923		5,196		2,890		8,086		24,009		1,722
Total originated consumer	46,261		5,314		51,575		7,896		3,301		11,197		62,772		3,409
Total originated TDRs	$	61,544	$	8,071	$	69,615	$	9,336	$	5,698	$	15,034	$	84,649	$	4,600
Covered loans
Commercial
C&I	$	435	$	1,328	$	1,763	$	—	$	—	$	—	$	1,763	$	518
CRE	7,658		42,614		50,272		—		—		—		50,272		4,959
Construction	2,361		5,810		8,171		—		—		—		8,171		1,220
Total covered commercial	10,454		49,752		60,206		—		—		—		60,206		6,697
Consumer
Home equity lines	5,632		—		5,632		—		—		—		5,632		—
Total covered TDRs	$	16,086	$	49,752	$	65,838	$	—	$	—	$	—	$	65,838	$	6,697
Total loans
Commercial
C&I	$	1,139	$	2,332	$	3,471	$	844	$	65	$	909	$	4,380	$	735
CRE	20,377		43,407		63,784		461		2,332		2,793		66,577		5,828
Construction	4,221		6,770		10,991		135		—		135		11,126		1,325
Total commercial	25,737		52,509		78,246		1,440		2,397		3,837		82,083		7,888
Consumer
Installment	27,085		1,547		28,632		2,064		174		2,238		30,870		1,526
Home equity lines	10,815		236		11,051		636		226		862		11,913		34
Credit card	1,483		118		1,601		—		11		11		1,612		127
Residential mortgages	12,510		3,413		15,923		5,196		2,890		8,086		24,009		1,722
Total consumer	51,893		5,314		57,207		7,896		3,301		11,197		68,404		3,409
Total TDRs	$	77,630	$	57,823	$	135,453	$	9,336	$	5,698	$	15,034	$	150,487	$	11,297



As of June 30, 2012
	Accruing TDRs						Nonaccruing TDRs						Total		Total
	Current		Delinquent		Total		Current		Delinquent		Total		TDRs		Allowance
Originated loans
Commercial
C&I	$	746	$	25	$	771	$	1,086	$	2,217	$	3,303	$	4,074	$	319
CRE	14,810		—		14,810		2,020		1,788		3,808		18,618		424
Construction	3,536		—		3,536		134		300		434		3,970		115
Total originated commercial	19,092		25		19,117		3,240		4,305		7,545		26,662		858
Consumer
Installment	30,035		1,002		31,037		—		6		6		31,043		1,773
Home equity lines	5,508		156		5,664		298		101		399		6,063		22
Credit card	1,902		90		1,992		—		6		6		1,998		128
Residential mortgages	12,475		3,246		15,721		952		1,906		2,858		18,579		1,649
Total originated consumer	49,920		4,494		54,414		1,250		2,019		3,269		57,683		3,572
Total originated TDRs	$	69,012	$	4,519	$	73,531	$	4,490	$	6,324	$	10,814	$	84,345	$	4,430
Covered loans
Commercial
C&I	$	1,185	$	3,914	$	5,099	$	—	$	—	$	—	$	5,099	$	1,384
CRE	33,107		20,098		53,205		—		—		—		53,205		7,721
Construction	8,444		6,907		15,351		—		—		—		15,351		923
Total covered TDRs	$	42,736	$	30,919	$	73,655	$	—	$	—	$	—	$	73,655	$	10,028
Total loans
Commercial
C&I	$	1,931	$	3,939	$	5,870	$	1,086	$	2,217	$	3,303	$	9,173	$	1,703
CRE	47,917		20,098		68,015		2,020		1,788		3,808		71,823		8,145
Construction	11,980		6,907		18,887		134		300		434		19,321		1,038
Total commercial	61,828		30,944		92,772		3,240		4,305		7,545		100,317		10,886
Consumer
Installment	30,035		1,002		31,037		—		6		6		31,043		1,773
Home equity lines	5,508		156		5,664		298		101		399		6,063		22
Credit card	1,902		90		1,992		—		6		6		1,998		128
Residential mortgages	12,475		3,246		15,721		952		1,906		2,858		18,579		1,649
Total consumer	49,920		4,494		54,414		1,250		2,019		3,269		57,683		3,572
Total TDRs	$	111,748	$	35,438	$	147,186	$	4,490	$	6,324	$	10,814	$	158,000	$	14,458

Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Corporation evaluates the loan for possible further impairment. The allowance for loan losses may be increased, adjustments may be made in the allocation of the allowance for loan losses, or partial charge-offs may be taken to further write-down the carrying value of the loan.

The following table provides the number of loans modified in a TDR during the previous 12 months that subsequently defaulted during the three months ended June 30, 2013, as well as the recorded investment in these restructured loans as of June 30, 2013.



	As of June 30, 2013
	Number of Loans	Recorded Investment
Originated loans
Commercial
C&I	—	$	—
CRE	1	85
Construction	1	537
Total originated commercial	2	622
Consumer
Installment	109	1,737
Home equity lines	14	794
Credit card	8	72
Residential mortgages	—	—
Total originated consumer	131	$	2,603
Covered loans
Commercial
C&I	—	$	—
CRE	—	—
Construction	—	—
Total covered commercial	—	$	—
Total loans
Commercial
C&I	—	$	—
CRE	1	85
Construction	1	537
Total commercial	2	622
Consumer
Installment	109	1,737
Home equity lines	14	794
Credit card	8	72
Residential mortgages	—	—
Total consumer	131	2,603
Total	133	$	3,225