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5. Allowance for Credit Losses
<br />The allowance for credit losses reflects management's estimate of credit losses inherent in the loan
<br />and lease portfolio and reserve for unfunded lending commitments. We consider the allowance for credit
<br />losses of $893.9 million at the end of 2011 to be adequate to cover such losses. Changes in the allowance
<br />for credit losses were:
<br />(dollars in thousands)
<br />December 31,
<br />2011 2010
<br />Balance at beginning of year $1,059,017 $1,220,661
<br />Provision for credit losses 319,865 512,782
<br />Charge -offs:
<br />Commercial:
<br />Commercial and industrial (64,809) (132,851)
<br />Commercial real estate (194,336) (117,840)
<br />Construction (46,043) (66,581)
<br />Equipment leases (30,737) (52,818)
<br />Agriculture (8,703) (69,769)
<br />Total commercial'
<br />Consumer:
<br />Installments and lines
<br />Residential secured - closed -end
<br />Residential secured - revolving, open-end
<br />Total consumer
<br />(344,628) (439,859)
<br />(157,169) (211,568)
<br />(80,827) (93,950)
<br />(25,491) (27,277)
<br />(263,487) (332,795)
<br />Total charge -offs (608,115) (772,654)
<br />Recoveries:
<br />Commercial:
<br />Commercial and industrial 19,800 20,054
<br />Commercial real estate 22,519 9,821
<br />Construction 22,108 12,649
<br />Equipment leases 14,346 14,117
<br />Agriculture 4,419 2,281
<br />Total commercial 83,192 58,922
<br />Consumer:
<br />Installments and lines 28,768 32,006
<br />Residential secured - closed -end 9,622 6,023
<br />Residential secured - revolving, open-end 1,598 1,277
<br />Total consumer 39,988 39,306
<br />Total recoveries 123,180 98,228
<br />Net charge -offs (484,935) (674,426)
<br />Balance at end of year $ 893,947 $1,059,017
<br />Components:
<br />Allocated Loan and Leases $ 775,188 $ 966,400
<br />Unallocated Loan and Leases 95,000 92,617
<br />Total Allowance for Loans and Leases 870,188 1,059,017
<br />Reserve for Unfunded Commitments 23,759 -
<br />Allowance for Credit Losses $ 893,947 $1,059,017
<br />") Includes $143.4 million of charge -offs due to loans transferred to HFS.
<br />-26-
<br />20 i 1 Bank of the West Annual Report
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