Non-performing loans decreased to $61.5 million, or 4.9% of total loans, at June 30, 2011, compared with $69.9 million, or 5.5% of total loans, at March 31, 2011. Non-performing assets decreased to $111.4 million, or 6.7% of total assets, compared with $143.9 million, or 8.3% of total assets, at March 31, 2011.
Past due loans, by their nature, may migrate to nonperforming status if the credit weaknesses which caused delinquency status are not remedied. We have elevated our monitoring on a significant credit that has become past due during the second quarter having a principal balance of approximately $10 million. This credit is a retail development having current appraised values well in excess of our loan value therefore no credit losses are expected. However, the borrowers are under stress and we may ultimately take possession of the collateral to protect our position in the near future. At June 30, 2011, this credit is classified as performing. Further adverse changes could cause the loan to move to non-performing/impaired status.
We continue to resolve troubled loans by working them through the collection, foreclosure, and disposition process. Foreclosed properties at June 30, 2011 declined to $49.9 million compared with $67.6 million at December 31, 2010, and $68.5 million at June 30, 2010. Our ratio of non-performing assets to total assets decreased to 6.7% at June 30, 2011, compared with 7.4% at December 31, 2010.
|Non-Accrual Loan Activity|
|Non-accrual loans at March 31, 2011||$||65,964|
|Loans returned to accrual status||(4,240||)|
|Net principal pay-downs||(6,413||)|
|Loans foreclosed and transferred to OREO||(5,433||)|
|Loans placed on non-accrual during the period||16,908|
|Non-accrual loans at June 30, 2011||$||60,331|
|Other Real Estate Owned (OREO) Activity (Net of Allowance)|
|OREO at March 31, 2011||$||73,942|
|Real estate acquired||6,449|
|Valuation adjustment write downs||(14,951||)|
|Proceeds from sales of properties||(9,425||)|
|Gain (loss) on sales, net||(6,485||)|
|OREO at June 30, 2011||$||49,913|