Provision for Loan LossesThe provision for loan losses was $4.3 million for the third quarter of 2011, a decrease of $7.6 million, compared to $11.9 million for the third quarter of 2010. The provision decreased primarily because fewer loan loss reserves on commercial real estate loans were needed due to the stabilization of values of non-performing real estate in the third quarter of 2011 when compared to the third quarter of 2010. The provision also decreased because of the $117 million decrease in the loan portfolio between the periods. Total non-performing assets were $60.0 million at September 30, 2011, a decrease of $5.0 million, or 7.6%, from $65.0 million at June 30, 2011. Non-performing loans decreased $4.2 million and foreclosed and repossessed assets decreased $0.8 million during the third quarter of 2011. The non-performing loan and foreclosed and repossessed asset activity for the quarter was as follows:
(Dollars in thousands)
|Non-performing loans||Foreclosed and repossessed assets|
|June 30, 2011||$||43,086||June 30, 2011||$||21,871|
|Classified as non-performing||5,039||Transferred from non-performing loans||312|
|Charge offs||(6,436||)||Other foreclosures/repossessions||111|
|Principal payments received||(2,467||)||Real estate sold||(910||)|
|Classified as accruing||(52||)||Net gain on sale of assets||159|
|Transferred to real estate owned||(312||)||Write downs||(399||)|
|September 30, 2011||$||38,858||September 30, 2011||$||21,144|
The decrease in non-performing loans during the quarter relates primarily to loans that were charged off during the period. Of the $6.4 million in charge offs recorded during the third quarter of 2011, $3.8 million related to three residential development loans and $2.2 million related to various commercial business loans. The largest remaining non-performing loan at September 30, 2011 was for $3.8 million and is secured by a residential development located in the Bank’s primary market.
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