Employee benefits expense decreased during second quarter 2012, as compared to first quarter 2012, primarily due to decreases in the market value of securities held under deferred compensation plans and lower payroll tax and group insurance expenses. During second quarter 2012, fluctuations in the market value of securities held under deferred compensation plans resulted in a decrease in employee benefits expense of $356 thousand, as compared to an increase in employee benefits expense of $474 thousand during first quarter 2012 and $197 thousand during second quarter 2011.
For the six months ended June 30, 2012, as compared to the same period in 2011, decreases in the market values of securities held under deferred compensation plans were more than offset by increases in stock-based compensation expense, higher profit sharing accruals reflective of improved performance and increases in group medical insurance costs.
Increases in OREO expense during second quarter 2012, as compared to first quarter of 2012, were attributable to additional carrying costs associated with properties foreclosed during the period. Second quarter 2012 OREO expense included net operating expenses of $1.3 million, compared with net operating expenses of $453 thousand during first quarter 2012. Decreases in OREO expense during the three and six months ended June 30, 2012, as compared to the same periods in the prior year, were primarily the result of write-downs in the estimated fair value of OREO properties. During the three and six months ended June 30, 2012, the Company wrote-down the estimated fair value of OREO properties by $580 thousand and $1.1 million, respectively, as compared to write-downs of $2.0 million and $3.5 million during the same respective periods in the prior year.
Included in other expenses for second quarter 2012, is $1.5 million of donation expense associated with the second quarter 2012 sale of a bank building to a charitable organization. In addition, unamortized issuance costs of $428 thousand associated with redeemed junior subordinated debentures were charged to other expense during second quarter 2012. Other expense increased during the six months ended June 30, 2012, as compared to the same period in 2011, primarily due to increased donations expense and the write-off of unamortized debt issuance costs discussed above, and the accrual of $3.0 million of estimated collection and settlement costs during the first quarter 2012.
|(Unaudited; $ in thousands)|
|For the Three Months Ended|
|June 30,2012||March 31,2012||June 30,2011|
|Allowance for loan losses - beginning of period||$||115,902||$||112,581||$||124,446|
|Allowance for loan losses - end of period||$||102,794||$||115,902||$||124,579|
|June 30,2012||March 31,2012||June 30,2011|
|Period end loans||$||4,169,963||$||4,158,616||$||4,281,260|
|Accruing loans past due 90 days or more||6,451||5,017||2,194|
|Troubled debt restructurings||35,959||36,838||31,611|
|Total non-performing loans||172,333||222,765||263,467|
|Other real estate owned||53,817||44,756||28,323|
|Total non-performing assets||$||226,150||$||267,521||$||291,790|
|Net charge-offs to average loans, annualized||2.43||%||0.76||%||1.43||%|
|Provision for loan losses to average loans, annualized||1.16||%||1.08||%||1.45||%|
|Allowance for loan losses to period end loans||2.47||%||2.79||%||2.91||%|
|Allowance for loan losses to total non-performing loans||59.65||%||52.03||%||47.28||%|
|Non-performing loans to period end loans||4.13||%||5.36||%||6.15||%|
|Non-performing assets to period end loans and other real estate owned||5.35||%||6.36||%||6.77||%|
|Non-performing assets to total assets||3.10||%||3.60||%||4.05||%|
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