Aggressively Dealing with Credit Issues
- Nonperforming assets declined by $16.98 million from Sept. 30, 2012, a linked-quarter reduction of 29.1 percent and the 10th consecutive quarterly reduction.
- Nonperforming assets were 1.11 percent of total loans plus other real estate at Dec. 31, 2012, compared to 1.65 percent at Sept. 30, 2012, and 2.66 percent at Dec. 31, 2011.
- Nonperforming loans declined by $13.75 million during the fourth quarter of 2012, a linked-quarter reduction of 37.6 percent and the 11th consecutive quarterly reduction. Nonperforming loans are down 52.3 percent from Dec. 31, 2011.
- Other real estate declined by 14.8 percent, or $3.24 million, during the fourth quarter of 2012 compared to the third quarter of 2012, inclusive of $0.6 million in property foreclosures.
- Net charge-offs were $2.16 million for the quarter ended Dec. 31, 2012, compared to $6.34 million for the quarter ended Dec. 31, 2011, and $1.94 million for the third quarter of 2012. Annualized net charge-offs for the three and 12 months ended Dec. 31, 2012, were 0.24 percent and 0.29 percent, respectively.
- Provision for loan losses expense decreased from $5.44 million for the fourth quarter of 2011 to $2.49 million for the fourth quarter of 2012. The results reflect a reduction in net charge-offs and a substantial improvement in the credit quality of the loan portfolio compared to the same period in 2011.
- The allowance for loan losses represented 1.87 percent of total loans at Dec. 31, 2012, compared to 1.96 percent at Sept. 30, 2012, and 2.25 percent at Dec. 31, 2011. The ratio of the allowance for loan losses to nonperforming loans increased to 304.2 percent at Dec. 31, 2012, from 188.9 percent at Sept. 30, 2012, and 154.6 percent at Dec. 31, 2011.
“Our priority for the last three years has been to aggressively deal with credit issues,” Turner said. “With the ratio of nonperforming assets to total loans plus OREO of 1.11 percent and with the steady reduction in troubled asset inflows, we believe the rehabilitation of our balance sheet is substantially complete. We can now further intensify our focus and resources on growing our franchise in Middle and East Tennessee consistent with the competitive opportunities that exist for us in these two very attractive banking markets.”