Classified assets of $86.3 million, or 3.28% of total assets at December 31, 2012, declined by $101.9 million, or 54.2%, from $188.2 million, or 8.31% of total assets, at December 31, 2011. Nonperforming assets (NPAs) of $53.8 million, or 2.05% of total assets at December 31, 2012, declined $61.2 million, or 53.2%, from $115.1 million, or 5.08% of total assets at December 31, 2011. Nonaccrual loans of $29.9 million, or 2.23% of total loans at December 31, 2012, declined $46.6 million, or 60.9%, from $76.5 million, or 5.69% of total loans at December 31, 2011. Other real estate owned (OREO) balances of $23.9 million at December 31, 2012 declined $14.6 million, or 37.9%, from $38.6 million at December 31, 2011. The improvement in NPAs primarily resulted from the resolution and reduction of nonperforming commercial construction assets which declined $63.7 million, or 81.3%, year-over-year. Loan delinquencies of $88.2 million, or 6.6% of total loans at December 31, 2012, declined $51.6 million, or 36.9%, from $139.9 million, or 10.4% of total loans at December 31, 2011. Excluding single family mortgage loans insured or guaranteed by the FHA or the Department of Veterans' Affairs (VA), loan delinquencies were $37.0 million, or 2.8% of total loans at December 31, 2012, down from $94.6 million, or 7.0% of total loans, at December 31, 2011.
NPAs declined $1.4 million, or 2.6%, from $55.3 million at September 30, 2012, primarily as a result of a $5.1 million, or 13.1%, reduction in nonperforming commercial assets, partially offset by a $3.6 million, or 21.7%, increase in nonperforming consumer assets.
The allowance for credit losses of $27.8 million, or 2.07% of total loans at December 31, 2012, decreased by $15.0 million from $42.8 million, or 3.18% of total loans, at December 31, 2011. The decrease in the allowance for credit losses is the result of the successful resolution of problem assets during the year as demonstrated in the significant improvements in classified asset balances, which declined 54.2%, and nonaccrual loan balances, which declined 60.9% during 2012. A provision for credit losses of $4.0 million was recorded for the fourth quarter of 2012, compared to $5.5 million recorded in the third quarter of 2012. Net charge-offs in the fourth quarter of 2012 were $3.9 million, down from $5.0 million in the third quarter of 2012.
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