Income Statement

Net interest income of $64.6 million in the third quarter 2011 increased by 2.1 percent compared to the second quarter 2011 and 8.6 percent compared to the third quarter 2010. The net interest margin in the third quarter 2011 was 4.29 percent compared to 4.34 percent in the second quarter 2011 and 4.32 percent in the third quarter of 2010.

Operating non-interest income was $5.9 million for the third quarter 2011. 1 This performance was a decrease from $6.8 million for the second quarter of 2011 and $6.3 million for the third quarter of 2010. 1

Net revenue was $70.5 million for the third quarter 2011, a one percent increase from $70.1 million for the second quarter of 2011 and 7.1 percent from $65.8 million for the third quarter 2010. 1

Other non-interest income included a $6.4 million unrealized gain from the write-down of the Company’s liabilities due to credit spreads widening and a net gain on investment securities sales of $0.8 million.

Operating non-interest expenses have been relatively flat at $42.4 million for the third quarter 2011, compared to $42.5 million for the second quarter of 2011 and $41.3 million for the third quarter of 2010. 1 The Company’s operating efficiency ratio was 59.6 percent for the third quarter 2011, improved from 62.4 percent for the third quarter 2010. 1 The Company had 911 full-time equivalent employees at September 30, 2011, compared to 907 one year ago.

A key performance metric for the Company is its pre-tax, pre-provision operating earnings, which it defines as net operating revenue less its operating non-interest expense. 1 For the second quarter 2011, the Company’s performance was $28.1 million, up from $27.6 million in the second quarter 2011 and $24.6 million in the third quarter 2010. 1

The provision for credit losses was $11.2 million for the third quarter 2011 compared to $11.9 million for the second quarter 2011. The provision for the third quarter of 2010 was $23.0 million. Net loan charge-offs in the third quarter 2011 were $15.3 million or 1.40 percent of average loans (annualized), up from $13.6 million or 1.26 percent of average loans (annualized) for the second quarter 2011 due to increased residential real estate loan charge-offs. Net charge-offs for the third quarter 2010 were $24.8 million or 2.41% of average loans (annualized).

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