The Company also reported that during the fourth quarter of 2011, it had been informed that the OCC had lifted Pinnacle National Bank’s individual minimum capital requirement to maintain at least an 8 percent Tier 1 leverage ratio and 12 percent total risk-based capital ratio. Regardless of that fact, Turner noted that the Company intended to maintain at least an 8 percent Tier 1 leverage ratio and at least a 12 percent total risk-based capital ratio at the bank for the foreseeable future.

  • Credit quality
    • The allowance for loan losses represented 2.25 percent of total loans at Dec. 31, 2011, compared to 2.31 percent at Sept. 30, 2011, and 2.57 percent at Dec. 31, 2010.
      • Net charge-offs were $6.34 million for the quarter ended Dec. 31, 2011, compared to $7.15 million for the quarter ended Dec. 31, 2010, and $5.73 million for the third quarter of 2011.
      • Provision for loan losses expense increased from $5.17 million for the fourth quarter of 2010 to $5.44 million for the fourth quarter of 2011. Impacting fourth quarter provision expense was net loan growth of $50 million during 2011, compared to a net reduction in loans of $39 million during the same quarter in 2010. For the 12 months ended Dec. 31, 2011, provision expense was $21.8 million compared to $53.7 million last year.
    • Nonperforming assets were 2.66 percent of total loans plus other real estate at Dec. 31, 2011, compared to 3.05 percent at Sept. 30, 2011, and 4.29 percent at Dec. 31, 2010. The ratio of the allowance for loan losses to nonperforming loans increased to 154.6 percent at Dec. 31, 2011, from 137.0 percent at Sept. 30, 2011, and 102.1 percent at Dec. 31, 2010.
    • Past due loans over 30 days, excluding nonperforming loans, were 0.36 percent of total loans at Dec. 31, 2011, compared to 0.28 percent at Sept. 30, 2011, and 0.30 percent at Dec. 31, 2010.

"We are obviously pleased with the improvement in credit metrics in 2011, and we believe that we will experience continued improvement in our asset quality in 2012," Carpenter said. "At this time, we are becoming increasingly optimistic that our 2012 net charge-offs and other real estate expense will reflect meaningful improvement over 2011."

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