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. For the first quarter 2012, the Company’s performance on this metric was $31.7 million, up from $31.5 million in the fourth quarter 2011 and $25.3 million in the first quarter 2011. 1

The provision for credit losses remained flat at $13.1 million for the first quarter 2012 compared to the fourth quarter 2011. The provision for the first quarter of 2011 was $10.0 million. Net loan charge-offs in the first quarter 2012 were $14.1 million, or 1.18 percent of average loans (annualized), down from 1.24 percent of average loans (annualized) for the fourth quarter 2011. Net charge-offs for the first quarter 2011 were $14.6 million or 1.39% of average loans (annualized).

Nonaccrual loans increased $13.1 million to $103.5 million during the quarter as certain loans were placed on nonaccrual status despite adequate cash flow and current in payments but deficient in collateral coverage. Loans past due 90 days and still accruing totaled $1.0 million at March 31, 2012, down from $2.6 million at December 31, 2011 and $1.1 million at March 31, 2011. Loans past due 30-89 days totaled $12.0 million at quarter end, down from $13.7 million at December 31, 2011 and down from $30.7 million at March 31, 2011.

Classified assets to Tier I capital plus allowance for credit losses, a common regulatory measure of asset quality, improved to 37 percent at March 31, 2012 from 48 percent at March 31, 2011 and 39 percent at December 31, 2011. 1

Net loss on sales and valuation of repossessed assets (primarily other real estate) was $2.7 million for the first quarter of 2012 compared to $7.7 million for the fourth quarter 2011 and $6.1 million in the first quarter 2011. At March 31, 2012, other repossessed assets were valued at $81 million compared to $89 million at December 31, 2011 and $98 million one year ago.

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