Income Statement

Net interest income of $71.9 million in the third quarter 2012, an increase of 1.6 percent compared to the second quarter 2012 and 11.4 percent compared to the third quarter 2011. The Company’s net interest margin in the third quarter 2012 was 4.41 percent compared to 4.46 percent in the second quarter 2012 and 4.29 percent in the third quarter 2011.

Operating non-interest income was $5.4 million for the third quarter 2012, a decrease from $5.8 million for the second quarter of 2012 and $5.9 million for the third quarter of 2011. 1

Net revenue was $77.3 million for the third quarter 2012, up from $76.6 million for the second quarter of 2012 and an increase of 9.6 percent from $70.5 million for the third quarter 2011. 1

Operating non-interest expense was $43.9 million for the third quarter 2012, compared to $44.5 million for the second quarter of 2012 and $42.4 million for the third quarter of 2011. 1 The Company’s operating efficiency ratio on a tax equivalent basis was 54.9 percent for the third quarter 2012, improved from 59.6 percent for the third quarter 2011. 1

The Company had 964 full-time equivalent employees September 30, 2012, compared to 911 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. For the third quarter 2012, the Company’s performance on this metric was $33.4 million, up from $32.1 million in the second quarter 2012 and $28.1 million in the third quarter 2011. 1

The provision for credit losses was $8.9 million for the third quarter 2012 compared to $13.3 million for the second quarter 2012. The provision for the third quarter of 2011 was $11.2 million. Net loan charge-offs in the third quarter 2012 were $9.0 million, or 0.70 percent of average loans (annualized), down from 1.11 percent of average loans (annualized) for the second quarter 2012. Net charge-offs for the third quarter 2011 were $15.3 million or 1.40% of average loans (annualized).

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