The Company recorded a provision for loan and lease losses of $4.8 million during the three months ended September 30, 2012, compared with $5.2 million for the three months ended September 30, 2011. Net charge-offs were $4.8 million and the annualized net charge-off ratio was 0.45% for the three months ended September 30, 2012. Net charge-offs were $4.3 million and the annualized net charge-off ratio was 0.47% for the three months ended September 30, 2011.

Past due loans as a percentage of total loans was 0.65% at September 30, 2012, up from 0.54% at June 30, 2012, and down from 0.89% at December 31, 2011. Nonperforming loans remained flat at $45.6 million September 30, 2012 compared with June 30, 2012, and up from $41.5 million at December 31, 2011.

The allowance for loan and lease losses totaled $70.7 million at September 30, 2012, compared to $71.3 million at December 31, 2011. The allowance for loan losses as a percentage of loans and leases was 1.66% at September 30, 2012, compared to 1.88% at December 31, 2011. This reduction was due primarily to acquired loans that were recorded at fair value at acquisition. As acquired loans do not have a related allowance recorded, the acquisition resulted in a decrease of 9 basis points in the allowance for loan losses as a percentage of total loans as of September 30, 2012.  The balance of the reduced allowance is due to improvement in asset quality indicators throughout the year, as well as improvement in certain economic indicators.

Net Interest Income

Net interest income was up to $151.8 million for the nine months ended September 30, 2012, compared with $149.8 million for the nine months ended September 30, 2011. The Company's FTE net interest margin was 3.87% for the nine months ended September 30, 2012, down from 4.13% for the nine months ended September 30, 2011.  Average earning assets for the nine months ended September 30, 2012 was $5.3 billion, compared to $5.0 billion for the same period of 2011. This increase offset the decline in net interest margin, resulting in a $2.0 million increase in net interest income for nine months ended September 30, 2012.

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