At September 30, 2012, Banner’s non-performing assets were 1.38% of total assets, compared to 1.73% at June 30, 2012 and 3.53% at September 30, 2011. Non-performing assets decreased 19% to $59.1 million at September 30, 2012, compared to $73.2 million three months earlier, and decreased 61% when compared to $151.6 million a year ago.Balance Sheet Review “Despite the continuing adverse impact of refinancing activity on residential mortgage loan balances, total loans outstanding were essentially unchanged for the quarter. Aside from seasonal increases in construction and agricultural loans, net loan originations and credit line utilizations have remained disappointing, as the weak economy continues to temper loan demand by both businesses and consumers. We expect a continued challenging economic environment going forward as businesses and consumers maintain a cautious approach to spending and borrowing,” said Grescovich. “However, we believe the well-focused efforts of our bankers will allow us continued opportunity to capture increased market share.” Net loans were $3.13 billion at September 30, 2012, compared to $3.14 billion a year ago, and unchanged compared to three months earlier. Commercial and agricultural business loans were $822.7 million at September 30, 2012 compared to $811.8 million at June 30, 2012 and $792.4 million at September 30, 2011. Commercial real estate and multifamily real estate loans were $1.22 billion at both September 30, 2012 and June 30, 2012 compared to $1.20 billion at September 30, 2011. The aggregate total of securities and interest-bearing deposits increased to $764.4 million at September 30, 2012 compared to $729.3 million at June 30, 2012, but was slightly less than $783.2 million at September 30, 2011. The change in the mix of interest-bearing deposits and securities holdings compared to a year ago reflects a modest extension of the expected duration of this aggregate position designed to increase the yield relative to interest-bearing deposits. The securities purchased in recent periods were primarily short- to intermediate-term U.S. Government Agency notes and mortgage-backed securities and, to a lesser extent, intermediate-term tax-exempt municipal securities. The average duration of Banner’s securities portfolio at September 30, 2012 was 4.4 years.