Credit Quality"Credit costs continue to decline and were significantly below those of a year ago," said Grescovich. "Our bankers and loan work-out teams have done an outstanding job of enhancing our portfolio management processes and reducing non-performing assets from over $339 million three years ago to just above $50 million at the end of 2012. All of our key credit quality metrics have improved, including further improvement in the most recent quarter, while our reserve levels have remained substantial." Banner recorded a $1.0 million provision for loan losses in the fourth quarter of 2012, compared to a $3.0 million provision in the preceding quarter and a $5.0 million provision in the fourth quarter a year ago. The allowance for loan losses at December 31, 2012 was $77.5 million, representing 2.39% of total loans outstanding and 225% of non-performing loans. Non-performing loans decreased 11% to $34.4 million at December 31, 2012, compared to $38.7 million three months earlier, and decreased 54% when compared to $75.3 million a year earlier. Real estate owned and repossessed assets decreased 22% to $15.9 million at December 31, 2012, compared to $20.4 million three months earlier, and decreased 63% when compared to $43.0 million a year ago. Net charge-offs in the fourth quarter of 2012 totaled $2.3 million, or 0.07% of average loans outstanding, compared to $4.4 million, or 0.14% of average loans outstanding in the third quarter of 2012 and $8.2 million, or 0.25% of average loans outstanding in the fourth quarter a year ago. At December 31, 2012, Banner's non-performing assets were 1.18% of total assets, compared to 1.38% at September 30, 2012 and 2.79% a year ago. Non-performing assets decreased 15% to $50.2 million at December 31, 2012, compared to $59.1 million three months earlier, and decreased 58% when compared to $118.9 million a year ago. Balance Sheet Review "Total loans outstanding increased during the quarter," said Grescovich. "However, net loan originations were modest and credit line utilizations remained low, as the weak economy continues to temper loan demand by both businesses and consumers. We expect a continued challenging environment going forward as businesses and consumers maintain a cautious approach to spending and borrowing."