The provision for loan losses for the three- and six-month periods ended December 31, 2012, was $462,000 and $1.1 million, respectively, as compared to $345,000 and $862,000, respectively, in the same periods of the prior fiscal year.  As a percentage of average loans outstanding, provision for the current three-and six-month periods represented annualized charges of 0.30% and 0.35%, respectively, as compared to 0.25% and 0.31%, respectively, for the same periods of the prior fiscal year.  The increase in provision for the three- and six-month periods ended December 31, 2012, as compared to the same periods of the prior fiscal year, was attributed to higher net charge offs, strong loan growth, and an increase in nonperforming credits.  Net charge offs for the six-month period ended December 31, 2012, were 0.21% of average loans, as compared to 0.09% for the same period of the prior fiscal year.

The Company's noninterest income for the three- and six-month periods ended December 31, 2012, was $1.1 million and $2.2 million, respectively, increases of $219,000, or 24.3%, and $162,000, or 8.1%, respectively, as compared to the same periods of the prior fiscal year.  The increase was attributed primarily to increased deposit account charges and fees (resulting from transaction account growth and increased NSF activity), increases in the cash value of bank-owned life insurance (resulting from an additional investment in such policies in March 2012), and higher bank card network interchange revenues (resulting from additional bank card transaction volume).  The three-month period comparison was additionally improved as a result of better secondary market loan sales, while the six-month period comparison was less favorable as a result of inclusion in the prior period's result of the settlement of a legal claim obtained in the Acquisition.

Noninterest expense for the three- and six-month periods ended December 31, 2012, was $4.4 million and $8.6 million, respectively, increases of $557,000, or 14.3%, and $912,000, or 11.9%, respectively, as compared to the same periods of the prior fiscal year.  The increases were primarily attributable to higher compensation and occupancy expenses, additional expenses related to foreclosed property, and smaller gains on the sale of foreclosed property, partially offset by a decline in the cost of providing internet and mobile banking services.  The efficiency ratio for the three- and six-month periods ended December 31, 2012, was 52.6% and 50.7%, respectively, as compared to 47.2%  and 45.6%, respectively, for the same periods of the prior fiscal year.  The deterioration for the three- and six-month ratios resulted from increases of 14.3% and 11.9%, respectively, in expenses, partially offset by increases of 2.8% and 0.7%, respectively, in revenues. 

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