Total nonperforming assets (NPAs) were $11.5 million at quarter end, compared to $11.3 million at September 30, 2012, and $15.9 million at December 31, 2011. Troubled debt restructured loans totaled $6.7 million, up from $3.5 million at September 30, 2012, but down from $7.2 million at December 31, 2011, as the Company restructured one larger relationship during the fourth quarter.

Classified loans totaled $24.9 million at quarter end, a 23.9% decrease from September 30, 2012 and a 53.1% decrease from a year ago. Classified loans are loans in which the Company anticipates potential problems in obtaining repayment of principal and interest per the contractual terms, but does not necessarily believe that losses will occur.

"We achieved a substantial reduction in problem loans during the fourth quarter, as we successfully resolved a number of remaining work-out situations," said Hecker. 

The following tables summarize nonperforming assets by type and geographic region, and provide trending information over the prior year.
NPA BY CATEGORY
(Dollars in thousands) 12/31/2012 % of total 9/30/2012 % of total 12/31/2011 % of total
Commercial loans  $ 4,042 35.2%  $ 3,400 30.2%  $ 3,686 23.0%
Commercial real estate 1,716 14.9% 1,021 9.1% 2,786 17.5%
Commercial construction 44 0.3%
Land and land development 5,118 44.6% 6,204 55.0% 8,653 54.3%
Agriculture 98 0.9% 26 0.2% 187 1.2%
Multifamily
Residential real estate 502 4.4% 609 5.4% 567 3.6%
Residential construction 2
Consumer 4 12 0.1% 17 0.1%
Total NPA by Categories  $ 11,480 100.0%  $ 11,272 100.0%  $ 15,942 100.0%

The modest increase in commercial and commercial real estate NPAs reflects the addition of one larger relationship, for which active restructuring efforts are underway. Exposure from land and land development loans continues to decline each quarter. Most of the remaining NPAs are in the North Idaho/Eastern Washington region, reflecting the Company's higher loan totals in these areas, and the presence of a couple of larger problem credits in this market area.