Citizens Republic Bancorp Reports Fourth Quarter Earnings

22 Jan, 2013, 07:30 ET from Citizens Republic Bancorp, Inc.

FLINT, Mich., Jan. 22, 2013 /PRNewswire/ --

  • Net income attributable to common shareholders for the quarter increased 15% compared to last quarter and 38% compared to the fourth quarter of 2011
  • For the full year, net income attributable to common shareholders was $348 million or $8.61 per share
  • Continued strong credit metrics and a solid core deposit funding base have created a lower risk profile balance sheet
  • Pre-tax, pre-provision profit remained strong at $32 million

Citizens Republic Bancorp, Inc. (Nasdaq: CRBC) announced net income attributable to common shareholders of $17.0 million or $0.42 per diluted share for the three months ended December 31, 2012, compared to $14.9 million or $0.37 per diluted share for last quarter, and $12.3 million or $0.31 per diluted share for the fourth quarter of last year.  For the year ended December 31, 2012, Citizens recorded net income attributable to common shareholders of $347.9 million or $8.61 per share compared to a net loss of $16.3 million or $0.41 per share for the prior year.  Year to date 2012 results include a $275.5 million or $6.82 per share tax benefit related to the elimination of the valuation allowance against the deferred tax asset in the second quarter.

"We are pleased with our 2012 earnings results, which reflect our bankers' persistent execution of our strategic initiatives. Our success during 2012 allowed us to complete our key priorities including terminating our written regulatory agreement and restoring our deferred tax asset. In addition, we are in the midst of paying our accrued trust preferred dividends and our TARP obligation will be repaid through our pending merger with FirstMerit. We are proud of the hard work and dedication of everyone at Citizens as together we have addressed the many challenges from the last several years, and have emerged as a stronger banking franchise," commented Cathleen Nash, president and chief executive officer.

"While we continue to execute on our priorities, we are also looking ahead to our combination with FirstMerit as we create a premier Midwest banking franchise providing enhanced products and services to our clients and significant long-term value to our shareholders," added Nash.

Balance Sheet Citizens continues to enjoy a strong core deposit funding base. Core deposits of $5.4 billion at December 31, 2012 decreased slightly from the third quarter as a result of an expected seasonal reduction in public funds balances, but increased $255.8 million, or 4.9% from December 31, 2011. Time deposits decreased $69.5 million, or 3.9%, from the third quarter and $490.0 million, or 22.3%, from the fourth quarter of 2011 due to the intentional non-renewal of high cost rate sensitive retail and brokered balances.

Total assets decreased $138.1 million from the third quarter as a reduction in loan portfolio balances was partially offset by an increase in investment securities balances. Over the past year, growth within the C&I and indirect consumer portfolios helped to partially mitigate balance reductions in the commercial real estate, residential mortgage, and direct consumer portfolios.  Citizens continues to emphasize C&I and consumer lending as key components of its strategic plan.

Capital Citizens continues to grow capital organically through earnings and maintains a strong capital position.

Capital Ratios

December 31,

September 30,

December 31,

2012*

2012

2011

Leverage ratio

9.95%

9.66%

8.45%

Tier 1 capital ratio

15.67

15.09

13.51

Total capital ratio

16.93

16.35

14.84

Tier 1 common equity (non-GAAP)

9.24

8.83

7.24

Tangible equity to tangible assets (non-GAAP)

11.30

11.00

7.59

Tangible common equity to tangible assets (non-GAAP)

8.15

7.91

4.47

* Estimate

Net Interest Income and Margin Net interest margin was 3.50% in the fourth quarter, a seven basis point decrease from last quarter and a twelve basis point decrease from the fourth quarter of last year.  The decreases were driven by the continued low interest rate environment, which has resulted in reduced yields on our earning assets. The negative effects on asset yields were partially offset by a more advantageous funding mix and reduced funding costs. In the fourth quarter the negative pressures were also somewhat offset by an increase in commercial loan fees collected with the restructuring of several larger client relationships.  For the year ended December 31, 2012, net interest margin decreased two basis points over the prior year to 3.56%.

Net interest income for the fourth quarter was $73.2 million, a reduction of $2.6 million from last quarter and a decrease of $4.9 million from the fourth quarter of last year.  The decreases from both periods are result of both lower average earning assets and margin compression.  For the year ended December 31, 2012, net interest income decreased $12.3 million compared to 2011 primarily due to a reduction in average earning assets.

Credit Quality Credit quality continued its strong performance.  

  • Total delinquencies remained stable at 0.6% of portfolio loans.  
  • Nonperforming assets were $68.0 million, a 21% decrease from the end of September and a 33% decrease from December of last year due to proactively managing and resolving delinquent commercial and consumer loans and improving the risk profile of the loan portfolio.
  • Net charge-offs for the fourth quarter decreased to $16.0 million, compared to $19.2 million last quarter and $32.6 million in the fourth quarter of last year.  The provision for loan losses was $4.3 million in the fourth quarter, a decrease from $5.2 million in the third quarter and $15.0 million in the fourth quarter of the prior year. 
  • The allowance for loan losses was $110.4 million or 2.10% of portfolio loans at December 31, 2012, compared to $122.1 million or 2.25% at the end of the prior quarter, and $172.7 million or 3.12% at the end of the prior year.

Noninterest Income and Expense Total noninterest income was $22.0 million, a reduction of $1.7 million from the third quarter and a reduction of $2.3 million from the fourth quarter of last year. For the full year, noninterest income was $92.3 million; a decrease of $2.9 million compared to 2011.

  • Service charges decreased slightly from both the third quarter of 2012 and fourth quarter of last year.  For the full year, service charges on deposit accounts decreased 5% compared last year as clients changed behavior relative to penalty fees and product choices.
  • Brokerage and investment fees decreased $0.3 million compared to the prior quarter, however due to focused efforts to increase performance; fees increased 26% over the fourth quarter of last year, and improved 19% for the full year.
  • Other income decreased compared to last quarter primarily due to lower gains on deferred compensation.
  • The fourth quarter includes a $2.7 million charge related to one commercial loan relationship in the held for sale portfolio, that was partially offset by gains.

Noninterest expense was $6.9 million less than last quarter and $1.5 million lower than the fourth quarter of last year.

  • Professional services were $4.3 million lower than last quarter due to a reduction in merger related expenses.
  • Citizens experienced an overall recovery in ORE during the quarter compared to losses in both the third quarter of this year and the fourth quarter of 2011.

For the year ended December 31, 2012, noninterest expense decreased $12.5 million or 4% from 2011 as lower credit related expenses were partially offset by higher salaries and employee benefits and merger-related expenses.

Income Taxes and Deferred Tax Asset The income tax benefit for 2012 totaled $273.0 million, compared with a benefit of $20.3 million for 2011.  The majority of the tax benefit in 2012 was recorded in the second quarter as the result of eliminating the valuation allowance against our deferred tax asset.  

Conference Call Citizens' senior management will review the quarter's results in a conference call at 12:00 p.m. Eastern Time on Tuesday, January 22, 2013A live audio webcast is available on Citizens' investor relations page at www.citizensbanking.com or by calling (866) 952-1906 (conference ID: Citizens Republic).  To listen to the conference call, please connect approximately 10 minutes prior to the scheduled conference time.  A recording will be available approximately two hours after the completion of the conference call at www.citizensbanking.com, where it will be archived for 90 days.

Use of Non-GAAP Financial Measures In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this release includes non-GAAP financial measures such as tangible equity to tangible assets ratio, tangible common equity to tangible assets ratio, Tier 1 common equity ratio, pre-tax pre-provision profit, net interest margin, the efficiency ratio, and adjusted earnings per share.  Citizens believes these non-GAAP financial measures provide additional information that is useful to investors in understanding the underlying performance of Citizens, its business and performance trends, and such measures help facilitate performance comparisons with others in the banking industry.  Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited.  Readers should be aware of these limitations and should be cautious as to their use of such measures.  To mitigate these limitations, Citizens has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety to ensure that Citizens' performance is properly reflected to facilitate consistent period-to-period comparisons.  Although Citizens believes the above non-GAAP financial measures disclosed in this release enhance investors' understanding of its business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.  See our related Form 8-K for further discussion regarding these non-GAAP financial measures.

Corporate Profile Citizens Republic Bancorp, Inc. is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base.  Citizens serves communities in Michigan, Ohio, and Wisconsin with 219 offices and 248 ATMs.  Citizens is the largest bank holding company headquartered in Michigan with roots dating back to 1871 and is the 58th largest bank holding company headquartered in the United States.  More information about Citizens is available at www.citizensbanking.com.  

Safe Harbor Statement Discussions and statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as "will," "may," "should," "believe," "expect," "anticipate," "estimate," "project," "intend," and "plan," and statements regarding Citizens' future financial and operating results, plans, objectives, expectations and intentions, are forward-looking statements that involve risks and uncertainties, many of which are beyond Citizens' control or are subject to change.  No forward-looking statement is a guarantee of future performance and actual results could differ materially. 

Factors that could cause or contribute to actual results differing materially from Citizens' expectations include the risks and uncertainties detailed from time to time in Citizens' annual and quarterly filings with the SEC, which are available at the SEC's website www.sec.gov.  Other factors not currently anticipated may also materially and adversely affect Citizens' results of operations, cash flows, financial position and prospects.  There can be no assurance that future results will meet expectations.  While Citizens believes that the forward-looking statements in this release are reasonable, you should not place undue reliance on any forward-looking statement.  In addition, these statements speak only as of the date made.  Citizens does not undertake, and expressly disclaims, any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Consolidated Balance Sheets (Unaudited)

Citizens Republic Bancorp, Inc.

December 31,

September 30,

December 31,

(in thousands)

2012

2012

2011

Assets

Cash and due from banks

$    173,510

$     162,705

$      153,418

Money market investments

186,349

223,818

313,632

Investment Securities:

    Securities available for sale, at fair value

1,697,625

1,541,567

1,312,733

    Securities held to maturity, at amortized cost

      (fair value of $1,282,244, $1,378,310 and $1,487,550, respectively)

1,226,268

1,313,504

1,444,054

           Total investment securities

2,923,893

2,855,071

2,756,787

FHLB and Federal Reserve stock

126,763

122,123

117,943

Portfolio loans:

    Commercial and industrial

1,656,292

1,688,996

1,543,529

    Commercial real estate

1,242,348

1,335,601

1,544,361

           Total commercial

2,898,640

3,024,597

3,087,890

    Residential mortgage

546,513

570,295

637,245

    Direct consumer

844,240

865,777

933,314

    Indirect consumer

969,583

970,235

871,086

           Total portfolio loans

5,258,976

5,430,904

5,529,535

    Less: Allowance for loan losses

(110,439)

(122,125)

(172,726)

           Net portfolio loans

5,148,537

5,308,779

5,356,809

Loans held for sale

10,719

30,062

10,402

Premises and equipment

90,291

92,005

97,970

Goodwill

318,150

318,150

318,150

Other intangible assets

5,308

5,792

7,428

Bank owned life insurance

223,235

222,610

220,280

Deferred tax assets

272,891

268,347

---

Other assets

107,037

115,328

110,030

Total assets

$  9,586,683

$  9,724,790

$    9,462,849

Liabilities 

Noninterest-bearing deposits

$  1,754,248

$  1,854,715

$    1,614,311

Interest-bearing demand deposits

1,100,763

1,092,679

951,590

Savings deposits

2,594,378

2,574,642

2,627,665

Core deposits

5,449,389

5,522,036

5,193,566

Time deposits

1,711,396

1,780,929

2,201,375

          Total deposits

7,160,785

7,302,965

7,394,941

Federal funds purchased and securities sold

      under agreements to repurchase

42,747

42,796

40,098

Other liabilities

161,736

168,351

154,088

Long-term debt

850,910

852,481

854,185

Total liabilities

8,216,178

8,366,593

8,443,312

Shareholders' Equity

Preferred stock - no par value

292,473

290,580

285,114

Common stock - no par value

1,437,877

1,436,925

1,434,803

Retained deficit

(346,632)

(363,659)

(694,560)

Accumulated other comprehensive loss

(13,213)

(5,649)

(5,820)

Total shareholders' equity

1,370,505

1,358,197

1,019,537

Total liabilities and shareholders' equity

$  9,586,683

$  9,724,790

$    9,462,849

 

Consolidated Statements of Operations (Unaudited)

Citizens Republic Bancorp, Inc.

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(in thousands, except per share amounts)

2012

2011

2012

2011

Interest Income

   Interest and fees on loans

$   71,578

$   77,146

$ 293,782

$ 312,746

   Interest and dividends on investment securities:

      Taxable

14,556

18,617

63,912

79,281

      Tax-exempt

2,101

2,388

8,711

10,800

   Dividends on FHLB and Federal Reserve stock

1,410

1,009

4,897

4,152

   Money market investments

145

170

626

840

      Total interest income

89,790

99,330

371,928

407,819

Interest Expense

   Deposits

8,217

12,382

37,459

57,327

   Short-term borrowings

11

21

53

79

   Long-term debt

8,392

8,878

33,644

37,303

      Total interest expense

16,620

21,281

71,156

94,709

Net Interest Income

73,170

78,049

300,772

313,110

Provision for loan losses

4,314

15,007

23,204

138,808

      Net interest income after provision for loan losses

68,856

63,042

277,568

174,302

Noninterest Income

   Service charges on deposit accounts

9,414

9,724

37,308

39,268

   Trust fees

3,782

3,747

14,601

15,103

   Mortgage and other loan income

2,265

2,705

8,104

9,620

   Brokerage and investment fees

1,569

1,243

6,055

5,072

   Card-based and other nondeposit fees

4,367

4,305

17,507

17,167

   Net (losses) gains on loans held for sale

(1,723)

(217)

(984)

1,808

   Investment securities gains (losses)

---

38

---

(1,336)

   Other income

2,350

2,818

9,729

8,555

      Total noninterest income

22,024

24,363

92,320

95,257

Noninterest Expense

   Salaries and employee benefits

33,163

30,952

132,850

123,514

   Occupancy

6,031

6,326

24,997

26,059

   Professional services

2,478

2,311

13,772

9,331

   Equipment

2,858

3,326

12,001

12,136

   Data processing services

4,521

3,709

16,717

16,131

   Advertising and public relations

1,014

1,298

5,904

5,848

   Postage and delivery

1,081

1,165

4,456

4,543

   Other loan expenses

3,650

3,497

13,224

16,007

   (Gains) losses on other real estate (ORE)

(596)

1,081

(214)

12,768

   ORE expenses

220

995

1,259

4,322

   Intangible asset amortization

484

688

2,120

3,027

   Other expense

10,224

11,292

43,536

49,464

      Total noninterest expense

65,128

66,640

270,622

283,150

Income (Loss) before Income Taxes 

25,752

20,765

99,266

(13,591)

Income tax provision (benefit)

2,505

2,521

(273,009)

(20,258)

Net Income

23,247

18,244

372,275

6,667

Dividend on redeemable preferred stock

(6,220)

(5,897)

(24,347)

(22,985)

Net Income (Loss) Attributable to Common Shareholders

$   17,027

$   12,347

$ 347,928

$  (16,318)

Net Income (Loss) Per Common Share:

   Basic

$      0.42

$      0.31

$      8.61

$     (0.41)

   Diluted

0.42

0.31

8.61

(0.41)

Average Common Shares Outstanding: 

   Basic

39,491

39,433

39,475

39,422

   Diluted

39,491

39,433

39,475

39,422

 

Selected Quarterly Information (Unaudited)

Three Months Ended

December 31,

September 30,

June 30,

March 31,

December 31,

(in thousands, except per share amounts)

2012

2012

2012

2012

2011

Summary of Operations

Net interest income

$         73,170

$      75,805

$      75,680

$        76,119

$        78,049

Provision for loan losses

4,314

5,195

5,299

8,397

15,007

Noninterest income

22,024

23,710

22,345

24,240

24,363

Noninterest expense

65,128

72,055

66,339

67,101

66,640

Income before income taxes

25,752

22,265

26,387

24,861

20,765

Income tax provision (benefit) from continuing operations

2,505

1,274

(276,789)

---

2,521

Net income

23,247

20,991

303,176

24,861

18,244

Net income attributable to common shareholders

17,027

14,861

297,134

18,906

12,347

Taxable equivalent adjustment, continuing operations

1,468

1,503

1,532

1,571

1,670

Per Common Share Data

Net income:

      Basic

$            0.42

$          0.37

$          7.35

$            0.47

$            0.31

      Diluted 

0.42

0.37

7.35

0.47

0.31

Common book value

26.62

26.36

25.85

18.83

18.24

Tangible book value (non-GAAP)

25.85

25.53

24.97

17.88

17.24

Tangible common book value (non-GAAP)

18.63

18.36

17.84

10.75

10.16

Shares outstanding, end of period (1)

40,497,890

40,508,823

40,504,637

40,247,241

40,260,213

At Period End

Assets

$    9,586,683

$  9,724,790

$  9,670,493

$    9,577,346

$    9,462,849

Earning assets

8,453,513

8,600,731

8,588,343

8,774,119

8,680,995

Portfolio loans

5,258,976

5,430,904

5,521,748

5,528,063

5,529,535

Allowance for loan losses

110,439

122,125

136,120

153,007

172,726

Deposits

7,160,785

7,302,965

7,287,709

7,490,362

7,394,941

Long-term debt

850,910

852,481

853,042

853,599

854,185

Shareholders' equity

1,370,505

1,358,197

1,335,855

1,044,619

1,019,537

Average for the Quarter

Assets

$    9,604,447

$  9,723,587

$  9,429,050

$    9,521,386

$    9,523,184

Earning assets

8,506,333

8,638,390

8,622,067

8,750,078

8,761,435

Portfolio loans

5,317,771

5,501,400

5,517,726

5,508,528

5,632,432

Allowance for loan losses

121,998

135,968

152,154

172,509

190,163

Deposits

7,181,654

7,323,753

7,317,653

7,441,693

7,452,137

Long-term debt

851,723

852,776

853,333

853,912

856,206

Shareholders' equity

1,364,250

1,345,817

1,061,519

1,028,494

1,017,082

Financial Ratios (annualized)(2)

Return on average assets

0.96

%

0.86

%

12.93

%

1.05

%

0.76

%

Return on average shareholders' equity

6.78

6.20

114.87

9.72

7.12

Average shareholders' equity / average assets

14.20

13.84

11.26

10.80

10.68

Net interest margin (FTE) (3)

3.50

3.57

3.60

3.56

3.62

Efficiency ratio (non-GAAP) (4)

66.65

65.20

65.99

65.20

61.39

Allowance for loan losses as a percent of portfolio loans

2.10

2.25

2.47

2.77

3.12

Allowance for loan losses as a percent of nonperforming loans

187.15

191.29

161.53

202.56

197.56

Allowance for loan losses as a percent of nonperforming assets

162.38

141.69

144.85

168.87

168.97

Nonperforming loans as a percent of portfolio loans

1.12

1.18

1.53

1.37

1.58

Nonperforming assets as a percent of total loans plus ORAA(5)

1.29

1.58

1.69

1.63

1.84

Nonperforming assets as a percent of total assets

0.71

0.89

0.97

0.95

1.08

Ratio of net charge-offs during period to average portfolio loans

1.20

1.39

1.62

2.05

2.30

Leverage ratio

9.95

9.66

9.77

8.71

8.45

Tier 1 capital ratio

15.67

15.09

14.70

13.70

13.51

Total capital ratio

16.93

16.35

15.96

14.97

14.84

(1)Includes participating shares which are restricted stock units and restricted shares.

(2)Financial ratios are based upon continuing operations.

(3)Net interest margin is presented on an annual basis, includes taxable equivalent adjustments to interest income and is based on a tax rate of 35%.

(4)The efficiency ratio measures how efficiently a bank spends its revenues.  The formula is: (noninterest expense - goodwill impairment)/(net interest income + taxable equivalent adjustment + total noninterest income - investment securities gains (losses)).

(5)Other real estate assets acquired ("ORAA") include loans held for sale.

 

Loan Portfolios  (in thousands)

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

Land hold

$             4,366

$               4,984

$              5,119

$              5,387

$               6,542

Land development

6,258

7,521

7,006

7,226

13,104

Construction

8,860

6,689

4,591

6,410

5,847

Income producing

689,765

767,202

803,546

877,461

913,755

Owner-occupied

533,099

549,205

597,147

590,575

605,113

  Total commercial real estate

1,242,348

1,335,601

1,417,409

1,487,059

1,544,361

Commercial and industrial

1,656,292

1,688,996

1,711,411

1,657,140

1,543,529

  Total commercial

2,898,640

3,024,597

3,128,820

3,144,199

3,087,890

Residential mortgage

546,513

570,295

588,144

611,166

637,245

Direct consumer

844,240

865,777

881,070

903,238

933,314

Indirect consumer

969,583

970,235

923,714

869,460

871,086

  Total consumer

2,360,336

2,406,307

2,392,928

2,383,864

2,441,645

Total portfolio loans

$       5,258,976

$         5,430,904

$       5,521,748

$       5,528,063

$         5,529,535

 

Delinquency Rates By Loan Portfolio

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

30 to 89 days past due  (in thousands)

$

% of Portfolio

$

% of  Portfolio

$

% of Portfolio

$

% of Portfolio

$

% of Portfolio

Land hold

$          ---

---

%

$          ---

---

%

$          ---

---

%

$          ---

---

%

$         21

0.32

%

Land development

---

---

---

---

---

---

130

1.81

---

---

Construction

---

---

---

---

---

---

---

---

---

---

Income producing

1,470

0.21

1,104

0.14

1,519

0.19

1,447

0.16

2,508

0.27

Owner-occupied

695

0.13

4,598

0.84

936

0.16

5,177

0.88

2,345

0.39

  Total commercial real estate

2,165

0.17

5,702

0.43

2,455

0.17

6,754

0.45

4,874

0.32

Commercial and industrial

1,949

0.12

880

0.05

1,565

0.09

2,887

0.17

2,454

0.16

  Total commercial

4,114

0.14

6,582

0.22

4,020

0.13

9,641

0.31

7,328

0.24

Residential mortgage

7,641

1.40

6,029

1.06

7,731

1.31

7,568

1.24

9,544

1.50

Direct consumer

13,354

1.58

11,435

1.32

12,396

1.41

14,002

1.55

17,810

1.91

Indirect consumer

8,356

0.86

7,514

0.77

8,504

0.92

8,780

1.01

13,067

1.50

  Total consumer

29,351

1.24

24,978

1.04

28,631

1.20

30,350

1.27

40,421

1.66

Total delinquent loans

$   33,465

0.64

$   31,560

0.58

$   32,651

0.59

$   39,991

0.72

$   47,749

0.86

Nonperforming Assets                              

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

(in thousands)

$

% of Portfolio

$

% of  Portfolio

$

% of Portfolio

$

% of Portfolio

$

% of Portfolio

Land hold

$        291

6.67

%

$        326

6.54

%

$        326

6.37

%

$          ---

---

%

$          ---

---

%

Land development

3

0.04

3

0.04

3

0.05

207

2.87

213

1.62

Construction

---

---

---

---

---

---

150

2.34

150

2.57

Income producing

8,117

1.18

12,904

1.68

19,408

2.42

18,566

2.12

21,171

2.32

Owner-occupied

12,068

2.26

13,146

2.39

18,187

3.05

20,716

3.51

23,798

3.93

  Total commercial real estate

20,479

1.65

26,379

1.98

37,924

2.68

39,639

2.67

45,332

2.94

Commercial and industrial

6,162

0.37

9,190

0.54

21,676

1.27

14,629

0.88

16,946

1.10

  Total nonaccruing commercial

26,641

0.92

35,569

1.18

59,600

1.90

54,268

1.73

62,278

2.02

Residential mortgage

17,500

3.20

15,271

2.68

13,474

2.29

11,137

1.82

11,312

1.78

Direct consumer

12,720

1.51

10,552

1.22

9,263

1.05

8,895

0.98

12,115

1.30

Indirect consumer

2,083

0.21

2,391

0.25

1,875

0.20

1,074

0.12

953

0.11

  Total nonaccruing consumer

32,303

1.37

28,214

1.17

24,612

1.03

21,106

0.89

24,380

1.00

    Total nonaccruing loans

58,944

1.12

63,783

1.17

84,212

1.53

75,374

1.37

86,658

1.57

Loans 90+ days still accruing

68

---

60

---

59

---

164

---

770

0.01

  Total nonperforming portfolio loans

59,012

1.12

63,843

1.18

84,271

1.53

75,538

1.37

87,428

1.58

Nonperforming held for sale

3,190

16,650

887

3,264

2,372

Other repossessed assets acquired

5,811

5,700

8,817

11,803

12,422

  Total nonperforming assets

$   68,013

$   86,193

$   93,975

$   90,605

$ 102,222

Restructured loans still accruing

$   21,033

$   21,433

$   18,187

$   17,911

$   32,347

Commercial inflows

$     4,769

$     4,572

$   23,828

$   14,027

$   13,269

Commercial outflows

(13,697)

(28,603)

(18,496)

(22,037)

(20,730)

Net change

$    (8,928)

$  (24,031)

$     5,332

$    (8,010)

$    (7,461)

Net Charge-Offs

Three Months Ended

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

(in thousands)

$

% of Portfolio*

$

% of Portfolio*

$

% of Portfolio*

$

% of Portfolio*

$

% of Portfolio*

Land hold

$        133

12.10

%

$          ---

---

%

$        (58)

(4.58)

%

$          ---

---

%

$        (33)

(2.00)

%

Land development

(14)

(0.89)

(8)

(0.45)

100

5.76

(83)

(4.64)

3,079

93.21

Construction

(1)

(0.04)

(21)

(1.24)

14

1.24

(101)

(6.33)

(4)

(0.24)

Income producing

1,660

0.96

2,582

1.34

3,100

1.55

4,151

1.90

11,924

5.18

Owner-occupied

916

0.68

1,891

1.37

2,384

1.61

2,537

1.73

5,791

3.80

  Total commercial real estate

2,694

0.86

4,444

1.32

5,540

1.57

6,504

1.76

20,757

5.33

Commercial and industrial

743

0.18

5,363

1.26

5,249

1.23

3,029

0.74

1,032

0.27

  Total commercial

3,437

0.47

9,807

1.29

10,789

1.39

9,533

1.22

21,789

2.80

Residential mortgage

4,024

2.93

2,515

1.75

3,506

2.40

5,076

3.34

1,170

0.73

Direct consumer

5,614

2.65

4,790

2.20

5,666

2.59

10,935

4.87

6,930

2.95

Indirect consumer

2,925

1.20

2,078

0.85

2,225

0.97

2,572

1.19

2,746

1.25

  Total consumer

12,563

2.12

9,383

1.55

11,397

1.92

18,583

3.14

10,846

1.76

  Total net charge-offs

$   16,000

1.20

$   19,190

1.39

$   22,186

1.62

$   28,116

2.05

$   32,635

2.30

* Represents an annualized rate.

 

Summary of Loan Loss Experience

Three Months Ended 

December 31,

September 30,

June 30,

March 31,

December 31,

(in thousands)

2012

2012

2012

2012

2011

Allowance for loan losses - beginning of period

$      122,125

$      136,120

$      153,007

$      172,726

$      190,354

Provision for loan losses

4,314

5,195

5,299

8,397

15,007

Charge-offs:

Commercial and industrial

793

4,552

3,667

2,388

1,489

Small business

1,556

1,039

2,271

1,265

399

Commercial real estate

3,100

5,452

8,093

8,997

21,581

Total commercial

5,449

11,043

14,031

12,650

23,470