2014

Citizens Republic Bancorp Reports Fourth Quarter Earnings

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



Residential mortgage


4,612


3,261


3,972


5,210


1,366



Direct consumer


6,798


6,067


7,168


11,527


7,544



Indirect consumer


3,835


3,172


3,157


3,251


3,229



Total charge-offs


20,694


23,543


28,328


32,638


35,609

















Recoveries:













Commercial and industrial


1,038


108


577


376


609



Small business


568


120


112


248


248



Commercial real estate


406


1,008


2,553


2,493


824



Total commercial


2,012


1,236


3,242


3,117


1,681



Residential mortgage


588


746


466


134


197



Direct consumer


1,184


1,277


1,502