During the fourth quarter 2012, nonaccrual loans declined $7.5 million as compared to third quarter 2012, primarily due to the payoff of the largest single nonaccrual loan. In addition, classified loans declined $11.7 million and loans classified as special mention and watch loans declined by $14.5 million. OREO decreased by $4.0 million during the fourth quarter 2012 as compared to the third quarter 2012, primarily driven by the $3.0 million write down on the Company's single largest OREO property, which was subsequently sold in January 2013.
At December 31, 2012, classified assets as a percentage of capital and allowance for loan losses were 25.2%, a favorable decline from 32.1% at September 30, 2012 and 36.6% at December 31, 2011.
Net charge-offs in the fourth quarter 2012 were negligible as compared to $0.7 million in the third quarter 2012 and $2.2 million in the fourth quarter 2011.
The general component of the allowance for loan losses decreased from $24.8 million at September 30, 2012 to $22.5 million at December 31, 2012. The general component represented 1.9% of loans, net of unearned discount, at December 31, 2012 as compared to 2.2% of loans, net of unearned discount, at the end of the previous quarter. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased from 131.6% at September 30, 2012 to 180.7% at December 31, 2012.
The Company recorded a $3.5 million negative provision for loan losses in the fourth quarter 2012, as compared to no provision in the third quarter 2012 and $1.0 million in the fourth quarter 2011. The decrease in provision for loan losses over the last year reflects an overall improvement in asset quality and the declines in net historical charge-offs.
Shares Outstanding
As of December 31, 2012, the Company had 105,847,607 shares of common stock outstanding, consisting of 100,752,607 shares of voting common stock and 5,095,000 shares of non-voting common stock. At December 31, 2012, total common shares outstanding include 1,696,796 shares of unvested stock awards.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures related to tangible assets, including tangible book value and the tangible equity ratio, all of which exclude intangible assets.
The Company discloses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's core financial performance. Management believes that these non-GAAP financial measures allow for additional transparency and are used by some investors, analysts and other users of the Company's financial information as performance measures. These non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures used by other companies.
The following non-GAAP schedules reconcile the book value per share to the tangible book value per share and the GAAP equity ratio to the tangible equity ratio as of the dates indicated:
December 31, September 30, December 31, 2012 2012 2011 ------------- ------------- ------------- (Dollars in thousands, except per share amounts)Tangible Book Value per Common Share Total stockholders' equity $ 188,200 $ 185,073 $ 171,011 Less: Intangible assets (9,348) (10,161) (9,963) ------------- ------------- ------------- Tangible common equity $ 178,852 $ 174,912 $ 161,048 ============= ============= ============= Number of common shares outstanding 105,847,607 106,256,654 105,436,623 Book value per common share $ 1.78 $ 1.74 $ 1.62 Tangible book value per common share $ 1.69 $ 1.65 $ 1.53Tangible Common Equity Ratio December 31, September 30, December 31, 2012 2012 2011 ------------- ------------- ------------- (Dollars in thousands, except per share amounts) Total stockholders' equity $ 188,200 $ 185,073 $ 171,011 Less: Intangible assets (9,348) (10,161) (9,963) ------------- ------------- ------------- Tangible common equity $ 178,852 $ 174,912 $ 161,048 ============= ============= ============= Total assets $ 1,886,938 $ 1,834,978 $ 1,689,668 Less: Intangible assets (9,348) (10,161) (9,963) ------------- ------------- ------------- Tangible assets $ 1,877,590 $ 1,824,817 $ 1,679,705 ============= ============= ============= Equity ratio - GAAP (total stockholders' equity / total assets) 9.97% 10.09% 10.12% Tangible common equity ratio (tangible common equity / tangible assets) 9.53% 9.59% 9.59%
