Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kevin Fitzsimmons – Sandler O'Neill.
Kevin Fitzsimmons – Sandler O'Neill & Partners
Richard, I was wondering given your comments that it seems like the movement into OREO is kind of freed up in Florida and you've been able to kind of break that log jam and move some things in there. And the fact that criticized loans in Florida were down I think 8% in the quarter.
Are we at a point where we'd – I mean are you at a point where you think non-accrual balances in Florida could actually decline next quarter, whereas the stuff you're getting out is outpacing the new stuff that's coming in?
Richard Hickson
Kevin, sure. If you take a look at our Florida charge, there's not much they isn't classify in the construction side. Bob Hardison and Barry Harvey – and Barry oversees a lot of this analytical work. And, I'm going to let Barry take a shot at that, and then Bob chime in with color, since Bob has actually worked in these credits.
Barry Harvey
Kevin, I would say that it's a possibility that we would begin to – the increase in ORE would begin to outpace the increase in our accruals. I think, as Richard indicated, a large percentage of the credits are already criticized [inaudible], and some of which are currently accruing, of course.
So there is some more potential for substandard credits to still become non-accrual, but I think that the majority of the non-accruals that we're going to see, we felt at this point it's just a matter if the legal process continues to be extremely slow. While we are seeing some stuff move into ORE, it's still at a snail's pace just from a portfolio standpoint. Bob.
Bob Hardison
Yes, it has always been difficult to try to predict in [tomorrow] because as we said early on when started this about two years ago, we were seeing borrowers who were paying and keeping current and then one month they would come in and basically say they were throwing in the towel.
So I think the basics are there to see some decline, but again we have to emphasize that it is still a little bit of a moving target. And while we dealt, we think, with that majority of the larger credits down there, we still have a way to go and we're still very diligently working the credits down there.
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