The following tables present the allowance for loan losses and the carrying amount of loans based on management's overall assessment of probable incurred losses (in $1,000s), and should not be interpreted as an indication of future charge-offs:

	March 31, 2012
	Secured by Real Estate
	Commercial		Residential (including multi- family)		Construction, Land Development and Other Land		Commercial and Other Business- Purpose Loans		Consumer		Other		Unallocated		Total

Allowance for loan losses:
Individually
evaluated for
impairment	$	10,986	$	4,201	$	3,784	$	3,361	$	20					$	22,352
Collectively
evaluated for
probable incurred
losses		22,497		13,997		6,472		9,341		536	$	18	$	11,586		64,447

Total allowance
for loan losses	$	33,483	$	18,198	$	10,256	$	12,702	$	556	$	18	$	11,586	$	86,799

Portfolio loans:
Individually
evaluated for
impairment	$	159,343	$	55,685	$	33,840	$	22,529	$	109					$	271,506
Collectively
evaluated for
probable incurred
losses		776,589		284,971		68,984		154,296		12,870	$	2,903				1,300,613

Total portfolio loans	$	935,932	$	340,656	$	102,824	$	176,825	$	12,979	$	2,903			$	1,572,119

	December 31, 2011
	Secured by Real Estate
	Commercial		Residential (including multi- family)		Construction, Land Development and Other Land		Commercial and Other Business- Purpose Loans		Consumer		Other		Unallocated		Total

Allowance for loan losses:
Individually
evaluated for
impairment	$	11,141	$	4,305	$	3,434	$	3,740	$	29					$	22,649
Collectively
evaluated for
probable incurred
losses		28,204		16,836		8,453		11,199		721	$	20	$	4,447		69,880

Total allowance
for loan losses	$	39,345	$	21,141	$	11,887	$	14,939	$	750	$	20	$	4,447	$	92,529

Portfolio loans:
Individually
evaluated for
impairment	$	173,165	$	59,371	$	40,013	$	23,796	$	63					$	296,408
Collectively
evaluated for
probable incurred
losses		799,880		304,431		77,723		169,055		13,750	$	2,962				1,367,801

Total portfolio loans	$	973,045	$	363,802	$	117,736	$	192,851	$	13,813	$	2,962			$	1,664,209

The allowance for loan losses is maintained at a level believed adequate by management to absorb potential losses inherent in the loan portfolio at the balance-sheet date. Management's determination of the adequacy of the allowance is an estimate based on evaluation of the portfolio (including potential impairment of individual loans and concentrations of credit), past loss experience, current economic conditions, volume, amount and composition of the loan portfolio and other factors. The allowance is increased by provisions for loan losses charged to operations and reduced by net charge-offs.

	Three Months Ended March 31, 2012
	Secured by Real Estate
	Commercial			Residential (including multi- family)			Construction, Land Development and Other Land			Commercial and Other Business- Purpose Loans			Consumer			Other			Unallocated		Total

Beginning balance	$	39,345		$	21,141		$	11,887		$	14,939		$	750		$	20		$	4,447	$	92,529

Charge-offs		(5,992	)		(4,708	)		(2,227	)		(1,801	)		(295	)							(15,023	)
Recoveries		2,515			3,207			773			1,402			63			7					7,967
Net charge-offs		(3,477	)		(1,501	)		(1,454	)		(399	)		(232	)		7					(7,056	)

Provision for loan
losses		1,869			105			289			(1,038	)		97			4					1,326

Additional
unallocated
allowance		(4,254	)		(1,547	)		(466	)		(800	)		(59	)		(13	)		7,139

Ending balance	$	33,483		$	18,198		$	10,256		$	12,702		$	556		$	18		$	11,586	$	86,799

	Three Months Ended March 31, 2011
	Secured by Real Estate
	Commercial			Residential (including multi- family)			Construction, Land Development and Other Land			Commercial and Other Business- Purpose Loans			Consumer			Other			Total

Beginning balance	$	50,017		$	35,722		$	18,867		$	24,660		$	709		$	87		$	130,062

Acquired loan loss
reserve		1,043			117			651			500			68			1			2,380

Charge-offs		(8,599	)		(7,265	)		(8,225	)		(5,303	)		(223	)					(29,615	)
Recoveries		995			981			3,008			776			38			1			5,799
Net charge-offs		(7,604	)		(6,284	)		(5,217	)		(4,527	)		(185	)		1			(23,816	)

Provision for loan
losses		7,488			(2,487	)		3,843			4,337			291			(43	)		13,429

Ending balance	$	50,944		$	27,068		$	18,144		$	24,970		$	883		$	46		$	122,055

The average total portfolio loans for the three months ended March 31, 2012 and 2011 were $1.6 billion and $2.1 billion, respectively. The ratio of net charge-offs (annualized) to average portfolio loans outstanding was 1.74% and 4.62% as of March 31, 2012 and 2011, respectively.

Nonperforming loans (i.e., loans which are 90 days or more past due and still accruing interest and loans on nonaccrual status) and other nonperforming assets are summarized below (in $1,000s):

	March 31, 2012		December 31, 2011
Nonaccrual loans:
Loans secured by real estate:
Commercial	$	115,735	$	122,481
Residential (including multi-family)		41,081		47,728
Construction, land development and other land		24,026		31,297
Total loans secured by real estate		180,842		201,506
Commercial and other business-purpose loans		15,064		18,002
Consumer		182		124
Total nonaccrual loans		196,088		219,632

Past due (>90 days) loans and accruing interest:
Loans secured by real estate:
Commercial		696		3,778
Residential (including multi-family)		1,089		259
Construction, land development and other land		312		--
Total loans secured by real estate		2,097		4,037
Commercial and other business-purpose loans		233		148
Consumer		17		38
Total past due loans		2,347		4,223

Total nonperforming loans	$	198,435	$	223,855

Real estate owned and other repossessed assets		106,031		100,727

Total nonperforming assets	$	304,466	$	324,582

Impaired loans which do not have an allowance requirement include collateral-dependent loans for which direct write-downs have been made to the carrying amount of such loans and, accordingly, no additional allowance requirement or allocation is currently necessary.

	Carrying Value		Unpaid Principal Balance		Related Allowance for Loan Losses

With an allowance recorded:
Loans secured by real estate:
Commercial	$	87,527	$	92,939	$	11,434
Residential (including multi-family)		38,257		41,625		5,281
Construction, land development and other land		17,737		20,878		4,012
Total loans secured by real estate		143,521		155,442		20,727
Commercial and other business-purpose loans		15,767		17,389		3,583
Consumer		286		1,370		111
		159,574		174,201		24,421
With no related allowance recorded:
Loans secured by real estate:
Commercial		89,720		134,503
Residential (including multi-family)		25,509		46,918
Construction, land development and other land		19,603		36,765
Total loans secured by real estate		134,832		218,186
Commercial and other business-purpose loans		9,683		21,978
Consumer		14		672
		144,529		240,836

Total	$	304,103	$	415,037	$	24,421

Included in total impaired loans as of March 31, 2012 is $220.1 million of loans modified as troubled debt restructurings (see further discussion under the Troubled Debt Restructurings section of this Note).

Interest income is recorded on impaired loans if not on nonaccrual status, or may be recorded on a cash basis in some circumstances, if such payments are not credited to principal. For the three months ended March 31, 2012 and 2011, the average recorded investment in impaired loans and interest income recorded on impaired loans were as follows (in $1,000s):

	Three Months Ended
	March 31, 2012				March 31, 2011
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recorded		Investment		Recorded

Commercial	$	178,560	$	1,732	$	184,722	$	544
Residential (including multi-family)		66,555		679		65,364		150
Construction, land development and other land		40,192		392		53,539		36
Total loans secured by real estate		285,307		2,803		303,625		730
Commercial and other business-purpose loans		26,699		318		34,486		100
Consumer		239		4		395

Total	$	312,245	$	3,125	$	338,506	$	830

	Carrying Value		Unpaid Principal Balance		Related Allowance for Loan Losses

With an allowance recorded:
Loans secured by real estate:
Commercial	$	72,164	$	83,433	$	11,533
Residential (including multi-family)		33,649		38,238		5,744
Construction, land development and other land		16,980		22,940		3,764
Total loans secured by real estate		122,793		144,611		21,041
Commercial and other business-purpose loans		16,120		17,506		4,728
Consumer		166		173		95
		139,079		162,290		25,864
With no related allowance recorded:
Loans secured by real estate:
Commercial		107,709		148,926
Residential (including multi-family)		35,695		48,220
Construction, land development and other land		26,064		42,309
Total loans secured by real estate		169,468		239,455
Commercial and other business-purpose loans		11,828		17,146
Consumer		12		48
		181,308		256,649

Total	$	320,387	$	418,939	$	25,864

Included in impaired loans as of December 31, 2011 is $217.5 million of loans modified as troubled debt restructurings (see further discussion under the Troubled Debt Restructurings section of this Note).

	March 31, 2012
	Past Due Loans						Total
	(based on payment due dates)						Amount of
					Loans on		Loans More		Loans Either
	More Than				Nonaccrual		Than 29 Days		Current or
	29 Days,		More Than		Status		Past Due or on		Less Than		Total
	and Less Than		89 Days		(Generally, 90		Nonaccrual		30 Days		Portfolio
	90 Days		(Accruing)		Days or More)		Status		Past Due		Loans

Loans secured by real estate:
Commercial	$	21,698	$	696	$	115,735	$	138,129	$	797,803	$	935,932
Residential (including multi-
family)		5,917		1,089		41,081		48,087		292,569		340,656
Construction, land development
and other land		2,593		312		24,026		26,931		75,893		102,824
Total loans secured by real estate		30,208		2,097		180,842		213,147		1,166,265		1,379,412
Commercial and other business-
purpose loans		3,414		233		15,064		18,711		158,114		176,825
Consumer		97		17		182		296		12,683		12,979
Other		3						3		2,900		2,903

Total	$	33,722	$	2,347	$	196,088	$	232,157	$	1,339,962	$	1,572,119

	December 31, 2011
	Past Due Loans						Total
	(based on payment due dates)						Amount of
					Loans on		Loans More		Loans Either
	More Than				Nonaccrual		Than 29 Days		Current or
	29 Days,		More Than		Status		Past Due or on		Less Than		Total
	and Less Than		89 Days		(Generally, 90		Nonaccrual		30 Days		Portfolio
	90 Days		(Accruing)		Days or More)		Status		Past Due		Loans

Loans secured by real estate:
Commercial	$	18,127	$	3,778	$	122,481	$	144,386	$	828,659	$	973,045
Residential (including multi-
family)		5,376		259		47,728		53,363		310,439		363,802
Construction, land development
and other land		4,634				31,297		35,931		81,805		117,736
Total loans secured by real estate		28,137		4,037		201,506		233,680		1,220,903		1,454,583
Commercial and other business-
purpose loans		3,958		148		18,002		22,108		170,743		192,851
Consumer		479		38		124		641		13,172		13,813
Other										2,962		2,962

Total	$	32,574	$	4,223	$	219,632	$	256,429	$	1,407,780	$	1,664,209

Capitol categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt obligations based on: current financial information, aging analysis, historical payment experience, credit documentation and public information, among other factors. Capitol analyzes loans individually by classifying the loans as to credit risk. This analysis generally includes all loans and is generally performed at least quarterly. The following loan risk rating definitions are used:

Watch. Loans classified as watch have a potential weakness that deserves management's close attention. If not improved, those potential weaknesses may result in deterioration of the repayment prospects for the loan in the future.

Substandard. Loans classified as substandard are inadequately protected by the borrower's current net worth, paying capacity of the borrower or the fair value of collateral. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt obligation by the borrower. These are characterized by the reasonable possibility that some loss will be sustained if the deficiencies are not favorably resolved.

	March 31, 2012
	Pass						Total Portfolio Loans
	Pass		Watch		Substandard		Total Portfolio Loans

Loans secured by real estate:
Commercial	$	639,516	$	92,853	$	203,563	$	935,932
Residential (including multi-family)		237,746		28,513		74,397		340,656
Construction, land development and
other land		52,475		14,036		36,313		102,824
Total loans secured by real estate		929,737		135,402		314,273		1,379,412
Commercial and other business-purpose
loans		133,331		13,795		29,699		176,825
Consumer		11,868		666		445		12,979
Other		2,618		285				2,903

Total	$	1,077,554	$	150,148	$	344,417	$	1,572,119

	December 31, 2011
	Pass						Total Portfolio Loans
	Pass		Watch		Substandard		Total Portfolio Loans

Loans secured by real estate:
Commercial	$	662,963	$	94,151	$	215,931	$	973,045
Residential (including multi-family)		250,750		32,631		80,421		363,802
Construction, land development and
other land		59,249		12,592		45,895		117,736
Total loans secured by real estate		972,962		139,374		342,247		1,454,583
Commercial and other business-purpose
loans		145,498		14,641		32,712		192,851
Consumer		12,715		578		520		13,813
Other		2,668		294				2,962

Total	$	1,133,843	$	154,887	$	375,479	$	1,664,209

Loan modifications or restructurings are accounted for as troubled debt restructurings if, for economic or legal reasons, it has been determined a borrower is experiencing financial difficulties and the bank grants a "concession" to the borrower that it would not otherwise consider. For all classes of loans, a troubled debt restructuring may involve a modification of terms such as a reduction of the stated interest rate or loan balance, a reduction of the accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof involving a concession to the borrower to facilitate repayment.

The Corporation has designated a troubled debt restructuring as a loan that has been modified because the borrower is experiencing financial difficulty and the loan meets one or more of the following criteria:

1.	An extension or renewal of a substandard rated loan with no change in rate or terms, and the terms provided are not representative of current market rates for credits with similar risk characteristics;

2.	A loan modification where the repayment terms are modified for a specific period of time in order to allow the borrower to liquidate or dispose of the related collateral to provide the ability to pay the loan off in full;

Loans modified and classified as troubled debt restructurings are impaired loans. Each loan that is designated as a troubled debt restructuring is individually evaluated for impairment to determine the specific reserve to be established. The specific reserve is determined using the discounted cash flow method, the collateral dependency method or, when available, the observable market price method, and is calculated as the difference between the carrying value of the loan and the result of the impairment measurement method.

The loan portfolios contain primarily three categories of troubled debt restructurings, (1) loans for which the rate or terms have been modified (2) loans for which the rate or terms have not been modified but the loan was extended or renewed, and (3) loans that have been modified with interest only terms. The following are the factors that enter into the determination of the specific reserve for each of these categories:

Loans for which the rate or terms have been modified: The specific reserve for loans in this category, for which the repayment ability is based on the cash flows of the borrower, is determined using a discounted cash flow analysis. The discount period used is based on when the bank believes, based on cash flows from the borrower or project, that the credit will be paid in full. The period used is generally based on a defined cash flow event that is projected to occur in the future. For an event which will result in a paydown allowing for a refinance, the discount period would be the number of months until the refinance. If an event for paydown or refinance cannot be documented, a discount period that will result in the cash flows from the borrower reducing the loan balance down to the collateral value is used. The specific reserve for loans in this category that have been deemed collateral dependent is determined using the collateral dependency method.

Loans for which there has been no rate or term modification: If there has been no change in the rate and term, a discounted cash flow analysis using the same terms would not, in most cases, yield a specific reserve allocation commensurate with loans in the general allowance account that have similar risk characteristics with respect to payment default but that have not been modified and are a troubled debt restructuring. In the determination of the specific reserve for this category of loans, the appropriate general pool loss reserve factor is used as a baseline with adjustments made based on known circumstances that may affect the collectability of the loan. Any increase or decrease to the baseline general allowance reserve factor is determined based on the loss experience for loans with similar risk characteristics and probabilities of default.

Loans that have interest only terms: Unless there is a specific event that can be documented which will result in the loan being paid, returned to the original contract terms or refinanced, these loans are treated as collateral-dependent and the specific reserve is based on the net value of the collateral held.

	Number of Contracts		Pre-restructuring Outstanding Recorded Investment		Post-restructuring Outstanding Recorded Investment		Loan Loss Reserve
Troubled debt restructurings:
Loans secured by real estate:
Commercial		52	$	16,174	$	16,215	$	1,158
Residential		41		4,160		4,384		306
Construction, land development
and other		22		3,604		2,784		272
Total loans secured by
real estate		115		23,938		23,383		1,736
Commercial and other business-
purpose loans		18		895		1,262		123
Consumer		2		2		39		3

Total		135	$	24,835	$	24,684	$	1,862

Of the amounts in the table above, approximately $8.8 million, or 36%, and 53 contracts, or 39%, are substandard rated loans that were extended or renewed with no change in rate or terms, and the terms provided were not representative of current market rates for loans with similar risk characteristics. The remainder of the troubled debt restructuring pool constitutes loans where repayment terms and/or interest rates were modified, or the loan was modified to an "interest only" structure.

The following table summarizes loans modified as troubled debt restructurings in the last twelve months for which there was a payment default (i.e., when a loan becomes 90 days or more past due) during the three months ended March 31, 2012 (in $1,000s):

	Number of Contracts		Recorded Investment
Troubled debt restructurings that
subsequently defaulted:
Loans secured by real estate:
Commercial		11	$	1,799
Residential		6		348
Construction, land development
and other		1		62
Total loans secured by
real estate		18		2,209
Commercial and other business-
purpose loans		2		105

Total		20	$	2,314

	Troubled Debt Restructurings at March 31, 2012
	On Non-Accrual Status		On Accrual Status		Total

Loans secured by real estate:
Commercial	$	66,867	$	61,512	$	128,379
Residential (including multi-family)		25,483		22,685		48,168
Construction, land development and
other land		12,452		13,315		25,767
Total loans secured by real estate		104,802		97,512		202,314
Commercial and other business-purpose
loans		7,263		10,386		17,649
Consumer		1		118		119

Total	$	112,066	$	108,016	$	220,082

	Troubled Debt Restructurings at December 31, 2011
	On Non-Accrual Status		On Accrual Status		Total

Loans secured by real estate:
Commercial	$	65,814	$	57,392	$	123,206
Residential (including multi-family)		27,105		21,616		48,721
Construction, land development and
other land		15,475		11,748		27,223
Total loans secured by real estate		108,394		90,756		199,150
Commercial and other business-purpose
loans		8,336		9,945		18,281
Consumer				54		54

Total	$	116,730	$	100,755	$	217,485