The First Glance 12L provides a first look at the financial performance of 12th Federal Reserve District banks each quarter. The 2Q12 report, subtitled “Banks Recovering – But Still Have a Long Way to Go,” provides updated details on the recovery of District banks from the impact of the Great Recession. Asset quality continued to improve largely through charge-off and banks’ loan workout efforts. The average noncurrent loan rate dropped to 2.8%, still high from a historical perspective, but well down from the early 2010 peak of 4.8%. Profitability also improved significantly with an average ROAA of 0.63% in 1H12, nearly double the year-ago figure. The improvement was mainly due to reduced loan loss provisions, although core earnings trends generally were positive. For the first time in over three years, the year-over-year loan growth rate was positive on average, driven by growth in commercial & industrial, agricultural, and residential (single and multifamily) loans. The percentage of banks with less-than-satisfactory CAMELS ratings assigned by bank examiners edged down to 46% from the record-high 60% at year-end 2010. Only one insured depository institution in the District failed in 2012 year-to-date, down from 37 and 12 in 2010 and 2011, respectively. While banking conditions remain far from normal, and uncertainty in the economy means banks are not out of the woods yet, banks have make solid progress towards normalcy. As usual, the First Glance 12L report also includes sections on “Banks Supervisors’ Hot Topics” and comparisons of trends at commercial banks, industrial banks, and savings institutions.