Deposits declined by $5.9 million, or 1.18%, to $501.4 million at June 30, 2010 compared to $507.3 million at December 31, 2009. Core deposits, which management considers to be demand, money market, NOW and savings accounts, increased $20.1 million in aggregate or 5.99%, compared to December 31, 2009. Management continued to actively manage deposits during the quarter to reduce DNB's cost of funds. DNB's composite cost of funds for the second quarter of 2010 dropped 50 basis points to 1.26% compared to 1.76% for the three months ended December 31, 2009. Time deposits declined $26.1 million to $145.0 million at June 30, 2010 compared to $171.1 million at December 31, 2009.
Capital remained strong at the end of the second quarter of 2010, as DNB's tier 1 leverage ratio stood at 8.88% and its total risk-based capital ratio stood at 14.90%, well above the levels of 5.00% and 10.00% respectively to be deemed "well capitalized" for regulatory purposes and also at levels management feels are appropriate for current market conditions.
During the quarter, DNB increased its allowance for credit losses to $6.0 million. This increase strengthened the allowance as a percentage of loans to 1.63% from 1.52% at December 31, 2009 and increased our coverage ratio, defined as the allowance for credit losses as a percentage of non-performing loans, to 67.7% from 59.6%. Although management is not satisfied with the level of non-performing assets, the level of such assets appears to have stabilized during the last nine months and begun to decline. At June 30, 2010, non-performing assets totaled $12.6 million, and the level of these assets was $13.2 million, $13.7 million and $13.8 million at March 31, 2010, December 31, 2009, and September 30, 2009, respectively.
Net income for the six months ended June 30, 2010 was $1.6 million compared to $440,000 for the same period for 2009. Earnings per common share for the first six months of 2010 were $0.50 on a fully diluted basis compared to $0.07 for the same period in 2009. Core earnings, defined above, improved to $1.3 million for the six months ended June 30, 2010, compared to a loss of $18,000 for the same period in 2009.