Ameriana's expansion of its banking network in late 2008 and mid-2009, with the addition of new banking centers in Carmel, Fishers and Westfield, continues to contribute to the growth of the Company in terms of loans, deposits and visibility for the Ameriana brand. "Our banking centers in these areas reflect a way of community banking for our customers that is uniquely Ameriana," Gassen added. "These communities are fast-growing and demonstrate other strong demographics that make them attractive markets for an expanded slate of financial products, like investment and brokerage services, mortgage lending, insurance products and other retail consumer services, which extends well beyond the conventional appeal of basic banking services. We continue to be pleased by the positive response we have received from customers regarding the new style of Ameriana community banking in these new markets and across our network of banking centers."
Ameriana Bancorp's net interest income increased 11% for the second quarter of 2010 compared with the year-earlier period, and was up 9% for the first half of 2010 compared with the same period of 2009. These improvements were achieved with a lower volume of interest-earning assets resulting from a balance sheet restructuring in the last half of 2009, which increased the Bank's regulatory capital ratios and led to an increasing net interest margin. For the second quarter of 2010, Ameriana's net interest margin on a fully tax-equivalent basis increased to 3.61% or 11 basis points more than the first quarter of 2010 and 75 basis points higher than the second quarter of 2009, continuing a positive trend that began in the third quarter of 2009.
Ameriana continues to navigate the prolonged downturn in the economy, characterized by high unemployment, declining home prices and an uncertain outlook, which together exert pressure on borrowers and result in high credit costs for the Company. In this environment, the Bank's non-performing assets, which include non-performing loans, OREO and repossessed assets, have remained at a relatively stable level over the past several quarters after rising steadily during the first half of 2009 following the onset of the recession. Non-performing assets totaled $15.7 million at June 30, 2010, compared with $16.0 million at March 31, 2010, and $14.6 million as of December 31, 2009. Net charge-offs for the second quarter of 2010 were $588,000, up from $402,000 for the first quarter of the year, but below net charge-offs of $772,000 for the fourth quarter of 2009.