Non-interest expense for the current quarter amounted to $150.7 million, a decrease of $2.9 million, or 1.9%, from the same quarter last year and a slight increase compared to the previous quarter. Compared to the 2
quarter of last year, salaries and benefits expense increased $3.3 million, or 3.9%, mainly due to an increase in salary costs of $2.0 million, or 2.7%, coupled with increases in medical and pension-related costs which grew by $1.0 million. Full-time equivalent employees totaled 4,702 and 4,786 at June 30, 2012 and 2011, respectively.
Compared to the 2
quarter of last year, occupancy and equipment expense declined $811 thousand on a combined basis mainly due to lower depreciation costs. Data processing and software costs grew by 4.3% mainly due to higher bank card-related costs (related to higher revenues) coupled with higher software costs. Other expense in the 2
quarter of 2011 included an expense accrual of $5.0 million related a loss contingency for litigation that was ultimately resolved later in 2011.
The effective tax rate for the Company was 33.0% in the current quarter, compared with 33.3% in the previous quarter and 32.1% in the 2
quarter of 2011.
Net loan charge-offs in the 2
quarter of 2012 amounted to $8.2 million, compared with $11.2 million in the prior quarter and $15.2 million in the 2
quarter of last year. The $3.0 million decline in net loan charge-offs in the 2
quarter of 2012 compared to the previous quarter was mainly the result of recoveries of $3.6 million received during the quarter on two non-performing commercial loans, coupled with lower net loan charge-offs on consumer and consumer credit card loans. The ratio of annualized net loan charge-offs to total average loans was .36% in the current quarter compared to .49% in the previous quarter.
For the 2
quarter of 2012, annualized net loan charge-offs on average consumer credit card loans amounted to 3.35%, compared with 3.40% in the previous quarter and 4.58% in the same period last year. Consumer loan net charge-offs for the quarter amounted to .70% of average consumer loans, compared to .96% in the previous quarter and .80% in the same quarter last year. The provision for loan losses for the current quarter totaled $5.2 million, a decrease of $3.0 million from the previous quarter and $7.0 million lower than in the same period last year. The current quarter provision for loan losses was $3.0 million less than net loan charge-offs for the current quarter, thereby reducing the allowance for loan losses to $178.5 million. At June 30, 2012 the allowance was 1.90% of total loans, excluding loans held for sale, and was 287% of total non-accrual loans.
At June 30, 2012, total non-performing assets amounted to $82.3 million, a decrease of $5.2 million from the previous quarter. Non-performing assets are comprised of non-accrual loans ($62.2 million) and foreclosed real estate ($20.1 million). At June 30, 2012, the balance of non-accrual loans, which represented .66% of loans outstanding, included business real estate loans of $21.6 million, construction and land loans of $18.2 million and business loans of $14.1 million. Loans more than 90 days past due and still accruing interest totaled $11.3 million at June 30, 2012.