Total loans and leases, net of deferred fees and discount, of $3.39 billion at June 30, 2012, decreased by $94.7 million, or 2.72%, from $3.48 billion at December 31, 2011. We attribute the vast majority of this decrease to the following:
- $62.3 million to the non-covered dairy and livestock portfolio. Historically, our dairy and livestock customers have seasonal borrowing patterns and tend to draw down on available lines of credit in the fourth quarter and repay these advances in the second quarter.
- $7.8 million decline in non-covered construction loans.
- $14.0 million decline in purchased mortgage pools.
- $52.4 million decrease in covered loans.
The above decreases were offset by increases of $29.5 million in non-covered commercial and industrial loans and $16.7 million in non-covered commercial real estate loans.
Construction loans and purchased mortgage pools are considered non-core lending niches. Our core lending strategy is focused on commercial & industrial business lending, dairy, livestock, and agribusiness lending, and commercial real estate loans.
Deposits & Customer Repurchase Agreements
Total deposits of $4.70 billion and customer repurchase agreements of $467.6 million totaled $5.17 billion at June 30, 2012. This represents an increase of $52.6 million, or 1.03%, when compared with total deposits and customer repurchase agreements of $5.11 billion at December 31, 2011.
Non-interest bearing deposits were $2.25 billion at June 30, 2012, an increase of $224.4 million, or 11.07%, compared to $2.03 billion at December 31, 2011. At June 30, 2012, non-interest bearing deposits were 47.93% of total deposits, up from 44.04% at December 31, 2011 and 42.06% at June 30, 2011.
Our average cost of total deposits was 0.13% for the three months ended June 30, 2012, compared to our cost of total deposits of 0.20% for the same period last year. Our cost of total deposits including customer repurchase agreements was 0.15% for the three months ended June 30, 2012.