"We continue to accrete capital through strong earnings and increased our common divided in the first quarter 2012 due to our earnings growth. Not many community banks can say that in today's environment."
"We are focused on growing our non-interest income and continue to identify and increase sources of non-interest income for the company, while offering quality and competitively priced fee based products and services."
Net interest income was $5.7 million for the three months ended September 30, 2012 compared to $5.5 million for the same period in 2011, primarily due to lower rates on liabilities. The net interest margin for the three months ended September 30, 2012 was 3.80%, a 10 basis point increase over the same period in 2011.
Assets increased $19.1 million or 3.1% to $626.2 million at September 30, 2012 compared to $607.1 million at December 31, 2011. Deposits increased by $20.3 million or 4.09% to $517.9 million at September 30, 2012 compared to $497.5 million at December 31, 2011. Core deposits, i.e., demand deposits, money market accounts, NOW and savings accounts increased $18.6 million in aggregate or 4.75%, while time deposits increased $1.7 million or 1.62% each since December 31, 2011. DNB's composite cost of funds for the third quarter of 2012 dropped 15 basis points to 0.64% compared to 0.79% for the three months ended September 30, 2011.
DNB's Tier 1 leverage ratio stood at 10.31%, while its total risk-based capital ratio stood at 14.42%, well exceeding minimum accepted regulatory standards for a well-capitalized institution. Stockholders' equity increased $4.6 million to $55.7 million at September 30, 2012 compared to $51.0 million at December 31, 2011, reflecting solid earnings growth.
Non-interest income included a $212,000 write down of an OREO property to its net realizable value. Absent this write down and gains on the sale of securities, non-interest income for the third quarter of 2012 was $930,000 compared to $859,000 for the same period in 2011. Service charges on deposits and fees from wealth management services and products continue a positive trend, exceeding third quarter 2011 by approximately $50,000 or 17.28% and $65,000 or 41.07% respectively. Non-interest expense for the three months ended September 30, 2012 increased 2.96% or $122,000, compared to the same period in 2011. The variance was due largely to increased costs for staffing and third party services, offset in part by lower occupancy and marketing expense.