The Company’s provision for loan losses was $809,000 for the first nine months of 2012 compared to $1,691,000 for the first nine months of 2011. For the third quarter of 2012, the provision was $174,000 compared to $309,000 for the same time period of the prior year. The year to date decrease in the provision were mainly due to net loan charge-offs being approximately 20% lower for the nine months ended September 30, 2012 compared to September 30, 2011 as well as the Bank having significantly lower levels of criticized and classified loans. Mr. Hall commented, “Improved asset quality has been the catalyst for improved earnings as pressure on the provision has eased.”
Noninterest income increased $177,000 or 7% to $2,569,000 for the nine months ended September 30, 2012 compared to $2,392,000 for the same time period of 2011. This increase in noninterest income was primarily driven by a 57% increase in fees on sales of mortgage loans as the low interest rate environment continues to stimulate origination activity. This increase was partially offset by a decline in commissions and fees from investment and insurance sales.
Noninterest expense increased $380,000 or approximately 4% to $8,873,000 for the nine months ended September 30, 2012 compared to $8,493,000 for the same period of 2011. The main factors contributing to the increase have been losses associated with the sale of real estate acquired through foreclosures as well as higher advertising expenses, both of which have been partially offset by a decrease in federal deposit insurance premiums.
Total assets as of September 30, 2012 were $346,884,000, up $4,400,000 from $342,484,000 as of December 31, 2011. The principal components of the Company’s assets as of September 30, 2012 were $265,524,000 in net loans, $41,770,000 in cash and cash equivalents and $25,812,000 in securities. During the nine-month period ended September 30, 2012, net loans decreased less than 1% or $1,599,000 from $267,123,000 as of December 31, 2011. Also during the nine-month period ended September 30, 2012, securities increased approximately 4% or $1,043,000 and cash and cash equivalents increased approximately 11% or $4,223,000 from December 31, 2011.