Non-interest income was $15.9 million for 2012, compared with $34.2 million for 2011. Non-interest income for 2012 was reduced by a $21.9 million net decrease in the FDIC loss sharing asset, compared to an increase of $171,000 for 2011.
As a percentage of average assets, non-interest expense was 2.13% for 2012, compared to 2.17% for 2011. If the FHLB debt termination expense of $20.4 million and $3.3 million for 2012 and 2011, respectively, are eliminated from this calculation, non-interest expense was 1.82% for 2012 and 2.12% for 2011. In terms of dollars, this represents a year-over-year decrease of $19.9 million. The decrease was primarily attributable to decreases of $7.5 million in legal expenses, $4.6 million in OREO related expenses, $1.5 million in salaries and related expenses, $1.4 million in regulatory assessments, $1.3 million in other professional expenses, and $1.3 million in amortization of intangible assets.
The Company reported net income of $22.1 million for the fourth quarter ended December 31, 2012. This represents an increase of $424,000, or 1.95%, when compared with $21.7 million in net income reported for the fourth quarter of 2011. Diluted earnings per share were $0.21 for the fourth quarter of 2012 and 2011.
Net income for the fourth quarter of 2012 produced an annualized return on beginning equity of 11.68%, an annualized return on average equity of 11.52% and an annualized return on average assets of 1.37%.Interest income and fees on loans for the fourth quarter of 2012 totaled $47.2 million, which included $3.3 million of discount accretion from accelerated principal reductions, payoffs and improved credit loss experienced on covered loans acquired from San Joaquin Bank (“SJB”). This represented a decrease of $1.1 million, or 2.24%, when compared to interest income on loans of $48.3 million, which included $948,000 of discount accretion from accelerated principal reductions, payoffs and improved credit loss experienced on acquired loans, for 2011. Interest income and fees on loans for 2012 totaled $205.8 million, which included $22.6 million of discount accretion from accelerated principal reductions, payoffs and improved credit loss experienced on covered loans acquired from SJB. This compares to interest income and fees on loans of $207.1 million, which included $12.6 million of discount accretion for 2011.
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