Net income of $2.1 million for the quarter ended December 31, 2012, represents a decrease of $0.7 million, or 24.8%, from net income of $2.8 million for the preceding quarter ended September 30, 2012. The decline was primarily due to an increase of $1.2 million in non-interest expense, partially offset by a reduction of $0.4 million in income taxes. Earnings per share for the current quarter totaled $0.46 compared with $0.61 for the preceding quarter. Return on average assets and return on average equity for the current quarter were 0.67% and 6.33%, respectively, compared with 0.89% and 8.53%, respectively, for the preceding quarter.
Net Interest Income:
Net interest income for the twelve months ended December 31, 2012, totaled $46.8 million compared with $43.8 million for the prior year, an increase of $3.0 million, or 6.7%. Net interest margin was 4.07% for the twelve months ended December 31, 2012, level with the prior year. The increase in net interest income was primarily due to an increase in average earning assets. The increase in average earning assets was the result of the Capital Bank acquisition in April 2011, and organic growth during 2012 in the Albany region.
Net interest income for the fourth quarter of 2012 was $11.6 million compared with $12.0 million for the same quarter in the prior year, a decrease of $0.4 million, or 3.2%. Net interest margin declined to 3.98% for the current quarter from 4.19% for the same quarter in the prior year. The decline in net interest margin was primarily due to yields on interest-earning assets decreasing at a faster rate than the cost of interest-bearing liabilities. The decrease in yield on interest-earning assets was attributable to lower loan yields as loans continue to reprice at current market rates.Compared with the preceding quarter ended September 30, 2012, net interest income decreased by $0.1 million, primarily due to a six basis point decline in the net interest margin. The decrease in the net interest margin was primarily due to a 19 basis point decrease in the yield on loans.