Net interest margin for 2012 was 3.61%, a decrease of 0.25% from the 3.86% for 2011. The margin decrease was mainly the result of a 0.41% lower yield from interest-earning assets partially offset by a 0.19% reduction in the rate paid for interest-bearing deposits.
For the three months ended December 31, 2012, the Bank had a net loss of $1.0 million compared to a loss of $164,000 for the three months ended December 31, 2011. This increased net loss is predominantly the result of expenses and charges related to resolving problem loans resulting in an increase in the loan loss provision expense of $140,000 and an increase in the loss on the sale and write-down of other real estate owned of $506,000. Additionally, net interest income was $161,000 less when compared to the fourth quarter of 2011. There were no gains from the sale of securities in 2012 as compared to $263,000 of securities gains in the fourth quarter of 2011. Fee income decreased $14,000 in the fourth quarter of 2012 as compared to the fourth quarter of 2011. Non-interest expenses in the fourth quarter of 2012 decreased $215,000 as compared to the same period last year largely due to a fraud loss of $301,000 recognized in the fourth quarter of 2011. Miscellaneous expenses increased $76,000 while expenses for taxes decreased $57,000. Expenses related to ORE increased $99,000.
Net interest margin for the fourth quarter of 2012 was 3.53%, a decrease of 0.31% from the 3.84% for the fourth quarter of 2011. The margin decrease was mainly the result of a 0.52% lower yield from interest-earning assets partially offset by a 0.27% reduction in the rate paid for interest-bearing deposits.
Total assets at December 31, 2012 were $174.3 million, representing an increase of $1.4 million from December 31, 2011. The increase was due primarily to an increase in Fed funds sold and interest bearing cash deposits, which increased $3.8 million and investments which increased $8.5 million. Gross loans totaled $123.9 million at December 31, 2012, a decrease of $9.2 million from $133.1 million at December 31, 2011. The allowance for loan losses at December 31, 2012 was $1.5 million, an increase of $157,000 from $1.3 million at December 31, 2011. Other real estate owned at December 31, 2012 was $5.6 million, an increase of $1.1 million from $4.5 million at December 31, 2011 and other assets decreased $240,000.
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