Total non-interest expense remained stable year over year, with total non-interest expense in the second quarter of 2013 equaling $4.27 million compared with $4.27 million in the second quarter of 2012. For the six months ended June 30, 2013, non-interest expense was $8.66 million compared with $8.59 million for the same period in 2012.
Balance Sheet Highlights
Total deposits were $561.91 million at June 30, 2013, up 5.9% compared with $530.42 million at December 31, 2012. Growth was supported by initiatives to attract core deposits and expand customer relationships to incorporate more deposit activity. Core deposit growth contributed positively to the company's 0.52% cost of funds at June 30, 2013. The company trimmed Federal Home Loan Bank borrowings to $10 million in the first half of 2013 compared with $20 million at December 31, 2012.
Gross loans were $389.79 million, down 1.7% from $396.50 million at December 31, 2012. The decline in net loans reflect customer pay-downs of higher-rate loans and not renewing selected weaker credits. The company's loan pipeline is strong moving into the third quarter of 2013.Non-performing loans to total loans declined to 2.60% at June 30, 2013 compared with 4.05% at March 31, 2013 and 2.63% at December 31, 2012. William J. Hieb, President and Chief Risk & Credit Officer, noted: "Our focus on asset quality has resulted in significant improvement in the bank's ratio of NPLs to total loans. We anticipate in coming quarters that our emphasis on credit quality and ongoing reduction of non-performing assets, combined with growth initiatives and disciplined expense management, will be apparent in the company's earnings." Total stockholders' equity was $57.40 million at June 30, 2013 compared to $56.71 million at December 31, 2012. Book value per common share was $16.18 at June 30, 2013. DNB's Tier 1 leverage ratio was 10.42%, the Tier 1 risk-based capital ratio was 15.22% and the total risk-based capital ratio was 16.47%, well in excess of regulatory standards for well-capitalized institutions.