Ameriana Bancorp's net interest margin on a fully tax-equivalent basis was 3.74% for the second quarter of 2011, down two basis points from the first quarter of 2011. The net interest margin increased 13 basis points versus the second quarter of 2010, primarily due to a decrease in the cost of funds. For the first six months of 2011, net interest margin increased 19 basis points to 3.75% compared with 3.56% in the year-earlier period.The provision for loan losses totaled $255,000 for the second quarter of 2011, down $105,000 from the first quarter of 2011 and down $403,000 compared with the year-earlier quarter. The allowance for loan losses decreased to 1.32% of total loans at June 30, 2011, compared with 1.41% of total loans at March 31, 2011, and was flat compared with June 30, 2010. Total non-performing loans at the end of the second quarter were $8.1 million, a decline of $2.8 million from March 31, 2011. Non-performing loans were 2.6% of total loans at June 30, 2011, down from 3.6% at the end of the first quarter of 2011. OREO declined slightly from the first quarter of 2011. The total of classified assets (substandard loans, non-accrual loans and OREO) declined $3.6 million from March 31, 2011. Ameriana's loan portfolio, while up $4.6 million on a year-over-year basis, declined $3.7 million and $2.1 million during the first and second quarters of 2011, respectively, as demand for both commercial and residential mortgage loans remained weak, and Ameriana continued to sell new production fixed-rate residential mortgage loans in the secondary market. Total deposits decreased $800,000 during the second quarter of 2011, primarily a result of the Bank calling and redeeming $5.1 million of brokered certificates of deposit, but total deposits at June 30, 2011, were still $16.2 million higher than December 31, 2010, and $22.4 million above the total a year earlier at June 30, 2010.