Our comments today will refer to the financial information included with our earnings announcement, which we released at 4:30 yesterday afternoon. These documents can be found on our website at fult.com by clicking on Investor Relations and then on News.On this call, representatives of Fulton may make forward-looking statements with respect to Fulton's financial conditions, results of operation and business. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond Fulton's control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Fulton undertakes no obligation other than required by law to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In our earnings release, we've included our Safe Harbor statement on forward-looking statements, and we refer you to this message in the earnings release and incorporated into this presentation. For a more complete discussion of certain risks and uncertainties affecting Fulton, please see the sections entitled Risk Factors and Management's Discussion and Analysis of financial conditions and results of operations set forth in Fulton's filings with the SEC. Now we'd like to turn the call over to your host, Scott Smith. R. Scott Smith Thank you, Laura, and good morning, everyone, and thank you for joining us. I have a few remarks about the fourth quarter and the year, and then the Phil Wenger will discuss credit. Charlie Nugent will discuss our financial performance. And then we will be happy to take your questions. We were encouraged by our progress in 2011, but there's more to be accomplished. Diluted earnings per share were up 24% for the year. Our commitment to credit quality improvement enabled us to reduce the provision by $25 million. We saw strong average core deposit growth of over 11%, and much of that growth came from small business sector. These low-cost funds help us expand our net interest margin by 10 basis points despite pressure on earning asset yields.
Since there is little clarity about capital requirements, we made ROA improvement a management priority. Our efforts to maximize balance sheet resources paid off, as we improved our return on assets by 12 basis points.Although it did not happen as rapidly as we would have liked, we saw continued improvement in our credit metrics. Other income increased due to stable residential mortgage activity and despite regulatory restrictions on revenue. We saw a modest increase in year-over-year expenses that enabled us to maintain our strong efficiency ratio. Our progress combined with confidence in our capital level also allowed us to increase the cash dividend to shareholders. Knowing how important dividends are for many of our shareholders, this was particularly gratifying in light of the confidence and patience they have exhibited over the last few years. Now I want to direct our attention specifically to the fourth quarter. This was a somewhat mixed quarter and one that presented a number of challenges. While there were positives, there were also some headwinds. In a more normal environment, the impact of these headwinds would have been mitigated, but since the pace of economic growth and particularly credit demand is still not that brisk, we reported diluted net earnings per share at $0.18, down 10% from the $0.20 we made in the third quarter. On the credit front, Phil will give you more details. This quarter we sold at $35 million worth of nonperforming residential mortgages and nonperforming home equity loans. The transaction improved our overall credit metrics but also resulted in a charge to the allowance. After study, we concluded that the sale would enable us to more efficiently devote our resources to resolving our remaining nonperforming loans in 2012. We were encouraged to see some moderate loan growth that, if annualized, would be over 1%. As you know, over the last several quarters, our growth in various loan categories has been repeatedly offset by a reduction in our construction book. Last quarter was no exception.
Although the pace of the decline continues to slow, we're also pleased with the meaningful decrease in our overall delinquency. Core factors that largely accounted for earnings decrease through the quarter or an increase in operating expenses, the October 1st implementation of new debit interchange restrictions, compression of our net interest margin and our decision to keep newly originated 10- and 15-year residential mortgages in our portfolio. As a result of this mortgage decision and as to be expected, our sale gains were lower for the quarter.Read the rest of this transcript for free on seekingalpha.com