Non-interest income jumped $45,000 or 34%, to $178,000 for the quarter. Gain on sale of securities totaled $65,000. No gains on sale of securities were reported for the year-earlier period. Total non-interest expense for second quarter 2013 fell $10,000 or 1%, compared to the same period a year ago. Repossessed property expense decreased $37,000 or 50%. Salaries and employee benefit expense increased $33,000 or 10%.

For the six-month period ended December 31, 2012, the Company reported net income of $256,000, or $.20 basic and $.19 diluted earnings per share. Net income was $254,000, or $.19 basic and diluted earnings per share for the six months ended December 31, 2011. Gain on sale of securities, and lower repossessed property expense, offset the impact of higher loan loss provisions plus higher legal and professional fees; resulting in net income comparable to the same six-month period a year earlier.

Net interest income was $1.6 million for both six-month periods ending December 31, 2012 and 2011. Interest income fell $150,000 or 7%, but was more than offset by a $165,000 or 30% drop in interest expense.

Loan loss provisions were $200,000 for the six-month period ended December 31, 2012, compared to $137,000 a year earlier. Loan loss provisions reflect management’s assessment of various risk factors including, but not limited to, the level and trend of loan delinquencies and losses. Net loan losses for the six months ended December 31, 2012 increased to $227,000, compared to $210,000 for the six months ended December 31, 2011.

Non-interest income was $356,000 for the first half of fiscal 2013, compared to $310,000 for the year-earlier period. Gain on sale of securities increased $84,000, to $121,000. Non-interest expense increased $28,000 or 2%. Repossessed property expense, including net loss on sale of foreclosed property, dropped $43,000 or 44%, to $55,000 for the six-month period ended December 31, 2012. Legal and professional fees increased $51,000 or 64% to $130,000.