Noninterest income remained relatively unchanged at $494,000 for the quarter ended June 30, 2013 compared to $491,000 for the same period in 2012. For the fiscal year ended June 30, 2013, noninterest income decreased $67,000, or 3.1%, to $2.1 million compared to $2.2 million for the prior fiscal year. The decrease was primarily the result of a decline in service charges and fees totaling $70,000 and an increase in net losses on sale of other real estate owned (“OREO”) totaling $97,000 more than offsetting an increase in mortgage origination fee income totaling $139,000.

Noninterest expense remained stable at $3.8 million for the quarter ended June 30, 2013 and decreased $1.1 million, or 6.9%, to $15.5 million for the fiscal year ended June 30, 2013 compared to the same periods in 2012. Valuation adjustments and expenses on OREO decreased $105,000 and $1.6 million, respectively, for the three and twelve month periods ended June 30, 2013 compared to the same periods in 2012. Compensation expense increased $18,000 and $552,000, respectively, for the three and twelve month periods ended June 30, 2013 due to increases in commissions, salary expense, and health insurance costs.

At June 30, 2013, total assets were $503.0 million compared to $522.9 million at June 30, 2012. Net loans decreased slightly to $321.3 million at June 30, 2013, compared to $322.5 million at June 30, 2012. Total deposits decreased $24.2 million, or 5.7%, to $399.6 million at June 30, 2013 compared to $423.9 million at June 30, 2012 primarily due to the planned runoff of higher cost certificates of deposit. Certificates of deposit comprised 37.1% of total deposits at June 30, 2013 compared to 40.2% of total deposits at June 30, 2012. The average cost of interest-bearing deposits for the three-month period ended June 30, 2013 was 0.40% compared to 0.58% for the corresponding period in 2012.