WILMINGTON, Ohio, July 17, 2012 (GLOBE NEWSWIRE) -- NB&T Financial Group, Inc. (Nasdaq:NBTF), parent company of The National Bank and Trust Company ("NB&T"), Wilmington, Ohio, announced net income for the second quarter of 2012 of $1.2 million, or $.33 per share. Net income for the second quarter of 2011 was $1.0 million, or $.31 per share. Net income increased primarily due to recognition of $161,000 in securities sale gains, compared to $10,000 in securities sale losses in the second quarter of last year. Net income for the first six months of 2012 was $1.5 million, or $.44 per share, compared to $2.1 million, or $.60 per share, for the same period in 2011.
Comparing the first half of 2012 to 2011, President & CEO, John Limbert, commented, "Beside the increase in the loan loss provision, our net interest income declined $1.1 million the first six months of 2012, compared to the same period last year. The continued low interest rate environment and stagnant loan volume is impacting our margin. Fortunately, we have been able to reduce expenses approximately $900,000 over the comparable period of last year to partially offset the margin decrease."
Net interest income was $5.4 million for the second quarter of 2012, compared to $6.1 million for the second quarter of 2011. Net interest margin decreased to 3.38% for the second quarter of 2012, compared to 3.95% for the same quarter last year. The net interest margin decreased primarily due to a change in asset mix from higher-yielding loans to lower-yielding securities. Average loans, which had an average rate of 5.47%, declined $14.7 million, while average overnight investments and securities, with an average rate of 1.50%, increased $38.3 million in the second quarter of 2012. Net interest income for the first half of 2012 was $10.9 million, compared to $12.0 million for the first half of 2011.
The provision for loan losses for the second quarter of 2012 was $332,000, compared to $385,000 in the same quarter last year. Net charge-offs were $397,000 in the second quarter of 2012, compared to $415,000 in the second quarter of 2011. Year to date net charge-offs for 2012 were $1.8 million, compared to $415,000 for the first six months of 2011. Charge-offs in 2012 increased primarily due to the write-off of one commercial loan for approximately $850,000, which was fully reserved for at the previous year end. The provision for loan losses for the six months ended June 30, 2012, was also increased to add specific loan reserves of approximately $622,000 for two commercial real estate loans and to add general reserves related to increased charge-off experience. Non-performing loans were $12.1 million at June 30, 2012, compared to $12.5 million at June 30, 2011. The June 30, 2012 non-performing loans include a $3.2 million loan relationship put on non-accrual status during the quarter. The borrower's financial condition has weakened and its working capital line has matured. The borrower and NB&T are currently developing a workout plan. Approximately $727,000 of the non-performing loans outstanding at June 30, 2012 are covered under the Company's FDIC loss share agreement, with the FDIC sharing in 80% of any future losses associated with those loans.
Total non-interest income was $2.3 million for the second quarter of 2012, compared to $1.9 million for the second quarter of 2011. Non-interest income for 2012 was higher due to recognition of $161,000 in securities sale gains, compared to $10,000 in securities sale losses in the second quarter of last year. In addition, overdraft fees have increased in 2012. Non-interest income for the first six months of 2012 was $4.4 million, compared to $4.5 million for the same period last year.
Total non-interest expense was $5.8 million for the second quarter of 2012, compared to $6.1 million for the second quarter of 2011. The decline in expense is to due to overall expense reduction primarily in the areas of personnel, benefit costs, branch hours, marketing and other processing costs. For the first six months of 2012, total non-interest expense was $11.8 million, compared to $12.7 million for the same period in 2011.
On May 15, 2012, the Board of Directors declared a dividend of $0.30 per share, payable July 23, 2012 to shareholders of record on June 29, 2012.