Net interest income and the net interest margin for the current quarter reflected declines from the same quarter last year, due to the effect of the lower market yields, which compressed asset yields more than deposit costs. Additionally, a much higher overnight cash balance position maintained during the current quarter also contributed to the compressed margin. Partially offsetting these effects, net interest income and margin were benefitted in the current quarter by the positive effect of increased loans funded by cash flows from lower yielding investment securities.
For the first quarter of 2013, average loans totaled $1.14 billion as compared to $1.05 billion for the same quarter in 2012, which was an increase of $90.1 million, or 8.6 percent.
The average commercial mortgage and commercial loan portfolio for the quarter ended March 2013 increased $84.2 million, or 18.4 percent, from the same quarter of 2012. The increase was attributable to a more concerted focus on this type of business, as well as demand from high-quality borrowers looking to refinance multi-family and other commercial mortgages held by other institutions.
Total loans at March 31, 2013 grew $83.9 million or 7.8 percent when compared to total loans at March 31, 2012.
Total loan originations were $116.9 million for the first quarter of 2013, up from $99.8 million for the same quarter of 2012. Included in the total were commercial mortgage/commercial loan originations of $52.5 million for the 2013 quarter compared to $36.7 million for the 2012 quarter.
Mr. Kennedy said "I was pleased with our success in generating solid lending growth this past quarter. As part of our Strategic Plan, we have begun to introduce a comprehensive Commercial & Industrial (C&I) lending program and expect to begin closing loans from this effort in the next several months. We have also added a seasoned multi-family lender in the current quarter who had a very robust pipeline at the end of the quarter."
For the March 2013 quarter, average total deposits (interest-bearing and noninterest-bearing) increased $64.6 million when compared to the same quarter last year. Over that same period, the Company saw growth in all deposit categories, except certificates of deposit. For the first quarter of 2013, average certificates of deposit (CDs) declined $17.4 million from the same 2012 quarter. These higher-cost CDs were replaced with lower-cost, more stable core deposits.
Total deposits at March 31, 2013 increased $69.5 million, or 4.9 percent from March 31, 2012. The Company continues to successfully focus on:
•Business and personal core deposit generation, particularly checking; •Municipal relationships within its market territory; and •Growth in deposits associated with its commercial mortgage/commercial loan growth.
Mr. Kennedy commented, "Our strong and valuable low cost core deposit base and our traditional focus on providing high touch client service are key as we implement our Strategic Plan."
PGB Trust & Investments
In the first quarter of 2013, PGB Trust & Investments generated $3.37 million in fee income compared to $3.18 million for the first quarter of 2012, reflecting growth of 6.0 percent. The growth was due to new business, as well as market action coupled with solid investment advisory and management. The market value of the assets under administration of the wealth management division was $2.54 billion at March 31, 2013, up from $2.30 billion at December 31, 2012 and $2.06 billion reported at March 31, 2012.
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