Net interest income for the fourth quarter of 2011 increased 5.6 percent to $38.2 million compared with $36.2 million in 2010. The net interest margin, on a taxable equivalent basis, was 4.44 percent compared with 4.69 percent in the same quarter last year and 4.62 percent in the third quarter of this year.
The provision for loan losses was $1.22 million in the fourth quarter of 2011 compared with $1.99 million in the same quarter last year and $1.35 million in the third quarter of this year.
Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.64 percent at Dec. 31, 2011, compared with 1.60 percent at Sept. 30, 2011, and 1.53 percent at Dec. 31, 2010.
Noninterest income in the fourth quarter of 2011 was $12.79 million compared with $12.87 million in the same quarter a year ago. Trust fees increased to $3.15 million in the fourth quarter of 2011 compared with $2.91 million in the same quarter last year. Service charges on deposit accounts decreased to $4.31 million during the fourth quarter of 2011 compared with $4.85 million for the same quarter a year ago, due primarily to reduced customer use of overdraft services. ATM and credit card fees increased to $3.55 million during the fourth quarter of 2011 from $3.02 million in the same quarter last year.
Noninterest expense in the fourth quarter of 2011 was $26.26 million, essentially unchanged from the same quarter last year. The Company's efficiency ratio in the fourth quarter of 2011 improved to 48.33 percent compared with 50.53 percent in the same quarter last year.
For the year, net income increased 14.6 percent to $68.37 million from $59.66 million in 2010, making 2011 the 25th consecutive year of earnings increases for the Company. Basic earnings per share rose to $2.17 for the year from $1.91 in the previous year. The prior year's results included net proceeds after tax of $1.30 million from the expropriation of company-owned property in Southlake, Texas, by the Texas Department of Transportation. Excluding this extraordinary item, net income for 2010 would have been $58.36 million, or $1.87 per share.
Net interest income increased 11.62 percent for the year to $152 million from $136.17 million a year ago. The provision for loan losses for 2011 totaled $6.63 million compared with $8.96 million the prior year. Noninterest income was $51.44 million for the year compared with $49.48 million a year ago. Noninterest expense rose to $104.62 million in 2011 compared with $98.26 million last year primarily as a result of our Huntsville acquisition.
As of Dec. 31, 2011, consolidated assets for the company totaled $4.12 billion compared with $3.78 billion a year ago. Loans grew 5.7 percent and totaled $1.79 billion at year end compared with loans of $1.69 billion a year ago. Total deposits were $3.33 billion as of Dec. 31, 2011, a 7.1 percent growth over $3.11 billion a year earlier. Shareholders' equity rose to $508.54 million as of Dec. 31, 2011, compared with $441.69 million the prior year.
"It is a special honor to be able to announce to our shareholders that 2011 marked a quarter century of consecutive annual earnings increases for the Company," said F. Scott Dueser, Chairman, President and CEO. "This rare accomplishment could not have occurred without the dedication, hard work and expertise of our executive team, bank presidents and all our people.
"We are especially pleased with the loan and deposit growth we achieved in 2011, the successful integration of our newly acquired bank in Huntsville, Texas, and the continued growth for our Trust Company," Dueser said. "We believe First Financial's future remains bright, despite challenges from a sluggish national economy, extraordinarily low interest rates and the burden of complying with new federal regulations in the banking industry. In the year ahead, we will continue to pursue both internal growth opportunities and acquisitions, while keeping our focus on providing exceptional customer service and serving the needs of our communities."