quarter and first two quarters of 2018, respectively, compared with $30,000 and $56,000, respectively, for the second quarter and first two quarters of 2017. The Company is working diligently to
address and reduce its non-performing assets. The Companys nonaccrual loans totaled $9,373,000 and $13,810,000 at June 30, 2018 and December 31, 2017, respectively. Most of these loans are
collateral-dependent, and the Company has rigorously evaluated the value of its collateral to determine potential losses.
Non-interest income decreased $601,000 and $620,000 for the second quarter and first two quarters of 2018,
respectively, as compared with 2017 results primarily as a result of the non-recurring gain of $429,000 discussed above.
Non-interest expense increased $119,000 and decreased $180,000 for the second quarter and first two quarters of 2018,
respectively, as compared with 2017 results. This increase for the second quarter of 2018 was the result of an increase in equipment rentals, depreciation and maintenance of $106,000 and an increase in other real estate expense of $96,000 which were
partially offset by the decrease in net occupancy expenses of $70,000 as compared with 2017. This decrease for the first two quarters of 2018 was the result of decreases in net occupancy expenses of $165,000 and other expense of $230,000, which were
partially offset by an increase in other real estate (ORE) expense of $154,000 as compared with 2017.
Total assets at June 30, 2018
decreased $9,143,000 as compared with December 31, 2017. Available for sale securities decreased $14,644,000 as maturities and unrealized losses on these securities exceeded investments. Total loans decreased $8,654,000 as principal payments,
maturities, charge-offs and foreclosures relating to existing loans outpaced new loans. Total deposits decreased $6,307,000 at June 30, 2018 as compared with December 31, 2017 as customers in the casino industry and county and municipal
entities reallocate their resources periodically.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income, the amount by
which interest income on loans, investments and other interest- earning assets exceeds interest expense on deposits and other borrowed funds, is the single largest component of the Companys income. Managements objective is to provide the
largest possible amount of income while balancing interest rate, credit, liquidity and capital risk. Changes in the volume and mix of interest-earning assets and interest-bearing liabilities combined with changes in market rates of interest directly
affect net interest income.
Quarter Ended June 30, 2018 as Compared with Quarter Ended June 30, 2017
The Companys average interest-earning assets decreased approximately $28,985,000, or 5%, from approximately $605,193,000 for the second quarter of 2017
to approximately $576,208,000 for the second quarter of 2018. The Companys average balance sheet decreased primarily as average loans decreased approximately $23,371,000 and average balances due from financial institutions decreased
approximately $35,627,000 while average held to maturity taxable securities increased approximately $6,546,000 and average taxable available for sale securities increased