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Total probes chicago white sox nonperforming loans baseball gathers were $31.0 million at June 30, 2009 as comparedto $46.5 million at March 31, 2009, a decline of $15.5 million. This declinelargely reflects one loan of approximately $10.9 million which was returned tocurrent status during the second quarter and to a reduction of $4.6 millionduring the second quarter of 2009 in other nonperforming loans. Net charge-offs inthe six months ended June 30, 2009 were attributable to charge-offs in theunguaranteed portion of SBA loans ($202 thousand), commercial and industrialloans ($1.5 million), consumer loans ($124 thousand), and commercial real estateinvestment property loans ($187 thousand) and real estate owner occupiedcommercial loans ($32 thousand).The ratio of nonperforming loans to total loans improved significantly to 2.36%of total loans at June 30, 2009 as compared to 3.67% of total loans at March 31,2009. Net charge-offs in the second quarter of 2009 wereattributable to charge-offs in commercial and industrial loans ($795 thousand),consumer loans ($124 thousand), and commercial real estate investment propertyloans ($187 thousand), and real estate owner occupied commercial loans ($32thousand).For the six months ended June 30, 2009 net charge-offs totaled $2.1 millionversus $418 thousand for the six months ended June 30, 2008. Excluding these impaired loans carried at fairvalue, the pro-forma coverage ratio of the allowance to nonperforming loans is107%.For the three months ended June 30, 2009, the Company recorded net charge-offsof $1.1 million as compared to $393 thousand of net charge-offs for the threemonths ended June 30, 2008. The lower coverage ratio (allowance for credit losses to totalnonperforming loans) at June 30, 2009 as compared to June 30, 2008 is reflectiveof impaired loans acquired from Fidelity (approximately $12.6 million, or 41% ofnonperforming loans) which in accordance with generally accepted accountingprinciples, are carried at fair value, without any allowance attributable topre-acquisition deterioration. The higher allowance percentage at June 30, 2009 ascompared to December 31, 2008 and June 30, 2008 resulted primarily fromincreases in reserves for problem loans and to the acquisition of the loanportfolio of Fidelity whose allowance for credit losses was approximately $7.5million or 2.10% of loans outstanding at the date of the acquisition on August31, 2008.At June 30, 2009, the allowance for credit losses represented 63% ofnonperforming loans as compared to 41% at March 31, 2009 and 79% at June 30,2008.
The1.50% allowance represents an increase as compared to 1.45% at December 31, 2008and 1.15% at June 30, 2008 chicago white sox email . The higher provisioning in the first sixmonths of 2009 as compared to 2008 is attributable to higher net charge-offs in2009, risk migration within the portfolio and increased reserves for problemloans.At June 30, 2009 the allowance for credit losses represented 1.50% of loansoutstanding, unchanged from the allowance percentage at March 31, 2009 baseball tickets . Theprovision for credit losses was $3.3 million for the first six months of 2009 ascompared to $1.5 million in 2008 baseball ticket . Additionally, the Company's issuance of$12.15 million of subordinated notes in the third quarter of 2008 caused anadditional category of interest expense which did not exist in the secondquarter of 2008 baseball stuff .
The Company's net interest margin remains favorable to peerbanking companies.The provision for credit losses was $1.7 million for the three months ended June30, 2009 as compared to $814 thousand for the three months ended June 30, 2008.The higher provisioning in the second quarter of 2009 as compared to the secondquarter of 2008 is primarily attributable to higher levels of loan growth in thesecond quarter of 2009 as compared to the same period in 2008 ($45.4 million ascompared to $35.6 million), increases in specific reserves for problem andpotential problem loans, and net charge-offs in the second quarter of 2009 of0.35% of average loans as compared to the second quarter of 2008 of 0.20% chicago white sox ringtones . TheCompany's net interest margin for the second quarter of 2009 improved by 15basis points to 3.91% over the net interest margin for the first quarter of 2009of 3.76%, as both pricing of new loans and the cost of funds was managedaggressively baseball . Margin compression, reflecting declines in market interest rateson earning assets resulting from Federal Reserve activities which have not beenmatched by comparable declines in rates on interest bearing liabilities, hasbeen challenging the banking industry baseball tickets . For the three months ended June 30, 2009, the net interest margin was3.91% as compared to 4.34% for the three months ended June 30, 2008 . Taken together, these threenon-recurring items positively impacted second quarter earnings by $274 thousandafter tax or $0.02 per basic and diluted common shares.Net interest income increased 56% for the three months ended June 30, 2009 over2008, as the effect of favorable balance sheet growth was partially offset by adecline (43 basis points) in the net interest margin over the past twelvemonths. From a recurring or operating standpoint, investment gainsrealized were offset by a special deposit insurance premium assessment imposedon all banks by the FDIC in the second quarter of 2009, which has a pretax costto the Company of $723 thousand, and to a one-time payment of $224 thousand upontermination of a former director's fee agreement. Agency securities, to reduce potentialextension risk in longer term U.S.
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