In a recent earnings release, a prominent financial institution reported a robust performance for the quarter, with notable achievements in net interest income and loan growth. The bank achieved a diluted GAAP earnings per share of $0.36 and a core earnings per share of $0.38. Net interest income stood at $83 million, while the net interest margin was 2.69%. Loan originations reached $515 million, including $78 million in commercial and industrial (C&I) loans. Annualized net loan growth was 4%, primarily driven by owner-occupied and residential portfolios. Deposit growth was modest at 1% excluding brokered CDs. Despite challenges in non-interest income and expenses, the bank maintained strong capital levels with a Common Equity Tier 1 ratio of 11.2% and tangible book value per share of $18.98. The company also declared its 112th consecutive quarterly cash dividend of $0.20 per common share.
The financial institution demonstrated significant progress in several key areas during the quarter. Notably, net interest income expanded to $83 million, reflecting improved financial performance. The net interest margin of 2.69% indicated stable funding costs relative to earning asset yields. Loan originations surged to $515 million, with C&I loans contributing $78 million. This growth was bolstered by a 4% annualized increase in net loans, particularly from the owner-occupied and residential sectors. Asset quality remained robust, as evidenced by a 16% decrease in loans classified as special mention or substandard. The bank's capital position remained solid, supported by a Common Equity Tier 1 capital ratio of 11.2% and a tangible book value per share of $18.98. Additionally, the company declared its 112th consecutive quarterly cash dividend of $0.20 per share, underscoring its commitment to shareholder returns.
However, the quarter also presented some challenges. Non-interest income declined by $2.5 million to $12.2 million, highlighting difficulties in revenue diversification. Operating expenses increased by $1.1 million to $64.8 million, largely due to acquisitions and continued hiring efforts. Deposit growth was limited to about 1%, excluding brokered CDs, indicating constrained organic deposit expansion. The effective tax rate for the quarter was 19%, slightly impacting overall profitability. CFO Patrick Barrett noted that operating expenses typically see a modest increase in Q1 due to compensation and payroll taxes, ranging from $1 million to $1.5 million. The bank is focused on strategic hires, particularly in C&I banking and Premier Banking teams, spanning from Northern Virginia to Boston.
The bank is also evaluating options for refinancing preferred shares, considering multiple strategies to optimize capital structure. CEO Christopher Maher highlighted that less than half of the reserve build was related to the Spring Garden acquisition, with the remainder influenced by macroeconomic factors. The bank aims to continue repricing the deposit base down methodically, especially for the CD book, taking advantage of reduced competitive pressure compared to the past two years. Overall, the bank's strategic initiatives and strong capital position position it well to navigate current market conditions.
The bank's performance highlights both strengths and areas for improvement. While net interest income and loan growth were positive, challenges in non-interest income and expense management remain. The institution's focus on strategic hiring and capital optimization underscores its commitment to long-term sustainability and shareholder value. With a solid capital foundation and ongoing efforts to enhance asset quality, the bank is well-prepared to address future opportunities and challenges in the evolving financial landscape.