Net interest income for the second quarter of 2009 increased $ .2 million in comparison to the second quarter of 2008 . This increase resulted from a $ 2.6 million decrease in interest expense during the period offset by a decrease in interest income of $ 2.4 million . The decrease in interest expense resulted from a decrease in rates paid on interest-bearing deposits . Average loans increased by $ 69.7 million while the average balance in investment securities declined by $ 52.7 million . Average interest-bearing liabilities increased by $ 78.5 million ( 5.7 % ) during the second quarter of 2009 when compared to the second quarter of 2008 . This increase resulted primarily from increases in interest bearing deposits and long-term borrowings offset by a decrease in short-term borrowings . The effective rate on interest bearing liabilities decreased by 91 basis points comparing quarter to quarter . Overall , the net interest margin decreased by 11 basis points from 3.77 % to 3.66 % when comparing quarter to quarter .