For the second quarter of 2020, we showed impressive returns on average tangible common equity of 19.98% annualized and on average assets of 1.61%.
Our earnings were $130.9 million in the second quarter of 2020 compared with $82 million for the same period in 2019, an increase of $48.6 million or 59.1%.
Our diluted earnings per share were $1.41 for the second quarter of 2020 compared with the $1.18 for the same period in 2019, an increase of 19.5%.
The second quarter 2020 earnings per share of $1.41 includes a $0.22 income tax benefit, a $0.06 charge for merger related expenses and a $0.03 charge for the writedown of fixed assets related to the merger and some CRA funds.
In summary, it was $0.22 in benefit to earnings and $0.09 in inductions mostly related to the merger.
Loans at June 30, 2020 were $21.025 billion, an increase of $10.4 billion or 98.6% compared with $10.587 billion at June 30, 2019.
Our linked quarter loans increased $1.898 billion or 9.9% from the $19.127 billion at 31, 2020, of which $1.392 billion were SBA Paycheck Protection Program, sometimes referred to as PPP loans.
Mortgage warehouse loans also increased $843 million in the second quarter 2020 compared to the first quarter.
Our core loans, excluding held for sale and the warehouse purchase program and the PPP loans, decreased $311 million.
Our deposits at June 30, 2020 were $26.153 billion, an increase of $9.265 billion or 54.9% compared with $16.888 billion at June 30, 2019.
Our linked quarter deposits increased $2.326 billion or 9.8% from the $23.826 billion at March 31, 2020.
Nonperforming assets totaled $77.9 million or 28 basis points of quarterly average interest earning assets at June 30, 2020.
For the second quarter of 2020, net charge-offs were $13 million.
Of these charge-offs, $12.4 million were related to PCD loans with specific reserves of $28.5 million that we acquired in the merger.
So far, $16.1 million in specific reserves were released to the general reserve in addition to the $10 million provision for loan losses for the second quarter.
The Blue Chip consensus forecast estimates that fourth quarter 2020 GDP will end at a negative 5.6% compared with the fourth quarter of 2019.
However, they're forecasting a positive 4.8% GDP for the fourth quarter of 2021 compared with the fourth quarter of 2020.
They are also forecasting an unemployment rate of 9.4% for the fourth quarter of 2020 compared with unemployment rate of 6.9% for the fourth quarter of 2021.
Net interest income before provision for credit losses for the three months ended June 30, 2020 was $259 million compared to $154.8 million for the same period in 2019, an increase of $104.1 million or 67.2%.
The increase was primarily due to the merger with LegacyTexas in November 2019 and loan discount accretion of $24.3 million in the second quarter 2020.
The net interest margin on a tax equivalent basis was 3.69% for the three months ended June 30, 2020 compared to 3.16% for the same period in 2019 and 3.81% for the quarter ended March 31, 2020.
Excluding purchase accounting adjustments, the core net interest margin for the quarter ended June 30, 2020 was 3.33% compared to 3.14% for the same period in 2019 and 3.36% for the quarter ended March 31, 2020.
Non-interest income was $25.7 million for the three months ended June 30, 2020 compared to $30 million for the same period in 2019.
The current quarter non-interest income was affected by $3.9 million in writedown of certain assets and general impacts of COVID-19 pandemic.
Non-interest expense for the three months ended June 30, 2020 was $134.4 million compared to $80.8 million for the same period in 2019.
The increase was primarily due to the merger with LegacyTexas and one-time merger related expenses of $7.5 million due to the core system conversion that occurred in June.
We expect this additional savings to be about $7 million to $9 million per quarter.
This, combined with the savings realized in the first and second quarter, will be in line with our previously stated 25% cost savings in non-interest expense.
The efficiency ratio was 46.56% for the three months ended June 30, 2020 compared to 43.74% for the same period in 2019 and 42.9% for the three months ended March 31, 2020.
Excluding merger related expenses of $7.5 million, the efficiency ratio was 43.97% for the three months ended June 30, 2020.
The bond portfolio metrics at 6/30/2020 showed a weighted average life of 2.69 years and projected annual cash flows of approximately $2.3 billion.
Our nonperforming assets at quarter-end June 30, 2020 totaled $77,942,000 or 37 basis points of loans and other real estate.
The June 30, 2020 non-performing assets total was made up of $71,595,000 in loans, $187,000 in repossessed assets and $6,160,000 in other real estate.
Of the $77,942,000 in nonperforming assets, $12,173,000 or 16% are energy credits, $12,73,000 of which are service company credits and $100,000 are production company credits.
Since June 30, 2020, $15,786,000 has been removed from the nonperforming assets list through the sale of collateral.
This represents 20% of the nonperforming assets dollars.
Net charge-offs for the three months ended June 30, 2020 were $13,01,000.
$10 million was added to the allowance for credit losses during the quarter ended June 30, 2020.
The average monthly new loan production for the quarter ended June 30, 2020 was $871 million.
This includes a total of $1.430 billion in PPP loans booked during the quarter.
Loans outstanding at June 30, 2020 were $21.025 billion.
The June 30, 2020 loan total is made up of 39% fixed rate loans, 36% floating rate loans and 25% loans resetting at specific intervals.

Summary:
Our diluted earnings per share were $1.41 for the second quarter of 2020 compared with the $1.18 for the same period in 2019, an increase of 19.5%.
The second quarter 2020 earnings per share of $1.41 includes a $0.22 income tax benefit, a $0.06 charge for merger related expenses and a $0.03 charge for the writedown of fixed assets related to the merger and some CRA funds.
Our linked quarter loans increased $1.898 billion or 9.9% from the $19.127 billion at 31, 2020, of which $1.392 billion were SBA Paycheck Protection Program, sometimes referred to as PPP loans.
Net interest income before provision for credit losses for the three months ended June 30, 2020 was $259 million compared to $154.8 million for the same period in 2019, an increase of $104.1 million or 67.2%.