In the second quarter, we closed over $460 million of new loans, an increase of 57% from the prior quarter.
This solid production in part, it was offset in part by a decline in line of credit utilization of approximately $161 million over the average for fiscal 2020.
Consequently, we saw a net decrease in our commercial loan portfolio of about $49 million for the quarter.
At quarter end, our pipeline remains strong at approximately $1.7 billion.
Nevertheless, I'd like to point out that the largest percentage of our growth is a non-interest-bearing demand deposits, which grew at an annualized rate of 17% and presently comprised 24% of our deposits.
Our total cost of those deposits is about 26 basis points and is among the best in our peer group.
SB One Insurance had a strong second quarter with new business that resulted in a 60% increase from the same quarter last year.
Beacon Trust also had a very good quarter with assets under management increasing approximately 24% annualized and revenue being up 32% over the same quarter last year.
Our net income for the quarter was $44.8 million or $0.58 per diluted share compared with $48.6 million or $0.63 per diluted share for the trailing quarter.
Earnings for the current quarter benefited from $8.7 million of net negative provisions for credit losses on loans and off balance sheet credit exposures, while the trailing quarter reflected negative provisions of $15.9 million.
Pre-tax pre-provision earnings were $51.4 million or an annualized 1.56% of average assets.
This is an improvement from $48.9 million or 1.52% of average assets in the trailing quarter as revenue increased quarterly -- to a quarterly record $112 million and operating expenses declined by $2 million.
Our net interest margin compressed 6 basis points versus the trailing quarter.
We were able to reduce the cost of interest-bearing liabilities by 5 basis points versus the trailing quarter through reductions in deposit costs.
Including non-interest bearing deposits, our total cost deposits fell to 26 basis points this quarter from 30 basis points in the trailing quarter.
Average non-interest bearing deposits increased to $100 million or an annualized 17% to $2.48 billion, or 24% of total average deposits for the quarter.
Average borrowing levels decreased $146 million as we shifted funding to lower costing brokered demand deposits.
The pull-through adjusted loan pipeline at June 30th increased $250 million in the trailing quarter to a record $1.1 billion.
However, the pipeline rate decreased 35 basis points since last quarter to 3.28% reflecting the current competitive rate environment.
Our provision for credit losses on loans was a benefit of $10.7 million for the current quarter compared with a benefit of $15 million in the trailing quarter.
The current quarter benefit was attributable to $6 million of net recoveries on previously charged off loans, improved asset quality, a favorable economic forecast and a decrease in loans outstanding.
We had annualized net recoveries as a percentage of average loans of 25 basis points this quarter compared with net charge-offs of 4 basis points for the trailing quarter.
Non-performing assets decreased to 62 basis points of total assets from 65 basis points at March 31st.
Excluding PPP loans, the allowance represented 88 basis points of loans compared with 92 basis points in the trailing quarter.
Loans granted short term COVID-19 related payment deferrals have declined from their peak of $1.3 billion to just over $7 million.
This compares with $132 million at December 31st.
Non-interest income was stable versus the trailing quarter at $21 million, as increased loan prepayment fees and growth in wealth management insurance agency income were offset by decreased bank-owned life insurance income and reductions in net profits on loan level swaps and gains on loan sales.
Excluding provisions for credit losses and commitments to extend credit, operating expenses were an annualized 1.84% of average assets for the current quarter compared to 1.95% in the trailing quarter and 1.86% for the second quarter of 2020.
The efficiency ratio improved to 54.12% in the second quarter of 2021 from 56.19% in the trailing quarter and 57.35% in the second quarter of 2020.
Our effective tax rate was 25.4% versus 25.1% for the trailing quarter.
And we are currently projecting an effective tax rate of approximately 25% for the remainder of 2021.

Summary:
Our net income for the quarter was $44.8 million or $0.58 per diluted share compared with $48.6 million or $0.63 per diluted share for the trailing quarter.