As a percentage of loans the allowance for loan loss decreased to 1.7% compared to 1.79% from the previous quarter and is equal to reserve at December 31. 2013. Core banking non-interest income which represents income from traditional banking services provided to our customers was up 25% for the year compared to 2013. As we continue to focus on enhancing our product offerings and adding new customers. The core banking non-interest income for the fourth quarter was $4.5 million, an increase of $200,000 or 4% from the previous quarter driven mainly by higher foreign exchange income. As I mentioned last quarter, foreign exchange income can fluctuate based on our customers’ needs and we benefited again this quarter from a larger number of transactions which may not be repeatable in the future.
Warrant income for the fourth quarter was 792,000 up slightly from the third quarter. The quarter includes a higher number of merger transactions for our customers. Non-interest expense increased by 697,000 for the quarter to 17.5 million as personnel expense increased by 753,000 from higher salaries and incentive compensation expense.
Expenses were up a total of 19% for the year compared to 2013. We anticipate expenses to increase in the mid-teens in 2015 as we continue to recruit bankers and invest in our franchise. The effective tax rate for the fourth quarter was higher as we saw an increase in the portion of income that was taxable resulting in true-up in the quarter to raise our annual effective tax rate to 31.4%. Now I will turn the call back over to Doug.
Dough Bowers – President & CEO
All right, well thank you, Pat. Operator if we could open it up for questions, please.
Operator
Thank you, sir. Ladies and gentlemen on the phone line if you’d like to ask a question please press * then 1 on your telephone. If your questions have been answer and you wish to remove yourself from the queue please press the pound key. Once again, if you have a question please press * then 1. Our first question comes from Jennifer Demba from Suntrust, your line is open please go ahead.
Q: Good morning. Couple of questions, first of all on your loan growth, just wondering if you could break that down geographically for us, if you can. Just let us kind of give us an idea where you’re seeing relatively more momentum?
Dough Bowers – President & CEO
Well, from a geographic perspective, I’m not sure it would be very helpful and in fact it is very broad-based but we saw good activity on the VCS side, the Venture Capital Services, the Capital call lines. So, good increases there, good increases in the later-stage business as we mentioned, our SBA portfolio continues to grow and more in the expansion stage we’re in. So, we do think of it in geography terms, we also think much more in terms of how we’re doing across the stages.
