Turning now to non-interest income and expense, for the fourth quarter, our non-interest income was $1.3 million and approximately $100,000 above the amount we suggested in our last quarterly call. The higher than anticipated non-interest income was primarily due to increased merchant bankcard revenue as during the fourth quarter the bank received a bonus payment from our third-party vendor for meeting various sales goals during the year.
We anticipate our first quarter 2015 non-interest income will be down from fourth quarter and range from $1.2 million to $1.3 million. Our non-interest expense in the fourth quarter was up $649,000 over the prior quarter, but as noted in our press release, fourth quarter expense included $470,000 in merger costs.
Excluding merger costs, our non-interest expense was in the range that we suggested in our last call. Looking into the first quarter 2015 and excluding merger expense estimated at approximately $4 million, we expect expenses in the first quarter 2015 to be up slightly over the fourth quarter and in the range of $9.4 million to $9.6 million.
Regarding merger expense and assuming our pending acquisition of Capital Pacific closure during the first quarter, we even anticipate either the payment of or accrual of all merger expense related to that acquisition.
Concluding with comments on our tax provision, our effective tax rate was elevated in the fourth quarter, as a result of non-deductibility of certain merger-related expenses. During 2015, we anticipate our effective tax rate will be approximately 35%. That completes my prepared remarks and I’ll now turn it over to Casey Hogan, Chief Operating Officer.
Casey Hogan – Executive Vice President & Chief Operating Officer
Thank you, Mick. Today, I will briefly discuss our key credit statistics and trends and then describe various factors related to the bank’s fourth quarter loan and deposit activity. I will specifically address for the dental loan portfolio and provide an update on the healthcare segment. So let’s begin with credit.
Over all our credit quality statistics continued their positive migration. As of December 31st, non-performing assets as a percentage of total assets declined from third quarter’s 1.08% to 1.02%. The 30-day to 89-day past due ratio was just 0.15%. And the allowance as a percentage of net non-performing loans rose to a robust 786%. For the year, net charge-offs were $280,000 or just 0.03% of average loans.
Classified assets as a percentage of capital ended the year at 24.5% versus the 29% recorded at last year’s end. Consequentially, when combining these factors and the positive credits trends that suggests that our allowance as a percentage of period-end loans, as of December 31st, 2015, are 1.5%, will likely remain adequate in the coming quarter subject to, of course, to unforeseen changes or situations.
Moving to the dental portfolio, these key credit statistics also continued to perform near or above the quality measurements associated with the overall portfolio. Annualized net charge-offs were 0.17% at year-end versus the 0.38% last year. While the 30-day to 89-day past due ratio was 0.11%. Total past dues were 0.3%, the lowest in the last five years.
Let’s now discuss growth trends beginning with loans. Loan growth continued for the 14th consecutive quarter. Period-end loans, as of December 31st, 2014, increased $51.2 million or 5.2% over last year-end.
