NILES, Ohio -- First Niles Financial Inc., the holding company for Home Federal Savings and Loan Association of Niles, last week reported net income of $260,000 for the first quarter of 2004, a decrease of $14,000 from the first quarter of 2003. The return on average assets for the three months ended March 31 was 1.04% compared to 1.09% in the same quarter one year prior. Primary earnings per share for the three months ended March 31, 2004 was 20 cents compared with 21 cents for the year-ago quarter.Net interest income after the provision for loan losses for the first quarter of 2004 totaled $737,000, compared to $798,000, a decrease of $61,000 compared to the 2003 quarter. Total interest income was $1.23 million for the current quarter, a $123,000 decrease from the same period in 2003. Non-interest income for the first quarter of 2004 was $102,000 vs. $57,000 for the same period in 2003. This increase was essentially the result of a $94,000 gain on sale of securities realized during the first quarter of 2004, as compared to a $49,000 gain on sale of securities during the first quarter of 2003. Non-interest expense for the first quarter of 2004 was $466,000 compared to $462,000 in the first quarter one year ago. Compensation and benefits expense declined $34,000 in the current quarter as compared to the same period one year ago, primarily due to a staff reduction. However, general increases in several expense categories, including a $20,000 increase in other operating expense and a $9,000 increase in equity in loss of limited partnership more than offset this cost savings. Non-performing loans, consisting of non-accruing loans and accruing loans delinquent more than 90 days totaled $1.1 million at March 31, 2004, or 2.7% of net loans receivable, an increase of $78,000 from Dec. 31, 2003. The allowance for loan losses totaled $758,000 at March 31, representing 70.3% of non-performing loans and 1.9% of net loans receivable.At March 31, total assets were $99.2 million compared to $100 million at Dec. 31, 2003. Deposits were $61.3 million compared with $61.9 million at Dec. 31, 2003.Total equity at March 31, 2004 was $16.4 million, $206,000 lower than at December 31, 2003. The decrease in total equity was primarily related to a $416,000 increase in treasury shares and $198,000 in dividends paid on common stock, partially offset by a $149,000 increase in net unrealized gains on securities available for sale. First Niles repurchased 35,719 shares of its common stock during the quarter at an average price of $17.27. "