Disciplined loan pricing and more flexibility on the funding side underscored a steady rather than stellar December half year for Bendigo and Adelaide Bank.Bendigo's managing director Mike Hirst, said the bank "did not want to get into a price war or a credit war."He warned, though, of "hyper competitive" pricing and aggressive discounting around fixed rate loans, mainly through the broker segment.Profit after tax fell by A$8 million to $181 million.The cash profit, however, increased by $16 million to $186 million. The bank's return on equity was 8.8 per cent, up on the previous corresponding period but stable over six months. Bendigo lifted its net interest margin by five basis points to 2.24 per cent over the year, at odds with the trend in big bank margins.Hirst said the bank was "doing good business on the asset side that's profitable … We do have optionality on the funding side of the book," where it was improving margins on term deposits and wholesale borrowings."We want to avoid a price war. We are a value player and that's reflected in the prices we put in the market.""We see different organisations discounting heavily. It's not something we want to become involved in."We believe we can charge a reasonable premium and still grow our balance sheet."Cattle country in north Queensland was the only real credit weak spot for the bank, with properties in that sector "continuing to devalue".Arrears at the bank's Rural Bank arm have, however, improved over recent months and are below the arrears level of 2011. Arrears in the Rural Bank are also less than the arrears level in the bank's wider commercial lending portfolio.