IMB Building Society's December-half earnings were hit by a combination of interest rate cuts and weak demand for loans.IMB released its financial report for the six months to December yesterday, showing a 6.3 per cent fall in net interest income and a 6.6 per cent fall in net profit.Profit fell to A$14.1 million in the latest half, from $15.1 million in the previous corresponding period.IMB said its net interest margin was a little below two per cent - "only slightly lower than the average margin of the last financial year."Operating expenses rose from $32.5 million to $33.2 million.On the positive side, impairment losses were down from $1.1 million in the six months to December 2011 to $302,000 in the latest half.The group's capital ratio rose 1.9 percentage points to 15.9 per cent.The board declared a dividend of 10 cents a share, fully franked.Last May, IMB completed a review of its capital structure and adopted a policy offering a series of share buybacks. It undertook the first of these in September, when it bought back $9.5 million worth of shares.