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Evidence of this strain can be found in the residential loan portfolio where we continue to experience delinquencies from prime borrowers, as we did not originate any sub-prime mortgages as these borrowers struggle with loss of employment and declining home values. We are however seeing some early signs of stabilization in the residential home valuation. The consumer though has been severely impacted by this historic recession hence normalcy will be dramatically different in the recovery.Competition is returning to the marketplace however we will not change our loan underwriting practices and credit discipline to win some business. There are many commercial lending opportunities that we have passed on as the stress of the economy has made the credit analysis problematic. Despite these challenges, we have net increases of $44.9 million in commercial and multi-family mortgages, an asset class that has performed well for us. The residential mortgage demand has been primarily in the 30-year fixed category, which we continue to sell as origination to minimize our interest rate risk. Consumer lending, which consists primarily of home equity and HELOCs, has been sluggish as most applicants had very little equity in their homes complicated by higher levels of debt to income. The main driver of our earnings and margin improvement has been in the funding area specifically the cost of deposits. We continue to reduce the pricing and level of CDs while growing our core deposits, which now represents 70.7% of our total deposits. Time deposits declined $76 million or 5% in the quarter with many of these customers being single product based. We continually strive to build relationships and keep reaching for our share of the customer’s wallet. Overall, our cost of deposits has declined to 1.26% from 2.06% in the first quarter of 2009. The improvement in our efficiency ratio can be traced to improved net interest income while effectively managing cost. With the increased burden of higher FDIC insurance expenses for the foreseeable future, we will continue to seek our ways to optimize our operations and capacity. Increase in the expenses of foreclosed assets of $423,000 during the quarter also impacted our expense line.
We are pleased to continue to pay our quarterly cash dividend of $0.11, which we did not cut or suspend during the period of economic turmoil. We remain well capitalized as currently defined by our regulators. The challenge of this historic recession has stressed many businesses and our customers. This accompanied by major financial regulation reforms pending in Washington may hamper business recovery.Asset quality remains a primary focus and challenge as we navigate the myriad changes on the horizon and despite not being a TARP recipient; we cannot avoid the vortex of issues affecting the New Jersey and US economy. With that as a backdrop, I would like Tom to take us through the details regarding our first quarter results. Tom? Tom Lyons Thank you Chris and good morning everyone. Net income for the first quarter of 2010 was $11.2 million or $0.20 per share as compared to $6.8 million or $0.12 per share for the fourth quarter of 2009. Compared with the trailing quarter, first quarter results benefitted from a $3.2 million decrease in the provision for loan losses, a $2.4 million decrease in non-interest expense, a $2.2 million increase in net interest income, and a $976,000 increase in non-interest income. The March 31, 2010 tangible common equity to tangible assets increased 8.34%. The company’s regulatory capital ratios strengthened further and the company and the bank continued to be well capitalized by the current regulatory guidelines. Read the rest of this transcript for free on seekingalpha.com