In comparing the March 2010 quarter to the same quarter last year, the effect of growth in lower yielding, but less risky and shorter duration cash deposits and investment securities coupled with declining loan balances, contributed to the reduced margin. Mr. Kissel stated, “We have built substantial short and medium-term liquidity into our balance sheet over the last several quarters, so as to be better positioned in the future when we expect loan demand will increase and interest rates will rise.”Loans Average loans totaled $978.5 million for the first quarter of 2010 as compared to $1.05 billion for the same 2009 quarter, reflecting a decrease of $69.4 million or 6.6 percent. The average residential mortgage loan portfolio declined $52.5 million or 10.5 percent to $449.4 million from the same quarter of 2009, as the Corporation has opted to sell its longer-term, fixed-rate loan production as an interest rate risk management strategy in the lower rate environment and loan payments have outpaced originations retained in portfolio. The average commercial portfolio declined $18.2 million or 12.9 percent to $122.7 million, as loan demand and quality borrowers on the commercial front have remained scarce. The average home equity line portfolio rose $7.0 million or 21.7 percent to $39.1 million for the first quarter of 2010 compared to the same quarter in 2009. The Corporation focused on the origination of these adjustable-rate loans, and loan originations outpaced principal paydowns over the year. Deposits Average total deposits (interest-bearing and noninterest-bearing) grew 6.9 percent from $1.24 billion in the first quarter of 2009 to $1.32 billion in the first quarter of 2010. Average noninterest-bearing checking grew $15.9 million or 8.3 percent to $208.0 million in the first quarter of 2010 from the first quarter of 2009. Average interest-bearing checking balances totaled $238.3 million in the first quarter of 2010, rising $70.2 million or 41.8 percent from the same quarter in 2009. Checking growth is attributable to the Corporation’s focus on core deposit growth, particularly checking, coupled with growth in the Ultimate Checking product, which provides customers with a low-cost checking product and a higher yield for larger balances.