Compared with the quarter ended March 31, 2010, the net interest margin remained flat at 3.92% for the quarter ended June 30, 2010. Net interest income for the quarter ended June 30, 2010 was $31.2 million, decreasing slightly from $31.5 million for the linked quarter ended March 31, 2010. Total deposits also remained relatively stable at $2.45 billion at June 30, 2010 compared to $2.44 billion at March 31, 2010. 

Mortgage banking income was $2.4 million for the third quarter of fiscal 2010, an increase of $369 thousand or 17.8% from the linked quarter ended March 31, 2010 and an increase of $1.5 million or 147.2% from the comparative quarter ended June 30, 2009. The linked and comparable quarter increases are the result of increases in the volume of loans sold due to the lower mortgage rate environment combined with the positive impact of the hedging strategies utilized to protect the value of our capitalized mortgage servicing asset from interest rate risk.  

During the quarter ended June 30, 2010, the Company recognized a credit-related other than temporary impairment ("OTTI") charge totaling $311 thousand on seven collateralized debt obligation ("CDO") investments. This was down considerably from credit-related OTTI charges of $1.8 million for the linked quarter as there has been some stabilization in the CDO market. In addition, we have a recovery in value through Other Comprehensive Income from one significant corporate security previously charged off as OTTI. Total CDOs, comprised of financial institution trust preferred securities, were $4.0 million or less than 1.0% of our total investment portfolio at June 30, 2010. 

Core other income, excluding impairment on investment securities and gains on disposition of assets, was $17.5 million for the third quarter of fiscal 2010 compared to $15.7 million for the second quarter of fiscal 2010 and $13.3 million for the quarter ended June 30, 2009. The linked quarter difference was primarily attributable to a one-time $1.5 million final settlement received from the Federal Deposit Insurance Corporation ("FDIC") in conjunction with the Cape Fear Bank acquisition. Total revenues, defined as net interest income plus core other income was $48.8 million for the quarter ended June 30, 2010, a slight decrease from $48.9 million during the comparable quarter ended June 30, 2009.