Mr. Howell further stated that the Bank weathered the worst financial crisis and local real estate market decline since the Great Depression. “We assembled a strong loan workout team and loan review team and are experiencing positive results. Management is confident that the loan loss reserve is ample to absorb any losses embedded in the portfolio”.Despite the residual effects of the economic crisis of 2008 – 2009, actual losses on loans paid-off continue to remain low. For the six months ended June 30, 2010, loan payoffs totaled $78.7 million on which Bancorp incurred approximately $189,000 or 0.24% in actual realized losses as compared to the loan loss allowance coverage ratio of 2.26% to total loans at June 30, 2010. The Bank’s traditionally conservative underwriting standards and low loan-to-value ratios at loan origination have mitigated the level of these actual realized losses at the time the loans are paid off. Net interest income increased to $5.9 million for the three months ended June 30, 2010 as compared to $4.4 million for the three months ended June 30, 2009. The improvement in net interest income is primarily the result of the continuing improvement in the overall cost of funds; interest expense on deposits declined 51% when compared to the same period last year. The net interest margin for the second quarter of 2010 was 3.12% which reflects an impact of 53 basis points for delinquent interest payments received on nonaccrual loans in the second quarter; the net interest margin for the same period last year was 1.91%. The provision for loan losses of $512,000 recorded for the second quarter of 2010 represents a decrease of $5.4 million when compared to the same period last year. Loans decreased $108.9 million or 15% as compared to June 30, 2009. This decrease in the loan portfolio combined with the downward trend in nonperforming assets contributed to the improvement in the provision. This decrease also reflects the ongoing execution of the Bank’s strategic decision to improve the risk profile of its loan portfolio by reducing its construction and commercial real estate loan concentrations. Loan charge-offs, net of recoveries for the second quarter of 2010 were $1.6 million as compared to $6.0 million for the second quarter of 2009.