Lowell Dansker, Chairman of the Company, commented: "We are encouraged by positive trends in our credit quality as the migration of performing loans to nonaccrual or TDR status slowed to $10 million in Q3-10, a substantial decrease from $47 million and $23 million in the first and second quarter of 2010, respectively. The bulk of our loan portfolio has and continues to perform during this very difficult economic environment. Although we were required in Q3-10 to re-classify approximately $21 million of our performing TDRs to nonaccrual status based on regulatory guidance, our total nonperforming assets (inclusive of TDRs) remained relatively stable at $78 million at quarter end, up slightly from $75 million at June 30. These TDRs continue to pay as agreed under their renegotiated terms. We also made progress during the quarter in increasing our capital ratios."Mr. Dansker continued: "Looking forward, beginning in 2011 our new data processing system is expected to save approximately $0.8 million annually for each of the next seven years. We also continue to see strong demand for our loan product from asset purchasers who have expressed interest in our performing, classified and nonaccrual loans. Our website www.I-Netmortgageclearinghouse.com continues to generate leads for us. The economies and commercial real estate markets in our main lending areas of Florida and New York remain challenging. Our management team is committed to working through our remaining problem assets, returning to profitability and re-building shareholder value." The combined provision for loan and real estate losses increased to $4.6 million in Q3-10, from $2.8 million in Q3-09, reflecting credit rating downgrades on certain loans, the impact of transferring $21 million of performing TDRs to nonaccrual status and lower estimates of value on ORE properties in Florida and Georgia. Noninterest expenses decreased to $5.8 million in Q3-10 from $6.9 million in Q3-09, primarily due to a decrease of $1.3 million in carrying expenses associated with nonperforming assets and $0.5 million of non-recurring expense in Q3-09 related to the early retirement of higher cost borrowings. These items were partially offset by a $0.6 million non-recurring charge in Q3-10 related to the data processing conversion referred to above. In Q3-10, an income tax benefit of $78,000 was recorded, compared to $0.6 million of income tax expense in Q3-09.