Mr. Kissel stated, “As evidenced by our relatively short duration investment portfolio, we believe we are well positioned for the future when we expect loan demand will increase and interest rates will rise.”Loans Average loans totaled $949.3 million for the third quarter of 2010 as compared to $1.01 billion for the same 2009 quarter, reflecting a decrease of $60.0 million or 5.9 percent. The average residential mortgage loan portfolio declined $44.5 million or 9.4 percent to $428.4 million in the third quarter of 2010 from the same quarter of 2009. The Corporation sells the majority of its longer-term, fixed-rate loan production as a source of non-interest income and as part of its interest rate risk management strategy in the lower rate environment, and loan pay-downs have outpaced the originations retained in portfolio. The average commercial loan portfolio declined $19.1 million or 4.0 percent from the third quarter of 2009 to $454.3 million for the same quarter in 2010. Mr. Kissel commented: “Loan demand from quality borrowers on the commercial front has been generally scarce through the first nine months of 2010. However, over the last couple of months we have seen commercial loan demand from quality borrowers pick up somewhat. The commercial loan pipeline stands at $31 million at September 30, 2010.” The average home equity line portfolio rose $6.0 million or 16.7 percent to $42.2 million for the third 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. Mr. Kissel continued, “We have the capital and liquidity to lend to well-qualified individuals and businesses. However, we do remain committed to our conservative underwriting standards that have served us well.” Deposits Average total deposits (interest-bearing and noninterest-bearing) grew $8.6 million from $1.31 billion in the third quarter of 2009 to $1.32 billion in the third quarter of 2010, despite a significant reduction in certificate of deposit balances. Average certificates of deposit declined from $374.5 million in the September 2009 quarter to $251.5 million in the September 2010 quarter, a decline of $123.0 million or 32.8 percent. The Corporation allowed higher cost certificates of deposit to run-off and replaced those funds with lower cost, more stable core deposits.