For the year ended September 30, 2010, net interest income increased $1.2 million or 8.6% to $15.7 million as compared to $14.4 million for the same period in 2009. The increase was due to a $3.5 million or 27.2% decrease in interest expense partially offset by a $2.3 million or 8.3% decrease in interest income. The decrease in interest expense resulted primarily from a 89 basis point decrease to 2.06% in the weighted average rate paid on interest-bearing liabilities in 2010, reflecting the repricing downward of interest-bearing liabilities during the year, partially offset by a $18.5 million or 4.2% increase in the average balance of interest-bearing liabilities, primarily in certificates of deposit, for the year ended September 30, 2010 as compared to 2009. The decrease in interest income resulted primarily from a 56 basis point decrease to 5.08% in the weighted average yield earned on interest-earning assets as assets repriced downward in 2010 partially offset by a $8.6 million or 1.8% increase in the average balance of interest-earning assets for the year ended September 30, 2010 as compared to 2009.

For the quarter ended September 30, 2010, the net interest margin was 2.88%, as compared to 3.06% for the same period in 2009. For the year ended September 30, 2010, the net interest margin was 3.17%, as compared to 2.97% for the same period in 2009. The increase in the interest margin for the year ended September 30, 2010 was primarily due to the greater interest rate sensitivity in the Company's interest-bearing liabilities as compared to the Company's interest-earning assets resulting in a greater decline in the weighted average rate paid on interest-bearing liabilities than in the weighted average yield earned on interest-earning assets. The decrease in the net interest margin during the quarter ended September 30, 2010 was primarily due to the shift in the relative composition of interest-earning assets to increased amounts of cash and cash equivalents as higher yielding investment securities were called and repaid during the fourth quarter of fiscal 2010.