The Company established provisions for loan losses of $615,000 for the quarter ended September 30, 2010 and $1.1 million for the year ended September 30, 2010 as compared to $230,000 and $1.4 million for the comparable periods in 2009. At September 30, 2010, the Company's non-performing assets totaled $6.7 million or 1.3% of total assets as compared to $5.6 million or 1.1% of total assets at September 30, 2009. Non-performing assets consisted of five commercial real estate loans totaling $1.5 million, 18 one-to four-family residential mortgage loans totaling $1.8 million, one construction loan totaling $206,000 and six real estate owned properties totaling $3.2 million. The largest real estate owned property consists of a single-family residence and an adjacent lot with an aggregate book value of $1.2 million. This property is actively being marketed for sale. Four of the real estate owned properties totaling $1.7 million consist of four townhouses in the same development project. These properties are being rented at this time at sufficient levels to cover the Company's cost of operating the properties. The Company anticipates that it will be marketing the townhouses for sale when market conditions improve. The allowance for loan losses totaled $3.2 million, or 1.2% of total loans and 90.6% of non-performing loans at September 30, 2010.

Non-interest income amounted to $137,000 and $387,000 for the three months and year ended September 30, 2010, respectively, compared with losses of $16,000 and $2.5 million, respectively, for the same periods in 2009. The losses incurred in the 2009 periods were due to OTTI charges related to the securities received as a result of the Company's redemption in kind in June 2008 of its entire investment in a mutual fund. The decline in the amount of losses recognized between the 2009 and 2010 periods reflected the decline in the amount of the OTTI charges from $224,000 and $3.3 million, respectively, for the quarter and year ended September 30, 2009 to $137,000 and $560,000, respectively, during the quarter and year ended September 30, 2010. The level of OTTI charges related to the non-agency mortgage-backed securities received as part of the redemption in kind slowed significantly in 2010 as the markets for such securities began to stabilize during the 2010 periods.