Fourth Quarter Results:Bank net income for the fourth quarter of 2010 was $13.3 million compared to $14.9 million, excluding the PMRS charges, for the same quarter last year and $15.3 million in the third quarter of 2010. The $1.6 million decrease in net income for the fourth quarter of 2010 compared to the fourth quarter of 2009 (excluding the 2009 PMRS charges) was primarily attributable to (on an after-tax basis):
- $2 million higher provision for loan losses;
- $2 million reduction in net interest income primarily due to lower yields and lower earning asset balances as a consequence of the sales of low yield, fixed-rate mortgage originations; and
- $2 million reduction in noninterest income due to lower fees as a result of regulatory changes related to overdraft fees.
- $1.2 million charge-off of one commercial loan; and
- Approximately $1.4 million for a one-time adjustment to enhance our reserve methodology for our declining portfolio of residential lot loans.