Compression in the net interest margin ratio during the twelve months ended December 31, 2011, compared to the same period in 2010, was attributable to lower yields earned on the Company's investment and loan portfolios and lower outstanding loan balances, the effects of which were substantially offset by a 37 basis point reduction in the cost of interest bearing liabilities.Non-interest Income Other service charges, commissions and fees decreased during fourth quarter 2011, as compared to third quarter 2011, primarily due to decreases in ATM service charges and debit card interchange income, which typically decline during the fourth quarter of the year. Other service charges, commissions and fees increased during the three and twelve months ended December 31, 2011, as compared to the same periods in 2010, primarily due to increases in debit and credit card interchange income and ATM service charges resulting from higher transaction volumes. These increases were partially offset by reductions in mortgage loan servicing fees. Although regulations became effective on October 1, 2011 that reduced the maximum allowable debit card interchange fee per transaction for large issuers with over $10 billion in assets, the Company qualifies for the small-issuer exemption. Under this exemption the Company did not experience any immediate, significant impact to interchange revenues. Income from the origination and sale of residential mortgage loans increased during fourth quarter 2011, as compared to third quarter 2011 and fourth quarter 2010, primarily due to increased refinancing activity brought on by a reduction in home mortgage rates. Refinancing activity accounted for approximately 68% of the Company's residential real estate loan originations during fourth quarter 2011, as compared to 53% during third quarter 2011 and 72% during fourth quarter 2010. During the twelve months ended December 31, 2011, refinancing activity accounted for approximately 56% of the Company's residential real estate loan originations, as compared to 60% during the same period in 2010.