“We are pleased with the increase in our net interest margin for the quarter and the stability seen throughout this economic cycle,” said Small. “The balance sheet restructuring we did in the fourth quarter was an important move as we anticipate that an extended low rate environment and continued pricing pressures will put pressure on the margin.”Non-Interest Income Non-interest income for the 2012 fourth quarter increased to $10.2 million from $7.9 million in the fourth quarter of 2011. Gain on investment securities was $1.6 million for the fourth quarter of 2012, compared to $169,000 in the fourth quarter of 2011. All of the gains from the sale of securities in the fourth quarter of 2012 were due to the executed balance sheet restructure. Income from the sale of insurance and investment products remained stable at $2.0 million in the fourth quarter of 2012, flat with $2.0 million in the same period of 2011. Mortgage banking income increased to $2.7 million in the fourth quarter of 2012, compared with $1.9 million in the same period in 2011. Gains from the sale of mortgage loans increased in the fourth quarter of 2012 to $2.7 million from $1.7 million in the fourth quarter of 2011. Mortgage loan servicing revenue increased slightly in the fourth quarter 2012 to $888,000 from $874,000 in the fourth quarter of 2011. First Defiance recorded a positive valuation adjustment of $96,000 on mortgage servicing rights (“MSR”) in the fourth quarter of 2012, compared with a positive adjustment of $181,000 in the fourth quarter of 2011. The MSR valuation adjustment is a reflection of the increase in the fair value of certain sectors of the Company’s portfolio of MSRs. “Non-interest income increased, driven by mortgage banking and solid fee income, which are part of our core operating strategy. Gain on sale of mortgage loans was higher this quarter compared to the 2011 fourth quarter driven by higher loan activity,” stated Small. "The mortgage originations for the bank in 2012 represented a record for the highest dollar level of production in a year."