NON-INTEREST INCOME

Non-interest income decreased to $27.6 million during third quarter 2013, as compared to $29.6 million during second quarter 2013 and $30.2 million during third quarter 2012. These decreases were primarily due to lower income from the origination and sale of mortgage loans, which was partially offset by increases in wealth management revenues.

Income from the origination and sale of loans decreased to $7.9 million during third quarter 2013, as compared to $10.0 million during second quarter 2013, and $11.7 million during third quarter 2012, primarily due to lower demand for refinancing loans. The Company's total mortgage loan production decreased approximately 21% during third quarter 2013, as compared to second quarter 2013, and 33% as compared to third quarter 2012. Loans originated for home purchases accounted for approximately 72% of the Company's mortgage loan production during third quarter 2013, as compared to approximately 53% during the second quarter 2013 and approximately 38% during third quarter 2012.

Wealth management revenues increased to $4.6 million during third quarter 2013, as compared to $4.0 million during second quarter 2013 and $3.6 million during third quarter 2012. During third quarter 2013, the Company recorded revenues from the sale of two multi-million dollar life insurance policies aggregating $370 thousand. The remainder of third quarter 2013 increases, as compared to second quarter 2013 and third quarter 2012, were primarily due to the addition of new wealth management customers and increases in assets under trust management.

NON-INTEREST EXPENSE

Non-interest expense decreased to $52.6 million during third quarter 2013, as compared to $55.0 million during second quarter 2013 and $57.1 million during third quarter 2012, primarily due to decreases in salaries and wages expense and reductions in other expenses. Also contributing to the third quarter 2013 decrease in non-interest expense, as compared to the same period in the prior year, were reductions in other real estate owned, or OREO, expense.

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