• Net interest income at $24.9 million for the second quarter of 2010 was $2.4 million, or 11% higher than the second quarter of 2009.
   
• Non-interest bearing demand deposits at $358.1 million increased by $11.4 million or 3% from March 31, 2010 and by $34.9 million, or 11%, from year-end 2009.
   
• Non-performing assets decreased $3.4 million from March 31, 2010 to $42.3 million. The ratio of the Allowance for Loan and Lease Losses to Total Loans increased from 1.34% at March 31, 2010 to 1.39% at the end of the second quarter of 2010.

Net Income for the first six months of 2010 was $9.3 million, compared to a Net Loss of ($9.5) million for the same period last year. Net Income Available to Common Shareholders for the first six months of 2010 was $7.5 million or $0.31 per diluted share, compared to a loss of ($11.0) million or ($0.46) per diluted share for the first six months of 2009.

The Board of Directors declared a quarterly cash dividend of $0.05 per common share. The cash dividend will be paid on August 16, 2010 to holders of record as of the close of business on July 30, 2010.

In the second quarter of 2010, we continued our ongoing strategy of focusing on organic growth, expense management, expanding our market presence, and taking advantage of opportunities that are available in our marketplace. Our margins remain strong, as we continue to attract core deposits by providing the best in customer service. Non-performing assets declined and the overall level of the loan loss allowance was strengthened. Additionally, our capital ratios remain well in excess of regulatory requirements.

As always, we thank our team of employees, officers, directors, shareholders and customers for all their continued support.

Sincerely,

Thomas J. Shara
President and Chief Executive Officer