Management’s Discussion and Analysis 2011 vs. 2010 comparison 2010 vs. 2009 comparison Service charges on deposit accounts were $1.2 million in 2011, compared to $1.3 million in 2010. The decrease is  primarily due to a decline in insufficient funds charges, reflecting changes in customer behavior and spending patterns. Mortgage lending income was $1.9 million in 2011, compared to $2.5 million in 2010. A decline in the level of  mortgage refinance activity during 2011 when compared to the levels experienced during 2010 contributed to the decrease in  mortgage lending income. The Company's income from mortgage lending typically fluctuates as mortgage interest rates  change and is primarily attributable to origination and sale of new mortgage loans. Losses related to affordable housing partnership investments were $0.6 million in 2011, compared to $0.3 million in  2010. The increase in losses on affordable housing partnership investments was primarily due to the Company’s increased  total investment in these projects in 2011. While the losses incurred by the partnerships are recognized in pre-tax earnings,  these investments are designed to generate a return primarily through the realization of federal tax credits. As a result, these  investments have significantly reduced the Company’s income tax expense during 2011 when compared to 2010. In January  of 2012, the Company sold its interests in three affordable housing partnership investments. The Company will recognize a  pre-tax gain on sale of $3.2 million related to these investments in 2012. Accordingly, the Company expects it will not incur  any losses related to affordable housing partnership investments subsequent to the sale. In addition, the Company does not  expect to receive any federal tax credits related to affordable housing partnership investments in 2012. The net gain on securities was $0.9 million in 2011, compared to a net gain of $1.4 million in 2010. Gross realized  gains of $1.7 million in 2011 were reduced by gross realized losses of $0.5 million and other-than-temporary impairment  charges of $0.3 million related to trust preferred securities. Gross realized gains of $3.5 million in 2010 were primarily  reduced by approximately $2.0 million in other-than-temporary impairment charges related to trust preferred securities and  corporate debt securities. Service charges on deposit accounts were $1.3 million in 2010, compared to $1.2 million in 2009. The increase was  primarily due to increased insufficient funds charges, reflecting changes in customer behavior and spending patterns. Mortgage lending income was $2.5 million in 2010, compared to $3.3 million in 2009. A significant decline in the  level of mortgage refinance activity during 2010 when compared to the record levels experienced during 2009 contributed to  the decrease in mortgage lending income. The Company’s income from mortgage lending typically fluctuates as mortgage  interest rates change and is primarily attributable to origination and sale of new mortgage loans.  Losses related to affordable housing partnership investments were $0.3 million in 2010, compared to $0.2 million in  2009. The increase in losses on affordable housing partnership investments was primarily due to the Company’s increased  total investment in these projects. While the losses incurred by the partnerships are recognized in pre-tax earnings, these  investments are designed to generate a return primarily through the realization of federal tax credits.  The net gain on securities was $1.4 million in 2010, compared to a net loss of $3.7 million in 2009. Gross realized  gains of $3.5 million in 2010 were offset by gross realized losses of $2.1 million. Gross realized losses in 2010 primarily  related to other-than-temporary impairment charges for trust preferred securities and corporate debt securities. Gross realized  losses of $6.6 million in 2009 primarily related to other-than-temporary impairment charges for trust preferred securities and  an investment in the common stock of Silverton Financial Services, Inc. These losses were offset by gross realized gains of  $2.9 million during the same period.  page 9