Servicing fee income, which is reported on the income statement as Other Noninterest Income, is recorded for fees earned for serviced loans. The fees are based on a contractual percentage of the outstanding principal, or a fixed amount per loan, and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Servicing fees totaled $179,000 and $177,000 for the years ended December 31, 2010 and 2009, respectively. Late fees and ancillary fees related to loan servicing are not material.  Investment in Real Estate Limited Partnerships – Investment in real estate limited partnerships represent the Bancorp’s investments in affordable housing projects for the primary purpose of available tax benefits. The method of accounting used for each investment is based on ownership percentage in the investment. One investment is accounted for using the cost method of accounting. The excess of the carrying amount of the investment over its estimated residual value is amortized during the periods in which associated tax credits are allocated to the investor. The annual amortization of the investment is based on the proportion of tax credits received in the current year to total estimated tax credits to be allocated to the Bancorp. The other investment is accounted for using the equity method of accounting. Under the equity method of accounting, the Bancorp records its share of the partnership’s earnings or losses in its income statement and adjusts the carrying amount of the invest- ments on the balance sheet. These investments are reviewed for impairment when events indicate their carrying amounts may not be recoverable from future undiscounted cash flows. If impaired, the investments are reported at fair value. The Bancorp’s involvement in these types of investments is for tax planning purposes only and, as such, the Bancorp is not involved in the management or operation of such invest- ments. Long-term Assets –  Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. Bank Owned Life Insurance –  The Bancorp has purchased life insurance policies on certain key executives.  In accordance with accounting for split-dollar life insurance, Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.  Repurchase Agreements –  Substantially, all repurchase agreement liabilities represent amounts advanced by various customers that are not covered by federal deposit insurance and are secured by securities owned by the Bancorp. Postretirement Benefits Other Than Pensions –  The Bancorp sponsors a defined benefit postretirement plan that provides comprehensive major medical benefits to all eligible retirees. Postretirement benefits are accrued based on the Operating Segments –  While the Bancorp's executive management monitors the revenue streams of the various products and services, the identifiable segments are not material and operations are managed and financial perfor- mance is evaluated on a company-wide basis. Accordingly, Fair Value of Financial Instruments –  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular instruments. Changes in assumptions or in market conditions could significantly affect the estimates.  Restrictions on Cash –  Cash on hand or on deposit with the Federal Reserve Bank of $692,000 and $537,000 was required to meet regulatory reserve and clearing require- ments at December 31, 2010 and 2009, respectively.  These balances do not earn interest. Loss Contingencies –  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe such matters currently exist that will have a material effect on the financial statements. Comprehensive Income –  Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available-for-sale and the unrecognized gains and losses on postretirement benefits.  Earnings Per Common Share –  Basic earnings per common share is net income divided by the weighted- average number of common shares outstanding during  the period. Diluted earnings per common share includes  the dilutive effect of additional potential common shares issuable under stock options. Loan Commitments and Related Financial Instruments – Financial instruments include off-balance sheet credit  instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the expo- sure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Income Taxes –  Income tax expense is the total of the current year income tax due or refundable and the change  in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the tempo- rary differences between carrying amounts and tax bases  of assets and liabilities, computed using enacted tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.  expected cost of providing postretirement benefits to employees during the years the employees have rendered service to the Bancorp. 26