MORTGAGE LOANS.  Substantially all of the Company's mortgage loans consist of residential 1-4 family loans. The vast majority of the Company's residential 1-4 family mortgage loan portfolio is secured by properties located in its market area and is originated under terms and documentation which permit their sale in the secondary market. Company practice has been to sell, or hold for sale in the secondary market, the majority of all conforming fixed rate loan originations and retain adjustable rate loan originations in the portfolio. Over the past two years, there was a considerable amount of refinancing activity in the Company’s mortgage loan portfolio as a result of the decline in long-term rates and subsequent low rate environment over a prolonged period. Consistent with previous practice, the Company continued to sell the majority of newly originated and refinanced conventional loans in the secondary market. This was done to reduce portfolio rate risk on loans with longer expected durations and limited cross-sell opportunities. From the end of 2001, the mortgage loan portfolio grew by $19.3 million, or 9.4%. Mortgage loan increases were primarily the result of construction lending and retention of larger private banking residential loans. Additionally, opportunities available in the secondary market afforded the ability to selectively purchase in-market jumbo mortgage loans (over $322,700 individually) as part of the Company’s efforts to build private banking relationships. At December 31, 2002, $139.3 million, or 62.3%, of the Company's residential 1-4 family mortgage and construction loans were fixed rate loans and $84.3 million, or 37.7%, were adjustable rate loans. CONSUMER LOANS.  The Company offers consumer loans in order to provide a full range of retail financial services to its customers. At December 31, 2002, $406.9 million, or 39.0% of the Company's total loan portfolio, was comprised of consumer loans. The Company originates substantially all of such loans in its primary market area. During the second quarter of the year, the Company completed the sale of the Morgan City, Louisiana branch office. The branch sale included approximately $5.4 million in total loans, of which $4.8 million were classified as consumer loans. The largest component of the Company's consumer loan portfolio consists of indirect automobile loans. These loans are originated by the automobile dealerships and applications are forwarded to Company personnel for approval or denial. The Company relies on the dealerships, in part, for loan qualifying information. To that extent, there is risk inherent in indirect automobile loans associated with fraud perpetrated by the automobile dealership. To limit this risk, an emphasis is placed on established dealerships that have demonstrated reputable behavior, both within the community and through long relationships with the Company. A decrease of $1.4 million in the indirect automobile loan category was the intentional result of management’s decision to control growth in this line of business given the uncertainty of the economy, while maintaining a focus on prime, or low risk, paper. At December 31, 2002, $219.3 million, or 21.0% of the Company's total loan portfolio, consisted of indirect automobile loans.  At December 31, 2002, the Company's remaining consumer loan portfolio was comprised of home equity loans, direct automobile loans, credit card loans and other consumer loans. On the retail side, growth of $8.7 million in home equity loans was offset by a small decrease in other consumer categories. Excluding the branch sale, direct consumer loans grew by $7.2 million from the end of 2001 to the end of 2002. At December 31, 2002, $122.8 million, or 11.8% of the Company’s total loan portfolio, made up the home equity loan balance. At December 31, 2002, the Company's direct automobile loans amounted to $25.9 million, or 2.5% of the Company's total loan portfolio. The Company's VISA and MasterCard credit card loans totaled $9.4 million, or 0.9% of the Company's total loan portfolio at such date. The Company's other personal consumer loans amounted to $29.5 million, or 2.8% of the Company's total loan portfolio at December 31, 2002.  The following table sets forth the scheduled contractual maturities of the Company’s loan portfolio at December 31, 2002, unadjusted for scheduled principal reductions, prepayments or repricing opportunities. Demand loans, loans having no stated schedule of repayments and no stated maturity and overdraft loans are reported as due in one year or less. The average life of a loan is substantially less than the contractual terms because of prepayments. As a result, scheduled contractual amortization of loans is not reflective of the expected term of the Company’s loan portfolio. Approximately 80% of the value of loans with a maturity greater than one year bears a fixed rate of interest. 20