Flexible Spending Accounts: Don't Lose Your Hard-Earned Money

(NAPSI)-Flexible spending accounts (FSAs) are a valuable benefit to help pay for medical expenses. Employees can contribute a portion of each paycheck to a FSA, tax-free account that can be used to cover anything from acupuncture to X-rays. However, by law, people who contribute to FSAs must use all of their contributions by the end of the year or forfeit them.

Unfortunately, about one-third of people who take advantage of FSAs leave an average of $168 in their accounts each year. Some people may not realize the range of medical expenses covered by FSAs, which may contribute to their leaving unspent funds behind.

What's Reimbursable

Reimbursable medical expenses cover a variety of health-related products, treatments and procedures, including over-the-counter medication, dental care and even many treatments for vein disorders, including varicose veins and venous leg ulcers.

FSAs May Cover Vein Treatments

Dr. Ted King, Medical Director of the Vein Clinics of America, says FSAs have become a common way for patients to cover treatment for their vein disorders. "While FSAs don't cover cosmetic procedures, many vein disorders are much more than a cosmetic issue," said Dr. King. "Because vein disorders can have an impact on lifestyle and lead to serious complications, FSAs may cover vein treatments, which can improve health and well-being, in addition to self-esteem."

Vein disorders, while often unsightly, can also be painful and, if left untreated, lead to serious problems--even life-threatening consequences. It is estimated that more than 80 million people in the United States have varicose veins.

For more information, please visit www.veinclinics.com.

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Tightened credit, Reduced Demand Push SBA Loan Volume Down in FY 2008; Agency Works with Banks To Jumpstart Small Business Lending

A “perfect storm” of tightened credit by commercial lenders, declining creditworthiness, and reduced demand for loans from small business borrowers uncertain about the future has led to a substantial decline in the number of small business loans guaranteed by the U.S. Small Business Administration during FY 2008, SBA Acting Administrator Sandy K. Baruah said today.

Although SBA posted a record year in 2007 with nearly 100,000 loans approved, that number dropped by nearly 30 percent in 2008. The dollar value of those loans declined by 13 percent, from a combined $20.6 billion in 2007, to $17.96 billion in 2008. Average loan size increased from $142,000 in FY 2007 to $183,000 in FY 2008, demonstrating that by increasing the average amount, these loans may in fact contribute to expanding more sustainable and successful small businesses.

Georgia experienced the same downward trend in loans. The total number of SBA guaranteed loans dropped by nearly 29 percent in FY 2008 while the dollar amount for these loans decline by nearly 15 percent. During the past fiscal year 2,218 SBA loans were approved in Georgia for approximately $671 million. In FY 2007, the agency approved 3,111 small business loans for approximately $789 million.

These program declines began not long after the fiscal year started in October 2007, and accelerated throughout the fiscal year.

The volume numbers represent loans made under SBA’s two primary loan programs, the 7(a) guaranteed loan program and the Certified Development Company, or 504, loan program. Loans approved under 7(a) declined by 30 percent, from 99,606 in 2007 to 69,434 in 2008, with loan dollars falling 11 percent, from $14.3 billion in 2007 to $12.7 billion in 2008. In the 504 program, loan approvals fell by 17 percent, from 10,669 in 2007 to 8,883 in 2008, and loan dollars declined by 16 percent, from $6.3 billion in 2007 to $5.3 billion 2008.

Loan volume in both programs had set records in each of the previous five years.

Baruah said he feels strongly that the steps taken by the Administration and Congress will have a positive effect on the credit situation and the economy. The SBA is holding meetings across the country to better understand how the agency can work with both lenders and small businesses to help them during these difficult economic times.

“I am very hopeful,” said Baruah. “I am hopeful because I have seen this great nation tackle and overcome all sorts of challenges in just the last few years. From the Y2K scare, to the bursting of the dot-com bubble, to the 9-11 terror attacks, to corporate scandals, and large natural disasters, we’ve proven that we can take a hit and keep on growing – it’s one of our unique strengths as Americans.

“President Bush and his economic team have been doing everything possible to resolve the financial crisis and restore stability to the markets, aggressively using every tool available on every front to unclog the pipes of our credit system, increase liquidity, and restore confidence in all facets of our economy,” he said.

“The recently signed Emergency Economic Stabilization Act of 2008 does this by giving the government new tools to unclog the arteries of our financial system, allowing credit and capital to flow once again,” Baruah said. “And that objective should be important to all of us because capital is the lifeblood not only of our economic system but also small business.”

The rescue plan also authorizes FDIC to expand insurance to cover all non-interest bearing accounts, which are commonly used by small businesses to cover day-to-day operations including payroll and inventory purchases.

Also, the Federal Reserve will soon become the buyer of last resort for commercial paper. By unfreezing the market for commercial paper, which provides short-term financing for banks and businesses, this action will help businesses of all sizes meet payroll, purchase inventory, and invest to create new jobs.

“All these efforts will need time to fully work their way through the economic system,” Baruah said. “But when they do, we will see results. We will see money and credit and capital flowing once again, making a big difference for small business, whose lifeblood depends upon access to capital.”

Baruah also said SBA is taking steps to encourage the flow of credit to small businesses.

Among the steps taken by the agency are:
· Working to improve the liquidity of SBA loans on the secondary market and exploring strategies to increase access to capital by small businesses.

· The accelerated launch of Small Rural Lender Advantage ahead of schedule, which targets smaller financial institutions – like community banks – and institutions with low SBA volume.

· Encouraging SBA’s lending partners to use their authority to work with qualified borrowers on a case-by-case basis and defer SBA guaranteed loan payments by up to three months.

· Reminding lenders and borrowers that interest rates have fallen with the prime rate, and are now about 40 percent less than a year ago.

For more information on how to get an SBA loan, visit www.sba.gov.
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Isakson, Chambliss Urge Treasury to Address Needs of Community Banks

U.S. Senators Johnny Isakson, R-Ga., and Saxby Chambliss, R-Ga., today sent a letter to Treasury Secretary Henry Paulson urging him to give community banks access to the Troubled Asset Relief Program authorized by the Emergency Economic Stabilization Act.

It is the second letter Isakson and Chambliss have written asking Paulson to address the needs of community banks in Georgia and across the country.

The text of the letter is below:

Dear Secretary Paulson:

Recently, we have learned of Treasury’s efforts to expand the government's financial rescue plan to include non-publicly-traded banks. We are again writing to urge you to give close review and a favorable decision that permits both publicly-traded and privately held community banks access to the Troubled Asset Relief Program authorized by the Emergency Economic Stabilization Act.

In our enclosed letter of October 21, 2008, we stress the vital role these banks play in our communities for both small businesses and individuals. We hope that these concerns will be at the forefront of your deliberations on the matter.

Sincerely,
Saxby Chambliss
United States Senator
Johnny Isakson
United States Senator
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Fannie Mae to Take Valuation Allowance Against Deferred Tax Asset

/PRNewswire-FirstCall/ -- Fannie Mae (NYSE:FNM) announced today that it has determined to take a valuation allowance against its deferred tax asset. While the amount of the valuation allowance has not yet been determined, it is likely to be substantially all of the value of the deferred tax asset as of September 30, 2008.

The Company is in the process of completing its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008. Further information concerning the amount of the valuation allowance and the effect of taking that allowance on the results of operations for the third quarter as well as other information such as balance sheet information, including stockholders' equity and net worth, and results of operations for the third quarter, will be included in the Form 10-Q when it is filed with the Securities and Exchange Commission.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.

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Georgia-Carolina Bancshares Announces Third Quarter Results

PRNewswire-FirstCall/ -- Georgia-Carolina Bancshares, Inc. (OTC:GECR) (BULLETIN BOARD: GECR) , parent company of First Bank of Georgia, reported today that net income increased 7.8% for the three months ended September 30, 2008. Net income totaled $966,000 ($.28 per diluted common share) compared to $896,000 ($.25 per diluted common share) for the three months ended September 30, 2007.

Net income for the nine months ended September 30, 2008 increased slightly. Net income totaled $2,584,000 ($.74 per diluted common share) compared to $2,562,000 ($.73 per diluted common share) for the nine months ended September 30, 2007.

Remer Y. Brinson III, President & CEO of the Company, stated, "We are extremely pleased with our results given the current state of the economy and the turmoil in the global credit markets. We believe our financial results reflect our conservative management style and the stability of the Augusta economy."

"The national media has recently been commenting that banks aren't making loans, but that's definitely not true, at least as it relates to First Bank. Naturally, we have experienced some decline in loan demand; however, total bank loans have grown moderately year to date. Deposit growth remains strong, particularly core deposits," Brinson continued.

"A key topic being discussed in the national media is exposure to sub-prime lending. First Bank of Georgia did not participate in sub-prime lending, either through the loan origination process or in purchasing sub-prime loans. Therefore, we do not have any sub-prime mortgage assets in our portfolio," Brinson reported.

"Another important subject that concerns our customers is FDIC insurance. In order to address this issue, First Bank of Georgia held a public seminar on October 2, 2008 to outline exactly how FDIC insurance works, how customers can structure their deposit accounts to maximize their insurance coverage, and alternatives to use if their deposits exceed FDIC coverage. We believe this type of personal and professional service separates us from the competition. In this day of 'self service' banking, it is important to have an informed, professional banker who can address an individual customer's unique needs," Brinson continued.

Georgia-Carolina Bancshares, Inc. is a bank holding company with $451 million in assets as of September 30, 2008. The Company owns First Bank of Georgia, which conducts banking operations through offices in Augusta, Columbia County, and Thomson, Georgia and mortgage originations through its offices in Augusta and Savannah, Georgia and Jacksonville, Florida.

Georgia-Carolina Bancshares' common stock is quoted on the OTC Bulletin Board under the symbol GECR.

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which can generally be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "anticipates," "plans" or similar expressions to identify forward-looking statements, and are made on the basis of management's plans and current analyses of the Company, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic and market conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes, and other risks and uncertainties described in the Company's periodic filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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Tanger Reports Third Quarter 2008 Results

PRNewswire-FirstCall/ -- Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported funds from operations available to common shareholders ("FFO"), a widely accepted measure of REIT performance, for the three months ended September 30, 2008 increased 9.4% to $0.70 per share, or $26.5 million, as compared to FFO of $0.64 per share, or $23.9 million, for the three months ended September 30, 2007. For the nine months ended September 30, 2008, FFO was $64.4 million, or $1.70 per share, as compared to FFO of $67.4 million, or $1.80 per share, for the nine months ended September 30, 2007.

FFO for the nine months ended September 30, 2008 was impacted by a previously announced $8.9 million charge relating to the settlement of $200.0 million in 10 year US Treasury locks, as well as a $406,000 prepayment premium associated with the early extinguishment of debt. Excluding these two non-recurring charges, FFO for the nine months ended September 30, 2008 would have been $1.94 per share, representing an increase of 7.8% compared to the nine months ended September 30, 2007.

For the three months ended September 30, 2008, net income available to common shareholders increased 26.9% to $8.9 million or $0.28 per share, as compared to $7.0 million, or $0.22 per share for the third quarter of 2007. Net income available to common shareholders for the nine months ended September 30, 2008 was $14.3 million, or $0.45 per share compared $13.9 million, or $0.44 per share for the first nine months of 2007. Net income available to common shareholders for the nine months ended September 30, 2008 was also impacted by the non-recurring charges described above.

Net income and FFO per share amounts above are on a diluted basis. FFO is a supplemental non-GAAP financial measure used as a standard in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO is included in this press release.

Third Quarter Highlights

-- Received an upgrade from BBB- to BBB from Standard and Poor's Ratings Services on October 23, 2008

-- 31.2% debt-to-total market capitalization ratio, compared to 30.5% as of September 30, 2007

-- 3.92 times interest coverage ratio compared to 3.40 times last year

-- 4.7% increase in same center net operating income for the third quarter and year to date

-- 47.0% average increase in base rental rates on 77,000 square feet of re-leased space during the third quarter of 2008, 43.8% increase year to date, compared to a 37.6% increase year to date in 2007

-- 8.3% average increase in base rental rates on 56,000 square feet of signed renewals during the third quarter of 2008, 17.6% increase year to date, compared to a 13.2% increase year to date in 2007

-- 96.7% occupancy rate for wholly-owned properties, up 0.5% from June 30, 2008

-- Same-space tenant sales for the rolling twelve months ended September 30, 2008 increased 0.3% to $341 per square foot excluding two properties undergoing major renovations

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, "Our third quarter results were very positive. Same center net operating income increased 4.7% for the quarter as a result of our continuing efforts to drive rental rates on the renewal and releasing of space. Our balance sheet is conservatively positioned given current financial and economic conditions."

Financing Activities and Balance Sheet Summary

On October 23, 2008, Tanger was upgraded by Standard and Poor's Ratings Services from BBB- to BBB, making it one of only two REITs to receive a ratings upgrade this year. The company also currently maintains an investment grade rating with Moody's Investors Service of Baa3.

On June 11, 2008, Tanger closed on a $235.0 million unsecured three year term loan facility. The facility bears interest at a spread over LIBOR of 160 basis points, with the spread adjusting over time, based upon the debt ratings of the company.

On June 26, 2008, the company used proceeds from the term loan to repay its only remaining mortgage with a principal balance of approximately $170.7 million two weeks ahead of its optional prepayment date. As a result of the repayment of this mortgage, Tanger's entire portfolio of wholly-owned properties is now unencumbered. The remaining proceeds of approximately $62.8 million, net of closing costs, were applied against amounts outstanding on the company's unsecured lines of credit and to settle two treasury based interest rate lock protection agreements.

On July 9, 2008, Tanger entered into a LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on $118.0 million of the unsecured three year term loan facility to a fixed rate of 5.21%. The interest rate swap agreement expires on April 1, 2011. Subsequently, on September 25, 2008, the company entered into an additional LIBOR based interest rate swap agreement, which effectively changes the floating rate of interest on the remaining $117.0 million of the unsecured three year term loan facility to a fixed rate of 5.30%. This interest rate swap agreement also expires on April 1, 2011.

As of September 30, 2008, Tanger had $783.3 million of debt outstanding, equating to a 31.2% debt-to-total market capitalization ratio. The company had $149.5 million outstanding on its $325.0 million in available unsecured lines of credit, and approximately 81% of Tanger's debt was at fixed interest rates as of September 30, 2008. During the third quarter of 2008, Tanger continued to maintain a strong interest coverage ratio of 3.92 times, compared to 3.40 times during the third quarter of last year.

Portfolio Operating Results

During the first nine months of 2008, Tanger executed 351 lease documents, totaling 1,521,000 square feet within its wholly-owned properties. Lease renewals accounted for 1,040,000 square feet, or 77.0% of the square feet which was scheduled to expire during 2008, and generated a 17.6% increase in average base rental rates on a straight-line basis. Base rental increases on re-tenanted space during the first nine months of 2008 averaged 43.8% on a straight-line basis and accounted for the remaining 481,000 square feet.

Same center net operating income increased 4.7% for the third quarter of 2008 and the first nine months of 2008 compared to the same period in 2007. Excluding two properties undergoing major renovations, reported tenant comparable sales per square foot for the rolling twelve months ended September 30, 2008 were up 0.3% to $341 per square foot, compared to $340 per square foot for the twelve months ended September 30, 2007. Sales were impacted by the general weakness in the U.S. economy, as well as severe weather and hurricanes during the third quarter of the year.

Investment and Other Activities

In Washington County, south of Pittsburgh, Pennsylvania, Tanger held a very successful grand opening celebration of its second center in the state on August 29, 2008. The first phase, totaling 370,000 square feet, was approximately 86% leased upon opening. The Washington County center is wholly owned by Tanger.

On October 23, 2008, Tanger held the grand opening of its center in Deer Park (Long Island), NY. The initial phase which contains approximately 656,000 square feet of retail space and 26,000 square feet of office space, opened to huge crowds and parking lots filled beyond their capacity. The retail space at the Deer Park center was approximately 77% leased upon opening. The Deer Park property is owned through a joint venture of which Tanger and two venture partners each own a one-third interest.

Based upon the tremendous response by customers at both of these centers' grand opening events, the company feels confident additional tenant interest in the remaining available space will remain high and additional signed leases for both properties will be completed during the first year stabilization period.

Tanger has entered into purchase options on new development sites located in Mebane, North Carolina and Irving, Texas. Tanger is continuing with its predevelopment work at these locations. However in October, 2008, Tanger made the decision to terminate its purchase options with respect to its potential sites in Port St. Lucie, Florida and Phoenix, Arizona. As a result, Tanger will be taking a charge of approximately $1.8 million relating to its predevelopment costs on these projects during the fourth quarter of 2008.

Tanger Elects New Board Member

At its meeting on October 28, 2008, the Nominating and Corporate Governance Committee of the company's Board of Directors recommended, and the Board of Directors approved, that the number of directors be expanded from six members to seven members, and that Ms. Bridget Ryan Berman shall serve as independent director of the company effective January 1, 2009 until the next Annual Shareholders Meeting.

Ms. Berman was formerly the Chief Executive Officer of Giorgio Armani Corp., the wholly-owned US subsidiary of Giorgio Armani S.p.A., one of the leading fashion and luxury goods groups in the world, from 2006 to 2007. Previously, she was Vice President/Chief Operating Officer of Apple Computer Retail from 2004 to 2005 and held various executive positions with Polo Ralph Lauren Corporation, including Group President of Polo Ralph Lauren Global Retail, from 1992 to 2004. Ms. Berman also served in various capacities at May Department Stores, Federated Department Stores, and Allied Stores Corp. from 1982 to 1992. In addition, Ms. Berman was a member of the board of directors, and served on the audit committee for J. Crew Group, Inc. from 2005 to 2006.

"We are pleased to add to our Board of Directors someone with Ms. Berman's credentials," said Steven B. Tanger, President and Chief Operating Officer. "Ms. Berman's extensive experience and impressive background in the retail industry will add value and perspective to our board."

2008 FFO Per Share Guidance

Based on current market conditions and the strength and stability of its core portfolio, the company currently believes its net income for 2008, excluding gains or losses on the sale of real estate, will be between $0.63 and $0.69 per share and its FFO for 2008 will be between $2.35 and $2.41 per share. The company's earnings estimates include the impact of the expected write-off of predevelopment costs mentioned above totaling approximately $1.8 million, but do not include the impact of any potential gains on the sale of land parcels or the impact of any potential sales or acquisitions of properties. The following table provides the reconciliation of estimated diluted net income available to common shareholders per share to estimated diluted FFO per share:

For the twelve months ended December 31, 2008:
Low Range High Range
Estimated diluted net income per share $0.63 $0.69
Minority interest, gain/loss on the sale of
real estate, depreciation and amortization
uniquely significant to real estate
including minority interest share and our
share of joint ventures 1.72 1.72
Estimated diluted FFO per share $2.35 $2.41



Third Quarter Conference Call

Tanger will host a conference call to discuss its third quarter results for analysts, investors and other interested parties on Wednesday, October 29, 2008, at 10:00 A.M. eastern time. To access the conference call, listeners should dial 1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers Third Quarter 2008 Financial Results call. Alternatively, the call will be web cast by CCBN and can be accessed at the company's web site at http://www.tangeroutlet.com/investorrelations/news .

A telephone replay of the call will be available from October 29, 2008 starting at 1:00 P.M. Eastern Time through 11:59 P.M., November 7, 2008, by dialing 1-800-642-1687 (conference ID # 65292786). Additionally, an online archive of the broadcast will also be available through November 7, 2008.

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SunTrust Plans Sale of $3.5 Billion in Preferred Stock to U.S. Treasury; Company Separately Announces 30% Dividend Reduction

PRNewswire-FirstCall/ -- SunTrust Banks, Inc., (NYSE:STI) said today that it has received preliminary approval from the U.S. Treasury for the sale of $3.5 billion in preferred stock and related warrants to the U.S. Treasury under the Capital Purchase Program of the Emergency Economic Stabilization Act of 2008. The approval is subject to certain conditions and the execution of definitive agreements.

"Our participation in the Capital Purchase Program enhances SunTrust's already solid capital position and will permit us to further expand our business and take advantage of growth opportunities," said James M. Wells III, Chairman, President and CEO. "In addition, we are pleased to support the Treasury in its ongoing effort to address dislocations in financial markets and spur the market stabilization that is in the public interest."

Mr. Wells said he would anticipate "prudent deployment" of some of the capital in areas such as expansion of careful lending, expansion of business capabilities and the exploration of potential acquisitions in line with the Bank's long-term strategic goals. In addition, Mr. Wells said that as long as the current uncertain and challenging economic environment persists, maintenance of capital at elevated levels is desirable.

Separately, Mr. Wells said SunTrust's Board of Directors has approved a 30% reduction in the Company's dividend on its common stock. Effective with the next dividend, the quarterly dividend rate will be $.54 per common share.

"Although it has become common in our industry, reducing the dividend was not a decision we took lightly," said Mr. Wells. "But the reality is that even though SunTrust has been managing successfully through this difficult period, and our expectation is that will continue to be the case, reducing the dividend is the responsible thing to do given recent deterioration in the economy, the prospect of continued weakness in 2009, and the implications of this on the near-term outlook for SunTrust and our industry."

Mr. Wells noted that the dividend decision followed an extensive evaluation of the Company's overall capital structure in light of current and projected market conditions and the economic environment.

"We consistently have said that we would be taking the steps necessary to manage through the current turmoil, while also looking appropriately to position ourselves for post-cycle growth," said Mr. Wells. "The developments announced today are right in line with those priorities."

SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. As of September 30, 2008, SunTrust had total assets of $174.8 billion and total deposits of $115.9 billion. The Company operates an extensive branch and ATM network throughout the high- growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves customers in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the Company provides mortgage banking, insurance, brokerage, investment management, equipment leasing and capital markets services. SunTrust's Internet address is suntrust.com .

Important Cautionary Statement About Forward-Looking Statements

The information in this news release may contain forward-looking statements. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These statements often include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "initiatives," "potentially," "probably," "projects," "outlook" or similar expressions or future conditional verbs such as "may," "will," "should," "would," and "could." Such statements are based upon the current beliefs and expectations of management and on information currently available to management. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements speak as of the date hereof, and we do not assume any obligation to update the statements made herein or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Exhibit 99.3 to our Current Report on Form 8-K filed with the SEC on October 23, 2008.

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Regions Selected to Participate in U.S. Treasury Capital Purchase Program

(BUSINESS WIRE)--Regions Financial Corporation (NYSE:RF) announced today that it has received preliminary approval from the U.S. Treasury Department, subject to standard closing conditions, for the investment of $3.5 billion in the company as part of the government’s effort to restore confidence in our nation’s financial system, increase the flow of credit to consumers and businesses, and to provide additional assistance to distressed homeowners facing foreclosure. This will increase Regions’ Tier 1 capital to approximately 10.5 percent.

The Treasury’s plan to invest $3.5 billion in preferred stock and warrants in Regions is part of its program to provide capital to the healthy financial institutions that are the core of the nation’s economy. Treasury originally announced the infusion of $125 billion into nine large banks, and encouraged other strong financial institutions to also participate.

“Regions believes this government program is important to restoring the flow of funds to consumers and businesses, both large and small, who are at the core of our economy,” said Dowd Ritter, Regions’ chairman, president and chief executive officer. “These funds, while still strengthening our capital base, will enable us to expand lending and step up acquisitions.”

Regions will pay the government a 5 percent dividend, or $175 million annually, for each of the first five years of the investment, and 9 percent thereafter unless Regions redeems the shares. The government will also receive 10-year warrants for common stock, which will give the Treasury the opportunity to benefit from an increase in the common stock price of the company.

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Isakson, Chambliss Urge Delta Air Lines, Pilots’ Union to Reconsider Termination of Retired Pilots’ Pensions

U.S. Senators Johnny Isakson, R-Ga., and Saxby Chambliss, R-Ga., today sent a letter to Delta Air Lines CEO Richard Anderson and Captain Lee Moak, Chairman of the Delta Air Lines Master Executive Council, urging them to reconsider a proposal to make a voluntary contribution to the Pension Benefit Guaranty Corporation for the benefit of retired Delta pilots and to work toward finding a solution that protects the earned benefits of employees and retirees alike.

The text of the letter is below:

Dear Mr. Anderson and Captain Moak:

As you know, we worked tirelessly on behalf of the Delta employees, retirees, and their families to pass into law provisions allowing airlines to spread their pension plan funding over a more manageable schedule. We did this to protect the 91,000 Delta Air Lines pensioners and family members in Georgia from losing their pensions and to help protect American taxpayers from having to pay for those airline pensions.

We understand that over 5,500 retired Delta pilots have had their retirement plan terminated and turned over to the Pension Benefit Guaranty Corporation (PBGC). Our understanding is that a majority of retired Delta pilots receive only a small percentage of the monthly retirement benefit they earned while employees of Delta. We are also told that a number of retired pilots receive zero benefit from the PBGC, and many more get a monthly PBGC payment that equals half or less than half of their Social Security benefit check. Finally, we are told that Delta will be assuming the pension liabilities for over 30,000 Northwest employees and retirees.

A group representing thousands of retired pilots recently sent a proposal to you, Mr. Anderson, asking Delta to make a voluntary contribution to the PBGC that would partially correct this issue. They also raised the issue at the September 25, 2008 shareholders meeting. As proponents of legislation designed to save these pensions, we were disappointed to hear that the response from Delta at that meeting was that this was considered a closed issue.

We urge you both to reconsider your positions, and to work towards finding a solution that protects the earned benefits of all employees and retirees. We appreciate your attention to this matter, stand ready to assist you in any way possible, and look forward to your response.

Sincerely,
Johnny Isakson
United States Senator
Saxby Chambliss
United States Senator
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In an Effort to Help Small Businesses, SBA Encourages Lenders to Offer Loan Deferment Relief

In response to the financial crisis, the U.S. Small Business Administration today announced it is strongly encouraging its participating 7(a) lenders and Certified Development companies to work with business borrowers to provide them with the flexibility they need to keep their businesses running during these difficult economic times.

As access to credit and capital has tightened, many businesses face increased challenges in meeting their financial obligations. This is especially true of small businesses hit hard by the recent economic slowdown that are now unable to make payroll, or purchase essential inventory.

SBA is reminding participating lenders they have the authority on a case-by-case basis to extend temporary payment relief for qualifying borrowers with 7(a) and 504 loans who are struggling to make their payments.

“The SBA is here to help small businesses during these difficult economic times. We are encouraging our lending partners to follow suit by extending three-month payment deferments on their SBA guaranteed loans to qualified borrowers who need relief,” said SBA Acting Administrator Sandy K. Baruah. “We recognize that small business owners are faced with challenging decisions right now. By providing three-month deferments to qualifying borrowers who are struggling, our lending partners can help small business owners free up the capital they need to maintain their businesses.”

If a deferment longer than three consecutive monthly payments is needed for a loan, borrowers can work directly with their lenders who in turn will work closely with the SBA to identify the best solution.

At the same time, the SBA is asking its lenders not to broadly call borrower loans due to changing financial variables, such as fluctuations in personal credit scores, declining collateral values, and reduced home equity, which are currently affected by the disruption in the financial markets. The SBA has issued a notice that will be distributed widely to its lenders and 120 field offices encouraging them to look at these cases individually and to work with individual borrowers in order to facilitate the longer term success of these small businesses.
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Synovus Invests in FDIC Liquidity Guarantee Program

(BUSINESS WIRE)--Synovus (NYSE: SNV), the Columbus, Georgia-based financial services company, will participate in the Federal Deposit Insurance Corporation’s (FDIC) Temporary Liquidity Guarantee Program beyond the initial 30-day program offered by all banks in conjunction with the FDIC. This FDIC program allows Synovus to offer 100% deposit protection for non-interest bearing deposit transaction accounts regardless of dollar amount at FDIC-insured institutions. Non-interest bearing deposit transaction accounts are usually payment-processing accounts, such as payroll accounts used by businesses, which frequently exceed the current maximum limit of $250,000. The Liquidity Guarantee Program can be voluntarily offered by banks to customers through the end of 2009. There is no cost to customers to receive the additional FDIC insurance.

“The benefit for our customers is that there is no limit on FDIC insurance coverage for their deposits in these types of accounts at any Synovus bank,” said Richard Anthony, Chairman and CEO of Synovus. “We understand the desire customers have during this difficult economic climate to be guaranteed they will always have access to their money.”

Additionally, Synovus’ Shared CD and Money Market accounts offer customers the unique opportunity to access up to $8 million in FDIC insurance by spreading deposits across its 32 separately-chartered banks.

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Isakson, Chambliss Urge Treasury, Federal Reserve to Address Needs of Community Banks

U.S. Senators Johnny Isakson, R-Ga., and Saxby Chambliss, R-Ga., today sent a letter to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke asking them to address the needs of community banks in Georgia and across the country.
The text of the letter is below:

Dear Chairman Bernanke & Secretary Paulson:

Given the current financial climate and its challenges, it is imperative that we address the significant needs of both large financial firms and money center banks for the protection of our investments and retirement security. We must also address the needs of our community banks that small businesses and individuals look to for everyday needs such as inventory loans, operating capital and payroll.

As you move forward implementing your new authority established by the Emergency Economic Stabilization Act, we urge you to determine how best to use your authority to provide much needed capital and access to credit to community banks in Georgia and across the country.

Sincerely,

Saxby Chambliss
United States Senator

Johnny Isakson
United States Senator

Ameris Bancorp Reports Results for Third Quarter of 2008

/PRNewswire-FirstCall/ -- AMERIS BANCORP (NASDAQ: ABCB) , reported net income of $366,000, or $0.03 per share, for the quarter ended September 30, 2008, compared to net income for the same quarter in 2007 of $3.6 million, or $0.26 per share. Net income for the year-to-date period totaled $6.5 million, or $0.48 per share, compared to $14.0 million, or $1.02 per share for the same period in 2007. Unusually high levels of loan loss provision have been required as several of the Company's markets have been adversely affected by increasingly negative economic trends.

Provision for Loan Losses and Credit Quality

The Company's provision for loan losses during the third quarter amounted to $8.2 million, an increase of $5.2 million over the $3.0 million recorded in the third quarter of 2007. Similarly, provision for loan losses for the year- to-date period increased $10.7 million to $15.1 million for the first nine months of 2008, compared to 2007.

Non-performing assets increased during the current quarter to 2.52% of total loans, compared to 2.09% for the second quarter of 2008 and 1.57% at December 31, 2007. Net charge-offs on loans during the third quarter of 2008 increased to $6.7 million, compared to $3.2 million in the second quarter of 2008 and $1.6 million in the same quarter of 2007.

The Company's credit quality has declined as real estate activity and valuations continue to fall. Construction and development loans account for approximately 61% and 59% of the net charge-offs in the current quarter and year-to-date periods ended September 30, 2008, respectively. In addition to losses in the construction and development portfolio, residential real estate loans account for approximately 14% and 19% of the net charge-offs in the current quarter and year-to-date periods ended September 30, 2008, respectively. Construction and development loans account for approximately 21.1% and 24.7% of total loans for the period ended September 30, 2008 and September 30, 2007, respectively, while residential real estate loans account for approximately 20.3% and 19.2% of total loans during that same time period.

Trends in Net Interest Income and Net Interest Margin

Total net interest income of $19.2 million for the third quarter of 2008 represented only a slight increase over the $19.1 million recorded in the third quarter of 2007. Similarly, the year-to-date period reflected small increases in total net interest income, increasing 1.5% to $56.7 million. Lower levels of growth in net interest income were the result of modest levels of loan growth combined with declining overall margins.

The Company's net interest margin declined in the current quarter to 3.87%, compared to 4.03% in the same quarter in 2007. For the year-to-date period ended September 30, 2008, the Company reported a decline in the net interest margin to 3.92% from 4.05% in the same period in 2007. Increases in non-performing assets of $21.2 million from September 30, 2007, to September 30, 2008, accounted for 44% of the decline in net interest margin.

Yields on earning assets declined to 6.38% in the current quarter, from 7.87% in the same quarter in 2007. This decline in overall yields resulted primarily from changes in loan yields, which fell from 8.48% during the third quarter of 2007 to 6.67% during the third quarter of 2008. Decreases in interest income on loans were partially offset by increases in investment securities, the yields on which increased to 5.06% for the third quarter of 2008, compared to 4.96% in the third quarter of 2007.

Funding costs also offset some of the declines in earning asset yields. Total funding costs declined to 2.54% in the third quarter of 2008, compared to 3.90% in the same quarter of 2007. Declines in the yields on time deposits accounted for most of the decline in funding costs, falling to 3.79% in the current quarter, compared to 5.08% in the third quarter of 2007. The cost of non-deposit borrowing fell significantly to 2.09% in the third quarter of 2008, from 5.78% in the third quarter of 2007. The majority of the Company's non-deposit borrowings are LIBOR-based and have benefited materially from both declining rates and interest rate floors tied to the Company's borrowings from the FHLB.

Non-Interest Income

Total non-interest income remained virtually unchanged during the third quarter at $4.6 million when compared to the third quarter of 2007. Increases in service charges on deposit accounts to $3.7 million offset smaller declines in the other non-interest income categories, including mortgage banking activities. Increases in charges and fees have allowed the Company to experience better than average growth in fee income while slower activity in residential real estate in many of the Company's markets has slowed the growth of mortgage-related revenue.

Non-Interest Expense

Total non-interest expense for the third quarter of 2008 was $14.8 million, a decrease of approximately $408,000 from the same period in 2007. Salaries and benefits in the current quarter decreased approximately 4.4% to $7.1 million, when compared to the third quarter of 2007. This decline is primarily attributable to a reduction in incentive pay expense of approximately $1.3 million. Although the Company's previously announced workforce reduction was completed during the third quarter, the impact will not begin to be realized until the fourth quarter of 2008 due to its timing during the quarter and the related severance expense. Occupancy and equipment expense increased during the quarter to $1.9 million, an increase of 8.4% when compared to the same period in 2007. Additional offices, primarily in South Carolina and Jacksonville, Florida, are the primary reasons for the additional occupancy expenses.

Ameris Bancorp is headquartered in Moultrie, Georgia, and at the end of the most recent quarter, had 50 locations in Georgia, Alabama, northern Florida and South Carolina.

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Planning For Retirement In A Tough Economy

(NAPSI)-Planning for the future and the changes in the economy often go hand-in-hand--and now is no exception. These issues are top of mind for millions of Americans. In fact, a recent AARP study (May 2008) found that one-third of middle-aged and older people have stopped putting money into their retirement accounts. This is likely due to the challenges and stresses they feel in the economy. However, proper retirement planning, which can be stressful at any age and income level, does not have to be a cause of anxiety. With smart planning and the guidance of an investment consultant, you can take steps now to plan for a more comfortable retirement.

Investment consultants can help identify goals and create a personalized plan to help achieve them, and then--most importantly-continue to help manage and follow through on those plans. Acting as a partner, these consultants can help work through the anxiety and uncertainty of retirement planning, providing practical answers and solutions to common retirement concerns--no matter what the economic conditions may be.

Retirement Planning Tips

While there is no substitute for speaking directly to an investment consultant who is well educated on the economy and the latest retirement strategies, here are some tips for consideration to avoid putting your own retirement at risk:

• Continue making contributions to your retirement funds;

• Refrain from borrowing against or pulling from your current retirement savings;

• Identify long-term and short-term goals and consider having money automatically deposited into an interest-gaining retirement account. Even a small amount can add up quickly; and

• Use online tools as a way to ease into the planning process--many financial institutions provide these free resources to both current and potential clients.

SunTrust's Retirement GamePlan is an example of such an online tool that helps people ease into the planning process (www.suntrust.com/retirement). Retirement GamePlan provides the resources to quickly and simply plan for retirement, as well as direct access to a corps of specially trained financial advisors.

"We believe that planning for retirement is a journey," says John Rhett, chairman of SunTrust Investment Services. "It is a lifetime of preparation that can help reach a comfortable retirement." SunTrust guides clients at all life stages, from just beginning to plan to all the way through retirement, so they are knowledgeable about exactly how much they are saving and spending in order to be well positioned for a comfortable retirement.

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Southeastern Banking Corporation Reports Third Quarter 2008 Earnings

PRNewswire-FirstCall/ -- Southeastern Banking Corporation (OTC:SEBC) (BULLETIN BOARD: SEBC) today announced its net income results for the quarter and nine months ended September 30, 2008 compared to the corresponding periods last year.

-- Net income for the 2008 third quarter approximated $1,142,000, down $521,000 or 31.33% from September 30, 2007.

-- Year-to-date, net income declined $1,362,000 or 27.31% to $3,625,000 at September 30, 2008 from $4,987,000 in 2007. On a per share basis, net income for the nine-month period fell $0.41 to $1.14 at September 30, 2008 from $1.55 in 2007.

The decline in net income was primarily attributable to reductions in net interest margin.

Southeastern Banking Corporation (the Company), with assets exceeding $400 million, is a financial services company with operations in southeast Georgia and northeast Florida. Southeastern Bank (SEB), the Company's principal subsidiary, offers a full line of commercial and retail services to meet the financial needs of its customer base through its seventeen branch locations and ATM network. Services offered include traditional deposit and credit services, long-term mortgage originations, and credit cards. SEB also offers 24-hour delivery channels, including internet and telephone banking, and provides insurance and investment brokerage services. The Company is headquartered in Darien, Georgia. More information on the Company and its subsidiaries can be obtained through SEB's website at www.southeasternbank.com or through periodic filings with the Securities & Exchange Commission at www.sec.gov.

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The Conference Board U.S. Leading Economic Index Edges Up Slightly

PRNewswire/ -- The Conference Board reports today that the Composite Index of Leading Economic Indicators edged up 0.3 percent in September, following a 0.9 percent decline in August, and a 0.7 percent decline in July.

Says Ken Goldstein, Labor Economist at The Conference Board: "This summer, before the financial market turmoil intensified, the overall economy was entering a period of decline. The extreme volatility in the financial market, and the near freeze-up of credit, will no doubt weaken the economy further. But latest data suggest that conditions in the non-financial economy are not falling apart. Data on hand reflect a contracting economy, but not one in free fall. More likely, what's going on in the financial market is a stretching of the recovery process - which could take a full year to develop."

The Conference Board reports that the Coincident Index fell by 0.5 percent in September, following no change in August, and a 0.2 percent decrease in July. The Lagging Index fell by 0.2 percent in September, following a 0.2 percent rise in August.

-- The leading index increased in September, the first increase in the
last five months. Real money supply, consumer expectations, the
interest rate spread, and the index of supplier deliveries all made
large positive contributions to the index in September, more than
offsetting the negative contributions from building permits, stock
prices, initial claims for unemployment insurance (inverted) and the
average workweek in manufacturing. From March to September, the
leading index decreased 1.3 percent (a -2.5 percent annual rate),
declining modestly slower than the 1.7 percent decrease (a -3.4
percent annual rate) that prevailed in the previous six months.
However, the weaknesses among the leading indicators have remained
widespread over the past six months.

-- The coincident index decreased sharply in September and it has
declined or held steady since October 2007. Industrial production fell
steeply this month, while employment continued to decline. The
six-month decline in the coincident index has picked up to 0.8 percent
(a -1.7 percent annual rate), from a decrease of 0.3 percent (a -0.6
percent annual rate) in the previous six months, while the weaknesses
among the coincident indicators remained very widespread. In
September, the coincident index decreased more than the lagging index,
and the coincident-to-lagging ratio continued to decline as a result.

-- With consistently widespread weakness among its components, the
leading index has been falling since July 2007. Following the leading
index, the coincident index, a monthly measure of current economic
conditions, has also been decreasing, and its rate of decline has
accelerated in recent months. Meanwhile, real GDP growth slowed to a
1.8 percent average annual rate in the first half of the year, down
from an average annual rate of 2.3 percent in the second half of 2007.
Taken together, the behavior of the composite indexes suggests that
the economy is unlikely to improve in the near term.


LEADING INDICATORS

Six of the ten indicators that make up the leading index increased in September. The positive contributors - beginning with the largest positive contributor - were real money supply*, index of consumer expectations, interest rate spread, index of supplier deliveries (vendor performance), manufacturers' new orders for nondefense capital goods*, and manufacturers' new orders for consumer goods and materials*. The negative contributors - beginning with the largest negative contributor - were building permits, average weekly initial claims for unemployment insurance (inverted), stock prices, and average weekly manufacturing hours.

The leading index now stands at 100.6 (2004=100). Based on revised data, this index decreased 0.9 percent in August and decreased 0.7 percent in July. During the six-month span through September, the leading index decreased 1.3 percent, with two out of ten components advancing (diffusion index, six-month span equals 20 percent).

COINCIDENT INDICATORS

Two of the four indicators that make up the coincident index increased in September. The positive contributors to the index - beginning with the larger positive contributor - were personal income less transfer payments* and manufacturing and trade sales*. The negative contributors were industrial production and employees on nonagricultural payrolls.

The coincident index now stands at 106 (2004=100). This index remained unchanged in August and decreased 0.2 percent in July. During the six-month period through September, the coincident index decreased 0.8 percent, with one out of four components advancing (diffusion index, six-month span equals 25 percent).

LAGGING INDICATORS

The lagging index stands at 112.2 (2004=100) in September, with two of the seven components advancing. The positive contributors to the index - beginning with the larger positive contributor - were commercial and industrial loans outstanding* and the ratio of manufacturing and trade inventories to sales*. The negative contributors - beginning with the largest negative contributor - were average duration of unemployment (inverted), change in CPI for services, and change in labor cost per unit of output*. The average prime rate charged by banks, and ratio of consumer installment credit to personal income* held steady in September. Based on revised data, the lagging index increased 0.2 percent in August and increased 0.5 percent in July.

DATA AVAILABILITY AND NOTES

The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on October 17, 2008. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure used to deflate the money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, the consumer price index, and the personal consumption expenditure used to deflate commercial and industrial loans outstanding.

The procedure used to estimate the current month's personal consumption expenditure deflator (used in the calculation of real money supply and commercial and industrial loans outstanding) now incorporates the current month's consumer price index when it is available before the release of the U.S. Leading Economic Indicators.

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Fidelity Southern Corporation Reports Expected Loss

PRNewswire-FirstCall/ -- Fidelity Southern Corporation ("Fidelity" or "the Company") (NASDAQ:LION) , holding Company for Fidelity Bank, reported as expected a net loss of $4,875,000 for the third quarter of 2008 compared to net income of $1,679,000 for the same quarter of 2007. Basic and diluted loss per share for the third quarter of 2008 were $.52 compared to earnings per share of $.18 for the same period in 2007. Net loss for the first nine months of 2008 was $4,667,000 compared to net income of $6,313,000 for the same period in 2007. Basic and diluted loss per share for the first nine months of 2008 were $.50 compared to earnings per share of $.68 for the same period in 2007. Fidelity reported an increase in its loan loss provision of $8,600,000 in the quarter ended September 30, 2008 compared to the same period in 2007. The allowance for loan losses increased to $26,023,000 or 1.83% of total loans at September 30, 2008. OREO increased to $16,668,000 at that same date. Net charge-offs for the quarter were $7,897,000. Total risk based capital ratios improved in the Bank to 10.45% at September 30, 2008 from 10.35% at June 30, 2008 and 10.29% at December 31, 2007.

Chairman James B. Miller, Jr. said, "Capital and liquidity and the diversity of our portfolio continue to be the strength of our Company. We continue to make loans even in this troubling credit environment. We will take care of our customers."

President, H. Palmer Proctor, Jr. said, "Our branches are opening an increasing number of accounts. Our ability to gather deposits continues to be remarkable as customers continue to show confidence in the Bank."

Significant developments in the quarter and the first nine months of 2008 included:

-- Net interest income grew 2.13% over the first nine months of 2007.
-- Cost of funds decreased 114 basis points to 3.68% and 90 basis points
to 3.92% for the third quarter and nine months ended September 30,
2008, respectively, compared to the same periods in 2007 as a result of
moderate deposit pricing.
-- Personnel expenses were down 3.16% for the third quarter of 2008
compared to the same period in 2007.
-- Total assets decreased 1.07% in the quarter to $1.760 billion.
-- Our Totally Free checking account product increased 29% this year
through September.
-- Remote deposit volume grew to 33.82% of all deposits.
-- Loan reserves substantially increased to 1.83% of loans from 1.10% at
September 30, 2007, 1.19% at December 31, 2007, and 1.56% at June 30,
2008. The increase was $3.5 million over the second quarter of 2008
and $10.9 million greater than reserves at September 30, 2007.
Provision for loan losses was $11.4 million and $21.9 million for the
third quarter and first nine months of 2008, respectively, compared to
$2.8 million and $5.0 million for the same periods in 2007.
-- Net charge-offs increased to $7.9 million in the third quarter from
$2.4 million in the second quarter of 2008.
-- The ratio of net charge-offs to average loans outstanding was 1.16% for
the first nine months of 2008 compared to .39% for the same period in
2007.
-- Nonperforming loans, repossessions and other real estate totaled $91.4
million at the end of the third quarter, an increase of $34.1 million
in the quarter.
-- During the quarter, $2.4 million of ORE assets were sold while $8.2
million was added to ORE net of $559,000 in charge-downs. ORE consists
of 53 houses, representing 58.6% of total balances, and 126 lots and
one commercial property.
-- New residential construction loan advances made during the quarter
totaled $3.1 million, while the payoffs of construction loans totaled
$28.5 million. There are 559 houses and 1,936 lots financed at
September 30, 2008, compared to 1,138 houses and 2,220 lots at
September 30, 2007.
-- Nonperforming residential construction and development loans at
September 30, 2008, included 157 houses and 411 lots and land totaling
approximately $67.4 million. During the quarter approximately $1.2
million of nonperforming loans were paid down by our customers while
approximately $41.5 million in loans were moved to nonperforming.



The decrease in net income for both the third quarter and nine month periods in 2008 compared to the prior year was primarily the result of a higher provision for loan losses due to higher charge-offs and adverse credit trends in the real estate construction and to a degree in consumer loan portfolios requiring an increase in the allowance for loan losses.

Net interest income for the third quarter decreased $81,000 or .67% over the same period in 2007. Net interest income for the first nine months of 2008 increased $744,000 or 2.13% when compared to the same period in 2007. The decrease in the third quarter compared to the prior year is a result of lower margins resulting from reductions in the prime rate and higher nonperforming assets. The increase for the year to date was primarily a result of higher average interest-earning assets. The net interest margin decreased nine basis points to 2.86% in the third quarter compared to 2.95% in the second quarter of 2008. The net interest margin decreased 23 basis points in the third quarter of 2008 when compared to the same period in 2007. The net interest margin decreased 14 basis points to 2.92% for the first nine months of 2008 compared to the same period in 2007. The decline in net interest margin in the third quarter and first nine months of 2008 was due primarily to reductions in the prime rate and foregone interest due to an increase in nonperforming loans.

Total interest income for the third quarter and first nine months of 2008 decreased $3.0 million and $5.1 million, or 10.24% and 5.96%, respectively, compared to the same periods in 2007. The decreases in interest income for the third quarter and first nine months of 2008 were the result of a decrease of 121 basis points and 91 basis points in the yield on average interest- earning assets, respectively, offset in part by the growth in average interest-earning assets, which increased $118.1 million and $108.9 million or 7.6% and 7.1%, respectively.

Interest expense for the third quarter and first nine months of 2008 decreased $2.9 million and $5.8 million, or 17.0% and 11.6%, respectively, compared to the same periods in 2007. The decreases in interest expense for the third quarter and first nine months of 2008 were attributable to an increase in average interest-bearing liabilities of $124.5 million and $116.8 million, respectively, more than offset by a 114 basis point and 90 basis point decrease in the cost of interest-bearing liabilities, respectively.

The provision for loan losses for the third quarter and first nine months of 2008 was $11.4 million and $21.9 million, respectively, compared to $2.8 million and $5.0 million for the same periods in 2007, due to increased charge-offs and adverse credit trends in the construction loan portfolio and in the consumer loan portfolio. Net charge-offs increased $6.1 million and $8.4 million to $7.9 million and $12.4 million for the third quarter and first nine months of 2008 when compared to the same periods in 2007. The allowance for loan losses as a percentage of loans increased from 1.19% at December 31, 2007, to 1.83% at September 30, 2008, compared to 1.10% at September 30, 2007. Nonperforming assets increased to $91.4 million at the end of the third quarter of 2008 compared to $13.8 million at the end of the third quarter of 2007 and $24.2 million at the end of 2007. Management believes it has identified and placed on nonaccrual, charged down, and charged off these nonperforming assets timely and appropriately.

Noninterest income decreased $944,000 and 19.7% to $3.9 million in the third quarter of 2008 compared to the same period in 2007. This decrease in noninterest income was a result of lower SBA lending activities which decreased $351,000 or 47.6% to $387,000 and decreased indirect lending revenues of $281,000 or 20.5% to $1.1 million. Both the SBA lending activity and indirect lending revenues were hindered by the lack of liquidity in the economy resulting in fewer sales and lower gains on sales. Noninterest income increased $287,000 or 2.1% to $13.9 million in the first nine months of 2008 compared to the same period in 2007, due to the $1.3 million securities gain in the first quarter of 2008 from the mandatory redemption of 29,267 shares of Visa, Inc. common stock as a result of its initial public offering in March 2008. This increase was somewhat offset by a decrease in SBA lending revenues of $788,000, or 40.37%, to $1.2 million during the first nine months of 2008 when compared to the same period last year. The decrease is a result of a reduction in loans sold from $30.3 million for the nine months ended September 2007 to $18.1 million for the same period in 2008.

Noninterest expense for the third quarter and first nine months of 2008 increased $743,000 and $1.7 million, or 6.3% and 4.8%, to $12.6 million and $36.4 million, respectively compared to the same periods in 2007. The increase for the third quarter of 2008 is a result of ORE write-downs and related expenses which increased to $806,000 in the third quarter of 2008 compared to none for the same period in 2007. In addition, the Bank recorded a charge of $360,000 pre-tax for its estimated proportional share of a settlement of the Visa litigation with Discovery Financial Services which was settled in October, 2008. Fidelity, as a member bank of Visa, is obligated for its proportional share of litigation and legal expenses. These increases were somewhat offset by lower salaries and benefits of 3.2% quarter to quarter and advertising and promotion expense decreasing. The increase for the first nine months of 2008 is a result of ORE write-downs and related expenses which increased to $2.0 million for the first nine months of 2008 compared to none for the same period in 2007. The Visa related accrual discussed above also contributed to the higher expense. Salaries and benefits expense increased $324,000 or 1.7% to $19.6 million compared to the same period in 2007, due to the addition of seasoned loan production employees, and staff for the three branches opened in 2007. The increase in noninterest expense for the first nine months of 2008 was partially offset by the reversal of the fourth quarter 2007 Visa litigation expense accrual of $567,000 as the result of the Visa funding of a litigation escrow account through its initial public offering in March 2008. There were also reductions in advertising and promotion, and stationery, printing and supplies as a result of cost cutting measures implemented by management.

Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking services and credit related insurance products through 23 branches in Atlanta, Georgia, a branch in Jacksonville, Florida, and an insurance office in Atlanta, Georgia. SBA loans are provided through employees located throughout the Southeast. For additional information about Fidelity's products and services, please visit the website at www.FidelitySouthern.com.

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward Looking Statements" on page 3 of Fidelity Southern Corporation's 2007 Annual Report filed on Form 10-K with the Securities and Exchange Commission.

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Wall Street's Collapse May Boost Private Equity Markets

The collapse of the housing and credit markets that has crippled some Wall Street giants is likely to have a variety of effects on private equity, say faculty at Emory University and its Goizueta Business School.

The fall of Lehman Brothers, the sale of Merrill Lynch to Bank of America, and the decision by Goldman Sachs and J.P. Morgan to be placed under the purview of the Federal Reserve are driving big changes in financial markets, note faculty members.

One likely shift is a larger role for private equity providers in financing big-ticket deals. But liquidity concerns are likely to rein in their appetite for risk, despite the just-passed $700 billion bailout package, add faculty.

"The consolidation taking place in the financial markets means the playing field is getting a bit smaller," says Thomas More Smith, an assistant professor in the practice of finance. "With fewer investment banking giants available to service big-company deals, we may see smaller private-equity firms swoop in to fill the empty spots."

In fact U.S. private equity firms have picked up the pace of their fund-raising, says the Private Equity Analyst newsletter, published by Dow Jones.

Domestic private equity firms raised $222.6 billion in 264 funds during the first three quarters of 2008, 11% ahead of the $200.4 billion raised by 298 funds in the same time last year, according to Dow Jones.

Distressed firms are seeing strong interest from investors with 18 funds raising $37.9 billion this year, up 28% from $29.5 billion raised by 16 funds at this point last year, according to the Dow Jones analysis.

The newsletter also reports that mezzanine, or layered financing funds attracted $36.9 billion across 13 funds, compared to $3 billion across nine funds through the third quarter last year.

But if the distressed and mezzanine-financing segments were excluded, private equity fund-raising would have been weaker compared to last year, says Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

"Buyout fund-raising continues to lag," she notes. "And fresh concerns about the availability of debt won't help."

The credit crunch has still spooked investors and is likely to dampen their enthusiasm for some time, according to Goizueta’s Smith.

"Despite the bank bailout, we’re likely to see reduced capacity," says Smith. "The fact that there are fewer players remaining may also mean a pullback in the variety of services and niche activity that is offered."

Small businesses are finding it tougher to access credit, and that could spur a shift in the direction of venture capital, adds Smith.

"For the most part, VC firms have targeted ‘sexy’ businesses with high-growth potential, like technology companies," says Smith. "That’s in line with their traditional exit strategies that often envision a five-year exit with high returns."

But lately, venture capital providers have been shunning startups and have instead been targeting later-stage companies with a proven track record. That could open the door for more staid firms to catch VC’s eye, says Smith.

"A small but growing advertising company, say, may not offer the same potential as a high-tech business, but it may offer more security," he notes. "As their credit gets choked off, more small traditional businesses may begin to approach venture capitalists. And according to anecdotal evidence, some VCs are paying more attention to them. It’s too early to call it a trend, because we don’t have the data yet. But the potential is there."

A Shift in How Deals are Done

In fact Wall Street’s woes are likely to drive a big shift in the way deals are done, observes Lawrence M. Benveniste, a chaired professor of finance and dean of Goizueta Business School.

"The changes we’re seeing in the investment banking landscape are opening up huge opportunities for private-equity firms," he says. "I expect they will move in to fill the underwriting and other voids that are left as investment banks retreat. Amid the turmoil for example, Blackstone [a global corporate private equity group] has hired some high-level Lehman professionals."

On October 2, the Blackstone Group announced it took on a partner and two managing directors who formerly worked with Lehman Brothers.

Private equity already has a substantial presence in the world market, but as it expands its footprint, companies are likely to see significant changes in the way that deals are financed, says Benveniste.

"Many of the recent transactions have been driven by access to credit and the potential to increase returns through leverage. Leverage ratios of 80% were not uncommon," he explains. "Debt financing has not exactly disappeared, but it is a lot tougher to obtain it. Private equity is available, but I believe that the price-EBITDA multiples on deals will shrink considerably and opportunities for Leverage driven deals will disappear. Instead, deals will be driven more by the potential to add value to the purchased company. This is the traditional model of private equity."

Relating leveraged transactions to the current crisis in the markets, Benveniste remarks that the "The devaluation of much of this leverage debt has contributed significantly to the current weakness in financial institutions."

Klaas Baks, an assistant professor of finance at Goizueta and head of the Emory Center for Private Equity and Hedge Funds, agrees that private equity players may score some gains in today’s financial crisis.

"Many PE firms that rely on leverage to generate returns will need debt financing, but the tight credit markets will put pressure on them," he says. "In this type of market, successful PE firms will add value through channels other than leverage such as improved corporate governance or operational efficiencies."

He says that as investment banks like Morgan Stanley and Goldman Sachs take on the attributes of commercial banks, private equity firms and hedge funds will likely fill some of the void. "We may see private equity and hedge funds start to perform functions traditionally performed by investment banks," Baks predicts. "But if government regulation is expanded to private equity and hedge funds, such a move may be inhibited."

He expresses some concern about the bailout plan, noting that "at this point we just don’t know the true level of toxic debt."

Baks also questions whether a $700 billion taxpayer-financed bailout will lead to a "moral hazard," or more reckless behavior on the part of financial institutions that believe they are "too big to fail and will be bailed out by the federal government if they get into trouble."

Ray Hill, an adjunct professor of finance at Goizueta Business School, also believes that the problems on Wall Street may drive more activity to private equity firms.

"Private equity firms will be able to attract talent from investment banks," he says. "Also, some private equity firms that did not become overleveraged are already moving segments that were traditionally handled by investment banking firms."

But that does not mean that the investment banking segment is about to disappear from the landscape, adds Hill.

"Goldman Sachs is not about to go under," he says. "Instead the group is likely to retreat from its historical risk taking model. I expect Goldman will still engage in merger and acquisition, advisory and underwriting functions, but will probably limit its maximum leverage to 10x, instead of 25x. The company will make its money through smarter investments instead of just riskier ones."

Looking at a broader issue, Hill worries that the financial crisis is now infecting the real economy.

"The argument made for the bailout by [U.S. Treasury Secretary] Henry Paulson and [Federal Reserve Chairman] Ben Bernanke is that we have a crisis in part of the financial system that may spread to the general economy," says Hill. "At the time they proposed the rescue plan, you could say that the real economy was slowing down, but probably not headed to recession. In the last two weeks, the leading economic indicators have become more pessimistic and the current freeze in short-term credit is likely to do further damage."

He notes that the bailout plan is still a few weeks away from being implemented. "It is no surprise that we don't see the benefits of the plan yet, but some of the adverse consequences of the credit freeze will not be reversible."

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Wells Fargo Reports Net Income of $1.64 Billion, or $0.49 Per Share

(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC):
-- Strong business momentum continues:
-- Year-to-date revenue up 11 percent
-- Average loans up 15 percent from prior year and 13 percent
(annualized) from prior quarter
-- Average earning assets up 15 percent from prior year and 13
percent (annualized) from prior quarter
-- Core deposits up 10 percent from September 30, 2007, and 30
percent (annualized) from June 30, 2008
-- Cross-sell of 6.3 for wholesale customers and a record 5.7 for
retail bank households

-- Credit reserve build of $500 million ($0.10 per share), bringing
allowance for credit losses to $8.0 billion

-- Previously announced impairment charges for investments in Fannie
Mae, Freddie Mac and Lehman Brothers totaling $646 million ($0.13
per share)

-- Revenue up 5 percent from prior year despite impact of investment
write-downs

-- Tier 1 capital of 8.58 percent, up from 8.24 percent in second
quarter 2008

Wells Fargo & Company (NYSE:WFC) reported diluted earnings per common share of $0.49 in third quarter 2008 compared with $0.53 in second quarter 2008 and $0.64 in third quarter 2007. Net income was $1.64 billion compared with $1.75 billion in second quarter 2008 and $2.17 billion in third quarter 2007.

“Despite the dramatic changes in our industry and economy, the Wells Fargo team rose to the challenge this quarter and achieved solid growth in loans and deposits, a truly remarkable accomplishment,” said President and CEO John Stumpf. “Revenue year to date was up 11 percent continuing our track record of strong, double-digit growth. Our strength, security and outstanding financial performance continued to compare favorably with our industry peers. Our vision and values and our diversified business model are time-tested over more than two decades. We’re focused, as always, on building lifelong relationships with our customers and communities, and because of that we continue to grow market share and wallet share. Barron’s ranks us one of the world’s 20 most admired companies.

“We’re known and admired for our conservative financial position, and a disciplined acquisition strategy that will not change. In that regard, we look forward with great anticipation and confidence to completing our merger with Wachovia Corporation by year end. The union of our two companies will provide compelling value for all our stakeholders, including Wachovia’s team members, combining the industry’s best in service and best in sales, an unbeatable combination that will create the nation’s premier coast-to-coast financial services company.”

Financial Performance

“Wells Fargo earned $1.64 billion, or $0.49 per share, in the third quarter, after incurring $0.13 per share of previously announced write-downs for investments in Fannie Mae, Freddie Mac and Lehman Brothers,” said Chief Financial Officer Howard Atkins. “We also built our credit reserves by an additional $500 million ($0.10 per share), bringing the allowance for credit losses to $8.0 billion, a $4.0 billion increase in the allowance since the credit crunch began a year ago. Business momentum remained strong in the quarter, with double-digit loan and earning asset growth (both up 15 percent year over year), double-digit growth in core deposits (up 10 percent from September 30, 2007), and 30 percent (annualized) from June 30, 2008, double-digit growth in assets under management, primarily mutual funds (up 12 percent year over year) and a record 5.7 cross-sell in our retail banking business. In addition, we continued to fortify our already strong balance sheet.

“Our net interest margin remained among the best of the large bank holding companies at 4.79 percent, reflecting the decline in our funding costs since last year and continued above-market growth in core deposits. Finally, despite the strong growth in earning assets, investment write-downs and higher credit costs in the quarter, our capital ratios increased, with Tier 1 capital rising to 8.58 percent, one of the strongest capital positions in the industry. The strength of our franchise, earnings and balance sheet positions us well for the exciting merger about to take place with Wachovia.”

Revenue

Revenue was $10.38 billion, up 5 percent from $9.85 billion a year ago. The write-downs for investments in Fannie Mae, Freddie Mac and Lehman Brothers reduced revenue by 7 percentage points. “Year-to-date revenue was up 11 percent, a remarkable accomplishment in this environment,” said Atkins. “Many of our businesses continued to generate double-digit, year-over-year revenue growth including asset-based lending, commercial banking, credit cards, mortgage banking, insurance, international and wealth management, and the significant growth this quarter in net new checking accounts positions us well with new accounts and new customers to continue our strong, double-digit revenue growth.”

Loans

Average loans of $404.2 billion increased $53.5 billion, or 15 percent, from a year ago. On a linked-quarter basis, average loans grew $12.7 billion, or 13 percent (annualized). Average commercial and commercial real estate loans increased $36.0 billion, or 27 percent, from third quarter 2007 and increased $9.7 billion, or 24 percent (annualized), from second quarter 2008, making this the 16th consecutive quarter of double-digit, year-over-year growth. Average consumer loans increased $17.8 billion, or 9 percent, from third quarter 2007, and increased $3.1 billion, or 5 percent (annualized), from second quarter 2008. “We continued to provide new, appropriately-priced credit to our customers while at the same time paring down indirect channels and higher risk tiers,” said Atkins.

Deposits

“We saw a tremendous inflow of deposits in the latter part of the quarter, especially at the end of September reflecting what we believe is a significant flight to quality,” said Atkins. Core deposits increased $23.7 billion, or 30 percent (annualized), from June 30, 2008. Average core deposits of $320.1 billion increased $13.9 billion, or 5 percent, from a year ago and $1.7 billion, or 2 percent (annualized), linked quarter. Average mortgage escrow deposits were $21.2 billion, down $1.2 billion from third quarter 2007 and down $1.5 billion linked quarter. Average retail core deposits increased $13.2 billion, or 6 percent, from third quarter 2007 and increased $3.8 billion, or 7 percent (annualized), linked quarter. Average consumer checking accounts grew a net 6.1 percent from second quarter 2007, with 8 percent growth in California, the largest increase in net new checking accounts in California in almost four years. Wealth Management group average core deposits of $22.7 billion increased $7.7 billion, or 52 percent, from third quarter 2007.

Net Interest Income

Net interest income increased $1.1 billion, or 21 percent, from third quarter 2007 driven by double-digit earning asset growth (up 15 percent) and a 24 basis point increase in the net interest margin to 4.79 percent. Net interest income grew $103 million, or 7 percent (annualized), linked quarter due to 13 percent (annualized) linked-quarter growth in earning assets offset in part by a 13 basis point linked-quarter decline in the net interest margin. “At 4.79 percent, we continued to have an industry-leading net interest margin in large part due to wider new business spreads, significantly lower funding costs, and our success in building core deposits,” said Atkins. “The modest decline in our net interest margin on a linked-quarter basis was due to asset growth and slightly lower loan yields. The year-to-date increase in net interest income has basically offset the year-to-date increase in net loan charge-offs. Thus, for Wells Fargo, excluding the credit reserve build, the benefits of the credit crisis in terms of increasing assets at wider spreads have offset the negative aspects of the credit crisis in terms of higher loan losses.”

Noninterest Income

Noninterest income decreased $575 million from third quarter 2007, including a $756 million decline in net investment gains. The $1.2 billion decrease in noninterest income linked quarter was primarily due to a $378 million decline in net investment gains, as well as lower linked-quarter mortgage banking income. Net investment losses of $423 million consisted of previously announced other-than-temporary impairment charges of $646 million for Fannie Mae, Freddie Mac and Lehman Brothers, an additional $247 million of other-than-temporary write-downs on debt securities and $470 million of realized bond and equity gains.

Despite the 24 percent decline in the S&P500® year over year, trust and investment fees declined only 5 percent. Card fees were up 7 percent year over year and 9 percent (annualized) linked quarter due to continued growth in new accounts and greater purchase activity. Insurance fees were up 33 percent year over year due to customer growth, higher crop insurance revenues and the fourth quarter 2007 acquisition of ABD Insurance, but declined 20 percent linked quarter due to seasonally lower crop insurance revenues. Charges and fees on loans were up 8 percent, primarily reflecting strong commercial loan demand. Net unrealized losses on securities available for sale were $4.9 billion at September 30, 2008, compared with net unrealized losses of $2.1 billion at June 30, 2008.

Mortgage banking noninterest income was a solid $892 million, the second best quarter ever. Mortgage banking noninterest income increased $69 million from third quarter 2007 and was down $305 million linked quarter, with higher servicing income offset by lower origination volumes. The owned mortgage servicing portfolio was $1.56 trillion at quarter end, up 6 percent from a year ago. Mortgage applications of $83 billion in the quarter were down 13 percent from a year ago but at wider margins.

Noninterest Expense

Noninterest expense decreased $154 million, or 3 percent, from third quarter 2007 and decreased $343 million linked quarter. “We continued to make investments in distribution and sales and service team members, adding over 1,000 platform bankers since last year end and adding 12 new banking stores in third quarter 2008 alone. We continue to be disciplined about our efforts to restrict expenses to revenue-creating opportunities while at the same time paring down other unit costs,” said Atkins. The efficiency ratio was 53.2 percent even after taking into account the non-cash, other-than-temporary impairment.

Credit Quality

“The current credit cycle continued to be challenging,” said Chief Credit Officer Mike Loughlin. “While our wholesale portfolios continued to perform well given current market conditions, several consumer loan portfolios remained under stress.” Third quarter 2008 net charge-offs were $1,995 million (1.96 percent of average loans, annualized) compared with $1,512 million (1.55 percent) in second quarter 2008 and $892 million (1.01 percent) in third quarter 2007. A significant part of the sequential increase reflected the changes in the National Home Equity Group (Home Equity) charge-off policy in the second quarter, which deferred an estimated $265 million of charge-offs. After taking into account the impact of the new Home Equity policy, charge-offs rose at a more moderate pace in third quarter than in the last few quarters. Third quarter 2008 provision was $2.5 billion, including a $500 million credit reserve build primarily related to higher projected losses in several consumer credit businesses, as well as growth in the wholesale portfolios, bringing the allowance for credit losses to $8.0 billion, double its level from just before the credit crunch began a year ago. “As expected, consumer behavior continued to be influenced by weakness in residential real estate values. Additionally, the effects of higher energy prices and higher unemployment levels impacted the performance of the consumer loan portfolios during the quarter. On the positive side, we saw signs of stabilizing loan losses in our business direct and student loan business. Loan requests in our wholesale businesses have increased dramatically as quality borrowers are providing attractive business opportunities that are both well-structured and appropriately priced for risk.”

Net charge-offs in the real estate 1-4 family first mortgage portfolio increased $43 million linked quarter, including the $19 million increase from Wells Fargo Financial’s residential real estate portfolio. “As stated in prior quarters, residential real estate loss levels will continue to be driven by housing price trends,” said Loughlin. Credit card charge-offs increased $32 million. “Loss levels continued to increase in this credit cycle as the impacts from lower disposable income and unemployment weigh on the consumer.” Losses in the auto portfolio increased $74 million from second quarter 2008 in part due to seasonality and lower used car values. “While we remain optimistic about the positive impacts of process improvements and underwriting changes we made in the auto business in prior quarters, as well as our robust loss mitigation efforts, the economic environment continued to stress the consumer and influence loan performance.”

Net charge-offs in the real estate 1-4 family junior lien portfolio increased $307 million from second quarter 2008 as the effect of the second quarter charge-off policy change dissipated. “The fact that property values continued to drop in many markets directly impacted loss levels in this portfolio,” said Loughlin. “Until residential real estate values stabilize, the Home Equity portfolio will produce higher than normal loss levels.” Of the combined $350 million increase in real estate first and second mortgage losses, approximately $265 million was due to the deferral of charge-offs from second quarter related to the change in the Home Equity charge-off policy.

Commercial and commercial real estate net charge-offs decreased $4 million linked quarter, including a modest decline in charge-offs on loans originated through our Business Direct small business lending group. “The wholesale businesses continued to weather the turbulent credit environment relatively well and we are pleased with the progress we’ve made in small business credit,” said Loughlin. “Commercial credits related to residential real estate and the consumer segment have shown some weakness, but remained within our expectations. On the positive side, additional lending opportunities have increased as our customers have seen credit availability shrink in the market place. Our ability to lend to our quality customers is a win-win scenario.”

Nonperforming Assets

Total nonperforming assets were $6.29 billion (1.53 percent of total loans) at September 30, 2008, and included $5.00 billion of nonperforming loans, $596 million of insured Government National Mortgage Association (GNMA) loan repurchases, and $700 million of foreclosed and repossessed real estate and vehicles. This compares with $5.23 billion (1.31 percent) at June 30, 2008, consisting of $4.07 billion of nonperforming loans, $535 million of GNMA loan repurchases and $619 million of foreclosed and repossessed assets. “Until conditions improve in the residential real estate and liquidity markets, we will continue to hold more nonperforming assets on our balance sheet as it is currently the most economic option available,” said Loughlin. “A portion of the increase in nonperforming loans continued to relate to our active loss mitigation strategies at Home Equity, Wells Fargo Home Mortgage (Home Mortgage) and Wells Fargo Financial as we are aggressively working with customers to keep them in their homes. Increases in commercial nonperforming assets were also a direct result of the conditions in the residential real estate markets and general consumer economy. The home builders, mortgage service providers, contractors, suppliers and others in the residential real estate-related segments continued to be stressed as this cycle plays out. Additionally, as the consumer cuts back on discretionary spending we are seeing some of those credits dependent on this spending weaken.”

Loans 90 days or more past due and still accruing totaled $8.44 billion, $7.26 billion, and $5.53 billion at September 30, 2008, June 30, 2008, and September 30, 2007, respectively. For the same periods, the totals included $6.30 billion, $5.48 billion and $4.26 billion, respectively, in advances pursuant to our servicing agreement to GNMA mortgage pools and similar loans whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs. “We continued to see the balances of 90 days or greater past due and still accruing increasing as the negative credit trends impact loan performance.”

Allowance for Credit Losses

The allowance for credit losses, including unfunded commitments, totaled $8.03 billion at September 30, 2008, compared with $7.52 billion at June 30, 2008. Third quarter 2008 results included a credit reserve build of $500 million primarily for higher projected loss rates across several consumer credit businesses, as well as growth in the wholesale portfolios. Since the beginning of fourth quarter 2007, the Company has provided $3.9 billion in excess of net charge-offs. “Over the last 12 months, we have doubled the size of the allowance to address higher credit losses and support the strength of our balance sheet in these volatile times,” said Loughlin. “We believe the allowance was adequate for losses inherent in the portfolio at September 30, 2008.”


Regional Banking
-- Record core product solutions (sales) of 6.30 million, up 20
percent from prior year
-- Record core sales per platform banker FTE (active, full-time
equivalent) of 5.72 per day, up from 5.18 in prior year
-- Record retail bank household cross-sell of 5.7 products per
household; 24 percent of our retail bank households have 8 or more
products, our long-term goal

-- Sales of Wells Fargo Packages(R) (a checking account and at least
three other products) up 47 percent from prior year, purchased by
74 percent of new checking account customers
-- Consumer checking accounts up a net 6.1 percent from prior year, up
over 8 percent in California
-- Customer loyalty scores up 7 percent and welcoming and wait time
scores up 8 percent from prior year (based on customers conducting
transactions with tellers)
-- Added 1,115 platform banker FTEs from prior year through hiring and
acquisitions

-- Opened 12 banking stores, added 13 webATM(R) machines and converted

226 to Envelope-freeSM webATM machines
-- Business Banking
-- Store-based business solutions up 25 percent from prior year
-- Loans to small businesses (loans primarily less than $100,000
on our Business Direct platform) up 6 percent from prior year
-- Business checking accounts up a net 2.3 percent from prior year
-- Business Banking household cross-sell of 3.6 products per
household

-- Sales of Wells Fargo Business Services Packages (a business
checking account and at least three other business products) up
42 percent from prior year, purchased by 50 percent of new
business checking account customers
-- According to 2007 CRA data, Wells Fargo was America's #1 small
business lender for the sixth consecutive year, extending $23
billion in originations to small business owners nationwide (in
loans under $100,000)

“Our amazing regional banking team continued to focus on helping our customers succeed financially by providing a record 6.30 million core product solutions in the third quarter, up 20 percent from the prior year,” said Carrie Tolstedt, senior EVP, Community Banking. “In addition to our record retail bank household cross-sell, we experienced significant gains in net new customer relationships. Consumer checking accounts were up a net 6.1 percent, the highest growth in almost four years, with over 8 percent net gain in California. We continued to have success with cross-selling these new relationships, with sales of Wells Fargo Packages® remaining strong, purchased by 74 percent of new checking account customers. Many indicators show that new and existing customers are honoring us with more of their business.”

Home Mortgage
-- Home Mortgage retail originations of $23 billion, down 21 percent
from prior year
-- Mortgage applications of $83 billion, down 13 percent from prior
year
-- Mortgage application pipeline of $41 billion, down 9 percent from
prior year
-- Record owned mortgage servicing portfolio of $1.56 trillion, up 6
percent from prior year and 4 percent (annualized) from prior
quarter

“Our talented and dedicated sales, servicing and capital markets teams continued to manage through all the turmoil in the housing and financial markets and delivered very strong performance this quarter,” said Mark Oman, senior EVP, Home and Consumer Finance Group. “By staying true to the Wells Fargo vision of satisfying all our customers’ financial needs and helping them succeed financially and to our long-term commitment to responsible lending and responsible servicing principles, we have avoided many of the issues which have plagued the industry this year.

“While mortgage originations declined as a result of the combined slowdown in home purchase and refinancing activities thus reducing gains on sales of mortgage loans, this reduction in revenue was partially offset by higher servicing income which benefited from the decline in mortgage pre-payments.

“Despite the economic slowdown, our servicing portfolio continued to perform relatively well. For our largest product category, prime conventional first mortgages representing 5.7 million customers and over $1 trillion of servicing, 97 out of every 100 customers were current with their payments as of September 30, 2008, compared with 98 out of every 100 as of September 30, 2007. We believe in homeownership and do all we can to keep people in their homes. We are committed to working with our customers, government agencies and our mortgage securities investors to find potential solutions when our customers experience financial difficulties and only as a last resort will we foreclose.”

Wealth Management Group
-- Revenue up 14 percent from prior year
-- Net income up 32 percent from prior year
-- Private Bank revenue up 56 percent, net income up 99 percent from
prior year
-- Private Bank average core deposits up 52 percent, average loans up
29 percent from prior year

-- WellsTrade(R) revenue up 40 percent from prior year
-- Wells Fargo Private Bank opened its first location in Manhattan

Online Banking
-- 10.8 million active online consumers, up 14 percent from prior
year; 68 percent of all consumer checking accounts are online
-- 5.4 million online money movement customers, up 16 percent from
prior year
-- 1.1 million active online small business customers, up 16 percent
from prior year

-- Announced national availability of Wells Fargo vSafeSM service,
lets customers protect, organize and access online copies of
important documents, first storage solution of its kind from a
major financial institution

Wholesale Banking serves customers coast to coast, including middle market banking, corporate banking, commercial real estate, treasury management, asset-based lending, insurance brokerage, foreign exchange, trade services, specialized lending, equipment finance, corporate trust, capital markets activities and asset management.

Selected Financial Information

Third Quarter %
(in millions) 2008 2007 Change
Total revenue $ 1,782 $ 2,157 (17 )%
Provision for credit losses 294 19 NM
Noninterest expense 1,393 1,230 13
Net income 83 591 (86 )

(in billions)
Average loans 116.2 87.5 33
Average assets 156.6 115.9 35
Average core deposits 65.2 63.1 3
NM - Not meaningful
-- Average loans up 33 percent
-- Average mutual fund balances up 12 percent over same period last
year
-- Institutional Brokerage record revenue up 57 percent over same
period last year
-- Foreign Exchange revenue up 33 percent over same period last year
-- Acquired insurance brokerages in Indiana, New Jersey, North
Carolina and Washington

“Wholesale Banking’s third quarter results were substantially impacted by the illiquidity and disruption in the credit markets, particularly write-downs associated with Fannie Mae, Freddie Mac and Lehman Brothers,” said Dave Hoyt, senior EVP, Wholesale Banking Group. “While we’re not pleased about the impacts of these events brought on by current market conditions, these same market conditions have benefited us by creating more opportunities to increase market share by bringing in new customers and increase wallet share by doing more business with existing customers. Our underlying business performance was good, with strong loan and deposit growth across the board. We’re growing relationships, gaining new customers, and getting more chances to compete for their business. Wholesale Banking’s overall cross-sell was 6.3 products per customer relationship, and our middle market business had an average of 7.8 products per customer relationship. Average loans increased 33 percent from a year ago. Our credit performance was in line with our expectations, but we continue to have a cautious outlook. Our credit policies and disciplined approach work for us and our customers in good times and bad.

“In a testament to our diversified business model, revenue was broad-based. Certain business lines – such as Commercial Real Estate brokerage – were more impacted by current conditions while others – including Foreign Exchange, Treasury Management and Institutional Brokerage – did very well. Even given the difficult equity market performance, with the S&P500 Index down 24 percent in the last 12 months, our mutual fund balances grew 12 percent. Growth was fueled mainly by increased money market balances, up over 15 percent in third quarter 2008 on a linked-quarter basis. Since the launch of our CEO Mobile® service last year – the only browser-based mobile banking service for corporate banking customers – we have transferred over $1 billion through the phone channel. Foreign Exchange Online (FXOL) – the online foreign exchange customer platform accessed through the Commercial Electronic Office® (CEO®) portal – was extended to small businesses to help them manage their foreign currency risk.”

Wholesale Banking reported net income of $83 million in third quarter 2008 compared with $591 million a year ago, mainly due to other-than-temporary impairment charges in our securities portfolio. Revenue decreased $375 million, including impairment charges of $407 million. Net interest income increased $136 million or 15 percent, driven by strong loan and deposit growth. Average loans grew to $116 billion, up 33 percent from a year ago, with double-digit increases across nearly all wholesale lending businesses. Average total deposits were $84 billion, up 10 percent from a year ago, all in interest-bearing balances. Noninterest income decreased $511 million from third quarter 2007, primarily due to impairment charges. Noninterest income from foreign exchange, loan fees, institutional brokerage and insurance all increased. Noninterest expense increased $163 million from a year ago, mainly due to higher personnel-related costs including expenses due to the acquisition of ABD Insurance and higher agent commissions in the crop insurance business stemming from higher commodity prices. The provision for credit losses was $294 million, an increase of $275 million from third quarter 2007, and included $115 million of net charge-offs (0.39 percent of total loans) and a $178 million credit reserve build for the wholesale portfolio.

Wells Fargo Financial offers consumer loans primarily through real estate-secured debt consolidation products, automobile financing, consumer and private-label credit cards and commercial services to consumers and businesses throughout the United States, Canada, Puerto Rico and the Pacific Rim.

Selected Financial Information

Third Quarter %
(in millions) 2008 2007 Change
Total revenue $ 1,394 $ 1,373 2 %
Provision for credit losses 770 427 80
Noninterest expense 677 728 (7 )
Net income (loss) (33 ) 135 NM

(in billions)
Average loans 67.5 65.8 3
Average assets 71.4 71.7 --
NM - Not meaningful
-- Average loans/leases of $67.5 billion, up 3 percent from third
quarter 2007
-- Real estate-secured receivables of $29.2 billion, up 12 percent
from third quarter 2007
-- Auto finance receivables/operating leases of $26.2 billion, down 14
percent from third quarter 2007

“Although Wells Fargo Financial credit losses were elevated from historic norms in all of our portfolios because of current market stress on consumers, we continued to fare much better than industry averages due to previously implemented tightened underwriting standards in our real estate, auto and credit cards businesses that have enabled us to effectively manage risk,” said Tom Shippee, Wells Fargo Financial CEO. “In our real estate-secured portfolio, those losses have been predominately concentrated in California, Florida, Arizona and Nevada, where 26 percent of our $29.2 billion portfolio is based. In the first nine months of 2008, we have worked to reduce expenses during this difficult credit environment by consolidating our store network – closing 9 percent, or 86, of our U.S. stores – and also by reducing our full-time equivalent team member base by 14 percent, or almost 3,000 FTEs.”

“We work hard to keep our real estate customers in their homes,” said Dave Kvamme, Wells Fargo Financial president and chief operating officer. “Our foreclosure rate was dramatically below the industry average for nonprime lenders. The strength of our portfolio relative to the industry is due to our sound and conservative underwriting standards, which prohibit the selling of higher-risk products such as stated income or teaser rate loans. Losses in our auto portfolio increased this quarter, driven by a decline in used car values. Across all of our businesses, we continue to take actions to reduce credit risk and right-size our expense base.”

Wells Fargo Financial lost $33 million this quarter reflecting higher credit costs, including a $162 million credit reserve build as a result of continued softening in the real estate, auto and credit card markets. Third quarter revenue of $1.39 billion was flat from a year ago. Pre-tax pre-provision income (i.e., revenue less noninterest expense) increased $72 million, or 11 percent from a year ago. Average loans increased 3 percent from third quarter 2007. Noninterest expense declined 7 percent from third quarter 2007.

Recorded Message

A recorded message reviewing Wells Fargo’s results is available at 5:30 a.m. Pacific Time through October 18, 2008. Dial 866-519-1052 (domestic) or 585-295-6792 (international). No password is required. The call is also available on the internet at www.wellsfargo.com/invest_relations/earnings and http://www.investorcalendar.com/IC/CEPage.asp?ID=135429.

Wells Fargo & Company is a diversified financial services company with $623 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Services, “AAA.”

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements about the Company, including our beliefs and expectations for future credit quality and losses and our expectations for the Wachovia merger transaction, the statement that residential real estate loss levels will continue to be driven by housing price trends, the statement that until residential real estate values stabilize, the Home Equity portfolio will produce higher than normal loss levels, and the statement that until conditions improve in the residential real estate and liquidity markets, we will continue to hold more nonperforming assets on our balance sheet. Do not unduly rely on forward-looking statements. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them to reflect changes that occur after that date.

There are a number of factors that could cause results to differ significantly from our expectations, including further deterioration in the credit quality of our home equity, real estate, auto or other loan portfolios, or in the value of the collateral securing those loans, due to higher interest rates, increased unemployment, declining home or auto values, economic recession or other economic factors. Factors related to the Wachovia merger include the receipt of necessary regulatory approvals and the approval of Wachovia shareholders. For a discussion of factors that may cause actual results to differ from expectations, refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, and our Annual Report on Form 10-K for the year ended December 31, 2007, including information incorporated into the 10-K from our 2007 Annual Report to Stockholders, filed with the Securities and Exchange Commission (SEC) and available on the SEC’s website at www.sec.gov.

Any factor described in this news release or in any document referred to in this news release could, by itself or together with one or more other factors, adversely affect the Company’s business, earnings and/or financial condition.

Where to Find More Information About the Wachovia Merger

The proposed merger will be submitted to Wachovia Corporation shareholders for their consideration. Wells Fargo will file with the SEC a registration statement on Form S-4 that will include a proxy statement of Wachovia Corporation that also constitutes a prospectus of Wells Fargo. Wachovia Corporation will mail the proxy statement-prospectus to its shareholders. Wachovia shareholders and other investors are urged to read the final proxy statement-prospectus when it becomes available because it will describe the proposed merger and contain other important information. You may obtain copies of all documents filed with the SEC regarding the proposed merger, free of charge, on the SEC’s website at www.sec.gov. You may also obtain free copies of these documents by contacting Wells Fargo or Wachovia, as follows:

Wells Fargo & Company, Investor Relations, MAC A0101-25, 420 Montgomery Street, 2nd Floor, San Francisco, California 94104-1207, (415) 396-3668.

Wachovia Corporation, Investor Relations, One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, (704) 374-6782.

Wells Fargo and Wachovia and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Wachovia Corporation shareholders in connection with the proposed merger. Information about Wells Fargo’s directors and executive officers and their ownership of Wells Fargo common stock is contained in the definitive proxy statement for Wells Fargo’s 2008 annual meeting of stockholders, as filed by Wells Fargo with the SEC on Schedule 14A on March 17, 2008. Information about Wachovia’s directors and executive officers and their ownership of Wachovia common stock is contained in the definitive proxy statement for Wachovia’s 2008 annual meeting of shareholders, as filed by Wachovia with the SEC on Schedule 14A on March 10, 2008. You may obtain a free copy of these documents by contacting Wells Fargo or Wachovia at the contact information provided above. The proxy statement-prospectus for the proposed merger will provide more information about participants in the solicitation of proxies from Wachovia Corporation shareholders.

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