Understanding The Changing Tax Picture

(NAPSI)-As more baby boomers reach retirement age, analysts say it could pay to give some extra thought to taxes.

Indeed, tax efficiency and dividends will become important income streams for a growing number of retirees. And, according to a recent survey, investor interest in tax management strategies-which can help avoid the loss of returns to taxes-is on the rise.

One key to protecting your assets could be to work with a financial advisor, since investors who do so are twice as likely to invest in mutual funds that are specifically designed to minimize the effects of taxes. But it's also important to understand the tax picture. This quick quiz from Eaton Vance could help:

Questions

1. T or F? For the average taxable mutual fund investor, about 2 percentage points of return were surrendered to taxes each year over the past decade.

2. T or F? The highest tax rate on both qualified dividends and long-term capital gains today is 15 percent.

3. T or F? Tax-managed stock funds, municipal bond funds and variable annuities are examples of investments best suited to be held outside of a qualified retirement plan such as an IRA or 401(k).

4. T or F? AMT stands for "Alternative Minimum Tax."

5. T or F? All municipal bonds are "tax-free" and therefore are not subject to the Alternative Minimum Tax.

Answers

1. True. Over the past 10 years, taxable mutual fund investors gave up between 1.3 and 2.2 percentage points of return because of taxes.

2. True. The Jobs and Growth Tax Relief Reconciliation Act of 2003 reduced the tax rate on qualified dividends and long-term capital gains from almost 39 percent to 15 percent. This now gives investors two incentives to better manage the tax consequences of their investments.

3. True. The optimal use for each of these tax-advantaged investments is outside of a qualified retirement plan. Investors should generally use their qualified retirement plans to shield investments that would otherwise be fully taxable. Investors who are unsure of how best to use qualified plans should consult a financial advisor to help them make the correct investment decisions.

4. True. The Alternative Minimum Tax, or AMT, is calculated alongside ordinary income tax for all households. Under the AMT, taxpayers must pay whichever is higher, the AMT-usually 26 percent to 28 percent of income-or their typical blended tax rate. The AMT was originally adopted in 1969 to ensure that the wealthy would pay taxes. But, because the AMT's exclusion level is not inflation-indexed and incomes have risen, many middle-class American families are now subject to this tax. Without additional legislation, the AMT could affect nearly half of households earning between $75,000 and $100,000 by 2010.

5. False. Municipal bonds issued by entities-such as housing agencies, airports and industrial developers-are subject to the AMT because their use is considered outside of government purposes. These bonds, which comprise about 10 to 12 percent of the overall municipal bond market, are popular with municipal bond investors (including some mutual funds) because they tend to provide income (yield) that is about 0.25 percent higher than similar AMT-free bonds. While this can provide a good source of income for investors who are not subject to the AMT, after-tax yield comparisons between these bonds are not favorable for AMT-paying investors. Because AMT status may not be clear until the end of a tax year, municipal bond investors should ensure that holdings are AMT-free.

For more information or to begin learning how changing government regulations might affect your tax returns in the coming years, visit www.eatonvance.com/mediacenter or call 800-225-6265.

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New Tax Law Changes Can Help Millions of Taxpayers Save Money

/PRNewswire-FirstCall/ -- As we near the final days of 2008, what continues to weigh heavy on the minds of many people is the slowing U.S. economy -- unemployment has reached the highest percentage in years at 6.7 percent*, layoffs and business closures continue and the housing market remains weak. This year, lawmakers have passed more than a hundred new tax law changes intended to help millions of individual taxpayers. Jackson Hewitt Tax Service(R) encourages taxpayers to find out how these new tax credits and deductions can help lower their individual tax liability and possibly put more money back in their pockets this tax season.

"With more than a hundred pro-taxpayer credits and deductions, many taxpayers will qualify for new benefits that may not have been available last year," said Mark Steber, vice president of tax resources at Jackson Hewitt Tax Service. "Taxpayers affected by these changes could see significant savings, and with the current recession, it is even more important that taxpayers get all of the tax benefits they deserve."

Tax Law Changes
Steber outlines some money-saving tax law changes for 2008, including:

-- Economic Stimulus Payment and Recovery Rebate Credit: This initiative
is a two-phased program consisting of the economic stimulus payment
and the recovery rebate credit. Phase one was the economic stimulus
payment which was an advanced payment of the projected amount of
recovery rebate credit available on the taxpayer's 2008 return. Phase
two is the 2008 component of the program, so taxpayers who did not
receive their full economic stimulus payment in 2008 may qualify for
the remainder as a Recovery Rebate Credit on their 2008 tax returns.
For example, Jane, a single taxpayer, filed her 2007 tax return in
February 2008. She filed single, without children, and received a
$600 economic stimulus payment. In November, Jane gave birth to a
baby girl. Because she had a child in 2008, Jane may be eligible for
an additional $300 credit when she files her 2008 tax return and
claims her child as a dependent.

-- Mortgage Debt Forgiveness Relief Act: Homeowners who experienced
foreclosure on their primary home can exclude the cancelled debt
amount from their taxable income. For example, a married couple
filing jointly with an adjusted gross income (AGI) of $35,000, and a
home foreclosure that includes $10,000 in cancelled debt, could
decrease their tax liability by $1,500 under this act. In the past,
the $10,000 of cancelled debt would have been considered taxable
income to the individual that owed the debt. The home must meet the
following criteria:
-- It must be the taxpayer's main residence
-- The amount of debt forgiven cannot exceed $2,000,000
-- The loan must have been used to buy, build or substantially
improve the home.

-- Housing Assistance Tax Act: Taxpayers who pay real estate taxes and
are not otherwise eligible to itemize deductions can increase their
standard deduction amount by the lesser of:
-- Real estate taxes paid in 2008 OR
-- $500 ($1,000 if married filing jointly)


For example, a married couple filing jointly with an income of $28,000 that did not itemize their tax return but paid $1,200 in real estate taxes in 2008 could increase their standard deduction amount by $1,000. This additional standard deduction would decrease their tax liability by $100.

-- Additional Child Tax Credit: The Additional Child Tax Credit is a
refundable credit. This year, the income threshold has been decreased
to $8,500 from $12,050, allowing certain taxpayers to qualify for up
to $533 more per child in a potential refund. For example, a single
parent with two children and an income of $15,000 would receive a
refund of $5,799. Before the change, the potential refund amount
would have been $5,266.

-- First Time Homebuyers Credit: Taxpayers who purchased a new home for
the first time after April 8, 2008, may qualify for a refundable
credit up to $7,500. Part of the American Housing Rescue and
Foreclosure Prevention Act, this refundable tax credit works like an
interest-free loan for all qualified taxpayers. The credit must be
paid back in equal parts over a period of 15 years beginning in 2010.

Extending expired tax benefits
Lawmakers also extended several expired tax benefits, including:
-- Tax-free charitable donations for taxpayers 70.5 or older who choose
to direct up to a $100,000 donation from a traditional or Roth IRA
directly to a charitable organization.
-- A two-year extension of the Educator Expense Deduction which allows
teachers an above-the-line tax deduction of up to $250 for
out-of-pocket classroom expenses.
-- A two-year extension of the Qualified Tuition Deduction which allows
students to directly deduct up to $4,000 of qualified tuition and fees
paid to a college or trade school.
-- A two-year extension to the sales tax deduction. Taxpayers can claim
the greater of their state and local income taxes paid or their state
and local sales taxes paid when itemizing deductions. This is of
particular interest to taxpayers that live in states with little or no
income tax and those that purchased high-ticket items during the year.


"These are just some of the changes in the tax laws this year," added Steber. "Taxpayers should consult a trained tax preparer this year in particular, to ensure they don't miss out on the benefits available as a result of these new credits and deductions or any other commonly overlooked deductions. Clearly it is even more important this year that taxpayers ensure they get back the money they deserve or keep more money in their pockets."

Unemployed in 2008

For those taxpayers who were unemployed in 2008, it is important to remember that unemployment compensation is taxable on federal and most state tax returns. Income tax is not automatically withheld from unemployment compensation, however, individuals can elect to have taxes deducted. If you did not have taxes withheld throughout the year, you may have a potential balance due when you file your 2008 income taxes.

For those taxpayers looking for a job during 2008, there are deductible costs they can claim if they itemize deductions, including:

-- Mileage costs accrued on a personal vehicle while job hunting
including trips to job interviews and to the unemployment office.
Between January 1, 2008, and June 30, 2008, taxpayers can claim 50.5
cents per mile. Between July 1, 2008 and December 31, 2008, taxpayers
can claim 58.5 cents per mile.
-- Costs for creating, printing and mailing a resume
-- Costs for a headhunter or job placement agency
-- Transportation costs such as a bus, taxi, train or plane to an
interview
-- Meals and lodging if out of town for an interview
-- Parking and tolls when driving to an interview
-- Long distance or mobile phone call charges directly associated with a
job search
-- Business research services
-- Physical exam expenses if required by a potential employer


If a taxpayer accepted a new job which required relocation, he or she may be able to deduct qualified moving expenses not reimbursed by the new employer. Taxpayers should keep receipts related to all moving expenses in order to substantiate these expenses.

For more information, including a list of the most commonly overlooked deductions, credits and updates on recent tax changes, visit www.jacksonhewitt.com.

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Fidelity Southern Corporation Receives $48.2 Million From U.S. Treasury

/PRNewswire-FirstCall/ -- Fidelity Southern Corporation (NASDAQ:LION) , the holding company for Fidelity Bank, today announced that it has received $48.2 million from the U.S. Treasury through the sale of 48,200 shares of the Company's authorized Fixed Rate Cumulative Perpetual Preferred Stock, Series A, as part of the federal government's TARP Capital Purchase Program.

"We are pleased to have been approved to participate in this voluntary program implemented for healthy financial institutions," said President H. Palmer Proctor, Jr. He also stated that, "Since the Bank already exceeds well capitalized regulatory guidelines, the loan proceeds will be utilized to increase our lending capacity, improve our ability to work with troubled borrowers, and support the Bank's broader strategic growth and community service initiatives."

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Consumers Can Detect and Fight “Madoff-Style” Ponzi Schemes:

(BUSINESS WIRE)--Thousands of large and small investors will suffer from Ponzi schemes such as those perpetrated by Bernard Madoff and Lou Perlman – but few investors will know how to avoid them in the future or how to recover any of their losses, says Lunelle Siegel, executive director of the Association for Fraud Recovery and Prevention (AFRP) (http://www.fraudrecovery.org).

“Ponzi schemes are insidious and can go on for years, and affect both the wealthy and not-so-wealthy,” says Siegel. “For most investors, the chance of a direct recovery is very slight. However, there are special tax code provisions that will allow them to recover up to 30 percent of their losses. AFRP can help them understand their options.”

AFRP is a consumer advocacy association formed to investigate fraudulent schemes, inform members of scams, provide information on how to evaluate opportunities before investing, help individuals recover a portion of their losses and advocate for stricter penalties for those convicted of investment fraud.

Following are some tips AFRP offers for individuals considering an investment:

* Is the annual return the same in up and down markets? Many fraudsters promise a number and don’t change it despite the volatility of the market and how investments react to it.
* Is the investment salesman registered in your state or with the Securities & Exchange Commission (SEC)? Ask to see their license. Individual states and the SEC govern the sale of investments in their jurisdictions. If the salesman isn’t registered, he or she is likely a scam artist.
* Is the accounting firm that is providing financial statements for the investment registered with the state in which they are located? Legitimate sounding frauds often include audited financials from a fictitious CPA firm.

“The old saying that if something seems too good to be true, it probably isn’t, is often right,” says Siegel. “Sadly, some investors will fall prey to investment scams more than once – a situation that can be devastating for older individuals living on a fixed income. And in today’s difficult economic times, there’s less and less leeway for loss in anyone’s portfolio.”

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Complete Analysis of the Worker, Retiree, and Employer Recovery Act of 2008 Available From the Tax & Accounting Business of Thomson Reuters

/PRNewswire/ -- Both the House and Senate unanimously and in record-time passed the Worker, Retiree, and Employer Recovery Act of 2008 at the end of last week, clearing the way for the President's signature. This new tax law, which is already available in full analysis on Checkpoint, the premier tax research platform for the Tax & Accounting business of Thomson Reuters, temporarily suspends the requirement for taxpayers age 70-1/2 and older (and their beneficiaries) to make annual minimum distributions from their retirement plan accounts. This will provide older Americans some much-needed financial flexibility as they struggle to manage their finances during this difficult economic time.

According to Bob Trinz, Senior Tax Analyst for the Tax & Accounting business of Thomson Reuters, tax laws generally require individuals with retirement accounts to make required withdrawals based on the size of their account and their age every year after age 70-1/2. The new law suspends the required minimum distribution from retirement accounts in 2009. This waiver, available to everyone regardless of their total retirement account balances, applies to all defined-contribution plans, including 401(k), 403(b), 457(b), and IRA accounts. Suspending the mandatory withdrawal allows retirees to keep the money in their account if they choose, and possibly recover some losses. The suspension for 2009 also applies to beneficiaries of retirement plan accounts and IRA owners.

The new law also provides relief for single-employer plans by allowing employers to "smooth" the value of pension plan assets over 24 months instead of having to apply the mathematical average that Treasury requires. This change will soften the accounting of 2008 plan losses. "The adjustment of this phase-in rule will provide great relief," says Trinz.

The new law also helps multiemployer plans, which may elect to "freeze" their status as (or as not) "endangered" or "critical" for one year. Plan years that started between October 1, 2008 and October 1, 2009 may elect to retain their status from the previous year. As before the new law, plans in endangered or critical status must adopt a funding improvement or rehabilitation plan, respectively. While a plan is in critical status, employers obligated to contribute must make additional contributions not required for plans in endangered status, but are relieved from the obligation to make general funding contributions. Under the new law, the election to freeze a plan's status would delay the need to respond to any lack of progress under the terms of the funding improvement or rehabilitation plan until the following plan year.

The new law also provides an election for sponsors of multiemployer plans in endangered or critical status in plan years beginning in 2008 or 2009, allowing a three-year extension of a funding improvement or rehabilitation plan. That allows these plans to accomplish their goals in 13 years instead of 10 (18 years instead of 15, for seriously endangered plans).

The new law makes numerous technical corrections to the Pension Protection Act of 2006. "The technical modification of greatest interest is for nonspouse beneficiaries of qualified plan participants and IRA owners," says Trinz. "For plan years beginning after 2009, company sponsored plans will have to offer nonspouse beneficiaries a rollover option. This gives much-needed flexibility to those who inherit retirement plan accounts from someone other than their spouse."

"The extent of the technicalities and scope of this new law is far-reaching and taxpayers should contact their tax preparers to ascertain how it will affect them in the long and short-term," says Trinz. "For our seniors, we can conclusively say: 'this will help.'"

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Interface Extends Consent Payment Deadline for Exchange Offer for Certain of its Outstanding Notes

/PRNewswire-FirstCall/ -- Interface, Inc. (NASDAQ: IFSIA) , the world's largest manufacturer of modular carpet, announced today that it has extended the consent payment deadline with respect to its previously announced exchange offer and consent solicitation with respect to its outstanding 10.375% Senior Notes due 2010 (the "Notes"). The consent payment deadline, which was 5:00 p.m., New York City time on December 15, 2008, will be extended to 5:00 p.m., New York City time on Friday, December 19, 2008, unless further extended.

All other material terms of the consent solicitation and the related exchange offer remain unchanged. Holders who have already properly tendered their Notes and delivered their consents do not need to re-tender or deliver new consents. Consents (whether previously or hereafter delivered) may only be revoked in the manner described in the Offering Memorandum dated November 25, 2008. Rights to withdraw tendered Notes and revoke the delivered consents terminated at 5:00 p.m., New York City time, on December 9, 2008.

The exchange offer and consent solicitation are made upon the terms and conditions set forth in the Offering Memorandum and the related Letter of Transmittal and Consent. The exchange offer and consent solicitation are subject to the satisfaction of certain conditions, including the general conditions as set forth in the Offering Memorandum. The exchange offer will expire at midnight, New York City time, on December 23, 2008, unless extended or earlier terminated by Interface.

This release is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, the Notes. The exchange offer for Notes is only being made pursuant to the Offering Memorandum (and its related documents) that Interface has distributed to certain qualified holders of Notes. The exchange offer and consent solicitation are not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the exchange offer or consent solicitation are required to be made by a licensed broker or dealer, they shall be deemed to be made by the Dealer Managers on behalf of Interface.

The replacement notes issued in exchange for the Notes in the exchange offer will not be initially registered under the Securities Act of 1933, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer.

Interface, Inc. is the world's largest manufacturer of modular carpet, which it markets under the InterfaceFLOR(R), FLOR(TM), Heuga(R) and Bentley Prince Street(R) brands, and, through its Bentley Prince Street brand, enjoys a leading position in the designer quality segment of the broadloom carpet market. The company is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment while enhancing shareholder value.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the other matters set forth in this news release are forwardlooking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including risks and uncertainties associated with economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading "Risk Factors" included in Item 1A of the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2008 and Annual Report on Form 10-K for the fiscal year ended December 30, 2007, which discussion is incorporated herein by this reference, including, but not limited to, the discussion of specific risks and uncertainties under the headings "The recent worldwide financial and credit crisis could have a material adverse effect on our business, financial condition and results of operations," "We compete with a large number of manufacturers in the highly competitive commercial floorcovering products market, and some of these competitors have greater financial resources than we do," "Sales of our principal products have been and may continue to be affected by adverse economic cycles in the renovation and construction of commercial and institutional buildings," "Our success depends significantly upon the efforts, abilities and continued service of our senior management executives and our principal design consultant, and our loss of any of them could affect us adversely," "Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including by restrictive taxation or other government regulation and by foreign currency fluctuations," "Large increases in the cost of petroleum-based raw materials could adversely affect us if we are unable to pass these cost increases through to our customers," "Unanticipated termination or interruption of any of our arrangements with our primary third-party suppliers of synthetic fiber could have a material adverse effect on us," "We have a significant amount of indebtedness, which could have important negative consequences to us," "The market price of our common stock has been volatile and the value of your investment may decline," "Our earnings in a future period could be adversely affected by non-cash adjustments to goodwill, if a future test of goodwill assets indicates a material impairment of those assets," "Our Chairman, together with other insiders, currently has sufficient voting power to elect a majority of our Board of Directors," and "Our Rights Agreement could discourage tender offers or other transactions for our stock that could result in shareholders receiving a premium over the market price for our stock." Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company assumes no responsibility to update or revise forward-looking statements made in this press release and cautions readers not to place undue reliance on any such forward-looking statements.

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Senate Subcommittees Examine State Agency Programs

Sen. Mitch Seabaugh (R-Sharpsburg) chaired a joint meeting of the Senate Fiscal Management Subcommittee and the Best Value in Government Task Force today at the Capitol. Members of both committees gathered to discuss agency reports, efficiencies, and cost savings for the Departments of Audits, Revenue, Banking and Finance, and Administrative Services, as well as the State Accounting Office, State Properties Commission/Georgia Building Authority, Georgia Technology Authority, and the Office of State Administrative Hearings.

“With the current economy causing a significant impact in state revenues, it’s imperative that we find budget savings and efficiencies everywhere we can in order to be fiscally responsible, and to ensure that we fund programs that are fundamental to the role of government in Georgia,” said Sen. Seabaugh.

Each agency presented an overview of programs, efficiencies, and cost savings that have been implemented. The current budgets were submitted and several agencies were asked to provide further detailed information on particular programs or services. Members of the committee focused on uncovering duplicated services between agencies, and encouraged making as many programs self sufficient as possible.

The committee also heard testimony from Commissioner Bart Graham of the Department of Revenue, State Accountant Greg Griffin with the State Accounting Office, State Properties Commission/Georgia Building Authority Director Steve Stancil, Georgia Technology Authority Director Patrick Moore, Department of Audits Commissioner Russell Hinton, Commissioner Rob Braswell of the Department of Banking and Finance, Commissioner Brad Douglas of the Department of Administrative Services, and Chief Judge Lois Oakley with the Office of State Administrative Services.

The Senate has been holding similar joint workshops over the past several months at the request of Lt. Governor Casey Cagle, who has charged the Senate to proactively identify non-essential government services and maximize efficiency and value in our state government. Several of the topics that have been covered include transportation, education, natural resources and community health.
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Wachovia Corporation Lowers Prime Rate

/PRNewswire-FirstCall/ -- Effective today, Wachovia Corporation (NYSE:WB) lowered its prime interest rate to 3.25 percent from 4 percent at Wachovia Bank, National Association, and all of its other banking subsidiaries.

The prime rate is a benchmark used to set interest rates on various forms of corporate and consumer credit. It is one of several interest rate bases used by Wachovia, which lends at interest rates above and below the prime rate. The prime rate last changed on Oct. 29, 2008.

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Recession-Induced Child Poverty to Cost U.S. $1.7 Trillion in Economic Loss

/PRNewswire-USNewswire/ -- A new report has found that the United States will suffer a future economic loss of over $1.7 trillion if the current recession drives an additional 3 million children into poverty, as has been predicted. That amounts to a yearly loss of about $35 billion dollars per year over the lifetime these children.

The report, entitled "The Cost of Doing Nothing," was released today by First Focus, a bipartisan children's advocacy organization. The report analyzes the costs of childhood poverty, including its effects on lifetime earnings and health outcomes. Research indicates that children who spend more than half of their childhood in poverty earn, on average, 39% less than the median income. Furthermore, a poor child loses approximately a quarter of a million dollars worth of "health quality" over the course of their lifetimes. By aggregating these long-term effects across the millions of poor children who are projected to fall into poverty as a result of this recession, the report produces a baseline estimate of the economic costs of allowing additional children to become poor during a recession.

"If we do not act now, the current economic climate will lead to millions more children living in poverty, which will cause a severe economic loss for our nation's future," said Bruce Lesley, President of First Focus. "When children enter poverty at a young age, their ability to achieve the American dream is diminished. They are 13 times more likely to remain in poverty for several years after the recession ends, leading to adverse effects on lifetime earnings as well health outcomes."

The report looks at the particularly severe ramifications that stem from numerous childhood years spent in poverty. The report finds that more than half of children who fall into poverty during recessions are likely to remain in poverty for at least some time after the recession ends. In fact, about a quarter of children who suffer from recession-induced poverty will spend at least half of their remaining childhood in poverty.

"Our findings show that recession-induced poverty has a lifelong effect on our children. Moreover, we know that poverty during childhood leads to severe, long-term economic costs. Therefore, there is a significant economic benefit to acting now to prevent the child poverty rate from skyrocketing. Indeed, if we can just maintain the current child poverty rate, the US economy will benefit by at least $1.7 trillion over the next several decades," Lesley added.

In August, the U.S. Census Bureau released data showing that the number of children living in poverty in 2007 has already begun to climb, reaching its highest rate in a decade. The Census shows that in 2007, 13.3 million children were living in poverty.

The report can be found at http://www.firstfocus.net/pages/3533.

First Focus is a bipartisan advocacy organization that is committed to making children and their families a priority in federal policy and budget decisions.

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What's Ahead for U.S. Financial Institutions?

When Barack Obama is sworn in as the 44th U.S. president on January 20, he will inherit a weak economy that has helped to effectively put some Wall Street companies out of business while driving bank failures to the highest level in more than a decade.

From Knowledge@Emory

At the very least, financial institutions can expect increased government scrutiny, according to faculty from Emory University’s Goizueta Business School. The challenge, they add, will be to refrain from strangling the financial system with over-regulation.

The number of failing financial institutions is sobering, and includes the wind-down of Lehman Brothers, Merrill Lynch’s rushed sale to Bank of America, Bear Sterns’ sale to JP Morgan Chase and the failure of 22 banks as of November 21, to 22, according to a running tally kept by the Federal Deposit Insurance Corp. Numbers like that have not been seen since 1993 when 50 banks fell, according to FDIC records.

“In the past few years Wall Street made an incredible amount of money by taking on enormous leverage,” says Jeffrey A. Busse, a professor of finance at Goizueta. “But it is now clear that the risk they took on was not fully understood.”

In the wake of the current financial disaster, there’s likely to be a lot less appetite for the kind of high-leverage merger and acquisition deals that helped pave the way for an eventual credit crunch, adds Busse.

“Along with the pullback in leverage, we’re likely to see stepped-up government regulation of banks and other financial institutions,” he says. “When companies ask for federal bailouts, they’ve got to expect the funds will come with some strings attached.”

Some banks in particular initially benefitted from issuing sub-prime and other exotic loans, but suffered significant losses as the housing market collapsed, Busse notes.

“Even after this crisis subsides, banks are likely to record lower revenue as a result of tighter lending standards,” he says. “Further, this credit crunch may last for some time, and more loan restrictions will likely lead to slower growth in the economy over the long term. That might not be so bad, though. Years of easy-money policies meant that too many people got used to living beyond their means. They didn’t realize that you can’t do that forever.”

Financial markets and institutions are changing in significant ways, observes Tarun Chordia, a chaired professor of finance at Goizueta.

“With the decision by Morgan Stanley and Goldman Sachs to reorganize as bank holding companies, there are essentially no more standalone investment banks,” says Chordia. “That means their proprietary trading desks will not be as active and we’ll see a disappearance, or at least a significant curtailment, of the huge bets on markets that once characterized Wall Street.”

Chordia says banks are likely to face stiffer capital requirements, especially as the government pumps public money into financial institutions.

“Banks are likely to be required to watch their liquidity very carefully, and derivative markets will also face more scrutiny,” he says. “For instance, we are likely to see more transparency in the credit default swap market which is more likely to move towards an exchange market with appropriate constraints on counterparty risk.”

However, he notes, the financial crisis has led to a “suspension of the debate” about the appropriate level of regulation of markets and institutions.

“Risk taking by banks is likely to undergo some significant tightening,” Chordia adds.

”More regulation is coming and maybe some of it is necessary but too much regulation can also be harmful to the economy. It is important to strike the right balance so as not to endanger the innovativeness and the creativity of the U.S. economy. The optimal rate of bank loan defaults is not zero.”

As a society, says Chordia, there is a question of whether there should be tighter constraints on the ability of financial institutions to take on risk. Too much regulation can drive activity to other international markets and harm America’s standing as an international financial center, he observes.

“The economy would have suffered if over-regulation had strangled Silicon Valley,” warns Chordia. “Let us remember that Google, Apple, Cisco and countless other firms were started in the U.S. and the risk taking ability of the financial institutions was an important ingredient in their creation.”

Chordia is somewhat concerned about solving that conundrum. “We need some regulation,” he says. “The trick is to strike the right balance, and I believe that [U.S. Federal Reserve Chairman] Bernanke and [U.S. Treasury Secretary] Paul Paulson seem to understand the situation. However, I am concerned that with one party in control of the executive and legislative branches of the government we might see some excesses. Gridlock may have been better.”

“In the long run, regulators should strengthen the partition between tax-payer underwritten portions of a bank’s operations and other operations,” according to Narasimhan Jegadeesh, a chaired professor of finance at Goizueta. “One set of banking operations, for example customer deposits, have a government guarantee and are subject to strict regulations regarding investments. The other assets of banks are not as highly regulated because they have no government guarantees. The government guaranteed operations of a bank should be solvent on a standalone basis, but in the current environment troubles in the non-banking operations are hurting banks’ ability to support their deposits.”

Today’s financial crisis has been exacerbated by the repeal of the federal Glass-Steagall Act in 1999 [a 1933 regulation that prohibited commercial banks from collaborating with full-service brokerage firms or participating in investment banking activities], he adds.

“Glass-Steagall was repealed in order to let banks compete better with other financial institutions,” explains Jegadeesh. “The problem is it let banks take more risks, but used taxpayer funds [through the FDIC, for example] to guarantee their continued existence. Government-sponsored entities such as Fannie Mae and Freddie Mac also took on risks far in excess of what could be supported by their capital base because of implicit government guarantees.”

Giving an institution explicit or implicit government guarantees is inherently dangerous because it encourages “moral hazard,” or undue risk-taking, he explains.

Fannie Mae and Freddie Mac, which were created to help increase the availability of residential mortgages, were recently seized by the government over concerns about the sharp increase in failing mortgages. Regulators did not fully understand the extent of risks they were taking until very recently.

Similarly, the Community Reinvestment Act, enacted by Congress in 1977, was intended to facilitate homeownership by the economically weaker section of the Society. CRA encouraged banks to extend credit to residents of local communities who might otherwise not qualify for home loans.

“It was a noble goal, but it effectively forced banks to extend credit to people who could not carry the debt,” says Jegadeesh. “I believe the incoming presidential administration will have no choice but to ease up programs like the CRA, although it will likely do so in a politically proper manner.”

As politicians ponder their approach, they would do well to consider the way their actions are likely to affect market liquidity, says Kevin Crowley, a lecturer of finance at Goizueta.

“They may be tempted to hammer away at hedge funds and other institutions, but over-regulation could drive money to other countries,” he notes. “Something similar happened after Congress passed the Sarbanes-Oxley Act of 2002, which imposed more rules on publicly held companies. Some foreign companies decided not to list on U.S. markets, and there was an increase in the number of public companies who voluntarily delisted as a way to escape the additional reporting costs associated with Sarbanes-Oxley compliance.”

But with a Democratic Congressional majority and a Democrat in the White House, Crowley sees little chance of a retreat in financial regulation.

“Many kinds of players contributed to this financial meltdown,” says Crowley. “But politicians generally find it easier to blame banks, hedge funds and speculators than to admit their own role. The concern now is that the regulatory pendulum may swing too far and possibly choke off a recovery.”


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Citizens Trust Bank Announces Purchase Agreement for a Full Service Branch in Lithonia, Georgia

/PRNewswire-FirstCall/ -- Citizens Trust Bank, the banking subsidiary of Citizens Bancshares Corporation, is pleased to announce the signing of a definitive agreement for its purchase of The Peoples Bank branch in Lithonia, Georgia. The agreement with The Peoples Bank provides for Citizens Trust Bank's purchase of approximately $51.5 million in deposits. Upon consummation of the purchase, which is subject to regulatory approvals, the Lithonia branch will become Citizens Trust Bank's 11th financial center and will be located at 3065 Stone Mountain Street. The acquisition of the branch is expected to be completed in the first half of 2009.

"We are looking forward to expanding our full banking services in the Lithonia market and welcome the opportunity to service the customers, who are currently banking at that location," stated James E. Young, President and CEO of Citizens Trust Bank. "We believe the purchase of this branch will add significantly to our already strong presence in DeKalb County."

Citizens Bancshares Corporation is a holding company that provides a full range of commercial and personal banking services to individual and corporate customers. Citizens Trust Bank, formed in 1921, is committed to enabling their customers and the community to realize dreams of economic empowerment. As a leader in the financial services industry, Citizens Trust Bank operates under a state charter and currently serves Georgia and Alabama with ten financial centers. As of September 30, 2008, Citizens Bancshares Corporation had total consolidated assets of approximately $335 million, net loans of approximately $212 million, total deposits of approximately $287 million, and shareholders' equity of approximately $33 million. For more information on Citizens Trust Bank please visit www.CTBconnect.com.

Sandler O'Neill + Partners L.P. served as financial advisor to Citizens Trust Bank in the acquisition and Hunton & Williams LLP served as legal advisor to Citizens Trust Bank.

Statements concerning future performance, events, expectations for growth and market forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated expectations. Specific factors include, but are not limited to, the ability to continue to grow Citizens Trust Bank and the services it provides, the ability to successfully integrate new business lines and expand into new markets, competition in the marketplace and general economic conditions. The information contained in this release should be read in conjunction with the consolidated financial statements and notes included in Citizens Bancshares Corporation's most recent reports on Form 10-K and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Results of operations for the most recent quarter are not necessarily indicative of operating results for any future periods. Any projections in this release are based on limited information currently available to management, which is subject to change. Although any such projections and the factors influencing them will likely change, the bank will not necessarily update the information, since management will only provide guidance at certain points during the year. Such information speaks only as of the date of this release. Additional information on these and other factors that could affect our financial results are included in filings by Citizens Bancshares Corporation with the Securities and Exchange Commission.

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North Carolina Judge Rules in Favor of Wells Fargo and Wachovia on Voting Preferred Shares

(BUSINESS WIRE)--On December 5, 2008, a North Carolina Business Court judge ruled in favor of Wachovia Corporation (NYSE:WB) and Wells Fargo & Company (NYSE:WFC) in a case brought to enjoin Wells Fargo from voting shares of voting preferred stock issued to Wells Fargo by Wachovia. The shares were issued to Wells Fargo on October 20, 2008 pursuant to a share exchange agreement entered in connection with the merger agreement between Wells Fargo and Wachovia and gave Wells Fargo 39.9% of the voting power of Wachovia. The Court’s ruling keeps the Wachovia shareholder vote on schedule for Tuesday, December 23, 2008. As previously disclosed, Wells Fargo will vote its shares of Wachovia voting preferred stock in favor of approval of the merger. The Court specifically found that Wachovia's board "acted in good faith, on an informed basis, and in the best interests of the Company in approving the Merger Agreement."

The Court also considered a provision allowing Wells Fargo’s preferred shares to remain outstanding in the event the merger remains unconsummated for 18 months following the shareholder vote. In granting preliminary injunctive relief relating to this provision, the Court noted that granting Plaintiff's request for injunctive relief on this provision would cause little if any harm to Wells Fargo or Wachovia because "[t]his is not a provision that affects the value or structure of the [Merger Agreement.]"

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S and P 500 Stock Buybacks Continue at Lower Levels; Retreat 48% in Third Quarter

/PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that preliminary results show S&P 500 stock buybacks posting $89.7 billion in stock repurchases during the third quarter of 2008, representing a 47.8% decline over the record setting $172.0 billion spent during the third quarter of 2007.

"Starting in the fourth quarter of last year, companies began to retreat from stock buybacks," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "Year-to-date, Standard & Poor's data shows that stock buybacks are coming in at $156 billion less than this time last year."

"Cash levels for the third quarter of 2008 were near an all-time high, so it's not that companies can't fulfill buyback programs," continues Silverblatt. "They are instead choosing to hold onto the cash, unsure of what the near-term may bring."

On a sector basis, Standard & Poor's notes that Energy was the only sector to increase buybacks during the third quarter of '08 versus the third quarter of '07. Information Technology continued to account for a quarter of all buybacks, with Energy now accounting for 18%.

"Given the current economic uncertainty, fewer employee options in the money, and the lack of alternative financing, Standard & Poor's expects fourth quarter buybacks to drop from the current level, with the full year posting a 35% decline," adds Silverblatt.

Since the buyback boom began during the fourth quarter of 2004, S&P 500 issues have spent approximately $1.73 trillion on stock buybacks compared to $1.87 trillion on Capital Expenditures and $907 billion on dividends.

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SunTrust Approved to Sell Remaining Allotment of Preferred Stock Under Treasury Program

/PRNewswire-FirstCall/ -- SunTrust Banks, Inc. (NYSE:STI) said today it has received preliminary approval to sell to the U.S. Treasury the remaining $1.4 billion of preferred securities available to it under Treasury's Capital Purchase Program. As previously announced, SunTrust has already received an initial $3.5 billion under the program. This additional amount brings the combined total to approximately $4.9 billion, or the full 3% of risk weighted assets for which SunTrust was eligible.

"As we now know from the most recent data, the economic situation is decidedly bleaker than was the case when we announced our initial, partial regulatory capital transaction under the Treasury program," said James M. Wells III, SunTrust Chairman and Chief Executive Officer. "Given the increasingly uncertain economic outlook, we have concluded that further augmenting our capital at this point is a prudent step, especially if the current recession proves to be longer and more severe than previously expected."

Mr. Wells added that "at SunTrust, we are acutely aware of the importance to economic stability of responsible lending by banks. This additional capital will enhance our capacity to continue to make good loans to qualified borrowers, work with homeowners, and pursue other opportunities that support economic stability, even as we manage through this difficult industry environment."

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 expected capital levels, charge-offs, credit results, and 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. 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 Reports on Form 8-K filed on October 23, 2008 with the Securities and Exchange Commission and available at the Securities and Exchange Commission's internet site (http://www.sec.gov/). Those factors include: difficult market conditions have adversely affected our industry; current levels of market volatility are unprecedented; the soundness of other financial institutions could adversely affect us; there can be no assurance that recently enacted legislation will stabilize the U.S. financial system; the impact on us of recently enacted legislation, in particular the Emergency Economic Stabilization Act of 2008 and its implementing regulations, and actions by the FDIC, cannot be predicted at this time; credit risk; weakness in the economy and in the real estate market, including specific weakness within our geographic footprint, has adversely affected us and may continue to adversely affect us; weakness in the real estate market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to adversely affect us; as a financial services company, adverse changes in general business or economic conditions could have a material adverse effect on our financial condition and results of operations; changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital or liquidity; the fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings; we may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; consumers may decide not to use banks to complete their financial transactions, which could affect net income; we have businesses other than banking which subject us to a variety of risks; hurricanes and other natural disasters may adversely affect loan portfolios and operations and increase the cost of doing business; negative public opinion could damage our reputation and adversely impact our business and revenues; we rely on other companies to provide key components of our business infrastructure; we rely on our systems, employees and certain counterparties, and certain failures could materially adversely affect our operations; we depend on the accuracy and completeness of information about clients and counterparties; regulation by federal and state agencies could adversely affect our business, revenue and profit margins; competition in the financial services industry is intense and could result in losing business or reducing margins; future legislation could harm our competitive position; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we may not pay dividends on our common stock; our ability to receive dividends from our subsidiaries accounts for most of our revenue and could affect our liquidity and ability to pay dividends; significant legal actions could subject us to substantial uninsured liabilities; recently declining values of residential real estate may increase our credit losses, which would negatively affect our financial results; deteriorating credit quality, particularly in real estate loans, has adversely impacted us and may continue to adversely impact us; disruptions in our ability to access global capital markets may negatively affect our capital resources and liquidity; any reduction in our credit rating could increase the cost of our funding from the capital markets; we have in the past and may in the future pursue acquisitions, which could affect costs and from which we may not be able to realize anticipated benefits; we depend on the expertise of key personnel; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase costs and reduce profitability and may adversely impact our ability to implement our business strategy; our accounting policies and methods are key to how we report our financial condition and results of operations, and these require us to make estimates about matters that are uncertain; changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition; our stock price can be volatile; our disclosure controls and procedures may not prevent or detect all errors or acts of fraud; our financial instruments carried at fair value expose us to certain market risks; our revenues derived from our investment securities may be volatile and subject to a variety of risks; we may enter into transactions with off-balance sheet affiliates or our subsidiaries that could result in current or future gains or losses or the possible consolidation of those entities; and we are subject to market risk associated with our asset management and commercial paper conduit businesses.

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Oxendine: No Formula for Diminished Value

Insurance Commissioner John W. Oxendine issued a directive late last week informing automobile insurance companies licensed to conduct business in Georgia about the proper handling of diminished value claims.

Oxendine ordered all auto insurance companies to cease using any language that implies that the Georgia Insurance Department has endorsed or approved a particular formula for determining diminution of value in physical damage automobile claims. Diminished value refers to the loss of value in a vehicle that has been damaged and repaired. The Commissioner issued a previous directive in 2001 regarding the Georgia Supreme Court ruling that set precedent for diminished value claims. Now the Commissioner wants to be sure that companies understand there is no single formula for determining the amount of diminished value to be paid in a particular claim.

“There seems to be some misunderstanding in the industry that a particular formula exists for diminished value,” Oxendine said. “I want to clarify the matter by reminding insurers that my office has never issued any regulation requiring the use of a specific formula for determining diminished value, so each claim should be evaluated on its own merits.”
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Merrill Lynch Stockholders Approve Transaction with Bank of America

(BUSINESS WIRE)--Merrill Lynch & Co., Inc. (NYSE: MER) announced that Bank of America’s acquisition of Merrill Lynch was approved today at its special stockholders meeting along with two other related proposals. Under the terms of the transaction, which was announced on September 15, 2008, Merrill Lynch stockholders will receive 0.8595 of a share of Bank of America common stock for each share of Merrill Lynch common stock held immediately prior to the merger and Merrill Lynch & Co., Inc. will become a wholly-owned subsidiary of Bank of America Corporation. The acquisition is expected to close by the end of the year, pending the receipt of regulatory approvals and the satisfaction of other customary closing conditions.

"By approving this transaction, Merrill Lynch stockholders expressed confidence that the combination of our firm and Bank of America will create one of the most powerful financial institutions in the world, with unmatched capabilities and service," said, John Thain, chairman and CEO of Merrill Lynch. "This combination will create great value for our stockholders and clients around the world."

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Oxendine Orders Blue Cross to Reimburse $12 Million

Insurance Commissioner John W. Oxendine announced today that he has ordered Blue Cross and Blue Shield of Georgia, Inc. to make additional claims payments of $12 million for certain ambulance services rendered to its policyholders that were improperly reimbursed.

The consent order is the result of a market conduct exam initiated by Oxendine’s office which revealed that Blue Cross incorrectly reimbursed out-of-network ambulance providers for services rendered. In a number of instances, Blue Cross made inconsistent payments for comparable ambulance services. In other cases, Blue Cross failed to increase its reimbursement rates over a number of years, in spite of the increasing costs of providing ambulance services.

“The proper payment of claims for emergency services is vital to the maintenance of our trauma system and equally important to protect consumers from excessive balance billing. I want insurers to know that I expect providers to be paid according to the requirements of Georgia law,” Oxendine said.

As a result of this action, Blue Cross has also been ordered to increase reimbursement rates for future out-of-network ambulance services. “Resolving prior practices is only part of the solution,” Oxendine said. “We must ensure that insurance companies reimburse medical providers and policyholders in a fair and equitable manner.”
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Governor Sonny Perdue’s Remarks to the Georgia Economic Outlook Luncheon

Our nation faces an economic storm that many are calling the most troubling of our generation. And though that may be true, just yesterday, I sat in the chambers of our nation’s first Capitol at Congress Hall and thought about the utter resiliency of our nation, of our people, of America.

During the almost ten years it served as our nation’s capitol building, Congress Hall witnessed many historic events: three states were admitted to the Union under its roof, the Bill of Rights was ratified there in 1791. The second Presidential inauguration of George Washington took place in the House chamber in 1793, as did the inauguration of President John Adams in 1797.

But, I was quickly jolted back to the reality, that while we can learn from history and prepare a vision for the future, we may only act in the present. An old proverb says, “Vision without action is merely a daydream, while action without vision is a nightmare.”

I joined my fellow Governors in Philadelphia for what the media described as states begging for a Washington bailout. Well ladies and gentleman, let me be the first to tell you … the meeting was anything but that.

From Georgia’s perspective, our meeting with President-elect Obama was not intended to ask the federal government to fill a hole in our state budget. As a matter of fact, it was just the opposite. Many Governors shared what we are doing to balance our budgets, and live within our means.

As President-elect Obama considers putting together a stimulus package, we encouraged him to look at our country’s long term needs – investing in projects, not in budgets. Simply doling out money to states to fill budget gaps is no different than handing it out to companies with flawed business models. I believe it is imperative that we ensure that any stimulus avoids creating an undue burden for the future generations who will be left to foot the bill.

I'm sure you've heard T. Boone Pickens decry what he calls the "greatest transfer of wealth in the history of mankind" between America and other countries. But what troubles me, and many of my fellow Governors, is that this bailout fever sweeping through our economy will result in the greatest transfer of debt in America's history to our sons, daughters and grandchildren.

As we wrapped up nearly two hours of open, candid discussion, looking at America’s future from both the federal and state perspective, I am confident that many of my fellow Governors, as well as President-elect Obama, realized how much we all had in common when it comes to getting America back on track.

I was especially encouraged that we were able to put partisanship aside. Everyone in the room recognized that governors must be engaged to ensure that America’s economic health is restored. Despite the bitter campaign that has raged, the spirit in Congress Hall yesterday was one of collaboration, and I was proud to be a part of it.

We talked a lot about the issues we are facing in our own states, but we also took a collective message insisting that the federal government act as we governors are forced to year after year balancing the budget, in good times and in the lean years.

Ralph Waldo Emerson said, “This time, like all times, is a very good one if we but know what to do with it.” Or, as one of my fellow governors said yesterday, “A crisis is a terrible thing to waste.”

Here in Georgia, we have been and will continue to take a hard look at the ship of state. Any ship at sea is going to pick up some barnacles along the way and at times like these you clean up the ship, making it more responsive and efficient.

Georgia, like other cities and states across America, has been affected by this ebbing tide throughout our national economy. But I can assure you we are plotting a course through rough seas just as we’ve done before, with a ship that is strong and built to last.

Since I have been office, we have made the prudent moves to position our state for growth and prosperity. We kept doing the things that are necessary, but we tightened our belts … Government got leaner, more efficient and more focused on delivering value for the taxpayer dollar.

Most importantly, we did the simple exercise that Georgia families do around the kitchen table every month balancing their checkbooks – we did what we had to do to make ends meet.

After Georgia went through a similar turbulent period six years ago, we spent conservatively and began building a rainy day fund – an action for which we were accused of hoarding money, of not spending enough.

Georgia is a state that has bounced back in the past, and that will continue to bounce back. And once again, we are poised to lead the nation in recovery.

Last year, the Pew Center ranked Georgia one of the best managed states in the nation. So it’s no surprise that Forbes currently ranks our business environment 5th best in the nation … Thanks Steve, we hope to be number one after today’s lunch.

Just recently, Newell Rubbermaid and NCR, both Fortune 500 companies, expanded their headquarters’ operations in Georgia and construction of the Kia plant continues to progress in West Point. And over the past seven years, our OneGeorgia Authority has awarded rural Georgia more than $230 million, resulting in total project investment exceeding $4 billion, while creating more than 40,000 jobs.

This is exactly the kind of investment that results in long-term, sustainable growth and could be a model for the nation.

Now it’s natural that the good things happening in our state are overshadowed in times like these, but I remind you of them today because we have enabled Georgia to weather this economic storm better than many other states.

This year, state revenues are down and probably do not fully reflect the damage from the most recent economic turmoil. But, we will manage this downturn well just like we did six years ago. We will emerge more focused on our basic tasks – leaner and stronger. We will be prepared to take advantage of business looking to invest when the national economy rebounds.

In closing, I would like to share something I read earlier this week about the origins of Thanksgiving.

In 1621, just months after 100 settlers came over on the Mayflower, Plymouth Governor William Bradford set aside a day for thanksgiving. They had sailed across the Atlantic Ocean on a trip that took two months, crammed into an area maybe half the size of your house. That first year; nearly 50 men, women and children died.

Now, let’s look at 1621 and 2008 side by side. In 1621, within a matter of months, nearly every family in that group had lost – not a job, not a big percentage of their 401k, not their house, not their business – but, a loved one. They were scratching out an existence, holding on for dear life, sometimes surviving, sometimes unable to sustain themselves or their families.

In the midst of their trials, Governor Bradford asked his people to be thankful for what they had and for the future that lay in front of them. He led the group with optimism and a hopefulness about the future based on a firm reliance on God.

That is the DNA from which we come … It is that strength of character and confidence from which we can build our future.

In the days ahead, we need – as a people – to recapture that faith and hopefulness. Georgia has been through rough seas and emerged each time stronger than before. Our best days are ahead; and while there will be some tough choices, it is up to us to confidently lay the groundwork that our rebound will be built upon.

Thank you and God bless!
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Post Properties Announces Reduced Quarterly Dividend, Departure of Chief Investment Officer and New Stock Repurchase Program

(BUSINESS WIRE)--Post Properties, Inc. (NYSE: PPS), an Atlanta-based real estate investment trust, today announced that its Board of Directors has reduced the quarterly dividend rate on its common stock to $0.20 per share for the fourth quarter of 2008. The Board of Directors currently anticipates maintaining this dividend rate throughout 2009, for an annualized dividend level of $0.80 per share. However, the amount of dividends to be paid by the Company will continue to be determined quarterly by the Board of Directors. The dividend is payable on January 15, 2009 to all common stock shareholders of record as of January 2, 2009.

“We believe that reducing the dividend level on the common stock is in the best interests of our shareholders,” said David P. Stockert, President and Chief Executive Officer. “Along with continuing to reduce costs, adjusting the dividend is an important part of our strategy to maintain the strength of our balance sheet and to provide financial flexibility through uncertain economic times. We expect that taking this step will help us preserve capital and improve our competitive position through the current business cycle.”

Post also announced today that Thomas D. Senkbeil, Executive Vice President and Chief Investment Officer, will leave the Company, effective on December 31, 2008. Mr. Senkbeil's responsibilities will be assumed by other members of Post’s Investment Group. The Company expects to record a charge in the fourth quarter related to contractual arrangements with Mr. Senkbeil.

Said Mr. Stockert, “With his considerable background and experience in real estate, Tom Senkbeil has made substantial contributions to Post, and attracted talented individuals to the Company. We appreciate his many accomplishments and wish him every continued success.”

Post also announced regular quarterly dividends for its 8.5 percent Series A Cumulative Redeemable Preferred Stock and its 7 5/8 percent Series B Cumulative Redeemable Preferred Stock. On its 8.5 percent Series A Cumulative Redeemable Preferred Stock, Post declared a regular quarterly dividend of $1.0625 per share for the fourth quarter. The dividend is payable on December 31, 2008 to all Series A preferred stock shareholders of record as of December 15, 2008. On its 7 5/8 percent Series B Cumulative Redeemable Preferred Stock, Post declared a regular quarterly dividend of $0.47656 per share for the fourth quarter. The dividend is payable on December 31, 2008 to all Series B preferred stock shareholders of record as of December 15, 2008. Dividends on the Company’s Series A and Series B preferred stock are unchanged from prior quarterly dividend levels.

Post also announced today that its Board of Directors adopted a new stock repurchase program under which Post may repurchase up to $200 million of common stock or preferred stock at market prices from time to time until December 31, 2010. Under its previous stock repurchase program which expires on December 31, 2008, Post repurchased approximately $3.7 million of common stock during 2007 and 2008. The Board of Directors also authorized Post’s management to explore opportunistic repurchases of debt in open market transactions from time to time.

Forward Looking Statement:

Certain statements made in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. Examples of such statements in this press release include expectations with respect to the anticipated future dividend rate and capital preservation. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. In particular, the Company notes that there can be no assurance that the current dividend level will maintained in future periods. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

The following are some of the factors that could cause the Company’s actual expectations to differ materially from those described in the Company’s forward-looking statements: the success of the Company’s business strategies discussed in its Annual Report on Form 10-K dated December 31, 2007, as amended and in previous filings with the SEC; future conditions in the global capital markets, including changes in the availability of credit and liquidity; future local and national economic conditions, including changes in levels of employment, interest rates, the availability of mortgage and other financing and related factors; uncertainties associated with the timing and amount of asset sales, the market for asset sales and the resulting gains/losses associated with such asset sales; conditions affecting ownership of residential real estate and general conditions in the multifamily residential real estate market. Other important risk factors regarding the Company are included under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and under the caption “Risk Factors” in the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2008 and may be discussed in subsequent filings with the SEC. The risk factors discussed in Form 10-K, as amended, and Form 10-Q under the caption “Risk Factors” are specifically incorporated by reference into this press release.

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Freddie Mac Advises NYSE of Intent To Meet Continued Listing Standard

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today reported in a filing with the U.S. Securities and Exchange Commission (SEC) that the company has notified the New York Stock Exchange (NYSE) that it intends to bring the share price of its common stock and the average share price of its common stock for 30 consecutive trading days above $1.00 by no later than May 18, 2009.

Freddie Mac is currently working with its conservator, the Federal Housing Finance Agency (FHFA), to determine the specific action or actions that Freddie Mac will take to cure the deficiency. If necessary to bring its share price and its average share price for 30 consecutive trading days above $1.00, and subject to the approval of the U.S. Department of the Treasury, Freddie Mac has advised the NYSE that it may undertake a reverse stock split in order to cure the deficiency by the May 18, 2009 date. Freddie Mac expects to determine the actual number of shares that will produce one share of common stock as a result of any reverse stock split based on both the market price of Freddie Mac's common stock prior to announcement of the split and additional input from FHFA and Treasury.

Under applicable NYSE rules, Freddie Mac now has until May 18, 2009, subject to supervision by the NYSE, to bring its share price and its average share price for 30 consecutive trading days above $1.00. If it fails to do so, the NYSE will initiate suspension and delisting procedures.

Freddie Mac's common stock and each of the company's listed series of preferred stock continue to trade on the exchange's main platform under the symbol or prefix "FRE," but with the addition of a ".BC" to indicate to investors that the company is not currently in compliance with the exchange's continued listing standards.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

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Acuity Brands Announces Offer to Purchase for Cash Any and All of Its Outstanding $160,000,000 6% Notes Due 2009

(BUSINESS WIRE)--Acuity Brands, Inc. (NYSE: AYI) (the “Company”) today announced that it has commenced a cash tender offer to purchase any and all of its outstanding 6% Notes due 2009 (CUSIP No. 00508YAA0) (the “Notes”). The tender offer is being made pursuant to an Offer to Purchase dated today (the “Offer to Purchase”) and related Letter of Transmittal, which more fully set forth the terms and conditions of the tender offer. As of December 1, 2008, the aggregate principal amount of Notes outstanding was $160 million.

The tender offer is scheduled to expire at 5:00 p.m., New York City time, on December 9, 2008, unless extended or earlier terminated. The Company expects to pay for Notes validly tendered and not withdrawn in the tender offer promptly following the expiration of the tender offer.

The purchase price being offered for the Notes is $990.00 per $1,000.00 principal amount of Notes validly tendered and accepted for purchase, plus the accrued and unpaid interest to but excluding the applicable settlement date. The settlement date will be the first business day following the date on which the tender offer expires, or as soon thereafter as practicable.

Except as set forth in the Offer to Purchase or as required by applicable law, Notes tendered may be withdrawn only on or before the expiration of the tender offer, and tendered Notes may not be withdrawn after the expiration of the tender offer.

The tender offer is subject to certain customary conditions but is not conditioned on the tender of a minimum principal amount of the Notes. The Company is not soliciting consents from holders of Notes in connection with the tender offer.

The Company has retained Citi to serve as the dealer manager for the tender offer and has retained Global Bondholder Services Corporation to serve as the depositary and information agent for the tender offer. Requests for copies of the Offer to Purchase and related Letter of Transmittal may be directed to Global Bondholder Services Corporation by telephone at 212-430-3774 or 866-540-1500, or in writing at 65 Broadway – Suite 723, New York, NY, 10006, Attention: Corporate Actions. Questions regarding the tender offer may be directed to Citi at 800-558-3745 or 212-723-6106.

This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes or any other securities. The tender offer is made only by and pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal. None of the Company, the dealer manager or the depositary and information agent makes any recommendations as to whether holders should tender their Notes pursuant to the tender offer. Holders must make their own decisions as to whether to tender Notes and, if so, the principal amount of Notes to tender.

Acuity Brands, Inc. owns and operates Acuity Brands Lighting, Inc. and Acuity Brands Technology Services, Inc. With fiscal year 2008 net sales of over $2.0 billion, Acuity Brands Lighting and Acuity Brands Technology Services combined are one of the world's leading providers of lighting fixtures and related products and services and include brands such as Lithonia Lighting®, Holophane®, Peerless®, Mark Architectural Lighting™, Hydrel®, American Electric Lighting®, Gotham®, Carandini®, SpecLight®, MetalOptics®, Antique Street Lamps™, Synergy® Lighting Controls, SAERIS™, and ROAM®. Headquartered in Atlanta, Georgia, Acuity Brands employs approximately 6,300 associates and has operations throughout North America and in Europe and Asia.

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First Coweta Bank Announces Third Quarter Results

/PRNewswire-FirstCall/ -- First Coweta Bank (OTC:FCWT) (BULLETIN BOARD: FCWT) , based in Newnan, Georgia, reports a net loss of ($484,363) or ($0.17) per share for the quarter ending September 30, 2008 as compared to a net loss of ($188,847) or ($0.07) per share for the same quarter in 2007. Net loss for the nine month period ending September 30, 2008 totals ($1,815,776) or ($0.65) per share as compared to net income of $606,439 or $0.22 per share for the same period in 2007. The bank's total assets have declined over the first nine months of 2008 from approximately $179 million on December 31, 2007 to approximately $163 million on September 30, 2008.

Third quarter 2008 results were primarily due to increased non-performing assets and compressed net interest margin. Non-performing assets totaled $14.2 million and $3.4 million at September 30, 2008 and September 30, 2007, respectively. The bank took provision for loan losses of $1.36 million for the quarter ended September 30, 2008. Our resulting allowance for loan loss was approximately $4.4 million at September 30, 2008, which represented approximately 3.23% of total loans. Management has added significant provisions in the first nine months of 2008 and will continue to evaluate our loan portfolio and real estate owned for additional changes to the allowance for loan loss reserve.

Mike Barber, President and Chief Executive Officer stated, "The communities that we serve continues to experience a downturn in housing and real estate related markets, especially as it relates to acquisition, construction, and development. As a result of this weakening, and the fact that our capital levels are more strained than in prior periods, we have considerably slowed down our loan origination activity. Gross loans decreased during the first nine months of 2008 from $148.5 million at December 31, 2007 to $136.3 million at September 30, 2008. Our Board of Directors, Officers, and employees remain committed to maintaining a sound financial institution during these difficult times. We will continue to monitor our loan quality and will make adjustments to our reserves as necessary to adequately cover any potential losses."

First Coweta Bank opened for business on July 12, 2004. The bank's stock is publicly traded over the counter under the symbol "FCWT."

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