GBPI Releases New Fact Sheet: Income Tax Evens Out the Burden for Families

The Georgia Budget and Policy Institute (GBPI) released a fact sheet highlighting the attributes of the income tax that make it a good counterweight to sales taxes, especially for families.

The Special Council on Tax Reform and Fairness for Georgians meets today to finalize recommendations before state legislators return on Monday, Jan. 10. Those recommendations will go to a joint House and Senate committee, which will craft legislation for an up or down vote by legislators.

The Council is likely to recommend a shift from the income tax to the sales tax, based on a presentation by Chairman A.D. Frazier in December.

The income tax is an important mechanism for recognizing the different needs of families and vulnerable populations. For example, the income tax excludes a base amount of income per person to ensure we are not taxing the most basic level of income.

Each person in a four person family receives a personal exemption ($5,400 for the parents and $3,000 for each child). A single person receives a $2,700 personal exemption. Thus, a family of four earning $50,000 pays about $1,900 in state income taxes, compared to about $2,500 in income taxes for a single person earning $50,000. In contrast, the sales tax does not recognize that it takes a larger amount of income to provide for more people.

"The state income tax is a tool that allows us to balance some of the negative aspects of the sales tax," said Sarah Beth Gehl, deputy director of the Georgia Budget and Policy Institute. "A dramatic shift from income to sales tax will likely mean middle class families and vulnerable populations will foot more of the bill for state services."

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Study: Recession Will Cost Baby Boomers Up To $40,000 in Social Security Benefits

/PRNewswire/ -- Baby Boomers will see greatly reduced Social Security benefits over the course of their retirements due to an unprecedented combination of low wage growth and no annual cost-of-living adjustments (COLA), according to a new study by The Senior Citizens League. And those who first become eligible for Social Security in 2011 will receive lower benefits than retirees born a year earlier.

This is the most comprehensive study ever released to show the recession's impact on Social Security benefits for the first wave of baby boomers.

It found that the combination of rapidly slowing wage growth and no COLA is shrinking the normal increases in initial retirement benefits. An inequity will also be created: people born in 1949 (who turn 62 next year) will receive lower benefits than retirees with similar work histories born just one year earlier. Moreover, the lack of a COLA will reduce lifetime Social Security benefits by as much as $40,000 for many retirees with average earning histories (reductions will be felt regardless of the age at which people begin claiming benefits, and some higher-earning seniors stand to lose even more).

Recent wage and consumer price trends – two of the key factors in determining Social Security benefits – have combined to form a "perfect storm" for the first wave of Baby Boomers. Since the start of the recession, average wage growth has plummeted, and there will be no COLA in 2011 for the second year in a row.

Under normal economic conditions, the initial benefits of each succeeding birth year tend to be slightly higher than the previous birth year as wages rise over time. But average wage growth has been slowing since the 1980s and has dropped markedly since 2008.

Furthermore, low inflation (a situation that government economists expect to continue) led to no COLA in 2010 and 2011. The loss of the compounding effect of a COLA on lifetime benefits is high, and grows the longer a senior spends in retirement. Seniors who turn 62 during the years of no COLA are hit with the full brunt of the compounding loss and stand to lose the most.

Aggravating the situation is the fact that, although general inflation is low, seniors' living costs have increased, especially due to rising Medicare premiums.

Lifetime Social Security Benefits an Average Senior Will Lose Due to No/Low COLAs(1)

Year of Birth	62-Year-Old Retiree	66-Year-Old Retiree
1946	-$30,163.60	-$39,152.50
1947	-$31,436.10	-$39,463.20
1948	-$20,871.00	-$26,130.60
1949	-$8,908.90	-$11,141.30
1950	-$2,229.20	-$2,880.90
1951	-$463.00	-$648.70

(1) Low COLA is defined as less than 2.8 percent, which is the average COLA paid from 1975 through 2009. This chart shows how much low or no COLA will affect benefits over a 20-year (for those retiring at age 66) or 25 year (for those retiring at age 62) retirement.

"Large numbers of seniors will be at risk of outliving their retirement income and being pushed into poverty due to an unprecedented combination of economic factors," said Larry Hyland, chairman of The Senior Citizens League. "The Senior Citizens League is adamantly opposed to deficit reduction proposals that would cut COLAs. Instead, Congress needs to pass an emergency COLA provision or guarantee a minimum average COLA to prevent this disturbing erosion in Social Security benefits."

The Senior Citizens League also recommends that any legislation that changes how Social Security benefits are calculated is devised in a way that is fair to all, to prevent inequities between retirees close in age.

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AARP Survey Looks at Recession's Impact on Lower-Income Adults 45+

/PRNewswire/ -- An AARP report released today for the first time paints a picture of the struggles lower-income older adults are facing during the recession. The AARP Closer Look June 2010 survey found that nearly six in 10 Americans 45+ who make less than $25,000 a year say they are either "not at all" or "not too" confident they will have enough money to pay medical and living expenses in retirement, compared to 36 percent of higher income adults.

More than four in 10 (42 percent) lower-income older adults rate their health as "fair" or "poor," compared to only 18 percent of those who earn more than $25,000 a year. Additionally, many report they are struggling to meet basic needs, like paying for food and electricity, heat and water bills.

"While the recession has been devastating for many older Americans, this recent data indicates lower-income folks are being hit particularly hard," said Jo Ann Jenkins, president of AARP's affiliated charity, the AARP Foundation. "Each day, millions are choosing between essentials like buying groceries or paying for prescriptions. It's a devastating choice that no one should have to make."

Similar to the general population, lower-income older adults have cut back, but they are doing so in greater numbers. Nearly 40 percent had to cancel or postpone needed healthcare or dental treatments in the last six months--twice as many as higher-income adults. Twenty-three percent skipped doses, cut pills in half or did not fill prescriptions, compared with 15 percent of higher-income people. Lower-income adults are twice as likely to have looked for more affordable housing in the last six months compared to higher-income levels. And half used their car less to cut down on gas costs.

Additional findings for all income levels indicate the continual struggles older Americans are experiencing in tough economic times:

-- More than one in four adults 45+ (28 percent) stopped contributing to
retirement savings in the past six months, and 14 percent of adults 45
to 64 reported having to prematurely withdraw funds from retirement
savings vehicles--a trend which has increased at a significant rate
over the recession.
-- When asked about current value of retirement savings available, nearly
half (48 percent) reported having less than $50,000 in savings, with
16 percent of those reporting no savings at all.
-- With many older workers currently facing extended unemployment, a
large majority (63 percent) of respondents said that, based on what
they have experienced or observed, older workers face age
discrimination in the workplace.
-- Twenty percent of people 45+ reported problems paying their medical
bills in the last six months. The percentages were significantly
higher for Hispanics (29 percent) and African-Americans (33 percent).
-- More than a quarter of people 45+ have put off or postponed getting
needed health care or dental treatments or services in the last six
months.
-- Gas prices continue to be a challenge for more than a third (35
percent) of people age 45+, but finding adequate public transportation
alternatives is also a problem, 34 percent say.
-- A third of people age 45+ report are fixing up their homes to stay
there longer even as almost half (45 percent) note that their
community lacks affordable housing if they chose to move.


AARP Foundation (www.aarp.org/foundation) and AARP Real Relief (www.aarp.org/realrelief) have resources to help lower-income older Americans make ends meet, including federal benefits assistance, money management programs and tips to cut expenses.

AARP Closer Look is a twice-yearly poll to help understand the effect of social and economic changes on baby boomers and older Americans. The full survey is available at http://www.aarp.org/money/budgeting-saving/info-09-2010/closer-look-econ-0610. html.

Methodology

ICR conducted the Closer Look Survey for AARP via telephone between June 9 and June 30, 2010, among a nationally representative sample of 1,000 respondents 45+. One hundred respondents were Hispanic and 100 were African American. The margin of error is +/- 3.35 percent at a 95 percent confidence level.

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Federal Income Taxes On Middle-Income Families at Historically Low Levels

/PRNewswire/ -- The following release by Chuck Marr and Gillian Brunet was released today by the Center on Budget and Policy Priorities:

Middle-income Americans are now paying federal taxes at or near historically low levels, according to the latest available data. That's true whether it comes to their federal income taxes or their total federal taxes.

-- Income taxes: A family of four in the exact middle of the income
spectrum will pay only 4.6 percent of its income in federal income
taxes this year, according to a new analysis by the Urban
Institute-Brookings Institution Tax Policy Center. This is the
second-lowest percentage in the past 50 years.
-- Overall federal taxes: Middle-income households are paying overall
federal taxes -- which include income as well as payroll and excise
taxes -- at or near their lowest levels in decades, according to the
latest data from the Congressional Budget Office (CBO).

Federal Income Taxes Have Declined Significantly in Recent Decades

Federal income taxes on middle-income families have declined significantly in recent decades.

In 2000, the year before the 2001 tax cut that President Bush and Congress enacted, the median-income family of four paid 8.0 percent of its income in individual income taxes, according to Tax Policy Center estimates -- a smaller share than in any year since 1967 (except for 1998 and 1999).(1) The Bush tax cuts further reduced middle-income tax obligations.

This year, the Making Work Pay tax credit, which President Obama and Congress enacted as part of the 2009 American Recovery and Reinvestment Act, is providing a credit of $800 to married joint filers ($400 to single filers). A median-income family with two children thus will receive an $800 tax cut in the return it files this year.

With the new tax cut, the median family's federal income taxes will equal just 4.6 percent of its income in 2009. That is lower than in any year since 1955 (the first year for which these data are available) except for 2008, when another stimulus-related tax cut was in effect.

The 4.6 percent effective tax rate -- the percentage of its income that a family pays in taxes -- is well below the 15 percent marginal tax rate that a family of four in the exact middle of the income spectrum faces. Typically, such a family reduces its effective tax rate by taking the standard deduction (or, in some cases, itemized deductions), personal exemptions, and tax credits such as the child tax credit. The Making Work Pay tax credit further reduces that family's effective tax rate.

Overall Federal Taxes Also at Low Levels

The decline in income taxes on middle-class households in recent years has driven a decline in these households' overall federal taxes.

Households in the middle fifth of the income spectrum paid an average of 14.2 percent of their income in overall federal taxes in 2006, the latest year for which data are available, according to CBO.(2) This is just slightly above this group's effective tax rate of 13.8 percent in 2003, which was the lowest level since at least 1979.

Most Americans pay more in payroll taxes, which support Social Security and Medicare, than they do in income taxes. Thus, the 14.2 percent figure reflects the impact of payroll taxes far more than income taxes.

Due to the impact of the recession and the temporary tax cuts in the Recovery Act, particularly the Making Work Pay tax credit, CBO data for 2009 (when they become available) will likely show that middle-income families faced significantly lower effective overall federal tax rates than in 2006.

This analysis, and other reports that provide a greater understanding of trends in taxation, are posted to: www.cbpp.org.

The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.

NOTES:

(1) Tax Policy Center, "Historical Federal Income Tax Rates for a Family of Four," April 12, 2010. The Tax Policy Center's estimates were derived by updating (using Treasury's methodology) a 1998 Treasury Department analysis that examined changes since 1955 in the percentage of income that the median-income family of four pays in federal income taxes.

(2) The CBO study covers the 1979-2006 period and includes federal income, payroll, and excise taxes. Congressional Budget Office, "Historical Effective Federal Tax Rates, 1979-2006," April 2009.

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Estate Planners Await 'Big Bang' in 2010 From Tax and Retirement Law Changes

/PRNewswire/ -- People who are nearing or planning for retirement will be hearing from their advisors this fall about changes in federal law that could have a huge impact on their financial plans.

From Roth IRA conversions to the estate tax, there is a lot on the horizon to consider for individuals who want to have enough money for retirement, ensure the continuation of a family business, or leave an inheritance to a charity or their heirs.

"What happens in the next few months could cause some of the biggest changes we've seen in the trusts and estates field," said Roy Adams, professor emeritus of estate planning and taxation at Northwestern University School of Law where he taught both subjects for 25 years.

Adams is going to explain recent and upcoming changes and offer suggestions for dealing with them September 14 in a presentation at the Minneapolis Convention Center. Securian Trust Company and The Salvation Army are co-sponsoring the live event in Minneapolis for estate planning professionals entitled, "Coping with Change - Like It or Not." This is the 17th Annual Estate and Charitable Gift Planning Institute in the Twin Cities and usually draws 700 to 800 tax, estate, and wealth management professionals.

At the heart of the pending changes is the estate tax. In 2010 it is scheduled to be repealed for one year. In 2011, it will revert to its 2000 version. Though many believe that is unlikely to happen, there will be changes to estate and gift tax rules and Americans need to prepare for that. The changes could have an impact on family-owned businesses and heirs and also could affect other aspects of financial planning including charitable contributions and gift taxes.

To add even more drama, the income limitation on converting regular IRAs, 401(k) accounts, and 403(b) accounts to Roth IRAs will be removed in 2010, opening it up to wealthy individuals. The expectation is that many will want to capitalize on this opportunity.

Adams' co-presenter, Christopher Hoyt, is a professor at the University of Missouri - Kansas City School of Law where he teaches courses in federal income taxation and business operations. Hoyt also is the co-chairman of the American Bar Association committee on charitable organizations.

"Coping With Change - Like It or Not," will be broadcast live to several locations throughout North Dakota and Minnesota, as well as nationally. The presentation in Minneapolis is free and open to the public: Go to http://www.thesalarmy.org/cont/royadams.htm to register.

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One in Seven Seniors Faces Social Security Check Cuts in 2010

/PRNewswire / -- Close to seven million seniors -- one in every seven -- will receive a smaller Social Security check next year, according to a new analysis by The Senior Citizens League (TSCL). Millions of other seniors who do not have their Medicare premiums automatically deducted from their checks will also have fewer Social Security dollars leftover next year.

These seniors will be affected because their Social Security Cost of Living Adjustment (COLA) is forecast to be zero next year, while their Medicare Part B (doctors' visits, tests, and outpatient hospital care), Part C (Medicare Advantage) and/or Part D (prescription drugs) premiums are forecast to rise.

Affected seniors generally fall into one of two groups, if not both:

1. MEDICARE PART B: HOLD HARMLESS PROVISION: Approximately three million
seniors will endure cuts because they are not protected by a "hold
harmless" provision that prevents the vast majority of beneficiaries
from receiving smaller Social Security checks in years when Medicare
Part B premiums exceed the COLA. Two groups of seniors will not receive
hold harmless protection in 2010:
a. MEANS TESTING: 2,121,500 beneficiaries who pay higher premiums due
to Part B "means testing." Individuals with adjusted gross incomes
(AGI) above $85,000 and couples over $170,000 are affected.
b. NEW ENROLLEES: 848,000 new enrollees will pay the 2010 premium
rate, forecast by Medicare's Trustees to be $104.20 per month,
instead of the current rate of $96.40 per month that tens of
millions of seniors will continue to pay next year due to hold
harmless.

2. MEDICARE PARTS C & D: More than 3.8 million other seniors will see
smaller Social Security checks next year due solely to likely increases
in Medicare Parts C and D, for which no hold harmless provision exists.
Note: Millions of other seniors will also be affected, as our estimate
includes just those who will have automatic reductions to their Social
Security checks. Additional millions of seniors who pay plans directly
will also have fewer Social Security dollars leftover next year.


"It's bad enough that seniors will have to endure rising costs next year without an increase in their Social Security checks -- but to actually cut checks for millions of seniors in this economy borders on cruelty," said Daniel O'Connell, TSCL chairman. "Our members are already unable to afford their prescriptions, rent, and air conditioning. We simply can't survive year-after-year of cuts."

A majority of those aged 65 and over who receive a Social Security check depend on it for at least 50 percent of their total income, and one in three beneficiaries rely on it for 90 percent or more of their total income.

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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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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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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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Georgia-Carolina Bancshares Announces Second Quarter Results

PRNewswire-FirstCall/ -- Georgia-Carolina Bancshares, Inc. (BULLETIN BOARD: GECR) , parent company of First Bank of Georgia, reported today net income of $866,000 ($.25 per diluted common share) for the three months ended June 30, 2008, compared to $935,000 ($.27 per diluted common share) for the three months ended June 30, 2007.

Net income for the six months ended June 30, 2008 was $1,618,000 ($.46 per diluted common share) compared to $1,666,000 ($.48 per diluted common share) for the six months ended June 30, 2007.

Remer Y. Brinson III, President & CEO of the Company stated, "We are pleased with our results given the current state of the economy and interest rates. Due to the rapid decrease in interest rates by the Federal Reserve, our net interest margin has declined. This is the primary reason for the decrease in year over year quarterly income."

"Consumer and commercial loan growth has been strong during the first half of 2008, while residential mortgage and construction lending has slowed. We have also enjoyed a 14.7% growth in non-interest bearing deposits and a 17.50% growth in NOW accounts," Brinson continued.

"We feel that this growth is in response to our community bank model and our ATM Anywhere FREE Checking program which provides an automatic refund of other banks' ATM charges," Brinson said.

Georgia-Carolina Bancshares, Inc. is a bank holding company with $456 million in assets as of June 30, 2008. The Company owns First Bank of Georgia, which conducts banking operations through offices in Augusta, Columbia County, and Thomson, Georgia.

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.