Census Bureau Reports State Government Tax Collections Decrease $14 Billion in 2010

/PRNewswire/ -- State government tax collections decreased $14.3 billion to $704.6 billion in fiscal year 2010, the U.S. Census Bureau reported today. There was a $65.8 billion decrease in 2009.

These new data come from the 2010 Annual Survey of State Government Tax Collections , which contains annual statistics on the fiscal year tax collections of all 50 state governments, including receipts from licenses and compulsory fees. Tax revenues also include related penalty and interest receipts of the governments.

"The first response of researchers and analysts, when confronted with a new tax policy question, is to see what the Annual Survey of State Government Tax Collections data tell them about the question," said John Mikesell, a Chancellor's Professor at Indiana University's School of Public and Environmental Affairs. "These data make the public finance world easier to understand and to analyze."

According to the survey, corporate net income tax revenue was $38.2 billion, down 6.6 percent, while tax revenue on individual income was $236.4 billion, down 4.4 percent. General sales tax revenue was $224.5 billion, down 1.8 percent. These taxes comprised 70.8 percent of all state government tax collections nationally.

This survey provides an annual summary of taxes collected by state for up to 25 tax categories. For more information about this survey, visit http://www.census.gov/govs/statetax/.

Eleven states saw increases in total tax revenue in fiscal year 2010, led by North Dakota (9.6 percent), North Carolina (4.8 percent), Nevada (4.0 percent), and California (3.8 percent).

The states with the largest total tax revenue decreases were Wyoming (23.4 percent), Louisiana (14.2 percent), Oklahoma (13.5 percent), and Montana (11.0 percent).

States with the largest percent decrease in revenue from individual income taxes were Louisiana (22.2 percent), Tennessee (22.2 percent), North Dakota (18.0 percent) and New Hampshire (16.2 percent).

Severance taxes — collected for removal or harvesting of natural resources (e.g., oil, gas, coal, timber, fish, etc.) — were down $2.3 billion, a 17.4 percent decrease. This followed a 24.8 percent decrease in fiscal year 2009. The largest decreases in severance tax revenue were seen in the West and South. The Midwest saw an increase in severance tax revenue this year.

Revenue on taxes imposed distinctively on insurance companies and measured by gross or adjusted gross premiums (insurance premium sales tax) increased $754.0 million, up 5.0 percent. This followed a 4.6 percent decrease in fiscal year 2009. The largest increases in insurance premium sales tax revenue were seen in the Northeast and South.

These data do not include employer and employee assessments for retirement and social insurance purposes. Also excluded are collections for the unemployment compensation taxes imposed by each of the state governments. In addition, these data include tax collections for state governments only; they do not include tax collections from local governments.

Although the data are not subject to sampling error, the statistics are subject to possible inaccuracies in classification, response and processing. Every effort is made to keep such errors to a minimum through care in examining, editing and tabulating the data.

The tax revenue data pertain to state fiscal years that ended June 30, 2010, in all but four states. Amounts shown for these four states reflect the different timing of their respective fiscal years, which were the 12-month periods ending on March 31, 2010, for New York; Aug. 31, 2010, for Texas; and Sept. 30, 2010, for Alabama and Michigan.

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Dept of Audits Says State Will Gain at Least $355 Million Beginning July 1 if Law Passes

Lawmakers can balance deep cuts to the state by passing House Bill 39, which picks Georgia's cigarette tax up off the bottom of the national ranking and brings the state squarely to the middle.

Raising the tax $1 a pack from 37 cents, even accounting for declining sales, doubles Georgia's tobacco revenue, according to the state's official fiscal note.

"Given Georgia's multi-billion deficit and slashes to vital services such as child protection, public safety, hospitals, and elder servies, this additional revenue is very important," said Sarah Beth Gehl, the Georgia Budget & Policy's tax expert and deputy director.

Bottom line: New revenues should be part of a balanced approach to resolving Georgia's revenue problem.

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Sensible Tax Change Would Bring in $450 Million, Avoid Additional Service Cuts

The General Assembly is poised to slash the budget more in light of another month of declining revenues caused by the Great Recession and Georgia's structural deficit.

"This problem is too large to solve with budget cuts alone," said Sarah Beth Gehl, deputy director of the Georgia Budget & Policy Institute. "We should seek a balance of cuts and new revenues through sensible tax changes such as repealing the deduction of state income tax."

One concrete way to bring in $450 million* is to repeal the bizarre state tax deduction, which almost all states do not allow. The deduction not only costs nearly a half-billion dollars, but it unfairly lowers the effective tax rate for taxpayers who itemize.

"This tax change would not affect the vast majority of taxpayers with incomes less than about $50,000, since they do not itemize," said Gehl, "but for those who do, about 15 percent of filers, the average tax increase would be $85. (The total amount will still be deductible on the federal income tax.)

"Another $1 billion cut to state services will have an immediate negative impact on Georgia's economy, as
well as devastating effects on the education and healthcare infrastructure," said Executive Director, Alan Essig. "This sensible tax change should be part of a balanced solution going forward, along with the proposed increase in the cigarette tax."

* $450 million is an estimate calculated by the Institute on Taxation and Economic Policy, March 2010.

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Statement: Alan Essig, Executive Director, on October Revenue Decline and Worsening State Budget Deficit

The dismal October revenue numbers released today underscore the depth of Georgia's fiscal crisis. For these first four months of the new fiscal year, revenues are down by 15.1 percent.

The governor's preliminary analysis of the FY 2010 revenue projection estimates a 6.2 percent revenue decline, a decrease from the nearly 4.0 percent revenue decline the governor announced in July.

Although there has been no public announcement, this analysis is contained within the Official Statement for the State of Georgia General Obligation Bond Sale dated October 26, 2009.

The revised projection means Georgia likely is facing a $1.26 billion budget shortfall. This is an additional $320 million budget shortfall on top of the $940 million budget shortfall previously announced.

In response to the projections, the governor's budget office has a contingency plan that requires state agencies to cut their budgets again, this time by $320 million dollars (an additional three percent). This comes on top of the five percent budget cuts announced in July ($800 million dollars of cuts), and the double-digit percentage cuts ($500 million) already implemented when the FY 2010 budget was passed last April.

Also problematic are more than $2 billion in non-recurring revenues in the base of the FY 2010 budget. Unless lawmakers take a more balanced approach to solving this fiscal crisis, an approach that includes revenue options, Georgia will be facing further cuts to vital public services in FY 2011 and 2012, including those to healthcare, public safety, and education.

It is time for Governor Perdue and the General Assembly to bring a balanced approach and transparency to this fiscal crisis. The General Assembly should hold public hearings and learn about the state's revenue outlook from leading economists in the state.

The General Assembly also should hear from state agency staff and citizens about the impact of the budget cuts already in place and the potential impact of planned cuts.

In order for Georgia to prosper, lawmakers must not rely soley on cuts to public services. Georgia can not cut its way to prosperity. The governor and General Assembly must look to raise revenues, as a majority of states have done, including a majority of our conservative southern neighbors. They must take a balanced, informed, and thoughtful approach to solve the state fiscal crisis, and this must include strategic revenue options.

Alan Essig
The Georgia Budget & Policy Institute

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Companies See Prospect of Tax Audits as Governments Seek Revenue, According to Poll by Tax Governance Institute

/PRNewswire/ -- As governments seek additional revenue in the current tight economy, senior business professionals say the increased possibility of an audit by taxing authorities is the most significant tax risk facing their organizations today, according to a survey conducted by the Tax Governance Institute (TGI).

Some 30 percent of more than 500 respondents polled during a recent TGI webcast identified the possibility of a tax audit as their number one risk. Also, high on the list of anticipated tax risks were increased regulatory requirements (27 percent) and accuracy of tax provisions (26 percent).

"As countries and states seek additional revenue, corporate tax executives are bracing for a round of heightened regulatory scrutiny," said Hank Gutman, principal at KPMG LLP, the audit, tax and advisory firm, and executive director of the TGI. "Companies know they will need to have documentation in place and accessible to demonstrate compliance with the many domestic and international tax requirements they regularly address in today's global economy."

Companies are also seeking to improve cash-flow in the current economic climate, the survey found. In fact, identifying and increasing the potential use of tax refunds, credits and incentives has been the top tax area of focus by companies in the past six months, according to 37 percent of respondents.

"By being alert to both overpayment of estimated taxes and opportunities to claim credits or utilize incentives, companies can reclaim some much-needed cash, a valuable commodity in today's difficult marketplace," said Scott Vance, principal at KPMG and moderator of the webcast.

The survey also revealed that compliance and reporting has been the tax function most focused on by companies during the past six months, according to 44 percent of respondents, followed by enhancing tax savings (21 percent).

"In difficult economic times, tax professionals can play a critical, strategic role for their enterprises," said Gutman, "by both limiting compliance risks and effectively managing their refund and incentives opportunities."

Among other key findings:
-- During the past six months, most companies (47 percent) kept tax
department resources about constant, with 28 percent reporting a
decrease in their in-house tax resources.
-- A majority of companies (69 percent) view tax risk management as an
integral part of their organization's enterprise risk management
policy.
-- Most companies (51 percent) said that reporting by the company's tax
function to the board and audit committee has remained about the same,
while 18 percent said that such reporting has seen an increase over
the past six months.



The Tax Governance Institute currently comprises more than 14,000 members. Launched in early 2007, it provides a forum for board members, corporate management, stakeholders, and government representatives to share knowledge regarding the identification, oversight, management, and appropriate disclosure of tax risk.

The survey was conducted during the Institute's March 12 webcast, "Identifying and Managing Tax Risks in an Economic Downturn." A replay of the webcast can be accessed at the TGI Web site at www.taxgovernanceinstitute.com.

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History and Overview of the Federal Estate Tax

/24-7/ -- The federal estate tax is defined by the Internal Revenue Service as a tax on the right to transfer property at death. The tax is imposed on the taxable estate, which is the total fair market value of the property transferred at death (called the gross estate) minus allowable deductions. Deductions allowed under the Internal Revenue Code include administration expenses, funeral expenses, charitable transfers and property that will be passed on to a surviving spouse.

History of the Estate Tax

Prior to 1916, death taxes were enacted temporarily to raise funds for a specific purpose. For example, the first version of the estate tax was enacted by Congress in 1797 to fund the formation of the American Navy. The Revenue Act of 1862 enacted an inheritance tax and introduced a gift tax for the first time in order to fund the Civil War effort. The War Revenue Act of 1898 implemented an inheritance tax of .74%.to 15%, which was used to fund the Spanish-American War.

The Revenue Act of 1916 assessed taxes on estates based on their value as of the date of death. An exemption of $50,000 was allowed. Rates ranged from 1% for estates with a net value below $50,000 to 10% for estates over $5,000,000. These rates were increased in 1917 to 2% for estates valued at less than $50,000 and 25% for estates over $10,000,000. The Revenue Act of 1918 cut the rates on estates valued below $1,000,000 and expanded the estate tax base by including life insurance proceeds and the value of the surviving spouse's interest in the estate above $40,000 of the estate's value.

The Revenue Act of 1924 raised the tax rate to 40% on estates over $10,000,000 and added a gift tax. The gift tax was repealed in 1926 and the estate tax rate was lowered to 1% for estates below $50,000 and set at 20% for estates over $10,000,000. Between 1932 and 1942, estate and gift taxes were increased several times and exemption amounts were lowered. Estate tax rates were at their highest rate in 1941 - 77% for estates over $50,000,000.

The Tax Reform Act of 1976 brought sweeping changes to the estate and gift tax laws. The reform included a generation-skipping tax. The three separate taxes became part of a unified system for the first time. Estate and gift taxes were capped at 70% for estates over $5,000,000.

The Economic Recovery Act of 1981 phased in an increase in the unified tax transfer credit from $47,000 to $192,000 and a decrease in the maximum tax rate from 70% to 50%. The limits on estate and gift tax marital deductions were eliminated. The Taxpayer Protection Act of 1997 phased in an increase in the amount excluded from taxes from $600,000 in 1997 to $1,000,000 in 2006.

Current Law

The current estate taxes are nearing the end of the phased changes set forth in the Economic Growth and Tax Relief Reconciliation Act of 2001 ("2001 Act"). The 2001 Act gradually reduced the maximum estate tax rates from 50% in 2002, to the current rate of 45%, where it will remain through 2009. The amounts exempt from estate taxes increased from $1,000,000 in 2002 to $2,000,000 for 2008. This amount increases to $3,500,000 for 2009. The 2001 Act repeals the federal estate tax in 2010. Unless Congress acts to extend the tax relief offered by the 2001 Act, the rates will return to pre-2001 Act levels in 2011.

The history of federal estate taxes indicates that the U.S. government has used estate taxes as a source of revenue during tough economic times and war. With the war in Iraq draining resources and the current economic recession, it seems possible that Congress will not extend the estate tax relief provided in the 2001 Act.

Article provided by the Prince Law Firm. Please visit us at www.probateprince.com.

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Tanger Reports Third Quarter 2008 Results

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

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

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

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

Third Quarter Highlights

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

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

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

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

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

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

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

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

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

Financing Activities and Balance Sheet Summary

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

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

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

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

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

Portfolio Operating Results

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

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

Investment and Other Activities

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

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

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

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

Tanger Elects New Board Member

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

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

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

2008 FFO Per Share Guidance

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

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



Third Quarter Conference Call

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

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

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Ameris Bancorp Reports Results for Third Quarter of 2008

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

Provision for Loan Losses and Credit Quality

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

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

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

Trends in Net Interest Income and Net Interest Margin

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

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

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

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

Non-Interest Income

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

Non-Interest Expense

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

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

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State of Georgia's Revenue Collecctions for May 2008 Cause Concerns

State of Georgia's Revenue Collections for May 2008 Cause Concerns: Governor Should Appoint Commission to Study Revenue Structure

The latest Georgia revenue figures released by the Department of Revenue show that revenues have declined by 0.1 percent through the first 11 months of the fiscal year. The Governor's FY 2008 revenue estimate is based on revenue growth of 2.7 percent. If revenue growth remains flat in June, the FY 2008 Georgia budget will be facing a $500 to $600 million shortfall.

"Because of the Governor's wise fiscal management over the past four years, the state has healthy reserve funds. These reserves put the Governor in a position to manage the economically driven revenue shortfalls without cutting vital government services," said Alan Essig, the executive director of the Georgia Budget and Policy Institute. The Revenue Shortfall Reserve (RSR) contains over $1.5 billion. If revenues remain sluggish throughout FY 2009, it is expected that almost all of the $1.5 billion of reserve funds would be needed to cover budget shortfalls.

"The continued revenue slowdown highlights the fiscal irresponsibility of those legislative leaders who proposed significant tax cuts this past legislative session. Along with this slowdown, there are continued needs, such as trauma care, full education funding, the mental health system, and health insurance for children who are eligible but not enrolled in Medicaid and PeachCare. In light of legislators wasting time with politically motivated tax cut rhetoric, the Governor should take the responsible action of establishing a blue ribbon commission to study the revenue and budget realities of Georgia," Essig concluded.