ATLANTA, Jan. 17 /PRNewswire-FirstCall/ -- Fidelity Southern Corporation ("Fidelity") reported net income of $321,000 for the fourth quarter of 2007 compared to $2,898,000 for the same quarter in 2006, a decrease of $2,577,000. Basic and diluted earnings per share for the fourth quarter of 2007 were $.03 compared to $.31 for the same period in 2006.
Net income for the year ended December 31, 2007, was $6,634,000 compared to $10,374,000 for 2006, a decrease of $3,740,000 or 36.1%. Basic and diluted earnings per share for the year ended December 31, 2007, were $.71 compared to $1.12 for 2006.
The decline in earnings was primarily due to a $4.9 million increase in the provision for loan losses in 2007 equal to $.33 per share and an expense of $567,000, or $.04 per share, to recognize a proportional share of Visa litigation settlements and reserves, and the incremental liability for certain other Visa litigation under our indemnification obligation as a Visa member bank. The additional provision reflects both deterioration in the Company's real estate construction and consumer portfolios, as well as the continued outlook for a weak economy.
Other significant year over year developments were: -- Net interest income grew 7.5% -- Noninterest income grew 14.1% -- Equity grew 5.6% -- Loans grew 4.3% -- Allowance for loan losses grew 16.8%
Chairman James B. Miller, Jr. said, "The housing market in Atlanta and Florida continues to look for equilibrium. Some of the builders we have lent to are experiencing surprisingly good sales while others suffer. Our challenge is to support those builders who are showing the determination and ability to manage through this period. A seasoned builder is better able to build and sell houses and to sell lots than is the Bank. Where it becomes necessary, we will dispose of property in an orderly fashion.
"In 2008 we expect nonperforming assets will continue to grow, at least in the first quarter and probably also in the second quarter, as some builders will not sell enough homes to keep loans current. However, early signs are that traffic in some of the subdivisions where we lend has picked up. The loan loss reserve will also continue to be adjusted as appropriate.
"In addition to costs of credit issues, management believes it prudent to continue to position the Bank for a leadership role in the growth of the greater Atlanta market. This is a challenge in what we see as a period of likely flat profitability. Management plans to add lenders this year and two were hired in January. We have begun construction of a new branch building and two additional branch locations are being considered. We believe the second half of 2008 should see improving profitability."
Fidelity President H. Palmer Proctor, Jr. said, "We continued to be successful with our deposit account acquisition program as our transaction and savings account balances increased 6.2% from the end of 2006. These accounts provide stability in our funding capacity at a lower average interest cost and also generate noninterest income. Our revenue from service charges on deposit accounts increased 13.8% over last year.
"We also continued to see noninterest income increases from our SBA and indirect automobile lending sales and servicing activities in 2007, with increases of 30.3% and 13.8% in indirect automobile revenues and in SBA revenues, respectively.
"It is also important to note that, despite the challenges faced in our loan portfolio, our equity increased 5.6% in 2007 over the end of 2006 and our regulatory capital percentages continued to exceed well capitalized guidelines. While conservatively managing the Company through a difficult economic period, we will continue to strive to improve operating results and build long-term shareholder value, while emphasizing our dedication to providing superior service."
At December 31, 2007, total assets were $1.686 billion compared to $1.649 billion at the end of 2006, a $37.3 million or 2.3% increase. In other year- ago comparisons, loans increased 4.3% to $1.388 billion, total loans (including loans held-for-sale) increased 4.5% to $1.452 billion, deposits increased 1.4% to $1.406 billion, and shareholders' equity increased 5.6% to $100 million.
Net interest income for the fourth quarter and year ended December 31, 2007, increased $222,000 and $3.3 million, or 1.9% and 7.5%, respectively, when compared to the same periods in 2006. These increases were driven by increases in average interest-earning assets. The net interest margin decreased seven basis points to 2.99% in the fourth quarter of 2007 and decreased by six basis points to 3.04% for the year ended December 31, 2007, when compared to the same periods in 2006. The decline in net interest income in the fourth quarter of 2007 was primarily the result of lower interest income relating to reductions in the prime rate and the increase in nonperforming loans and to a lesser extent due to a relatively higher cost of funds because of the credit crunch and the high cost of deposit retention experienced in the quarter.
Total interest income for the fourth quarter and year ended December 31, 2007, increased $1.1 million and $15.7 million, or 3.9% and 16.0%, respectively, compared to the same periods in 2006. The increase in interest income for the fourth quarter of 2007 was the result of a decrease of 4 basis points in yield on average interest-earning assets while average interest earning assets increased $68.4 million or 4.5%. For the year ended December 31, 2007, compared to 2006, the yield on average interest earning assets increased 41 basis points and average interest-earning assets increased $138.5 million or 9.8%.
Interest expense for the fourth quarter and year ended December 31, 2007, increased $856,000 and $12.4 million, or 5.3% and 22.9%, respectively, compared to the same periods in 2006. For the fourth quarter of 2007 compared to the same period in 2006, the increase in interest expense was attributable to an increase in interest bearing liabilities of $82.4 million net of a four basis point decrease in the cost of interest bearing liabilities. The increase in interest expense for the year ended December 31, 2007, compared to 2006 was primarily attributable to a 47 basis point increase in the cost of interest-bearing liabilities and an increase in the volume of average interest-bearing liabilities of $137.5 million or 10.9%.
The provision for loan losses for the fourth quarter and the year ended December 31, 2007, driven by the housing slowdown and a weakening economy, was $3.6 million and $8.5 million, respectively, compared to $1.3 million and $3.6 million for the same periods in 2006. Net charge-offs increased $3.9 million for the year ended December 31, 2007, when compared to 2006. The ratio of net charge-offs to average loans outstanding was .45% for the year ended December 31, 2007, compared to .19% for 2006. The allowance for loan losses as a percentage of loans increased from 1.05% at December 31, 2006, to 1.17% at December 31, 2007. The ratio of adversely classified loans to total loans increased from 2.30% at December 31, 2006, to 3.35% at December 31, 2007. Nonperforming assets increased to $24.2 million at December 31, 2007, compared to $5.5 million at December 31, 2006. The increase in nonperforming assets was primarily driven by increases in nonaccrual loans and other real estate, over 84% of the balances of which are secured by real estate. The remaining 16% is secured by other collateral. Management believes it has identified, charged down, and charged off these nonperforming assets timely and appropriately.
Noninterest income increased $13,000 and $2.2 million, or 0.3% and 14.1%, to $4.3 million and $17.9 million, respectively, in the fourth quarter and year ended December 31, 2007, compared to the same periods in 2006. These increases were primarily due to increases in indirect lending revenues and SBA lending activities. Indirect lending revenues increased $368,000 and $1.3 million, or 37.9% and 30.3%, to $1.3 million and $5.4 million, respectively, during the fourth quarter and year ended December 31, 2007, when compared to the same periods last year due to an increase in the number and volume of indirect loans sold and increases in servicing and other fees from indirect loans serviced. Revenue from SBA lending activities decreased $425,000 and increased $297,000, or (46.3%) and 13.8%, to $492,000 and $2.4 million, for the fourth quarter and the year ended December 31, 2007, respectively, when compared to the same periods in 2006. The decrease in SBA revenue in the fourth quarter was a result of lower gains on sales compared to the same quarter in 2006. Service charges on deposit accounts increased $144,000 and $583,000, or 13.2% and 13.9%, to $1.2 million and $4.8 million, respectively, due to the growing number of transaction accounts resulting from the transaction account acquisition program initiated in early 2006 to attract lower-costing deposits.
Noninterest expense for the fourth quarter and year ended December 31, 2007, increased $2.1 million and $6.6 million, or 20.2% and 16.4%, to $12.5 million and $47.2 million, respectively, when compared to the same periods in 2006. These increases were primarily related to increases in salaries and benefits expense of $646,000 and $3.5 million, or 11.0% and 15.7%, to $6.5 million and $25.8 million, respectively, and increases in other operating expenses of $1.0 million and $2.0 million, or 79.3% and 39.3%, to $2.3 million and $7.0 million, respectively. The increases in salaries and benefits expenses were primarily due to the addition of seasoned loan production and branch operations staff, including SBA, indirect automobile, and commercial lenders to increase lending volume, and staff for the new branches added in 2006 and in 2007. The increases in other operating expenses were primarily related to Visa litigation costs, hiring expenses, business development costs, and costs related to growing numbers of accounts and related transaction activity. During the fourth quarter of 2007, the Company recorded a charge of $567,000 pre-tax for its proportional share of a settlement of the Visa litigation with American Express, a reserve for the lawsuit between Visa and Discover Financial Services, and the incremental liability for certain other Visa litigation under our indemnification obligation as a Visa member bank. Fidelity, as a member bank of Visa, is obligated for its proportional share of legal expenses. Visa has a planned public offering for the first quarter of 2008. The value of Fidelity's proportionate shares of the Visa stock, based on current estimates, is expected to more than offset the above charges.
Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking services and a credit related insurance product through 23 branches in Atlanta, Georgia, a branch in Jacksonville, Florida, and an insurance office in Atlanta, Georgia. Automobile loans and SBA loans are provided through employees located throughout the Southeast. For additional information about Fidelity's products and services, please visit the website at http://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 2006 Annual Report filed on Form 10-K with the Securities and Exchange Commission.
Contacts: Martha Fleming, Rod Marlow Fidelity Southern Corporation (404) 240-1504 FIDELITY SOUTHERN CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) QUARTERS ENDED YEARS ENDED (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) DECEMBER 31, DECEMBER 31, 2007 2006 2007 2006 INTEREST INCOME LOANS, INCLUDING FEES $26,855 $25,622 $105,924 $89,477 INVESTMENT SECURITIES 1,765 1,878 7,237 7,893 FEDERAL FUNDS SOLD AND BANK DEPOSITS 60 102 301 434 TOTAL INTEREST INCOME 28,680 27,602 113,462 97,804 INTEREST EXPENSE DEPOSITS 14,341 13,960 57,902 45,351 SHORT-TERM BORROWINGS 739 483 2,316 2,623 SUBORDINATED DEBT 1,453 1,117 4,945 4,378 OTHER LONG-TERM DEBT 341 458 1,519 1,923 TOTAL INTEREST EXPENSE 16,874 16,018 66,682 54,275 NET INTEREST INCOME 11,806 11,584 46,780 43,529 PROVISION FOR LOAN LOSSES 3,550 1,300 8,500 3,600 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,256 10,284 38,280 39,929 NONINTEREST INCOME SERVICE CHARGES ON DEPOSIT ACCOUNTS 1,236 1,092 4,790 4,207 OTHER FEES AND CHARGES 464 458 1,872 1,642 MORTGAGE BANKING ACTIVITIES 64 142 339 676 BROKERAGE ACTIVITIES 144 198 747 753 INDIRECT LENDING ACTIVITIES 1,338 970 5,390 4,136 SBA LENDING ACTIVITIES 492 917 2,444 2,147 BANK OWNED LIFE INSURANCE 296 288 1,166 1,109 OTHER OPERATING INCOME 270 226 1,163 1,029 TOTAL NONINTEREST INCOME 4,304 4,291 17,911 15,699 NONINTEREST EXPENSE SALARIES AND EMPLOYEE BENEFITS 6,511 5,865 25,815 22,314 FURNITURE AND EQUIPMENT 782 636 2,942 2,636 NET OCCUPANCY 1,113 960 4,105 3,557 COMMUNICATION EXPENSES 433 396 1,729 1,548 PROFESSIONAL AND OTHER SERVICES 857 697 3,582 2,955 ADVERTISING AND PROMOTION 227 216 928 1,348 STATIONERY, PRINTING AND SUPPLIES 185 245 758 850 INSURANCE EXPENSES 69 73 296 299 OTHER OPERATING EXPENSES 2,273 1,268 7,048 5,061 TOTAL NONINTEREST EXPENSE 12,450 10,356 47,203 40,568 INCOME BEFORE INCOME TAX EXPENSE 110 4,219 8,988 15,060 INCOME TAX EXPENSE (211) 1,321 2,354 4,686 NET INCOME $321 $2,898 $6,634 $10,374 EARNINGS PER SHARE: BASIC EARNINGS PER SHARE $0.03 $0.31 $0.71 $1.12 DILUTED EARNINGS PER SHARE $0.03 $0.31 $0.71 $1.12 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC 9,362,028 9,282,164 9,330,932 9,268,132 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-FULLY DILUTED 9,362,636 9,290,880 9,344,891 9,279,520 FIDELITY SOUTHERN CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) December 31, ASSETS 2007 2006 CASH AND DUE FROM BANKS $23,442 $32,659 FEDERAL FUNDS SOLD 6,605 26,316 CASH AND CASH EQUIVALENTS 30,047 58,975 INVESTMENTS AVAILABLE-FOR-SALE 103,149 108,796 INVESTMENTS HELD-TO-MATURITY 29,064 33,182 INVESTMENT IN FHLB STOCK 5,665 4,834 LOANS HELD-FOR-SALE 63,655 58,268 LOANS 1,388,358 1,330,756 ALLOWANCE FOR LOAN LOSSES (16,288) (13,944) LOANS, NET 1,372,070 1,316,812 PREMISES AND EQUIPMENT, NET 18,821 18,803 OTHER REAL ESTATE 7,307 - ACCRUED INTEREST RECEIVABLE 9,367 9,312 BANK OWNED LIFE INSURANCE 26,699 25,694 OTHER ASSETS 20,640 14,503 TOTAL ASSETS $1,686,484 $1,649,179 LIABILITIES DEPOSITS: NONINTEREST BEARING DEMAND $131,597 $154,392 INTEREST BEARING DEMAND/ MONEY MARKET 314,067 286,620 SAVINGS 216,442 182,390 TIME DEPOSITS, $100,000 AND OVER 285,497 276,536 OTHER TIME DEPOSITS 458,022 486,603 TOTAL DEPOSIT LIABILITIES 1,405,625 1,386,541 FEDERAL FUNDS PURCHASED 17,000 20,000 OTHER SHORT-TERM BORROWINGS 58,954 52,061 SUBORDINATED DEBT 67,527 46,908 OTHER LONG-TERM DEBT 25,000 37,000 ACCRUED INTEREST PAYABLE 6,760 7,042 OTHER LIABILITIES 5,655 4,980 TOTAL LIABILITIES 1,586,521 1,554,532 SHAREHOLDERS' EQUITY COMMON STOCK 45,997 44,815 ADDITIONAL PAID IN CAPITAL 167 0 ACCUMULATED OTHER COMPREHENSIVE LOSS (804) (1,590) RETAINED EARNINGS 54,603 51,422 TOTAL SHAREHOLDERS' EQUITY 99,963 94,647 TOTAL LIABILITIES AND SHARE-HOLDERS' EQUITY $1,686,484 $1,649,179 BOOK VALUE PER SHARE $10.67 $10.19 SHARES OF COMMON STOCK OUTSTANDING 9,368,904 9,288,222 FIDELITY SOUTHERN CORPORATION ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (UNAUDITED) (DOLLARS IN THOUSANDS) QUARTERS ENDED YEARS ENDED DECEMBER 31, DECEMBER 31, 2007 2006 2007 2006 BALANCE AT BEGINNING OF PERIOD $14,886 $13,548 $13,944 $12,643 CHARGE-OFFS: COMMERCIAL, FINANCIAL AND AGRICULTURAL 200 - 200 1 SBA - - - 67 REAL ESTATE-CONSTRUCTION 522 - 1,934 - REAL ESTATE-MORTGAGE 20 2 82 5 CONSUMER INSTALLMENT 1,745 1,199 5,301 3,616 TOTAL CHARGE-OFFS 2,487 1,201 7,517 3,689 RECOVERIES: COMMERCIAL, FINANCIAL AND AGRICULTURAL 2 87 257 505 SBA - 3 - 145 REAL ESTATE-CONSTRUCTION 150 - 190 - REAL ESTATE-MORTGAGE - 2 78 7 CONSUMER INSTALLMENT 187 205 836 733 TOTAL RECOVERIES 339 297 1,361 1,390 NET CHARGE-OFFS 2,148 904 6,156 2,299 PROVISION FOR LOAN LOSSES 3,550 1,300 8,500 3,600 BALANCE AT END OF PERIOD $16,288 $13,944 $16,288 $13,944 RATIO OF NET CHARGE-OFFS DURING PERIOD TO AVERAGE LOANS OUTSTANDING, NET 0.61% 0.27% 0.45% 0.19% ALLOWANCE FOR LOAN LOSSES AS A PERCENTAGE OF LOANS 1.17% 1.05% 1.17% 1.05% NONPERFORMING ASSETS (UNAUDITED) (DOLLARS IN THOUSANDS) DECEMBER 31, 2007 2006 NONACCRUAL LOANS $14,371 $4,587 REPOSSESSIONS 2,512 937 OTHER REAL ESTATE 7,308 - TOTAL NONPERFORMING ASSETS $24,191 $5,524 LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING $23 $- RATIO OF LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING TO TOTAL LOANS -% -% RATIO OF NONPERFORMING ASSETS TO TOTAL LOANS AND REPOSSESSIONS 1.64% 0.40% FIDELITY SOUTHERN CORPORATION LOANS, BY CATEGORY (UNAUDITED) PERCENT (DOLLARS IN THOUSANDS) CHANGE DECEMBER 31, Dec. 31, 2007/ 2007 2006 Dec. 31, 2006 COMMERCIAL, FINANCIAL AND AGRICULTURAL $107,325 $107,992 (0.62)% TAX-EXEMPT COMMERCIAL 9,235 14,969 (38.31)% REAL ESTATE MORTGAGE - COMMERCIAL 189,881 163,275 16.30 % TOTAL COMMERCIAL 306,441 286,236 7.06 % REAL ESTATE-CONSTRUCTION 282,056 306,078 (7.85)% REAL ESTATE-MORTGAGE 93,673 91,652 2.21 % CONSUMER INSTALLMENT 706,188 646,790 9.18 % LOANS 1,388,358 1,330,756 4.33 % LOANS HELD-FOR-SALE: ORIGINATED RESIDENTIAL MORTGAGE LOANS 1,412 321 339.88 % SBA LOANS 24,243 14,947 62.19 % INDIRECT AUTO LOANS 38,000 43,000 (11.63)% TOTAL LOANS HELD-FOR-SALE 63,655 58,268 9.25 % TOTAL LOANS $1,452,013 $1,389,024 FIDELITY SOUTHERN CORPORATION AVERAGE BALANCE, INTEREST AND YIELDS (UNAUDITED) YEARS ENDED December 31, 2007 December 31, 2006 Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Interest-earning assets: Loans, net of unearned income Taxable $1,390,625 $105,222 7.57% $1,239,437 $88,884 7.17% Tax-exempt (1) 12,837 1,052 8.20% 10,949 871 7.95% Total loans 1,403,462 106,274 7.57% 1,250,386 89,755 7.18% Investment securities Taxable 137,370 6,964 5.07% 155,955 7,893 5.03% Tax-exempt (2) 6,782 420 6.19% - - - Total investment securities 144,152 7,384 5.12% 155,955 7,893 5.03% Interest-bearing deposits 1,134 58 5.08% 1,484 74 5.00% Federal funds sold 4,855 243 5.01% 7,280 360 4.94% Total interest- earning assets 1,553,603 113,959 7.34% 1,415,105 98,082 6.93% Cash and due from banks 23,383 22,411 Allowance for loan losses (14,644) (13,133) Premises and equipment, net 18,875 15,516 Other real estate owned 2,918 80 Other assets 51,385 43,405 Total assets $1,635,520 $1,483,384 Liabilities and shareholders' equity Interest-bearing liabilities : Demand deposits $293,336 $10,243 3.49% $234,871 $6,561 2.79% Savings deposits 203,529 8,881 4.36% 177,505 7,328 4.13% Time deposits 749,803 38,778 5.17% 683,074 31,462 4.61% Total interest- bearing deposits 1,246,668 57,902 4.64% 1,095,450 45,351 4.14% Federal funds purchased 10,310 548 5.31% 12,171 637 5.23% Securities sold under agreements to repurchase 21,674 657 3.03% 28,954 928 3.21% Other short-term borrowings 24,516 1,111 4.54% 25,337 1,058 4.17% Subordinated debt 54,478 4,945 9.08% 46,908 4,378 9.33% Long-term debt 35,888 1,519 4.23% 47,203 1,923 4.07% Total interest- bearing liabilities 1,393,534 66,682 4.79% 1,256,023 54,275 4.32% Noninterest-bearing : Demand deposits 130,835 127,978 Other liabilities 14,092 10,517 Shareholders' equity 97,059 88,866 Total liabilities and shareholders' equity $1,635,520 $1,483,384 Net interest income/ spread $47,277 2.55% $43,807 2.61% Net interest margin 3.04% 3.10% (1) Interest income includes the effect of taxable-equivalent adjustment for 2007 and 2006 of $350,000 and $278,000 respectively. (2) Interest income includes the effect of taxable-equivalent adjustment for 2007 for $147,000. FIDELITY SOUTHERN CORPORATION AVERAGE BALANCE, INTEREST AND YIELDS (UNAUDITED) QUARTERS ENDED December 31, 2007 December 31, 2006 Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Interest-earning assets: Loans, net of unearned income Taxable $1,428,415 $26,731 7.43% $1,345,851 $25,422 7.50% Tax-exempt (1) 9,694 188 7.70% 14,111 296 8.32% Total loans 1,438,109 26,919 7.43% 1,359,962 25,718 7.50% Investment securities Taxable 130,472 1,653 5.07% 148,757 1,878 5.05% Tax-exempt (2) 10,883 173 6.37% - - - Total investment securities 141,355 1,826 5.17% 148,757 1,878 5.05% Interest-bearing deposits 1,206 14 4.57% 1,596 22 5.35% Federal funds sold 4,106 46 4.43% 6,079 80 5.24% Total interest- earning assets 1,584,776 28,805 7.21% 1,516,394 27,698 7.25% Cash and due from banks 23,722 23,364 Allowance for loan losses (16,193) (13,752) Premises and equipment, net 18,854 16,570 Other real estate owned 6,602 - Other assets 54,536 45,567 Total assets $1,672,297 $1,588,143 Liabilities and shareholders' equity Interest-bearing liabilities : Demand deposits $308,624 $2,677 3.44% $268,061 $2,303 3.41% Savings deposits 221,065 2,345 4.21% 182,582 2,078 4.52% Time deposits 725,171 9,319 5.10% 754,730 9,579 5.04% Total interest- bearing deposits 1,254,860 14,341 4.53% 1,205,373 13,960 4.59% Federal funds purchased 15,402 191 4.91% 10,843 152 5.57% Securities sold under agreements to repurchase 25,418 185 2.87% 26,698 233 3.46% Other short-term borrowings 32,011 363 4.50% 10,739 98 3.61% Subordinated debt 67,527 1,453 8.53% 46,908 1,117 9.45% Long-term debt 32,587 341 4.15% 44,837 458 4.05% Total interest- bearing liabilities 1,427,805 16,874 4.69% 1,345,398 16,018 4.73% Noninterest-bearing : Demand deposits 131,190 138,033 Other liabilities 13,915 12,183 Shareholders' equity 99,387 92,529 Total liabilities and shareholders' equity $1,672,297 $1,588,143 Net interest income/ spread $11,931 2.52% $11,680 2.52% Net interest margin 2.99% 3.06% (1) Interest income includes the effect of taxable-equivalent adjustment for 2007 and 2006 of $64,000 and $95,000 respectively. (2) Interest income includes the effect of taxable-equivalent adjustment for 2007 for $61,000.
