Fidelity Southern 8-K Results of Operations and Financial Condition

Released January 22, 2009, at 3:27 p.m. by PR Newswire

FOR IMMEDIATE RELEASE

Contacts: Martha Fleming, Steve Brolly
Fidelity Southern Corporation (404) 240-1504

FIDELITY SOUTHERN CORPORATION
REPORTS FOURTH QUARTER LOSS;
CAPITAL RATIO INCREASES;
TARP MONEY RECEIVED

     ATLANTA, GA (January 22, 2009) — Fidelity Southern Corporation (“Fidelity” or “the Company”) (NASDAQ:LION), Holding Company for Fidelity Bank, reported a net loss of $7.6 million for the fourth quarter of 2008 compared to net income of $321,000 for the same quarter of 2007. Basic and diluted loss per share for the fourth quarter of 2008 were $.80 compared to earnings per share of $.03 for the same period in 2007. Net loss for 2008 was $12.2 million compared to net income of $6.6 million for the same period in 2007. Basic and diluted loss per share for 2008 were $1.30 compared to earnings per share of $.71 for the same period in 2007.

     Chairman James B. Miller, Jr. said, “We continued to have positive pre-tax pre-provision earnings of $15.2 million which, with the TARP funding, leaves us in a strong position for the future.”

CAPITAL

     Fidelity reported total risk based capital ratio improved in the Bank to 13.09% at December 31, 2008 from 10.45% at September 30, 2008 and 10.30% at December 31, 2007, reflecting the $48.2 million TARP investment from the U.S. Treasury in December 2008.

TARP

     Miller also said, “The $48 million in TARP funding had a positive immediate impact on the Company’s capital, liquidity, and its ability to lend. Beginning with the receipt of TARP funds in December, we have increased loans to consumers to purchase automobiles by over $10 million, and anticipate this to increase each quarter. We also hired 53 people into the mortgage company in January, which will increase mortgage lending significantly. The volume of mortgage loans produced should increase more than $50 million in the first quarter.”

Fidelity Southern Corporation
Fourth Quarter Earnings Release
January 22, 2009

ALLOWANCE

     Fidelity reported an increase in the allowance for loan losses to $33.7 million or 2.43% of total loans at December 31, 2008, and $17.1 million greater than year-end 2007.

PROVISION

     The provision for loan losses for the fourth quarter and the year 2008 was $14.7 million and $36.6 million, respectively, compared to $3.6 million and $8.5 million for the same periods in 2007, due to increased charge-offs and the continued adverse credit trends in the construction loan portfolio and in the consumer loan portfolio through December 31, 2008. Net charge-offs increased $4.9 million and $13.3 million to $7.0 million and $19.4 million for the fourth quarter and the year 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 2.43% at December 31, 2008.

OREO, CHARGE-OFFS, NONPERFORMING

     Net charge-offs decreased to $7.0 million in the fourth quarter from $7.9 million in the third quarter of 2008, and were $19.4 million for the year 2008. The ratio of net charge-offs to average loans outstanding was 1.36% for 2008 compared to .45% for 2007.

     Nonperforming loans, repossessions and other real estate totaled $115.2 million at the end of the fourth quarter, an increase of $23.9 million in the quarter.

     Nonperforming residential construction and development loans at December 31, 2008, included 171 houses and 631 lots and land totaling approximately $85.7 million. During the quarter approximately $4.6 million of nonperforming loans were paid down by our customers while approximately $27.0 million in loans were moved to nonperforming.

     During the fourth quarter, $2.3 million of ORE assets were sold while $744,000 was added to ORE net of $930,000 in charge-downs. ORE consists of 49 houses, representing 55% of total balances, and 135 lots and two commercial properties. ORE increased to $15.1 million at year-end 2008.

     Management believes it has identified and placed on nonaccrual, charged down, and charged off nonperforming assets timely and appropriately.

COST OF FUNDS

     Cost of funds decreased 106 basis points to 3.63% and 94 basis points to 3.85% for the fourth quarter and the year 2008, respectively, compared to the same periods in 2007 as a result of moderating deposit pricing. Totally Free checking balances increased 43% this year, while remote deposit volume grew to 31.9% of all deposits in December 2008.

2

Fidelity Southern Corporation
Fourth Quarter Earnings Release
January 22, 2009

REAL ESTATE

     New residential construction loan advances made during the quarter totaled $15.9 million, while the payoffs of construction loans totaled $19.3 million. There are 523 houses and 1,939 lots financed at December 31, 2008, compared to 700 houses and 2,138 lots at December 31, 2007.

     Construction, and A&D loans totaled at year-end 2008 $224.8 million, down 21.4% from $286.1 million at year-end 2007.

     Residential construction and A&D loans as a percentage of capital decreased from 177% at December 31, 2007, to 124% at December 31, 2008. The regulatory guideline is a maximum of 100%.

     All real estate loans, except for owner-occupied properties, as a percentage of capital decreased from 237% at December 31, 2007, to 172% at December 31, 2008. The regulatory guideline is a maximum of 300%.

NET INCOME

     The decrease in net income for both the fourth quarter and the year 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 in the consumer loan portfolios requiring an increase in the allowance for loan losses.

NET INTEREST INCOME

     Net interest income for the fourth quarter decreased $1.1 million or 9.4% over the same period in 2007 and for the year 2008, decreased $362,000 or .8% when compared to the same period of 2007. The net interest margin decreased 24 basis points to 2.62% in the fourth quarter compared to 2.86% in the third quarter of 2008, decreased 37 basis points in the fourth quarter of 2008 when compared to the same period in 2007, and decreased 20 basis points to 2.84% for 2008 compared to the same period in 2007. The decreases are the result of lower margins from reductions in the prime rate, foregone interest due to an increase in nonperforming assets and the continued pressures on cost of deposits in the Atlanta market.

INTEREST INCOME

     Total interest income for the fourth quarter and the year 2008 decreased $4.4 million and $9.4 million, or 15.2% and 8.3%, respectively, compared to the same periods in 2007. The decreases in interest income in the fourth quarter and the year 2008 were the result of a decrease of 128 basis points and 100 basis points in the yield on average interest-earning assets, respectively, offset in part by the growth in average interest-earning assets for the fourth quarter and year 2008, which increased $55.3 million and $95.4 million or 3.5% and 6.1%, respectively.

3

Fidelity Southern Corporation
Fourth Quarter Earnings Release
January 22, 2009

INTEREST EXPENSE

     Interest expense for the fourth quarter and the year 2008 decreased $3.2 million and $9.0 million, or 19.2% and 13.6%, respectively, compared to the same periods in 2007. The decreases in interest expense were attributable to an increase in average interest-bearing liabilities of $66.0 million and $104.0 million, respectively, more than offset by a 106 basis point and 94 basis point decrease in the cost of interest-bearing liabilities, respectively.

NONINTEREST INCOME

      Noninterest income decreased $562,000 and 13.1% to $3.7 million in the fourth 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 $406,000 or 82.5% to $86,000 and decreased indirect lending revenues of $358,000 or 25.6% to $1.0 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. Partially offsetting the decrease were increases in other income and income on bank owned life insurance.

     Noninterest income decreased $275,000 or 1.5% to $17.6 million for the year ended December 31, 2008, compared to 2007, due to a decrease in SBA lending revenues of $1.2 million, or 48.9%, to $1.3 million compared to the same period last year. The decrease is a result of a reduction in loans sold from $40.0 million for the year ended December 31, 2007 to $18.1 million in 2008. Other operating income decreased $375,000 or 19.6% to $1.5 million due to lower retail brokerage commissions, and lower insurance commissions net of gains on asset sales. The decrease in other income is somewhat offset by a $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.

NONINTEREST EXPENSE

      Noninterest expense for the fourth quarter decreased $37,000 or .3% to $12.4 million compared to the same period in 2007. The decrease is a result of a reduction in salaries and employee benefits of $471,000 or 7.2% to $6.0 million as the Bank reduced the number of employees, offset by higher other operating expense, which increased $475,000 or 20.9% to $2.7 million due primarily to higher ORE expense, FDIC insurance premiums and loss on valuation of SBA loans held-for-sale.

     Noninterest expense for the year ended December 31, 2008, increased $1.6 million or 3.5% to $48.8 million compared to 2007. The increase for the year ended December 31, 2008, is a result of ORE write-downs and related expenses which increased to $3.3 million for 2008 compared to $105,000 in 2007, FDIC insurance expense which increased $818,000, appraisal fees which increased $230,000 and a loss of $192,000 related to impairment on SBA loans held-for-sale. Offsetting these increases was the VISA litigation accrual activity in which a $567,000 accrual was recorded in the fourth quarter of 2007 for the Bank’s estimated proportional share of a settlement of the VISA litigation. In the first quarter of 2008, this accrual was reversed as the

4

Fidelity Southern Corporation
Fourth Quarter Earnings Release
January 22, 2009

result of VISA funding a litigation escrow account through its initial public offering. In 2008, an additional $142,000 VISA accrual was recorded. The net change for this VISA related litigation was a reduction in other expense of approximately $1.0 million for the year ended December 31, 2008, compared to 2007. Other year over year reductions in expense came from decreased employee placement fees, fraud and other losses, dealer track application expense, travel expense, credit reports, clearing and administration fees and business development expense as the Bank continued to implement cost cutting measures.

     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 atwww.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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FIDELITY SOUTHERN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

	QUARTER ENDED						YEAR ENDED
	DECEMBER 31,						DECEMBER 31,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)	2008			2007			2008			2007
INTEREST INCOME
LOANS, INCLUDING FEES	$	22,468		$	26,855		$	96,398		$	105,924
INVESTMENT SECURITIES		1,835			1,765			7,441			7,237
FEDERAL FUNDS SOLD AND BANK DEPOSITS		26			60			215			301
TOTAL INTEREST INCOME		24,329			28,680			104,054			113,462
INTEREST EXPENSE
DEPOSITS		11,518			14,341			48,722			57,902
SHORT-TERM BORROWINGS		385			739			2,065			2,316
SUBORDINATED DEBT		1,307			1,453			5,284			4,945
OTHER LONG-TERM DEBT		419			341			1,565			1,519
TOTAL INTEREST EXPENSE		13,629			16,874			57,636			66,682
NET INTEREST INCOME		10,700			11,806			46,418			46,780
PROVISION FOR LOAN LOSSES		14,700			3,550			36,550			8,500
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		(4,000	)		8,256			9,868			38,280
NONINTEREST INCOME
SERVICE CHARGES ON DEPOSIT ACCOUNTS		1,168			1,176			4,757			4,730
OTHER FEES AND CHARGES		470			464			1,944			1,872
MORTGAGE BANKING ACTIVITIES		95			64			340			339
INDIRECT LENDING ACTIVITIES		1,040			1,398			5,227			5,449
SBA LENDING ACTIVITIES		86			492			1,250			2,444
SECURITIES GAINS, NET		—			2			1,306			2
BANK OWNED LIFE INSURANCE		374			296			1,278			1,166
OTHER OPERATING INCOME		510			413			1,534			1,909
TOTAL NONINTEREST INCOME		3,743			4,305			17,636			17,911
NONINTEREST EXPENSE
SALARIES AND EMPLOYEE BENEFITS		6,040			6,511			25,827			25,815
FURNITURE AND EQUIPMENT		672			782			2,949			2,942
NET OCCUPANCY		1,071			1,114			4,137			4,105
COMMUNICATION EXPENSES		401			433			1,654			1,729
PROFESSIONAL AND OTHER SERVICES		1,031			859			3,823			3,559
ADVERTISING AND PROMOTION		236			226			645			927
STATIONERY, PRINTING AND SUPPLIES		137			185			647			758
INSURANCE EXPENSES		79			69			344			296
OTHER OPERATING EXPENSES		2,746			2,271			8,813			7,071
TOTAL NONINTEREST EXPENSE		12,413			12,450			48,839			47,202
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE		(12,670	)		111			(21,335	)		8,989
INCOME TAX (BENEFIT) EXPENSE		(5,101	)		(210	)		(9,099	)		2,355
NET (LOSS) INCOME	$	(7,569	)	$	321		$	(12,236	)	$	6,634
(LOSS) EARNINGS PER SHARE:
BASIC (LOSS) EARNINGS PER SHARE	$	(0.80	)	$	0.03		$	(1.30	)	$	0.71
DILUTED (LOSS) EARNINGS PER SHARE	$	(0.80	)	$	0.03		$	(1.30	)	$	0.71
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC		9,535,624			9,341,021			9,437,087			9,330,932
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—FULLY DILUTED		9,538,588			9,343,009			9,473,594			9,329,302

FIDELITY SOUTHERN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	DECEMBER 31,
(DOLLARS IN THOUSANDS)	2008			2007
ASSETS
CASH AND DUE FROM BANKS	$	68,841		$	23,442
FEDERAL FUNDS SOLD		23,184			6,605
CASH AND CASH EQUIVALENTS		92,025			30,047
INVESTMENTS AVAILABLE-FOR-SALE		128,749			103,149
INVESTMENTS HELD-TO-MATURITY		24,793			29,064
INVESTMENT IN FHLB STOCK		5,282			5,665
LOANS HELD-FOR-SALE		55,840			63,655
LOANS		1,388,022			1,388,358
ALLOWANCE FOR LOAN LOSSES		(33,691	)		(16,557	)
LOANS, NET		1,354,331			1,371,801
PREMISES AND EQUIPMENT, NET		19,311			18,821
OTHER REAL ESTATE		15,063			7,307
ACCRUED INTEREST RECEIVABLE		8,092			9,367
BANK OWNED LIFE INSURANCE		27,868			26,699
OTHER ASSETS		31,759			20,909
TOTAL ASSETS	$	1,763,113		$	1,686,484
LIABILITIES
DEPOSITS:
NONINTEREST-BEARING DEMAND	$	138,634		$	131,597
INTEREST-BEARING DEMAND/ MONEY MARKET		208,723			314,067
SAVINGS		199,465			216,442
TIME DEPOSITS, $100,000 AND OVER		317,540			285,497
OTHER TIME DEPOSITS		579,320			458,022
TOTAL DEPOSIT LIABILITIES		1,443,682			1,405,625
FEDERAL FUNDS PURCHASED		—			5,000
OTHER SHORT-TERM BORROWINGS		55,017			70,954
SUBORDINATED DEBT		67,527			67,527
OTHER LONG-TERM DEBT		47,500			25,000
ACCRUED INTEREST PAYABLE		7,038			6,760
OTHER LIABILITIES		5,665			5,655
TOTAL LIABILITIES		1,626,429			1,586,521
SHAREHOLDERS’ EQUITY
PREFERRED STOCK		48,200			—
DISCOUNT ON PREFERRED STOCK		(4,413	)		—
WARRANTS		4,413			—
COMMON STOCK		47,328			46,164
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		1,333			(804	)
RETAINED EARNINGS		39,823			54,603
TOTAL SHAREHOLDERS’ EQUITY		136,684			99,963
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,763,113		$	1,686,484
BOOK VALUE PER SHARE	$	9.21		$	10.67
SHARES OF COMMON STOCK OUTSTANDING		9,610,169			9,368,904

FIDELITY SOUTHERN CORPORATION
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)

	QUARTERS ENDED						YEARS ENDED
	DECEMBER 31,						DECEMBER 31,
(DOLLARS IN THOUSANDS)	2008			2007			2008			2007
BALANCE AT BEGINNING OF PERIOD	$	26,023		$	15,155		$	16,557		$	14,213
CHARGE-OFFS:
COMMERCIAL, FINANCIAL AND AGRICULTURAL		—			200			99			200
SBA		—			—			220			—
REAL ESTATE—CONSTRUCTION		3,720			522			9,083			1,934
REAL ESTATE—MORTGAGE		71			20			332			82
CONSUMER INSTALLMENT		3,492			1,745			10,841			5,301
TOTAL CHARGE-OFFS		7,283			2,487			20,575			7,517
RECOVERIES:
COMMERCIAL, FINANCIAL AND AGRICULTURAL		—			2			5			257
SBA		24			—			215			—
REAL ESTATE—CONSTRUCTION		13			150			43			190
REAL ESTATE—MORTGAGE		1			—			14			78
CONSUMER INSTALLMENT		213			187			882			836
TOTAL RECOVERIES		251			339			1,159			1,361
NET CHARGE-OFFS		7,032			2,148			19,416			6,156
PROVISION FOR LOAN LOSSES		14,700			3,550			36,550			8,500
BALANCE AT END OF PERIOD	$	33,691		$	16,557		$	33,691		$	16,557
RATIO OF NET CHARGE-OFFS DURING PERIOD TO AVERAGE LOANS OUTSTANDING, NET		1.99	%		0.61	%		1.36	%		0.45	%
ALLOWANCE FOR LOAN LOSSES AS A PERCENTAGE OF LOANS		2.43	%		1.19	%		2.43	%		1.19	%

NONPERFORMING ASSETS
(UNAUDITED)

	DECEMBER 31,
(DOLLARS IN THOUSANDS)	2008			2007
NONACCRUAL LOANS	$	98,151		$	14,371
REPOSSESSIONS		2,016			2,512
OTHER REAL ESTATE		15,063			7,308
TOTAL NONPERFORMING ASSETS	$	115,230		$	24,191
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 OREO, AND REPOSSESSIONS		7.89	%		1.65	%

FIDELITY SOUTHERN CORPORATION
LOANS, BY CATEGORY
(UNAUDITED)

	DECEMBER 31,
(DOLLARS IN THOUSANDS)	2008		2007		PERCENT CHANGE
COMMERCIAL, FINANCIAL AND AGRICULTURAL	$	137,988	$	107,325		28.57	%
TAX-EXEMPT COMMERCIAL		7,508		9,235		(18.70	)%
REAL ESTATE MORTGAGE — COMMERCIAL		202,516		189,881		6.65	%
TOTAL COMMERCIAL		348,012		306,441		13.57	%
REAL ESTATE—CONSTRUCTION		245,153		282,056		(13.08	)%
REAL ESTATE—MORTGAGE		115,527		93,673		23.33	%
CONSUMER INSTALLMENT		679,330		706,188		(3.80	)%
LOANS		1,388,022		1,388,358		(0.02	)%
LOANS HELD-FOR-SALE:
ORIGINATED RESIDENTIAL MORTGAGE LOANS		967		1,412		(31.52	)%
SBA LOANS		39,873		24,243		64.47	%
INDIRECT AUTO LOANS		15,000		38,000		(60.53	)%
TOTAL LOANS HELD-FOR-SALE		55,840		63,655		(12.28	)%
TOTAL LOANS	$	1,443,862	$	1,452,013

FIDELITY SOUTHERN CORPORATION
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)

	YEARS ENDED
	December 31, 2008								December 31, 2007
	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	$	1,472,573		$	96,009		6.52	%	$	1,390,624		$	105,222		7.57	%
Tax-exempt (1)		8,493			581		6.97	%		12,837			1,052		8.20	%
Total loans		1,481,066			96,590		6.52	%		1,403,461			106,274		7.57	%
Investment securities
Taxable		139,391			6,867		4.93	%		137,370			6,964		5.07	%
Tax-exempt (2)		13,975			833		5.96	%		6,782			390		5.75	%
Total investment securities		153,366			7,700		5.05	%		144,152			7,354		5.12	%
Interest-bearing deposits		2,630			36		1.38	%		1,134			58		5.08	%
Federal funds sold		11,960			179		1.49	%		4,855			243		5.01	%
Total interest-earning assets		1,649,022			104,505		6.34	%		1,553,602			113,929		7.34	%
Cash and due from banks		22,239								23,383
Allowance for loan losses		(22,610	)							(14,644	)
Premises and equipment, net		19,537								18,875
Other real estate owned		12,624								2,918
Other assets		57,682								51,386
Total assets	$	1,738,494							$	1,635,520
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Demand deposits	$	271,429		$	6,226		2.29	%	$	293,336		$	10,243		3.49	%
Savings deposits		209,301			6,043		2.89	%		203,529			8,881		4.36	%
Time deposits		836,049			36,453		4.36	%		749,803			38,778		5.17	%
Total interest-bearing deposits		1,316,779			48,722		3.70	%		1,246,668			57,902		4.64	%
Federal funds purchased		9,001			265		2.94	%		10,310			548		5.31	%
Securities sold under agreements to repurchase		34,924			921		2.64	%		21,674			657		3.03	%
Other short-term borrowings		25,393			879		3.46	%		24,516			1,111		4.54	%
Subordinated debt		67,527			5,284		7.83	%		54,478			4,945		9.08	%
Long-term debt		43,948			1,565		3.56	%		35,888			1,519		4.23	%
Total interest-bearing liabilities		1,497,572			57,636		3.85	%		1,393,534			66,682		4.79	%
Noninterest-bearing:
Demand deposits		128,706								130,835
Other liabilities		13,755								14,092
Shareholders’ equity		98,461								97,059
Total liabilities and
shareholders’ equity	$	1,738,494							$	1,635,520
Net interest income / spread				$	46,869		2.49	%				$	47,247		2.55	%
Net interest margin							2.84	%							3.04	%

(1)	Interest income includes the effect of taxable-equivalent adjustment for 2008 and 2007 of $192,000 and $350,000, respectively.
(2)	Interest income includes the effect of taxable-equivalent adjustment for 2008 and 2007 of $259,000 and $147,000, respectively.

FIDELITY SOUTHERN CORPORATION
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)

	QUARTER ENDED
	December 31, 2008								December 31, 2007
	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	$	1,452,376		$	22,383		6.13	%	$	1,428,415		$	26,731		7.43	%
Tax-exempt (1)		7,631			128		6.73	%		9,694			188		7.70	%
Total loans		1,460,007			22,511		6.13	%		1,438,109			26,919		7.43	%
Investment securities
Taxable		142,913			1,679		4.70	%		130,472			1,653		5.07	%
Tax-exempt (2)		15,209			227		5.97	%		10,883			161		5.93	%
Total investment securities		158,122			1,906		4.85	%		141,355			1,814		5.17	%
Interest-bearing deposits		5,003			5		0.41	%		1,206			14		4.57	%
Federal funds sold		16,955			21		0.49	%		4,106			46		4.43	%
Total interest-earning assets		1,640,087			24,443		5.93	%		1,584,776			28,793		7.21	%
Cash and due from banks		22,239								23,722
Allowance for loan losses		(27,105	)							(16,193	)
Premises and equipment, net		19,752								18,854
Other real estate owned		16,933								6,602
Other assets		57,971								54,536
Total assets	$	1,729,877							$	1,672,297
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Demand deposits	$	219,288		$	945		1.71	%	$	308,624		$	2,677		3.44	%
Savings deposits		199,964			1,338		2.66	%		221,065			2,345		4.21	%
Time deposits		905,505			9,235		4.06	%		725,171			9,319		5.10	%
Total interest-bearing deposits		1,324,757			11,518		3.46	%		1,254,860			14,341		4.53	%
Federal funds purchased		250			1		2.16	%		15,402			191		4.91	%
Securities sold under agreements to repurchase		43,716			296		2.69	%		25,418			185		2.89	%
Other short-term borrowings		10,098			88		3.46	%		32,011			363		4.50	%
Subordinated debt		67,527			1,307		7.70	%		67,527			1,453		8.53	%
Long-term debt		47,500			419		3.52	%		32,587			341		4.15	%
Total interest-bearing liabilities		1,493,848			13,629		3.63	%		1,427,805			16,874		4.69	%
Noninterest-bearing:
Demand deposits		127,220								131,190
Other liabilities		10,452								13,915
Shareholders’ equity		98,357								99,387
Total liabilities and shareholders’ equity	$	1,729,877							$	1,672,297
Net interest income / spread				$	10,814		2.30	%				$	11,919		2.52	%
Net interest margin							2.62	%							2.99	%

(1)	Interest income includes the effect of taxable-equivalent adjustment for 2008 and 2007 of $43,000 and $64,000, respectively.
(2)	Interest income includes the effect of taxable-equivalent adjustment for 2008 and 2007 of $71,000 and $61,000, respectively.