Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matt Olney - Stephens.
Matt Olney - Stephens Inc.
Tommy you gave some good details on the student loan issues our there and how the fee income maybe down partially offset by some interest income. Could you go with those details one more time?
Thomas May
Yes, I think I can. What we said is the net impact is about $400,000 for the balance of 2008. $700,000 of that would be in the area of non-interest income from the sale and then that would be offset by a positive impact of about $300,000 on the carrying in of additional loans in our portfolio for that period of time.
Robert Fehlman
If you look at our income statement, you will see that premium on sale student loans in the non-interest income category; what we got in the third quarter and the fourth quarter of ’07, that income will basically go away because of the liquidity in the student loan market and that’s what Mr. May said, but yet our portfolio will increase and there will be a spread on that. So, we think again the difference will be about $400,000.
Matt Olney - Stephens Inc
And that’s for both the third quarter and fourth quarter combines, is that right?
Robert Fehlman
That’s correct.
Matt Olney - Stephens Inc.
You also provided some details on the expenses Tommy, I think you mentioned the credit card applications were up, the new bully accounting rule. I didn’t see anything in then that was unusual in the sense that it would dropout in the back half of the year; is that fair to say?
Thomas May
No. I believe what we’ve said is that the expenses, the non-interest expense was up about 5.5% ?
Robert Fehlman
Yes, about 5%, you normalize it; on a quarter-over-quarter basis for the branches would be about 3, but Matt if you look at the second quarter I think you’ve got a pretty good run rate going forward with our branches fully loaded and then at Burghley we talked about a little bit, the $72,000 or so, that’s going to carry forward going for the next few years, but, we’ll say the second quarter is a pretty good run rate and then we also noticed, Mr. May said earlier that are De Novo branches were at the end of that process right now. We’re continuing to evaluate where we are, so we should have second quarter fully loaded for the branches in there.
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