Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Brooks O'Neil – Dougherty & Company.
Brooks O'Neil – Dougherty & Company
I have a number of questions. I guess first I’d like to start off, Stan, perhaps you could talk to us about the tax rate and in particular, I guess two questions, I know it’s a very complicated situation, but number one, can you comment on what the tax rate might have been excluding the impact of the impairment charges this quarter. And two, can you talk about what impact those impairment charges might have on your tax rate going forward into 2009?
Stanley Rosenbaum
Let me talk about taxes. Let me start with on a going forward basis and then I’ll come back into the fourth quarter. We will still have a banking credit going forward of about $800,000 per year and if you add about 5% for state taxes, that would be how I would model out our tax provision going forward.
As for the fourth quarter, we reversed basically all of the banking credits that we had done in the first three quarters and that was treated as part of the goodwill impairment charge. We also had a 5% roughly provision for state taxes in the fourth quarter offset by a one-time reversal of a reserve that we had setup under FIN 48 at the beginning of 2007 as the statute of limitations had expired on that particular liability. That’s why we had the $400,000 plus goodwill in the fourth quarter.
So, again, hopefully that answers your question.
Richard Friedman
Brooks, this is Rich. Just let me add on just looking back over the prior few quarters just so everybody’s aware in the first quarter the tax expense was $77,000 followed by $1.072 in the second and $730 in the [inaudible]. So just trying to give for comparative purposes what the taxes look like. So when you look at the third quarter it was approximately $0.02 per share.
Stanley Rosenbaum
On a normalized tax rate, you remember, Brooks we also have under 109 we are required to setup a reserve against our tax assets. So that will continue into the foreseeable future, therefore, going forward you will only see the state taxes and that $800,000 banking credit.
Brooks O'Neil – Dougherty & Company
Secondly, I guess one thing that popped out at me was that the G&A expenses did pop up about $1 million from the third quarter and obviously I’m guessing Rick is very high priced talent, but maybe you could just comment on any other factors that drove that increase and what the outlook for that line item might be going into 2009.
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