Leaders for the holding company that runs First Bank of Georgia said Tuesday that their second-quarter earnings were not as strong as last year because of the Federal Reserve's decision to lower interest rates.

Augusta-based Georgia-Carolina Bancshares Inc. reported net income of $866,000, or 25 cents per diluted share, for April, May and June, compared to $935,000, or 27 cents per diluted share, for the same period in 2007.

"We are pleased with our results given the current state of the economy and interest rates. Due to the rapid decrease in interest rates by the Federal Reserve, our net interest margin has declined. This is the primary reason for the decrease in year over year quarterly income," said president and chief executive officer Remer Brinson III.

For the first half of 2008, the holding company reported net income of $1.61 million, slightly down from the $1.66 million earned in the first half of 2007.

Mr. Brinson said consumer and commercial loan growth has been strong so far this year though residential mortgage and construction lending has slowed.

Georgia-Carolina Bancshares has $456 million in assets as of June 30.

The bank has three offices in Augusta, two in Martinez and one in Thomson. It also has mortgage offices in Augusta, Savannah and Jacksonville, Fla.

Mr. Brinson said First Bank continues to benefit from the ATM Anywhere Free checking program that refunds other banks' ATM charges.

"We have also enjoyed a 14.7 percent growth in non-interest bearing deposits and a 17.5 percent growth in NOW accounts," Mr. Brinson said.