Gateway Financial Holdings has reported a net income of $5.1 million for the first six months of 2008, up $550,000, from $4.5 million posted during the corresponding six-month period of 2007.

The company has reported a net income for the second quarter of 2008 of $2 million, compared to a net income of $2 million for the same quarter of 2007.

Return on average assets (ROAA) was 0.38% for the quarter, compared with 0.55% for the second quarter of 2007. Return on average equity (ROAE) was 4.12% as against 6.97% recorded in the 2007 second quarter.

ROAA was 0.51% for the first six months of 2008, compared with 0.68% for the same period in 2007 and ROAE was 5.77% versus 7.95% for the comparable period of 2007.

Ben Berry, chairman, president and CEO of Gateway Financial Holdings, said: Although, as we had previously indicated, second quarter results primarily reflected the ongoing impact of unprecedented interest rate reductions in the prime rate over the past six months, we enter the third quarter with steadily improving margins, in a solid and stable marketplace, with asset quality that stands among the highest in our peer group in this challenging environment.