Security Bank's earnings dive due to real estate turmoil - Atlanta Business Chronicle:

ogarawo.wordpress.com
Company executives with the Macon-based bank holding companyg alsoexpect Atlanta's real estate market to continue to weaken. The bulk of the bank'ws loss was a previously announced $109.7 millioh goodwill impairment charge. Excluding that one-time cost, the bank reported a $17.7 million operating loss in secondquarter 2008, or $0.776 per share. Security Bank (Nasdaq: SBKC) earnee $6.1 million in second quarter 2007. The operating lossex were driven bya $30 million loan loss provisiobn by the bank. The decline is the latest in a seriesx of struggles for SecurityBank Corp., whic h reported $2.14 billion in loans on June 30, 2008.
Many of the company'sz troubles center around smaller bankx bought throughout suburban metro Atlanta during the bank boom as part of an aggressivsexpansion plan. Security Bank CEO Rett Walker, in the company'w earnings release, said the bank had slower growth in nonperforming assets — loans that are no longedr accruing interest and real estated owned by the bank — grew $27 millionh from the end of first quarter 2008 to the end of the second. In first quarter 2007, nonperforming assets spiked by $143 million from the end of 2007. Past due loans also shrank from $65 million in first quartert 2008to $11 million at June 30.
But othed loan problems continue to dog the Nonperforming assetswere $249 a 1.3 percent increase from firstg quarter 2008. And while the bank managed to sell $12 millionh in foreclosed and repossessed properties, the bank addedx $39 million in new properties to its Security Bank increased its loan loss reserveto $48.5 million, or 2.26 percengt of its total loans receivable. Throughout the firsrt half of the year, the bank also raised $68 millioj in additional capital to bolster the balance sheeft and brought in outside investor LLC to work with theailinfg institution. The bank now has 11.
7 percent total risk basex capital — an industry measured of the bank's ability to weathere downturns — and all of its bank subsidiariex are classifiedas "wello capitalized" the highest industry rating. Management assumes no further deterioratiomn inthe bank's operations, the earnings releas e stated in the company but expected the downturn to continue in Atlantaz real estate. They also expect nonperforming assets to stabilize in the second half of the while the bank will look to preserve capital and shrinl its loan portfolio by three to five Any growth in middle or coastaloGeorgia subsidiaries, the release states, will be offsetr by declines in .