Atlantic Southern Financial Group (Nasdaq:ASFN) today reported a
net loss of $3.7 million, or $0.87 per diluted share, for the third
quarter of 2010 compared to a net loss of $8.3 million, or $1.97
per diluted share, in the third quarter of 2009. The net loss
was primarily driven by adding $2.2 million to the allowance for
loan losses and paying approximately $1.1 million in FDIC quarterly
assessments.
Atlantic Southern's net loss for the first nine months of 2010
was $9.3 million, or $2.22 per diluted share compared to the net
loss of $31.3 million, or $7.44 per diluted share, for the first
nine months of 2009 which included the non-recurring charge for
goodwill impairment of $19.5 million.
The net interest income for the third quarter of 2010 was $3.9
million compared to $4.0 million for the same period a year
earlier. The net interest margin was 2.07 percent for the
third quarter of 2010 compared to 1.56 percent for the third
quarter of 2009. The net interest income for the nine months
ended September 30, 2010 was $12.1 million compared to $13.9
million for the same period a year earlier, which represents a
decrease of $1.8 million. The net interest margin was 2.00
percent for the nine months ended September 30, 2010 compared to
1.97 percent for the same period a year earlier. "Our cost of
funds continues to trend downward, our average assets decreased by
$251.3 million, and we experienced a decline in the level of new
problem loans. As a result, our net interest margin improved
51 basis points over the third quarter of 2009. The margin
should continue to rebound over the next several quarters as our
credit quality improves and our cost of funds continues to
decrease," stated Mark Stevens, president and chief executive
officer.
The Company's nonperforming assets increased approximately $13.2
million, or 9.61 percent, to approximately $150.2 million as
of September 30, 2010 as compared to $137.0 million as of
December 31, 2009. Non-accrual loans decreased
approximately $26.7 million from December 31, 2009 to September 30,
2010, due to approximately $47.5 million moving to other real
estate owned and other assets, as well as $8.6 million in partial
charge-offs on non-accrual loans and approximately
$8.6 million in pay downs. During the first nine months
of 2010, there was approximately $38.0 million in loans moved to
non-accrual. All non-accrual loans are adequately
collateralized based on management's judgment and supported by
recent collateral appraisals or have a specific reserve allocated
as part of the allowance for loan loss for any inadequate
collateralization. Other real estate owned increased $40.5
million from December 31, 2009 to September 30, 2010. This
increase is due to the addition of $46.7 million in foreclosed
properties and $839 thousand in capitalized improvements on several
foreclosed properties being offset by the sale of $5.3 million in
foreclosed properties, resulting in a loss of $225 thousand on
these properties. The Company has written down $1.5 million
for several foreclosed properties based upon updated
appraisals. The Company continues to actively market and
continuously monitor all other real estate owned properties in
order to minimize losses. "Our Special Assets Division remains
focused on resolving problem assets by aggressively addressing weak
credits and marketing our other real estate properties. As the
real estate market stabilizes, we believe our problem assets will
moderate," stated Mark Stevens.
The total nonperforming assets increased to 17.61 percent of
total assets as of September 30, 2010 compared to 14.45 percent as
of December 31, 2009. Net charge-offs annualized for the third
quarter of 2010 were 1.78 percent of average loans compared to 5.91
percent for the same period a year earlier. Net charge-offs
annualized for the nine months ended September 30, 2010 were 1.64
percent compared to 2.45 percent for the same period a year
earlier. During the third quarter of 2010, the Company charged
off approximately $3.1 million primarily due to the impairment of
several real estate loans.
At September 30, 2010, the allowance for loan loss amounted to
$18.7 million, or 3.07 percent of total loans outstanding compared
to $21.5 million, or 2.99 percent of total loans outstanding at
December 31, 2009. Provision for loan losses decreased
approximately $9.2 million for the third quarter of 2010 to $2.2
million compared to the same period in 2009. For the nine
months ended September 30, 2010, provision for loan loss decreased
$11.9 million to $5.5 million compared to the same period in
2009. While there has been an increase in nonperforming loans,
the Company decreased its provision for loan losses based on
management's analysis of the allowance for loan losses. There
has also been an overall decrease in loan activity for the three
and nine months ended September 30, 2010 compared to the three and
nine months ended September 30, 2009.
For the third quarter of 2010, noninterest income was $1.4
million compared to $1.1 million for the third quarter of
2009. The increase is due to a gain of $557 thousand on the
sale of several investment securities being offset by a decrease of
$181 thousand in mortgage origination income. Noninterest
income for the nine months ended September 30, 2010 was $3.2
million compared to $4.5 million for the same period a year
earlier. The decrease is primarily attributed to the Company
reporting a gain of $600 thousand on the sale of several investment
securities during the second and third quarters of 2010 compared to
a gain of $1.3 million on the sale of several mortgage-backed
securities during the second and third quarters of 2009. Also,
the Company's mortgage department experienced a decrease in
mortgage closing volume during the first nine months of 2010
compared to the same period in 2009.
Noninterest expense for the third quarter of 2010 was $6.8
million compared to $6.5 million for the third quarter of
2009. For the third quarter of 2010 when compared to the same
period in 2009, there was an increase in the noninterest expense
resulting from the loss on the sale and impairment of other real
estate properties of $381 thousand and an increase of $374 thousand
in quarterly FDIC assessments while experiencing a decrease of $377
thousand in salary and employee benefits with the Company
eliminating their accrual on the 401k match for
employees. Noninterest expense for the nine months ended
September 30, 2010 was $19.1 million compared to $19.5 million for
the same period a year earlier, excluding the goodwill impairment
charge. For the first nine months of 2010 when compared to the
same period in 2009, the Company has experienced an increase of
$1.1 million in other real estate expenses and an increase of $1.5
million in quarterly FDIC assessments with an offset of a decrease
in salaries and employee benefits of $1.2 million. At the end
of the third quarter of 2010, the Company held a total of 102
foreclosed properties compared to 54 properties at the end of the
third quarter of 2009. Since the Bank entered into the Cease
and Desist Order with the FDIC in September 2009, the Bank has
experienced higher assessments due to the Bank's risk
classification with the FDIC. When comparing the first nine months
of 2010 to the first nine months of 2009, the decrease in salaries
and employee benefits is attributed to a four percent reduction in
staff, a bank officer one day per quarter furlough, no accrual for
bonuses, a reduction in the accrual for the Company's salary
continuation plan, and no accrual for matching employee 401k
contributions. Also, subsequent to quarter end, the Bank terminated
individual supplemental retirement agreements with several named
executive officers. Each affected officer voluntarily
relinquished all benefits contemplated by his or her agreement,
including those benefits accrued and vested as of the termination
date.
At September 30, 2010, total gross loans were $607.8 million,
down $110.7 million or 15.40 percent, from December 31,
2009. Total deposits at September 30, 2010 were $786.3
million, a decrease of $74.8 million, or 8.69 percent, from
December 31, 2009. The Company was able to increase its retail
time deposits at September 30, 2010 by $17.4 million from December
31, 2009 due to management's aggressive efforts to increase core
deposits obtained both locally and through a national rate-listing
service. Non-interest bearing and interest bearing deposits
decreased at September 30, 2010 by $21.1 million from December 31,
2009. Management continued to significantly reduce its
exposure to, and reliance on, wholesale deposit funding by
decreasing wholesale deposits at September 30, 2010 by $71.1
million from December 31, 2009.
Total shareholders' equity was $20.2 million at September 30,
2010. The Bank's total risk-based capital ratio at September
30, 2010 was 5.49 percent compared to 6.19 percent at December 31,
2009. The Company and the Bank were considered "significantly
undercapitalized" by bank regulatory authorities as of September
30, 2010.
About Atlantic Southern Financial Group, Inc. and Atlantic
Southern Bank
With headquarters in Macon, Georgia, Atlantic Southern Financial
Group, Inc., operates nine banking locations in the middle Georgia
markets of Macon and Warner Robins, five locations in the coastal
markets of Savannah, Darien, Brunswick, one location in the south
Georgia market of Valdosta, Georgia and one location in the
northeast Florida market of Jacksonville, Florida. The Company
specializes in commercial real estate and small business
lending.
Safe Harbor
This news release contains forward-looking statements, as
defined by Federal Securities Laws, including statements about
financial outlook and business environment. These statements
are provided to assist in the understanding of a future financial
performance and such performance involves risks and uncertainties
that may cause actual results to differ materially from those in
such statements. Any such statements are based on current
expectations and involve a number of risks and
uncertainties. For a discussion of factors that may cause such
forward-looking statements to differ materially from actual
results, please refer to the section entitled "Forward-Looking
Statements" in Atlantic Southern Financial Group, Inc.'s annual
report filed on Form 10-K with the Securities and Exchange
Commission.
Atlantic Southern
Financial Group, Inc. |
Financial
Highlights |
(unaudited) |
(In Thousands, Except
Per Share Data) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30,
2010 |
September 30,
2009 |
September 30,
2010 |
September 30,
2009 |
EARNINGS (LOSS)
SUMMARY |
|
|
|
|
Interest and dividend
income |
$ 8,593 |
$ 11,255 |
$ 27,323 |
$ 35,503 |
Interest expense |
4,654 |
7,223 |
15,191 |
21,580 |
Net interest income |
3,939 |
4,032 |
12,132 |
13,923 |
Provision for loan
losses |
2,178 |
11,352 |
5,514 |
17,420 |
Noninterest income |
1,401 |
1,132 |
3,167 |
4,475 |
Operating expenses (1) |
6,821 |
6,495 |
19,114 |
19,510 |
Operating loss before
taxes |
(3,659) |
(12,683) |
(9,329) |
(18,532) |
Income tax benefit |
-- |
4,395 |
-- |
6,738 |
Net operating loss (1) |
(3,659) |
(8,288) |
(9,329) |
(11,794) |
Noncash goodwill impairment
charge |
-- |
-- |
-- |
19,534 |
Net loss |
$ (3,659) |
$ (8,288) |
$ (9,329) |
$ (31,328) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
PERFORMANCE
MEASURES |
September 30,
2010 |
September 30,
2009 |
September 30,
2010 |
September 30,
2009 |
Per Share Data: |
|
|
|
|
Net loss |
$ (0.87) |
$ (1.97) |
$ (2.22) |
$ (7.44) |
Diluted net loss |
(0.87) |
(1.97) |
(2.22) |
(7.44) |
Book value |
4.79 |
13.66 |
4.79 |
13.66 |
Tangible book value |
4.25 |
13.03 |
4.25 |
13.03 |
|
|
|
|
|
Key Performance Ratios |
|
|
|
|
Return on average assets
(2) |
-1.68% |
-2.95% |
-1.37% |
-3.90% |
Return on average equity
(2) |
-63.95% |
-51.47% |
-47.71% |
-51.67% |
Net interest margin, tax equivalent
(2) |
2.07% |
1.56% |
2.00% |
1.97% |
|
|
|
|
|
(1) Excludes the
non-recurring goodwill impairment charge of $19.5 million in the
second quarter of 2009. |
(2) Annualized |
|
|
|
|
|
ASSET
QUALITY |
September 30,
2010 |
December 31,
2009 |
|
|
Non-performing assets/loans &
OREO |
22.44% |
18.52% |
|
|
Allowance for loan losses/total
loans |
3.07% |
2.99% |
|
|
Allowance for loan
losses/non-performing loans |
21.06% |
18.53% |
|
|
Net charge-offs to average loans
(3) |
1.64% |
4.27% |
|
|
|
|
|
|
|
AT PERIOD END |
|
|
|
|
Loans |
$ 607,845 |
$ 718,559 |
|
|
Earning Assets |
763,436 |
892,065 |
|
|
Total Assets |
852,581 |
948,380 |
|
|
Deposits |
786,303 |
861,157 |
|
|
Shareholders' Equity |
20,160 |
29,639 |
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
Loans |
$ 678,932 |
$ 779,790 |
|
|
Earning Assets |
826,491 |
967,271 |
|
|
Total Assets |
913,736 |
1,070,628 |
|
|
Deposits |
833,689 |
927,405 |
|
|
Shareholders' Equity |
26,143 |
74,504 |
|
|
|
|
|
|
|
(3) September 30, 2010 is
annualized. |
CONTACT: Atlantic Southern Financial Group, Inc.
Mark Stevens, President and CEO
478-330-5820
Atlantic Southern Financial Grp., Inc. (MM) (NASDAQ:ASFN)
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