Today, Atlantic Southern Financial, a bank located in my hometown of Macon, Georgia, reported third quarter earnings. I’ve repeated before that odds favor this bank failing within a year or so barring any sort of capital raising. Here’s the opening paragraphs of the press release:
MACON, Ga., Oct. 30, 2009 (GLOBE NEWSWIRE) — Atlantic Southern Financial Group (Nasdaq:ASFN) today reported a net operating loss of $8.3 million, or $1.97 per diluted share, for the third quarter of 2009 compared to net loss of $347 thousand, or $0.08 per share, in the third quarter of 2008. The net operating loss was primarily driven by elevated credit costs including an $11.4 million provision in the allowance for loan losses.
Atlantic Southern’s net operating loss for the first nine months of 2009 was $11.8 million, or $2.80 per share. Including the non-recurring charge for goodwill impairment from the second quarter of 2009, the net loss for the first nine months of 2009 was $31.3 million, or $7.44 per share compared to net earnings of $1.6 million, or $.35 per share, for the first nine months of 2008.
“We continue our strategy of aggressively addressing problem credits,” stated Mark Stevens, President and Chief Executive Officer of Atlantic Southern Financial Group. “During the third quarter of 2009, we saw an increase in non-performing assets. Unusually high levels of loan loss provision have been necessary as management addresses asset quality deterioration associated with the real estate downturn.”
Yep, you read that right. A loss of 7.44 per share for the first nine months of this year, or just a loss of 2.80 per share if you don’t count the non-recurring charge. And really, is a goodwill impairment really nonrecurring in this case? Aren’t there always going to be recessions and aren’t banks always going to write down loans or good will during these times?
Anyways, net interest margin declined again as well as the allowance for loan losses/non-performing loans ratio and shareholder’s equity. I can’t wait to see the data they filed with the FDIC as I would like see how their loan portfolio has deteriorated. If I had any money above the insured limit at Atlantic Southern, I would be pulling that portion out of there.
Also, if I had the time, I would like to be interviewing some of these executives and employees of these supposedly safe and conservative small community banks in order to find out just what exactly they were thinking when they were sowing the seeds of destruction for their shareholders. I would turn it into some sort of short story or allegory… Or hey, why the hell doesn’t the local paper do this? Some sort of 5-part investigatory series detailing what has happened to the local financial institutions and how management and boards of directors ran their companies into the ground? I think the locals public would eat this up. I don’t think this is rocket science, but I guess most of the paper’s staff has been laid off, so maybe they just can’t pull this off?