Atlantic Southern (ASFN), a bank based in my hometown of Macon, Georgia, reported its Q2 earnings at the end of July. Things are starting to look a LOT worse over there and I am beginning to think chances are increasing that they could be taken over within a year.
First, ASFN reported a net loss $5.65 per share for the second quarter of 2009. Compare this to a net gain of $.18 per share for the first quarter of 2009 and to a net gain of $.17 per share for the second quarter of 2008.
Second, asset quality and capitalization ratios have declined from the previous quarter and are starting to look very similar to the ratios of Security Bank before they failed and were acquired by State Bank & Trust.
So is it possible ASFN could eventually be taken over? I say yes because anything is possible and secondly because of the aforementioned data. Quarter after quarter, things have gotten progressively worse for Atlantic Southern and the stock price is clearly reflecting the lack of confidence. The stock is now trading again at all time lows (click chart).
I also believe if this company was going to survive we would be seeing at least a little bit of insider activity. However, the last time we saw any positive activity was back in November 2008 when Director and largest insider Bill Fickling purchased some shares at $7.68. Since then, there has been zero activity. If ASFN was such a good buy in the seven dollar range, why haven’t we seen knowledgeable directors or executives purchase at half that price? Well, the presumed answer is that the these owners and executives have no confidence in their company.
Anyone still holding onto this stock should probably sell now while they still can.
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