To improve capital after a spike in troubled loans, WGNB Corp. in Carrollton, Ga., is cutting its dividend in half and introducing a dividend reinvestment plan.
Steve Haack, WGNB's chief financial officer, said in an interview Friday that improving capital is a priority for the $886 million-asset company because it expects "more writeoffs" this quarter.
In April WGNB slashed its previously reported net income for 2007 by 59%, to $3 million, citing a sharp increase in chargeoffs and nonperforming assets. Then last month it reported that nonperforming assets jumped 766% in the first quarter from the year earlier, to $54.5 million, or 6.2% of total assets.
Though it is still well capitalized, "we just want to make sure we stay that way," Mr. Haack said.
The parent of First National Bank of Georgia said in a press release last week that the dividend reinvestment plan would let registered shareholders and new investors buy stock in the company without paying a brokerage commission. WGNB has registered 500,000 new shares of stock for issuance under the plan.
It also said that the reduced dividend of 10.5 cents per share will be payable on July 1.
In late afternoon trading Friday, WGNB was down 6.41%, to $13 a share.
