Georgia's Security Posts Loss on Bad Credits

With bad loans to real estate developers piling up, Security Bank Corp. of Macon, Ga., reported a wider-than-expected loss for the second quarter.

Late Monday the $2.9 billion-asset multibank holding company reported a net operating loss of $17.8 million, or 77 cents a share, versus a profit of $6.1 million, or 31 cents a share, a year earlier. The average forecast of analysts polled by Thomson Reuters had called for a loss of 46 cents a share.

Including a previously announced $109.7 million goodwill impairment charge, Security's total loss for the quarter was $121.4 million.

The nonperforming loan rate rose 1.3 percentage points from a quarter earlier, to 11.3% of its total as of June 30.

Security attributed the bulk of its loan troubles to weak real estate conditions in the Atlanta area. During the quarter it put $70 million of loans on nonaccrual status and charged off $32 million more, or 5.2% of its total loans. Its chargeoff rate for the second quarter of last year was 0.2%.

In the first half of this year Security charged off $56 million, but it said it expects chargeoffs to decrease to between $20 million and $25 million in the second half as market conditions improve.

Security's shares fell 7.8% Wednesday, to $5.23.