Expecting losses in its residential construction loan portfolio to continue to mount, WGNB Corp. of Carrollton, Ga., is looking to raise as much as $25 million.
The $833 million-asset parent of First National Bank of Georgia said Friday that it would offer shares first to its current shareholders. If the offering is not oversubscribed, shares then would be offered to the general public. The offering will begin next month and will continue for 30 days, WGNB said. It plans to use the proceeds for "capital enhancement and general working capital purposes."
In a Securities and Exchange Commission filing Friday, WGNB said that its nonperforming assets have climbed significantly since the third quarter. "Nonperforming assets and potential chargeoffs are likely to increase throughout 2008 before the residential construction and development market becomes more stable." It also said that it was "likely to come under increased regulatory scrutiny, which may include enforcement actions." In the first quarter WGNB's nonperforming assets climbed 766% from a year earlier, to $55 million, or 8% of total loans.
