WGNB Corp.'s shares fell sharply Thursday after the Carrollton, Ga., company warned that fourth-quarter and full-year earnings would fall well short of 2006 results due to continued weakness in its residential real estate portfolio.
The $860 million-asset company announced late Wednesday that its nonperforming assets at Dec. 31 totaled $42 million, or 6.3% of loans, up 79% from the quarter that ended Sept. 30, and that it had more than tripled its loan-loss provision since then, to $2.3 million.
As a result, it said, it expects to report fourth-quarter earnings of just 7 cents per share, an 82% drop from the year earlier. For the full year, it said, it would earn $1.26 per share, down 24%.
WGNB's shares were trading at $17.45 late Thursday, down nearly 10% from Wednesday's close. They are down 47% from their 52-week high.
In a press release late Wednesday, WGNB president and chief executive H.B. "Rocky" Lipham 3rd said the company had spent the last three months "evaluating credit, analyzing valuations, and aggressively collecting on problem residential real estate loans.
"As a result of this extensive review, ongoing senior management analysis, and our strong capital levels, we believe we are well positioned to manage through this difficult credit cycle."
The company expects to release fourth-quarter and full-year results on Jan. 14.
WGNB is the parent of First National Bank of Georgia, which has 16 branches.
