Atlantic Southern Financial Group Inc. Reports Operating Results (10-Q)

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May 01, 2009
Atlantic Southern Financial Group Inc. (ASFN, Financial) filed Quarterly Report for the period ended 2009-03-31.

ATLANTIC SOUTHERN FINANCIAL GROUP INC. is a bank holding company through its wholly owned subsidiary Atlantic Southern Bank. With headquarters in Macon Georgia Atlantic operates nine banking locations in the middle Georgia markets of Macon and Warner Robins six locations in the coastal markets of Savannah Darien Brunswick and St. Simons Island one location in the south Georgia market of Valdosta Georgia and one location in the northeast Florida market of Jacksonville Florida. The Company specializes in commercial real estate and small business lending. Atlantic Southern is truly a full-service bank. A varied menu of banking services allows the company to address the diverse and busy lifestyles of our customers - from extended drive-through hours after-hours deposit service and same-day processing of transactions to innovative checking and investment accounts consumer and commercial loans and competitive rates on Visa and MasterCard. Atlantic Southern Financial Group Inc. has a market cap of $17.8 million; its shares were traded at around $4.25 with a P/E ratio of 5.7 and P/S ratio of 0.3.

Highlight of Business Operations:

The Companys total assets at March 31, 2009, were approximately $1.1 billion, which represented an increase of approximately $58.9 million or 6% from December 31, 2008. Net earnings decreased 38% for the three months ended March 31, 2009 to $742 thousand or $0.18 per diluted share compared to $1.2 million or $0.27 per diluted share for the three months ended March 31, 2008. Financial Condition

The most significant change in the composition of assets was the increase in cash and due from banks due to the growth of deposits of the Company. The most significant change in the composition of liabilities was the increase in deposits, especially time deposits. Time deposits, including wholesale (brokered and internet) and core deposits, are our principal source of funds for loans and investing in securities. Local retail time deposits at March 31, 2009 increased approximately $48.0 million due to managements aggressive efforts to increase core deposits and reduce reliance on wholesale deposits. The Company was able to decrease wholesale deposits approximately $6.3 million at March 31, 2009 primarily due to its ability to replace them with retail deposits. Other core deposits (non-interest bearing, interest bearing and saving accounts) increased approximately $15.7 million at March 31, 2009 compared to December 31, 2009.

Securities in our portfolio totaled $89.7 million at March 31, 2009, compared to $100.6 million at December 31, 2008. The most significant decrease in the securities portfolio has resulted from the sale of $4.2 million in state, county and municipal bonds and from the sales and/or paydowns of $13.1 million in mortgage-backed securities being offset by the purchase of $7.5 million in mortgage-backed securities. The majority of the mortgage backed securities purchased consist of U.S. Government National Mortgage Association (Ginnie Mae) securities. At March 31, 2009, the securities portfolio had unrealized net gains of approximately $1.9 million.

Nonperforming assets increased $5.4 million or 17% from December 31, 2008 to March 31, 2009. On March 31, 2009, management placed one loan with a balance of approximately $3.5 million on non-accrual that is secured by assignment of liquid assets and residential construction and land development real estate appraised at approximately $2.9 million. Management is continuously monitoring the non-accrual loans to minimize any losses.

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