Bank still suffering from housing market fall

By PAUL DONSKY

The Atlanta Journal-Constitution

The prolonged real estate slump has pushed United Community Bank, Georgia’s third-largest bank, to its fourth straight quarterly loss.

The bank, based in the North Georgia mountain city of Blairsville, on Friday reported a $16-million second-quarter loss, or 38 cents per share.

Like many Georgia banks, United Community has posted sizable losses over the past year related to real estate loans that have gone bad amid the recession.

United Community has been aggressively moving problem loans off its books, writing off $58.3 million in the second quarter alone. In the past four quarters, the bank has written off $231 million in problem loans.

“Credit quality continues to be a primary area of focus for us, particularly within the Atlanta residential construction portfolio,” Jimmy Tallent, the bank’s president and CEO, said in a news release.

The bank wagered big on the metro Atlanta housing market, which is reeling from an oversupply of homes and vacant lots and a flood of foreclosures.

Bank officials said they are also closely watching the performance of commercial real estate loans, where problems appear to be growing. In the second quarter, non-performing commercial real estate loans nearly doubled, to $65 million.

United Community wrote off $9.8 million in commercial real estate assets in the second quarter, compared to $1.8 million in the first quarter.

The bank’s total amount of non-performing loans increased to $287.8 million, compared to $259 million in the first quarter.