Many Georgia banks say no executive bonuses

It’s a bleak holiday season for Georgia bankers.

Profits are down, bad loans are mounting and the economy is tanking. Bah, humbug, indeed.

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Gordon Teel, CEO of Atlanta-based Georgian Bank: ‘In this environment, we all ought to be grateful to have a job.’

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And that means no bonuses for many of the state’s bank executives, a marked change from recent years, when soaring profits sometimes meant six-figure salary sweeteners at year’s end.

Gordon Teel, chairman and CEO of Atlanta-based Georgian Bank, said for the first time in memory, his bank doesn’t plan to offer bonuses.

“In this environment, we all ought to be grateful to have a job,” he said.

Palmer Proctor, president of Atlanta’s Fidelity Bank, had a similar take.

“We’re not doing anything. No bonus,” he said. “In my mind, it’s just not appropriate given the level of earnings the bank is generating at this point.”

Fidelity lost nearly $3 million through the third quarter, compared to earnings of $7.6 million in the same period last year.

Bank bonuses are under renewed scrutiny these days, as the federal government pumps hundreds of billions of dollars into banks nationwide to stabilize the reeling industry.

Many critics, from Capitol Hill to Main Street, say bonuses shouldn’t be handed out in such a climate.

Only a handful of Georgia banks have announced they’ve received government cash, though many have applied.

Georgia’s largest bank, SunTrust, has received $3.5 billion and has asked to sell an additional $1.4 billion in preferred shares to the U.S. Treasury Department. The bank says it hasn’t decided what course to take regarding bonuses. The company’s board will consider the matter after the year is over, spokesman Barry Koling said.

For the second year in a row, United Community Bank in Blairsville won’t be handing out bonuses to its senior management team, said Jimmy Tallent, the bank’s president and chief executive officer.

The bank has received a $180 million federal cash infusion, but Tallent said the company’s performance does not warrant any payouts. United Community lost $14.5 million through the first three quarters of the year, posting its first quarterly loss in its 58-year history.

In 2006, though, Tallent and his leadership team were paid handsomely. Tallent received a $650,000 bonus, in addition to a base salary of $472,500, according to a company filing.

Four other executives received bonuses of between $145,000 and $300,000 that year.

Not all banks are cutting back. Atlanta-based Atlantic Capital Bank will be paying bonuses based on this year’s performance, though not to executive officers. As a new, or de novo, bank, it’s prohibited from granting such payments to its top officials, said Doug Williams, the company’s president.

The 19-month-old bank’s loan portfolio has grown fast this year, from $91 million at the end of 2007 to more than $400 million, Williams said, a robust performance that warrants a financial reward.

“We’re a bright spot in an otherwise dismal picture,” Williams said, noting that as a new bank, the company isn’t saddled with bad loans like so many Georgia banks. He expects to have problems at some point, given the challenging economic environment.

Steve Bridges, president and CEO of the Community Bankers Association of Georgia, said the recent downturn comes after a robust 10- to 15-year period in which bonuses were common.

“It’s a little bit of a wake-up call to these folks that a bonus isn’t something they should be counting on as something in their pocket,” he said.