Georgia’s Security Bank posts $42 million loss

A growing pool of bad real estate loans pushed Security Bank, the fourth-largest Georgia-based bank, to post big losses in the fourth quarter — the fifth-straight quarter the Macon bank has been in the red.

Security lost $42.4 million in the fourth quarter, or $1.82 per share, and $208 million for the year, the bank said Thursday. The fourth-quarter figures included a goodwill impairment charge of $18.4 million.

The company’s stock price plummeted 21 percent to 91 cents per share — the lowest it’s been in at least a decade. In the last six months. Security’s stock has fallen 87 percent.

The bank is reeling from bad real estate bets, particularly in the troubled metro Atlanta market. Security bought three suburban Atlanta banks in 2005 and 2006 to tap the area’s lucrative properties, but the housing bubble subsequently burst, releasing a flood of bad loans.

In the fourth quarter, Security charged off $30 million in bad loans and reported $232.5 million of problem loans, up 16 percent from the third quarter.

In the fourth quarter of 2007, Security reported $50.8 million in problem loans.

“While we anticipated that nonperforming assets would remain elevated through the year, the significant decline in growth in the economy, and the residential real estate market in particular over this period, has made it difficult to sell [bank-owned property] and reduce problem credits,” said Tony Collins, Security’s president and CEO.

Goodwill represents intangible assets, such as the strength of a brand name, that add value above a company’s book value. If the goodwill charges and another special item are taken out, Security had a loss of $24.9 million in the fourth quarter, or $1.07 per share. Wall Street had been expecting a loss of 73 cents per share.

Security boosted its allowance for future loan losses in the fourth quarter by 17 percent, to $31.7 million.

A bank spokeswoman could not be reached for comment. In an interview last September, bank officials said they had raised $68 million in capital during 2008, had tightened lending standards and were moving to diversify the bank’s loan portfolio.