Future of Macon’s Security Bank in doubt, auditor says

Two troubled Georgia banks that reported big losses last year have been hit with more bad news.

Security Bank, the fourth-biggest bank based in Georgia, said Tuesday that its auditor had expressed “substantial doubt” about the bank’s ability to stay in business. Meanwhile, regulators took an enforcement action against Omni National Bank in Atlanta that requires the bank to bolster its capital and improve its accounting controls.

Both banks bet heavily on the metro Atlanta real estate market and have been bleeding red ink over the past year as the housing market collapsed. Security, based in Macon, lost $208 million last year, while Omni is saddled with $114 million in nonperforming loans.

In an SEC filing on Monday, Security Bank said that it was unsure if it could raise the funds required to meet its debt obligations. The company has applied for bailout funds from the U.S. Treasury but has yet to receive any money. A letter from the bank’s auditors, McNair, Mclemore, Middlebrooks & Co., said the losses and need for new capital “result in uncertainty about the company’s ability to meet obligations coming due in 2009.”

Omni, one of the state’s larger community banks with nearly $1 billion in assets, lost $14.5 million in 2008. In a regulatory agreement reached Monday and made public Tuesday, Omni must get approval from regulators to issue dividends and boost salaries or give bonuses to directors and top executives. Stephen Klein, Omni’s chairman and CEO, did not return a telephone call Tuesday.