MACON — Atlantic Southern Financial Group, Inc. (NASDAQ Global Market: ASFN) announced the financial results for the first quarter of 2009.
For the first quarter of 2009, net earnings were $742,000 compared to $1,190,000 a year earlier. Diluted earnings per share decreased to $.18 from $.27 a year ago. Compared with the first quarter of 2008, the company’s net earnings decreased $448,000, or 38 percent, and the diluted earnings per share decreased $0.09, or 33 percent. The decrease in the first quarter net earnings is attributable to a decrease in net interest income.
The net interest income for the first quarter of 2009 was $5.4 million compared to $6.3 million for the same period a year earlier, which represents a decrease of $880,000. This decrease is attributable to the interest rates on earning assets decreasing at a faster pace than the cost of funds due to the rapid interest rate cuts by the Federal Reserve during 2008.
“We continued to see margin compression in the first quarter,” said President and CEO Mark Stevens. “Continued competitive deposit pricing, coupled with the full quarter impact of declining rates and a higher level of non-performing assets were key contributors.
“The current operating environment is challenging with continuing deterioration in our economy and historically low interest rates. We are responding to this environment by preserving capital, aggressively managing the risk in our loan portfolio, and increasing our focus on retail deposits.”
For the first quarter of 2009, noninterest income was $1.2 million compared to $989,000 for the first quarter of 2008. The increase is mostly attributed to the gain on sales of investment securities from several state, county and municipal bonds and mortgage-backed securities during the first quarter of 2009.
Noninterest expense for the first quarter of 2009 was $5.3 million compared to $5.2 million for the first quarter of 2008. The small increase was mostly due to the company absorbing other real estate expenses from several foreclosed properties acquired during the fourth quarter of 2008.
“Our management team and board have implemented an aggressive strategy to reduce non-interest expense. We continue to evaluate profitability potential in all of our markets. On Dec. 31, 2008, we closed our St. Simons office based on its poor location on the island and low deposit base. We are analyzing all non-interest expenses and have made a strategic decision to eliminate branch and market expansion until general market conditions improve,” Stevens stated.
