Security Bank to sell coastal branches

Macon-based Security Bank Corp. announced Monday that it has an agreement to sell two Glynn County branches.

“Consistent with our strategic initiatives, we anticipate that this transaction will enhance our capital position while allowing us to focus on our core markets in Middle Georgia and northern Atlanta,” Tony E. Collins, Security Bank’s president and CEO, said in a news release.

Under the agreement, The Heritage Bank, a Hinesville-based operation, would buy Security’s branches in Brunswick and on St. Simons Island. The transaction still needs regulatory approval, and it is subject to customary closing conditions, the release said. It is expected to be completed in the second quarter of this year.

Security’s efforts to sell two of its branches were revealed in a recent audit report in which auditors raised “substantial doubt about the ability of Security Bank Corp. to continue as a going concern.”

According to the report, the company reported a net income loss of $254.4 million in 2008, after profits of $6.6 million in 2007 and $23.4 million in 2006. However, Security officials said, last year’s net income figure included two one-time accounting adjustments that had a “significant impact on earnings” that were not tied to operations.

According to the annual report, Security Bank has done or is doing several other things, some of which are required by federal regulators, including:

Ÿ At the request of the Federal Reserve Bank of Atlanta, the bank’s board of directors agreed in February 2008 it would not take on additional debt and that it would not declare or pay additional dividends to shareholders without the prior approval of the Reserve Bank.

Ÿ The bank has applied to participate in the TARP Capital Purchase Program, which would allow the bank to issue and sell preferred stock to the U.S. Treasury, but if approved, it would dilute the stock of the company’s current shareholders.

As of Dec. 31, Security Bank had assets of $2.9 billion, and it had a total of 405 full-time equivalent employees.

Information from Telegraph archives was used in this report.