First Bank earnings climb through lending

First Bank of Georgia's holding company reported a 21 percent increase in net income during the second quarter of 2004 as it focused more on typical bank operations.

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Georgia-Carolina Bankshares Inc., First Bank's holding company, reported net income earnings of $850,000, or 32 cents per share, for the second quarter ending June 30, up from $702,000 for the quarter ending March 31.

Total assets for the company have increased 7 percent to $285 million since the start of the year.

Asset growth has been fueled by a return to typical bank operations. First Bank reported a $23 million increase, 13.4 percent, in commercial loans during the first six months of 2004.

"We knew when we started the year that we would have to grow commercial lending, and that's what we've done," said Pat Blanchard, the president and CEO of Georgia-Carolina Bankshares.

But year-to-date earnings were down. Net income during the April to June period of 2004 was down 34 percent from the same period in 2003 as the mortgage refinancing business cooled.

Mortgage rates reached 40-year lows in late 2003, which allowed many homeowners to refinance, while more first-time buyers could afford to buy homes.

"Many community banks such as First Bank that originate loans reported a high level of lending volume and profitability during the second and third quarters of 2003," Mr. Blanchard said in a statement. "First Bank, like many other community banks, utilized this period as an opportunity to generate additional fee income that was beyond normal expectations."

First Bank's gain on the sale of mortgages was down more than $1 million during the second period compared with the same period last year. For the year, gains on mortgage sales are down nearly $2 million.

Mr. Blanchard said mortgage lending is still a viable business operation, but it is taking a smaller role in bank earnings.

Mr. Blanchard also announced that the groundbreaking of the company's new headquarters on Wheeler Road should take place in the next 30 days, with the building to be completed in July 2005.

Reach James Gallagher at (706) 823-3227 or james.gallagher@augustachronicle.com.

Pat Blanchard said the bank's goal was to increase commercial lending.

--From the Thursday, July 29, 2004 printed edition of the Augusta Chronicle