Originally created 04/23/04

Bank & Trust is showing growth



Georgia Bank & Trust Co.'s holding company reported record growth in assets on the back of increased commercial lending, a sign of a strengthening economy.

At the same time, mortgage loans declined as mortgage rates inched up after hitting 30-year lows.

Driven by an increase in income earned from interest, Georgia Bank Financial Corp. reported slightly more than $2 million in profit during the first quarter of 2004, up 8.3 percent over the same period last year.

For the quarter ending March 31, the bank's total deposits increased to $516.3 million, up 6.7 percent during the quarter. Earnings per share were 38 cents per share, diluted, compared to 35 cents during the same period last year.

Increasing loans for commercial development, business operations, residential development and residential construction elevated the company's assets past the $650 million mark for the first time and offset declines in non-interest income, which includes service charges and the sales of mortgages.

"The core bank has grown significantly even though we've had the resulting drop off in mortgages," said Ron Thigpen, the company's executive vice president.

Record low mortgage rates resulted in a significantly high demand for new mortgages and refinances during the past few years. At some points, refinances accounted for more than half of all the bank's mortgage business, three times the traditional average, Mr. Thigpen said.

As the economy strengthens, mortgage rates have started inching up, reducing the demand for refinancing.

Sales of mortgages in the secondary market also declined.

Mr. Thigpen said he expects refinances to fall to 16 percent to 18 percent of the bank's mortgage business - which compares with industry averages of five years ago.

The return to core banking principles, deposits and loans, should not have adverse affects on the bank's profitability, Mr. Thigpen said, adding he expects the bank to experience double-digit growth in market share this year.

Georgia Bank & Trust operates six branches in Richmond and Columbia counties - a seventh location in the Cotton Exchange downtown is expected to open later this year. With $653.8 million in assets, it is the largest locally-owned and operated community bank in the area.

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