Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO)
Financial Highlights
-- Net interest margin for the fourth quarter 2008 increased 22 basis
points to 3.10% from 2.88% in the third quarter 2008
-- Nonperforming loans were 1.10% of total loans at December 31, 2008
compared with 0.91% of total loans at September 30, 2008
-- Nonperforming assets were 1.12% of total assets at December 31, 2008
compared with 0.84% at September 30, 2008
-- Annualized fourth quarter 2008 net charge-offs increased to 0.43% of
average loans compared with 0.28% for the third quarter 2008
-- Fourth quarter provision for loan losses of $2.36 million, an increase
of $1.01 million compared to $1.35 million in the third quarter 2008
-- Allowance for loan losses was 1.43% of total loans at December 31,
2008 compared to 1.35% at September 30, 2008 and 1.20% at year-end 2007
-- Loan and deposit growth for 2008 was excellent at 10.6% and 18.0%,
respectively
-- Received $42.75 million in new capital under the Treasury's Capital
Purchase Program
-- Fourth quarter 2008 net income of $1.56 million, or $0.08 diluted
earnings per common share, in line with third quarter 2008 earnings of
$1.63 million, or $0.09 diluted earnings per common share, despite an
increase in provision for loan losses of $1.0 million
-- 2008 earnings of $5.85 million, or $0.33 diluted earnings per common
share, decreased 22% from $7.55 million, or $0.43 diluted earnings per
common share, for 2007; however 2008 earnings included an increase in the
provision for loan losses of $5.39 million over 2007 provision
-- Declared cash dividend of $0.04 per share for fourth quarter
Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO), the holding company for Southern Community Bank and Trust,
reported net income of $1.56 million for the fourth quarter of
2008, compared with $1.63 million for the third quarter of 2008 and
$1.89 million for the fourth quarter of 2007. Earnings per diluted
common share were $0.08 in the fourth quarter 2008, $0.09 in the
third quarter 2008 and $0.11 in the fourth quarter 2007. For the
year ended December 31, 2008, net income of $5.85 million ($0.33
per diluted common share) decreased from the $7.55 million ($0.43
per diluted common share) for the prior year. The respective
increases in the provision for loan losses of $1.01 million for the
fourth quarter 2008 on a linked quarter basis and $5.39 million for
the year ended December 31, 2008 were largely responsible for the
decrease in earnings for those periods. Earnings in the earnings
per common share calculation represents net income reduced for
dividends that are payable on the $42.75 million in preferred stock
issued to the United States Treasury on December 5, 2008.
Asset Quality
During the fourth quarter of 2008, nonperforming loans increased
to $14.4 million (or 1.10% of total loans) from $12.0 million (or
0.91% of total loans) at September 30, 2008. Nonperforming assets
increased to $20.2 million (or 1.12% of total assets) at December
31, 2008 from $15.1 million (or 0.84% of total assets) at September
30, 2008. Net charge-offs totaled $1.5 million during the fourth
quarter, or 0.43% of average loans on an annualized basis, a 60%
increase compared to $920 thousand (or 0.28% of average loans,
annualized) in third quarter 2008. Nonperforming loans,
nonperforming assets and net charge-offs activity continue to be
predominantly related to residential construction and development
lending as 82% of nonperforming loans, 87% of nonperforming assets
and 81% of net charge-offs originated from this segment of the loan
portfolio.
The provision for loan losses of $2.36 million for the fourth
quarter increased $1.01 million compared to the third quarter 2008
provision and increased $1.61 million compared to the fourth
quarter 2007 provision. The allowance for loan losses at December
31, 2008 of $18.9 million represented 1.43% of total loans and 1.31
times nonperforming loans compared with 1.35% of total loans and
1.49 times nonperforming loans at September 30, 2008.
"As this challenging economic environment became more severe
during the fourth quarter and is expected to persist through 2009,
we are continuing to work with our customers to resolve problem
credits," said F. Scott Bauer, Chairman and Chief Executive
Officer. "Through the efforts of our lending officers, credit
administrators and executive management who monitor our delinquent
and problem credits constantly, we successfully managed to hold the
increase in nonperforming loans during the quarter to only $2.4
million. We prudently increased our allowance for loan losses to a
level that better handles the increased risk in our loan portfolio
due to the growth in charge-offs and nonperforming loans. As a
result of this action, I believe we will be better positioned for
the first quarter of 2009, at which time we expect nonperforming
assets to increase from current levels. While this level of
nonperforming assets is higher than our historical average, we
believe it is manageable and continues to reflect the difficult
housing market conditions that persist across our footprint.
While managing the challenges of this current credit environment
is our top priority, we are also focused on margin improvement
through pricing discipline and expense control as well as
profitable and prudent growth. We are pleased that our underlying
earnings and core business remain strong which positions us well
for the future.
We intend to leverage our new capital in a responsible manner
and promote customer initiatives to foster improvement in the
financial well-being of our customers and the economies within our
local communities. Following the recent $42.75 million investment
under the Treasury's Capital Purchase Program, we believe we have
sufficient capital and liquidity to weather the current economic
environment and our regulatory capital ratios remain at levels that
continue to be considered 'well capitalized'," Bauer said.
Financial Performance
Net interest income of $12.82 million for the fourth quarter
2008 increased by 8% compared with $11.86 million in the third
quarter 2008, and 14.1% over the $11.24 million in the fourth
quarter 2007. Net interest margin of 3.10% for the fourth quarter
2008 increased 22 basis points from 2.88% compared with the linked
quarter and declined 5 basis points from 3.15% for the fourth
quarter 2007. Growth in net interest income in the fourth quarter
2008 was significantly influenced by the impact of the 175 basis
point reduction in the Federal Reserve's target funds rate on
market interest rates. The Company's deposit and borrowing costs
repriced downward to a greater extent than its asset yields due to
the institution of interest rate floors on a majority of its
variable rate loans.
Non-interest income of $2.52 million during the fourth quarter
increased by $441 thousand or 21.2% compared with the third quarter
2008 primarily due to the $440 thousand nonrecurring loss on
certain terminated derivative contracts during third quarter 2008.
Also affecting fourth quarter non-interest income was a $138
thousand decrease in wealth management income on a sequential basis
attributable to lower transaction volumes and overall market
conditions. This impact was offset by $98 thousand in gains on
sales of investment securities and $50 thousand increase in income
from SBIC activities. Non-interest income for the twelve months
ended December 31, 2008 remained relatively flat compared to the
same period in 2007 as increases in service charge income, gains on
derivatives and wealth management income were offset by $2.04
million decrease in SBIC income.
Non-interest expenses of $10.7 million for the fourth quarter
2008 increased $449 thousand or 4% on a linked quarter basis and
$166 thousand or 1.6% year-over-year. On a linked quarter basis,
the increase in non-interest expenses included a $360 thousand
increase in legal and professional services expense, a $291
thousand write-off of goodwill related to prior acquisition of a
mortgage company and $99 thousand in writedowns of foreclosed
properties. Increased problem loan workout activity was the primary
reason for the increased legal and professional services for the
fourth quarter. As an annualized percentage of average assets, the
expense load represented 2.35% of average assets for the fourth
quarter 2008 and 2.42% of average assets for the twelve months
ended December 31, 2008.
As of December 31, 2008, total assets amounted to $1.80 billion,
representing an increase of $234.8 million, or 15% year-over-year
driven by strong loan and deposit growth. On a linked quarter
basis, asset growth for the fourth quarter 2008 was relatively
flat. The loan portfolio decreased by $8.6 million or 1.0%
sequentially during the fourth quarter due primarily to the payoff
of one large commercial construction loan. Total deposits stood at
$1.23 billion at December 31, 2008, an increase of $187.9 million
or 18.0% year-over-year. During the fourth quarter 2008, deposits
decreased $29.9 million or 2.4% from the September 30, 2008 level
as depositors withdrew some liquidity from money market accounts
for seasonal needs or in response to management's strategy to
improve funding costs.
At December 31, 2008, stockholders' equity of $188.0 million
represented 10.4% of total assets. Stockholders' equity increased
$45.1 million or 32% from $142.8 million at September 30, 2008
primarily as a result of $42.75 million in preferred stock issued
to the U.S. Treasury under its Capital Purchase Program. Regulatory
capital ratios remain in excess of the "well capitalized"
threshold.
Southern Community's executive management team will host a
conference call on January 23, 2009, at 10:00 AM Eastern Time to
discuss the quarter-end results. The call can be accessed by
dialing 1-877-741-4239 or 1-719-325-4762 and entering pass code
4742889. A replay of the conference call can be accessed until
11:59 pm on February 6, 2009, by calling 1-888-203-1112 or
1-719-457-0820 and entering pass code 4742889. You may access
additional presentation materials for this conference call in the
Investor Relations section of Southern Community's web site at
www.smallenoughtocare.com.
Southern Community Financial Corporation is headquartered in
Winston-Salem, North Carolina and is the holding company of
Southern Community Bank and Trust, a community bank with twenty-two
banking offices throughout North Carolina.
Southern Community Financial Corporation's common stock and
trust preferred securities are listed on the NASDAQ Global Select
Market under the trading symbols SCMF and SCMFO, respectively.
Additional information about Southern Community Financial
Corporation is available on its website at
www.smallenoughtocare.com or by email at
investor.relations@smallenoughtocare.com.
This news release contains forward-looking statements. Such
statements are subject to certain factors that may cause the
Company's results to vary from those expected. These factors
include changing economic and financial market conditions,
competition, ability to execute our business plan, items already
mentioned in this press release, and other factors described in our
filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's judgment only as of the date
hereof. The Company undertakes no obligation to publicly revise
these forward-looking statements to reflect events and
circumstances that arise after the date hereof.
Southern Community Financial Corporation
(Dollars in thousands except per share data)
(Unaudited)
For the three months ended For the Year Ended
Income Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, Dec 31,
Statement 2008 2008 2008 2008 2007 2008 2007
---------------------------------------------- -----------------
Total
Interest
Income $ 24,278 $ 24,412 $ 23,727 $ 24,325 $ 25,370 $ 96,742 $ 98,908
Total
Interest
Expense 11,459 12,553 11,947 13,323 14,132 49,282 55,141
-------- -------- -------- -------- -------- -------- --------
Net
Interest
Income 12,819 11,859 11,780 11,002 11,238 47,460 43,767
Provision
for Loan
Losses 2,360 1,350 3,530 925 750 8,165 2,775
Net
Interest
Income
after
Provision
for Loan
Losses 10,459 10,509 8,250 10,077 10,488 39,295 40,992
Non-Interest
Income
Service
Charges on
Deposit
Accounts 1,487 1,491 1,475 1,406 1,441 5,859 4,931
Income
from
mortgage
banking
activities 233 219 358 484 325 1,294 1,343
Investment
brokerage
and trust
fees 147 285 335 371 289 1,138 915
SBIC
income
(loss)
and
management
fees 89 39 82 (150) 394 60 2,103
Gain
(Loss)
and Net
Cash
Settlement
on Economic
Hedges - (440) 330 1,044 19 934 79
Other
Income 464 483 518 434 372 1,899 1,960
-------- -------- -------- -------- -------- -------- --------
Total
Non-
Interest
Income 2,518 2,077 3,098 3,589 2,840 11,282 11,331
Non-Interest
Expense
Salaries
and
Employee
Benefits 5,088 5,535 5,621 5,794 5,467 22,038 21,218
Occupancy
and
Equipment 1,930 1,854 1,931 1,964 2,021 7,679 7,928
Other 3,635 2,815 3,120 2,802 2,999 12,372 11,754
-------- -------- -------- -------- -------- -------- --------
Total
Non-
Interest
Expense 10,653 10,204 10,672 10,560 10,487 42,089 40,900
Income
Before
Taxes 2,324 2,382 676 3,106 2,841 8,488 11,423
Provision
for
Income
Taxes 766 754 73 1,041 948 2,634 3,869
-------- -------- -------- -------- -------- -------- --------
Net Income $ 1,558 $ 1,628 $ 603 $ 2,065 $ 1,893 $ 5,854 $ 7,554
======== ======== ======== ======== ======== ======== ========
Effective
dividend
on
preferred
stock 185 - - - - 185 -
-------- -------- -------- -------- -------- -------- --------
Net income
available
to common
share-
holders $ 1,373 $ 1,628 $ 603 $ 2,065 $ 1,893 $ 5,669 $ 7,554
======== ======== ======== ======== ======== ======== ========
Net Income
per
Common
Share
Basic $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11 $ 0.33 $ 0.43
Diluted $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11 $ 0.33 $ 0.43
======== ======== ======== ======== ======== ======== ========
Balance
Sheet Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2008 2008 2008 2008 2007
----------- ----------- ----------- ----------- -----------
Assets
Cash and
due from
Banks $ 25,215 $ 27,453 $ 37,576 $ 35,037 $ 31,905
Federal
Funds
Sold &
Int
Bearing
Balances 2,180 2,605 3,607 4,752 2,250
Investment
Securities 334,455 313,113 316,336 296,151 228,933
Loans held
for sale 316 920 2,106 4,110 1,929
Loans 1,314,811 1,323,360 1,285,014 1,235,952 1,188,438
Allowance
for Loan
Losses (18,851) (17,929) (17,499) (14,853) (14,258)
----------- ----------- ----------- ----------- -----------
Net
Loans 1,295,960 1,305,431 1,267,515 1,221,099 1,174,180
Bank
Premises
and
Equipment 40,030 39,264 39,672 38,790 38,997
Goodwill 49,501 49,792 49,792 49,792 49,792
Other
Assets 56,368 59,283 55,101 40,721 41,196
----------- ----------- ----------- ----------- -----------
Total
Assets $ 1,804,025 $ 1,797,861 $ 1,771,705 $ 1,690,452 $ 1,569,182
=========== =========== =========== =========== ===========
Liabilities
and
Stock-
holders'
Equity
Deposits
Non-
Interest
Bearing $ 102,048 $ 104,988 $ 114,685 $ 109,534 $ 109,895
Money
market,
savings
and NOW 475,772 523,949 560,094 507,105 495,448
Time 655,292 634,037 542,622 526,096 439,894
----------- ----------- ----------- ----------- -----------
Total
Deposits 1,233,112 1,262,974 1,217,401 1,142,735 1,045,237
Borrowings 373,213 378,500 401,667 393,306 372,405
Accrued
Expenses
and Other
Liabil-
ities 9,743 13,549 10,747 10,061 9,201
----------- ----------- ----------- ----------- -----------
Total
Liabil-
ities 1,616,068 1,655,023 1,629,815 1,546,102 1,426,843
Total
Stock-
holders'
Equity 187,957 142,838 141,890 144,350 142,339
----------- ----------- ----------- ----------- -----------
Total
Liabil-
ities and
Stock-
holders'
Equity $ 1,804,025 $ 1,797,861 $ 1,771,705 $ 1,690,452 $ 1,569,182
=========== =========== =========== =========== ===========
Book Value
per
Common
Share $ 8.78 $ 8.22 $ 8.17 $ 8.33 $ 8.18
=========== =========== =========== =========== ===========
As of or for the three months ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2008 2008 2008 2008 2007
---------- ---------- ---------- ---------- ----------
Per Common
Share Data:
Basic Earnings
per Share $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11
Diluted
Earnings per
Share $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11
Book Value per
Share $ 8.78 $ 8.22 $ 8.17 $ 8.33 $ 8.18
Cash dividends
paid $ 0.040 $ 0.040 $ 0.040 $ 0.040 $ 0.040
Selected
Performance
Ratios:
Return on
Average Assets
(annualized)
ROA 0.34% 0.36% 0.14% 0.51% 0.48%
Return on
Average Equity
(annualized)
ROE 4.01% 4.57% 1.68% 5.84% 5.35%
Return on
Tangible
Equity
(annualized) 5.98% 7.13% 2.60% 9.12% 8.42%
Net Interest
Margin 3.10% 2.88% 2.99% 2.98% 3.15%
Net Interest
Spread 2.88% 2.67% 2.76% 2.67% 2.77%
Non-interest
Income as a %
of Revenue 16.42% 14.90% 20.82% 24.60% 20.17%
Non-interest
Income as a %
of Average
Assets 0.56% 0.45% 0.71% 0.89% 0.72%
Non-interest
Expense to
Average Assets 2.35% 2.27% 2.47% 2.61% 2.67%
Efficiency
Ratio 69.46% 73.22% 71.73% 72.37% 74.49%
Asset Quality:
Nonperforming
Loans $ 14,433 $ 12,007 $ 12,796 $ 7,012 $ 2,052
Nonperforming
Assets $ 20,178 $ 15,086 $ 14,210 $ 8,042 $ 2,827
Nonperforming
Loans to Total
Loans 1.10% 0.91% 1.00% 0.57% 0.17%
Nonperforming
Assets to
Total Assets 1.12% 0.84% 0.80% 0.48% 0.18%
Allowance for
Loan Losses to
Period-end
Loans 1.43% 1.35% 1.36% 1.20% 1.20%
Allowance for
Loan Losses to
Nonperforming
Loans (X) 1.31X 1.49X 1.37X 2.12X 6.95X
Net Charge-offs
to Average
Loans
(annualized) 0.43% 0.28% 0.28% 0.11% 0.23%
Capital Ratios:
Equity to Total
Assets 10.42% 7.94% 8.01% 8.54% 9.07%
Tangible Equity
to Total
Tangible
Assets (1) 5.51% 5.26% 5.28% 5.69% 6.00%
Average
Balances:
Year to Date
Interest
Earning
Assets $1,588,542 $1,569,306 $1,535,388 $1,485,037 $1,370,413
Total
Assets 1,738,868 1,717,357 1,680,842 1,625,164 1,513,619
Total Loans 1,279,041 1,264,744 1,238,843 1,219,800 1,114,677
Equity 145,754 142,800 143,282 142,190 138,693
Interest
Bearing
Liabilities 1,474,539 1,456,848 1,421,227 1,368,420 1,250,986
Quarterly
Interest
Earning
Assets $1,645,832 $1,636,404 $1,586,068 $1,485,037 $1,416,061
Total
Assets 1,802,934 1,789,593 1,736,520 1,625,164 1,559,047
Gross
Loans 1,321,621 1,315,983 1,257,886 1,219,800 1,176,945
Equity 154,552 141,846 144,374 142,190 140,470
Interest
Bearing
Liabilities 1,527,227 1,527,316 1,474,186 1,368,420 1,291,307
Weighted
Average Number
of Shares
Outstanding
Basic 17,369,765 17,369,925 17,354,298 17,359,452 17,449,203
Diluted 17,398,432 17,416,675 17,401,298 17,401,589 17,466,703
Period end
outstanding
shares 16,769,675 17,370,175 17,370,175 17,319,351 17,399,882
As of or
For the Year Ended
Dec 31, Dec 31,
2008 2007
---------- ----------
Per Common
Share Data:
Basic Earnings
per Share $ 0.33 $ 0.43
Diluted
Earnings per
Share $ 0.33 $ 0.43
Book Value per
Share $ 8.78 $ 8.18
Cash dividends
paid $ 0.160 $ 0.155
Selected
Performance
Ratios:
Return on
Average Assets
(annualized)
ROA 0.34% 0.50%
Return on
Average Equity
(annualized)
ROE 4.02% 5.45%
Return on
Tangible
Equity
(annualized) 6.18% 8.64%
Net Interest
Margin 2.99% 3.19%
Net Interest
Spread 2.75% 2.81%
Non-interest
Income as a %
of Revenue 19.21% 20.57%
Non-interest
Income as a %
of Average
Assets 0.65% 0.75%
Non-interest
Expense to
Average Assets 2.42% 2.70%
Efficiency
Ratio 71.65% 74.23%
Asset Quality:
Nonperforming
Loans $ 14,433 $ 2,052
Nonperforming
Assets $ 20,178 $ 2,827
Nonperforming
Loans to Total
Loans 1.10% 0.17%
Nonperforming
Assets to
Total Assets 1.12% 0.18%
Allowance for
Loan Losses to
Period-end
Loans 1.43% 1.20%
Allowance for
Loan Losses to
Nonperforming
Loans (X) 1.31X 6.95X
Net Charge-offs
to Average
Loans
(annualized) 0.28% 0.14%
Capital Ratios:
Equity to Total
Assets 10.42% 9.07%
Tangible Equity
to Total
Tangible
Assets (1) 5.51% 6.00%
Average
Balances:
Year to Date
Interest
Earning
Assets
Total Assets
Total Loans
Equity
Interest Bearing
Liabilities
Quarterly
Interest
Earning
Assets
Total Assets
Gross Loans
Equity
Interest Bearing
Liabilities
Weighted Average
Number of
Shares
Outstanding
Basic 17,363,395 17,559,352
Diluted 17,398,318 17,624,399
Period end
outstanding
shares 16,769,675 17,399,882
(1) - Tangible Equity to Total Tangible Assets is period-ending equity less
intangibles, divided by period-ending assets less intangibles.
Management provides the above non-GAAP measure, footnote (1) to provide
readers with the impact of purchase accounting on this key financial ratio.
For additional information: F. Scott Bauer Chairman/CEO James
Hastings Executive Vice President/CFO (336) 768-8500
Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) (NASDAQ:SCMFO)
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Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) (NASDAQ:SCMFO)
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부터 5월(5) 2023 으로 5월(5) 2024
