Southern Community Enters Into Consent Order With Regulators; Bank's Capital Position Exceeds Regulatory Requirements
17 2월 2011 - 9:00PM
Marketwired
Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO) announced today that its wholly-owned bank subsidiary,
Southern Community Bank and Trust, has entered into a Consent Order
with the Federal Deposit Insurance Corporation and the State of
North Carolina Office of the Commissioner of Banks with certain
requirements, including reducing problem loans and maintaining
current capital levels.
"One of the positives that came from our recent regulatory
examination was the recognition by regulators that we are in
compliance with all regulatory capital requirements," said Chairman
and CEO F. Scott Bauer. "Credit quality has been a concern of ours
for the past two years. Fortunately, we have begun to see
improvement over the last few quarters."
Separately, Southern Community has elected to defer dividend
payments on its preferred stock issued to the U.S. Department of
Treasury and interest payments on both outstanding issues of trust
preferred securities.
The Bank's agreement with the regulators follows on the heels of
one of the nation's worst economic periods since the Great
Depression.
"The banking industry continues to be challenged by the economic
climate," Bauer said. "In the past two years, we have revamped our
credit policies to reduce our exposure and address future credit
risk."
"Our Board and management team are committed to working closely
with regulatory agencies to continue to resolve the issues facing
the Bank and meet all of the terms and conditions of the agreement.
For over two years, the banking industry has been, and continues to
be, particularly challenged by the economic climate in our markets.
We will continue to address those challenges head-on. We will not
be diverted from providing our customers with the outstanding
services and fast, friendly service to which they are accustomed.
Our management remains confident in our ability to overcome this
challenge and looks forward to emerging as an even stronger Bank
than before."
Under the agreement with the regulators, entered into on
February 16, 2011, the Bank has agreed, among other matters, to:
(1) improve its credit risk exposure through continued reductions
in problem assets and continued enhancements to credit risk
management practices; (2) comply with regulatory capital
requirements of 8% Tier 1 leverage capital and 11% total risk-based
capital ratios; and (3) not accept or renew any brokered
deposits.
The Company has given notice to the U.S. Treasury Department
that it is suspending the payment of regular quarterly cash
dividends on the Company's preferred stock issued to the U.S.
Treasury Department. The dividends will continue to be accrued for
payment in the future.
Additionally, the Company has also elected to defer regularly
scheduled interest payments on both issues of junior subordinated
debentures, relating to outstanding trust preferred securities
(TRUPS), having an outstanding principal amount of $45.9 million.
Under the terms of the trust documents, the Company may defer
payments of interest for up to 20 consecutive quarterly periods
without default or penalty. The regularly scheduled interest
payments will continue to be accrued for payment in the future and
reported as an expense for financial statement purposes.
Together, the deferral of interest payments on TRUPS and
suspension of dividend payments to the U.S. Treasury Department
should preserve approximately $5.1 million per year in bank level
capital. While the Company has sufficient cash and liquidity to pay
the scheduled dividends on its TARP Preferred Stock and interest
payments on the TRUPS, these actions are taken: (1) to support and
preserve its capital position in light of uncertain economic
conditions, (2) as a source of strength for its subsidiary bank and
(3) to lessen the need for raising any additional capital. The
Company intends to re-evaluate the deferral of these payments
periodically and, in consultation with its regulators, will
consider reinstating these payments when appropriate.
About Southern Community Financial
Corporation
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 is available on our
website at www.smallenoughtocare.com (including the Form 8-K filed
with the Securities and Exchange Commission) or by email at
investor.relations@smallenoughtocare.com.
Forward-Looking Statements
Certain statements in this news release contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, such as statements relating to future plans and
expectations, and are thus prospective. Such forward-looking
statements include but are not limited to (1) statements regarding
potential future economic recovery, (2) statements with respect to
our plans, objectives, expectations, intentions and other
statements that are not historical facts, and (3) other statements
identified by words such as "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "targets" and "projects," as well
as similar expressions. Such statements are subject to risks,
uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. Although we believe that the
assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove to be inaccurate.
Therefore, we can give no assurance that the results contemplated
in the forward-looking statements will be realized. The inclusion
of this forward-looking information should not be construed as a
representation by our Company or any person that the future events,
plans or expectations contemplated by our Company will be
achieved.
All subsequent written and oral forward-looking statements
concerning the Company or any person acting on its behalf is
expressly qualified in its entirety by the cautionary statements
above. We do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
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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