Southern Community Financial Corporation Provides Guidance on Anticipated Second Quarter 2009 Results
30 June 2009 - 10:00PM
Marketwired
Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO) updated its guidance for second quarter 2009 results. The
Company now expects its provision for loan losses will increase to
approximately $6.0 million for the second quarter 2009 in response
to an accelerated level of charge-offs. Net charge-offs are now
anticipated to be approximately $5.7 million to $5.9 million, or
1.78% to 1.84% of average loans on an annualized basis, compared
with $3.5 million or 1.09% of average loans (annualized) for the
first quarter 2009. The allowance for loan losses is expected to be
in the range of $19.4 million to $19.6 million or 1.53% to 1.55% of
total loans, up from $19.3 million or 1.49% of total loans in the
first quarter of 2009.
"This increase in our provision for loan losses and net
charge-offs for the second quarter is driven by our aggressive
efforts to work off troubled assets and effectively resolve problem
credits. Similar to the trends that we experienced over the past
year, this quarter's charge-off activity is primarily related to
our residential construction and development loans, as sales
continue to be negatively impacted by the persistent slow housing
market conditions. During the second quarter, we have seen
decreasing loan delinquencies and expect a reduction in
nonperforming loans at quarter-end versus the March 31, 2009 level
of $20.3 million or 1.56% of total loans. However, despite the
expected decline in nonperforming loans, an increased level of
foreclosed assets is expected to increase nonperforming assets to a
range between 2.10% to 2.15% of total assets at June 30, 2009
compared with 1.73% of total assets at March 31, 2009," said F.
Scott Bauer, Chairman and Chief Executive Officer.
Southern Community also announced that it expects to take a $1.0
million charge against earnings to write off the value of
collateral held by Lehman Brothers as the counterparty in certain
derivative contracts. As previously disclosed, the Company has
filed a claim against Lehman for all funds due to the Company,
including the return of this collateral, as a result of Lehman's
technical default. Counsel has recently determined that the
Company's claim against Lehman in pending bankruptcy proceedings
will be classified as an unsecured creditor with no preferential
status. Despite the potential for partial recovery through either
insurance coverage or the bankruptcy proceedings, the Company
recognizes that there is material uncertainty involved in the
determination of the collateral's continuing value which could
result in little or no recovery of this asset. A charge of $440
thousand associated with these derivatives was previously taken in
the third quarter of 2008. The charge in the second quarter 2009
eliminates all exposure under Lehman derivative contracts.
Southern Community expects to release full second quarter 2009
results on Thursday, July 23, 2009. Conference call information
will be provided at a later date.
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.
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)
Historical Stock Chart
From May 2024 to Jun 2024
Capital Bank Financial Corp. - Southern Community Capital Trust II - % Cumulative Trust Preferred Securities (MM) (NASDAQ:SCMFO)
Historical Stock Chart
From Jun 2023 to Jun 2024