WINSTON-SALEM, N.C. , Dec. 7, 2011 /PRNewswire/ -- In a move to
separate the powers of Chairman and Chief Executive Officer,
Southern Community Financial Corporation (the "Company") (NASDAQ:
SCMF) announced today that it has named founding director Dr.
William G. Ward, Sr. as Chairman of
the Board of Directors. The Board of Directors (the "Board") asked
F. Scott Bauer, the Company's Chief
Executive Officer, to also assume the role of President.
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The decision, part of the Company's ongoing efforts to
strengthen future performance, follows October's third-quarter
announcement in which Southern Community reported its strongest
year-over-year gains in loan quality and net income since the
beginning of the financial crisis in
2008.
In an era of increasing financial oversight by governing bodies,
the Board voted to establish clearer lines of reporting between
itself and the Company's management.
"In this new business and regulatory environment, I believe more
banks will separate these two positions," said Ward, currently a
professor of Orthopedic Surgery at Wake Forest
University Baptist Medical Center. "Boards are expected to
be intimately involved in the supervision and direction of their
companies. Having further clarity in the duties, responsibilities
and reporting will facilitate the Board's oversight of bank
operations."
Ward, 58, was recently named among "America's Top Doctors for
Cancer" by Castle Connolly Medical, Ltd., an honor he has received
every year since 2005. Castle Connolly annually publishes a series
of books representing the best doctors by specialty for consumers
looking for the best in healthcare. Doctors are nominated by their
peers.
Ward, a 1978 graduate of the Duke
University School of Medicine, has performed more than 5,000
tumor-related orthopedic surgeries in his career. He joined
Wake Forest University Baptist Medical
Center in 1990, a year after he completed his residency at
Duke University Hospital.
Like many community banks, Southern Community Bank originally
separated the Chairman and CEO roles into separate positions when
it opened in 1996. Bauer was elected to the chair after the
founding chairman retired in 2001.
"Our management team understands the significance and importance
of this decision; we know in the end it will make us a stronger
company," Bauer said. "Bill's election as Chairman comes at a time
when our bank has made significant progress over the past 12
months. He is an excellent choice for Chairman. Bill is
well-respected and has been with our bank from the beginning. He
understands the challenges facing the financial industry."
With his resignation as Chairman and director, Bauer was asked
by the Board to add to his CEO duties the role of President,
removing any doubt to outsiders that he remains clearly in charge
of the day-to-day operations of the Company.
Jeff Clark, former President and
successor to Bauer, will become First Executive Vice President and
Chief Commercial Banking Officer and continue to perform many of
the duties he held as President. Clark formally takes over the
responsibilities left vacant earlier this year following the
departure of the bank's commercial lending executive.
"Jeff is the architect and manager of our sales culture," Bauer
said. "He has always done everything possible to keep us
successful. Jeff's leadership is crucial to the Company continuing
its forward progress."
"The Company continues to benefit from regulatory guidance
as its financial performance appears to be turning around," says
Ward. Ward brings to the chairmanship insight and perspective
from an earlier experience in which he served as a founding
director for a community bank before Southern Community.
"Scott and I both agree that our management team has no greater
responsibility than to focus its attention on working with
regulators to remove the bank from under the written agreement," he
said. "We have made significant progress toward that goal over the
past 12 months thanks to our management team.
"I've known Scott since before we opened as Southern
Community Bank," Ward said. "He was an excellent choice to lead our
bank then and he remains our choice to lead our Company in the
future. Scott has many great qualities; one of the best being that
he surrounds himself with highly qualified individuals. Our senior
management team is superb."
Bauer believes the decision will create greater clarity of roles
between the Board and management, a strategic move that will have a
lasting impact on the Company's performance in years to come.
"The strongest message I could send to our shareholders and
customers is that Southern Community Bank has faced its problems
head-on," he said. "We believe that we are emerging on the other
side of these challenges. And with these changes, we expect to see
continued improvement."
The change comes as Southern Community is making noteworthy
progress, particularly in the area of credit risk management. Of
note is the improvement of the Company's loan portfolio. Nearly
every measure of credit quality is significantly better than it was
12 months ago – from nonperforming assets to charge-offs to
reserves for loan losses.
October's earnings revealed that the Company's most recent
year-over-year results - representing third-quarter comparisons
between 2011 and 2010 - were their best since 2008.
Nonperforming assets, which include noncurrent loans and
foreclosed property, fell by $26.2
million or 22 percent from 2010 levels. Charge-offs were
down to 1.98 percent of average loans compared to 3.78 percent a
year ago. The Company needed significantly less in its provision
for loan losses, a reduction of nearly $13
million over last year.
As credit quality has improved so has net income. In June, the
Company reported its first profit in two years. In the quarter
ended September 30, 2011, Southern
Community followed with its second straight quarterly profit. And
despite reporting a loss at March 31,
2011, the Company earned $161,000 for the first nine months of 2011
compared to a $14.2 million loss
through nine months in 2010.
Southern Community's capital ratios – the measure of a bank's
financial strength – have improved as well. Tier 1 leverage
capital, a combination of equity and retained earnings, improved in
the third quarter to 8.76 percent of total assets from 7.42 percent
reported at December 31, 2010. The
bank's capital ratios have always exceeded regulatory
requirements.
The Company's progress, according to management, is largely a
direct result of efforts to remove problem assets from its balance
sheet, as new credit and loan review processes implemented over the
course of two years have begun to have a meaningful impact on
financial performance. Southern Community's efforts have focused on
loan review, problem loan management, underwriting, risk grading,
loan remediation and loan loss modeling.
"Our goal has always been to do everything possible to help our
customers, no matter the circumstance," Bauer said. "That has been
especially true in the past few years. We're positive about the
future and extremely appreciative of the support that our
shareholders and customers continue to show us."
Southern Community Financial Corporation, the holding company of
Southern Community Bank and Trust, operates 22 banking offices
throughout North Carolina. For
more information, go to www.smallenoughtocare.com.
SOURCE Southern Community Financial Corporation