Southern Community Financial Corporation Announces Suspension of Quarterly Dividend and Provides Guidance on Anticipated First Q
24 Marzo 2009 - 2:30PM
Marketwired
Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO) announced that its Board of Directors voted to suspend
payment of the Company's quarterly cash dividend. The Board will
continue to evaluate the payment of a quarterly cash dividend on a
quarterly basis.
Southern Community also announced that it anticipates
nonperforming loans to increase to a range of approximately $21.0
million to $25.3 million, or 1.60% to 1.93% of total loans in the
first quarter of 2009, up from $14.4 million or 1.10% of total
loans in the fourth quarter of 2008. The Company also anticipates
net charge-offs of approximately $3.1 million to $3.3 million or
approximately 0.95% to 1.01% of average loans on an annualized
basis, up from $1.4 million or 0.44% of average loans (annualized)
in the fourth quarter of 2008. As a result of the increased level
of nonperforming loans and net charge-offs, Southern Community
expects to record a provision for loan losses of approximately $4.0
million. The allowance for loan losses is expected to be in the
range of $19.6 million to $19.8 million or 1.50% to 1.51% of total
loans, up from $18.9 million or 1.43% of total loans in the fourth
quarter of 2008.
"The suspension of our quarterly dividend, while disappointing,
is a prudent step in preserving our capital during this severe
economic crisis. In addition, we proactively took this step and
believe that cash dividends should be paid from current and
expected earnings preserving our capital. We estimate that our
decision will save nearly $2.7 million in capital annually, or $671
thousand per quarter," said F. Scott Bauer, Chairman and Chief
Executive Officer.
"As it was in the fourth quarter of 2008, the increase in
nonperforming loans and net charge-offs during the first quarter of
2009 was primarily related to our residential construction and
development loans, which have been negatively impacted by the
persistent slow housing market. Our lending officers are
proactively monitoring delinquencies, and we are continuing to work
with builders to effectively resolve problem credits and provide
relief until market conditions improve. This includes monitoring
the completion of homes, meeting with borrowers, employing key
realtors who are actively selling properties and reducing housing
inventories.
"While the provision for loan losses is expected to increase
significantly in the first quarter of 2009 compared to the fourth
quarter of 2008, we expect to remain modestly profitable in the
first quarter of 2009. Our capital remains strong exceeding the
regulatory standards for well capitalized institutions. As a result
of the increased loan loss provision and strong capital position, I
believe we will be better positioned to weather the uncertain
economic climate that is expected to unfold throughout 2009."
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
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