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WINSTON-SALEM, N.C., July 27 /PRNewswire-FirstCall/ -- Southern Community Financial Corporation (Nasdaq: SCMF; SCMFO) (the "Company"), the holding company for Southern Community Bank and Trust and The Community Bank, reported operating results for the three and six-month periods ended June 30, 2004. The Company completed the acquisition of The Community Bank in the first quarter of 2004, which has provided much of the year-over-year growth. For the second quarter ended June 30, 2004, the Company reported net income of $1,957,000, up 129.7% from $852,000 in the year ago period. This represents earnings of $0.11 per diluted share compared with $0.09 per diluted share from the second quarter of 2003. For the six month period ended June 30, 2004, net income totaled $3,643,000, an increase of 102.5% from $1,799,000 for the same six-month period in 2003. On a diluted per share basis, the Company reported year to date earnings of $0.21 per share, a 10.5% increase from the $0.19 for the six months ended June 30, 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020823/SCFCLOGO )
Significant milestones achieved during 2004:
* Completed the acquisition of The Community Bank, raising assets to over
$1 billion and increasing the number of banking offices to 18;
* Opened a loan production office in Mooresville, North Carolina;
* Redeemed all of the outstanding 7.25% Cumulative Convertible Trust
Preferred Securities (SCMFP) on March 12, 2004;
* Increased common shares outstanding from 8.99 million at year-end 2003
to 17.71 million at the end of the second quarter;
* Paid an annual cash dividend of $0.11 per share on March 15, 2004;
* Added to the Russell 3000 Index on June 25, 2004;
* Increased net loans $35.4 million during the second quarter.
Net interest income for the second quarter rose to record levels at $8.6
million, a 66.9% increase over the $5.2 million reported in the same quarter a
year ago. Year to date, net interest income has risen to $17.1 million from
$10.0 million for the first six months of 2003, a rise of 70.4%. This growth
can be primarily attributed to the year over year increase in investment
securities and loans associated with the acquisition of The Community Bank, at
48.7% and 56.7%, respectively. Net interest income was further enhanced by
the level of non-interest bearing deposits, which rose 67.5% over the last
year.
The Company continues to generate solid fee income levels leading to a
25.0% rise in non-interest income to $1.8 million for the second quarter of
2004 from $1.4 million in the prior year period. As for the six months ended
June 30, 2004, non-interest income was $3.3 million as opposed to the $2.6
million reported for the same period in 2003, an increase of 27.6%. Non-
interest expense for the quarter increased by 46.1% over the second quarter of
2003 and totaled $6.7 million compared to $4.6 million in the year ago period.
This increase is a product of the continued transition of The Community Bank
acquisition along with higher staff levels needed to support growth.
As of June 30, 2004, the Company posted total assets of $1.2 billion, an
increase of 62.0%, or $450.3 million year over year and an increase of 2.9%,
or $33.4 million on a linked quarter basis. The consolidated loan portfolio,
net of allowance for loan losses, increased to $727.5 million in the current
quarter, an increase of $263.2 million, or 56.7% over the same quarter a year
ago. Total deposits expanded by $289.4 million, or 57.3% over the year ago
period to $794.8 million at June 30, 2004.
The Company's allowance for loan losses equaled $12.6 million, or 1.7% of
total loans and 706% of non-performing loans at June 30, 2004. Credit quality
metrics displayed improvement as non-performing assets as a percentage of
total assets amounted to 0.19% at June 30, 2004 compared to 0.24% at June 30,
2003. Non-performing assets totaled $2.2 million at quarter-end, in
comparison with $1.8 million as reported for the quarter ended June 30, 2003.
Net charge-offs as a percentage of average loans declined to .16% from .41% in
the second quarter of 2003 and to .15% from .34% for the six months ended June
30, 2003.
At June 30, 2004 stockholders' equity totaled $129.1 million and
represented 10.97% of total assets. Stockholders' equity increased $80.1
million or 163.4% from $49.0 million for the year ago period. The growth in
equity is a by-product of the issuance of $63 million of equity as a portion
of the consideration in The Community Bank acquisition as well as the
conversion into common stock of $17.3 million of the Company's convertible
trust preferred securities. Regulatory capital ratios are all in excess of
the "well-capitalized" threshold.
Southern Community Financial Corporation Chairman, President and Chief
Executive Officer F. Scott Bauer commented, "This past quarter has been one of
growth and integration in which we have made continuing progress in the
pursuit of our strategic objectives. We successfully incorporated The
Community Bank into our operations, attained record levels of net income, and
maintained quality assets. Our people continue to do a great job of serving
our customers."
Southern Community Financial Corporation is the holding company of
Southern Community Bank and Trust and The Community Bank. Southern Community
Bank and Trust is a community bank with eight offices in Winston-Salem,
Clemmons, High Point, Kernersville and Yadkinville, North Carolina. The
Community Bank operates ten banking offices serving markets in Pilot Mountain,
Mount Airy, Sandy Ridge, Madison, Union Grove, Dobson, King, Walnut Cove, and
Jonesville, North Carolina. Southern Community is headquartered in Winston-
Salem, North Carolina.
Southern Community Financial Corporation's common stock and trust
preferred securities are listed on the NASDAQ National Market under the
trading symbols SCMF and SCMFO, respectively. Additional information about
Southern Community is available on its website
at http://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.
Southern Community Financial Corporation
(Amounts in thousands except per share data)
(Unaudited)
For the three months ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
Income Statement 2004 2004 2003 2003 2003
Total Interest Income $13,154 $12,849 $9,510 $9,338 $8,801
Total Interest Expense 4,513 4,409 3,945 3,657 3,625
Net Interest Income 8,641 8,440 5,565 5,681 5,176
Provision for Loan Losses 717 597 595 465 685
Net Interest Income after
Provision for Loan Losses 7,924 7,843 4,970 5,216 4,491
Non-Interest Income
Service Charges on Deposit
Accounts 815 750 373 399 373
Other Income 965 779 761 858 1,051
Total Non-Interest Income 1,780 1,529 1,134 1,257 1,424
Non-Interest Expense
Salaries and Employee Benefits 3,525 3,454 2,541 2,549 2,413
Occupancy and Equipment 1,040 1,027 786 793 776
Other 2,161 2,270 1,491 1,550 1,415
Total Non-Interest Expense 6,726 6,751 4,818 4,892 4,604
Income Before Taxes 2,978 2,621 1,286 1,581 1,311
Provision for Income Taxes 1,021 935 450 553 459
Net Income 1,957 1,686 836 1,028 852
Net Income per Share
Basic $0.11 $0.11 $0.09 $0.12 $0.10
Diluted $0.11 $0.10 $0.09 $0.11 $0.09
Southern Community Financial Corporation
(Amounts in thousands except per share data)
(Unaudited)
Six months ended
June 30, June 30,
Income Statement 2004 2003
Total Interest Income $26,003 $17,171
Total Interest Expense 8,922 7,149
Net Interest Income 17,081 10,022
Provision for Loan Losses 1,314 1,225
Net Interest Income after Provision
for Loan Losses 15,767 8,797
Non-Interest Income
Service Charges on Deposit Accounts 1,565 670
Other Income 1,744 1,924
Total Non-Interest Income 3,309 2,594
Non-Interest Expense
Salaries and Employee Benefits 6,979 4,513
Occupancy and Equipment 2,067 1,466
Other 4,431 2,644
Total Non-Interest Expense 13,477 8,623
Income Before Taxes 5,599 2,768
Provision for Income Taxes 1,956 969
Net Income 3,643 1,799
Net Income per Share
Basic $0.22 $0.20
Diluted $0.21 $0.19
Balance Sheet June 30, March 31, Dec. 31, Sept. 30, June 30,
2004 2004 2003 2003 2003
Assets
Cash and due from Banks $24,447 $19,297 $22,929 $19,571 $18,346
Federal Funds Sold 4,349 6,014 271 19,436 1,097
Investment Securities 315,147 322,471 230,757 196,787 211,869
Loans 740,074 704,237 519,746 496,810 471,145
Allowance for Loan
Losses (12,567) (12,125) (7,275) (6,948) (6,816)
Net Loans 727,507 692,112 512,471 489,862 464,329
Bank Premises and
Equipment 25,320 24,730 17,337 18,033 18,041
Goodwill 50,063 50,071 - - -
Other Assets 29,603 28,295 14,737 13,171 12,439
Total Assets $1,176,436 $1,142,990 $798,502 $756,860 $726,121
Liabilities and
Stockholders' Equity
Deposits
Non-Interest Bearing 89,358 89,327 51,868 50,019 53,357
Interest Bearing 705,454 711,946 523,350 493,863 452,016
Total Deposits 794,812 801,273 575,218 543,882 505,373
Borrowings 245,971 202,867 169,527 158,725 168,230
Accrued Expenses and
Other Liabilities 6,574 7,775 2,866 5,022 3,510
Total Liabilities 1,047,357 1,011,915 747,611 707,629 677,113
Total Stockholders'
Equity 129,079 131,075 50,891 49,231 49,008
Total Liabilities
and Stockholders'
Equity $1,176,436 $1,142,990 $798,502 $756,860 $726,121
Book Value per Share $7.29 $7.44 $5.66 $5.55 $5.57
As of or for the three months ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
2004 2004 2003 2003 2003
Per Share Data:
Basic Earnings per Share $0.11 $0.11 $0.09 $0.12 $0.10
Diluted Earnings per Share $0.11 $0.10 $0.09 $0.11 $0.09
Book Value per Share $7.29 $7.44 $5.66 $5.55 $5.57
Cash dividends paid (1) - $0.11 - - -
Selected Performance Ratios:
Return on Average Assets
(annualized) 0.68% 0.61% 0.43% 0.55% 0.52%
Return on Average Equity
(annualized) 5.97% 5.61% 6.64% 8.25% 7.19%
Return on Tangible Equity
(annualized) (2) 9.94% 9.50% - - -
Net Interest Margin 3.32% 3.37% 3.05% 3.21% 3.38%
Net Interest Spread 3.10% 3.15% 2.85% 3.03% 3.15%
Non-interest Income as a %
of Revenue 17.08% 15.34% 16.91% 18.12% 21.57%
Non-interest Income as a %
of Average Assets 0.62% 0.55% 0.59% 0.67% 0.88%
Non-interest Expense to
Average Assets 2.33% 2.45% 2.48% 2.60% 2.83%
Efficiency Ratio 64.54% 67.72% 71.91% 70.52% 69.75%
Asset Quality:
Nonperforming Loans $1,779 $1,132 $769 $1,201 $1,092
Nonperforming Assets $2,235 $1,685 $1,041 $1,863 $1,766
Nonperforming Loans to Total
Loans 0.24% 0.16% 0.15% 0.24% 0.23%
Nonperforming Assets to Total
Assets 0.19% 0.15% 0.13% 0.25% 0.24%
Allowance for Loan Losses to
Period-end Loans 1.70% 1.72% 1.40% 1.40% 1.45%
Allowance for Loan Losses to
Nonperforming Loans (X) 7.06 10.71 9.46 5.79 6.24
Net Charge-offs to Average
Loans (annualized) 0.16% 0.14% 0.21% 0.27% 0.41%
Capital Ratios:
Equity to Total Assets 10.97% 11.47% 6.37% 6.50% 6.75%
Tangible Equity to Total
Tangible Assets (3) 6.83% 7.23% - - -
(1) - Amount is an annual dividend.
(2) - Return on Tangible Equity is annualized net income divided by
average equity of $127 million year-to-date and $131 million for
the quarter, less intangibles of $52 million.
(3) - Tangible Equity to Total Tangible Assets is period-ending equity
less intangibles of $52 million, divided by period-ending assets
less intangibles of $52 million.
Management provides the above non-GAAP measures, footnotes (2) and (3), to
provide readers with the impact of purchase accounting on key financial
ratios.
As of or for the six months ended
June 30, June 30,
2004 2003
Per Share Data:
Basic Earnings per Share $0.22 $0.20
Diluted Earnings per Share $0.21 $0.19
Book Value per Share $7.29 $5.57
Cash dividends paid (1) $0.11 -
Selected Performance Ratios:
Return on Average Assets (annualized) 0.64% 0.57%
Return on Average Equity (annualized) 5.76% 7.51%
Return on Tangible Equity (annualized) (2) 9.82% -
Net Interest Margin 3.35% 3.39%
Net Interest Spread 3.12% 3.14%
Non-interest Income as a % of Revenue 16.23% 20.56%
Non-interest Income as a % of Average Assets 0.58% 0.82%
Non-interest Expense to Average Assets 2.37% 2.74%
Efficiency Ratio 66.10% 68.35%
Asset Quality:
Nonperforming Loans $1,779 $1,092
Nonperforming Assets $2,235 $1,766
Nonperforming Loans to Total Loans 0.24% 0.23%
Nonperforming Assets to Total Assets 0.19% 0.24%
Allowance for Loan Losses to Period-end Loans 1.70% 1.45%
Allowance for Loan Losses to Nonperforming
Loans (X) 7.06 6.24
Net Charge-offs to Average Loans (annualized) 0.15% 0.34%
Capital Ratios:
Equity to Total Assets 10.97% 6.75%
Tangible Equity to Total Tangible Assets (3) 6.83% -
(1) - Amount is an annual dividend.
(2) - Return on Tangible Equity is annualized net income divided by
average equity of $127 million year-to-date and $131 million for
the quarter, less intangibles of $52 million.
(3) - Tangible Equity to Total Tangible Assets is period-ending equity
less intangibles of $52 million, divided by period-ending assets
less intangibles of $52 million.
Management provides the above non-GAAP measures, footnotes (2) and (3), to
provide readers with the impact of purchase accounting on key financial
ratios.
SOURCE Southern Community Financial Corporation
-0- 07/27/2004
/CONTACT: F. Scott Bauer, Chairman and CEO of Southern Community
Financial Corporation, +1-336-768-8500/
/Photo: http://www.newscom.com/cgi-bin/prnh/20020823/SCFCLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com /
/Web site: http://www.smallenoughtocare.com /
(SCMF SCMFO)
CO: Southern Community Financial Corporation
ST: North Carolina
IN: FIN
SU: ERN
KM-JJ
-- CLTU105 --
9722 07/27/200417:23 EDThttp://www.prnewswire.com