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WINSTON-SALEM, N.C., Jan. 28 /PRNewswire-FirstCall/ -- Southern Community Financial Corporation (Nasdaq: SCMF; SCMFP; SCMFO) (the "Company"), the holding company for Southern Community Bank and Trust and The Community Bank, announced record net income for the year ended December 31, 2003 of $3,663,000, an increase of 14.0% over net income of $3,214,000 earned in 2002. Diluted earnings per share for the year were $0.40, up 14.3% from the $0.35 reported for 2002. For the 4th quarter ended December 31, 2003, the Company reported net income of $836,000, or $0.09 per diluted share versus net income of $1,051,000, or $0.12 per diluted share reported in the year ago period.
Significant milestones achieved during 2003:
- Announced the execution of a definitive agreement to acquire The
Community Bank (transaction closed 1-12-04 bringing total assets to
over $1 billion);
- Ranked the 3rd largest community bank in the Piedmont Triad;
- Sold the operations of Southeastern Acceptance Corporation;
- Opening of a loan production office in Iredell County (Mooresville,
NC);
- Expanded ATM network with three new locations (Winston-Salem at Ernie
Shore Field, Lewisville, and High Point);
- Sold $34.5 million in Trust Preferred securities.
Net interest income for the 4th quarter remained at record levels despite
the continued contraction of our net interest margin. Net interest income was
$5.6 million, a 10.5% increase over the $5.0 million reported in the same
quarter a year ago. For the year, net interest income rose to $21.3 million
from $17.5 million for the year ended December 31, 2002, a rise of 21.7%,
primarily due to an increase in interest earning assets. The net interest
margin for the fourth quarter declined to 3.05%, a reduction of 16 basis
points from the third quarter of 2003 caused by the prolonged effects of low
interest rates on deposit spreads.
Total non-interest income for the year ended December 31, 2003 was $5.0
million, an increase of 26.9% over the $3.9 million reported for the
corresponding 2002 period. For the three months ended December 31, 2003 and
2002, non-interest income was $1.1 million and $1.3 million, respectively.
Growth in non-interest income during 2003 reflected continued strength in
depositor and other retail banking fees as well as improved performance in the
full-service brokerage and mortgage areas. Non-interest expense for the
fourth quarter increased by 15.0% over the 4th quarter of 2002 and totaled
$4.8 million compared to $4.2 million in the year ago period. Total non-
interest expense for 2003 and 2002 was $18.3 million and $14.8 million,
respectively. This increase is a byproduct of the opening of a new corporate
office and LPO office combined with continued strong internal growth.
Total assets increased $186.3 million, or 30.4%, to $798.5 million at
December 31, 2003 from $612.2 million at December 31, 2002. The increase in
total assets for the year reflected a $96.9 million increase in the Bank's
loan portfolio, net of allowance for loan losses, as well as an increase of
$88.1 million in investment securities. On a quarterly basis, total assets
increased by $41.6 million, or 5.5% from September 30, 2003. Total deposits
expanded to $575.2 million at December 31, 2003, an increase of $31.3 million
over the prior quarter and an increase of $126.0 million from year-end 2002.
The Company's allowance for loan losses equaled $7.3 million, or 1.40% of
total loans and 946% of non-performing loans at December 31, 2003. The
Company's asset quality continued its marked improvement as non-performing
loans totaled $769,000 or 0.15% of total loans at year-end, in comparison with
$1.8 million or 0.43% of total loans as reported for December 31, 2002. Net
charge-offs at 0.29% of average loans for 2003 were down year-over-year as
compared to 0.38% reported at year-end 2002.
Stockholders' equity totaled $50.9 million, or 6.37% of total assets at
December 31, 2003 which represents an increase of $3.4 million, or 7.1% from
$47.5 million for the year ago period. In addition, regulatory capital ratios
are all well in excess of the "well-capitalized" threshold.
Southern Community Financial Corporation Chairman, President and Chief
Executive Officer F. Scott Bauer commented, "This past year has been one of
dynamic positive change for our Company. We were able to attain record levels
of net income and continued improvement in credit quality, while having
extraordinary internal growth. The addition of the excellent team at The
Community Bank positions us well for 2004 and beyond. We are proud of the
caring service our people have continued to provide to our customers."
Southern Community Financial is the holding company of Southern Community
Bank and Trust and The Community Bank. 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 Bank and Trust operates eight offices in
Winston-Salem, Clemmons, High Point, Kernersville and Yadkinville, North
Carolina.
Southern Community Financial Corporation's common stock trades on The
NASDAQ National Market under the trading symbol SCMF and trust preferred
securities under the symbols SCMFP and SCMFO. Additional information about
Southern Community 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.
Southern Community Financial Corporation
(Amounts in thousands except per share data)
(Unaudited)
For the three months ended
Dec. 31, Sept. 30, June 30, March 31,
Income Statement 2003 2003 2003 2003
Total Interest Income $9,510 $9,338 $8,801 $8,370
Total Interest Expense 3,945 3,657 3,625 3,524
Net Interest Income 5,565 5,681 5,176 4,846
Provision for Loan Losses 595 465 685 540
Net Interest Income after Provision
for Loan Losses 4,970 5,216 4,491 4,306
Non-Interest Income
Service Charges on Deposit Accounts 373 399 373 297
Other Income 761 858 1,051 873
Gain on Sale of Securities 0 0 0 0
Total Non-Interest Income 1,134 1,257 1,424 1,170
Non-Interest Expense
Salaries and Employee Benefits 2,541 2,549 2,413 2,100
Occupancy and Equipment 786 793 776 690
Other 1,491 1,550 1,415 1,229
Total Non-Interest Expense 4,818 4,892 4,604 4,019
Income Before Taxes 1,286 1,581 1,311 1,457
Provision for Income Taxes 450 553 459 510
Net Income 836 1,028 852 947
Net Income per Share
Basic $0.09 $0.12 $0.10 $0.11
Diluted $0.09 $0.11 $0.09 $0.10
Southern Community Financial Corporation
(Amounts in thousands except per share data)
(Unaudited)
For the three Twelve Months
months ended ended
Dec. 31, Dec. 31, Dec. 31,
Income Statement 2002 2003 2002
Total Interest Income $8,917 $36,019 $33,281
Total Interest Expense 3,879 14,751 15,803
Net Interest Income 5,038 21,268 17,478
Provision for Loan Losses 475 2,285 1,655
Net Interest Income after Provision
for Loan Losses 4,563 18,983 15,823
Non-Interest Income
Service Charges on Deposit Accounts 311 1,442 1,121
Other Income 962 3,543 2,737
Gain on Sale of Securities 0 0 69
Total Non-Interest Income 1,273 4,985 3,927
Non-Interest Expense
Salaries and Employee Benefits 2,289 9,603 7,758
Occupancy and Equipment 665 3,045 2,508
Other 1,237 5,685 4,515
Total Non-Interest Expense 4,191 18,333 14,781
Income Before Taxes 1,645 5,635 4,969
Provision for Income Taxes 594 1,972 1,755
Net Income 1,051 3,663 3,214
Net Income per Share
Basic $0.12 $0.41 $0.37
Diluted $0.12 $0.40 $0.35
For the three months ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
Balance Sheet 2003 2003 2003 2003 2002
Assets
Cash and due from Banks $22,929 $19,571 $18,346 $17,170 $16,632
Federal Funds Sold 271 19,436 1,097 605 11,084
Investment Securities 224,424 189,454 205,036 126,643 136,324
Other Investments, at
cost 6,333 7,333 6,833 5,355 5,355
Loans 519,746 496,810 471,145 442,896 421,938
Allowance for Loan
Losses (7,275) (6,948) (6,816) (6,603) (6,342)
Net Loans 512,471 489,862 464,329 436,293 415,596
Bank Premises and
Equipment 17,337 18,033 18,041 16,629 15,962
Other Assets 14,737 13,171 12,439 11,363 11,286
Total Assets $798,502 $756,860 $726,121 $614,058 $612,239
Liabilities and
Stockholders' Equity
Deposits
Non-Interest Bearing 51,868 50,019 53,357 46,873 41,869
Interest Bearing 523,350 493,863 452,016 415,121 407,347
Total Deposits 575,218 543,882 505,373 461,994 449,216
Borrowings 117,875 141,475 150,980 83,436 95,706
Trust Preferred
Securities 51,575 17,250 17,250 17,250 17,250
Accrued Expenses and
Other Liabilities 2,943 5,022 3,510 3,089 2,528
Total Liabilities 747,611 707,629 677,113 565,769 564,700
Total Stockholders'
Equity 50,891 49,231 49,008 48,289 47,539
Total Liabilities and
Stockholders' Equity $798,502 $756,860 $726,121 $614,058 $612,239
Book Value per Share $5.71 $5.55 $5.57 $5.49 $5.41
As of or for the three months ended
Dec. 31, Sept. 30, June 30, March 31,
2003 2003 2003 2003
Per Share Data:
Basic Earnings per Share $0.09 $0.12 $0.10 $0.11
Diluted Earnings per Share $0.09 $0.11 $0.09 $0.10
Book Value per Share $5.71 $5.55 $5.57 $5.49
Selected Performance Ratios:
Return on Average Assets 0.43% 0.55% 0.52% 0.64%
Return on Average Equity 6.64% 8.25% 7.19% 8.00%
Net Interest Margin 3.05% 3.21% 3.38% 3.48%
Net Interest Spread 2.85% 3.03% 3.15% 3.21%
Non-interest Income as a % of Revenue 16.91% 18.12% 21.57% 19.45%
Non-interest Income as a % of Average
Assets 0.59% 0.67% 0.88% 0.79%
Non-interest Expense to Average
Assets 2.48% 2.60% 2.83% 2.71%
Efficiency Ratio 71.91% 70.52% 69.75% 66.81%
Asset Quality:
Nonperforming Loans $769 $1,201 $1,092 $3,432
Nonperforming Assets $1,041 $1,863 $1,766 $3,646
Nonperforming Loans to Total Loans 0.15% 0.24% 0.23% 0.77%
Nonperforming Assets to Total Assets 0.13% 0.25% 0.24% 0.59%
Allowance for Loan Losses to Period-
end Loans 1.40% 1.40% 1.45% 1.49%
Allowance for Loan Losses to
Nonperforming Loans (X) 9.46 5.79 6.24 1.92
Net Charge-offs to Average Loans
(annualized) 0.21% 0.27% 0.41% 0.26%
Capital Ratios:
Equity to Total Assets 6.37% 6.50% 6.75% 7.86%
As of or for the As of or for the
three months ended the 12 months ended
Dec. 31, Dec. 31, Dec. 31,
2002 2003 2002
Per Share Data:
Basic Earnings per Share $0.12 $0.41 $0.37
Diluted Earnings per Share $0.12 $0.40 $0.35
Book Value per Share $5.41 $5.71 $5.41
Selected Performance Ratios:
Return on Average Assets 0.69% 0.53% 0.58%
Return on Average Equity 8.87% 7.48% 7.24%
Net Interest Margin 3.48% 3.25% 3.34%
Net Interest Spread 3.19% 3.03% 3.02%
Non-interest Income as a % of Revenue 20.17% 18.99% 18.35%
Non-interest Income as a % of Average
Assets 0.83% 0.72% 0.71%
Non-interest Expense to Average
Assets 2.73% 2.63% 2.66%
Efficiency Ratio 66.44% 69.83% 69.05%
Asset Quality:
Nonperforming Loans $1,823 $769 $1,823
Nonperforming Assets $2,206 $1,041 $2,206
Nonperforming Loans to Total Loans 0.43% 0.15% 0.43%
Nonperforming Assets to Total Assets 0.36% 0.13% 0.36%
Allowance for Loan Losses to Period-
end Loans 1.50% 1.40% 1.50%
Allowance for Loan Losses to
Nonperforming Loans (X) 3.48 9.46 3.48
Net Charge-offs to Average Loans
(annualized) 0.25% 0.29% 0.38%
Capital Ratios:
Equity to Total Assets 7.76% 6.37% 7.76%
SOURCE Southern Community Financial Corporation
-0- 01/28/2004
/CONTACT: F. Scott Bauer, Chairman and CEO of Southern Community
Financial Corporation, +1-336-768-8500/
/Web site: http://www.smallenoughtocare.com/
(SCMF SCMFP SCMFO)
CO: Southern Community Financial Corporation
ST: North Carolina
IN: FIN
SU: ERN
MH-JK
-- CLW095 --
6089 01/28/200418:40 ESThttp://www.prnewswire.com