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WINSTON-SALEM, N.C., July 24 /PRNewswire-FirstCall/ -- Southern Community Financial Corporation (Nasdaq: SCMF SCMFP) (the "Company"), the holding company for Southern Community Bank and Trust, reported operating results for the three and six-month periods ended June 30, 2003. For the 2nd quarter ended June 30, 2003, the Company reported net income of $852,000, up 26.6% from $673,000 in the year ago period. Earnings per share increased 28.6% to $0.09 per diluted share as compared to $0.07 per diluted share for the 2nd quarter of 2002. As for the six-month period ended June 30, 2003, net income rose to $1,799,000, an increase of 46.5% from $1,228,000 for the same six- month period in 2002. On a diluted per share basis, the Company reported $0.19 as opposed to $0.13 for the six-month period ended June 30, 2002, up 46.2%. The Company ended the period with total assets of $726.1 million.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020823/SCFCLOGO )
Significant milestones achieved during 2003:
* Loan growth of $49.2 million or 12%; * Total assets in excess of $700 million; * Opening of new, thirty thousand square foot corporate office; * Opening of full-service branch office in High Point; * Major ad campaign emphasizing bank's full-service capabilities; * Expanded ATM network with three new locations (Winston-Salem at Ernie Shore Field, Lewisville, and High Point); * A 52% reduction in non-performing assets at June 30, 2003 as compared to March 31, 2003.Net interest income for the 2nd quarter rose to record levels at $5.2 million, a 25.1% increase over the $4.1 million reported in the same quarter a year ago. Year to date, net interest income has risen to just over $10 million from $7.7 million for the first six months of 2002, a rise of 29.5%. This growth can be primarily attributed to the increase in earning assets and the favorable mix of deposit growth, as non-interest bearing deposits grew more rapidly than interest bearing deposits over the past year, at 41.8% and 13.4%, respectively. Another contributing factor was the expansion of net interest margin to 3.38% in the current quarter, an increase of 9 basis points over the 2nd quarter of 2002.
The Company continues to generate solid fee income levels leading to a 61.1% rise in non-interest income to $1.4 million for three-months ended June 30, 2003, from $884,000 in the prior year period. Although non-interest income typically increases commensurate with asset growth, the Company was able to grow non-interest income at more than double the rate of the growth in assets. As for the six months ended June 30, 2003, non-interest income was $2.6 million as opposed to the $1.6 million reported in the first half of 2002, an increase of 57.7%. In looking at the components of non-interest income, service charges on deposit accounts increased in the 2nd quarter to $373,000 from $284,000 in the year ago period, while other income rose 98% to $1.05 million from $531,000. The main impetus behind this growth in other income was fee income produced by mortgage loan originations, increasing popularity of the bounce protection feature and investment brokerage services. Non-interest expense for the quarter increased by 28.9% over the 2nd quarter of 2002 and totaled $4.6 million compared to $3.6 million in the year ago period. This increase is primarily the result of higher personnel costs associated with our continued growth.
As of June 30, 2003, the Company posted total assets of $726.1 million, an increase of 18.2%, or $112.1 million on a linked quarter basis and an increase of 28.5%, or $161.2 million year over year reflecting increases in the loan and investment portfolios. The Bank's loan portfolio, net of allowance for loan losses, increased to $464.3 million, an increase of $28.0 million, or 6.4% from March 31, 2003 and an increase of $68.6 million, or 17.3% from June 30, 2002. Investment securities increased by $80 million during the 2nd quarter of 2003 due to replacing bonds that matured in the 1st quarter and pre-investing projected maturities for the remainder of the year. Total deposits expanded to $505.4 million at June 30, 2003, an increase of $43.4 million over the prior quarter and an increase of $69.0 million from the year ago period.
The Company's allowance for loan losses equaled $6.8 million, or 1.45% of total loans and 624% of non-performing loans at June 30, 2003. Asset quality demonstrated marked improvement as non-performing loans totaled $1.1 million or 0.23% of total loans at quarter-end, in comparison with $3.4 million or 0.77% of total loans as reported for March 31, 2003. The decrease in non- performing loans was due to the resolution of a $2.0 million loan participation previously placed in nonaccrual status. Net charge-offs for the quarter equaled 0.41% of average loans.
At June 30, 2003 stockholders' equity totaled $49.0 million and represented 6.75% of total assets. Stockholders' equity increased $4.9 million or 11% from $44.2 million for the year ago period. 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, "We are pleased with the strength of our earnings despite interest margin pressures due to continued easing by the Federal Reserve. The breadth and diversity of our product mix enabled us to achieve solid earnings growth and expansion of assets despite a still tenuous economic environment. We are confident that our strategic direction and focus on customer service positions us for continued growth, creating long-term value for our shareholders. The Company is performing well in all areas due to the commitment and hard work of our people."
Southern Community Financial Corporation is the holding company of Southern Community Bank and Trust, a community bank with eight offices in Winston-Salem, Clemmons, High Point, Kernersville and Yadkinville, North Carolina. Services are also provided through "Southern eCom" internet banking and 24-hour phone banking. Southern Community is headquartered in Winston- Salem, North Carolina.
Southern Community Financial Corporation's common stock and convertible trust preferred are listed on the Nasdaq National Market under the trading symbol SCMF and SCMFP, respectively. 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) For the three months ended June 30, March 31, Income Statement 2003 2003 Total Interest Income $8,801$8,370 Total Interest Expense 3,625 3,524 Net Interest Income 5,176 4,846 Provision for Loan Losses 685 540 Net Interest Income after Provision for Loan Losses 4,491 4,306 Non-Interest Income Service Charges on Deposit Accounts 373 297 Other Income 1,051 873 Gain on Sale of Securities 0 0 Total Non-Interest Income 1,424 1,170 Non-Interest Expense Salaries and Employee Benefits 2,413 2,100 Occupancy and Equipment 776 690 Other 1,415 1,229 Total Non-Interest Expense 4,604 4,019 Income Before Taxes 1,311 1,457 Provision for Income Taxes 459 510 Net Income 852 947 Net Income per Share Basic $0.10$0.11 Diluted $0.09$0.10Southern Community Financial Corporation (Amounts in thousands except per share data) For the three months ended December September June 31, 30, 30, Income Statement 2002 2002 2002 Total Interest Income $8,917$8,656$8,165 Total Interest Expense 3,879 3,954 4,029 Net Interest Income 5,038 4,702 4,136 Provision for Loan Losses 475 400 420 Net Interest Income after Provision for Loan Losses 4,563 4,302 3,716 Non-Interest Income Service Charges on Deposit Accounts 311 279 284 Other Income 962 729 531 Gain on Sale of Securities 0 0 69 Total Non-Interest Income 1,273 1,008 884 Non-Interest Expense Salaries and Employee Benefits 2,289 2,102 1,748 Occupancy and Equipment 665 636 641 Other 1,237 1,133 1,184 Total Non-Interest Expense 4,191 3,871 3,573 Income Before Taxes 1,645 1,439 1,027 Provision for Income Taxes 594 503 354 Net Income 1,051 936 673 Net Income per Share Basic $0.12$0.11$0.08 Diluted $0.12$0.10$0.07Southern Community Financial Corporation (Amounts in thousands except per share data) Six Months ended June 30, June 30, Income Statement 2003 2002 Total Interest Income $17,171$15,708 Total Interest Expense 7,149 7,969 Net Interest Income 10,022 7,739 Provision for Loan Losses 1,225 780 Net Interest Income after Provision for Loan Losses 8,797 6,959 Non-Interest Income Service Charges on Deposit Accounts 670 533 Other Income 1,924 1,043 Gain on Sale of Securities 0 69 Total Non-Interest Income 2,594 1,645 Non-Interest Expense Salaries and Employee Benefits 4,513 3,367 Occupancy and Equipment 1,466 1,206 Other 2,644 2,145 Total Non-Interest Expense 8,623 6,718 Income Before Taxes 2,768 1,886 Provision for Income Taxes 969 658 Net Income 1,799 1,228 Net Income per Share Basic $0.20$0.14 Diluted $0.19$0.13 June March December September June Balance Sheet 30, 31, 31, 30, 30, 2003 2003 2002 2002 2002 Assets Cash and due from Banks 18,346 17,170 16,632 15,758 16,240 Federal Funds Sold 1,097 605 11,084 10,883 14,743 Investment Securities 205,036 126,643 136,324 132,811 109,465 Other Investments, at cost 6,833 5,355 5,355 4,829 3,579 Loans 471,145 442,896 421,938 410,578 401,686 Allowance for Loan Losses (6,816) (6,603) (6,342) (6,129) (5,976) Net Loans 464,329 436,293 415,596 404,449 395,710 Bank Premises and Equipment 18,041 16,629 15,962 15,127 14,366 Other Assets 12,439 11,363 11,286 11,221 10,814 Total Assets $726,121$614,058$612,239$595,078$564,917 Liabilities and Stockholders' Equity Deposits Non-Interest Bearing 53,357 46,873 41,869 40,619 37,638 Interest Bearing 452,016 415,121 407,347 407,589 398,763 Total Deposits 505,373 461,994 449,216 448,208 436,401 Borrowings 150,980 83,436 95,706 80,000 65,000 Convertible Preferred Securities 17,250 17,250 17,250 17,250 17,250 Accrued Expenses and Other Liabilities 3,510 3,089 2,528 3,027 2,108 Total Liabilities 677,113 565,769 564,700 548,485 520,759 Total Stockholders' Equity 49,008 48,289 47,539 46,593 44,158 Total Liabilities and Stockholders' Equity $726,121$614,058$612,239$595,078$564,917 Book Value per Share $5.57$5.49$5.41$5.30$5.02 As of or for the three months ended June 30, March 31, 2003 2003 Per Share Data: Basic Earnings per Share $0.10$0.11 Diluted Earnings per Share $0.09$0.10 Book Value per Share $5.57$5.49 Selected Performance Ratios: Return on Average Assets 0.52% 0.64% Return on Average Equity 7.19% 8.00% Net Interest Margin 3.38% 3.48% Net Interest Spread 3.15% 3.21% Non-interest Income as a % of Revenue 21.57% 19.45% Non-interest Income as a % of Average Assets 0.88% 0.79% Non-interest Expense to Average Assets 2.83% 2.71% Efficiency Ratio 69.75% 66.81% Asset Quality: Nonperforming Loans $1,092$3,432 Nonperforming Assets $1,766$3,646 Nonperforming Loans to Total Loans 0.23% 0.77% Nonperforming Assets to Total Assets 0.24% 0.59% Allowance for Loan Losses to Period- end Loans 1.45% 1.49% Allowance for Loan Losses to Nonperforming Loans (X) 6.24 1.92 Net Charge-offs to Average Loans (annualized) 0.41% 0.26% Capital Ratios: Equity to Total Assets 6.75% 7.86% As of or for the three months ended December September June 31, 30, 30, 2002 2002 2002 Per Share Data: Basic Earnings per Share $0.12$0.11$0.08 Diluted Earnings per Share $0.12$0.10$0.07 Book Value per Share $5.41$5.30$5.02 Selected Performance Ratios: Return on Average Assets 0.69% 0.64% 0.50% Return on Average Equity 8.87% 8.25% 6.29% Net Interest Margin 3.48% 3.49% 3.29% Net Interest Spread 3.19% 3.17% 2.96% Non-interest Income as a % of Revenue 20.17% 18.79% 17.59% Non-interest Income as a % of Average Assets 0.83% 0.69% 0.66% Non-interest Expense to Average Assets 2.73% 2.65% 2.66% Efficiency Ratio 66.44% 67.79% 71.15% Asset Quality: Nonperforming Loans $1,823$2,194$1,052 Nonperforming Assets $2,206$2,442$1,300 Nonperforming Loans to Total Loans 0.43% 0.53% 0.26% Nonperforming Assets to Total Assets 0.36% 0.41% 0.23% Allowance for Loan Losses to Period- end Loans 1.50% 1.49% 1.49% Allowance for Loan Losses to Nonperforming Loans (X) 3.48 2.79 5.68 Net Charge-offs to Average Loans (annualized) 0.25% 0.24% 0.18% Capital Ratios: Equity to Total Assets 7.76% 7.83% 7.82% As of or for the six months ended June 30, June 30, 2003 2002 Per Share Data: Basic Earnings per Share $0.20$0.14 Diluted Earnings per Share $0.19$0.13 Book Value per Share $5.57$5.02 Selected Performance Ratios: Return on Average Assets 0.57% 0.48% Return on Average Equity 7.51% 5.79% Net Interest Margin 3.39% 3.19% Net Interest Spread 3.14% 2.84% Non-interest Income as a % of Revenue 20.56% 17.54% Non-interest Income as a % of Average Assets 0.82% 0.64% Non-interest Expense to Average Assets 2.74% 2.61% Efficiency Ratio 68.35% 71.59% Asset Quality: Nonperforming Loans $1,092$1,052 Nonperforming Assets $1,766$1,300 Nonperforming Loans to Total Loans 0.23% 0.26% Nonperforming Assets to Total Assets 0.24% 0.23% Allowance for Loan Losses to Period- end Loans 1.45% 1.49% Allowance for Loan Losses to Nonperforming Loans (X) 6.24 5.68 Net Charge-offs to Average Loans (annualized) 0.41% 0.18% Capital Ratios: Equity to Total Assets 6.75% 7.82%SOURCE Southern Community Financial Corporation -0- 07/24/2003 /CONTACT: F. Scott Bauer, Chairman and Chief Executive Officer of Southern Community Financial Corporation, +1-336-768-8500/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20020823/SCFCLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, 888-776-6555 or 212-782-2840/ /Web site: http://www.smallenoughtocare.com / (SCMF SCMFP)
CO: Southern Community Financial Corporation; Southern Community Bank and Trust ST: North Carolina IN: FIN SU: ERN
JD-CM -- CHTH010 -- 6894 07/24/200311:08 EDThttp://www.prnewswire.com
