Southern Community Financial Corporation Receives Preliminary Approval for Investment Under U.S. Treasury Capital Purchase Plan
November 18 2008 - 1:30PM
Marketwired
Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ:
SCMFO) announced that it has received preliminary approval from the
U.S. Treasury for the sale of $42.75 million in preferred stock and
related warrants to the U.S. Treasury under the Capital Purchase
Program of the Emergency Economic Stabilization Act of 2008. The
preferred stock will pay a 5% dividend for the first five years,
after which time the rate will increase to 9% if the shares are not
redeemed by the Company. The approval is subject to certain
conditions and the execution of definitive agreements. The
transaction is expected to close during the fourth quarter of 2008.
A summary of the Treasury's Capital Purchase program can be found
on the U.S. Treasury Department's website at
http://www.ustreas.gov/initiatives/eesa/.
Southern Community remains well-capitalized, for regulatory
purposes. On a pro forma basis, the leverage ratio, Tier 1
risk-based capital ratio, and total risk-based capital ratios at
the holding company level will increase to 10.29%, 12.28%, and
13.61%, respectively, from 7.83%, 9.34%, and 10.67% as of September
30, 2008.
"We are pleased to be one of the first community banks within
our market to receive preliminary approval under the Treasury's
Capital Purchase Program. This investment strengthens Southern
Community's already solid capital position and allows us to
selectively take advantage of the significant opportunities that
have resulted from the unprecedented market disruption that has
occurred across our footprint," said F. Scott Bauer, Chairman, and
Chief Executive Officer.
"These opportunities include the expansion of our lending
capabilities and deposit acquisition activities across our markets,
as well as the exploration of acquisitions that are aligned with
our long-term strategic goals. In addition, we believe that as long
as the uncertain and challenging economic environment persists, it
is prudent to maintain our capital position at higher than historic
levels."
About Southern Community Financial Corporation
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 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 because 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/Chief Financial Officer
336-768-8500
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