EASLEY, S.C., Aug. 14, 2009 (GLOBE NEWSWIRE) -- CommunitySouth Financial Corporation (OTCBB:CBSO), parent company of CommunitySouth Bank & Trust, today reported a net loss for the quarter ended June 30, 2009 of approximately $805,000, or $0.17 per diluted share, compared to a net loss of approximately $1,390,000, or $0.30 per diluted share, for the previous year second quarter. Net loss for the first six months of 2009 totaled $841,000, or $0.18 per diluted share, compared to a net loss of $1,049,000, or $0.22 per diluted share, for the same period in 2008.
"As with most financial institutions, our financial performance has continued to be negatively impacted by one of the longest economic recessions in recent history," said C. Allan Ducker, III, Chief Executive Officer of CommunitySouth. "In consideration of the many factors affecting nearly all banks, we have elected to make an additional contribution of $1.5 million to our allowance for loan losses in the second quarter. Our financial performance was also negatively impacted by a one-time FDIC insurance premium that all federally insured banks were required to pay. This special assessment, which equated to $178,000, helped replenish the Federal Deposit Insurance Corp. fund."
"We are not pleased with the loss being reported. But despite the challenging economic and industry conditions, we continue to be pleased with CommunitySouth's core business results, as evidenced by our core deposit growth, core operating earnings and increases in our net interest margin and non-interest income," Ducker continued.
* Core deposits grew approximately 11% year-to-date. CommunitySouth defines its core deposits as checking, savings and money market accounts. * Core operating earnings were $1,531,000 for 2009, compared to $1,131,000 for the same period in 2008. These year-to-date earnings are pre-tax and pre-provision. * CommunitySouth's capital levels continue to exceed all of the well-capitalized regulatory standards. * Net interest margin for the first six months of 2009 was 2.96%, compared to 2.68% for the same period in the prior year. * Year-to-date non-interest income was $484,000, an increase of 62.8% over the same period in the prior year. * Total assets ended the quarter at $386.8 million, an increase of 1.0% over the second quarter of 2008 and an increase of 0.5% over the prior quarter. This is reflective of the Company's focus on deleveraging its balance sheet to bolster its capital ratios, as opposed to asset growth.
"While the outlook is for the economic environment to remain challenging, we are committed to operating with sound banking fundamentals in order to emerge stronger on the other side," Ducker continued. "We continue to focus on enhancing our capital position and reducing our levels of adversely classified assets while running a customer-centered bank."
CommunitySouth's stock is quoted on the Over the Counter Bulletin Board under the symbol CBSO.
About CommunitySouth Bank & Trust:
CommunitySouth Bank & Trust (OTCBB:CBSO) was founded in 2004. The Bank has since grown assets to over $380 million and currently employs more than 95 banking professionals.
CommunitySouth serves the Upstate region of South Carolina and operates full-service offices in Greenville, Spartanburg, Anderson, Greer, Mauldin and Easley. The Company also operates full-service mortgage and investment divisions.
CommunitySouth offers a complete line of financial products and services, including Free Checking, Nationwide Free ATMs, Free Refreshment Centers with freshly baked cookies, Free Online Banking & Bill Pay, free business courier service, remote deposit, and commercial and consumer loans.
For more information, call 864-306-2540 or visit www.communitysouthbankandtrust.com.
The CommunitySouth Bank & Trust logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2708
Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include but are not limited to (1) statements regarding potential future economic recovery, (2) statements with respect to CommunitySouth's plans, objectives, expectations and intentions and other statements that are not historical facts, and (3) other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," and "projects," as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which CommunitySouth conducts operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the company's loan portfolio and allowance for loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in CommunitySouth's loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in the U.S. legal and regulatory framework; and (5) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the company. Additional factors that could cause CommunitySouth's results to differ materially from those described in the forward-looking statements can be found in CommunitySouth's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC's Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. CommunitySouth does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Summary Consolidated Financial Data
Our summary consolidated financial data as of and for the three months ended June 30, 2009 and 2008 have not been audited but, in the opinion of our management, contain all adjustments necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles.
Three Months ended June 30,
---------------------------
2009 2008
------------- -------------
(In thousands, except per share dollar
amounts)
Summary Results of Operations Data:
Interest income - loans $ 4,292 $ 4,980
Interest income - investments 336 671
------------- -------------
Total interest income 4,628 5,651
Interest expense 1,951 3,337
------------- -------------
Net interest income 2,677 2,314
Provision for loan losses 1,500 2,579
------------- -------------
Net interest income (loss) after
provision for loan losses 1,177 (265)
Non-interest income 441 400
Non-interest expense 2,837 2,232
------------- -------------
Income (loss) before taxes (1,219) (2,097)
Income tax expense (benefit) (414) (707)
------------- -------------
Net income (loss) $ (805) $ (1,390)
============= =============
Weighted Average Number of Shares
Outstanding:
Basic 4,699 4,699
Diluted 4,699 4,699
Per Share Data:
Net income (loss), basic $ (0.17) $ (0.30)
Net income (loss), diluted $ (0.17) $ (0.30)
Book value $ 5.80 $ 6.35
Summary Balance Sheet Data:
Total assets $ 386,810 $ 383,055
Average earning assets 376,879 370,996
Investment securities(1) 42,715 48,027
Other investments(1) 1,599 1,130
Total loans(2) 307,087 315,768
Allowance for loan losses 9,689 6,745
Total deposits 323,488 307,802
Shareholders' equity 27,271 29,831
Performance Ratios:
Return on average assets(3) -0.84% -1.45%
Return on average equity(3) -11.65% -17.83%
Net interest margin(4) 2.87% 2.54%
Efficiency ratio(5) 91.02% 82.25%
Bank Capital Ratios:
Total risk-based capital ratio 10.73% 10.26%
Tier 1 risk-based capital ratio 9.46% 9.01%
Leverage ratio 7.57% 8.16%
Growth Ratios since June 30, 2008:
Percentage change in total assets 0.98%
Percentage change in loans, gross -2.75%
Percentage change in total deposits 5.10%
Percentage change in shareholders' equity -8.58%
Other Data as of June 30, 2009:
Allowance for loan losses to total loans 3.15%
Total loans to total deposits ratio 94.93%
(1) Marketable securities are stated at fair value. Non-marketable
securities are stated at cost.
(2) Loans are stated at gross amounts before allowance for loan
losses.
(3) The three month period return is annualized and then divided by
the average total assets or equity for the three month period.
(4) The net interest margin is annualized for the three month
period.
(5) Computed by dividing non-interest expense by the sum of net
interest income and non-interest income.