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SOUTHERN NATIONAL BANK 'A-/F-1' DEPOSITS ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --

 NEW YORK, Aug. 10 /PRNewswire/ -- Southern National Bank of North Carolina's recently assigned "A-/F-1" long- and short-term certificate of deposit ratings are placed on FitchAlert with negative implications. The action follows Friday's announcement by the bank's parent company, Southern National Corp., that it plans to acquire The First Savings Bank of Greenville, S.C.
 The acquisition, scheduled to be completed early next year, will boost consolidated assets by roughly 40 percent and result in significant increases in nonperforming assets and balance sheet leverage. While Southern National's management has established a strong track record for growing the company through acquisitions, the First Savings transaction is more than five times larger than any other merger the company has undertaken to date. Including the impact of pending acquisitions, the First Savings transaction will reduce consolidated equity to approximately 7.2 percent of June 30 assets on a pro-forma basis from its reported level of 8.7 percent. In addition, management's demonstrated ability to quickly resolve asset quality problems will be challenged by the acquisition-related surge in the company's consolidated NPA ratio to 2.63 percent from 0.82 percent.
 While, on the surface, the acquisition will not affect the North Carolina bank directly, federal banking legislation imposes cross guarantees on commonly controlled depository institutions and requires parent bank holding companies to guarantee the maintenance of adequate capital at each of its bank subsidiaries. Hence, it is necessary to evaluate the banks' financial condition on a combined basis. Fitch will continue to assess the impact of the proposed transaction on Southern National's banks as more information is made available.
 -0- 8/10/93
 /CONTACT: Christopher M. Siedman, 212-908-0524 or Scott J. O'Donnell, 212-908-0531, of Fitch/
 (SNB)


CO: Southern National Bank of North Carolina ST: North Carolina IN: FIN SU: RTG

LG -- NY036 -- 1137 08/10/93 10:45 EDT
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Publication:PR Newswire
Date:Aug 10, 1993
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