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SOUTHERN NATIONAL BANK CERTIFICATES OF DEPOSIT 'A-/F-1' BY FITCH

 NEW YORK, July 28 /PRNewswire/ -- Southern National Bank of North Carolina's long- and short-term certificates of deposit are rated "A-/F-1" by Fitch. The credit trend is stable. The ratings reflect Southern National Bank's excellent asset quality, capital strength, and improved core earnings.
 On a consolidated basis, Southern National earned $35.5 million through June, 1993, representing an annualized return on average assets (ROA) of 1.4 percent. Excluding a $13.5 million gain on the sale of $269 million of mortgage-backed securities (MBS) and a $3.6 million charge related to a change in accounting principle, earnings approximated $30 million, or an ROA of 1.18 percent. While the net interest margin continues to be strong at 4.77 percent, it is slightly below 1992's 4.89 percent, as proceeds from the sale of MBS were reinvested in lower-yielding securities.
 Southern National's core operating efficiency is solid at 59 percent, but lack of a significant fee businesses remains a concern. While efforts in mutual funds and mortgage banking will diversify its revenue sources, fee income remained far below other regional banks at only 18 percent of total revenues.
 The loan portfolio is balanced, with consumer and commercial portfolios representing 47 percent and 53 percent of total loans, respectively. Loan portfolio quality is excellent, with nonperforming assets totalling only $25.7 million, or 0.82 percent of total loans and foreclosed property. The company's reserve for loan losses is an ample 1.24 percent of total loans and coverage of NPAs plus loans past due more than 90 days is comfortable at 147 percent. Further evidence of Southern National's strong underwriting skills is found in its loan loss rate. Net chargeoffs totaled only $2.6 million during 1993's first half, an annualized loss ratio of only 17 basis points.
 Bolstered by strong earnings, a $77 million preferred stock issue in 1992, and common stock issued pursuant to merger conversions, the company has raised both its equity to assets and Tier 1 leverage ratio to 8.7 percent. Risk-based ratios were 14.4 percent and 15.7 percent for Tier 1 and total risk-based capital, respectively.
 Southern National Bank is the principal subsidiary of Southern National Corp., a $5.1 billion bank holding company operating 158 offices in 84 cities and towns in North and South Carolina. Southern National has grown rapidly, completing eight acquisitions representing over $1.2 billion of assets since 1990.
 -0- 7/28/93
 /CONTACT: Christopher M. Siedman, 212-908-0524 or Scott J. O'Donnell, 212-908-0531, both of Fitch/
 (SNB)


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

LG -- NY102 -- 6869 07/28/93 15:45 EDT
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Publication:PR Newswire
Date:Jul 28, 1993
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