Big names to lose big if First National fails

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To date, the mini-wave of bank failures that has swept the US over the past few months has yet to touch South Carolina. But if the odds makers were to choose a candidate to break that trend, First National Bank of the South would have to be among the favorites.

The Spartanburg bank is the subsidiary of First National Bancshares, which lost $44.8 million in 2008 and another $1.4 million during the first three months of this year.

First National Bank of the South is no longer categorized as being “well capitalized” and in April the Office of the Comptroller of the Currency gave First National 120 days to improve its balance sheet by raising capital, limiting growth or selling assets. 

First National’s stock is trading for around $1 a share.

Should First National be seized by regulators, a number of well-known South Carolinians would see substantial investments in the company disappear.

Consider some of the names associated with First National:

  • Joel A. Smith, director – Dean emeritus of the Moore School of Business at the University of South Carolina; former president of Bank of America’s East Region; and member of the South Carolina Business Hall of Fame.
  • Bob Staton, director – Former chairman and chief executive of Colonial Life; current vice president for external relations for Presbyterian College; and 2006  SC education superintendent candidate.
  • Bill Stern, director – Vice chairman of the South Carolina State Ports Authority; president, Stern & Stern and Associates, real estate development firm.
  • I.S. Leevy Johnson, director – Former member of the SC House of Representatives; partner, Johnson, Toal and Battiste; and owner of Leevy Johnson Funeral Home.
  • Roger Whaley, consultant/former executive vice president – Former president and chief executive of Carolina National Corp., parent of Carolina National Bank; prior president, Bank of America, Oklahoma.
  • Martha Cloud Chapman, director – First female board member of the Spartanburg County Foundation, the South Carolina Development Board, and the South Carolina Mining Council.
  • Norman F. Pulliam, director – Member, SC Natural Resources Board; founder, Pulliam Investment Co.
  • W. Russel Floyd Jr., director – President, Business Communications, Inc., an Upstate telephone services and equipment provider.
  • Donald Wildman, director – Managing partner, Johnson, Smith, Hibbard, and Wildman, LLP.

Those nine individuals alone own more than 615,000 shares of First National stock, according to the company’s most recent proxy statement.

Consider that in May 2008, First National was trading for $10 a share. It closed Thursday at $1.18. That means the 615,000-plus shares held by the individuals above which were worth more than $6 million a little over a year ago are valued at a little more than $700,000 today.

Palmettovore: silly and wasteful

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Among the many problems with the South Carolina Department of Agriculture’s Certified SC Grown program is that it spends tax dollars to promote a specific industry.

If SC farmers are getting state assistance to help them sell their goods, why shouldn’t SC steel manufacturers and SC paper makers expect to get the same benefit?

The latest phase of the Certified SC Grown effort is the Palmettovore campaign, designed by Columbia ad agency Chernoff Newman, which seeks to convince SC consumers to eat only South Carolina-grown produce and products.

And as if the program weren’t silly enough, it’s apparently completely unnecessary, according to a story in The Myrtle Beach Sun News.

A headline on a report in the publication earlier this week that focused on South Carolina-grown products read: “Demand rising for local produce.” 

If that’s the case, and SC Agriculture Commissioner Hugh Weather asserts as much, then one has to question why South Carolina is putting scarce tax dollars into a program that’s apparently redundant.

“The rage of eating and buying local has sparked a new campaign by the state called Palmettovore,” according to The Sun News.

That would mean demand for locally grown products was already in place before the state spent tens of thousands of tax dollars on the Palmettovore effort.

In other words, consumers were already aware of the high quality of SC-grown products, meaning Palmettovore is repetitive and wasteful, as the SC Policy Council points out here.