Peoples Bancorporation posts major loss


Peoples Bancorporation Inc. lost $8.3 million in 2008, “by far the most difficult year in our Company’s history,” according to a letter to shareholders dated Feb. 26.

That compares with a $4.3 million gain in 2007. In the last three months of 2008, Peoples lost $2.8 million, compared with a gain of $693,000 during the same period the previous year.

Easley, SC-based Peoples posted a pre-tax loss of $13.4 million for the year and it more than doubled its reserves  against  possible loan losses from $4.3 million to $9.2 million during 2008, according to information filed with the Securities & Exchange Commission.

Peoples, the parent company of The Peoples National Bank, Bank of Anderson and Seneca National Bank, has seen its stock price plummet over the past year, from more than $9 a share to its current level of $1.65.

The letter to shareholders is reprinted below:

Dear Shareholder:

We would  like to thank  you for  being a  stockholder  and  supporting  Peoples Bancorporation.  In  difficult  times such as these,  your  support is extremely valuable to our entire organization, its employees and its directors. We want to take this opportunity to share with you our assessment of Peoples Bancorporation as it relates to these  difficult  economic  times.  With the  ongoing  economic recession that impacted every household in the nation,  we realize that 2008 was by far the most difficult year in our Company’s history. Having earned in excess of $4 million in each of 2005,  2006,  and 2007 we  experienced a net loss – our
first in many  years – of $8.3  million  in 2008.  Management  has  focused  its efforts on  generating  revenue and  controlling  expenses with renewed vigor in response to these difficult economic times.

Please find enclosed a copy of our  Consolidated  Financial  Highlights  for the fourth quarter and year ended December 31, 2008. It is important to realize that all three of our  subsidiary  banks remain “well  capitalized”  according to the federal  government  guidelines,  and in this economic  environment  it is often stated that, “capital is king.” We have also taken proactive, conservative steps to shore up our asset quality, not the least of which was more than doubling our reserves  against  possible loan losses from $4.3 million to $9.2 million during 2008.

We will weather this economic  storm as we have in the past, and we believe that solid,  profitable,  community banking has always been our niche and will remain our focus going  forward.  Our  strategic  plan has us well  positioned  for the future, in spite of the difficult  economy that will undoubtedly  persist in the near term.  Last of all, we  sincerely  appreciate  your  continued  support and patronage of our banks.


George B. Nalley, Jr., Chairman

R. Riggie Ridgeway, Chief Executive Officer

L. Andrew Westbrook, III, President and Chief Operating Officer 

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