First National slides closer to oblivion

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Investors appear increasingly doubtful about the ultimate survival of Spartanburg, SC-based First National Bancshares.

On Friday, the company’s stock hit an all-time low of 85 cents a share before closing at 91 cents. That represents a drop of 90 percent from a year ago, when First National was trading at more than $9 a share.

First National lost nearly $1.4 million in the first quarter of the year, which came on the heels of a $44.8 million loss last year, and the company recently revealed it had been turned down for federal bailout funds, as well.

Its subsidiary, First National Bank of the South is no longer categorized as being “well capitalized.”

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. 

If the bank fails to comply with the capital and liquidity funding requirements in the OCC consent order, or suffers continued deterioration in its financial condition, “we may be subject to being placed into a federal conservatorship or receivership by the OCC, with the FDIC appointed as conservator or receiver,” the company stated in its May 13 SEC filing.

Also, First National’s independent registered public accounting firm has stated “that the uncertainty created by our inability to repay or replace our holding company’s line of credit or to obtain a waiver of covenant defaults on that line of credit through December 31, 2009 raises substantial doubt about our ability to continue as a going concern,” according to a May 1 SEC filing.

Jumonville Glen and the genesis of America

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It’s doubtful that one in a 100 Americans recognizes the geographic locale of Jumonville Glen, but 255 years ago this week it was the site of a small but crucial event that helped lead to the creation of the United States of America.

On May 28, 1754, George Washington, then a lieutenant colonel in the Virginia militia, was on his way through the Pennsylvania frontier to reinforce a British fort when he learned that a French force had been spotted in the area.

He and about 40 men went on a reconnaissance mission and came upon the sleeping French camp shortly after dawn. What happened next is still mired in controversy: The French maintained that their diplomatic party had been ambushed, while Washington reported that he had been fired on first.

When the smoke cleared, the entire French force appeared to have been killed, wounded or captured. The dead included the French commander, the Ensign Jumonville, who had been slain by Half King, an Indian ally of the British.

Called the Battle of Jumonville Glen, the event was the opening battle of the French and Indian War. The conflict not only ultimately gave Great Britain control of Canada and much of North America, but it laid the groundwork for the American Revolution.

“The goal was for the British to remove the French from North America , which they did,” Thomas Markwadt, public relations director at Fort Necessity, told The Pittsburgh Tribune-Review in May 2008. “It left the British with a large empire, which created the need for more revenue, which resulted in higher taxes for the colonists.”

As the colonists took on more of a role in their own defense, they began to assert their own identity.

“Because the colonists were no longer threatened by the French, the colonists no longer needed British protection,” Markwadt said. “They wanted to handle their own affairs. It set the stage for the American Revolution.”

Washington was just 22 years old at the time of Jumonville Glen and the battle marked his first test under fire. Although the Battle of Jumonville Glen was a victory for Washington, he lost the campaign when his troops were surrounded by French and Indian enemies a month later.

Former NBSC chief out at Synovus

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Southeastern banking company Synovus Financial Corp. said Thursday that company president Fred Green, the former chief executive of National Bank of South Carolina, has resigned.

Columbus, Ga.-based Synovus, the parent of NBSC, gave no reason for Green’s departure.

Synovus CEO Richard Anthony issued the following bland statement: “The Synovus family is grateful to Fred for the service he has offered over the past 14 years, and we wish him the very best as he pursues the next stage of his career. I am confident that the foundation he has helped build will be a tremendous asset as we continue the work of positioning Synovus to emerge stronger from today’s challenging economic environment.”

Synovus reported a net loss of $136 million for first quarter of 2009. Its stock trades for a little more than $3 a share.

Green was the head of NBSC when Synovus bought the Columbia bank in 1995. He helped grow it into a banking powerhouse, increasing its asset size to $4 billion by the time he moved to the parent company in 2006.

Green is a well respected banker and an all-around good guy. Columbia could do a lot worse if he were to return to the Palmetto State. 

What’s a ‘clean coal energy campus?’

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Lucky South Carolina! We could shortly have a “clean coal energy campus” right here in the Palmetto State.

At least, that’s what a guest columnist called the coal power plant that’s been proposed for the state’s Pee Dee region.

Hogan Gridley, the executive director of an organization called South Carolina Action for Jobs, authored the “Coal campus would bring needed jobs” op-ed that appeared in The State Wednesday, and termed the coal-fired plant that utility Santee Cooper wants to build a “clean coal energy campus.”

The piece is a non-too-transparent attempt to generate some positive PR for the proposed plant, which has drawn the ire of environmentalists.

Santee Cooper, which wants to build the 600-megawatt plant near the town of Kingsburg in Florence County, said it needs the plant by 2012 or its customers could face brownouts and blackouts.

Regardless of whether the plant is good for South Carolina or not – and one suspects that given the state’s surging population and ever-increasing energy demands, it’s a necessary project – to call it a “clean coal energy campus” is ridiculous.

It’s a coal plant. Its purpose is to burn coal in order to produce energy, plain and simple.

Presenting an issue or cause in a positive light is all part of the public relations game, but when someone trots out an elaborate euphenism like “clean coal energy campus” it makes one wonder what’s really going on.

Collexis continues to pump out stock

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The rate at which Collexis Holdings is diluting its stock would make the leaders of inflation-ridden Wiemar Germany of the 1920s proud.

Columbia, SC-based Collexis has issued 44.5 million shares of stock in the past few weeks, all at 7 cents a share. That netted the struggling technology company a little more than $3 million, helping it keep its head above water financially.

Now, more dilution is on the way. In the company’s most recent quarterly report, it said that it is conducting an additional private placement of common stock to try and raise another $4 million.

Should this offering be fully subscribed at what appears to be the current going rate of 7 cents a share, it would mean the company would issue another 57.1 million shares.

Given the fire sales prices on company stock, Collexis’s future remains, unsurprisingly, murky at best.

“With the full subscription of our $4.0 million private placement referred to above, combined with any funds generated from our operations, we believe we will have sufficient cash to fund our operations through July 31, 2009,” the company said in a recent filing with the US Securities and Exchange Commission. “However, this will not provide sufficient capital to pay our deferred purchase obligations of approximately $2.2 million due over the next three months.”

Collexis has had to dilute its stock to stay afloat because the company has suffered major losses over the past couple years. It lost more than $5 million for the first nine months of the current year and more than $11 million during the fiscal year ended June 30, 2008.

Last year, the company’s independent accounting firm included an explanatory paragraph in Collexis’s annual report that expressed substantial doubt about Collexis’s ability to continue as a going concern.

Not surprisingly, Collexis’s stock price as dwindled as the company continues to issues shares. It closed Wednesday at 8 cents a share, compared to its 52-week high of 75 cents a share. Collexis’s stock sold for as much as $12 a share just a couple years ago.

NY Times says no to Big Government

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Jeffrey Tucker over at the Ludwig von Mises Institute’s blog lauds The New York Times for denouncing big-government socialism.

He highlights an editorial in which the newspaper takes a politician to task for pushing a platform heavy on competition curbs, income taxes and the role of a central bank.

The publication said that the American people are too intelligent and have too much common sense to be deluded by the “shallow sophistries of Roosevelt Socialism.”

Yes, sadly, the NY Times’ piece was published in 1913, in reaction to the platform of Teddy Roosevelt.

Nearly a century later, it’s clear that while the American people, or at least some of them, are still too intelligent and have too much common sense to embrace this kind of big-government interventionism, the same most definitely cannot be said of The New York Times.

State takes note of foundering Collexis

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It would appear that The State newspaper has rediscovered Collexis, the Columbia, SC, technology company it was all too happy to puff up just a couple short years ago.

Last week, The State reported that Collexis was selling stock to raise enough money to operate through July.

According to the paper, “The company said it had a $3.12 million commitment from a private investor and expects to receive an additional $300,000 over the next 15 days. With that money and regular operating revenue, ‘we believe we will have sufficient cash to fund our operations through July 31, 2009,’ the company said in the report.

“However, that will not be enough money for Collexis to repay $2.2 million of debt that is owed over the next three months, the report said.”

The report added that the company lost $1.4 million during the first three months of 2009.

What’s remarkable about the story is that, according to Lexis, the piece marks the first time in more than a year that The State has bothered to report on Collexis’s struggling financial condition.

Here’s what the paper neglected to cover over the past year:

  • Collexis lost more than $11 million during the fiscal year ended June 30, 2008, and another $4 million-plus over the last six months of 2008.
  • The company’s independent accounting firm included an explanatory paragraph in Collexis’s annual report last October that expressed substantial doubt about Collexis’s ability to continue as a going concern.
  • Over the past few weeks, Collexis has diluted its stock by issuing nearly 40 million shares at 7 cents a share in an effort to raise money to meet operating costs.

The thing is, there was a time when The State couldn’t get enough of Collexis. The paper ran six full stories about the company between Sept. 24, 2006, and Oct 4, 2007, and another half dozen shorter mentions, according to a Lexis search.

The highlight was a profile that ran in September 2006. The 1,200-word piece was titled “Google on Steroids.”

But since May 2008 – once the bad news really started to pile up at the tech company – the paper has managed little more than a handful of short pieces, basically rewriting company press releases on such events as former University of South Carolina President Andrew Sorensen joining the Collexis’s board and the company getting an award.

It’s not like Columbia and South Carolina have a lengthy list of corporate entities which precludes The State from being able to keep close track of publicly traded companies.

If The State believes a company’s worth profiling when it’s ostensibly got a good story to tell, doesn’t it have an obligation to its readers to follow up when things aren’t going so well?