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.

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