Just last week South Financial Group Chief Executive Lynn Harton said the Greenville company was taking steps to reverse its troubled course, and that he was confident its Carolina First subsidiary would be able to raise the additional capital required by federal regulators.
“The only way to fix things is to face them and call them like they are and move on,” Harton told The Greenville News in a May 13 story.
Harton said he was optimistic about investor activity because of signs that economic conditions have improved, capital markets are opening up and stock and bond markets are improving, he said.
Yet, just a few days later, the company announced it was being acquired by TD Bank Financial Group for a paltry 28 cents a share. Compare that to two years ago, when South Financial stock was trading for more than $17 a share.
The Monday announcement caused TSFG’s stock to fall from 67 cents to 30 cents in a single day.
In the Greenville News article, Harton said the regulatory requirements would strengthen the company. In the meantime, it’s business as usual at the bank, he said last week.
“Particularly given the environment, prepping the company for success long term, we’ve done extremely well,” Harton told the publication. “If you look at our internal measures of clarity of vision, they’re stronger than they have absolutely ever been.”
He told the News that his management team has stressed to employees, shareholders and customers that it was no surprise that federal regulators stepped in recently with an order to strengthen Carolina First’s financial position.
The bank’s consent order with the Federal Deposit Insurance Corp. sets deadlines for raising capital levels and mandates a reduction in the amount of assets considered “substandard” and “doubtful.”
Now, less than a week later, Harton no longer has to worry about raising capital levels and troubled assets. Instead, he’s got to face such issues as shareholder lawsuits.