TSFG to media last week: ‘Business as usual’

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.


Chavez: Turning chicken salad into chicken sh*t

Venezuela is one of the world’s great energy powers. Its oil reserves are among the world’s largest and its hydroelectric plants are among the most potent.

Yet the South American country’s economy is in desperate straits, thanks in large part to the socialist policies of President Hugo Chavez, according to a report by National Public Radio

“Blackouts plague major cities,” NPR reports. “Its inflation rate is among the world’s highest. Private enterprise has been so hammered, the World Bank says, that Venezuela is forced to import almost everything it needs.”

Venezuela’s economy contracted 3.3 percent in 2009 and is expected to shrink further this year. Few business owners see a rosy future, at least in the short term.

 Jose Guerra, a former Central Bank economist, says Chavez’s state intervention in private business is battering the economy.

“The government is nationalizing, expropriating, or confiscating,” he told NPR. “They are not creating new wealth; this is wealth that was already created.”

And, adds NPR, if that weren’t bad enough, another factor is hobbling the economy — an unprecedented energy crisis.

“Critics say a lack of investment, coupled with government ineptitude, left Venezuela without the electrical generation capacity it needs. The government blames a brutal drought,” according to the report.

“Whatever the reason, cities such as San Cristobal go dark every day — sometimes for four hours or more, as the government uses rolling blackouts to save energy.”

Ah, good times, indeed. Keep up the stellar work, Mr. Chavez.

(Hat tip: Coyote Blog)

Tidelands withdraws stock offering

Tidelands Bancshares has nixed plans to offer approximately $35 million in common stock due to unfavorable market conditions, the company announced Tuesday.

Mt. Pleasant-based Tidelands is aggressively analyzing other capital-raising alternatives, though it did not disclose what those might be.

“As a result of the prevailing poor market conditions influenced by numerous factors both domestic and abroad, the likely terms for our previously announced common stock offering did not meet our criteria and was not at a level that we believed was in the best interests of our shareholders,” Chief Executive Chip Coffee said in a press release.

The offering elicited interest from a number of potential investors but poor industry market conditions in recent weeks have adversely impacted the company’s ability to sell stock, Coffee added.

Tidelands, the parent of Tidelands Bank, lost $2 million during the quarter ended March 31, compared to an $860,000 loss during the same period in 2009, according to information filed with the US Securities and Exchange Commission.

In all, Tidelands lost nearly $11.2 million in 2009, compared to a loss of nearly $5 million the previous year. Provisions for loan losses rose to $14.7 million in 2009 from $4.7 million in 2008.

Tidelands’ shares fell nearly 23 percent Tuesday, to $1.35.