More bad news for CommunitySouth

CommunitySouth Financial Corp. continues to struggle. The Easley-based parent of CommunitySouth Bank & Trust reported a loss of $2.1 million for the three months ended March 31, compared to a $36,000 deficit during the same period in 2009.

That comes on the heels of an $18.3 million loss in 2009 and stock in the company is trading for 40 cents a share. That’s down from more than $17 a share in 2007.

In its most recent filing with the US Securities and Exchange Commission, CommunitySouth highlighted a number of issues with regulators.

Last June, the bank entered into the memorandum of understanding with the SC Board of Financial Institutions and the Federal Deposit Insurance Corp.

Then, this past February, the bank received a supervisory letter from the FDIC which put additional restrictions on the bank and called for mandatory actions to be taken, including:

• Achieve and maintain total risk-based capital at least equal to 10 percent of risk-weighted assets and Tier 1 capital at least equal to 8 percent of total assets;
• Develop a written analysis and assessment of the Bank’s management and staffing needs;
• Establish a comprehensive policy for determining the adequacy of the bank’s allowance for loan and lease losses, which must provide for a review of the bank’s allowance for loan and lease losses at least once each calendar quarter; 
• Enhance the bank’s written plan for the reduction of classified assets, which shall include, among other things, a reduction of the bank’s risk position in each asset in excess of $250,000 that is classified as “substandard” or “doubtful.” 

On March 1, 2010, the company entered into an informal agreement with the Federal Reserve Bank of Richmond.

In addition, the company’s auditor has said there is substantial doubt about the company’s ability to continue as a going concern.