Parent of Carolina First posts its seventh consecutive quarterly loss
The South Financial Group, the Greenville-based parent of Carolina First, announced Tuesday a $341 million loss in the third quarter - its seventh consecutive quarterly loss.
The largest South Carolina-based bank has now reported losses of more than $1 billion since the beginning of 2008.
And the losses could get worse. South Financial announced Tuesday that it is determining how much value of Carolina First to write off since the recession hurt the bank.
The company already took a charge for the drop in value of its Florida banking arm, Mercantile.
South Financial reported in the third quarter that it lost $340.8 million, or a loss of $1.95 per share, versus a loss of $31.2 million, or a loss of 43 cents per share, a year earlier.
The current loss included a $200 million non-cash charge on the valuation for deferred tax assets and provisions for credit losses bolstered by nearly $100 million over a year ago.
Loan charge-offs doubled from a year ago as the bank sold more problem loans during the quarter. Net interest income fell 16 percent from a year earlier, while non-interest income dropped nearly 10 percent.
"The environment remains challenging, and credit stress continues to be high," South Financial chief executive Lynn Harton said in a statement. "However, during the quarter, we took advantage of improving liquidity in the loan sale market to significantly increase our sales of problem and potential problem loans.
"While this increased quarterly credit losses, it also contributed to our first decline in nonperforming assets since the beginning of the credit cycle in early 2008."
South Financial shares closed at $1.43 per share Tuesday. They started the year at $4.32 and began 2008 at $15.63. The earnings were announced after the market closed Tuesday.