Shares of Southern Community Bancshares Inc. in Fayetteville, Ga., fell 20% Tuesday, to $2.40, after the $378 million-asset company said it is operating under a cease-and-desist order from the Federal Deposit Insurance Corp. and the Georgia Department of Banking and Finance.
The order requires Southern Community Bank to retain qualified executives, increase its Tier 1 capital ratio to 8%, improve board oversight, strengthen its loan underwriting, reduce or eliminate problem assets within set time frames, address credit concentrations, and formulate a plan to improve earnings, among other things.
Southern Community Bancshares, which has reported losses for three consecutive quarters, said in a filing Friday with the Securities and Exchange Commission that it signed the order Oct. 6, and that it arose from an FDIC exam in December.
The company also said the bank has taken steps to address many of the weaknesses, including hiring David R. Coxon, a veteran banker, as its president and chief executive officer and adding $2 million of capital.
The thinly traded stock has lost 71% of its value over the past 52 weeks.