Southern National Bank: Fitch Investors Service Inc. put on FitchAlert, with negative implications, the A-minus rating of Southern National Bank of North Carolina's long-term CD's and the F-1 rating of its short-term CDs.
The action follows the announcement by the bank's parent company, Southern National Corp., that it plans to acquire First Savings Bank of Greenville, S.C.
Fitch said: "The acquisition, scheduled to be completed early next year, will boost consolidated assets by roughly 40% and result in significant increases in nonperforming assets and balance sheet leverage.
"While Southern National's management has established a strong track record for growing the company through acquisitions, the First Savings transaction is more than five times larger than any other merger the company has undertaken to date.
"While, on the surface, the acquisition will not affect the North Carolina bank directly," Fitch said, "federal banking legislation imposes cross-guarantees on commonly controlled depository institutions.
"Hence, it is necessary to evaluate the banks' financial condition on a combined basis."
Moody's Investors Service confirmed the Baa3 preferred stock rating of Southern National, following the bank's announcement of its merger plans with First Savings Bank.
Standard & Poor's affirmed the bank's BB-plus preferred stock rating, A2 commercial paper rating and BBB-plus/A2 rating on Southern National Bank of North Carolina certificates of deposit.