NEW YORK -- Fitch Investors Service Inc. said it put the long-term and short-term certificate of deposit ratings of Southern National Bank of North Carolina on its alert list, with negative implications. The action follows an announcement last week by the bank's parent company, Southern National Corp., that it plans to acquire First Savings Bank of Greenville, S.C.

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. But it noted that the First Savings transaction is more than five times larger than any other merger the company has undertaken to date and, along with other pending acquisitions, will reduce consolidated equity to approximately 7.2% of June 30 assets on a proforma basis from its reported level of 8.7%.

In addition, it said management's demonstrated ability to quickly resolve asset quality problems will be challenged by the acquisition-related surge in the company's consolidated nonperforming asset ratio to 2.63% from 0.82%.

Separately, Standard & Poor's Corp. affirmed its BB-Plus subordinated debt rating on Signet Banking Corp. and revised its rating outlook on the Virginia banking company to "positive" from "stable". It said the revision "reflects Signet's continued progress in disposing of its large book of troubled commercial real estate assets, as well as strong operating performance measures derived principally from its rapidly growing credit card portfolio."

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