Crescent Banking Company Declares Quarterly Dividend and Announces Earnings

SOURCE:

Crescent Banking Company

2008-08-13 15:09:00

JASPER, GA–(EMWNews – August 13, 2008) – Crescent Banking Company, Jasper, Georgia

(NASDAQ: CSNT) (the “Company”) is pleased to announce that its Board of

Directors has declared the Company’s 48th consecutive quarterly cash

dividend on its common stock. The dividend of $0.04 per share is payable

on September 5, 2008 to holders of record on August 25, 2008.

The Company experienced a net loss for the six months ended June 30, 2008

of $6.0 million, which represented a net loss per share on both a basic and

fully diluted basis of $1.16. In comparison, the Company had net income

for the six months ended June 30, 2007 of $3.0 million, which represented

net income per share on a basic and fully diluted basis of $0.58 and $0.56,

respectively. The Company’s net loss for the first six months of 2008 is

largely attributable to the provision for loan losses of approximately $9.7

million. The Company charged-off $6.8 million in loans during the second

quarter of 2008 on a net basis, which was a significant increase from the

second quarter of 2007 and the first quarter of 2008 during which the

Company charged-off $30,939 and $463,037 in loans, respectively. Of the

total amount charged-off during the second quarter of 2008, $5.8 million

was related to loans that the Company had not taken into foreclosure.

While the banking industry generally does not charge-off impairment on

loans until foreclosure, the Bank took an aggressive approach based upon

the current downturn in the economy and real estate market, and charged-off

the balances after determining that the losses related to these

unforeclosed loans were uncollectible.

The Company’s net loss for the quarter ended June 30, 2008 totaled $4.1

million, which represented a net loss per share on both a basic and a fully

diluted basis of $0.78. In comparison, the Company had net income for the

quarter ended June 30, 2007 of $1.5 million, which represented net income

per share on a basic and a fully diluted basis of $0.29 and $0.28,

respectively.

Don Boggus, the Company’s President and Chief Executive Officer, stated:

“In light of the current economic climate, we have taken what we believe to

be an aggressive approach in determining the probability of losses in our

loan portfolio. While this approach had a very negative effect on our

second quarter results, we are pleased that the Company’s capital ratios

remained above the ‘well capitalized’ level, which is the highest

regulatory capital rating recognized by bank regulatory authorities. At

June 30, 2008, our banking subsidiary had $78.3 million of Tier 1 capital,

resulting in a leverage ratio of 8.14%. To be well capitalized, the

minimum required leverage ratio is 5.00% or higher, which, in our case,

would have required only $48.1 million of Tier 1 capital. In addition, we

believe that we continue to have strong liquidity, as we held $85.2 million

of liquid assets at June 30, 2008. While the prevailing economic

environment is challenging, especially to banks, we intend to continue to

take steps that will preserve the long-term safety and soundness of our

institution, and to maintain our capital ratios at levels that will

continue to result in our company being well capitalized.”

The ratio of the Company’s non-performing assets to total loans and other

real estate was 4.20% at June 30, 2008, as compared to 2.87% at March 31,

2008 and 1.34% at December 31, 2007. The Company had $34.6 million of

non-performing assets at June 30, 2008, comprised of $28.6 million of

non-accrual loans and $6.0 million of foreclosed properties held in other

real estate owned. The ratios of net charge-offs to average commercial

banking loans outstanding were 1.76% (annualized) for the six months ended

June 30, 2008, 0.11% for the year ended December 31, 2007 and 0.11%

(annualized) for the six months ended June 30, 2007. The Company’s loan

portfolio decreased by $5.2 million during the second quarter, from $823.9

million at March 31, 2008 to $818.7 million at June 30, 2008. The Company

experienced a $4.1 decrease in construction and acquisition and development

loans, as well as a decrease in 1-4 family and non-farm non-residential

real estate loans of $2.1 million.

Mr. Boggus stated: “We continued to work aggressively to identify problem

loans, and to pursue favorable resolutions of any issues associated with

those problem loans. We are pleased with our progress in reducing our

balances of acquisition and development and residential construction loans,

and we are hopeful that our conservative approach will continue to serve us

well in this difficult economy.”

About Crescent Banking Company

Crescent Banking Company is a bank holding company headquartered in Jasper,

Georgia with total consolidated assets of approximately $979.0 million and

consolidated shareholders’ equity of approximately $61.7 million,

representing a book value of $11.58 per share, as of June 30, 2008. The

Company has 11 full service offices, a loan production office and a

corporate office, located in seven counties in North Georgia. The Company

had approximately 5.4 million shares of common stock outstanding at June

30, 2008. The Company’s common stock is listed on the Nasdaq Capital

Market under the symbol “CSNT.”

Cautionary Notice Regarding Forward-Looking Statements

Certain of the statements in this Press Release may constitute

“forward-looking statements” for purposes of Section 27A of the Securities

Act of 1933, as amended (the “Securities Act”), and Section 21E of the

Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as

such may involve known and unknown risks, uncertainties and other factors

which may cause the actual results, performance or achievements of the

Company to be materially different from the future results, performance or

achievements expressed or implied by such forward-looking statements. All

statements other than statements of historical fact are statements that

could be forward-looking statements. You can identify forward-looking

statements through our use of words such as “believe,” “intend,”

“continue,” “hopeful” and other similar words and expressions of the

future. Such

forward-looking statements include, without limitation, statements about:

the Company taking a conservative approach charge-offs in its loan

portfolio; the Company having strong liquidity; the Company taking steps to

preserve its long-term safety and soundness; the Company’s ability to

identify and resolve credit issues in its loan portfolio; and the Company’s

ability to maintain certain capital levels.

These forward-looking statements are based upon information presently

available to the Company’s management and are inherently subjective,

uncertain and subject to change, due to any number of risks and

uncertainties, including, without limitation: the Company’s inability to

properly manage its credit exposure, including, without limitation, any

failure by the Company to identify and resolve credit problems, and/or to

any failure to maintain adequate reserves to protect itself against any

losses resulting from those credit problems; further deterioration of the

Company’s asset quality, and/or greater deterioration in asset quality than

presently anticipated by the Company; the Company experiencing further

unanticipated charge-offs in the loan portfolio; the Company experiencing

further net interest margin or other earnings pressures, or other

developments, that would negatively affect the Company’s liquidity

position; the Company’s inability to maintain certain capital levels; and

those other risks and factors discussed in the Company’s Annual Report on

Form 10-K for the year ended December 31, 2007 and Quarterly Report for the

quarter ended March 31, 2008 under the captions “Special Cautionary Notice

Regarding Forward-Looking Statements” and “Risk Factors,” and otherwise in

the Company’s reports and filings that it makes with the Securities and

Exchange Commission.

You should not place undue reliance on any forward-looking statements,

since those statements speak only as of the date that they are made. The

Company has no obligation and does not undertake to publicly update, revise

or correct any of the forward-looking statements after the date of this

Press Release, or after the respective dates on which such statements

otherwise are made, whether as a result of new information, future events

or otherwise, except as otherwise may be required by law.

CRESCENT BANKING COMPANY
P.O. Box 2020, 7 Caring Way
Jasper, GA 30143
(678) 454-2266
Fax (678) 454-2282

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