PremierWest announces reverse stock split

Medford-based PremierWest Bancorp announced a reverse stock split Thursday along with news that it had narrowed its bottom-line losses in the fourth quarter of 2010.

The parent company of PremierWest Bank will institute a 1-for-10 reverse stock split, effective Feb. 10.

Shareholders approved a series of potential reverse stock splits at a special meeting on Dec. 16.

The intention of the reverse stock split is to bring PremierWest above the $1 minimum bid price required for continued listing on the Nasdaq Capital Market. PremierWest has until March 10 to regain compliance.

PremierWest's present market capitalization is $38.13 million. Shares traded as high as $16 in 2006 but haven't finished a session above $6 since the start of 2009. PremierWest shares closed at 38 cents on Thursday on volume of 382,495.

"While the reverse split will bring us into compliance with Nasdaq listing rules, we understand that profitability is what ultimately drives share price," said President and Chief Executive Officer Jim Ford.

The announcement came on the same day that PremierWest Bancorp reported a loss of $705,000 for the three months ending Dec. 31, a vast improvement over the $110.6 million setback of a year earlier. For all of 2010, PremierWest lost $7.5 million.

The bank's lending amount declined 6 percent during the period to $976.8 million, a drop of $57.8 million.

Problem loans continued to plague the company, as the loan-loss reserve "remained elevated" at $35.6 million, or 3.64 percent of PremierWest's loans.

Nonperforming loans increased by $14.5 million to $129.6 million — 13.2 percent of loans — compared with $115.1 million or 11.1 percent at the end of the third quarter. However, there was no provision for loan losses recorded during the fourth quarter after a $1.6 million provision for the third quarter and a $16.7 million provision a year earlier.

Foreclosures and other real estate owned increased $2.1 million to $32 million while the company sold $4.8 million worth of property for a net gain of $125,000.

Ford indicated problem loans were moving toward foreclosure and "are expected to ultimately be liquidated from the balance sheet." Ford said the company was close to the break-even point in the fourth quarter before TARP and other government dividend and interest payments were made.

Reach reporter Greg Stiles at 541-776-4463 or e-mail

Share This Story