Surry Business

North Carolina’s number of employed workers grew by 30,600 workers in September, but the unemployment rate increased slightly to 4.9 percent, according to statistics released today by the N.C. Employment Security Commission.

“Our state experienced growth in three areas during September,” said ESC Chairman Harry E. Payne Jr. “The labor force, the number of employed workers, and the number of unemployed people all increased from August. With the number of new jobs that have been announced recently, the outlook continues to appear good.”

Overall employment increased by 30,600 workers in September, to 4,324,635, and, the labor force increased by 37,222 people during the month to 4,546,961. Seasonally adjusted unemployment increased by 6,622 workers, to 222,326. Since this time last year, unemployment has decreased by 216 workers. The labor force, over the year, has increased by 56,734 people.

North Carolina’s unemployment rate of 4.9 percent remained above the U.S. rate of 4.7 percent. The state rate in August 2006 was 5.0 percent.

Southern Community Financial Corp. (NASDAQ: SCMF) in Winston-Salem, the holding company that owns Southern Community Bank and Trust, reported on Oct. 18 that net income declined by 17 percent to $1.7 million in the third quarter of 2007 compared with the third quarter of 2006.

Diluted earnings decreased 17 percent to 10 cents a share and fell two cents short of the average forecast of analysts surveyed by Zacks Investment Research. The report came out after markets had closed Thursday. At midday today Southern Community’s share price was down 2.8 percent from Thursday’s close.

The bank stated that income from loans rose 8 percent in the quarter to almost $11 million, while income from fees declined 5 percent to $2.5 million.

The bank said it had reduced its loan-loss provision by 21 percent in the quarter to $575,000.

Nonperforming loans declined 26 percent to $2.2 million.

The bank had total assets of $1.55 billion on Sept. 30, up $28.5 million from June 30.

Southern Community Bank and Trust opened for business in November 1996 in Winston-Salem with one office and 13 employees. Since then, it has expanded to more than 200 employees in a growing network of banking offices across the Piedmont Triad. The company has Surry County offices at 2010 Community Drive and 255 E. Independence Boulevard in Mount Airy, 201 W. Kapp in Dobson and 616 S. Key St. in Pilot Mountain.

Wachovia Corp. (NYSE:WB) of Charlotte today reported net income of $1.69 billion, or 89 cents per share, in the third quarter of 2007. The dollar volume is down 10 percent from $1.88 billion, or $1.17 per share, in the third quarter of 2006.

After-tax net merger-related expenses amounted to 1 cent per common share in the third quarter of 2007 and 2 cents per common share in the third quarter of 2006. Excluding these expenses, earnings were $1.71 billion, or 90 cents per share, in the third quarter of 2007 and $1.90 billion, or $1.19 per share, in the third quarter of 2006.

“I’m very proud of our ability to provide capital, liquidity and advice to our customers and peers in the face of the disruption in the fixed income markets in the third quarter,” said Ken Thompson, Wachovia chairman and chief executive officer. “These conditions clearly had a disappointing impact on the results of market-oriented businesses, but the strength in our core banking and brokerage businesses continued to serve us very well.

“Our loan and deposit trends were solid, and our retail brokerage performance was strong — and poised for even more growth as our A.G. Edwards colleagues join our team. Additionally, the first of our World Savings branch and deposit conversions was completed successfully last weekend, and going forward, attention in our expanded platform returns fully to sales production.

“While the impact of the market disruption was significant, it’s worth noting that the majority of the lower market valuations in the third quarter largely arose from a repricing of risk in the marketplace and do not reflect deterioration in the underlying credit quality of the assets in our leveraged finance and commercial real estate securitization businesses.

“Looking ahead, we’re taking the appropriate steps to ensure that as markets remain unsettled, we focus intently on actively managing our exposures and controlling costs. Longer term, we believe the challenges of the third quarter will be an advantage to companies like Wachovia with strong capital and liquidity positions and a clear understanding of the needs of customers and investors.”

Wachovia has Surry County financial centers at 105 N. Crutchfield in Dobson, 1058 U.S. 52 South and 554 N. Main in Mount Airy and at 1500 N. Bridge St. and 102 W. Main in Elkin.

Bank of America Corp. (NYSE: BAC) reported Thursday that third-quarter net income declined 32 percent to $3.70 billion from $5.42 billion a year earlier. Diluted earnings per share fell 31 percent to $0.82 from $1.18.

The lower net income resulted from a $1.33-billion decline in earnings in global corporate and investment banking “given the significant disruption in the financial markets during the quarter” including rising costs for consumer and small business credit and stress in several portfolios driven by the weakened U.S. housing market.

“While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third quarter performance,” said Kenneth D. Lewis, chairman and chief executive officer. “However, the majority of our businesses experienced solid revenue growth as sales momentum continued, demonstrating the value of our diverse business mix. We continued to invest in our businesses for the long term and to introduce innovative products and services to differentiate Bank of America in the marketplace.

“While we cannot predict the near term, I am confident that such innovation and execution combined with the advantages of scale and reach are the formula for future success.”

The news was not all bad. Total sales of retail products rose 12 percent, generated by strong growth in sales of first mortgages, checking and savings accounts and online banking activations. Net new retail checking accounts grew to a record 757,000. Retail deposits increased $16.52 billion, or 4 percent. Debit card purchase volume increased 11 percent and an increase in retail accounts drove service charge income higher by 8 percent. First mortgage originations rose 27 percent. Average loans and leases in business lending increased 9 percent to nearly $240 billion. Total unit sales to small businesses with less than $2.5 million in annual sales rose 24 percent, while average deposits grew 9 percent.

Total shareholders’ equity was $138.51 billion at Sept. 30. Period-end assets were $1.6 trillion.

During the quarter, Bank of America paid a cash dividend of $0.64 per share. The company also issued 9.5 million common shares related to employee stock options and ownership plans and repurchased 9.6 million common shares.

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company has more than 5,700 retail banking offices including one in Surry County at 704 Independence Boulevard, Mount Airy.

Omega Construction Inc. of Pilot Mountain has redesigned and improved its web site. The company unveiled the site’s new look and features this week.

In addition to photos of past and present projects, Omega Construction’s web site includes “Construction Cam.” By clicking the link and controls that pan or zoom the camera, site visitors can watch the progress of Omega Construction’s projects in real time. The first project featured on “Construction Cam” is a Hampton Inn in Roanoke Rapids.

The site also includes a link to NextPlans. This Internet-based service puts hard-copy plans and specs on the World Wide Web where documents can be shared by clients, architects and contractors. “The result is a solution that benefits from increased control, security and speed when managing building documents,” according to Omega Construction.

MuncyWeb of King, N.C., owned and operated by Cliff Muncy, created the new web site.

Established in 1975 in Surry County, Omega Construction serves North Carolina’s Piedmont area as a leader in commercial construction.

“Pride and ability to both design and construct buildings which suit the individual wants and needs of our various clients has distinguished us from our competitors,” the company says. “Constructing hotels, churches, office buildings, schools, health care facilities and industrial buildings, we have proven to be a uniquely versatile company, displaying a personal involvement rarely found in today’s marketplace. Emphasizing innovative design and quality construction, our professionals remain committed to providing turn-key projects at affordable costs.”

Omega Construction’s headquarters is at 800 S. Key St., Pilot Mountain, NC 27041-8596. The main phone number is (336) 368-5156. P.R. (Paul) Covington Jr. is the company’s president.

BB&T (NYSE: BBT) reported Oct. 18 that diluted earnings rose by 3 cents to 80 cents a share in the third quarter. The earnings fell 4 cents short of the average forecast by analysts surveyed by Zacks Investment Research.

However, the WInston-Salem-based bank increased its profit in the quarter while rivals Bank of America Corp. and SunTrust Banks Inc. reported sharp declines in net income.

“The third quarter presented significant challenges for the financial services industry, including unusual disruptions in financial markets and a rising level of loan losses,” said Chairman and Chief Executive Officer John A. Allison. “…I am pleased with a number of other positive accomplishments for the quarter. In particular, this quarter represents BB&T’s fourth consecutive quarter of generating positive operating leverage and improved operating efficiency through solid execution of our emphasis on expense control. Also, our loan and deposit growth continued to be healthy during the quarter. In addition, last week we received the results of the FDIC’s annual report on deposit market share, which were very positive for BB&T. On balance, our overall performance was very solid in a difficult
environment.”

BB&T’s net income in the third quarter of 2007 totaled $444 million, or $.80 per diluted share, up 6.5 percent and 3.9 percent, respectively, from $417 million, or $.77 per diluted share, in the third quarter of 2006. Operating earnings for the third quarter of 2007 grew to $448 million, or $.81 per diluted share, compared to $424 million, or $.78 per diluted share, in the third quarter of 2006.

Income from loan revenue was up 4.3 percent to $978 million before the bank raised its loan-loss provision by $43 million to $105 million during the quarter. Including the loan-loss provision increase, income from loans was down less than 1 percent at $873 million.

Noninterest income was up 2.3 percent to $675 million, including a 14 percent increase in revenue from service charges on deposit accounts at $157 million. “This increase was primarily attributable to growth in revenues from overdraft items,” the bank said in its quarterly report.

BB&T has five offices in Surry County: 108 E. Main in Pilot Mountain, 1661 N. Bridge St. and 202 W. Main in Elkin, and 541 N. Main and 2151 Rockford St. in Mount Airy.

Insteel Industries’ fourth-quarter 2007 earnings were nearly half those in the comparable quarter in 2006, the Mount Airy company reported Oct. 18.

On Thursday, Insteel’s stock price closed down almost 3.8 percent on the news, settling at a new 52-week low: $13.52. Analysts’ consensus estimate had been that Insteel would report fourth-quarter earnings of $0.36 per share. The actual number was 22 percent below expectations.

“Insteel’s fourth-quarter earnings were negatively impacted by the continuation of soft demand in certain markets,” said H.O. Woltz III, Insteel’s president and chief executive officer. “As we had previously reported, the reduction in shipments for the quarter was driven by the continued weakness in housing-related demand, high levels of PC strand imports and unfavorable weather conditions in certain regions of the country that resulted in construction delays.

“Gross margins for the quarter narrowed to 17.1 percent from 22.0 percent in the third quarter and 22.2 percent a year ago due to the reduced shipments, lower spreads between average selling prices and raw material costs, and higher unit conversion costs.

“On a positive note, excluding the impact of our decision not to pursue certain PC strand business during the quarter due to low-priced import competition, shipments were up 2.1 percent from a year ago, reflecting the continued strength of the nonresidential construction sector.”

Earnings from continuing operations in the quarter that ended Sept. 29, 2007, were $5.1 million, or $0.28 per diluted share, compared with $9.5 million, or $0.52 per diluted share for the same period last year. Including the results of discontinued operations, net earnings were $5.2 million, or $0.28 per diluted share compared with $10.1 million, or $0.55 per diluted share in the prior year. Net sales for the fourth quarter decreased 9.9 percent to $74.4 million from $82.5 million in the prior year quarter. Shipments decreased 9.4 percent while average selling prices decreased 0.4 percent.

For the year that ended Sept. 29, 2007, earnings from continuing operations were $24.3 million, or $1.33 per diluted share, compared with $34.4 million, or $1.86 per diluted share in the prior year. Including the results of discontinued operations, net earnings were $24.2 million, or $1.32 per diluted share compared with $33.0 million, or $1.79 per diluted share in the prior year. Net sales for the year decreased 9.6 percent to $297.8 million from $329.5 million last year. Shipments decreased 11.4 percent while average selling prices increased 2.0 percent.

Operating activities of continuing operations provided $6.4 million of cash during the fourth quarter compared with $9.7 million in the year-ago period primarily due to the decrease in earnings. The company funded $3.7 million of capital expenditures, paid $1.1 million in dividends and ended the quarter debt-free with $8.7 million in cash, an increase of $2.4 million from the previous quarter-end.

Capital expenditures for 2008 are currently expected to total $10 million. Insteel is upgrading its Florida PC strand facility and plans additional projects.

Commenting on the outlook for fiscal 2008, Woltz said, “As we approach the seasonally slower months of the year, prices for hot-rolled steel wire rod, our primary raw material, are on the rise and reduced operating rates will have an unfavorable impact on unit conversion costs. Our ability to recover these additional costs will ultimately depend upon the strength of demand and competitive dynamics in our markets.

“At a macro level, the outlook for our primary demand driver, nonresidential construction, remains positive, although we expect some moderation in the growth rate from the elevated levels of recent years. In contrast, conditions in the housing market have continued to deteriorate, making the timing of a recovery uncertain at this point.

“Despite these near-term challenges, we expect increasing contributions from the substantial investments that have been made in our facilities over the past two years as we ramp up production volumes on the new equipment. With engineered structural mesh continuing to gain broader market acceptance as a replacement for rebar, we are well-positioned to capitalize on this growth opportunity through the new production lines at our North Carolina and Texas facilities and are evaluating further expansions.”

Insteel Industries is one of the nation’s largest manufacturers of steel wire reinforcing products for concrete construction applications. The company manufactures and markets PC strand and welded wire reinforcement, including concrete pipe reinforcement, engineered structural mesh (“ESM”) and standard welded wire reinforcement. Insteel’s products are sold primarily to manufacturers of concrete products that are used in nonresidential construction.

Headquartered in Surry County, North Carolina, Insteel operates six manufacturing facilities in the United States.

Ty Ransdell, a 27-year veteran in the newspaper industry, is the new publisher of the Elkin Tribune, The Yadkin Ripple and On the Vine magazine, all owned by Heartland Publications.

He takes over from Gary Lawrence, Heartland Publications’ regional manager and publisher of The Mount Airy News, who has been the Tri-County News’ interim publisher. This past summer, Heartland Publications acquired Mid-South Management’s publications in Surry and Stokes counties in North Carolina and in Carroll County, Va.

Ransdell, 43, has worked for newspapers in Colorado and New Mexico, most recently as a consultant. He was general manager of the Santa Fe New Mexican, a 27,000-circulation newspaper serving northern New Mexico. He was on the New Mexico Press Association’s board of directors for eight years and was the association’s president for two years.

Ransdell and his wife, Ruth Ann, have three sons: Dustin, 20, Aaron, 15 and Logan, 10. He says the family is looking forward to the move east. His wife grew up in West Virginia and Ransdell said her parents live within a short drive of the Yadkin Valley.

Eagle Carports Inc., a privately held North Carolina corporation with its headquarters’ offices just north of Surry County in Cana, Va., has purchased 132,200-square-foot plant formerly owned by Spencer’s Inc. along U.S. 52 at Arlington Street in Mount Airy.

According to The Mount Airy News, in an Oct. 16 story citing county records, Eagle Carports Inc. paid $700,000 for 9.5 acres and the Spencer’s No. 4 building, a former manufacturing facility and warehouse, valued for tax purposes at $790,610. The replacement cost for the building is $3.4 million on Surry County tax records.

Tim Gammons, Eagle Carports’ general manager, told the newspaper it’s premature to say what operations will be housed in the building. Gammons said he expects the facility will be used to expand the company’s production and distribution system.

Eagle Carports operates a sales, distribution and installation network spanning 30 states. It has manufacturing facilities in Cana, Va.; Dickson, Tenn.; Nacogdoches and Amarillo, Texas; Clovis, N.M.; and Gulfport, Miss.

Gabriel and Alicia Torres founded Eagle Carports in 1997.

The company’s competitors include two carport manufacturers and distributors already based in Surry County. Those firms are T-N-T Carports at Dobson and Carolina Carports in Mount Airy.

Selling on eBay, effective marketing on a budget, worksite safety and bookkeeping are the topics of four upcoming seminars arranged by the Small Business Center at Surry Community College.

Three of the four are free and “Dynamite Marketing on a Firecracker Budget” costs only $5.

See the schedule below:

 For more information, contact:

Dennis Lowe
Director of the Small Business Center
336-386-3309
lowed@surry.edu

Renee Hutchins
Coordinator, Division Services
336-386-3211
hutchinsr@surry.edu