Market Overview

Southeastern Bank Financial Corp. Reports Record Third Quarter 2012 Earnings

Share:

AUGUSTA, Ga., Oct. 26, 2012 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported record quarterly net income of $3.9 million for the three months ended Sept. 30, 2012, or $0.58 in diluted earnings per share, compared to $2.9 million, or $0.44 in diluted earnings per share, in the third quarter of 2011.

"We are pleased to have achieved another record quarter of income and earnings, especially in the midst of a slow growth economy, low interest rates and a costly regulatory environment," said President and Chief Executive Officer R. Daniel Blanton. "As in previous quarters, we experienced a broad mix of positive results including growth in core earnings and mortgage income. We are delighted to see loan growth for the quarter. We saw decreases in both interest and noninterest expense for the third quarter, and our credit quality continued to remain solid with a decline in nonperforming assets."

Total assets at Sept. 30, 2012, were $1.7 billion, an increase of $58.3 million from Dec. 31, 2011. Loans outstanding at the end of the third quarter were $883.1 million, an increase of $7.5 million from Dec. 31, 2011, and an increase of $20.8 million from Sept. 30, 2011. Total deposits were $1.4 billion at Sept. 30, 2012, an increase of $17.1 million from Dec. 31, 2011, and an increase of $35.1 million from Sept. 30, 2011. Cash and cash equivalents totaled $54.2 million at the end of the third quarter of 2012.

Net interest income for the third quarter of 2012 totaled $13.0 million, a slight decrease from $13.1 million for the same period in 2011. Noninterest income for the third quarter totaled $5.7 million, a 9.8 percent increase from $5.2 million for the same period a year ago, resulting from higher mortgage origination volume. Noninterest expense was $10.6 million in the third quarter of 2012, a slight decrease from a year ago.

The net interest margin was 3.34 percent for the quarter-ended Sept. 30, 2012, compared to 3.38 percent for the second quarter of 2012, and 3.51 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.93 percent for the third quarter of 2012, an increase of 20 basis points from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.89 percent, an increase of 155 basis points from the third quarter of 2011.

Nonperforming assets at Sept. 30, 2012, were 2.03 percent of total assets, compared to 2.63 percent at June 30, 2012, and 2.34 percent at Sept. 30, 2011. Net charge-offs for the third quarter of 2012 totaled 0.93 percent of average loans on an annualized basis, compared to 0.97 percent annualized in the second quarter of 2012 and 1.20 percent annualized in the third quarter of 2011. The company held $4.1 million in OREO at Sept. 30, 2012, compared to $6.2 million at December 31, 2011, and $7.9 million at Sept. 30, 2011.

The company's loan-loss provision expense was $2.4 million in the third quarter of 2012, compared to $1.9 million in the second quarter of 2012 and $3.5 million in the third quarter a year ago. The allowance for loan losses at Sept. 30, 2012, was $29.1 million, or 3.41 percent of loans outstanding, compared to $29.0 million, or 3.43 percent of loans outstanding, at Dec. 31, 2011, and $29.3 million, or 3.50 percent of loans outstanding, at Sept. 30, 2011.

Net income for the nine months ended Sept. 30, 2012, totaled $10.5 million, an increase of $2.5 million from the same period of 2011. Diluted earnings per share for the first nine months of 2012 were $1.58, an increase of $0.38 per share earned from the same period a year ago.

Net interest income for the first nine months of 2012 was $38.6 million, a 1.1 percent increase from $38.2 million in the first nine months of 2011. Noninterest income was $16.0 million for the first nine months of 2012, a 14.8 percent increase from $14.0 million in the same period of 2011. Noninterest expense was $32.8 million for the nine-month period ended Sept. 30, 2012, compared to $30.5 million in the same period in 2011.

"While we have seen some loan growth, the overall level of business activity continues to remain low in our market," said Blanton. "As such, significant pressure remains on the net interest margin. We will continue with our strategy of maintaining a strong balance sheet, keeping expenses in line and finding ways of generating additional revenue growth."

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.7 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices, three full-service offices in Aiken County, S.C. operating as Southern Bank & Trust and one limited service Loan Production Office in Athens, GA. The company also has mortgage operations in Augusta and Savannah. The banks focus primarily on real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals, and also provides wealth management and trust services. The company's common stock is publicly traded under the symbol SBFC on OTCQB. Investors can find Real-Time quotes and market information for the Company on www.otcmarkets.com or by visiting the Company's Web site, www.georgiabankandtrust.com.

Safe Harbor Statement – Forward-Looking Statements

Statements made in this release by Southeastern Bank Financial Corporation (The Company) other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management's belief as well as assumptions made by, and information currently available to, management pursuant to "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including: unanticipated changes in the Bank's local economy and in the national economy; governmental monetary and fiscal policies; deposit levels, loan demand, loan collateral values and securities portfolio values; difficulties in interest rate risk management; difficulties in operating in a variety of geographic areas; the effects of competition in the banking business; changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions; failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans; and other factors. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.

 
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
     
Consolidated Balance Sheets
     
  September 30,  
  2012 December 31,
Assets (Unaudited) 2011
     
Cash and due from banks  $ 39,641,054  $ 51,080,600
Interest-bearing deposits in other banks  14,526,319  18,760,812
Cash and cash equivalents  54,167,373  69,841,412
     
Available-for-sale securities  676,088,612  603,758,999
     
Loans held for sale  29,165,522  29,615,131
     
Loans  853,927,025  846,010,275
Less allowance for loan losses  29,101,646  29,045,876
Loans, net  824,825,379  816,964,399
     
Premises and equipment, net  26,345,759  27,608,118
Accrued interest receivable  6,860,530  6,246,880
Bank-owned life insurance  31,544,363  30,713,488
Restricted equity securities  5,295,600  5,086,000
Other real estate owned  4,066,500  6,208,720
Prepaid FDIC assessment  2,367,042  3,419,738
Deferred tax asset  9,750,570  12,723,238
Other assets  2,627,396  2,586,986
     
   $ 1,673,104,646  $ 1,614,773,109
     
Liabilities and Stockholders' Equity    
     
Deposits    
Noninterest-bearing  $ 160,998,122  $ 147,196,034
Interest-bearing:    
NOW accounts  335,179,344  346,235,936
Savings  493,138,121  471,727,749
Money management accounts  43,483,647  42,977,515
Time deposits over $100,000  278,962,478  286,318,774
Other time deposits  124,581,637  124,766,377
   1,436,343,349  1,419,222,385
     
Securities sold under repurchase agreements  654,373  700,798
Advances from Federal Home Loan Bank  64,000,000  39,000,000
Accrued interest payable and other liabilities  17,858,016  15,874,526
Subordinated debentures  21,546,646  22,946,646
     
Total liabilities  1,540,402,384  1,497,744,355
     
Stockholders' equity:    
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2012 and 2011, respectively  --   -- 
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,680,225 and 6,677,667 shares issued in 2012 and 2011, respectively; 6,674,225 and 6,677,667 shares outstanding in 2012 and 2011, respectively  20,040,675  20,033,001
Additional paid-in capital  62,824,032  62,767,133
Retained earnings  41,132,092  30,593,180
Treasury stock, at cost; 6,000 and 0 shares in 2012 and 2011, respectively  (83,460)  -- 
Accumulated other comprehensive income, net  8,788,923  3,635,440
     
Total stockholders' equity  132,702,262  117,028,754
     
   $ 1,673,104,646  $ 1,614,773,109
 
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
         
Consolidated Statements of Income
         
(Unaudited)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2012 2011 2012 2011
Interest income:        
Loans, including fees  $ 11,741,990  $ 12,635,856  $ 34,960,016  $ 38,090,629
Investment securities  4,134,441  4,450,114  12,801,516  13,279,868
Interest-bearing deposits in other banks  15,036  22,466  61,576  92,895
Total interest income  15,891,467  17,108,436  47,823,108  51,463,392
         
Interest expense:        
Deposits  2,227,312  3,381,564  7,318,465  11,288,957
Securities sold under repurchase agreements  738  1,214  9,408  4,488
Other borrowings  683,606  637,019  1,910,598  2,014,416
Total interest expense  2,911,656  4,019,797  9,238,471  13,307,861
         
Net interest income  12,979,811  13,088,639  38,584,637  38,155,531
         
Provision for loan losses  2,401,386  3,534,567  6,567,098  10,198,085
         
Net interest income after provision for loan losses  10,578,425  9,554,072  32,017,539  27,957,446
         
Noninterest income:        
Service charges and fees on deposits  1,732,609  1,729,312  5,028,932  5,057,149
Gain on sales of loans  2,873,107  2,097,176  6,895,581  5,024,313
Gain on sale of fixed assets  4,000  --   10,459  16,659
Investment securities gains (losses), net  (36,333)  250,514  441,186  368,737
Other-than-temporary loss        
Total impairment loss  --   (64,711)  (13,314)  (191,618)
Less loss recognized in other comprehensive income  --   (24,072)  (4,268)  (89,494)
Net impairment loss recognized in earnings  --   (40,639)  (9,046)  (102,124)
Retail investment income  419,903  443,857  1,446,549  1,408,124
Trust service fees  279,808  284,120  857,084  849,358
Earnings from cash surrender value of bank-owned life insurance  304,892  301,918  830,875  767,898
Miscellaneous income  169,543  169,452  535,274  573,518
Total noninterest income  5,747,529  5,235,710  16,036,894  13,963,632
         
Noninterest expense:        
Salaries and other personnel expense  6,603,393  5,990,176  19,343,362  17,207,907
Occupancy expenses  1,014,315  1,088,207  3,111,118  3,314,824
Other real estate losses (gains), net  (96,667)  572,243  1,252,269  1,033,212
Other operating expenses  3,090,970  2,971,831  9,073,049  8,904,176
Total noninterest expense  10,612,011  10,622,457  32,779,798  30,460,119
         
Income before income taxes  5,713,943  4,167,325  15,274,635  11,460,959
         
Income tax expense  1,838,467  1,242,912  4,735,723  3,429,487
         
Net income  $ 3,875,476  $ 2,924,413  $ 10,538,912  $ 8,031,472
         
Comprehensive income   $ 6,645,709  $ 5,637,598  $ 15,692,395  $ 15,323,762
         
Basic net income per share  $ 0.58  $ 0.44  $ 1.58  $ 1.20
         
Diluted net income per share  $ 0.58  $ 0.44  $ 1.58  $ 1.20
         
Weighted average common shares outstanding  6,680,020  6,677,059  6,679,294  6,676,463
         
Weighted average number of common and common equivalent shares outstanding  6,680,020  6,677,059  6,679,294  6,676,463
CONTACT: Ronald L. Thigpen Executive Vice President and COO Southeastern Bank Financial Corp. 706-481-1014 Andy Mus Vice President Ketchum Inc. 404-879-9075
View Comments and Join the Discussion!