AUGUSTA, Ga., Oct. 29, 2010 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust of Aiken, S.C. (SB&T), today reported quarterly net income of $1.8 million, or $0.27 in diluted earnings per share, for the three months ended Sept. 30, 2010, compared to net income of $740,000, or $0.11 in diluted earnings per share, in the third quarter of 2009.
"Our third consecutive quarter of income and earnings growth demonstrates that we are returning to solid profitability, despite continuing uncertainty in our markets and in the broader economy," said R. Daniel Blanton, president and chief executive officer. "We are encouraged by the continued improvement in our asset quality and our ability to generate increases in net interest income despite the industry-wide lack of loan demand, which contributes to additional pressure on our net interest margin. That said, we still face many challenges related to the stagnant economy, which is why we have continued to build our loan loss reserve."
At Sept. 30, 2010, total assets for the company were $1.6 billion, an increase of $155.6 million, or 10.4 percent, from Dec. 31, 2009.
Loans outstanding at the end of the third quarter of 2010 were $920.4 million, compared to $956.6 million at Dec. 31, 2009. Total deposits at Sept. 30, 2010, were $1.4 billion, a 12.1 percent increase from $1.3 billion at Dec. 31, 2009. The company held $118.0 million in cash and cash equivalents at the end of the third quarter.
Net interest income for the third quarter of 2010 was $11.8 million, an increase of $972,926, or 9.0 percent, from the same period a year ago. Noninterest income for the third quarter increased 36.0 percent to $6.5 million, from $4.8 million in the third quarter of 2009, due primarily to a 47.9 percent increase in mortgage income from the third quarter of 2009, and a 52.3 percent improvement in retail investment income over that same period.
Noninterest expense in the third quarter of 2010 increased 7.0 percent to $11.0 million from a year ago, largely as a result of higher commission-related costs from mortgage origination and retail investments as well as an increase in the loss on the sale of Other Real Estate assets.
Nonperforming assets at Sept. 30, 2010, were 1.98 percent of total assets, a sizable improvement from 2.53 percent at June 30, 2010, and 3.83 percent at Sept. 30, 2009. Net charge-offs for the third quarter of 2010 totaled 1.36 percent of average loans, compared to 1.37 percent in the second quarter of 2010, and 0.41 percent in the third quarter of 2009. The company held $7.1 million in foreclosed property or other real estate owned (OREO) at Sept. 30, 2010, compared to $7.2 million at June 30, 2010, and $15.6 million at Sept. 30, 2009.
The provision for loan losses totaled $4.8 million for the third quarter of 2010, compared to $4.9 million in the same period a year ago. The allowance for loan losses at Sept. 30, 2010, was $25.5 million, or 2.87 percent of loans outstanding, compared to $22.3 million, or 2.38 percent, at Dec. 31, 2009.
"Our asset quality has steadily improved in 2010, reflecting the success of our decision to aggressively reduce problem assets in 2009 and convert nonearning assets to earning assets," said Blanton. "We will continue to monitor our loan portfolio closely as we move forward."
Return on average assets (ROA) was 0.45 percent for the third quarter of 2010, and return on average shareholders' equity (ROE) was 7.05 percent. The company's net interest margin was 3.12 percent, compared to 3.19 percent at June 30, 2010, and 3.17 percent a year ago.
For the nine months ended Sept. 30, 2010, the company reported net income of $4.7 million, or $0.71 in diluted earnings per share, compared to net income of $1.4 million, or $0.23 in diluted earnings per share, in the same period a year ago.
Net interest income for the first nine months of 2010 was $33.7 million, up 6.5 percent from $31.6 million in the comparable period in 2009. Noninterest income was $15.7 million for the first nine months of 2010, compared to $15.3 million for the same period in 2009, an increase of 3.1 percent. Noninterest expense for the first three quarters of 2010 totaled $31.0 million, compared to $30.9 million for the comparable period in 2009.
"Looking ahead, our plan is maintain control of our expenses, manage our problem assets, and continue to find ways to generate revenue in a tough economy," said Blanton.
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.6 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and an office in Athens, Ga. SB&T is a state charted bank serving the Aiken County, S.C., market, with three full-service offices. 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 provide wealth management and trust services. The company's common stock is publicly traded on the OTC Bulletin Board under the symbol SBFC. For more information, please visit 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 SUBSIDIARIES | ||
| Consolidated Balance Sheets | ||
| Assets |
September 30, 2010 (Unaudited) |
December 31, 2009 |
| Cash and due from banks | $ 80,321,874 | $ 123,660,855 |
| Federal funds sold | -- | 7,300,000 |
| Interest-bearing deposits in other banks | 37,585,543 | 17,032,784 |
| Cash and cash equivalents | 117,907,417 | 147,993,639 |
| Investment securities | ||
| Available-for-sale | 541,549,460 | 306,216,156 |
| Held-to-maturity, at cost (fair values of $311,848 and $491,860, respectively) | 310,000 | 490,000 |
| Loans held for sale | 31,803,881 | 19,156,943 |
| Loans | 888,596,510 | 937,489,634 |
| Less allowance for loan losses | 25,540,308 | 22,338,255 |
| Loans, net | 863,056,202 | 915,151,379 |
| Premises and equipment, net | 29,970,723 | 31,702,655 |
| Accrued interest receivable | 6,226,124 | 6,090,791 |
| Bank-owned life insurance | 23,956,866 | 23,247,879 |
| Restricted equity securities | 5,911,800 | 6,337,700 |
| Other real estate owned | 7,106,477 | 7,973,830 |
| Prepaid FDIC assessment | 5,376,581 | 6,886,319 |
| Deferred tax asset | 9,685,032 | 11,159,725 |
| Other assets | 3,864,135 | 8,711,716 |
| $ 1,646,724,698 | $ 1,491,118,732 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 120,700,178 | $ 114,780,339 |
| Interest-bearing: | ||
| NOW accounts | 368,994,416 | 210,437,831 |
| Savings | 408,550,797 | 343,739,778 |
| Money management accounts | 36,782,943 | 44,780,787 |
| Time deposits over $100,000 | 357,564,244 | 418,750,941 |
| Other time deposits | 142,760,928 | 148,044,382 |
| 1,435,353,506 | 1,280,534,058 | |
| Securities sold under repurchase agreements | 437,768 | 3,187,807 |
| Advances from Federal Home Loan Bank | 67,000,000 | 77,000,000 |
| Other borrowed funds | 700,000 | 600,000 |
| Accrued interest payable and other liabilities | 16,033,829 | 13,106,706 |
| Subordinated debentures | 22,946,646 | 22,946,646 |
| Total liabilities | 1,542,471,749 | 1,397,375,217 |
| Stockholders' equity: | ||
|
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2010 and 2009, respectively |
-- | -- |
|
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,674,465 and 6,672,826 shares issued and outstanding in 2010 and 2009, respectively |
20,023,395 | 20,018,478 |
| Additional paid-in capital | 62,552,739 | 62,359,597 |
| Retained earnings | 17,402,521 | 12,692,134 |
|
Treasury stock, at cost; 0 shares in 2010 and 2009, respectively |
-- | -- |
| Accumulated other comprehensive income (loss), net | 4,274,294 | (1,326,694) |
| Total stockholders' equity | 104,252,949 | 93,743,515 |
| $ 1,646,724,698 | $ 1,491,118,732 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES | ||||
| Consolidated Statements of Income | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| Interest income: | ||||
| Loans, including fees | $ 13,611,252 | $14,217,691 | $ 40,470,959 | $42,227,664 |
| Investment securities | 4,168,836 | 3,294,625 | 11,543,369 | 10,964,112 |
| Federal funds sold | 2,319 | 3,498 | 9,201 | 25,353 |
| Interest-bearing deposits in other banks | 111,635 | 86,140 | 293,802 | 126,841 |
| Total interest income | 17,894,042 | 17,601,954 | 52,317,331 | 53,343,970 |
| Interest expense: | ||||
| Deposits | 5,186,817 | 5,658,474 | 15,872,983 | 18,468,660 |
|
Federal funds purchased and securities sold under repurchase agreements |
1,642 | 114,023 | 17,499 | 320,259 |
| Other borrowings | 912,178 | 1,008,978 | 2,757,300 | 2,927,443 |
| Total interest expense | 6,100,637 | 6,781,475 | 18,647,782 | 21,716,362 |
| Net interest income | 11,793,405 | 10,820,479 | 33,669,549 | 31,627,608 |
| Provision for loan losses | 4,759,111 | 4,878,571 | 11,841,246 | 14,741,487 |
| Net interest income after provision for loan losses | 7,034,294 | 5,941,908 | 21,828,303 | 16,886,121 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,801,943 | 1,846,238 | 5,145,149 | 5,224,080 |
| Gain on sales of loans | 2,877,241 | 1,945,562 | 6,452,542 | 6,642,993 |
| Gain (loss) on sale of fixed assets | (656) | (80) | 26,368 | (16,229) |
| Investment securities gains (losses), net | 775,171 | 380,512 | 937,115 | 1,692,842 |
| Other-than-temporary loss | ||||
| Total impairment loss | (96,258) | (618,465) | (96,258) | (1,809,432) |
| Loss recognized in other comprehensive income | 258 | 262,540 | 258 | 834,648 |
| Net impairment loss recognized in earnings | (96,000) | (355,925) | (96,000) | (974,784) |
| Retail investment income | 497,232 | 326,434 | 1,248,321 | 853,572 |
| Trust service fees | 276,161 | 267,897 | 852,725 | 765,867 |
| Increase in cash surrender value of bank-owned life insurance | 256,867 | 255,628 | 708,987 | 649,263 |
| Miscellaneous income | 149,055 | 142,023 | 466,319 | 428,351 |
| Total noninterest income | 6,537,014 | 4,808,289 | 15,741,526 | 15,265,955 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 6,115,266 | 5,469,234 | 17,524,143 | 16,927,335 |
| Occupancy expenses | 1,131,918 | 1,213,009 | 3,469,021 | 3,494,500 |
| Other operating expenses | 3,736,448 | 3,581,576 | 9,984,179 | 10,484,131 |
| Total noninterest expense | 10,983,632 | 10,263,819 | 30,977,343 | 30,905,966 |
| Income before income taxes | 2,587,676 | 486,378 | 6,592,486 | 1,246,110 |
| Income tax expense (benefit) | 752,584 | (253,376) | 1,882,099 | (187,011) |
| Net income | $ 1,835,092 | $ 739,754 | $ 4,710,387 | $ 1,433,121 |
| Basic net income per share | $ 0.27 | $ 0.11 | $ 0.71 | $ 0.23 |
| Diluted net income per share | $ 0.27 | $ 0.11 | $ 0.71 | $ 0.23 |
| Weighted average common shares outstanding | 6,674,465 | 6,672,118 | 6,673,912 | 6,338,632 |
| Weighted average number of common and common equivalent shares outstanding | 6,674,465 | 6,672,388 | 6,673,912 | 6,344,275 |