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 |