MT. PLEASANT, S.C., Jan. 17, 2007 (PRIME NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced today that it had unaudited net income of $4,839,000 or $0.89 per basic share, for the year ended December 31, 2006. This compares to net income of $4,189,000, or $1.06 per basic share, for the year ended December 31, 2005. The average basic shares, included in the earnings per share calculation, were 38.6% greater for the year ended December 31, 2006, than for the year ended December 31, 2005. This increase in outstanding shares is primarily a result of the completion of our offering of 1,610,000 additional shares of stock during the fourth quarter of 2005. Average shares outstanding for both periods have been adjusted for the 10% stock dividend issued May 26, 2006.
"Southcoast Financial Corporation continues to report increased profits in an ever challenging interest rate market. Asset quality remained strong, and improved during the fourth quarter. Non-performing loans decreased to 0.18% at December 31st, down from 0.28% at September 30th. We slowed our growth somewhat to increase our attention to asset quality and adjust to a slowing of the real estate market. We continued to focus on the core earnings of our Bank subsidiary, Southcoast Community Bank," Chairman and Chief Executive Officer Wayne Pearson said.
Total assets as of December 31, 2006 were $481.9 million compared to $476.6 million as of December 31, 2005, an increase of 1.1%. Loans, excluding loans held for sale, decreased to $367.6 million, down 2.3% from $375.9 million as of December 31, 2005. Deposits dropped 0.2% to $310.9 million over the same period.
"Despite some slowing of growth, our local economy continues to show strength and Southcoast continues to expand its branch network. On January 8, 2007, we opened our ninth branch office at 1654 Sam Rittenberg Blvd, in the West Ashley area of Charleston. This branch is our second office in the West Ashley area. We expect to open our third Mt. Pleasant office in the second quarter of 2007. Our expansion into the Hilton Head market is underway. We have entered into a letter of intent to lease office space for our Hilton Head loan production office. We have acquired two locations for our expansion in the market. Our regional headquarters will be located on Palmetto Bay Road, and an additional branch will be located on Highway 170 in Bluffton," Pearson said.
For the quarter ended December 31, 2006, unaudited net income was $967,000, or $0.18 per basic share. This compares to net income of $1,313,000, or $0.27 per basic share, for the quarter ended December 31, 2005. The reduction of net income is the result of having significant noninterest income in the fourth quarter of 2005 related to the sale of real estate which did not recur in 2006. The average basic shares included in the earnings per share calculation were 13.7% greater for the three months ended December 31, 2006, than for the three months ended December 31, 2005, primarily due to the completion of the aforementioned stock offering during the fourth quarter of 2005. The average shares included in the earnings per share calculation for both periods have been adjusted for the earlier referenced 10% stock dividend.
Southcoast Financial Corporation, headquartered in Mt. Pleasant, South Carolina, is the holding company of Southcoast Community Bank. The Bank, which opened for business July 20, 1998, is a state chartered commercial bank operating from its main office at 530 Johnnie Dodds Boulevard in Mt. Pleasant, South Carolina. Trading in Southcoast Financial Corporation's common stock is reported on NASDAQ under the symbol SOCB. Information about the corporation is available on our web site, www.southcoastbank.com.
This press release contains forward-looking statements about branch openings within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events.
Any or all of our forward-looking statements here or in other publications may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward looking-statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock.
We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.
Southcoast Financial Corporation SELECTED FINANCIAL DATA (dollars in thousands, except earnings per share) Year Year Year Ended Ended Ended Dec 2006 Dec. 2005 Dec. 2004 (Unaudited) INCOME STATEMENT DATA Net interest income $16,145 $13,914 $10,692 Provision for loan losses 723 865 1,146 Noninterest income 3,837 2,725 2,700 Noninterest expenses 11,542 9,243 7,966 Net income 4,839 4,189 2,982 PER SHARE DATA * Net income per share Basic $0.89 $1.06 $0.83 Diluted $0.89 $1.06 $0.82 BALANCE SHEET DATA Total assets $481,856 $476,599 $366,102 Total deposits 310,893 311,554 258,153 Total loans (net) 363,246 371,656 293,208 Investment securities 46,461 35,203 24,831 Total earning assets 439,507 440,942 344,482 Other Borrowings 67,841 67,000 58,000 Junior subordinated debentures 21,655 21,655 11,345 Shareholders' equity 78,803 73,315 36,571 Average shares outstanding* Basic 5,461,034 3,941,199 3,586,523 Diluted 5,465,859 3,945,882 3,637,618 KEY RATIOS Return on assets 1.00% 1.04% 0.98% Return on equity 6.36% 9.28% 8.56% Equity to asset ratio 16.35% 15.38% 9.99% Non-performing assets to assets 0.18% 0.11% 0.27% Reserve to loans 1.19% 1.14% 1.15% Net interest margin 3.62% 3.69% 3.78% Employees 110 91 77 # of accounts 10,778 10,728 9,391 # of offices open 8 8 7 # of offices under construction 2 1 0 # of office sites purchased 2 0 2 ATM stand alone 1 1 1 Year Year Year Ended Ended Ended Dec. 2003 Dec. 2002 Dec. 2001 INCOME STATEMENT DATA Net interest income $7,858 $5,458 $4,236 Provision for loan losses 735 480 321 Noninterest income 1,711 1,767 1,137 Noninterest expenses 6,171 4,866 4,043 Net income 1,704 1,147 646 PER SHARE DATA * Net income per share Basic $0.76 $0.57 $0.36 Diluted $0.74 $0.55 $0.35 BALANCE SHEET DATA Total assets $253,217 $181,513 $124,309 Total deposits 166,213 132,655 81,856 Total loans (net) 199,732 134,729 95,737 Investment securities 22,049 7,608 8,183 Total earning assets 238,009 168,225 113,323 Other Borrowings 41,100 23,500 30,400 Junior subordinated debentures 11,345 11,345 0 Shareholders' equity 33,410 12,709 11,549 Average shares outstanding* Basic 2,246,398 2,021,109 1,783,008 Diluted 2,299,766 2,102,388 1,839,676 KEY RATIOS Return on assets 0.79% 0.78% 0.59% Return on equity 10.43% 9.45% 6.69% Equity to asset ratio 13.19% 7.00% 9.29% Non-performing assets to assets 0.04% 0.06% 0.07% Reserve to loans 1.18% 1.21% 1.25% Net interest margin 3.90% 4.02% 4.21% Employees 68 61 50 # of accounts 7,814 6,899 4,975 # of offices open 5 5 4 # of offices under construction 2 0 1 # of office sites purchased 1 2 1 ATM stand alone 0 0 0 * Share and per share data has been adjusted for 10% stock dividends in 2006, 2005, 2004, and 2002 and 10% and 5% dividends in 2003. Southcoast Financial Corporation Consolidated Statements of Condition (Dollars in thousands, except per share data) Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2006 2005 2004 2003 2002 (Unaudited) Assets Cash and due from banks $7,008 $14,378 $11,853 $5,550 $5,490 Federal Funds sold 31,204 16,964 4,236 12,031 14,583 Investments 46,461 35,203 24,831 22,049 7,608 Loans held for sale 140 9,275 12,009 427 8,683 Loans: Commercial and Construction 196,572 209,609 191,836 135,292 95,619 Mortgage 159,774 162,716 101,216 62,543 35,649 Consumer 11,264 3,601 3,559 4,274 5,117 -------- -------- -------- -------- -------- Total loans 367,610 375,926 296,611 202,109 136,385 Less: Allowance for loan Losses 4,364 4,270 3,404 2,377 1,656 -------- -------- -------- -------- -------- Net loans 363,246 371,656 293,207 199,732 134,729 Fixed assets 25,126 19,898 14,844 9,412 8,054 Other assets 8,671 9,225 5,122 4,016 2,366 -------- -------- -------- -------- -------- Total Assets $481,856 $476,599 $366,102 $253,217 $181,513 ======== ======== ======== ======== ======== Liabilities & Shareholders' Equity Deposits: Noninterest bearing $34,694 38,754 $27,955 $19,646 17,393 Interest bearing 276,199 272,800 230,198 146,567 $115,262 -------- -------- -------- -------- -------- Total deposits 310,893 311,554 258,153 166,213 132,655 Other Borrowings 67,841 67,000 58,000 41,100 23,500 Junior subordinated debentures 21,655 21,655 11,345 11,345 11,345 Other liabilities 2,664 3,075 2,034 1,149 1,304 -------- -------- -------- -------- -------- Total liabilities 403,053 403,284 329,532 219,807 168,804 Shareholders' Equity Common Stock 75,316 70,268 34,081 33,298 12,329 Retained Earnings and Accumulated Other Comprehensive Income or Loss 3,487 3,047 2,490 112 380 -------- -------- -------- -------- -------- Total shareholders' equity 78,803 73,315 36,571 33,410 12,709 -------- -------- -------- -------- -------- Total Liabilities and Shareholders' Equity $481,856 $476,599 $366,103 $253,217 $181,513 ======== ======== ======== ======== ======== Book value per share $14.23** $13.45** $10.17** $9.36** $6.28** Allowance for loan losses to Loans Ratio 1.19% 1.14% 1.15% 1.18% 1.21% ** Adjusted for a 15% stock dividend in 2003 and a 10% dividend in 2006, 2005, 2004, and 2002. Southcoast Financial Corporation Consolidated Income Statements (Dollars in thousands, except earnings per share) Year Ended Three Months Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2006 2005 2006 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest Income Interest and fees on loans $28,080 $22,206 $7,270 $6,407 Interest on investments 2,852 1,343 738 404 Interest on Fed funds sold 478 340 155 72 --------- --------- --------- --------- Total interest income 31,410 23,889 $8,163 6,883 Interest expense 15,265 9,975 4,158 3,042 --------- --------- --------- --------- Net interest income 16,145 13,914 4,005 3,841 Provision for loan losses 723 865 0 285 --------- --------- --------- --------- Net interest income after loan loss provision 15,422 13,049 4,005 3,556 Noninterest income 3,837 2,725 565 1,393 --------- --------- --------- --------- Total operating income 19,259 15,774 4,570 4,949 Noninterest expense Salaries and benefits 6,499 5,711 1,609 1,815 Occupancy and equipment 1,925 1,291 601 340 Other expenses 3,118 2,241 871 585 --------- --------- --------- --------- Total noninterest expense 11,542 9,243 3,081 2,740 --------- --------- --------- --------- Income before taxes 7,717 6,531 1,489 2,209 Income tax expense 2,878 2,342 522 896 --------- --------- --------- --------- Net income $4,839 $4,189 $967 $1,313 ========= ========= ========= ========= Basic net income per common share* $0.89 $1.06 $0.18 $0.27 Diluted net income per common share* $0.89 $1.06 $0.18 $0.27 Average shares outstanding* Basic 5,461,034 3,941,199 5,470,316 4,812,138 Diluted 5,465,859 3,945,882 5,474,673 4,816,666 * Share and per share data has been adjusted for 10% stock dividends in 2006 and 2005.