AUGUSTA, Ga., July 27, 2007 (PRIME NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta and Southern Bank & Trust of Aiken, S.C., today reported record quarterly net income of $3.0 million for the three months ended June 30, 2007, a slight increase from $2.9 million in the second quarter of 2006. Diluted earnings per share for the second quarter of 2007 were $0.54, a slight decrease from $0.55 for the same period last year.
Total assets at June 30, 2007, were $1.1 billion, an increase of $195.4 million, or 20.8 percent, from a year ago, and $92.1 million, or 8.8 percent, from December 31, 2006. Loans outstanding at the end of the second quarter were $809.6 million, and total deposits were $898.1 million, an increase of 8.0 percent and 12.0 percent, respectively, from December 31, 2006.
"We continued to grow our asset base in the second quarter, which is up nearly nine percent since the beginning of the year," said President and Chief Executive Officer R. Daniel Blanton. "Contributing to this increase was our Southern Bank & Trust affiliate in Aiken, S.C., which has grown to $60 million in assets.
"While earnings in the second quarter were only slightly ahead of a year ago, we faced a tough comparison with a record second quarter of 2006. Yet, we still managed to grow income more than six percent year-to-date over 2006, and we also generated solid growth in net interest income."
Net interest income for the second quarter of 2007 totaled $9.5 million, a 12.4 percent increase from $8.4 million for the same period of 2006. Noninterest income for the quarter totaled $3.8 million, relatively unchanged from a year ago. Noninterest expense was $7.6 million, a 5.0 percent increase from a year ago, primarily due to costs related to the growth of Southern Bank & Trust.
Annualized return on average assets (ROA) was 1.06 percent for the second quarter of 2007, and annualized return on average shareholder's equity (ROE) was 14.19 percent.
Net income for the six months ended June 30, 2007, totaled $5.7 million, a 6.4 percent increase over the $5.4 million reported in the same period of 2006. Diluted earnings per share for the first six months of 2007 were $1.04, an increase of 3.0 percent from $1.01 per share earned in the same period a year ago.
Net interest income for the first six months of 2007 was $18.5 million, up 12.9 percent from the $16.4 million in the first six months of 2006. Noninterest income was $7.4 million for the first six months of 2007, an increase of 5.2 percent from $7.1 million in the same period of 2006. Noninterest expense was $15.4 million for the six month period, compared to $14.4 million in 2006.
"Our allowance for loan losses is up almost $1.4 million since the end of 2006, due to robust loan growth and some softening in asset quality. Our non-performing assets increased $1 million since December 31, 2006 even though net chargeoffs were only $137,000 during the first six months of 2007. We still compare very favorably to our peer group of banks," said Blanton. "We remain confident that we can maintain a solid level of credit quality moving forward."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.1 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 eight full-service Augusta-area offices and an office in Athens, Ga. SB&T is a full-service, federally chartered thrift serving the Aiken County, S.C., market. 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, the national economy, and the ability of borrowers to repay their loans; 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 multiple geographic areas and dealing with an additional regulatory agency; 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 June 30, 2007 December 31, Assets (Unaudited) 2006 --------------- --------------- Cash and due from banks $ 25,027,050 $ 25,709,915 Federal funds sold 21,322,000 14,688,000 Interest-bearing deposits in other banks 500,000 512,690 --------------- --------------- Cash and cash equivalents 46,849,050 40,910,605 Investment securities Available-for-sale 222,853,031 199,135,716 Held-to-maturity, at cost (fair values of $1,974,288 and $3,048,196, respectively) 1,935,358 2,970,619 Loans held for sale 11,889,620 14,857,315 Loans 797,706,559 735,111,615 Less allowance for loan losses (11,133,435) (9,776,779) --------------- --------------- Loans, net 786,573,124 725,334,836 Premises and equipment, net 25,768,202 23,402,588 Accrued interest receivable 6,661,129 5,982,654 Bank-owned life insurance 16,307,789 15,982,052 Restricted equity securities 4,879,781 4,936,281 Other assets 9,601,218 7,689,596 --------------- --------------- $1,133,318,302 $1,041,202,262 =============== =============== Liabilities and Stockholders' Equity Deposits Noninterest-bearing $ 110,247,395 $ 106,846,160 Interest-bearing: NOW accounts 125,090,049 119,334,300 Savings 295,546,347 255,065,766 Money management accounts 54,700,645 45,897,176 Time deposits over $100,000 216,922,210 193,860,714 Other time deposits 95,604,566 80,758,973 --------------- --------------- 898,111,212 801,763,089 Federal funds purchased and securities sold under repurchase agreements 69,581,289 70,019,551 Advances from Federal Home Loan Bank 55,000,000 60,000,000 Other borrowed funds 1,000,000 1,000,000 Accrued interest payable and other liabilities 7,782,475 9,495,498 Subordinated debentures 20,000,000 20,000,000 --------------- --------------- Total liabilities 1,051,474,976 962,278,138 --------------- --------------- Stockholders' equity: Common stock, $3.00 par value; 10,000,000 shares authorized; 5,433,614 and 5,433,285 shares issued in 2007 and 2006, respectively; 5,431,734 and 5,432,854 shares outstanding in 2007 and 2006, respectively 16,300,842 16,299,855 Additional paid-in capital 39,238,901 38,989,058 Retained earnings 29,604,629 25,287,006 Treasury stock, at cost; 1,880 and 431 shares in 2007 and 2006, respectively (70,830) (16,809) Accumulated other comprehensive loss, net (3,230,216) (1,634,986) --------------- --------------- Total stockholders' equity 81,843,326 78,924,124 --------------- --------------- $1,133,318,302 $1,041,202,262 =============== =============== SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------ 2007 2006 2007 2006 ----------- ----------- ----------- ----------- Interest income: Loans, including fees $16,399,199 $13,018,274 $31,902,869 $24,830,362 Investment securities 2,921,476 2,702,309 5,532,810 5,158,381 Federal funds sold 315,503 44,036 681,585 194,629 Interest-bearing deposits in other banks 6,980 5,675 13,470 13,650 ----------- ----------- ----------- ----------- Total interest income 19,643,158 15,770,294 38,130,734 30,197,022 ----------- ----------- ----------- ----------- Interest expense: Deposits 8,164,890 5,547,283 15,657,083 10,465,934 Federal funds purchased and securities sold under repurchase agreements 802,685 724,846 1,669,830 1,408,754 Other borrowings 1,188,987 1,058,303 2,263,726 1,905,291 ----------- ----------- ----------- ----------- Total interest expense 10,156,562 7,330,432 19,590,639 13,779,979 ----------- ----------- ----------- ----------- Net interest income 9,486,596 8,439,862 18,540,095 16,417,043 Provision for loan losses 1,030,389 456,336 1,606,187 960,128 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 8,456,207 7,983,526 16,933,908 15,456,915 ----------- ----------- ----------- ----------- Noninterest income: Service charges and fees on deposits 1,581,451 1,539,978 2,978,467 2,892,122 Gain on sales of loans 1,320,377 1,270,992 2,604,655 2,525,337 Investment securities gains, net -- 283,600 33,191 283,600 Retail investment income 275,218 216,562 598,457 383,973 Trust service fees 284,906 198,367 558,442 390,832 Increase in cash surrender value of bank-owned life insurance 160,935 149,973 325,737 289,243 Miscellaneous income 160,861 146,770 328,540 296,395 ----------- ----------- ----------- ----------- Total noninterest income 3,783,748 3,806,242 7,427,489 7,061,502 ----------- ----------- ----------- ----------- Noninterest expense: Salaries and other personnel expense 4,628,251 4,505,040 9,423,758 8,945,020 Occupancy expenses 742,442 685,165 1,502,786 1,433,901 Other operating expenses 2,223,365 2,041,484 4,490,300 4,018,655 ----------- ----------- ----------- ----------- Total noninterest expense 7,594,058 7,231,689 15,416,844 14,397,576 ----------- ----------- ----------- ----------- Income before income taxes 4,645,897 4,558,079 8,944,553 8,120,841 Income tax expense 1,674,956 1,631,675 3,214,332 2,734,462 ----------- ----------- ----------- ----------- Net income $ 2,970,941 $ 2,926,404 $ 5,730,221 $ 5,386,379 =========== =========== =========== =========== Basic net income per share $ 0.55 $ 0.55 $ 1.05 $ 1.02 =========== =========== =========== =========== Diluted net income per share $ 0.54 $ 0.55 $ 1.04 $ 1.01 =========== =========== =========== =========== Weighted average common shares outstanding 5,432,476 5,279,333 5,433,054 5,276,526 =========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding 5,499,666 5,331,632 5,501,470 5,329,007 =========== =========== =========== =========== SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2007 2006 ------------- ------------- Cash flows from operating activities: Net income $ 5,730,221 $ 5,386,379 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 729,628 720,553 Provision for loan losses 1,606,186 960,128 Net investment securities gains -- (283,600) Net (accretion of discount) amortization of premium on investment securities (110,702) (167,840) Increase in CSV of bank owned life insurance (325,737) (289,243) Stock options compensation cost 267,603 258,890 Loss (Gain) on disposal of premises and equipment 42,983 (91,834) Gain on sales of loans (2,604,656) (2,525,337) Real estate loans originated for sale (133,166,369) (136,105,604) Proceeds from sales of real estate loans 138,738,720 140,676,591 Increase in accrued interest receivable (678,475) (151,270) Increase in other assets (355,030) (339,948) (Decrease) increase in accrued interest payable and other liabilities (1,713,024) 199,627 ------------- ------------- Net cash provided by operating activities 8,161,348 8,247,492 ------------- ------------- Cash flows from investing activities: Proceeds from sales of available for sale securities -- 15,729,239 Proceeds from maturities of available for sale securities 30,247,642 22,151,932 Proceeds from maturities of held to maturity securities 1,035,000 500,000 Purchase of available for sale securities (56,713,297) (44,778,338) Purchase of Federal Home Loan Bank stock (168,500) (873,800) Proceeds from redemption of FHLB stock 225,000 225,000 Net increase in loans (63,185,249) (60,311,450) Purchase of Bank-owned life insurance -- (3,500,000) Additions to premises and equipment (3,148,243) (3,061,294) Proceeds from sale of other real estate 48,256 -- Proceeds from sale of premises and equipment 10,018 1,770,651 ------------- ------------- Net cash used in investing activities (91,649,373) (72,148,060) ------------- ------------- Cash flows from financing activities: Net increase in deposits 96,348,122 65,982,787 Net decrease in federal funds purchased and securities sold under repurchase agreements (438,262) (12,609,226) Advances from Federal Home Loan Bank -- 19,000,000 Payments of Federal Home Loan Bank advances (5,000,000) (11,000,000) Proceeds from subordinated debentures -- 10,000,000 Principal payments on other borrowed funds -- (600,000) Purchase of treasury stock (70,830) (31,146) Payment of cash dividends (1,412,597) (1,372,090) Proceeds from stock options exercised 37 176,124 ------------- ------------- Net cash provided by financing activities 89,426,470 69,546,449 ------------- ------------- Net increase in cash and cash equivalents $ 5,938,445 $ 5,645,881 Cash and cash equivalents at beginning of period 40,910,605 22,563,056 ------------- ------------- Cash and cash equivalents at end of period $ 46,849,050 $ 28,208,937 ============= ============= Supplemental disclosures of cash paid during the period for: Interest $ 19,931,087 $ 13,165,019 ============= ============= Income taxes $ 2,491,847 $ 3,255,000 ============= ============= Supplemental information on noncash investing activities: Loans transferred to other real estate $ 340,775 $ -- ============= =============