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 $ --
============= =============