AUGUSTA, Ga., Oct. 19, 2007 (PRIME NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta and Southern Bank & Trust, today reported quarterly net income of $3.4 million for the three months ended Sept. 30, 2007, an increase of 14.7 percent from $2.9 million in the third quarter of 2006. Diluted earnings per share for the third quarter of 2007 were $0.61, a 10.9 percent increase from $0.55 for the same period last year.
"We produced quality growth across our banking franchise in the third quarter, from core deposits to loans to fee income," said R. Daniel Blanton, president and chief executive officer. "Our Southern Bank & Trust subsidiary has exceeded our expectations and closed the quarter with more than $75 million in total assets, contributing substantially to our continued strong growth. In August, we opened our second Southern Bank & Trust office, in North Augusta, S.C.
"We are also pleased that our traditionally strong credit culture is holding up well in an environment that is causing asset quality issues at many institutions," said Blanton. "We will continue to take a measured approach to our growth as we look to expand in the future." Nonperforming assets at Sept. 30, 2007, were 0.33 percent of total loans, and net charge-offs for the quarter totaled 0.04 percent of average loans. At December 31, 2006, non performing assets were also 0.33 percent of total loans and net chargeoffs for 2006 were 0.17 percent of average loans.
At Sept. 30, 2007, total assets were $1.2 billion, an increase of $146.7 million, or 14.1 percent, from Dec. 31, 2006. Loans outstanding at the end of the third quarter were $849.4 million, an increase of 13.3 percent from Dec. 31, 2006. Total deposits were $951.2 million, an increase of 18.6 percent for the same period.
Net interest income for the third quarter of 2007 was $9.7 million, up 11.8 percent from the same period a year ago. Noninterest income for the quarter was $4.7 million, an increase of 37.3 percent over the third quarter of 2006, including a one-time gain on the sale of real estate totaling $1.1 million, which was partially offset by a one-time loss on the sale of securities of $278,206. The securities sale involved the sale of lower yielding securities in exchange for higher yielding securities, in an effort to position the company for greater earnings growth in the future.
Noninterest expense totaled $8.3 million in the third quarter of 2007, a 14.9 percent increase from a year ago, reflecting higher operating costs associated with the company's expansion activities, including the opening of a new Southern Bank & Trust banking center, as well as a $250,000 charitable donation made during the quarter to Georgia Bank Foundation.
"Notwithstanding the one-time gain, we generated solid returns in noninterest income in the third quarter, which was driven by several factors," said Blanton. "Deposits in our Augusta and Aiken markets grew faster than projected, resulting in a sizable increase in service charge and fee income. Our mortgage operations have held steady, despite the ongoing turmoil in the housing and credit markets, even gaining slightly from the third quarter of 2006. And our wealth management business continued to expand, as income from retail investment and trust services was up significantly in the third quarter."
Return on average assets (ROA) was 1.16 percent for the third quarter of 2007, and return on average shareholders' equity (ROE) was 15.86 percent.
For the nine months ended Sept. 30, 2007, the company reported net income of $9.1 million, or $1.65 in diluted earnings per share, an increase of 9.3 percent and 5.8 percent, respectively, from the same period a year ago.
Net interest income for the first nine months of 2007 was $28.3 million, up 12.5 percent from $25.1 million in the comparable nine months in 2006. Noninterest income was $12.1 million for the first nine months of 2007, compared to $10.6 million for the same period in 2006, an increase of 14.1 percent. Noninterest expense for the first three quarters of 2007 totaled $23.7 million, compared to $21.7 million for the comparable period in 2006.
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.2 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 federally chartered thrift serving the Aiken County, S.C., market, with two 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 September 30, 2007 December 31, Assets (Unaudited) 2006 -------------- -------------- Cash and due from banks $ 26,487,084 $ 25,709,915 Federal funds sold 23,847,000 14,688,000 Interest-bearing deposits in other banks 500,031 512,690 -------------- -------------- Cash and cash equivalents 50,834,115 40,910,605 Investment securities Available-for-sale 232,545,144 199,135,716 Held-to-maturity, at cost (fair values of $1,980,734 and $3,048,196, respectively) 1,935,227 2,970,619 Loans held for sale 9,562,760 14,857,315 Loans 839,862,823 735,111,615 Less allowance for loan losses (11,804,686) (9,776,779) -------------- -------------- Loans, net 828,058,137 725,334,836 Premises and equipment, net 28,140,004 23,402,588 Accrued interest receivable 7,424,365 5,982,654 Bank-owned life insurance 16,476,922 15,982,052 Restricted equity securities 5,059,781 4,936,281 Other assets 7,882,950 7,689,596 -------------- -------------- $1,187,919,405 $1,041,202,262 ============== ============== Liabilities and Stockholders' Equity Deposits Noninterest-bearing $ 109,053,029 $ 106,846,160 Interest-bearing: NOW accounts 136,381,664 119,334,300 Savings 301,562,674 255,065,766 Money management accounts 59,520,051 45,897,176 Time deposits over $100,000 238,930,907 193,860,714 Other time deposits 105,779,924 80,758,973 -------------- -------------- 951,228,249 801,763,089 Federal funds purchased and securities sold under repurchase agreements 61,953,938 70,019,551 Advances from Federal Home Loan Bank 59,000,000 60,000,000 Other borrowed funds 900,000 1,000,000 Accrued interest payable and other liabilities 8,224,404 9,495,498 Subordinated debentures 20,000,000 20,000,000 -------------- -------------- Total liabilities 1,101,306,591 962,278,138 -------------- -------------- 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; 5,425,982 and 5,432,854 shares outstanding in 2007 and 2006, respectively 16,300,842 16,299,855 Additional paid-in capital 39,376,328 38,989,058 Retained earnings 32,255,461 25,287,006 Treasury stock, at cost; 7,632 and 431 shares in 2007 and 2006, respectively (289,865) (16,809) Accumulated other comprehensive loss, net (1,029,952) (1,634,986) -------------- -------------- Total stockholders' equity 86,612,814 78,924,124 -------------- -------------- $1,187,919,405 $1,041,202,262 ============== ============== SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Three Months Ended Nine Months Ended September, 30, September, 30, ------------------------ ------------------------ 2007 2006 2007 2006 ----------- ----------- ----------- ----------- Interest income: Loans, including fees $17,138,785 $14,208,614 $49,041,654 $39,038,976 Investment securities 3,015,836 2,705,083 8,548,646 7,863,464 Federal funds sold 220,138 195,013 901,723 389,642 Interest-bearing deposits in other banks 6,710 5,808 20,180 19,458 ----------- ----------- ----------- ----------- Total interest income 20,381,469 17,114,518 58,512,203 47,311,540 ----------- ----------- ----------- ----------- Interest expense: Deposits 8,688,555 6,479,749 24,345,638 16,945,683 Federal funds purchased and securities sold under repurchase agreements 829,797 754,106 2,499,627 2,162,860 Other borrowings 1,127,128 1,168,587 3,390,854 3,073,878 ----------- ----------- ----------- ----------- Total interest expense 10,645,480 8,402,442 30,236,119 22,182,421 ----------- ----------- ----------- ----------- Net interest income 9,735,989 8,712,076 28,276,084 25,129,119 Provision for loan losses 1,001,232 666,913 2,607,419 1,627,041 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 8,734,757 8,045,163 25,668,665 23,502,078 ----------- ----------- ----------- ----------- Noninterest income: Service charges and fees on deposits 1,675,173 1,422,806 4,653,640 4,314,928 Gain on sales of loans 1,349,880 1,328,907 3,954,535 3,854,244 Gain on sale of fixed assets 1,094,902 3,210 1,031,764 95,049 Investment securities (losses) gains, net (278,206) (10,000) (245,015) 273,600 Retail investment income 296,025 192,363 894,482 576,336 Trust service fees 271,167 214,294 829,609 605,126 Increase in cash surrender value of bank-owned life insurance 169,133 156,010 494,870 445,253 Miscellaneous income 168,453 150,682 496,993 447,077 ----------- ----------- ----------- ----------- Total noninterest income 4,746,527 3,458,272 12,110,878 10,611,613 ----------- ----------- ----------- ----------- Noninterest expense: Salaries and other personnel expense 4,905,273 4,538,449 14,329,031 13,483,469 Occupancy expenses 845,373 637,723 2,348,159 2,071,624 Other operating expenses 2,557,612 2,057,702 6,984,774 6,168,196 ----------- ----------- ----------- ----------- Total noninterest expense 8,308,258 7,233,874 23,661,964 21,723,289 ----------- ----------- ----------- ----------- Income before income taxes 5,173,026 4,269,561 14,117,579 12,390,402 Income tax expense 1,816,746 1,344,532 5,031,078 4,078,994 ----------- ----------- ----------- ----------- Net income $ 3,356,280 $ 2,925,029 $ 9,086,501 $ 8,311,408 =========== =========== =========== =========== Basic net income per share $ 0.62 $ 0.55 $ 1.67 $ 1.57 =========== =========== =========== =========== Diluted net income per share $ 0.61 $ 0.55 $ 1.65 $ 1.56 =========== =========== =========== =========== Weighted average common shares outstanding 5,428,409 5,312,831 5,431,489 5,288,760 =========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding 5,492,967 5,361,440 5,499,414 5,329,051 =========== =========== =========== =========== Southeastern Bank Financial Corporation September 2007 Ratios 3rd Quarter YTD 2007 ----------- ----------- RETURN ON AVERAGE ASSETS: 1.16% 1.10% RETURN ON AVERAGE EQUITY: 15.86% 14.77% NET INTEREST MARGIN: 3.54% 3.58% CHARGE OFFS / GROSS AVG LOANS 0.04% 0.07%