MT. PLEASANT, S.C., Feb. 4, 2009 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced today that the Company has declined to participate in the U.S. Department of the Treasury's Capital Purchase Program, even though it had applied for and received preliminary approval. The Capital Purchase Program is not a "bailout" but is an offer by the Treasury to make an investment in the Company on terms that are disadvantageous to existing shareholders. The Company has determined that participation in the program would be dilutive to existing shareholders, subject the Company to a constantly increasing administrative burden and expose the Company to unknown future restrictions on its business. The Company believes that it has sufficient capital to meet its foreseeable needs. It also believes that other capital raising alternatives will be available should a need for additional capital arise.
For the year ended December 31, 2008, the Company announced unaudited net income of $217,000 or $0.05 per basic share. This compares to net income of $3,429,000 or $0.63 per basic share, for the year ended December 31, 2007. Average basic shares decreased 14.5% between 2007 and 2008 primarily due to the Company's buyback of 508,593 shares during 2008. The Company has remaining authority to repurchase up to an additional 144,598 shares of its outstanding common stock.
"Despite the effects of a $3.0 million charge taken with respect to FNMA and FHLMC preferred stock and $4.3 million of loan loss provisions taken over the course of the year, Southcoast Financial Corporation managed to record positive earnings for the year," Chairman and Chief Executive Officer L. Wayne Pearson said.
For the quarter ended December 31, 2008, unaudited net loss was $409,000, or $0.09 per basic share. This compares to net income of $723,000, or $0.15 per basic share, for the quarter ended December 31, 2007. The decrease in net income between the two periods is the result of a $1.7 million loan loss provision taken during the fourth quarter of 2008 to deal with the continuing weakness in the economy and pressure on the Company's borrowers.
Total assets as of December 31, 2008 were $535.0 million compared to $500.9 million as of December 31, 2007, an increase of 6.8%. Loans, excluding loans held for sale, increased to $404.5 million, up 6.9% from $378.4 million as of December 31, 2007. Deposits increased 7.0% to $366.8 million over the same period. "We are proud that we have been able to expand our loans and deposits in 2008 despite an extremely challenging economic environment. Even after absorbing the substantial charges to our income, we have remained well capitalized at a level substantially above regulatory requirements," Pearson said.
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. Southcoast Financial Corporation's common stock trades on the NASDAQ Global Market under the symbol SOCB. Information about the corporation is available on our web site, www.southcoastbank.com.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our beliefs, expectations or forecasts about 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 2008 Dec 2007 Dec 2006
(Unaudited)
INCOME STATEMENT DATA
Net interest income $15,113 $14,354 $16,145
Provision for loan losses 4,294 0 723
Noninterest income 2,576 2,554 3,837
Noninterest expenses 13,403 11,999 11,542
Net income 217 3,429 4,839
PER SHARE DATA*
Net income per share
Basic $0.05 $0.63 $0.81
Diluted $0.05 $0.63 $0.80
BALANCE SHEET DATA
Total assets $534,965 $500,852 $481,856
Total deposits 366,811 342,755 310,893
Total loans (net) 397,123 374,117 363,246
Investment securities 62,282 62,609 46,461
Total earning assets 476,031 443,200 445,119
Other Borrowings 97,590 81,230 67,841
Junior subordinated debentures 10,310 10,310 21,655
Shareholders' equity 55,233 62,741 78,803
Book value per share $12.24 $12.52 $14.41
Average shares outstanding*
Basic 4,631,135 5,419,474 6,007,137
Diluted 4,631,135 5,423,915 6,012,445
KEY RATIOS
Return on assets 0.04% 0.71% 1.00%
Return on equity 0.37% 4.96% 6.22%
Equity to asset ratio 10.32% 12.53% 16.35%
Non-performing assets to assets 3.06% 0.91% 0.18%
Reserve to loans 1.83% 1.14% 1.19%
Net interest margin 3.33% 3.40% 3.64%
*Share and per share data has been adjusted for 10% stock dividends
in 2007, 2006, 2005, and 2004
REGULATORY CAPITAL RATIOS Total Tier 1 Tier 1
Risk-Based(1) Risk-Based(2) Leverage(3)
Southcoast Community Bank 14.36% 13.10% 9.68%
FDIC Well Capitalized Minimum 10.00% 6.00% 5.00%
(1) Total Risk-Based Capital divided by total risk-weighted assets
(2) Tier 1 Capital divided by total risk-weighted assets
(3) Tier 1 Capital divided by average total assets
Year Year Year
Ended Ended Ended
Dec. 2005 Dec. 2004 Dec. 2003
INCOME STATEMENT DATA
Net interest income $13,914 $10,692 $7,858
Provision for loan losses 865 1,146 735
Noninterest income 2,725 2,700 1,711
Noninterest expenses 9,243 7,966 6,171
Net income 4,189 2,982 1,704
PER SHARE DATA*
Net income per share
Basic $0.97 $0.76 $0.69
Diluted $0.97 $0.75 $0.67
BALANCE SHEET DATA
Total assets $476,599 $366,102 $253,217
Total deposits 311,554 258,153 166,213
Total loans (net) 371,656 293,207 199,732
Investment securities 35,203 24,831 22,049
Total earning assets 440,942 344,482 238,009
Other Borrowings 67,000 58,000 41,100
Junior subordinated debentures 21,655 11,345 11,345
Shareholders' equity 73,315 36,571 33,410
Book value per share $14.80 $12.31 $12.46
Average shares outstanding*
Basic 4,335,319 3,945,175 2,471,038
Diluted 4,340,470 4,001,380 2,529,742
KEY RATIOS
Return on assets 1.04% 0.98% 0.79%
Return on equity 9.28% 8.56% 10.43%
Equity to asset ratio 15.38% 9.99% 13.19%
Non-performing assets to assets 0.11% 0.27% 0.04%
Reserve to loans 1.14% 1.15% 1.18%
Net interest margin 3.69% 3.78% 3.90%
*Share and per share data has been adjusted for 10% stock dividends
in 2007, 2006, 2005, and 2004
Southcoast Financial Corporation
Consolidated Statements of Condition
(Dollars in thousands, except per share data)
December 31 December 31
2008 2007
(Unaudited)
Assets
Cash and due from banks $10,659 $7,033
Federal Funds sold 11,902 3,774
Investments 62,282 62,609
Loans held for sale 417 384
Loans:
Commercial and Construction 243,503 222,273
Mortgage 148,976 145,615
Consumer 12,054 10,526
-------- --------
Total loans 404,533 378,414
Less: Allowance for loan Losses 7,410 4,297
-------- --------
Net loans 397,123 374,117
Fixed assets 23,813 26,735
Other assets 28,769 26,200
-------- --------
Total Assets $534,965 $500,852
======== ========
Liabilities & Shareholders' Equity
Deposits:
Noninterest bearing $27,932 $32,607
Interest bearing 338,879 310,148
-------- --------
Total deposits 366,811 342,755
Other Borrowings 97,590 81,230
Junior subordinated debentures 10,310 10,310
Other liabilities 5,021 3,816
-------- --------
Total liabilities 479,732 438,111
Shareholders' Equity
Common Stock 53,442 60,157
Retained Earnings and Accumulated Other
Comprehensive Income or Loss 1,791 2,584
-------- --------
Total shareholders' equity 55,233 62,741
-------- --------
Total Liabilities and Shareholders' Equity $534,965 $500,852
======== ========
Book value per share $12.24 $12.52
Allowance for loan losses to Loans Ratio 1.83% 1.14%
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,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited)
Interest Income
Interest and fees on
loans $27,423 $28,760 $6,826 $7,289
Interest on investments 3,499 2,716 848 747
Interest on Fed funds
sold 36 397 1 38
--------- --------- --------- ---------
Total interest income 30,958 31,873 $7,675 $8,074
Interest expense 15,845 17,519 3,860 4,559
--------- --------- --------- ---------
Net interest income 15,113 14,354 3,815 3,515
Provision for loan
losses 4,294 0 1,700 0
--------- --------- --------- ---------
Net interest income
after loan loss
provision 10,819 14,354 2,115 3,515
Noninterest income 2,576 2,555 930 634
--------- --------- --------- ---------
Total operating income 13,395 16,909 3,045 4,149
Noninterest expense
Salaries and benefits 7,701 6,747 1,875 1,812
Occupancy and equipment 2,419 2,288 637 584
Other expenses 3,283 2,964 948 854
--------- --------- --------- ---------
Total noninterest
expense 13,403 11,999 3,460 3,250
--------- --------- --------- ---------
Income(loss) before
taxes (8) 4,910 (415) 899
Income tax expense
(benefit) (225) 1,481 (6) 176
--------- --------- --------- ---------
Net income(loss) $217 $3,429 ($409) $723
========= ========= ========= =========
Basic net income(loss)
per common share* $0.05 $0.63 ($0.09) $0.15
Diluted net income(loss)
per common share* $0.05 $0.63 ($0.09) $0.15
Average shares
outstanding*
Basic 4,631,135 5,419,474 4,527,002 5,019,704
Diluted 4,631,135 5,423,915 4,527,002 5,021,347
* Share and per share data has been adjusted for a 10% stock dividend
in 2007.