MACON, Ga., April 24, 2009 (GLOBE NEWSWIRE) -- Security Bank Corporation (Nasdaq:SBKC) today reported a net loss of $18.5 million for the first quarter ended March 31, 2009, compared with a net loss of $24.2 million for the first quarter of 2008. Diluted loss for the first quarter of 2009 was $0.79 per share compared to a loss of $1.22 per share for the comparable year ago period. The reduction in net loss for the first quarter of 2009 was primarily driven by a $30.1 million decrease in the provision for loan losses which more than offset a decrease in net interest income of $10.9 million. On a pre-tax, pre-provision basis, losses for the first quarter of 2009 were $8.2 million versus income of $3.8 million for the first quarter of 2008.
Security Bank Corporation also announced today that five of its six banking subsidiaries have entered into Cease and Desist Orders with the Federal Deposit Insurance Corporation (FDIC) and with the State of Georgia Department of Banking and Finance. The orders set forth requirements for the banks to take actions to address capital levels and lending policies, and place restrictions on dividends by the banks to Security Bank Corporation and restrictions on brokered deposits, among other items. Security Bank Corporation has also withdrawn its application to participate in the TARP Capital Purchase Program.
Deposit and retirement accounts continue to be insured for a minimum of $250,000 per depositor by the FDIC through December 2009. Because Security Bank is participating in the FDIC's Transaction Account Guarantee Program, most types of checking accounts are insured without limit.
Tony E. Collins, Security Bank Corporation's President and CEO commented, "Our financial results continue to be impacted by the unprecedented economic conditions we are facing, as the residential housing market remains under significant pressure. The consent orders highlight a process that involves working with the FDIC and State to reduce the risks in our lending portfolio and improve the quality of our asset management. We have been working closely with our regulators throughout this process and have already initiated many of the steps outlined in the orders. We greatly appreciate the continued support of our customers and our employees who remain committed to providing our customers with the highest level of service."
Liquidity
Security Bank Corporation currently has approximately $481 million of available liquidity in the form of cash and cash equivalents, unpledged securities and available secured fed funds lines. This represents approximately 17% of total assets as of March 31, 2009.
Asset Quality
Nonperforming assets (nonaccrual loans and OREO) at the end of first quarter 2009 were $391 million, or 14.0% of total assets compared to 11.5% at the end of the fourth quarter of 2008 and 7.9% at the end of the first quarter in 2008. While Security Bank Corporation sold $7 million of OREO during the first quarter of 2009, new properties totaling approximately $19 million were moved to OREO from nonaccrual loans. Approximately $91 million of loans were placed on nonaccrual status during the first quarter. Security Bank Corporation charged-off approximately $18 million in loans resulting in net charge-offs to average loans of 3.7% annualized for the first quarter of 2009, a decrease from 5.9% in net charge-offs to average loans annualized for the fourth quarter of 2008. Net charge-offs to average loans were 4.4% annualized for the first quarter of 2008. Security Bank Corporation increased its allowance for loan losses to 2.8% of loans receivable at March 31, 2009, or $53.5 million versus 2.3% of loans or $49.7 million at March 31, 2008.
Balance Sheet
Loans receivable totaled $1.93 billion at March 31, 2009, down 12% from $2.18 billion at March 31, 2008. On a sequential basis, loans declined 11% annualized with a 3% annualized decline in the middle and coastal Georgia markets, a 19% annualized decline in the Atlanta market and a 14% annualized decline in Security Real Estate Services, Inc.
Total deposits were $2.40 billion at March 31, 2009 an increase of 4% from $2.31 billion at March 31, 2008 and decreased 1.5% from $2.44 billion at December 31, 2008. Total assets decreased 1% to $2.79 billion at March 31, 2009, compared to $2.82 billion at March 31, 2008, and decreased 2% compared with $2.85 billion at December 31, 2008.
Tangible shareholders' equity at March 31, 2009 declined to $64.1 million from $179.4 million at March 31, 2008, primarily reflecting net losses incurred during the period.
Net Interest Income
Net interest income for the first quarter of 2009 was $3.9 million, a decrease of 74% from $14.8 million when compared to the first quarter of 2008. The decrease is primarily the result of a decline in the net interest margin and the significant increase in non-performing assets in Security Bank Corporation's loan portfolio. The net interest margin (on a fully tax-equivalent basis ("FTE")) was 0.60% for the quarter ended March 31, 2009, compared to 1.02% for the fourth quarter of 2008 and 2.33% for the comparable period one year ago. The decrease in the net interest margin in the first quarter of 2009 on a year-over-year and sequential quarterly basis was the result of costs associated with the current credit cycle, including carrying costs and reversals of interest for nonaccruing loans, liquidity costs, the decline in market interest rates and the asset-sensitive nature of the balance sheet.
Noninterest Income and Expense
Noninterest income for the first quarter of 2009 decreased $1.0 million to $4.8 million compared to the first quarter of 2008 due primarily to a decrease in mortgage banking fees of $1.0 million. During the fourth quarter of 2008 Security Bank Corporation outsourced its personal mortgage-lending department to a mortgage company in Texas.
Noninterest expense for the first quarter of 2009 was $16.9 million, a decrease of $19.0 million sequentially, and essentially flat with the first quarter 2008 level. Excluding increased credit cycle costs and increases in foreclosure expenses, losses on sales of OREO and FDIC insurance premiums, noninterest expense was down $2.3 million or 22% over the first quarter 2008 level. The decline in controllable noninterest expense was primarily due to reduced salary and benefits expense and the elimination of directors' fees at the holding company and bank level.
This press release, including the attached selected unaudited financial tables, which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are "tangible book value," "tangible equity to tangible assets" and "return on average tangible equity." Security Bank Corporation's management uses these non-GAAP measures in its analysis of Security Bank Corporation's performance.
Tangible book value is defined as total equity reduced by recorded intangible assets, net of related deferred tax benefits. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Security Bank Corporation that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Tangible equity to tangible assets is the ratio of tangible equity defined as total equity reduced by recorded intangible assets, net of related deferred tax benefits, to tangible assets defined as total assets reduced by recorded intangible assets, net of related deferred tax benefits. Tangible equity to tangible assets is an important measure of Security Bank Corporation's capital strength without the effects of purchase accounting as noted above. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period or year-to-date period, as applicable) divided by average equity reduced by average goodwill and other intangible assets, net of related deferred tax benefits. Security Bank Corporation's management includes this measure because it believes that it is important when measuring Security Bank Corporation's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and many investors use this measure as part of their analysis of Security Bank Corporation.
These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP measures and the most directly comparable GAAP measures.
About Security Bank Corporation
Based in Macon, Georgia, Security Bank Corporation is a multi-bank holding company with assets of $2.8 billion at March 31, 2009. Security Bank Corporation operates six community banks with banking offices located throughout middle Georgia, coastal Georgia and north metropolitan Atlanta.
Security Bank Corporation common stock is traded on the NASDAQ Global Select Market under the ticker symbol "SBKC." You may obtain copies of all documents that Security Bank Corporation files with the Securities and Exchange Commission, free of charge, at the SEC's website at www.sec.gov, including the Cease and Desist Orders referenced in this release that Security Bank Corporation will file on Form 8-K on April 24, 2009, or on Security Bank Corporation's website at www.securitybank.net under the "Investor Information" tab. In addition, copies of these documents may also be obtained from us without charge by directing a written request to Security Bank Corporation, 4219 Forsyth Road, Macon, Georgia 31210, Attention: Investor Relations.
Safe Harbor
This press release contains forward-looking statements as defined by federal securities laws, including statements about Security Bank Corporation's loan loss provisions, capital or liquidity adequacy, deferred tax asset and any potential impairment, net charge-offs, non-performing assets, net interest margin changes, compliance with regulatory orders, the overall economic cycle and its impact on real estate values in Security Bank Corporation's markets, loan growth, and Security Bank Corporation's long-term prospects, among others. Statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements may address issues involving significant risks, uncertainties, estimates and assumptions made by management. Security Bank Corporation's ability to accurately project results or predict the effects of future plans or strategies is inherently limited. Although Security Bank Corporation believes that the expectations and estimates reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Please refer to Security Bank Corporation's public filings with the Securities and Exchange Commission for a summary of important factors and risk factors that could affect Security Bank Corporation's financial results and operations and its forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Security Bank Corporation does not intend, and undertakes no responsibility to update or revise any forward looking statement, whether as a result of difference in actual results, changes in assumptions or changes in other factors affecting such statements, except as required by law.
Security Bank Corporation Selected Consolidated Financial Data (Dollars in Thousands, except Per Share Amounts) Unaudited Quarters Ended March 31, % 2009 2008 Change ---- ---- ------ RESULTS SUMMARY: Net interest income $ 3,907 $ 14,799 -73.6% Provision for loan losses 12,108 42,199 -71.3% Noninterest income 4,849 5,862 -17.3% Foreclosed property expenses 1,949 1,373 42.0% Losses (gains) on sales of ORE 2,523 274 820.8% Other noninterest expense 12,439 15,260 -18.5% Income taxes (1,811) (14,247) -87.3% Net income (loss) (18,452) (24,198) -23.7% PER SHARE: Basic earnings (loss) $ (0.79) $ (1.22) -35.2% Diluted earnings (loss) (0.79) (1.22) -35.2% Cash dividends declared -- 0.088 -100.0% Book value 2.83 13.34 -78.8% Tangible book value 2.75 7.72 -64.4% KEY PERFORMANCE RATIOS(a): Return on average tangible equity -97.91% -53.31% Return on average assets -2.63% -3.45% Efficiency ratio 193.14% 81.83% Net interest margin (FTE) 0.60% 2.33% Net charge-offs to average loans 3.73% 4.43% BALANCE SHEET SUMMARY - END OF PERIOD Investment securities $ 404,689 $ 306,018 32.2% Mortgage loans Held for sale -- 5,759 -100.0% Loans receivable 1,928,758 2,181,557 -11.6% Allowance for loan losses 53,545 49,749 7.6% Total assets 2,786,149 2,818,477 -1.1% Deposits 2,402,469 2,309,671 4.0% Other borrowed money 289,673 170,066 70.3% Shareholders' equity 65,934 309,876 -78.7% Tangible equity to tangible assets 2.30% 6.67% -65.5% ASSET QUALITY - END OF PERIOD Nonaccrual loans $ 285,308 $ 186,520 53.0% Loans 90 Days Past Due and Accruing -- 68 -100.0% Other real estate owned 105,581 35,749 195.3% Total nonperforming assets 390,889 222,337 75.8% Allowance for loan losses/loans 2.78% 2.28% (a) Income annualized based on number of days in the period, except efficiency ratio NOTE: Refer to the attached GAAP to non-GAAP reconciliation Security Bank Corporation Average Balance Sheet and Net Interest Income Analysis (Dollars in Thousands) Unaudited Quarter Ended March 31, 2009 Average Income/ Yield/ Balance Expense Rate ------- ------- ---- ASSETS Earning assets: Interest-bearing deposits and fed funds sold $ 300,772 $ 129 0.17% Investment securities 401,072 3,320 3.36% Mortgage Loans Held for Sale 0 0 0.00% Loans 1,955,732 23,891 4.95% Other earning assets 1,238 17 5.57% Total earning assets 2,658,814 27,357 4.17% Non-earning assets 187,659 ---------- Total assets $2,846,473 ========== LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Savings and interest-bearing transaction $ 377,679 $ 1,655 1.78% Time deposits 1,921,980 18,907 3.99% Borrowings 295,752 2,875 3.94% Total interest-bearing liabilities 2,595,411 23,437 3.66% Noninterest-bearing liabilities: Noninterest bearing deposits 145,065 Other noninterest-bearing liabilities 27,605 Total liabilities $2,768,081 ---------- Shareholders' Equity 78,392 ---------- Total liabilities and shareholders' equity $2,846,473 ========== Interest rate spread 0.51% Net interest income $ 3,920 Net interest margin (FTE) 0.60% Security Bank Corporation (SBKC) Selected Financial Information (Amounts in thousands, except per share data) 2009 2008 ---------- ---------------------------------- 1st Dec. 31/ 4th 3rd Quarter YTD Quarter Quarter ---------- ---------------------------------- Period-End Balance Sheet ------------------ Total Assets $2,786,149 $2,846,054 $2,846,054 $2,888,353 Interest-Bearing Deposits and Fed Funds Sold 252,189 277,472 277,472 $ 14,556 Total Securities 404,689 407,343 407,343 347,020 Mortgage Loans held for Sale -- -- -- 4,780 Loans: Commercial Real- Estate 866,580 906,909 906,909 942,075 Construction/A&D(2) 623,461 652,806 652,806 715,631 Personal Real-Estate 158,249 157,405 157,405 152,604 Other 280,468 264,356 264,356 239,799 Total Loans 1,928,758 1,981,476 1,981,476 2,050,109 Allowance for loan losses 53,545 59,437 59,437 60,442 Other earning assets 1,238 1,238 1,238 1,238 Total Earning Assets 2,586,874 2,667,529 2,667,529 2,417,703 Cash and Due From Banks 34,955 37,216 37,216 283,238 Other Real Estate 105,581 94,717 94,717 83,362 Intangibles: Goodwill -- -- -- 18,373 Core-Deposit 3,038 3,241 3,241 3,444 Deposits: Demand Deposits 147,942 153,006 153,006 145,416 Interest bearing deposits 2,254,527 2,285,130 2,285,130 2,257,138 Total Deposits 2,402,469 2,438,136 2,438,136 2,402,554 Fed Funds purchased & repo agreements 25,999 36,844 36,844 31,343 Other borrowed funds 263,674 263,777 263,777 266,558 Shareholders Equity 65,934 84,708 84,708 166,662 ===================================================================== Average Balance Sheet --------------------- Total Assets $2,846,473 $2,870,635 $2,900,222 $2,863,228 Total Securities 401,072 338,437 362,556 345,775 Mortgage Loans held for Sale -- 4,129 1,994 3,869 Loans: Commercial Real- Estate 883,298 954,279 918,047 965,881 Construction/A&D 640,090 777,000 688,792 742,968 Personal Real-Estate 157,932 157,160 154,547 158,421 Other 274,412 231,497 262,853 240,954 Total Loans 1,955,732 2,119,936 2,024,239 2,108,224 Other earning assets 302,010 161,701 287,946 170,505 Total Earning Assets 2,658,814 2,624,203 2,676,735 2,628,373 Cash and Due From Banks 32,114 27,031 29,382 44,079 Other Real Estate 97,843 63,459 88,808 77,300 Deposits: Demand Deposits 145,065 154,173 141,830 157,289 Interest bearing deposits Savings 13,862 14,978 14,090 15,112 NOW 310,956 348,413 302,184 333,136 Money Market 52,861 86,857 58,768 81,446 Time deposits > $100,000 1,082,354 1,082,546 1,107,146 1,099,022 Time deposits < $100,000 839,626 680,342 790,572 709,688 Total Deposits 2,444,724 2,367,309 2,414,590 2,395,693 Fed Funds purchased & repo agreements 32,642 37,535 37,697 32,168 Other borrowed funds 263,110 199,771 265,201 230,453 Shareholders Equity 78,392 240,934 160,690 184,340 ===================================================================== Results of Operations --------------------- Interest Income $ 27,344 $ 145,948 $ 31,367 $ 36,150 Interest Expense 23,437 98,526 24,544 24,126 Net Interest Income 3,907 47,422 6,823 12,024 Loan loss provision 12,108 128,070 29,129 26,359 Service charges on deposit accounts 1,915 9,183 2,218 2,425 Securities Gains (Losses) 2,626 3,334 1,299 -- Other income 308 6,118 402 1,339 Total noninterest income 4,849 18,635 3,919 3,764 Salaries and benefits 6,255 31,623 7,004 7,803 Occupancy and equipment 1,751 6,401 1,503 1,848 Foreclosed Property Expenses 1,949 7,003 2,202 2,104 Losses (Gains) on Sales of ORE 2,523 8,235 2,487 3,904 Other noninterest expense 4,433 147,826 22,681 5,391 Total noninterest expense 16,911 201,088 35,877 21,050 Pre-tax earnings (loss) (20,263) (263,101) (54,264) (31,621) Income Taxes (1,811) (8,735) 34,310 (11,472) Net income (loss) $ (18,452) $ (254,366) $ (88,574) $ (20,149) Earnings (loss) per share-basic $ (0.79) $ (11.36) $ (3.81) $ (0.87) Earnings (loss) per share-diluted $ (0.79) $ (11.36) $ (3.81) $ (0.87) End of period shares outstanding 23,274,639 23,274,639 23,274,639 23,259,539 Weighted average diluted shares o/s 23,274,639 22,387,908 23,265,091 23,247,824 Tax equivalent adjustment 13 94 15 15 Net interest income (FTE) 3,920 47,516 6,838 12,039 Effective Tax Rate 8.94% 3.32% -63.23% 36.28% ===================================================================== Stock and related per share data: --------------------- Book value $ 2.83 $ 3.64 $ 3.64 $ 7.17 Tangible book value 2.75 3.55 3.55 6.28 Dividends declared per share -- 0.1313 -- -- ===================================================================== Other Key Ratios/Data: ---------------------- Return on average tangible equity(1) -97.91% -153.17% -250.92% -48.95% Return on average assets(1) -2.63% -8.86% -12.15% -2.80% Net interest margin (FTE)(1) 0.60% 1.81% 1.02% 1.82% Efficiency ratio (FTE) 192.84% 303.98% 333.54% 133.21% Tangible Equity/ Tangible Assets 2.30% 2.91% 2.91% 5.10% ===================================================================== Loan Performance Data: ---------------------- Nonaccrual loans $ 285,308 $ 232,436 $ 232,436 $ 199,907 Loans 90 Days Past Due and Accruing -- 146 146 -- Other real estate (ORE) 105,581 94,717 94,717 83,362 Total nonperforming assets 390,889 327,299 327,299 283,269 Net charge-offs 18,000 100,331 30,134 14,369 Reversal of Interest 1,456 6,751 1,487 968 Forfeited Interest from NPA's 5,025 16,477 4,773 4,704 Allowance for loan losses/loans 2.78% 3.00% 3.00% 2.95% NPA's/Loans plus ORE 19.21% 15.76% 15.76% 13.28% Nonperforming assets/ total assets 14.03% 11.50% 11.50% 9.81% Net charge-offs to average loans(1) 3.73% 4.73% 5.92% 2.71% ===================================================================== 2008 2007 ---------------------- ---------- 2nd 1st Dec. 31/ Quarter Quarter YTD ---------------------- ---------- Period-End Balance Sheet ------------------------ Total Assets $2,877,383 $2,818,477 $2,833,071 Interest-Bearing Deposits and Fed Funds Sold $ 94,665 $ 25,466 13,627 Total Securities 342,994 306,018 305,399 Mortgage Loans held for Sale 6,192 5,759 7,605 Loans: Commercial Real-Estate 983,733 963,384 947,371 Construction/A&D (2) 772,179 862,532 898,690 Personal Real-Estate 160,878 157,040 158,244 Other 225,472 198,601 178,008 Total Loans 2,142,262 2,181,557 2,182,313 Allowance for loan losses 48,452 49,749 31,698 Other earning assets 1,238 1,238 1,238 Total Earning Assets 2,587,351 2,520,038 2,510,182 Cash and Due From Banks 117,970 71,313 91,644 Other Real Estate 62,814 35,749 28,175 Intangibles: Goodwill 18,373 128,074 128,571 Core-Deposit 3,647 3,879 4,125 Deposits: Demand Deposits 172,610 164,842 158,759 Interest bearing deposits 2,283,016 2,144,829 2,139,946 Total Deposits 2,455,626 2,309,671 2,298,705 Fed Funds purchased & repo agreements 36,084 31,328 68,417 Other borrowed funds 180,340 138,738 137,909 Shareholders Equity 183,285 309,876 306,693 ===================================================================== Average Balance Sheet --------------------- Total Assets $2,877,604 $2,818,622 $2,591,947 Total Securities 348,677 296,395 216,610 Mortgage Loans held for Sale 4,782 5,896 6,328 Loans: Commercial Real-Estate 974,558 958,903 907,729 Construction/A&D 802,453 875,131 825,302 Personal Real-Estate 157,616 158,069 153,682 Other 219,744 201,989 195,286 Total Loans 2,154,371 2,194,092 2,081,999 Other earning assets 100,342 55,246 36,866 Total Earning Assets 2,608,172 2,551,629 2,341,803 Cash and Due From Banks 34,520 35,272 51,442 Other Real Estate 53,994 33,299 15,970 Deposits: Demand Deposits 162,222 155,389 163,712 Interest bearing deposits Savings 15,741 14,979 16,005 NOW 376,409 382,597 373,522 Money Market 96,607 110,976 145,619 Time deposits > $100,000 1,067,626 1,061,895 892,248 Time deposits < $100,000 637,784 575,833 521,923 Total Deposits 2,356,389 2,301,669 2,113,029 Fed Funds purchased & repo agreements 39,601 44,745 43,881 Other borrowed funds 171,993 130,379 100,430 Shareholders Equity 306,580 313,635 313,504 ===================================================================== Results of Operations --------------------- Interest Income $ 37,689 $ 40,742 $ 192,840 Interest Expense 23,913 25,943 102,316 Net Interest Income 13,776 14,799 90,524 Loan loss provision 30,383 42,199 32,660 Service charges on deposit accounts 2,253 2,287 9,363 Securities Gains (Losses) 1 2,034 (3) Other income 2,836 1,541 9,622 Total noninterest income 5,090 5,862 18,982 Salaries and benefits 8,080 8,736 35,061 Occupancy and equipment 1,501 1,549 6,189 Foreclosed Property Expenses 1,324 1,373 2,879 Losses (Gains) on Sales of ORE 1,570 274 1,944 Other noninterest expense 114,779 4,975 21,002 Total noninterest expense 127,254 16,907 67,075 Pre-tax earnings (loss) (138,771) (38,445) 9,771 Income Taxes (17,326) (14,247) 3,183 Net income (loss) $ (121,445) $ (24,198) $ 6,588 Earnings (loss) per share-basic $ (5.23) $ (1.22) $ 0.35 Earnings (loss) per share-diluted $ (5.23) (1.22) 0.34 End of period shares outstanding 23,248,585 23,233,634 18,912,264 Weighted average diluted shares o/s 23,235,668 19,810,520 19,225,069 Tax equivalent adjustment 15 50 445 Net interest income (FTE) 13,791 14,849 90,969 Effective Tax Rate 12.49% 37.06% 32.58% ===================================================================== Stock and related per share data: --------------------------------- Book value $ 7.88 $ 13.34 $ 16.22 Tangible book value 7.00 7.72 9.28 Dividends declared per share 0.0438 0.0875 0.35 ===================================================================== Other Key Ratios/Data: ---------------------- Return on average tangible equity(1) -275.40% -53.31% 3.63% Return on average assets(1) - 16.97% -3.45% 0.25% Net interest margin (FTE)(1) 2.13% 2.33% 3.88% Efficiency ratio (FTE) 673.98% 81.63% 61.00% Tangible Equity/Tangible Assets 5.69% 6.67% 6.50% ===================================================================== Loan Performance Data: ---------------------- Nonaccrual loans $ 186,139 $ 186,520 $ 50,635 Loans 90 Days Past Due and Accruing -- 68 242 Other real estate (ORE) 62,814 35,749 28,175 Total nonperforming assets 248,953 222,337 79,052 Net charge-offs 31,680 24,148 23,298 Reversal of Interest 1,268 3,028 1,874 Forfeited Interest from NPA's 4,259 2,741 4,435 Allowance for loan losses/loans 2.26% 2.28% 1.45% NPA's/Loans plus ORE 11.29% 10.03% 3.58% Nonperforming assets/total assets 8.65% 7.89% 2.79% Net charge-offs to average loans(1) 5.91% 4.43% 1.12% ===================================================================== (1) The actual number of days in the period was used to annualize income (2) At March 31, 2009, approximately 60% of loans were residential and 40% of loans were commercial. NOTE: Refer to the attached GAAP to non-GAAP reconciliation Security Bank Corporation (SBKC) GAAP Reconciliation Table (Amounts in thousands, except per share data) 2009 2008 ---------------------------------------------- 1st Dec 31/ 4th 3rd Quarter YTD Quarter Quarter ---------------------------------------------- Reconciliation Table- GAAP to non-GAAP: --------------------- Book Value per share $ 2.83 $ 3.64 $ 3.64 $ 7.17 Effect of intangible assets per share (0.08) (0.09) (0.09) (0.89) ---------------------------------------------- Tangible book value $ 2.75 $ 3.55 $ 3.55 $ 6.28 Equity $ 65,934 $ 84,708 $ 84,708 $ 166,662 Intangible assets 3,038 3,241 3,241 21,817 Less tax effect of Core-Deposit Intangible (38%) (1,154) (1,232) (1,232) (1,309) ---------------------------------------------- Tangible equity $ 64,050 $ 82,699 $ 82,699 $ 146,154 Assets $2,786,149 $2,846,054 $2,846,054 $2,888,353 Intangible assets 1,884 2,009 2,009 20,508 ---------------------------------------------- Tangible assets $2,784,265 $2,844,045 $2,844,045 $2,867,845 Equity/Assets 2.37% 2.98% 2.98% 5.77% Effect of intangible assets -0.07% -0.07% -0.07% -0.67% ---------------------------------------------- Tangible Equity/ Tangible Assets 2.30% 2.91% 2.91% 5.10% Average Equity $ 78,392 $ 240,934 $ 160,690 $ 184,340 Average Intangible assets 3,165 76,263 21,540 21,944 Less tax effect of Core-Deposit Intangible (38%) (1,203) (1,402) (1,279) (1,357) ---------------------------------------------- Average tangible equity $ 76,430 $ 166,073 $ 140,429 $ 163,753 Net Income (loss) (18,452) $ (254,366) $ (88,574) $ (20,149) Return on average tangible equity(a) -97.91% -153.17% -250.92% -48.95% 2008 2007 ---------------------------------- 2nd 1st Dec 31/ Quarter Quarter YTD ---------------------------------- Reconciliation Table- GAAP to non-GAAP: ----------------------------- Book Value per share $ 7.88 $ 13.34 $ 16.22 Effect of intangible assets per share (0.88) (5.62) (6.94) ---------------------------------- Tangible book value $ 7.00 $ 7.72 $ 9.28 Equity $ 183,285 $ 309,876 $ 306,693 Intangible assets 22,020 131,953 132,696 Less tax effect of Core-Deposit Intangible (38%) (1,386) (1,474) (1,568) ---------------------------------- Tangible equity $ 162,651 $ 179,397 $ 175,565 Assets $2,877,383 $2,818,477 $2,833,071 Intangible assets 20,634 130,479 131,129 ---------------------------------- Tangible assets $2,856,749 $2,687,998 $2,701,942 Equity/Assets 6.37% 10.99% 10.83% Effect of intangible assets -0.68% -4.32% -4.33% ---------------------------------- Tangible Equity/Tangible Assets 5.69% 6.67% 6.50% Average Equity $ 306,580 $ 313,635 $ 313,504 Average Intangible assets 130,657 132,599 133,878 Less tax effect of Core-Deposit Intangible (38%) (1,440) (1,533) (1,763) ---------------------------------- Average tangible equity $ 177,363 $ 182,569 $ 181,389 Net Income (loss) $ (121,445) $ (24,198) $ 6,588 Return on average tangible equity(a) -275.40% -53.31% 3.63% (a) The actual number of days in the period were used to annualize income