AUGUSTA, Ga., July 31, 2009 (GLOBE 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 quarterly net income of $637,000 for the three months ended June 30, 2009, or $0.10 in diluted earnings per share, compared to $2.4 million, or $0.40 in diluted earnings per share, in the second quarter of 2008.
"We continued to be profitable in a tough environment during the second quarter, thanks to a solid performance from our core banking operations, sizeable gains in mortgage income from refinancing activity, and our ability to keep operating expenses under control," said President and Chief Executive Officer R. Daniel Blanton. "We also continued to work through our problem loans during the second quarter, raising our provision for loan losses to ensure that we maintain adequate coverage as our markets struggle to recover."
The company's loan-loss provision was $5.1 million in the second quarter of 2009, which compares to $4.7 million in the first quarter of 2009 and $1.7 million a year ago. The increase in provision for loan losses resulted in a rise in the allowance for loan losses to $16.0 million, or 1.63 percent of loans outstanding, compared to $15.2 million, or 1.52 percent of loans outstanding, at March 31, 2009.
Nonperforming assets at June 30, 2009, were 3.89 percent of total assets, compared to 2.11 percent at June 30, 2008, and 3.56 percent at March 31, 2009. Net charge-offs for the second quarter of 2009 totaled 0.43 percent of average loans, compared to 0.01 percent in the second quarter of 2008 and 0.43 percent in the first quarter of 2009. The company held $13.8 million in foreclosed property or other real estate owned (OREO) at June 30, 2009, compared to none at June 30, 2008, and $7.0 million at March 31, 2009.
Total assets at June 30, 2009, were $1.5 billion, an increase of $147.9 million from a year ago, and $50.8 million from Dec. 31, 2008. Assets at the company's SB&T subsidiary totaled $154.2 million at the close of the second quarter, an increase of $30.7 million, or 24.8 percent, compared to Dec. 31, 2008.
Loans outstanding at the end of the second quarter were $981.7 million, compared to $968.1 million a year ago. Total deposits were $1.2 billion at June 30, 2009, compared to $1.1 billion for the same period a year ago. Cash and cash equivalents totaled $124.2 million at the end of the second quarter, compared to $37.8 million at Dec. 31, 2008, and $119.4 million at the end of the first quarter.
Net interest income for the second quarter of 2009 totaled $10.7 million, a 6.6 percent increase from $10.0 million for the same period in 2008. This increase is a result of higher earning asset volumes despite a decrease in the company's net interest margin. The net interest margin was 3.18 percent at June 30, 2009, compared to 3.25 percent a year ago.
Noninterest income for the quarter totaled $5.9 million, an increase of 32.8 percent from a year ago, reflecting strong growth in mortgage revenue from the gain on sale of loans, as well as gains from the sales of investment securities.
Noninterest expense was $10.8 million, compared to $9.3 million a year ago. The increase included $670,000 of costs associated with the FDIC's special assessment on insured banks of 5 basis points of total assets, an increase of $700,000 in regular FDIC assessments as they increased from 6 to 14 basis points of total deposits, and the additional compensation expense resulting from significantly higher mortgage origination volume.
Annualized return on average assets (ROA) was 0.18 percent for the second quarter of 2009, and annualized return on average shareholder's equity (ROE) was 2.56 percent.
Net income for the six months ended June 30, 2009, totaled $693,000, compared to $5.0 million reported in the same period of 2008. Diluted earnings per share for the first six months of 2009 were $0.11, compared to $0.84 per share earned in the same period a year ago.
Net interest income for the first six months of 2009 was $20.8 million, compared to $20.3 million in the first six months of 2008. Noninterest income was $10.5 million for the first six months of 2009, an increase of 24.8 percent from $8.4 million in the same period of 2008. Noninterest expense was $20.6 million for the six-month period, compared to $18.2 million in 2008.
"We are focused on the safety and soundness of the company in this continuing unusual economic environment," said Blanton. "We remain cautious and we will keep a close eye on the economy and the performance of our loan portfolio. The good news is that we continue to be well-capitalized and have significant liquidity, which keeps us in a favorable position as we move forward."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.5 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 offices in Athens, Ga., and Greenville, S.C. SB&T is a federally chartered thrift serving the Aiken County, S.C., market, with three 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
(Dollars in thousands, except share data)
June 30,
2009 Dec. 31,
Assets (Unaudited) 2008
---------- ----------
Cash and due from banks $ 91,490 $ 24,860
Federal funds sold 7,300 9,780
Interest-bearing deposits in other banks 25,407 3,128
---------- ----------
Cash and cash equivalents 124,197 37,768
Investment securities
Available-for-sale 276,905 299,339
Held-to-maturity, at cost (fair values of
$485 and $698, respectively) 490 689
Loans held for sale 23,975 18,955
Loans 957,727 986,831
Less allowance for loan losses (16,031) (14,742)
---------- ----------
Loans, net 941,696 972,089
Premises and equipment, net 32,908 33,960
Accrued interest receivable 6,266 7,085
Bank-owned life insurance 22,762 17,368
Restricted equity securities 6,338 6,571
Other real estate owned 13,786 5,734
Other assets 12,552 11,481
---------- ----------
$1,461,875 $1,411,039
========== ==========
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 116,805 $ 111,291
Interest-bearing:
NOW accounts 173,262 166,561
Savings 285,819 247,249
Money management accounts 42,858 50,404
Time deposits over $100 404,173 385,439
Other time deposits 168,360 178,608
---------- ----------
1,191,277 1,139,552
Federal funds purchased and securities sold
under repurchase agreements 49,361 62,553
Advances from Federal Home Loan Bank 84,000 84,000
Other borrowed funds 700 --
Accrued interest payable and other
liabilities 10,739 10,283
Subordinated debentures 22,947 20,000
---------- ----------
Total liabilities 1,359,024 1,316,388
---------- ----------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000
shares authorized; 6,671,509 and
5,987,674 shares issued in 2009 and 2008,
respectively; 6,671,509 and 5,987,674
shares outstanding in 2009 and 2008,
respectively 20,014 17,963
Preferred stock, no par value;
10,000,000 shares authorized;
0 shares outstanding in 2009 and
2008, respectively -- --
Additional paid-in capital 62,251 55,189
Retained earnings 21,370 21,455
Accumulated other comprehensive
(loss) income, net (784) 44
---------- ----------
Total stockholders' equity 102,851 94,651
---------- ----------
$1,461,875 $1,411,039
========== ==========
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Interest income:
Loans, including
fees $ 14,206 $ 15,087 $ 28,010 $ 31,480
Investment
securities 3,595 3,337 7,669 6,598
Federal funds
sold 16 96 41 187
Interest-bearing
deposits in
other banks 18 6 22 12
---------- ---------- ---------- ----------
Total interest
income 17,835 18,526 35,742 38,277
---------- ---------- ---------- ----------
Interest expense:
Deposits 6,009 7,166 12,810 15,042
Federal funds
purchased and
securities
sold under
repurchase
agreements 95 324 206 864
Other borrowings 1,023 993 1,919 2,063
---------- ---------- ---------- ----------
Total interest
expense 7,127 8,483 14,935 17,969
---------- ---------- ---------- ----------
Net interest
income 10,708 10,043 20,807 20,308
Provision for loan
losses 5,114 1,652 9,863 2,923
---------- ---------- ---------- ----------
Net interest
income after
provision
for loan
losses 5,594 8,391 10,944 17,385
---------- ---------- ---------- ----------
Noninterest income:
Service charges
and fees on
deposits 1,737 1,820 3,378 3,491
Gain on sales
of loans 2,461 1,576 4,697 2,836
(Loss) gain on
sale of
fixed assets (42) 5 (16) 8
Investment
securities
gains, net 1,101 30 1,312 68
Other-than-
temporary
impairment
losses (less
$572 recognized
in other
comprehensive
income, before
taxes) (244) -- (619) --
Retail
investment
income 318 276 527 564
Trust service
fees 245 299 498 584
Increase in
cash surrender
value of
bank-owned
life insurance 213 194 394 358
Miscellaneous
income 123 252 286 473
---------- ---------- ---------- ----------
Total
noninterest
income 5,912 4,452 10,457 8,382
---------- ---------- ---------- ----------
Noninterest expense:
Salaries and
other personnel
expense 5,800 5,383 11,458 10,554
Occupancy
expenses 1,140 1,005 2,281 2,030
Other operating
expenses 3,868 2,877 6,903 5,601
---------- ---------- ---------- ----------
Total
noninterest
expense 10,808 9,265 20,642 18,185
---------- ---------- ---------- ----------
Income before
income taxes 698 3,578 759 7,582
Income tax expense 61 1,170 66 2,539
---------- ---------- ---------- ----------
Net income $ 637 $ 2,408 $ 693 $ 5,043
========== ========== ========== ==========
Basic net income
per share $ 0.10 $ 0.40 $ 0.11 $ 0.85
========== ========== ========== ==========
Diluted net income
per share $ 0.10 $ 0.40 $ 0.11 $ 0.84
========== ========== ========== ==========
Weighted average
common shares
outstanding 6,348,312 5,965,978 6,169,125 5,962,471
========== ========== ========== ==========
Weighted average
number of common
and common
equivalent shares
outstanding 6,354,344 6,020,119 6,177,569 6,021,581
========== ========== ========== ==========