AUGUSTA, Ga., April 29, 2011 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T), today reported quarterly net income of $2.3 million, or $0.34 in diluted earnings per share, for the three months ended March 31, 2011, compared to $1.3 million, or $0.19 in diluted earnings per share, in the first quarter of 2010.
"We experienced a significant decrease in deposit costs that increased net interest income and our net interest margin the first quarter of 2011," said R. Daniel Blanton, president and chief executive officer. "It marks our fifth consecutive quarter of income and earnings growth, which is a considerable achievement given the weak economy and lack of loan demand. At the same time, our asset quality remained stable during the first quarter. Overall, we are pleased with how our company has performed, though we are maintaining a conservative posture with regards to our provision for loan losses."
Total assets at March 31, 2011, were $1.6 billion, an increase of $27.7 million from Dec. 31, 2010.
Loans outstanding at the end of the first quarter were $881.7 million, a decrease of $5.2 million from Dec. 31, 2010, and a decline of $57.8 million from March 31, 2010. Total deposits were $1.4 billion at March 31, 2011, an increase of $27.4 million from Dec. 31, 2010, and an increase of $147.3 million from the same period a year ago. Cash and cash equivalents totaled $125.4 million at the end of the first quarter, compared to $65.1 million at Dec. 31, 2010.
Net interest income for the first quarter of 2011 was $12.2 million, a 15.9 percent increase from $10.5 million in the same period a year ago. The increase was driven by a $1.3 million decrease in deposit costs, which also led to an expansion of the company's net interest margin. Noninterest income for the first quarter was $4.0 million, a 1.2 percent increase from the first quarter of 2010. Noninterest expense in the first quarter of 2011 totaled $9.8 million, a 3.6 percent increase compared to the same period a year ago a year ago, due primarily to higher problem loan-related expenses and other operating expenses.
The company's net interest margin grew to 3.28 percent in the first quarter of 2011, compared to 3.17 percent for the three months ended Dec. 31, 2010, and 3.07 percent for the same period a year ago. Return on average assets (ROA) was 0.58 percent for the first quarter of 2011, an increase of 24 basis points from the same period a year ago. Return on average shareholders' equity (ROE) was 9.37 percent for the first quarter of 2011, an increase of 406 basis points from the first quarter of 2010.
The provision for loan losses totaled $3.2 million for the first quarter of 2011, compared to $4.0 million in the fourth quarter of 2010 and $3.3 million in the first quarter of 2010. Allowance for loan losses totaled $26.8 million, or 3.08 percent of loans outstanding at March 31, 2011, compared to $26.7 million, or 3.05 percent of loans outstanding, at Dec. 31, 2010, and $23.1 million, or 2.52 percent of loans outstanding, at March 31, 2010.
Nonperforming assets at March 31, 2011, were 2.20 percent of total assets, compared to 2.12 percent at Dec. 31, 2010, and 2.52 percent at March 31, 2010. Net charge-offs for the first quarter of 2011 totaled 1.43 percent of average loans on an annualized basis, compared to 1.27 percent annualized in the fourth quarter of 2010, and 1.10 percent annualized in the first quarter of 2010. The company held $7.6 million in other real estate owned (OREO) at March 31, 2011, compared to $7.8 million at Dec. 31, 2010, and $5.9 million at March 31, 2010.
"Our strategic plan has remained unchanged – we are maintaining control of our expenses, managing our problem assets, and finding ways to generate revenue in a tough economy," said Blanton. "Our aim is to continue on this path as we move forward, building on our positive momentum and preserving our overall safety and soundness."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.6 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 one limited service Loan Production Office in Athens, GA. SB&T is a state charted bank 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 | ||
| March 31, | ||
| 2011 | December 31, | |
| Assets | (Unaudited) | 2010 |
| Cash and due from banks | $ 60,119,714 | $ 42,304,774 |
| Federal funds sold | -- | -- |
| Interest-bearing deposits in other banks | 65,250,838 | 22,810,141 |
| Cash and cash equivalents | 125,370,552 | 65,114,915 |
| Investment securities | ||
| Available-for-sale | 558,306,124 | 586,301,633 |
| Held-to-maturity, at cost (fair values of | ||
| $0 and $310,753, respectively) | -- | 310,000 |
| Loans held for sale | 10,699,992 | 12,774,806 |
| Loans | 871,017,145 | 874,095,184 |
| Less allowance for loan losses | 26,820,623 | 26,656,672 |
| Loans, net | 844,196,522 | 847,438,512 |
| Premises and equipment, net | 29,103,466 | 29,415,853 |
| Accrued interest receivable | 6,576,315 | 6,382,121 |
| Bank-owned life insurance | 24,396,511 | 24,178,634 |
| Restricted equity securities | 5,745,000 | 5,706,900 |
| Other real estate owned | 7,565,099 | 7,750,552 |
| Prepaid FDIC assessment | 4,221,219 | 4,784,587 |
| Deferred tax asset | 15,682,706 | 14,594,554 |
| Other assets | 2,938,915 | 2,352,138 |
| $ 1,634,802,421 | $ 1,607,105,205 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 135,219,451 | $ 120,138,486 |
| Interest-bearing: | ||
| NOW accounts | 363,309,166 | 356,266,740 |
| Savings | 433,636,180 | 409,583,995 |
| Money management accounts | 37,650,142 | 36,937,485 |
| Time deposits over $100,000 | 332,876,329 | 346,721,403 |
| Other time deposits | 135,484,822 | 141,088,967 |
| 1,438,176,090 | 1,410,737,076 | |
| Securities sold under repurchase agreements | 609,791 | 817,574 |
| Advances from Federal Home Loan Bank | 60,000,000 | 60,000,000 |
| Other borrowed funds | -- | -- |
| Accrued interest payable and other liabilities | 11,722,933 | 12,646,021 |
| Subordinated debentures | 22,946,646 | 22,946,646 |
| Total liabilities | 1,533,455,460 | 1,507,147,317 |
| Stockholders' equity: | ||
| Preferred stock, no par value; 10,000,000 shares | ||
| authorized; 0 shares outstanding in 2011 and | ||
| 2010, respectively | -- | -- |
| Common stock, $3.00 par value; 10,000,000 shares | ||
| authorized; 6,675,851 and 6,675,147 shares issued | ||
| and outstanding in 2011 and 2010, respectively | 20,027,553 | 20,025,441 |
| Additional paid-in capital | 62,654,391 | 62,617,358 |
| Retained earnings | 21,850,482 | 19,548,606 |
| Treasury stock, at cost; 0 shares in | ||
| 2011 and 2010, respectively | -- | -- |
| Accumulated other comprehensive loss, net | (3,185,465) | (2,233,517) |
| Total stockholders' equity | 101,346,961 | 99,957,888 |
| $ 1,634,802,421 | $ 1,607,105,205 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES | ||
| Consolidated Statements of Income | ||
| (Unaudited) | ||
| Three Months Ended | ||
| March 31, | ||
| 2011 | 2010 | |
| Interest income: | ||
| Loans, including fees | $ 12,628,248 | $ 13,343,446 |
| Investment securities | 4,319,904 | 3,419,381 |
| Federal funds sold | -- | 3,421 |
| Interest-bearing deposits in other banks | 47,503 | 88,672 |
| Total interest income | 16,995,655 | 16,854,920 |
| Interest expense: | ||
| Deposits | 4,079,832 | 5,367,058 |
| Securities sold under repurchase | ||
| agreements | 1,658 | 10,838 |
| Other borrowings | 714,578 | 954,540 |
| Total interest expense | 4,796,068 | 6,332,436 |
| Net interest income | 12,199,587 | 10,522,484 |
| Provision for loan losses | 3,240,404 | 3,288,499 |
| Net interest income after provision | ||
| for loan losses | 8,959,183 | 7,233,985 |
| Noninterest income: | ||
| Service charges and fees on deposits | 1,577,742 | 1,594,449 |
| Gain on sales of loans | 1,206,634 | 1,353,279 |
| Gain on sale of fixed assets | 16,659 | 27,024 |
| Investment securities gains, net | 147,756 | 12,675 |
| Other-than-temporary loss | ||
| Total impairment loss | (126,907) | -- |
| Loss recognized in other comprehensive loss | 65,422 | -- |
| Net impairment loss recognized in earnings | (61,485) | -- |
| Retail investment income | 457,506 | 335,012 |
| Trust service fees | 273,064 | 287,154 |
| Increase in cash surrender value of | ||
| bank-owned life insurance | 217,877 | 229,076 |
| Miscellaneous income | 213,382 | 161,119 |
| Total noninterest income | 4,049,135 | 3,999,788 |
| Noninterest expense: | ||
| Salaries and other personnel expense | 5,564,356 | 5,494,529 |
| Occupancy expenses | 1,115,173 | 1,171,045 |
| Other real estate losses (gains), net | 95,403 | (85,193) |
| Other operating expenses | 3,000,716 | 2,851,811 |
| Total noninterest expense | 9,775,648 | 9,432,192 |
| Income before income taxes | 3,232,670 | 1,801,581 |
| Income tax expense | 930,794 | 546,915 |
| Net income | $ 2,301,876 | $ 1,254,666 |
| Basic net income per share | $ 0.34 | $ 0.19 |
| Diluted net income per share | $ 0.34 | $ 0.19 |
| Weighted average common shares outstanding | 6,675,851 | 6,673,334 |
| Weighted average number of common and | ||
| common equivalent shares outstanding | 6,676,015 | 6,673,334 |