AUGUSTA, Ga., Oct. 28, 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 of Aiken, S.C. (SB&T), today reported quarterly net income of $2.9 million, or $0.44 in diluted earnings per share, for the three months ended Sept. 30, 2011, compared to net income of $1.8 million, or $0.27 in diluted earnings per share, in the third quarter of 2010.
"We continued to perform well in the third quarter, growing income, earnings and our net interest margin from both the previous quarter and the prior year," said R. Daniel Blanton, president and chief executive officer. "Our improved performance over the past year reflects a consistent focus on executing the basics of banking and high-quality customer service."
At Sept. 30, 2011, total assets for the company were $1.6 billion, an increase of $2.3 million from Dec. 31, 2010. Loans outstanding at the end of the third quarter of 2011 were $862.3 million, compared to $886.9 million at Dec. 31, 2010. Total deposits at Sept. 30, 2011, were $1.4 billion, a slight decrease from Dec. 31, 2010. The company held $83.3 million in cash and cash equivalents at the end of the third quarter.
Net interest income for the third quarter of 2011 was $13.1 million, an increase of $1.3 million, or 11.0 percent, from the same period a year ago. Noninterest income for the third quarter of 2011 totaled $5.2 million, a decline from $6.5 million in the third quarter of 2010, resulting primarily from lower mortgage origination income and a reduction in investment gains. Noninterest expense in the third quarter of 2011 declined 3.4 percent to $10.6 million from a year ago, largely as a result of lower expenses related to personnel, losses on other real estate and general operations.
The company's net interest margin was 3.51 percent at Sept. 30, 2011, compared to 3.44 percent at June 30, 2011, and 3.12 percent a year ago. Return on average assets (ROA) was 0.73 percent for the third quarter of 2011, an increase of 28 basis points from the same period a year ago, and return on average shareholders' equity (ROE) was 10.34 percent, an increase of 329 basis points from the same period the previous year.
Nonperforming assets at Sept. 30, 2011, were 2.34 percent of total assets, compared to 2.29 percent at June 30, 2011, and 1.98 percent at Sept. 30, 2010. Net charge-offs for the third quarter of 2011 totaled 1.20 percent of average loans, compared to 0.85 percent in the second quarter of 2011, and 1.36 percent in the third quarter of 2010. The company held $7.9 million in other real estate owned (OREO) at Sept. 30, 2011, compared to $8.6 million at June 30, 2011, and $7.1 million at Sept. 30, 2010.
The provision for loan losses totaled $3.5 million for the third quarter of 2011, compared to $4.8 million in the same period a year ago. The allowance for loan losses at Sept. 30, 2011, was $29.3 million, or 3.50 percent of loans outstanding, compared to $28.4 million, or 3.25 percent of loans outstanding at June 30, 2011 and $25.5 million, or 2.87 percent, at Sept. 30, 2010.
For the nine months ended Sept. 30, 2011, the company reported net income of $8.0 million, or $1.20 in diluted earnings per share, compared to net income of $4.7 million, or $0.71 in diluted earnings per share, in the same period a year ago.
Net interest income for the first nine months of 2011 was $38.2 million, up 13.3 percent from $33.7 million in the comparable period in 2010. Noninterest income was $14.0 million for the first nine months of 2011, compared to $15.7 million for the same period in 2010. Noninterest expense for the first three quarters of 2011 totaled $30.5 million, compared to $31.0 million for the comparable period in 2010.
"The company continues to be well positioned in the midst of a lackluster economy and limited loan demand in our markets," said Blanton. "Also, historic-low interest rates appear to be set for the near future, which is a constraint on banks' ability to generate interest income. Under these ongoing conditions, we will continue to keep a tight rein on expenses as we look for other revenue opportunities."
Blanton also announced that Georgia Bank & Trust Company had received approval from the Federal Deposit Insurance Corporation to merge the operations of Southern Bank & Trust into Georgia Bank & Trust Company. Southern Bank will continue to operate under the trade name of Southern Bank & Trust in South Carolina. It is anticipated this merger will be completed by December 31, 2011.
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 | ||
| Assets |
September 30, 2011 (Unaudited) |
December 31, 2010 |
| Cash and due from banks | $ 74,259,983 | $ 42,304,774 |
| Federal funds sold | -- | -- |
| Interest-bearing deposits in other banks | 8,992,027 | 22,810,141 |
| Cash and cash equivalents | 83,252,010 | 65,114,915 |
| Investment securities | ||
| Available-for-sale | 596,935,681 | 586,301,633 |
| Held-to-maturity, at cost (fair values of $0 and $310,753, respectively) | -- | 310,000 |
| Loans held for sale | 23,504,229 | 12,774,806 |
| Loans | 838,776,831 | 874,095,184 |
| Less allowance for loan losses | 29,338,641 | 26,656,672 |
| Loans, net | 809,438,190 | 847,438,512 |
| Premises and equipment, net | 28,050,482 | 29,415,853 |
| Accrued interest receivable | 6,158,856 | 6,382,121 |
| Bank-owned life insurance | 30,446,532 | 24,178,634 |
| Restricted equity securities | 5,277,400 | 5,706,900 |
| Other real estate owned | 7,858,521 | 7,750,552 |
| Prepaid FDIC assessment | 3,537,346 | 4,784,587 |
| Deferred tax asset | 11,926,132 | 14,594,554 |
| Other assets | 3,040,611 | 2,352,138 |
| $ 1,609,425,990 | $ 1,607,105,205 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 135,464,409 | $ 120,138,486 |
| Interest-bearing: | ||
| NOW accounts | 330,319,128 | 356,266,740 |
| Savings | 478,583,376 | 409,583,995 |
| Money management accounts | 41,936,811 | 36,937,485 |
| Time deposits over $100,000 | 290,300,374 | 346,721,403 |
| Other time deposits | 124,667,440 | 141,088,967 |
| 1,401,271,538 | 1,410,737,076 | |
| Securities sold under repurchase agreements | 540,189 | 817,574 |
| Advances from Federal Home Loan Bank | 52,000,000 | 60,000,000 |
| Other borrowed funds | -- | -- |
| Accrued interest payable and other liabilities | 17,268,373 | 12,646,021 |
| Subordinated debentures | 22,946,646 | 22,946,646 |
| Total liabilities | 1,494,026,746 | 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; 6,677,059 and 6,675,147 shares issued and outstanding in 2011 and 2010, respectively | 20,031,177 | 20,025,441 |
| Additional paid-in capital | 62,729,216 | 62,617,358 |
| Retained earnings | 27,580,078 | 19,548,606 |
| Treasury stock, at cost; 0 shares in 2011 and 2010, respectively | -- | -- |
| Accumulated other comprehensive income (loss), net | 5,058,773 | (2,233,517) |
| Total stockholders' equity | 115,399,244 | 99,957,888 |
| $ 1,609,425,990 | $ 1,607,105,205 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES | ||||
| Consolidated Statements of Income | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Interest income: | ||||
| Loans, including fees | $ 12,635,856 | $ 13,611,252 | $ 38,090,629 | $ 40,470,959 |
| Investment securities | 4,450,114 | 4,168,836 | 13,279,868 | 11,543,369 |
| Federal funds sold | -- | 2,319 | -- | 9,201 |
| Interest-bearing deposits in other banks | 34,606 | 111,635 | 119,816 | 293,802 |
| Total interest income | 17,120,576 | 17,894,042 | 51,490,313 | 52,317,331 |
| Interest expense: | ||||
| Deposits | 3,393,704 | 5,186,817 | 11,315,878 | 15,872,983 |
| Securities sold under repurchase agreements | 1,214 | 1,642 | 4,488 | 17,499 |
| Other borrowings | 637,019 | 912,178 | 2,014,416 | 2,757,300 |
| Total interest expense | 4,031,937 | 6,100,637 | 13,334,782 | 18,647,782 |
| Net interest income | 13,088,639 | 11,793,405 | 38,155,531 | 33,669,549 |
| Provision for loan losses | 3,534,567 | 4,759,111 | 10,198,085 | 11,841,246 |
| Net interest income after provision for loan losses | 9,554,072 | 7,034,294 | 27,957,446 | 21,828,303 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,729,312 | 1,801,943 | 5,057,149 | 5,145,149 |
| Gain on sales of loans | 2,097,176 | 2,877,241 | 5,024,313 | 6,452,542 |
| Gain (loss) on sale of fixed assets | -- | (656) | 16,659 | 26,368 |
| Investment securities gains, net | 250,514 | 775,171 | 368,737 | 937,115 |
| Other-than-temporary loss | ||||
| Total impairment loss | (64,711) | (96,258) | (191,618) | (96,258) |
| Less loss recognized in other comprehensive income | (24,072) | (258) | (89,494) | (258) |
| Net impairment loss recognized in earnings | (40,639) | (96,000) | (102,124) | (96,000) |
| Retail investment income | 443,857 | 497,232 | 1,408,124 | 1,248,321 |
| Trust service fees | 284,120 | 276,161 | 849,358 | 852,725 |
| Increase in cash surrender value of bank-owned life insurance | 301,918 | 256,867 | 767,898 | 708,987 |
| Miscellaneous income | 169,452 | 149,055 | 573,518 | 466,319 |
| Total noninterest income | 5,235,710 | 6,537,014 | 13,963,632 | 15,741,526 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 5,990,176 | 6,115,266 | 17,207,907 | 17,524,143 |
| Occupancy expenses | 1,088,207 | 1,131,918 | 3,314,824 | 3,469,021 |
| Other real estate losses, net | 572,243 | 706,993 | 1,033,212 | 1,035,480 |
| Other operating expenses | 2,971,831 | 3,029,455 | 8,904,176 | 8,948,699 |
| Total noninterest expense | 10,622,457 | 10,983,632 | 30,460,119 | 30,977,343 |
| Income before income taxes | 4,167,325 | 2,587,676 | 11,460,959 | 6,592,486 |
| Income tax expense | 1,242,912 | 752,584 | 3,429,487 | 1,882,099 |
| Net income | $ 2,924,413 | $ 1,835,092 | $ 8,031,472 | $ 4,710,387 |
| Comprehensive income | $ 5,637,598 | $ 2,379,687 | $ 15,323,762 | $10,311,375 |
| Basic net income per share | $ 0.44 | $ 0.27 | $ 1.20 | $ 0.71 |
| Diluted net income per share | $ 0.44 | $ 0.27 | $ 1.20 | $ 0.71 |
| Weighted average common shares outstanding | 6,677,059 | 6,674,465 | 6,676,463 | 6,673,912 |
| Weighted average number of common and common equivalent shares outstanding | 6,677,059 | 6,674,465 | 6,676,463 | 6,673,912 |