MT. PLEASANT, S.C., April 12, 2012 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited net income of $1,243,000, or $0.23 per basic share, for the quarter ended March 31, 2012. This compares to unaudited net loss of $579,000, or $0.11 per basic share, for the quarter ended March 31, 2011. The March 31, 2012 income per share is based on 5,316,633 basic average shares compared to 5,270,053 basic average shares for the first quarter of 2011.
"The first quarter's results were impacted by a decrease in operating expenses, gains on the sale of impaired assets, security gains and a reduction in our loan loss provision," said L. Wayne Pearson, Chairman and Chief Executive Officer. "While we continue to work diligently on improving our asset quality, we continue to maintain strong capital levels and are encouraged by an improvement in our net core earnings over the quarter ended March 31, 2011."
Net interest income decreased $56,000 from $3,233,000 for the first quarter of 2011 to $3,177,000 for the first quarter of 2012. A reduction in interest income due to volume decreases in average loans and securities was almost completely offset by the reduction of interest cost as existing liabilities repriced. The Company's annualized net interest margin improved by 19 basis points to 3.46% for the first quarter of 2012 from 3.27% for the first quarter of 2011, due to the significant reduction in our cost of funds.
Noninterest income increased to $906,000 for the first quarter of 2012 from $342,000 for the first quarter of 2011, primarily due to $215,000 of securities gains and $124,000 of gains on sales of fixed assets during the first quarter of 2012, compared to securities gains of $21,000 and no gains on sales of fixed assets during the first quarter of 2011. Non-interest income levels for the quarter ended March 31, 2011 also included a $176,000 other-than-temporary impairment charge on an investment security. The amount of securities gains and other-than-temporary impairment charges may fluctuate significantly between periods.
Noninterest expense levels decreased to $2,652,000 for the quarter ended March 31, 2012 from $3,428,000 for the quarter ended March 31, 2011. The first quarter of 2012 included the benefit of $736,000 in net gains on sales of other real estate owned compared to only $2,000 in net gains for the quarter ended March 31, 2011.
Total assets as of March 31, 2012 were $437.6 million compared to $427.5 million as of December 31, 2011; an increase of 2.4%. Loans, excluding loans held for sale, increased to $323.4 million, up 1.1% from $319.7 million as of December 31, 2011. Deposits during the same period increased3.7% to $327.8 million, while other borrowings decreased 3.5% to $64.5 million.
The Company's ratio of nonperforming assets to total assets was 6.71% as of March 31, 2012, compared to 6.37% as of March 31, 2011. The allowance for loan losses as a percentage of loans was 2.96% as of March 31, 2012, compared to 2.66% as of March 31, 2011. This increase is directionally consistent with the level of nonperforming problem loans. The allowance for loan losses as a percentage of total nonperforming loans totaled 43.13% as of March 31, 2012, compared to 42.58% as of March 31, 2011.
The subsidiary bank's capital position as of March 31, 2012 remains substantially in excess of regulatory well-capitalized requirements, with tier 1 capital to average assets of 9.41%. "We continue to be encouraged by the future direction of our Company given our capital strength and improvement in core operations," concluded Pearson.
About Southcoast Financial Corporation
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 and nine branches in the Charleston, South Carolina area. Trading in Southcoast Financial Corporation's common stock is traded on the NASDAQ Global Market under the symbol SOCB.
| Southcoast Financial Corporation | ||
| SELECTED FINANCIAL DATA | ||
| (dollars in thousands, except earnings per share) | ||
| Three Months Ended | ||
| March 2012 | March 2011 | |
| (Unaudited) | ||
| INCOME STATEMENT DATA | ||
| Net interest income | $ 3,177 | $ 3,233 |
| Provision for loan losses | 100 | 1,150 |
| Noninterest income | 906 | 342 |
| Noninterest expenses | 2,652 | 3,428 |
| Net income | $ 1,243 | $ (579) |
| PER SHARE DATA | ||
| Net income per share | ||
| Basic | $ 0.23 | $ (0.11) |
| Diluted | $ 0.23 | $ (0.11) |
| BALANCE SHEET DATA | ||
| Total assets | $ 437,642 | $ 474,947 |
| Total deposits | 327,768 | 351,993 |
| Total loans (net) | 313,797 | 322,033 |
| Investment securities | 47,177 | 68,932 |
| Other borrowings | 64,500 | 63,580 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Shareholders' equity | 31,807 | 45,981 |
| Average shares outstanding | ||
| Basic | 5,316,633 | 5,270,053 |
| Diluted | 5,316,633 | 5,270,053 |
| Book value per share | $5.98 | $9.60 |
| Key ratios | ||
| Return on assets* | 1.17% | -0.50% |
| Return on equity* | 15.97% | -5.12% |
| Equity to asset ratio | 7.27% | 9.68% |
| Nonperforming assets to assets | 6.71% | 6.37% |
| Reserve to loans | 2.96% | 2.66% |
| Reserve to nonperforming loans | 43.13% | 42.58% |
| Net interest margin | 3.46% | 3.27% |
| * Ratios for three months are annualized. | ||
| Southcoast Financial Corporation | ||
| Consolidated Balance Sheets | ||
| March 31 | December 31 | |
| 2012 | 2011 | |
| (Unaudited) | (Unaudited) | |
| Assets | ||
| Cash and due from banks | $32,005 | $18,037 |
| Investments | 47,177 | 52,755 |
| Loans held for sale | 484 | 995 |
| Loans | 323,376 | 319,740 |
| Less: Allowance for loan losses | 9,579 | 10,692 |
| Net loans | 313,797 | 309,048 |
| Fixed assets | 21,716 | 21,977 |
| Other assets | 22,463 | 24,709 |
| Total Assets | $437,642 | $427,521 |
| Liabilities & Shareholders' Equity | ||
| Deposits: | ||
| Non-interest bearing | $40,483 | $34,120 |
| Interest bearing | 287,285 | 282,027 |
| Total deposits | 327,768 | 316,147 |
| Other borrowings | 64,500 | 66,850 |
| Other liabilities | 3,257 | 3,402 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Total liabilities | 405,835 | 396,709 |
| Shareholders' Equity | ||
| Common Stock | 54,397 | 54,382 |
| Retained Deficit and Accumulated Other Comprehensive Loss | (22,590) | (23,570) |
| Total shareholders' equity | 31,807 | 30,812 |
| Total Liabilities and Shareholders' equity | $437,642 | $427,521 |
| Southcoast Financial Corporation | ||
| Consolidated Income Statement | ||
| (Dollars in thousands, except share data) | ||
| Quarter Ended | ||
| March 31, | March 31, | |
| 2012 | 2011 | |
| (Unaudited) | (Unaudited) | |
| Interest Income | ||
| Interest and fees on loans | $4,155 | $4,491 |
| Interest on investments | 304 | 512 |
| Interest on Fed funds sold | 6 | 7 |
| Total interest income | 4,465 | 5,010 |
| Interest expense | 1,288 | 1,777 |
| Net interest income | 3,177 | 3,233 |
| Provision for loan losses | 100 | 1,150 |
| Net interest after provision | 3,077 | 2,083 |
| Securities gains | 215 | 21 |
| Securities other-than-temporary impairment | -- | (176) |
| Other noninterest income | 691 | 497 |
| Total noninterest income | 906 | 342 |
| Total operating income | 3,983 | 2,425 |
| Noninterest expense | ||
| Salaries and benefits | 1,596 | 1,699 |
| Occupancy and furniture and equipment | 735 | 657 |
| Other expenses | 321 | 1,072 |
| Total noninterest expense | 2,652 | 3,428 |
| Income before taxes | 1,331 | (1,003) |
| Income tax expense(benefit) | 88 | (424) |
| Net income(loss) | $1,243 | ($579) |
| Basic net income per common share | $0.23 | ($0.11) |
| Diluted net income per common share | $0.23 | ($0.11) |
| Average number of common shares | ||
| Basic | 5,316,633 | 5,270,053 |
| Diluted | 5,316,633 | 5,270,053 |