AUGUSTA, Ga., July 27, 2012 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported record quarterly net income of $3.4 million for the three months ended June 30, 2012, or $0.50 in diluted earnings per share, compared to $2.8 million, or $0.42 in diluted earnings per share, in the second quarter of 2011.
"We generated record earnings in the second quarter, nearly a 20 percent gain from a year ago," said President and Chief Executive Officer R. Daniel Blanton. "We also grew core earnings, deposits, total assets and saw a slight increase in core loans while maintaining a stable credit quality. Our performance reflects the ongoing success of our focus on executing the fundamentals of banking and providing an unparalleled level of customer service."
Total assets at June 30, 2012, were $1.7 billion, an increase of $51.4 million from Dec. 31, 2011. Loans outstanding at the end of the second quarter were $875.0 million, a decrease of $669 thousand from Dec. 31, 2011, and a decrease of $14.8 million from June 30, 2011. Total deposits were $1.4 billion at June 30, 2012, an increase of $15.8 million at Dec. 31, 2011, and an increase of $33.0 million from June 30, 2011. Cash and cash equivalents totaled $59.3 million at the end of the second quarter of 2012.
Net interest income for the second quarter of 2012 totaled $13.0 million, a slight increase from $12.9 million for the same period in 2011. Noninterest income for the second quarter totaled $5.0 million, a 6.4 percent increase from $4.7 million for the same period a year ago, resulting from higher mortgage origination volume. Noninterest expense was $11.2 million in the second quarter of 2012, an increase of 10.9 percent from $10.1 million a year ago, resulting primarily from higher commission and benefit expenses as well as other real estate losses, though occupancy and operating expenses declined slightly in comparison to the second quarter of 2011.
The net interest margin was 3.38 percent for the quarter-ended June 30, 2012, compared to 3.34 percent at the end of the first quarter of 2012, and 3.44 percent a year ago. Annualized return on average assets (ROA) was 0.82 percent for the second quarter of 2012, an increase of 12 basis points from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 10.92 percent, an increase of 16 basis points from the second quarter of 2011.
Nonperforming assets at June 30, 2012, were 2.63 percent of total assets, compared to 2.92 percent at March 31, 2012, 3.19 percent at December 31, 2011 and 2.29 percent at June 30, 2011. Net charge-offs for the second quarter of 2012 totaled 0.97 percent of average loans on an annualized basis, compared to 0.78 percent annualized in the first quarter of 2012 and 0.85 percent annualized in the second quarter of 2011. The company held $7.8 million in OREO at June 30, 2012, compared to $6.2 million at December 31, 2011, and $8.6 million at June 30, 2011.
The company's loan-loss provision expense was $1.9 million in the second quarter of 2012, compared to $2.2 million in the first quarter of 2012 and $3.4 million in the second quarter a year ago. The allowance for loan losses at June 30, 2012, was $29.6 million, or 3.49 percent of loans outstanding, compared to $29.0 million, or 3.43 percent of loans outstanding, at Dec. 31, 2011, and $28.4 million, or 3.25 percent of loans outstanding, at June 30, 2011.
Net income for the six months ended June 30, 2012, totaled $6.7 million, an increase of $1.6 million from the same period of 2011. Diluted earnings per share for the first six months of 2012 were $1.00, an increase of $0.24 per share earned from the same period a year ago.
Net interest income for the first six months of 2012 was $25.6 million, a 2.1 percent increase from $25.1 million in the first six months of 2011. Noninterest income was $10.3 million for the first six months of 2012, a 17.9 percent increase from $8.7 million in the same period of 2011. Noninterest expense was $22.2 million for the six-month period ended June 30, 2012, compared to $19.8 million in the same period in 2011.
"While we are very encouraged by our growth and profitability over the past two years, the state of the economy remains in flux, which is why we have built and maintained a 'fortress' balance sheet," said Blanton. "We will always position ourselves conservatively as we move forward."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.7 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices, three full-service offices in Aiken County, S.C. operating as Southern Bank & Trust and one limited service Loan Production Office in Athens, GA. 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 under the symbol SBFC on OTCQB. Investors can find Real-Time quotes and market information for the Company on www.otcmarkets.com or by visiting 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 SUBSIDIARY | ||
| Consolidated Balance Sheets | ||
| June 30, 2012 | December 31, | |
| Assets | (Unaudited) | 2011 |
| Cash and due from banks | $ 53,499,901 | $ 51,080,600 |
| Interest-bearing deposits in other banks | 5,820,026 | 18,760,812 |
| Cash and cash equivalents | 59,319,927 | 69,841,412 |
| Available-for-sale securities | 665,369,199 | 603,758,999 |
| Loans held for sale | 27,197,419 | 29,615,131 |
| Loans | 847,758,800 | 846,010,275 |
| Less allowance for loan losses | 29,551,983 | 29,045,876 |
| Loans, net | 818,206,817 | 816,964,399 |
| Premises and equipment, net | 26,787,235 | 27,608,118 |
| Accrued interest receivable | 6,507,878 | 6,246,880 |
| Bank-owned life insurance | 31,239,471 | 30,713,488 |
| Restricted equity securities | 5,399,000 | 5,086,000 |
| Other real estate owned | 7,772,867 | 6,208,720 |
| Prepaid FDIC assessment | 2,732,710 | 3,419,738 |
| Deferred tax asset | 11,523,343 | 12,723,238 |
| Other assets | 4,071,286 | 2,586,986 |
| $ 1,666,127,152 | $ 1,614,773,109 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 154,046,942 | $ 147,196,034 |
| Interest-bearing: | ||
| NOW accounts | 348,627,779 | 346,235,936 |
| Savings | 483,101,422 | 471,727,749 |
| Money management accounts | 38,980,229 | 42,977,515 |
| Time deposits over $100,000 | 284,014,164 | 286,318,774 |
| Other time deposits | 126,244,548 | 124,766,377 |
| 1,435,015,084 | 1,419,222,385 | |
| Securities sold under repurchase agreements | 663,789 | 700,798 |
| Advances from Federal Home Loan Bank | 66,000,000 | 39,000,000 |
| Accrued interest payable and other liabilities | 16,784,572 | 15,874,526 |
| Subordinated debentures | 21,546,646 | 22,946,646 |
| Total liabilities | 1,540,010,091 | 1,497,744,355 |
| Stockholders' equity: | ||
| Preferred stock, no par value; 10,000,000 shares | ||
| authorized; 0 shares outstanding in 2012 and | ||
| 2011, respectively | -- | -- |
| Common stock, $3.00 par value; 10,000,000 shares | ||
| authorized; 6,679,381 and 6,677,667 shares issued | ||
| and outstanding in 2012 and 2011, respectively | 20,038,143 | 20,033,001 |
| Additional paid-in capital | 62,803,611 | 62,767,133 |
| Retained earnings | 37,256,617 | 30,593,180 |
| Accumulated other comprehensive income, net | 6,018,690 | 3,635,440 |
| Total stockholders' equity | 126,117,061 | 117,028,754 |
| $ 1,666,127,152 | $ 1,614,773,109 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY | ||||
| Consolidated Statements of Income | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Interest income: | ||||
| Loans, including fees | $ 11,557,319 | $ 12,826,525 | $ 23,218,026 | $ 25,454,773 |
| Investment securities | 4,422,010 | 4,509,850 | 8,667,075 | 8,829,754 |
| Interest-bearing deposits in other banks | 21,638 | 34,955 | 46,540 | 70,429 |
| Total interest income | 16,000,967 | 17,371,330 | 31,931,641 | 34,354,956 |
| Interest expense: | ||||
| Deposits | 2,377,509 | 3,839,590 | 5,091,153 | 7,907,393 |
| Securities sold under repurchase agreements | 7,486 | 1,616 | 8,670 | 3,274 |
| Other borrowings | 630,538 | 662,819 | 1,226,992 | 1,377,397 |
| Total interest expense | 3,015,533 | 4,504,025 | 6,326,815 | 9,288,064 |
| Net interest income | 12,985,434 | 12,867,305 | 25,604,826 | 25,066,892 |
| Provision for loan losses | 1,949,700 | 3,423,114 | 4,165,712 | 6,663,518 |
| Net interest income after provision for loan losses | 11,035,734 | 9,444,191 | 21,439,114 | 18,403,374 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,685,451 | 1,750,095 | 3,296,323 | 3,327,837 |
| Gain on sales of loans | 2,003,180 | 1,720,503 | 4,022,474 | 2,927,137 |
| Gain on sale of fixed assets | 8,000 | -- | 6,459 | 16,659 |
| Investment securities gains (losses), net | 100,519 | (29,533) | 477,519 | 118,223 |
| Other-than-temporary loss | ||||
| Total impairment loss | (13,314) | -- | (13,314) | (126,907) |
| Less loss recognized in other comprehensive income | (4,268) | -- | (4,268) | (65,422) |
| Net impairment loss recognized in earnings | (9,046) | -- | (9,046) | (61,485) |
| Retail investment income | 504,416 | 506,761 | 1,026,646 | 964,267 |
| Trust service fees | 288,439 | 292,174 | 577,276 | 565,238 |
| Earnings from cash surrender value of bank-owned life insurance | 265,462 | 248,103 | 525,983 | 465,980 |
| Miscellaneous income | 175,652 | 190,684 | 365,731 | 404,066 |
| Total noninterest income | 5,022,073 | 4,678,787 | 10,289,365 | 8,727,922 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 6,542,556 | 5,653,375 | 12,739,969 | 11,217,731 |
| Occupancy expenses | 1,042,733 | 1,111,444 | 2,096,803 | 2,226,617 |
| Other real estate losses, net | 688,456 | 365,566 | 1,348,936 | 460,969 |
| Other operating expenses | 2,970,800 | 2,931,629 | 5,982,079 | 5,932,345 |
| Total noninterest expense | 11,244,545 | 10,062,014 | 22,167,787 | 19,837,662 |
| Income before income taxes | 4,813,262 | 4,060,964 | 9,560,692 | 7,293,634 |
| Income tax expense | 1,451,852 | 1,255,781 | 2,897,256 | 2,186,575 |
| Net income | $ 3,361,410 | $ 2,805,183 | $ 6,663,436 | $ 5,107,059 |
| Comprehensive income | $ 5,774,124 | $ 8,336,236 | $ 9,046,686 | $ 9,686,164 |
| Basic net income per share | $ 0.50 | $ 0.42 | $ 1.00 | $ 0.76 |
| Diluted net income per share | $ 0.50 | $ 0.42 | $ 1.00 | $ 0.76 |
| Weighted average common shares outstanding | 6,679,371 | 6,676,467 | 6,678,927 | 6,676,161 |
| Weighted average number of common and common equivalent shares outstanding | 6,679,371 | 6,676,467 | 6,678,927 | 6,676,161 |