AUGUSTA, Ga., July 26, 2013 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $4.0 million, or $0.60 in diluted earnings per share, for the three months ended June 30, 2013, compared to $3.4 million, or $0.50 in diluted earnings per share, in the second quarter of 2012.
"We achieved a record high in net income in the second quarter thanks to continued growth in our core banking operations and a decrease in expenses," said President and Chief Executive Officer R. Daniel Blanton. "Increases in loans, deposits and net interest income helped drive double-digit growth in income and earnings, while improvement in our deposit mix helped lower our funding costs. Loan growth was slight, however, due to low loan demand resulting from a lackluster economy and uncertainty among consumers and small businesses."
Total assets at June 30, 2013, were $1.7 billion, an increase of $31.4 million from Dec. 31, 2012. Loans outstanding at the end of the second quarter were $903.4 million, an increase of $1.9 million from Dec. 31, 2012, and an increase of $28.5 million from June 30, 2012. Total deposits were $1.4 billion at June 30, 2013, an increase of $21.6 million from Dec. 31, 2012, and an increase of $7.9 million from June 30, 2012. Cash and cash equivalents totaled $44.3 million at the end of the second quarter of 2013.
Net interest income for the second quarter of 2013 totaled $13.3 million, a 2.4 percent increase from $13.0 million for the same period in 2012, resulting from a lower cost of funds. Noninterest income for the second quarter totaled $5.2 million, a 3 percent decline from the same period a year ago, due to slower mortgage volumes as well as a decrease in gains on the sale of investment securities. Noninterest expense was $10.3 million in the second quarter of 2013, an 11.3 percent decrease from a year ago resulting primarily from lower expenses on other real estate and operating costs, though decreases were seen across all expense categories.
The net interest margin was 3.36 percent for the quarter ended June 30, 2013, compared to 3.40 percent at March 31, 2013, and 3.38 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.95 percent for the second quarter of 2013, an increase of 13 basis points from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.42 percent, an increase of 50 basis points from the second quarter of 2012.
Nonperforming assets at June 30, 2013, were 2.08 percent of total assets, compared to 1.80 percent at March 31, 2013, and 2.63 percent at June 30, 2012. Net charge-offs for the second quarter of 2013 totaled 1.87 percent of average loans on an annualized basis, compared to 0.77 percent annualized in the first quarter of 2013 and 0.97 percent annualized in the second quarter of 2012. The company held $1.1 million in OREO at June 30, 2013, compared to $2.4 million at March 31, 2013, and $7.8 million at June 30, 2012.
The company's loan-loss provision expense was $2.4 million in the second quarter of 2013, a 38.4 percent increase from $1.7 million in the previous quarter, and a 23.8 percent increase from $2.0 million in the second quarter a year ago. The allowance for loan losses at June 30, 2013, was $27.3 million, or 3.12 percent of loans outstanding, compared to $28.9 million, or 3.28 percent of loans outstanding, at March 31, 2013, and $29.6 million, or 3.50 percent of loans outstanding, at June 30, 2012.
"We increased our provision for loan losses in the second quarter to accommodate the resolution of several problem credits," said Blanton. "Our overall asset quality ratios remained solid, however, and have been stable throughout the past year. Though we have generated consistent growth in income and earnings in recent quarters, we will continue to keep a close watch on assets and maintain our conservative approach to banking."
On July 17, 2013, the holding company's board of directors declared a regular quarterly cash dividend of $0.13 per share of common stock payable on August 16, 2013, to shareholders of record as of August 2, 2013. Based on the share price of $19.80 at the close of business on Thursday, July 25, 2013, this dividend represents an annualized yield to shareholders of 2.63 percent.
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 provides 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, | ||
| 2013 | December 31, | |
| Assets | (Unaudited) | 2012 |
| Cash and due from banks | $ 40,978,509 | $ 39,565,757 |
| Interest-bearing deposits in other banks | 3,346,330 | 4,322,317 |
| Cash and cash equivalents | 44,324,839 | 43,888,074 |
| Available-for-sale securities | 678,569,925 | 654,738,964 |
| Loans held for sale | 30,904,991 | 30,051,204 |
| Loans | 872,523,298 | 871,446,844 |
| Less allowance for loan losses | 27,254,204 | 28,846,336 |
| Loans, net | 845,269,094 | 842,600,508 |
| Premises and equipment, net | 25,967,480 | 26,145,378 |
| Accrued interest receivable | 6,671,268 | 6,602,879 |
| Bank-owned life insurance | 35,396,037 | 34,825,588 |
| Restricted equity securities | 4,869,600 | 5,295,600 |
| Other real estate owned | 1,095,670 | 3,489,887 |
| Prepaid FDIC assessment | 24,292 | 2,023,977 |
| Deferred tax asset | 17,363,829 | 10,406,187 |
| Other assets | 3,444,289 | 2,434,228 |
| $1,693,901,314 | $1,662,502,474 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 177,005,347 | $ 158,066,510 |
| Interest-bearing: | ||
| NOW accounts | 349,119,604 | 349,531,376 |
| Savings | 517,454,418 | 504,193,793 |
| Money management accounts | 16,530,853 | 18,032,530 |
| Time deposits over $100,000 | 274,512,679 | 280,870,648 |
| Other time deposits | 108,269,897 | 110,576,827 |
| 1,442,892,798 | 1,421,271,684 | |
| Securities sold under repurchase agreements | 10,718,272 | 976,433 |
| Advances from Federal Home Loan Bank | 64,000,000 | 64,000,000 |
| Accrued interest payable and other liabilities | 16,911,959 | 18,924,619 |
| Due to broker | 6,480,000 | -- |
| Subordinated debentures | 21,546,646 | 21,546,646 |
| Total liabilities | 1,562,549,675 | 1,526,719,382 |
| Stockholders' equity: | ||
| Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2013 and 2012, respectively | -- | -- |
| Common stock, $3.00 par value; 10,000,000 shares authorized; 6,680,225 and 6,680,225 shares issued in 2013 and 2012, respectively; 6,678,807 and 6,675,000 shares outstanding in 2013 and 2012, respectively | 20,040,675 | 20,040,675 |
| Additional paid-in capital | 62,853,466 | 62,835,122 |
| Retained earnings | 51,938,961 | 45,028,153 |
| Treasury stock, at cost; 1,418 and 5,225 shares in 2013 and 2012, respectively | (19,724) | (72,680) |
| Accumulated other comprehensive income (loss), net | (3,461,739) | 7,951,822 |
| Total stockholders' equity | 131,351,639 | 135,783,092 |
| $1,693,901,314 | $1,662,502,474 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY | ||||
| Consolidated Statements of Income | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Interest income: | ||||
| Loans, including fees | $ 11,744,176 | $ 11,557,319 | $ 23,434,937 | $ 23,218,026 |
| Investment securities | 3,897,515 | 4,422,010 | 7,879,253 | 8,667,075 |
| Interest-bearing deposits in other banks | 20,662 | 21,638 | 36,885 | 46,540 |
| Total interest income | 15,662,353 | 16,000,967 | 31,351,075 | 31,931,641 |
| Interest expense: | ||||
| Deposits | 1,683,039 | 2,377,509 | 3,512,522 | 5,091,153 |
| Securities sold under repurchase agreements | 813 | 7,486 | 1,701 | 8,670 |
| Other borrowings | 676,209 | 630,538 | 1,345,576 | 1,226,992 |
| Total interest expense | 2,360,061 | 3,015,533 | 4,859,799 | 6,326,815 |
| Net interest income | 13,302,292 | 12,985,434 | 26,491,276 | 25,604,826 |
| Provision for loan losses | 2,413,949 | 1,949,700 | 4,158,692 | 4,165,712 |
| Net interest income after provision for loan losses | 10,888,343 | 11,035,734 | 22,332,584 | 21,439,114 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,793,770 | 1,685,451 | 3,467,563 | 3,296,323 |
| Gain on sales of loans | 2,155,303 | 2,362,780 | 4,056,812 | 4,318,452 |
| Gain on sale of fixed assets, net | 16,204 | 8,000 | 21,704 | 6,459 |
| Investment securities gains (losses), net | 14,903 | 100,519 | (29,326) | 477,519 |
| Other-than-temporary loss | ||||
| Total impairment loss | -- | (13,314) | -- | (13,314) |
| Less loss recognized in other comprehensive income | -- | (4,268) | -- | (4,268) |
| Net impairment loss recognized in earnings | -- | (9,046) | -- | (9,046) |
| Retail investment income | 487,132 | 504,416 | 987,840 | 1,026,646 |
| Trust service fees | 284,369 | 288,439 | 589,255 | 577,276 |
| Earnings from cash surrender value of bank-owned life insurance | 287,915 | 265,462 | 570,449 | 525,983 |
| Miscellaneous income | 186,758 | 175,652 | 375,413 | 365,731 |
| Total noninterest income | 5,226,354 | 5,381,673 | 10,039,710 | 10,585,343 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 6,140,533 | 6,542,556 | 12,337,942 | 12,739,969 |
| Occupancy expenses | 939,055 | 1,042,733 | 1,874,136 | 2,096,803 |
| Other real estate losses, net | 207,571 | 688,456 | 617,300 | 1,348,936 |
| Other operating expenses | 3,000,886 | 3,330,400 | 6,219,098 | 6,278,057 |
| Total noninterest expense | 10,288,045 | 11,604,145 | 21,048,476 | 22,463,765 |
| Income before income taxes | 5,826,652 | 4,813,262 | 11,323,818 | 9,560,692 |
| Income tax expense | 1,824,018 | 1,451,852 | 3,544,765 | 2,897,256 |
| Net income | $ 4,002,634 | $ 3,361,410 | $ 7,779,053 | $ 6,663,436 |
| Comprehensive income (loss) | $ (7,094,452) | $ 5,774,124 | $ (3,634,508) | $ 9,046,686 |
| Basic net income per share | $ 0.60 | $ 0.50 | $ 1.16 | $ 1.00 |
| Diluted net income per share | $ 0.60 | $ 0.50 | $ 1.16 | $ 1.00 |
| Weighted average common shares outstanding | 6,678,807 | 6,679,371 | 6,678,112 | 6,678,927 |
| Weighted average number of common and common equivalent shares outstanding | 6,678,807 | 6,679,371 | 6,678,112 | 6,678,927 |