MT. PLEASANT, S.C., Oct. 8, 2013 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited net income of $8,735,000, or $1.23 per basic share, for the nine months ended September 30, 2013. This compares to unaudited net income of $2,590,000, or $0.37 per basic share, for the nine months ended September 30, 2012. The September 30, 2013 income per share is based on 7,074,183 basic average shares compared to 7,044,365 basic average shares for 2012.
The year to date 2013 results include the reversal of the deferred tax asset (DTA) valuation allowance resulting in the recognition of a tax benefit of approximately $6,363,000, or $0.90 per share. The reversal was reflective of sustained profitability and improving credit quality that has led to significantly lower credit related costs supporting the anticipated capacity to utilize the DTA in future periods to reduce income tax payments. The impact of the DTA valuation allowance reversal, coupled with operating earnings, increased the Company's book value to $5.97 per share as of September 30, 2013, compared to $4.76 per share as of September 30, 2012.
For the nine months ended September 30, 2013, net interest income increased $510,000 from $9,880,000 for the nine months of 2012 to $10,390,000 for the nine months ended September 30, 2012.
Noninterest income decreased to $1,840,000 for the first nine months of 2013 from $2,550,000 for the first nine months of 2012, primarily due to $626,000 of securities gains and $124,000 of gains on sales of fixed assets during the 2012 period, compared to only $105,000 of gains from sales of securities and $28,000 of gains on sales of fixed assets in the 2013 period.
Noninterest expense levels increased to $9,858,000 for the nine months ended September 30, 2013 from $8,957,000 for the nine months ended September 30, 2012. The first nine months of 2012 included the benefit of $1,042,000 in net gains on sales of other real estate owned compared to only $314,000 for the nine months ended September 30, 2013.
For the quarter ended September 30, 2013, the unaudited net income was $694,000, or $0.10 per basic share. This compares to an unaudited net income of $844,000, or $0.12 per basic share for the quarter ended September 30, 2012. The September 30, 2013 income per share is based on 7,077,878 basic average shares compared to 7,057,450 basic average shares for the quarter ended September 30, 2012. The third quarter of 2013 represents the seventh consecutive quarter of net income. The Company's annualized net interest margin improved by 8 basis points to 3.64% for the quarter ended September 30, 2013, compared to 3.56% for the quarter ended September 30, 2012.
Total assets as of September 30, 2013 were $441.2 million compared to $438.2 million as of December 31, 2012, an increase of 0.68%. Loans, excluding loans held for sale, increased to $328.6 million, from $327.5 million as of December 31, 2012. Deposits decreased by $6.4 million to $313.2 million at September 30, 2013, from $319.6 million at December 31, 2012. This decrease was comprised of a $29.2 million decrease in time deposits between the two periods, partially offset by increases of $8.5 million and $14.3 million in noninterest bearing and interest bearing non-time deposits, respectively.
"The 2013 results reflect the continued improvement of our net interest margin, continued decreased levels of nonperforming assets, and an improved deposit mix. These items are helping us achieve our goals of increased core earnings and a strong capital base," said L. Wayne Pearson, Chairman and Chief Executive Officer.
The Company's ratio of nonperforming assets to total assets was 3.78% as of September 30, 2013, compared to 5.08% as of September 30, 2012. The allowance for loan losses as a percentage of loans was 2.02% as of September 30, 2013, compared to 2.59% as of September 30, 2012. The allowance for loan losses as a percentage of total nonperforming loans totaled 58.99% as of September 30, 2013, compared to 62.01% as of September 30, 2012. The subsidiary bank's capital position as of September 30, 2013 remains in excess of regulatory well-capitalized requirements.
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. Southcoast Financial Corporation's common stock is traded on the NASDAQ Global Market under the symbol SOCB.
| Southcoast Financial Corporation | ||
| Consolidated Balance Sheets | ||
| (Dollars in thousands) | ||
| September 30 | December 31 | |
| 2013 | 2012 | |
| Assets | ||
| Cash and cash equivalents | $24,785 | $21,984 |
| Investments | 43,963 | 48,367 |
| Loans held for sale | 925 | 1,789 |
| Loans | 328,567 | 327,469 |
| Less: Allowance for loan losses | 6,649 | 8,159 |
| Net loans | 321,918 | 319,310 |
| Fixed assets | 21,324 | 21,653 |
| Other assets | 28,288 | 25,118 |
| Total Assets | $441,203 | $438,221 |
| Liabilities & Shareholders' Equity | ||
| Deposits: | ||
| Noninterest bearing | $47,343 | $38,797 |
| Interest bearing nontime | 129,564 | 115,245 |
| Time deposits | 136,335 | 165,590 |
| Total deposits | 313,242 | 319,632 |
| Other borrowings | 70,833 | 69,949 |
| Other liabilities | 4,546 | 4,066 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Total liabilities | 398,931 | 403,957 |
| Shareholders' Equity | ||
| Common Stock | 54,519 | 54,437 |
| Accumulated deficit | (10,266) | (19,002) |
| Accumulated other comprehensive loss | (1,981) | (1,171) |
| Total shareholders' equity | 42,272 | 34,264 |
| Total Liabilities and | ||
| Shareholders' equity | $441,203 | $438,221 |
| Southcoast Financial Corporation | ||||
| Consolidated Income Statements | ||||
| (Dollars in thousands, except earnings per share) | ||||
| Nine Months Ended | Three Months Ended | |||
| September 30, | September 30, | September 30, | September 30, | |
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest Income | ||||
| Interest and fees on loans | $12,468 | $12,632 | $4,106 | $4,255 |
| Interest on investments | 809 | 971 | 318 | 320 |
| Interest on Fed funds sold | 24 | 23 | 11 | 7 |
| Total interest income | 13,301 | 13,626 | 4,435 | 4,582 |
| Interest expense | 2,911 | 3,746 | 951 | 1,183 |
| Net interest income | 10,390 | 9,880 | 3,484 | 3,399 |
| Provision for loan losses | 0 | 880 | 0 | 450 |
| Net interest income after provision | 10,390 | 9,000 | 3,484 | 2,949 |
| Noninterest income | 1,840 | 2,550 | 560 | 1,070 |
| Total operating income | 12,230 | 11,550 | 4,044 | 4,019 |
| Noninterest expense | ||||
| Salaries and benefits | 5,260 | 4,870 | 1,705 | 1,639 |
| Occupancy and equipment | 2,221 | 2,132 | 763 | 707 |
| Other expenses | 2,377 | 1,955 | 882 | 865 |
| Total noninterest expense | 9,858 | 8,957 | 3,350 | 3,211 |
| Income before taxes | 2,372 | 2,593 | 694 | 808 |
| Income tax expense | -6,363 | 3 | -- | (36) |
| Net income | $8,735 | $2,590 | $694 | $844 |
| Basic net income per share | $1.23 | $0.37 | $0.10 | $0.12 |
| Diluted net income per share | $1.23 | $0.37 | $0.10 | $0.12 |
| Average number of shares | ||||
| Basic | 7,074,183 | 7,044,365 | 7,077,878 | 7,057,450 |
| Diluted | 7,074,183 | 7,044,365 | 7,077,878 | 7,057,450 |
| Southcoast Financial Corporation | ||
| SELECTED FINANCIAL DATA | ||
| (dollars in thousands, except earnings per share) | ||
| Three Months Ended | ||
| September 30, 2013 | September 30, 2012 | |
| (Unaudited) | (Unaudited) | |
| INCOME STATEMENT DATA | ||
| Net interest income | $ 3,484 | $ 3,399 |
| Provision for loan losses | -- | 450 |
| Noninterest income | 560 | 1,070 |
| Noninterest expenses | 3,350 | 3,211 |
| Net income | $ 694 | $ 844 |
| PER SHARE DATA | ||
| Net income per share | ||
| Basic | $ 0.10 | $ 0.12 |
| Diluted | $ 0.10 | $ 0.12 |
| BALANCE SHEET DATA | ||
| Total assets | $ 441,203 | $ 441,961 |
| Total deposits | 313,242 | 325,776 |
| Total loans (net) | 321,918 | 316,602 |
| Investment securities | 43,963 | 51,644 |
| Other borrowings | 70,833 | 62,681 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Shareholders' equity | 42,272 | 33,593 |
| Average shares outstanding1 | ||
| Basic | 7,077,878 | 7,057,450 |
| Diluted | 7,077,878 | 7,057,450 |
| Book value per share1 | $5.97 | $4.76 |
| Key ratios | ||
| Return on assets2 | 0.64% | 0.78% |
| Return on equity2 | 7.22% | 10.14% |
| Equity to asset ratio | 9.58% | 7.60% |
| Nonperforming assets to assets3 | 3.83% | 5.08% |
| Reserve to loans | 2.02% | 2.59% |
| Reserve to nonperforming loans4 | 58.99% | 62.01% |
| Net interest margin2 | 3.64% | 3.56% |
| 1 Prior period per share amounts adjusted for 15% stock dividends paid during January 2013 and June 2013. | ||
| 2 Ratios for three months are annualized. | ||
| 3 Includes nonaccruing loans, loans 90 or more days past due still accruing interest, troubled debt restructures, and other real estate owned. | ||
| 4 Includes nonaccruing loans, loans 90 or more days past due still accruing interest, and troubled debt restructures. | ||