AUGUSTA, Ga., Oct. 25, 2013 (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 $4.2 million for the three months ended Sept. 30, 2013, or $0.63 in diluted earnings per share, compared to $3.9 million, or $0.58 in diluted earnings per share, in the third quarter of 2012.
"We achieved another record quarter of earnings driven by solid growth in our core banking operations and effective expense controls," said President and Chief Executive Officer R. Daniel Blanton. "Our performance has been very consistent from quarter to quarter. Our net interest income has continued to rise while our noninterest expenses have declined, leading to steady, healthy margins and growth in our return on assets. Another area of stability has been our asset quality, which continued to improve in the third quarter, enabling us to further reduce our loan loss provision. As expected, our noninterest income declined on a year-over-year basis resulting from a drop-off in demand for mortgage refinancing due to higher interest rates."
Total assets at Sept. 30, 2013, were $1.7 billion, an increase of $28.5 million from Dec. 31, 2012. Loans outstanding at the end of the third quarter were $900.6 million, a slight decrease from Dec. 31, 2012, and an increase of $17.5 million from Sept. 30, 2012. Total deposits were $1.4 billion at Sept. 30, 2013, an increase of $20.4 million from Dec. 31, 2012, and an increase of $5.3 million from Sept. 30, 2012. Cash and cash equivalents totaled $64.9 million at the end of the third quarter of 2013.
Net interest income for the third quarter of 2013 totaled $13.2 million, a slight increase from $13.0 million for the same period in 2012. Noninterest income for the third quarter totaled $4.9 million, a 16.5 percent decrease from $5.8 million for the same period a year ago, resulting from a slowdown in mortgage origination volume. Noninterest expense was $10.2 million in the third quarter of 2013, a 4.4 percent decrease from a year ago, as a result of reduced salary and benefit costs.
The net interest margin was 3.31 percent for the quarter-ended Sept. 30, 2013, compared to 3.36 percent at the end of the second quarter of 2013, and 3.34 percent a year ago. Annualized return on average assets (ROA) was 0.99 percent for the third quarter of 2013, an increase of 6 basis points from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 12.84 percent, an increase of 95 basis points from the third quarter of 2012.
Nonperforming assets at Sept. 30, 2013, were 1.78 percent of total assets, compared to 2.08 percent at June 30, 2013, and 2.03 percent at Sept. 30, 2012. Net charge-offs for the third quarter of 2013 totaled 1.17 percent of average loans on an annualized basis, compared to 1.87 percent annualized in the second quarter of 2013 and 1.34 percent annualized in the third quarter of 2012. The company held $1.2 million in OREO at Sept. 30, 2013, compared to $1.1 million at June 30, 2013, and $4.1 million at Sept. 30, 2012.
The company's loan-loss provision expense was $1.9 million in the third quarter of 2013, compared to $2.4 million in the second quarter of 2013 and $2.4 million in the third quarter a year ago. The allowance for loan losses at Sept. 30, 2013, was $26.6 million, or 2.99 percent of loans outstanding, compared to $27.3 million, or 3.12 percent of loans outstanding, at June 30, 2013, and $29.1 million, or 3.41 percent of loans outstanding, at Sept. 30, 2012.
Net income for the nine months ended Sept. 30, 2013, totaled $12.0 million, compared to net income of $10.5 million from the same period of 2012. Diluted earnings per share for the first nine months of 2013 were $1.79, a 13.3 percent increase from $1.58 per share earned in the same period a year ago.
Net interest income for the first nine months of 2013 was $39.7 million, a 2.9 percent increase from $38.6 million in the first nine months of 2012. Noninterest income was $14.9 million for the first nine months of 2013, a 9.2 percent decrease from $16.4 million in the same period of 2012. Noninterest expense was $31.3 million for the nine-month period ended Sept. 30, 2013, a 6 percent decrease from $33.2 million in the same period in 2012.
"While our profitability has been solid and steady, we expect the increase in mortgage rates to have a negative impact on both re-finance and purchase origination revenue resulting in lower levels for the near future," said Blanton. "As such, we will continue to proceed with both optimism and caution, maintaining a watchful eye for opportunities for growth and managing the risks to our business."
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 | ||
| Consolidated Balance Sheets | ||
| September 30, | ||
| 2013 | December 31, | |
| Assets | (Unaudited) | 2012 |
| Cash and due from banks | $ 62,301,687 | $ 39,565,757 |
| Interest-bearing deposits in other banks | 2,554,290 | 4,322,317 |
| Cash and cash equivalents | 64,855,977 | 43,888,074 |
| Available-for-sale securities | 655,525,261 | 654,738,964 |
| Loans held for sale | 13,816,847 | 30,051,204 |
| Loans | 886,768,902 | 871,446,844 |
| Less allowance for loan losses | 26,558,065 | 28,846,336 |
| Loans, net | 860,210,837 | 842,600,508 |
| Premises and equipment, net | 26,145,132 | 26,145,378 |
| Accrued interest receivable | 6,639,061 | 6,602,879 |
| Bank-owned life insurance | 35,455,058 | 34,825,588 |
| Restricted equity securities | 5,319,600 | 5,295,600 |
| Other real estate owned | 1,154,541 | 3,489,887 |
| Prepaid FDIC assessment | -- | 2,023,977 |
| Deferred tax asset | 18,798,247 | 10,406,187 |
| Other assets | 3,053,149 | 2,434,228 |
| $1,690,973,710 | $1,662,502,474 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 176,502,843 | $ 158,066,510 |
| Interest-bearing: | ||
| NOW accounts | 342,244,341 | 349,531,376 |
| Savings | 524,179,994 | 504,193,793 |
| Money management accounts | 18,755,629 | 18,032,530 |
| Time deposits over $100,000 | 267,180,250 | 280,870,648 |
| Other time deposits | 112,798,796 | 110,576,827 |
| 1,441,661,853 | 1,421,271,684 | |
| Securities sold under repurchase agreements | 697,981 | 976,433 |
| Advances from Federal Home Loan Bank | 74,000,000 | 64,000,000 |
| Accrued interest payable and other liabilities | 17,592,301 | 18,924,619 |
| Due to broker | 3,635,649 | -- |
| Subordinated debentures | 21,546,646 | 21,546,646 |
| Total liabilities | 1,559,134,430 | 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; 6,679,426 and 6,675,000 shares outstanding in 2013 and 2012, respectively | 20,040,675 | 20,040,675 |
| Additional paid-in capital | 62,858,518 | 62,835,122 |
| Retained earnings | 55,272,952 | 45,028,153 |
| Treasury stock, at cost; 799 and 5,225 shares in 2013 and 2012, respectively | (11,114) | (72,680) |
| Accumulated other comprehensive income (loss), net | (6,321,751) | 7,951,822 |
| Total stockholders' equity | 131,839,280 | 135,783,092 |
| $1,690,973,710 | $1,662,502,474 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION | ||||
| Consolidated Statements of Comprehensive Income | ||||
| (Unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Interest income: | ||||
| Loans, including fees | $ 11,668,193 | $ 11,741,990 | $ 35,103,130 | $ 34,960,016 |
| Investment securities | 3,874,708 | 4,134,441 | 11,753,961 | 12,801,516 |
| Interest-bearing deposits in other banks | 13,255 | 15,036 | 50,140 | 61,576 |
| Total interest income | 15,556,156 | 15,891,467 | 46,907,231 | 47,823,108 |
| Interest expense: | ||||
| Deposits | 1,637,737 | 2,227,312 | 5,150,259 | 7,318,465 |
| Securities sold under repurchase agreements | 3,924 | 738 | 5,625 | 9,408 |
| Other borrowings | 684,450 | 683,606 | 2,030,026 | 1,910,598 |
| Total interest expense | 2,326,111 | 2,911,656 | 7,185,910 | 9,238,471 |
| Net interest income | 13,230,045 | 12,979,811 | 39,721,321 | 38,584,637 |
| Provision for loan losses | 1,887,354 | 2,401,386 | 6,046,046 | 6,567,098 |
| Net interest income after provision for loan losses | 11,342,691 | 10,578,425 | 33,675,275 | 32,017,539 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,849,000 | 1,732,609 | 5,316,563 | 5,028,932 |
| Gain on sales of loans | 1,659,195 | 2,948,935 | 5,716,007 | 7,267,387 |
| Gain on sale of fixed assets, net | -- | 4,000 | 21,704 | 10,459 |
| Investment securities gains (losses), net | (162,619) | (36,333) | (191,945) | 441,186 |
| Other-than-temporary loss: | ||||
| Total impairment loss | -- | -- | -- | (13,314) |
| Less loss recognized in other comprehensive income | -- | -- | -- | (4,268) |
| Net impairment loss recognized in earnings | -- | -- | -- | (9,046) |
| Retail investment income | 557,222 | 419,903 | 1,545,062 | 1,446,549 |
| Trust service fees | 300,529 | 279,808 | 889,784 | 857,084 |
| Earnings from cash surrender value of bank-owned life insurance | 326,514 | 304,892 | 896,963 | 830,875 |
| Miscellaneous income | 332,527 | 169,543 | 707,940 | 535,274 |
| Total noninterest income | 4,862,368 | 5,823,357 | 14,902,078 | 16,408,700 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 5,712,535 | 6,603,393 | 18,050,477 | 19,343,362 |
| Occupancy expenses | 940,349 | 1,014,315 | 2,814,485 | 3,111,118 |
| Other real estate losses (gains), net | 10,508 | (96,667) | 627,808 | 1,252,269 |
| Other operating expenses | 3,549,935 | 3,166,798 | 9,769,033 | 9,444,855 |
| Total noninterest expense | 10,213,327 | 10,687,839 | 31,261,803 | 33,151,604 |
| Income before income taxes | 5,991,732 | 5,713,943 | 17,315,550 | 15,274,635 |
| Income tax expense | 1,789,415 | 1,838,467 | 5,334,180 | 4,735,723 |
| Net income | $ 4,202,317 | $ 3,875,476 | $ 11,981,370 | $ 10,538,912 |
| Other comprehensive income (loss): | ||||
| Unrealized gain (loss) on derivatives | 179,133 | 30,034 | 1,304,103 | (327,825) |
| Unrealized gain (loss) on securities available-for-sale | (5,022,623) | 4,467,565 | (24,857,051) | 9,194,471 |
| Reclassification adjustment for realized (gain) loss on securities, net of OTTI | 162,619 | 36,333 | 191,945 | (432,140) |
| Tax effect | 1,820,859 | (1,763,699) | 9,087,430 | (3,281,023) |
| Total other comprehensive income (loss) | (2,860,012) | 2,770,233 | (14,273,573) | 5,153,483 |
| Comprehensive income (loss) | $ 1,342,305 | $ 6,645,709 | $ (2,292,203) | $ 15,692,395 |
| Basic net income per share | $ 0.63 | $ 0.58 | $ 1.79 | $ 1.58 |
| Diluted net income per share | $ 0.63 | $ 0.58 | $ 1.79 | $ 1.58 |
| Weighted average common shares outstanding | 6,679,426 | 6,680,020 | 6,678,555 | 6,679,294 |
| Weighted average number of common and common equivalent shares outstanding | 6,679,426 | 6,680,020 | 6,678,555 | 6,679,294 |