MT. PLEASANT, S.C., Jan. 17, 2014 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited net income of $9,065,000, or $1.28 per basic share, for the year ended December 31, 2013. This compares to unaudited net income of $3,518,000, or $0.50 per basic share, for the year ended December 31, 2012. The December 31, 2013 income per share is based on 7,076,157 basic average shares compared to 7,044,365 basic average shares for 2012.
The 2013 results included the reversal of the Deferred Tax Asset (DTA) valuation allowance which contributed to a net tax benefit of approximately $6,590,000, or $0.93 per share. The reversal was the result of six quarters of sustained profitability and improving credit quality which indicated an anticipated capacity to utilize the DTA in future periods. The impact of the DTA valuation allowance reversal, coupled with operating earnings, increased the Company's book value to $6.02 per share as of December 31, 2013, compared to $4.86 per share as of December 31, 2012. The 2013 results also reflect decreased levels of nonperforming assets and an improved deposit mix.
For the year ended December 31, 2013, net interest income totaled $13,703,000, an increase of $327,000 from $13,376,000 for the year ended December 31, 2012. The net interest margin increased to 3.63% as of December 31, 2013 from 3.55% as of December 31, 2012.
Noninterest income for 2013 decreased to $2,360,000 from $3,277,000 for 2012, primarily due to $626,000 of securities gains and $192,000 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 $13,188,000 for 2013 from $12,118,000 for 2012. Included in 2012 was the benefit of $1,240,000 in net gains on sales of other real estate owned compared to only $339,000 for 2013.
Total assets as of December 31, 2013 were $447.4 million compared to $438.2 million as of December 31, 2012, an increase of 2.09%. Loans, excluding loans held for sale, increased to $331.9 million, from $327.5 million as of December 31, 2012. Deposits decreased by $3.8 million to $315.8 million at December 31, 2013, from $319.6 million at December 31, 2012. This decrease was comprised of a $29.1 million decrease in time deposits between the two periods, offset by an increase of $25.3 in non-maturity deposit accounts. The growth in these core deposits was a major strategy incorporated in our 2013 strategic plan.
The Company's ratio of nonperforming assets to total assets was 3.47% as of December 31, 2013, compared to 4.87% as of December 31, 2012. The allowance for loan losses as a percentage of loans was 1.82% as of December 31, 2013, compared to 2.49% as of December 31, 2012. The allowance for loan losses as a percentage of total nonperforming loans totaled 58.88% as of December 31, 2013, compared to 71.86% as of December 31, 2012. The year to year reduction in the allowance for loan losses was indicative of improved credit quality in the loan portfolio, most notably due to a significant reduction in criticized and classified loans. The subsidiary bank's capital position as of December 31, 2013 remains in excess of regulatory well-capitalized requirements.
From January 4, 2013 to January 16, 2014, the Company's stock price rose from $3.97 to $5.96. The earlier price has been adjusted for the stock dividend issued in early 2013. During the same period, the stock was included in the Russell 2000 Small Cap Index fund and celebrated its ten year anniversary on the NASDAQ exchange. "We are proud of these accomplishments and they reflect the hard work of our employees during an extremely challenging extended period," said L. Wayne Pearson, Chairman and Chief Executive Officer.
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) | ||
| December 31 | December 31 | |
| 2013 | 2012 | |
| (Unaudited) | ||
| Assets | ||
| Cash and cash equivalents | $28,460 | $21,984 |
| Investments | 43,451 | 48,367 |
| Loans held for sale | 271 | 1,789 |
| Loans | 331,906 | 327,469 |
| Less: Allowance for loan losses | 6,041 | 8,159 |
| Net loans | 325,865 | 319,310 |
| Fixed assets | 21,150 | 21,653 |
| Other assets | 28,187 | 25,118 |
| Total Assets | $447,384 | $438,221 |
| Liabilities & Shareholders' Equity | ||
| Deposits: | ||
| Noninterest bearing | $40,399 | $38,797 |
| Interest bearing nontime | 138,899 | 115,245 |
| Time deposits | 136,530 | 165,590 |
| Total deposits | 315,828 | 319,632 |
| Other borrowings | 73,818 | 69,949 |
| Other liabilities | 4,859 | 4,066 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Total liabilities | 404,815 | 403,957 |
| Shareholders' Equity | ||
| Common Stock | 54,544 | 54,437 |
| Accumulated deficit | (9,937) | (19,002) |
| Accumulated other comprehensive loss | (2,038) | (1,171) |
| Total shareholders' equity | 42,569 | 34,264 |
| Total Liabilities and Shareholders' equity | $447,384 | $438,221 |
| Southcoast Financial Corporation | ||
| Consolidated Income Statements | ||
| (Dollars in thousands, except earnings per share) | ||
| Year Ended | ||
| December 31, | December 31, | |
| 2013 | 2012 | |
| (Unaudited) | ||
| Interest Income | ||
| Interest and fees on loans | $16,425 | $16,947 |
| Interest on investments | 1,106 | 1,260 |
| Interest on Fed funds sold | 30 | 29 |
| Total interest income | 17,561 | 18,236 |
| Interest expense | 3,858 | 4,860 |
| Net interest income | 13,703 | 13,376 |
| Provision for loan losses | 400 | 880 |
| Net interest income after provision | 13,303 | 12,496 |
| Noninterest income | 2,360 | 3,277 |
| Total operating income | 15,663 | 15,773 |
| Noninterest expense | ||
| Salaries and benefits | 7,024 | 6,487 |
| Occupancy and equipment | 2,935 | 2,904 |
| Other expenses | 3,229 | 2,727 |
| Total noninterest expense | 13,188 | 12,118 |
| Income before taxes | 2,475 | 3,655 |
| Income tax expense (benefit) | (6,590) | 137 |
| Net income | $9,065 | $3,518 |
| Basic net income per share | $1.28 | $0.50 |
| Diluted net income per share | $1.28 | $0.50 |
| Average number of shares | ||
| Basic | 7,076,157 | 7,044,365 |
| Diluted | 7,076,157 | 7,044,365 |
| Southcoast Financial Corporation | ||
| SELECTED FINANCIAL DATA | ||
| (dollars in thousands, except earnings per share) | ||
| Year Ended | ||
| December 31, 2013 | December 31, 2012 | |
| (Unaudited) | ||
| INCOME STATEMENT DATA | ||
| Net interest income | $ 13,703 | $ 13,376 |
| Provision for loan losses | 400 | 880 |
| Noninterest income | 2,360 | 3,277 |
| Noninterest expenses | 13,188 | 12,118 |
| Income tax expense (benefit) | (6,590) | 137 |
| Net income | $ 9,065 | $ 3,518 |
| PER SHARE DATA | ||
| Net income per share | ||
| Basic | $ 1.28 | $ 0.50 |
| Diluted | $ 1.28 | $ 0.50 |
| BALANCE SHEET DATA | ||
| Total assets | $ 447,384 | $ 438,221 |
| Total deposits | 315,828 | 319,632 |
| Total loans (net) | 325,865 | 319,310 |
| Investment securities | 43,451 | 48,367 |
| Other borrowings | 73,818 | 69,949 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Shareholders' equity | 42,569 | 34,264 |
| Average shares outstanding1 | ||
| Basic | 7,076,157 | 7,044,365 |
| Diluted | 7,076,157 | 7,044,365 |
| Book value per share1 | $6.01 | $4.86 |
| Key ratios | ||
| Return on assets | 2.09% | 0.81% |
| Return on equity | 23.60% | 10.81% |
| Equity to asset ratio | 9.52% | 7.82% |
| Nonperforming assets2 to assets | 3.47% | 4.87% |
| Reserve to loans | 1.82% | 2.49% |
| Reserve to nonperforming loans3 | 58.88% | 69.56% |
| Net interest margin | 3.63% | 3.55% |
| 1 Prior period per share amounts restated for 15% stock dividend paid during June 2013. | ||
| 2 Includes nonaccruing loans, loans 90 or more days past due still accruing interest, troubled debt restructures, and other real estate owned. | ||
| 3 Includes nonaccruing loans, loans 90 or more days past due still accruing interest, and troubled debt restructures. | ||