MT. PLEASANT, S.C., April 10, 2014 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited pretax income of $988,000 and after tax net income of $643,000, or $.09 per basic share, for the quarter ended March 31, 2014. This compares to unaudited pretax income of $1,061,000 and after tax net income of $1,006,000, or $0.14 per basic share, for the quarter ended March 31, 2013. The March 31, 2014 income per share is based on 7,085,818 basic average shares compared to 7,070,375 basic average shares for 2013. The 2014 results include the continued improvement in asset quality, deposit mix and net interest margin.
For the quarter ended March 31, 2014, net interest income totaled $3,630,000, an increase of $197,000 from $3,433,000 for the quarter ended March 31, 2013. The net interest margin increased to 3.81% as of March 31, 2014 from 3.65% as of March 31, 2013.
Noninterest income for 2014 decreased to $488,000 from $589,000 for 2013, primarily due to an $83,000 reduction in mortgage loan and related fees.
Noninterest expense levels increased to $3,130,000 for 2014 from $2,961,000 for 2013. Included in 2013 was the benefit of $288,000 in net gains on sales of other real estate owned compared to only $105,000 in 2014.
Tax expense increased to $345,000 for 2014 from $55,000 for 2013. In the first quarter of 2013, the company was not accruing any Federal income tax due to its deferred tax asset (DTA) valuation allowance. The valuation allowance was reversed later in 2013, requiring tax expense to once again be accrued.
Total assets as of March 31, 2014 were $453.0 million compared to $447.4 million as of December 31, 2013, an increase of 1.26%. Loans, excluding loans held for sale, increased 2.23% to $339.3 million, from $331.9 million as of December 31, 2013. Deposits increased by $15.6 million to $331.5 million at March 31, 2014, from $315.8 million at December 31, 2013. This increase was comprised of an $11.9 million increase in noninterest demand deposits and a $5.5 million increase in time deposits, offset by a $1.8 million decrease in interest bearing nontime deposits. Growth in core deposits is a major strategy incorporated into our 2014 strategic plan.
The Company's ratio of nonperforming assets to total assets was 2.92% as of March 31, 2014, compared to 3.90% as of March 31, 2013. The allowance for loan losses as a percentage of loans was 1.81% as of March 31, 2014, compared to 2.41% as of March 31, 2013. The allowance for loan losses as a percentage of total nonperforming loans totaled 68.61% as of March 31, 2014, compared to 74.88% as of March 31, 2013. The year to year reduction in the allowance for loan losses to total loans was reflective 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 March 31, 2014 remains in excess of regulatory well-capitalized requirements.
"We are proud of the improvements in our Company's performance as they reflect the loyalty of our customers and the dedication of our employees," 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) | ||
| March 31 | December 31 | |
| 2014 | 2013 | |
| (Unaudited) | ||
| Assets | ||
| Cash and cash equivalents | $ 29,280 | $ 28,460 |
| Investments | 42,908 | 43,451 |
| Loans held for sale | 0 | 271 |
| Loans | 339,291 | 331,906 |
| Less: Allowance for loan losses | 6,146 | 6,041 |
| Net loans | 333,145 | 325,865 |
| Fixed assets | 20,950 | 21,150 |
| Other assets | 26,743 | 28,187 |
| Total Assets | $ 453,026 | $ 447,384 |
| Liabilities & Shareholders' Equity | ||
| Deposits: | ||
| Noninterest bearing | $ 52,337 | $ 40,399 |
| Interest bearing nontime | 137,100 | 138,899 |
| Time deposits | 142,024 | 136,530 |
| Total deposits | 331,461 | 315,828 |
| Other borrowings | 63,694 | 73,818 |
| Other liabilities | 4,003 | 4,859 |
| Junior subordinated debentures | 10,310 | 10,310 |
| Total liabilities | 409,468 | 404,815 |
| Shareholders' Equity | ||
| Common Stock | 54,565 | 54,544 |
| Accumulated deficit | (9,294) | (9,937) |
| Accumulated other comprehensive loss | (1,713) | (2,038) |
| Total shareholders' equity | 43,558 | 42,569 |
| Total Liabilities and Shareholders' equity | $ 453,026 | $ 447,384 |
| Book Value Per Share | $ 6.15 | $ 6.01 |
| Southcoast Financial Corporation | ||
| Consolidated Income Statement | ||
| (Dollars in thousands, except share data) | ||
| Quarter Ended | ||
| March 31, | March 31, | |
| 2014 | 2013 | |
| (Unaudited) | (Unaudited) | |
| Interest Income | ||
| Interest and fees on loans | $ 4,235 | $ 4,201 |
| Interest on investments | 301 | 252 |
| Interest on Fed funds sold | 6 | 6 |
| Total interest income | 4,542 | 4,459 |
| Interest expense | 912 | 1,026 |
| Net interest income | 3,630 | 3,433 |
| Provision for loan losses | -- | -- |
| Net interest after provision | 3,630 | 3,433 |
| Noninterest income | 488 | 589 |
| Total noninterest income | 488 | 589 |
| Total operating income | 4,118 | 4,022 |
| Noninterest expense | ||
| Salaries and benefits | 1,759 | 1,679 |
| Occupancy and furniture and equipment | 719 | 753 |
| Other expenses | 652 | 529 |
| Total noninterest expense | 3,130 | 2,961 |
| Income before taxes | 988 | 1,061 |
| Income tax expense | 345 | 55 |
| Net income | $ 643 | $ 1,006 |
| Basic net income per common share | $ 0.09 | $ 0.14 |
| Diluted net income per common share | $ 0.09 | $ 0.14 |
| Average number of common shares | ||
| Basic | 7,085,818 | 7,070,375 |
| Diluted | 7,085,818 | 7,070,375 |
| Southcoast Financial Corporation | ||
| SELECTED FINANCIAL DATA | ||
| (dollars in thousands, except earnings per share) | ||
| Three Months Ended | ||
| March 31, 2014 | March 31, 2013 | |
| (Unaudited) | ||
| INCOME STATEMENT DATA | ||
| Net interest income | $ 3,630 | $ 3,433 |
| Provision for loan losses | -- | -- |
| Noninterest income | 488 | 589 |
| Noninterest expenses | 3,130 | 2,961 |
| Income Tax expense | 345 | 55 |
| Net income | $ 643 | $ 1,006 |
| PER SHARE DATA | ||
| Net income per share | ||
| Basic | $ 0.09 | $ 0.14 |
| Diluted | $ 0.09 | $ 0.14 |
| Average shares outstanding1 | ||
| Basic | 7,085,818 | 7,070,375 |
| Diluted | 7,085,818 | 7,070,375 |
| Key ratios | ||
| Return on assets2 | 0.59% | 0.95% |
| Return on equity2 | 6.06% | 11.74% |
| Nonperforming assets to assets3 | 2.92% | 3.90% |
| Reserve to loans4 | 1.81% | 2.41% |
| Reserve to nonperforming loans | 68.61% | 74.88% |
| Net interest margin2 | 3.81% | 3.65% |
1 Prior period per share amounts adjusted for 15% stock dividend paid during 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.