Southeastern Bank Financial Corp. Reports Record Earnings for the Fourth Quarter and Year-end 2014 and Increase in Dividend


AUGUSTA, Ga., Jan. 30, 2015 (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 $4.4 million for the three months ended Dec. 31, 2014, or $0.66 in diluted earnings per share, compared to $4.4 million, or $0.65 in diluted earnings per share, in the fourth quarter of 2013. For the full year, the company reported record net income of $16.6 million, or $2.49 per diluted share, compared to net income of $16.3 million, or $2.45 per diluted share, for 2013.

"A record fourth quarter finished out another record year that produced both loan and deposit growth. We are pleased to have continued our consistent, solid performance for 2014," said President and Chief Operating Officer Ronald L. Thigpen. "We continued to grow net interest income in a historically low interest rate environment. Our strong performance also reflects further improved asset quality and growth in capital."

Total assets at Dec. 31, 2014, were $1.7 billion, an increase of $43.5 million from Dec. 31, 2013. Loans outstanding at the end of the fourth quarter were $984.7 million, an increase of $68.3 million from Dec. 31, 2013. Total deposits were $1.5 billion at Dec. 31, 2013, an increase of $9.1 million from Dec. 31, 2013. Cash and cash equivalents totaled $36.0 million at the end of the fourth quarter of 2014.

Net interest income for the fourth quarter of 2014 totaled $13.4 million, an increase of $327 thousand from the same period in 2013. Noninterest income for the fourth quarter totaled $5.2 million, a significant increase from $3.6 million for the same period a year ago, due to higher mortgage origination volume and gains on investment securities. Noninterest expense was $11.7 million in the fourth quarter of 2014, a $2.6 million increase from a year ago resulting from higher personnel, occupancy and other operating expenses.

The net interest margin was 3.20 percent for the quarter-ended Dec. 31, 2014, an improvement from 3.16 percent for the third quarter of 2014, and 3.21 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.98 percent for the fourth quarter of 2014, a slight decrease from 1.01% from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.46 percent, compared to 13.02 percent from the fourth quarter of 2013, decreasing primarily from increased capital levels.

Nonperforming assets at Dec. 31, 2014, were 1.26 percent of total assets, compared to 1.09 percent at Sept. 30, 2014, and 1.58 percent at Dec. 31, 2013. Net charge-offs for the fourth quarter of 2014 totaled 0.74 percent of average loans on an annualized basis, compared to 0.43 percent annualized in the third quarter of 2014 and 0.68 percent annualized in the fourth quarter of 2013. The company held $1.1 million in OREO at Dec. 31, 2014, compared to $1.0 million at December 31, 2013.

The company's loan-loss provision expense was $548 thousand in the fourth quarter of 2014, a 37.5 percent decrease from $877 thousand in the third quarter of 2014, and a 60.6 percent decrease from $1.4 million in the fourth quarter a year ago. The allowance for loan losses at Dec. 31, 2014, was $25.5 million, or 2.64 percent of loans outstanding, compared to $26.4 million, or 2.92 percent of loans outstanding, at Dec. 31, 2013.

Net interest income for the 12 months ended Dec. 31, 2014, was $52.1 million, a 1.4 percent decrease from $52.8 million in the full year 2013. Noninterest income was $19.0 million for the 12 months ended Dec. 31, 2014, a 2.9 percent increase from $18.5 million in the same period of 2013, due to increased gain on investment securities, retail investment income and trust income, offsetting a decrease in mortgage income for the year as the bank placed approximately $30.0 million of residential mortgages on its balance sheet. Noninterest expense was $43.5 million for the full year 2014, compared to $40.4 million in the same period in 2013.

"The Company is focused on improving operating efficiency and increasing noninterest income by expanding its trust and retail investment as evidenced by the consolidation and relocation of retail investments late in the year," said Thigpen. "We are keeping with our consistent long term approach to our business and look forward to another year of long term relationships meeting the needs of our customers."

On January 14, 2015, the Board of Directors of Southeastern Bank Financial Corp. declared a regular quarterly cash dividend of $0.15 per share of common stock payable on February 13, 2015, to shareholders of record as of January 30, 2015. This is a $0.02 cents or 15.4 percent increase in the quarterly dividend from the previous rate of $0.13 cents per share. Based on the share price of $27.00 at the close of business on Thursday, January 29, 2015, this dividend represents an annualized yield to shareholders of 2.22%.

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
December 31, 2014 and 2013
  2014 2013
Assets (Dollars in thousands, except share data) 
Cash and due from banks  $ 33,286 36,766   
Interest-bearing deposits in other banks 2,709    10,570   
Cash and cash equivalents 35,995    47,336   
     
Available-for-sale securities 644,465    649,979   
     
Loans held for sale 18,365    10,638   
Loans 966,356    905,713   
Less allowance for loan losses 25,506    26,409   
Loans, net 940,850    879,304   
     
Premises and equipment, net 27,842    27,003   
Accrued interest receivable 5,898    6,221   
Goodwill, net 140    140   
Bank-owned life insurance 36,908    35,745   
Restricted equity securities 4,398    4,870   
Other real estate owned 1,107    1,014   
Deferred tax asset 15,263    21,023   
Other assets 1,550    6,053   
   $ 1,732,781 1,689,326   
Liabilities and Stockholders' Equity    
Deposits:    
Noninterest-bearing 196,624    187,287   
Interest-bearing:    
NOW accounts 354,038    351,799   
Savings 521,570    521,656   
Money management accounts 15,824    16,065   
Time deposits of $100 or more 299,299    293,004   
Other time deposits 76,509    84,992   
  1,463,864    1,454,803   
     
Securities sold under repurchase agreements 10,678    808   
Advances from Federal Home Loan Bank 64,000    64,000   
Accrued interest payable and other liabilities 18,953    16,599   
Subordinated debentures 20,000    21,547   
Total liabilities 1,577,495    1,557,757   
Stockholders' equity:    
Preferred stock, no par value; 10,000,000 shares    
authorized; 0 shares outstanding in 2014    
and 2013, respectively —  — 
Common stock, $3.00 par value; 10,000,000 shares    
authorized; 6,744,891 and 6,680,225 shares issued in    
2014 and 2013, respectively; 6,744,160 and 6,679,982    
shares outstanding in 2014 and 2013, respectively 20,235    20,041   
Additional paid-in capital 63,096    62,863   
Retained earnings 71,902    58,769   
Treasury stock, at cost; 731 and 243 shares in    
2014 and 2013, respectively (18)   (3)  
Accumulated other comprehensive income (loss), net 71    (10,101)  
Total stockholders' equity 155,286    131,569   
   $ 1,732,781 1,689,326   
 
SOUTHEASTERN BANK FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
         
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2014 2013 2014 2013
  (Dollars in thousands, except share data)
Interest income:        
Loans, including fees  $ 11,812  11,376  46,444  46,479
Investment securities:        
Taxable 3,138    3,309    11,868    12,918   
Tax-exempt 631    701    2,571    2,846   
Interest-bearing deposits in other banks 20    21    67    71   
Total interest income 15,601    15,407    60,950    62,314   
Interest expense:        
Deposits 1,543    1,643    6,252    6,794   
Securities sold under repurchase agreements 1    1    5    6   
Other borrowings 651    684    2,629    2,714   
Total interest expense 2,195    2,328    8,886    9,514   
Net interest income 13,406    13,079    52,064    52,800   
Provision for loan losses 548    1,392    3,492    7,438   
Net interest income after provision for loan losses 12,858    11,687    48,572    45,362   
Noninterest income:        
Service charges and fees on deposits 1,856    1,839    7,180    7,155   
Gain on sales of loans 1,555    1,127    5,465    6,843   
Gain on sale of fixed assets, net 37    4    64    26   
Investment securities gains (losses), net 333    (703)   825    (895)  
Retail investment income 580    554    2,188    2,099   
Trust services fees 340    295    1,310    1,185   
Earnings from cash surrender value of bank-owned        
life insurance 287    290    1,163    1,187   
Miscellaneous income 212    189    835    897   
Total noninterest income 5,200    3,595    19,030    18,497   
Noninterest expense:        
Salaries and other personnel expense 6,842    5,028    25,047    23,079   
Occupancy expenses 1,042    907    4,000    3,722   
Other real estate losses, net 2    14    228    642   
Other operating expenses 3,793    3,154    14,213    12,923   
Total noninterest expense 11,679    9,103    43,488    40,366   
Income before income taxes 6,379    6,179    24,114    23,493   
Income tax expense 1,979    1,813    7,482    7,147   
Net income  $ 4,400 4,366 16,632 16,346
Other comprehensive income (loss):        
Unrealized gain (loss) on derivatives (521)   344    (1,191)   1,648   
Unrealized gain (loss) on securities available-for-sale 4,215    (7,233)   18,664    (32,090)  
Reclassification adjustment for realized (gain) loss        
on securities, net of OTTI (333)   703    (825)   895   
Tax effect (1,307)   2,406    (6,476)   11,494   
Total other comprehensive income (loss) 2,054    (3,780)   10,172    (18,053)  
Comprehensive income (loss)  $ 6,454 586    26,804    (1,707)  
         
Basic net income per share $ 0.66 0.65 2.49 2.45
Diluted net income per share 0.66 0.65 2.49 2.45
Weighted average common shares outstanding 6,681,238 6,679,982 6,681,220 6,678,914
Weighted average number of common and
common equivalent shares outstanding
6,700,113 6,679,982 6,690,423 6,678,914

            

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