AUGUSTA, Ga., Jan. 25, 2008 (PRIME NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta and Southern Bank & Trust, today reported net income of $2.7 million for the three months ended Dec. 31, 2007, compared to $2.8 million in the fourth quarter of 2006. Diluted earnings per share for the fourth quarter of 2007 were $0.49, compared with $0.52 for the same period last year.
At Dec. 31, 2007, total assets were $1.2 billion, an increase of $171.8 million, or 16.5 percent, from Dec. 31, 2006. Loans outstanding at the end of the fourth quarter were $882.7 million, an increase of 17.7 percent from Dec. 31, 2006. Total deposits were $952.2 million, an increase of 18.8 percent over the same period. Increases in both loans and deposits were due, in particular, to the success of the Southern Bank & Trust operations in Aiken, S.C., which grew to $85.9 million in total assets by the end of its first full year in operation.
For all of 2007, the company reported net income of $11.8 million, or $2.14 in diluted earnings per share (EPS), as compared to net income of $11.2 million, or $2.08 in diluted earnings per share for 2006, an increase of 5.4 percent in net income and 3.0 percent in EPS.
"Generating increases in both earnings and income in one of the more difficult banking years in memory is a great accomplishment and a testament to the soundness of our banking philosophy, the strength of our markets and the talent of our people," said R. Daniel Blanton, president and chief executive officer. "While our net income and earnings per share were lower in the fourth quarter on a comparative basis, this was the result of planned higher expenses related to several strategic initiatives that are more fully described below and the increase in the provision for loan loss due to higher levels of classified assets. Most importantly, our credit quality remained sound and continues to compare favorably to our peers, and we ended the year with ample capital reserves."
Nonperforming assets at Dec. 31, 2007, were 0.45 percent of total loans, compared to 0.33 percent at Sept. 30, 2007. Net charge-offs for the fourth quarter totaled 0.14 percent of average loans, compared to 0.04 percent in the third quarter of 2007. The company increased its allowance for loan losses to $11.8 million at Dec. 31, 2007, compared to $9.8 million at year-end 2006, in response to ongoing difficulties in the economy.
Net interest income for the fourth quarter of 2007 was $10.0 million, up 9.9 percent from the same period a year ago. Noninterest income for the quarter was $4.1 million, an increase of 18.3 percent over the fourth quarter of 2006, with the increases being attributable principally to increased income from retail investment and trust services resulting from growth in the company's wealth management division. Mortgage income was flat compared to the fourth quarter of 2006.
Noninterest expense was $8.8 million in the fourth quarter of 2007, an increase of $1.6 million from a year ago and $538,400 from the previous quarter, reflecting costs related to several strategic initiatives aimed at enhancing the long-term growth and operations of the company. This includes construction of a new full-service branch in Evans, Ga., located adjacent to the company's current Augusta markets, which opened in the third quarter of 2007, the opening of two additional branches for Southern Bank & Trust in the Aiken County, S.C. market, as well as a 53,000-sq.-ft. corporate operations center, which opened in October in order to consolidate all company operations into one location. The company also opened a fully staffed loan production office in Greenville, S.C., in the fourth quarter.
For the full year, net interest income was $38.2 million, up 11.8 percent from $34.2 million in 2006. Noninterest income in 2007 was $16.2 million, compared to $14.0 million in 2006, an increase of 15.2 percent. Noninterest expense for the full year totaled $32.5 million, an increase of $3.6 million from $28.9 million in 2006.
Return on average assets (ROA) was 0.88 percent for the fourth quarter of 2007 and 1.04 percent for the full year, and return on average shareholders' equity (ROE) was 12.00 percent for the quarter and 14.03 percent for the year.
"We are managing this company for the long-term," said Blanton. "While we will continue to closely monitor our loan portfolio and maintain a conservative posture regarding current economic conditions, we are nonetheless moving forward with our plans to grow this company. With an experienced management team, successful core banking operations and strong balance sheet, we are well-positioned to succeed in these difficult and volatile economic times."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.2 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and offices in Athens, Ga., and Greenville, S.C. SB&T is a federally chartered thrift serving the Aiken County, S.C., market, with three full-service offices. 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 on the OTC Bulletin Board under the symbol SBFC. For more information, please visit 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 AND SUBSIDIARIES
Consolidated Balance Sheets
December 31,
2007 2006
-------------- --------------
Assets (Unaudited)
Cash and due from banks $ 24,557,517 $ 25,709,915
Federal funds sold -- 14,688,000
Interest-bearing deposits
in other banks 500,031 512,690
-------------- --------------
Cash and cash equivalents 25,057,548 40,910,605
Investment securities
Available-for-sale 245,428,825 199,135,716
Held-to-maturity, at cost (fair
values of $1,467,032 and
$3,048,196, respectively) 1,435,178 2,970,619
Loans held for sale 11,303,098 14,857,315
Loans 871,439,789 735,111,615
Less allowance for loan losses (11,800,163) (9,776,779)
-------------- --------------
Loans, net 859,639,626 725,334,836
Premises and equipment, net 32,612,246 23,402,588
Accrued interest receivable 7,416,257 5,982,654
Bank-owned life insurance 16,660,485 15,982,052
Restricted equity securities 5,059,781 4,936,281
Other assets 8,366,957 7,689,596
-------------- --------------
$1,212,980,001 $1,041,202,262
============== ==============
Liabilities and
Stockholders' Equity
Deposits
Noninterest-bearing $ 101,272,104 $ 106,846,160
Interest-bearing:
NOW accounts 132,185,890 119,334,300
Savings 289,730,991 255,065,766
Money management accounts 73,609,269 45,897,176
Time deposits over $100,000 243,500,864 193,860,714
Other time deposits 111,867,272 80,758,973
-------------- --------------
952,166,390 801,763,089
Federal funds purchased and
securities sold under
repurchase agreements 81,165,423 70,019,551
Advances from Federal Home Loan Bank 59,000,000 60,000,000
Other borrowed funds 500,000 1,000,000
Accrued interest payable and
other liabilities 10,390,373 9,495,498
Subordinated debentures 20,000,000 20,000,000
-------------- --------------
Total liabilities 1,123,222,186 962,278,138
-------------- --------------
Stockholders' equity:
Common stock, $3.00 par value;
10,000,000 shares authorized;
5,433,614 and 5,433,285 shares
issued in 2007 and 2006,
respectively; 5,425,182 and
5,432,854 shares outstanding
in 2007 and 2006, respectively 16,300,842 16,299,855
Additional paid-in capital 39,517,286 38,989,058
Retained earnings 34,228,272 25,287,006
Treasury stock, at cost; 8,432 and
431 shares in 2007 and 2006,
respectively (316,800) (16,809)
Accumulated other comprehensive
income (loss), net 28,215 (1,634,986)
-------------- --------------
Total stockholders' equity 89,757,815 78,924,124
-------------- --------------
$1,212,980,001 $1,041,202,262
============== ==============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Twelve Months Ended
December, 31, December, 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Interest income:
Loans, including
fees $17,177,340 $15,299,290 $66,218,994 $54,338,266
Investment
securities 3,274,139 2,798,831 11,822,785 10,662,295
Federal funds sold 210,439 210,345 1,112,162 599,987
Interest-bearing
deposits in other
banks 6,679 5,819 26,859 25,277
----------- ----------- ----------- -----------
Total interest
income 20,668,597 18,314,285 79,180,800 65,625,825
----------- ----------- ----------- -----------
Interest expense:
Deposits 8,800,990 7,153,424 33,146,628 24,099,107
Federal funds
purchased and
securities sold
under repurchase
agreements 805,176 915,831 3,304,803 3,078,691
Other borrowings 1,089,361 1,170,797 4,480,215 4,244,675
----------- ----------- ----------- -----------
Total interest
expense 10,695,527 9,240,052 40,931,646 31,422,473
----------- ----------- ----------- -----------
Net interest
income 9,973,070 9,074,233 38,249,154 34,203,352
Provision for loan
losses 1,215,666 851,457 3,823,085 2,478,498
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 8,757,404 8,222,776 34,426,069 31,724,854
----------- ----------- ----------- -----------
Noninterest income:
Service charges
and fees on
deposits 1,755,161 1,426,908 6,408,801 5,741,836
Gain on sales of
loans 1,230,781 1,299,510 5,185,316 5,153,754
Gain/(loss) on
sale of fixed
assets 17,057 (48,222) 1,048,821 46,828
Investment securities
gains (losses),
net 8,099 (60,085) (236,916) 213,515
Retail investment
income 372,926 211,951 1,267,408 788,287
Trust service fees 302,022 255,112 1,131,631 860,238
Increase in cash
surrender value of
bank-owned life
insurance 183,562 159,523 678,432 604,776
Miscellaneous
income 187,416 183,720 684,409 630,797
----------- ----------- ----------- -----------
Total noninterest
income 4,057,024 3,428,417 16,167,902 14,040,031
----------- ----------- ----------- -----------
Noninterest expense:
Salaries and other
personnel expense 5,014,477 4,321,912 19,343,508 17,805,381
Occupancy expenses 1,108,808 775,451 3,456,967 2,847,075
Other operating
expenses 2,723,373 2,111,178 9,708,147 8,279,375
----------- ----------- ----------- -----------
Total noninterest
expense 8,846,658 7,208,541 32,508,622 28,931,831
----------- ----------- ----------- -----------
Income before
income taxes 3,967,770 4,442,652 18,085,349 16,833,054
Income tax expense 1,289,648 1,594,388 6,320,726 5,673,382
----------- ----------- ----------- -----------
Net income $ 2,678,122 $ 2,848,264 $11,764,623 $11,159,672
=========== =========== =========== ===========
Basic net income
per share $ 0.49 $ 0.52 $ 2.17 $ 2.09
=========== =========== =========== ===========
Diluted net income
per share $ 0.49 $ 0.52 $ 2.14 $ 2.08
=========== =========== =========== ===========
Weighted average
common shares
outstanding 5,425,427 5,430,704 5,429,961 5,324,558
=========== =========== =========== ===========
Weighted average
number of common
and common equi-
valent shares out-
standing 5,484,756 5,470,701 5,496,389 5,371,656
=========== =========== =========== ===========