MT. PLEASANT, S.C., July 13, 2007 (PRIME NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited pre-tax income of $2,565,000 and unaudited net income of $1,695,000, or unaudited net income of $.30 per basic share, for the six months ended June 30, 2007. This compares to unaudited pre-tax income of $4,560,000 and unaudited net income of $2,816,000, or unaudited net income of $0.47 per basic share for the six months ended June 30, 2006. The June 30, 2007 earnings per share are based on 5,725,460 basic average shares outstanding compared to 5,997,310 basic average shares outstanding for the six months ended June 30, 2006. This decrease in outstanding shares is the result of a stock repurchase initiative commenced in January 2007. The Company's Board of Directors authorized the repurchase of up to 547,194 shares, or 10% of the Company's outstanding shares as of January 23, 2007. During the first six months of 2007, the Company repurchased 544,465 shares for a total of $11,079,592.
Chairman and Chief Executive Officer, L. Wayne Pearson said, "While we experienced a drop in net income compared to the same period of 2006, we continue to see a positive trend in our branch activity. The decline in net income is due primarily to an expected decrease in non-recurring income from real estate sales. We also experienced increases in occupancy costs to support the growth of our branch network."
For the quarter ending June 30, 2007, pre-tax income was $1,290,000 and net income was $864,000 or net income of $0.15 per share. This compares to pre-tax income of $2,473,000 and net income of $1,479,000, or net income of $0.25 per share, for the quarter ending June 30, 2006. The 2007 earnings per share are based on 5,603,193 basic average shares outstanding compared to 5,998,400 basic average shares outstanding for the quarter ending June 30, 2006.
Total assets as of June 30, 2007 were $487.7 million compared to $481.9 million as of December 31, 2006, an increase of 1.2%. Loans, excluding loans held for sale, increased to $372.3 million, up 1.3% from $367.6 million as of December 31, 2006. Deposits during the same period declined 0.7% to $308.7 million. The decline in deposits is directly related to our decision in the third quarter of 2006 to reduce our wholesale lending operations and our related brokered and wholesale deposit base. As of June 30, 2007, the ratio of non-performing assets to total assets was 0.38% and the allowance for loan losses as a percentage of loans was 1.16%.
The Corporation currently has ten branches. The ninth branch at 1654 Sam Rittenberg Boulevard in West Ashley opened in January 2007. The tenth branch at the intersection of Highway 17N at Park West and South Morgans Point Road in Mt. Pleasant, South Carolina, opened in May 2007. "As our branches continue to mature we should see the bank's core business continue to increase," said Pearson.
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. Southcoast Financial Corporation's common stock is traded on the NASDAQ Global Market under the symbol SOCB.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events. Any or all of our forward-looking statements here or in other publications may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward looking-statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.
Southcoast Financial Corporation
SELECTED FINANCIAL DATA
(dollars in thousands, except earnings per share)
Six Months Ended
June 2007 June 2006
(Unaudited) (Unaudited)
INCOME STATEMENT DATA
Net interest income $7,365 $8,245
Provision for loan losses 0 624
Noninterest income 1,164 2,576
Noninterest expenses 5,964 5,637
Net income 1,695 2,816
PER SHARE DATA(a)
Net income per share
Basic $0.30 $0.47
Diluted $0.30 $0.47
BALANCE SHEET DATA
Total assets $487,704 $514,583
Total deposits 308,652 339,817
Total loans (net) 368,025 386,539
Investment securities 59,785 70,109
Total earning assets 433,116 480,780
Advances from FHLB 75,500 67,000
Junior subordinated debentures 21,655 21,655
Shareholders' equity 68,945 75,884
Average shares outstanding
Basic 5,725,460 5,997,310
Diluted 5,731,162 6,003,125
Key ratios(b)
Return on assets 0.72% 1.19%
Return on equity 4.63% 7.61%
Equity to asset ratio 14.14% 14.75%
Non-performing assets to assets 0.38% 0.43%
Reserve to loans 1.16% 1.23%
Net interest margin 3.44% 3.77%
Employees 118 97
# of accounts 11,516 11,109
# of offices open 10 8
# of offices under construction 0 1
# of office sites purchased 2 1
ATM stand alone 1 1
Year Year Year Year Year
Ended Ended Ended Ended Ended
Dec. 2006 Dec. 2005 Dec. 2004 Dec. 2003 Dec. 2002
INCOME
STATEMENT DATA
Net interest
income $16,145 $13,914 $10,692 $7,858 $5,458
Provision
for loan
losses 723 865 1,146 735 480
Noninterest
income 3,837 2,725 2,700 1,711 1,767
Noninterest
expenses 11,542 9,243 7,966 6,171 4,866
Net income 4,839 4,189 2,982 1,704 1,147
PER SHARE DATA(a)
Net income
per share
Basic $0.81 $0.97 $0.76 $0.69 $0.52
Diluted $0.81 $0.97 $0.75 $0.67 $0.50
BALANCE SHEET
DATA
Total assets $481,856 $476,599 $366,103 $253,217 $181,513
Total
deposits 310,893 311,554 258,153 166,213 132,655
Total loans
(net) 363,247 371,656 293,207 199,732 134,729
Investment
securities 46,460 35,203 24,831 22,049 7,608
Total earning
assets 445,129 440,942 344,482 238,009 168,225
Advances from
FHLB 66,000 67,000 58,000 41,100 23,500
Junior
subordinated
debentures 21,655 21,655 11,345 11,345 11,345
Shareholders'
equity 78,803 73,315 36,571 33,410 12,709
Average
shares
outstanding
Basic 6,007,137 4,335,319 3,945,175 2,471,038 2,223,220
Diluted 6,012,445 4,340,470 4,001,380 2,529,743 2,312,627
Key ratios(b)
Return on
assets 1.00% 1.04% 0.98% 0.79% 0.78%
Return on
equity 6.22% 9.28% 8.56% 10.43% 9.45%
Equity to
asset ratio 16.35% 15.38% 9.99% 13.19% 7.01%
Non-performing
assets to
assets 0.18% 0.11% 0.27% 0.04% 0.06%
Reserve to
loans 1.19% 1.14% 1.15% 1.18% 1.21%
Net interest
margin 3.64% 3.69% 3.78% 3.90% 4.02%
Employees 110 91 77 68 61
# of accounts 10,778 10,728 9,391 7,814 6,899
# of offices
open 8 8 7 5 5
# of offices
under
construction 2 1 0 2 0
# of office
sites
purchased 2 0 2 1 2
ATM stand
alone 1 1 1 0 0
(a) Share and per share data has been adjusted for 10% stock
dividends in 2007, 2006, 2005, 2004, and dividends totaling 15%
in 2003.
(b) Ratios for three months are annualized.
Southcoast Financial Corporation
Consolidated Balance Sheets
June 30 June 30 Dec. 31 Dec. 31 Dec. 31
2007 2006 2006 2005 2004
(Unaudited) (Unaudited) (Audited) (Audited) (Audited)
Assets
Cash and due
from banks $ 8,816 $ 14,149 $ 7,008 $ 14,378 $ 11,853
Federal Funds
sold 1,162 11,682 31,204 16,964 4,236
Investments 59,785 70,109 46,460 35,203 24,831
Loans held
for sale 347 1,665 140 9,275 12,010
Loans 372,340 391,369 367,611 375,926 296,611
Less:
Allowance for
loan losses 4,315 4,830 4,364 4,270 3,404
-------- -------- -------- -------- --------
Net loans 368,025 386,539 363,247 371,656 293,207
Fixed assets 25,653 21,183 25,126 19,898 14,844
Other assets 23,916 9,256 8,671 9,225 5,122
-------- -------- -------- -------- --------
Total Assets $487,704 $514,583 $481,856 $476,599 $366,103
======== ======== ======== ======== ========
Liabilities &
Shareholders'
Equity
Deposits:
Non-interest
bearing $ 36,625 $ 39,923 $ 34,694 $ 38,754 $ 27,955
Interest
bearing 272,027 299,894 276,199 272,800 230,198
-------- -------- -------- -------- --------
Total
deposits 308,652 339,817 310,893 311,554 258,153
Other
borrowings 85,924 74,602 67,841 67,000 58,000
Other
liabilities 2,528 2,625 2,664 3,075 2,034
Junior
subordinated
debentures 21,655 21,655 21,655 21,655 11,345
-------- -------- -------- -------- --------
Total
liabilities 418,759 438,699 403,053 403,284 329,532
Shareholders'
Equity
Common Stock 68,635 75,249 75,316 70,268 34,081
Retained
Earnings and
Accumulated
Other
Comprehensive
Income or
Loss 310 635 3,487 3,047 2,490
-------- -------- -------- -------- --------
Total
shareholders'
equity 68,945 75,884 78,803 73,315 36,571
-------- -------- -------- -------- --------
Total
Liabilities
and
Shareholders'
equity $487,704 $514,583 $481,856 $476,599 $366,103
======== ======== ======== ======== ========
Book Value Per
Share (a) $ 12.59 $ 12.62 $ 13.10 $ 12.23 $ 9.25
Reserve to
Loans Ratio 1.16% 1.23% 1.19% 1.14% 1.15%
(a) Adjusted for a 10% stock dividend in 2007, 2006, and 2005.
Southcoast Financial Corporation
Consolidated Income Statements
(Dollars in thousands, except earnings per share)
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income
Interest and fees
on loans $14,223 $13,752 $7,249 $7,018
Interest on
investments 1,206 1,195 604 755
Interest on Fed
funds sold 297 263 80 158
------ ------ ------ ------
Total interest
income 15,726 15,210 7,933 7,931
Interest expense 8,361 6,965 4,209 3,712
------ ------ ------ ------
Net interest
income 7,365 8,245 3,724 4,219
Provision for loan
losses 0 624 0 305
------ ------ ------ ------
Net interest
income after
provision 7,365 7,621 3,724 3,914
Noninterest income 1,164 2,576 561 1,790
------ ------ ------ ------
Total operating
income 8,529 10,197 4,285 5,704
Noninterest expense
Salaries and
benefits 3,423 3,423 1,695 1,946
Occupancy and
equipment 1,105 892 560 504
Other expenses 1,436 1,322 740 781
------ ------ ------ ------
Total noninterest
expense 5,964 5,637 2,995 3,231
Income before taxes 2,565 4,560 1,290 2,473
Income tax expense 870 1,744 426 994
------ ------ ------ ------
Net income $1,695 $2,816 $864 $1,479
====== ====== ====== ======
Basic net income
per share $0.30 $0.47 $0.15 $0.25
Diluted net income
per share $0.30 $0.47 $0.15 $0.25
Average number
of shares
Basic 5,725,460 5,997,310 5,603,193 5,998,400
Diluted 5,731,162 6,003,125 5,609,052 6,004,231