AUGUSTA, Ga., Oct. 19, 2007 (PRIME NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta and Southern Bank & Trust, today reported quarterly net income of $3.4 million for the three months ended Sept. 30, 2007, an increase of 14.7 percent from $2.9 million in the third quarter of 2006. Diluted earnings per share for the third quarter of 2007 were $0.61, a 10.9 percent increase from $0.55 for the same period last year.
"We produced quality growth across our banking franchise in the third quarter, from core deposits to loans to fee income," said R. Daniel Blanton, president and chief executive officer. "Our Southern Bank & Trust subsidiary has exceeded our expectations and closed the quarter with more than $75 million in total assets, contributing substantially to our continued strong growth. In August, we opened our second Southern Bank & Trust office, in North Augusta, S.C.
"We are also pleased that our traditionally strong credit culture is holding up well in an environment that is causing asset quality issues at many institutions," said Blanton. "We will continue to take a measured approach to our growth as we look to expand in the future." Nonperforming assets at Sept. 30, 2007, were 0.33 percent of total loans, and net charge-offs for the quarter totaled 0.04 percent of average loans. At December 31, 2006, non performing assets were also 0.33 percent of total loans and net chargeoffs for 2006 were 0.17 percent of average loans.
At Sept. 30, 2007, total assets were $1.2 billion, an increase of $146.7 million, or 14.1 percent, from Dec. 31, 2006. Loans outstanding at the end of the third quarter were $849.4 million, an increase of 13.3 percent from Dec. 31, 2006. Total deposits were $951.2 million, an increase of 18.6 percent for the same period.
Net interest income for the third quarter of 2007 was $9.7 million, up 11.8 percent from the same period a year ago. Noninterest income for the quarter was $4.7 million, an increase of 37.3 percent over the third quarter of 2006, including a one-time gain on the sale of real estate totaling $1.1 million, which was partially offset by a one-time loss on the sale of securities of $278,206. The securities sale involved the sale of lower yielding securities in exchange for higher yielding securities, in an effort to position the company for greater earnings growth in the future.
Noninterest expense totaled $8.3 million in the third quarter of 2007, a 14.9 percent increase from a year ago, reflecting higher operating costs associated with the company's expansion activities, including the opening of a new Southern Bank & Trust banking center, as well as a $250,000 charitable donation made during the quarter to Georgia Bank Foundation.
"Notwithstanding the one-time gain, we generated solid returns in noninterest income in the third quarter, which was driven by several factors," said Blanton. "Deposits in our Augusta and Aiken markets grew faster than projected, resulting in a sizable increase in service charge and fee income. Our mortgage operations have held steady, despite the ongoing turmoil in the housing and credit markets, even gaining slightly from the third quarter of 2006. And our wealth management business continued to expand, as income from retail investment and trust services was up significantly in the third quarter."
Return on average assets (ROA) was 1.16 percent for the third quarter of 2007, and return on average shareholders' equity (ROE) was 15.86 percent.
For the nine months ended Sept. 30, 2007, the company reported net income of $9.1 million, or $1.65 in diluted earnings per share, an increase of 9.3 percent and 5.8 percent, respectively, from the same period a year ago.
Net interest income for the first nine months of 2007 was $28.3 million, up 12.5 percent from $25.1 million in the comparable nine months in 2006. Noninterest income was $12.1 million for the first nine months of 2007, compared to $10.6 million for the same period in 2006, an increase of 14.1 percent. Noninterest expense for the first three quarters of 2007 totaled $23.7 million, compared to $21.7 million for the comparable period in 2006.
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 an office in Athens, Ga. SB&T is a federally chartered thrift serving the Aiken County, S.C., market, with two 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
September 30,
2007 December 31,
Assets (Unaudited) 2006
-------------- --------------
Cash and due from banks $ 26,487,084 $ 25,709,915
Federal funds sold 23,847,000 14,688,000
Interest-bearing deposits in
other banks 500,031 512,690
-------------- --------------
Cash and cash equivalents 50,834,115 40,910,605
Investment securities
Available-for-sale 232,545,144 199,135,716
Held-to-maturity, at cost
(fair values of $1,980,734 and
$3,048,196, respectively) 1,935,227 2,970,619
Loans held for sale 9,562,760 14,857,315
Loans 839,862,823 735,111,615
Less allowance for loan losses (11,804,686) (9,776,779)
-------------- --------------
Loans, net 828,058,137 725,334,836
Premises and equipment, net 28,140,004 23,402,588
Accrued interest receivable 7,424,365 5,982,654
Bank-owned life insurance 16,476,922 15,982,052
Restricted equity securities 5,059,781 4,936,281
Other assets 7,882,950 7,689,596
-------------- --------------
$1,187,919,405 $1,041,202,262
============== ==============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 109,053,029 $ 106,846,160
Interest-bearing:
NOW accounts 136,381,664 119,334,300
Savings 301,562,674 255,065,766
Money management accounts 59,520,051 45,897,176
Time deposits over $100,000 238,930,907 193,860,714
Other time deposits 105,779,924 80,758,973
-------------- --------------
951,228,249 801,763,089
Federal funds purchased and
securities sold under repurchase
agreements 61,953,938 70,019,551
Advances from Federal Home Loan Bank 59,000,000 60,000,000
Other borrowed funds 900,000 1,000,000
Accrued interest payable and other
liabilities 8,224,404 9,495,498
Subordinated debentures 20,000,000 20,000,000
-------------- --------------
Total liabilities 1,101,306,591 962,278,138
-------------- --------------
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; 5,425,982 and
5,432,854 shares outstanding in
2007 and 2006, respectively 16,300,842 16,299,855
Additional paid-in capital 39,376,328 38,989,058
Retained earnings 32,255,461 25,287,006
Treasury stock, at cost; 7,632
and 431 shares in 2007 and 2006,
respectively (289,865) (16,809)
Accumulated other comprehensive
loss, net (1,029,952) (1,634,986)
-------------- --------------
Total stockholders' equity 86,612,814 78,924,124
-------------- --------------
$1,187,919,405 $1,041,202,262
============== ==============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September, 30, September, 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Interest income:
Loans, including
fees $17,138,785 $14,208,614 $49,041,654 $39,038,976
Investment
securities 3,015,836 2,705,083 8,548,646 7,863,464
Federal funds
sold 220,138 195,013 901,723 389,642
Interest-bearing
deposits in
other banks 6,710 5,808 20,180 19,458
----------- ----------- ----------- -----------
Total interest
income 20,381,469 17,114,518 58,512,203 47,311,540
----------- ----------- ----------- -----------
Interest expense:
Deposits 8,688,555 6,479,749 24,345,638 16,945,683
Federal funds
purchased and
securities sold
under repurchase
agreements 829,797 754,106 2,499,627 2,162,860
Other borrowings 1,127,128 1,168,587 3,390,854 3,073,878
----------- ----------- ----------- -----------
Total interest
expense 10,645,480 8,402,442 30,236,119 22,182,421
----------- ----------- ----------- -----------
Net interest
income 9,735,989 8,712,076 28,276,084 25,129,119
Provision for
loan losses 1,001,232 666,913 2,607,419 1,627,041
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 8,734,757 8,045,163 25,668,665 23,502,078
----------- ----------- ----------- -----------
Noninterest
income:
Service charges
and fees on
deposits 1,675,173 1,422,806 4,653,640 4,314,928
Gain on sales
of loans 1,349,880 1,328,907 3,954,535 3,854,244
Gain on sale of
fixed assets 1,094,902 3,210 1,031,764 95,049
Investment
securities
(losses) gains,
net (278,206) (10,000) (245,015) 273,600
Retail
investment
income 296,025 192,363 894,482 576,336
Trust service
fees 271,167 214,294 829,609 605,126
Increase in cash
surrender value
of bank-owned
life insurance 169,133 156,010 494,870 445,253
Miscellaneous
income 168,453 150,682 496,993 447,077
----------- ----------- ----------- -----------
Total
noninterest
income 4,746,527 3,458,272 12,110,878 10,611,613
----------- ----------- ----------- -----------
Noninterest
expense:
Salaries and
other personnel
expense 4,905,273 4,538,449 14,329,031 13,483,469
Occupancy
expenses 845,373 637,723 2,348,159 2,071,624
Other operating
expenses 2,557,612 2,057,702 6,984,774 6,168,196
----------- ----------- ----------- -----------
Total
noninterest
expense 8,308,258 7,233,874 23,661,964 21,723,289
----------- ----------- ----------- -----------
Income before
income taxes 5,173,026 4,269,561 14,117,579 12,390,402
Income tax expense 1,816,746 1,344,532 5,031,078 4,078,994
----------- ----------- ----------- -----------
Net income $ 3,356,280 $ 2,925,029 $ 9,086,501 $ 8,311,408
=========== =========== =========== ===========
Basic net income
per share $ 0.62 $ 0.55 $ 1.67 $ 1.57
=========== =========== =========== ===========
Diluted net
income per share $ 0.61 $ 0.55 $ 1.65 $ 1.56
=========== =========== =========== ===========
Weighted average
common shares
outstanding 5,428,409 5,312,831 5,431,489 5,288,760
=========== =========== =========== ===========
Weighted average
number of common
and common
equivalent shares
outstanding 5,492,967 5,361,440 5,499,414 5,329,051
=========== =========== =========== ===========
Southeastern Bank Financial Corporation
September 2007 Ratios
3rd Quarter YTD 2007
----------- -----------
RETURN ON AVERAGE ASSETS: 1.16% 1.10%
RETURN ON AVERAGE EQUITY: 15.86% 14.77%
NET INTEREST MARGIN: 3.54% 3.58%
CHARGE OFFS / GROSS AVG LOANS 0.04% 0.07%