×

Southeastern Bank Financial Corp. Reports Record Third Quarter Earnings and Declares Quarterly Dividend

AUGUSTA, Ga., Oct. 31, 2014 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta, today reported record quarterly net income of $4.4 million for the three months ended Sept. 30, 2014, or $0.65 in diluted earnings per share, compared to $4.2 million, or $0.63 in diluted earnings per share, in the third quarter of 2013.

"We are pleased to report record earnings for the quarter driven by growth in loans, deposits and noninterest income," said President and Chief Operating Officer Ronald L. Thigpen. "Our performance continues to be very consistent from quarter to quarter. We, as well as the rest of the industry, continue to be challenged by the current low interest rate environment and its impact on the net interest margin. Our return on assets of 0.99 percent and return on equity of 11.74 percent continue to reflect excellent performance for a bank our size."

Total assets at Sept. 30, 2014, were $1.8 billion, an increase of $63.4 million from Dec. 31, 2013. Loans outstanding at the end of the third quarter were $978.6 million, an increase of $62.3 million or 6.8 percent from Dec. 31, 2013, and an increase of $78.1 million from Sept. 30, 2013. Total deposits were $1.5 billion at Sept. 30, 2014, an increase of $45.1 million from Dec. 31, 2013, and an increase of $58.3 million from Sept. 30, 2013. Cash and cash equivalents totaled $45.0 million at the end of the third quarter of 2014.

Net interest income for the third quarter of 2014 totaled $13.1 million, a slight decrease from $13.2 million for the same period in 2013. Noninterest income for the third quarter totaled $5.2 million, a 7.3 percent increase from $4.9 million for the same period a year ago. Noninterest expense was $11.1 million in the third quarter of 2014, an 8.2 percent increase from a year ago, as a result of increased salary and benefit costs.

The net interest margin was 3.16 percent for the quarter-ended Sept. 30, 2014, compared to 3.18 percent at the end of the second quarter of 2014, and 3.31 percent for the same quarter a year ago. Annualized return on average assets (ROA) was 0.99 percent for the third quarter of 2014, maintaining the level from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.74 percent, a decrease from 12.84 percent in the third quarter of 2013.

Nonperforming assets at Sept. 30, 2014, were 1.09 percent of total assets, compared to 1.58 percent at Dec. 31, 2013, 1.28 percent at June 30, 2014 and 1.78 percent at Sept. 30, 2013. Net charge-offs for the third quarter of 2014 totaled 0.43 percent of average loans on an annualized basis, compared to 0.68 percent annualized at Dec. 31, 2013, 0.18 percent annualized in the second quarter of 2014 and 1.17 percent annualized in the third quarter of 2013. The company held $1.4 million in OREO at Sept. 30, 2014, compared to $1.0 million at Dec. 31, 2013, $1.5 million at June 30, 2014 and $1.2 million at Sept. 30, 2013.

The company's loan-loss provision expense was $876 thousand in the third quarter of 2014, compared to $1.0 million in the second quarter of 2014 and $1.9 million in the third quarter a year ago. The loan-loss provision for the first nine months of 2014 was $2.9 million, a 51.3 percent decrease from the loan-loss provision of $6.0 million for the same period in 2013. The allowance for loan losses at Sept. 30, 2014, was $26.7 million, or 2.79 percent of loans outstanding, compared to $26.9 million, or 2.80 percent of loans outstanding, at June 30, 2014, and $26.6 million, or 2.99 percent of loans outstanding, at Sept. 30, 2013.

Net income for the nine months ended Sept. 30, 2014, totaled $12.2 million, compared to net income of $12.0 million from the same period of 2013. Diluted earnings per share for the first nine months of 2014 were $1.83, a 2.2 percent increase from $1.79 per share earned in the same period a year ago.

Net interest income for the first nine months of 2014 was $38.7 million, a 2.7 percent decrease from $39.7 million in the first nine months of 2013. Noninterest income was $13.8 million for the first nine months of 2014, a 7.2 percent decrease from $14.9 million in the same period of 2013. Noninterest expense was $31.8 million for the nine-month period ended Sept. 30, 2014, a 1.7 percent increase from $31.3 million in the same period in 2013.

"We are optimistic about growth opportunities in the local economy. With our excellent and steady profitability, we will continue to focus on increases in loan growth and noninterest income," said Thigpen.

On October 15, 2014, the company's Board of Directors declared a regular quarterly cash dividend of $0.13 per share of common stock payable on November 21, 2014, to shareholders of record as of November 7, 2014. Based on the share price of $25.75 at the close of business on Thursday, October 30, 2014, this dividend represents an annualized yield to shareholders of 2.02 percent.

Also, On October 15, 2014, the company's Board of Directors announced a Stock Repurchase Program, pursuant to which it will, from time to time, repurchase up to 300,000 shares of its outstanding common stock in the open market or in private transactions. This program replaces the company's prior Stock Repurchase Program which commenced in 2004 and authorized the repurchase of up to 100,000 shares of common stock.

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.8 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, acquisitions and capital; 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
(Dollars in thousands, except share data)
September 30,
2014 December 31,
Assets (Unaudited) 2013
Cash and due from banks $ 41,662 $ 36,766
Interest-bearing deposits in other banks 3,314 10,570
Cash and cash equivalents 44,976 47,336
Available-for-sale securities 660,983 649,979
Loans held for sale 21,321 10,638
Loans 957,317 905,713
Less allowance for loan losses 26,734 26,409
Loans, net 930,583 879,304
Premises and equipment, net 27,233 27,003
Accrued interest receivable 6,165 6,221
Bank-owned life insurance 36,621 35,745
Restricted equity securities 4,398 4,870
Other real estate owned 1,384 1,014
Deferred tax asset 16,496 21,023
Other assets 2,600 6,193
$ 1,752,760 $ 1,689,326
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 200,329 $ 187,287
Interest-bearing:
NOW accounts 377,712 351,799
Savings 521,367 521,656
Money management accounts 20,351 16,065
Time deposits of $100,000 or more 301,335 293,004
Other time deposits 78,837 84,992
1,499,931 1,454,803
Securities sold under repurchase agreements 565 808
Advances from Federal Home Loan Bank 64,000 64,000
Accrued interest payable and other liabilities 17,154 16,599
Due to broker 1,527 --
Subordinated debentures 20,000 21,547
Total liabilities 1,603,177 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;
6,743,755 and 6,679,982 shares outstanding in 2014 and 2013, respectively
20,235 20,041
Additional paid-in capital 62,980 62,863
Retained earnings 68,379 58,769
Treasury stock, at cost; 1,136 and 243 shares in 2014 and 2013, respectively (28) (3)
Accumulated other comprehensive loss, net (1,983) (10,101)
Total stockholders' equity 149,583 131,569
$ 1,752,760 $ 1,689,326
SOUTHEASTERN BANK FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Interest income:
Loans, including fees $ 11,711 $ 11,668 $ 34,632 $ 35,103
Investment securities 3,518 3,875 10,670 11,754
Interest-bearing deposits in other banks 14 13 47 50
Total interest income 15,243 15,556 45,349 46,907
Interest expense:
Deposits 1,535 1,637 4,709 5,150
Securities sold under repurchase agreements 1 4 4 6
Other borrowings 651 685 1,978 2,030
Total interest expense 2,187 2,326 6,691 7,186
Net interest income 13,056 13,230 38,658 39,721
Provision for loan losses 876 1,887 2,944 6,046
Net interest income after provision for loan losses 12,180 11,343 35,714 33,675
Noninterest income:
Service charges and fees on deposits 1,903 1,849 5,324 5,317
Gain on sales of loans 1,718 1,659 3,910 5,716
Gain on sale of fixed assets, net 15 -- 27 21
Investment securities gains (losses), net 215 (163) 492 (192)
Retail investment income 520 557 1,608 1,545
Trust service fees 328 301 970 890
Earnings from cash surrender value of bank-owned life insurance 317 326 876 897
Miscellaneous income 200 333 623 708
Total noninterest income 5,216 4,862 13,830 14,902
Noninterest expense:
Salaries and other personnel expense 6,291 5,713 18,205 18,051
Occupancy expenses 1,027 940 2,958 2,814
Other real estate losses, net 239 11 226 628
Other operating expenses 3,498 3,550 10,420 9,769
Total noninterest expense 11,055 10,214 31,809 31,262
Income before income taxes 6,341 5,991 17,735 17,315
Income tax expense 1,959 1,789 5,503 5,334
Net income $ 4,382 $ 4,202 $ 12,232 $ 11,981
Other comprehensive income (loss):
Unrealized gain (loss) on derivatives (27) 179 (670) 1,304
Unrealized gain (loss) on securities available-for-sale (849) (5,023) 14,449 (24,857)
Reclassification adjustment for realized (gain) loss on securities, net of OTTI (215) 163 (492) 192
Tax effect 424 1,821 (5,169) 9,088
Total other comprehensive income (loss) (667) (2,860) 8,118 (14,273)
Comprehensive income (loss) $ 3,715 $ 1,342 $ 20,350 $ (2,292)
Basic net income per share $ 0.66 $ 0.63 $ 1.83 $ 1.79
Diluted net income per share $ 0.65 $ 0.63 $ 1.83 $ 1.79
Weighted average common shares outstanding 6,681,743 6,679,426 6,681,214 6,678,555
Weighted average number of common and common equivalent shares outstanding 6,694,528 6,679,426 6,687,056 6,678,555

CONTACT: Ronald L. Thigpen President and COO Southeastern Bank Financial Corp. 706-481-1014Source:Southeastern Bank Financial Corp.