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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

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