Southeastern Bank Financial Corp. Reports First Quarter 2015 Earnings and Declares Dividend

AUGUSTA, Ga., April 24, 2015 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $4.2 million for the three months ended March 31, 2015, or $0.63 in diluted earnings per share, compared to $3.8 million, or $0.57 in diluted earnings per share, in the first quarter of 2014, an increase of 10.5 percent.

"We are pleased to report a significant increase in earnings over the year-ago period," said President and Chief Operating Officer Ronald L. Thigpen. "Our net interest income increased based on growth in loans and securities and we experienced an 18 percent increase in mortgage origination volume. Credit costs decreased further as asset quality continued to improve. Our balance sheet grew, as we saw both core loan growth and solid deposit growth. Overall, we continue to perform well reflecting an annualized 0.97 percent return on average assets and an annualized 10.82 percent return on average equity."

Total assets at March 31, 2015, were $1.8 billion, an increase of $70.6 million from December 31, 2014. Loans outstanding at the end of the first quarter were $988.6 million, an increase of $3.9 million from December 31, 2014, and an increase of $48.3 million from March 31, 2014. Total deposits were $1.5 billion at March 31, 2015, an increase of $73.2 million from December 31, 2014, and an increase of $33.9 million from March 31, 2014. Cash and cash equivalents totaled $71.5 million at the end of the first quarter of 2015.

Net interest income for the first quarter of 2015 totaled $13.1 million, a 4.1 percent increase from $12.6 million for the same period in 2014. Noninterest income for the first quarter totaled $4.7 million, an increase from $4.1 million for the same period a year ago, primarily due to significantly higher mortgage origination volume and increased service charges and fees on deposits. Noninterest expense was $11.1 million in the first quarter of 2015, a 9.4 percent increase from a year ago resulting from increased commission expense and higher salary and benefit expense.

The net interest margin was 3.22 percent for the quarter-ended March 31, 2015, compared to 3.20 percent at December 31, 2014, and 3.16 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.97 percent for the first quarter of 2015, an increase from 0.91 percent for the same period a year ago, and annualized return on average shareholder's equity (ROE) was 10.82 percent, a decrease from 11.36 percent from the first quarter of 2014, due to increased capital levels.

Nonperforming assets at March 31, 2015, were 1.11 percent of total assets, compared to 1.26 percent at December 31, 2014, and 1.38 percent at March 31, 2014. Net charge-offs for the first quarter of 2015 totaled 0.28 percent of average loans on an annualized basis, compared to 0.74 percent annualized in the fourth quarter of 2014 and 0.52 percent annualized in the first quarter of 2014. The company held $1.0 million in OREO at March 31, 2015, compared to $1.1 million at December 31, 2014, and $1.3 million at March 31, 2014.

The company's loan-loss provision expense was $547 thousand in the first quarter of 2015, virtually the same as the previous quarter, and a 48.3 percent decrease from $1.1 million in the first quarter a year ago. The allowance for loan losses at March 31, 2015, was $25.4 million, or 2.57 percent of loans outstanding, compared to $25.5 million, or 2.59 percent of loans outstanding, at December 31, 2014, and $26.3 million, or 2.80 percent of loans outstanding, at March 31, 2014.

"We are challenged by this continuing low interest rate environment, but we are encouraged by the increases in mortgage origination volume along with core loan and deposit growth," said Thigpen. "Our balance sheet is as strong as ever and we stand ready to handle increased loan growth as the market continues to improve."

On April 22, 2014, the company's Board of Directors declared a regular quarterly cash dividend of $0.15 per share of common stock payable on May 22, 2015, to shareholders of record as of May 8, 2015. Based on the share price of $28.20 at the close of business on Thursday, April 23, 2015, this dividend represents an annualized yield to shareholders of 2.13 percent.

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 Company'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
(Dollars in thousands, except share data)


Assets
March 31,
2015
(Unaudited)

December 31,
2014
Cash and due from banks $ 51,873 $ 33,286
Interest-bearing deposits in other banks 19,576 2,709
Cash and cash equivalents 71,449 35,995
Available-for-sale securities 675,321 644,465
Loans held for sale 18,271 18,365
Loans 970,307 966,356
Less allowance for loan losses 25,391 25,506
Loans, net 944,916 940,850
Premises and equipment, net 28,020 27,842
Accrued interest receivable 6,311 5,898
Bank-owned life insurance 37,186 36,908
Restricted equity securities 4,276 4,398
Other real estate owned 955 1,107
Deferred tax asset 14,090 15,263
Other assets 2,549 1,690
$ 1,803,344 $ 1,732,781
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 215,567 $ 196,624
Interest-bearing:
NOW accounts 396,569 354,038
Savings 528,849 521,570
Money management accounts 16,528 15,824
Time deposits 379,506 375,808
1,537,019 1,463,864
Securities sold under repurchase agreements 715 10,678
Advances from Federal Home Loan Bank 64,000 64,000
Accrued interest payable and other liabilities 19,033 18,953
Due to broker 1,586 --
Subordinated debentures 20,000 20,000
Total liabilities 1,642,353 1,577,495
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized;
0 shares outstanding in 2015 and 2014, respectively
-- --
Common stock, $3.00 par value; 10,000,000 shares authorized;
6,744,891 and 6,744,891 shares issued in 2015 and 2014,
respectively; 6,744,245 and 6,744,160 shares outstanding
in 2015 and 2014, respectively
20,235 20,235
Additional paid-in capital 63,259 63,096
Retained earnings 75,097 71,902
Treasury stock, at cost; 646 and 731 shares in 2015 and 2014, respectively (17) (18)
Accumulated other comprehensive income, net 2,417 71
Total stockholders' equity 160,991 155,286
$ 1,803,344 $ 1,732,781
SOUTHEASTERN BANK FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income
(Dollars in thousands, except share and per share data)
(Unaudited)
Three Months Ended
March 31,
2015 2014
Interest income:
Loans, including fees $ 11,525 $ 11,280
Investment securities 3,647 3,534
Interest-bearing deposits in other banks 17 15
Total interest income 15,189 14,829
Interest expense:
Deposits 1,460 1,588
Securities sold under repurchase agreements 3 1
Other borrowings 638 668
Total interest expense 2,101 2,257
Net interest income 13,088 12,572
Provision for loan losses 547 1,057
Net interest income after provision for loan losses 12,541 11,515
Noninterest income:
Service charges and fees on deposits 1,744 1,629
Gain on sales of loans 1,554 819
Gain (loss) on sale of fixed assets, net 1 (1)
Investment securities gains, net (includes $57 and $251
accumulated other comprehensive income reclassifications
for unrealized gains (losses) on available-for-sale securities)
57 251
Retail investment income 526 574
Trust service fees 336 323
Earnings from cash surrender value of bank-owned life insurance 278 278
Miscellaneous income 223 218
Total noninterest income 4,719 4,091
Noninterest expense:
Salaries and other personnel expense 6,587 5,766
Occupancy expenses 1,018 944
Other real estate gains, net (66) (35)
Other operating expenses 3,526 3,438
Total noninterest expense 11,065 10,113
Income before income taxes 6,195 5,493
Income tax expense 1,989 1,687
Net income $ 4,206 $ 3,806
Other comprehensive income:
Unrealized loss on derivatives $ (366) $ (355)
Unrealized gain on securities available-for-sale 4,263 8,487
Reclassification adjustment for realized gain on securities, net of OTTI (57) (251)
Tax effect (1,494) (3,066)
Total other comprehensive income 2,346 4,815
Comprehensive income $ 6,552 $ 8,621
Basic net income per share $ 0.63 $ 0.57
Diluted net income per share $ 0.63 $ 0.57
Weighted average common shares outstanding 6,695,011 6,680,634
Weighted average number of common and
common equivalent shares outstanding
6,707,037 6,680,717

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