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Southeastern Bank Financial Corp. Reports Record Earnings for the Fourth Quarter and Year-End 2015

AUGUSTA, Ga., Jan. 29, 2016 (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 $4.6 million for the three months ended December 31, 2015, or $0.69 in diluted earnings per share, compared to $4.4 million, or $0.66 in diluted earnings per share, in the fourth quarter of 2014. Net income for the full year 2015 totaled $19.4 million, or $2.89 per diluted share, compared to net income of $16.6 million, or $2.49 per diluted share for 2014, an increase in income of 16.6 percent.

“We are pleased to report a quarterly increase in earnings over the year ago period and another consecutive year of record earnings,” said Ronald L. Thigpen, President and Chief Operating Officer. “The Company surpassed $1.8 billion in total assets while continuing to improve net interest income in a historically low interest rate environment.”

Total assets at December 31, 2015, were $1.8 billion, an increase of $107.6 million from December 31, 2014. Total loans outstanding at the end of the fourth quarter were $1.0 billion, an increase of $42.8 million from December 31, 2014. Total deposits were $1.5 billion at December 31, 2015, an increase of $65.2 million from December 31, 2014. Cash and cash equivalents totaled $42.9 million at the end of the fourth quarter of 2015.

Net interest income for the fourth quarter of 2015 totaled $13.7 million, an increase of $302 thousand from the same period in 2014. Noninterest income for the fourth quarter totaled $4.6 million, a decrease from $5.2 million for the same period a year ago, due primarily to lower mortgage origination volume and a net loss on investment securities recorded in the fourth quarter of 2015. Noninterest expense was $11.2 million in the fourth quarter of 2015, a $486 thousand decrease from a year ago resulting primarily from lower salary and benefit expenses.

The net interest margin was 3.14 percent for the quarter ended December 31, 2015, a decrease from 3.18 percent for the third quarter of 2015, and 3.20 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.99 percent for the fourth quarter of 2015, a slight increase from 0.98 percent from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 10.84 percent, compared to 11.46 percent from the fourth quarter of 2014, decreasing primarily as a result of increased capital levels.

Nonperforming assets at December 31, 2015, were 0.97 percent of total assets, compared to 0.77 percent at September 30, 2015, and 1.26 percent at December 31, 2014. Net charge-offs for the fourth quarter of 2015 totaled 0.48 percent of average loans on an annualized basis, compared to 0.56 percent annualized in the third quarter of 2015 and 0.74 percent annualized in the fourth quarter of 2014. The Company held $360 thousand in OREO at December 31, 2015, compared to $1.1 million at December 31, 2014.

The Company's loan-loss provision expense was $383 thousand in the fourth quarter of 2015, an increase from $132 thousand in the third quarter of 2015, and a 30.1 percent decrease from $548 thousand in the fourth quarter a year ago. The allowance for loan losses at December 31, 2015, was $21.4 million, or 2.12 percent of loans outstanding, compared to $25.5 million, or 2.64 percent of loans outstanding, at December 31, 2014.

Net interest income for the twelve months ended December 31, 2015, was $54.3 million, a 4.2 percent increase from $52.1 million in the full year 2014. Noninterest income was $18.7 million for the twelve months ended December 31, 2015, a 1.8 percent decrease from $19.0 million in the same period of 2014, due primarily to losses on investment securities. Noninterest expense was $46.0 million for the full year 2015, compared to $43.5 million in the same period in 2014.

“The Company continues to focus on core loan and deposit growth and on increasing noninterest income by expanding its trust and retail investment operations,” said Thigpen. “We are keeping with our consistent, long term approach to our business and look forward to another year meeting the needs of our customers and the communities we serve.”

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 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, 2015 and 2014
2015
(Unaudited) 2014
Assets (Dollars in thousands, except share data)
Cash and due from banks$ 40,181 33,286
Interest-bearing deposits in other banks 2,736 2,709
Cash and cash equivalents 42,917 35,995
Available-for-sale securities 691,563 644,465
Loans held for sale, at fair value 18,647 18,365
Loans
1,009,149 966,356
Less allowance for loan losses 21,367 25,506
Loans, net 987,782 940,850
Premises and equipment, net 27,398 27,842
Accrued interest receivable 6,331 5,898
Goodwill, net
140 140
Bank-owned life insurance 43,167 36,908
Restricted equity securities 5,169 4,398
Other real estate owned 360 1,107
Deferred tax asset 13,958 15,263
Other assets
2,933 1,550
$ 1,840,365 1,732,781
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing 229,002 196,624
Interest-bearing:
NOW accounts 401,674 354,038
Savings
548,729 521,570
Money management accounts 16,330 15,824
Time deposits 333,345 375,808
1,529,080 1,463,864
Securities sold under repurchase agreements 15,684 10,678
Advances from Federal Home Loan Bank 85,000 64,000
Accrued interest payable and other liabilities 20,688 18,953
Subordinated debentures 20,000 20,000
Total liabilities 1,670,452 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; 6,745,818 and 6,744,891 shares issued in
2015 and 2014, respectively; 6,745,818 and 6,744,160
shares outstanding in 2015 and 2014, respectively 20,237 20,235
Additional paid-in capital 63,637 63,096
Retained earnings 87,250 71,902
Treasury stock, at cost; 0 and 731 shares in
2015 and 2014, respectively (18)
Accumulated other comprehensive (loss) income, net (1,211) 71
Total stockholders’ equity 169,913 155,286
$ 1,840,365 1,732,781


SOUTHEASTERN BANK FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income
Three Months Ended Twelve Months Ended
December 31, December 31,
2015 2014 2015
(Unaudited) (Unaudited) (Unaudited) 2014
(Dollars in thousands, except share data)
Interest income:
Loans, including fees$ 11,750 11,812 47,046 46,444
Investment securities:
Taxable 3,108 3,138 12,236 11,868
Tax-exempt 857 631 3,119 2,571
Interest-bearing deposits in other banks 29 20 83 67
Total interest income 15,744 15,601 62,484 60,950
Interest expense:
Deposits 1,436 1,543 5,790 6,252
Securities sold under repurchase agreements 1 1 12 5
Other borrowings 599 651 2,425 2,629
Total interest expense 2,036 2,195 8,227 8,886
Net interest income 13,708 13,406 54,257 52,064
Provision (Credit) for loan losses 383 548 (1,628) 3,492
Net interest income after provision for loan losses 13,325 12,858 55,885 48,572
Noninterest income:
Service charges and fees on deposits 1,897 1,856 7,315 7,180
Gain on sales of loans 1,276 1,555 6,595 5,465
Gain on sale of fixed assets, net 39 37 36 64
Investment securities (losses) gains, net (38) 333 (1,043) 825
Retail investment income 547 580 2,182 2,188
Trust services fees 360 340 1,408 1,310
Earnings from cash surrender value of bank-owned
life insurance 335 287 1,259 1,163
Miscellaneous income 227 212 936 835
Total noninterest income 4,643 5,200 18,688 19,030
Noninterest expense:
Salaries and other personnel expense 6,416 6,842 26,384 25,047
Occupancy expenses 1,090 1,042 4,178 4,000
Other real estate losses (gains), net 2 (102) 228
Prepayment fees 955
Other operating expenses 3,687 3,793 14,625 14,213
Total noninterest expense 11,193 11,679 46,040 43,488
Income before income taxes 6,775 6,379 28,533 24,114
Income tax expense 2,141 1,979 9,138 7,482
Net income$ 4,634 4,400 19,395 16,632
Other comprehensive income (loss):
Unrealized gain (loss) on derivatives 207 (521) (53) (1,191)
Unrealized (loss) gain on securities available-for-sale (5,095) 4,215 (3,089) 18,664
Reclassification adjustment for realized loss (gain)
on securities, net of OTTI 38 (333) 1,043 (825)
Tax effect 1,887 (1,307) 817 (6,476)
Total other comprehensive income (loss) (2,963) 2,054 (1,282) 10,172
Comprehensive income$ 1,671 6,454 18,113 26,804
Basic net income per share$ 0.69 0.66 2.89 2.49
Diluted net income per share 0.69 0.66 2.89 2.49
Weighted average common shares outstanding 6,703,818 6,681,238 6,701,291 6,681,220
Weighted average number of common and
common equivalent shares outstanding 6,724,872 6,700,113 6,716,369 6,690,423


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

Source:Southeastern Bank Financial Corp.