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Southeastern Bank Financial Corp. Reports Earnings for the First Quarter 2013

AUGUSTA, Ga., April 26, 2013 (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 $3.8 million for the three months ended March 31, 2013, or $0.57 in diluted earnings per share, compared to $3.3 million, or $0.49 in diluted earnings per share, in the first quarter of 2012.

"We began 2013 on a good note, growing net income by 14.4 percent from a year ago," said President and Chief Executive Officer R. Daniel Blanton. "This growth was driven by increases in net interest income and core deposits, a decrease in noninterest expense and a lower loan loss provision resulting from continued improvement in our loan quality. We also expanded our margins and saw modest, though continued growth in loans. Overall, we continued to perform well."

Total assets at March 31, 2013, were $1.7 billion, an increase of $55.6 million from Dec. 31, 2012. Loans outstanding at the end of the first quarter were $905.4 million, an increase of $3.9 million from Dec. 31, 2012, and an increase of $27.5 million from March 31, 2012. Total deposits were $1.5 billion at March 31, 2013, an increase of $45.9 million from Dec. 31, 2012, and an increase of $33.7 million from March 31, 2012. Cash and cash equivalents totaled $87.1 million at the end of the first quarter of 2013.

Net interest income for the first quarter of 2013 totaled $13.2 million, a 4.5 percent increase from $12.6 million for the same period in 2012, resulting from lower cost of funds. Noninterest income for the first quarter totaled $4.8 million, a decline from $5.3 million for the same period a year ago, due to slower mortgage volumes as well as the absence of any gains on the sale of investment securities. Noninterest expense was $10.7 million in the first quarter of 2013, a 2.1 percent decrease from a year ago resulting primarily from lower expenses on other real estate and operating costs.

The net interest margin was 3.40 percent for the quarter ended March 31, 2013, compared to 3.30 percent at Dec. 31, 2012, and 3.34 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.91 percent for the first quarter of 2013, an increase of 10 basis points from the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.13 percent, an increase of 3 basis points from the first quarter of 2012.

Nonperforming assets at March 31, 2013, were 1.80 percent of total assets, compared to 2.08 percent at Dec. 31, 2012, and 2.92 percent at March 31, 2012. Net charge-offs for the first quarter of 2013 totaled 0.77 percent of average loans on an annualized basis, compared to 0.84 percent annualized in the fourth quarter of 2012 and 0.78 percent annualized in the first quarter of 2012. The company held $2.4 million in OREO at March 31, 2013, compared to $3.5 million at December 31, 2012, and $4.9 million at March 31, 2012.

The company's loan-loss provision expense was $1.7 million in the first quarter of 2013, a 10.9 percent increase from $1.6 million in the previous quarter, and a 21.3 percent decrease from $2.2 million in the first quarter a year ago. The allowance for loan losses at March 31, 2013, was $28.9 million, or 3.28 percent of loans outstanding, compared to $28.9 million, or 3.31 percent of loans outstanding, at Dec. 31, 2012, and $29.6 million, or 3.50 percent of loans outstanding, at March 31, 2012.

"The growth in our business has been steady and consistent, as has the improvement in our asset quality," said Blanton. "This has enabled us to maintain a strong balance sheet and remain conservatively positioned. Given the lack-luster loan demand in our local markets, we will continue to follow this approach in 2013."

On April 24, 2013, the company's Board of Directors declared a regular quarterly cash dividend of $0.13 per share of common stock payable on May 17, 2013, to shareholders of record as of May 6, 2013. Based on the share price of $19.50 at the close of business on Thursday, April 25, 2013, this dividend represents an annualized yield to shareholders of 2.67%.

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 provides 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 AND SUBSIDIARY
Consolidated Balance Sheets
March 31,
2013 December 31,
Assets (Unaudited) 2012
Cash and due from banks $ 51,335,557 $ 39,565,757
Interest-bearing deposits in other banks 35,768,734 4,322,317
Cash and cash equivalents 87,104,291 43,888,074
Available-for-sale securities 664,257,445 654,738,964
Loans held for sale 24,071,147 30,051,204
Loans 881,286,115 871,446,844
Less allowance for loan losses 28,931,218 28,846,336
Loans, net 852,354,897 842,600,508
Premises and equipment, net 26,128,781 26,145,378
Accrued interest receivable 7,016,958 6,602,879
Bank-owned life insurance 35,108,122 34,825,588
Restricted equity securities 4,869,600 5,295,600
Other real estate owned 2,380,973 3,489,887
Prepaid FDIC assessment 1,647,949 2,023,977
Deferred tax asset 10,797,848 10,406,187
Other assets 2,398,333 2,434,228
$1,718,136,344 $1,662,502,474
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 171,720,811 $ 158,066,510
Interest-bearing:
NOW accounts 363,408,882 349,531,376
Savings 510,349,236 504,193,793
Money management accounts 18,953,234 18,032,530
Time deposits over $100,000 289,405,062 280,870,648
Other time deposits 113,305,913 110,576,827
1,467,143,138 1,421,271,684
Securities sold under repurchase agreements 777,646 976,433
Advances from Federal Home Loan Bank 64,000,000 64,000,000
Accrued interest payable and other liabilities 25,369,786 18,924,619
Subordinated debentures 21,546,646 21,546,646
Total liabilities 1,578,837,216 1,526,719,382
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2013 and 2012, respectively -- --
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,680,225 and 6,680,225 shares issued in 2013 and 2012, respectively; 6,678,143 and 6,675,000 shares outstanding in 2013 and 2012, respectively 20,040,675 20,040,675
Additional paid-in capital 62,847,497 62,835,122
Retained earnings 48,804,570 45,028,153
Treasury stock, at cost; 2,082 and 5,225 shares in 2013 and 2012, respectively (28,961) (72,680)
Accumulated other comprehensive income, net 7,635,347 7,951,822
Total stockholders' equity 139,299,128 135,783,092
$1,718,136,344 $1,662,502,474
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31,
2013 2012
Interest income:
Loans, including fees $ 11,690,761 $ 11,660,707
Investment securities 3,981,738 4,245,065
Interest-bearing deposits in other banks 16,223 24,902
Total interest income 15,688,722 15,930,674
Interest expense:
Deposits 1,829,483 2,713,644
Securities sold under repurchase agreements 888 1,184
Other borrowings 669,367 596,454
Total interest expense 2,499,738 3,311,282
Net interest income 13,188,984 12,619,392
Provision for loan losses 1,744,743 2,216,012
Net interest income after provision for loan losses 11,444,241 10,403,380
Noninterest income:
Service charges and fees on deposits 1,673,793 1,610,872
Gain on sales of loans 1,839,840 2,019,294
Gain (loss) on sale of fixed assets 5,500 (1,541)
Investment securities gains (losses), net (44,229) 377,000
Other-than-temporary loss
Total impairment loss -- --
Less loss recognized in other comprehensive income -- --
Net impairment loss recognized in earnings -- --
Retail investment income 500,708 522,230
Trust service fees 304,886 288,837
Earnings from cash surrender value of bank-owned life insurance 282,534 260,521
Miscellaneous income 188,655 190,079
Total noninterest income 4,751,687 5,267,292
Noninterest expense:
Salaries and other personnel expense 6,197,409 6,197,413
Occupancy expenses 935,081 1,054,070
Other real estate losses, net 409,729 660,480
Other operating expenses 3,156,545 3,011,279
Total noninterest expense 10,698,764 10,923,242
Income before income taxes 5,497,164 4,747,430
Income tax expense 1,720,747 1,445,404
Net income $ 3,776,417 $ 3,302,026
Comprehensive income $ 3,459,942 $ 3,272,562
Basic net income per share $ 0.57 $ 0.49
Diluted net income per share $ 0.57 $ 0.49
Weighted average common shares outstanding 6,677,409 6,678,484
Weighted average number of common and common equivalent shares outstanding 6,677,409 6,678,484

CONTACT: For More Information: Ronald L. Thigpen Executive Vice President and COO Southeastern Bank Financial Corp. 706-481-1014 Andy Mus Vice President Ketchum Inc. 404-879-9075Source:Southeastern Bank Financial Corp.