AUGUSTA, Ga., Oct. 30, 2009 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T), today reported quarterly net income of $740,000, or $0.11 in diluted earnings per share, for the three months ended Sept. 30, 2009, compared to net income of $1.9 million, or $0.31 in diluted earnings per share, in the third quarter of 2008.
"Overall, it was a relatively positive quarter as we grew income and earnings over the second quarter of 2009," said R. Daniel Blanton, president and chief executive officer. "Our core bank continued to perform well, with gains in net interest income and noninterest income over last year, giving us the ability to increase our provision for loan losses while maintaining positive earnings. Of particular note from the third quarter is the fact that our Aiken, S.C., subsidiary, SB&T, which only began operations three years ago in September, has grown to $165 million in total assets and achieved operating profitability during the quarter. This is a remarkable achievement in this difficult economy."
At Sept. 30, 2009, total assets for the company were $1.5 billion, an increase of $64.8 million, or 4.6 percent, from Dec. 31, 2008.
Loans outstanding at the end of the third quarter of 2009 were $983.9 million, compared to $1.0 billion at Dec. 31, 2008. Total deposits at Sept. 30, 2009, were $1.3 billion, a 10.5 percent increase from $1.1 billion at Dec. 31, 2008. The company strengthened its liquidity position by increasing cash and cash equivalents to $99.5 million, up from $37.8 million at Dec. 31, 2008, an increase of 163.5 percent.
Net interest income for the third quarter of 2009 was $10.8 million, an increase of $1.1 million, or 11.1 percent, from the same period a year ago. Noninterest income for the third quarter increased 8.4 percent to $4.8 million, from $4.4 million in the third quarter of 2008, as a result of solid gains in mortgage income and retail investment income.
Noninterest expense in the third quarter of 2009 increased 9.6 percent to $10.3 million from a year ago, due primarily to costs associated with the significant increase in the FDIC's premium expense and compensation expense associated with the higher levels of mortgage origination.
Nonperforming assets at Sept. 30, 2009, were 3.83 percent of total assets, compared to 3.65 percent at June 30, 2009, and 2.78 percent at Sept. 30, 2008. Net charge-offs for the third quarter of 2009 totaled 0.41 percent of average loans, compared to 0.43 percent in the second quarter of 2009, and 0.31 percent in the third quarter of 2008. The company held $15.6 million in foreclosed property or other real estate owned (OREO) at Sept. 30, 2009, compared to $13.8 million at June 30, 2009, and $377,000 at Sept. 30, 2008.
The provision for loan losses totaled $4.9 million for the third quarter of 2009, an increase of $2.8 million, or 135 percent, from the same period a year ago. This increase resulted in an increase in the allowance for loan losses to $16.8 million, or 1.75 percent of loans outstanding, at Sept. 30, 2009, compared to $14.7 million, or 1.49 percent of loans outstanding, at Dec. 31, 2008.
"We continued to work aggressively to reduce problem assets during the third quarter," said Blanton. "The good news is that our level of non-performing assets remained relatively flat with no further deterioration from the second quarter. That said, we remain cautious given the continued weakness in our real estate markets."
Return on average assets (ROA) was 0.20 percent for the third quarter of 2009, and return on average shareholders' equity (ROE) was 2.84 percent. The company's net interest margin was 3.17 percent, compared to 3.04 percent a year ago and 3.18 percent at June 30, 2009.
For the nine months ended Sept. 30, 2009, the company reported net income of $1.4 million, or $0.23 in diluted earnings per share, compared to net income of $6.9 million, or $1.15 in diluted earnings per share, in the same period a year ago.
Net interest income for the first nine months of 2009 was $31.6 million, up 5.3 percent from $30.0 million in the comparable period in 2008. Noninterest income was $15.3 million for the first nine months of 2009, compared to $12.8 million for the same period in 2008, an increase of 19.1 percent. Noninterest expense for the first three quarters of 2009 totaled $30.9 million, compared to $27.6 million for the comparable period in 2008.
"As we have done for the past several quarters, we will remain focused on the reduction of nonperforming assets, enhancing our core banking operations and controlling expenses," said Blanton. "We believe that we are well-positioned in terms of capitalization, liquidity, and resources to manage credit quality as we continue to operate through a challenging banking environment."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.5 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and offices in Athens, Ga., and Greenville, S.C. SB&T is a federally chartered thrift serving the Aiken County, S.C., market, with three full-service offices. 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 on the OTC Bulletin Board under the symbol SBFC. For more information, please visit 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 SUBSIDIARIES
Consolidated Balance Sheets
September 30,
2009 December 31,
Assets (Unaudited) 2008
-------------- --------------
Cash and due from banks $ 74,171,613 $ 24,859,620
Federal funds sold 7,300,000 9,780,000
Interest-bearing deposits in other
banks 18,045,990 3,128,043
-------------- --------------
Cash and cash equivalents 99,517,603 37,767,663
Investment securities
Available-for-sale 313,461,182 299,339,182
Held-to-maturity, at cost (fair
values of $491,263 and $697,977,
respectively) 490,000 689,128
Loans held for sale 20,834,793 18,955,283
Loans 963,015,687 986,830,706
Less allowance for loan losses (16,825,614) (14,742,339)
-------------- --------------
Loans, net 946,190,073 972,088,367
Premises and equipment, net 32,331,348 33,959,975
Accrued interest receivable 6,368,877 7,085,348
Bank-owned life insurance 23,017,328 17,368,065
Restricted equity securities 6,337,700 6,571,485
Other real estate owned 15,619,335 5,733,775
Other assets 11,636,802 11,480,316
-------------- --------------
$1,475,805,041 $1,411,038,587
============== ==============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 116,424,714 $ 111,291,359
Interest-bearing:
NOW accounts 242,624,437 166,560,715
Savings 331,408,476 247,249,303
Money management accounts 42,846,309 50,404,031
Time deposits over $100,000 373,029,231 385,439,375
Other time deposits 152,415,705 178,607,605
-------------- --------------
1,258,748,872 1,139,552,388
Federal funds purchased and
securities sold under repurchase
agreements 859,646 62,552,922
Advances from Federal Home Loan Bank 77,000,000 84,000,000
Other borrowed funds 600,000 --
Accrued interest payable and other
liabilities 10,162,838 10,282,777
Subordinated debentures 22,946,646 20,000,000
-------------- --------------
Total liabilities 1,370,318,002 1,316,388,087
-------------- --------------
Stockholders' equity:
Common stock, $3.00 par value;
10,000,000 shares authorized;
6,672,118 and 5,987,674 shares
issued in 2009 and 2008,
respectively; 6,672,118 and
5,987,674 shares outstanding in
2009 and 2008, respectively 20,016,354 17,963,022
Preferred stock, no par value;
10,000,000 shares authorized;
0 shares outstanding in 2009 and
2008, respectively -- --
Additional paid-in capital 62,305,618 55,188,533
Retained earnings 22,109,822 21,455,152
Treasury stock, at cost; 0 shares in
2009 and 2008, respectively -- --
Accumulated other comprehensive
income, net 1,055,245 43,793
-------------- --------------
Total stockholders' equity 105,487,039 94,650,500
-------------- --------------
$1,475,805,041 $1,411,038,587
============== ==============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Interest income:
Loans, including
fees $14,217,691 $15,003,069 $42,227,664 $46,483,403
Investment
securities 3,294,625 3,345,109 10,964,112 9,943,439
Federal funds sold 21,904 188,348 62,526 374,903
Interest-bearing
deposits in other
banks 67,734 6,879 89,668 18,419
----------- ----------- ----------- -----------
Total interest
income 17,601,954 18,543,405 53,343,970 56,820,164
----------- ----------- ----------- -----------
Interest expense:
Deposits 5,658,474 7,496,926 18,468,660 22,539,003
Federal funds
purchased and
securities sold
under repurchase
agreements 114,023 295,465 320,259 1,159,693
Other borrowings 1,008,978 1,009,309 2,927,443 3,071,954
----------- ----------- ----------- -----------
Total interest
expense 6,781,475 8,801,700 21,716,362 26,770,650
----------- ----------- ----------- -----------
Net interest
income 10,820,479 9,741,705 31,627,608 30,049,514
Provision for
loan losses 4,878,571 2,073,254 14,741,487 4,996,275
----------- ----------- ----------- -----------
Net interest
income after
provision
for loan losses 5,941,908 7,668,451 16,886,121 25,053,239
----------- ----------- ----------- -----------
Noninterest income:
Service charges
and fees on
deposits 1,846,238 1,955,048 5,224,080 5,445,950
Gain on sales
of loans 1,945,562 1,529,276 6,642,993 4,365,076
(Loss) gain on
sale of fixed
assets (80) (931) (16,229) 6,761
Investment
securities gains,
net 380,512 20,809 1,692,842 88,617
Other-than-
temporary
impairment losses
(less $262,540
and $834,648 for
the three and
nine months ended,
respectively,
recognized in
other
comprehensive
income, before
taxes) (355,925) -- (974,784) --
Retail investment
income 326,434 276,581 853,572 840,915
Trust service fees 267,897 288,332 765,867 872,627
Increase in cash
surrender value
of bank-owned
life insurance 255,628 189,871 649,263 548,261
Miscellaneous
income 142,023 178,460 428,351 651,649
----------- ----------- ----------- -----------
Total
noninterest
income 4,808,289 4,437,446 15,265,955 12,819,856
----------- ----------- ----------- -----------
Noninterest
expense:
Salaries and other
personnel expense 5,469,234 5,201,681 16,927,335 15,755,522
Occupancy expenses 1,213,009 1,122,107 3,494,500 3,152,672
Other operating
expenses 3,581,576 3,040,904 10,484,131 8,641,621
----------- ----------- ----------- -----------
Total noninterest
expense 10,263,819 9,364,692 30,905,966 27,549,815
----------- ----------- ----------- -----------
Income before
income taxes 486,378 2,741,205 1,246,110 10,323,280
Income tax
(benefit) expense (253,376) 865,817 (187,011) 3,405,118
----------- ----------- ----------- -----------
Net income $ 739,754 $ 1,875,388 $ 1,433,121 $ 6,918,162
=========== =========== =========== ===========
Basic net income
per share $ 0.11 $ 0.31 $ 0.23 $ 1.16
=========== =========== =========== ===========
Diluted net income
per share $ 0.11 $ 0.31 $ 0.23 $ 1.15
=========== =========== =========== ===========
Weighted average
common shares
outstanding 6,672,118 5,976,883 6,338,632 5,967,310
=========== =========== =========== ===========
Weighted average
number of common
and common
equivalent shares
outstanding 6,672,388 6,018,584 6,344,275 6,010,367
=========== =========== =========== ===========