FOR IMMEDIATE RELEASE
For More Information:
Ronald L. Thigpen John Marsh
Executive Vice President and COO President
Southeastern Bank Financial Corp. Marsh Communications LLC
706-481-1014 770-458-7553
Southeastern Bank Financial Corp. Reports
Record Second Quarter 2006 Earnings
AUGUSTA, Ga., July 21, 2006 - Southeastern Bank Financial Corp. (OTCBB:SBFC),
the holding company for Georgia Bank & Trust Company of Augusta and Southern
Bank & Trust of Aiken, S.C., today reported record quarterly net income of $2.9
million for the three months ended June 30, 2006, an increase of 21.6 percent
from $2.4 million in the second quarter of 2005. Diluted earnings per share for
the second quarter of 2006 were $0.55, a 22.2 percent increase from $0.45 for
the same period last year.
Total assets at June 30, 2006, were $937.9 million, and total deposits were
$729.6 million. This represents an increase of 19.3 percent in assets and 18.4
percent in deposits over June 30, 2005, when total assets and deposits were
$786.3 million and $616.1 million, respectively. Net interest income for the
second quarter of 2006 totaled $8.4 million, a 17.9 percent increase from $7.2
million for the same period of 2005. Second quarter 2006 noninterest income rose
to $3.8 million from $3.2 million a year ago, an increase of 19.4 percent,
reflecting a broad-based increase in service charges and fee income, with
particular strength in retail investment income and trust service fees.
"Robust loan growth across the company helped spur our strong overall
performance in the second quarter," said President and Chief Executive Officer
R. Daniel Blanton. "Both our new Georgia Bank & Trust office in Athens, Ga., and
our new Southern Bank & Trust affiliate in Aiken, S.C., have contributed solidly
to our growth. In addition, our healthy increase in noninterest income is a
testament to our ability to increase fee income to balance continuing margin
pressure in this difficult rate environment."
Asset growth continued at a strong pace during the second quarter. At June 30,
2006, loans outstanding were $658.7 million, reflecting an increase of $106.4
million, or 19.3 percent, compared to the same period last year. Annualized
return on average assets (ROA) was 1.27 percent for the second quarter of 2006,
and annualized return on average shareholder's equity (ROE) was 17.48 percent.
Net income for the six months ended June 30, 2006, totaled $5.4 million, a 20.0
percent increase over the $4.5 million reported in the same period of 2005.
Diluted earnings per share for the six months ended June 30, 2006, were $1.01,
versus $0.84 per share for the same period a year ago, a 20.2 percent increase.
Net interest income for the first six months of 2006 was $16.4 million, up 18.9
percent from the $13.8 million in the first six months of 2005. Noninterest
income was $7.1 million for the first six months of 2006, an increase of 19.9
percent from $5.9 million in the same period of 2005.
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"We're very pleased with the quality of growth we have achieved in the second
quarter and first half of 2006," said Blanton. "Increasing net income, EPS,
loans and deposits at a double-digit rate through the first half of the year
attest to the core strength of our company. With the recent charter approval of
our new South Carolina affiliate, Southern Bank & Trust, we look to continue
delivering quality growth and value to our shareholders as we progress toward
our immediate goal of reaching and exceeding $1 billion in assets."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $938 million-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 eight full-service Augusta-area offices and an office
in Athens, Ga. SB&T is a full-service, federally chartered thrift serving the
Aiken County, S.C., market. 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 expanding our operations into new
geographic areas and dealing with an additional regulatory agency; 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.
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
ASSETS June 30,
2006 December 31,
(Unaudited) 2005
------------- --------------
Cash and due from banks $ 19,572,531 $ 18,792,799
Federal funds sold 8,124,000 2,758,000
Interest-bearing deposits in other banks 512,406 1,012,257
------------- --------------
Cash and cash equivalents 28,208,937 22,563,056
Investment securities
Available-for-sale 202,271,023 197,551,996
Held-to-maturity, at cost (fair values of
$3,352,195 and $3,897,341, respectively) 3,275,847 3,776,040
Loans held for sale 20,101,184 22,146,834
Loans 638,618,458 579,087,791
Less allowance for loan losses (9,304,146) (9,124,801)
------------- --------------
Loans, net 629,314,312 569,962,990
Premises and equipment, net 22,038,107 21,376,183
Accrued interest receivable 4,775,293 4,624,023
Bank-owned life insurance 15,666,519 11,863,276
Restricted equity securities 4,936,281 4,287,481
Other assets 7,345,431 6,125,360
------------- --------------
$937,932,934 $ 864,277,239
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $104,373,028 $ 97,083,931
Interest-bearing:
NOW accounts 114,281,798 100,692,388
Savings 254,044,309 265,131,754
Money management accounts 44,951,173 37,719,408
Time deposits over $100,000 153,375,134 122,009,813
Other time deposits 58,612,194 41,017,555
------------- --------------
729,637,636 663,654,849
Federal funds purchased and securities sold
under repurchase agreements 54,404,190 67,013,416
Advances from Federal Home Loan Bank 60,000,000 52,000,000
Other borrowed funds 400,000 1,000,000
Accrued interest payable and other liabilities 7,225,394 7,025,767
Subordinated debentures 20,000,000 10,000,000
------------- --------------
Total liabilities 871,667,220 800,694,032
------------- --------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000
shares authorized; 5,279,549 and 5,279,241 shares issued
In 2006 and 2005, respectively; 5,279,440 and 5,263,144 shares
outstanding in 2006 and 2005, respectively 15,838,647 15,837,723
Additional paid-in capital 34,311,955 34,138,876
Retained earnings 20,113,703 16,099,414
Treasury stock, at cost 109 and 16,097 shares in
2006 and 2005, respectively (4,033) (233,898)
Accumulated other comprehensive loss, net (3,994,558) (2,258,908)
------------- --------------
Total stockholders' equity 66,265,714 63,583,207
------------- --------------
$937,932,934 $ 864,277,239
============= ==============
See accompanying notes to consolidated financial statements.
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2006 2005 2006 2005
----------- ------------ ----------- ------------
Interest Income:
Loans, including fees $13,018,274 $ 9,271,626 $24,830,362 $17,515,164
Investment securities 2,702,309 1,936,599 5,158,381 3,701,141
Federal funds sold 44,036 95,762 194,629 151,369
Interest-bearing deposits in other banks 5,675 6,766 13,650 9,199
----------- ------------ ----------- ------------
Total interest income 15,770,294 11,310,753 30,197,022 21,376,873
----------- ------------ ----------- ------------
Interest expense:
Deposits 5,547,283 3,244,981 10,465,934 5,890,571
Federal funds purchased and securities sold
under repurchase agreements 724,846 350,430 1,408,754 622,400
Other borrowings 1,058,303 554,263 1,905,291 1,062,090
----------- ------------ ----------- ------------
Total interest expense 7,330,432 4,149,674 13,779,979 7,575,061
----------- ------------ ----------- ------------
Net interest income 8,439,862 7,161,079 16,417,043 13,801,812
Provision for loan losses 456,336 515,269 960,128 986,963
----------- ------------ ----------- ------------
Net interest income after provision
for loan losses 7,983,526 6,645,810 15,456,915 12,814,849
----------- ------------ ----------- ------------
Noninterest income:
Service charges and fees on deposits 1,539,978 1,354,425 2,892,122 2,565,475
Gain on sales of loans 1,270,992 1,298,399 2,525,337 2,340,582
Investment securities gains (losses), net 283,600 (40,051) 283,600 (39,260)
Retail investment income 216,562 121,603 383,973 203,566
Trust service fees 198,367 150,024 390,832 306,936
Increase in cash surrender value of
bank-owned life insurance 149,973 102,157 289,243 184,946
Miscellaneous income 146,770 202,201 296,395 327,303
----------- ------------ ----------- ------------
Total noninterest income 3,806,242 3,188,758 7,061,502 5,889,548
----------- ------------ ----------- ------------
Noninterest expense:
Salaries 3,427,626 3,014,016 6,808,185 5,763,555
Employee benefits 1,077,414 775,925 2,136,835 1,585,369
Occupancy expenses 685,165 682,433 1,433,901 1,355,526
Other operating expenses 2,041,484 1,734,410 4,018,655 3,239,572
----------- ------------ ----------- ------------
Total noninterest expense 7,231,689 6,206,784 14,397,576 11,944,022
----------- ------------ ----------- ------------
Income before income taxes 4,558,079 3,627,784 8,120,841 6,760,375
Income tax expense 1,631,675 1,222,052 2,734,462 2,270,654
----------- ------------ ----------- ------------
Net income $ 2,926,404 $ 2,405,732 $ 5,386,379 $ 4,489,721
(continued)
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Basic net income per share $ 0.55 $ 0.46 $ 1.02 $ 0.85
========== ========== ========== ==========
Diluted net income per share $ 0.55 $ 0.45 $ 1.01 $ 0.84
========== ========== ========== ==========
Weighted average common shares outstanding 5,279,333 5,256,807 5,276,526 5,255,175
========== ========== ========== ==========
Weighted average number of common and
common equivalent shares outstanding 5,331,090 5,343,086 5,329,474 5,337,433
========== ========== ========== ==========
See accompanying notes to consolidated financial statements.
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