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
Double-Digit Growth in Third Quarter 2006 Earnings
Company Reaches $1 Billion in Assets
AUGUSTA, Ga., Oct. 20, 2006 - Southeastern Bank Financial Corp. (OTCBB:SBFC),
the holding company for Georgia Bank & Trust Company of Augusta and Southern
Bank & Trust, today reported quarterly net income of $2.9 million for the three
months ended Sept. 30, 2006, an increase of 12.6 percent from $2.6 million in
the third quarter of 2005. Diluted earnings per share for the third quarter of
2006 were $0.55, a 12.5 percent increase from $0.48 for the same period last
year.
"We reached the $1 billion-asset mark in the third quarter and saw the
continuation of consistent growth in core deposits, loans and fee income," said
R. Daniel Blanton, president and chief executive officer. "This milestone, and
our ongoing growth, are testaments to the success of our responsive,
service-oriented approach to community banking and the progress of the market
expansion strategy on which we embarked last year. They also reflect the ongoing
vitality of our markets and the quality, dedication and commitment of our
employees."
At Sept. 30, 2006, total assets were $1.0 billion, an increase of $155.5
million, or 18.0 percent, from Dec 31, 2005Loans outstanding at the end of the
third quarter were $692.9 million, an increase of 15.2 percent from Dec. 31,
2005. Total deposits were $792.6 million, an increase of 19.4 percent for the
same period.
Net interest income for the third quarter of 2006 was $8.7 million, up 13.6
percent from the same period a year ago. Noninterest income for the quarter was
$3.5 million, an increase of 5.3 percent over the third quarter of 2005.
Noninterest expense was $7.2 million in the third quarter of 2006, an increase
of $785,185 from a year ago, and unchanged from the previous quarter.
Return on average assets (ROA) was 1.20 percent for the third quarter of 2006,
and return on average shareholders' equity (ROE) was 16.97 percent.
"We experienced a surge in deposit growth during the third quarter, which is
especially promising given the challenging and competitive environment among
banks for deposits," said Blanton. "This growth is due in part to the opening of
our Southern Bank & Trust affiliate in Aiken County, S.C. From the first day we
opened our doors the response has been overwhelming. We attribute this to the
strong local ties of the management team and board in Aiken, and to the demand
in the area for a true community-oriented bank that focuses on serving
customers."
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For the nine months ended Sept. 30, 2006, the company reported net income of
$8.3 million, or $1.56 in diluted earnings per share (EPS), an increase of 17.3
percent in net income and 17.3 percent in diluted EPS from the same period a
year ago.
Net interest income for the first nine months of 2006 was $25.1 million, up 17.0
percent from $21.5 million in the comparable nine months in 2005. Noninterest
income was $10.5 million for the first nine months of 2006, compared to $9.2
million in the first nine months of 2005, an increase of 14.7 percent.
Noninterest expense for the first three quarters of 2006 totaled $21.6 million,
compared to $18.4 million for the comparable period in 2005.
"As we move beyond the $1 billion-asset mark, we will continue to focus on
serving our customers, supporting our communities and operating as an
independent, locally-owned banking organization," said Blanton.
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1 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 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 SUBSIDIARIES
Consolidated Balance Sheets
ASSETS September 30,
2006 December 31,
(Unaudited) 2005
--------------- --------------
Cash and due from banks $ 29,874,861 $ 18,792,799
Federal funds sold 27,999,000 2,758,000
Interest-bearing deposits in other banks 512,541 1,012,257
--------------- --------------
Cash and cash equivalents 58,386,402 22,563,056
Investment securities
Available-for-sale 218,491,019 197,551,996
Held-to-maturity, at cost (fair values of
$3,369,014 and $3,897,341, respectively) 3,275,750 3,776,040
Loans held for sale 15,289,290 22,146,834
Loans 677,576,995 579,087,791
Less allowance for loan losses (9,737,666) (9,124,801)
--------------- --------------
Loans, net 667,839,329 569,962,990
Premises and equipment, net 23,274,120 21,376,183
Accrued interest receivable 5,387,374 4,624,023
Bank-owned life insurance 15,822,530 11,863,276
Restricted equity securities 4,936,281 4,287,481
Other assets 7,083,937 6,125,360
--------------- --------------
$1,019,786,032 $ 864,277,239
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 100,582,521 $ 97,083,931
Interest-bearing:
NOW accounts 151,172,700 100,692,388
Savings 256,281,081 265,131,754
Money management accounts 53,968,604 37,719,408
Time deposits over $100,000 165,866,087 122,009,813
Other time deposits 64,727,263 41,017,555
--------------- --------------
792,598,256 663,654,849
Federal funds purchased and securities sold
under repurchase agreements 62,902,781 67,013,416
Advances from Federal Home Loan Bank 60,000,000 52,000,000
Other borrowed funds 1,000,000 1,000,000
Accrued interest payable and other liabilities 7,861,443 7,025,767
Subordinated debentures 20,000,000 10,000,000
--------------- --------------
Total liabilities 944,362,480 800,694,032
--------------- --------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000
shares authorized; 5,416,118 and 5,279,241 shares issued
In 2006 and 2005, respectively; 5,418,118 and 5,263,144 shares
outstanding in 2006 and 2005, respectively 16,248,354 15,837,723
Additional paid-in capital 38,386,164 34,138,876
Retained earnings 22,350,522 16,099,414
Treasury stock, at cost 0 and 16,097 shares in
2006 and 2005, respectively - (233,898)
Accumulated other comprehensive loss, net (1,561,488) (2,258,908)
--------------- --------------
Total stockholders' equity 75,423,552 63,583,207
--------------- --------------
$1,019,786,032 $ 864,277,239
=============== ==============
<FN>
See accompanying notes to consolidated financial statements.
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ----------- ------------
Interest Income:
Loans, including fees $14,208,614 $10,345,667 $39,038,976 $27,860,831
Investment securities 2,705,083 2,001,470 7,863,464 5,702,611
Federal funds sold 195,013 131,878 389,642 283,247
Dividend Income 24,865 -0- 24,865 -0-
Interest-bearing deposits in other banks 5,808 7,400 19,458 16,599
------------ ------------ ----------- ------------
Total interest income 17,139,383 12,486,415 47,336,405 33,863,288
------------ ------------ ----------- ------------
Interest expense:
Deposits 6,479,749 3,746,904 16,945,683 9,637,475
Federal funds purchased and securities sold
under repurchase agreements 754,106 459,035 2,162,860 1,081,435
Other borrowings 1,193,452 609,027 3,098,743 1,671,117
------------ ------------ ----------- ------------
Total interest expense 8,427,307 4,814,966 22,207,286 12,390,027
------------ ------------ ----------- ------------
Net interest income 8,712,076 7,671,449 25,129,119 21,473,261
Provision for loan losses 666,913 589,260 1,627,041 1,576,223
------------ ------------ ----------- ------------
Net interest income after provision
for loan losses 8,045,163 7,082,189 23,502,078 19,897,038
------------ ------------ ----------- ------------
Noninterest income:
Service charges and fees on deposits 1,422,806 1,391,383 4,314,928 3,956,858
Gain on sales of loans 1,328,907 1,520,241 3,854,244 3,860,823
Investment securities (losses) gains, net (10,000) (46,406) 273,600 (85,666)
Retail investment income 192,363 87,030 576,336 290,596
Trust service fees 214,294 163,855 605,126 470,791
Increase in cash surrender value of
bank-owned life insurance 156,010 108,393 445,253 293,339
Miscellaneous income 150,682 57,727 447,077 385,030
------------ ------------ ----------- ------------
Total noninterest income 3,455,062 3,282,223 10,516,564 9,171,771
------------ ------------ ----------- ------------
Noninterest expense:
Salaries 3,576,905 3,236,300 10,385,090 8,999,855
Employee benefits 961,544 768,789 3,098,379 2,354,158
Occupancy expenses 637,723 687,031 2,071,624 2,042,557
Other operating expenses 2,054,492 1,753,359 6,073,147 4,992,931
------------ ------------ ----------- ------------
Total noninterest expense 7,230,664 6,445,479 21,628,240 18,389,501
------------ ------------ ----------- ------------
Income before income taxes 4,269,561 3,918,933 12,390,402 10,679,308
Income tax expense 1,344,532 1,320,336 4,078,994 3,590,990
------------ ------------ ----------- ------------
Net income $ 2,925,029 $ 2,598,597 $ 8,311,408 $ 7,088,318
(continued)
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Basic net income per share $ 0.55 $ 0.49 $ 1.57 $ 1.35
========== ========== ========== ==========
Diluted net income per share $ 0.55 $ 0.48 $ 1.56 $ 1.33
========== ========== ========== ==========
Weighted average common shares outstanding 5,312,831 5,258,713 5,288,760 5,256,367
========== ========== ========== ==========
Weighted average number of common and
common equivalent shares outstanding 5,361,440 5,358,959 5,329,051 5,344,621
========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
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