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 2007 EARNINGS
AUGUSTA, GA., JULY 27, 2007 - 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 $3.0
million for the three months ended June 30, 2007, a slight increase from $2.9
million in the second quarter of 2006. Diluted earnings per share for the second
quarter of 2007 were $0.54, a slight decrease from $0.55 for the same period
last year.
Total assets at June 30, 2007, were $1.1 billion, an increase of $195.4 million,
or 20.8 percent, from a year ago, and $92.1 million, or 8.8 percent, from
December 31, 2006. Loans outstanding at the end of the second quarter were
$809.6 million, and total deposits were $898.1 million, an increase of 8.0
percent and 12.0 percent, respectively, from December 31, 2006.
"We continued to grow our asset base in the second quarter, which is up nearly
nine percent since the beginning of the year," said President and Chief
Executive Officer R. Daniel Blanton. "Contributing to this increase was our
Southern Bank & Trust affiliate in Aiken, S.C., which has grown to $60 million
in assets.
"While earnings in the second quarter were only slightly ahead of a year ago, we
faced a tough comparison with a record second quarter of 2006. Yet, we still
managed to grow income more than six percent year-to-date over 2006, and we also
generated solid growth in net interest income."
Net interest income for the second quarter of 2007 totaled $9.5 million, a 12.4
percent increase from $8.4 million for the same period of 2006. Noninterest
income for the quarter totaled $3.8 million, relatively unchanged from a year
ago. Noninterest expense was $7.6 million, a 5.0
percent increase from a year ago, primarily due to costs related to the growth
of Southern Bank & Trust.
Annualized return on average assets (ROA) was 1.06 percent for the second
quarter of 2007, and annualized return on average shareholder's equity (ROE) was
14.19 percent.
Net income for the six months ended June 30, 2007, totaled $5.7 million, a 6.4
percent increase over the $5.4 million reported in the same period of 2006.
Diluted earnings per share for the first six months of 2007 were $1.04, an
increase of 3.0 percent from $1.01 per share earned in the same period a year
ago.
Net interest income for the first six months of 2007 was $18.5 million, up 12.9
percent from the $16.4 million in the first six months of 2006. Noninterest
income was $7.4 million for the first six months of 2007, an increase of 5.2
percent from $7.1 million in the same period of 2006. Noninterest expense was
$15.4 million for the six month period, compared to $14.4 million in 2006.
"Our allowance for loan losses is up almost $1.4 million since the end of 2006,
due to robust loan growth and some softening in asset quality. Our
non-performing assets increased $1 million since December 31, 2006 even though
net chargeoffs were only $137,000 during the first six months of 2007. We still
compare very favorably to our peer group of banks," said Blanton. "We remain
confident that we can maintain a solid level of credit quality moving forward."
ABOUT SOUTHEASTERN BANK FINANCIAL CORP.
Southeastern Bank Financial Corp. is the $1.1 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, the national
economy, and the ability of borrowers to repay their loans; 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 multiple 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.
###
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
JUNE 30,
2007 DECEMBER 31,
ASSETS (UNAUDITED) 2006
--------------- ---------------
Cash and due from banks $ 25,027,050 $ 25,709,915
Federal funds sold 21,322,000 14,688,000
Interest-bearing deposits in other banks 500,000 512,690
--------------- ---------------
Cash and cash equivalents 46,849,050 40,910,605
Investment securities
Available-for-sale 222,853,031 199,135,716
Held-to-maturity, at cost (fair values of
$1,974,288 and $3,048,196, respectively) 1,935,358 2,970,619
Loans held for sale 11,889,620 14,857,315
Loans 797,706,559 735,111,615
Less allowance for loan losses (11,133,435) (9,776,779)
--------------- ---------------
Loans, net 786,573,124 725,334,836
Premises and equipment, net 25,768,202 23,402,588
Accrued interest receivable 6,661,129 5,982,654
Bank-owned life insurance 16,307,789 15,982,052
Restricted equity securities 4,879,781 4,936,281
Other assets 9,601,218 7,689,596
--------------- ---------------
$1,133,318,302 $1,041,202,262
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 110,247,395 $ 106,846,160
Interest-bearing:
NOW accounts 125,090,049 119,334,300
Savings 295,546,347 255,065,766
Money management accounts 54,700,645 45,897,176
Time deposits over $100,000 216,922,210 193,860,714
Other time deposits 95,604,566 80,758,973
--------------- ---------------
898,111,212 801,763,089
Federal funds purchased and securities sold
under repurchase agreements 69,581,289 70,019,551
Advances from Federal Home Loan Bank 55,000,000 60,000,000
Other borrowed funds 1,000,000 1,000,000
Accrued interest payable and other liabilities 7,782,475 9,495,498
Subordinated debentures 20,000,000 20,000,000
--------------- ---------------
Total liabilities 1,051,474,976 962,278,138
--------------- ---------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000 shares
authorized; 5,433,614 and 5,433,285 shares issued in
2007 and 2006, respectively; 5,431,734 and 5,432,854
shares outstanding in 2007 and 2006, respectively 16,300,842 16,299,855
Additional paid-in capital 39,238,901 38,989,058
Retained earnings 29,604,629 25,287,006
Treasury stock, at cost; 1,880 and 431 shares in
2007 and 2006, respectively (70,830) (16,809)
Accumulated other comprehensive loss, net (3,230,216) (1,634,986)
--------------- ---------------
Total stockholders' equity 81,843,326 78,924,124
--------------- ---------------
$1,133,318,302 $1,041,202,262
=============== ===============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Interest income:
Loans, including fees $16,399,199 $13,018,274 $31,902,869 $24,830,362
Investment securities 2,921,476 2,702,309 5,532,810 5,158,381
Federal funds sold 315,503 44,036 681,585 194,629
Interest-bearing deposits in other banks 6,980 5,675 13,470 13,650
----------- ----------- ----------- -----------
Total interest income 19,643,158 15,770,294 38,130,734 30,197,022
----------- ----------- ----------- -----------
Interest expense:
Deposits 8,164,890 5,547,283 15,657,083 10,465,934
Federal funds purchased and securities sold
under repurchase agreements 802,685 724,846 1,669,830 1,408,754
Other borrowings 1,188,987 1,058,303 2,263,726 1,905,291
----------- ----------- ----------- -----------
Total interest expense 10,156,562 7,330,432 19,590,639 13,779,979
----------- ----------- ----------- -----------
Net interest income 9,486,596 8,439,862 18,540,095 16,417,043
Provision for loan losses 1,030,389 456,336 1,606,187 960,128
----------- ----------- ----------- -----------
Net interest income after provision
for loan losses 8,456,207 7,983,526 16,933,908 15,456,915
----------- ----------- ----------- -----------
Noninterest income:
Service charges and fees on deposits 1,581,451 1,539,978 2,978,467 2,892,122
Gain on sales of loans 1,320,377 1,270,992 2,604,655 2,525,337
Investment securities gains, net - 283,600 33,191 283,600
Retail investment income 275,218 216,562 598,457 383,973
Trust service fees 284,906 198,367 558,442 390,832
Increase in cash surrender value of
bank-owned life insurance 160,935 149,973 325,737 289,243
Miscellaneous income 160,861 146,770 328,540 296,395
----------- ----------- ----------- -----------
Total noninterest income 3,783,748 3,806,242 7,427,489 7,061,502
----------- ----------- ----------- -----------
Noninterest expense:
Salaries and other personnel expense 4,628,251 4,505,040 9,423,758 8,945,020
Occupancy expenses 742,442 685,165 1,502,786 1,433,901
Other operating expenses 2,223,365 2,041,484 4,490,300 4,018,655
----------- ----------- ----------- -----------
Total noninterest expense 7,594,058 7,231,689 15,416,844 14,397,576
----------- ----------- ----------- -----------
Income before income taxes 4,645,897 4,558,079 8,944,553 8,120,841
Income tax expense 1,674,956 1,631,675 3,214,332 2,734,462
----------- ----------- ----------- -----------
Net income $ 2,970,941 $ 2,926,404 $ 5,730,221 $ 5,386,379
=========== =========== =========== ===========
Basic net income per share $ 0.55 $ 0.55 $ 1.05 $ 1.02
=========== =========== =========== ===========
Diluted net income per share $ 0.54 $ 0.55 $ 1.04 $ 1.01
=========== =========== =========== ===========
Weighted average common shares outstanding 5,432,476 5,279,333 5,433,054 5,276,526
=========== =========== =========== ===========
Weighted average number of common and
common equivalent shares outstanding 5,499,666 5,331,632 5,501,470 5,329,007
=========== =========== =========== ===========