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
First Quarter 2008 Earnings
AUGUSTA, Ga., April 25, 2008 - 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 $2.6 million for the three
months ended March 31, 2008, compared to $2.8 million in the first quarter of
2007. Diluted earnings per share for the first quarter of 2008 were $0.48,
compared to $0.50 for the same period last year.
"As we expected, it was a difficult operating quarter for most banks, yet we
managed through it and performed well compared to many of our peers," said R.
Daniel Blanton, president and chief executive officer. "Despite the soft
economy, we grew core deposits and loans, continued to expand our noninterest
income at a solid rate, and maintained our overall asset quality.
"The year-over-year decrease in quarterly net income was the result of two
factors," continued Blanton. "First, our decision to increase our loan-loss
provision by $695,000, or 121 percent, from the first quarter of 2007; and
second, the compression of our net interest margin from 3.61 percent in the
first quarter of last year to 3.49 percent for the first quarter of 2008, in
part a consequence of the Fed's interest rate campaign, which has seen the
federal funds rate decrease three percentage points since September 2007."
Total assets at March 31, 2008, were $1.3 billion, an increase of $164.0 million
from a year ago, and $58.6 million from December 31, 2007. Loans outstanding at
the end of the first quarter were $927.0 million, an increase of 19.6 percent
from March 31, 2007, and
5.0 percent from December 31, 2007. Total deposits were $1.0 billion at March
31, 2008, an increase of 16.2 percent from the same period a year ago and 6.7
percent from December 31, 2007.
Net interest income for the first quarter of 2008 was $10.3 million, up 13.4
percent from the same period a year ago. Noninterest income for the quarter was
$3.9 million, an increase of 9.4 percent over the first quarter of 2007.
Noninterest expense was $8.9 million in the first quarter of 2008, an increase
of $1.1 million or 14.8 percent from a year ago, due mainly to costs associated
with the recent opening of the company's two full-service branches in Aiken,
S.C., the loan production office in Greenville, S.C., and the new operations
center in Augusta.
Nonperforming assets at March 31, 2008, were 0.63 percent of total assets,
compared to 0.23 percent at March 31, 2007, and 0.45 percent at December 31,
2007. Net charge-offs for the first quarter of 2008 totaled 0.03 percent of
average loans, compared to 0.01 percent in the first quarter of 2007 and 0.14
percent in the fourth quarter of 2007. The company's allowance for loan losses
was $12.8 million at March, 31, 2008, compared to $11.8 million at year-end
2007.
"Our asset quality continues to compare favorably to our peers; however, like
most community banks, we are not immune to the real estate-related problems in
our markets," said Blanton. "As such, we will continue to monitor our loan
portfolio closely. The good news is that we have been able to absorb the uptick
in nonperforming assets while keeping our charge-offs fairly low."
Return on average assets (ROA) was 0.86 percent for the first quarter of 2008,
and return on average shareholders' equity (ROE) was 11.57 percent.
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.3 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
March 31,
2008 December 31,
Assets (Unaudited) 2007
-------------- ---------------
Cash and due from banks $ 21,261,332 $ 24,557,517
Federal funds sold 8,027,000 -
Interest-bearing deposits in other banks 500,021 500,031
-------------- --------------
Cash and cash equivalents 29,788,353 25,057,548
Investment securities
Available-for-sale 254,658,980 245,428,825
Held-to-maturity, at cost (fair values of
$1,469,992 and $1,467,032, respectively) 1,435,398 1,435,178
Loans held for sale 19,637,777 11,303,098
Loans 907,387,448 871,439,789
Less allowance for loan losses (12,807,996) (11,800,163)
-------------- --------------
Loans, net 894,579,452 859,639,626
Premises and equipment, net 33,180,769 32,612,246
Accrued interest receivable 6,783,282 7,416,257
Bank-owned life insurance 16,824,654 16,660,485
Restricted equity securities 5,814,681 5,059,781
Other assets 8,837,002 8,366,957
-------------- --------------
$1,271,540,348 $1,212,980,001
============== ==============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 112,716,244 $ 101,272,104
Interest-bearing:
NOW accounts 155,827,632 132,185,890
Savings 292,172,204 289,730,991
Money management accounts 80,326,051 73,609,269
Time deposits over $100,000 260,080,160 243,500,864
Other time deposits 114,838,322 111,867,272
-------------- --------------
1,015,960,613 952,166,390
Federal funds purchased and securities sold
under repurchase agreements 62,270,512 81,165,423
Advances from Federal Home Loan Bank 69,000,000 59,000,000
Other borrowed funds 700,000 500,000
Accrued interest payable and other liabilities 11,261,268 10,390,373
Subordinated debentures 20,000,000 20,000,000
-------------- --------------
Total liabilities 1,179,192,393 1,123,222,186
-------------- --------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000 shares
authorized; 5,433,614 and 5,433,614 shares issued in
2008 and 2007, respectively; 5,421,319 and 5,425,182
shares outstanding in 2008 and 2007, respectively 16,300,842 16,300,842
Additional paid-in capital 39,359,355 39,517,286
Retained earnings 36,159,034 34,228,272
Treasury stock, at cost; 12,295 and 8,432 shares in
2008 and 2007, respectively (403,237) (316,800)
Accumulated other comprehensive gain, net 931,961 28,215
-------------- --------------
Total stockholders' equity 92,347,955 89,757,815
-------------- --------------
$1,271,540,348 $1,212,980,001
============== ==============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended
March, 31,
----------- ------------
2008 2007
----------- ------------
Interest income:
Loans, including fees $16,392,754 $15,503,670
Investment securities 3,261,374 2,611,334
Federal funds sold 64,813 366,082
Interest-bearing deposits in other banks 5,822 6,490
----------- ------------
Total interest income 19,724,763 18,487,576
----------- ------------
Interest expense:
Deposits 7,876,557 7,492,193
Federal funds purchased and securities sold
under repurchase agreements 513,977 867,145
Other borrowings 1,069,480 1,074,739
----------- ------------
Total interest expense 9,460,014 9,434,077
----------- ------------
Net interest income 10,264,749 9,053,499
Provision for loan losses 1,271,005 575,798
----------- ------------
Net interest income after provision
for loan losses 8,993,744 8,477,701
----------- ------------
Noninterest income:
Service charges and fees on deposits 1,670,589 1,397,016
Gain on sales of loans 1,259,962 1,284,278
Gain / (loss) on sale of fixed assets 2,999 (51,932)
Investment securities gains, net 37,580 33,191
Retail investment income 288,799 323,239
Trust service fees 285,948 273,536
Increase in cash surrender value of
bank-owned life insurance 164,169 164,802
Miscellaneous income 220,955 167,679
----------- ------------
Total noninterest income 3,931,001 3,591,809
----------- ------------
Noninterest expense:
Salaries and other personnel expense 5,171,110 4,795,507
Occupancy expenses 1,025,349 760,344
Other operating expenses 2,724,112 2,215,003
----------- ------------
Total noninterest expense 8,920,571 7,770,854
----------- ------------
Income before income taxes 4,004,174 4,298,656
Income tax expense 1,369,515 1,539,376
----------- ------------
Net income $ 2,634,659 $ 2,759,280
=========== ============
Basic net income per share $ 0.49 $ 0.51
=========== ============
Diluted net income per share $ 0.48 $ 0.50
=========== ============
Weighted average common shares outstanding 5,417,388 5,433,639
=========== ============
Weighted average number of common and
common equivalent shares outstanding 5,468,606 5,503,845
=========== ============