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
PROFIT IN FIRST QUARTER 2009
Board Suspends Quarterly Dividends
AUGUSTA, GA., APRIL 24, 2009 - 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 $685,759,
or $0.11 in diluted earnings per share, for the three months ended March 31,
2009, compared to $2.6 million, or $0.44 in diluted earnings per share, in the
first quarter of 2008, and $660,139, or $0.11 in diluted earnings per share, in
the fourth quarter of 2008.
"Our net income in the first quarter showed slight improvement over the fourth
quarter of 2008, which is a notable achievement in this difficult market and low
interest rate environment," said R. Daniel Blanton, president and chief
executive officer. "Our core banking operations performed well, which, along
with gains we made on the sale of investments during the quarter, enabled us to
continue to further build our loan loss reserves. We believe this is appropriate
given the current market environment, even though the resulting increase in
loan-loss provision expense reduced our income and earnings compared to last
year."
The company's loan loss provision was $4.7 million in the first quarter of 2009.
This compares to $1.3 million in the first quarter of 2008, and $4.1 million in
the fourth quarter of 2008. The increase in loan loss provisions resulted in a
rise in the allowance for loan losses to $15.2 million, or 1.52 percent of loans
outstanding. This compares to $12.8 million or 1.38 percent of loans outstanding
at March 31, 2008, and $14.7 million or 1.47 percent of loans outstanding at
Dec. 31, 2008.
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Nonperforming assets at March 31, 2009, were 3.56 percent of total assets,
compared to 0.63 percent at March 31, 2008, and 3.39 percent at Dec. 31, 2008.
Net charge-offs for the first quarter of 2009 totaled 0.43 percent of average
loans, compared to 0.03 percent in the first quarter of 2008 and 0.30 percent in
the fourth quarter of 2008. The company held $7.0 million in other real estate
owned (OREO) at March 31, 2009, compared to $5.7 million at Dec. 31, 2008, and
$412,000 at March 31, 2008.
"We remained well-capitalized and continued to maintain significant liquidity
during the first quarter," said Blanton. "In addition to growth from our core
banking operations, mortgage income nearly doubled in the first quarter due to a
significant increase in refinancing volume. Revenue from our GB&T operations
slowed during the quarter, though this was partially offset by the continued
growth of our SB&T thrift."
Total assets at March 31, 2009, were $1.5 billion, an increase of $214.3 million
from a year ago, and $74.8 million from Dec. 31, 2008. Assets at the company's
SB&T subsidiary totaled $149.4 million at the close of the first quarter, an
increase of $25.8 million, or 20.9 percent, compared to Dec. 31, 2008.
Loans outstanding at the end of the first quarter were $997.6 million, an
increase of 7.6 percent from March 31, 2008, and a decline of 0.8 percent from
Dec. 31, 2008. Total deposits were $1.2 billion at March 31, 2009, an increase
of 20.7 percent from the same period a year ago and 7.6 percent from Dec. 31,
2008. Cash and cash equivalents totaled $119.4 million at the end of the first
quarter, compared to $37.8 million from Dec. 31, 2008.
Net interest income for the first quarter of 2009 was $10.1 million, compared to
$10.3 million in the same period a year ago. Noninterest income for the quarter
was $5.5 million, compared to $3.9 million for the first quarter of 2008.
Noninterest expense was $9.8 million in the first quarter of 2009, an increase
of $912,890 from a year ago. Increases in noninterest income and expense were in
support of the Company's $214 million growth in total assets during the last
twelve months.
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The company's net interest margin was 2.96 percent, compared to 2.99 percent for
the three months ended Dec. 31, 2008, and 3.49 percent a year ago. The net
interest margin appears to have stabilized although at significantly lower
levels than the prior year due to the significant reduction in interest rates by
the Federal Reserve. Return on average assets (ROA) was 0.19 percent for the
first quarter of 2009, and return on average shareholders' equity (ROE) was 2.96
percent.
The company's Board of Directors has voted to suspend the payment of quarterly
cash dividends on the company's common stock effective immediately. Given the
current state of the economy, the Board believes the suspension is a prudent
action that will help the company maintain its currently strong capital position
by conserving approximately $3.2 million of capital per year. The Board plans to
reinstate the dividend payment at an appropriate time once economic conditions
improve and stabilize.
"We have resisted suspending our quarterly cash dividend in the past as we felt
strongly that our loyal shareholders and supporters should be rewarded," said
Blanton. "However, in light of the recession and the unlikely prospects for a
near-term economic recovery, we have reached the point where conserving capital
has become the most responsible use of our resources. While the suspension was a
difficult decision, we believe it is in the best long-term interests of our
shareholders."
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.
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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.
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
MARCH 31,
2009 DECEMBER 31,
ASSETS (UNAUDITED) 2008
---------------- ---------------
Cash and due from banks $ 33,762,533 $ 24,859,620
Federal funds sold 61,664,000 9,780,000
Interest-bearing deposits in other banks 23,948,713 3,128,043
---------------- ---------------
Cash and cash equivalents 119,375,246 37,767,663
Investment securities
Available-for-sale 300,998,219 299,339,182
Held-to-maturity, at cost (fair values of
$676,089 and $697,977, respectively) 689,164 689,128
Loans held for sale 20,809,064 18,955,283
Loans 976,837,586 986,830,706
Less allowance for loan losses (15,185,895) (14,742,339)
---------------- ---------------
Loans, net 961,651,691 972,088,367
Premises and equipment, net 33,254,190 33,959,975
Accrued interest receivable 6,343,240 7,085,348
Bank-owned life insurance 17,548,279 17,368,065
Restricted equity securities 6,923,037 6,571,485
Other real estate owned 6,989,755 5,733,775
Other assets 11,209,003 11,480,316
---------------- ---------------
$1,485,790,888 $1,411,038,587
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 117,921,292 $ 111,291,359
Interest-bearing:
NOW accounts 181,130,051 166,560,715
Savings 271,986,457 247,249,303
Money management accounts 46,335,384 50,404,031
Time deposits over $100,000 428,636,154 385,439,375
Other time deposits 180,674,397 178,607,605
--------------- ---------------
1,226,683,735 1,139,552,388
Federal funds purchased and securities sold
under repurchase agreements 48,763,613 62,552,922
Advances from Federal Home Loan Bank 84,000,000 84,000,000
Other borrowed funds 900,000 -
Accrued interest payable and other liabilities 9,683,667 10,282,777
Subordinated debentures 20,000,000 20,000,000
--------------- ---------------
Total liabilities 1,390,031,015 1,316,388,087
--------------- ---------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000
shares authorized; 5,988,087 and 5,987,674
shares issued in 2009 and 2008,
respectively; 5,987,785 and 5,987,674
shares outstanding in 2009 and 2008,
respectively 17,964,261 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 55,242,246 55,188,533
Retained earnings 21,362,460 21,455,152
Treasury stock, at cost; 302 and 0 shares in
2009 and 2008, respectively (4,832) -
Accumulated other comprehensive income, net 1,195,738 43,793
--------------- ---------------
Total stockholders' equity 95,759,873 94,650,500
--------------- ---------------
$1,485,790,888 $1,411,038,587
================ ===============
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
------------------------------
2009 2008
-------------- --------------
Interest income:
Loans, including fees $ 13,804,456 $ 16,392,754
Investment securities 4,074,379 3,261,374
Federal funds sold 24,452 90,769
Interest-bearing deposits in other banks 3,837 5,822
-------------- --------------
Total interest income 17,907,124 19,750,719
-------------- --------------
Interest expense:
Deposits 6,800,802 7,876,557
Federal funds purchased and securities
sold under repurchase agreements 111,469 539,933
Other borrowings 895,937 1,069,480
-------------- --------------
Total interest expense 7,808,208 9,485,970
-------------- --------------
Net interest income 10,098,916 10,264,749
Provision for loan losses 4,749,297 1,271,005
-------------- --------------
Net interest income after provision
for loan losses 5,349,619 8,993,744
-------------- --------------
Noninterest income:
Service charges and fees on deposits 1,640,725 1,670,589
Gain on sales of loans 2,236,696 1,259,962
Gain on sale of fixed assets 26,135 2,999
Investment securities gains, net 743,900 37,580
Retail investment income 209,152 288,799
Trust service fees 253,344 285,948
Increase in cash surrender value of
bank-owned life insurance 180,214 164,169
Miscellaneous income 163,274 220,955
-------------- --------------
Total noninterest income 5,453,440 3,931,001
-------------- --------------
Noninterest expense:
Salaries and other personnel expense 5,657,934 5,171,110
Occupancy expenses 1,141,124 1,025,349
Other operating expenses 3,034,403 2,724,112
-------------- --------------
Total noninterest expense 9,833,461 8,920,571
-------------- --------------
Income before income taxes 969,598 4,004,174
Income tax expense 283,839 1,369,515
-------------- --------------
Net income $ 685,759 $ 2,634,659
============== ==============
Basic net income per share $ 0.11 $ 0.45
============== ==============
Diluted net income per share $ 0.11 $ 0.44
============== ==============
Weighted average common shares outstanding 5,987,948 5,958,963
-------------- --------------
Weighted average number of common and
common equivalent shares outstanding 5,998,578 6,015,301
-------------- --------------
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