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
Second Quarter 2009 Earnings
AUGUSTA, Ga., July 31, 2009 - 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 quarterly net income of $637,000 for
the three months ended June 30, 2009, or $0.10 in diluted earnings per share,
compared to $2.4 million, or $0.40 in diluted earnings per share, in the second
quarter of 2008.
"We continued to be profitable in a tough environment during the second quarter,
thanks to a solid performance from our core banking operations, sizeable gains
in mortgage income from refinancing activity, and our ability to keep operating
expenses under control," said President and Chief Executive Officer R. Daniel
Blanton. "We also continued to work through our problem loans during the second
quarter, raising our provision for loan losses to ensure that we maintain
adequate coverage as our markets struggle to recover."
The company's loan-loss provision was $5.1 million in the second quarter of
2009, which compares to $4.7 million in the first quarter of 2009 and $1.7
million a year ago. The increase in provision for loan losses resulted in a rise
in the allowance for loan losses to $16.0 million, or 1.63 percent of loans
outstanding, compared to $15.2 million, or 1.52 percent of loans outstanding, at
March 31, 2009.
Nonperforming assets at June 30, 2009, were 3.89 percent of total assets,
compared to 2.11 percent at June 30, 2008, and 3.56 percent at March 31, 2009.
Net charge-offs for the second quarter of 2009 totaled 0.43 percent of average
loans, compared to 0.01 percent in the second quarter of 2008 and 0.43 percent
in the first quarter of 2009. The company held $13.8 million in foreclosed
property or other real estate owned (OREO) at June 30, 2009, compared to none at
June 30, 2008, and $7.0 million at March 31, 2009.
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Total assets at June 30, 2009, were $1.5 billion, an increase of $147.9 million
from a year ago, and $50.8 million from Dec. 31, 2008. Assets at the company's
SB&T subsidiary totaled $154.2 million at the close of the second quarter, an
increase of $30.7 million, or 24.8 percent, compared to Dec. 31, 2008.
Loans outstanding at the end of the second quarter were $981.7 million, compared
to $968.1 million a year ago. Total deposits were $1.2 billion at June 30, 2009,
compared to $1.1 billion for the same period a year ago. Cash and cash
equivalents totaled $124.2 million at the end of the second quarter, compared to
$37.8 million at Dec. 31, 2008, and $119.4 million at the end of the first
quarter.
Net interest income for the second quarter of 2009 totaled $10.7 million, a 6.6
percent increase from $10.0 million for the same period in 2008. This increase
is a result of higher earning asset volumes despite a decrease in the company's
net interest margin. The net interest margin was 3.18 percent at June 30, 2009,
compared to 3.25 percent a year ago.
Noninterest income for the quarter totaled $5.9 million, an increase of 32.8
percent from a year ago, reflecting strong growth in mortgage revenue from the
gain on sale of loans, as well as gains from the sales of investment securities.
Noninterest expense was $10.8 million, compared to $9.3 million a year ago. The
increase included $670,000 of costs associated with the FDIC's special
assessment on insured banks of 5 basis points of total assets, an increase of
$700,000 in regular FDIC assessments as they increased from 6 to 14 basis points
of total deposits, and the additional compensation expense resulting from
significantly higher mortgage origination volume.
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Annualized return on average assets (ROA) was 0.18 percent for the second
quarter of 2009, and annualized return on average shareholder's equity (ROE) was
2.56 percent.
Net income for the six months ended June 30, 2009, totaled $693,000, compared to
$5.0 million reported in the same period of 2008. Diluted earnings per share for
the first six months of 2009 were $0.11, compared to $0.84 per share earned in
the same period a year ago.
Net interest income for the first six months of 2009 was $20.8 million, compared
to $20.3 million in the first six months of 2008. Noninterest income was $10.5
million for the first six months of 2009, an increase of 24.8 percent from $8.4
million in the same period of 2008. Noninterest expense was $20.6 million for
the six-month period, compared to $18.2 million in 2008.
"We are focused on the safety and soundness of the company in this continuing
unusual economic environment," said Blanton. "We remain cautious and we will
keep a close eye on the economy and the performance of our loan portfolio. The
good news is that we continue to be well-capitalized and have significant
liquidity, which keeps us in a favorable position as we move forward."
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
(Dollars in thousands, except share data)
June 30,
2009 December 31,
Assets (Unaudited) 2008
------------ --------------
Cash and due from banks $ 91,490 $ 24,860
Federal funds sold 7,300 9,780
Interest-bearing deposits in other banks 25,407 3,128
------------ --------------
Cash and cash equivalents 124,197 37,768
Investment securities
Available-for-sale 276,905 299,339
Held-to-maturity, at cost (fair values of
$485 and $698, respectively) 490 689
Loans held for sale 23,975 18,955
Loans 957,727 986,831
Less allowance for loan losses (16,031) (14,742)
------------ --------------
Loans, net 941,696 972,089
Premises and equipment, net 32,908 33,960
Accrued interest receivable 6,266 7,085
Bank-owned life insurance 22,762 17,368
Restricted equity securities 6,338 6,571
Other real estate owned 13,786 5,734
Other assets 12,552 11,481
------------ --------------
$ 1,461,875 $ 1,411,039
============ ==============
Liabilities And Stockholders' Equity
Deposits
Noninterest-bearing $ 116,805 $ 111,291
Interest-bearing:
NOW accounts 173,262 166,561
Savings 285,819 247,249
Money management accounts 42,858 50,404
Time deposits over $100 404,173 385,439
Other time deposits 168,360 178,608
------------ --------------
1,191,277 1,139,552
Federal funds purchased and securities sold
under repurchase agreements 49,361 62,553
Advances from Federal Home Loan Bank 84,000 84,000
Other borrowed funds 700 -
Accrued interest payable and other liabilities 10,739 10,283
Subordinated debentures 22,947 20,000
------------ --------------
Total liabilities 1,359,024 1,316,388
------------ --------------
Stockholders' equity:
Common stock, $3.00 par value; 10,000,000 shares
authorized; 6,671,509 and 5,987,674 shares issued in
2009 and 2008, respectively; 6,671,509 and 5,987,674
shares outstanding in 2009 and 2008, respectively 20,014 17,963
Preferred stock, no par value; 10,000,000 shares
authorized; 0 shares outstanding in 2009 and
2008, respectively - -
Additional paid-in capital 62,251 55,189
Retained earnings 21,370 21,455
Accumulated other comprehensive (loss) income, net (784) 44
------------ --------------
Total stockholders' equity 102,851 94,651
------------ --------------
$ 1,461,875 $ 1,411,039
============ ==============
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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2009 2008 2009 2008
----------- ---------- ----------- ----------
Interest income:
Loans, including fees $ 14,206 $ 15,087 $ 28,010 $ 31,480
Investment securities 3,595 3,337 7,669 6,598
Federal funds sold 16 96 41 187
Interest-bearing deposits in other banks 18 6 22 12
----------- ---------- ----------- ----------
Total interest income 17,835 18,526 35,742 38,277
----------- ---------- ----------- ----------
Interest expense:
Deposits 6,009 7,166 12,810 15,042
Federal funds purchased and securities sold
under repurchase agreements 95 324 206 864
Other borrowings 1,023 993 1,919 2,063
----------- ---------- ----------- ----------
Total interest expense 7,127 8,483 14,935 17,969
----------- ---------- ----------- ----------
Net interest income 10,708 10,043 20,807 20,308
Provision for loan losses 5,114 1,652 9,863 2,923
----------- ---------- ----------- ----------
Net interest income after provision
for loan losses 5,594 8,391 10,944 17,385
----------- ---------- ----------- ----------
Noninterest income:
Service charges and fees on deposits 1,737 1,820 3,378 3,491
Gain on sales of loans 2,461 1,576 4,697 2,836
(Loss) gain on sale of fixed assets (42) 5 (16) 8
Investment securities gains, net 1,101 30 1,312 68
Other-than-temporary impairment losses (less
$572 recognized in other comprehensive
income, before taxes) (244) - (619) -
Retail investment income 318 276 527 564
Trust service fees 245 299 498 584
Increase in cash surrender value of
bank-owned life insurance 213 194 394 358
Miscellaneous income 123 252 286 473
----------- ---------- ----------- ----------
Total noninterest income 5,912 4,452 10,457 8,382
----------- ---------- ----------- ----------
Noninterest expense:
Salaries and other personnel expense 5,800 5,383 11,458 10,554
Occupancy expenses 1,140 1,005 2,281 2,030
Other operating expenses 3,868 2,877 6,903 5,601
----------- ---------- ----------- ----------
Total noninterest expense 10,808 9,265 20,642 18,185
----------- ---------- ----------- ----------
Income before income taxes 698 3,578 759 7,582
Income tax expense 61 1,170 66 2,539
----------- ---------- ----------- ----------
Net income $ 637 $ 2,408 $ 693 $ 5,043
=========== ========== =========== ==========
Basic net income per share $ 0.10 $ 0.40 $ 0.11 $ 0.85
=========== ========== =========== ==========
Diluted net income per share $ 0.10 $ 0.40 $ 0.11 $ 0.84
=========== ========== =========== ==========
Weighted average common shares outstanding 6,348,312 5,965,978 6,169,125 5,962,471
=========== ========== =========== ==========
Weighted average number of common and
common equivalent shares outstanding 6,354,344 6,020,119 6,177,569 6,021,581
=========== ========== =========== ==========
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