AUGUSTA, Ga., April 29, 2016 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $4.7 million for the three months ended March 31, 2016, or $0.70 in diluted earnings per share, compared to $4.2 million, or $0.63 in diluted earnings per share, in the first quarter of 2015, an increase of 11.1 percent.
"We are pleased to report a significant increase in earnings over the year-ago period," said President and Chief Operating Officer Ronald L. Thigpen. "Our net interest income increased based on loan growth. Noninterest income increased and included an 8.6 percent increase in gain on sale of loans from our mortgage operations. Credit costs continued to decline along with further improvement in asset quality. Growth in our balance sheet reflected increases in core loans and deposits. Overall, we continue to perform very well reflecting an annualized 1.03 percent return on average assets and an annualized 10.82 percent return on average equity.”
Total assets at March 31, 2016, were $1.9 billion, an increase of $36.9 million from December 31, 2015. Loans outstanding at the end of the first quarter were $1.05 billion, an increase of $20.7 million from December 31, 2015, and an increase of $59.9 million from March 31, 2015. Total deposits were $1.6 billion at March 31, 2016, an increase of $39.4 million from December 31, 2015, and an increase of $31.4 million from March 31, 2015. Cash and cash equivalents totaled $90.7 million at the end of the first quarter of 2016.
Net interest income for the first quarter of 2016 totaled $13.8 million, a 5.7 percent increase from $13.1 million for the same period in 2015. Noninterest income for the first quarter totaled $5.2 million, an increase from $4.7 million for the same period a year ago, primarily due to higher mortgage origination volume and investment securities gains. Noninterest expense was $11.7 million in the first quarter of 2016, a 5.9 percent increase from a year ago resulting from higher salary and personnel expenses, including commissions, as well as increased marketing and processing expenses.
The net interest margin was 3.23 percent for the quarter-ended March 31, 2016, compared to 3.14 percent at December 31, 2015, and 3.22 percent for the same period a year ago. Annualized return on average assets (ROA) was 1.03 percent for the first quarter of 2016, an increase from 0.97 percent for the same period a year ago, and annualized return on average shareholder's equity (ROE) was 10.82 percent, remaining the same as the first quarter of 2015.
Nonperforming assets at March 31, 2016, were 0.84 percent of total assets, compared to 0.97 percent at December 31, 2015, and 1.11 percent at March 31, 2015. Net charge-offs for the first quarter of 2016 totaled 0.10 percent of average loans on an annualized basis, compared to 0.48 percent annualized in the fourth quarter of 2015 and 0.28 percent annualized in the first quarter of 2015. The company held $655 thousand in OREO at March 31, 2016, compared to $360 thousand at December 31, 2015, and $1.0 million at March 31, 2015.
The company's loan-loss provision expense was $428 thousand in the first quarter of 2016, compared to $382 thousand in the fourth quarter of 2015 and $547 thousand in the first quarter of 2015. The allowance for loan losses at March 31, 2016, was $21.5 million, or 2.06 percent of loans outstanding, compared to $21.4 million, or 2.08 percent of loans outstanding, at December 31, 2015, and $25.4 million, or 2.57 percent of loans outstanding, at March 31, 2015.
"This low interest rate environment continues to challenge our net interest margin but we are pleased with core loan and deposit growth and the increases in our mortgage origination volume," said Thigpen. "Our balance sheet remains strong and we are well positioned to handle increased loan growth and meet the needs of our community.”
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.9 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices, three full-service offices in Aiken County, S.C., operating as Southern Bank & Trust and one limited service Loan Production Office in Athens, Ga. 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 under the symbol SBFC on OTCQB. Investors can find Real-Time quotes and market information for the Company on www.otcmarkets.com or by visiting 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 Company’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 | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| (Dollars in thousands, except share data) | ||||||||||
| March 31, | ||||||||||
| 2016 | December 31, | |||||||||
| Assets | (Unaudited) | 2015 | ||||||||
| Cash and due from banks | $ | 61,396 | $ | 40,181 | ||||||
| Interest-bearing deposits in other banks | 29,321 | 2,736 | ||||||||
| Cash and cash equivalents | 90,717 | 42,917 | ||||||||
| Available-for-sale securities | 662,265 | 691,563 | ||||||||
| Loans held for sale, at fair value | 18,588 | 18,647 | ||||||||
| Loans | 1,029,936 | 1,009,149 | ||||||||
| Less allowance for loan losses | 21,548 | 21,367 | ||||||||
| Loans, net | 1,008,388 | 987,782 | ||||||||
| Premises and equipment, net | 26,959 | 27,398 | ||||||||
| Accrued interest receivable | 6,237 | 6,331 | ||||||||
| Bank-owned life insurance | 43,496 | 43,167 | ||||||||
| Restricted equity securities | 5,478 | 5,169 | ||||||||
| Other real estate owned | 655 | 360 | ||||||||
| Deferred tax asset | 11,094 | 13,958 | ||||||||
| Other assets | 3,398 | 3,073 | ||||||||
| $ | 1,877,275 | $ | 1,840,365 | |||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Deposits | ||||||||||
| Noninterest-bearing | $ | 254,356 | $ | 229,002 | ||||||
| Interest-bearing: | ||||||||||
| NOW accounts | 406,553 | 401,674 | ||||||||
| Savings | 548,413 | 548,729 | ||||||||
| Money management accounts | 16,154 | 16,330 | ||||||||
| Time deposits | 342,977 | 333,345 | ||||||||
| 1,568,453 | 1,529,080 | |||||||||
| Securities sold under repurchase agreements | 763 | 15,684 | ||||||||
| Advances from Federal Home Loan Bank | 90,000 | 85,000 | ||||||||
| Accrued interest payable and other liabilities | 19,866 | 20,688 | ||||||||
| Subordinated debentures | 20,000 | 20,000 | ||||||||
| Total liabilities | 1,699,082 | 1,670,452 | ||||||||
| Stockholders' equity: | ||||||||||
| Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2016 and 2015, respectively | ||||||||||
| - | - | |||||||||
| Common stock, $3.00 par value; 10,000,000 shares authorized; 6,746,328 and 6,745,818 shares issued in 2016 and 2015, respectively; 6,746,328 and 6,745,818 shares outstanding in 2016 and 2015, respectively | ||||||||||
| 20,239 | 20,237 | |||||||||
| Additional paid-in capital | 63,869 | 63,637 | ||||||||
| Retained earnings | 90,867 | 87,250 | ||||||||
| Treasury stock, at cost; 0 shares in 2016 and 2015, respectively | ||||||||||
| - | - | |||||||||
| Accumulated other comprehensive income (loss), net | 3,218 | (1,211 | ) | |||||||
| Total stockholders' equity | 178,193 | 169,913 | ||||||||
| $ | 1,877,275 | $ | 1,840,365 | |||||||
| SOUTHEASTERN BANK FINANCIAL CORPORATION | |||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||
| (Dollars in thousands, except share and per share data) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2016 | 2015 | ||||||||||
| Interest income: | |||||||||||
| Loans, including fees | $ | 11,954 | $ | 11,525 | |||||||
| Investment securities | 3,849 | 3,647 | |||||||||
| Interest-bearing deposits in other banks | 37 | 17 | |||||||||
| Total interest income | 15,840 | 15,189 | |||||||||
| Interest expense: | |||||||||||
| Deposits | 1,375 | 1,460 | |||||||||
| Securities sold under repurchase agreements | 10 | 3 | |||||||||
| Other borrowings | 626 | 638 | |||||||||
| Total interest expense | 2,011 | 2,101 | |||||||||
| Net interest income | 13,829 | 13,088 | |||||||||
| Provision for loan losses | 428 | 547 | |||||||||
| Net interest income after provision for loan losses | 13,401 | 12,541 | |||||||||
| Noninterest income: | |||||||||||
| Service charges and fees on deposits | 1,765 | 1,744 | |||||||||
| Gain on sales of loans | 1,688 | 1,554 | |||||||||
| Investment securities gains (losses), net | 236 | 57 | |||||||||
| Retail investment income | 538 | 526 | |||||||||
| Trust service fees | 354 | 336 | |||||||||
| Earnings from cash surrender value of bank-owned life insurance | |||||||||||
| 329 | 278 | ||||||||||
| Miscellaneous income | 305 | 224 | |||||||||
| Total noninterest income | 5,215 | 4,719 | |||||||||
| Noninterest expense: | |||||||||||
| Salaries and other personnel expense | 6,772 | 6,587 | |||||||||
| Occupancy expenses | 1,091 | 1,018 | |||||||||
| Other real estate losses (gains), net | - | (66 | ) | ||||||||
| Other operating expenses | 3,849 | 3,526 | |||||||||
| Total noninterest expense | 11,712 | 11,065 | |||||||||
| Income before income taxes | 6,904 | 6,195 | |||||||||
| Income tax expense | 2,208 | 1,989 | |||||||||
| Net income | $ | 4,696 | $ | 4,206 | |||||||
| Other comprehensive income: | |||||||||||
| Unrealized loss on derivatives | $ | (643 | ) | $ | (366 | ) | |||||
| Unrealized gain on securities available-for-sale | 8,128 | 4,263 | |||||||||
| Reclassification adjustment for realized gain on securities, net of OTTI | |||||||||||
| (236 | ) | (57 | ) | ||||||||
| Tax effect | (2,820 | ) | (1,494 | ) | |||||||
| Total other comprehensive income | 4,429 | 2,346 | |||||||||
| Comprehensive income | $ | 9,125 | $ | 6,552 | |||||||
| Basic net income per share | $ | 0.70 | $ | 0.63 | |||||||
| Diluted net income per share | 0.70 | 0.63 | |||||||||
| Weighted average common shares outstanding | 6,718,157 | 6,695,011 | |||||||||
| Weighted average number of common and common equivalent shares outstanding | |||||||||||
| 6,731,088 | 6,707,037 | ||||||||||