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| 8-K - SOUTHCOAST FINANCIAL CORP | sthcst8k3d-12.htm |
Exhibit 99
Southcoast Financial Corporation
News Release
Southcoast Announces Nine Months Earnings
Mt. Pleasant, S.C., October 15, 2012 / Globe Newswire / - Southcoast Financial Corporation (NASDAQ: SOCB) announced unaudited net income of $2,590,000, or $.49 per basic share, for the nine months ended September 30, 2012. This compares to an unaudited net loss of $11,678,000, or $2.21 per basic share, for the nine months ended September 30, 2011. The per share amounts are based on 5,326,552 basic average shares compared to 5,280,533 basic average shares for the nine months ended September 30, 2011.
The ratio of nonperforming assets to total assets improved from 7.40% as of December 31, 2011 to 5.08% as of September 30, 2012. The allowance for loan losses as a percentage of loans was 2.59% as of September 30, 2012, compared to 3.34% as of December 31, 2011. The allowance for loan losses as a percentage of total non-performing loans totaled 62.7% as of September 30, 2012, compared to 47.9% as of December 31, 2011.
“The 2012 results were benefited by the reduction in our loan loss provision and expenses associated with other real estate owned, both of which were the result of lower nonperforming assets as compared to the same period of 2011, and increases in the net interest margin and core earnings,” said L. Wayne Pearson, Chairman and Chief Executive Officer. “While we continue to work diligently on our non-performing assets, we also continue to focus on improving our profitable core business and maintaining strong capital levels.”
The nine months ended September 30, 2011 loss included a $6,623,000 provision for loan losses and $4,397,000 of income tax expense related to a write down of the Company’s deferred tax asset. The provision for loan losses for the first nine months of 2012 was $880,000 and there was no deferred tax write-down.
Net interest income for the first nine months of 2012 increased $500,000 to $9,880,000 from $9,380,000 for the same period of 2011. The reduction in interest income, which was due to the decrease in average earning assets and the reduction of yield in those assets, was completely offset by the reduction of interest cost as existing liabilities were repriced. The Company’s annualized net interest margin improved by 36 basis points to 3.51% for the nine months of 2012 from 3.15% for the same period of 2011, due to the significant reduction in our cost of funds.
Non-interest income increased to $2,550,000 for the first nine months of 2012 from $2,179,000 for the same period of 2011, primarily due to a $124,000 gain on the sale of fixed assets, increased deposit fees of $115,000, and $161,000 of increased fees on loans sold.
Non-interest expense levels decreased by $3,260,000 to $8,957,000 for the first nine months of 2012 from $12,217,000 for the same period of 2011. Reductions in other real estate related impairments and expenses net of rental income and gains on sale accounted for $2,861,000 of the decrease. Operating expenses associated with FDIC insurance, computer software and foreclosure expenses decreased another $199,000.
For the quarter ended September 30, 2012, net income was $844,000, or $.16 per basic share. This compares to a net loss of $2,971,000, or $.56 per basic share, for the quarter ended September 30, 2011. The net income/loss per share is based on 5,336,446 basic average shares for the quarter ended September 30, 2012, compared to 5,290,429 basic average shares for the same period of 2011. The additional provision for loan losses and the deferred tax write down in 2011 are the main reasons for the fluctuation in the earnings for the quarters.
Total assets as of September 30, 2012 were $442.0 million compared to $427.5 million as of December 31, 2011, an increase of 3.4%. Loans, excluding loans held for sale, increased to $325.0 million, up 1.7% from $319.7 million as of December 31, 2011. Deposits as of September 30, 2012 increased 3.1% to $325.8 million, brokered and wholesale certificates of deposit as of September 30, 2012 totaled $22,047,000, down 48.6% from the December 31, 2011 total of $42,898,000 as the Company continued to reduce non-core funding.
The subsidiary bank’s capital position as of September 30, 2012 remains in excess of the well-capitalized requirements under the regulatory framework for prompt corrective action, with tier 1 capital to average assets of 9.66%. “We continue to be encouraged by the future direction of our Company given our capital strength, the reduction in non-performing assets and our continued improvement in the net interest margin,” concluded Pearson.
About Southcoast Financial Corporation
Southcoast Financial Corporation, headquartered in Mt. Pleasant, South Carolina, is the holding company of Southcoast Community Bank. The Bank, which opened for business July 20, 1998, is a state chartered commercial bank operating from its main office at 530 Johnnie Dodds Boulevard in Mt. Pleasant, South Carolina and nine branches in the Charleston, South Carolina area. Southcoast Financial Corporation’s common stock is traded on the NASDAQ Global Market under the symbol SOCB.
SOURCE Southcoast Financial Corporation
/ Contact William C. Heslop, Senior Vice President and
Chief Financial Officer, (843) 216-3019
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Southcoast Financial Corporation
Consolidated Balance Sheets
(Dollars in thousands)
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September 30
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December 31
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2012
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2011
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(Unaudited)
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(Unaudited)
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Assets
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Cash and cash equivalents
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$ | 26,875 | $ | 18,037 | ||||
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Investments
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51,643 | 52,755 | ||||||
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Loans held for sale
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721 | 995 | ||||||
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Loans
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325,029 | 319,740 | ||||||
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Less: Allowance for loan losses
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8,427 | 10,692 | ||||||
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Net loans
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316,602 | 309,048 | ||||||
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Fixed assets
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21,838 | 21,977 | ||||||
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Other assets
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24,282 | 24,709 | ||||||
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Total Assets
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$ | 441,961 | $ | 427,521 | ||||
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Liabilities & Shareholders' Equity
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Deposits:
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Non-interest bearing
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$ | 41,488 | $ | 34,120 | ||||
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Interest bearing
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284,288 | 282,027 | ||||||
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Total deposits
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325,776 | 316,147 | ||||||
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Other borrowings
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68,535 | 66,850 | ||||||
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Other liabilities
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3,747 | 3,402 | ||||||
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Junior subordinated debentures
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10,310 | 10,310 | ||||||
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Total liabilities
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408,368 | 396,709 | ||||||
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Shareholders' Equity
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||||||||
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Common Stock
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54,437 | 54,382 | ||||||
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Retained Deficit and Accumulated Other Comprehensive Loss
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(20,844 | ) | (23,570 | ) | ||||
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Total shareholders' equity
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33,593 | 30,812 | ||||||
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Total Liabilities and
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Shareholders' equity
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$ | 441,961 | $ | 427,521 | ||||
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Southcoast Financial Corporation
Consolidated Income Statements
(Dollars in thousands, except earnings per share)
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Nine Months Ended
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Three Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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2012
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2011
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2012
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2011
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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Interest Income
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Interest and fees on loans
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$ | 12,632 | $ | 12,983 | $ | 4,255 | $ | 4,018 | ||||||||
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Interest on investments
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971 | 1,552 | 320 | 455 | ||||||||||||
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Interest on Fed funds sold
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23 | 26 | 7 | 8 | ||||||||||||
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Total interest income
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13,626 | 14,561 | 4,582 | 4,481 | ||||||||||||
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Interest expense
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3,746 | 5,181 | 1,183 | 1,669 | ||||||||||||
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Net interest income
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9,880 | 9,380 | 3,399 | 2,812 | ||||||||||||
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Provision for loan losses
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880 | 6,623 | 450 | 2,980 | ||||||||||||
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Net interest income after provision
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9,000 | 2,757 | 2,949 | (168 | ) | |||||||||||
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Noninterest income
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2,550 | 2,179 | 1,019 | 524 | ||||||||||||
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Total operating income
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11,550 | 4,936 | 3,968 | 356 | ||||||||||||
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Noninterest expense
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||||||||||||||||
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Salaries and benefits
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4,870 | 5,044 | 1,639 | 1,665 | ||||||||||||
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Occupancy and equipment
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2,132 | 2,094 | 656 | 696 | ||||||||||||
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Other expenses
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1,955 | 5,079 | 865 | 1,380 | ||||||||||||
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Total noninterest expense
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8,957 | 12,217 | 3,160 | 3,741 | ||||||||||||
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Income(loss) before taxes
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2,593 | (7,281 | ) | 808 | (3,385 | ) | ||||||||||
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Income tax expense(benefit)
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3 | 4,397 | (36 | ) | (414 | ) | ||||||||||
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Net income(loss)
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$ | 2,590 | (11,678 | ) | $ | 844 | (2,971 | ) | ||||||||
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Basic net income(loss) per share
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$ | 0.49 | $ | (2.21 | ) | $ | 0.16 | $ | (0.56 | ) | ||||||
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Diluted net income(loss) per share
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$ | 0.49 | $ | (2.21 | ) | $ | 0.16 | $ | (0.56 | ) | ||||||
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Average number of shares
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Basic
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5,326,552 | 5,280,533 | 5,336,446 | 5,290,429 | ||||||||||||
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Diluted
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5,326,552 | 5,280,533 | 5,336,446 | 5,290,429 | ||||||||||||
4
Southcoast Financial Corporation
SELECTED FINANCIAL DATA
(dollars in thousands, except earnings per share)
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Three Months Ended
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September
2012
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September
2011
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(Unaudited)
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INCOME STATEMENT DATA
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Net interest income
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$ | 3,399 | $ | 2,812 | ||||
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Provision for loan losses
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450 | 2,980 | ||||||
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Noninterest income
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1,019 | 524 | ||||||
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Noninterest expenses
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3,160 | 3,741 | ||||||
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Net income(loss)
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844 | (2,971 | ) | |||||
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PER SHARE DATA
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Net income(loss) per share
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Basic
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$ | 0.16 | $ | (0.56 | ) | |||
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Diluted
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$ | 0.16 | $ | (0.56 | ) | |||
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BALANCE SHEET DATA
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Total assets
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$ | 441,961 | $ | 444,414 | ||||
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Total deposits
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325,776 | 330,279 | ||||||
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Total loans (net)
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316,602 | 315,514 | ||||||
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Investment securities
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51,643 | 66,143 | ||||||
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Other borrowings
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68,535 | 64,359 | ||||||
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Junior subordinated debentures
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10,310 | 10,310 | ||||||
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Shareholders' equity
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33,593 | 35,902 | ||||||
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Average shares outstanding
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||||||||
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Basic
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5,336,446 | 5,290,429 | ||||||
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Diluted
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5,336,446 | 5,290,429 | ||||||
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Book value per share
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$ | 6.30 | $ | 6.80 | ||||
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Key ratios
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Equity to asset ratio
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7.60 | % | 8.08 | % | ||||
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Nonperforming assets to assets^
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5.08 | % | 6.71 | % | ||||
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Reserve to loans
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2.59 | % | 3.22 | % | ||||
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Reserve to nonperforming loans
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62.70 | % | 45.34 | % | ||||
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^ Includes nonaccrual loans, loans 90 days past due and still accruing interest, troubled debt restructurings, and other real estate owned.
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