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| 8-K - FORM 8-K - Southeastern Bank Financial CORP | t82133_8k.htm |
FOR IMMEDIATE RELEASE
For More Information:
Ronald L. Thigpen
President and Chief Operating Officer
Southeastern Bank Financial Corp.
706-481-1014
Southeastern Bank Financial Corp. Reports First Quarter
2015 Earnings and Declares Dividend
AUGUSTA, Ga., April 24, 2015 – Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $4.2 million for the three months ended March 31, 2015, or $0.63 in diluted earnings per share, compared to $3.8 million, or $0.57 in diluted earnings per share, in the first quarter of 2014, an increase of 10.5 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 growth in loans and securities and we experienced an 18 percent increase in mortgage origination volume. Credit costs decreased further as asset quality continued to improve. Our balance sheet grew, as we saw both core loan growth and solid deposit growth. Overall, we continue to perform well reflecting an annualized 0.97 percent return on average assets and an annualized 10.82 percent return on average equity.”
Total assets at March 31, 2015, were $1.8 billion, an increase of $70.6 million from December 31, 2014. Loans outstanding at the end of the first quarter were $988.6 million, an increase of $3.9 million from December 31, 2014, and an increase of $48.3 million from March 31, 2014. Total deposits were $1.5 billion at March 31, 2015, an increase of $73.2 million from December 31, 2014, and an increase of $33.9 million from March 31, 2014. Cash and cash equivalents totaled $71.5 million at the end of the first quarter of 2015.
Net interest income for the first quarter of 2015 totaled $13.1 million, a 4.1 percent increase from $12.6 million for the same period in 2014. Noninterest income for the first quarter totaled $4.7 million, an increase from $4.1 million for the same period a year ago, primarily due to significantly higher mortgage origination volume and increased service charges and fees on deposits. Noninterest expense was $11.1 million in the first quarter of 2015, a 9.4 percent increase from a year ago resulting from increased commission expense and higher salary and benefit expense.
The net interest margin was 3.22 percent for the quarter-ended March 31, 2015, compared to 3.20 percent at December 31, 2014, and 3.16 percent for the same period a year ago. Annualized return on average assets (ROA) was 0.97 percent for the first quarter of 2015, an increase from 0.91 percent for the same period a year ago, and annualized return on average shareholder’s equity (ROE) was 10.82 percent, a decrease from 11.36 percent from the first quarter of 2014, due to increased capital levels.
Nonperforming assets at March 31, 2015, were 1.11 percent of total assets, compared to 1.26 percent at December 31, 2014, and 1.38 percent at March 31, 2014. Net charge-offs for the first quarter of 2015 totaled 0.28 percent of average loans on an annualized basis, compared to 0.74 percent annualized in the fourth quarter of 2014 and 0.52 percent annualized in the first quarter of 2014. The company held $1.0 million in OREO at March 31, 2015, compared to $1.1 million at December 31, 2014, and $1.3 million at March 31, 2014.
The company’s loan-loss provision expense was $547 thousand in the first quarter of 2015, virtually the same as the previous quarter, and a 48.3 percent decrease from $1.1 million in the first quarter a year ago. The allowance for loan losses at March 31, 2015, was $25.4 million, or 2.57 percent of loans outstanding, compared to $25.5 million, or 2.59 percent of loans outstanding, at December 31, 2014, and $26.3 million, or 2.80 percent of loans outstanding, at March 31, 2014.
“We are challenged by this continuing low interest rate environment, but we are encouraged by the increases in mortgage origination volume along with core loan and deposit growth,” said Thigpen. “Our balance sheet is as strong as ever and we stand ready to handle increased loan growth as the market continues to improve.”
On April 22, 2014, the company’s Board of Directors declared a regular quarterly cash dividend of $0.15 per share of common stock payable on May 22, 2015, to shareholders of record as of May 8, 2015. Based on the share price of $28.20 at the close of business on Thursday, April 23, 2015, this dividend represents an annualized yield to shareholders of 2.13 percent.
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.8 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.
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SOUTHEASTERN BANK FINANCIAL CORPORATION
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Consolidated Balance Sheets
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(Dollars in thousands, except share data)
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March 31,
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2015
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December 31,
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Assets
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(Unaudited)
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2014
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Cash and due from banks
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$ | 51,873 | $ | 33,286 | ||||
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Interest-bearing deposits in other banks
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19,576 | 2,709 | ||||||
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Cash and cash equivalents
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71,449 | 35,995 | ||||||
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Available-for-sale securities
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675,321 | 644,465 | ||||||
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Loans held for sale, at fair value
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18,271 | 18,365 | ||||||
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Loans
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970,307 | 966,356 | ||||||
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Less allowance for loan losses
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25,391 | 25,506 | ||||||
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Loans, net
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944,916 | 940,850 | ||||||
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Premises and equipment, net
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28,020 | 27,842 | ||||||
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Accrued interest receivable
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6,311 | 5,898 | ||||||
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Bank-owned life insurance
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37,186 | 36,908 | ||||||
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Restricted equity securities
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4,276 | 4,398 | ||||||
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Other real estate owned
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955 | 1,107 | ||||||
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Deferred tax asset
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14,090 | 15,263 | ||||||
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Other assets
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2,549 | 1,690 | ||||||
| $ | 1,803,344 | $ | 1,732,781 | |||||
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Liabilities and Stockholders’ Equity
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Deposits
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Noninterest-bearing
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$ | 215,567 | $ | 196,624 | ||||
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Interest-bearing:
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NOW accounts
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396,569 | 354,038 | ||||||
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Savings
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528,849 | 521,570 | ||||||
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Money management accounts
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16,528 | 15,824 | ||||||
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Time deposits
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379,506 | 375,808 | ||||||
| 1,537,019 | 1,463,864 | |||||||
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Securities sold under repurchase agreements
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715 | 10,678 | ||||||
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Advances from Federal Home Loan Bank
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64,000 | 64,000 | ||||||
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Accrued interest payable and other liabilities
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19,033 | 18,953 | ||||||
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Due to broker
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1,586 | — | ||||||
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Subordinated debentures
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20,000 | 20,000 | ||||||
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Total liabilities
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1,642,353 | 1,577,495 | ||||||
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Stockholders’ equity:
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Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2015 and 2014, respectively
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— | — | ||||||
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Common stock, $3.00 par value; 10,000,000 shares authorized; 6,744,891 and 6,744,891 shares issued in 2015 and 2014, respectively; 6,744,245 and 6,744,160 shares outstanding in 2015 and 2014, respectively
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20,235 | 20,235 | ||||||
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Additional paid-in capital
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63,259 | 63,096 | ||||||
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Retained earnings
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75,097 | 71,902 | ||||||
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Treasury stock, at cost; 646 and 731 shares in 2015 and 2014, respectively
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(17 | ) | (18 | ) | ||||
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Accumulated other comprehensive income, net
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2,417 | 71 | ||||||
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Total stockholders’ equity
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160,991 | 155,286 | ||||||
| $ | 1,803,344 | $ | 1,732,781 | |||||
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SOUTHEASTERN BANK FINANCIAL CORPORATION
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Consolidated Statements of Comprehensive Income
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(Dollars in thousands, except share and per share data)
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(Unaudited)
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Three Months Ended
March 31,
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2015
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2014
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Interest income:
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Loans, including fees
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$ | 11,525 | $ | 11,280 | ||||
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Investment securities
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3,647 | 3,534 | ||||||
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Interest-bearing deposits in other banks
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17 | 15 | ||||||
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Total interest income
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15,189 | 14,829 | ||||||
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Interest expense:
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Deposits
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1,460 | 1,588 | ||||||
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Securities sold under repurchase agreements
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3 | 1 | ||||||
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Other borrowings
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638 | 668 | ||||||
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Total interest expense
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2,101 | 2,257 | ||||||
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Net interest income
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13,088 | 12,572 | ||||||
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Provision for loan losses
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547 | 1,057 | ||||||
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Net interest income after provision for loan losses
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12,541 | 11,515 | ||||||
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Noninterest income:
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Service charges and fees on deposits
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1,744 | 1,629 | ||||||
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Gain on sales of loans
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1,554 | 819 | ||||||
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Gain (loss) on sale of fixed assets, net
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1 | (1 | ) | |||||
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Investment securities gains, net (includes $57 and $251 accumulated other comprehensive income reclassifications for unrealized gains (losses) on available-for-sale securities)
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57 | 251 | ||||||
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Retail investment income
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526 | 574 | ||||||
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Trust service fees
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336 | 323 | ||||||
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Earnings from cash surrender value of bank-owned life insurance
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278 | 278 | ||||||
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Miscellaneous income
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223 | 218 | ||||||
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Total noninterest income
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4,719 | 4,091 | ||||||
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Noninterest expense:
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Salaries and other personnel expense
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6,587 | 5,766 | ||||||
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Occupancy expenses
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1,018 | 944 | ||||||
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Other real estate gains, net
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(66 | ) | (35 | ) | ||||
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Other operating expenses
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3,526 | 3,438 | ||||||
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Total noninterest expense
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11,065 | 10,113 | ||||||
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Income before income taxes
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6,195 | 5,493 | ||||||
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Income tax expense
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1,989 | 1,687 | ||||||
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Net income
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$ | 4,206 | $ | 3,806 | ||||
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Other comprehensive income:
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Unrealized loss on derivatives
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$ | (366 | ) | $ | (355 | ) | ||
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Unrealized gain on securities available-for-sale
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4,263 | 8,487 | ||||||
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Reclassification adjustment for realized gain on securities, net of OTTI
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(57 | ) | (251 | ) | ||||
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Tax effect
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(1,494 | ) | (3,066 | ) | ||||
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Total other comprehensive income
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2,346 | 4,815 | ||||||
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Comprehensive income
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$ | 6,552 | $ | 8,621 | ||||
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Basic net income per share
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$ | 0.63 | $ | 0.57 | ||||
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Diluted net income per share
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$ | 0.63 | $ | 0.57 | ||||
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Weighted average common shares outstanding
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6,695,011 | 6,680,634 | ||||||
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Weighted average number of common and common equivalent shares outstanding
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6,707,037 | 6,680,717 | ||||||