updated 1/28/2011 10:17:18 AM ET 2011-01-28T15:17:18

AUGUSTA, Ga., Jan. 28, 2011 (GLOBE NEWSWIRE) -- 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 $2.1 million, or $0.32 in diluted earnings per share, for the three months ended Dec. 31, 2010, compared to a quarterly net loss of $9.4 million, or a loss of $1.41 per share, in the fourth quarter of 2009. For the full year, the company reported net income of $6.9 million, or $1.03 per diluted share, compared to a net loss of $8.0 million, or a loss of $1.24 per diluted share, for 2009.

"We had a strong finish to 2010," said R. Daniel Blanton, president and chief executive officer. "We grew our net interest income, which we consider core earnings, in the fourth quarter by nearly 15 percent from 2009, deposits increased 10.2 percent and trends in our credit quality showed solid improvement over last year. As a consequence, we lowered our provision for loan losses compared to the fourth quarter of 2009, which, combined with a $4.8 million drop in noninterest expenses, contributed to our income and earnings growth.

"In addition, we continue to be pleased with the growth of our Aiken County subsidiary, which grew its assets by $25.1 million in 2010 and has generated a year of solid profitability," said Blanton.

At Dec. 31, 2010, total assets were $1.6 billion, an increase of $116.0 million, or 7.8 percent, from Dec. 31, 2009. The company's SB&T subsidiary closed the fourth quarter of 2010 with $184.7 million in total assets, reflecting growth of $25.1 million, or 15.7 percent, since Dec. 31, 2009.

Loans outstanding at the end of the fourth quarter of 2010 were $886.9 million, compared to $956.6 million at Dec. 31, 2009. Total deposits at Dec. 31, 2010, were $1.4 billion, an increase of 10.2 percent from the same period a year ago. Cash and cash equivalents totaled $65.1 million at the end of the fourth quarter.

Net interest income for the fourth quarter of 2010 was $12.2 million, an increase of $1.6 million, or 14.6 percent, from the same period a year ago. Noninterest income for the quarter was $5.3 million, a decrease of $129,274 from the fourth quarter of 2009. Noninterest expense in the fourth quarter of 2010 decreased $4.8 million from a year ago to $10.8 million, primarily due to a steep decline in losses associated with the sale of other real estate owned (OREO) and lower occupancy expenses.

Nonperforming assets at Dec. 31, 2010, were 2.12 percent of total assets, compared to 1.98 percent at Sept. 30, 2010, and 2.70 percent at Dec. 31, 2009. Net charge-offs for the fourth quarter of 2010 totaled 1.27 percent of average loans on an annualized basis, compared to 1.36 percent annualized in the third quarter of 2010 and 4.42 percent annualized in the fourth quarter of 2009. Net charge-offs for the year totaled 1.24 percent of average loans, compared to 2.42 percent for 2009. The company held $7.8 million in OREO at Dec. 31, 2010, compared to $7.1 million at Sept. 30, 2010, and $8.0 million at Dec. 31, 2009. Net losses from the sale of and writedowns of OREO in the fourth quarter of 2010 totaled $574,518, compared to $5.8 million in the fourth quarter of 2009.

The provision for loan losses totaled $4.0 million for the fourth quarter of 2010, compared to $4.8 million in the third quarter of 2010 and $16.2 million in the fourth quarter of 2009. Allowance for loan losses increased to $26.7 million, or 3.05 percent of loans outstanding, at Dec. 31, 2010, from $25.5 million, or 2.87 percent of loans outstanding, at Sept. 30, 2010, and $22.3 million, or 2.38 percent of loans outstanding, at Dec. 31, 2009.

Return on average assets (ROA) was 0.52 percent for the fourth quarter of 2010, and return on average shareholders' equity (ROE) was 8.16 percent. The company's net interest margin was 3.17 percent at Dec. 31, 2010, compared to 3.12 percent at Sept. 30, 2010, and 3.03 percent a year ago.

Net interest income for the 12 months ended Dec. 31, 2010, was $45.9 million, an increase of $3.6 million from the same period in 2009. Noninterest income for the full year 2010 was $21.1 million, an increase from $20.7 million in 2009, reflecting gains in mortgage origination income, retail investment income and trust income. Noninterest expense in 2010 totaled $41.8 million, a decrease of $4.7 million from 2009. The company's net interest margin was 3.18 percent for the full year, compared to 3.12 percent for 2009.

"We are quite pleased with the direction in which we are headed," said Blanton. "The economy remains an unknown, however, and as such, we will maintain a cautious, conservative approach moving forward."

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.6 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 an office in Athens, Ga. SB&T is a state charted bank 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.

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.

 
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
     
Consolidated Balance Sheets
     
  December 31,  
  2010 December 31,
Assets (Unaudited) 2009
     
Cash and due from banks  $ 42,304,774  $ 123,660,855
Federal funds sold  --   7,300,000
Interest-bearing deposits in other banks  22,810,141  17,032,784
Cash and cash equivalents  65,114,915  147,993,639
     
Investment securities    
Available-for-sale  586,301,633  306,216,156
Held-to-maturity, at cost (fair values of $310,753 and $491,860, respectively)  310,000  490,000
     
Loans held for sale  12,774,806  19,156,943
     
Loans  874,095,184  937,489,634
Less allowance for loan losses  26,656,672  22,338,255
Loans, net  847,438,512  915,151,379
     
Premises and equipment, net  29,415,853  31,702,655
Accrued interest receivable  6,382,121  6,090,791
Bank-owned life insurance  24,178,634  23,247,879
Restricted equity securities  5,706,900  6,337,700
Other real estate owned  7,750,552  7,973,830
Prepaid FDIC assessment  4,784,587  6,886,319
Deferred tax asset  14,594,554  11,159,725
Other assets  2,352,138  8,711,716
     
   $1,607,105,205  $1,491,118,732
     
Liabilities and Stockholders' Equity    
     
Deposits    
Noninterest-bearing  $ 120,138,486  $ 114,780,339
Interest-bearing:    
NOW accounts  356,266,740  210,437,831
Savings  409,583,995  343,739,778
Money management accounts  36,937,485  44,780,787
Time deposits over $100,000  346,721,403  418,750,941
Other time deposits  141,088,967  148,044,382
   1,410,737,076  1,280,534,058
     
Securities sold under repurchase agreements  817,574  3,187,807
Advances from Federal Home Loan Bank  60,000,000  77,000,000
Other borrowed funds  --   600,000
Accrued interest payable and other liabilities  12,646,021  13,106,706
Subordinated debentures  22,946,646  22,946,646
     
Total liabilities  1,507,147,317  1,397,375,217
     
Stockholders' equity:    
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2010 and 2009, respectively  --   -- 
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,675,147 and 6,672,826 shares issued and outstanding in 2010 and 2009, respectively  20,025,441  20,018,478
Additional paid-in capital  62,617,358  62,359,597
Retained earnings  19,548,606  12,692,134
Treasury stock, at cost; 0 shares in 2010 and 2009, respectively  --   -- 
Accumulated other comprehensive loss, net  (2,233,517)  (1,326,694)
     
Total stockholders' equity  99,957,888  93,743,515
     
   $1,607,105,205  $1,491,118,732
 
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
         
Consolidated Statements of Income
         
(Unaudited)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2010 2009 2010 2009
Interest income:        
Loans, including fees  $13,235,719  $13,968,352  $53,706,678  $56,196,016
Investment securities  4,237,833  3,317,714  15,781,202  14,281,826
Federal funds sold  --   3,472  9,201  28,825
Interest-bearing deposits in other banks  83,557  126,565  377,359  253,406
Total interest income  17,557,109  17,416,103  69,874,440  70,760,073
         
Interest expense:        
Deposits  4,591,650  5,779,900  20,464,633  24,248,560
Federal funds purchased and securities sold under repurchase agreements  2,209  7,272  19,708  327,531
Other borrowings  756,212  979,586  3,513,512  3,907,029
Total interest expense  5,350,071  6,766,758  23,997,853  28,483,120
         
Net interest income  12,207,038  10,649,345  45,876,587  42,276,953
         
Provision for loan losses  3,959,639  16,162,301  15,800,885  30,903,788
         
Net interest income (loss) after provision for loan losses  8,247,399  (5,512,956)  30,075,702  11,373,165
         
Noninterest income:        
Service charges and fees on deposits  1,780,474  1,826,849  6,925,623  7,050,929
Gain on sales of loans  2,171,421  1,850,433  8,623,963  8,493,426
Gain (loss) on sale of fixed assets  --   1,500  26,368  (14,729)
Investment securities gains, net  334,160  838,761  1,271,275  2,531,603
Other-than-temporary loss        
Total impairment loss  --   --   (96,258)  (990,605)
Loss recognized in other comprehensive loss  --   --   258  15,821
Net impairment loss recognized in earnings  --   --   (96,000)  (974,784)
Retail investment income  413,966  321,459  1,662,287  1,175,031
Trust service fees  274,636  273,952  1,127,361  1,039,819
Increase in cash surrender value of bank-owned life insurance  221,768  230,551  930,755  879,814
Miscellaneous income  147,950  130,144  614,269  558,495
Total noninterest income  5,344,375  5,473,649  21,085,901  20,739,604
         
Noninterest expense:        
Salaries and other personnel expense  5,938,076  5,606,466  23,462,219  22,533,801
Occupancy expenses  1,112,034  1,196,477  4,581,055  4,690,977
Other real estate losses, net  574,518  5,812,835  1,609,999  6,328,951
Other operating expenses  3,213,048  2,989,655  12,161,746  12,957,670
Total noninterest expense  10,837,676  15,605,433  41,815,019  46,511,399
         
Income (loss) before income taxes  2,754,098  (15,644,740)  9,346,584  (14,398,630)
         
Income tax expense (benefit)  608,012  (6,227,052)  2,490,111  (6,414,063)
         
Net income (loss)  $ 2,146,086  $ (9,417,688)  $ 6,856,473  $ (7,984,567)
         
Basic net income (loss) per share  $ 0.33  $ (1.41)  $ 1.03  $ (1.24)
         
Diluted net income (loss) per share  $ 0.33  $ (1.41)  $ 1.03  $ (1.24)
         
Weighted average common shares outstanding  6,675,147  6,672,826  6,674,224  6,422,867
         
Weighted average number of common and common equivalent shares outstanding  6,675,147  6,672,826  6,674,224  6,422,867
CONTACT: Ronald L. Thigpen
         Executive Vice President and COO
         Southeastern Bank Financial Corp.
         706-481-1014
         Andy Mus
         Senior Vice President
         Marsh Communications LLC
         404-327-7662

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