Southeastern Bank Financial Corp. Reports Record Fourth Quarter, Annual Earnings for 200529 January 2006
Southeastern Bank Financial Corp. (OTC Bulletin Board: SBFC), the holding company for Georgia Bank & Trust Company of Augusta, today reported quarterly net income of $2.9 million for the three months ended Dec. 31, 2005, an increase of 29.1 percent from $2.2 million in the fourth quarter of 2004. Diluted earnings per share for the fourth quarter of 2005 were $0.53, a 26.2 percent increase from $0.42 for the same period last year.
"We experienced strong growth in income and earnings during the fourth quarter, spurred by double-digit increases in deposits, loans and net interest income," said R. Daniel Blanton, president and chief executive officer. "It was a successful end to a year of robust growth for our company, and it gives us good momentum for 2006."
At Dec. 31, 2005, total assets were $864.3 million, an increase of $157.8 million or 22.3 percent from a year ago. Loans outstanding at Dec. 31, 2005, were $601.2 million, and total deposits were $663.7 million, an increase of 21.7 percent and 19.2 percent, respectively, from a year ago.
Net interest income for the fourth quarter of 2005 was $7.9 million, up 17.0 percent from the same period a year ago. Noninterest income for the quarter was $3.2 million, an increase of 5.9 percent over the fourth quarter of 2004. Noninterest expense was $6.6 million in the fourth quarter of 2005, an increase of approximately $547,700 from a year ago, due primarily to infrastructure and employee costs associated with opening the Georgia Bank & Trust branch in Athens, Ga.
Return on average assets (ROA) was 1.35 percent for the fourth quarter of 2005, and return on average shareholders' equity (ROE) was 17.68 percent. For the full year, ROA was 1.27 percent, and ROE was 16.15 percent.
Record net income totaled $9.9 million for 2005, a 14.3 percent increase over the $8.7 million reported in 2004. Diluted earnings per share were $1.86, versus $1.63 per share for 2004, a 14.1 percent increase.
Net interest income for 2005 was $29.4 million, up 14.4 percent from $25.7 million in 2004. Noninterest income was $12.4 million, compared to $12.5 million in 2004. Noninterest expense increased to $25.0 million from $23.7 million in 2004.
"It was a momentous year for Southeastern Bank Financial," said Blanton. "We changed the name of our holding company and embarked on a new long-term expansion plan, which included the opening of our first Georgia Bank & Trust branch outside of our metro Augusta market, in Athens, Ga., and the announcement of our intention to charter a thrift to enter the Aiken, S.C., market. We continue to strongly progress toward reaching and exceeding $1 billion in assets within our Augusta metro market while maintaining our long-standing commitment to remain an independent, locally owned and operated banking organization."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $864 million-asset bank holding company of Georgia Bank & Trust Company of Augusta. GB&T is the largest locally owned and operated community bank in the Augusta metro market, with eight full-service Augusta-area offices and an office in Athens, Ga. The company also has mortgage operations in Augusta and Savannah. The bank focuses primarily on real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals, and also provides 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, http://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 expanding our operations into new geographic areas and dealing with an additional regulatory agency; 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 SUBSIDIARY
Consolidated Balance Sheets
December 31,
2005 December 31,
Assets (Unaudited) 2004
Cash and due from banks $18,792,799 $13,186,173
Federal funds sold 2,758,000 12,326,000
Interest-bearing deposits in other banks 1,012,257 512,024
Cash and cash equivalents 22,563,056 26,024,197
Investment securities
Available-for-sale 201,839,477 152,637,090
Held-to-maturity, at cost (fair values
of $3,897,341 and $3,997,361,
respectively) 3,776,040 3,776,428
Loans held for sale 22,146,834 14,778,614
Loans 579,087,791 479,391,209
Less allowance for loan losses (9,124,801) (7,930,366)
Loans, net 569,962,990 471,460,843
Premises and equipment, net 21,376,183 18,437,500
Accrued interest receivable 4,624,023 3,638,247
Bank-owned life insurance 11,863,276 11,463,591
Other assets 6,125,360 4,300,801
$864,277,239 $706,517,311
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $97,083,931 $80,798,355
Interest-bearing:
NOW accounts 100,692,388 80,417,657
Savings 265,131,754 225,533,029
Money management accounts 37,719,408 25,142,955
Time deposits over $100,000 122,009,813 106,835,743
Other time deposits 41,017,555 38,056,932
663,654,849 556,784,671
Federal funds purchased and securities
sold under repurchase agreements 67,013,416 44,581,259
Advances from Federal Home Loan Bank 52,000,000 40,000,000
Other borrowed funds 1,000,000 900,000
Accrued interest and other liabilities 7,025,767 5,271,556
Junior subordinated debentures 10,000,000 -
Total liabilities 800,694,032 647,537,486
Stockholders' equity:
Common stock, $3.00 par value;
10,000,000 shares authorized;
5,279,241 and 5,287,100 shares
issued in 2005 and 2004,
respectively; 5,263,144 and
5,249,604 shares outstanding in
2005 and 2004, respectively 15,837,723 15,861,300
Additional paid-in capital 34,138,876 34,375,510
Retained earnings 16,099,414 8,878,633
Treasury stock, at cost;
16,097 and 37,496 shares in
2005 and 2004, respectively (233,898) (497,127)
Accumulated other comprehensive income (2,258,908) 361,509
Total stockholders' equity 63,583,207 58,979,825
$864,277,239 $706,517,311
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Interest income:
Loans, including
fees $11,036,747 $7,730,325 $38,897,578 $28,235,160
Investment
securities 2,270,896 1,774,965 7,973,507 7,039,261
Federal funds sold 97,206 26,941 380,453 72,941
Interest-bearing
deposits in
other banks 8,999 2,753 25,598 3,293
Total interest
income 13,413,848 9,534,984 47,277,136 35,350,655
Interest expense:
Deposits 4,235,668 2,123,329 13,873,143 7,222,141
Federal funds
purchased and
securities sold
under repurchase
agreements 615,784 196,714 1,697,219 651,185
Other borrowings 643,794 448,553 2,314,911 1,797,163
Total interest
expense 5,495,246 2,768,596 17,885,273 9,670,489
Net interest
income 7,918,602 6,766,388 29,391,863 25,680,166
Provision for loan
losses 265,212 575,403 1,841,435 1,588,426
Net interest
income after
provision for
loan losses 7,653,390 6,190,985 27,550,428 24,091,740
Noninterest income:
Service charges and
fees on deposits 1,406,448 1,296,155 5,363,306 4,924,629
Gain on sales of
loans 1,227,734 1,337,948 5,088,557 5,705,051
Investment
securities
losses, net - (99,281) (85,666) (101,990)
Retail investment
income 164,114 99,660 454,710 444,479
Trust service fees 171,225 149,022 642,016 554,331
Increase in cash
surrender value
of bank-owned
life insurance 106,346 121,171 399,685 491,958
Miscellaneous income 129,969 122,719 514,999 443,017
Total noninterest
income 3,205,836 3,027,394 12,377,607 12,461,475
Noninterest expense:
Salaries 3,452,018 3,023,983 12,451,873 11,649,152
Employee benefits 725,390 715,589 3,079,548 2,905,631
Occupancy expenses 688,037 689,644 2,730,594 2,622,953
Other operating
expenses 1,764,146 1,652,603 6,757,077 6,566,480
Total noninterest
expense 6,629,591 6,081,819 25,019,092 23,744,216
Income before
income taxes 4,229,635 3,136,560 14,908,943 12,808,999
Income tax expense 1,363,744 917,435 4,954,734 4,104,723
Net income $2,865,891 $2,219,125 $9,954,209 $8,704,276
Basic net income
per share $0.54 $0.42 $1.89 $1.66
Diluted net income
per share $0.53 $0.42 $1.86 $1.63
Weighted average
common shares
outstanding 5,262,465 5,249,147 5,257,904 5,247,901
Weighted average
number of common
and common
equivalent shares
outstanding 5,367,624 5,325,488 5,350,384 5,323,924
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Year Ended December 31,
2005 2004
Cash flows from operating activities:
Net income $9,954,209 $8,704,276
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 1,454,503 1,335,362
Deferred income tax benefit (617,633) (204,160)
Provision for loan losses 1,841,435 1,588,426
Net investment securities losses 85,666 101,990
Net amortization of premium on
investment securities 311,604 411,722
Increase in CSV of bank owned
life insurance (399,685) (491,958)
Loss on disposal of premises and
equipment 7,278 2,365
Loss on the sale of other real estate 7,888 3,728
Gain on sales of loans (5,088,557) (5,705,051)
Real estate loans originated for sale (264,726,917) (274,939,497)
Proceeds from sales of real
estate loans 262,447,254 279,913,014
(Increase) decrease in accrued
interest receivable (985,776) 146,641
Decrease (increase) in other assets 89,557 (46,790)
Increase in accrued interest and
other liabilities 1,754,211 48,202
Net cash provided by operating
activities 6,135,037 10,868,270
Cash flows from investing activities:
Proceeds from sales of available
for sale securities 23,852,712 40,304,730
Proceeds from sales of held to
maturity securities - 550,000
Proceeds from maturities of
available for sale securities 24,281,923 47,852,287
Proceeds from maturities of held
to maturity securities - 1,168,000
Purchase of available for sale
securities (101,008,633) (89,633,987)
Purchase of Federal Home Loan
Bank stock (920,600) (1,309,000)
Proceeds from redemption of FHLB stock 225,000 -
Net increase in loans (100,569,887) (62,006,652)
Additions to premises and equipment (4,402,964) (5,574,879)
Proceeds from sale of other real estate 271,846 259,476
Proceeds from sale of premises and
equipment 2,500 50,195
Net cash used in investing activities(158,268,103) (68,339,830)
Cash flows from financing activities:
Net increase in deposits 106,870,178 72,832,869
Net increase (decrease) in federal
funds purchased and securities sold
under repurchase agreements 22,432,157 (12,387,495)
Advances from Federal Home Loan Bank 17,000,000 10,000,000
Payments of Federal Home Loan
Bank advances (5,000,000) -
Proceeds from junior subordinated
debentures 10,000,000
Proceeds from other borrowed funds 100,000 100,000
Purchase of treasury stock - (62,043)
Payment of cash dividends (2,733,427) (2,729,118)
Proceeds from stock options exercised 3,017 19,660
Net cash provided by financing
activities 148,671,925 67,773,873
Net (decrease) increase in cash
and cash equivalents $(3,461,141) $10,302,313
Cash and cash equivalents at beginning
of period 26,024,197 15,721,884
Cash and cash equivalents at end of
period $22,563,056 $26,024,197
Supplemental disclosures of cash
paid during the period for:
Interest $17,310,768 $9,721,549
Income taxes $5,046,258 $4,571,000
Supplemental information on noncash
investing activities:
Loans transferred to other real estate $226,305 $311,905
Source: prnewswire
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