AUGUSTA, Ga., July 25, 2008 (PRIME NEWSWIRE) -- Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta and Southern Bank & Trust of Aiken, S.C., today reported quarterly net income of $2.4 million for the three months ended June 30, 2008, a decrease from $3.0 million in the second quarter of 2007. Diluted earnings per share for the second quarter of 2008 were $0.40, compared to $0.49 for the same period last year.
"We fared quite well compared to the overall banking market in the second quarter," said President and Chief Executive Officer R. Daniel Blanton. "We continued to improve our core banking performance with increases in both net interest and noninterest income, despite continued margin pressure from a further cut in the federal funds rate in April. Overall, we remain in a solid position during this economic environment with respect to our profitability, capital levels, liquidity and asset quality.
"Our net income and earnings were lower on a comparative basis to last year due to the 60 percent increase in our provision for loan losses to $1.7 million for the quarter ended June 30, 2008," continued Blanton. "We felt the increase in the provision was a prudent move in light of the ongoing softness of the real estate market and the resulting downgrade of credits. Had it not been for our stringent underwriting discipline requiring quality collateral, we would have had to increase the provision for loan losses even further."
Total assets at June 30, 2008, were $1.3 billion, an increase of $180.7 million from a year ago, and $101.0 million from Dec. 31, 2007. Loans outstanding at the end of the second quarter were $968.1 million, and total deposits were $1.1 billion, an increase of 9.7 percent and 10.3 percent, respectively, from Dec. 31, 2007.
Net interest income for the second quarter of 2008 totaled $10.0 million, a 5.9 percent increase from $9.5 million for the same period of 2007. Noninterest income for the quarter totaled $4.5 million, an increase of 18.0 percent from a year ago, reflecting strong growth in service charges and mortgage revenue from the gain on sale of loans.
Noninterest expense was $9.3 million, compared to $7.6 million a year ago. The rise in expense is due primarily to the continued expansion of the Company and related personnel and occupancy costs associated with the opening of a new Georgia Bank & Trust office in Evans, Ga., and new Southern Bank & Trust offices in North Augusta and Aiken, S.C. a loan production office in Greenville, S.C., as well as the company's move into a newly expanded 53,000-sq.-ft. Operations Center.
Nonperforming assets at June 30, 2008, were 2.11 percent of total assets, compared to 0.32 percent at June 30, 2007, and 0.63 percent at March 31, 2008. This increase is the result of a few credits that have deteriorated. Net charge-offs for the second quarter of 2008 totaled 0.01 percent of average loans, compared to 0.04 percent in the second quarter of 2007 and 0.03 percent in the first quarter of 2008. The company held no foreclosed property or other real estate (ORE) at June 30, 2008, compared to $293,000 at June 30, 2007 and $412,000 at March 31, 2008.
Annualized return on average assets (ROA) was 0.75 percent for the second quarter of 2008, and annualized return on average shareholder's equity (ROE) was 11.50 percent. The company's net interest margin was 3.25 percent at June 30, 2008, compared to 3.58 percent a year ago and 3.49 percent at the end of the first quarter of 2008.
Net income for the six months ended June 30, 2008, totaled $5.0 million, compared to $5.7 million reported in the same period of 2007. Diluted earnings per share for the first six months of 2008 were $0.84, compared to $0.95 per share earned in the same period a year ago.
Net interest income for the first six months of 2008 was $20.3 million, an increase of 9.5 percent from $18.5 million in the first six months of 2007. Noninterest income was $8.4 million for the first six months of 2008, an increase of 13.8 percent from $7.4 million in the same period of 2007. Noninterest expense was $18.2 million for the six-month period, compared to $15.4 million in 2007.
"As we move forward, we are confident that Southeastern Bank Financial is well-positioned to move through these unusual economic times," said Blanton. "We will continue our conservative style of 'vanilla banking' as we work to expand our banking franchise, serving our customers and our communities. Our philosophy of organic growth, rather than by acquisition, and limiting ourselves to markets we are familiar with has worked well for us."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.3 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 offices in Athens, Ga., and Greenville, S.C. SB&T is a federally chartered thrift 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
June 30,
2008 December 31,
Assets (Unaudited) 2007
-------------- --------------
Cash and due from banks $ 30,797,068 $ 24,557,517
Federal funds sold 2,900,000 --
Interest-bearing deposits in other
banks 499,942 500,031
-------------- --------------
Cash and cash equivalents 34,197,010 25,057,548
Investment securities
Available-for-sale 250,230,113 245,428,825
Held-to-maturity, at cost (fair
values of $699,944 and $1,467,032,
respectively) 689,056 1,435,178
Loans held for sale 19,372,289 11,303,098
Loans 948,745,422 871,439,789
Less allowance for loan losses (14,324,130) (11,800,163)
-------------- --------------
Loans, net 934,421,292 859,639,626
Premises and equipment, net 34,060,694 32,612,246
Accrued interest receivable 6,461,418 7,416,257
Bank-owned life insurance 17,018,875 16,660,485
Restricted equity securities 6,401,369 5,059,781
Other assets 11,131,776 8,366,957
-------------- --------------
$1,313,983,892 $1,212,980,001
============== ==============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 115,804,097 $ 101,272,104
Interest-bearing:
NOW accounts 156,811,092 132,185,890
Savings 288,859,144 289,730,991
Money management accounts 75,518,119 73,609,269
Time deposits over $100,000 287,902,060 243,500,864
Other time deposits 125,478,314 111,867,272
-------------- --------------
1,050,372,826 952,166,390
Federal funds purchased and securities
sold under repurchase agreements 61,424,469 81,165,423
Advances from Federal Home Loan Bank 81,000,000 59,000,000
Other borrowed funds 400,000 500,000
Accrued interest payable and other
liabilities 9,790,346 10,390,373
Subordinated debentures 20,000,000 20,000,000
-------------- --------------
Total liabilities 1,222,987,641 1,123,222,186
-------------- --------------
Stockholders' equity:
Common stock, $3.00 par value;
10,000,000 shares authorized;
5,976,811 and 5,976,811 shares
issued in 2008 and 2007, respectively;
5,967,414 and 5,967,536 shares
outstanding in 2008 and 2007,
respectively 17,930,433 16,300,842
Additional paid-in capital 55,087,980 39,517,286
Retained earnings 20,474,753 34,228,272
Treasury stock, at cost; 9,397 and
9,275 shares in 2008 and 2007,
respectively (278,483) (316,800)
Accumulated other comprehensive
(loss) gain, net (2,218,432) 28,215
-------------- --------------
Total stockholders' equity 90,996,251 89,757,815
-------------- --------------
$1,313,983,892 $1,212,980,001
============== ==============
SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Interest income:
Loans, including
fees $ 15,087,580 $ 16,399,199 $ 31,480,334 $ 31,902,869
Investment
securities 3,336,956 2,921,476 6,598,330 5,532,810
Federal funds
sold 95,786 315,503 186,555 681,585
Interest-bearing
deposits in
other banks 5,718 6,980 11,540 13,470
------------ ------------ ------------ ------------
Total interest
income 18,526,040 19,643,158 38,276,759 38,130,734
------------ ------------ ------------ ------------
Interest expense:
Deposits 7,165,520 8,164,890 15,042,077 15,657,083
Federal funds
purchased and
securities sold
under repurchase
agreements 324,295 802,685 864,228 1,669,830
Other borrowings 993,165 1,188,987 2,062,645 2,263,726
------------ ------------ ------------ ------------
Total interest
expense 8,482,980 10,156,562 17,968,950 19,590,639
------------ ------------ ------------ ------------
Net interest
income 10,043,060 9,486,596 20,307,809 18,540,095
Provision for loan
losses 1,652,016 1,030,389 2,923,021 1,606,187
------------ ------------ ------------ ------------
Net interest
income after
provision for
loan losses 8,391,044 8,456,207 17,384,788 16,933,908
------------ ------------ ------------ ------------
Noninterest income:
Service charges
and fees on
deposits 1,820,313 1,581,451 3,490,902 2,978,467
Gain on sales of
loans 1,575,838 1,320,377 2,835,800 2,604,655
Investment
securities gains,
net 30,228 -- 67,808 33,191
Gain / (loss) on
sale of fixed
assets 4,693 (11,205) 7,692 (63,137)
Retail investment
income 275,535 275,218 564,334 598,457
Trust service
fees 298,347 284,906 584,295 558,442
Increase in cash
surrender value
of bank-owned
life insurance 194,221 160,935 358,390 325,737
Miscellaneous
income 252,234 160,861 473,189 328,540
------------ ------------ ------------ ------------
Total
noninterest
income 4,451,409 3,772,543 8,382,410 7,364,352
------------ ------------ ------------ ------------
Noninterest expense:
Salaries and other
personnel
expense 5,382,731 4,628,251 10,553,841 9,423,758
Occupancy
expenses 1,005,216 742,442 2,030,565 1,502,786
Other operating
expenses 2,876,605 2,212,160 5,600,717 4,427,163
------------ ------------ ------------ ------------
Total
noninterest
expense 9,264,552 7,582,853 18,185,123 15,353,707
------------ ------------ ------------ ------------
Income before
income taxes 3,577,901 4,645,897 7,582,075 8,944,553
Income tax expense 1,169,786 1,674,956 2,539,301 3,214,332
------------ ------------ ------------ ------------
Net income $ 2,408,115 $ 2,970,941 $ 5,042,774 $ 5,730,221
============ ============ ============ ============
Basic net income
per share $ 0.40 $ 0.50 $ 0.85 $ 0.96
============ ============ ============ ============
Diluted net
income per
share $ 0.40 $ 0.49 $ 0.84 $ 0.95
============ ============ ============ ============
Weighted average
common shares
outstanding 5,965,978 5,975,559 5,962,471 5,976,195
============ ============ ============ ============
Weighted average
number of common
and common
equivalent shares
outstanding 6,023,375 6,058,068 6,023,271 6,059,909
============ ============ ============ ============