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.