Southeastern Bank Financial Corp., the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $5.7 million for the three months ended June 30, 2015, or $0.85 in diluted earnings per share, compared to $4.0 million, or $0.60 in diluted earnings per share, in the second quarter of 2014, an increase of 40.7 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. "The second quarter net interest income reflects an extraordinary impact from a significant payoff and recovery on a problem credit.  The resolution of this credit contributed to an increase in net interest income and the negative provision for loan losses. Non-interest income reflected a 2.8 percent increase in service charges and an increase in gain on sale of loans from mortgage origination of 28.0 percent.  Credit costs decreased further as asset quality continued to improve. Our balance sheet grew, as we experienced solid deposit growth. Loan growth continues to be a major challenge. Overall, we continue to perform well reflecting an annualized 1.27 percent return on average assets and an annualized 14.15 percent return on average equity for the second quarter of 2015.”

Total assets at June 30, 2015, were $1.8 billion, an increase of $62.2 million or 3.6 percent from December 31, 2014. Loans outstanding at the end of the second quarter were $969.0 million, a decrease of $15.7 million from December 31, 2014, and a decrease of $15.7 million from June 30, 2014. Total deposits were $1.5 billion at June 30, 2015, an increase of $70.5 million from December 31, 2014, and an increase of $2.5 million from June 30, 2014. Cash and cash equivalents totaled $78.1 million at the end of the second quarter of 2015.

Net interest income for the second quarter of 2015 totaled $13.9 million, a 6.9 percent increase from $13.0 million for the same period in 2014. Noninterest income for the second quarter totaled $4.0 million, a decrease from $4.5 million for the same period a year ago, primarily due to investment securities losses taken.  The negative impact of investment losses was partially offset by higher mortgage origination volume and increased service charges and fees on deposits. Noninterest expense was $12.2 million in the second quarter of 2015, a 14.8 percent increase from a year ago resulting from increased salary and other operating expense. The higher operating expense reflected the fee to pay off a high rate Federal Home Loan Bank borrowing.

The net interest margin was 3.32 percent for the quarter-ended June 30, 2015, compared to 3.20 percent for the quarter-ended December 31, 2014, and 3.18 percent for the same period a year ago. Annualized return on average assets (ROA) was 1.27 percent for the second quarter of 2015, an increase from 0.93 percent for the same period a year ago, and annualized return on average shareholder's equity (ROE) was 14.15 percent, an increase from 11.39 percent from the second quarter of 2014.

Nonperforming assets at June 30, 2015, were 0.86 percent of total assets, compared to 1.26 percent at December 31, 2014, and 1.28 percent at June 30, 2014. Net charge-offs for the second quarter of 2015 totaled negative 0.28 percent of average loans on an annualized basis (reflecting the large recovery), compared to 0.74 percent annualized in the fourth quarter of 2014 and 0.18 percent annualized in the second quarter of 2014. The company held $922 thousand in OREO at June 30, 2015, compared to $1.1 million at December 31, 2014, and $1.5 million at June 30, 2014.

The company's loan-loss provision expense was a negative $2.7 million in the second quarter of 2015, compared to $547 thousand in the previous quarter, and $1.0 million in the second quarter a year ago. The allowance for loan losses at June 30, 2015, was $23.4 million, or 2.41 percent of loans outstanding, compared to $25.5 million, or 2.59 percent of loans outstanding, at December 31, 2014, and $26.9 million, or 2.73 percent of loans outstanding, at June 30, 2014.

"We continue to be challenged by the low level of loan demand, but we are encouraged by the increases in mortgage origination volume along with core deposit growth.  Also, we took advantage of the extraordinary recovery by taking steps to improve our future net interest margin," said Thigpen. "Our balance sheet remains strong and we are well positioned to support our customers and the community as loan demand continues to improve.”

On July 22, 2015, the company's Board of Directors declared a regular quarterly cash dividend of $0.15 per share of common stock payable on August 21, 2015, to shareholders of record as of August 7, 2015. Based on the share price of $29.75 at the close of business on Thursday, July 23, 2015, this dividend represents an annualized yield to shareholders of 2.02 percent

- See more at: http://globenewswire.com/news-release/2015/07/24/754932/0/en/Southeastern-Bank-Financial-Corp-Reports-Second-Quarter-2015-Earnings-and-Declares-Dividend.html#sthash.kEWBQLGM.dpuf