Southeastern Bank Financial Corp., the holding company for Georgia Bank & Trust Company of Augusta, reported quarterly net income of $4.7 million for the three months ended March 31, 2016, or $0.70 in diluted earnings per share, compared to $4.2 million, or $0.63 in diluted earnings per share, in the first quarter of 2015, an increase of 11.1 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 loan growth.  Noninterest income increased and included an 8.6 percent increase in gain on sale of loans from our mortgage operations. Credit costs continued to decline along with further improvement in asset quality. Growth in our balance sheet reflected increases in core loans and deposits. Overall, we continue to perform very well reflecting an annualized 1.03 percent return on average assets and an annualized 10.82 percent return on average equity.”

Total assets at March 31, 2016, were $1.9 billion, an increase of $36.9 million from December 31, 2015. Loans outstanding at the end of the first quarter were $1.05 billion, an increase of $20.7 million from December 31, 2015, and an increase of $59.9 million from March 31, 2015. Total deposits were $1.6 billion at March 31, 2016, an increase of $39.4 million from December 31, 2015, and an increase of $31.4 million from March 31, 2015. Cash and cash equivalents totaled $90.7 million at the end of the first quarter of 2016.

Net interest income for the first quarter of 2016 totaled $13.8 million, a 5.7 percent increase from $13.1 million for the same period in 2015. Noninterest income for the first quarter totaled $5.2 million, an increase from $4.7 million for the same period a year ago, primarily due to higher mortgage origination volume and investment securities gains. Noninterest expense was $11.7 million in the first quarter of 2016, a 5.9 percent increase from a year ago resulting from higher salary and personnel expenses, including commissions, as well as increased marketing and processing expenses.

The net interest margin was 3.23 percent for the quarter-ended March 31, 2016, compared to 3.14 percent at December 31, 2015, and 3.22 percent for the same period a year ago. Annualized return on average assets (ROA) was 1.03 percent for the first quarter of 2016, an increase from 0.97 percent for the same period a year ago, and annualized return on average shareholder's equity was 10.82 percent, remaining the same as the first quarter of 2015.

Nonperforming assets at March 31, 2016, were 0.84 percent of total assets, compared to 0.97 percent at December 31, 2015, and 1.11 percent at March 31, 2015. Net charge-offs for the first quarter of 2016 totaled 0.10 percent of average loans on an annualized basis, compared to 0.48 percent annualized in the fourth quarter of 2015 and 0.28 percent annualized in the first quarter of 2015. The company held $655 thousand in OREO at March 31, 2016, compared to $360 thousand at December 31, 2015, and $1.0 million at March 31, 2015.

The company's loan-loss provision expense was $428 thousand in the first quarter of 2016, compared to $382 thousand in the fourth quarter of 2015 and $547 thousand in the first quarter of 2015. The allowance for loan losses at March 31, 2016, was $21.5 million, or 2.06 percent of loans outstanding, compared to $21.4 million, or 2.08 percent of loans outstanding, at December 31, 2015, and $25.4 million, or 2.57 percent of loans outstanding, at March 31, 2015.

"This low interest rate environment continues to challenge our net interest margin but we are pleased with core loan and deposit growth and the increases in our mortgage origination volume," said Thigpen. "Our balance sheet remains strong and we are well positioned to handle increased loan growth and meet the needs of our community.”