Southeastern Banking Corporation Reports Third Quarter 2022 Results, Declares Quarterly Dividend

Southeastern Banking Corporation (OTCBB:SEBC) (the “Company”), the parent of Southeastern Bank, today reported financial results for the third quarter of 2022. Financial highlights are shown below.

Additionally, the Board of Directors declared a quarterly dividend of $0.16 per share, to be paid on December 8, 2022, to shareholders of record on December 1, 2022.

Commenting on the Company’s results, Donald “Jay” Torbert, Jr., President and Chief Executive Officer, said, “We are pleased with our results for the quarter and year‐to‐date. Although the rising interest rate environment causes some economic concerns, it has enabled us to restore our margins to a more profitable level. We’ll be carefully monitoring margins and inflationary pressures as we head into 2023.”

Earnings
•  Net income increased to $2.6 million ($0.82 per diluted share) for the third quarter of 2022, compared to $1.9 million ($0.60 per diluted share) for the second quarter of 2022, and $1.9 million ($0.59 per diluted share) for the third quarter of 2021. Rising rates coupled with increased loan  production led to net interest income increasing more than $800,000 compared to the second quarter of 2022, and over $1.0 million compared to the third quarter of 2021.
•  Core operating earnings increased to $3.0 million for the third quarter of 2022 compared to $2.4 million for the second quarter of 2022 and $1.8 million for the third quarter of 2021 (see Quarterly Financial Highlights).
•  Return on average assets for the third quarter increased to 1.56%, compared to 1.24% for the third quarter of 2021.
•  Return on average equity was 16.91% for the third quarter versus 10.72% for the third quarter of 2021.
•  Net interest margin continues to improve in the rising interest rate environment, totaling 3.52% in the third quarter versus 3.10% for the second quarter of 2022.

Balance Sheet
•  Total assets declined 2.9%, or $19.0 million, during the third quarter to end at $641.3 million. Since September 30, 2021, assets increased 6.8%, or $41.0 million. Despite the quarterly decline, total assets remain elevated from a surge in deposits since the 2020 pandemic.
•  Loans, net of unearned income, increased 3.5%, or $9.9 million, during the third quarter to end at $296.0 million. Loans increased 4.9%, or $13.8 million, year‐over‐year.
•  Deposits declined 2.8%, or $17.0 million, during the third quarter to end at $583.0 million. Deposits increased 9.9%, or $52.5 million, year‐over‐year.

Capital
•  Capital continues to exceed regulatory thresholds required to be considered as “well‐capitalized.”
•  Tier 1 leverage capital ratio was 10.42% as of September 30, 2022, up 20bps during the quarter.
•  However, book value per share decreased to $17.88 during the quarter from $18.70. This decrease is from accounting adjustments to capital reflecting the decline in market value of the Company’s available for sale investment securities attributed to rising interest rates.

Asset Quality
•  The Company had relatively few asset quality issues to arise in recent quarters, even as economic conditions remained volatile.
•  Nonperforming assets totaled $1.4 million, or 0.21% of total assets, as of September 30, 2022 compared to $1.5 million, or 0.23% of total assets at the end of the second quarter of 2022.
•  The allowance for loan losses was $7.3 million, or 2.46% of total loans, at September 30, 2022, compared to $7.3 million, or 2.55% of total loans, at June 30, 2022.
•  Based on credit quality metrics, a provision for loan losses was not necessary for the first nine months of 2022. During the same period in 2021, a recovery of $850,000 was recognized.

About Southeastern Banking Corporation
Southeastern Banking Corporation is the bank holding company for Southeastern Bank. Southeastern Bank, established in 1888, has a long history of serving its customers and communities through its 10 locations in coastal Georgia and northeast Florida, including Brunswick, Callahan, Darien, Eulonia, Folkston, Hilliard, Kingsland, Nahunta, Richmond Hill and St. Simons Island. The Bank is headquartered in Darien, Georgia.

Southeastern Banking Corporation’s common stock is traded on the OTC Markets PINK under the symbol “SEBC.” For more information, please visit www.southeasternbank.com.

Forward‐Looking Statements
Certain statements contained in this release may not be based on historical facts and are forward‐looking statements. These forward‐looking statements may be identified by their reference to a future period or periods or by the use of forward‐looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could” or “intend.” We caution you not to place undue reliance on the forward‐looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward‐looking statements as a result of a variety of factors. We undertake no obligation to update these forward‐looking statements to reflect events or circumstances that occur after the date of this news release.

Explanation of Certain Unaudited Non‐GAAP Financial Measures
The measure entitled core operating earnings is not a measure recognized under U.S. generally accepted accounting principles (GAAP) and therefore is considered to be a non‐GAAP financial measure. The most comparable GAAP measure is net income before taxes. Core operating  earnings exclude select revenues and expenditures not considered as core to the Company’s daily operations.

Management uses this non‐GAAP financial measure in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's operating performance. These disclosures should not be considered an alternative to GAAP. The computations of core operating earnings are set forth in the following Quarterly Financial Highlights table.

CONTACT:
Robert M. Eidson, Jr.

Chief Financial Officer

912‐459‐0574
robbie.eidson@southeasternbank.com