Southeastern Banking Corporation Reports Third Quarter 2023 Results - Declares Quarterly Cash Dividend of $0.18 Per Share

Southeastern Banking Corporation Reports Third Quarter 2023 Results

Declares Quarterly Cash Dividend of $0.18 Per Share

Darien, GA — November 16, 2023 – Southeastern Banking Corporation (OTCPINK:SEBC; the “Company”), the parent of Southeastern Bank, today reported financial results for the third quarter of 2023. Financial highlights are shown below.

Additionally, the Board of Directors declared a quarterly dividend of $0.18 per share, to be paid on December 7, 2023, to shareholders of record on November 30, 2023.

Commenting on the Company’s results, Donald “Jay” Torbert, Jr., President and Chief Executive Officer, said, “The Bank continues to perform at a relatively high level, especially in terms of core earnings where it is on pace to surpass 2022 levels, despite difficult operating and interest rate environments.  During the third quarter, we launched the migration to a new banking platform that presented certain operational distractions of its own.  However, I am extremely proud of our team, who worked hard implementing the changes while continuing to provide a high level of service assisting our customers with the transition.  We believe this investment in our systems and other ongoing enhancements are necessary to efficiently deliver products and services that meet our customers’ needs today and into the future.”

Earnings

• Net income was $2.1 million (or $0.65 per share) for the third quarter of 2023, compared to $2.7 million (or $0.86 per share) for the second quarter of 2023 and $2.6 million (or $0.82 per share) for the third quarter of 2022. The decline in net earnings during the third quarter is primarily attributable to $745 thousand in nonrecurring charges related to the systems migration. Additionally, contraction in earning assets combined with increased rates paid on deposit accounts drove a $243 thousand decline in net interest income compared to the second quarter of 2023.
• Core operating earnings for the third quarter totaled $3.3 million compared to $3.6 million for the second quarter of 2023 and $3.0 million for the third quarter of 2022.
• The return on average assets for the third quarter of 2023 was 1.39%, compared to 1.78% for the second quarter of 2023 and 1.56% for the third quarter of 2022.
• The return on average equity was 12.74% versus 16.92% for the second quarter of 2023 and 16.91% for the third quarter of 2022.
• Net interest margin was 4.38% in the third quarter versus 4.46% for the second quarter of 2023 and 3.52% in the third quarter of 2022.
• Year to date, net income was $7.8 million (or $2.47 per share) compared to $6.2 million (or $1.97 per share) for the first nine months of 2022.

Balance Sheet

• Total assets decreased 1.5%, or $8.9 million, during the third quarter to end at $592.6 million. This reduction is attributed to net deposit outflows. Over the last twelve months total assets declined 7.6%, or $48.7 million.
• Deposits declined 1.5%, or $7.8 million, during the third quarter to end at $527.1 million. Deposits contracted 9.6%, or $55.9 million, year-over-year. The net deposit outflows reflect a release of pandemic surge deposits, yet we still remain above pre-pandemic deposit levels, and the placement of customer deposits through a third party network. Net deposit placements off balance sheet declined $12.8 million during the third quarter but increased $40.5 million over the last twelve months. Deposit declines were largely led by commercial demand (down $9.8 million for the quarter and $18.5 million year-over-year) and public deposits (down $9.9 million for the quarter and $11.6 million year-over-year). Despite the dollar decline in deposits, we have experienced growth in the number of core deposit accounts over the last twelve months.
• Loans, net of unearned income, increased by 1.2%, or $4.0 million, during the third quarter to end at $338.2 million. Year-over-year, loans outstanding increased 14.3%, or $42.2 million.
• Total loan production through commercial and retail lending activities was in excess of $32.5 million during the third quarter, down from $38.5 million in the second quarter and the $41.3 million generated during the third quarter of 2022. We have seen a notable slowdown in loan demand that we attribute in large part to higher interest rates.

Capital

• Capital continues to exceed regulatory thresholds required to be considered “well-capitalized.”
• Consolidated Tier 1 leverage capital ratio was 12.83% at September 30, 2023, up 67bps during the quarter and 241bps over the last twelve months.
• Book value per share was $19.86 at September 30, 2023, and has increased by $1.98 over the last twelve months.

Asset Quality

• Asset quality remained stable through the third quarter of 2023.
• Nonperforming assets were $1.3 million, or 0.22% of total assets, at September 30, 2023 and were virtually unchanged during the quarter.
• The allowance for credit losses related to loans aggregated $7.6 million, or 2.25% of total loans, at September 30, 2023, compared to $7.6 million, or 2.28% of total loans, at June 30, 2023.
• Based on credit quality metrics, a provision for credit losses was not considered necessary during the quarter.

About Southeastern Banking Corporation

Southeastern Banking Corporation is the bank holding company for Southeastern Bank. Established in 1888, Southeastern Bank has a long history of serving its customers and communities through its 10 branch locations in coastal Georgia and northeast Florida, including Brunswick, Callahan (FL), Darien, Eulonia, Folkston, Hilliard (FL), Kingsland, Nahunta, Richmond Hill and St. Simons Island.  In addition to these full service branches, the Bank has a loan production office in Hinesville, Georgia. 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, as actual results could differ materially from those indicated in such forward-looking statements. 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 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 Quarterly Financial Highlights table.

CONTACT:        

Robert M. Eidson, Jr.

Treasurer

912-437-4141

robbie.eidson@southeasternbank.com