Southeastern Banking Corporation (OTCBB:SEBC; the “Company”), the parent of Southeastern Bank, today reported financial results for the fourth quarter and full year of 2022. Financial highlights are shown below.
Additionally, the Board of Directors declared a quarterly dividend of $0.17 per share, to be paid on March 9, 2023, to shareholders of record on March 2, 2023. This dividend amount represents a 6.25% increase over the $0.16 per share quarterly dividend paid during 2022.
Commenting on the Company’s results, Donald “Jay” Torbert, Jr., President and Chief Executive Officer, said, “We are pleased to report improved profitability and growth for the fourth quarter and record earnings for the full year. Although inflation and rising interest rates have had an impact on economic conditions, housing and labor markets in particular, our asset quality levels have held steady and capital levels continue to strengthen.”
Earnings
For the year ended December 31, 2022, net income of $9.1 million represented an increase of $1.6 million, or 20.8%, compared to 2021.
Quarterly net income increased to $2.8 million ($0.90 per diluted share) for the fourth quarter of 2022, compared to $2.6 million ($0.82 per diluted share) for the third quarter of 2022 and $1.6 million ($0.49 per diluted share) for the fourth quarter of 2021. Rising interest rates combined with increased loan production drove an $860 thousand increase in net interest income compared to the third quarter of 2022, and over $2.0 million compared to the fourth quarter of 2021.
Core operating earnings increased to $3.8 million for the fourth quarter of 2022 compared to $3.0 million for the third quarter of 2022 and $1.7 million for the fourth quarter of 2021 (see Quarterly Financial Highlights).
The Company’s credit card portfolio was sold during the fourth quarter of 2022, resulting in a gain of $92 thousand.
Return on average assets for the fourth quarter increased to 1.74%, compared to 1.00% for the fourth quarter of 2021.
Return on average equity was 19.72% for the fourth quarter versus 9.18% for the fourth quarter of 2021.
Net interest margin continues to improve in the rising rate environment, totaling 4.07% in the fourth quarter versus 3.52% for the third quarter of 2022 and 3.06% in the fourth quarter of 2021.
Balance Sheet
Total assets increased 4.8%, or $30.7 million, during the fourth quarter to end at $672.0 million. The quarterly increase resulted largely from seasonal inflows in local government deposits. Since December 31, 2021, assets increased 4.7%, or $29.9 million.
Loans, net of unearned income, increased 10.6%, or $31.3 million, during the fourth quarter to end at $327.3 million. The quarterly increase in loans was driven by strong loan demand and funding of projects initiated earlier in the year. Loans increased 11.2%, or $32.9 million, year‐over‐year.
Deposits increased 4.7%, or $27.6 million, during the third quarter to end at $610.6 million. Deposits increased 6.2%, or $35.6 million, year‐over‐year.
Capital
During the fourth quarter, capital increased by $3.3 million due to earnings and variations in interest rates resulting in less unrealized losses on investment securities.
Capital continues to exceed regulatory thresholds required to be considered “well‐capitalized.”
Consolidated Tier 1 leverage capital ratio was 10.78% as of December 31, 2022, up 36bps during the quarter.
Book value per share increased to $18.94 during the quarter from $17.88.
Asset Quality
Asset quality remains stable as of December 31, 2022.
Nonperforming assets totaled $1.3 million, or 0.19% of total assets, as of December 31, 2022 compared to $1.5 million, or 0.24% of total assets at the end of 2021.
The allowance for loan losses was $7.2 million, or 2.21% of total loans, at December 31, 2022, compared to $7.3 million, or 2.48% of total loans, at December 31, 2021.
Based on credit quality metrics, a provision for loan losses was not necessary for 2022. During 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, 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
912‐459‐0574
robbie.eidson@southeasternbank.com