Southeastern Banking Corporation Reports Second Quarter 2024 Results
Declares Quarterly Cash Dividend of $0.19 Per Share
Darien, GA — August 15, 2024 – Southeastern Banking Corporation (OTCPINK:SEBC), the “Company”, the parent of Southeastern Bank, the “Bank”, today reported financial results for the second quarter and first half of 2024. Financial highlights are shown below.
Additionally, the Board of Directors declared a quarterly dividend of $0.19 per share, to be paid September 5, 2024, to shareholders of record on August 29, 2024.
Commenting on the Company’s results, Donald “Jay” Torbert, Jr., President and Chief Executive Officer, said, “We are pleased with our results for the first half of 2024. Earnings are slightly lower than 2023’s record earnings pace due to higher funding costs and operating expenses caused by elevated interest rates and inflation. In this interest rate environment, we expect to see some continued compression of our net interest margin in the coming quarters. However, solid loan production, asset quality and capital levels from the second quarter, I believe, position us favorably to deliver comparable results for the remainder of the year.”
Earnings
- Net income was $2.5 million (or $0.80 per share) for the second quarter of 2024, compared to $2.8 million (or $0.90 per share) for the first quarter of 2024 and $2.7 million (or $0.86 per share) for the second quarter of 2023. Loan growth along with continued repricing of earning assets led to increased interest income, which was offset during the quarter by higher funding costs and a $237 thousand provision for credit loss. Noninterest income declined primarily due to a decline in mortgage origination volume. Noninterest expense rose primarily on increased wages and benefits costs.
- Core operating earnings for the second quarter totaled $3.5 million compared to $3.7 million for the first quarter and $3.6 million for the second quarter of 2023.
- The return on average assets for the second quarter of 2024 was 1.73%, compared to 1.91% for the first quarter and 1.78% for the second quarter of 2023.
- The return on average equity was 14.19% versus 16.19% for the first quarter and 16.92% for the second quarter of 2023. The lower comparative return is the result of increasing capital and a slight decline in earnings.
- Net interest margin was 4.69% in the second quarter versus 4.74% for the first quarter and 4.46% in the second quarter of 2023. Though our yield on earning assets continues to rise, increased funding costs have caused the contraction of our margin.
Balance Sheet
- Total assets decreased 1.7%, or $10.0 million, during the second quarter to end at $595.1 million. Net deposit outflows were partially offset by short-term borrowings utilized to fund loan growth. Over the last twelve months, total assets declined 1.1%, or $6.4 million.
- Deposits fell 5.6%, or $30.0 million, during the second quarter to end at $500.8 million. Year-over-year, deposits declined 6.4%, or $34.0 million. During the quarter, deposits held by local municipalities decreased $20.9 million, consumer interest-bearing checking declined $6.3 million and commercial demand deposits decreased $4.0 million, with the declines partially offset by increased reciprocal deposits.
- Loans increased by 5.3%, or $19.0 million, during the second quarter to end at $378.8 million. Year-over-year, loans grew 13.3%, or $44.6 million.
- Total loan production through commercial and retail lending activities was $46.6 million during the second quarter, up from $42.9 million in the first quarter and $38.5 million during the second quarter of 2023.
Capital
- Capital continues to exceed regulatory thresholds required to be considered “well-capitalized.”
- Consolidated Tier 1 leverage capital ratio was 13.97% at June 30, 2024, up 51bps during the quarter and 181bps over the last twelve months.
- Book value per share was $23.24 at June 30, 2024, a $0.73 increase during the quarter.
Asset Quality
- Asset quality concerns remained relatively low and stable throughout the second quarter.
- Nonperforming assets were $1.2 million, or 0.19% of total assets, at June 30, 2024, which reflects a reduction both during the second quarter and from one year ago.
- The allowance for credit losses related to loans aggregated $8.0 million, or 2.10% of total loans, at June 30, 2024, compared to $7.6 million, or 2.17% of total loans, at the end of 2023.
- Total provision for credit losses during the second quarter was $237 thousand, due to loan growth 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