Southcoast Financial Corporation (Nasdaq:SOCB) announced that it
had unaudited net income of $1,352,000, or $.19 per diluted share,
for the six months ended June 30, 2014. This compares to unaudited
net income of $8,041,000, or $1.14 per diluted share, for the six
months ended June 30, 2013. The difference in net income between
the two periods primarily relates to the one-time tax benefit of
$6.4 million derived from the recapture of the Company's deferred
tax asset in the second quarter of 2013. The June 30, 2014 income
per share is based on 7,087,860 diluted average shares compared to
7,072,956 diluted average shares for 2013. Income before income
taxes increased 23.7% to $2,076,000 from $1,678,000. The 2014
pretax results were influenced by a growth in loan interest income,
reduced funding costs, and reductions in noninterest expenses.
For the six months ended June 30, 2014, net interest income
totaled $7,203,000, an increase of $297,000 from $6,906,000 for the
six months ended June 30, 2013.
Noninterest income for 2014 decreased to $1,118,000 from
$1,280,000 for 2013, primarily due to a $150,000 reduction in fees
on mortgage loans sold.
Noninterest expense levels decreased from $6,508,000 for 2013 to
$6,245,000 for 2014. Contributing to this decrease were reductions
in salaries and benefits, FDIC insurance premiums, and overhead
expenses on other real estate owned.
For the quarter ended June 30, 2014, the unaudited net income
was $709,000, or $0.10 per diluted share. This compares to an
unaudited net income of $7,035,000, or $0.99 per diluted share for
the quarter ended June 30, 2013. The net income for the quarter
ended June 30, 2013, included a one-time tax benefit of $6,419,000
resulting from the Company's recapture of its deferred tax asset
valuation allowance. The June 30, 2014 income per share is based on
7,089,902 diluted average shares compared to 7,074,210 diluted
average shares for the quarter ended June 30, 2013.
Total assets as of June 30, 2014 were $465.0 million compared to
$447.4 million as of December 31, 2013, an increase of 3.93%.
Loans, excluding loans held for sale, increased $17.6 million or
5.31% to $349.5 million, from $331.9 million as of December 31,
2013. Deposits increased by $18.6 million, or 5.90% to $334.5
million at June 30, 2014, from $315.8 million at December 31, 2013.
The increase in loans was completely funded by an increase in core
non-time deposits. Growth in core non-time deposits is a major
strategy incorporated in our Company's strategic plan.
The Company continues to show improvement in asset quality. For
the first six months of 2014, additions to the allowance for loan
losses have not been required. Increased recoveries, reduced
non-performing assets, controlled delinquencies, and reduced
classified loans all contributed to this result. The ratio of
nonperforming assets to total assets was 2.76% as of June 30, 2014,
compared to 3.53% as of June 30, 2013. The allowance for loan
losses as a percentage of loans was 1.73% as of June 30, 2014,
compared to 2.26% as of June 30, 2013. The allowance for loan
losses as a percentage of total nonperforming loans totaled 76.40%
as of June 30, 2014, compared to 72.45% as of June 30, 2013.
"The value of our franchise continues to improve as our
performance improves. We are proud of our accomplishments as they
reflect the loyalty of our customers and the dedication of our
employees", said L. Wayne Pearson, Chairman and Chief Executive
Officer.
About Southcoast Financial Corporation
Southcoast Financial Corporation, headquartered in Mt. Pleasant,
South Carolina, is the holding company of Southcoast Community
Bank. The Bank, which opened for business July 20, 1998, is a state
chartered commercial bank operating from its main office at 530
Johnnie Dodds Boulevard in Mt. Pleasant, South Carolina and nine
branches in the Charleston, South Carolina area. Southcoast
Financial Corporation's common stock is traded on the NASDAQ Global
Market under the symbol SOCB.
Southcoast Financial
Corporation |
SELECTED FINANCIAL DATA |
(dollars in thousands, except
earnings per share) |
|
|
|
|
Three Months
Ended |
|
June 30, 2014 |
June 30, 2013 |
|
(Unaudited) |
INCOME STATEMENT DATA |
|
|
Net interest income |
$ 3,573 |
$ 3,473 |
Provision for loan losses |
-- |
-- |
Noninterest income |
630 |
691 |
Noninterest expenses |
3,115 |
3,548 |
Income tax expense
(benefit) |
379 |
(6,419) |
Net income |
$ 709 |
$ 7,035 |
|
|
|
PER SHARE DATA |
|
|
Net income per share |
|
|
Basic |
$ 0.10 |
$ 0.99 |
Diluted |
$ 0.10 |
$ 0.99 |
|
|
|
|
|
|
Average shares outstanding |
|
|
Basic |
7,089,902 |
7,074,210 |
Diluted |
7,089,902 |
7,074,210 |
|
|
|
Key ratios |
|
|
Return on assets1 |
0.62% |
6.47% |
Return on equity1 |
6.38% |
67.69% |
Nonperforming assets to
assets2 |
2.76% |
3.53% |
Reserve to loans |
1.73% |
2.26% |
Reserve to nonperforming
loans3 |
76.40% |
72.45% |
Net interest margin1 |
3.65% |
3.69% |
|
|
|
1 Ratios for three months are
annualized. |
2 Includes nonaccruing loans,
loans 90 or more days past due still accruing interest, troubled
debt restructures, and other real estate owned. |
3 Includes nonaccruing loans,
loans 90 or more days past due still accruing interest, and
troubled debt restructures. |
|
|
|
Southcoast Financial
Corporation |
|
Consolidated Balance
Sheets |
|
(Dollars in thousands) |
|
|
|
|
June 30 |
December 31 |
|
2014 |
2013 |
|
(Unaudited) |
|
Assets |
|
|
Cash and cash equivalents |
$31,054 |
$28,460 |
Investments |
42,783 |
43,451 |
Loans held for sale |
0 |
271 |
Loans |
349,546 |
331,906 |
Less: Allowance for loan losses |
6,037 |
6,041 |
|
|
|
Net loans |
343,509 |
325,865 |
Fixed assets |
20,780 |
21,150 |
Other assets |
26,842 |
28,187 |
|
|
|
Total Assets |
$464,968 |
$447,384 |
|
|
|
Liabilities & Shareholders' Equity |
|
|
Deposits: |
|
|
Noninterest bearing |
$54,222 |
$40,399 |
Interest bearing nontime |
141,875 |
138,899 |
Time deposits |
138,373 |
136,530 |
|
|
|
Total deposits |
334,470 |
315,828 |
Other borrowings |
70,911 |
73,818 |
Other liabilities |
4,664 |
4,859 |
Junior subordinated debentures |
10,310 |
10,310 |
|
|
|
Total liabilities |
420,355 |
404,815 |
|
|
|
Shareholders' Equity |
|
|
Common Stock |
54,595 |
54,544 |
Accumulated deficit |
(8,585) |
(9,937) |
Accumulated other comprehensive
loss |
(1,397) |
(2,038) |
|
|
|
Total shareholders' equity |
44,613 |
42,569 |
|
|
|
Total Liabilities and
Shareholders' equity |
$464,968 |
$447,384 |
|
|
|
Book Value Per Share |
$6.29 |
$6.01 |
|
|
|
|
|
|
Southcoast Financial
Corporation |
|
|
Consolidated Income
Statement |
|
|
(Dollars in thousands,
except share data) |
|
|
|
|
|
|
|
|
Six Months Ended |
Three Months Ended |
|
June 30 |
June 30, |
June 30 |
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Interest Income |
|
|
|
|
Interest and fees on loans |
$8,417 |
$8,362 |
$4,182 |
$4,161 |
Interest on investments |
579 |
491 |
278 |
239 |
Interest on Fed funds sold |
16 |
13 |
10 |
7 |
|
|
|
|
|
Total interest income |
9,012 |
8,866 |
4,470 |
4,407 |
|
|
|
|
|
Interest expense |
1,809 |
1,960 |
897 |
934 |
|
|
|
|
|
Net interest income |
7,203 |
6,906 |
3,573 |
3,473 |
Provision for loan losses |
-- |
-- |
-- |
-- |
|
|
|
|
|
Net interest after
provision |
7,203 |
6,906 |
3,573 |
3,473 |
|
|
|
|
|
Noninterest income |
1,118 |
1,280 |
630 |
691 |
|
|
|
|
|
Total noninterest income |
1,118 |
1,280 |
630 |
691 |
|
|
|
|
|
Total operating income |
8,321 |
8,186 |
4,203 |
4,164 |
|
|
|
|
|
Noninterest expense |
|
|
|
|
Salaries and benefits |
3,449 |
3,555 |
1,690 |
1,876 |
Occupancy and furniture and
equipment |
1,428 |
1,458 |
709 |
705 |
Other expenses |
1,368 |
1,495 |
716 |
967 |
|
|
|
|
|
Total noninterest expense |
6,245 |
6,508 |
3,115 |
3,548 |
|
|
|
|
|
Income before taxes |
2,076 |
1,678 |
1,088 |
616 |
Income tax expense (benefit) |
724 |
(6,363) |
379 |
(6,419) |
|
|
|
|
|
Net income |
$1,352 |
$8,041 |
$709 |
$7,035 |
|
|
|
|
|
Basic net income per common share |
$0.19 |
$1.14 |
$0.10 |
$0.99 |
|
|
|
|
|
Diluted net income per common share |
$0.19 |
$1.14 |
$0.10 |
$0.99 |
|
|
|
|
|
Average number of common shares |
|
|
|
|
Basic |
7,087,860 |
7,072,956 |
7,089,902 |
7,074,210 |
Diluted |
7,087,860 |
7,072,956 |
7,089,902 |
7,074,210 |
|
|
|
|
|
CONTACT: William C. Heslop, Senior Vice President and
Chief Financial Officer, (843) 216-3019
Southcoast Financial Corp. (NASDAQ:SOCB)
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