MT. PLEASANT, S.C., July 13, 2007 (PRIME NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced that it had unaudited pre-tax income of $2,565,000 and unaudited net income of $1,695,000, or unaudited net income of $.30 per basic share, for the six months ended June 30, 2007. This compares to unaudited pre-tax income of $4,560,000 and unaudited net income of $2,816,000, or unaudited net income of $0.47 per basic share for the six months ended June 30, 2006. The June 30, 2007 earnings per share are based on 5,725,460 basic average shares outstanding compared to 5,997,310 basic average shares outstanding for the six months ended June 30, 2006. This decrease in outstanding shares is the result of a stock repurchase initiative commenced in January 2007. The Company's Board of Directors authorized the repurchase of up to 547,194 shares, or 10% of the Company's outstanding shares as of January 23, 2007. During the first six months of 2007, the Company repurchased 544,465 shares for a total of $11,079,592.
Chairman and Chief Executive Officer, L. Wayne Pearson said, "While we experienced a drop in net income compared to the same period of 2006, we continue to see a positive trend in our branch activity. The decline in net income is due primarily to an expected decrease in non-recurring income from real estate sales. We also experienced increases in occupancy costs to support the growth of our branch network."
For the quarter ending June 30, 2007, pre-tax income was $1,290,000 and net income was $864,000 or net income of $0.15 per share. This compares to pre-tax income of $2,473,000 and net income of $1,479,000, or net income of $0.25 per share, for the quarter ending June 30, 2006. The 2007 earnings per share are based on 5,603,193 basic average shares outstanding compared to 5,998,400 basic average shares outstanding for the quarter ending June 30, 2006.
Total assets as of June 30, 2007 were $487.7 million compared to $481.9 million as of December 31, 2006, an increase of 1.2%. Loans, excluding loans held for sale, increased to $372.3 million, up 1.3% from $367.6 million as of December 31, 2006. Deposits during the same period declined 0.7% to $308.7 million. The decline in deposits is directly related to our decision in the third quarter of 2006 to reduce our wholesale lending operations and our related brokered and wholesale deposit base. As of June 30, 2007, the ratio of non-performing assets to total assets was 0.38% and the allowance for loan losses as a percentage of loans was 1.16%.
The Corporation currently has ten branches. The ninth branch at 1654 Sam Rittenberg Boulevard in West Ashley opened in January 2007. The tenth branch at the intersection of Highway 17N at Park West and South Morgans Point Road in Mt. Pleasant, South Carolina, opened in May 2007. "As our branches continue to mature we should see the bank's core business continue to increase," said Pearson.
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. Southcoast Financial Corporation's common stock is traded on the NASDAQ Global Market under the symbol SOCB.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events. Any or all of our forward-looking statements here or in other publications may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward looking-statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.
Southcoast Financial Corporation SELECTED FINANCIAL DATA (dollars in thousands, except earnings per share) Six Months Ended June 2007 June 2006 (Unaudited) (Unaudited) INCOME STATEMENT DATA Net interest income $7,365 $8,245 Provision for loan losses 0 624 Noninterest income 1,164 2,576 Noninterest expenses 5,964 5,637 Net income 1,695 2,816 PER SHARE DATA(a) Net income per share Basic $0.30 $0.47 Diluted $0.30 $0.47 BALANCE SHEET DATA Total assets $487,704 $514,583 Total deposits 308,652 339,817 Total loans (net) 368,025 386,539 Investment securities 59,785 70,109 Total earning assets 433,116 480,780 Advances from FHLB 75,500 67,000 Junior subordinated debentures 21,655 21,655 Shareholders' equity 68,945 75,884 Average shares outstanding Basic 5,725,460 5,997,310 Diluted 5,731,162 6,003,125 Key ratios(b) Return on assets 0.72% 1.19% Return on equity 4.63% 7.61% Equity to asset ratio 14.14% 14.75% Non-performing assets to assets 0.38% 0.43% Reserve to loans 1.16% 1.23% Net interest margin 3.44% 3.77% Employees 118 97 # of accounts 11,516 11,109 # of offices open 10 8 # of offices under construction 0 1 # of office sites purchased 2 1 ATM stand alone 1 1 Year Year Year Year Year Ended Ended Ended Ended Ended Dec. 2006 Dec. 2005 Dec. 2004 Dec. 2003 Dec. 2002 INCOME STATEMENT DATA Net interest income $16,145 $13,914 $10,692 $7,858 $5,458 Provision for loan losses 723 865 1,146 735 480 Noninterest income 3,837 2,725 2,700 1,711 1,767 Noninterest expenses 11,542 9,243 7,966 6,171 4,866 Net income 4,839 4,189 2,982 1,704 1,147 PER SHARE DATA(a) Net income per share Basic $0.81 $0.97 $0.76 $0.69 $0.52 Diluted $0.81 $0.97 $0.75 $0.67 $0.50 BALANCE SHEET DATA Total assets $481,856 $476,599 $366,103 $253,217 $181,513 Total deposits 310,893 311,554 258,153 166,213 132,655 Total loans (net) 363,247 371,656 293,207 199,732 134,729 Investment securities 46,460 35,203 24,831 22,049 7,608 Total earning assets 445,129 440,942 344,482 238,009 168,225 Advances from FHLB 66,000 67,000 58,000 41,100 23,500 Junior subordinated debentures 21,655 21,655 11,345 11,345 11,345 Shareholders' equity 78,803 73,315 36,571 33,410 12,709 Average shares outstanding Basic 6,007,137 4,335,319 3,945,175 2,471,038 2,223,220 Diluted 6,012,445 4,340,470 4,001,380 2,529,743 2,312,627 Key ratios(b) Return on assets 1.00% 1.04% 0.98% 0.79% 0.78% Return on equity 6.22% 9.28% 8.56% 10.43% 9.45% Equity to asset ratio 16.35% 15.38% 9.99% 13.19% 7.01% Non-performing assets to assets 0.18% 0.11% 0.27% 0.04% 0.06% Reserve to loans 1.19% 1.14% 1.15% 1.18% 1.21% Net interest margin 3.64% 3.69% 3.78% 3.90% 4.02% Employees 110 91 77 68 61 # of accounts 10,778 10,728 9,391 7,814 6,899 # of offices open 8 8 7 5 5 # of offices under construction 2 1 0 2 0 # of office sites purchased 2 0 2 1 2 ATM stand alone 1 1 1 0 0 (a) Share and per share data has been adjusted for 10% stock dividends in 2007, 2006, 2005, 2004, and dividends totaling 15% in 2003. (b) Ratios for three months are annualized. Southcoast Financial Corporation Consolidated Balance Sheets June 30 June 30 Dec. 31 Dec. 31 Dec. 31 2007 2006 2006 2005 2004 (Unaudited) (Unaudited) (Audited) (Audited) (Audited) Assets Cash and due from banks $ 8,816 $ 14,149 $ 7,008 $ 14,378 $ 11,853 Federal Funds sold 1,162 11,682 31,204 16,964 4,236 Investments 59,785 70,109 46,460 35,203 24,831 Loans held for sale 347 1,665 140 9,275 12,010 Loans 372,340 391,369 367,611 375,926 296,611 Less: Allowance for loan losses 4,315 4,830 4,364 4,270 3,404 -------- -------- -------- -------- -------- Net loans 368,025 386,539 363,247 371,656 293,207 Fixed assets 25,653 21,183 25,126 19,898 14,844 Other assets 23,916 9,256 8,671 9,225 5,122 -------- -------- -------- -------- -------- Total Assets $487,704 $514,583 $481,856 $476,599 $366,103 ======== ======== ======== ======== ======== Liabilities & Shareholders' Equity Deposits: Non-interest bearing $ 36,625 $ 39,923 $ 34,694 $ 38,754 $ 27,955 Interest bearing 272,027 299,894 276,199 272,800 230,198 -------- -------- -------- -------- -------- Total deposits 308,652 339,817 310,893 311,554 258,153 Other borrowings 85,924 74,602 67,841 67,000 58,000 Other liabilities 2,528 2,625 2,664 3,075 2,034 Junior subordinated debentures 21,655 21,655 21,655 21,655 11,345 -------- -------- -------- -------- -------- Total liabilities 418,759 438,699 403,053 403,284 329,532 Shareholders' Equity Common Stock 68,635 75,249 75,316 70,268 34,081 Retained Earnings and Accumulated Other Comprehensive Income or Loss 310 635 3,487 3,047 2,490 -------- -------- -------- -------- -------- Total shareholders' equity 68,945 75,884 78,803 73,315 36,571 -------- -------- -------- -------- -------- Total Liabilities and Shareholders' equity $487,704 $514,583 $481,856 $476,599 $366,103 ======== ======== ======== ======== ======== Book Value Per Share (a) $ 12.59 $ 12.62 $ 13.10 $ 12.23 $ 9.25 Reserve to Loans Ratio 1.16% 1.23% 1.19% 1.14% 1.15% (a) Adjusted for a 10% stock dividend in 2007, 2006, and 2005. Southcoast Financial Corporation Consolidated Income Statements (Dollars in thousands, except earnings per share) Six Months Ended Three Months Ended June 30, June 30, June 30, June 30, 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest Income Interest and fees on loans $14,223 $13,752 $7,249 $7,018 Interest on investments 1,206 1,195 604 755 Interest on Fed funds sold 297 263 80 158 ------ ------ ------ ------ Total interest income 15,726 15,210 7,933 7,931 Interest expense 8,361 6,965 4,209 3,712 ------ ------ ------ ------ Net interest income 7,365 8,245 3,724 4,219 Provision for loan losses 0 624 0 305 ------ ------ ------ ------ Net interest income after provision 7,365 7,621 3,724 3,914 Noninterest income 1,164 2,576 561 1,790 ------ ------ ------ ------ Total operating income 8,529 10,197 4,285 5,704 Noninterest expense Salaries and benefits 3,423 3,423 1,695 1,946 Occupancy and equipment 1,105 892 560 504 Other expenses 1,436 1,322 740 781 ------ ------ ------ ------ Total noninterest expense 5,964 5,637 2,995 3,231 Income before taxes 2,565 4,560 1,290 2,473 Income tax expense 870 1,744 426 994 ------ ------ ------ ------ Net income $1,695 $2,816 $864 $1,479 ====== ====== ====== ====== Basic net income per share $0.30 $0.47 $0.15 $0.25 Diluted net income per share $0.30 $0.47 $0.15 $0.25 Average number of shares Basic 5,725,460 5,997,310 5,603,193 5,998,400 Diluted 5,731,162 6,003,125 5,609,052 6,004,231