MT. PLEASANT, S.C., Feb. 4, 2009 (GLOBE NEWSWIRE) -- Southcoast Financial Corporation (Nasdaq:SOCB) announced today that the Company has declined to participate in the U.S. Department of the Treasury's Capital Purchase Program, even though it had applied for and received preliminary approval. The Capital Purchase Program is not a "bailout" but is an offer by the Treasury to make an investment in the Company on terms that are disadvantageous to existing shareholders. The Company has determined that participation in the program would be dilutive to existing shareholders, subject the Company to a constantly increasing administrative burden and expose the Company to unknown future restrictions on its business. The Company believes that it has sufficient capital to meet its foreseeable needs. It also believes that other capital raising alternatives will be available should a need for additional capital arise.
For the year ended December 31, 2008, the Company announced unaudited net income of $217,000 or $0.05 per basic share. This compares to net income of $3,429,000 or $0.63 per basic share, for the year ended December 31, 2007. Average basic shares decreased 14.5% between 2007 and 2008 primarily due to the Company's buyback of 508,593 shares during 2008. The Company has remaining authority to repurchase up to an additional 144,598 shares of its outstanding common stock.
"Despite the effects of a $3.0 million charge taken with respect to FNMA and FHLMC preferred stock and $4.3 million of loan loss provisions taken over the course of the year, Southcoast Financial Corporation managed to record positive earnings for the year," Chairman and Chief Executive Officer L. Wayne Pearson said.
For the quarter ended December 31, 2008, unaudited net loss was $409,000, or $0.09 per basic share. This compares to net income of $723,000, or $0.15 per basic share, for the quarter ended December 31, 2007. The decrease in net income between the two periods is the result of a $1.7 million loan loss provision taken during the fourth quarter of 2008 to deal with the continuing weakness in the economy and pressure on the Company's borrowers.
Total assets as of December 31, 2008 were $535.0 million compared to $500.9 million as of December 31, 2007, an increase of 6.8%. Loans, excluding loans held for sale, increased to $404.5 million, up 6.9% from $378.4 million as of December 31, 2007. Deposits increased 7.0% to $366.8 million over the same period. "We are proud that we have been able to expand our loans and deposits in 2008 despite an extremely challenging economic environment. Even after absorbing the substantial charges to our income, we have remained well capitalized at a level substantially above regulatory requirements," Pearson said.
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 trades on the NASDAQ Global Market under the symbol SOCB. Information about the corporation is available on our web site, www.southcoastbank.com.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our beliefs, expectations or forecasts about 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) Year Year Year Ended Ended Ended Dec 2008 Dec 2007 Dec 2006 (Unaudited) INCOME STATEMENT DATA Net interest income $15,113 $14,354 $16,145 Provision for loan losses 4,294 0 723 Noninterest income 2,576 2,554 3,837 Noninterest expenses 13,403 11,999 11,542 Net income 217 3,429 4,839 PER SHARE DATA* Net income per share Basic $0.05 $0.63 $0.81 Diluted $0.05 $0.63 $0.80 BALANCE SHEET DATA Total assets $534,965 $500,852 $481,856 Total deposits 366,811 342,755 310,893 Total loans (net) 397,123 374,117 363,246 Investment securities 62,282 62,609 46,461 Total earning assets 476,031 443,200 445,119 Other Borrowings 97,590 81,230 67,841 Junior subordinated debentures 10,310 10,310 21,655 Shareholders' equity 55,233 62,741 78,803 Book value per share $12.24 $12.52 $14.41 Average shares outstanding* Basic 4,631,135 5,419,474 6,007,137 Diluted 4,631,135 5,423,915 6,012,445 KEY RATIOS Return on assets 0.04% 0.71% 1.00% Return on equity 0.37% 4.96% 6.22% Equity to asset ratio 10.32% 12.53% 16.35% Non-performing assets to assets 3.06% 0.91% 0.18% Reserve to loans 1.83% 1.14% 1.19% Net interest margin 3.33% 3.40% 3.64% *Share and per share data has been adjusted for 10% stock dividends in 2007, 2006, 2005, and 2004 REGULATORY CAPITAL RATIOS Total Tier 1 Tier 1 Risk-Based(1) Risk-Based(2) Leverage(3) Southcoast Community Bank 14.36% 13.10% 9.68% FDIC Well Capitalized Minimum 10.00% 6.00% 5.00% (1) Total Risk-Based Capital divided by total risk-weighted assets (2) Tier 1 Capital divided by total risk-weighted assets (3) Tier 1 Capital divided by average total assets Year Year Year Ended Ended Ended Dec. 2005 Dec. 2004 Dec. 2003 INCOME STATEMENT DATA Net interest income $13,914 $10,692 $7,858 Provision for loan losses 865 1,146 735 Noninterest income 2,725 2,700 1,711 Noninterest expenses 9,243 7,966 6,171 Net income 4,189 2,982 1,704 PER SHARE DATA* Net income per share Basic $0.97 $0.76 $0.69 Diluted $0.97 $0.75 $0.67 BALANCE SHEET DATA Total assets $476,599 $366,102 $253,217 Total deposits 311,554 258,153 166,213 Total loans (net) 371,656 293,207 199,732 Investment securities 35,203 24,831 22,049 Total earning assets 440,942 344,482 238,009 Other Borrowings 67,000 58,000 41,100 Junior subordinated debentures 21,655 11,345 11,345 Shareholders' equity 73,315 36,571 33,410 Book value per share $14.80 $12.31 $12.46 Average shares outstanding* Basic 4,335,319 3,945,175 2,471,038 Diluted 4,340,470 4,001,380 2,529,742 KEY RATIOS Return on assets 1.04% 0.98% 0.79% Return on equity 9.28% 8.56% 10.43% Equity to asset ratio 15.38% 9.99% 13.19% Non-performing assets to assets 0.11% 0.27% 0.04% Reserve to loans 1.14% 1.15% 1.18% Net interest margin 3.69% 3.78% 3.90% *Share and per share data has been adjusted for 10% stock dividends in 2007, 2006, 2005, and 2004 Southcoast Financial Corporation Consolidated Statements of Condition (Dollars in thousands, except per share data) December 31 December 31 2008 2007 (Unaudited) Assets Cash and due from banks $10,659 $7,033 Federal Funds sold 11,902 3,774 Investments 62,282 62,609 Loans held for sale 417 384 Loans: Commercial and Construction 243,503 222,273 Mortgage 148,976 145,615 Consumer 12,054 10,526 -------- -------- Total loans 404,533 378,414 Less: Allowance for loan Losses 7,410 4,297 -------- -------- Net loans 397,123 374,117 Fixed assets 23,813 26,735 Other assets 28,769 26,200 -------- -------- Total Assets $534,965 $500,852 ======== ======== Liabilities & Shareholders' Equity Deposits: Noninterest bearing $27,932 $32,607 Interest bearing 338,879 310,148 -------- -------- Total deposits 366,811 342,755 Other Borrowings 97,590 81,230 Junior subordinated debentures 10,310 10,310 Other liabilities 5,021 3,816 -------- -------- Total liabilities 479,732 438,111 Shareholders' Equity Common Stock 53,442 60,157 Retained Earnings and Accumulated Other Comprehensive Income or Loss 1,791 2,584 -------- -------- Total shareholders' equity 55,233 62,741 -------- -------- Total Liabilities and Shareholders' Equity $534,965 $500,852 ======== ======== Book value per share $12.24 $12.52 Allowance for loan losses to Loans Ratio 1.83% 1.14% Southcoast Financial Corporation Consolidated Income Statements (Dollars in thousands, except earnings per share) Year Ended Three Months Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 (Unaudited) (Unaudited) (Unaudited) Interest Income Interest and fees on loans $27,423 $28,760 $6,826 $7,289 Interest on investments 3,499 2,716 848 747 Interest on Fed funds sold 36 397 1 38 --------- --------- --------- --------- Total interest income 30,958 31,873 $7,675 $8,074 Interest expense 15,845 17,519 3,860 4,559 --------- --------- --------- --------- Net interest income 15,113 14,354 3,815 3,515 Provision for loan losses 4,294 0 1,700 0 --------- --------- --------- --------- Net interest income after loan loss provision 10,819 14,354 2,115 3,515 Noninterest income 2,576 2,555 930 634 --------- --------- --------- --------- Total operating income 13,395 16,909 3,045 4,149 Noninterest expense Salaries and benefits 7,701 6,747 1,875 1,812 Occupancy and equipment 2,419 2,288 637 584 Other expenses 3,283 2,964 948 854 --------- --------- --------- --------- Total noninterest expense 13,403 11,999 3,460 3,250 --------- --------- --------- --------- Income(loss) before taxes (8) 4,910 (415) 899 Income tax expense (benefit) (225) 1,481 (6) 176 --------- --------- --------- --------- Net income(loss) $217 $3,429 ($409) $723 ========= ========= ========= ========= Basic net income(loss) per common share* $0.05 $0.63 ($0.09) $0.15 Diluted net income(loss) per common share* $0.05 $0.63 ($0.09) $0.15 Average shares outstanding* Basic 4,631,135 5,419,474 4,527,002 5,019,704 Diluted 4,631,135 5,423,915 4,527,002 5,021,347 * Share and per share data has been adjusted for a 10% stock dividend in 2007.