MT. PLEASANT, S.C., July 18, 2014 (GLOBE NEWSWIRE) -- 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 assets 1 | 0.62% | 6.47% |
| Return on equity 1 | 6.38% | 67.69% |
| Nonperforming assets to assets 2 | 2.76% | 3.53% |
| Reserve to loans | 1.73% | 2.26% |
| Reserve to nonperforming loans 3 | 76.40% | 72.45% |
| Net interest margin 1 | 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 |
William C. Heslop, Senior Vice President and Chief Financial Officer, (843) 216-3019
