MT. PLEASANT, S.C., Aug. 5, 2011 (GLOBE NEWSWIRE) — Southcoast Financial Corporation (Nasdaq:SOCB) today announced unaudited financial results for the six months and quarter ended June 30, 2011. Results included a continued focus on improving balance sheet quality by reserving for potential loan losses and writing down the Company’s other real estate owned and deferred tax asset.
For the quarter ended June 30, 2011, Southcoast reported a net loss of .1 million, or .54 per diluted share compared with net income of 9,000, or .08 per diluted share in the prior year’s second quarter. The net loss included a non-cash loss of .2 million related to a write down of the Company’s deferred tax asset which had a minimal impact on the Company and Bank’s regulatory capital ratios.�The loss also includes .5 million of loan loss provision and writedowns to other real estate owned. �
For the six months ended June 30, 2011, the Company had a net loss of .7 million or .65 per diluted share, compared with net income of 2,000 or .15 per diluted share for the six months of 2010. The June 30, 2011 per share results are based on 5,275,558 basic average shares compared to 5,009,293 basic average shares for the six months ending June 30, 2010.
The Bank remains well-capitalized. As of June 30, 2011, the Bank’s Tier One Leverage ratio was 9.22%, its Tier One Risk Based Capital ratio was 12.84%, and its Total Risk Based Capital ratio was 14.12%. These ratios are above the FDIC minimums for well capitalized institutions.
“Although recording significant charges had a negative impact on our financial results, these actions demonstrate management’s desire to aggressively tackle asset quality issues, in order for Southcoast to be properly positioned for a renewed focus on growth and profitability,” explained L. Wayne Pearson, President and CEO. “We feel the bank is well reserved, with reserves to nonperforming loans equaling 47%.”
The Company grew net interest income to .6 million for the six months ended June 30, 2011, up 11% compared with .9 million at June 30, 2010. Second quarter 2011 net interest income before provision for loan losses was .3 million compared with .0 million at June 30, 2010, an increase of 10%. Southcoast increased its net margin to 3.27% at the end of second quarter 2011 compared with 2.92% at the end of the prior year’s second quarter.�Non-interest income was .3 million compared with .4 million in the prior year’s second quarter. As previously noted, quarterly non-interest expenses were impacted by the write-down of other real estate owned.�These writedowns totaled .0 million.
Total deposits at June 30, 2011 were 2.1 million compared with 4.6 million at December 31, 2010. Net loans were 0.4 million at June 30, 2010 compared with 6.9 million at December 31, 2010. The company’s holdings of investment securities was .7 million compared at the end of second quarter 2011 compared with .4 million at December 31, 2010, reflecting the sale of securities that generated 9,000 in net gains.
“A meaningful indication of our ability to build business banking relationships was an increase in non-interest bearing deposit accounts, which are frequently associated with commercial banking relationships. We grew these direct deposit accounts (DDAs) to .6 million, which increased nearly 13% from the end of 2010.�We anticipate this will facilitate lending opportunities through new customer relationships,” noted Pearson.
“As we address balance sheet and asset quality issues in a prudent and expeditious manner, we are competing for new consumer and business lending opportunities as the economy recovers.�Mortgage lending has continued to be active, and we have retained many of these loans to build our loan portfolio.�While business lending growth has been slow, we have been able to gain market share and add new relationships.�We are optimistic about the lending and deposit opportunities in the Charleston area market,” said Pearson.��
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. Trading in Southcoast Financial Corporation’s common stock is traded on the NASDAQ Global Market under the symbol SOCB.
Safe Harbor Statement
Statements in this news release which express “belief,” “intention,” “expectation,” “anticipate,”strategy,” “vision” and similar expressions, identify forward-looking statements.�Such forward-looking statements are based on the beliefs of Southcoast Financial’s management, as well as assumptions made by, and information currently available to, such management.�Any forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.�Some of the information in this presentation is derived from third party sources that we believe to be reliable, but we make no guarantees that such information is correct. Such statements are inherently uncertain and there can be no assurance that the underlying assumptions will prove to be accurate.�Actual results could differ materially from those contemplated by the forward-looking statements. Please refer to the company’s filings with the Securities and Exchange Commission for additional information about historical performance and risk factors. Undue reliance should not be placed on the forward-looking statements. Southcoast does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
CONTACT: William C. Heslop, Senior Vice President and
Chief Financial Officer
(843) 216-3019
http://bit.ly/r4CUVJ
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