Augusta-based Southeastern Bank Financial Corp. on Friday reported an 11.1 percent increase in first-quarter earnings, powered by new loan growth and increased profitability from mortgage operations.
The holding company for Georgia Bank & Trust Co. in Augusta and Southern Bank & Trust in Aiken County said net income during the three-month period ending March 31 was $4.7 million, or 70 cents per share, up from $4.2 million, or 63 cents per share, a year earlier.
President and Chief Operating Officer Ronald L. Thigpen said in a statement that noninterest income included an 8.6 percent increase in revenue from mortgage loan sales and that credit costs have declined in response to “further improvement in asset quality.”
“Growth in our balance sheet reflected increases in core loans and deposits,” he said. “Overall, we continue to perform very well, reflecting an annualized 1.03 percent return on average assets and an annualized 10.82 percent return on average equity.”
The company’s total assets at the end of the period were $1.9 billion. Loans outstanding at the end of the quarter were $1.05 billion, up $59.9 million from a year ago. Total deposits were $1.6 billion, or $31.4 million more than were reported during the same period in 2015.
First-quarter net interest income increased 5.7 percent during the first quarter to $13.8 million, while the nearly 9 percent gain in noninterest income during the quarter – $5.2 million – was primarily from higher mortgage origination volume and investment securities gains, the company said.
Higher personnel expenses and increases in salaries and commissions at the bank’s 12 full-service branch offices caused noninterest expenses to rise 5.9 percent during the quarter to $11.7 million.
The company’s net interest margin - the difference between what it pays out in interest for deposits and what it takes in from loans - was 3.23 percent for the quarter, compared with 3.22 percent for the same period a year ago.
“This low interest rate environment continues to challenge our net interest margin, but we are pleased with core loan and deposit growth and the increases in our mortgage origination volume,” Thigpen said.
“Our balance sheet remains strong, and we are well positioned to handle increased loan growth and meet the needs of our community.”