Southcoast Announces First Quarter Earnings

Southcoast Announces First Quarter Earnings

MT. PLEASANT, S.C., April 11, 2013 (GLOBE NEWSWIRE) -- Southcoast Financial
Corporation (Nasdaq:SOCB) announced that it had unaudited net income of
$1,006,000, or $.16 per basic share, for the quarter ended March 31, 2013.
This compares to unaudited net income of $1,243,000, or $0.20 per basic share,
for the quarter ended March 31, 2012. The March 31, 2013 income per share is
based on 6,148,152 basic average shares compared to 6,114,128 basic average
shares for the first quarter of 2012.

"The first quarter's results reflect an improved net interest margin,
decreased levels of nonperforming assets, and an improved deposit mix," said
L. Wayne Pearson, Chairman and Chief Executive Officer. "The results for this
quarter represent the fifth consecutive profitable quarter for our Company
since the recession started."

Net interest income increased $256,000 from $3,177,000 for the first quarter
of 2012 to $3,433,000 for the first quarter of 2013. The Company's annualized
net interest margin improved by 17 basis points to 3.63% for the first quarter
of 2013 from 3.46% for the first quarter of 2012, due to the significant
reduction in our cost of funds.

Noninterest income decreased to $589,000 for the first quarter of 2013 from
$906,000 for the first quarter of 2012, primarily due to $215,000 of
securities gains and $124,000 of gains on sales of fixed assets during the
first quarter of 2012, compared to no gains from sales of securities or fixed
assets during the first quarter of 2013.

Noninterest expense levels increased to $2,961,000 for the quarter ended March
31, 2013 from $2,652,000 for the quarter ended March 31, 2012. The first
quarter of 2012 included the benefit of $736,000 in net gains on sales of
other real estate owned compared to only $288,000 for the quarter ended March
31, 2013.

Total assets as of March 31, 2013 were $441.8 million compared to $438.2
million as of December 31, 2012, an increase of 0.8%. Loans, excluding loans
held for sale, decreased to $324.2 million, down 1.0% from $327.5 million as
of December 31, 2012. Deposits during the same period increased0.3% to $320.6
million, while other borrowings increased 3.0% to $64.5 million.

The Company's ratio of nonperforming assets to total assets was 3.90% as of
March 31, 2013, compared to 6.71% as of March 31, 2012. The allowance for loan
losses as a percentage of loans was 2.41% as of March 31, 2013, compared to
2.96% as of March 31, 2012. The allowance for loan losses as a percentage of
total nonperforming loans totaled 74.88% as of March 31, 2013, compared to
43.13% as of March 31, 2012.

The subsidiary bank's capital position as of March 31, 2013 remains
substantially in excess of regulatory well-capitalized requirements, with Tier
1 capital to average assets of 10.25%. "We continue to be encouraged by the
future direction of our Company given our capital strength and improvement in
core operations," concluded 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.
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
                                March 31, 2013 March 31, 2012
                                (Unaudited)
INCOME STATEMENT DATA                           
Net interest income              $3,433        $3,177
Provision for loan losses        --            100
Noninterest income               589             906
Noninterest expenses             2,961           2,652
Net income                       $1,006        $1,243
                                               
PER SHARE DATA                                 
Net income per share                            
Basic                            $0.16         $0.20
Diluted                          $0.16         $0.20
                                               
BALANCE SHEET DATA                              
Total assets                     $441,835      $437,642
Total deposits                   320,637         327,768
Total loans (net)                316,365         313,797
Investment securities            45,879          47,177
Other borrowings                 72,066          64,500
Junior subordinated debentures   10,310          10,310
Shareholders' equity             35,267          31,807
                                               
Average shares outstanding^1                    
Basic                            6,148,152       6,114,128
Diluted                          6,148,152       6,114,128
                                               
Book value per share^1           $5.74           $5.20
                                               
Key ratios                                     
Return on assets^2               0.95%           1.17%
Return on equity^2               11.74%          15.97%
Equity to asset ratio            7.98%           7.27%
Nonperforming assets to assets^3 3.90%           6.71%
Reserve to loans^4               2.41%           2.96%
Reserve to nonperforming loans   74.88%          43.13%
Net interest margin^2            3.63%           3.46%

^1 Prior period per share amounts adjusted for 15% stock dividend paid during
January 2013.
^2 Ratios for three months are annualized.
^3 Includes nonaccruing loans, loans 90 or more days past due still accruing
interest, troubled debt restructures, and other real estate owned.
^4 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)
                                                         
                                           March 31      December 31
                                           2013           2012
                                                         
Assets                                                    
Cash and cash equivalents                   $35,097        $21,984
Investments                                 45,879         48,367
Loans held for sale                         776            1,789
Loans                                       324,172        327,469
Less: Allowance for loan losses             7,807          8,159
                                                         
Net loans                                   316,365        319,310
Fixed assets                                21,539         21,653
Other assets                                22,179         25,118
                                                         
Total Assets                               $441,835       $438,221
                                                         
Liabilities & Shareholders' Equity                        
Deposits:                                                 
Non-interest bearing                       $45,777        $38,797
Interest bearing non-time                  128,093        115,245
Time deposits                              146,767        165,590
                                                         
Total deposits                             320,637        319,632
Other borrowings                            72,066         69,949
Other liabilities                           3,555          4,066
Junior subordinated debentures              10,310         10,310
                                                         
Total liabilities                          406,568        403,957
                                                         
Shareholders' Equity                                      
Common Stock                              54,484         54,437
Accumulated deficit                        (17,996)      (19,002)
Accumulated other comprehensive loss       (1,221)       (1,171)
                                                         
Total shareholders' equity                 35,267         34,264
                                                         
Total Liabilities and Shareholders' equity $441,835       $438,221



Southcoast Financial Corporation
Consolidated Income Statement
(Dollars in thousands, except share data)
                                                  
                                                  
                                      QuarterEnded
                                      March 31,   March 31,
                                      2013         2012
                                      (Unaudited) (Unaudited)
Interest Income                                    
Interest and fees on loans            $4,201       $4,155
Interest on investments                252          304
Interest on Fed funds sold             6            6
                                                  
Total interest income                  4,459        4,465
                                                  
Interest expense                       1,026        1,288
                                                  
Net interest income                   3,433        3,177
Provision for loan losses              --          100
                                                  
Net interest after provision          3,433        3,077
                                                  
Securities gains                       --         215
Other noninterest income               589          691
                                                  
Total noninterest income               589          906
                                                  
Total operating income                4,022        3,983
                                                  
Noninterest expense                               
Salaries and benefits                 1,679        1,596
Occupancy and furniture and equipment 753          735
Other expenses                        529          321
                                                  
Total noninterest expense             2,961        2,652
                                                  
Income before taxes                    1,061        1,331
Income tax expense                     55           88
                                                  
Net income                             $1,006       $1,243
                                                  
Basic net income per common share      $0.16        $0.20
                                                  
Diluted net income per common share    $0.16        $0.20
                                                  
Average number of common shares                    
Basic                                 6,148,152    6,114,128
Diluted                               6,148,152    6,114,128

CONTACT: William C. Heslop, Senior Vice President and
         Chief Financial Officer, (843) 216-3019