Southcoast Announces 2013 Results

Southcoast Announces 2013 Results

MT. PLEASANT, S.C., Jan. 17, 2014 (GLOBE NEWSWIRE) -- Southcoast Financial
Corporation (Nasdaq:SOCB) announced that it had unaudited net income of
$9,065,000, or $1.28 per basic share, for the year ended December 31, 2013.
This compares to unaudited net income of $3,518,000, or $0.50 per basic share,
for the year ended December 31, 2012. The December 31, 2013 income per share
is based on 7,076,157 basic average shares compared to 7,044,365 basic average
shares for 2012.

The 2013 results included the reversal of the Deferred Tax Asset (DTA)
valuation allowance which contributed to a net tax benefit of approximately
$6,590,000, or $0.93 per share. The reversal was the result of six quarters of
sustained profitability and improving credit quality which indicated an
anticipated capacity to utilize the DTA in future periods. The impact of the
DTA valuation allowance reversal, coupled with operating earnings, increased
the Company's book value to $6.02 per share as of December 31, 2013, compared
to $4.86 per share as of December 31, 2012. The 2013 results also reflect
decreased levels of nonperforming assets and an improved deposit mix.

For the year ended December 31, 2013, net interest income totaled $13,703,000,
an increase of $327,000 from $13,376,000 for the year ended December 31, 2012.
The net interest margin increased to 3.63% as of December 31, 2013 from 3.55%
as of December 31, 2012.

Noninterest income for 2013 decreased to $2,360,000 from $3,277,000 for 2012,
primarily due to $626,000 of securities gains and $192,000 of gains on sales
of fixed assets during the 2012 period, compared to only $105,000 of gains
from sales of securities and $28,000 of gains on sales of fixed assets in the
2013 period.

Noninterest expense levels increased to $13,188,000 for 2013 from $12,118,000
for 2012. Included in 2012 was the benefit of $1,240,000 in net gains on sales
of other real estate owned compared to only $339,000 for 2013.

Total assets as of December 31, 2013 were $447.4 million compared to $438.2
million as of December 31, 2012, an increase of 2.09%. Loans, excluding loans
held for sale, increased to $331.9 million, from $327.5 million as of December
31, 2012. Deposits decreased by $3.8 million to $315.8 million at December 31,
2013, from $319.6 million at December 31, 2012. This decrease was comprised of
a $29.1 million decrease in time deposits between the two periods, offset by
an increase of $25.3 in non-maturity deposit accounts. The growth in these
core deposits was a major strategy incorporated in our 2013 strategic plan.

The Company's ratio of nonperforming assets to total assets was 3.47% as of
December 31, 2013, compared to 4.87% as of December 31, 2012. The allowance
for loan losses as a percentage of loans was 1.82% as of December 31, 2013,
compared to 2.49% as of December 31, 2012. The allowance for loan losses as a
percentage of total nonperforming loans totaled 58.88% as of December 31,
2013, compared to 71.86% as of December 31, 2012. The year to year reduction
in the allowance for loan losses was indicative of improved credit quality in
the loan portfolio, most notably due to a significant reduction in criticized
and classified loans. The subsidiary bank's capital position as of December
31, 2013 remains in excess of regulatory well-capitalized requirements.

From January 4, 2013 to January 16, 2014, the Company's stock price rose from
$3.97 to $5.96. The earlier price has been adjusted for the stock dividend
issued in early 2013. During the same period, the stock was included in the
Russell 2000 Small Cap Index fund and celebrated its ten year anniversary on
the NASDAQ exchange. "We are proud of these accomplishments and they reflect
the hard work of our employees during an extremely challenging extended
period," 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
                                          Consolidated Balance Sheets
                                          (Dollars in thousands)
                                                          
                                          December 31     December 31
                                          2013             2012
                                          (Unaudited)      
Assets                                                     
Cash and cash equivalents                  $28,460          $21,984
Investments                                43,451           48,367
Loans held for sale                        271              1,789
Loans                                      331,906          327,469
Less: Allowance for loan losses            6,041            8,159
                                                          
Net loans                                  325,865          319,310
Fixed assets                               21,150           21,653
Other assets                               28,187           25,118
                                                          
Total Assets                               $447,384         $438,221
                                                          
Liabilities & Shareholders' Equity                         
Deposits:                                                  
Noninterest bearing                        $40,399          $38,797
Interest bearing nontime                   138,899          115,245
Time deposits                              136,530          165,590
                                                          
Total deposits                             315,828          319,632
Other borrowings                           73,818           69,949
Other liabilities                          4,859            4,066
Junior subordinated debentures             10,310           10,310
                                                          
Total liabilities                          404,815          403,957
                                                          
Shareholders' Equity                                       
Common Stock                               54,544           54,437
Accumulated deficit                        (9,937)         (19,002)
Accumulated other comprehensive loss       (2,038)         (1,171)
                                                          
Total shareholders' equity                 42,569           34,264
                                                          
Total Liabilities and Shareholders' equity $447,384         $438,221
                                                          

                                  
                                  
                                  
                                  Southcoast Financial Corporation
                                  Consolidated Income Statements
                                  (Dollars in thousands, except earnings per
                                   share)
                                                        
                                  YearEnded
                                  December 31,           December 31,
                                  2013                   2012
                                  (Unaudited)            
Interest Income                                          
Interest and fees on loans         $16,425                $16,947
Interest on investments            1,106                  1,260
Interest on Fed funds sold         30                     29
                                                        
Total interest income              17,561                 18,236
                                                        
Interest expense                   3,858                  4,860
                                                        
Net interest income                13,703                 13,376
Provision for loan losses          400                    880
                                                        
Net interest income after          13,303                 12,496
provision
                                                        
Noninterest income                 2,360                  3,277
                                                        
Total operating income             15,663                 15,773
                                                        
Noninterest expense                                      
Salaries and benefits              7,024                  6,487
Occupancy and equipment            2,935                  2,904
Other expenses                     3,229                  2,727
                                                        
                                                        
Total noninterest expense          13,188                 12,118
                                                        
Income before taxes                2,475                  3,655
                                                        
Income tax expense (benefit)       (6,590)               137
                                                        
Net income                         $9,065                 $3,518
                                                        
                                                        
Basic net income per share         $1.28                  $0.50
                                                        
Diluted net income per share       $1.28                  $0.50
                                                        
Average number of shares                                 
Basic                              7,076,157              7,044,365
Diluted                            7,076,157              7,044,365

                                                        
                                                        
                                                        
Southcoast Financial Corporation                         
SELECTED FINANCIAL DATA
(dollars in thousands, except earnings per share)
                                                        
                                   Year Ended
                                   December 31, 2013    December 31, 2012
                                   (Unaudited)           
INCOME STATEMENT DATA                                    
Net interest income                 $13,703             $13,376
Provision for loan losses           400                   880
Noninterest income                  2,360                 3,277
Noninterest expenses                13,188                12,118
Income tax expense (benefit)        (6,590)              137
Net income                          $9,065              $3,518
                                                        
PER SHARE DATA                                           
Net income per share                                    
Basic                               $1.28               $0.50
Diluted                             $1.28               $0.50
                                                        
BALANCE SHEET DATA                                       
Total assets                        $447,384            $438,221
Total deposits                      315,828               319,632
Total loans (net)                   325,865               319,310
Investment securities               43,451                48,367
Other borrowings                    73,818                69,949
Junior subordinated debentures      10,310                10,310
Shareholders' equity                42,569                34,264
                                                        
Average shares outstanding^1                             
Basic                               7,076,157             7,044,365
Diluted                             7,076,157             7,044,365
                                                        
Book value per share^1              $6.01                 $4.86
                                                        
Key ratios                                               
Return on assets                    2.09%                 0.81%
Return on equity                    23.60%                10.81%
Equity to asset ratio               9.52%                 7.82%
Nonperforming assets^2 to assets    3.47%                 4.87%
Reserve to loans                    1.82%                 2.49%
Reserve to nonperforming loans^3    58.88%                69.56%
Net interest margin                 3.63%                 3.55%
                                                        
^1 Prior period per share amounts restated for 15% stock dividend paid
duringJune 2013.
^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.

CONTACT: William C. Heslop, Senior Vice President and
         Chief Financial Officer, (843) 216-3019
 
Press spacebar to pause and continue. Press esc to stop.