<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended................................................ 06-30-95
Commission File Number............................................... 2-83157
SOUTHEASTERN BANKING CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
GEORGIA 58-1423423
- --------------------------------------------- -------------------------
(State or other jurisdiction of incorporation (I. R. S. Employer
or organization) Identification No.)
1010 NORTHWAY STREET
DARIEN, GEORGIA 31305
- --------------------------------------------- -------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area
code (912) 437-4141
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS SHARES OUTSTANDING
- ----- ------------------
Common Stock $1.25 Par Value 1,193,599 Shares at 7-31-95
THIS DOCUMENT CONSISTS OF 11 PAGES.
THE EXHIBIT INDEX IS LOCATED AT PAGE 10.
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<PAGE>
<PAGE>
<TABLE>
SOUTHEASTERN BANKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
ASSETS 6/30/95 12/31/94
----------------------------
<S> <C> <C>
Cash and due from banks $ 12,815,661 $ 18,523,647
Federal funds sold 8,515,000 4,720,000
-----------------------------
Cash and cash equivalents 21,330,661 23,243,647
Investment securities:
Held to maturity (market value of
$24,441,000 at June 30, 1995 and
$24,414,000 at December 31, 1994) 23,731,220 24,661,034
Available for sale, at market value 71,018,713 66,687,545
-----------------------------
Total investment securities 94,749,933 91,348,579
Loans, gross 166,592,416 160,221,819
Unearned income (3,952,425) (3,950,090)
Allowance for loan losses (3,803,782) (3,257,000)
-----------------------------
Loans, net 158,836,209 153,014,729
Premises and equipment, net 7,172,142 7,311,116
Intangible assets 3,193,305 3,328,426
Other assets 5,415,200 5,567,656
-----------------------------
Total assets $ 290,697,450 $ 283,814,153
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing deposits $ 47,034,027 $ 48,216,342
Interest-bearing deposits 205,936,175 202,813,553
-----------------------------
Total deposits 252,970,202 251,029,895
U. S. Treasury demand note 2,641,239 635,347
Note payable 3,275,000 3,500,000
Other liabilities 2,954,409 3,224,461
-----------------------------
Total liabilities 261,840,850 258,389,703
-----------------------------
Stockholders' equity:
Common stock - $1.25 par value; authorized
10,000,000 shares; issued and outstanding 1,491,998 1,491,998
1,193,599 shares
Additional paid-in-capital 4,375,721 4,375,721
Retained earnings 23,087,753 21,430,096
-----------------------------
Realized stockholders' equity 28,955,472 27,297,815
Unrealized losses on investment securities, net (98,872) (1,873,365)
-----------------------------
Total stockholders' equity 28,856,600 25,424,450
-----------------------------
Total liabilities and stockholders' equity $ 290,697,450 $ 283,814,153
=============================
See notes to consolidated financial statements.
1
</TABLE>
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<TABLE>
SOUTHEASTERN BANKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
QUARTER ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1995 1994 1995 1994
------------------------ ------------------------
<S> <C> <C> <C> <C>
Interest Income:
Loans, including fees $ 4,544,591 $ 3,355,093 $ 8,971,178 $ 6,458,675
Federal funds sold 145,216 41,370 310,237 99,269
Investment securities:
Taxable 1,110,829 925,510 2,099,973 1,913,543
Tax-exempt 347,912 379,226 702,908 773,307
------------------------ ------------------------
Total interest income 6,148,548 4,701,199 12,084,296 9,244,794
------------------------ ------------------------
Interest expense:
Deposits 2,466,633 1,697,464 4,686,908 3,357,063
U. S. Treasury demand note 13,262 10,622 30,360 20,995
Note payable to bank 67,700 136,193
------------------------ ------------------------
Total interest expense 2,547,595 1,708,086 4,853,461 3,378,058
------------------------ ------------------------
Net interest income 3,600,953 2,993,113 7,230,835 5,866,736
Provision for loan losses 300,000 300,000 600,000 600,000
Net interest income after ------------------------ ------------------------
provision for loan losses 3,300,953 2,693,113 6,630,835 5,266,736
------------------------ ------------------------
Other income:
Service charges on deposit accounts 660,668 556,879 1,297,479 1,059,016
Investment securities gains (losses), net 11,448 27,423 (38,984) 43,118
Other operating income 179,147 176,710 457,464 410,607
------------------------ ------------------------
Total other income 851,263 761,012 1,715,959 1,512,741
------------------------ ------------------------
Other expense:
Salaries and employee benefits 1,406,852 1,199,831 2,967,399 2,394,484
Net occupancy and equipment 434,933 345,441 870,324 697,107
Other operating expense 803,641 731,730 1,597,263 1,440,271
------------------------ ------------------------
Total other expense 2,645,426 2,277,002 5,434,986 4,531,862
------------------------ ------------------------
Income before income taxes 1,506,790 1,177,123 2,911,808 2,247,615
Income tax expense 465,916 293,560 848,327 535,264
------------------------ ------------------------
Net income $ 1,040,874 $ 883,563 $ 2,063,481 $ 1,712,351
======================== ========================
Net income per share based on
1,193,599 shares outstanding $0.87 $0.74 $1.73 $1.43
======================== ========================
Dividends per share $0.17 $0.16 $0.34 $0.32
======================== ========================
See notes to consolidated financial statements.
</TABLE>
2
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<TABLE>
SOUTHEASTERN BANKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED June 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
Six Months Ended June 30
1995 1994
---------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,063,481 $ 1,712,351
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 600,000 600,000
Depreciation 443,527 443,122
Amortization and accretion, net 131,979 139,320
Deferred income tax benefit (413,088) (249,743)
Investment securities losses (gains), net 38,984 (43,118)
Net gains on sales of other real estate owned (60,380) (152,792)
Changes in assets and liabilities:
(Increase) decrease in other assets (436,311) 280,445
Decrease in other liabilities (79,076) (491,538)
---------------------------
Net cash provided by operating activities 2,289,116 2,238,047
---------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities:
Held to maturity 923,000 2,336,550
Available for sale 13,737,275 12,568,615
Proceeds from sales of investment securities:
Available for sale 5,938,906 3,000,469
Proceeds from sales of other real estate owned 88,915 382,000
Purchases of investment securities:
Held to maturity (2,192,459)
Available for sale (21,347,750) (13,667,663)
Net increase in loans (6,414,685) (14,607,255)
Additions to premises and equipment, net (252,162) (624,115)
---------------------------
Net cash used in investing activities (7,326,501) (12,803,858)
---------------------------
Cash flows from financing activities:
Net (decrease) increase in demand, NOW, and
savings deposits (8,381,412) 8,436,616
Net increase (decrease) in certificates of deposit 10,321,719 (1,286,452)
Net increase (decrease) in U. S. Treasury demand note 2,005,892 (723,508)
Payments on note payable (225,000)
Cash dividends paid (596,800) (560,992)
---------------------------
Net cash provided by financing activities 3,124,399 5,865,664
---------------------------
Net decrease in cash and cash equivalents (1,912,986) (4,700,147)
Cash and cash equivalents at beginning of year 23,243,647 16,786,362
---------------------------
Cash and cash equivalents at June 30 $ 21,330,661 $12,086,215
===========================
See notes to consolidated financial statements.
</TABLE>
3
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SOUTHEASTERN BANKING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Southeastern Banking Corporation (the Company) is a bank holding
company headquartered in Darien, Georgia. Its two subsidiaries, Southeastern
Bank and Southeastern Bank of Florida, operate full-service banking offices in
southeast Georgia and central Florida. Southeastern Bank (SEB), a state banking
association incorporated under the laws of the State of Georgia, operates from
its main office in Darien and its branch offices in Douglas, Eulonia, Folkston,
Hazlehurst, Hoboken, Kingsland, Nahunta, Nicholls, St. Marys, and Woodbine. At
June 30, 1995, Southeastern Bank had total assets of approximately $250,000,000.
Southeastern Bank of Florida (SEBF), a state banking association incorporated
under the laws of the State of Florida, operates from its main office in Alachua
and its branch offices in Gainesville and Jonesville. At June 30, 1995,
Southeastern Bank of Florida had total assets of approximately $39,912,000.
Both banks provide traditional deposit and credit services to individual and
corporate customers.
The primary objective of Southeastern Banking Corporation is to provide
quality banking service to the people in its trade areas while maintaining an
adequate return on investment for its stockholders and a capital base in excess
of regulatory requirements.
On October 14, 1994, the Company acquired 100% of the outstanding
common stock of United Citizens Bank of Alachua County, Alachua, Florida under
the name Southeastern Bank of Florida (SEBF). The aggregate consideration paid
for SEBF was approximately $5,139,000.00. The results of operations of SEBF
have been included in the consolidated financial statements from the date of
acquisition forward.
On June 15, 1995, the Company and SEBF signed a letter of intent to
acquire the Callahan, Hilliard, and Yulee offices of Compass Bank in North
Florida's Nassau County. Geographically, Nassau County borders Camden and
Charlton Counties in South Georgia where the Company has existing offices.
The transaction is subject to the execution of a definitive agreement and the
subsequent receipt of all regulatory approvals. At June 30, 1995, these
Compass Bank offices had approximately $25,000,000 in total assets.
Total assets increased $6,883,297 or 2.43% during the first six months
of 1995, after increasing $5,713,049 or 2.44% during the same period in 1994.
Earning assets represented approximately 90% of total assets at June 30, 1995.
Investment securities, exclusive of unrealized gains and losses,
increased $712,728 or .76% during the first six months of 1995. The available-
for-sale portfolio, consisting primarily of U. S. Treasury and Agency
securities, increased $1,642,542, a reflection of the net purchases of these
holdings since December 31, 1994. The held-to-maturity portfolio, consisting
primarily of municipal bonds, declined $929,814. During the first half of
1994, investment securities declined $2,068,409 or 2.23%; funds from the net
principal paydowns, maturities, calls, and sales of these securities were used
to meet increased loan demand.
Generally accepted accounting principles require that securities
classified as available for sale be carried at market value. The higher
interest rates in 1994 meant that the market value of our investment securities
classified as available for sale would decline in value, resulting in an
overall net unrealized loss at December 31, 1994. Due to the stabilization
of interest rates during the first half of 1995, the market value of our
investment securities has increased in value, resulting in a $2,688,626
reduction in the net unrealized loss on these securities at June 30, 1995
compared to December 31, 1994.
Though loan demand has softened from 1994 levels, loans, net of unearned
income, grew $6,368,262 or 4.08% during the six months ended June 30, 1995
after remaining virtually unchanged during the first quarter. Nonaccrual loans
represented 1.22% of net loans at June 30, 1995 compared to 1.42% at
December 31, 1994. At June 30, 1995, the net loans to deposits ratio was 64.29%
compared to 62.25% at year-end 1994. During the first half of 1994, net loans
4
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<PAGE>
grew $14,435,974 or 12.62%; commercial loans accounted for approximately 55% of
this growth while installment loans accounted for the remaining 45%.
The allowance for loan losses increased $546,782 or 16.79% during the
first half of 1995. The allowance to net loans ratio was 2.34% at June 30, 1995
compared to 2.24% and 1.86% at June 30, 1994 and 1993. Net charge-offs were
$53,218, down $137,514 from June 30, 1994.
Net additions to premises and equipment were insignificant during the
first six months of 1995. During the prior year, premises and equipment, net
of depreciation, increased $624,115 due primarily to the purchase of proof
equipment for the centralized proof center now operating at SEB's main office
in Darien.
Other assets declined $152,456 or 2.74% since year-end 1994. The
substantial decline in deferred taxes on the unrealized gains and losses on
available-for-sale securities was largely offset by an increase in the deferred
income tax benefit on the allowance for loan losses and an increase in the
accrued interest receivable on loans. Other assets, net of deferred taxes on
the unrealized gains and losses on available for sale securities, declined
$207,373 during the six months ended June 30, 1994. This net decline in other
assets resulted primarily from the sale of other real estate owned.
LIQUIDITY
The purpose of liquidity management is to ensure sufficient cash flow
to satisfy demands for credit, deposit withdrawals, and other corporate needs.
The Company meets most of its daily liquidity needs through the management of
cash and federal funds sold. Additional short and long-term liquidity is
provided by payments and maturities of the loan and investment securities
portfolios. At June 30, 1995, securities maturing within one year totaled
approximately $18,806,000; securities maturing within one and five years
totaled approximately $57,608,000. The Company's classification of investment
securities for market purposes also enables the Company to meet liquidity and
other needs prior to asset maturity when necessary.
Growth in deposits is an additional source of liquidity. During the
six months ended June 30, 1995, deposits increased $1,940,307 or .77%.
Interest-bearing deposits grew $3,122,622, partially offsetting a $1,182,315
decline in noninterest-bearing deposits. At quarter-end, approximately 86%
and 14% of total deposits were attributable to SEB and SEBF, respectively.
During the same period in 1994, total deposits grew $7,150,164 or 3.51%. In
addition to the liquidity sources mentioned above, the Company has also made
arrangements with correspondent banks to handle any unusual short-term
liquidity needs.
The U. S. Treasury demand note increased $2,005,892 at June 30, 1995
compared to December 31, 1994, after declining $723,508 or 27.43% during the
same period in 1994. The balance of this note fluctuates based on the amount
of payroll and income taxes deposited by commercial customers and the cash needs
of the U. S. Treasury.
The Company has prepaid $225,000 of the annual principal installment on
its note payable to bank. Principal payments of $425,000 are due annually.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
5
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INTEREST RATE SENSITIVITY
The objective of interest rate sensitivity management is to minimize the
effect of interest rate changes on net interest margin while maintaining net
interest income at acceptable levels. The Company attempts to accomplish this
objective by structuring the balance sheet so that repricing opportunities
exist for both assets and liabilities in roughly equivalent amounts at
approximately the same time intervals. Imbalances in these repricing
opportunities at any time constitute interest rate sensitivity. An indicator
of interest rate sensitivity is the difference between interest rate sensitive
assets and interest rate sensitive liabilities; this difference is known as the
interest rate sensitivity gap.
The Company's interest rate sensitivity position at June 30, 1995 is
set forth in the table below:
<TABLE>
<CAPTION>
INTEREST RATE
SENSITIVITY
(Amounts in Thousands )
REPRICING WITHIN
------------------------------------------------------------
More
0-90 91-180 181-365 One -Five Than Five
Days Days Days Years Years Total
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest Rate Sensitive Assets:
Federal Funds Sold $8,515 $ 8,515
Securities* 2,015 5,321 12,466 56,612 18,486 94,900
Loans 75,656 11,119 17,090 47,820 14,907 166,592
-------------------------------------------------------------
Total Interest Rate Sensitive Assets $86,186 $16,440 $29,556 $104,432 $33,393 $270,007
Interest Rate Sensitive Liabilities:
Deposits $77,840 $20,213 $33,632 $46,788 $183 $178,656
U. S. Treasury Demand Note 2,641 2,641
Note Payable 3,275 3,275
-------------------------------------------------------------
Total Interest Rate Sensitive
Liabilities $83,756 $20,213 $33,632 $46,788 $183 $184,572
-------------------------------------------------------------
INTEREST RATE SENSITIVITY GAP $2,430 $(3,773) $(4,076) $57,644 $33,210 $85,435
=============================================================
CUMULATIVE INTEREST RATE SENSITIVITY GAP $2,430 $(1,343) $(5,419) $52,225 $85,435
=============================================================
CUMULATIVE GAP AS A % OF
TOTAL ASSETS--JUNE 30, 1995 .81% -.45% -1.82% 17.49% 28.62%
=============================================================
CUMULATIVE GAP AS A % OF
TOTAL ASSETS--JUNE 30, 1994 -5.10% -7.04% -4.90% 18.85% 32.41%
=============================================================
* Distribution of maturities for available for sale securities is based on amortized cost. Additionally, distribution of
maturities for mortgage-backed securities is based on expected final maturities which may be different from the contractual
terms.
</TABLE>
At June 30, 1995, the gap analysis indicates a negative cumulative gap
position through the one year time interval of $(5,419,000). A negative gap
position indicates that the Company's rate sensitive liabilities will reprice
faster than its rate sensitive assets, with 75% of rate sensitive liabilities
repricing within one year and 45% within 90 days. The Company's rate sensitive
assets will reprice more slowly than its rate sensitive liabilities, with 49%
repricing within one year and 32% within 90 days. As a percent of total
assets, the Company's cumulative gap for the one year time interval has
6
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<PAGE>
narrowed to (1.82%) from (4.90%) a year ago. The improvement in our gap
position results primarily from variable rate loans that have been made since
June 30, 1994.
The interest rate sensitivity table presumes that all loans and
securities* will perform according to their contractual maturities when, in
many cases, actual loan terms are much shorter than the original terms and
securities are subject to early redemption. In addition, the table does not
necessarily indicate the impact of general interest rate movements on net
interest margin since the repricing of various categories of assets and
liabilities is subject to competitive pressures and customer needs. The
Company monitors and adjusts its exposure to interest rate risks within
specific policy guidelines based on its view of current and expected market
conditions.
CAPITAL RESOURCES
Realized stockholders' equity increased 6.07% or $1,657,657 during the
first six months of 1995, an increase in book value from $22.87 to $24.26 per
share. Our investment securities classified as available for sale appreciated
in value at June 30, 1995 compared to December 31, 1994, resulting in a
$1,774,493 increase in unrealized stockholders' equity; this appreciation
resulted from a decline in market interest rates at June 30, 1995. Consistent
with our objective, the Company maintains capital ratios well above regulatory
requirements. Our capital ratios for the most recent periods are presented in
the table below.
Capital adequacy is measured with a framework that makes capital
requirements sensitive to the risk profiles of individual banking companies.
Regulatory guidelines define capital as either Tier 1 (primarily stockholders'
equity) or Tier 2 (certain debt instruments and a portion of the allowance for
loan losses). The Company and its subsidiaries are subject to a minimum Tier 1
capital to risk-weighted assets ratio of 4% and a total capital (Tier 1 plus
Tier 2) to risk-weighted assets ratio of 8%. Additionally, the Company is
subject to a Tier 1 leverage ratio that measures the ratio of Tier 1 capital to
average quarterly assets. In December 1994, the regulatory agencies issued a
final rule prohibiting banks and bank holding companies from including
unrecognized gains and losses on investment securities in calculating risk-
based capital.
The regulatory agencies have defined "well-capitalized" institutions as
those whose capital ratios equal or exceed the following ratios: Tier 1
capital ratio of 6%, total risk-based capital of 10%, and Tier 1 leverage ratio
of 5%. At June 30, 1995, the Company's Tier 1 capital, total risk-based
capital, and Tier 1 leverage ratios were 15.52%, 16.78%, and 9.00%. The
Company's ratios declined at June 30, 1995 and December 31, 1994 compared to
June 30, 1994 and December 31, 1993 due to the increase in assets that resulted
from our cash purchase of SEBF.
<TABLE>
<CAPTION>
SOUTHEASTERN BANKING CORPORATION 6/30/95 6/30/94 12/31/94 12/31/93
<S> <C> <C> <C> <C>
Tier 1 Capital Ratio 15.52% 19.02% 15.07% 19.46%
Total Risk-Based Capital Ratio 16.78% 20.28% 16.33% 20.71%
Tier 1 Leverage Ratio 9.00% 10.29% 8.79% 10.15%
Realized Shareholders' Equity
to Assets 9.96% 10.77% 9.56% 10.53%
</TABLE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Interest income increased $1,447,349 or 30.79% during the second
quarter of 1995 compared to the second quarter of 1994, after increasing
7
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<PAGE>
$1,392,153 or 30.64% during the first quarter of 1995 compared to the first
quarter of 1994. The loan portfolio was the primary factor in the interest
income improvement for the first two quarters of 1995. After giving effect to
the increase in interest and fees on loans attributable to SEBF, whose
operating results have been included in the consolidated financial statements
from the date of acquisition forward, interest and fees on loans increased
$1,424,416 or 22.05% during the first half of 1995. This improvement in
interest and fees on loans was marked by increases in average balances and
rates at SEB: Average balances at June 30, 1995 were 12.75% higher than
June 30, 1994, a result of the growth in loans during the first half of 1995 as
well as strong loan demand during the last three quarters of 1994. For the six
month period, the yield on loans was 11.81%, up 89 basis points from 1994. For
the first six months of 1994, interest and fees on loans increased $456,477, a
7.61% increase from the first half of 1993. Though higher average balances
resulted in an increase in interest and fees on loans, the yield on loans had
declined 34 basis points to 10.92% at June 30, 1994 compared to 1993 due to an
increase in simple interest installment loans.
For the first six months of 1995, interest income on investment
securities increased $116,031 or 4.32% compared to 1994. The $276,025 increase
in interest income attributable to SEBF only partially offset the decline in
interest income that resulted from a 9.56% drop in average balances at SEB for
the first six months of 1995 compared to 1994. Though net new purchases of
investment securities were made during the first half of 1995, the average
balance of the investment portfolio had declined substantially during the
second, third, and fourth quarters of 1994 due to SEB's need to fund its loan
demand. The yield on taxable investments was 5.80% at June 30, 1995 compared
to 5.46% and 5.69% at June 30, 1994 and March 31, 1995. On a taxable-
equivalent basis, the yield on tax-exempt investments was 9.29% at
June 30, 1995 compared to 9.51% at June 30, 1994. Interest income on
investment securities declined $215,932 or 14.20% during the second quarter
of 1994 compared to 1993.
When compared to the results for the first two quarters of 1994,
interest income on federal funds sold increased $210,968 during the first six
months of 1995. Approximately 39% of the increase was attributable to SEBF;
the remaining 61% increase was attributable to higher average balances and
higher yields at SEB. At June 30, 1995, the yield on federal funds sold was
5.90%, up 246 basis points from June 30, 1994. Because of lower average
balances, interest income on federal funds sold declined $5,409 during the
first half of 1994 compared to 1993.
Interest expense on deposits increased $769,169 or 45.31% during the
second quarter of 1995 compared to 1994, after declining $49,935 or 2.86%
during 1994. For the six months ended June 30, 1995, interest expense
increased $1,329,845 or 39.61%. Approximately $623,000 of the increase in
interest expense on deposits for the six month period was due to SEBF; the
remaining increase resulted from higher average deposit balances and higher
rates on deposits at SEB. The average interest paid on deposits was 4.61%, up
77 basis points from June 30, 1994. The average interest paid on the term loan
during the first half of 1995 was 7.91%.
In summary, net interest income increased $1,364,099 or 23.25% during
the first half of 1995 compared to 1994. SEBF contributed $820,474 in net
interest income for this most recent period. During the same period last year,
net interest income increased $283,060 or 5.07%.
The provision for loan losses was $300,000 for each of the second
quarters of 1995 and 1994. For the six months ended June 30, 1995, the
provision totaled $600,000, unchanged from the provision at June 30, 1994.
8
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<PAGE>
OTHER INCOME
After giving effect to the $178,030 increase in noninterest income
attributable to SEBF, non-interest income grew $25,188 or 1.66% during the first
six months of 1995 compared to the same period in 1994. The current period
improvement resulted from increases in service charges on deposit accounts and
commissions from the sale of credit life insurance; these increases offset
declines in book gains on sales of other real estate owned and realized losses
on sales of investment securities. Various investment securities were sold
during the current period to enable the Company to maintain its liquidity
position and to increase the overall rates of return of the investment
portfolio. The 5.03% increase in other income during the first half of 1994
was largely attributable to book gains on sales of other real estate owned,
gains associated with investment securities, and an increase in mortgage
origination fees. The prior year increase was partially offset by a decline in
service charges on deposit accounts.
OTHER EXPENSE
When compared to the results for the first six months of 1994, salaries
and employee benefits were up $572,915 or 23.93% at June 30, 1995.
Approximately 70% of the increase was attributable to SEBF; the remaining 30%
was attributable to an increase in benefit accruals at SEB. For the quarter
and six months ended June 30, 1994, the change in salaries and employee
benefits was insignificant.
Net occupancy and equipment expense was up $173,217 or 24.85% during
the six months ended June 30, 1995 compared to 1994. Virtually all of the
increase in net occupancy and equipment expense was attributable to SEBF.
During the prior year, net occupancy and equipment expense increased a mere
$51,843 or 6.92%. Other operating expenses increased $156,992 or 10.90%
during the six months ended June 30, 1995 compared to 1994. The $286,088
increase attributable to SEBF was largely offset by declines in legal and
accounting fees. During the same period in 1994, other operating expense was
up $133,776 or 10.24% due mainly to legal and accounting fees associated with
pending acquisitions and an increase in FDIC assessment fees.
Income tax expense for the second quarter totaled $465,916, up $172,356
or 58.71% over 1994. Income tax expense for the six months ended June 30, 1995
was up $313,063 or 58.49% over the same period in 1994 which was up 27.71% over
1993. Second quarter earnings totaled $1,040,874, up $157,311 or 17.80% over
the same period in 1994. For the first six months of 1995, earnings totaled
$2,063,481, up $351,130 or 20.51% over the same period in 1994 which was down
.58% from 1993. SEBF contributed $57,414 in earnings during the first half of
1995; although these results are lower than expected, management anticipates
that SEBF's profitability will improve during the second half of 1995. On a
per share basis, earnings were $1.73, $1.43, and $1.44 for the six months ended
June 30, 1995, 1994, and 1993. The 15.12% return on beginning equity for the
most recent period compares favorably with the 13.92% return in 1994.
9
</Page>
<PAGE>
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(NOT APPLICABLE)
ITEM 2. CHANGES IN SECURITIES
(NOT APPLICABLE)
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(NOT APPLICABLE)
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(NOT APPLICABLE)
ITEM 5. OTHER INFORMATION
(NOT APPLICABLE)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits:
Exhibit Table Page
------------------------------------------ ----
Exhibit 22 Subsidiaries of Registrant 10
Exhibit 27 Financial Data Schedule
Submitted in electronic format only.
(b) Reports on Form 8-K - NONE
EXHIBIT 22.
Subsidiaries of the Company:
Southeastern Bank, Darien, Georgia
Southeastern Bank of Florida, Alachua, Florida
10
</Page>
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SOUTHEASTERN BANKING CORPORATION
(Registrant)
By: /s/ S. Michael Little
---------------------------------
S. Michael Little, Vice-President
By: /s/ Wanda D. Pitts
---------------------------------
Wanda D. Pitts, Secretary
Date: August 14, 1995
---------------
11
</Page>
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0
0
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