Southeastern Bank Financial, Augusta, GA (SBFC)

The Case of a Juicy Bank Stock in the Peachtree State

If I were limited to owning stock in just one bank in this country, I'd probably put my money into Augusta, Georgia's Southeastern Bank Financial.

It's really rare to find a bank doing this well trading this cheaply. It could easily fetch twice book value in a sale, but given the bank's rate of earnings growth and return on equity, I see no reason why SBFC's stellar team shouldn't keep running the bank themselves. At the end of the day, it's reasonable to expect that owners of SBFC stock will wake up sometime in the next 10 years with shares trading at a multiple of today's price.

Disclosure: As of this posting, I own significant shares of SBFC and may subsequently either dispose of them or purchase more.

Prospective Buyers
By acquiring SBFC's 12 branches and $1.4B in deposits, any of these deposit-hungry banks could expect to scale regional operations manyfold:

First Citizens Bancorp, Columbia, SC (FCNCA) has seven nearby branches holding collectively less than $300M in deposits.
SunTrust Banks, Atlanta, GA (STI) has four local branches with $165M in deposits. 
Toronto Dominion Bank, Toronto, Canada (TD) has just two branches in the area and $88M in deposits.
Financial Snapshot
(as of 3/31/2012)

Total assets:
Tangible book value per share:
NPAs to assets:
Price to book:
Market cap:
Dividend yield:
Trailing 12-month return on assets:
Trailing 12-month return on equity:
Robert W. Pollard, Jr., Chairman
Daniel Blanton, President and CEO
Ronald Thigpen, Executive VP and COO
Gold Stars
Four traits about Southeastern Bank Financial that I find especially peachy include:
  • Top Five Performance.  According to an SNL Article, for the one-year period ending September 30, 2011 only three banks in the entire US grew their tangible book value by a greater percentage than SBFC. In fact, since the start of the Great Recession in 2007, SBFC's book value rose over 20% while most of our nation's banks saw their book value dive.
  • High Insider Ownership. Insiders own over 30% and have been steady buyers in the open market over the years. The largest individual shareholders include Founder Pollard, Sr. (15.2%), Current Chairman Pollard, Jr., (8.7%), and Current President and CEO Blanton (8%).
  • Superior Asset Quality. SBFC's NPAs are a manageable 2.9% of assets and never got to be more than 3.2%, well below national averages. Reserves are a healthy 69% of non-performing loans. (In my experience, bank regulators like to see reserves above 30%.)
  • Good Old-Fashioned Self-Reliance. While other banks were taking TARP funding from the government (that is, from taxpayers), Southeastern Bank Financial raised $12M from friends and family.


      1. Is this the old georgia carolina? Or did they buy the mortgage business from the failure in jasper georgia, i forget the name

        1. Thanks for reading and commenting Sam. Georgia Carolina is a different bank. The symbol is GECR. It looks pretty cheap as well. I think the failure you're referring to is Crescent Bank and Trust. Renasant Bank of Tupelo was the buyer from the FDIC.