South Atlantic Bank Continues Strong Financial Performance

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MYRTLE BEACH, S.C., Oct. 25, 2011 /PRNewswire/ -- South Atlantic Bancshares, Inc., parent of South Atlantic Bank, today announced net income of $418,157 or $0.15 per diluted share for the three months ended September 30, 2011, marking the bank's third consecutive profitable quarter. Net income for the nine months ended September 30, 2011 was $797,041 or $0.29 per diluted share.

"The bank's financial performance continued to gain steam in the third quarter," said chairman of the board and chief executive officer K. Wayne Wicker. "Improvement in the net interest margin, expense control, and our strong credit quality all combined to help fuel profitability."

The bank's net interest margin improved to 3.31% for the nine months ended September 30, 2011, up from 2.87% reported for the same period a year ago. The improvement in the margin is due to an increase in the yields on interest earning assets and a decrease in interest costs for deposits.

South Atlantic Bank's credit quality is strong, with just one loan charged off year-to-date. While the bank has not been immune to the issues caused by the economic downturn, its percentage of nonperforming assets remains well below the local, regional, and national averages. Due in part to the bank's credit quality, its capital ratios remain strong and continue to exceed regulatory requirements. Total assets grew 20.9%, from $195.1 million at September 30, 2010, to $235.9 million at September 30, 2011.

Moderate growth was reported in the balance sheet. Total loans increased 9.0%, from $153.2 million at September 30, 2010 to $167.0 million at September 30, 2011. Total deposits grew 22.8%, from $173.3 million at September 30, 2010 to $212.9 million at September 30, 2011. The bank's deposit base continues to favor a strong mix of core accounts.

"Our success also can be attributed to the overall growth in our Myrtle Beach and Murrells Inlet locations, as these offices are now firmly established in our community," Wicker said. "Recent figures released by the FDIC show that South Atlantic Bank is first in market share in Murrells Inlet, tenth along the Grand Strand, and seventh in Myrtle Beach zip code 29577. Our gains in market share demonstrate that our community banking philosophy has resonated with customers who want local, personal banking service."

BauerFinancial, Inc., a leading independent bank rating firm, recently awarded South Atlantic Bank a 5-Star superior rating, which is the highest rating given. South Atlantic Bank was the only bank in the Grand Strand market to receive a 5-Star rating. In addition, the Myrtle Beach Area Chamber of Commerce honored the bank with the Small Business of the Year award at its annual meeting earlier in October.

About South Atlantic Bank

South Atlantic Bank is a $235.9 million financial institution that is locally owned, controlled, and operated. The bank is headquartered in Myrtle Beach, South Carolina and has a second location in Murrells Inlet, South Carolina. South Atlantic Bank offers a wide variety of services for businesses and consumers, including internet banking, no-fee ATM access, checking, CD, and money market accounts, merchant services, remote deposit capture, and more. Its experienced team of bankers knows the Grand Strand market and is skilled in meeting the special needs of this coastal community.

Member FDIC

South Atlantic Bank Selected Financial Highlights
		For the	For the	For the
		Nine Months Ended	Twelve Months Ended	Nine Months Ended
		9/30/2011	12/31/2010	9/30/2010

*Year End / Quarter End Balances (in thousands)*
Total assets	$	235,925	204,909	195,080
Investment securities		39,151	22,289	23,020
Loans, net of unearned income (total loans)		167,031	162,894	153,172
Deposits		212,870	178,871	173,304
Shareholders' equity		22,543	20,725	21,466

*Average Balances (in thousands)*
Total assets	$	226,675	188,535	185,316
Earning assets		212,286	173,812	170,490
Investment securities		33,574	21,028	20,690
Loans, net of unearned income		163,119	144,490	140,116
Deposits		203,337	165,660	163,347
Shareholders' equity		21,535	21,606	21,663

*Earnings Breakdown*
Total interest income	$	7,100	7,955	5,819
Total interest expense		1,735	2,792	2,163
Net interest income		5,365	5,163	3,656
Total noninterest income		622	540	361
Total noninterest expense		4,549	5,616	4,178
Income (loss)		797	(945)	(746)

*Selected Ratios*
Interest income to total average assets		4.19%	4.22%	4.20%
Interest expense to total average assets		1.03%	1.48%	1.56%
Net interest income to total average assets		3.16%	2.74%	2.64%
Loan loss reserve to total loans		1.48%	1.22%	1.46%
Nonperforming assets to total assets		0.63%	0.35%	0.00%
Charge-offs to total average assets		0.07%	0.35%	0.00%

*Selected % Increases*		*Changes compared to* *09/30/2010*	*Changes Compared to* *12/31/2010*
Total assets		20.94%	15.14%
Total interest earning assets		22.88%	16.78%
Total loans		9.05%	2.54%
Total deposits		22.83%	19.01%
Interest income		22.02%	19.34%
Interest expense		(19.80)%	(16.94)%
Noninterest income		72.19%	15.24%
Noninterest expense		8.89%	8.41%