CVWFF
CVW SUSTAINABLE ROYALTIES INC.

Security Bank Corporation Announces Acquisition in North Metro Atlanta Market. Press Release Source: Security Bank Corporation Security Bank Corporation Announces Acquisition in North Metro Atlanta Market and Reports Record First Quarter Earnings Wednesday April 19, 5:02 pm ET MACON, Ga., April 19 /PRNewswire-FirstCall/ -- Security Bank Corporation (Nasdaq: - News) today announced its third acquisition in the northern metropolitan Atlanta market with the signing of a definitive agreement to acquire Homestead Bank, a community bank located in Suwanee, Georgia. Homestead Bank, with approximately $258.9 million in total assets, $214.8 million in deposits and $20.7 million in shareholders' equity as of March 31, 2006, operates one full service banking office in Gwinnett County. Separately, Security Bank Corporation announced earnings and results of operations for the first quarter of 2006. All per share figures have been adjusted for the Company's two-for-one stock split on May 27, 2005. Definitive Agreement Signed to Acquire Homestead Bank Under the terms of the merger agreement with Homestead Bank, Security Bank will pay approximately $50 million to Homestead Bank's shareholders, based on the value of the consideration at the time of signing the definitive agreement. Security Bank will issue approximately 79% of the purchase price in common stock, and the remainder in cash to a significant shareholder. The transaction was unanimously approved by the boards of directors of both companies and is subject to regulatory approval, the approval of Homestead shareholders and other customary closing conditions. The acquisition is expected to be completed during the third quarter of 2006 and is expected to be accretive to Security Bank's earnings during the first full year of combined operations. In a joint statement, Heyward Horton, President and Chief Executive Officer of Homestead, said, "We are enthusiastic about joining the Security Bank team of successful community banks. I'm confident we will continue providing superior service to our customers as part of Security Bank. Security Bank's success is the result of empowering people to make local decisions based on the unique needs of each market." Rett Walker, President and Chief Executive Officer of Security Bank, said, "Homestead's management shares our passion for building shareholder value by providing superior banking service to the local community. Strategically, this expands our franchise in the Atlanta metropolitan area and when combined with our prior acquisitions in the northern metropolitan area of Atlanta, greatly enhances our position in three of the fastest growing markets in Georgia. This acquisition is consistent with our disciplined acquisition strategy of focused expansion into demographically attractive markets. It also meets our stated financial goals of anticipated earnings accretion within one year and the expectation of earning back tangible book value dilution within five years." Announcement of First Quarter Earnings Earnings Summary Net income for the first quarter of 2006 increased 51% to a record $5.1 million, compared to $3.4 million in the first quarter of 2005. Diluted earnings per share were $0.35 versus $0.29 for the same quarter in 2005, an increase of 21%. The Company's annualized returns on average equity and assets for the first quarter were 11.44% and 1.25%, respectively, compared to 12.82% and 1.28%, respectively, for the first quarter of 2005. The Company's return on average tangible equity for the first quarter of 2006 was 20.26% compared to 17.68% in the first quarter of 2005. Rett Walker remarked on the Company's performance, "We are pleased with our first quarter results. We successfully completed the conversion of Rivoli Baricorp and the acquisition of Neighbors Bancshares and saw strong growth in our loan portfolio. In addition, our net interest margin held up well and we incurred minimal charge offs during the quarter." Security Bank Corporation's first quarter 2006 results reflect the completion of the Company's acquisition of SouthBank in May 2005, which now operates as Security Bank of North Metro, and the acquisition of Rivoli BanCorp, Inc. in December 2005, which operates as Security Bank of Bibb County. On April 10, 2006, the Company completed the acquisition of Neighbors Bancshares Inc., a community bank holding company for Neighbors Bank, located in Alpharetta, Georgia. Neighbors Bank had approximately $147.5 million in assets at March 31, 2006. For accounting purposes, the acquisition of Neighbors was effective as of March 31, 2006 and therefore the balances of Neighbors Bank are included in the Company's balance sheet data presented below. However, there was no impact on the Company's first quarter average balances or the Company's results of operations for the first quarter of 2006. Balance Sheet Loans, excluding loans held for resale, were $1.47 billion at March 31, 2006, up from $890.5 million at March 31, 2005, an increase of 65%. Excluding acquisitions, loans increased $150.3 million or 16.9% since March 31, 2005. Total deposits were $1.53 billion at March 31, 2006, an increase of 69% from $907.1 million. Excluding acquisitions, deposits increased $206.7 million or 23% since March 31, 2005. Total assets increased 71% to $1.91 billion at March 31, 2006, compared to $1.12 billion at March 31, 2005. Excluding acquisitions, total assets increased $205.5 million or 18.4%, compared to March 31, 2005. Shareholders' equity increased $106.7 million to $217.6 million, an increase of 96% compared to March 31, 2005. The primary reasons for the increase were the acquisitions of SouthBank, Rivoli Bancorp and Neighbors Bancshares, which contributed approximately $89.2 million of the increase along with the increase in earnings, net of dividends paid, which contributed the remainder. Net Interest Income Net interest income (on a fully tax equivalent basis) for the first quarter of 2006 was $16.8 million, an increase of 51% when compared to the first quarter of 2005. The increase is primarily the result of the continued growth in the Company's loan portfolio. The net interest margin on a fully tax-equivalent basis was 4.54% for the quarter ended March 31, 2006, compared to 4.50% for the comparable period one year ago and 4.53% for the fourth quarter of 2005. Noninterest Income and Expense Noninterest income for the first quarter of 2006 was $4.9 million versus $3.5 million for the first quarter of 2005, an increase of 40%, The change is attributable to an increase in service charges on deposits of approximately $507,000 resulting from the significant increase in core deposits during the period. The increase is also attributable to an increase in the recognized portion of construction loan origination fees in the first quarter of 2005. Noninterest expense for the first quarter of 2006 was $12.8 million, an increase of 52% over the first quarter 2005's level of $8.5 million. The increase is primarily attributable to a $2.8 million increase in salaries and benefits, which is the direct result of the Company's significant growth through acquisitions completed since the first quarter of 2005. The increase is also related to occupancy and equipment, which increased approximately $462,000 due to the addition of numerous properties in connection with acquisitions since the first quarter of 2005. The Company's efficiency ratio was 59.3% for the first quarter of 2006 compared to 57.9% for the first quarter of 2005. Asset Quality Total nonperforming assets (nonaccrual, repossessed assets and other real estate owned) were 0.72% of total loans plus other real estate owned when compared to 0.75% and 0.74% at the end of the first and fourth quarters, respectively, of 2005. Net charge-offs to average loans decreased to 0.06% for the first quarter of 2006 from 0.15% in the first quarter of 2005. The allowance for loan losses was $17.8 million at March 31, 2006, up from $11.4 million at March 31, 2005. The increase in the allowance is primarily attributable to growth in the Company's loan portfolio and the addition of $4.9 million of loss reserves in connection with the previously noted acquisitions. Other Information Security Bank Corporation's management team will host a conference call to discuss these results at 8:30 AM EDT on Thursday, April 20, 2006. This call is open to all interested parties. From locations within the United States, the call-in number is 877-407-8035 (201-689-8035 from outside the United States). Please call in 10 minutes prior to the beginning of the conference and ask for the Security Bank Corporation conference call. A recorded playback of the conference call will be available by calling 877-660-6853, (201-612-7415 from outside the United States) from approximately 12:00 PM EDT, Thursday, April 20, 2006 until 11:59 PM EDT Friday, April28, 2006. The reservation numbers for this playback are Account #286 and Conference ID # 146953. Security Bank Corporation will file a registration statement, including a proxy statement addressed to the shareholders of Homestead Bank and a prospectus for the Security Bank Corporation stock to be offered in the proposed merger with Homestead Bank, with the SEC. A definitive proxy statement will be sent to Homestead Bank's shareholders seeking their approval of the proposed merger. Investors and shareholders are urged to read the registration statement carefully when it becomes available, because it will contain important information about the proposed merger. Investors and shareholders may obtain a free copy of the registration statement, when it becomes available, and other documents filed with, or furnished to, the SEC by the Company at the SEC's website at www.sec.gov Copies of the registration statement and other documents filed by the Company with the SEC may also be obtained for free from the Company by directing a written request to Security Bank Corporation, 4219 Forsyth Road, Macon, Georgia 31210; attn: Chief Financial Officer. Additional details about the definitive agreement are posted at Security Bank's web site at www.securitybank.net Select Investor Info/Presentations. This press release, including the attached selected unaudited financial tables, which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are "tangible book value" and "return on average tangible equity." Security Bank's management uses these non-GAAP measures in its analysis of Security Bank's performance. Tangible book value is defined as total equity reduced by recorded intangible assets. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace that are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Security Bank that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period) divided by average equity reduced by average goodwill and other intangible assets. Security Bank's management includes this measure because it believes that it is important when measuring the Company's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and this measure is used by many investors as part of their analysis of Security Bank. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures. About Security Bank Corporation Security Bank Corporation is a Georgia multi-bank holding company based in Macon, Bibb County, Georgia. The Company's wholly-owned bank subsidiaries are Security Bank of Bibb County, Security Bank of Houston County, Security Bank of Jones County, Security Bank of North Metro and Neighbors Bank. The banks maintain 15 full service offices in Central Georgia (Macon, Perry, Warner Robins, and Gray), two full service offices in Coastal Georgia (Brunswick and St. Simons Island), one full service office in Griffin, Georgia and two full service offices in North Metro Atlanta (Woodstock and Alpharetta) as well as loan production offices in Hiram, Cumming and Oconee County, Georgia. In addition, Security Bank of Bibb County operates a wholly-owned mortgage subsidiary; Fairfield Financial Services, Inc. Fairfield has offices in Macon, Warner Robins, Columbus, Richmond Hill, Gray, Pooler, Woodstock, St. Simons Island and Brunswick. Safe Harbor This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Please refer to Security Bank Corporation's filings with the Securities and Exchange Commission for a summary of important factors that could affect Security Bank Corporation's forward-looking statements. Security Bank Corporation does not intend to and assumes no responsibility for updating or revising any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise.