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CST: 28/02/2021 08:57:42   

SouthCrest Financial Group Reports Preliminary 2Q19 Earnings

584 Days ago

ATLANTA, July 24, 2019 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.05MM or $0.12/share for the second quarter ended June 30, 2019. Excluding unusual items, primarily consisting of a loss on the sale of a former bank building, core earnings were $1.23MM or $0.15/share. The core results represent year over year quarterly earnings growth of over 20%, driven by loan growth and continued focus on expenses.

“We are extremely pleased to experience earnings growth of over 25% in the first half of 2019 versus the first half of 2018. The pricing environment continues to remain challenging on both sides of the balance sheet. Atlanta has experienced significant changes in the banking landscape and the competition remains robust. We continue to look for ways to increase SouthCrest’s influence in the Atlanta MSA while maintaining our primary focus of improving shareholder value and managing capital appropriately.”

Total assets were down to $528.5MM vs. $542.6MM in 1Q19, and vs. $541.3MM in 2Q18. Seasonality accounts for some of the decline in total assets during the quarter vs. 1Q, and there was one large municipal deposit that left the bank due to pricing competition. The cost of funds and cost of deposits were up just 3bps and 2bps respectively from 1Q19.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 9.95%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.21 per share, up from $6.90 at the end of the first quarter. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the impact to TBV by OCI is $0.07/share vs. -$0.16/share as of 1Q19. The current fully converted share count at the end of the quarter was 8.42 million shares, comprised of 6.36 million common shares and 2.06 million preferred shares. In addition, the Company still retains a small deferred tax asset valuation allowance related to state taxes that totals approximately $0.07/fully converted share.

Asset quality ratios ticked up slightly during the quarter, with NPAs to assets increasing to 1.09% vs. 0.92% in 1Q19, excluding the $396,000 of a former bank building in OREO (this building was under contract and subsequently sold in early July). Including this building, 2Q19 NPAs/total assets were 1.17% of assets vs. 1.02% in 1Q19. Excluding the impact of the bank building in OREO, OREO balances were just $179,000.

ABOUT SOUTHCREST
SouthCrest Financial Group, Inc. is a bank holding company with over half a billion dollars in assets, headquartered in Atlanta, GA. The company operates a 9 branch network throughout Georgia through its subsidiary bank, SouthCrest Bank, N.A. The bank provides a full suite of retail, private, entrepreneurial, high-net-worth and commercial banking services, and online banking services. 

FORWARD LOOKING STATEMENTS
This presentation may contain certain “forward-looking statements” that are subject to risks, uncertainties, and other factors that could cause actual results and shareholder values to differ materially from those projected. Factors that could cause or contribute to such differences include economic conditions, government regulation and legislation, changes in interest rates, credit quality, competition, and other risk factors. 

Andy Borrmann
Chief Financial Officer
678.734.3505

 
Statement of Operations ($000s, Unaudited)
  Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Interest Income          
Loans          
Construction and Development $479 $560 $633 $609 $603
Commercial Real Estate   1,696   1,776   1,819   1,800   1,834
Commercial Loans   370   454   401   458   429
Multi Family   28   27   20   19   32
Residential Mortgage   1,116   1,119   1,167   1,176   1,101
Consumer Loans   56   51   48   41   41
County/Municipal Loans   23   23   25   25   22
Loss Share Loans   79   70   64   62   61
Investment Securities          
Federal Funds/Overnight Funds $48 $41 $65 $82 $88
Bank Owned CDs   6   7   7   7   6
Investment Securities   1,214   1,181   1,187   1,168   1,111
Total Interest Income $ 5,115 $ 5,311 $ 5,436 $ 5,447 $ 5,329
           
Total Interest Expense $506 $586 $728 $746 $759
Net Interest Income $ 4,609 $ 4,725 $ 4,708 $ 4,701 $ 4,570
Provision for Loan Losses   0   46   0   0   0
Net Interest Income after Loan Losses $ 4,609 $ 4,679 $ 4,708 $ 4,701 $ 4,570
           
Other Income          
Service Charges on Deposits $165 $169 $164 $156 $153
NSF/Overdraft Fees   334   350   396   309   310
Other Service Charges   63   62   65   65   70
ATM/Billpay/DR Card Income   280   273   260   255   284
Other Income   125   316   172   204   131
Total Other Income $ 967 $ 1,170 $ 1,057 $ 989 $ 947
Non-Interest Expense          
Salaries, Other Comp (+ FAS123R) $1,969 $1,889 $1,822 $1,849 $1,842
Employee Benefits   524   435   458   419   370
Occupancy & FF&E Expense   590   621   588   621   570
Professional Fees   156   305   136   170   274
Data Processing   489   485   476   481   488
Other Expense   832   693   724   649   613
Total Noninterest Expenses $ 4,560 $ 4,428 $ 4,204 $ 4,189 $ 4,157
Pre-Tax Income (Loss) $1,016 $ 1,421 $ 1,561 $ 1,501 $ 1,360
Income Taxes   210   319   289   321   315
Net Income $ 806 $ 1,102 $ 1,272 $ 1,180 $ 1,045


 
Balance Sheet ($000s, Unaudited)
 
Assets Q2 2018
  Q3 2018
  Q4 2018
  Q1 2019
  Q2 2019
 
Current Assets                
Cash & Due from Bank $18,408   $14,189   $20,168   $20,243   $30,930  
Federal Funds/Overnight Funds   5,446     0     6,070     1,718     0  
Bank Owned CDs   1,319     1,322     1,322     1,322     1,322  
Investment Securities   169,924     166,632     162,936     161,561     141,013  
Total Current Assets $ 195,097   $ 182,143   $ 190,496   $ 184,844   $ 173,265  
                     
Loans          
Construction and Development $34,157   $43,113   $40,420   $41,777   $40,040  
Commercial Real Estate   134,653     148,219     144,329     144,178     153,527  
Commercial Loans   29,873     29,997     29,452     28,177     28,036  
Multi Family   2,230     1,518     1,466     1,438     1,970  
Residential Mortgage   92,346     88,357     94,199     92,405     85,064  
Consumer Loans   3,361     2,143     2,579     1,086     1,384  
County/Municipal Loans   2,480     2,459     2,438     2,301     2,037  
Loss Share Loans   4,480     3,466     4,030     3,975     3,933  
Total Loans $ 303,581   $ 319,272   $ 318,914   $ 315,337   $ 315,991  
Allowance for Loss   (3,037 )   (3,060 )   (3,042 )   (2,968 )   (3,022 )
Net Loans $ 300,544   $ 316,212   $ 315,872   $ 312,369   $ 312,698  
OREO   879     720     821     670     575  
FDIC Indemnification   112     0     0     0     0  
BOLI   21,640     21,773     21,909     22,039     22,186  
Fixed Assets, net   9,970     9,733     9,511     9,268     9,180  
Intangible Assets   152     126     116     107     100  
Other Assets   12,880     13,365     11,759     13,336     10,083  
Total Assets $541,274   $544,072   $ 550,484   $ 542,633   $ 528,503  
           
Liabilities & Stockholders' Equity          
Liabilities          
           
Deposits          
DDAs $97,587   $88,768   $106,821   $99,896   $98,229  
Interest Bearing Demand   81,262     64,684     62,829     59,270     59,606  
Celebration Checking   105,358     101,474     99,694     102,617     100,950  
Money Market Accts   30,402     47,286     55,836     49,584     33,080  
Savings   43,862     44,139     43,574     44,152     44,407  
CDs Less Than $100k   57,600     57,349     56,864     56,664     56,256  
CDs Greater than $100k   30,477     34,795     38,007     39,867     38,854  
Total Deposits $ 446,548   $ 438,495   $ 463,625   $ 452,054   $ 431,382  
Other Liabilities   1,874     2,115     1,493     2,492     2,583  
Net Borrowings (Wholesale Funding)   40,000     50,641     30,000     30,000     33,795  
Total Liabilities   $488,422     $491,251      $495,118     $484,546      $467,760  
Total Equity   52,852     52,821     55,366     58,087     60,743  
Total Liabilities & Stockholders' Equity   $541,274     $544,072     $550,484     $542,633     $528,503  


       
Ratios      
  Q2 2018   Q3 2018   Q4 2018   Q1 2019   Q2 2019  
ROAA 0.59%   0.81%   0.93%   0.86%   0.78%  
ROAE 6.12%   8.35%   9.40%   8.32%   7.03%  
NPAs/Assets (Core) 1.25%   1.11%   0.92%   0.92%   1.09%  
Est. T1 Leverage (Bank)  8.56%   8.94%   9.16%   9.46%   9.95%  
Total Common Shares 6,190,012   6,198,632   6,198,632   6,198,632   6,360,273  
Total Preferred Shares 2,223,360   2,223,360   2,223,360   2,223,360   2,061,719  
Total Common Equiv. Shares 8,413,372   8,421,992   8,421,992   8,421,992   8,421,992  
NIM 3.73%   3.78%   3.79%   3.86%   3.75%  
Cost of Deposits 0.25%   0.33%   0.44%   0.49%   0.51%  
Loan/Deposit 68.0%   72.5%   68.8%   69.5%   73.4%  
Employees 115   110   106   105   106  
Loans in Atlanta MSA 61.6%   65.8%   65.3%   66.0%   67.4%  

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