ATLANTA, Oct. 21, 2020 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $2.40 million or $0.31/share for the third quarter ended September 30, 2020. Excluding non-core items, primarily securities gains, core earnings were $1.49 million, or $0.19/share. Total core net income was up 6% from 3Q19, and increased by 23% from 2Q20.
“We continue to be thankful for the efforts of all of our team members during this stressful period, and the ongoing partnerships we have with our customers. This is a marathon that we will all finish together one day.”
“Financially, we remain very comfortable with the credit and capital position at SouthCrest. Loan deferrals ended the quarter at 0.17% after hitting a high of nearly 18% during the second quarter. Earnings have held up well to this point and while we will experience some NIM compression, we will be focusing on maximizing ROA and maintaining appropriate capital levels. Expense discipline has been exceptional this year with total expenses running 5% below budget, even with COVID expenses.”
Total assets increased to $634.2 million vs. $622.4 million in 2Q20 and $523.7MM in the year ago quarter. Loan balances declined as payoffs accelerated during the quarter, finishing at $326.4 million vs. $338.6 million at the end of 2Q20 and $331.2 million 3Q19. The ALLL fell from $4.0MM (1.18% of loans) to $3.7MM (1.14% of loans) in the quarter due to the resolution of a pre-COVID bankruptcy.
Interest income decreased 1.7% from 2Q20 due to the decrease in loan balances and the resulting higher cash levels. Interest expense declined 5.3% during the quarter as well which led to an overall net interest income decrease of 1.2% or $56,000 versus the second quarter. During the third quarter, the cost of deposits declined by 5bps to 0.41%. Provision expense fell to zero from $450,000 in the prior quarter.
Non-interest income, excluding the $1.23MM of securities gains, was up from the prior three months with NSF and overdraft fees increasing by 34% as the primary driver, although these fees remain down 40% over the prior year. Non-interest expense increased slightly as bonus accruals were reinstated, but otherwise core expenses fell approximately 4% on all other expense lines.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 9.41% from 8.99% as a result of the income and securities gains offsetting the additional growth of the balance sheet. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $8.02 per share, up from $6.83 at the end of 2019 and $7.84 at the end of 2Q20. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the positive impact to TBV by OCI is $0.79/share vs. $0.09/share at the end of 4Q19 and $0.86/share as of 2Q20. The current fully converted share count at the end of the quarter was 7.816 million shares, comprised of 5.761 million common shares and 2.055 million preferred shares.
Asset quality ratios continued a multi-quarter trend of improvement even with the COVID economic environment. NPAs to assets declined to 0.59% vs. 0.71% in 2Q20. As of June 30, 2020 the Company’s OREO balances were $447,000.
ABOUT SOUTHCREST
SouthCrest Financial Group, Inc. is a bank holding company with over $630 million 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. You should not rely upon forward-looking statements, as they are inherently unlikely to occur, and we do not assume any liability to update or correct any forward-looking statements that we make.
Andy Borrmann
Chief Financial Officer
678.734.3505
| Statement of Operations ($000s, Unaudited) | ||||||||||||||||||||
| Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | ||||||||||||||||
| Interest Income | ||||||||||||||||||||
| Loans | ||||||||||||||||||||
| Construction and Development | $ | 636 | $ | 669 | $ | 744 | $ | 758 | $ | 781 | ||||||||||
| Commercial Real Estate | 2,037 | 2,030 | 1,856 | 1,974 | 1,846 | |||||||||||||||
| Commercial Loans | 446 | 645 | 553 | 567 | 542 | |||||||||||||||
| Multi Family | 27 | 28 | 21 | 21 | 25 | |||||||||||||||
| Residential Mortgage | 991 | 1,029 | 904 | 750 | 743 | |||||||||||||||
| Consumer Loans | 41 | 34 | 36 | 29 | 28 | |||||||||||||||
| County/Municipal Loans | 22 | 24 | 34 | 41 | 50 | |||||||||||||||
| Loss Share Loans | 61 | 58 | 46 | 37 | 33 | |||||||||||||||
| Investment Securities | ||||||||||||||||||||
| Federal Funds/Overnight Funds | $ | 107 | $ | 77 | $ | 129 | $ | 6 | $ | 8 | ||||||||||
| Bank Owned CDs | 6 | 2 | 0 | 0 | 0 | |||||||||||||||
| Investment Securities | 950 | 996 | 1,023 | 1,393 | 1,425 | |||||||||||||||
| Total Interest Income | $ | 5,324 | $ | 5,592 | $ | 5,346 | $ | 5,576 | $ | 5,481 | ||||||||||
| Total Interest Expense | $ | 658 | $ | 699 | $ | 769 | $ | 741 | $ | 702 | ||||||||||
| Net Interest Income | $ | 4,666 | $ | 4,893 | $ | 4,577 | $ | 4,835 | $ | 4,779 | ||||||||||
| Provision for Loan Losses | 39 | 0 | 150 | 450 | 0 | |||||||||||||||
| Net Interest Income after Loan Losses | $ | 4,627 | $ | 4,893 | $ | 4,427 | $ | 4,385 | $ | 4,779 | ||||||||||
| Other Income | ||||||||||||||||||||
| Service Charges on Deposits | $ | 148 | $ | 144 | $ | 138 | $ | 132 | $ | 130 | ||||||||||
| NSF/Overdraft Fees | 356 | 348 | 305 | 158 | 213 | |||||||||||||||
| Other Service Charges | 78 | 95 | 64 | 71 | 78 | |||||||||||||||
| ATM/Billpay/DR Card Income | 278 | 271 | 247 | 277 | 298 | |||||||||||||||
| Other Income | 308 | 268 | 238 | 664 | 1,441 | |||||||||||||||
| Total Other Income | $ | 1,169 | $ | 1,186 | $ | 992 | $ | 1,303 | $ | 2,160 | ||||||||||
| Non-Interest Expense | ||||||||||||||||||||
| Salaries, Other Comp (+ FAS123R) | $ | 1,856 | $ | 2,140 | $ | 1,940 | $ | 1,711 | $ | 1,985 | ||||||||||
| Employee Benefits | 391 | 379 | 412 | 341 | 276 | |||||||||||||||
| Occupancy & FF&E Expense | 564 | 529 | 503 | 506 | 475 | |||||||||||||||
| Professional Fees | 152 | 149 | 141 | 143 | 197 | |||||||||||||||
| Data Processing | 497 | 502 | 488 | 385 | 353 | |||||||||||||||
| Other Expense | 505 | 667 | 632 | 661 | 672 | |||||||||||||||
| Total Noninterest Expenses | $ | 3,963 | $ | 4,366 | $ | 4,116 | $ | 3,747 | $ | 3,958 | ||||||||||
| Pre-Tax Income (Loss) | $ | 1,832 | $ | 1,713 | $ | 1,303 | $ | 1,941 | $ | 2,981 | ||||||||||
| Income Taxes | 417 | 389 | 265 | 316 | 580 | |||||||||||||||
| Net Income | $ | 1,414 | $ | 1,323 | $ | 1,038 | $ | 1,625 | $ | 2,401 | ||||||||||
| Balance Sheet ($000s, Unaudited) | ||||||||||||||||||||
| Assets | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | |||||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash & Due from Bank | $ | 13,758 | $ | 38,555 | $ | 19,845 | $ | 22,520 | $ | 39,600 | ||||||||||
| Federal Funds/Overnight Funds | 0 | 5,215 | 0 | 7,873 | 10,101 | |||||||||||||||
| Bank Owned CDs | 1,069 | 77 | 0 | 0 | 0 | |||||||||||||||
| Investment Securities | 139,907 | 139,880 | 184,377 | 218,680 | 222,913 | |||||||||||||||
| Total Current Assets | $ | 154,733 | $ | 183,727 | $ | 204,222 | $ | 249,072 | $ | 272,614 | ||||||||||
| Loans | ||||||||||||||||||||
| Construction and Development | $ | 43,661 | $ | 47,593 | $ | 56,430 | $ | 64,320 | $ | 65,675 | ||||||||||
| Commercial Real Estate | 155,397 | 146,287 | 142,610 | 139,407 | 134,986 | |||||||||||||||
| Commercial Loans | 42,921 | 53,833 | 53,383 | 56,860 | 55,327 | |||||||||||||||
| Multi Family | 1,939 | 1,611 | 1,601 | 1,590 | 1,714 | |||||||||||||||
| Residential Mortgage | 80,391 | 77,772 | 73,778 | 66,810 | 62,672 | |||||||||||||||
| Consumer Loans | 1,022 | 830 | 2,144 | 2,472 | 1,868 | |||||||||||||||
| County/Municipal Loans | 2,037 | 3,109 | 3,732 | 4,851 | 1,990 | |||||||||||||||
| Loss Share Loans | 3,859 | 3,601 | 2,451 | 2,315 | 2,152 | |||||||||||||||
| Total Loans | $ | 331,227 | $ | 334,635 | $ | 336,129 | $ | 338,625 | $ | 326,383 | ||||||||||
| Allowance for Loss | (3,073 | ) | (3,039 | ) | (3,184 | ) | (3,984 | ) | (3,705 | ) | ||||||||||
| Net Loans | $ | 328,154 | $ | 331,596 | $ | 332,946 | $ | 334,641 | $ | 322,678 | ||||||||||
| OREO | 0 | 497 | 529 | 447 | 447 | |||||||||||||||
| FDIC Indemnification | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| BOLI | 22,323 | 22,456 | 22,583 | 22,737 | 22,872 | |||||||||||||||
| Fixed Assets, net | 8,982 | 8,862 | 8,705 | 8,697 | 8,540 | |||||||||||||||
| Intangible Assets | 96 | 84 | 80 | 68 | 64 | |||||||||||||||
| Other Assets | 9,424 | 8,740 | 8,604 | 6,731 | 7,030 | |||||||||||||||
| Total Assets | $ | 523,711 | $ | 555,960 | $ | 577,669 | $ | 622,383 | $ | 634,245 | ||||||||||
| Liabilities & Stockholders' Equity | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| DDAs | $ | 94,680 | $ | 103,154 | $ | 96,517 | $ | 114,554 | $ | 118,082 | ||||||||||
| Interest Bearing Demand | 63,386 | 87,685 | 85,746 | 96,141 | 95,732 | |||||||||||||||
| Celebration Checking | 97,277 | 98,558 | 103,718 | 111,421 | 114,657 | |||||||||||||||
| Money Market Accts | 32,382 | 33,888 | 37,693 | 38,650 | 43,746 | |||||||||||||||
| Savings | 44,383 | 44,370 | 44,516 | 47,674 | 48,928 | |||||||||||||||
| CDs Less Than $100k | 56,543 | 54,228 | 53,616 | 52,709 | 51,735 | |||||||||||||||
| CDs Greater than $100k | 41,846 | 43,404 | 47,259 | 47,049 | 43,612 | |||||||||||||||
| Total Deposits | $ | 430,497 | $ | 465,288 | $ | 469,064 | $ | 508,198 | $ | 516,491 | ||||||||||
| Other Liabilities | 2,516 | 2,143 | 2,415 | 2,184 | 2,772 | ||||||||||
| Net Borrowings (Wholesale Funding) | 33,429 | 34,697 | 50,228 | 50,546 | 52,258 | ||||||||||
| Total Liabilities | $ | 466,443 | $ | 502,127 | $ | 521,708 | $ | 560,918 | $ | 571,522 | |||||
| Total Equity | 57,268 | 53,833 | 55,961 | 61,465 | 62,723 | ||||||||||
| Total Liabilities & Stockholders' Equity | $ | 523,711 | $ | 555,960 | $ | 577,669 | $ | 622,393 | $ | 634,245 |
| Ratios | ||||||||||||||||
| Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q2 2020 | ||||||||||||
| ROAA | 1.09 | % | 0.98 | % | 0.75 | % | 1.05 | % | 1.53 | % | ||||||
| ROAE | 10.10 | % | 9.52 | % | 7.30 | % | 10.87 | % | 16.88 | % | ||||||
| NPAs/Assets (Core) | 1.00 | % | 0.77 | % | 0.80 | % | 0.71 | % | 0.59 | % | ||||||
| Est. T1 Leverage (Bank) | 9.65 | % | 9.63 | % | 9.62 | % | 8.99 | % | 9.41 | % | ||||||
| Total Common Shares | 5,849,101 | 5,832,793 | 5,832,793 | 5,786,288 | 5,761,439 | |||||||||||
| Total Preferred Shares | 2,058,121 | 2,054,759 | 2,054,759 | 2,054,759 | 2,054,759 | |||||||||||
| Total Common Equiv. Shares | 7,907,222 | 7,887,552 | 7,887,552 | 7,841,047 | 7,816,198 | |||||||||||
| NIM (Bank) | 3.92 | % | 4.03 | % | 3.65 | % | 3.37 | % | 3.22 | % | ||||||
| Cost of Deposits (Bank) | 0.54 | % | 0.53 | % | 0.54 | % | 0.46 | % | 0.41 | % | ||||||
| Loan/Deposit | 76.7 | % | 71.9 | % | 71.6 | % | 66.6 | % | 63.1 | |||||||
| Employees | 103 | 105 | 104 | 102 | 98 | |||||||||||
| Loans in Atlanta MSA | 76.8 | % | 77.5 | % | 78.2 | % | 79.1 | % | 80.5 | % | ||||||