ATLANTA, Jan. 24, 2018 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary results of -$4.59MM or -$0.55/share for the fourth quarter ended December 31, 2017. Excluding the impact of previously announced one-time items which included the impact of the new tax law and office relocations, net income would have been $0.9MM or $0.11/share.
“Like a large number of our peers, the tax law change created a significant mark to our deferred tax asset. In addition, we made what we have thought of as a capital investment by preparing to move out of our operations center and to move our Tyrone branch to our Fayetteville LPO. These two items were responsible for a $5.9MM negative impact to earnings in the fourth quarter.
“We were also excited to announce a special dividend of $0.60/common share recently. At the end of the day, our primary responsibility is to be good stewards of the capital that our investors have given us, and we believe that this was the best use of this capital at this time. Importantly, we believe that after this dividend the Company has sufficient capital to take advantage of any strategic growth opportunity that may present itself.
“The Company should continue to have significant operating leverage, improved loan growth and significantly improved ROA and ROE.”
Tangible book value declined to $6.37/share which takes into account both the one-time items and the impact of the special dividend.
Deposits saw a normal seasonal pattern for the quarter and were up 15% LQA vs a slight year over year decline of 2%. Total deposits at the end of 4Q17 were $444.7MM vs. $428.9MM as of 3Q17 and $452.7MM as of 4Q16 (adjusted for the Alabama branch sale).
On a core basis, expenses for the quarter were $4.2 million, continuing the downward trend that has existed for several quarters. Total expenses for the quarter were $4.79MM.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.27% due to the funding of the special dividend. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.37 per share. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the negative impact to TBV by OCI is -$0.19/share vs. -$0.07/share as of 3Q17. The current fully converted share count at the end of the quarter remained 8.41 million 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 remained steady during the quarter, with NPAs to assets ticking up slightly to 1.05% from 0.91%, excluding the $2.5 million of former bank buildings that are projected to be sold over the next several quarters in OREO. Including these buildings, 3Q17 NPAs/total assets were 1.51% of assets vs. 1.28% in 3Q17, with half of the increase being driven by the operations center that is being vacated. Excluding the impact of the Bank buildings in OREO, OREO balances were just $115,000.
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.
Contact:
Andy Borrmann
Chief Financial Officer
678.734.3505
Andrew Bowen, APR
ab@clearviewcom.com
404-822-3309
| Statement of Operations ($000s, Unaudited) | |||||||||
| 2016 | 2017 | ||||||||
| Q4 | Q1 | Q2 | Q3 | Q4 | |||||
| Interest Income | |||||||||
| Loans | |||||||||
| Construction and Development | $150 | $197 | $198 | $238 | $360 | ||||
| Commercial Real Estate | 1,645 | 1,691 | 1,737 | 1,767 | 1,669 | ||||
| Commercial Loans | 291 | 316 | 341 | 378 | 368 | ||||
| Multi Family | 31 | 27 | 26 | 29 | 30 | ||||
| Residential Mortgage | 1,230 | 1,190 | 1,209 | 1,140 | 1,117 | ||||
| Consumer Loans | 122 | 117 | 109 | 61 | 68 | ||||
| County/Municipal Loans | 42 | 25 | 25 | 24 | 24 | ||||
| Loss Share Loans | 119 | 111 | 33 | 89 | 81 | ||||
| Investment Securities | |||||||||
| Federal Funds/Overnight Funds | $28 | $58 | $77 | $97 | $99 | ||||
| Bank Owned CDs | 6 | 5 | 6 | 5 | 7 | ||||
| Investment Securities | 1,039 | 967 | 872 | 922 | 1,036 | ||||
| Total Interest Income | $4,703 | $4,705 | $4,633 | $4,750 | $4,859 | ||||
| Total Interest Expense | $247 | $249 | $250 | $293 | $393 | ||||
| Net Interest Income | $4,456 | $4,456 | $4,383 | $4,457 | $4,466 | ||||
| Provision for Loan Losses | 94 | 106 | 70 | 0 | 0 | ||||
| Net Interest Income after Loan Losses | $4,362 | $4,349 | $4,314 | $4,457 | $4,466 | ||||
Other Income | |||||||||
| Service Charges on Deposits | $228 | $216 | $209 | $201 | $174 | ||||
| NSF/Overdraft Fees | 542 | 488 | 491 | 494 | 393 | ||||
| Other Service Charges | 83 | 75 | 78 | 68 | 63 | ||||
| ATM/Billpay/DR Card Income | 303 | 296 | 307 | 284 | 266 | ||||
| Other Income | (386) | 451 | 541 | 1,920 | (969) | ||||
| Total Other Income | $768 | $1,526 | $1,626 | $2,967 | $(73) | ||||
| Non-Interest Expense | |||||||||
| Salaries, Other Comp (+ FAS123R) | $2,014 | $1,799 | $1,874 | $1,869 | $1,977 | ||||
| Employee Benefits | 463 | 438 | 378 | 395 | 409 | ||||
| Occupancy & FF&E Expense | 764 | 739 | 765 | 740 | 934 | ||||
| Professional Fees | 190 | 190 | 157 | 201 | 154 | ||||
| Data Processing | 525 | 498 | 549 | 561 | 488 | ||||
| Other Expense | 730 | 816 | 707 | 754 | 825 | ||||
| Total Noninterest Expenses | $4,687 | $4,480 | $4,430 | $4,520 | $4,787 | ||||
| Pre-Tax Income (Loss) | $443 | $1,395 | $1,510 | $2,904 | $(394) | ||||
| Income Taxes | 128 | 465 | 488 | 1,036 | 4,192 | ||||
| Net Income | $315 | $930 | $1,022 | $1,868 | $(4,586) | ||||
| Preferred Dividends | $125 | $125 | $57 | $0 | $0 | ||||
| Balance Sheet ($000s, Unaudited) | |||||||||
| 2016 | 2017 | ||||||||
| Assets | Q4 | Q1 | Q2 | Q3 | Q4 | ||||
| Current Assets | |||||||||
| Cash & Due from Bank | $33,015 | $41,302 | $31,852 | $32,153 | $41,514 | ||||
| Federal Funds/Overnight Funds | 4,299 | 6,688 | 5,355 | 1,150 | 2,356 | ||||
| Bank Owned CDs | 1,069 | 1,069 | 1,069 | 1,319 | 1,319 | ||||
| Investment Securities | 176,723 | 152,583 | 144,740 | 157,261 | 165,203 | ||||
| Total Current Assets | $215,106 | $201,642 | $183,016 | $191,883 | $210,392 | ||||
Loans | |||||||||
| Construction and Development | $15,159 | $12,486 | $15,604 | $14,400 | $31,184 | ||||
| Commercial Real Estate | 138,155 | 140,003 | 143,883 | 138,550 | 133,191 | ||||
| Commercial Loans | 23,462 | 23,923 | 27,884 | 27,719 | 26,681 | ||||
| Multi Family | 2,281 | 2,093 | 2,050 | 2,330 | 2,283 | ||||
| Residential Mortgage | 97,194 | 98,302 | 95,682 | 89,760 | 87,001 | ||||
| Consumer Loans | 6,893 | 6,117 | 5,874 | 14,086 | 3,304 | ||||
| County/Municipal Loans | 3,387 | 2,999 | 2,971 | 2,791 | 2,771 | ||||
| Loss Share Loans | 7,123 | 6,626 | 5,755 | 4,659 | 4,593 | ||||
| Total Loans | $293,654 | $292,549 | $299,703 | $294,132 | $291,008 | ||||
| Allowance for Loss | (2,766) | (2,797) | (2,875) | (2,813) | (2,820) | ||||
| Net Loans | $290,888 | $289,752 | $296,828 | $291,482 | $288,188 | ||||
| OREO | 3,581 | 2,728 | 2,315 | 2,194 | 2,761 | ||||
| FDIC Indemnification | 304 | 238 | 112 | 112 | 112 | ||||
| BOLI | 20,816 | 20,947 | 21,094 | 21,227 | 21,359 | ||||
| Fixed Assets, net | $13,717 | $13,429 | $13,406 | $11,868 | $9,916 | ||||
| Intangible Assets | 468 | 420 | 373 | 326 | 242 | ||||
| Other Assets | 17,953 | 17,428 | 16,564 | 15,867 | 19,383 | ||||
| Total Assets | $562,833 | $546,584 | $533,708 | $534,959 | $552,353 | ||||
| Liabilities & Stockholders' Equity | |||||||||
| Liabilities | |||||||||
| Deposits | |||||||||
| DDAs | $125,459 | $112,286 | $106,968 | $93,150 | $99,905 | ||||
| Interest Bearing Demand | 65,654 | 63,949 | 63,481 | 58,723 | 73,555 | ||||
| Celebration Checking | 112,355 | 113,548 | 112,731 | 105,514 | 102,367 | ||||
| Money Market Accts | 32,271 | 27,942 | 28,689 | 29,869 | 29,699 | ||||
| Savings | 50,495 | 51,304 | 51,095 | 44,703 | 43,147 | ||||
| CDs Less Than $100k | 72,091 | 70,020 | 67,892 | 61,548 | 59,272 | ||||
| CDs Greater than $100k | 38,922 | 39,966 | 38,952 | 36,234 | 36,723 | ||||
| Total Deposits | $497,247 | $479,018 | $469,809 | $428,929 | $444,668 | ||||
| Other Liabilities | 1,252 | 1,632 | 1,763 | 2,223 | 13,756 | ||||
| Net Borrowings (Wholesale Funding) | - | - | - | 40,000 | 40,000 | ||||
| Total Liabilities | $498,499 | $480,650 | $471,572 | $471,152 | $498,738 | ||||
| Total Equity | 64,334 | 65,934 | 62,136 | 63,807 | 53,615 | ||||
| Total Liabilities & Stockholders' Equity | $562,833 | $546,584 | $533,708 | $534,959 | $552,353 | ||||
| Ratios | |||||||||
| 4Q 2016 | 1Q 2016 | 2Q 2017 | 3Q 2017 | 4Q 2017 | |||||
| ROAA | 0.48% | 0.72% | 0.76% | 1.40% | -0.84% | ||||
| ROAE | 4.44% | 6.78% | 6.57% | 11.86% | -7.81% | ||||
| NPAs/Assets (Core) | 0.83% | 0.84% | 0.76% | 0.91% | 1.05% | ||||
| Est. T1 Leverage (Bank) | 9.26% | 8.87% | 9.31% | 10.00% | 8.27% | ||||
| Total Common Equiv. Shares | 8,389,954 | 8,389,954 | 8,395,696 | 8,410,332 | 8,413,372 | ||||
| NIM | 3.63% | 3.72% | 3.68% | 3.70% | 3.68% | ||||
| Cost of Deposits | 0.20% | 0.21% | 0.21% | 0.23% | 0.24% | ||||
| Loan/Deposit | 59.0% | 60.3% | 63.7% | 68.5% | 65.3% | ||||
| Employees | 122 | 122 | 122 | 114 | 115 | ||||