FAYETTEVILLE, Ga., Feb. 9, 2006 (PRIMEZONE) -- SouthCrest Financial Group, Inc. (OTCBB:SCSG) reported net income of $1,154,000 for the quarter ended December 31, 2005 compared to $1,172,000 for the same quarter a year ago. For the year ended December 31, 2005, net income was $4,844,000 compared to $3,857,000 for the same period in 2004. Most of the increase in net income for year compared to the prior year was the result of the Company's merger with First Polk Bankshares, Inc. on September 30, 2004. Assets and liabilities, and results of operations for First Polk are only included in the balance sheets and income statements of the Company from the date of merger going forward. On a per share basis, results were $0.32 per share for the current quarter compared to $0.32 for the same period a year ago, and $1.36 per share for the year ended December 31, 2005 compared to $1.52 for the year ended December 31, 2004. Reductions in earnings per share are mostly due to dilution resulting from increased number of shares resulting from the merger with First Polk. Current quarter results include recognized loss on disposal of equipment of $184,000, or $114,000 net of tax. This represents $0.03 per share.
Return on average assets was 1.03% for the current quarter compared to 1.13% for the same period in 2004, and 1.13% for the current year compared to 1.32% for 2004. Return on average equity was 8.63% for the quarter compared to 9.11% in 2004, and 9.29% and 11.67% for the annual periods in 2005 and 2004, respectively. The Company's net interest margins have remained consistent with the previous year, increasing to 4.42% for the fourth quarter of 2005 from 4.39% in the same period in 2004, and to 4.43% for the year ended December 31, 2005 from 4.25% for the same period in 2004.
Total assets at December 31, 2005 were $451.2 million compared to $407.5 million at December 31, 2004, an increase of $43.7 million, or 10.7%. The increase in total assets is primarily attributable to growth resulting from increased lending activity. Gross loans (excluding reserves for loan losses) totaled $276.8 million at December 31, 2005 compared to $229.9 million at December 31, 2004, an increase of $46.9 million or 20.4%. Much of the growth in loans relates to the SouthCrest banking office in Fayetteville, Georgia, which opened in November 2004. Deposits increased $25.6 million or 7.3% to $377.9 million at December 31, 2005. Borrowed funds increased $14.9 million to $15.3 million.
At December 31, 2005, the allowance for loan losses was 1.26% of loans compared to 1.37% at December 31, 2004. Net chargeoffs were 0.17% and 0.19% of average loans for the years ended December 31, 2005 and 2004, respectively. Despite an increase in nonperforming assets at December 31, 2005, the Company's asset quality indicators compare favorably with historical benchmarks for the industry. At December 31, 2005, nonperforming assets were $1,112,000, or 0.25% of total assets, compared to $562,000 or 0.14% of total assets at December 31, 2004.
In a press release dated January 4, 2006, the Company announced that it declared a dividend of $0.125 per share compared to $0.12 per share for the same period a year ago. The dividend was paid on January 31, 2006 to shareholders of record as of January 17, 2006.
About SouthCrest Financial Group, Inc.
SouthCrest Financial Group, Inc. is the parent company of two bank subsidiaries operating a total of nine branch offices. Bank of Upson, based in Thomaston, Georgia, has two branches in Upson County, three branches in Meriwether County operating as Meriwether Bank & Trust, and one branch in Fayette County operating as SouthCrest Bank. First National Bank of Polk County, based in Cedartown, Georgia, operates three branches in Polk County. SouthCrest is traded on the OTC-Bulletin Board under the symbol "SCSG."
Forward-Looking Statements
This release contains forward-looking statements including statements relating to present or future trends or factors generally affecting the banking industry and specifically affecting SouthCrest's operations, markets and products. Without limiting the foregoing, the words "believes," "anticipates," "intends," "expects," or similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected for many reasons, including, without limitation, changing events and trends that have influenced SouthCrest's assumptions, but that are beyond SouthCrest's control. These trends and events include (i) changes in the interest rate environment which may reduce margins, (ii) not achieving expected growth, (iii) less favorable than anticipated changes in the national and local business environment and securities markets, (iv) adverse changes in the regulatory requirements affecting SouthCrest, (v) greater competitive pressures among financial institutions in SouthCrest's markets and (vi) greater loan losses than historic levels. Additional information and other factors that could affect future financial results are included in SouthCrest's filings with the Securities and Exchange Commission.
SouthCrest Financial Group, Inc.
Consolidated Financial Highlights
(Unaudited)
Quarter Ended December 31 Year Ended December 31
-------------------------- -------------------------
2005 2004 % 2005 2004 %
Change Change
--------- -------- ------ --------- -------- -----
All dollars in
thousands
except per
share data
EARNINGS
Net interest
income $ 4,597 $ 4,162 10.5% $ 17,469 $ 11,460 52.4%
Provision for
loan losses 232 85 172.9% 751 375 100.3%
Noninterest
income 1,082 1,128 -4.1% 4,411 3,357 31.4%
Noninterest
expense 3,798 3,544 7.2% 14,129 8,925 58.3%
Income taxes 495 489 1.2% 2,156 1,660 29.9%
Net income 1,154 1,172 -1.5% 4,844 3,857 25.6%
PER SHARE
INFORMATION
Earnings per
share $ 0.32 $ 0.32 0.0% $ 1.36 $ 1.52 -10.5%
Dividends per
share 0.120 0.115 4.3% 0.480 0.460 4.3%
Book value per
share 14.93 14.21 5.1%
OPERATING
RATIOS (a)
Net interest
margin 4.42% 4.39% 4.43% 4.25%
Return on
average
assets 1.03% 1.13% 1.13% 1.32%
Return on
average
equity 8.63% 9.11% 9.29% 11.67%
Efficiency
ratio 64.78% 66.99% 63.23% 60.23%
Net chargeoffs
/average
loans 0.18% 0.22% 0.17% 0.19%
AVERAGE BALANCES
Loans $274,884 $231,895 18.5% $249,394 $156,003 59.9%
Total earning
assets 413,044 377,155 9.5% 394,076 269,651 46.1%
Total assets 445,890 412,352 8.1% 428,360 292,446 46.5%
Deposits 373,788 353,691 5.7% 366,877 256,035 43.3%
Borrowed funds 13,523 404 n/m 4,695 580 n/m
Shareholders'
equity 53,059 51,207 3.6% 52,125 33,062 57.7%
END OF PERIOD As of December 31,
BALANCES 2005 2004
-------- --------
Loans $276,780 $229,907 20.4%
Reserve for
loan losses 3,477 3,161 10.0%
Total earning
assets 410,897 374,684 9.7%
Intangible
assets 6,913 7,876 -12.2%
Total assets 451,206 407,512 10.7%
Deposits 377,900 352,252 7.3%
Borrowed funds 15,275 385 n/m
Shareholders'
equity 53,456 50,740 5.4%
ASSET QUALITY
(END OF PERIOD)
Loans 90 days
past due and
still
accruing $ 549 $ 186
Nonaccrual
Loans 232 190
Other Real
Estate Owned 331 186
Total
nonperforming
assets 1,112 562
Nonperforming
assets/total
assets 0.25% 0.14%
Allowance for
loan losses/
total loans 1.26% 1.37%
(a) All ratios are annualized.
n/m - percentage change is not meaningful.