PEACHTREE CITY, Ga., Jan. 22, 2013 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company has closed a preferred equity offering of over $5.3 million. Approximately $1.3 million of the capital was issued in 2013.These funds have been used to eliminate holding company debt and were a component of the strategic troubled asset sale the company completed in September 2012.Future uses of the funds include providing the capital base for organic growth.
The investors purchased convertible preferred stock at $5.75 share with a 6.5% non-cumulative dividend. The preferred shares are convertible to common at a 1:1 ratio. FIG Partners LLC acted as a financial advisor to SouthCrest with regards to the capital raise.
"We believe the success of this offering is due to the significant improvements in asset quality and operational changes our employees have worked so hard to implement over the past year to position our bank for future growth. This new capital will enable us to continue to serve our customers' every need and to expand our reach in the higher growth markets we are targeting," said Mr. Maloy.
For the year 2012 the SouthCrest Financial Group reported preliminary results including operating net income of $152 thousand excluding the $7.34 million impact of the troubled asset sale. Including the impact of the sale total loss for the year was $7.19 million. The decline in total assets for the year from $579 million to $558 million was significantly impacted by the sale. Tier 1 capital ended the year at 8.80% or $49.4 million, while total stockholders' equity finished at $52.5 million.
"While we are far from satisfied with the bottom line results from 2012, we view the year as positive progress on the path to becoming one of the premier community banks in the southeast, and look forward to producing better bottom line results in 2013.Our total focus now turns to exhibiting our great customer service by safely and soundly growing our loan and deposit relationships."
The deposit mix improved throughout the year with non-interest bearing DDA accounts growing by 24% while jumbo CDs declined by 18%.Overall the cost of funds dropped from 0.73% during 4Q11 to an estimated 0.44% in December 2012, which we believe will be one of the lowest in the region. During the year the Company was also able to redeem its $1.4 million subordinated note and now has no holding company level debt.
Total loans fell during the year, partially due to the asset sale, ending at $257 million, down from $305 million. Excluding the asset sale, much of the focus this year was on organically reducing the balances of troubled loans, and working through our loss share portfolio, which combined led to the majority of the decline.
During 2012 the Company reduced core (not covered by loss share) non-performing assets by 63% from $31.24 million to $11.60 million, while core OREO declined from $7.19 million to $4.07 million. The loan loss provision for the year totaled $7.45 million and OREO losses and related expenses were $4.73 million. As of December 31, the allowance for loan losses is $5.72 million and covers 2.37% of non-loss share loans.
Finally, the company was listed in a press release dated December 18, 2012 from the Department of Treasury detailing the expectation that the TARP preferred equity issued by SouthCrest Financial Group and held by Treasury to be auctioned in 2013.
SouthCrest Financial Group, Inc. is a $560 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 14 branch network throughout Georgia and Alabama under the names SouthCrest Bank, The First National Bank of Polk County, Peachtree Bank and Bank of Chickamauga. The banks provide retail and commercial banking services, mortgage banking, investment management, and online banking services.
This presentation contains 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.