PEACHTREE CITY, Ga., Jan. 30, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company reported preliminary earnings for the fourth quarter of 2014.
"2014 was very much a transitional year for SouthCrest, but we are proud of the accomplishments during the year including:
- Completing legal and operational consolidation of our legacy four charters into one
- Core (ex. loss share) loan growth of 13%
- Total loan growth of 12%
- Total deposit growth of 4%
- Core (non-CD) deposit growth of 10%
- Net interest income growth of 11%
- Core expense decrease of 13% from 4Q13 to 4Q14
- A cumulatively profitable second half of 2014
- Paying the accrued Series A and Series B Perpetual Cumulative Preferred dividends
Our employees worked extremely hard this year to drive the improvement in financial results that occurred during the second half of 2014. While profitability remains at levels far from where we expect the Company to be over the next several quarters, we do believe in the people who have gotten us this far."
During the quarter the Company produced net income of $26,000 or $0.00/share while dropping salary and benefit expenses by $330,000 from the third quarter, increasing the loan loss provision by $25,000. The Company did experience some seasonal decline in mortgage related revenue during the quarter, but had the first meaningful SBA related revenues to partially offset the mortgage decline.
The Company's balance sheet was generally level with $2.8 million of loan growth from 3Q14 (4% annualized, 12% year over year) while deposits grew by over $9 million from the third quarter (7% annualized). "We were expecting better loan growth during the quarter, but we had one very large pre-payment that decreased the growth. Also, we tend to have some seasonal strength in deposits late in the year, so we do expect flat deposit levels during 1Q15," said Maloy.
The estimated Tier 1 Leverage ratio at the end of the quarter was 10.05%. On a fully converted basis (including the conversion of all preferred equity) TBV/share was negatively impacted by the TARP dividends moving up to 9% and ended the quarter at $5.63 per share. As of December 31, 2014, the Company had paid the total accrued dividends. The Company is currently reviewing all available TARP redemption options and expects some progress during 1Q15. The current fully converted share count at the end of the quarter is 8.380 million shares. In addition, the company still retains a deferred tax asset valuation allowance that totaled approximately $10.7 million ($1.28/fully converted share).
SouthCrest has a loss sharing agreement, related to the purchase of a small failed bank in 2010, which expires in March, 2015 for the non-residential portfolio. Based on the current internal analysis and external reviews, SouthCrest's accounting for the indemnification asset should align closely with related income over the remaining life of the loss share agreement which expires in March 2015, and should not cause any one time material impact in the financial reports. The indemnification asset is now down to $1.5 million from $3.1 million at the end of 2Q14 and $6.4 million as of 4Q13.
Asset quality remained reasonable as the Company continues to work through the last few remaining troubled assets. The non-performing assets/total assets (excluding loss share assets) ratio moved down from 2.44% to 1.92%. The allowance for loan losses fell to 1.37% of loans.
SouthCrest Financial Group, Inc. is a $570 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 12 branch network throughout Georgia and Alabama through its subsidiary bank, SouthCrest Bank, N.A. The bank provides retail and commercial banking services, SBA lending, mortgage banking, and online banking services.
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.
| Statement of Operations ($000s) | ||||||||||
| 2013 | 2014 | |||||||||
| Q4 | Q1 | Q2 | Q3 | Q4 | ||||||
| Interest Income | ||||||||||
| Loans | ||||||||||
| Construction and Development | $186 | $215 | $231 | $262 | $216 | |||||
| Commercial Real Estate | 1,058 | 1,081 | 1,173 | 1,297 | 1,371 | |||||
| Commercial Loans | 175 | 185 | 162 | 214 | 319 | |||||
| Multi Family | 14 | 17 | 13 | 14 | 17 | |||||
| Residential Mortgage | 1,408 | 1,430 | 1,573 | 1,518 | 1,408 | |||||
| Consumer Loans | 436 | 384 | 343 | 305 | 267 | |||||
| County/Municipal Loans | 72 | 31 | 32 | 34 | 42 | |||||
| Loss Share Loans | 288 | 310 | 236 | 200 | 194 | |||||
| Investment Securities | ||||||||||
| Federal Funds/Overnight Funds | $59 | $66 | $44 | $20 | $35 | |||||
| Bank Owned CDs | 14 | 8 | 7 | 6 | 4 | |||||
| Investment Securities | 686 | 767 | 1,022 | 975 | 971 | |||||
| Total Interest Income | $4,396 | $4,494 | $4,836 | $4,845 | $4,844 | |||||
| Total Interest Expense | $357 | $327 | $334 | $348 | $347 | |||||
| Net Interest Income | $4,039 | $4,167 | $4,502 | $4,497 | $4,497 | |||||
| Provision for Loan Losses | -- | -- | -- | 75 | 95 | |||||
| Net Interest Income after Loan Losses | $4,039 | $4,167 | $4,502 | $4,422 | $4,402 | |||||
| Other Income | ||||||||||
| Service Charges on Deposits | $109 | $108 | $105 | $102 | $106 | |||||
| NSF/Overdraft Fees | 587 | 526 | 575 | 626 | 603 | |||||
| Other Service Charges | 88 | 89 | 91 | 96 | 91 | |||||
| ATM/Billpay/DR Card Income | 369 | 394 | 414 | 403 | 402 | |||||
| Gain on Sale of loans | 295 | 364 | 581 | 566 | 476 | |||||
| Other Income | 851 | 1,676 | 2,004 | 1,209 | 794 | |||||
| Total Other Income | $2,299 | $3,157 | $3,770 | $3,002 | $2,472 | |||||
| Non-Interest Expense | ||||||||||
| Salaries, Other Comp (+ FAS123R) | $3,061 | $2,930 | $2,924 | $2,720 | $2,529 | |||||
| Employee Benefits | 628 | 658 | 719 | 571 | 432 | |||||
| Occupancy & FF& E Expense | 852 | 857 | 888 | 920 | 1,023 | |||||
| Professional Fees | 757 | 333 | 469 | 419 | 293 | |||||
| Data Processing | 292 | 247 | 301 | 295 | 306 | |||||
| OREO and Credit related Exp. | 276 | 295 | 223 | (35) | 287 | |||||
| Other Expense | 2,746 | 2,962 | 3,613 | 2,474 | 1,978 | |||||
| Total Noninterest Expenses | $8,612 | $8,282 | $9,137 | $7,364 | $6,848 | |||||
| Pre-Tax Income (Loss) | $(2,274) | $(958) | $(865) | $60 | $26 | |||||
| Income Taxes | -- | -- | -- | -- | -- | |||||
| Net Income | $(2,274) | $(958) | $(865) | $60 | $26 | |||||
| Balance Sheet ($000s) | ||||||||||
| 2013 | 2014 | |||||||||
| Assets | Q4 | Q1 | Q2 | Q3 | Q4 | |||||
| Current Assets | ||||||||||
| Cash & Due from Bank | $24,467 | $27,766 | $26,083 | $18,238 | $16,991 | |||||
| Federal Funds/Overnight Funds | 99,080 | 75,795 | 31,083 | 50,260 | 34,182 | |||||
| Bank Owned CDs | 3,247 | 3,762 | 2,965 | 2,231 | 2,974 | |||||
| Investment Securities | 123,685 | 143,221 | 166,182 | 164,971 | 190,864 | |||||
| Mortgage Loans Held for Sale | 4,642 | 7,548 | 13,343 | 5,376 | 932 | |||||
| Total Current Assets | $255,121 | $258,092 | $239,656 | $241,076 | $245,943 | |||||
| Loans | ||||||||||
| Construction and Development | $14,404 | $17,344 | $16,791 | $13,489 | $15,187 | |||||
| Commercial Real Estate | 82,492 | 85,158 | 96,664 | 105,664 | 104,493 | |||||
| Commercial Loans | 9,977 | 9,352 | 14,573 | 16,817 | 17,399 | |||||
| Multi Family | 2,155 | 2,112 | 1,142 | 1,112 | 1,589 | |||||
| Residential Mortgage | 105,496 | 107,654 | 109,916 | 107,234 | 110,347 | |||||
| Consumer Loans | 19,352 | 17,283 | 16,125 | 15,345 | 14,215 | |||||
| County/Municipal Loans | 3,845 | 3,684 | 4,190 | 5,110 | 4,343 | |||||
| Loss Share Loans | 13,426 | 13,957 | 12,844 | 12,407 | 12,447 | |||||
| Total Loans | $251,147 | $256,544 | $272,245 | $277,178 | $280,020 | |||||
| Allowance for Loss | (4,443) | (4,294) | (3,914) | (3,723) | (3,675) | |||||
| Net Loans | $246,704 | $252,250 | $268,331 | $273,455 | $276,345 | |||||
| Core Loans | $237,721 | $242,587 | $259,401 | $264,771 | $267,573 | |||||
| OREO | 5,283 | 4,763 | 4,932 | 5,320 | 4,473 | |||||
| FDIC Indemnification | 6,374 | 4,642 | 3,139 | 1,685 | 1,537 | |||||
| BOLI | 19,156 | 19,283 | 19,442 | 19,574 | 19,710 | |||||
| Fixed Assets, net | $18,617 | $19,314 | $19,509 | $19,503 | $19,255 | |||||
| Intangible Assets | 920 | 838 | 747 | 657 | 583 | |||||
| Other Assets | 7,141 | 6,979 | 6,926 | 6,917 | 7,523 | |||||
| Total Assets | $559,316 | $566,161 | $562,682 | $568,187 | $575,369 | |||||
| Liabilities & Stockholders' Equity | ||||||||||
| Liabilities | ||||||||||
| Deposits | ||||||||||
| DDAs | $127,477 | $126,454 | $123,672 | $122,374 | $125,699 | |||||
| Interest Bearing Demand | 48,950 | 52,320 | 51,018 | 54,661 | 64,178 | |||||
| Celebration Checking | 32,596 | 33,292 | 34,977 | 54,072 | 64,998 | |||||
| Money Market Accts | 54,704 | 53,658 | 57,056 | 49,594 | 44,434 | |||||
| Savings | 61,960 | 65,174 | 64,134 | 63,001 | 59,251 | |||||
| CDs Less Than $100k | 107,989 | 104,808 | 102,512 | 98,984 | 94,923 | |||||
| CDs Greater than $100k | 50,623 | 57,230 | 55,634 | 53,502 | 51,685 | |||||
| Total Deposits | $484,299 | $492,936 | $489,003 | $496,188 | $505,168 | |||||
| Other Liabilities | 11,576 | 10,585 | 11,263 | 10,695 | 9,361 | |||||
| Net Borrowings (Wholesale Funding) | -- | -- | 900 | -- | -- | |||||
| Total Liabilities | $495,875 | $503,521 | $501,166 | $506,883 | $514,529 | |||||
| Total Equity | 63,441 | 62,640 | 61,516 | 61,304 | 60,840 | |||||
| Total Liabilities & Stockholders' Equity | $559,316 | $566,161 | $562,682 | $568,187 | $575,369 | |||||
| Ratios | ||||||||||
| 4Q 2013 | 1Q 2014 | 2Q 2014 | 3Q 2014 | 4Q 2014 | ||||||
| ROAA | -1.62% | -0.68% | -0.67% | 0.04% | 0.02% | |||||
| ROAE | -14.02% | -6.09% | -6.00% | 0.34% | 0.17% | |||||
| NPAs/Assets (Core) | 1.64% | 1.84% | 1.90% | 2.44% | 1.92% | |||||
| Tier 1 Leverage | 11.02% | 10.97% | 10.80% | 10.78% | 10.05% | |||||
| Total Common Equiv. Shares | 8,380,337 | 8,380,337 | 8,380,337 | 8,380,337 | 8,380,337 | |||||
| NIM | 3.36% | 3.42% | 3.67% | 3.77% | 3.68% | |||||
| Cost of Funds | 0.29% | 0.27% | 0.27% | 0.28% | 0.28% | |||||
| Loan/Deposit | 51.9% | 52.0% | 55.7% | 55.9% | 55.4% | |||||