PEACHTREE CITY, Ga., Oct. 22, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company reported preliminary net income for the third quarter of 2015 of $661,000 or $0.08 per share. “In the third quarter we continued to show the momentum on loan growth and expense control that have been our primary areas of focus throughout the year. While the expense levels were flat with 2Q15, the third quarter results include the one time buyout of several contracts that totaled $160,000. These buyouts will have an average breakeven period of under nine months.”
“Also, in our second quarter earnings release we estimated cost savings over the following 12 months of $3 million. We are increasing this estimate to $3.5 million by the end of 2Q16. We believe this two front attack on expenses and loan growth, if successful, will drive real improvements in 2016 profitability.”
Loan growth in 2Q15 was extremely strong with $19 million of organic loan growth (26% linked quarter annualized). This was above our expectations and will likely be the best loan growth quarter for the foreseeable future. Approximately half of the production was in C&I and owner occupied CRE. At this time we believe loans will be flattish during the fourth quarter due to annual pay downs in loans to municipalities.
Deposits were down during the quarter which is a seasonally driven effect for SouthCrest due to municipal deposits in our rural communities. The fourth quarter is usually the strongest quarter for deposits due to tax receipts for the municipalities and Management expects to see this effect again this year.
During the quarter the Company completed one of two planned office relocations, combining the Alpharetta, Cumming and Johns Creek operations into one new commercial branch in Cumming GA. This transition improves the growth potential for this branch as well as saving the company over $250,000/year starting in November. We were also able to buyout a substantial portion of our telecom contracts saving nearly $250,000/year starting in October/November.
The Company did take $150,000 of security gains during the quarter, effectively offsetting the impact of the contract buyout charges.
The estimated Tier 1 Leverage ratio at the end of the quarter was 9.12%. On a fully converted basis (including the conversion of all preferred equity) TBV/share ended the quarter at $5.66 per share. 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 totals approximately $1.37/fully converted share.
Asset quality remained stable with 2Q15 at 1.68% NPAs/total assets.
SouthCrest Financial Group, Inc. is a $540 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 a full suite of 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, Unaudited) | ||||||||||||||||
| 2014 | 2015 | |||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||
| Interest Income | ||||||||||||||||
| Loans | ||||||||||||||||
| Construction and Development | $ | 262 | $ | 216 | $ | 219 | $ | 231 | $ | 261 | ||||||
| Commercial Real Estate | 1,297 | 1,371 | 1,274 | 1,374 | 1,483 | |||||||||||
| Commercial Loans | 214 | 319 | 245 | 261 | 301 | |||||||||||
| Multi Family | 14 | 17 | 20 | 26 | 29 | |||||||||||
| Residential Mortgage | 1,518 | 1,408 | 1,354 | 1,464 | 1,521 | |||||||||||
| Consumer Loans | 305 | 267 | 241 | 212 | 197 | |||||||||||
| County/Municipal Loans | 34 | 42 | 36 | 43 | 59 | |||||||||||
| Loss Share Loans | 200 | 194 | 169 | 324 | 214 | |||||||||||
| Investment Securities | ||||||||||||||||
| Federal Funds/Overnight Funds | $ | 20 | $ | 35 | $ | 22 | $ | 16 | $ | 11 | ||||||
| Bank Owned CDs | 6 | 4 | 8 | 7 | 7 | |||||||||||
| Investment Securities | 975 | 971 | 1,058 | 960 | 904 | |||||||||||
| Total Interest Income | $ | 4,845 | $ | 4,844 | $ | 4,646 | $ | 4,918 | $ | 4,987 | ||||||
| Total Interest Expense | $ | 348 | $ | 347 | $ | 329 | $ | 309 | $ | 308 | ||||||
| Net Interest Income | $ | 4,497 | $ | 4,497 | $ | 4,320 | $ | 4,611 | $ | 4,679 | ||||||
| Provision for Loan Losses | 75 | 95 | 239 | 200 | 0 | |||||||||||
| Net Interest Income after Loan Losses | $ | 4,422 | $ | 4,402 | $ | 4,078 | $ | 4,409 | $ | 4,679 | ||||||
| Other Income | ||||||||||||||||
| Service Charges on Deposits | $ | 102 | $ | 106 | $ | 99 | $ | 99 | $ | 113 | ||||||
| NSF/Overdraft Fees | 626 | 603 | 480 | 513 | 543 | |||||||||||
| Other Service Charges | 96 | 91 | 82 | 95 | 78 | |||||||||||
| ATM/Billpay/DR Card Income | 403 | 402 | 408 | 392 | 352 | |||||||||||
| Other Income | 1,775 | 1,270 | 1,028 | 1,017 | 973 | |||||||||||
| Total Other Income | $ | 3,002 | $ | 2,472 | $ | 2,097 | $ | 2,116 | $ | 2,059 | ||||||
| Non-Interest Expense | ||||||||||||||||
| Salaries, Other Comp (+ FAS123R) | $ | 2,720 | $ | 2,529 | $ | 2,610 | $ | 2,492 | $ | 2,419 | ||||||
| Employee Benefits | 571 | 432 | 672 | 440 | 424 | |||||||||||
| Occupancy & FF& E Expense | 920 | 1,023 | 935 | 1,004 | 1,020 | |||||||||||
| Professional Fees | 419 | 293 | 229 | 249 | 206 | |||||||||||
| Data Processing | 295 | 306 | 282 | 221 | 244 | |||||||||||
| OREO and Credit related Exp. | -35 | 287 | 230 | 67 | 156 | |||||||||||
| Other Expense | 2,474 | 1,978 | 1,613 | 1,575 | 1,608 | |||||||||||
| Total Noninterest Expenses | $ | 7,364 | $ | 6,848 | $ | 6,571 | $ | 6,048 | $ | 6,077 | ||||||
| Pre-Tax Income (Loss) | $ | 60 | $ | 26 | $ | (396 | ) | $ | 477 | $ | 661 | |||||
| Income Taxes | - | - | - | - | - | |||||||||||
| Net Income | $ | 60 | $ | 26 | $ | (396 | ) | $ | 477 | $ | 661 | |||||
| Balance Sheet ($000s, Unaudited) | ||||||||||||||||
| 2014 | 2015 | |||||||||||||||
| Assets | Q3 | Q4 | Q1 | Q2 | Q3 | |||||||||||
| Current Assets | ||||||||||||||||
| Cash & Due from Bank | $ | 18,238 | $ | 16,991 | $ | 34,459 | $ | 22,335 | $ | 20,355 | ||||||
| Federal Funds/Overnight Funds | 50,260 | 34,182 | 17,067 | 10,736 | 14,171 | |||||||||||
| Bank Owned CDs | 2,231 | 2,974 | 1,814 | 1,814 | 1,815 | |||||||||||
| Investment Securities | 164,971 | 190,864 | 188,864 | 179,276 | 145,247 | |||||||||||
| Mortgage Loans Held for Sale | 5,376 | 932 | 3,985 | 1,869 | 3,011 | |||||||||||
| Total Current Assets | $ | 241,076 | $ | 245,943 | $ | 246,189 | $ | 216,030 | $ | 184,599 | ||||||
| Loans | ||||||||||||||||
| Construction and Development | $ | 13,489 | $ | 15,187 | $ | 15,218 | $ | 16,495 | $ | 16,165 | ||||||
| Commercial Real Estate | 105,664 | 104,493 | 102,069 | 106,549 | 119,888 | |||||||||||
| Commercial Loans | 16,817 | 17,399 | 17,679 | 18,646 | 21,236 | |||||||||||
| Multi Family | 1,112 | 1,589 | 1,543 | 2,187 | 2,152 | |||||||||||
| Residential Mortgage | 107,234 | 110,347 | 105,021 | 116,961 | 116,969 | |||||||||||
| Consumer Loans | 15,345 | 14,215 | 12,790 | 11,787 | 10,814 | |||||||||||
| County/Municipal Loans | 5,110 | 4,343 | 5,178 | 7,631 | 12,293 | |||||||||||
| Loss Share Loans | 12,407 | 12,447 | 10,837 | 10,815 | 10,345 | |||||||||||
| Total Loans | $ | 277,178 | $ | 280,020 | $ | 270,334 | $ | 291,071 | $ | 309,862 | ||||||
| Allowance for Loss | (3,723 | ) | (3,675 | ) | (3,121 | ) | (3,263 | ) | (2,881 | ) | ||||||
| Net Loans | $ | 273,455 | $ | 276,345 | $ | 267,213 | $ | 287,808 | $ | 306,981 | ||||||
| OREO | 5,320 | 4,473 | 4,284 | 3,552 | 3,331 | |||||||||||
| FDIC Indemnification | 1,685 | 1,537 | 1,089 | 503 | 498 | |||||||||||
| BOLI | 19,574 | 19,710 | 19,834 | 19,995 | 20,130 | |||||||||||
| Fixed Assets, net | 19,503 | $ | 19,255 | $ | 18,978 | $ | 18,720 | $ | 18,553 | |||||||
| Intangible Assets | 657 | 583 | 573 | 535 | 648 | |||||||||||
| Other Assets | 6,917 | 7,523 | 7,964 | 6,552 | 6,339 | |||||||||||
| Total Assets | $ | 568,187 | $ | 575,369 | $ | 566,124 | $ | 553,695 | $ | 541,079 | ||||||
| Liabilities & Stockholders' Equity | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Deposits | ||||||||||||||||
| DDAs | $ | 122,374 | $ | 125,699 | $ | 121,381 | $ | 120,659 | $ | 114,345 | ||||||
| Interest Bearing Demand | 54,661 | 64,178 | 61,685 | 53,979 | 50,965 | |||||||||||
| Celebration Checking | 54,072 | 64,998 | 75,844 | 82,246 | 90,893 | |||||||||||
| Money Market Accts | 49,594 | 44,434 | 41,871 | 42,004 | 41,731 | |||||||||||
| Savings | 63,001 | 59,251 | 59,859 | 57,887 | 56,517 | |||||||||||
| CDs Less Than $100k | 98,984 | 94,923 | 91,545 | 88,158 | 84,510 | |||||||||||
| CDs Greater than $100k | 53,502 | 51,685 | 50,060 | 49,697 | 46,603 | |||||||||||
| Total Deposits | $ | 496,188 | $ | 505,168 | $ | 502,245 | $ | 494,630 | $ | 485,564 | ||||||
| Other Liabilities | 10,695 | 9,361 | 11,363 | 6,684 | 2,414 | |||||||||||
| Net Borrowings (Wholesale Funding) | - | - | - | - | - | |||||||||||
| Total Liabilities | $ | 506,883 | $ | 514,529 | $ | 513,607 | $ | 501,314 | $ | 487,978 | ||||||
| Total Equity | 61,304 | 60,840 | 52,517 | 52,381 | 53,101 | |||||||||||
| Total Liabilities & Stockholders' Equity | $ | 568,187 | $ | 575,369 | $ | 566,124 | $ | 553,695 | $ | 541,079 | ||||||
| Ratios | ||||||||||||||||
| 3Q 2014 | 4Q 2014 | 1Q 2015 | 2Q 2015 | 3Q 2015 | ||||||||||||
| ROAA | 0.04 | % | 0.02 | % | -0.07 | % | 0.34 | % | 0.48 | % | ||||||
| ROAE | 0.34 | % | 0.17 | % | -0.66 | % | 3.65 | % | 5.01 | % | ||||||
| NPAs/Assets (Core) | 2.44 | % | 1.92 | % | 1.68 | % | 1.71 | % | 1.68 | % | ||||||
| Tier 1 Leverage | 10.78 | % | 10.05 | % | 8.78 | % | 8.81 | % | 9.12 | % | ||||||
| Total Common Equiv. Shares | 8,380,337 | 8,380,337 | 8,380,337 | 8,380,337 | 8,380,337 | |||||||||||
| NIM | 3.77 | % | 3.68 | % | 3.60 | % | 3.81 | % | 3.76 | % | ||||||
| Cost of Funds | 0.28 | % | 0.28 | % | 0.26 | % | 0.25 | % | 0.25 | % | ||||||
| Loan/Deposit | 55.9 | % | 55.4 | % | 54.5 | % | 58.8 | % | 63.8 | % | ||||||
| Employees | 190 | 187 | 172 | 170 | 163 | |||||||||||