SouthCrest Financial Group Reports Preliminary 3Q18 Earnings


ATLANTA, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.1MM or $0.13/share for the third quarter ended September 30, 2018.  Excluding the impact of one-time items, net income would have been $1.2MM or $0.14/share. 

“In the third quarter of 2018 SouthCrest was operating on nearly all cylinders.  Loan growth was 21% annualized, our deposit balances remained above our internal projections during the seasonally weakest quarter of the year, we were able to exit our FDIC loss share agreement with a minimal financial loss, and core expenses were under $4.2MM.  This resulted in the best core profitability the Company has seen since the mid-2000s.”

“We do expect to see loan growth in the low single digit annualized range in the fourth quarter and we expect to see good seasonal deposit growth for the quarter and for the year.  Finally, we have announced a $0.03/share regular quarterly dividend in the fourth quarter.  These dividends will be payable November 15, 2018 to holders of record on November 1, 2018.”

Total assets were up slightly from 2Q, and up year over year at $544.0MM vs. 541.3MM in 2Q18 and $535.0MM in 3Q17.

Deposit balances were down sequentially due to seasonal factors, but overall balances were stronger than internal projections.  Total deposits were up 2% from 3Q17, with a 5% increase in non-maturity deposits from the previous year’s 3Q. 

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 8.94%.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.27 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 -$0.55/share vs. -$0.45/share as of 2Q18.  Excluding the OCI impact, TBV/share grew $0.09 during the quarter.  The current fully converted share count at the end of the quarter was 8.42 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 ratios remained within a reasonable range during the quarter, with NPAs to assets moving down slightly to 1.11% from 1.25%, excluding the $540,000 of a former bank building in OREO.  Including this building, 3Q18 NPAs/total assets were 1.21% of assets vs. 1.39% in 2Q18. Excluding the impact of the Bank buildings in OREO, OREO balances were just $180,000.   

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.  

Andy Borrmann
Chief Financial Officer
678.734.3505

 
Statement of Operations ($000s, Unaudited)  
 Q3 2017  Q4 2017 Q1 2018Q2 2018Q3 2018 
Interest Income       
Loans       
Construction and Development$238 $360 $535 $479 $560 
Commercial Real Estate 1,767  1,669  1,667  1,696  1,776 
Commercial Loans  378   368   341   370   454 
Multi Family  29   30   28   28   27 
Residential Mortgage   1,140   1,117   1,087   1,116   1,119 
Consumer Loans  61   68   57   56   51 
County/Municipal Loans 24  24  23  23  23 
Loss Share Loans  89   81   80  79  70 
Investment Securities       
Federal Funds/Overnight Funds$ 97 $ 99 $ 98 $ 48 $ 41 
Bank Owned CDs 5  7  6  6  7 
Investment Securities  922  1,036  1,187  1,214  1,181 
Total Interest Income $ 4,750 $ 4,859 $ 5,109 $ 5,115 $ 5,311 
       
Total Interest Expense $ 293 $ 393 $ 460 $ 506 $ 586 
Net Interest Income $ 4,457  $ 4,466  $ 4,649  $ 4,609  $ 4,725  
Provision for Loan Losses  0   0   125  0  46 
Net Interest Income after Loan Losses $ 4,457  $ 4,466  $ 4,524  $ 4,609  $ 4,679  
 

Other Income
      
Service Charges on Deposits$ 201 $ 174 $ 168 $ 165 $ 169 
NSF/Overdraft Fees  494   393   350   334   350 
Other Service Charges  68   63   64   63   62 
ATM/Billpay/DR Card Income  284   266   262   280   273 
Other Income 1,920  (969) 227  125  316 
Total Other Income $ 2,967 $(73)$1,071 $967 $1,170 
Non-Interest Expense       
Salaries, Other Comp (+ FAS123R) $ 1,869 $ 1,977 $ 1,948 $ 1,969 $ 1,889 
Employee Benefits 395  409  473  524  435 
Occupancy & FF&E Expense 740  934  653  590  621 
Professional Fees 201  154  161  156  305 
Data Processing 561  488  480  489  485 
Other Expense 754  825  883  832  693 
Total Noninterest Expenses $ 4,520 $ 4,787 $ 4,598 $ 4,560 $ 4,428 
Pre-Tax Income (Loss) $ 2,904 $ (394)$ 997 $ 1,016 $ 1,421 
Income Taxes 1,036  4,192  197  210  319 
Net Income$ 1,868 $ (4,586)$ 800 $ 806 $ 1,102 
Preferred Dividends$0 $0 $0 $0 $0 
       
      
Balance Sheet
($000s, Unaudited)
 
                
Assets Q3 2017  Q4 2017  Q1 2018  Q2 2018  Q3 2018 
Current Assets     
Cash & Due from Bank$ 32,153 $ 42,146 $ 24,603 $ 18,408 $ 14,189 
Federal Funds/Overnight Funds 1,150  2,356  0  5,446  0 
Bank Owned CDs  1,319   1,319   1,319   1,319   1,322 
Investment Securities  157,261   165,203   182,569   169,924   166,632 
Total Current Assets$191,883  $211,024  $208,491  $195,097  $182,143  
 

Loans
     
Construction and Development$ 14,400 $ 31,184 $ 31,475 $ 34,157 $ 43,113 
Commercial Real Estate  138,550   133,191   138,931   134,653   148,219 
Commercial Loans  27,719   26,681   28,048   29,873   29,997 
Multi Family  2,330   2,283   2,150   2,230   1,518 
Residential Mortgage  89,760   87,001   92,973   92,346   88,357 
Consumer Loans  14,086  3,304  5,738  3,361  2,143 
County/Municipal Loans 2,791  2,771  2,511  2,480  2,459 
Loss Share Loans  4,659   4,593   4,536   4,480   3,466 
Total Loans$ 294,132  $291,008 $306,362 $303,581 $319,272 
Allowance for Loss (2,813) (2,820) (3,028) (3,037) (3,060)
Net Loans$ 291,482  $ 288,188 $ 303,334 $ 300,544 $ 316,212 
OREO 2,194  2,760  2,697  879  720 
FDIC Indemnification 112  112  112  112  0 
BOLI  21,227   21,359   21,490   21,640   21,773 
Fixed Assets, net 11,868  9,915  10,166  9,970  9,733 
Intangible Assets  326   242   197   152   126 
Other Assets  15,867   11,754   13,228   12,880   13,365  
Total Assets$ 534,959  $ 545,354  $ 559,715  $ 541,274  $ 544,072  
      
Liabilities & Stockholders' Equity     
Liabilities     
Deposits     
      
DDAs$ 93,150 $ 99,906 $ 95,714 $ 97,587 $ 88,768 
Interest Bearing Demand 58,723  73,555  76,198  81,262  64,684 
Celebration Checking  105,514   102,368   105,247   105,358   101,474 
Money Market Accts  29,869   29,699   29,673   30,402   47,286 
Savings  44,703   43,147   44,030   43,862   44,139 
CDs Less Than $100k  61,548   59,273   57,827   57,600   57,349 
CDs Greater than $100k 36,234   36,723   37,232   30,477   34,795  
Total Deposits$ 428,929  $ 444,671  $ 445,921  $ 446,548  $ 438,495  
      
Other Liabilities 2,223  7,067  1,639  1,874  2,115  
Net Borrowings (Wholesale Funding) 40,000  40,000  59,666  40,000  50,641 
Total Liabilities$ 471,152 $ 491,738 $ 507,226 $ 488,422 $ 491,251 
Total Equity
 63,807  53,616  52,489  52,852  52,821 
Total Liabilities & Stockholders' Equity$534,959 $545,354 $559,715 $541,274 $544,072 
                


Ratios   
 3Q 20174Q 20171Q 20182Q 20183Q 2018
ROAA1.40%-0.84%0.58%0.59%0.81%
ROAE11.86%-7.81%6.03%6.12%8.35%
NPAs/Assets (Core)0.91%1.05%0.99%1.25%1.11%
Est. T1 Leverage (Bank) 10.00%8.27%8.42%8.56%8.94%
Total Common Equiv. Shares8,410,3328,413,3728,413,3728,413,3728,421,992
NIM3.70%3.68%3.83%3.73%3.78%
Cost of Deposits0.23%0.24%0.24%0.25%0.33%
Loan/Deposit68.5%65.3%68.3%68.0%72.5%
Employees114115116115110