ATLANTA, July 24, 2019 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.05MM or $0.12/share for the second quarter ended June 30, 2019. Excluding unusual items, primarily consisting of a loss on the sale of a former bank building, core earnings were $1.23MM or $0.15/share. The core results represent year over year quarterly earnings growth of over 20%, driven by loan growth and continued focus on expenses.
“We are extremely pleased to experience earnings growth of over 25% in the first half of 2019 versus the first half of 2018. The pricing environment continues to remain challenging on both sides of the balance sheet. Atlanta has experienced significant changes in the banking landscape and the competition remains robust. We continue to look for ways to increase SouthCrest’s influence in the Atlanta MSA while maintaining our primary focus of improving shareholder value and managing capital appropriately.”
Total assets were down to $528.5MM vs. $542.6MM in 1Q19, and vs. $541.3MM in 2Q18. Seasonality accounts for some of the decline in total assets during the quarter vs. 1Q, and there was one large municipal deposit that left the bank due to pricing competition. The cost of funds and cost of deposits were up just 3bps and 2bps respectively from 1Q19.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 9.95%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.21 per share, up from $6.90 at the end of the first quarter. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the impact to TBV by OCI is $0.07/share vs. -$0.16/share as of 1Q19. The current fully converted share count at the end of the quarter was 8.42 million shares, comprised of 6.36 million common shares and 2.06 million preferred 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 ticked up slightly during the quarter, with NPAs to assets increasing to 1.09% vs. 0.92% in 1Q19, excluding the $396,000 of a former bank building in OREO (this building was under contract and subsequently sold in early July). Including this building, 2Q19 NPAs/total assets were 1.17% of assets vs. 1.02% in 1Q19. Excluding the impact of the bank building in OREO, OREO balances were just $179,000.
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) | |||||||||||||||||||||||||
| Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | |||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||
| Loans | |||||||||||||||||||||||||
| Construction and Development | $479 | $560 | $633 | $609 | $603 | ||||||||||||||||||||
| Commercial Real Estate | 1,696 | 1,776 | 1,819 | 1,800 | 1,834 | ||||||||||||||||||||
| Commercial Loans | 370 | 454 | 401 | 458 | 429 | ||||||||||||||||||||
| Multi Family | 28 | 27 | 20 | 19 | 32 | ||||||||||||||||||||
| Residential Mortgage | 1,116 | 1,119 | 1,167 | 1,176 | 1,101 | ||||||||||||||||||||
| Consumer Loans | 56 | 51 | 48 | 41 | 41 | ||||||||||||||||||||
| County/Municipal Loans | 23 | 23 | 25 | 25 | 22 | ||||||||||||||||||||
| Loss Share Loans | 79 | 70 | 64 | 62 | 61 | ||||||||||||||||||||
| Investment Securities | |||||||||||||||||||||||||
| Federal Funds/Overnight Funds | $48 | $41 | $65 | $82 | $88 | ||||||||||||||||||||
| Bank Owned CDs | 6 | 7 | 7 | 7 | 6 | ||||||||||||||||||||
| Investment Securities | 1,214 | 1,181 | 1,187 | 1,168 | 1,111 | ||||||||||||||||||||
| Total Interest Income | $5,115 | $5,311 | $5,436 | $5,447 | $5,329 | ||||||||||||||||||||
| Total Interest Expense | $506 | $586 | $728 | $746 | $759 | ||||||||||||||||||||
| Net Interest Income | $4,609 | $4,725 | $4,708 | $4,701 | $4,570 | ||||||||||||||||||||
| Provision for Loan Losses | 0 | 46 | 0 | 0 | 0 | ||||||||||||||||||||
| Net Interest Income after Loan Losses | $4,609 | $4,679 | $4,708 | $4,701 | $4,570 | ||||||||||||||||||||
| Other Income | |||||||||||||||||||||||||
| Service Charges on Deposits | $165 | $169 | $164 | $156 | $153 | ||||||||||||||||||||
| NSF/Overdraft Fees | 334 | 350 | 396 | 309 | 310 | ||||||||||||||||||||
| Other Service Charges | 63 | 62 | 65 | 65 | 70 | ||||||||||||||||||||
| ATM/Billpay/DR Card Income | 280 | 273 | 260 | 255 | 284 | ||||||||||||||||||||
| Other Income | 125 | 316 | 172 | 204 | 131 | ||||||||||||||||||||
| Total Other Income | $967 | $1,170 | $1,057 | $989 | $947 | ||||||||||||||||||||
| Non-Interest Expense | |||||||||||||||||||||||||
| Salaries, Other Comp (+ FAS123R) | $1,969 | $1,889 | $1,822 | $1,849 | $1,842 | ||||||||||||||||||||
| Employee Benefits | 524 | 435 | 458 | 419 | 370 | ||||||||||||||||||||
| Occupancy & FF&E Expense | 590 | 621 | 588 | 621 | 570 | ||||||||||||||||||||
| Professional Fees | 156 | 305 | 136 | 170 | 274 | ||||||||||||||||||||
| Data Processing | 489 | 485 | 476 | 481 | 488 | ||||||||||||||||||||
| Other Expense | 832 | 693 | 724 | 649 | 613 | ||||||||||||||||||||
| Total Noninterest Expenses | $4,560 | $4,428 | $4,204 | $4,189 | $4,157 | ||||||||||||||||||||
| Pre-Tax Income (Loss) | $1,016 | $1,421 | $1,561 | $1,501 | $1,360 | ||||||||||||||||||||
| Income Taxes | 210 | 319 | 289 | 321 | 315 | ||||||||||||||||||||
| Net Income | $806 | $1,102 | $1,272 | $1,180 | $1,045 | ||||||||||||||||||||
| Balance Sheet ($000s, Unaudited) | ||||||||||||||||||||||||||||
| Assets | Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | |||||||||||||||||||||||
| Current Assets | ||||||||||||||||||||||||||||
| Cash & Due from Bank | $18,408 | $14,189 | $20,168 | $20,243 | $30,930 | |||||||||||||||||||||||
| Federal Funds/Overnight Funds | 5,446 | 0 | 6,070 | 1,718 | 0 | |||||||||||||||||||||||
| Bank Owned CDs | 1,319 | 1,322 | 1,322 | 1,322 | 1,322 | |||||||||||||||||||||||
| Investment Securities | 169,924 | 166,632 | 162,936 | 161,561 | 141,013 | |||||||||||||||||||||||
| Total Current Assets | $195,097 | $182,143 | $190,496 | $184,844 | $173,265 | |||||||||||||||||||||||
| Loans | ||||||||||||||||||||||||||||
| Construction and Development | $34,157 | $43,113 | $40,420 | $41,777 | $40,040 | |||||||||||||||||||||||
| Commercial Real Estate | 134,653 | 148,219 | 144,329 | 144,178 | 153,527 | |||||||||||||||||||||||
| Commercial Loans | 29,873 | 29,997 | 29,452 | 28,177 | 28,036 | |||||||||||||||||||||||
| Multi Family | 2,230 | 1,518 | 1,466 | 1,438 | 1,970 | |||||||||||||||||||||||
| Residential Mortgage | 92,346 | 88,357 | 94,199 | 92,405 | 85,064 | |||||||||||||||||||||||
| Consumer Loans | 3,361 | 2,143 | 2,579 | 1,086 | 1,384 | |||||||||||||||||||||||
| County/Municipal Loans | 2,480 | 2,459 | 2,438 | 2,301 | 2,037 | |||||||||||||||||||||||
| Loss Share Loans | 4,480 | 3,466 | 4,030 | 3,975 | 3,933 | |||||||||||||||||||||||
| Total Loans | $303,581 | $319,272 | $318,914 | $315,337 | $315,991 | |||||||||||||||||||||||
| Allowance for Loss | (3,037 | ) | (3,060 | ) | (3,042 | ) | (2,968 | ) | (3,022 | ) | ||||||||||||||||||
| Net Loans | $300,544 | $316,212 | $315,872 | $312,369 | $312,698 | |||||||||||||||||||||||
| OREO | 879 | 720 | 821 | 670 | 575 | |||||||||||||||||||||||
| FDIC Indemnification | 112 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| BOLI | 21,640 | 21,773 | 21,909 | 22,039 | 22,186 | |||||||||||||||||||||||
| Fixed Assets, net | 9,970 | 9,733 | 9,511 | 9,268 | 9,180 | |||||||||||||||||||||||
| Intangible Assets | 152 | 126 | 116 | 107 | 100 | |||||||||||||||||||||||
| Other Assets | 12,880 | 13,365 | 11,759 | 13,336 | 10,083 | |||||||||||||||||||||||
| Total Assets | $541,274 | $544,072 | $550,484 | $542,633 | $528,503 | |||||||||||||||||||||||
| Liabilities & Stockholders' Equity | ||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||
| DDAs | $97,587 | $88,768 | $106,821 | $99,896 | $98,229 | |||||||||||||||||||||||
| Interest Bearing Demand | 81,262 | 64,684 | 62,829 | 59,270 | 59,606 | |||||||||||||||||||||||
| Celebration Checking | 105,358 | 101,474 | 99,694 | 102,617 | 100,950 | |||||||||||||||||||||||
| Money Market Accts | 30,402 | 47,286 | 55,836 | 49,584 | 33,080 | |||||||||||||||||||||||
| Savings | 43,862 | 44,139 | 43,574 | 44,152 | 44,407 | |||||||||||||||||||||||
| CDs Less Than $100k | 57,600 | 57,349 | 56,864 | 56,664 | 56,256 | |||||||||||||||||||||||
| CDs Greater than $100k | 30,477 | 34,795 | 38,007 | 39,867 | 38,854 | |||||||||||||||||||||||
| Total Deposits | $446,548 | $438,495 | $463,625 | $452,054 | $431,382 | |||||||||||||||||||||||
| Other Liabilities | 1,874 | 2,115 | 1,493 | 2,492 | 2,583 | |||||||||||||||||||||||
| Net Borrowings (Wholesale Funding) | 40,000 | 50,641 | 30,000 | 30,000 | 33,795 | |||||||||||||||||||||||
| Total Liabilities | $488,422 | $491,251 | $495,118 | $484,546 | $467,760 | |||||||||||||||||||||||
| Total Equity | 52,852 | 52,821 | 55,366 | 58,087 | 60,743 | |||||||||||||||||||||||
| Total Liabilities & Stockholders' Equity | $541,274 | $544,072 | $550,484 | $542,633 | $528,503 | |||||||||||||||||||||||
| Ratios | ||||||||||
| Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | ||||||
| ROAA | 0.59% | 0.81% | 0.93% | 0.86% | 0.78% | |||||
| ROAE | 6.12% | 8.35% | 9.40% | 8.32% | 7.03% | |||||
| NPAs/Assets (Core) | 1.25% | 1.11% | 0.92% | 0.92% | 1.09% | |||||
| Est. T1 Leverage (Bank) | 8.56% | 8.94% | 9.16% | 9.46% | 9.95% | |||||
| Total Common Shares | 6,190,012 | 6,198,632 | 6,198,632 | 6,198,632 | 6,360,273 | |||||
| Total Preferred Shares | 2,223,360 | 2,223,360 | 2,223,360 | 2,223,360 | 2,061,719 | |||||
| Total Common Equiv. Shares | 8,413,372 | 8,421,992 | 8,421,992 | 8,421,992 | 8,421,992 | |||||
| NIM | 3.73% | 3.78% | 3.79% | 3.86% | 3.75% | |||||
| Cost of Deposits | 0.25% | 0.33% | 0.44% | 0.49% | 0.51% | |||||
| Loan/Deposit | 68.0% | 72.5% | 68.8% | 69.5% | 73.4% | |||||
| Employees | 115 | 110 | 106 | 105 | 106 | |||||
| Loans in Atlanta MSA | 61.6% | 65.8% | 65.3% | 66.0% | 67.4% | |||||