SouthCrest Financial Group, Inc. Announces Second Quarter Earnings


FAYETTEVILLE, Ga., Aug. 11, 2006 (PRIMEZONE) -- SouthCrest Financial Group, Inc. (OTCBB:SCSG) reported net income for the quarter ended June 30, 2006 of $1,426,000 or $0.40 per share, compared to $1,358,000 or $0.38 per share for the same quarter a year ago. For the six month period ended June 30, 2006, net income was $2,832,000, or $0.79 per share compared to $2,177,000, or $0.61 per share. All per share amounts are stated on a basic and fully diluted basis.

Total assets at June 30, 2006 were $461.2 million compared to $425.3 million at June 30, 2005, an increase of $35.9 million, or 8.4%. Over the same twelve month period, gross loans (excluding reserves for loan losses) increased 16.2% to $287.5 million while deposits grew 6.7% to $389.2 million.

Return on average assets for the current quarter was 1.26% and was 1.27% for the year to date period ended June 30, 2006.

At June 30, 2006, the allowance for loan losses was 1.31 % of loans compared to 1.26% at December 31, 2005. For the six months ended June 30, 2006, the Company experienced net recoveries of 0.03% compared to net chargeoffs of 0.16% for the same period in 2005. Nonperforming assets increased to $1,526,000 from $1,111,000 at December 31, 2005. Despite the increase in nonperforming assets, the Company's asset quality indicators compare favorably with historical benchmarks for the industry. At June 30, 2006, nonperforming assets were 0.33% of total assets compared to 0.25% of total assets at December 31, 2005.

In a press release dated July 3, 2006, the Company announced that it declared a dividend of $0.125 per share compared to $0.12 per share for the same period a year ago. The dividend was paid on July 31, 2006 to shareholders of record as of July 17, 2006.

About SouthCrest Financial Group, Inc.

SouthCrest Financial Group, Inc. is the parent company of two bank subsidiaries operating a total of nine branch offices. Bank of Upson, based in Thomaston, Georgia, has two branches in Upson County, three branches in Meriwether County operating as Meriwether Bank & Trust, and one branch in Fayette County operating as SouthCrest Bank. First National Bank of Polk County, based in Cedartown, Georgia, operates three branches in Polk County. SouthCrest is traded on the OTC-Bulletin Board under the symbol "SCSG."

Forward-Looking Statements

This release contains forward-looking statements including statements relating to present or future trends or factors generally affecting the banking industry and specifically affecting SouthCrest's operations, markets and products. Without limiting the foregoing, the words "believes," "anticipates," "intends," "expects," or similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected for many reasons, including, without limitation, changing events and trends that have influenced SouthCrest's assumptions, but that are beyond SouthCrest's control. These trends and events include (i) changes in the interest rate environment which may reduce margins, (ii) not achieving expected growth, (iii) less favorable than anticipated changes in the national and local business environment and securities markets, (iv) adverse changes in the regulatory requirements affecting SouthCrest, (v) greater competitive pressures among financial institutions in SouthCrest's markets and (vi) greater loan losses than historic levels. Additional information and other factors that could affect future financial results are included in SouthCrest's filings with the Securities and Exchange Commission.


                    SouthCrest Financial Group, Inc.
                   Consolidated Financial Highlights
                              (Unaudited)

  All dollars in thousands except per share data

                 Quarter Ended June 30        Six Months Ended June 30
              ---------------------------   --------------------------
                                     %                             %
                2006      2005     Change     2006       2005    Change
              ---------------------------   --------------------------
  EARNINGS
  Net 
   interest
   income     $ 4,624    $ 4,315     7.2%   $ 9,205    $  8,461    8.8%
  Provision 
   for loan 
   losses         133        152   -12.5%       241         273  -11.7%
  Noninterest                              
   income       1,311      1,229     6.7%     2,479       1,749   41.7%
  Noninterest                              
   expense      3,685      3,413     8.0%     7,230       6,814    6.1%
  Income 
   taxes          691        621    11.3%     1,381         946   46.0%
  Net income    1,426      1,358     5.0%     2,832       2,177   30.1%
              
 PER SHARE
 INFORMATION   
  Earnings 
   per       
   share      $  0.40    $  0.38     5.3%   $  0.79    $   0.61   29.5%
  Dividends 
   per                                                   
   share        0.125      0.120     4.2%     0.250       0.240    4.2%
  Book value                                                     
   per share    15.43      14.67     5.2%
               
 OPERATING
 RATIOS(a)
  Net 
   interest     
   margin        4.45%      4.47%              4.48%       4.44%
  Return on    
   average      
   assets        1.26%      1.29%              1.27%       1.05%
  Return on    
   average      
   equity       10.45%     10.51%             10.51%       8.54%
  Efficiency    
   ratio        62.09%     61.56%             63.18%      63.03%
  Net          
   chargeoffs  
   /average    
   loans         0.00%      0.18%             -0.03%       0.16%
             
 AVERAGE
 BALANCES 
  Loans      $282,696   $237,533    19.0%  $279,406   $ 233,226   19.8%
  Total      
   earning 
   assets     417,095    388,666     7.3%   414,491     384,018    7.9%
  Total 
   assets     454,372    422,135     7.6%   451,403     417,908    8.0%
  Deposits    385,893    365,303     5.6%   381,008     361,528    5.4%
  Borrowed                                 
   funds       11,137        884     n/m     13,175         629    n/m
  Share-
   holders'
   equity      54,719     51,805     5.6%    54,343      51,388    5.8%
   
  END OF PERIOD BALANCES 

                    As of  
                   June 30,                 As of
             -------------------    %      Dec. 31           %
               2006      2005    Change     2005           Change
             ----------------------------  ------------------------- 
 
  Loans      $287,536   $247,503    16.2%  $276,780         3.9%
  Reserve  
   for loan    
   losses       3,759      3,253    15.6%     3,477         8.1%
  Total    
   earning 
   assets     415,783    390,336     6.5%   410,897         1.2%
  Intangible  
   assets       6,503      7,325   -11.2%     6,913        -5.9%
  Total       
   assets     461,219    425,335     8.4%   450,848         2.3%
  Deposits    389,176    364,871     6.7%   377,900         3.0%
  Borrowed    
   funds       10,220      3,890     n/m     15,275       -33.1%
  Share-
   holders'    
   equity      55,253     52,400     5.4%    53,456         3.4%
     
 ASSET QUALITY
 (END OF PERIOD)
  Loans 90 days 
   past due and
   still
   accruing   $   469     $  386            $   549
  Nonaccrual                                     
   Loans        1,032        177                232
  Other Real  
   Estate 
   Owned           25        255                330
    Total                                        
     nonper-
     forming
     assets     1,526        818              1,111
  Nonperforming 
   assets/total 
   assets        0.33%      0.19%              0.25%
  Allowance
   for loan
   losses/total 
   loans         1.31%      1.31%              1.26%

 (a)  All ratios are annualized.
 n/m - percentage change is not meaningful.


            

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