PEACHTREE CITY, Ga., Oct. 24, 2013 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company reported preliminary results for the third quarter of 2013, as well as the completion of the previously disclosed $17.5 million capital raise. On September 27th, SouthCrest funded investments with affiliates of Castle Creek Capital and other institutional investors that total $17.5 million in a mix of voting common and non-voting preferred securities at a price of $5.05 per share. "We are beyond enthusiastic about our partnership with Castle Creek Capital and our other new investors," stated Mr. Maloy. "Their experience and involvement enables us to capitalize on our already building momentum and internal loan growth. We look forward to taking the fundamental dynamics we've developed into future growth opportunities in our Georgia and Alabama markets."
"The influx of this new capital enhances the Company's ability to help our customers thrive, empower our employees with training and technology, and continue to build value for our shareholders over time," continued Mr. Maloy.
The Company intends to use the proceeds for general corporate purposes, including the potential redemption of the TARP preferred shares and other strategic initiatives.
The Company also announced the approval by the Board of Directors to make the necessary applications to consolidate the charters of the four banks in the holding company. Charter consolidation has been a long term goal of the Company, and management expects to complete and file the application over the next few weeks. "The profitability improvements created by combining the charters should approach 0.20% ROAA. We expect to completely phase in these improvements within six to twelve months after we receive the required regulatory approvals," said Mr. Maloy.
During the quarter the company produced a net loss of $0.9 million, a large portion of which was due to the restructuring of the mortgage division that started in late 2Q13 and was completed in mid-3Q13. Total assets at the end of the quarter were up 1.7% linked quarter annualized (LQA) to $561.9 million from 2Q13, while total core loans increased 7.7% LQA, constituting the Company's strongest loan growth since before the financial crisis.
The deposit mix continued to improve, with total non-CD funding increasing to 66% in 3Q13 from 65% the prior quarter, although total deposits did decline somewhat. Given the current loan to deposit ratio, the Company is maintaining at or below market deposit pricing at this time which has led to the decline in total deposits. The improvement in deposit mix and disciplined pricing continued to drive the cost of funds down. The total cost of funds in 3Q13 was just 0.32%, vs. 0.52% during 3Q12.
Credit costs remained controlled with no loan loss provision expense, although OREO costs of $293,000 were up slightly from $178,000 in the prior quarter.
Finally, the completion of the capital raise during the quarter caused a significant increase in the capital ratios. The estimated Tier 1 Leverage ratio at the end of the quarter was 11.68%, up from 8.72% for 2Q13 and 8.83% at the end of 2012. The capital raise was modestly dilutive from a tangible book value perspective. On a fully diluted basis (including the conversion of all Series AAA Preferred and Series C Convertible Preferred equity) TBV/share ended the quarter at $6.26 per share. The current fully diluted, fully converted share count at the end of the quarter is 8.380 million shares. Not reflected in the current TBV/share is a deferred tax asset valuation allowance of $9.482 million.
The Company also continued to work through its FDIC loss share covered assets, with the net loan balance shrinking by 21% LQA. The FDIC Indemnification Asset declined by $422,000 or 5.5% from 2Q13 to 3Q13 (22% LQA), and now stands at $7.3 million with approximately 6 quarters remaining on the commercial portfolio loss sharing agreement.
SouthCrest Financial Group, Inc. is a $560 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 14 branch network throughout Georgia and Alabama through its four subsidiary banks: SouthCrest Bank, The First National Bank of Polk County, Peachtree Bank and Bank of Chickamauga. The banks provide retail and commercial banking services, mortgage banking, investment management, and online banking services.
This presentation may contain certain "forward-looking statements" that are subject to risks, uncertainties, and other factors that could cause actual results and shareholder values to differ materially from those projected. Factors that could cause or contribute to such differences include economic conditions, government regulation and legislation, changes in interest rates, credit quality, competition, and other risk factors.
|Construction and Development||$ 201||$ 199||$ 213||$ 613|
|Commercial Real Estate||974||1,012||1,004||2,990|
|Loss Share Loans||347||313||299||959|
|$ 3,754||$ 3,680||$ 3,673||$ 11,107|
|Federal Funds/Overnight Funds||$ 80||$ 80||$ 74||$ 234|
|Bank Owned CDs||14||13||18||45|
|Total Interest Income||$ 4,405||$ 4,377||$ 4,430||$ 13,212|
|Total Interest Expense||$ 484||$ 436||$ 397||$ 1,316|
|Net Interest Income||$ 3,922||$ 3,941||$ 4,033||$ 11,896|
|Provision for Loan Losses||400||--||--||400|
|Net Interest Income after Loan Losses||$ 3,522||$ 3,941||$ 4,033||$ 11,496|
|Service Charges on Deposits||$ 122||$ 112||$ 112||$ 346|
|Other Service Charges||86||104||94||284|
|ATM/Billpay/DR Card Income||322||362||354||1,038|
|Gain on Sale of loans||415||322||159||896|
|Total Other Income||$ 2,254||$ 2,170||$ 2,362||$ 6,786|
|Non Interest Expense|
|Salaries, Other Comp (+ FAS123R) (- FAS 91)||$ 2,623||$ 2,560||$ 2,838||$ 8,021|
|Occupancy & FF& E Expense||676||760||757||2,193|
|OREO and Credit related Exp.||451||178||293||922|
|Total Other Expenses||$ 6,864||$ 6,893||$ 7,329||$ 21,086|
|Pre-Tax Income (Loss)||$ (1,088)||$ (782)||$ (934)||$ (2,804)|
|Net Income||$ (1,088)||$ (782)||$ (934)||$ (2,804)|
|Assets||1Q 2013||2Q 2013||3Q 2013|
|Cash & Due from Bank||$ 16,468||$ 15,412||$ 29,665|
|Federal Funds/Overnight Funds||108,342||114,068||92,064|
|Bank Owned CDs||5,909||6,888||5,914|
|Mortgage Loans Held for Sale||4,239||3,713||2,803|
|Total Current Assets||$ 251,318||$ 253,865||$ 252,578|
|Construction and Development||$ 13,110||$ 12,696||$ 13,424|
|Commercial Real Estate||79,046||76,646||76,705|
|Loss Share Loans||14,670||14,372||13,622|
|Total Loans||$ 253,492||$ 247,608||$ 251,329|
|Allowance for Loss||(5,486)||(4,745)||(4,444)|
|Net Loans||$ 248,006||$ 242,863||$ 246,885|
|Core Loans||$ 238,822||$ 233,236||$ 237,707|
|OREO||$ 8,245||$ 11,441||$ 9,966|
|Technology, Software, & FFE||17,224||17,200||18,742|
|Accrued Interest Receivable||--||--||--|
|Total Assets||$ 559,626||$ 559,463||$ 561,865|
|Liabilities & Stockholders' Equity|
|DDAs||$ 114,063||$ 119,096||$ 115,614|
|Interest Bearing Demand||48,914||50,914||50,218|
|Money Market Accts||58,152||58,500||57,197|
|CDs Less Than $100k||120,310||116,326||112,421|
|CDs Greater than $100k||56,520||56,191||53,389|
|Total Deposits||$ 497,221||$ 498,831||$ 485,011|
|Other Liabilities||$ 9,642||$ 10,053||$ 10,289|
|Net Borrowings (Wholesale Funding)||275||--||330|
|Total Liabilities||$ 507,138||$ 508,884||$ 495,630|
|Total Equity||$ 52,488||$ 50,579||$ 66,235|
|Total Liabilities & Stockholders' Equity||$ 559,626||$ 559,463||$ 561,865|
|1Q 2013||2Q 2013||3Q 2013|
|Tier 1 Leverage||8.93%||8.67%||11.67%|
|Total Common Equiv. Shares||4,914,991||4,914,991||8,380,337|
|Cost of Funds||0.39%||0.35%||0.32%|
Andy Borrmann, 678-734-3505 SVP Finance, SouthCrest Financial Group
SouthCrest Financial Group, Inc.
Fayetteville, Georgia, UNITED STATES
Andy Borrmann, 678-734-3505 SVP Finance, SouthCrest Financial Group
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