SouthCrest Financial Group Reports Preliminary 4Q15 Earnings


PEACHTREE CITY, Ga., Feb. 09, 2016 (GLOBE NEWSWIRE) -- Andrew Borrmann, Chief Financial Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company reported preliminary net income of -$36,000 or $0.00/share.  Core net income for the fourth quarter of 2015 was $509,000 or $0.06 per share prior to $545,000 one-time items including $416,000 in severance.  Mr. Borrmann said, “In the fourth quarter we furthered our cost control efforts, bringing down core expenses to a run rate under $22 million/year in December.  At this time we believe the run rate entering 3Q16 will be under $18 million/year due to additional technology, occupancy, and personnel savings.  Most of the personnel savings will come from the elimination of the mortgage division, which was effectively break even during 2015.  Mortgage produced just under $250,000 in gain on sale in 4Q.  We believe 2016 will be slightly better on a net income basis without the division.”   Speaking on the balance sheet Borrmann said, “The decline in loans was disappointing and more than we were projecting.  We did see the expected growth in deposits versus the third quarter and the overall mix continues to shift away from CD’s into core categories.” 

Loan growth in 4Q15 was weak with a decline of $13.6 million from 3Q15 with tax revenue related loans to municipalities falling by $8.4 million.  The municipal related decline was expected, however traditional commercial lending was weaker than projected as pricing competition remained substantial.  Total loan balances were up 6% year over year.

Deposits were up significantly during the quarter with a continued improvement in the product mix and cost of funds.  This is a seasonal effect for SouthCrest due to municipal deposits in our rural communities.  Year over year deposits increased by 1%, with transaction accounts increasing to 57% of total deposits from 50% at the end of 2014.  Time deposits declined over the same period from 29% of deposits to 25% of deposits. 

The estimated Tier 1 Leverage ratio at the end of the quarter was 8.87%.  On a fully converted basis (including the conversion of all preferred equity) TBV/share ended the quarter at $5.59 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 $1.36/fully converted share.

Asset quality improved from 3Q15 with NPAs/total assets declining by 28 basis points to 1.40%.  This was primarily due to the sale of the Company’s largest single OREO property during the quarter.  Other real estate owned fell 46% year over year and now stands at $2.4 million.

SouthCrest Financial Group, Inc. is a $565 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, 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  
  Q4  Q1  Q2  Q3  Q4  
Interest Income      
Loans      
Construction and Development$216 $219 $231 $261 $205  
Commercial Real Estate 1,371  1,274  1,374  1,483  1,512  
Commercial Loans 319  245  261  301  275  
Multi Family 17  20  26  29  27  
Residential Mortgage 1,408  1,354  1,464  1,521  1,454  
Consumer Loans 267  241  212  197  178  
County/Municipal Loans 42  36  43  59  65  
Loss Share Loans 194  169  324  214  140  
Investment Securities      
Federal Funds/Overnight Funds$35 $22 $16 $11 $22  
Bank Owned CDs 4  8  7  7  8  
Investment Securities 971  1,058  960  904  916  
Total Interest Income$4,844  $4,646  $4,918  $4,987  $4,803   
       
Total Interest Expense$347 $329 $309 $308 $302  
Net Interest Income$4,497 $4,320 $4,611 $4,679 $4,501  
Provision for Loan Losses 95  239  200  0  150  
Net Interest Income after Loan Losses$4,402 $4,078 $4,409 $4,679 $4,351  
       
Other Income     
Service Charges on Deposits$106 $99 $99 $113 $110  
NSF/Overdraft Fees 603  480  513  543  525  
Other Service Charges 91  82  95  78  93  
ATM/Billpay/DR Card Income 402  408  392  352  370  
Other Income 1,270  1,028  1,017  973  475  
Total Other Income$2,472 $2,097 $2,116 $2,059 $1,535  
Non-Interest Expense      
Salaries, Other Comp (+ FAS123R)$2,529 $2,610 $2,492 $2,419 $2,257  
Employee Benefits 432  672  440  424  645  
Occupancy & FF&E Expense 1,023  935  1,004  1,020  919  
Professional Fees 293  229  249  206  263  
Data Processing 306  282  221  244  321  
OREO and Credit related Exp. 287  230  67  156  146  
Other Expense 1,978  1,613  1,575  1,608  1,409  
Total Noninterest Expenses$6,848 $6,571 $6,048 $6,077 $5,927  
Pre-Tax Income (Loss)$26 $(396)$477 $661 $(36) 
Income Taxes -  -  -  -  -  
Net Income$26 $(396)$477 $661 $(36) 

 

Balance Sheet
($000s, Unaudited)
      
  2014
   2015
    
Assets Q4  Q1  Q2  Q3  Q4  
Current Assets     
Cash & Due from Bank$16,991 $34,459 $22,335 $20,355 $44,157  
Federal Funds/Overnight Funds 34,182  17,067  10,736  14,171  2,186  
Bank Owned CDs 2,974  1,814  1,814  1,815  1,815  
Investment Securities 190,864  188,864  179,276  145,247  174,998  
Mortgage Loans Held for Sale 932  3,985  1,869  3,011  899  
Total Current Assets$245,943  $246,189  $216,030  $184,599  $224,055   
Loans     
Construction and Development$15,187 $15,218 $16,495 $16,165 $16,229  
Commercial Real Estate 104,493  102,069  106,549  119,888  118,780  
Commercial Loans 17,399  17,679  18,646  21,236  21,246  
Multi Family 1,589  1,543  2,187  2,152  2,117  
Residential Mortgage 110,347  105,021  116,961  116,969  114,803  
Consumer Loans 14,215  12,790  11,787  10,814  9,657  
County/Municipal Loans 4,343  5,178  7,631  12,293  3,911  
Loss Share Loans 12,447  10,837  10,815  10,345  9,543  
Total Loans$280,020 $270,334 $291,071 $309,862 $296,286  
Allowance for Loss (3,675) (3,121) (3,263) (2,881) (3,052) 
Net Loans$276,345  $267,213  $287,808  $306,981  $293,234   
OREO 4,473  4,284  3,552  3,331  2,421  
FDIC Indemnification 1,537  1,089  503  498  474  
BOLI 19,710  19,834  19,995  20,130  20,265  
Fixed Assets, net$19,255 $18,978 $18,720 $18,553 $18,214  
Intangible Assets 583  573  535  648  618  
Other Assets 7,523  7,964  6,552  6,339  6,983  
Total Assets$575,369 $566,124 $553,695 $541,079 $566,264  
       
Liabilities & Stockholders' Equity      
Liabilities     
Deposits     
DDAs$125,699 $121,381 $120,659 $114,345 $130,877  
Interest Bearing Demand 64,178  61,685  53,979  50,965  62,784  
Celebration Checking 64,998  75,844  82,246  90,893  97,316  
Money Market Accts 44,434  41,871  42,004  41,731  38,643  
Savings 59,251  59,859  57,887  56,517  55,550  
CDs Less Than $100k 94,923  91,545  88,158  84,510  81,930  
CDs Greater than $100k 51,685  50,060  49,697  46,603  44,080  
Total Deposits$505,168  $502,245  $494,630  $485,564  $511,180   
       
       
Other Liabilities 9,361  11,363  6,684  2,414  2,690  
Net Borrowings (Wholesale Funding) -  -  -  -  -  
Total Liabilities$514,529 $513,607 $501,314 $487,978 $513,870  
Total Equity 60,840  52,517  52,381  53,101  52,394  
Total Liabilities & Stockholders' Equity$575,369 $566,124 $553,695 $541,079 $566,264  

 

Ratios   
 4Q 20141Q 20152Q 20153Q 20154Q 2015
ROAA 0.02% -0.07% 0.34% 0.48% -0.01%
ROAE 0.17% -0.66% 3.65% 5.01% -0.10%
NPAs/Assets (Core) 1.92% 1.68% 1.71% 1.68% 1.40%
Tier 1 Leverage 10.05% 8.78% 8.81% 9.12% 8.87%
Total Common Equiv. Shares 8,380,337  8,380,337  8,380,337  8,380,337  8,380,337 
NIM 3.68% 3.60% 3.81% 3.76% 3.57%
Cost of Funds 0.28% 0.26% 0.25% 0.25% 0.24%
Loan/Deposit 55.4% 54.5% 58.8% 63.8% 57.9%
Employees 187  172  170  163  153 

 

 


            

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