SouthCrest Financial Group Reports Preliminary 3Q16 Earnings


WOODSTOCK, Ga., Oct. 28, 2016 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (PinkSheets:SCSG) announced today that the company reported preliminary net income of $680,000 or $0.08/share for the third quarter ended September 30, 2016. 

“I am excited to report my first quarter of earnings with SouthCrest Bank as the new CEO.  My goal is to to push our Company towards higher loan growth, better customer relationships, a higher level of employee satisfaction and higher, more consistent profitability for our shareholders,” Schmitt said.

“To complete this task, we will have some additional one-time items occur for the next few quarters, but expect these adjustments to move our return on assets closer to our long term target of 1.0% after tax.”  Schmitt continued.

“Our team has done significant work on the expense side and we will continue to maintain a high level of focus there. With that said, we are now looking to grow loans to improve our returns so we will dedicate additional financial resources to this area going forward.  We are also excited to have a new member of the Board of Directors, Dan Broos, join our team and help us push SouthCrest further along this path.” 

Core pre-tax earnings for the quarter were $1.3 million, with net unusual items during the quarter totaling $311,000 of pre-tax expenses.  This equates to an approximate 0.94% pre-tax ROA for the quarter.  On a core basis, expenses for the quarter were $4.4 million, down from approximately $5.9 million in 3Q15.

Deposits were lower, consistent with the seasonality the Company experiences every third quarter.  Year over year deposits fell less than 2%, which is well within the expectations of management based on the changes in deposit rates and fees that occurred over the past three quarters.

Loans did decline by 1.2% from 2Q16, but with the refocus on lending directly in the Atlanta market, management expects to make significant progress on balances.  

Service fee income, including all deposit fees, NSF/Overdraft and ATM/Card related income was up 12% from 2Q15, an annual run rate increase of over $500,000.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank was 9.00%.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.27 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 small deferred tax asset valuation allowance related to state taxes that totals approximately $0.06/fully converted share.

Asset quality continued its multi-quarter improvement trend, with 3Q16 NPAs/total assets declining to 0.91% of assets, the lowest level since March, 2008.  Other real estate owned decreased from 2Q16 and now stands at just $936,000, down from over $3.3 million in 3Q15.   

ABOUT SOUTHCREST
SouthCrest Financial Group, Inc. is a $550 million asset bank holding company headquartered in Woodstock, Ga. 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, 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. 

           
Statement of Operations ($000s, Unaudited)  
  2015      2016     
 Q3
  Q4
  Q1
  Q2
  Q3
  
Interest Income          
Loans          
Construction and Development$261  $205  $206  $143  $153  
Commercial Real Estate 1,483   1,512   1,465   1,479   1,537  
Commercial Loans 301   275   280   280   276  
Multi Family 29   27   26   18   18  
Residential Mortgage 1,521   1,454   1,415   1,337   1,289  
Consumer Loans 197   178   166   156   139  
County/Municipal Loans 59   65   29   28   29  
Loss Share Loans 214   140   116   132   132  
Investment Securities          
Federal Funds/Overnight Funds$11  $22  $38  $27  $42  
Bank Owned CDs 7   8   7   8   6  
Investment Securities 904   916   1,030   1,083   933  
Total Interest Income$4,987   $4,803   $4,779   $4,685   $4,556   
           
Total Interest Expense$308  $302  $299  $267  $246  
Net Interest Income$4,679  $4,501  $4,480  $4,417  $4,311  
Provision for Loan Losses 0   150   50   0   0  
Net Interest Income after Loan Losses  $4,679  $4,351  $4,430  $4,417  $4,311  
           
Other Income          
Service Charges on Deposits$113  $110  $105  $215  $245  
NSF/Overdraft Fees 543   525   475   515   575  
Other Service Charges 78   93   74   79   96  
ATM/Billpay/DR Card Income 352   370   293   336   302  
Other Income 973   475   829   (47)  339  
Total Other Income$2,059  $1,535  $1,776  $1,098  $1,560  
Non-Interest Expense          
Salaries, Other Comp (+ FAS123R)$2,419  $2,257  $2,006  $1,772  $1,705  
Employee Benefits 424   645   591   360   707  
Occupancy & FF&E Expense 1,020   919   933   848   860  
Professional Fees 206   263   174   209   212  
Data Processing 244   321   305   521   536  
OREO and Credit related Exp. 156   146   41   36   36  
Other Expense 1,608   1,409   1,243   927   724  
Total Noninterest Expenses$6,077  $5,927  $5,293  $4,673  $4,917  
Pre-Tax Income (Loss)$661  $  (36) $913  $842  $954  
Income Taxes -   -   -   (10,592)  274  
Net Income$661  $  (36) $913  $11,434  $680  
Preferred Dividends$125  $125  $125  $125  $125  
           
           
Balance Sheet ($000s, Unaudited)          
 2015
  2016         
AssetsQ3
  Q4
  Q1
  Q2
  Q3
  
Current Assets          
Cash & Due from Bank$20,355  $44,157  $30,427  $34,838  $31,268  
Federal Funds/Overnight Funds 14,171   2,186   3,306   569   0  
Bank Owned CDs 1,815   1,815   1,815   1,716   1,218  
Investment Securities 145,247   174,998   191,905   161,177   182,614  
Mortgage Loans Held for Sale 3,011   899   0   0   0  
Total Current Assets$184,599   $224,055   $227,452   $198,300   $215,100   
Loans          
Construction and Development$16,165  $16,229  $13,692  $11,285  $9,776  
Commercial Real Estate 119,888   118,780   116,175   119,419   121,609  
Commercial Loans 21,236   21,246   21,296   21,863   21,247  
Multi Family 2,152   2,117   1,450   1,419   1,401  
Residential Mortgage 116,969   114,803   110,094   107,270   102,512  
Consumer Loans 10,814   9,657   7,096   7,977   7,363  
County/Municipal Loans 12,293   3,911   3,537   4,501   6,456  
Loss Share Loans 10,345   9,543   9,360   7,689   7,589  
Total Loans$309,862  $296,286  $282,700  $281,425  $277,952  
Allowance for Loss (2,881)  (3,052)  (3,021)  (2,817)  (2,701) 
Net Loans$306,981   $293,234   $279,679   $278,608   $275,251   
OREO 3,331   2,421   1,500   1,769   936  
FDIC Indemnification 498   474   419   433   425  
BOLI 20,130   20,265   20,391   20,548   20,683  
Fixed Assets, net$18,553  $18,214  $17,671  $17,362  $16,967  
Intangible Assets 648   618   583   555   507  
Other Assets 6,339   6,983   6,651   33,982   16,476  
Total Assets$541,079  $566,264  $554,346  $551,557  $546,385  
           
Liabilities & Stockholders' Equity          
Liabilities          
Deposits          
DDAs$114,345  $130,877  $119,343  $112,974  $111,290  
Interest Bearing Demand 50,965   62,784   61,172   55,248   54,552  
Celebration Checking 90,893   97,316   108,076   110,894   111,544  
Money Market Accts 41,731   38,643   35,289   33,858   33,956  
Savings 56,517   55,550   55,831   53,397   52,061  
CDs Less Than $100k 84,510   81,930   79,221   76,301   73,964  
CDs Greater than $100k 46,603   44,080   39,576   40,585   39,832  
Total Deposits$485,564   $511,180   $498,508   $483,257   $477,388   
           
           
Other Liabilities 2,414   2,690   1,988   1,919   2,281  
Net Borrowings (Wholesale Funding) -   -   -   -   317  
Total Liabilities$487,978  $513,870  $500,496  $485,176  $479,797  
Total Equity 53,101   52,394   53,850   66,381   66,548  
Total Liabilities & Stockholders' Equity$541,079  $566,264  $554,346  $551,557  $546,345  
           
           
Ratios          
 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016* 
ROAA 0.48%  -0.01%  0.66%  8.29%  0.53% 
ROAE 5.01%  -0.10%  6.80%  76.1%  4.74% 
NPAs/Assets (Core) 1.68%  1.40%  1.18%  1.08%  0.91% 
Est. Tier 1 Leverage 9.12%  8.87%  8.94%  9.54%  9.84% 
Total Common Equiv. Shares 8,380,337   8,380,337   8,380,337   8,380,337   8,380,337  
NIM 3.76%  3.57%  3.47%  3.59%  3.59% 
Cost of Funds 0.25%  0.24%  0.24%  0.22%  0.20% 
Loan/Deposit 63.8%  57.9%  56.6%  58.2%  58.2% 
Employees 163   153   129   127   123  
           
*3Q2016 ROAA and ROAE are after tax vs. pre-tax prior to 2Q 2016.  2Q 2016 includes DTA valuation allowance recovery. 

            

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