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SouthCrest Financial Group Reports Preliminary 2Q15 Results

20:00 EDT 23 Jul 2015 | Globe Newswire

PEACHTREE CITY, Ga., July 24, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (OTCBB:SCSG) announced today that the company reported preliminary net income for the second quarter of 2015 of $479,000. “We are happy to announce earnings of nearly half a million dollars for the second quarter. While these are the best results the company has had on a core basis since prior to the financial crisis, we continue to strive for increased loan balances and cost efficiencies. We have cut non-interest expenses by over $3 million per year over the past six months, and expect to achieve similar additional savings over the next 12 months. Our focus has been on right-sizing our institution after consolidation last March. This has been a difficult but necessary process to achieve appropriate returns on equity and assets and long term shareholder value.”    

Loan growth improved during the quarter with $5 million of organic loan growth (7% linked quarter annualized) augmented with the purchase of a $14 million 1-4 family mortgage portfolio, made up of whole loans, purchased servicing released, located in our home markets of Georgia and Alabama. Organic loan growth remained steady during the quarter and management expects to report similar results in 3Q.

Expense control remains a primary focus for management. During the quarter the company completed a core processing conversion that will drive $1.0 million in additional annualized technology savings phasing in over the next three quarters. We also expect significant savings in occupancy expenses to occur by 2Q16 along with other core non-interest expense declines.

The estimated Tier 1 Leverage ratio at the end of the quarter was 8.81%. On a fully converted basis (including the conversion of all preferred equity) TBV/share ended the quarter at $5.58 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 $11.5 million ($1.37/fully converted share).

Asset quality remained stable with 1Q15 at 1.68% NPAs/total assets.

SouthCrest Financial Group, Inc. is a $550 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 retail and commercial banking services, SBA lending, mortgage banking, 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  
 Q2Q3Q4Q1Q2
 
 Interest Income       
 Loans       
 Construction and Development$ 231 $262 $216 $219 231      
 Commercial Real Estate  1,173  1,297  1,371  1,274  1,374       
 Commercial Loans  162   214   319   245  261       
 Multi Family  13   14   17   20  26       
 Residential Mortgage   1,573   1,518   1,408   1,354  1,464       
 Consumer Loans  343   305   267   241   212       
 County/Municipal Loans  32   34   42   36   43       
 Loss Share Loans  236   200   194   169   324       
 Investment Securities       
 Federal Funds/Overnight Funds$ 44 $ 20 $ 35 $ 22 $ 16       
 Bank Owned CDs  7   6   4   8   7       
 Investment Securities   1,022   975   971   1,058     960       
 Total Interest Income $ 4,836  $ 4,845  $ 4,844  $ 4,649 $ 4,920       
       
 Total Interest Expense $ 334 $ 348 $ 347 $ 329 $ 309       
 Net Interest Income $ 4,502 $ 4,497 $ 4,497 $ 4,320 $ 4,611       
 Provision for Loan Losses  -   75   95   239   200       
 Net Interest Income after Loan Losses $ 4,502 $ 4,422 $ 4,402 $ 4,081 $ 4,411       
 

Other Income
      
 Service Charges on Deposits$ 105 $ 102 $ 106 $ 99 $ 99  
 NSF/Overdraft Fees  575   626   603   480   513  
 Other Service Charges  91   96   91   82   95  
 ATM/Billpay/DR Card Income  414   403   402   408   392  
 Other Income  2,585   1,775   1,270  1,250  1,017  
 Total Other Income $ 3,770 $ 3,002 $ 2,472 $ 2,319 $ 2,116  
 Non-Interest Expense       
 Salaries, Other Comp (+ FAS123R) $ 2,924 $ 2,720 $ 2,529 $ 2,610 $ 2,492  
 Employee Benefits  719   571  432  672  440  
 Occupancy & FF& E Expense  888   920  1,023  935  1,004  
 Professional Fees  469   419   293   229   249  
 Data Processing  301   295  306  282  221  
 OREO and Credit related Exp.  223   -35  287  230  67  
 Other Expense  3,613   2,474   1,978   1,333   1,575  
 Total Noninterest Expenses $ 9,137 $ 7,364 $ 6,848 $ 6,291 $ 6,048  
 Pre-Tax Income (Loss) $ (865)$ 60 $ 26 $ (400)$ 479  
 Income Taxes  -   -   -   -   -  
 Net Income$ (865)$ 60 $ 26 $ (375)$ 479  
         
Balance Sheet ($000s, Unaudited)       
  2014  2015  
AssetsQ2
 Q3
  Q4
 Q1
 Q2
  
Current Assets      
Cash & Due from Bank$ 26,083 $ 18,238 $ 16,991 $ 34,459 $ 22,335  
Federal Funds/Overnight Funds  31,083   50,260   34,182   17,067   10,736  
Bank Owned CDs  2,965   2,231   2,974   1,814   1,814  
Investment Securities  166,182   164,971   190,864   188,864   179,276  
Mortgage Loans Held for Sale  13,343   5,376   932  3,872  1,869  
Total Current Assets$ 239,656  $ 241,076  $ 245,943  $ 246,076  $ 216,030   
Loans      
Construction and Development$ 16,791 $ 13,489 $ 15,187 $ 15,316 $ 16,484  
Commercial Real Estate  96,664   105,664   104,493   102,720   106,485  
Commercial Loans  14,573   16,817   17,399   17,792   18,635  
Multi Family  1,142   1,112   1,589   1,553   2,186  
Residential Mortgage  109,916   107,234   110,347   105,691   116,889  
Consumer Loans  16,125   15,345   14,215   12,872   11,780  
County/Municipal Loans  4,190   5,110   4,343   5,210   7,626  
Loss Share Loans  12,844   12,407   12,447   10,837   10,815  
Total Loans$ 272,245  $ 277,178  $ 280,020  $ 272,010  $ 290,903   
Allowance for Loss  (3,914)  (3,723)  (3,675)  (3,110)  (3,267) 
Net Loans$ 268,331  $ 273,455  $ 276,345  $ 268,895  $ 287,635   
OREO  4,932   5,320   4,473   4,284   3,552  
FDIC Indemnification  3,139   1,685   1,537   1,089   502  
BOLI  19,442   19,574   19,710   19,834   19,995  
Fixed Assets, net  19,509   19,503 $ 19,255 $ 18,978 $ 18,720  
Intangible Assets  747   657   583   573   535  
Other Assets  6,926    6,917    7,523    6,819    6,552   
Total Assets$ 562,682  $ 568,187  $ 575,369  $ 566,189  $ 553,695   


Liabilities & Stockholders' Equity
      
Liabilities      
Deposits      
DDAs$ 123,672 $ 122,374 $ 125,699 $ 121,381 $ 120,659  
Interest Bearing Demand  51,018   54,661   64,178   61,685   53,979  
Celebration Checking  34,977   54,072   64,998   75,844   82,246  
Money Market Accts  57,056   49,594   44,434   41,871   42,004  
Savings  64,134   63,001   59,251   59,859   57,887  
CDs Less Than $100k  102,512   98,984   94,923   91,545   88,158  
CDs Greater than $100k  55,634    53,502    51,685    50,060    49,697   
Total Deposits$ 489,003  $ 496,188  $ 505,168  $ 502,244  $ 494,630   
       


Other Liabilities  11,263   10,695  9,361  11,363  6,684 
Net Borrowings (Wholesale Funding)  900   -   -   -   - 
Total Liabilities$ 501,166  $ 506,883  $ 514,529  $ 513,607  $ 501,314  
Total Equity  61,516   61,304   60,840   52,582   52,381 
Total Liabilities & Stockholders' Equity$ 562,682  $ 568,187  $ 575,369  $ 566,189  $ 553,695  


 Ratios   
 2Q 20143Q 20144Q 20141Q 20152Q 2015
ROAA -0.67% 0.04% 0.02% -0.07% 0.34%
ROAE -6.00% 0.34% 0.17% -0.66% 3.65%
NPAs/Assets (Core) 1.90% 2.44% 1.92% 1.68% 1.68%
Tier 1 Leverage  10.80% 10.78% 10.05% 8.78% 8.81%
Total Common Equiv. Shares 8,380,337  8,380,337  8,380,337  8,380,337  8,380,337 
NIM 3.67% 3.77% 3.68% 3.60% 3.81%
Cost of Funds 0.27% 0.28% 0.28% 0.26% 0.25%
Loan/Deposit 55.7% 55.9% 55.4% 54.5% 58.8%
Employees 221  190  187  172  170 
                

 

Andy Borrmann
Chief Financial Officer
678.734.3505

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