ATLANTA, Oct. 26, 2017 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary net income of $1.87MM or $0.22/share for the third quarter ended June 30, 2017. Excluding the impact of the Alabama branch sale closing and OREO expenses due to a previously closed branch, net income would have been $0.9MM or $0.11/share.
“We are very happy to have the Alabama branch sale completed and think the resulting company is much better positioned to serve our Georgia customers. We are also continuing to work to lower our non-interest expenses, which are down 10% YTD 2017 vs. YTD 2016, and down 3% from 1Q17 to 3Q17 (excluding $160,000 in Alabama sales related expenses). Finally, as the Company generates significant regulatory and tangible capital growth, we believe it is prudent to continually review all potential uses for any excess capital.
“We are also extremely excited to have Michael Washburn join our team in the CCO role. I have known Mike for years and it is already easy to see that he will be a huge benefit to SouthCrest on both tactical and strategic levels.
“As of the end of September we had 40% of our loans and 15% of our deposits in the core 13 county Atlanta MSA market that we track vs. 37% and 12% as of the end of June. These are the metrics we use to track the success of our Atlanta growth initiative.”
“Tangible book value grew to $7.59/share, up $0.18 from the end of June and up $0.56 from December 2016. Total loans grew 6% year over year but fell slightly on a linked quarter annualized (LQA) basis due to the Alabama branch sale and one large scheduled payoff.
Excluding the impact of the Alabama branch sale, deposits were effectively flat on both a year over year and LQA basis. Total deposits at the end of 3Q17 were $428.9MM vs. $428.9MM as of 2Q17 (Alabama adjusted) and $432.4MM as of 3Q16 (Alabama adjusted). The Company did draw $40.0MM from the FHLB during the quarter to fund the cash requirements of the branch sale. The borrowing is a 1 year term and will have some impact to the overall cost of funds, but it can be partially or totally repaid at the Company’s option every quarter.
On a core basis, expenses for the quarter were $4.36 million, continuing the downward trend that has existed for several quarters. Total expenses for the quarter were $4.52MM.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 10.00%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.59 per share. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the negative impact to TBV by OCI is -$0.07/share vs. -$0.02/share as of 2Q17. The current fully converted share count at the end of the quarter is 8.41 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 remained steady during the quarter, with NPAs to assets ticking up slightly to 0.91% from 0.76%, excluding the $2.0 million of former bank buildings that are projected to be sold over the next several quarters in OREO. Including these buildings, 3Q17 NPAs/total assets were 1.28% of assets vs. 1.16% in 2Q17. Excluding the impact of the Bank buildings in OREO, OREO balances were down to a cycle low of $84,000.
ABOUT SOUTHCREST
SouthCrest Financial Group, Inc. is a $540 million asset bank holding company headquartered in Atlanta, GA. The company operates a 10 branch network throughout Georgia through its subsidiary bank, SouthCrest Bank, N.A. The bank provides a full suite of retail, private, entrepreneurial, high-net-worth 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) | ||||||||||||||||||||
| 2016 | 2017 | |||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||
| Interest Income | ||||||||||||||||||||
| Loans | ||||||||||||||||||||
| Construction and Development | $ | 153 | $ | 150 | $ | 197 | $ | 198 | $ | 238 | ||||||||||
| Commercial Real Estate | 1,537 | 1,645 | 1,691 | 1,737 | 1,767 | |||||||||||||||
| Commercial Loans | 276 | 291 | 316 | 341 | 378 | |||||||||||||||
| Multi Family | 18 | 31 | 27 | 26 | 29 | |||||||||||||||
| Residential Mortgage | 1,289 | 1,230 | 1,190 | 1,209 | 1,140 | |||||||||||||||
| Consumer Loans | 139 | 122 | 117 | 109 | 61 | |||||||||||||||
| County/Municipal Loans | 29 | 42 | 25 | 25 | 24 | |||||||||||||||
| Loss Share Loans | 132 | 119 | 111 | 33 | 89 | |||||||||||||||
| Investment Securities | ||||||||||||||||||||
| Federal Funds/Overnight Funds | $ | 42 | $ | 28 | $ | 58 | $ | 77 | $ | 97 | ||||||||||
| Bank Owned CDs | 6 | 6 | 5 | 6 | 5 | |||||||||||||||
| Investment Securities | 933 | 1039 | 967 | 872 | 922 | |||||||||||||||
| Total Interest Income | $ | 4,556 | $ | 4,703 | $ | 4,705 | $ | 4,633 | $ | 4,750 | ||||||||||
| Total Interest Expense | $ | 246 | $ | 247 | $ | 249 | $ | 250 | $ | 293 | ||||||||||
| Net Interest Income | $ | 4,311 | $ | 4,456 | $ | 4,456 | $ | 4,383 | $ | 4,457 | ||||||||||
| Provision for Loan Losses | 0 | 94 | 106 | 70 | 0 | |||||||||||||||
| Net Interest Income after Loan Losses | $ | 4,311 | $ | 4,362 | $ | 4,349 | $ | 4,314 | $ | 4,457 | ||||||||||
| Other Income | ||||||||||||||||||||
| Service Charges on Deposits | $ | 245 | $ | 228 | $ | 216 | $ | 209 | $ | 201 | ||||||||||
| NSF/Overdraft Fees | 575 | 542 | 488 | 491 | 494 | |||||||||||||||
| Other Service Charges | 96 | 83 | 75 | 78 | 68 | |||||||||||||||
| ATM/Billpay/DR Card Income | 302 | 303 | 296 | 307 | 284 | |||||||||||||||
| Other Income | 339 | -386 | 451 | 541 | 1,920 | |||||||||||||||
| Total Other Income | $ | 1,560 | $ | 768 | $ | 1,526 | $ | 1,626 | $ | 2,967 | ||||||||||
| Non-Interest Expense | ||||||||||||||||||||
| Salaries, Other Comp (+ FAS123R) | $ | 1,705 | $ | 2,014 | $ | 1,799 | $ | 1,874 | $ | 1,869 | ||||||||||
| Employee Benefits | 707 | 463 | 438 | 378 | 395 | |||||||||||||||
| Occupancy & FF&E Expense | 860 | 764 | 739 | 765 | 740 | |||||||||||||||
| Professional Fees | 212 | 190 | 190 | 157 | 201 | |||||||||||||||
| Data Processing | 536 | 525 | 498 | 549 | 561 | |||||||||||||||
| OREO/Credit related Exp. | 36 | 36 | 50 | (27 | ) | 11 | ||||||||||||||
| Other Expense | 861 | 694 | 766 | 734 | 743 | |||||||||||||||
| Total Noninterest Expenses | $ | 4,917 | $ | 4,687 | $ | 4,480 | $ | 4,430 | $ | 4,520 | ||||||||||
| Pre-Tax Income (Loss) | $ | 954 | $ | 443 | $ | 1,395 | $ | 1,510 | $ | 2,904 | ||||||||||
| Income Taxes | 274 | 128 | 465 | 488 | 1036 | |||||||||||||||
| Net Income | $ | 680 | $ | 315 | $ | 930 | $ | 1,022 | $ | 1,868 | ||||||||||
| Preferred Dividends | $ | 125 | $ | 125 | $ | 125 | $ | 57 | $ | 0 | ||||||||||
| Balance Sheet ($000s, Unaudited) | ||||||||||||||||||||
| 2016 | 2017 | |||||||||||||||||||
| Assets | Q3 | Q4 | Q1 | Q2 | Q3 | |||||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash & Due from Bank | $ | 31,268 | $ | 33,015 | $ | 41,302 | $ | 31,852 | $ | 32,153 | ||||||||||
| Federal Funds/Overnight Funds | 0 | 4,299 | 6,688 | 5,355 | 1,150 | |||||||||||||||
| Bank Owned CDs | 1,218 | 1,069 | 1,069 | 1,069 | 1,319 | |||||||||||||||
| Investment Securities | 182,614 | 176,723 | 152,583 | 144,740 | 157,261 | |||||||||||||||
| Total Current Assets | $ | 215,100 | $ | 215,106 | $ | 201,642 | $ | 183,016 | $ | 191,883 | ||||||||||
| Loans | ||||||||||||||||||||
| Construction and Development | $ | 9,776 | $ | 15,159 | $ | 12,486 | $ | 15,604 | $ | 14,400 | ||||||||||
| Commercial Real Estate | 121,609 | 138,155 | 140,003 | 143,883 | 138,550 | |||||||||||||||
| Commercial Loans | 21,247 | 23,462 | 23,923 | 27,884 | 27,719 | |||||||||||||||
| Multi Family | 1,401 | 2,281 | 2,093 | 2,050 | 2,330 | |||||||||||||||
| Residential Mortgage | 102,512 | 97,194 | 98,302 | 95,682 | 89,760 | |||||||||||||||
| Consumer Loans | 7,363 | 6,893 | 6,117 | 5,874 | 14,086 | |||||||||||||||
| County/Municipal Loans | 6,456 | 3,387 | 2,999 | 2,971 | 2,791 | |||||||||||||||
| Loss Share Loans | 7,589 | 7,123 | 6,626 | 5,755 | 4,659 | |||||||||||||||
| Total Loans | $ | 277,952 | $ | 293,654 | $ | 292,549 | $ | 299,703 | $ | 294,132 | ||||||||||
| Allowance for Loss | (2,701 | ) | (2,766 | ) | (2,797 | ) | (2,875 | ) | (2,813 | ) | ||||||||||
| Net Loans | $ | 275,251 | $ | 290,888 | $ | 289,752 | $ | 296,828 | $ | 291,482 | ||||||||||
| OREO | 936 | 3,581 | 2,728 | 2,315 | 2,194 | |||||||||||||||
| FDIC Indemnification | 425 | 304 | 238 | 112 | 112 | |||||||||||||||
| BOLI | 20,683 | 20,816 | 20,947 | 21,094 | 21,227 | |||||||||||||||
| Fixed Assets, net | $ | 16,967 | $ | 13,717 | $ | 13,429 | $ | 13,406 | $ | 11,868 | ||||||||||
| Intangible Assets | 507 | 468 | 420 | 373 | 326 | |||||||||||||||
| Other Assets | 16,476 | 17,953 | 17,428 | 16,564 | 15,867 | |||||||||||||||
| Total Assets | $ | 546,385 | $ | 562,833 | $ | 546,584 | $ | 533,708 | $ | 534,959 | ||||||||||
| Liabilities & Stockholders' Equity | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| DDAs | $ | 111,290 | $ | 125,459 | $ | 112,286 | $ | 106,968 | $ | 93,150 | ||||||||||
| Interest Bearing Demand | 54,552 | 65,654 | 63,949 | 63,481 | 58,723 | |||||||||||||||
| Celebration Checking | 111,544 | 112,355 | 113,548 | 112,731 | 105,514 | |||||||||||||||
| Money Market Accts | 33,956 | 32,271 | 27,942 | 28,689 | 29,869 | |||||||||||||||
| Savings | 52,061 | 50,495 | 51,304 | 51,095 | 44,703 | |||||||||||||||
| CDs Less Than $100k | 73,964 | 72,091 | 70,020 | 67,892 | 61,548 | |||||||||||||||
| CDs Greater than $100k | 39,832 | 38,922 | 39,966 | 38,952 | 36,234 | |||||||||||||||
| Total Deposits | $ | 477,388 | $ | 497,247 | $ | 479,018 | $ | 469,809 | $ | 428,929 | ||||||||||
| Other Liabilities | 2,281 | 1,252 | 1,632 | 1,763 | 2,223 | |||||||||||||||
| Net Borrowings (Wholesale Funding) | 317 | - | - | - | 40,000 | |||||||||||||||
| Total Liabilities | $ | 479,797 | $ | 498,499 | $ | 480,650 | $ | 471,572 | $ | 471,152 | ||||||||||
| Total Equity | 66,548 | 64,334 | 65,934 | 62,136 | 63,807 | |||||||||||||||
| Total Liabilities & Stockholders' Equity | $ | 546,345 | $ | 562,833 | $ | 546,584 | $ | 533,708 | $ | 534,959 | ||||||||||
| Ratios | ||||||||||
| 3Q 2016 | 4Q 2016 | 1Q 2017 | 2Q 2017 | 3Q 2017 | ||||||
| ROAA | 0.54 | % | 0.48 | % | 0.72 | % | 0.76 | % | 1.40 | % |
| ROAE | 4.77 | % | 4.44 | % | 6.78 | % | 6.57 | % | 11.86 | % |
| NPAs/Assets (Core) | 0.91 | % | 0.83 | % | 0.84 | % | 0.76 | % | 0.91 | % |
| Est. T1 Leverage (Bank) | 9.31 | % | 9.26 | % | 8.87 | % | 9.31 | % | 10.00 | % |
| Total Common Equiv. Shares | 8,380,337 | 8,389,954 | 8,389,954 | 8,395,696 | 8,410,332 | |||||
| NIM | 3.58 | % | 3.63 | % | 3.72 | % | 3.68 | % | 3.70 | % |
| Cost of Funds | 0.20 | % | 0.20 | % | 0.21 | % | 0.21 | % | 0.23 | % |
| Loan/Deposit | 58.2 | % | 59.0 | % | 60.3 | % | 63.7 | % | 68.5 | % |
| Employees | 123 | 122 | 122 | 122 | 114 | |||||
Contact:
Andy Borrmann
Chief Financial Officer
678.734.3505
Andrew Bowen, APR
ab@clearviewcom.com
404-822-3309