SouthCrest Financial Group Reports preliminary 1Q18 earnings


ATLANTA, April 26, 2018 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $0.8MM or $0.10/share for the first quarter ended March 31, 2018.  Excluding the impact of one-time items, net income would have been $0.9MM or $0.11/share. 

“We had a very successful first quarter, growing our balance sheet and improving the momentum at SouthCrest.  We are now fully staffed in the commercial lending area in Atlanta.  In addition, we hired a senior treasury management professional with deep relationships in the metro area.  Loan growth was over $15 million or 21% annualized from the fourth quarter, which was above plan.  We are obviously pleased with the loan production and, with the full lending staff now in place, we expect to have strong loan growth for the remainder of 2018.  We were also able to grow deposits slightly in a quarter that has averaged a 7% annualized decline due to seasonality over the past 3 years.  We believe all of these items are the beginning of a positive year for SouthCrest. 

“We were excited to recently announce the initiation of a $0.03/ share regular quarterly dividend for the first time since 2009.  These dividends will be payable May 15, 2018 to holders of record on May 1, 2018.”

Total assets grew from $552.4MM in 4Q17 to $559.7MM in 1Q18, overcoming the negative impact of the $5.1MM special dividend payment in February.  Total assets were up slightly over 2% year over year.

Deposit balances were up sequentially 1% annualized versus average first quarter annualized declines of nearly 7% over the past three years.  Total deposits at the end of 1Q18 were $445.9MM vs. $444.7MM as of 4Q17 and $435.8MM as of 1Q17 (adjusted for the Alabama branch sale). 

Non-interest expenses for the quarter were $4.6 million, which was higher than plan.  There were $225,000 of one-time expenses, primarily related to the facilities consolidation that occurred during the quarter and benefit expenses.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 8.46%.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.24 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 -$0.42/share vs. -$0.19/share as of 4Q17.  Excluding the OCI impact, TBV/share grew $0.10 during the quarter.  The current fully converted share count at the end of the quarter remained 8.41 million shares. In addition, the Company still retains a small deferred tax asset valuation allowance related to state taxes that totals approximately $0.07/fully converted share.

Asset quality remained steady during the quarter, with NPAs to assets ticking down slightly to 0.99% from 1.05%, excluding the $2.5 million of former bank buildings in OREO, one of which in under contract and expected to close in 2Q18.  Including these buildings, 1Q18 NPAs/total assets were 1.44% of assets vs. 1.51% in 4Q17. Excluding the impact of the Bank buildings in OREO, OREO balances were just $97,000.   

ABOUT SOUTHCREST
SouthCrest Financial Group, Inc. is a bank holding company with over half a billion dollars in assets, headquartered in Atlanta, GA.  The company operates a 9 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. 

Andy Borrmann
Chief Financial Officer
678.734.3505

 Statement of Operations ($000s, Unaudited)      
 Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
 Interest Income      
 Loans      
 Construction and Development$197$198$238$360$535
 Commercial Real Estate1,6911,7371,7671,6691,667
 Commercial Loans 316 341 378 368 341
 Multi Family 27 26 29 30 28
 Residential Mortgage  1,190 1,209 1,140 1,117 1,087
 Consumer Loans 117 109 61 68 57
 County/Municipal Loans2525242423
 Loss Share Loans 111 33 89 81 80
 Investment Securities      
 Federal Funds/Overnight Funds$58$77$97$99$98
 Bank Owned CDs56576
 Investment Securities 9678729221,0361,187
 Total Interest Income $4,705$ ,633$4,750$4,859$5,109
      
 Total Interest Expense $ 249$ 250$ 293$ 393$ 460
 Net Interest Income $4,456 $4,383 $4,457 $4,466 $4,649
 Provision for Loan Losses 106 70 0 0 125
 Net Interest Income after Loan Losses $4,349 $4,314 $4,457 $4,466 $4,524
 

Other Income
     
 Service Charges on Deposits$216$209$201$174$168
 NSF/Overdraft Fees 488 491 494 393 350
 Other Service Charges 75 78 68 63 64
 ATM/Billpay/DR Card Income 296 307 284 266 262
 Other Income4515411,920(969)227
 Total Other Income $1,526$1,626$2,967$(73)$1,071
 Non-Interest Expense      
 Salaries, Other Comp (+ FAS123R) $1,799$1,874$1,869$1,977$1,948
 Employee Benefits438378395409473
 Occupancy & FF&E Expense739765740934653
 Professional Fees190157201154161
 Data Processing498549561488480
 Other Expense816 707754825883
 Total Noninterest Expenses $4,480$4,430$4,520$4,787
$4,598
 Pre-Tax Income (Loss) $1,395$1,510$2,904$(394)
$997
 Income Taxes 465 4881,0364,192197
 Net Income$930$1,022$1,868$(4,586)
$800
 Preferred Dividends$125$57$0$0$0
      


Balance Sheet ($000s, Unaudited) 
        
AssetsQ1 2017Q2 2017Q3 2017Q4 2017Q1 2018
Current Assets     
Cash & Due from Bank$41,302$31,852$32,153$42,146$24,603
Federal Funds/Overnight Funds6,6885,3551,1502,3560
Bank Owned CDs 1,069 1,069 1,319 1,319 1,319
Investment Securities 152,583 144,740 157,261 165,203 182,569
Total Current Assets $201,642 $183,016 $191,883 $211,024 $208,491
      
Loans     
Construction and Development$12,486$15,604$14,400$31,184$31,475
Commercial Real Estate 140,003 143,883 138,550 133,191 138,931
Commercial Loans 23,923 27,884 27,719 26,681 28,048
Multi Family 2,093 2,050 2,330 2,283 2,150
Residential Mortgage 98,302 95,682 89,760 87,001 92,973
Consumer Loans 6,117 5,874 14,0863,3045,738
County/Municipal Loans2,9992,9712,7912,7712,511
Loss Share Loans 6,626 5,755 4,659 4,593 4,536
Total Loans$292,549 $299,703 $294,132 $291,008$306,362
Allowance for Loss(2,797)(2,875)(2,813)(2,820)(3,028)
Net Loans$289,752 $296,828  291,482 $288,188$303,334
OREO2,7282,3152,1942,7602,697
FDIC Indemnification238112112112112
BOLI 20,947 21,094 21,227 21,359 21,490
Fixed Assets, net 13,429 13,40611,8689,91510,166
Intangible Assets 420 373 326 242 197
Other Assets17,428 16,564 15,867 11,754 13,228
Total Assets$546,584 $533,708 $534,959 $545,354 $559,715
      


Liabilities & Stockholders' Equity     
Liabilities     
      
Deposits     
DDAs$112,286$106,968$93,150$99,906$95,714
Interest Bearing Demand63,94963,48158,72373,55576,198
Celebration Checking 113,548 112,731 105,514 102,368 105,247
Money Market Accts 27,942 28,689 29,869 29,699 29,673
Savings 51,304 51,095 44,703 43,147 44,030
CDs Less Than $100k 70,020 67,892 61,548 59,273 57,827
CDs Greater than $100k39,966 38,952 36,234 36,723 37,232
Total Deposits$479,018 $469,809 $428,929 $444,671 $445,921
      
Other Liabilities1,6321,7632,2237,0671,639
Net Borrowings (Wholesale Funding)--40,00040,00059,666
Total Liabilities$480,650$471,572$471,152$491,738$507,226
Total Equity65,93462,13663,80753,61652,489
Total Liabilities & Stockholders' Equity$546,584$533,708$534,959$545,354$559,715


Ratios   
 1Q 20172Q 20173Q 20174Q 20171Q 2018
ROAA0.72%0.76%1.40%-0.84%0.58%
ROAE6.78%6.57%11.86%-7.81%6.03%
NPAs/Assets (Core)0.84%0.76%0.91%1.05%0.99%
Est. T1 Leverage (Bank) 8.87%9.31%10.00%8.27%8.42%
Total Common Equiv. Shares8,389,9548,395,6968,410,3328,413,3728,413,372
NIM3.72%3.68%3.70%3.68%3.83%
Cost of Deposits0.21%0.21%0.23%0.24%0.24%
Loan/Deposit60.3%63.7%68.5%65.3%68.3%
Employees122122114115116


Contact:           
Andrew Bowen, APR
ab@clearviewcom.com
404-822-3309