SouthCrest Financial Group Reports Preliminary 1Q15 Results


PEACHTREE CITY, Ga., May 6, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK), announced today that the company reported a preliminary net loss for the first quarter of 2015 of $375,000. “There were several moving pieces that impacted our first quarter results. We exited the non-single family residential portion of our loss share agreement that resulted in $279,000 of expense and we completed an additional personnel downsizing that resulted in severance expenses of nearly $170,000. We also completed a sale of nearly $4 million of non-performing TDR loans and exited some additional OREO which was offset by securities gains. Core earnings for the quarter excluding these items was $74,000.”  

As previously announced, the Company also redeemed $8.0 million of its Series A Preferred Stock (the former TARP shares) during the quarter from cash on hand.

Loan growth was somewhat weaker than expected, especially early in the quarter, with total loans declining approximately $4 million excluding the loans sold. However activity reaccelerated later in the quarter and Management expects to report solid loan growth in 2Q15.  

The loan sale occurred in two tranches, a 1-4 family pool and a CRE pool and while it formally closed in April, the financial impact is recorded in 1Q. Including all related expenses, the Company realized a loss of approximately 16% of the loan book balance.

The Company has continued to focus on expenses, with core non-interest expense (excluding severance, loss share and consolidation expenses) down $280,000 in 1Q15 from 4Q14. Management expects this number to continue to trend downwards in 2Q.

The estimated Tier 1 Leverage ratio at the end of the quarter was 8.78%. On a fully converted basis (including the conversion of all preferred equity) TBV/share was negatively impacted by the TARP dividends, although the redemption will lower future dividends by approximately $180,000/quarter, and ended the quarter at $5.60 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).

SouthCrest maintains a single family residential loss sharing agreement, related to the purchase of a small failed bank in 2010. The non-residential portfolio loss share agreement expired at the end of the first quarter. The indemnification asset is now down to $1.1 million from $1.5 million at the end of 4Q14 and $4.6 million as of 1Q14, and should decline meaningfully in 2Q15.

Asset quality improved significantly as a result of the previously mentioned troubled loan sale. The non-performing assets/total assets (excluding loss share assets) ratio moved down 1.68%, the lowest level since the beginning of the recession.

SouthCrest Financial Group, Inc. is a $570 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  
 Q1
   Q2
  Q3
 Q4
 Q1
  
 Interest Income      
 Loans      
 Construction and Development $    215   $   231  $  262 $  216 $   219  
 Commercial Real Estate    1,081     1,173   1,297  1,371   1,275  
 Commercial Loans    185     162   214  319   245  
 Multi Family    17     13   14  17   20  
 Residential Mortgage    1,430     1,573   1,518  1,408   1,355  
 Consumer Loans    384     343   305  267   241  
 County/Municipal Loans    31     32   34  42   36  
 Loss Share Loans    310     236   200  194   169  
 Investment Securities      
 Federal Funds/Overnight Funds $    66   $   44  $  20 $  35 $   122  
 Bank Owned CDs    8     7   6  4   8  
 Investment Securities     767     1,022   975  971   1,058  
 Total Interest Income $    4,494   $   4,836  $  4,845 $  4,844 $   4,649  
      
 Total Interest Expense $    327   $   334  $  348 $  347 $   329  
 Net Interest Income $    4,167   $   4,502  $  4,497 $  4,497 $   4,320  
 Provision for Loan Losses     -       -    75  95   224  
 Net Interest Income after Loan Losses $    4,167   $   4,502  $  4,422 $  4,402 $   4,096  
      
Other Income     
Service Charges on Deposits $    108   $   105  $  102 $  106 $   99  
NSF/Overdraft Fees    526     575   626  603   480  
Other Service Charges    89     91   96  91   82  
ATM/Billpay/DR Card Income    394     414   403  402   408  
Gain on Sale of loans    364     581   566  476   467  
Other Income    1,676     2,004   1,209  794   783  
Total Other Income $    3,157   $   3,770  $  3,002 $  2,472 $   2,319  
Non-Interest Expense      
Salaries, Other Comp (+ FAS123R) $    2,930   $   2,924  $  2,720 $  2,529 $   2,610  
Employee Benefits    658     719   571  432   672  
Occupancy & FF& E Expense    857     888   920  1,023   935  
Professional Fees    333     469   419  293   229  
Data Processing    247     301   295  306   282  
OREO and Credit related Exp.    295     223   -35  287   230  
Other Expense    2,962     3,613   2,474  1,978   1,333  
Total Noninterest Expenses $    8,282   $   9,137  $  7,364 $  6,848 $   6,291  
Pre-Tax Income (Loss) $    (958)  $   (865) $  60 $  26 $   (375) 
Income Taxes      -        -      -     -      -   
Net Income$    (958  $   (865) $  60 $  26 $   (375) 


      
Balance Sheet ($000s, Unaudited)     
   2014       2015  
AssetsQ1
  Q2
  Q3
  Q4
  Q1
  
Current Assets     
Cash & Due from Bank$   27,766  $   26,083  $   18,238  $   16,991  $   34,459  
Federal Funds/Overnight Funds  75,795    31,083    50,260    34,182    17,067  
Bank Owned CDs  3,762    2,965    2,231    2,974    1,814  
Investment Securities  143,221    166,182    164,971    190,864    188,864  
Mortgage Loans Held for Sale  7,548    13,343    5,376    932    3,872  
Total Current Assets$   258,092  $   239,656  $   241,076  $   245,943  $   246,076  
Loans     
Construction and Development$   17,344  $   16,791  $   13,489  $   15,187  $   15,316  
Commercial Real Estate  85,158    96,664    105,664    104,493    102,720  
Commercial Loans  9,352    14,573    16,817    17,399    17,792  
Multi Family  2,112    1,142    1,112    1,589    1,553  
Residential Mortgage  107,654    109,916    107,234    110,347    105,691  
Consumer Loans  17,283    16,125    15,345    14,215    12,872  
County/Municipal Loans  3,684    4,190    5,110    4,343    5,210  
Loss Share Loans  13,957    12,844    12,407    12,447    10,837  
Total Loans$   256,544  $   272,245  $   277,178  $   280,020  $   272,010  
Allowance for Loss  (4,294)   (3,914)   (3,723)   (3,675)   (3,110) 
Net Loans$   252,250  $   268,331  $   273,455  $   276,345  $   268,895  
OREO  4,763    4,932    5,320    4,473    4,284  
FDIC Indemnification  4,642    3,139    1,685    1,537    1,089  
BOLI  19,283    19,442    19,574    19,710    19,834  
Fixed Assets, net  19,314    19,509    19,503    19,255    18,978  
Intangible Assets  838    747    657    583    573  
Other Assets  6,979    6,926    6,917    7,523    6,819  
Total Assets$   566,161  $   562,682  $   568,187  $   575,369  $   566,189  
      
Liabilities & Stockholders' Equity     
Liabilities     
Deposits     
DDAs$   126,454  $   123,672  $   122,374  $   125,699  $   121,381  
Interest Bearing Demand  52,320    51,018    54,661    64,178    61,685  
Celebration Checking  33,292    34,977    54,072    64,998    75,844  
Money Market Accts  53,658    57,056    49,594    44,434    41,871  
Savings  65,174    64,134    63,001    59,251    59,859  
CDs Less Than $100k  104,808    102,512    98,984    94,923    91,545  
CDs Greater than $100k  57,230    55,634    53,502    51,685    50,060  
Total Deposits$   492,936  $   489,003  $   496,188  $   505,168  $   502,244  
      
Other Liabilities  10,585    11,263    10,695    9,361    11,363  
Net Borrowings (Wholesale Funding)   -     900     -      -      -   
Total Liabilities$   503,521  $   501,166  $   506,883  $   514,529  $   513,607  
Total Equity  62,640    61,516    61,304    60,840    52,582  
Total Liabilities & Stockholders' Equity$   566,161  $   562,682  $   568,187  $   575,369  $   566,189  

 

Ratios     
  1Q 2014 2Q 20143Q 20144Q 20141Q 2015
ROAA  -0.68% -0.67% 0.04% 0.02% -0.07%
ROAE  -6.09% -6.00% 0.34% 0.17% -0.66%
NPAs/Assets (Core)  1.84% 1.90% 2.44% 1.92% 1.68%
Tier 1 Leverage  10.97% 10.80% 10.78% 10.05% 8.78%
Total Common Equiv. Shares 8,380,337  8,380,337  8,380,337  8,380,337  8,380,337 
NIM 3.42% 3.67% 3.77% 3.68% 3.60%
Cost of Funds  0.27% 0.27% 0.28% 0.28% 0.26%
Loan/Deposit  52.0% 55.7% 55.9% 55.4% 54.5%



            

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