ATLANTA, Jan. 24, 2018 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary results of -$4.59MM or -$0.55/share for the fourth quarter ended December 31, 2017.  Excluding the impact of previously announced one-time items which included the impact of the new tax law and office relocations, net income would have been $0.9MM or $0.11/share.

“Like a large number of our peers, the tax law change created a significant mark to our deferred tax asset.  In addition, we made what we have thought of as a capital investment by preparing to move out of our operations center and to move our Tyrone branch to our Fayetteville LPO.  These two items were responsible for a $5.9MM negative impact to earnings in the fourth quarter. 

“We were also excited to announce a special dividend of $0.60/common share recently.  At the end of the day, our primary responsibility is to be good stewards of the capital that our investors have given us, and we believe that this was the best use of this capital at this time.   Importantly, we believe that after this dividend the Company has sufficient capital to take advantage of any strategic growth opportunity that may present itself.

“The Company should continue to have significant operating leverage, improved loan growth and significantly improved ROA and ROE.”

Tangible book value declined to $6.37/share which takes into account both the one-time items and the impact of the special dividend.

Deposits saw a normal seasonal pattern for the quarter and were up 15% LQA vs a slight year over year decline of 2%. Total deposits at the end of 4Q17 were $444.7MM vs. $428.9MM as of 3Q17 and $452.7MM as of 4Q16 (adjusted for the Alabama branch sale). 

On a core basis, expenses for the quarter were $4.2 million, continuing the downward trend that has existed for several quarters.  Total expenses for the quarter were $4.79MM.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.27% due to the funding of the special dividend.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.37 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 -$0.19/share vs. -$0.07/share as of 3Q17. 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 up slightly to 1.05% from 0.91%, excluding the $2.5 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 1.51% of assets vs. 1.28% in 3Q17, with half of the increase being driven by the operations center that is being vacated. Excluding the impact of the Bank buildings in OREO, OREO balances were just $115,000.   

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. 

Contact:
Andy Borrmann
Chief Financial Officer
678.734.3505

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

Statement of Operations ($000s, Unaudited)
	2016		2017
	Q4		Q1		Q2		Q3	Q4
Interest Income
Loans
Construction and Development	$150		$197		$198		$238		$360
Commercial Real Estate	1,645		1,691		1,737		1,767		1,669
Commercial Loans	291		316		341		378		368
Multi Family	31		27		26		29		30
Residential Mortgage	1,230		1,190		1,209		1,140		1,117
Consumer Loans	122		117		109		61		68
County/Municipal Loans	42		25		25		24		24
Loss Share Loans	119		111		33		89		81
Investment Securities
Federal Funds/Overnight Funds	$28		$58		$77		$97		$99
Bank Owned CDs	6		5		6		5		7
Investment Securities	1,039		967		872		922		1,036
Total Interest Income	$4,703		$4,705		$4,633		$4,750		$4,859
Total Interest Expense	$247		$249		$250		$293		$393
Net Interest Income	$4,456		$4,456		$4,383		$4,457		$4,466
Provision for Loan Losses	94		106		70		0		0
Net Interest Income after Loan Losses	$4,362		$4,349		$4,314		$4,457		$4,466
Other Income
Service Charges on Deposits	$228		$216		$209		$201		$174
NSF/Overdraft Fees	542		488		491		494		393
Other Service Charges	83		75		78		68		63
ATM/Billpay/DR Card Income	303		296		307		284		266
Other Income	(386)		451		541		1,920		(969)
Total Other Income	$768		$1,526		$1,626		$2,967		$(73)
Non-Interest Expense
Salaries, Other Comp (+ FAS123R)	$2,014		$1,799		$1,874		$1,869		$1,977
Employee Benefits	463		438		378		395		409
Occupancy & FF&E Expense	764		739		765		740		934
Professional Fees	190		190		157		201		154
Data Processing	525		498		549		561		488
Other Expense	730		816		707		754		825
Total Noninterest Expenses	$4,687		$4,480		$4,430		$4,520		$4,787
Pre-Tax Income (Loss)	$443		$1,395		$1,510		$2,904		$(394)
Income Taxes	128		465		488		1,036		4,192
Net Income	$315		$930		$1,022		$1,868		$(4,586)
Preferred Dividends	$125		$125		$57		$0		$0
Balance Sheet ($000s, Unaudited)
	2016		2017
Assets	Q4		Q1		Q2		Q3	Q4
Current Assets
Cash & Due from Bank	$33,015		$41,302		$31,852		$32,153		$41,514
Federal Funds/Overnight Funds	4,299		6,688		5,355		1,150		2,356
Bank Owned CDs	1,069		1,069		1,069		1,319		1,319
Investment Securities	176,723		152,583		144,740		157,261		165,203
Total Current Assets	$215,106		$201,642		$183,016		$191,883		$210,392
Loans
Construction and Development	$15,159		$12,486		$15,604		$14,400		$31,184
Commercial Real Estate	138,155		140,003		143,883		138,550		133,191
Commercial Loans	23,462		23,923		27,884		27,719		26,681
Multi Family	2,281		2,093		2,050		2,330		2,283
Residential Mortgage	97,194		98,302		95,682		89,760		87,001
Consumer Loans	6,893		6,117		5,874		14,086		3,304
County/Municipal Loans	3,387		2,999		2,971		2,791		2,771
Loss Share Loans	7,123		6,626		5,755		4,659		4,593
Total Loans	$293,654		$292,549		$299,703		$294,132		$291,008
Allowance for Loss	(2,766)		(2,797)		(2,875)		(2,813)		(2,820)
Net Loans	$290,888		$289,752		$296,828		$291,482		$288,188
OREO	3,581		2,728		2,315		2,194		2,761
FDIC Indemnification	304		238		112		112		112
BOLI	20,816		20,947		21,094		21,227		21,359
Fixed Assets, net	$13,717		$13,429		$13,406		$11,868		$9,916
Intangible Assets	468		420		373		326		242
Other Assets	17,953		17,428		16,564		15,867		19,383
Total Assets	$562,833		$546,584		$533,708		$534,959		$552,353
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs	$125,459		$112,286		$106,968		$93,150		$99,905
Interest Bearing Demand	65,654		63,949		63,481		58,723		73,555
Celebration Checking	112,355		113,548		112,731		105,514		102,367
Money Market Accts	32,271		27,942		28,689		29,869		29,699
Savings	50,495		51,304		51,095		44,703		43,147
CDs Less Than $100k	72,091		70,020		67,892		61,548		59,272
CDs Greater than $100k	38,922		39,966		38,952		36,234		36,723
Total Deposits	$497,247		$479,018		$469,809		$428,929		$444,668
Other Liabilities	1,252		1,632		1,763		2,223		13,756
Net Borrowings (Wholesale Funding)	-		-		-		40,000		40,000
Total Liabilities	$498,499		$480,650		$471,572		$471,152		$498,738
Total Equity	64,334		65,934		62,136		63,807		53,615
Total Liabilities & Stockholders' Equity	$562,833		$546,584		$533,708		$534,959		$552,353
Ratios
	4Q 2016		1Q 2016		2Q 2017		3Q 2017		4Q 2017
ROAA	0.48%		0.72%		0.76%		1.40%		-0.84%
ROAE	4.44%		6.78%		6.57%		11.86%		-7.81%
NPAs/Assets (Core)	0.83%		0.84%		0.76%		0.91%		1.05%
Est. T1 Leverage (Bank)	9.26%		8.87%		9.31%		10.00%		8.27%
Total Common Equiv. Shares	8,389,954		8,389,954		8,395,696		8,410,332		8,413,372
NIM	3.63%		3.72%		3.68%		3.70%		3.68%
Cost of Deposits	0.20%		0.21%		0.21%		0.23%		0.24%
Loan/Deposit	59.0%		60.3%		63.7%		68.5%		65.3%
Employees	122		122		122		114		115

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