SouthCrest Financial Group Reports Preliminary 3Q19 Earnings

ATLANTA, Oct. 24, 2019 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.41 million or $0.18/share for the third quarter ended September 30, 2019. Excluding securities gains, core earnings were $1.40 million, or $0.17/share. This compares favorably with 3Q18 core EPS of $0.14/share, or $1.2 million.

“The third quarter saw the continuation of the momentum that SouthCrest experienced in the first half of 2019. Our team continued serving our clients, while keeping focused on the bottom line results that our shareholders expect. As a result, and to appropriately manage the capital entrusted to us, we are announcing a special dividend of $0.50 per share to be paid on December 10, 2019 to all shareholders of record November 26, 2019. This dividend is in addition to the standard quarterly dividend previously announced.”

“Finally, I’m pleased to report that the Company completed its previously announced $5 million share buyback program during the third quarter and is announcing a new share buyback program that positions us to repurchase up to $10 million of our common stock from today through 2021.”

Total assets were down to $523.7MM vs. $528.5MM in 2Q19 due to the share buyback, and vs. $544.7.3MM in 3Q18. Loan growth was robust for the quarter with total loans outstanding finishing at $331.2 million vs. $316.0 million at the end of 2Q19 and $319.3 million in the year ago quarter. The cost of funds was down 7bps due to a restructuring of FHLB borrowings, while the cost of deposits were up just 3bps from 2Q19.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank decreased to 9.65% as a result of the reduction in capital at the bank level to fund the share buyback. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.24 per share, up from $7.21 at the end of the second quarter. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the impact to TBV by OCI is $0.12/share vs. $0.07/share as of 2Q19. The current fully converted share count at the end of the quarter was 7.097 million shares, comprised of 5.849 million common shares and 2.058 million preferred shares.

Asset quality ratios improved slightly during the quarter, with NPAs to assets decreasing to 1.00% vs. 1.09% in 2Q19 (excluding former bank branches in OREO as of 2Q19). As of September 30, 2019 the Company’s OREO balances were $0.

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. You should not rely upon forward-looking statements, as they are inherently unlikely to occur, and we do not assume any liability to update or correct any forward-looking statements that we make.

Andy Borrmann
Chief Financial Officer
678.734.3505

Statement of Operations ($000s, Unaudited)
			Q3 2018				Q4 2018		Q1 2019		Q2 2019				Q3 2019
Interest Income
Loans
Construction and Development			$560				$633		$609		$603				$636
Commercial Real Estate				1,776				1,819		1,800		1,834			2,037
Commercial Loans				454				401		458		429			446
Multi Family				27				20		19		32			27
Residential Mortgage				1,119				1,167		1,176		1,101			991
Consumer Loans				51				48		41		41			41
County/Municipal Loans				23				25		25		22			22
Loss Share Loans				70				64		62		61			61
Investment Securities
Federal Funds/Overnight Funds			$41				$65		$82		$88				$107
Bank Owned CDs				7				7		7		6			6
Investment Securities				1,181				1,187		1,168		1,111			950
Total Interest Income			$5,311				$5,436		$5,447		$5,329				$5,324

Total Interest Expense			$586				$728		$746		$759				$658
Net Interest Income			$4,725				$4,708		$4,701		$4,570				$4,666
Provision for Loan Losses				46				0		0		0			39
Net Interest Income after Loan Losses			$4,679				$4,708		$4,701		$4,570				$4,627
Other Income
Service Charges on Deposits			$169				$164		$156		$153				$148
NSF/Overdraft Fees				350				396		309		310			356
Other Service Charges				62				65		65		70			78
ATM/Billpay/DR Card Income				273				260		255		284			278
Other Income				316				172		204		131			308
Total Other Income			$1,170				$1,057		$989		$947				$1,169
Non-Interest Expense
Salaries, Other Comp (+ FAS123R)			$1,889				$1,822		$1,849		$1,842				$1,856
Employee Benefits				435				458		419		370			391
Occupancy & FF&E Expense				621				588		621		570			564
Professional Fees				305				136		170		274			152
Data Processing				485				476		481		488			497
Other Expense				693				724		649		613			505
Total Noninterest Expenses			$4,428				$4,204		$4,189		$4,157				$3,963
Pre-Tax Income (Loss)			$1,421				$1,561		$1,501		$1,360				$1,832
Income Taxes				319				289		321		315			417
Net Income			$1,102				$1,272		$1,180		$1,045				$1,414
Balance Sheet ($000s, Unaudited)
Assets	Q3 2018				Q4 2018				Q1 2019				Q2 2019			Q3 2019
Current Assets
Cash & Due from Bank	$14,189				$20,168				$20,243				$30,930			$13,758
Federal Funds/Overnight Funds		0				6,070				1,718				0			0
Bank Owned CDs		1,322				1,322				1,322				1,322			1,069
Investment Securities		166,632				162,936				161,561				141,013			139,907
Total Current Assets	$182,143				$190,496				$184,844				$173,265			$154,733
Loans
Construction and Development	$43,113				$40,420				$41,777				$40,040			$43,661
Commercial Real Estate		148,219				144,329				144,178				153,527			155,397
Commercial Loans		29,997				29,452				28,177				28,036			42,921
Multi Family		1,518				1,466				1,438				1,970			1,939
Residential Mortgage		88,357				94,199				92,405				85,064			80,391
Consumer Loans		2,143				2,579				1,086				1,384			1,022
County/Municipal Loans		2,459				2,438				2,301				2,037			2,037
Loss Share Loans		3,466				4,030				3,975				3,933			3,859
Total Loans	$319,272				$318,914				$315,337				$315,991			$331,227
Allowance for Loss		(3,060)				(3,042)				(2,968)				(3,022)			(3,073)
Net Loans	$316,212				$315,872				$312,369				$312,698			$328,154
OREO		720				821				670				575			0
FDIC Indemnification		0				0				0				0			0
BOLI		21,773				21,909				22,039				22,186			22,323
Fixed Assets, net		9,733				9,511				9,268				9,180			8,982
Intangible Assets		126				116				107				100			96
Other Assets		13,365				11,759				13,336				10,083			9,424
Total Assets	$544,072				$550,484				$542,633				$528,503			$523,711
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs	$88,768				$06,821				$99,896				$98,229			$94,680
Interest Bearing Demand		64,684				62,829				59,270				59,606			63,386
Celebration Checking		101,474				99,694				102,617				100,950			97,277
Money Market Accts		47,286				55,836				49,584				33,080			32,382
Savings		44,139				43,574				44,152				44,407			44,383
CDs Less Than $100k		57,349				56,864				56,664				56,256			56,543
CDs Greater than $100k		34,795				38,007				39,867				38,854			41,846
Total Deposits	$438,495				$463,625				$452,054				$431,382			$430,497

Other Liabilities		2,115		1,493		2,492		2,583	2,516
Net Borrowings (Wholesale Funding)		50,641		30,000		30,000		33,795	33,429
Total Liabilities	$491,251		$495,118		$484,546		$467,760		$466,443
Total Equity		52,821		55,366		58,087		60,743	57,268
Total Liabilities & Stockholders' Equity	$544,072		$550,484			$542,633		$528,503	$523,711

Ratios
	Q3 2018	Q4 2018	Q1 2019	Q2 2019	Q3 2019
ROAA	0.81%	0.93%	0.86%	0.78%	1.09%
ROAE	8.34%	9.41%	8.32%	7.04%	10.10%
NPAs/Assets (Core)	1.11%	0.92%	0.92%	1.09%	1.00%
Est. T1 Leverage (Bank)	8.94%	9.16%	9.46%	9.95%	9.65%
Total Common Shares	6,198,632	6,198,632	6,198,632	6,360,273	5,849,101
Total Preferred Shares	2,223,360	2,223,360	2,223,360	2,061,719	2,058,121
Total Common Equiv. Shares	8,421,992	8,421,992	8,421,992	8,421,992	7,907,222
NIM (Bank)	3.78%	3.79%	3.86%	3.75%	3.91%
Cost of Deposits	0.33%	0.44%	0.49%	0.51%	0.54%
Loan/Deposit	72.5%	68.8%	69.5%	73.4%	76.9%
Employees	110	106	105	106	103
Loans in Atlanta MSA	65.8%	65.3%	66.0%	67.4%	76.8%

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SouthCrest Financial Group Reports Preliminary 3Q19 Earnings

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