SouthCrest Financial Group Reports Preliminary 1Q20 Earnings

ATLANTA, April 21, 2020 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.04 million or $0.13/share for the first quarter ended March 31, 2020. Excluding non-core items, core earnings were $1.00 million, or $0.13/share. Total net income is down 15% from 1Q19, but core EPS only declined $0.01/share from $0.14 in the year ago quarter.

“Most importantly, I would like to say how proud I am of our employees at SouthCrest who have performed amazingly well during this time of real hardship. Our customer facing teams have handled every transaction as safely as possible. Our operational and IT teams have supported their internal customers with efficiency and patience. And finally our leadership has worked tirelessly to make sure we make every new decision with as much knowledge and forethought as possible.”

“Financially, the first quarter was a challenge due to the changes in the interest rate environment that occurred starting in late February, and accelerated with the FOMC’s rate cut decisions in March. We do remain comfortable with our current capital and balance sheet position, but we will remain appropriately conservative until there is more transparency in the economic outlook and potential credit costs for the remainder of 2020. Importantly, we were able to take advantage of some of the pricing dislocation that occurred in municipal bonds in late March, which should partially offset the negative impact to revenues from the rate cuts.”

The Company also is announcing that it will pay the regular quarterly dividend of $0.05/share on May 14, 2020 to shareholders of record April 30, 2020.

Total assets increased to $577.7 million vs. $556.0 million in 4Q19, due to both an increase in deposits and an increase in wholesale funding, and vs. $542.6 million in 1Q19. Wholesale funding increased during the quarter to partially fund the increased purchases of municipal bonds. Loan growth was slightly below plan for the quarter with total loans outstanding finishing at $336.1 million vs. $334.6 million at the end of 4Q19 and $315.3 million in the year ago quarter. The cost of funds was up 3bps to 0.58%, from 0.55% in 4Q19 due to the lower day count and the increase in wholesale funding.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank was effectively flat with 4Q19 at to 9.62% from 9.63%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.09 per share, up from $6.83 at the end of 2019. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the positive impact to TBV by OCI is $0.28/share vs. $0.09/share at the end of 4Q19. The current fully converted share count at the end of the quarter was 7.888 million shares, comprised of 5.833 million common shares and 2.055 million preferred shares.

Asset quality ratios remained effectively flat with the prior quarter, with NPAs to assets increasing to 0.80% vs. 0.77% in 4Q19. As of December 31, 2019 the Company’s OREO balances were $529,000.

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. 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)
		Q1 2019		Q2 2019		Q3 2019		Q4 2019		Q1 2020
Interest Income
Loans
Construction and Development	$609		$603		$636		$669		$744
Commercial Real Estate		1,800		1,834		2,037		2,030		1,856
Commercial Loans		458		429		446		645		553
Multi Family		19		32		27		28		21
Residential Mortgage		1,176		1,101		991		1,029		904
Consumer Loans		41		41		41		34		36
County/Municipal Loans		25		22		22		24		34
Loss Share Loans		62		61		61		58		46
Investment Securities
Federal Funds/Overnight Funds	$82		$88		$107		$77		$129
Bank Owned CDs		7		6		6		2		0
Investment Securities		1,168		1,111		950		996		1,023
Total Interest Income	$5,447		$5,329		$5,324		$5,592		$5,346

Total Interest Expense	$746		$759		$658		$699		$769
Net Interest Income	$4,701		$4,570		$4,666		$4,893		$4,577
Provision for Loan Losses		0		0		39		0		150
Net Interest Income after Loan Losses	$4,701		$4,570		$4,627		$4,893		$4,427
Other Income
Service Charges on Deposits	$156		$153		$148		$144		$138
NSF/Overdraft Fees		309		310		356		348		305
Other Service Charges		65		70		78		95		64
ATM/Billpay/DR Card Income		255		284		278		271		247
Other Income		204		131		308		268		238
Total Other Income	$989		$947		$1,169		$1,186		$992
Non-Interest Expense
Salaries, Other Comp (+ FAS123R)	$1,849		$1,842		$1,856		$2,140		$1,940
Employee Benefits		419		370		391		379		412
Occupancy & FF&E Expense		621		570		564		529		503
Professional Fees		170		274		152		149		141
Data Processing		481		488		497		502		488
Other Expense		649		613		505		667		632
Total Noninterest Expenses	$4,189		$4,157		$3,963		$4,366		$4,116
Pre-Tax Income (Loss)	$1,501		$1,360		$1,832		$1,713		$1,303
Income Taxes		321		315		417		389		265
Net Income	$1,180		$1,045		$1,414		$1,323		$1,038


Balance Sheet ($000s, Unaudited)
Assets		Q1 2019			Q2 2019			Q3 2019			Q4 2019			Q1 2020
Current Assets
Cash & Due from Bank	$20,243			$30,930			$13,758			$38,555			$19,845
Federal Funds/Overnight Funds		1,718			0			0			5,215			0
Bank Owned CDs		1,322			1,322			1,069			77			0
Investment Securities		161,561			141,013			139,907			139,880			184,377
Total Current Assets	$184,844			$173,265			$154,733			$183,727			$204,222

Loans
Construction and Development	$41,777			$40,040			$43,661			$47,593			$56,430
Commercial Real Estate		144,178			153,527			155,397			146,287			142,610
Commercial Loans		28,177			28,036			42,921			53,833			53,383
Multi Family		1,438			1,970			1,939			1,611			1,601
Residential Mortgage		92,405			85,064			80,391			77,772			73,778
Consumer Loans		1,086			1,384			1,022			830			2,144
County/Municipal Loans		2,301			2,037			2,037			3,109			3,732
Loss Share Loans		3,975			3,933			3,859			3,601			2,451
Total Loans	$315,337			$315,991			$331,227			$334,488			$334,488
Allowance for Loss		(2,968	)		(3,022	)		(3,073	)		(3,039	)		(3,184	)
Net Loans	$312,369			$312,698			$328,154			$331,596			$331,596
OREO		670			575			0			497			529
FDIC Indemnification		0			0			0			0			0
BOLI		22,039			22,186			22,323			22,456			22,583
Fixed Assets, net		9,268			9,180			8,982			8,862			8,705
Intangible Assets		107			100			96			84			80
Other Assets		13,336			10,083			9,424			8,740			8,604
Total Assets	$542,633			$528,503			$523,711			$555,960			$577,669

Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs	$99,896			$98,229			$94,680			$103,154			$96,517
Interest Bearing Demand		59,270			59,606			63,386			87,685			85,746
Celebration Checking		102,617			100,950			97,277			98,558			103,718
Money Market Accts		49,584			33,080			32,382			33,888			37,693
Savings		44,152			44,407			44,383			44,370			44,516
CDs Less Than $100k		56,664			56,256			56,543			54,228			53,616
CDs Greater than $100k		39,867			38,854			41,846			43,404			47,259
Total Deposits	$452,054			$431,382			$430,497			$465,288			$469,064

Other Liabilities		2,492		2,583		2,516		2,143		2,415
Net Borrowings (Wholesale Funding)		30,000		33,795		33,429		34,697		50,228
Total Liabilities	$484,546		$467,760		$466,443		$502,127		$521,708
Total Equity		58,087		60,743		57,268		53,833		55,961
Total Liabilities & Stockholders' Equity	$542,633		$528,503		$523,711		$555,960		$577,669

Ratios
	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020
ROAA	0.86%	0.78%	1.09%	0.98%	0.75%
ROAE	8.32%	7.04%	10.10%	9.52%	7.30%
NPAs/Assets (Core)	0.92%	1.09%	1.00%	0.77%	0.80%
Est. T1 Leverage (Bank)	9.46%	9.95%	9.65%	9.63%	9.62%
Total Common Shares	6,198,632	6,360,273	5,849,101	5,832,793	5,832,793
Total Preferred Shares	2,223,360	2,061,719	2,058,121	2,054,759	2,054,759
Total Common Equiv. Shares	8,421,992	8,421,992	7,907,222	7,887,552	7,887,552
NIM (Bank)	3.79%	3.74%	3.92%	4.03%	3.65%
Cost of Deposits	0.49%	0.51%	0.54%	0.53%	0.54%
Loan/Deposit	69.5%	73.0%	76.7%	71.9%	71.6%
Employees	105	106	103	105	104
Loans in Atlanta MSA	66.0%	67.4%	76.8%	77.5%	78.2%

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SouthCrest Financial Group Reports Preliminary 1Q20 Earnings

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