ATLANTA, Oct. 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 $2.40 million or $0.31/share for the third quarter ended September 30, 2020.   Excluding non-core items, primarily securities gains, core earnings were $1.49 million, or $0.19/share. Total core net income was up 6% from 3Q19, and increased by 23% from 2Q20.

“We continue to be thankful for the efforts of all of our team members during this stressful period, and the ongoing partnerships we have with our customers. This is a marathon that we will all finish together one day.”

“Financially, we remain very comfortable with the credit and capital position at SouthCrest. Loan deferrals ended the quarter at 0.17% after hitting a high of nearly 18% during the second quarter. Earnings have held up well to this point and while we will experience some NIM compression, we will be focusing on maximizing ROA and maintaining appropriate capital levels. Expense discipline has been exceptional this year with total expenses running 5% below budget, even with COVID expenses.”   

Total assets increased to $634.2 million vs. $622.4 million in 2Q20 and $523.7MM in the year ago quarter.   Loan balances declined as payoffs accelerated during the quarter, finishing at $326.4 million vs. $338.6 million at the end of 2Q20 and $331.2 million 3Q19. The ALLL fell from $4.0MM (1.18% of loans) to $3.7MM (1.14% of loans) in the quarter due to the resolution of a pre-COVID bankruptcy.   

Interest income decreased 1.7% from 2Q20 due to the decrease in loan balances and the resulting higher cash levels. Interest expense declined 5.3% during the quarter as well which led to an overall net interest income decrease of 1.2% or $56,000 versus the second quarter. During the third quarter, the cost of deposits declined by 5bps to 0.41%. Provision expense fell to zero from $450,000 in the prior quarter.

Non-interest income, excluding the $1.23MM of securities gains, was up from the prior three months with NSF and overdraft fees increasing by 34% as the primary driver, although these fees remain down 40% over the prior year. Non-interest expense increased slightly as bonus accruals were reinstated, but otherwise core expenses fell approximately 4% on all other expense lines.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 9.41% from 8.99% as a result of the income and securities gains offsetting the additional growth of the balance sheet.   On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $8.02 per share, up from $6.83 at the end of 2019 and $7.84 at the end of 2Q20.   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 $0.79/share vs. $0.09/share at the end of 4Q19 and $0.86/share as of 2Q20. The current fully converted share count at the end of the quarter was 7.816 million shares, comprised of 5.761 million common shares and 2.055 million preferred shares.

Asset quality ratios continued a multi-quarter trend of improvement even with the COVID economic environment. NPAs to assets declined to 0.59% vs. 0.71% in 2Q20.   As of June 30, 2020 the Company’s OREO balances were $447,000.

ABOUT SOUTHCREST

SouthCrest Financial Group, Inc. is a bank holding company with over $630 million 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 2019				Q4 2019				Q1 2020				Q2 2020				Q3 2020
Interest Income
Loans
Construction and Development		$	636			$	669			$	744			$	758			$	781
Commercial Real Estate			2,037				2,030				1,856				1,974				1,846
Commercial Loans			446				645				553				567				542
Multi Family			27				28				21				21				25
Residential Mortgage			991				1,029				904				750				743
Consumer Loans			41				34				36				29				28
County/Municipal Loans			22				24				34				41				50
Loss Share Loans			61				58				46				37				33
Investment Securities
Federal Funds/Overnight Funds		$	107			$	77			$	129			$	6			$	8
Bank Owned CDs			6				2				0				0				0
Investment Securities			950				996				1,023				1,393				1,425
Total Interest Income		$	5,324			$	5,592			$	5,346			$	5,576			$	5,481
Total Interest Expense		$	658			$	699			$	769			$	741			$	702
Net Interest Income		$	4,666			$	4,893			$	4,577			$	4,835			$	4,779
Provision for Loan Losses			39				0				150				450				0
Net Interest Income after Loan Losses		$	4,627			$	4,893			$	4,427			$	4,385			$	4,779
Other Income
Service Charges on Deposits		$	148			$	144			$	138			$	132			$	130
NSF/Overdraft Fees			356				348				305				158				213
Other Service Charges			78				95				64				71				78
ATM/Billpay/DR Card Income			278				271				247				277				298
Other Income			308				268				238				664				1,441
Total Other Income		$	1,169			$	1,186			$	992			$	1,303			$	2,160
Non-Interest Expense
Salaries, Other Comp (+ FAS123R)		$	1,856			$	2,140			$	1,940			$	1,711			$	1,985
Employee Benefits			391				379				412				341				276
Occupancy & FF&E Expense			564				529				503				506				475
Professional Fees			152				149				141				143				197
Data Processing			497				502				488				385				353
Other Expense			505				667				632				661				672
Total Noninterest Expenses		$	3,963			$	4,366			$	4,116			$	3,747			$	3,958
Pre-Tax Income (Loss)		$	1,832			$	1,713			$	1,303			$	1,941			$	2,981
Income Taxes			417				389				265				316				580
Net Income		$	1,414			$	1,323			$	1,038			$	1,625			$	2,401
Balance Sheet ($000s, Unaudited)
Assets		Q3 2019				Q4 2019				Q1 2020				Q2 2020					Q3 2020
Current Assets
Cash & Due from Bank		$	13,758			$	38,555			$	19,845			$	22,520			$	39,600
Federal Funds/Overnight Funds			0				5,215				0				7,873				10,101
Bank Owned CDs			1,069				77				0				0				0
Investment Securities			139,907				139,880				184,377				218,680				222,913
Total Current Assets		$	154,733			$	183,727			$	204,222			$	249,072			$	272,614
Loans
Construction and Development		$	43,661			$	47,593			$	56,430			$	64,320			$	65,675
Commercial Real Estate			155,397				146,287				142,610				139,407				134,986
Commercial Loans			42,921				53,833				53,383				56,860				55,327
Multi Family			1,939				1,611				1,601				1,590				1,714
Residential Mortgage			80,391				77,772				73,778				66,810				62,672
Consumer Loans			1,022				830				2,144				2,472				1,868
County/Municipal Loans			2,037				3,109				3,732				4,851				1,990
Loss Share Loans			3,859				3,601				2,451				2,315				2,152
Total Loans		$	331,227			$	334,635			$	336,129			$	338,625			$	326,383
Allowance for Loss			(3,073	)			(3,039	)			(3,184	)			(3,984	)			(3,705	)
Net Loans		$	328,154			$	331,596			$	332,946			$	334,641			$	322,678
OREO			0				497				529				447				447
FDIC Indemnification			0				0				0				0				0
BOLI			22,323				22,456				22,583				22,737				22,872
Fixed Assets, net			8,982				8,862				8,705				8,697				8,540
Intangible Assets			96				84				80				68				64
Other Assets			9,424				8,740				8,604				6,731				7,030
Total Assets		$	523,711			$	555,960			$	577,669			$	622,383			$	634,245
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs		$	94,680			$	103,154			$	96,517			$	114,554			$	118,082
Interest Bearing Demand			63,386				87,685				85,746				96,141				95,732
Celebration Checking			97,277				98,558				103,718				111,421				114,657
Money Market Accts			32,382				33,888				37,693				38,650				43,746
Savings			44,383				44,370				44,516				47,674				48,928
CDs Less Than $100k			56,543				54,228				53,616				52,709				51,735
CDs Greater than $100k			41,846				43,404				47,259				47,049				43,612
Total Deposits		$	430,497			$	465,288			$	469,064			$	508,198			$	516,491

Other Liabilities			2,516			2,143			2,415			2,184			2,772
Net Borrowings (Wholesale Funding)			33,429			34,697			50,228			50,546			52,258
Total Liabilities		$	466,443		$	502,127		$	521,708		$	560,918		$	571,522
Total Equity			57,268			53,833			55,961			61,465			62,723
Total Liabilities & Stockholders' Equity		$	523,711		$	555,960		$	577,669		$	622,393		$	634,245

	Ratios
			Q3 2019			Q4 2019			Q1 2020			Q2 2020			Q2 2020
	ROAA		1.09	%		0.98	%		0.75	%		1.05	%		1.53	%
	ROAE		10.10	%		9.52	%		7.30	%		10.87	%		16.88	%
	NPAs/Assets (Core)		1.00	%		0.77	%		0.80	%		0.71	%		0.59	%
	Est. T1 Leverage (Bank)		9.65	%		9.63	%		9.62	%		8.99	%		9.41	%
	Total Common Shares		5,849,101			5,832,793			5,832,793			5,786,288			5,761,439
	Total Preferred Shares		2,058,121			2,054,759			2,054,759			2,054,759			2,054,759
	Total Common Equiv. Shares		7,907,222			7,887,552			7,887,552			7,841,047			7,816,198
	NIM (Bank)		3.92	%		4.03	%		3.65	%		3.37	%		3.22	%
	Cost of Deposits (Bank)		0.54	%		0.53	%		0.54	%		0.46	%		0.41	%
	Loan/Deposit		76.7	%		71.9	%		71.6	%		66.6	%		63.1
	Employees		103			105			104			102			98
	Loans in Atlanta MSA		76.8	%		77.5	%		78.2	%		79.1	%		80.5	%

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