SouthCrest Financial Group Reports Preliminary 1Q21 Earnings

ATLANTA, April 22, 2021 (GLOBE NEWSWIRE) — Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.91 million or $0.25/share for the first quarter ended March 31, 2021.  Excluding non-core items, primarily securities gains, core earnings were $1.34 million, or $0.17/share.

In addition, the Company is announcing the payment of its quarterly dividend of $0.06/share.  The dividend will be payable on May 20, 2021, to all shareholders of record on May 6, 2021.

“We consider the Company’s income performance this quarter to be reasonable given the loan pay downs that occurred.  I continue to be proud of our team’s performance in maintaining exceptional credit quality and expense discipline.”

“With the payoff of $15 million of wholesale FHLB borrowings during the quarter the total balance sheet size was down slightly, but total deposits grew by almost $12 million, clearing $600 million for the first time.”

Total assets declined to $707.1 million vs. $715.1 million in 4Q20 and $557.7 million in the first quarter of 2020.  Loan balances declined by $12 million during the quarter, primarily due to the planned decrease in a short term funding relationship with one client, finishing at $314.2 million vs. $326.7 million at the end of 4Q20 and $334.6 million in 1Q20.  The ALLL also remained flat at $3.7MM but increased as a percentage of loans to 1.18% from 1.14% in the prior quarter.    

Interest income remained effectively flat with 4Q20 as an increase in investment securities income offset the lower average loan balances.  Cash levels remained slightly elevated from pre-Covid standards, but management expects to continue to improve this over the next few quarters.  Interest expense remained level during the first quarter, even with significantly increased average balances.  Provision expense remained at zero for the quarter.

Non-interest income returned to Covid-like levels (excluding the $816,000 of securities gains in 4Q20), with NSF and overdraft fees declining by 18% from 4Q20 and 38% over the prior year.  Other non-interest expense categories remained relatively flat from 4Q20.  Non-interest expense were lower from 4Q20 with core expenses running at a $16.1MM annualized rate in 1Q21.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.27% from 9.08% as a result of the repurchase of over 420,000 common and preferred shares and significant average balance sheet growth during the quarter.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.64 per share, up from $7.09 as of 1Q20 but down from $8.17 at the end of 2020.  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 $0.38/share vs. $0.96/share at the end of 4Q20.  The current fully converted share count at the end of the quarter was 7.400 million shares, comprised of 5.761 million common shares and 1.639 million preferred shares.

Asset quality ratios continued a multi-quarter trend of improvement even with the COVID economic environment.  Loan deferrals remained flat with 4Q20 and NPAs to assets declined to 0.46% vs. 0.55% in 4Q20.  As of March 31, 2021 the Company’s OREO balances remained $447,000, consisting of one residential property.

ABOUT SOUTHCREST

SouthCrest Financial Group, Inc. is a bank holding company with over $700 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)
  Q1 2020
    Q2 2020     Q3 2020     Q4 2020     Q1 2021  
Interest Income                            
Loans                            
Construction and Development $ 744     $ 758     $ 781     $ 761     $ 665  
Commercial Real Estate 1,856     1,974     1,846     1,824     1,845  
Commercial Loans 553     567     542     547     494  
Multi Family 21     21     25     65     65  
Residential Mortgage 904     750     743     636     681  
Consumer Loans 36     29     28     29     26  
County/Municipal Loans 34     41     50     21     20  
Loss Share Loans 46     37     33     29     26  
Investment Securities                            
Federal Funds/Overnight Funds $ 129     $ 6     $ 8     $ 15     $ 10  
Bank Owned CDs 0     0     0     0     0  
Investment Securities 1,023     1,393     1,425     1,494     1,622  
Total Interest Income $  5,346     $  5,576     $  5,481     $  5,420     $  5,453  
                             
Total Interest Expense $ 769     $ 741     $ 702     $ 678     $ 678  
Net Interest Income $  4,577     $  4,835     $  4,779     $  4,742     $  4,775  
Provision for Loan Losses 150     450     0     0     0  
Net Interest Income after Loan Losses $  4,427     $  4,385     $  4,779     $  4,742     $  4,775  
Other Income                            
                             
Service Charges on Deposits $ 138     $ 132     $ 130     $ 128     $ 103  
NSF/Overdraft Fees 305     158     213     231     190  
Other Service Charges 64     71     78     73     76  
ATM/Billpay/DR Card Income 247     277     298     306     326  
Other Income 238     664     1,441     207     1,011  
Total Other Income $ 992     $ 1,303     $ 2,160     $ 946     $ 1,707  
Non-Interest Expense                            
Salaries, Other Comp (+ FAS123R) $ 1,940     $ 1,711     $ 1,985     $ 2,140     $ 1,924  
Employee Benefits 412     341     276     523     367  
Occupancy & FF&E Expense 503     506     475     474     463  
Professional Fees 141     143     197     235     232  
Data Processing 488     385     353     362     389  
Other Expense 632     661     672     665     754  
Total Noninterest Expenses $  4,116     $  3,747     $  3,958     $  4,400     $  4,130  
Pre-Tax Income (Loss) $  1,303     $  1,941     $  2,981     $  1,288     $  2,352  
Income Taxes 265     316     580     160     447  
Net Income $  1,038     $  1,625     $  2,401     $  1,127     $  1,905  
Balance Sheet ($000s, Unaudited)
Assets Q1 2020
    Q2 2020
    Q3 2020
    Q4 2020
    Q1 2021
 
Current Assets          
Cash & Due from Bank $ 19,845     $ 22,520     $ 39,600     $ 81,969     $ 42,699  
Federal Funds/Overnight Funds   0       7,873       10,101       4,192       15,720  
Bank Owned CDs   0       0       0       0       0  
Investment Securities   184,377       218,680       222,913       265,602       297,307  
Total Current Assets $ 204,222     $ 249,072     $ 272,614     $ 352,484     $ 355,726  
Loans          
Construction and Development $ 56,430     $ 64,320     $ 65,675     $ 54,631     $ 50,360  
Commercial Real Estate   142,610       139,407       134,986       140,558       155,014  
Commercial Loans   53,383       56,860       55,327       47,556       38,430  
Multi Family   1,601       1,590       1,714       6,346       6,191  
Residential Mortgage   73,778       66,810       62,672       59,856       55,262  
Consumer Loans   2,144       2,472       1,868       13,908       5,228  
County/Municipal Loans   3,732       4,851       1,990       1,982       1,849  
Loss Share Loans   2,451       2,315       2,152       1,848       1,828  
Total Loans $ 336,129     $ 338,625     $ 326,383     $ 326,684     $ 314,162  
Allowance for Loss   (3,184 )     (3,984 )     (3,705 )     (3,705 )     (3,713 )
Net Loans $ 332,946     $ 334,641     $ 322,678     $ 322,979     $ 310,449  
OREO   529       447       447       447       447  
FDIC Indemnification   0       0       0       0       0  
BOLI   22,583       22,737       22,872       23,009       23,140  
Fixed Assets, net   8,705       8,697       8,540       8,581       8,568  
Intangible Assets   80       68       64       1,089       1,060  
Other Assets   8,604       6,731       7,030       6,501       7,681  
Total Assets $ 577,669     $ 622,383     $ 634,245     $ 715,090     $ 707,073  
           
Liabilities & Stockholders’ Equity          
Liabilities          
Deposits          
DDAs $ 96,517     $ 114,554     $ 118,082     $ 130,268     $ 131,767  
Interest Bearing Demand   85,746       96,141       95,732       128,477       116,667  
Celebration Checking   103,718       111,421       114,657       132,372       141,369  
Money Market Accts   37,693       38,650       43,746       44,427       52,640  
Savings   44,516       47,674       48,928       51,953       57,099  
CDs Less Than $100k   53,616       52,709       51,735       58,452       57,323  
CDs Greater than $100k   47,259       47,049       43,612       49,715       50,767  
Total Deposits $ 469,064     $ 508,198     $ 516,491     $ 595,664     $ 607,631  
Other Liabilities   2,415       2,184       2,772       2,285       4,285  
Net Borrowings (Wholesale Funding)   50,228       50,546       52,258       52,263       37,611  
Total Liabilities $ 521,708     $ 560,918     $ 571,522     $ 650,212     $ 649,527  
Total Equity   55,961       61,465       62,723       64,878       57,546  
Total Liabilities & Stockholders’ Equity $ 577,669     $ 622,393     $ 634,245     $ 715,090     $ 707,073  
Ratios
  Q1 2020     Q2 2020     Q3 2020     Q4 2020     Q1 2021  
ROAA 0.75 %   1.05 %   1.53 %   0.69 %   1.09 %
ROAE 7.30 %   10.87 %   16.88 %   6.79 %   11.62 %
NPAs/Assets 0.80 %   0.71 %   0.59 %   0.55 %   0.46 %
Est. T1 Leverage (Bank) 9.62 %   8.99 %   9.41 %   9.08 %   8.27 %
Total Common Shares 5,832,793     5,786,288     5,761,439     5,761,439     5,761,170  
Total Preferred Shares 2,054,759     2,054,759     2,054,759     2,054,759     1,638,596  
Total Common Equiv. Shares 7,887,552     7,841,047     7,816,198     7,816,198     7,399,766  
NIM (Bank) 3.65 %   3.37 %   3.22 %   3.17 %   2.99 %
Cost of Deposits (Bank) 0.54 %   0.46 %   0.41 %   0.36 %   0.36 %
Loan/Deposit 71.6 %   66.6 %   63.1 %   54.8 %   51.7 %
Employees 104     102     98     94     99  
Loans in Atlanta MSA 78.2 %   79.1 %   80.5 %   77.8 %   80.7 %

Wall St Business News, Latest and Up-to-date Business Stories from Newsmakers of Tomorrow