SouthCrest Financial Group Reports Preliminary 3Q18 Earnings
ATLANTA, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.1MM or $0.13/share for the third quarter ended September 30, 2018. Excluding the impact of one-time items, net income would have been $1.2MM or $0.14/share.
“In the third quarter of 2018 SouthCrest was operating on nearly all cylinders. Loan growth was 21% annualized, our deposit balances remained above our internal projections during the seasonally weakest quarter of the year, we were able to exit our FDIC loss share agreement with a minimal financial loss, and core expenses were under $4.2MM. This resulted in the best core profitability the Company has seen since the mid-2000s.”
“We do expect to see loan growth in the low single digit annualized range in the fourth quarter and we expect to see good seasonal deposit growth for the quarter and for the year. Finally, we have announced a $0.03/share regular quarterly dividend in the fourth quarter. These dividends will be payable November 15, 2018 to holders of record on November 1, 2018.”
Total assets were up slightly from 2Q, and up year over year at $544.0MM vs. 541.3MM in 2Q18 and $535.0MM in 3Q17.
Deposit balances were down sequentially due to seasonal factors, but overall balances were stronger than internal projections. Total deposits were up 2% from 3Q17, with a 5% increase in non-maturity deposits from the previous year’s 3Q.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 8.94%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.27 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 -$0.55/share vs. -$0.45/share as of 2Q18. Excluding the OCI impact, TBV/share grew $0.09 during the quarter. The current fully converted share count at the end of the quarter was 8.42 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 ratios remained within a reasonable range during the quarter, with NPAs to assets moving down slightly to 1.11% from 1.25%, excluding the $540,000 of a former bank building in OREO. Including this building, 3Q18 NPAs/total assets were 1.21% of assets vs. 1.39% in 2Q18. Excluding the impact of the Bank buildings in OREO, OREO balances were just $180,000.
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.
Andy Borrmann
Chief Financial Officer
678.734.3505
| Statement of Operations ($000s, Unaudited) | |||||||||||||||
| Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||
| Interest Income | |||||||||||||||
| Loans | |||||||||||||||
| Construction and Development | $ | 238 | $ | 360 | $ | 535 | $ | 479 | $ | 560 | |||||
| Commercial Real Estate | 1,767 | 1,669 | 1,667 | 1,696 | 1,776 | ||||||||||
| Commercial Loans | 378 | 368 | 341 | 370 | 454 | ||||||||||
| Multi Family | 29 | 30 | 28 | 28 | 27 | ||||||||||
| Residential Mortgage | 1,140 | 1,117 | 1,087 | 1,116 | 1,119 | ||||||||||
| Consumer Loans | 61 | 68 | 57 | 56 | 51 | ||||||||||
| County/Municipal Loans | 24 | 24 | 23 | 23 | 23 | ||||||||||
| Loss Share Loans | 89 | 81 | 80 | 79 | 70 | ||||||||||
| Investment Securities | |||||||||||||||
| Federal Funds/Overnight Funds | $ | 97 | $ | 99 | $ | 98 | $ | 48 | $ | 41 | |||||
| Bank Owned CDs | 5 | 7 | 6 | 6 | 7 | ||||||||||
| Investment Securities | 922 | 1,036 | 1,187 | 1,214 | 1,181 | ||||||||||
| Total Interest Income | $ | 4,750 | $ | 4,859 | $ | 5,109 | $ | 5,115 | $ | 5,311 | |||||
| Total Interest Expense | $ | 293 | $ | 393 | $ | 460 | $ | 506 | $ | 586 | |||||
| Net Interest Income | $ | 4,457 | $ | 4,466 | $ | 4,649 | $ | 4,609 | $ | 4,725 | |||||
| Provision for Loan Losses | 0 | 0 | 125 | 0 | 46 | ||||||||||
| Net Interest Income after Loan Losses | $ | 4,457 | $ | 4,466 | $ | 4,524 | $ | 4,609 | $ | 4,679 | |||||
|
Other Income |
|||||||||||||||
| Service Charges on Deposits | $ | 201 | $ | 174 | $ | 168 | $ | 165 | $ | 169 | |||||
| NSF/Overdraft Fees | 494 | 393 | 350 | 334 | 350 | ||||||||||
| Other Service Charges | 68 | 63 | 64 | 63 | 62 | ||||||||||
| ATM/Billpay/DR Card Income | 284 | 266 | 262 | 280 | 273 | ||||||||||
| Other Income | 1,920 | (969 | ) | 227 | 125 | 316 | |||||||||
| Total Other Income | $ | 2,967 | $ | (73 | ) | $ | 1,071 | $ | 967 | $ | 1,170 | ||||
| Non-Interest Expense | |||||||||||||||
| Salaries, Other Comp (+ FAS123R) | $ | 1,869 | $ | 1,977 | $ | 1,948 | $ | 1,969 | $ | 1,889 | |||||
| Employee Benefits | 395 | 409 | 473 | 524 | 435 | ||||||||||
| Occupancy & FF&E Expense | 740 | 934 | 653 | 590 | 621 | ||||||||||
| Professional Fees | 201 | 154 | 161 | 156 | 305 | ||||||||||
| Data Processing | 561 | 488 | 480 | 489 | 485 | ||||||||||
| Other Expense | 754 | 825 | 883 | 832 | 693 | ||||||||||
| Total Noninterest Expenses | $ | 4,520 | $ | 4,787 | $ | 4,598 | $ | 4,560 | $ | 4,428 | |||||
| Pre-Tax Income (Loss) | $ | 2,904 | $ | (394 | ) | $ | 997 | $ | 1,016 | $ | 1,421 | ||||
| Income Taxes | 1,036 | 4,192 | 197 | 210 | 319 | ||||||||||
| Net Income | $ | 1,868 | $ | (4,586 | ) | $ | 800 | $ | 806 | $ | 1,102 | ||||
| Preferred Dividends | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||
|
Balance Sheet ($000s, Unaudited) | |||||||||||||||
| Assets | Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | ||||||||||
| Current Assets | |||||||||||||||
| Cash & Due from Bank | $ | 32,153 | $ | 42,146 | $ | 24,603 | $ | 18,408 | $ | 14,189 | |||||
| Federal Funds/Overnight Funds | 1,150 | 2,356 | 0 | 5,446 | 0 | ||||||||||
| Bank Owned CDs | 1,319 | 1,319 | 1,319 | 1,319 | 1,322 | ||||||||||
| Investment Securities | 157,261 | 165,203 | 182,569 | 169,924 | 166,632 | ||||||||||
| Total Current Assets | $ | 191,883 | $ | 211,024 | $ | 208,491 | $ | 195,097 | $ | 182,143 | |||||
|
Loans |
|||||||||||||||
| Construction and Development | $ | 14,400 | $ | 31,184 | $ | 31,475 | $ | 34,157 | $ | 43,113 | |||||
| Commercial Real Estate | 138,550 | 133,191 | 138,931 | 134,653 | 148,219 | ||||||||||
| Commercial Loans | 27,719 | 26,681 | 28,048 | 29,873 | 29,997 | ||||||||||
| Multi Family | 2,330 | 2,283 | 2,150 | 2,230 | 1,518 | ||||||||||
| Residential Mortgage | 89,760 | 87,001 | 92,973 | 92,346 | 88,357 | ||||||||||
| Consumer Loans | 14,086 | 3,304 | 5,738 | 3,361 | 2,143 | ||||||||||
| County/Municipal Loans | 2,791 | 2,771 | 2,511 | 2,480 | 2,459 | ||||||||||
| Loss Share Loans | 4,659 | 4,593 | 4,536 | 4,480 | 3,466 | ||||||||||
| Total Loans | $ | 294,132 | $ | 291,008 | $ | 306,362 | $ | 303,581 | $ | 319,272 | |||||
| Allowance for Loss | (2,813 | ) | (2,820 | ) | (3,028 | ) | (3,037 | ) | (3,060 | ) | |||||
| Net Loans | $ | 291,482 | $ | 288,188 | $ | 303,334 | $ | 300,544 | $ | 316,212 | |||||
| OREO | 2,194 | 2,760 | 2,697 | 879 | 720 | ||||||||||
| FDIC Indemnification | 112 | 112 | 112 | 112 | 0 | ||||||||||
| BOLI | 21,227 | 21,359 | 21,490 | 21,640 | 21,773 | ||||||||||
| Fixed Assets, net | 11,868 | 9,915 | 10,166 | 9,970 | 9,733 | ||||||||||
| Intangible Assets | 326 | 242 | 197 | 152 | 126 | ||||||||||
| Other Assets | 15,867 | 11,754 | 13,228 | 12,880 | 13,365 | ||||||||||
| Total Assets | $ | 534,959 | $ | 545,354 | $ | 559,715 | $ | 541,274 | $ | 544,072 | |||||
| Liabilities & Stockholders' Equity | |||||||||||||||
| Liabilities | |||||||||||||||
| Deposits | |||||||||||||||
| DDAs | $ | 93,150 | $ | 99,906 | $ | 95,714 | $ | 97,587 | $ | 88,768 | |||||
| Interest Bearing Demand | 58,723 | 73,555 | 76,198 | 81,262 | 64,684 | ||||||||||
| Celebration Checking | 105,514 | 102,368 | 105,247 | 105,358 | 101,474 | ||||||||||
| Money Market Accts | 29,869 | 29,699 | 29,673 | 30,402 | 47,286 | ||||||||||
| Savings | 44,703 | 43,147 | 44,030 | 43,862 | 44,139 | ||||||||||
| CDs Less Than $100k | 61,548 | 59,273 | 57,827 | 57,600 | 57,349 | ||||||||||
| CDs Greater than $100k | 36,234 | 36,723 | 37,232 | 30,477 | 34,795 | ||||||||||
| Total Deposits | $ | 428,929 | $ | 444,671 | $ | 445,921 | $ | 446,548 | $ | 438,495 | |||||
| Other Liabilities | 2,223 | 7,067 | 1,639 | 1,874 | 2,115 | ||||||||||
| Net Borrowings (Wholesale Funding) | 40,000 | 40,000 | 59,666 | 40,000 | 50,641 | ||||||||||
| Total Liabilities | $ | 471,152 | $ | 491,738 | $ | 507,226 | $ | 488,422 | $ | 491,251 | |||||
|
Total Equity |
63,807 | 53,616 | 52,489 | 52,852 | 52,821 | ||||||||||
| Total Liabilities & Stockholders' Equity | $ | 534,959 | $ | 545,354 | $ | 559,715 | $ | 541,274 | $ | 544,072 | |||||
| Ratios | ||||||||||
| 3Q 2017 | 4Q 2017 | 1Q 2018 | 2Q 2018 | 3Q 2018 | ||||||
| ROAA | 1.40 | % | -0.84 | % | 0.58 | % | 0.59 | % | 0.81 | % |
| ROAE | 11.86 | % | -7.81 | % | 6.03 | % | 6.12 | % | 8.35 | % |
| NPAs/Assets (Core) | 0.91 | % | 1.05 | % | 0.99 | % | 1.25 | % | 1.11 | % |
| Est. T1 Leverage (Bank) | 10.00 | % | 8.27 | % | 8.42 | % | 8.56 | % | 8.94 | % |
| Total Common Equiv. Shares | 8,410,332 | 8,413,372 | 8,413,372 | 8,413,372 | 8,421,992 | |||||
| NIM | 3.70 | % | 3.68 | % | 3.83 | % | 3.73 | % | 3.78 | % |
| Cost of Deposits | 0.23 | % | 0.24 | % | 0.24 | % | 0.25 | % | 0.33 | % |
| Loan/Deposit | 68.5 | % | 65.3 | % | 68.3 | % | 68.0 | % | 72.5 | % |
| Employees | 114 | 115 | 116 | 115 | 110 | |||||
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