SouthCrest Financial Group Reports Preliminary 1Q21 Earnings

Thursday, 22. April 2021 22:30

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 Estate1,856  1,974  1,846  1,824  1,845 
Commercial Loans553  567  542  547  494 
Multi Family21  21  25  65  65 
Residential Mortgage904  750  743  636  681 
Consumer Loans36  29  28  29  26 
County/Municipal Loans34  41  50  21  20 
Loss Share Loans46  37  33  29  26 
Investment Securities               
Federal Funds/Overnight Funds$129  $6  $8  $15  $10 
Bank Owned CDs0  0  0  0  0 
Investment Securities1,023  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 Losses150  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 Fees305  158  213  231  190 
Other Service Charges64  71  78  73  76 
ATM/Billpay/DR Card Income247  277  298  306  326 
Other Income238  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 Benefits412  341  276  523  367 
Occupancy & FF&E Expense503  506  475  474  463 
Professional Fees141  143  197  235  232 
Data Processing488  385  353  362  389 
Other Expense632  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 Taxes265  316  580  160  447 
Net Income$ 1,038  $ 1,625  $ 2,401  $ 1,127  $ 1,905 


Balance Sheet ($000s, Unaudited)
AssetsQ1 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 
ROAA0.75% 1.05% 1.53% 0.69% 1.09%
ROAE7.30% 10.87% 16.88% 6.79% 11.62%
NPAs/Assets0.80% 0.71% 0.59% 0.55% 0.46%
Est. T1 Leverage (Bank)9.62% 8.99% 9.41% 9.08% 8.27%
Total Common Shares5,832,793  5,786,288  5,761,439  5,761,439  5,761,170 
Total Preferred Shares2,054,759  2,054,759  2,054,759  2,054,759  1,638,596 
Total Common Equiv. Shares7,887,552  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/Deposit71.6% 66.6% 63.1% 54.8% 51.7%
Employees104  102  98  94  99 
Loans in Atlanta MSA78.2% 79.1% 80.5% 77.8% 80.7%

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