SouthCrest Financial Group Reports Preliminary 1Q21 Earnings

SouthCrest Financial Group, Inc.
·9 min read

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

%