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SouthCrest Financial Group Reports Preliminary 2Q21 Earnings

·9 min read

ATLANTA, July 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 $1.63 million or $0.22/share for the second quarter ended June 30, 2021. Excluding non-core items, primarily securities gains and deal related expenses, core earnings were $1.39 million, or $0.19/share.

“Once again, I am very proud of our team’s dedication and discipline as we spent the second quarter preparing to close our previously announced merger with Colony Bankcorp (NASDAQ:CBAN). We continue to grow more excited about the potential of the combined companies and the opportunities on the horizon.”

“Like much of the industry SouthCrest experienced meaningful loan payoffs during 2Q21 which caused balances to be lower than budgeted. With that said, the loan pipeline grew progressively through the quarter, even with the distraction of the merger, which speaks to the quality of our lending and credit staff. The deposit balances grew 6% annualized from 1Q21 with nearly all of the growth occurring in one of our checking products.”

“Finally, let me say thank you to all the employees, customers and shareholders who have put their trust in the management team at SouthCrest. We look forward to serving you in the future as part of Colony Bank!”

On July 14, 2021, at the annual shareholder meeting, the shareholders of SouthCrest Financial Group approved the Merger Proposal with and into Colony Bankcorp, with 5,578,598 votes for the merger, 28,290 votes against the merger, and 416 votes abstaining. Of the shares entitled to vote, 74% of the shares were voted in favor of the merger.

Total assets increased to $717.8 million vs. $707.1 million in 1Q21 and $622.4 million in the second quarter of 2020. Loan balances declined by $8 million during the quarter, driven primarily by unscheduled pay downs, finishing at $305.9 million vs. $314.2 million at the end of 1Q21. The ALLL also remained flat at $3.7MM but increased as a percentage of loans to 1.21% from 1.18% in the prior quarter.

Interest income increased slightly from 1Q21 as an increase in investment securities income offset the lower average loan balances. Cash levels remained slightly elevated from pre-Covid standards. 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 remained slightly below Covid-like levels (excluding the $647,000 of securities gains in 2Q21), and it is meaningfully down as a percentage of assets, with NSF and overdraft fees driving the majority of the differential. Other non-interest expense categories remained relatively flat from 4Q20. Non-interest expense was elevated with deal expenses beginning to be recognized during the quarter. Excluding these, expenses would have been effectively flat with 1Q21.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.22% from 8.27% as result of the continued balance sheet growth during the quarter. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $8.13 per share, up from $7.64 as of 1Q21. 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 $0.73/share vs. $0.38/share at the end of 1Q21. The current fully converted share count at the end of the quarter was 7.402 million shares, comprised of 5.764 million common shares and 1.639 million preferred shares.

Asset quality ratios remained solid, with NPAs to assets up slightly to 0.59% vs. 0.46% in 1Q21. As of June 30, 2021 the Company’s OREO balances increased to about $70,000 to $516,000, consisting of a handful of residential properties.

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)

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Interest Income

Loans

Construction and Development

$758

$781

$761

$665

$584

Commercial Real Estate

1,974

1,846

1,824

1,845

1,939

Commercial Loans

567

542

547

494

417

Multi Family

21

25

65

65

59

Residential Mortgage

750

743

636

681

609

Consumer Loans

29

28

29

26

23

County/Municipal Loans

41

50

21

20

19

Loss Share Loans

37

33

29

26

26

Investment Securities

Federal Funds/Overnight Funds

$6

$8

$15

$10

$10

Bank Owned CDs

0

0

0

0

0

Investment Securities

1,393

1,425

1,494

1,622

1,799

Total Interest Income

$5,576

$5,481

$5,420

$5,453

$5,486

Total Interest Expense

$741

$702

$678

$678

$673

Net Interest Income

$4,835

$4,779

$4,742

$4,775

$4,813

Provision for Loan Losses

450

0

0

0

0

Net Interest Income after Loan Losses

$4,385

$4,779

$4,742

$4,775

$4,813

Other Income

Service Charges on Deposits

$132

$130

$128

$103

$122

NSF/Overdraft Fees

158

213

231

190

179

Other Service Charges

71

78

73

76

82

ATM/Billpay/DR Card Income

277

298

306

326

354

Other Income

664

1,441

207

1,011

863

Total Other Income

$1,303

$2,160

$946

$1,707

$1,600

Non-Interest Expense

Salaries, Other Comp (+ FAS123R)

$1,711

$1,985

$2,140

$1,924

$1,961

Employee Benefits

341

276

523

367

377

Occupancy & FF&E Expense

506

475

474

463

466

Professional Fees

143

197

235

232

426

Data Processing

385

353

362

389

526

Other Expense

661

672

665

754

674

Total Noninterest Expenses

$3,747

$3,958

$4,400

$4,130

$4,430

Pre-Tax Income (Loss)

$1,941

$2,981

$1,288

$2,352

$1,983

Income Taxes

316

580

160

447

357

Net Income

$1,625

$2,401

$1,127

$1,905

$1,626


Balance Sheet ($000s, Unaudited)

Assets

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Current Assets

Cash & Due from Bank

$22,520

$39,600

$81,969

$42,699

$46,579

Federal Funds/Overnight Funds

7,873

10,101

4,192

15,720

5,224

Bank Owned CDs

0

0

0

0

0

Investment Securities

218,680

222,913

265,602

297,307

324,461

Total Current Assets

$249,072

$272,614

$352,484

$355,726

$376,265

Loans

Construction and Development

$64,320

$65,675

$54,631

$50,360

$49,063

Commercial Real Estate

139,407

134,986

140,558

155,014

158,272

Commercial Loans

56,860

55,327

47,556

38,430

34,175

Multi Family

1,590

1,714

6,346

6,191

5,340

Residential Mortgage

66,810

62,672

59,856

55,262

50,211

Consumer Loans

2,472

1,868

13,908

5,228

5,231

County/Municipal Loans

4,851

1,990

1,982

1,849

1,841

Loss Share Loans

2,315

2,152

1,848

1,828

1,801

Total Loans

$338,625

$326,383

$326,684

$314,162

$305,936

Allowance for Loss

(3,984)

(3,705)

(3,705)

(3,713)

(3,696)

Net Loans

$334,641

$322,678

$322,979

$310,449

$302,239

OREO

447

447

447

447

516

FDIC Indemnification

0

0

0

0

0

BOLI

22,737

22,872

23,009

23,140

23,291

Fixed Assets, net

8,697

8,540

8,581

8,568

8,409

Intangible Assets

68

64

1,089

1,060

1,032

Other Assets

6,731

7,030

6,501

7,681

5,999

Total Assets

$622,383

$634,245

$715,090

$707,073

$717,751

Liabilities & Stockholders' Equity

Liabilities

Deposits

DDAs

$114,554

$118,082

$130,268

$131,767

$133,798

Interest Bearing Demand

96,141

95,732

128,477

116,667

119,657

Celebration Checking

111,421

114,657

132,372

141,369

145,646

Money Market Accts

38,650

43,746

44,427

52,640

50,645

Savings

47,674

48,928

51,953

57,099

59,621

CDs Less Than $100k

52,709

51,735

58,452

57,323

57,323

CDs Greater than $100k

47,049

43,612

49,715

50,767

50,690

Total Deposits

$508,198

$516,491

$595,664

$607,631

$616,486

Other Liabilities

2,184

2,772

2,285

4,285

2,232

Net Borrowings (Wholesale Funding)

50,546

52,258

52,263

37,611

37,732

Total Liabilities

$560,918

$571,522

$650,212

$649,527

$656,450

Total Equity

61,465

62,723

64,878

57,546

61,301

Total Liabilities & Stockholders' Equity

$622,393

$634,245

$715,090

$707,073

$717,751


Ratios

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

ROAA

1.05%

1.53%

0.69%

1.09%

0.91%

ROAE

10.87%

16.88%

6.79%

11.62%

10.14%

NPAs/Assets

0.71%

0.59%

0.55%

0.46%

0.59%

Est. T1 Leverage (Bank)

8.99%

9.41%

9.08%

8.27%

8.22%

Total Common Shares

5,786,288

5,761,439

5,761,439

5,761,170

5,763,846

Total Preferred Shares

2,054,759

2,054,759

2,054,759

1,638,596

1,638,596

Total Common Equiv. Shares

7,841,047

7,816,198

7,816,198

7,399,766

7,402,442

NIM (Bank)

3.37%

3.22%

3.17%

2.99%

2.95%

Cost of Deposits (Bank)

0.46%

0.41%

0.36%

0.36%

0.38%

Loan/Deposit

66.6%

63.1%

54.8%

51.7%

49.5%

Employees

102

98

94

99

97

Loans in Atlanta MSA

79.1%

80.5%

77.8%

80.7%

81.3%