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SouthCrest Financial Group Reports Preliminary 3Q19 Earnings

ATLANTA, Oct. 24, 2019 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (PK) announced today that the Company reported preliminary earnings of $1.41 million or $0.18/share for the third quarter ended September 30, 2019.  Excluding securities gains, core earnings were $1.40 million, or $0.17/share.  This compares favorably with 3Q18 core EPS of $0.14/share, or $1.2 million. 

“The third quarter saw the continuation of the momentum that SouthCrest experienced in the first half of 2019.  Our team continued serving our clients, while keeping focused on the bottom line results that our shareholders expect.  As a result, and to appropriately manage the capital entrusted to us, we are announcing a special dividend of $0.50 per share to be paid on December 10, 2019 to all shareholders of record November 26, 2019.  This dividend is in addition to the standard quarterly dividend previously announced.”

“Finally, I’m pleased to report that the Company completed its previously announced $5 million share buyback program during the third quarter and is announcing a new share buyback program that positions us to repurchase up to $10 million of our common stock from today through 2021.”

Total assets were down to $523.7MM vs. $528.5MM in 2Q19 due to the share buyback, and vs. $544.7.3MM in 3Q18.  Loan growth was robust for the quarter with total loans outstanding finishing at $331.2 million vs. $316.0 million at the end of 2Q19 and $319.3 million in the year ago quarter.  The cost of funds was down 7bps due to a restructuring of FHLB borrowings, while the cost of deposits were up just 3bps from 2Q19. 

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank decreased to 9.65% as a result of the reduction in capital at the bank level to fund the share buyback.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.24 per share, up from $7.21 at the end of the second quarter.  This metric will continue to be influenced by OCI changes resulting from the swings in interest rates.  Currently, the impact to TBV by OCI is $0.12/share vs. $0.07/share as of 2Q19.    The current fully converted share count at the end of the quarter was 7.097 million shares, comprised of 5.849 million common shares and 2.058 million preferred shares.

Asset quality ratios improved slightly during the quarter, with NPAs to assets decreasing to 1.00% vs. 1.09% in 2Q19 (excluding former bank branches in OREO as of 2Q19).  As of September 30, 2019 the Company’s OREO balances were $0.

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.  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)    
  Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019  
 Interest Income            
Loans             
Construction and Development $560 $633   $609 $603 $636  
Commercial Real Estate   1,776   1,819     1,800   1,834  2,037  
Commercial Loans    454    401      458    429  446  
Multi Family    27    20     19   32  27  
Residential Mortgage     1,119    1,167      1,176    1,101  991  
Consumer Loans    51   48     41   41  41  
County/Municipal Loans   23   25     25   22  22  
Loss Share Loans   70   64     62   61  61  
Investment Securities            
Federal Funds/Overnight Funds $41 $65   $82 $88 $107  
Bank Owned CDs   7   7     7   6 6  
Investment Securities    1,181    1,187      1,168    1,111  950   
Total Interest Income $5,311 $5,436   $5,447 $5,329 $5,324  
             
Total Interest Expense $586 $728   $746 $759 $658  
Net Interest Income $4,725 $4,708   $4,701 $4,570 $4,666  
Provision for Loan Losses   46   0     0   0 39  
Net Interest Income after Loan
Losses
$4,679 $4,708   $4,701 $4,570 $4,627  
 
Other Income
           
Service Charges on Deposits $169 $164   $156 $153 $148  
NSF/Overdraft Fees    350    396      309    310  356  
Other Service Charges    62    65      65    70  78  
ATM/Billpay/DR Card Income    273    260      255    284  278  
Other Income   316   172     204   131 308  
Total Other Income $1,170 $1,057   $989 $947 $1,169  
Non-Interest Expense            
Salaries, Other Comp (+ FAS123R)  $1,889 $1,822   $1,849 $1,842 $1,856  
Employee Benefits   435   458     419   370 391  
Occupancy & FF&E Expense   621   588     621   570 564  
Professional Fees   305   136     170   274 152  
Data Processing   485   476     481   488 497  
Other Expense   693   724     649   613 505  
Total Noninterest Expenses $4,428 $4,204   $4,189 $4,157 $3,963  
Pre-Tax Income (Loss) $1,421 $1,561   $1,501 $1,360 $1,832  
Income Taxes   319   289     321   315 417  
Net Income $1,102 $1,272   $1,180 $1,045 $1,414  
 
Balance Sheet ($000s, Unaudited)

   
Assets Q3 2018
  Q4 2018
  Q1 2019
  Q2 2019
  Q3 2019
 
Current Assets          
Cash & Due from Bank $14,189   $20,168   $20,243   $30,930   $13,758  
Federal Funds/Overnight Funds   0     6,070     1,718     0     0  
Bank Owned CDs    1,322     1,322     1,322     1,322     1,069  
Investment Securities    166,632     162,936     161,561     141,013     139,907  
Total Current Assets $182,143   $190,496   $184,844   $173,265   $154,733  

Loans
         
Construction and Development $43,113   $40,420   $41,777   $40,040   $43,661  
Commercial Real Estate    148,219     144,329     144,178     153,527     155,397  
Commercial Loans    29,997     29,452     28,177     28,036     42,921  
Multi Family    1,518     1,466     1,438     1,970     1,939  
Residential Mortgage    88,357     94,199     92,405     85,064     80,391  
Consumer Loans   2,143     2,579     1,086     1,384     1,022  
County/Municipal Loans   2,459     2,438     2,301     2,037     2,037  
Loss Share Loans    3,466     4,030     3,975     3,933     3,859  
Total Loans $319,272   $318,914   $315,337   $315,991   $331,227  
Allowance for Loss   (3,060)     (3,042)     (2,968)     (3,022)     (3,073)  
Net Loans $316,212   $315,872   $312,369   $312,698   $328,154  
OREO   720     821     670     575     0  
FDIC Indemnification   0     0     0     0     0  
BOLI    21,773     21,909     22,039     22,186     22,323  
Fixed Assets, net   9,733     9,511     9,268     9,180     8,982  
Intangible Assets    126     116     107     100     96  
Other Assets   13,365     11,759     13,336     10,083     9,424  
Total Assets $544,072   $550,484   $542,633   $528,503   $523,711  

Liabilities & Stockholders'
Equity
         
Liabilities

         
Deposits          
DDAs $88,768   $06,821   $99,896   $98,229   $94,680  
Interest Bearing Demand   64,684     62,829     59,270     59,606     63,386  
Celebration Checking    101,474     99,694     102,617     100,950     97,277  
Money Market Accts    47,286     55,836     49,584     33,080     32,382  
Savings    44,139     43,574     44,152     44,407     44,383  
CDs Less Than $100k    57,349     56,864     56,664     56,256     56,543  
CDs Greater than $100k   34,795     38,007     39,867     38,854     41,846  
Total Deposits $438,495   $463,625   $452,054   $431,382   $430,497  


Other Liabilities   2,115    1,493   2,492   2,583   2,516  
Net Borrowings (Wholesale Funding)   50,641    30,000   30,000   33,795   33,429  
Total Liabilities $491,251  $495,118 $484,546 $467,760   $466,443  
Total Equity   52,821    55,366   58,087   60,743   57,268  
Total Liabilities &
Stockholders' Equity
$544,072  $550,484   $542,633   $528,503   $523,711  


 Ratios      
  Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
ROAA 0.81% 0.93% 0.86% 0.78% 1.09%
ROAE 8.34% 9.41% 8.32% 7.04% 10.10%
NPAs/Assets (Core) 1.11% 0.92% 0.92% 1.09% 1.00%
Est. T1 Leverage (Bank)  8.94% 9.16% 9.46% 9.95% 9.65%
Total Common Shares 6,198,632 6,198,632 6,198,632 6,360,273 5,849,101
Total Preferred Shares 2,223,360 2,223,360 2,223,360 2,061,719 2,058,121
Total Common Equiv. Shares 8,421,992 8,421,992 8,421,992 8,421,992 7,907,222
NIM (Bank) 3.78% 3.79% 3.86% 3.75% 3.91%
Cost of Deposits 0.33% 0.44% 0.49% 0.51% 0.54%
Loan/Deposit 72.5% 68.8% 69.5% 73.4% 76.9%
Employees 110 106 105 106 103
Loans in Atlanta MSA 65.8% 65.3% 66.0% 67.4%  76.8%