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SouthCrest Financial Group Reports Preliminary 4Q19 Earnings

ATLANTA, Jan. 22, 2020 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (PK) announced today that the Company reported preliminary earnings of $1.32 million or $0.17/share for the fourth quarter ended December 31, 2019. Excluding non-core expenses, core earnings were $1.48 million, or $0.19/share. This compares favorably with 4Q18 core EPS of $0.17/share, or $1.4 million. 

“We are excited as a team to be able to report another excellent quarter and full year of 2019. With core ROA at 1.0% for the year and the return of over $10 million to our shareholders, we consider this the most successful year in the Company’s history," said Schmitt. "Over the past two years the Company has returned over $16 million to our shareholders, through dividends and buybacks, which equates to almost $2/share. SouthCrest also continues to improve its penetration in the Atlanta MSA with 12% loan growth in the market during the year. We remain confident in the local economies we serve and believe that the credit quality of our loan portfolio will remain excellent for the foreseeable future."

“Finally, we are announcing our standard quarterly dividend of $0.05/share will be paid on February 14, 2020 to all shareholders of record January 30, 2020," added Schmitt.

Total assets increased to $556.0 million vs. $523.7 million in 3Q19, which is in line with standard seasonal growth, and vs. $550.5 million in 4Q18. Loan growth was a bit subdued for the quarter with total loans outstanding finishing at $334.5 million vs. $331.2 million at the end of 3Q19 and $318.9 million in the year ago quarter. The cost of funds was down 2bps due to a decline in the cost of deposits, which decreased by 1bps from 3Q19.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank decreased to 9.59% from 9.65% as of 3Q19 as a result of the increase in asset size. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $6.83 per share, down from $7.24 at the end of the third quarter. This was due to the payment of the regular and special dividends totaling $0.55/share during the quarter. 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 $0.9/share vs. $0.12/share at the end of 3Q19. The current fully converted share count at the end of the quarter was 7.888 million shares, comprised of 5.833 million common shares and 2.055 million preferred shares. Asset quality ratios improved slightly during the quarter, with NPAs to assets decreasing to 0.84% vs. 1.00% in 3Q19. As of December 31, 2019 the Company’s OREO balances consisted of one home carried at $497,000.

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. 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)    
  Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019  
 Interest Income            
Loans             
Construction and Development $633 $609 $603 $ 636 $ 669  
Commercial Real Estate   1,819   1,800   1,834    2,037    2,030  
Commercial Loans    401    458    429    446    645  
Multi Family    20   19   32    27    28  
Residential Mortgage     1,167    1,176    1,101    991   1,029  
Consumer Loans   48   41   41    41    34  
County/Municipal Loans   25   25   22    22    24  
Loss Share Loans   64   62   61    61    58  
Investment Securities            
Federal Funds/Overnight Funds $ 65 $ 82 $ 88 $ 107 $ 77  
Bank Owned CDs   7   7   6   6   2  
Investment Securities    1,187    1,168    1,111    950    996   
Total Interest Income $ 5,436 $ 5,447 $ 5,329 $ 5,324 $ 5,592  
             
Total Interest Expense $ 728 $ 746 $ 759 $ 658 $ 699  
Net Interest Income $ 4,708 $ 4,701 $ 4,570 $ 4,666 $ 4,893  
Provision for Loan Losses   0   0   0   39   0  
Net Interest Income after Loan Losses $ 4,708 $ 4,701 $ 4,570 $ 4,627 $ 4,893  
 Other Income            
Service Charges on Deposits $ 164 $ 156 $ 153 $ 148 $ 144  
NSF/Overdraft Fees    396    309    310    356    348  
Other Service Charges    65    65    70    78    95  
ATM/Billpay/DR Card Income    260    255    284    278    271  
Other Income   172   204   131   308   268  
Total Other Income $1,057 $989 $947 $1,169 $1,186  
Non-Interest Expense            
Salaries, Other Comp (+ FAS123R)  $ 1,822 $ 1,849 $ 1,842 $ 1,856 $ 2,140  
Employee Benefits   458   419   370   391   379  
Occupancy & FF&E Expense   588   621   570   564   529  
Professional Fees   136   170   274   152   149  
Data Processing   476   481   488   497   502  
Other Expense   724   649   613   505   667  
Total Noninterest Expenses $ 4,204 $ 4,189 $ 4,157 $ 3,963 $ 4,366  
Pre-Tax Income (Loss) $ 1,561 $ 1,501 $ 1,360 $ 1,832 $ 1,713  
Income Taxes   289   321   315   417   389  
Net Income $ 1,272 $ 1,180 $ 1,045 $ 1,414 $ 1,323  
 

Balance Sheet ($000s, Unaudited)
   


Assets
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Current Assets          
Cash & Due from Bank $20,168 $20,243 $30,930 $13,758 $38,555
Federal Funds/Overnight Funds   6,070   1,718   0   0   5,215
Bank Owned CDs   1,322   1,322   1,322   1,069   77
Investment Securities   162,936   161,561   141,013   139,907   139,880
Total Current Assets $190,496 $184,844 $173,265 $154,733 $183,727
 

Loans
         
Construction and Development $40,420 $41,777 $40,040 $43,661 $47,593
Commercial Real Estate   144,329   144,178   153,527   155,397   146,287
Commercial Loans   29,452   28,177   28,036   42,921   53,833
Multi Family   1,466   1,438   1,970   1,939   1,611
Residential Mortgage   94,199   92,405   85,064   80,391   77,772
Consumer Loans   2,579   1,086   1,384   1,022   830
County/Municipal Loans   2,438   2,301   2,037   2,037   3,109
Loss Share Loans   4,030   3,975   3,933   3,859   3,601
Total Loans $318,914 $315,337 $315,991 $331,227 $334,488
Allowance for Loss   (3,042)   (2,968)   (3,022)   (3,073)   (3,039)
Net Loans $315,872 $312,369 $312,698 $328,154 $331,596
OREO   821   670   575   0   497
FDIC Indemnification   0   0   0   0   0
BOLI   21,909   22,039   22,186   22,323   22,456
Fixed Assets, net   9,511   9,268   9,180   8,982   8,862
Intangible Assets   116   107   100   96   84
Other Assets   11,759   13,336   10,083   9,424   8,740
Total Assets $550,484 $542,633 $528,503 $523,711 $555,960


Liabilities & Stockholders' Equity
         
Liabilities          
Deposits          
DDAs $106,821 $99,896 $98,229 $94,680 $103,154
Interest Bearing Demand   62,829   59,270   59,606   63,386   87,685
Celebration Checking   99,694   102,617   100,950   97,277   98,558
Money Market Accts   55,836   49,584   33,080   32,382   33,888
Savings   43,574   44,152   44,407   44,383   44,370
CDs Less Than $100k   56,864   56,664   56,256   56,543   54,228
CDs Greater than $100k   38,007   39,867   38,854   41,846   43,404
Total Deposits $463,625 $452,054 $431,382 $430,497 $465,288


Other Liabilities 1,493 2,492 2,583 2,516 2,143
Net Borrowings (Wholesale Funding) 30,000 30,000 33,795 33,429 34,697
Total Liabilities 495,118 484,546 467,760 466,443 502,127
Total Equity 55,366 58,087 60,743 57,268 53,833
Total Liabilities & Stockholders' Equity 550,484 542,633 528,503 523,711 555,960


Ratios      
  Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
ROAA 0.93% 0.86% 0.78% 1.09% 0.98%
ROAE 9.41% 8.32% 7.04% 10.10% 9.52%
NPAs/Assets (Core) 0.92% 0.92% 1.09% 1.00% 0.84%
Est. T1 Leverage (Bank)  9.16% 9.46% 9.95% 9.65% 9.64%
Total Common Shares 6,198,632  6,198,632  6,360,273  5,849,101  5,832,793 
Total Preferred Shares 2,223,360  2,223,360  2,061,719  2,058,121  2,054,759 
Total Common Equiv.
Shares
8,421,992  8,421,992  8,421,992  7,907,222  7,887,552 
NIM (Bank) 3.79% 3.86% 3.75% 3.91% 3.97%
Cost of Deposits 0.44% 0.49% 0.51% 0.54% 0.53%
Loan/Deposit 68.8% 69.5% 73.4% 76.9% 73.8%
Employees 106  105  106  103  105 
Loans in Atlanta MSA 65.3% 66.0% 67.4%  76.8%  78.4%