PEACHTREE CITY, Ga., May 6, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK), announced today that the company reported a preliminary net loss for the first quarter of 2015 of $375,000. “There were several moving pieces that impacted our first quarter results. We exited the non-single family residential portion of our loss share agreement that resulted in $279,000 of expense and we completed an additional personnel downsizing that resulted in severance expenses of nearly $170,000. We also completed a sale of nearly $4 million of non-performing TDR loans and exited some additional OREO which was offset by securities gains. Core earnings for the quarter excluding these items was $74,000.”
As previously announced, the Company also redeemed $8.0 million of its Series A Preferred Stock (the former TARP shares) during the quarter from cash on hand.
Loan growth was somewhat weaker than expected, especially early in the quarter, with total loans declining approximately $4 million excluding the loans sold. However activity reaccelerated later in the quarter and Management expects to report solid loan growth in 2Q15.
The loan sale occurred in two tranches, a 1-4 family pool and a CRE pool and while it formally closed in April, the financial impact is recorded in 1Q. Including all related expenses, the Company realized a loss of approximately 16% of the loan book balance.
The Company has continued to focus on expenses, with core non-interest expense (excluding severance, loss share and consolidation expenses) down $280,000 in 1Q15 from 4Q14. Management expects this number to continue to trend downwards in 2Q.
The estimated Tier 1 Leverage ratio at the end of the quarter was 8.78%. On a fully converted basis (including the conversion of all preferred equity) TBV/share was negatively impacted by the TARP dividends, although the redemption will lower future dividends by approximately $180,000/quarter, and ended the quarter at $5.60 per share. The current fully converted share count at the end of the quarter is 8.380 million shares. In addition, the company still retains a deferred tax asset valuation allowance that totals approximately $11.5 million ($1.37/fully converted share).
SouthCrest maintains a single family residential loss sharing agreement, related to the purchase of a small failed bank in 2010. The non-residential portfolio loss share agreement expired at the end of the first quarter. The indemnification asset is now down to $1.1 million from $1.5 million at the end of 4Q14 and $4.6 million as of 1Q14, and should decline meaningfully in 2Q15.
Asset quality improved significantly as a result of the previously mentioned troubled loan sale. The non-performing assets/total assets (excluding loss share assets) ratio moved down 1.68%, the lowest level since the beginning of the recession.
SouthCrest Financial Group, Inc. is a $570 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 12 branch network throughout Georgia and Alabama through its subsidiary bank, SouthCrest Bank, N.A. The bank provides retail and commercial banking services, SBA lending, mortgage banking, and online banking services.
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.
|Statement of Operations ($000s, Unaudited)|
|Construction and Development||$||215||$||231||$||262||$||216||$||219|
|Commercial Real Estate||1,081||1,173||1,297||1,371||1,275|
|Loss Share Loans||310||236||200||194||169|
|Federal Funds/Overnight Funds||$||66||$||44||$||20||$||35||$||122|
|Bank Owned CDs||8||7||6||4||8|
|Total Interest Income||$||4,494||$||4,836||$||4,845||$||4,844||$||4,649|
|Total Interest Expense||$||327||$||334||$||348||$||347||$||329|
|Net Interest Income||$||4,167||$||4,502||$||4,497||$||4,497||$||4,320|
|Provision for Loan Losses||-||-||75||95||224|
|Net Interest Income after Loan Losses||$||4,167||$||4,502||$||4,422||$||4,402||$||4,096|
|Service Charges on Deposits||$||108||$||105||$||102||$||106||$||99|
|Other Service Charges||89||91||96||91||82|
|ATM/Billpay/DR Card Income||394||414||403||402||408|
|Gain on Sale of loans||364||581||566||476||467|
|Total Other Income||$||3,157||$||3,770||$||3,002||$||2,472||$||2,319|
|Salaries, Other Comp (+ FAS123R)||$||2,930||$||2,924||$||2,720||$||2,529||$||2,610|
|Occupancy & FF& E Expense||857||888||920||1,023||935|
|OREO and Credit related Exp.||295||223||-35||287||230|
|Total Noninterest Expenses||$||8,282||$||9,137||$||7,364||$||6,848||$||6,291|
|Pre-Tax Income (Loss)||$||(958||)||$||(865||)||$||60||$||26||$||(375||)|
|Balance Sheet ($000s, Unaudited)|
|Cash & Due from Bank||$||27,766||$||26,083||$||18,238||$||16,991||$||34,459|
|Federal Funds/Overnight Funds||75,795||31,083||50,260||34,182||17,067|
|Bank Owned CDs||3,762||2,965||2,231||2,974||1,814|
|Mortgage Loans Held for Sale||7,548||13,343||5,376||932||3,872|
|Total Current Assets||$||258,092||$||239,656||$||241,076||$||245,943||$||246,076|
|Construction and Development||$||17,344||$||16,791||$||13,489||$||15,187||$||15,316|
|Commercial Real Estate||85,158||96,664||105,664||104,493||102,720|
|Loss Share Loans||13,957||12,844||12,407||12,447||10,837|
|Allowance for Loss||(4,294||)||(3,914||)||(3,723||)||(3,675||)||(3,110||)|
|Fixed Assets, net||19,314||19,509||19,503||19,255||18,978|
|Liabilities & Stockholders' Equity|
|Interest Bearing Demand||52,320||51,018||54,661||64,178||61,685|
|Money Market Accts||53,658||57,056||49,594||44,434||41,871|
|CDs Less Than $100k||104,808||102,512||98,984||94,923||91,545|
|CDs Greater than $100k||57,230||55,634||53,502||51,685||50,060|
|Net Borrowings (Wholesale Funding)||-||900||-||-||-|
|Total Liabilities & Stockholders' Equity||$||566,161||$||562,682||$||568,187||$||575,369||$||566,189|
|1Q 2014||2Q 2014||3Q 2014||4Q 2014||1Q 2015|
|Tier 1 Leverage||10.97||%||10.80||%||10.78||%||10.05||%||8.78||%|
|Total Common Equiv. Shares||8,380,337||8,380,337||8,380,337||8,380,337||8,380,337|
|Cost of Funds||0.27||%||0.27||%||0.28||%||0.28||%||0.26||%|
Andy Borrmann Chief Financial Officer 678.734.3505
Source:SouthCrest Financial Group, Inc.