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SouthCrest Financial Group Reports Preliminary 2Q15 Results

PEACHTREE CITY, Ga., July 24, 2015 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (OTCBB:SCSG) announced today that the company reported preliminary net income for the second quarter of 2015 of $479,000. “We are happy to announce earnings of nearly half a million dollars for the second quarter. While these are the best results the company has had on a core basis since prior to the financial crisis, we continue to strive for increased loan balances and cost efficiencies. We have cut non-interest expenses by over $3 million per year over the past six months, and expect to achieve similar additional savings over the next 12 months. Our focus has been on right-sizing our institution after consolidation last March. This has been a difficult but necessary process to achieve appropriate returns on equity and assets and long term shareholder value.”

Loan growth improved during the quarter with $5 million of organic loan growth (7% linked quarter annualized) augmented with the purchase of a $14 million 1-4 family mortgage portfolio, made up of whole loans, purchased servicing released, located in our home markets of Georgia and Alabama. Organic loan growth remained steady during the quarter and management expects to report similar results in 3Q.

Expense control remains a primary focus for management. During the quarter the company completed a core processing conversion that will drive $1.0 million in additional annualized technology savings phasing in over the next three quarters. We also expect significant savings in occupancy expenses to occur by 2Q16 along with other core non-interest expense declines.

The estimated Tier 1 Leverage ratio at the end of the quarter was 8.81%. On a fully converted basis (including the conversion of all preferred equity) TBV/share ended the quarter at $5.58 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).

Asset quality remained stable with 1Q15 at 1.68% NPAs/total assets.

SouthCrest Financial Group, Inc. is a $550 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 ($000s, Unaudited)
2014 2015
Q2Q3Q4Q1Q2
Interest Income
Loans
Construction and Development$ 231 $262 $216 $219 $ 231
Commercial Real Estate 1,173 1,297 1,371 1,274 1,374
Commercial Loans 162 214 319 245 261
Multi Family 13 14 17 20 26
Residential Mortgage 1,573 1,518 1,408 1,354 1,464
Consumer Loans 343 305 267 241 212
County/Municipal Loans 32 34 42 36 43
Loss Share Loans 236 200 194 169 324
Investment Securities
Federal Funds/Overnight Funds$ 44 $ 20 $ 35 $ 22 $ 16
Bank Owned CDs 7 6 4 8 7
Investment Securities 1,022 975 971 1,058 960
Total Interest Income $ 4,836 $ 4,845 $ 4,844 $ 4,649 $ 4,920
Total Interest Expense $ 334 $ 348 $ 347 $ 329 $ 309
Net Interest Income $ 4,502 $ 4,497 $ 4,497 $ 4,320 $ 4,611
Provision for Loan Losses - 75 95 239 200
Net Interest Income after Loan Losses $ 4,502 $ 4,422 $ 4,402 $ 4,081 $ 4,411


Other Income
Service Charges on Deposits$ 105 $ 102 $ 106 $ 99 $ 99
NSF/Overdraft Fees 575 626 603 480 513
Other Service Charges 91 96 91 82 95
ATM/Billpay/DR Card Income 414 403 402 408 392
Other Income 2,585 1,775 1,270 1,250 1,017
Total Other Income $ 3,770 $ 3,002 $ 2,472 $ 2,319 $ 2,116
Non-Interest Expense
Salaries, Other Comp (+ FAS123R) $ 2,924 $ 2,720 $ 2,529 $ 2,610 $ 2,492
Employee Benefits 719 571 432 672 440
Occupancy & FF& E Expense 888 920 1,023 935 1,004
Professional Fees 469 419 293 229 249
Data Processing 301 295 306 282 221
OREO and Credit related Exp. 223 -35 287 230 67
Other Expense 3,613 2,474 1,978 1,333 1,575
Total Noninterest Expenses $ 9,137 $ 7,364 $ 6,848 $ 6,291 $ 6,048
Pre-Tax Income (Loss) $ (865)$ 60 $ 26 $ (400)$ 479
Income Taxes - - - - -
Net Income$ (865)$ 60 $ 26 $ (375)$ 479
Balance Sheet ($000s, Unaudited)
2014 2015
AssetsQ2
Q3
Q4
Q1
Q2
Current Assets
Cash & Due from Bank$ 26,083 $ 18,238 $ 16,991 $ 34,459 $ 22,335
Federal Funds/Overnight Funds 31,083 50,260 34,182 17,067 10,736
Bank Owned CDs 2,965 2,231 2,974 1,814 1,814
Investment Securities 166,182 164,971 190,864 188,864 179,276
Mortgage Loans Held for Sale 13,343 5,376 932 3,872 1,869
Total Current Assets$ 239,656 $ 241,076 $ 245,943 $ 246,076 $ 216,030
Loans
Construction and Development$ 16,791 $ 13,489 $ 15,187 $ 15,316 $ 16,484
Commercial Real Estate 96,664 105,664 104,493 102,720 106,485
Commercial Loans 14,573 16,817 17,399 17,792 18,635
Multi Family 1,142 1,112 1,589 1,553 2,186
Residential Mortgage 109,916 107,234 110,347 105,691 116,889
Consumer Loans 16,125 15,345 14,215 12,872 11,780
County/Municipal Loans 4,190 5,110 4,343 5,210 7,626
Loss Share Loans 12,844 12,407 12,447 10,837 10,815
Total Loans$ 272,245 $ 277,178 $ 280,020 $ 272,010 $ 290,903
Allowance for Loss (3,914) (3,723) (3,675) (3,110) (3,267)
Net Loans$ 268,331 $ 273,455 $ 276,345 $ 268,895 $ 287,635
OREO 4,932 5,320 4,473 4,284 3,552
FDIC Indemnification 3,139 1,685 1,537 1,089 502
BOLI 19,442 19,574 19,710 19,834 19,995
Fixed Assets, net 19,509 19,503 $ 19,255 $ 18,978 $ 18,720
Intangible Assets 747 657 583 573 535
Other Assets 6,926 6,917 7,523 6,819 6,552
Total Assets$ 562,682 $ 568,187 $ 575,369 $ 566,189 $ 553,695


Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs$ 123,672 $ 122,374 $ 125,699 $ 121,381 $ 120,659
Interest Bearing Demand 51,018 54,661 64,178 61,685 53,979
Celebration Checking 34,977 54,072 64,998 75,844 82,246
Money Market Accts 57,056 49,594 44,434 41,871 42,004
Savings 64,134 63,001 59,251 59,859 57,887
CDs Less Than $100k 102,512 98,984 94,923 91,545 88,158
CDs Greater than $100k 55,634 53,502 51,685 50,060 49,697
Total Deposits$ 489,003 $ 496,188 $ 505,168 $ 502,244 $ 494,630


Other Liabilities 11,263 10,695 9,361 11,363 6,684
Net Borrowings (Wholesale Funding) 900 - - - -
Total Liabilities$ 501,166 $ 506,883 $ 514,529 $ 513,607 $ 501,314
Total Equity 61,516 61,304 60,840 52,582 52,381
Total Liabilities & Stockholders' Equity$ 562,682 $ 568,187 $ 575,369 $ 566,189 $ 553,695


Ratios
2Q 20143Q 20144Q 20141Q 20152Q 2015
ROAA -0.67% 0.04% 0.02% -0.07% 0.34%
ROAE -6.00% 0.34% 0.17% -0.66% 3.65%
NPAs/Assets (Core) 1.90% 2.44% 1.92% 1.68% 1.68%
Tier 1 Leverage 10.80% 10.78% 10.05% 8.78% 8.81%
Total Common Equiv. Shares 8,380,337 8,380,337 8,380,337 8,380,337 8,380,337
NIM 3.67% 3.77% 3.68% 3.60% 3.81%
Cost of Funds 0.27% 0.28% 0.28% 0.26% 0.25%
Loan/Deposit 55.7% 55.9% 55.4% 54.5% 58.8%
Employees 221 190 187 172 170


Andy Borrmann Chief Financial Officer 678.734.3505

Source:SouthCrest Financial Group, Inc.