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SouthCrest Financial Group Reports Preliminary 1Q16 Earnings

PEACHTREE CITY, Ga., April 25, 2016 (GLOBE NEWSWIRE) -- Andrew Borrmann, Chief Financial Officer of SouthCrest Financial Group, Inc. (PinkSheets:SCSG) announced today that the company reported preliminary net income of $913,000 or $0.11/share. “The ongoing cost control initiatives continued to bear fruit with an expense run rate of $19.3 million/year in March vs. a run rate of just under $22 million/year in December. We continue to be confident with the Company’s earlier guidance of a 3Q16 run rate of under $18 million/year.” Borrmann continued, “The efforts of all our employees during this period of expense rationalization have been critical to the profitability that occurred in the first quarter. As a result this profitability improvement, we expect to reverse the valuation allowance on our deferred tax asset sometime in the next few months.”

Deposits fell during the first quarter, seasonally consistent with historical trends at SouthCrest, due to public funds relationships.

The estimated Tier 1 Leverage ratio at the end of the quarter was 8.94%. On a fully converted basis (including the conversion of all preferred equity) TBV/share ended the quarter at $5.75 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 $1.36/fully converted share.

Asset quality continued its multi-quarter improvement trend with 1Q16 NPAs/total assets declining by 22 basis points to 1.18%. This was primarily due to the sale of the Company’s largest single OREO property during the quarter. Other real estate owned declined by nearly 40% from 4Q15 and now stands at $1.5 million.

SouthCrest Financial Group, Inc. is a $555 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 a full suite of retail and commercial banking services, SBA lending, 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)
2015 2016
Q1
Q2
Q3
Q4
Q1
Interest Income
Loans
Construction and Development$219 $231 $261 $205 $205
Commercial Real Estate 1,274 1,374 1,483 1,512 1,451
Commercial Loans 245 261 301 275 277
Multi Family 20 26 29 27 25
Residential Mortgage 1,354 1,464 1,521 1,454 1,401
Consumer Loans 241 212 197 178 164
County/Municipal Loans 36 43 59 65 65
Loss Share Loans 169 324 214 140 116
Investment Securities
Federal Funds/Overnight Funds$ 22 $ 16 $ 11 $ 22 $ 38
Bank Owned CDs 8 7 7 8 7
Investment Securities 1,058 960 904 916 1030
Total Interest Income $ 4,646 $ 4,918 $ 4,987 $ 4,803 $ 4,779
Total Interest Expense $ 329 $ 309 $ 308 $ 302 $ 299
Net Interest Income $ 4,320 $ 4,611 $ 4,679 $ 4,501 $ 4,480
Provision for Loan Losses 239 200 0 150 50
Net Interest Income after Loan Losses $ 4,078 $ 4,409 $ 4,679 $ 4,351 $ 4,430
Other Income
Service Charges on Deposits$ 99 $ 99 $ 113 $ 110 $ 105
NSF/Overdraft Fees 480 513 543 525 475
Other Service Charges 82 95 78 93 74
ATM/Billpay/DR Card Income 408 392 352 370 293
Other Income 1,028 1,017 973 475 829
Total Other Income $ 2,097 $ 2,116 $ 2,059 $ 1,535 $ 1,776
Non-Interest Expense
Salaries, Other Comp (+ FAS123R) $ 2,610 $ 2,492 $ 2,419 $ 2,257 $ 2,006
Employee Benefits 672 440 424 645 591
Occupancy & FF&E Expense 935 1,004 1,020 919 933
Professional Fees 229 249 206 263 174
Data Processing 282 221 244 321 305
OREO and Credit related Exp. 230 67 156 146 41
Other Expense 1,613 1,575 1,608 1,409 1,243
Total Noninterest Expenses $ 6,571 $ 6,048 $ 6,077 $ 5,927 $ 5,293
Pre-Tax Income (Loss) $ (396)$ 477 $ 661 $ (36)$ 913
Income Taxes - - - - -
Net Income$ (396)$ 477 $ 661 $ (36)$ 913
Preferred Dividends$305 $125 $125 $125 $125
Balance Sheet ($000s, Unaudited)
2015
2016
Assets Q1
Q2
Q3
Q4
Q1
Current Assets
Cash & Due from Bank$ 34,459 $ 22,335 $ 20,355 $ 44,157 $ 30,427
Federal Funds/Overnight Funds 17,067 10,736 14,171 2,186 3,306
Bank Owned CDs 1,814 1,814 1,815 1,815 1,815
Investment Securities 188,864 179,276 145,247 174,998 191,905
Mortgage Loans Held for Sale 3,985 1,869 3,011 899 0
Total Current Assets$ 246,189 $ 216,030 $ 184,599 $ 224,055 $ 227,452
Loans
Construction and Development$ 15,218 $ 16,495 $ 16,165 $ 16,229 $ 13,692
Commercial Real Estate 102,069 106,549 119,888 118,780 116,175
Commercial Loans 17,679 18,646 21,236 21,246 21,296
Multi Family 1,543 2,187 2,152 2,117 1,450
Residential Mortgage 105,021 116,961 116,969 114,803 110,094
Consumer Loans 12,790 11,787 10,814 9,657 7,096
County/Municipal Loans 5,178 7,631 12,293 3,911 3,537
Loss Share Loans 10,837 10,815 10,345 9,543 9,360
Total Loans$ 270,334 $ 291,071 $ 309,862 $ 296,286 $ 282,700
Allowance for Loss (3,121) (3,263) (2,881) (3,052) (3,021)
Net Loans$ 267,213 $ 287,808 $ 306,981 $ 293,234 $ 279,679
OREO 4,284 3,552 3,331 2,421 1,500
FDIC Indemnification 1,089 503 498 474 419
BOLI 19,834 19,995 20,130 20,265 20,391
Fixed Assets, net$ 18,978 $ 18,720 $ 18,553 $ 18,214 $ 17,671
Intangible Assets 573 535 648 618 583
Other Assets 7,964 6,552 6,339 6,983 6,651
Total Assets$ 566,124 $ 553,695 $ 541,079 $ 566,264 $ 554,346
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs$ 121,381 $ 120,659 $ 114,345 $ 130,877 $ 119,343
Interest Bearing Demand 61,685 53,979 50,965 62,784 61,172
Celebration Checking 75,844 82,246 90,893 97,316 108,076
Money Market Accts 41,871 42,004 41,731 38,643 35,289
Savings 59,859 57,887 56,517 55,550 55,831
CDs Less Than $100k 91,545 88,158 84,510 81,930 79,221
CDs Greater than $100k 50,060 49,697 46,603 44,080 39,576
Total Deposits$ 502,245 $ 494,630 $ 485,564 $ 511,180 $ 498,508


Other Liabilities 11,363 6,684 2,414 2,690 1,988
Net Borrowings (Wholesale Funding) - - - - -
Total Liabilities$ 513,607 $ 501,314 $ 487,978 $ 513,870 $ 500,496
Total Equity 52,517 52,381 53,101 52,394 53,850
Total Liabilities & Stockholders' Equity$ 566,124 $ 553,695 $ 541,079 $ 566,264 $ 554,346


Ratios
1Q 2015
2Q 2015
3Q 2015
4Q 2015
1Q 2016
ROAA -0.07% 0.34% 0.48% -0.01% 0.66%
ROAE -0.66% 3.65% 5.01% -0.10% 6.80%
NPAs/Assets (Core) 1.68% 1.71% 1.68% 1.40% 1.18%
Tier 1 Leverage 8.78% 8.81% 9.12% 8.87% 8.94%
Total Common Equiv. Shares 8,380,337 8,380,337 8,380,337 8,380,337 8,380,337
NIM 3.60% 3.81% 3.76% 3.57% 3.61%
Cost of Funds 0.26% 0.25% 0.25% 0.24% 0.24%
Loan/Deposit 54.5% 58.8% 63.8% 57.9% 56.6%
Employees 172 170 163 153 129


Andy Borrmann Chief Financial Officer 678.734.3505

Source:SouthCrest Financial Group, Inc.