ATLANTA, July 20, 2017 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary net income of $1.02M or $0.12/share for the second quarter ended June 30, 2017.
“As planned, both SouthCrest Bank and SouthCrest Financial Group are now operating out of our new headquarters in midtown Atlanta, and we intend for our loan and deposit growth in the core Atlanta market to grow substantially,” said Schmitt. “Now with our four locations in and around Atlanta, we will focus strategically on having 50% of our total assets and 25% of our deposits in what we consider the core 13 counties at the center of the MSA.
“As of the end of June, we had 37% of our loans and 12% of our deposits in these counties. We are on track for planned future growth,” Schmitt explained. “These will be the metrics we will use to track the success of our Atlanta growth initiative.
“Tangible book value grew to $7.41/share, up over $0.20 from the end of March. Total loans grew 6.5% year over year and 9.5% on a linked quarter annualized (LQA) basis to $300 million. During the quarter, we closed on the sale of a small credit card portfolio that benefitted the quarter by approximately $160,000 after tax, or $0.02/share, making core earnings $0.10/share.
“As is the norm for SouthCrest due to seasonality, deposits declined slightly in the second quarter from the first quarter, and are down 2.8% from 2Q16. This is primarily due to the strategic decisions made regarding locations and fees that occurred in 2016. This has generally been the magnitude of the decline on a year over year basis for the past few quarters, between 2-3%,” Schmitt explained.
“We have regulatory approval to close the sale of our two Alabama branches, which is now scheduled for September. The process has required more time to complete than anticipated, but ultimately we believe this strategic move is a net positive for SouthCrest’s shareholders, and will be beneficial for our Alabama based customers.”
On a core basis, expenses for the quarter were $4.4 million, flat with the past few quarters, but down over 5% from 2Q16.
Loan activity remained improved from the end of the first quarter through this writing, and management expects continued growth in 2H17. In addition, the Company continues to recruit in the core Metro area for top quality lenders to increase the percentage of total assets to hit the 50% target.
The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank increased to 9.31%. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.41 per share. This metric will continue to be influenced by OCI changes resulting from the swings in interest rates. Currently, the negative impact to TBV by OCI is just $0.02/share. The current fully converted share count at the end of the quarter is 8.40 million shares. In addition, the Company still retains a small deferred tax asset valuation allowance related to state taxes that totals approximately $0.06/fully converted share.
Asset quality improved further during the quarter, with NPAs to assets declining to 0.76% from 0.84%, excluding the $2.1 million of former bank buildings that are projected to be sold over the next several quarters in OREO. Including these buildings, 2Q17 NPAs/total assets were 1.16% of assets vs. 1.23% in 1Q17. Excluding the impact of the Bank buildings in OREO, OREO balances were down to a cycle low of $86,000.
SouthCrest Financial Group, Inc. is a $540 million asset bank holding company headquartered in Atlanta, GA. The company operates a 10 branch network throughout Georgia and Alabama 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.
Chief Financial Officer
|Statement of Operations ($000s, Unaudited)|
|Construction and Development||$||143||$||153||$||150||$||197||$||198|
|Commercial Real Estate||1,479||1,537||1,645||1,691||1,737|
|Loss Share Loans||132||132||119||111||33|
|Federal Funds/Overnight Funds||$||27||$||42||$||28||$||58||$||77|
|Bank Owned CDs||8||6||6||5||6|
|Total Interest Income||$||4,685||$||4,556||$||4,703||$||4,705||$||4,633|
|Total Interest Expense||$||267||$||246||$||247||$||249||$||250|
|Net Interest Income||$||4,417||$||4,311||$||4,456||$||4,456||$||4,383|
|Provision for Loan Losses||0||0||94||106||70|
|Net Interest Income after Loan Losses||$||4,417||$||4,311||$||4,362||$||4,349||$||4,314|
|Service Charges on Deposits||$||215||$||245||$||228||$||216||$||209|
|Other Service Charges||79||96||83||75||78|
|ATM/Billpay/DR Card Income||336||302||303||296||307|
|Total Other Income||$||1,098||$||1,560||$||768||$||1,526||$||1,626|
|Salaries, Other Comp (+ FAS123R)||$||1,772||$||1,705||$||2,014||$||1,799||$||1,874|
|Occupancy & FF&E Expense||848||860||764||739||765|
|OREO/Credit related Exp.||36||36||36||50||(27)|
|Total Noninterest Expenses||$||4,673||$||4,917||$||4,687||$||4,480||$||4,430|
|Pre-Tax Income (Loss)||$||842||$||954||$||443||$||1,395||$||1,510|
|Balance Sheet ($000s, Unaudited) |
|Cash & Due from Bank||$||34,838||$||31,268||$||33,015||$||41,302||$||31,852|
|Federal Funds/Overnight Funds||569||0||4,299||6,688||5,355|
|Bank Owned CDs||1,716||1,218||1,069||1,069||1,069|
|Total Current Assets||$||198,300||$||215,100||$||215,106||$||201,642||$||183,016|
|Construction and Development||$||11,285||$||9,776||$||15,159||$||12,486||$||15,604|
|Commercial Real Estate||119,419||121,609||138,155||140,003||143,883|
|Loss Share Loans||7,689||7,589||7,123||6,626||5,755|
|Allowance for Loss||(2,817)||(2,701)||(2,766)||(2,797)||(2,875)|
|Fixed Assets, net||$||17,362||$||16,967||$||13,717||$||13,429||$||13,406|
|Liabilities & Stockholders' Equity|
|Interest Bearing Demand||55,248||54,552||65,654||63,949||63,481|
|Money Market Accts||33,858||33,956||32,271||27,942||28,689|
|CDs Less Than $100k||76,301||73,964||72,091||70,020||67,892|
|CDs Greater than $100k||40,585||39,832||38,922||39,966||38,952|
|Net Borrowings (Wholesale Funding)||-||317||-||-||-|
|Total Liabilities & Stockholders' Equity||$||551,557||$||546,345||$||562,833||$||546,584||$||533,708|
|Ratios||2Q 2016||3Q 2016*||4Q 2016*||1Q 2017*||2Q 2017*|
|Est. T1 Leverage |
|Total Common Equiv. Shares||8,380,337||8,380,337||8,389,954||8,389,954||8,395,696|
|Cost of Funds||0.22%||0.20%||0.20%||0.20%||0.21%|
*3Q2016 and later ROAA and ROAE are after tax vs. pre-tax prior to 2Q 2016. 2Q 2016 includes DTA valuation allowance recovery.
Contact: Andrew Bowen, APR email@example.com 404-822-3309
Source:SouthCrest Financial Group, Inc.