Thursday, 29 July 2021 05:58 GMT

SouthCrest Financial Group Reports Preliminary 2Q21 Earnings


( MENAFN - GlobeNewsWire - Nasdaq AT)LANTA, July 22, 2021 (GLOBE NEWSWIRE) -- Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.63 million or $0.22/share for the second quarter ended June 30, 2021. Excluding non-core items, primarily securities gains and deal related expenses, core earnings were $1.39 million, or $0.19/share.

“Once again, I am very proud of our team's dedication and discipline as we spent the second quarter preparing to close our previously announced merger with Colony Bankcorp (NASDAQ:CBAN). We continue to grow more excited about the potential of the combined companies and the opportunities on the horizon.”

“Like much of the industry SouthCrest experienced meaningful loan payoffs during 2Q21 which caused balances to be lower than budgeted. With that said, the loan pipeline grew progressively through the quarter, even with the distraction of the merger, which speaks to the quality of our lending and credit staff. The deposit balances grew 6% annualized from 1Q21 with nearly all of the growth occurring in one of our checking products.”

“Finally, let me say thank you to all the employees, customers and shareholders who have put their trust in the management team at SouthCrest. We look forward to serving you in the future as part of Colony Bank!”

On July 14, 2021, at the annual shareholder meeting, the shareholders of SouthCrest Financial Group approved the Merger Proposal with and into Colony Bankcorp, with 5,578,598 votes for the merger, 28,290 votes against the merger, and 416 votes abstaining. Of the shares entitled to vote, 74% of the shares were voted in favor of the merger.

Total assets increased to $717.8 million vs. $707.1 million in 1Q21 and $622.4 million in the second quarter of 2020. Loan balances declined by $8 million during the quarter, driven primarily by unscheduled pay downs, finishing at $305.9 million vs. $314.2 million at the end of 1Q21. The ALLL also remained flat at $3.7MM but increased as a percentage of loans to 1.21% from 1.18% in the prior quarter.

Interest income increased slightly from 1Q21 as an increase in investment securities income offset the lower average loan balances. Cash levels remained slightly elevated from pre-Covid standards. Interest expense remained level during the first quarter, even with significantly increased average balances. Provision expense remained at zero for the quarter.

Non-interest income remained slightly below Covid-like levels (excluding the $647,000 of securities gains in 2Q21), and it is meaningfully down as a percentage of assets, with NSF and overdraft fees driving the majority of the differential. Other non-interest expense categories remained relatively flat from 4Q20. Non-interest expense was elevated with deal expenses beginning to be recognized during the quarter. Excluding these, expenses would have been effectively flat with 1Q21.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.22% from 8.27% as result of the continued balance sheet growth during the quarter. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $8.13 per share, up from $7.64 as of 1Q21. 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 $0.73/share vs. $0.38/share at the end of 1Q21. The current fully converted share count at the end of the quarter was 7.402 million shares, comprised of 5.764 million common shares and 1.639 million preferred shares.

Asset quality ratios remained solid, with NPAs to assets up slightly to 0.59% vs. 0.46% in 1Q21. As of June 30, 2021 the Company's OREO balances increased to about $70,000 to $516,000, consisting of a handful of residential properties.

ABOUT SOUTHCREST

SouthCrest Financial Group, Inc. is a bank holding company with over $700 million 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)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Interest Income
Loans
Construction and Development $758 $781 $761 $665 $584
Commercial Real Estate 1,974 1,846 1,824 1,845 1,939
Commercial Loans 567 542 547 494 417
Multi Family 21 25 65 65 59
Residential Mortgage 750 743 636 681 609
Consumer Loans 29 28 29 26 23
County/Municipal Loans 41 50 21 20 19
Loss Share Loans 37 33 29 26 26
Investment Securities
Federal Funds/Overnight Funds $6 $8 $15 $10 $10
Bank Owned CDs 0 0 0 0 0
Investment Securities 1,393 1,425 1,494 1,622 1,799
Total Interest Income $5,576 $5,481 $5,420 $5,453 $5,486
Total Interest Expense $741 $702 $678 $678 $673
Net Interest Income $4,835 $4,779 $4,742 $4,775 $4,813
Provision for Loan Losses 450 0 0 0 0
Net Interest Income after Loan Losses $4,385 $4,779 $4,742 $4,775 $4,813
Other Income
Service Charges on Deposits $132 $130 $128 $103 $122
NSF/Overdraft Fees 158 213 231 190 179
Other Service Charges 71 78 73 76 82
ATM/Billpay/DR Card Income 277 298 306 326 354
Other Income 664 1,441 207 1,011 863
Total Other Income $1,303 $2,160 $946 $1,707 $1,600
Non-Interest Expense
Salaries, Other Comp (+ FAS123R) $1,711 $1,985 $2,140 $1,924 $1,961
Employee Benefits 341 276 523 367 377
Occupancy & FF & E Expense 506 475 474 463 466
Professional Fees 143 197 235 232 426
Data Processing 385 353 362 389 526
Other Expense 661 672 665 754 674
Total Noninterest Expenses $3,747 $3,958 $4,400 $4,130 $4,430
Pre-Tax Income (Loss) $1,941 $2,981 $1,288 $2,352 $1,983
Income Taxes 316 580 160 447 357
Net Income $1,625 $2,401 $1,127 $1,905 $1,626


Balance Sheet ($000s, Unaudited)
Assets Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
Current Assets
Cash & Due from Bank $22,520 $39,600 $81,969 $42,699 $46,579
Federal Funds/Overnight Funds 7,873 10,101 4,192 15,720 5,224
Bank Owned CDs 0 0 0 0 0
Investment Securities 218,680 222,913 265,602 297,307 324,461
Total Current Assets $249,072 $272,614 $352,484 $355,726 $376,265
Loans
Construction and Development $64,320 $65,675 $54,631 $50,360 $49,063
Commercial Real Estate 139,407 134,986 140,558 155,014 158,272
Commercial Loans 56,860 55,327 47,556 38,430 34,175
Multi Family 1,590 1,714 6,346 6,191 5,340
Residential Mortgage 66,810 62,672 59,856 55,262 50,211
Consumer Loans 2,472 1,868 13,908 5,228 5,231
County/Municipal Loans 4,851 1,990 1,982 1,849 1,841
Loss Share Loans 2,315 2,152 1,848 1,828 1,801
Total Loans $338,625 $326,383 $326,684 $314,162 $305,936
Allowance for Loss (3,984) (3,705) (3,705) (3,713) (3,696)
Net Loans $334,641 $322,678 $322,979 $310,449 $302,239
OREO 447 447 447 447 516
FDIC Indemnification 0 0 0 0 0
BOLI 22,737 22,872 23,009 23,140 23,291
Fixed Assets, net 8,697 8,540 8,581 8,568 8,409
Intangible Assets 68 64 1,089 1,060 1,032
Other Assets 6,731 7,030 6,501 7,681 5,999
Total Assets $622,383 $634,245 $715,090 $707,073 $717,751
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs $114,554 $118,082 $130,268 $131,767 $133,798
Interest Bearing Demand 96,141 95,732 128,477 116,667 119,657
Celebration Checking 111,421 114,657 132,372 141,369 145,646
Money Market Accts 38,650 43,746 44,427 52,640 50,645
Savings 47,674 48,928 51,953 57,099 59,621
CDs Less Than $100k 52,709 51,735 58,452 57,323 57,323
CDs Greater than $100k 47,049 43,612 49,715 50,767 50,690
Total Deposits $508,198 $516,491 $595,664 $607,631 $616,486
Other Liabilities 2,184 2,772 2,285 4,285 2,232
Net Borrowings (Wholesale Funding) 50,546 52,258 52,263 37,611 37,732
Total Liabilities $560,918 $571,522 $650,212 $649,527 $656,450
Total Equity 61,465 62,723 64,878 57,546 61,301
Total Liabilities & Stockholders' Equity $622,393 $634,245 $715,090 $707,073 $717,751


Ratios
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
ROAA 1.05% 1.53% 0.69% 1.09% 0.91%
ROAE 10.87% 16.88% 6.79% 11.62% 10.14%
NPAs/Assets 0.71% 0.59% 0.55% 0.46% 0.59%
Est. T1 Leverage (Bank) 8.99% 9.41% 9.08% 8.27% 8.22%
Total Common Shares 5,786,288 5,761,439 5,761,439 5,761,170 5,763,846
Total Preferred Shares 2,054,759 2,054,759 2,054,759 1,638,596 1,638,596
Total Common Equiv. Shares 7,841,047 7,816,198 7,816,198 7,399,766 7,402,442
NIM (Bank) 3.37% 3.22% 3.17% 2.99% 2.95%
Cost of Deposits (Bank) 0.46% 0.41% 0.36% 0.36% 0.38%
Loan/Deposit 66.6% 63.1% 54.8% 51.7% 49.5%
Employees 102 98 94 99 97
Loans in Atlanta MSA 79.1% 80.5% 77.8% 80.7% 81.3%

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