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SouthCrest Financial Group Reports Preliminary 2Q21 Earnings

ATLANTA, 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 2020Q3 2020Q4 2020Q1 2021Q2 2021
Interest Income      
Loans     
Construction and Development$758$781$761$665$584
Commercial Real Estate1,9741,8461,8241,8451,939
Commercial Loans567542547494417
Multi Family2125656559
Residential Mortgage750743636681609
Consumer Loans2928292623
County/Municipal Loans4150212019
Loss Share Loans3733292626
Investment Securities      
Federal Funds/Overnight Funds$6$8$15$10$10
Bank Owned CDs00000
Investment Securities1,3931,4251,4941,6221,799
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 Losses4500000
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 Fees158213231190179
Other Service Charges7178737682
ATM/Billpay/DR Card Income277298306326354
Other Income6641,4412071,011863
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 Benefits341276523367377
Occupancy & FF&E Expense506475474463466
Professional Fees143197235232426
Data Processing385353362389526
Other Expense661672665754674
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 Taxes316580160447357
Net Income $1,625 $2,401 $1,127 $1,905 $1,626


Balance Sheet ($000s, Unaudited)      
      
AssetsQ2 2020Q3 2020Q4 2020Q1 2021Q2 2021
Current Assets     
Cash & Due from Bank$22,520$39,600$81,969$42,699$46,579
Federal Funds/Overnight Funds7,87310,1014,19215,7205,224
Bank Owned CDs00000
Investment Securities218,680222,913265,602297,307324,461
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 Estate139,407134,986140,558155,014158,272
Commercial Loans56,86055,32747,55638,43034,175
Multi Family1,5901,7146,3466,1915,340
Residential Mortgage66,81062,67259,85655,26250,211
Consumer Loans2,4721,86813,9085,2285,231
County/Municipal Loans4,8511,9901,9821,8491,841
Loss Share Loans2,3152,1521,8481,8281,801
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
OREO447447447447516
FDIC Indemnification00000
BOLI22,73722,87223,00923,14023,291
Fixed Assets, net8,6978,5408,5818,5688,409
Intangible Assets68641,0891,0601,032
Other Assets6,7317,0306,5017,6815,999
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 Demand96,14195,732128,477116,667119,657
Celebration Checking111,421114,657132,372141,369145,646
Money Market Accts38,65043,74644,42752,64050,645
Savings47,67448,92851,95357,09959,621
CDs Less Than $100k52,70951,73558,45257,32357,323
CDs Greater than $100k47,04943,61249,71550,76750,690
Total Deposits$508,198$516,491$595,664$607,631$616,486
Other Liabilities2,1842,7722,2854,2852,232
Net Borrowings (Wholesale Funding)50,54652,25852,26337,61137,732
Total Liabilities$560,918$571,522$650,212$649,527$656,450
Total Equity61,46562,72364,87857,54661,301
Total Liabilities & Stockholders' Equity$622,393$634,245$715,090$707,073$717,751


Ratios   
 Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
ROAA1.05%1.53%0.69%1.09%0.91%
ROAE10.87%16.88%6.79%11.62%10.14%
NPAs/Assets0.71%0.59%0.55%0.46%0.59%
Est. T1 Leverage (Bank)8.99%9.41%9.08%8.27%8.22%
Total Common Shares5,786,2885,761,4395,761,4395,761,1705,763,846
Total Preferred Shares2,054,7592,054,7592,054,7591,638,5961,638,596
Total Common Equiv. Shares7,841,0477,816,1987,816,1987,399,7667,402,442
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/Deposit66.6%63.1%54.8%51.7%49.5%
Employees10298949997
Loans in Atlanta MSA79.1%80.5%77.8%80.7%81.3%
      

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