SouthCrest Financial Group Reports Preliminary 1Q21 Earnings

Rhea-AI Summary

SouthCrest Financial Group (SCSG:PK) reported preliminary earnings of $1.91 million or $0.25/share for Q1 2021. Excluding non-core items, core earnings were $1.34 million or $0.17/share. The company declared a quarterly dividend of $0.06/share, payable on May 20, 2021. Despite a decrease in total assets to $707.1 million, total deposits grew by nearly $12 million, exceeding $600 million. Loan balances declined by $12 million, attributed to a planned funding decrease.

Positive

• Total deposits grew by nearly $12 million, reaching over $600 million.
• Core earnings of $1.34 million, or $0.17/share, demonstrate operational resilience.
• Quarterly dividend of $0.06/share reflects shareholder value commitment.

Negative

• Total assets declined to $707.1 million from $715.1 million in Q4 2020.
• Loan balances decreased by $12 million, from $326.7 million in Q4 2020 to $314.2 million.
• Tier 1 Leverage ratio fell to 8.27% from 9.08%, indicating potential capital challenges.

ATLANTA, April 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 $1.91 million or $0.25/share for the first quarter ended March 31, 2021.  Excluding non-core items, primarily securities gains, core earnings were $1.34 million, or $0.17/share.

In addition, the Company is announcing the payment of its quarterly dividend of $0.06/share.  The dividend will be payable on May 20, 2021, to all shareholders of record on May 6, 2021.

“We consider the Company’s income performance this quarter to be reasonable given the loan pay downs that occurred.  I continue to be proud of our team’s performance in maintaining exceptional credit quality and expense discipline.”

“With the payoff of $15 million of wholesale FHLB borrowings during the quarter the total balance sheet size was down slightly, but total deposits grew by almost $12 million, clearing $600 million for the first time.”

Total assets declined to $707.1 million vs. $715.1 million in 4Q20 and $557.7 million in the first quarter of 2020.  Loan balances declined by $12 million during the quarter, primarily due to the planned decrease in a short term funding relationship with one client, finishing at $314.2 million vs. $326.7 million at the end of 4Q20 and $334.6 million in 1Q20.  The ALLL also remained flat at $3.7MM but increased as a percentage of loans to 1.18% from 1.14% in the prior quarter.    

Interest income remained effectively flat with 4Q20 as an increase in investment securities income offset the lower average loan balances.  Cash levels remained slightly elevated from pre-Covid standards, but management expects to continue to improve this over the next few quarters.  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 returned to Covid-like levels (excluding the $816,000 of securities gains in 4Q20), with NSF and overdraft fees declining by 18% from 4Q20 and 38% over the prior year.  Other non-interest expense categories remained relatively flat from 4Q20.  Non-interest expense were lower from 4Q20 with core expenses running at a $16.1MM annualized rate in 1Q21.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 8.27% from 9.08% as a result of the repurchase of over 420,000 common and preferred shares and significant average balance sheet growth during the quarter.  On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $7.64 per share, up from $7.09 as of 1Q20 but down from $8.17 at the end of 2020.  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 $0.38/share vs. $0.96/share at the end of 4Q20.  The current fully converted share count at the end of the quarter was 7.400 million shares, comprised of 5.761 million common shares and 1.639 million preferred shares.

Asset quality ratios continued a multi-quarter trend of improvement even with the COVID economic environment.  Loan deferrals remained flat with 4Q20 and NPAs to assets declined to 0.46% vs. 0.55% in 4Q20.  As of March 31, 2021 the Company’s OREO balances remained $447,000, consisting of one residential property.

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)
	Q1 2020				Q2 2020				Q3 2020				Q4 2020				Q1 2021
Interest Income
Loans
Construction and Development	$	744			$	758			$	781			$	761			$	665
Commercial Real Estate	1,856				1,974				1,846				1,824				1,845
Commercial Loans	553				567				542				547				494
Multi Family	21				21				25				65				65
Residential Mortgage	904				750				743				636				681
Consumer Loans	36				29				28				29				26
County/Municipal Loans	34				41				50				21				20
Loss Share Loans	46				37				33				29				26
Investment Securities
Federal Funds/Overnight Funds	$	129			$	6			$	8			$	15			$	10
Bank Owned CDs	0				0				0				0				0
Investment Securities	1,023				1,393				1,425				1,494				1,622
Total Interest Income	$	5,346			$	5,576			$	5,481			$	5,420			$	5,453
Total Interest Expense	$	769			$	741			$	702			$	678			$	678
Net Interest Income	$	4,577			$	4,835			$	4,779			$	4,742			$	4,775
Provision for Loan Losses	150				450				0				0				0
Net Interest Income after Loan Losses	$	4,427			$	4,385			$	4,779			$	4,742			$	4,775
Other Income
Service Charges on Deposits	$	138			$	132			$	130			$	128			$	103
NSF/Overdraft Fees	305				158				213				231				190
Other Service Charges	64				71				78				73				76
ATM/Billpay/DR Card Income	247				277				298				306				326
Other Income	238				664				1,441				207				1,011
Total Other Income	$	992			$	1,303			$	2,160			$	946			$	1,707
Non-Interest Expense
Salaries, Other Comp (+ FAS123R)	$	1,940			$	1,711			$	1,985			$	2,140			$	1,924
Employee Benefits	412				341				276				523				367
Occupancy & FF&E Expense	503				506				475				474				463
Professional Fees	141				143				197				235				232
Data Processing	488				385				353				362				389
Other Expense	632				661				672				665				754
Total Noninterest Expenses	$	4,116			$	3,747			$	3,958			$	4,400			$	4,130
Pre-Tax Income (Loss)	$	1,303			$	1,941			$	2,981			$	1,288			$	2,352
Income Taxes	265				316				580				160				447
Net Income	$	1,038			$	1,625			$	2,401			$	1,127			$	1,905

Balance Sheet ($000s, Unaudited)
Assets	Q1 2020							Q2 2020									Q3 2020						Q4 2020						Q1 2021
Current Assets
Cash & Due from Bank	$	19,845						$	22,520								$	39,600					$	81,969					$	42,699
Federal Funds/Overnight Funds		0							7,873									10,101						4,192						15,720
Bank Owned CDs		0							0									0						0						0
Investment Securities		184,377							218,680									222,913						265,602						297,307
Total Current Assets	$	204,222						$	249,072								$	272,614					$	352,484					$	355,726
Loans
Construction and Development	$	56,430						$	64,320								$	65,675					$	54,631					$	50,360
Commercial Real Estate		142,610							139,407									134,986						140,558						155,014
Commercial Loans		53,383							56,860									55,327						47,556						38,430
Multi Family		1,601							1,590									1,714						6,346						6,191
Residential Mortgage		73,778							66,810									62,672						59,856						55,262
Consumer Loans		2,144							2,472									1,868						13,908						5,228
County/Municipal Loans		3,732							4,851									1,990						1,982						1,849
Loss Share Loans		2,451							2,315									2,152						1,848						1,828
Total Loans	$	336,129						$	338,625								$	326,383					$	326,684					$	314,162
Allowance for Loss		(3,184				)			(3,984						)			(3,705			)			(3,705			)			(3,713	)
Net Loans	$	332,946						$	334,641								$	322,678					$	322,979					$	310,449
OREO		529							447									447						447						447
FDIC Indemnification		0							0									0						0						0
BOLI		22,583							22,737									22,872						23,009						23,140
Fixed Assets, net		8,705							8,697									8,540						8,581						8,568
Intangible Assets		80							68									64						1,089						1,060
Other Assets		8,604							6,731									7,030						6,501						7,681
Total Assets	$	577,669						$	622,383								$	634,245					$	715,090					$	707,073
Liabilities & Stockholders' Equity
Liabilities
Deposits
DDAs	$	96,517						$	114,554								$	118,082					$	130,268					$	131,767
Interest Bearing Demand		85,746							96,141									95,732						128,477						116,667
Celebration Checking		103,718							111,421									114,657						132,372						141,369
Money Market Accts		37,693							38,650									43,746						44,427						52,640
Savings		44,516							47,674									48,928						51,953						57,099
CDs Less Than $100k		53,616							52,709									51,735						58,452						57,323
CDs Greater than $100k		47,259							47,049									43,612						49,715						50,767
Total Deposits	$	469,064						$	508,198								$	516,491					$	595,664					$	607,631

Other Liabilities		2,415				2,184				2,772				2,285				4,285
Net Borrowings (Wholesale Funding)		50,228				50,546				52,258				52,263				37,611
Total Liabilities	$	521,708			$	560,918			$	571,522			$	650,212			$	649,527
Total Equity		55,961				61,465				62,723				64,878				57,546
Total Liabilities & Stockholders' Equity	$	577,669			$	622,393			$	634,245			$	715,090			$	707,073

Ratios
	Q1 2020			Q2 2020			Q3 2020			Q4 2020			Q1 2021
ROAA	0.75	%		1.05	%		1.53	%		0.69	%		1.09	%
ROAE	7.30	%		10.87	%		16.88	%		6.79	%		11.62	%
NPAs/Assets	0.80	%		0.71	%		0.59	%		0.55	%		0.46	%
Est. T1 Leverage (Bank)	9.62	%		8.99	%		9.41	%		9.08	%		8.27	%
Total Common Shares	5,832,793			5,786,288			5,761,439			5,761,439			5,761,170
Total Preferred Shares	2,054,759			2,054,759			2,054,759			2,054,759			1,638,596
Total Common Equiv. Shares	7,887,552			7,841,047			7,816,198			7,816,198			7,399,766
NIM (Bank)	3.65	%		3.37	%		3.22	%		3.17	%		2.99	%
Cost of Deposits (Bank)	0.54	%		0.46	%		0.41	%		0.36	%		0.36	%
Loan/Deposit	71.6	%		66.6	%		63.1	%		54.8	%		51.7	%
Employees	104			102			98			94			99
Loans in Atlanta MSA	78.2	%		79.1	%		80.5	%		77.8	%		80.7	%

FAQ

What were SouthCrest Financial Group's earnings for Q1 2021?

SouthCrest Financial Group reported preliminary earnings of $1.91 million, or $0.25/share for Q1 2021.

What dividend did SouthCrest Financial Group announce in April 2021?

The company announced a quarterly dividend of $0.06/share, payable on May 20, 2021.

How did total deposits perform for SouthCrest Financial Group in Q1 2021?

Total deposits grew by almost $12 million, exceeding $600 million for the first time.

What was the status of SouthCrest Financial Group's loan balances in Q1 2021?

Loan balances decreased by $12 million, finishing at $314.2 million as of March 31, 2021.

What is the Tier 1 Leverage ratio for SouthCrest Financial Group as of Q1 2021?

The Tier 1 Leverage ratio declined to 8.27% from 9.08% in the previous quarter.