PEACHTREE CITY, Ga., Feb. 5, 2014 (GLOBE NEWSWIRE) -- Kenneth H. Maloy, President and CEO of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the company reported preliminary results for the fourth quarter of 2013, and provided additional information regarding the consolidation of the Company's four banking charters. "We are currently right on schedule to consolidate into an OCC charter named SouthCrest Bank NA on February 28th," said Mr. Maloy. "Our teams are thrilled to have the opportunity to work more efficiently as one bank and pass that value on to our customers and shareholders. We're working hard at bringing the best we have to offer to every corner of our footprint."
During the quarter the Company produced a net loss of $2.3 million, of which $1.0 million was due to one-time expenses, the majority of which were related to the upcoming charter consolidation. There were also $0.3 million of OREO expense as the Company was able to exit its largest NPA, a $4.2 million shopping center, lowering the total NPA levels to 1.64% of total assets, the lowest level since 2Q08. Net interest income after provision for loan losses increased for the third quarter in a row. Core loans were effectively flat even though the company had a $6.0 million payoff in its low rate municipal lending area. Total assets at the end of the quarter were down 1.8% linked quarter annualized (LQA) to $559.3 million from 3Q13. "Our results are far from where they need to be," stated Mr. Maloy. "The underlying post provision net interest income and loan growth trends are beginning to show improvement, but we also have significant work to do on the expense side in the first half of 2014. Consolidation will be a huge step in that direction."
The deposit mix continued to improve, with total non-CD funding increasing to 67% in 4Q13 from 66% the prior quarter and 63% at the end of 2012, with total deposits declining slightly. Given the current loan to deposit ratio, the Company is maintaining at or below market deposit pricing at this time which has led to the decline in total deposits. The improvement in deposit mix and disciplined pricing continued to drive the cost of funds down. The total cost of funds in 4Q13 was just 0.29%, vs. 0.45% during 4Q12.
The estimated Tier 1 Leverage ratio at the end of the quarter was 11.02%, up from and 8.83% at the end of 2012 as a result of the capital raise that occurred in 3Q13. On a fully converted basis (including the conversion of all Series AAA Preferred and Series C Convertible Preferred equity) TBV/share ended the quarter at $5.93 per share. The current fully converted share count at the end of the quarter is 8.380 million shares.
The Company also continued to work through its FDIC loss share covered assets, with the net covered loan balance shrinking by 6% LQA. The FDIC Indemnification Asset declined by $892,000 or 12% from 3Q13 to 4Q13, and now stands at $6.4 million with approximately 5 quarters remaining on the commercial portfolio loss sharing agreement.
SouthCrest Financial Group, Inc. is a $560 million asset bank holding company headquartered in Peachtree City, Georgia. The company operates a 13 branch network throughout Georgia and Alabama through its four subsidiary banks: SouthCrest Bank, The First National Bank of Polk County, Peachtree Bank and Bank of Chickamauga. The banks provide retail and commercial banking services, mortgage banking, investment management, 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 (dollars in thousands) | 2013 | |||
| Q1 | Q2 | Q3 | Q4 | |
| Interest Income | ||||
| Loans | ||||
| Construction and Development | $201 | $199 | $213 | $186 |
| Commercial Real Estate | 974 | 1,012 | 1,004 | 1,058 |
| Commercial Loans | 155 | 151 | 156 | 175 |
| Multi Family | 18 | 16 | 19 | 14 |
| Residential Mortgage | 1,468 | 1,432 | 1,426 | 1,408 |
| Consumer Loans | 482 | 458 | 471 | 436 |
| SCM Loans | 110 | 100 | 84 | 72 |
| Loss Share Loans | 347 | 313 | 299 | 288 |
| Investment Securities | ||||
| Federal Funds/Overnight Funds | $80 | $80 | $74 | $59 |
| Bank Owned CDs | 14 | 13 | 13 | 14 |
| Investment Securities | 557 | 604 | 665 | 686 |
| Total Interest Income | $4,405 | $4,377 | $4,425 | $4,396 |
| Total Interest Expense | $484 | $436 | $397 | $357 |
| Net Interest Income | $3,922 | $3,941 | $4,028 | $4,039 |
| Provision for Loan Losses | 400 | -- | -- | -- |
| Net Interest Income after Loan Losses | $3,522 | $3,941 | $4,028 | $4,039 |
| Other Income | ||||
| Service Charges on Deposits | $122 | $112 | $112 | $109 |
| NSF/Overdraft Fees | 552 | 571 | 611 | 587 |
| Other Service Charges | 86 | 104 | 94 | 88 |
| ATM/Billpay/DR Card Income | 322 | 362 | 354 | 369 |
| Gain on Sale of loans | 415 | 322 | 159 | 295 |
| Other Income | 757 | 699 | 1,032 | 851 |
| Total Other Income | $2,254 | $2,170 | $2,362 | $2,299 |
| Non Interest Expense | ||||
| Salaries, Other Comp (+ FAS123R) | $2,623 | $2,560 | $2,838 | $3,061 |
| Employee Benefits | 658 | 524 | 574 | 628 |
| Occupancy & FF& E Expense | 676 | 760 | 757 | 852 |
| Professional Fees | 355 | 587 | 524 | 757 |
| Data Processing | 254 | 398 | 291 | 292 |
| OREO and Credit related Exp. | 451 | 178 | 293 | 276 |
| Other Expense | 1,847 | 1,886 | 2,052 | 2,746 |
| Total Noninterest Expenses | $6,864 | $6,893 | $7,329 | $8,612 |
| Pre-Tax Income (Loss) | $(1,088) | $(782) | $(939) | $(2,274) |
| Income Taxes | -- | -- | -- | -- |
| Net Loss | $(1,088) | $(782) | $(939) | $(2,274) |
| Balance Sheets (Dollars in Thousands) | ||||
| Assets | Q1 | Q2 | Q3 | Q4 |
| Current Assets | ||||
| Cash & Due from Bank | $16,468 | $15,412 | $29,665 | $24,467 |
| Federal Funds/Overnight Funds | 108,342 | 114,068 | 92,064 | 99,080 |
| Bank Owned CDs | 5,909 | 6,888 | 5,914 | 3,247 |
| Investment Securities | 116,360 | 113,784 | 122,132 | 123,685 |
| Mortgage Loans Held for Sale | 4,239 | 3,713 | 2,803 | 4,642 |
| Total Current Assets | $251,318 | $253,865 | $252,578 | $255,121 |
| Loans | ||||
| Construction and Development | $13,110 | $12,696 | $13,424 | $14,404 |
| Commercial Real Estate | 79,046 | 76,646 | 76,705 | 82,492 |
| Commercial Loans | 9,910 | 9,566 | 8,985 | 9,977 |
| Multi Family | 2,281 | 2,216 | 2,278 | 2,155 |
| Residential Mortgage | 103,762 | 102,786 | 104,186 | 105,496 |
| Consumer Loans | 20,735 | 19,916 | 20,464 | 19,352 |
| SCM Loans | 9,978 | 9,410 | 11,665 | 3,845 |
| Loss Share Loans | 14,670 | 14,372 | 13,622 | 13,426 |
| Total Loans | $253,492 | $247,608 | $251,329 | $251,147 |
| Allowance for Loss | (5,486) | (4,745) | (4,444) | (4,443) |
| Net Loans | $248,006 | $242,863 | $246,885 | $246,704 |
| Core Loans | $238,822 | $233,236 | $237,707 | $237,721 |
| OREO | $8,245 | $11,441 | $9,966 | $5,283 |
| FDIC Indemnification | 8,562 | 7,688 | 7,266 | 6,374 |
| BOLI | 18,725 | 18,886 | 19,021 | 19,156 |
| Fixed Assets, net | 17,224 | 17,200 | 18,742 | 18,617 |
| -- | -- | -- | -- | |
| Intangible Assets | 1,135 | 1,080 | 1,002 | 920 |
| Accrued Interest Receivable | -- | -- | -- | -- |
| Other Assets | 6,411 | 6,440 | 6,405 | 7,141 |
| Total Assets | $559,626 | $559,463 | $561,865 | $559,316 |
| Liabilities & Stockholders' Equity | ||||
| Liabilities | ||||
| Deposits | ||||
| DDAs | $114,063 | $119,096 | $115,614 | $127,477 |
| Interest Bearing Demand | 48,914 | 50,914 | 50,218 | 48,950 |
| Rewards Checking | 35,131 | 32,981 | 32,352 | 32,596 |
| Money Market Accts | 58,152 | 58,500 | 57,197 | 54,704 |
| Savings | 64,131 | 64,823 | 63,820 | 61,960 |
| CDs Less Than $100k | 120,310 | 116,326 | 112,421 | 107,989 |
| CDs Greater than $100k | 56,520 | 56,191 | 53,389 | 50,623 |
| Total Deposits | $497,221 | $498,831 | $485,011 | $484,299 |
| Other Liabilities | $9,642 | $10,053 | $10,289 | $11,576 |
| Net Borrowings (Wholesale Funding) | 275 | -- | 330 | -- |
| Total Liabilities | $507,138 | $508,884 | $495,630 | $495,875 |
| Total Equity | $52,488 | $50,579 | $66,235 | $63,441 |
| Total Liabilities & Stockholders' Equity | $559,626 | $559,463 | $561,865 | $559,316 |
| Ratios | ||||
| 1Q 2013 | 2Q 2013 | 3Q 2013 | 4Q 2013 | |
| ROAA | -0.79% | -0.56% | -0.67% | -1.62% |
| ROAE | -8.23% | -6.08% | -6.80% | -14.02% |
| NPAs/Assets (Core) | 2.72% | 2.27% | 2.31% | 1.64% |
| Tier 1 Leverage | 8.93% | 8.67% | 11.67% | 11.02% |
| Total Common Equiv. Shares | 4,914,991 | 4,914,991 | 8,380,337 | 8,380,337 |
| NIM | 3.27% | 3.23% | 3.38% | 3.36% |
| Cost of Funds | 0.39% | 0.35% | 0.32% | 0.29% |
| Loan/Deposit | 51.0% | 49.6% | 51.8% | 51.9% |
For more information, contact: Andy Borrmann, 678-734-3505 SVP Finance, SouthCrest Financial Group
