ATLANTA, GA – 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.
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