SouthCrest Financial : Reports Preliminary 4Q20 Earnings

ATLANTA, GA - Brian D. Schmitt, Chief Executive Officer of SouthCrest Financial Group, Inc. (SCSG:PK) announced today that the Company reported preliminary earnings of $1.13 million or $0.14/share for the fourth quarter ended December 31, 2020. Excluding non-core items, primarily deal related costs and severance, core earnings were $1.50 million, or $0.19/share.

In addition, the Company is announcing an increase in the quarterly dividend to $0.06/share. The dividend will be payable on February 18, 2021, to all shareholders of record on February 4, 2021.

'We would like to welcome the customers and team members from our branch purchase to the SouthCrest Bank family' Schmitt said. 'We are excited to partner with you and support your financial needs going forward. I'd also like to personally highlight the efforts of all of our personnel who worked tirelessly to successfully integrate the acquisition. The collaboration and creativity you have all shown during this transaction will benefit the Bank for years to come.'

'Financially, the acquisition and other efforts in 2020 has the Bank's ongoing strength and growth potential in the best position it has been in decades. The interest rate environment will be a challenge for the profitability of all banks for the foreseeable future, but we will continue to strive to maximize our opportunities and results against these headwinds for as long as they last.'

Total assets increased to $715.1 million vs. $634.2 million in 3Q20 and $556.0MM in the year ago quarter. Loan balances remained flat during the quarter, finishing at $326.7 million vs. $326.4 million at the end of 3Q20 and $334.6 million 4Q19. The ALLL also remained flat at $3.7MM (1.14% of loans) vs. $3.7MM (1.13% of loans, rounding difference) in the quarter.

Interest income declined 1.1% from 4Q20 due to lower average loan balances during the quarter and the resulting higher cash levels. Interest expense declined 3.3% during the quarter as well which led to an overall net interest income decrease of 0.8% or $38,000 versus the third quarter. During the fourth quarter, the cost of deposits declined by 5bps for the second quarter in a row to 0.36%. Provision expense remained at zero for the quarter.

Non-interest income increased from the prior quarter (excluding the $1.23MM of securities gains in 3Q20), with NSF and overdraft fees increasing by 8% as the primary driver, although these fees remain down 34% over the prior year. Non-interest expense increased due to some one time deal related expenses, severance and additional compensation related taxes. Excluding one-time items in both quarters, non-interest expense increased 1.0% vs 3Q20.

The estimated Tier 1 Leverage ratio at the end of the quarter for SouthCrest Bank declined to 9.08% from 9.41% as a result of the significant balance sheet growth during the quarter. On a fully converted basis (including the conversion of all preferred equity), TBV/share ended the quarter at $8.17 per share, up from $6.83 at the end of 2019 and $8.02 at the end of 3Q20. 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 $0.96/share vs. $0.09/share at the end of 4Q19 and $0.79/share as of 3Q20. The current fully converted share count at the end of the quarter was 7.816 million shares, comprised of 5.761 million common shares and 2.055 million preferred shares.

Asset quality ratios continued a multi-quarter trend of improvement even with the COVID economic environment. Loan deferrals remained flat with 3Q20 and NPAs to assets declined to 0.55% vs. 0.59% in 3Q20. As of December 31, 2020 the Company's OREO balances remained $447,000, from 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.

CONTACT
Andy Borrmann
Chief Financial Officer
678-734.3505

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