x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Georgia
|
58-2256460
|
(State
of
Incorporation)
|
(I.R.S.
Employer Identification
No.)
|
600
North Glynn Street, Suite B,
Fayetteville, Georgia
|
30214
|
(Address
of Principal Executive
Offices)
|
(Zip
Code)
|
Document
|
Parts
Into Which Incorporated
|
|
Annual
Report to Shareholders for the Year Ended December 31,
2006
|
Part
II
|
|
Proxy
Statement for the Annual Meeting of Shareholders to be held May 10,
2007
|
Part
III
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Page
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SIGNATURES | ||||
EXHIBIT INDEX |
ITEM 1. |
DESCRIPTION
OF BUSINESS
|
Market
|
Number of
Branches
|
Our Market
Deposits
|
Total
Market
Deposits
|
Ranking
|
Market Share
Percentage
(%)
|
|||||||||||
|
(Dollar
amounts in millions)
|
|||||||||||||||
Upson
|
|
|
|
|
|
|||||||||||
Fayette
County
|
1
|
$
|
6
|
$
|
1,793
|
15
|
0.3
|
%
|
||||||||
Meriwether
County
|
3
|
82
|
205
|
1
|
40.0
|
|||||||||||
Upson
County
|
2
|
157
|
355
|
1
|
44.1
|
|||||||||||
Upson
Total
|
6
|
245
|
2,353
|
4
|
10.4
|
|||||||||||
FNB
Polk
|
||||||||||||||||
Polk
County
|
3
|
145
|
384
|
1
|
37.8
|
|||||||||||
FNB
Polk Total
|
3
|
145
|
384
|
1
|
37.8
|
|||||||||||
Peachtree
|
||||||||||||||||
Chilton
County
|
2
|
54
|
374
|
4
|
14.5
|
|||||||||||
Peachtree
Total
|
2
|
54
|
374
|
4
|
14.5
|
|||||||||||
|
|
|
|
|
|
|||||||||||
SouthCrest
|
11
|
$
|
444
|
$
|
3,111
|
1
|
14.3
|
%
|
||||||||
|
|
|
|
|
|
·
|
acquiring
direct or indirect ownership or control of any voting shares of any
bank
if, after the acquisition, the bank holding company will directly
or
indirectly own or control more than 5% of the bank’s voting
shares;
|
·
|
acquiring
all or substantially all of the assets of any bank;
or
|
·
|
merging
or consolidating with any other bank holding
company.
|
·
|
the
bank holding company has registered securities under Section 12 of
the Securities Act of 1934; or
|
·
|
no
other person owns a greater percentage of that class of voting securities
immediately after the transaction.
|
·
|
banking
or managing or controlling banks;
and
|
·
|
any
activity that the Federal Reserve determines to be so closely related
to
banking as to be a proper incident to the business of
banking.
|
·
|
factoring
accounts receivable;
|
·
|
making,
acquiring, brokering or servicing loans and usual related
activities;
|
·
|
leasing
personal or real property;
|
·
|
operating
a non-bank depository institution, such as a savings
association;
|
·
|
trust
company functions;
|
·
|
financial
and investment advisory activities;
|
·
|
conducting
discount securities brokerage
activities;
|
·
|
underwriting
and dealing in government obligations and money market
instruments;
|
·
|
providing
specified management consulting and counseling
activities;
|
·
|
performing
selected data processing services and support
services;
|
·
|
acting
as agent or broker in selling credit life insurance and other types
of
insurance in connection with credit transactions;
and
|
·
|
performing
selected insurance underwriting
activities.
|
·
|
lending,
trust and other banking activities;
|
·
|
insuring,
guaranteeing or indemnifying against loss or harm, or providing and
issuing annuities and acting as principal, agent or broker for these
purposes, in any state;
|
·
|
providing
financial, investment or advisory
services;
|
·
|
issuing
or selling instruments representing interests in pools of assets
permissible for a bank to hold
directly;
|
·
|
underwriting,
dealing in or making a market in
securities;
|
·
|
other
activities that the Federal Reserve may determine to be so closely
related
to banking or managing or controlling banks as to be a proper incident
to
managing or controlling banks;
|
·
|
foreign
activities permitted outside of the United States if the Federal
Reserve
has determined them to be usual in connection with banking operations
abroad;
|
·
|
merchant
banking through securities or insurance affiliates;
and
|
·
|
insurance
company portfolio investments.
|
·
|
total
reported loans for construction, land development and other land
represent
100% or more of the institutions total capital,
or
|
·
|
total
commercial real estate loans represent 300% or more of the institution’s
total capital, and the outstanding balance of the institution’s commercial
real estate loan portfolio has increased by 50% or more during the
prior
36 months.
|
· |
Truth-In-Lending
Act, governing disclosures of credit terms to consumer borrowers;
|
· |
Home
Mortgage Disclosure Act of 1975, requiring financial institutions
to
provide information to enable the public and public officials to
determine
whether a financial institution is fulfilling its obligation to help
meet
the housing needs of the community it serves;
|
· |
Equal
Credit Opportunity Act, prohibiting discrimination on the basis of
race,
creed or other prohibited factors in extending
credit;
|
· |
Fair
Credit Reporting Act of 1978, as amended by the Fair and Accurate
Credit
Transactions Act, governing the use and provision of information
to credit
reporting agencies, certain identity theft protections, and certain
credit
and other disclosures;
|
· |
Fair
Debt Collection Act, governing the manner in which consumer debts
may be
collected by collection agencies;
|
· |
Soldiers’
and Sailors’ Civil Relief Act of 1940, as amended by the Servicemembers’
Civil Relief Act, governing the repayment terms of, and property
rights
underlying, secured obligations of persons currently on active duty
with
the United States military;
|
· |
Talent
Amendment in the 2007 Defense Authorization Act, establishing a 36%
annual
percentage rate ceiling, which includes a variety of charges including
late fees, for consumer loans to military service members and their
dependents; and
|
· |
rules
and regulations of the various federal banking regulators charged
with the
responsibility of implementing these federal
laws.
|
· |
Truth-In-Savings
Act, requiring certain disclosures for consumer deposit
accounts;
|
· |
Right
to Financial Privacy Act, which imposes a duty to maintain confidentiality
of consumer financial records and prescribes procedures for complying
with
administrative subpoenas of financial records;
|
· |
Electronic
Funds Transfer Act and Regulation E issued by the Federal Reserve
to
implement that act, which govern automatic deposits to and withdrawals
from deposit accounts and customers’ rights and liabilities arising from
the use of automated teller machines and other electronic banking
services; and
|
· |
rules
and regulations of the various federal banking regulators charged
with the
responsibility of implementing these federal
laws.
|
·
|
a
bank’s loans or extensions of credit to
affiliates;
|
·
|
a
bank’s investment in affiliates;
|
·
|
assets
a bank may purchase from affiliates, except for real and personal
property
exempted by the Federal Reserve;
|
·
|
loans
or extensions of credit made by a bank to third parties collateralized
by
the securities or obligations of affiliates;
and
|
·
|
a
bank’s guarantee, acceptance or letter of credit issued on behalf of an
affiliate.
|
·
|
raising
the coverage level for qualifying retirement accounts to $250,000,
subject
to future indexing;
|
·
|
the
FDIC and the National Credit Union Administration are authorized
to index
deposit insurance coverage for inflation, for standard accounts and
qualifying retirement accounts, every five years beginning April
1,
2007;
|
·
|
prohibiting
undercapitalized financial institutions from accepting employee benefit
plan deposits;
|
·
|
merging
the Bank Insurance Fund and Savings Association Insurance Fund into
a new
Deposit Insurance Fund (the DIF);
and
|
·
|
providing
credits to financial institutions that capitalized the FDIC prior
to 1996
to offset future assessment
premiums.
|
ITEM 1A. |
RISK
FACTORS
|
·
|
the
time and costs of evaluating new markets, hiring experienced local
management and opening new offices;
|
·
|
the
time lags between these activities and the generation of sufficient
assets
and deposits to support the costs of the expansion;
|
·
|
we
may not be able to finance an acquisition without diluting the interests
of our existing shareholders;
|
·
|
in
the event of an acquisition, costs or difficulties related to the
integration of our businesses may be greater than expected, and we
may
experience deposit attrition, customer loss or revenue loss that
is
greater than expected
|
·
|
the
diversion of our management’s attention to the negotiation of a
transaction may detract from their business productivity;
|
·
|
we
may enter into new markets where we lack experience; and
|
·
|
we
may introduce new products and services with which we have no prior
experience into our business.
|
ITEM 1B. |
UNRESOLVED
STAFF COMMENTS
|
ITEM 2. |
DESCRIPTION
OF PROPERTIES
|
ITEM 3. |
LEGAL
PROCEEDINGS
|
ITEM 4. |
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM 5. |
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY
SECURITIES
|
2006
|
2005
|
||||||||||||
High
|
Low
|
High
|
Low
|
||||||||||
First
Quarter
|
$
|
24.00
|
$
|
21.50
|
$
|
21.25
|
$
|
18.00
|
|||||
Second
Quarter
|
$
|
24.50
|
$
|
23.50
|
$
|
20.50
|
$
|
17.75
|
|||||
Third
Quarter
|
$
|
26.00
|
$
|
22.20
|
$
|
25.00
|
$
|
19.10
|
|||||
Fourth
Quarter
|
$
|
25.50
|
$
|
22.80
|
$
|
24.75
|
$
|
23.00
|
2006
|
2005
|
||||||||
First
Quarter
|
$
|
0.125
|
$
|
0.12
|
|||||
Second
Quarter
|
0.125
|
0.12
|
|||||||
Third
Quarter
|
0.125
|
0.12
|
|||||||
Fourth
Quarter
|
0.125
|
0.12
|
ITEM 6. |
SELECTED
FINANCIAL DATA
|
ITEM 7. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS
|
ITEM 7A. |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
FINANCIAL
STATEMENTS
|
|
|
|
|
Atlanta,
Georgia
February
18, 2005
|
ITEM 9. |
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS
AND PROCEDURES
|
ITEM 9B. |
OTHER
INFORMATION
|
ITEM 10. |
DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE
|
ITEM 11. |
EXECUTIVE
COMPENSATION
|
ITEM 12. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
Number
of securities to be issued upon exercise of outstanding
options
|
Weighted-average
exercise price of
outstanding
options
|
Number
of shares remaining available for future issuance under the Plan
(excludes
outstanding
options)
|
||||
Equity
compensation plans approved by security holders
|
191,400
|
$23.44
|
357,600
|
|||
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
|||
Total
|
191,400
|
$23.44
|
357,600
|
ITEM 13. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
|
ITEM 14. |
PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
|
ITEM 15. |
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
|
Number*
|
Exhibit
|
|
3.1
|
Articles
of Incorporation1
|
|
3.2
|
Amended
and Restated Bylaws9
|
|
3.3
|
Amendment
to Bylaws2
|
|
4.1
|
See
Exhibits 3.1, and 3.2 for provisions of the Articles of Incorporation
and
Bylaws defining rights of holders of the Common Stock
|
|
10.1
|
Lease
Contract, dated September 14, 1993, between Truitt A. Mallory and
Bank of
Upson9
|
|
10.2
|
Agreement
and Plan of Merger with Maplesville Bancorp3
|
|
10.3
|
Agreement
and Plan of Share Exchange with Bank of Chickamauga4
|
|
10.4*
|
Employment
Agreement with Daniel W. Brinks5
|
|
10.5*
|
Salary
Continuation Agreement with Daniel W. Brinks
|
|
10.6*
|
Joint
Beneficiary Designation Agreement with Daniel W. Brinks
|
|
10.7*
|
Employment
Agreement with Larry T. Kuglar13
|
|
10.8*
|
Salary
Continuation Agreement with Larry T. Kuglar
|
|
10.9*
|
Joint
Beneficiary Designation Agreement with Larry T. Kuglar
|
|
10.10*
|
Employment
Agreement with Douglas J. Hertha6
|
|
10.11*
|
Salary
Continuation Agreement with Douglas J. Hertha
|
|
10.12*
|
Joint
Beneficiary Designation Agreement with Douglas J.
Hertha
|
|
10.13*
|
Employment
Agreement with Harvey N. Clapp7
|
|
10.14*
|
Executive
Salary Continuation Agreement with Harvey N. Clapp15
|
*
|
Indicates
a compensatory plan or contract.
|
1 |
Incorporated
by reference to the Registration Statement on Form S-4 (Registration
No. 333-112845), as filed with the SEC on February 13,
2004.
|
2 |
Incorporated
by reference to the Current Report on Form 8-K dated October 31,
2006.
|
3 |
Incorporated
by reference to the Current Report on Form 8-K dated August 11,
2006.
|
4 |
Incorporated
by reference to the Current Report on Form 8-K dated February 23,
2007.
|
5 |
Incorporated
by reference to the Current Report on Form 8-K dated September
30,
2004.
|
6 |
Incorporated
by reference to the Current Report on Form 8-K dated February 15,
2005.
|
7 |
Incorporated
by reference to the Current Report on Form 8-K dated October 31,
2006.
|
Number*
|
Exhibit
|
|
10.15*
|
SouthCrest
Financial Group, Inc. 2005 Stock Incentive Plan8
|
|
10.16*
|
Form
of Incentive Stock Option under the SouthCrest Financial Group, Inc.
2005
Stock Incentive Plan
|
|
10.17*
|
Form
of Nonqualified Stock Option under the SouthCrest Financial Group,
Inc.
2005 Stock Incentive Plan
|
|
13.1
|
Excerpts
from the SouthCrest Financial Group, Inc. 2006 Annual Report to
Shareholders - Management’s Discussion and Analysis
|
|
13.2
|
Excerpts
from the SouthCrest Financial Group, Inc. 2006 Annual Report to
Shareholders - Consolidated Financial Statements
|
|
21.1
|
Subsidiaries
of the Registrant
|
|
23.1
|
Consent
of Dixon Hughes PLLC
|
|
23.2
|
Consent
of Mauldin & Jenkins, LLC
|
|
24.1
|
Power
of Attorney (appears on the signature pages to the Annual Report
on
Form 10-K)
|
|
31.1
|
Certification
of Principal Executive Officer pursuant to Rule 15d-14(a) of the
Exchange
Act
|
|
31.2
|
Certification
of Principal Financial Officer pursuant to Rule 15d-14(a) of the
Exchange
Act
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
8 |
Incorporated
by reference to the Annual Report on Form 10-KSB for the year ended
December 31, 2004.
|
SOUTHCREST
FINANCIAL GROUP, INC.
|
||
|
|
|
By: | /s/ Larry T. Kuglar | |
Larry T. Kuglar
Chief Executive Officer
|
||
Date: | April 2, 2007 |
Signature
|
Title
|
Date
|
||
/s/
Daniel W. Brinks
Daniel
W. Brinks
|
Chairman
and Chief Operating Officer
|
April
2, 2007
|
||
/s/
Larry T. Kuglar
Larry T. Kuglar |
Director,
President and Chief Executive Officer
(Principal
Executive Officer)
|
April
2, 2007
|
||
/s/
Douglas J. Hertha
Douglas
J. Hertha
|
Senior
Vice President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
April
2, 2007
|
Signature
|
Title
|
Date
|
||
/s/
Richard T. Bridges
Richard T. Bridges |
Director
|
April
2, 2007
|
||
/s/
Harvey N. Clapp
Harvey N. Clapp |
Director
|
April
2, 2007
|
||
/s/
Joan B. Cravey
Joan B. Cravey |
Director
|
April
2, 2007
|
||
/s/
Zack D. Cravey, Jr.
Zack D. Cravey, Jr. |
Director
|
April
2, 2007
|
||
/s/
Dr. Warren Patrick
Dr. Warren Patrick |
Director
|
April
2, 2007
|
||
/s/
Michael D. McRae
Michael D. McRae |
Director
|
April
2, 2007
|
||
/s/
Harold W. Wyatt, Jr.
Harold W. Wyatt, Jr. |
Director
|
April
2, 2007
|
Number*
|
Exhibit
|
|
3.1
|
Articles
of Incorporation1
|
|
3.2
|
Amended
and Restated Bylaws1
|
|
3.3
|
Amendment
to Bylaws2
|
|
4.1
|
See
Exhibits 3.1, and 3.2 for provisions of the Articles of Incorporation
and
Bylaws defining rights of holders of the Common Stock
|
|
10.1
|
Lease
Contract, dated September 14, 1993, between Truitt A. Mallory and
Bank of
Upson1
|
|
10.2
|
Agreement
and Plan of Merger with Maplesville Bancorp3
|
|
10.3
|
Agreement
and Plan of Share Exchange with Bank of Chickamauga4
|
|
10.4*
|
Employment
Agreement with Daniel W. Brinks5
|
|
10.5*
|
Salary
Continuation Agreement with Daniel W. Brinks
|
|
10.6*
|
Joint
Beneficiary Designation Agreement with Daniel W. Brinks
|
|
10.7*
|
Employment
Agreement with Larry T. Kuglar5
|
|
10.8*
|
Salary
Continuation Agreement with Larry T. Kuglar
|
|
10.9*
|
Joint
Beneficiary Designation Agreement with Larry T. Kuglar
|
|
10.10*
|
Employment
Agreement with Douglas J. Hertha6
|
|
10.11*
|
Salary
Continuation Agreement with Douglas J. Hertha
|
|
10.12*
|
Joint
Beneficiary Designation Agreement with Douglas J.
Hertha
|
|
10.13*
|
Employment
Agreement with Harvey N. Clapp7
|
|
10.14*
|
Executive
Salary Continuation Agreement with Harvey N. Clapp7
|
|
10.15*
|
SouthCrest
Financial Group, Inc. 2005 Stock Incentive Plan8
|
|
10.16*
|
Form
of Incentive Stock Option under the SouthCrest Financial Group, Inc.
2005
Stock Incentive Plan
|
|
10.17*
|
Form
of Nonqualified Stock Option under the SouthCrest Financial Group,
Inc.
2005 Stock Incentive Plan
|
|
13.1
|
Excerpts
from the SouthCrest Financial Group, Inc. 2006 Annual Report to
Shareholders - Management’s Discussion and Analysis
|
|
13.2
|
Excerpts
from the SouthCrest Financial Group, Inc. 2006 Annual Report to
Shareholders - Consolidated Financial Statements
|
|
21.1
|
Subsidiaries
of the Registrant
|
* |
Indicates
a compensatory plan or contract.
|
1
|
Incorporated
by reference to the Registration Statement on Form S-4 (Registration
No. 333-112845), as filed with the SEC on February 13,
2004.
|
2
|
Incorporated
by reference to the Current Report on Form 8-K dated October
31,
2006.
|
3
|
Incorporated
by reference to the Current Report on Form 8-K dated August 11,
2006.
|
4
|
Incorporated
by reference to the Current Report on Form 8-K dated February
23,
2007.
|
5
|
Incorporated
by reference to the Current Report on Form 8-K dated September
30,
2004.
|
6
|
Incorporated
by reference to the Current Report on Form 8-K dated February
15,
2005.
|
7
|
Incorporated
by reference to the Current Report on Form 8-K dated October
31,
2006.
|
8
|
Incorporated
by reference to the Annual Report on Form 10-KSB for the year
ended
December 31, 2004.
|
Number*
|
Exhibit
|
|
23.1
|
Consent
of Dixon Hughes PLLC
|
|
23.2
|
Consent
of Mauldin & Jenkins, LLC
|
|
24.1
|
Power
of Attorney (appears on the signature pages to the Annual Report
on
Form 10-K)
|
|
31.1
|
Certification
of Principal Executive Officer pursuant to Rule 15d-14(a) of the
Exchange
Act
|
|
31.2
|
Certification
of Principal Financial Officer pursuant to Rule 15d-14(a) of the
Exchange
Act
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|