8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) February 9, 2006

SouthCrest Financial Group, Inc. 

(Exact Name of Registrant as Specified in its Charter)

Georgia	000-51287	58-2256460
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

600 North Glynn Street, Suite B, Fayetteville, GA	30214
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code (770) 461-2781

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operation and Financial Condition.

The purpose of this Current Report on Form 8-K is to file SouthCrest Financial Group, Inc.’s earnings release for the quarter and year ended December 31, 2005.

Item 9.01. Financial Statements and Exhibits.

99.1Press release dated February 8, 2006. (Furnished, but not “filed” for purposes of liability under Section 18 of the Securities Exchange Act of 1934, as amended.)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	SOUTHCREST FINANCIAL GROUP, INC.
Dated:     February 13, 2006	By:	/s/ Douglas J. Hertha
		Douglas J. Hertha
		Senior Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibit No. Description of Exhibit

99.1 Press Release dated February 9, 2006

EX-99.1

Exhibit 99.1

SouthCrest Financial Group, Inc. Announces Fourth Quarter Earnings

FAYETTEVILLE, GA, (February 9, 2006) - SouthCrest Financial Group, Inc. (SCSG) reported net income of $1,154,000 for the quarter ended December 31, 2005 compared to $1,172,000 for the same quarter a year ago. For the year ended December 31, 2005, net income was $4,844,000 compared to $3,857,000 for the same period in 2004. Most of the increase in net income for year compared to the prior year was the result of the Company’s merger with First Polk Bankshares, Inc. on September 30, 2004. Assets and liabilities, and results of operations for First Polk are only included in the balance sheets and income statements of the Company from the date of merger going forward. On a per share basis, results were $0.32 per share for the current quarter compared to $0.32 for the same period a year ago, and $1.36 per share for the year ended December 31, 2005 compared to $1.52 for the year ended December 31, 2004. Reductions in earnings per share are mostly due to dilution resulting from increased number of shares resulting from the merger with First Polk. Current quarter results include recognized loss on disposal of equipment of $184,000, or $114,000 net of tax. This represents $0.03 per share.

Return on average assets was 1.03% for the current quarter compared to 1.13% for the same period in 2004, and 1.13% for the current year compared to 1.32% for 2004. Return on average equity was 8.63% for the quarter compared to 9.11% in 2004, and 9.29% and 11.67% for the annual periods in 2005 and 2004, respectively. The Company’s net interest margins have remained consistent with the previous year, increasing to 4.42% for the fourth quarter of 2005 from 4.39% in the same period in 2004, and to 4.43% for the year ended December 31, 2005 from 4.25% for the same period in 2004.

Total assets at December 31, 2005 were $451.2 million compared to $407.5 million at December 31, 2004, an increase of $43.7 million, or 10.7%. The increase in total assets is primarily attributable to growth resulting from increased lending activity. Gross loans (excluding reserves for loan losses) totaled $276.8 million at December 31, 2005 compared to $229.9 million at December 31, 2004, an increase of $46.9 million or 20.4%. Much of the growth in loans relates to the SouthCrest banking office in Fayetteville, Georgia, which opened in November 2004. Deposits increased $25.6 million or 7.3% to $377.9 million at December 31, 2005. Borrowed funds increased $14.9 million to $15.3 million.

At December 31, 2005, the allowance for loan losses was 1.26% of loans compared to 1.37% at December 31, 2004. Net chargeoffs were 0.17% and 0.19% of average loans for the years ended December 31, 2005 and 2004, respectively. Despite an increase in nonperforming assets at December 31, 2005, the Company’s asset quality indicators compare favorably with historical benchmarks for the industry. At December 31, 2005, nonperforming assets were $1,112,000, or 0.25% of total assets, compared to $562,000 or 0.14% of total assets at December 31, 2004.

In a press release dated January 4, 2006, the Company announced that it declared a dividend of $0.125 per share compared to $0.12 per share for the same period a year ago. The dividend was paid on January 31, 2006 to shareholders of record as of January 17, 2006.

About SouthCrest Financial Group, Inc.

SouthCrest Financial Group, Inc. is the parent company of two bank subsidiaries operating a total of nine branch offices. Bank of Upson, based in Thomaston, Georgia, has two branches in Upson County, three branches in Meriwether County operating as Meriwether Bank & Trust, and one branch in Fayette County operating as SouthCrest Bank. First National Bank of Polk County, based in Cedartown, Georgia, operates three branches in Polk County. SouthCrest is traded on the OTC-Bulletin Board under the symbol “SCSG.”

Forward-Looking Statements

This release contains forward-looking statements including statements relating to present or future trends or factors generally affecting the banking industry and specifically affecting SouthCrest’s operations, markets and products. Without limiting the foregoing, the words "believes," "anticipates," "intends," "expects," or similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected for many reasons, including, without limitation, changing events and trends that have influenced SouthCrest’s assumptions, but that are beyond SouthCrest’s control. These trends and events include (i) changes in the interest rate environment which may reduce margins, (ii) not achieving expected growth, (iii) less favorable than anticipated changes in the national and local business environment and securities markets, (iv) adverse changes in the regulatory requirements affecting SouthCrest, (v) greater competitive pressures among financial institutions in SouthCrest’s markets and (vi) greater loan losses than historic levels. Additional information and other factors that could affect future financial results are included in SouthCrest’s filings with the Securities and Exchange Commission.

# # #

Contact Information:

SouthCrest Financial Group, Inc.

Doug Hertha, CFO

770-461-2781

SouthCrest Financial Group, Inc.

Consolidated Financial Highlights

(Unaudited)

	Quarter Ended December 31									Year Ended December 31
	2005			2004			% Change			2005			2004			% Change
All dollars in thousands except per share data
EARNINGS
Net interest income	$	4,597		$	4,162			10.5	%	$	17,469		$	11,460			52.4	%
Provision for loan losses		232			85			172.9	%		751			375			100.3	%
Noninterest income		1,082			1,128			-4.1	%		4,411			3,357			31.4	%
Noninterest expense		3,798			3,544			7.2	%		14,129			8,925			58.3	%
Income taxes		495			489			1.2	%		2,156			1,660			29.9	%
Net income		1,154			1,172			-1.5	%		4,844			3,857			25.6	%
PER SHARE INFORMATION
Earnings per share	$	0.32		$	0.32		$	0.0	%	$	1.36		$	1.52			-10.5	%
Dividends per share		0.120			0.115			4.3	%		0.480			0.460			4.3	%
Book value per share		14.93			14.21			5.1	%
OPERATING RATIOS (1)
Net interest margin		4.42	%		4.39	%					4.43	%		4.25	%
Return on average assets		1.03	%		1.13	%					1.13	%		1.32	%
Return on average equity		8.63	%		9.11	%					9.29	%		11.67	%
Efficiency ratio		64.78	%		66.99	%					63.23	%		60.23	%
Net chargeoffs / average loans		0.18	%		0.22	%					0.17	%		0.19	%
AVERAGE BALANCES
Loans	$	274,884		$	231,895			18.5	%	$	249,394		$	156,003			59.9	%
Total earning assets		413,044			377,155			9.5	%		394,076			269,651			46.1	%
Total assets		445,890			412,352			8.1	%		428,360			292,446			46.5	%
Deposits		373,788			353,691			5.7	%		366,877			256,035			43.3	%
Borrowed funds		13,523			404			n/m			4,695			580			n/m
Shareholders' equity		53,059			51,207			3.6	%		52,125			33,062			57.7	%

	As of December 31,
END OF PERIOD BALANCES	2005			2004
Loans	$	276,780		$	229,907		20.4	%
Reserve for loan losses		3,477			3,161		10.0	%
Total earning assets		410,897			374,684		9.7	%
Intangible assets		6,913			7,876		-12.2	%
Total assets		451,206			407,512		10.7	%
Deposits		377,900			352,252		7.3	%
Borrowed funds		15,275			385		n/m
Shareholders' equity		53,456			50,740		5.4	%
ASSET QUALITY (END OF PERIOD)
Loans 90 days past due and still accruing	$	549		$	186
Nonaccrual Loans		232			190
Other Real Estate Owned		331			186
Total nonperforming assets		1,112			562
Nonperforming assets / total assets		0.25	%		0.14	%
Allowance for loan losses / total loans		1.26	%		1.37	%

(1) All ratios are annualized.

n/m - percentage change is not meaningful.