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0001689731FALSE00016897312024-01-222024-01-22

UNITED STATES

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): January 22, 2024
___________________________


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Southern States Bancshares, Inc.

(Exact Name of Registrant as Specified in its Charter)
___________________________

Alabama
001-40727
26-2518085
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
 Identification No.)
615 Quintard Ave.
Anniston, AL
36201
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (256) 241-1092
Securities registered pursuant to Section 12(b) of the Act:
___________________________
Title of each class
Trading
Symbols(s)
Name of exchange
on which registered
Common Stock, $5.00 par value SSBK
The NASDAQ Stock Market LLC
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:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item. 2.02 Results of Operations and Financial Condition.

On January 22, 2024, Southern States Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2023 (the “Earnings Release”). A copy of the Earnings Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).

The information set forth under Item 7.01 is also furnished pursuant to this Item 2.02

Item 7.01 Regulation FD Disclosure.

The Company has prepared a presentation of its results for the fourth quarter ended December 31, 2023 (the “Presentation”) to be used from time to time during meetings with members of the investment community. A copy of the Presentation is furnished as Exhibit 99.2 to this Report. The Presentation will also be made available on the Company’s investor relations website at ir.southernstatesbank.net under the Presentations section.

The information contained in Items 2.02 and 7.01, including Exhibits 99.1 and 99.2 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)Exhibits

Exhibit
No.
Description
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)





SIGNATURE

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.


Dated: January 23, 2024
SOUTHERN STATES BANCSHARES, INC.
By: /s/ Lynn Joyce
Name: Lynn Joyce
Title:
Senior Executive Vice President and Chief Financial Officer

EX-99.1 2 a4q23earningsrelease.htm EX-99.1 Document

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SOUTHERN STATES
 BANCSHARES, INC.
615 Quintard Avenue / Anniston, AL 36201 / (256) 241-1092
Southern States Bancshares, Inc. Announces Fourth Quarter 2023 Financial Results
Fourth Quarter 2023 Performance and Operational Highlights
•Core net income(1) of $7.3 million, or $0.81 per diluted share(1)
•Net income of $8.9 million, or $0.99 per diluted share
•Net interest income of $20.4 million, a decrease of $327,000 from the prior quarter
•Net interest margin (“NIM”) of 3.69%, down 9 basis points from the prior quarter
•NIM of 3.71% on a fully-taxable equivalent basis (“NIM - FTE”)(1)
•Return on average assets (“ROAA”) of 1.53%; return on average stockholders’ equity (“ROAE”) of 17.02%; and return on average tangible common equity (“ROATCE”)(1) of 18.62%
•Core ROAA(1) of 1.26%; and core ROATCE(1) of 15.26%
•Efficiency ratio of 41.48%; and core efficiency ratio of 45.78%
•Linked-quarter loan growth was 24.7% annualized
•Linked-quarter total deposits grew 21.1% annualized
•Linked-quarter total deposits, excluding brokered deposits, grew 8.9% annualized
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
ANNISTON, Ala., January 22, 2024 – Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States” or the “Company”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today reported net income of $8.9 million, or $0.99 diluted earnings per share, for the fourth quarter of 2023. This compares to net income of $6.6 million, or $0.73 diluted earnings per share, for the third quarter of 2023, and net income of $10.6 million, or $1.18 diluted earnings per share, for the fourth quarter of 2022. The Company reported core net income of $7.3 million, or $0.81 diluted core earnings per share, for the fourth quarter of 2023. This compares to core net income of $9.6 million, or $1.06 diluted core earnings per share, for the third quarter of 2023, and core net income of $8.1 million, or $0.90 diluted core earnings per share, for the fourth quarter of 2022 (see “Reconciliation of Non-GAAP Financial Measures”).





CEO Commentary
Mark Chambers, Chief Executive Officer and President of Southern States, said, “We produced solid fourth quarter earnings, highlighted by annualized sequential loan growth of 24.7% and annualized deposit growth of 21.1%. Our bankers remain active across our vibrant footprint, cultivating new business relationships and winning market share. We continue to maintain a sharp focus on credit management to ensure the ongoing health of our loan portfolio as evidenced by our low level of nonperforming loans, which totaled just 0.06% of the overall portfolio.”
“Our results were impacted by ongoing funding expense pressure due to elevated interest rates and increased deposit costs. Our net interest margin, while robust at 3.69% to finish the year, declined nine basis points from the prior quarter. Our loan yields increased substantially throughout the year and rose five basis points in the fourth quarter, but this momentum was offset by higher deposit costs.”
“Overall, we delivered exceptional results and returns on behalf of our shareholders throughout 2023, further fortifying our foundation. We enter the new year with strong capital and liquidity positions, as well as pristine credit quality, putting Southern States in excellent position to pursue prudent growth in 2024.”

Net Interest Income and Net Interest Margin
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Three Months Ended
% Change December 31, 2023 vs.
December 31,
2023
September 30,
2023
December 31,
2022
September 30,
2023
December 31,
2022
(Dollars in thousands)
Average interest-earning assets $ 2,195,381  $ 2,175,103  $ 1,893,069  0.9  % 16.0  %
Net interest income $ 20,404  $ 20,731  $ 20,884  (1.6) % (2.3) %
Net interest margin 3.69  % 3.78  % 4.38  % (9)  bps (69)  bps
Net interest income for the fourth quarter of 2023 was $20.4 million, a decrease of 1.6% from $20.7 million for the third quarter of 2023. The decrease was primarily driven by a higher cost of interest-bearing deposits due to both rising interest rates and growth, which more than offset a higher yield on interest-earning assets resulting from a combination of rising rates and growth. The yield on loans benefited from significant linked-quarter growth.

Relative to the fourth quarter of 2022, net interest income decreased $480,000, or 2.3%. The decrease was substantially the result of the accelerated rise in the cost of interest-bearing liabilities due to the rapid rise in interest rates and growth, which outpaced a sharp improvement in the yield on interest-earning assets due to both year-over-year growth and higher interest rates. A portion of the growth in interest-bearing deposits is due to migration from noninterest-bearing into interest-bearing deposits.

Net interest margin for the fourth quarter of 2023 was 3.69%, compared to 3.78% for the third quarter of 2023. The decrease was primarily due to an increase in the cost of interest-bearing deposits, which was greater than the increase in the yield on interest-earning assets.

Relative to the fourth quarter of 2022, net interest margin decreased from 4.38%. The decrease was primarily the result of the rapid increase in interest rates, which accelerated the cost of interest-bearing liabilities at a greater pace than the yield received on interest-earning assets. A shift from noninterest-bearing deposits into interest-bearing deposits also had a negative impact on net interest margin.












Noninterest Income
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Three Months Ended
% Change December 31, 2023 vs.
December 31,
2023
September 30,
2023
December 31,
2022
September 30,
2023
December 31,
2022
(Dollars in thousands)
Service charges on deposit accounts $ 441  $ 442  $ 431  (0.2) % 2.3  %
Swap fees 70  453  (84.5) % 3400.0  %
SBA/USDA fees 70  74  70  (5.4) % —  %
Mortgage origination fees 87  158  98  (44.9) % (11.2) %
Net loss on securities
98  (12) (86) (916.7) % (214.0) %
Employee retention credit and related revenue (“ERC”) —  (5,100) —  N/A N/A
Other operating income 2,352  1,091  4,088  115.6  % (42.5) %
   Total noninterest income $ 3,118  $ (2,894) $ 4,603  (207.7) % (32.3) %
Noninterest income for the fourth quarter of 2023 was $3.1 million, compared to noninterest net expense of $2.9 million for the third quarter of 2023. The third quarter of 2023 included a $5.1 million payment to the IRS for the return of the ERC, which was received during the second quarter of 2023. After reviewing revised IRS guidelines during the third quarter of 2023, the Company determined to return the full $5.1 million to the IRS and recorded a payable. Also contributing to the increase during the fourth quarter of 2023 was a $1.9 million fee related to the early payoff of a $12.0 million purchased loan. As this is unusually large and atypical for the Bank, it was determined to record it as noninterest income instead of interest income, which would have impacted the net interest margin. The increase was partially offset by a $383,000 decrease in swap fees during the fourth quarter of 2023.

Relative to the fourth quarter of 2022, noninterest income decreased 32.3% from $4.6 million. The decrease was substantially due to a $2.6 million gain on the sale of two branches during the fourth quarter of 2022. This decrease was significantly offset by the aforementioned $1.9 million fee related to the early payoff of the $12.0 million loan in the fourth quarter of 2023.

Noninterest Expense
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Three Months Ended
% Change December 31, 2023 vs.
December 31,
2023
September 30,
2023
December 31,
2022
September 30,
2023
December 31,
2022
(Dollars in thousands)
Salaries and employee benefits $ 5,739  $ 5,752  $ 6,738  (0.2) % (14.8) %
Equipment and occupancy expenses 681  718  730  (5.2) % (6.7) %
Data processing fees 639  650  711  (1.7) % (10.1) %
Regulatory assessments 355  322  165  10.2  % 115.2  %
Professional fees related to ERC —  (1,243) —  N/A N/A
Other operating expenses 2,303  2,370  2,092  (2.8) % 10.1  %
   Total noninterest expenses $ 9,717  $ 8,569  $ 10,436  13.4  % (6.9) %
Noninterest expense for the fourth quarter of 2023 was $9.7 million, an increase of 13.4% from $8.6 million for the third quarter of 2023. The increase was substantially related to the aforementioned return of ERC, which also resulted in a $1.2 million refund of professional fees related to the ERC, to which a receivable was recorded.







Relative to the fourth quarter of 2022, noninterest expense decreased 6.9% from $10.4 million. The decrease was primarily due to a decrease in salaries and benefits during the fourth quarter of 2023 and the recognition of a $285,000 credit for provision for unfunded loan commitments, which was not recognized during 2022. The fourth quarter of 2022 included expense associated with the issuance of restricted stock units in a deferred compensation plan which was significantly less in the fourth quarter of 2023. The decrease was partially offset by an increase in legal fees, in addition to an increase in FDIC insurance.

Loans and Credit Quality
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Three Months Ended
% Change December 31, 2023 vs.
December 31,
2023
September 30,
2023
December 31,
2022
September 30,
2023
December 31,
2022
(Dollars in thousands)
Gross loans 1,890,677  1,779,846  1,592,707  6.2  % 18.7  %
Unearned income (6,169) (5,698) (5,543) 8.3  % 11.3  %
Loans, net of unearned income (“Loans”) $ 1,884,508  $ 1,774,148  $ 1,587,164  6.2  % 18.7  %
Average loans, net of unearned (“Average loans”) $ 1,814,484  $ 1,740,582  $ 1,563,255  4.2  % 16.1  %
Nonperforming loans (“NPL”) $ 1,177  $ 1,082  $ 2,245  8.8  % (47.6) %
Provision for credit losses $ 2,579  $ 773  $ 1,938  233.6  % 33.1  %
Allowance for credit losses (“ACL”) $ 24,378  $ 22,181  $ 20,156  9.9  % 20.9  %
Net charge-offs (recoveries) $ 382  $ (23) $ 205  (1760.9) % 86.3  %
NPL to gross loans 0.06  % 0.06  % 0.14  %
Net charge-offs (recoveries) to average loans(1)
0.08  % (0.01) % 0.05  %
ACL to loans 1.29  % 1.25  % 1.27  %
(1) Ratio is annualized.
Loans, net of unearned income, were $1.9 billion at December 31, 2023, up $110.4 million from September 30, 2023 and up $297.3 million from December 31, 2022. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.

Nonperforming loans totaled $1.2 million, or 0.06% of gross loans, at December 31, 2023, compared with $1.1 million, or 0.06% of gross loans, at September 30, 2023, and $2.2 million, or 0.14% of gross loans, at December 31, 2022. The $1.1 million net decrease in nonperforming loans from December 31, 2022, was primarily attributable to two loans that were paid-off, one loan that was charged-off and another loan that was moved back to accruing status.

The Company recorded a provision for credit losses of $2.6 million for the fourth quarter of 2023, compared to $773,000 for the third quarter of 2023. Provision in the fourth quarter of 2023 was based on loan growth, qualitative economic factors and individually analyzed loans.

Net charge-offs for the fourth quarter of 2023 were $382,000, or 0.08% of average loans on an annualized basis, compared to net recoveries of $(23,000), or (0.01)% of average loans on an annualized basis, for the third quarter of 2023, and net charge-offs of $205,000, or 0.05% of average loans on an annualized basis, for the fourth quarter of 2022.

The Company’s allowance for credit losses was 1.29% of total loans and 2071.20% of nonperforming loans at December 31, 2023, compared with 1.25% of total loans and 2050.00% of nonperforming loans at September 30, 2023. Allowance for credit losses on unfunded commitments was $1.2 million at December 31, 2023.







Deposits
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Three Months Ended
% Change December 31, 2023 vs.
December 31,
2023
September 30,
2023
December 31,
2022
September 30,
2023
December 31,
2022
(Dollars in thousands)
Noninterest-bearing deposits $ 437,959  $ 418,125  $ 460,977  4.7  % (5.0) %
Interest-bearing deposits 1,580,230  1,498,276  1,259,766  5.5  % 25.4  %
   Total deposits $ 2,018,189  $ 1,916,401  $ 1,720,743  5.3  % 17.3  %
Uninsured deposits $ 615,651  $ 568,323  $ 600,977  8.3  % 2.4  %
Uninsured deposits to total deposits 30.51  % 29.66  % 34.93  %
Noninterest deposits to total deposits 21.70  % 21.82  % 26.79  %

Total deposits were $2.0 billion at December 31, 2023, up from $1.9 billion at September 30, 2023 and $1.7 billion at December 31, 2022. The $101.8 million increase in total deposits in the fourth quarter was primarily due to an increase of $82.0 in interest-bearing deposits, which includes a $62.5 million increase in brokered deposits, and an increase of $19.8 million in noninterest-bearing deposits. Total brokered deposits were $230.9 million at December 31, 2023.

Capital
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December 31,
2023
September 30,
2023
December 31,
2022
Company Bank Company Bank Company Bank
Tier 1 capital ratio to average assets 8.99  % 12.01  % 8.70  % 11.71  % 8.82  % 12.17  %
Risk-based capital ratios:
  Common equity tier 1 (“CET1”) capital ratio 9.18  % 12.28  % 9.32  % 12.55  % 8.86  % 12.21  %
  Tier 1 capital ratio 9.18  % 12.28  % 9.32  % 12.55  % 8.86  % 12.21  %
  Total capital ratio 14.26  % 13.42  % 14.60  % 13.67  % 14.34  % 13.24  %
As of December 31, 2023, total stockholders’ equity was $215.0 million, up from $201.9 million at September 30, 2023. The increase of $13.0 million was substantially due to earnings growth, coupled with a decrease in accumulated other comprehensive loss resulting from changes in the value of the available for sale securities portfolio.

About Southern States Bancshares, Inc.
Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 13 branches in Alabama and Georgia and two loan production offices in Atlanta.










Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given recent events and trends in the banking industry and the inflationary environment. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 under the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

These statements are often, but not always, made through the use of words or phrases such as “may,” “can,” “should,” “could,” “to be,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “likely,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “target,” “project,” “would” and “outlook,” or the negative version of those words or other similar words or phrases of a future or forward-looking nature. Forward-looking statements appear in a number of places in this press release and may include statements about business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions.

Contact Information
Lynn Joyce Kevin Dobbs
(205) 820-8065 (310) 622-8245
ljoyce@ssbank.bank ssbankir@finprofiles.com




SELECT FINANCIAL DATA
(Dollars in thousands, except share and per share amounts)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Results of Operations
Interest income $ 36,172  $ 35,204  $ 26,706  $ 132,260  $ 82,850 
Interest expense 15,768  14,473  5,822  52,148  11,512 
Net interest income 20,404  20,731  20,884  80,112  71,338 
Provision for credit losses 2,579  773  1,938  6,090  5,605 
Net interest income after provision 17,825  19,958  18,946  74,022  65,733 
Noninterest income 3,118  (2,894) 4,603  8,874  8,677 
Noninterest expense 9,717  8,569  10,436  41,876  39,614 
Income tax expense 2,330  1,866  2,521  9,068  7,725 
Net income $ 8,896  $ 6,629  $ 10,592  $ 31,952  $ 27,071 
Core net income(1)
$ 7,289  $ 9,563  $ 8,081  $ 31,190  $ 24,975 
Share and Per Share Data
Shares issued and outstanding 8,841,349  8,834,168  8,706,920  8,841,349  8,706,920 
Weighted average shares outstanding:
  Basic 8,864,734  8,846,018  8,707,026  8,809,590  8,774,860 
  Diluted 9,021,358  9,040,687  8,932,585  9,038,004  8,949,669 
Earnings per share:
  Basic $ 1.00  $ 0.75  $ 1.22  $ 3.63  $ 3.08 
  Diluted 0.99  0.73  1.18  3.53  3.02 
  Core - diluted(1)
0.81  1.06  0.90  3.45  2.79 
Book value per share 24.31  22.86  20.87  24.31  20.87 
Tangible book value per share(1)
22.30  20.84  18.79  22.30  18.79 
Cash dividends per common share 0.09  0.09  0.09  0.36  0.36 
Performance and Financial Ratios
ROAA 1.53  % 1.15  % 2.11  % 1.44  % 1.43  %
ROAE 17.02  % 12.96  % 23.77  % 16.16  % 15.55  %
Core ROAA(1)
1.26  % 1.66  % 1.61  % 1.41  % 1.32  %
ROATCE(1)
18.62  % 14.21  % 26.49  % 17.78  % 17.37  %
Core ROATCE(1)
15.26  % 20.50  % 20.21  % 17.35  % 16.02  %
NIM 3.69  % 3.78  % 4.38  % 3.81  % 3.99  %
NIM - FTE(2)
3.71  % 3.79  % 4.39  % 3.82  % 4.01  %
Net interest spread 2.73  % 2.84  % 3.84  % 2.92  % 3.68  %
Yield on loans 6.91  % 6.86  % 6.05  % 6.70  % 5.27  %
Yield on interest-earning assets 6.54  % 6.42  % 5.60  % 6.29  % 4.64  %
Cost of interest-bearing liabilities 3.81  % 3.58  % 1.76  % 3.37  % 0.96  %
Cost of funds(2)
3.03  % 2.80  % 1.29  % 2.63  % 0.68  %
Cost of interest-bearing deposits 3.66  % 3.43  % 1.52  % 3.19  % 0.79  %
Cost of total deposits 2.86  % 2.63  % 1.09  % 2.44  % 0.55  %
Noninterest deposits to total deposits 21.70  % 21.82  % 26.79  % 21.70  % 26.79  %
Core deposits to total deposits 83.70  % 86.58  % 89.73  % 83.70  % 89.73  %
Uninsured deposits to total deposits 30.51  % 29.66  % 34.93  % 30.51  % 34.93  %
Total loans to total deposits 93.38  % 92.58  % 92.24  % 93.38  % 92.24  %
Efficiency ratio 41.48  % 48.01  % 40.81  % 47.35  % 49.12  %
Core efficiency ratio(1)
45.78  % 42.79  % 45.98  % 46.74  % 50.97  %
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(2) Includes total interest-bearing liabilities and noninterest deposits.



SELECT FINANCIAL DATA
(Dollars in thousands)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Financial Condition (ending)
Total loans $ 1,884,508  $ 1,774,148  $ 1,587,164  $ 1,884,508  $ 1,587,164 
Total securities 198,632  189,496  175,196  198,632  175,196 
Total assets 2,446,339  2,296,527  2,045,204  2,446,339  2,045,204 
Total noninterest bearing deposits 437,959  418,125  460,977  437,959  460,977 
Total core deposits(1)
1,689,266  1,659,291  1,543,981  1,689,266  1,543,981 
Total deposits 2,018,189  1,916,401  1,720,743  2,018,189  1,720,743 
Total borrowings 183,673  146,573  117,295  183,673  117,295 
Total liabilities 2,231,375  2,094,603  1,863,485  2,231,375  1,863,485 
Total shareholders’ equity 214,964  201,924  181,719  214,964  181,719 
Financial Condition (average)
Total loans $ 1,814,484  $ 1,740,582  $ 1,563,255  $ 1,711,006  $ 1,421,376 
Total securities 209,074  201,830  188,765  200,047  178,755 
Total other interest-earning assets 171,823  232,691  141,049  192,433  187,263 
Total interest-bearing assets 2,195,381  2,175,103  1,893,069  2,103,486  1,787,394 
Total assets 2,303,398  2,282,217  1,994,087  2,211,739  1,893,046 
Total noninterest-bearing deposits 420,019  448,616  477,301  436,571  496,486 
Total interest-bearing deposits 1,502,348  1,472,024  1,216,492  1,422,453  1,127,637 
Total deposits 1,922,367  1,920,640  1,693,793  1,859,024  1,624,123 
Total borrowings 140,790  129,882  99,111  126,853  76,379 
Total interest-bearing liabilities 1,643,138  1,601,906  1,315,603  1,549,306  1,204,016 
Total shareholders’ equity 207,324  202,955  176,769  197,680  174,107 
Asset Quality
Nonperforming loans $ 1,177  $ 1,082  $ 2,245  $ 1,177  $ 2,245 
Other real estate owned (“OREO”) $ 33  $ 2,903  $ 2,930  $ 33  $ 2,930 
Nonperforming assets (“NPA”) $ 1,210  $ 3,985  $ 5,175  $ 1,210  $ 5,175 
Net charge-offs (recovery) to average loans(2)
0.08  % (0.01) % 0.05  % 0.03  % 0.02  %
Provision for credit losses to average loans(2)
0.56  % 0.18  % 0.49  % 0.36  % 0.39  %
ACL to loans 1.29  % 1.25  % 1.27  % 1.29  % 1.27  %
ACL to gross loans 1.29  % 1.25  % 1.27  % 1.29  % 1.27  %
ACL to NPL 2071.20  % 2050.00  % 897.82  % 2071.20  % 897.82  %
NPL to loans 0.06  % 0.06  % 0.14  % 0.06  % 0.14  %
NPL to gross loans 0.06  % 0.06  % 0.14  % 0.06  % 0.14  %
NPA to gross loans and OREO 0.06  % 0.22  % 0.32  % 0.06  % 0.32  %
NPA to total assets 0.05  % 0.17  % 0.25  % 0.05  % 0.25  %
Regulatory and Other Capital Ratios
Total shareholders’ equity to total assets 8.79  % 8.79  % 8.89  % 8.79  % 8.89  %
Tangible common equity to tangible assets(3)
8.12  % 8.08  % 8.07  % 8.12  % 8.07  %
Tier 1 capital ratio to average assets 8.99  % 8.70  % 8.82  % 8.99  % 8.82  %
Risk-based capital ratios:
  CET1 capital ratio 9.18  % 9.32  % 8.86  % 9.18  % 8.86  %
  Tier 1 capital ratio 9.18  % 9.32  % 8.86  % 9.18  % 8.86  %
  Total capital ratio 14.26  % 14.60  % 14.34  % 14.26  % 14.34  %
(1) We define core deposits as total deposits excluding brokered deposits and time deposits greater than $250,000.
(2) Ratio is annualized.
(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.



    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
     (Dollars in thousands)
logo.jpg
December 31,
2023
September 30,
2023
December 31,
2022
(Unaudited) (Unaudited) (Audited)
Assets
Cash and due from banks $ 19,710  $ 31,047  $ 15,260 
Interest-bearing deposits in banks 134,846  103,646  90,198 
Federal funds sold 96,095  81,487  63,041 
Total cash and cash equivalents 250,651  216,180  168,499 
Securities available for sale, at fair value 179,000  169,859  155,544 
Securities held to maturity, at amortized cost 19,632  19,637  19,652 
Other equity securities, at fair value 3,649  3,654  4,444 
Restricted equity securities, at cost 5,684  4,971  3,134 
Loans held for sale 450  1,799  1,047 
Loans, net of unearned income 1,884,508  1,774,148  1,587,164 
Less allowance for credit losses 24,378  22,181  20,156 
Loans, net 1,860,130  1,751,967  1,567,008 
Premises and equipment, net 26,426  26,694  27,345 
Accrued interest receivable 8,711  8,321  6,963 
Bank owned life insurance 29,884  29,697  29,186 
Annuities 15,036  15,266  15,478 
Foreclosed assets 33  2,903  2,930 
Goodwill 16,862  16,862  16,862 
Core deposit intangible 899  981  1,226 
Other assets 29,292  27,736  25,886 
Total assets $ 2,446,339  $ 2,296,527  $ 2,045,204 
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $ 437,959  $ 418,125  $ 460,977 
Interest-bearing 1,580,230  1,498,276  1,259,766 
Total deposits 2,018,189  1,916,401  1,720,743 
Other borrowings 26,994  4,991  (19)
FHLB advances 70,000  55,000  31,000 
Subordinated notes 86,679  86,582  86,314 
Accrued interest payable 1,519  1,280  584 
Other liabilities 27,994  30,349  24,863 
Total liabilities 2,231,375  2,094,603  1,863,485 
Stockholders' equity:
Common stock 44,479  44,307  43,714 
Capital surplus 78,361  77,671  76,785 
Retained earnings 102,523  94,429  73,764 
Accumulated other comprehensive loss (8,379) (13,126) (11,048)
Unvested restricted stock (466) (580) (477)
Vested restricted stock units (1,554) (777) (1,019)
Total stockholders' equity 214,964  201,924  181,719 
Total liabilities and stockholders' equity $ 2,446,339  $ 2,296,527  $ 2,045,204 



    CONSOLIDATED STATEMENTS OF INCOME
   (Dollars in thousands, except per share amounts)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Interest income:
Loans, including fees $ 31,613  $ 30,084  $ 23,853  $ 114,662  $ 74,936 
Taxable securities 1,986  1,796  1,206  6,806  3,622 
Nontaxable securities 230  227  322  977  1,253 
Other interest and dividends 2,343  3,097  1,325  9,815  3,039 
Total interest income 36,172  35,204  26,706  132,260  82,850 
Interest expense:
Deposits 13,869  12,732  4,655  45,368  8,906 
Other borrowings 1,899  1,741  1,167  6,780  2,606 
Total interest expense 15,768  14,473  5,822  52,148  11,512 
Net interest income 20,404  20,731  20,884  80,112  71,338 
Provision for credit losses 2,579  773  1,938  6,090  5,605 
Net interest income after provision for credit losses 17,825  19,958  18,946  74,022  65,733 
Noninterest income:
Service charges on deposit accounts 441  442  431  1,790  1,863 
Swap fees 70  453  691  49 
SBA/USDA fees 70  74  70  344  646 
Mortgage origination fees 87  158  98  533  815 
Net gain (loss) on securities
98  (12) (86) 555  (632)
Employee retention credit and related revenue —  (5,100) —  —  — 
Other operating income 2,352  1,091  4,088  4,961  5,936 
Total noninterest income 3,118  (2,894) 4,603  8,874  8,677 
Noninterest expenses:
Salaries and employee benefits 5,739  5,752  6,738  25,665  24,597 
Equipment and occupancy expenses 681  718  730  2,776  2,918 
Data processing fees 639  650  711  2,528  2,444 
Regulatory assessments 355  322  165  1,198  925 
     Professional fees related to ERC —  (1,243) —  —  — 
     Other operating expenses 2,303  2,370  2,092  9,709  8,730 
Total noninterest expenses 9,717  8,569  10,436  41,876  39,614 
Income before income taxes 11,226  8,495  13,113  41,020  34,796 
Income tax expense 2,330  1,866  2,521  9,068  7,725 
Net income $ 8,896  $ 6,629  $ 10,592  $ 31,952  $ 27,071 
Basic earnings per share $ 1.00  $ 0.75  $ 1.22  $ 3.63  $ 3.08 
Diluted earnings per share $ 0.99  $ 0.73  $ 1.18  $ 3.53  $ 3.02 






AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)
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Three Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
Average
Balance
Interest Yield/Rate Average
Balance
Interest Yield/Rate Average
Balance
Interest Yield/Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)
$ 1,814,484  $ 31,613  6.91  % $ 1,740,582  $ 30,084  6.86  % $ 1,563,255  $ 23,853  6.05  %
Taxable securities 163,537  1,986  4.82  % 156,364  1,796  4.56  % 132,222  1,206  3.62  %
Nontaxable securities 45,537  230  2.00  % 45,466  227  1.98  % 56,543  322  2.26  %
Other interest-earnings assets 171,823  2,343  5.41  % 232,691  3,097  5.28  % 141,049  1,325  3.73  %
Total interest-earning assets $ 2,195,381  $ 36,172  6.54  % $ 2,175,103  $ 35,204  6.42  % $ 1,893,069  $ 26,706  5.60  %
Allowance for credit losses (22,666) (21,606) (19,374)
Noninterest-earning assets 130,683  128,720  120,392 
Total Assets $ 2,303,398  $ 2,282,217  $ 1,994,087 
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts 86,163  23  0.11  % 88,668  20  0.09  % 98,978  22  0.09  %
Savings and money market accounts 885,548  8,445  3.78  % 867,066  7,767  3.55  % 794,692  3,126  1.56  %
Time deposits 530,637  5,401  4.04  % 516,290  4,945  3.80  % 322,822  1,507  1.85  %
FHLB advances 52,076  645  4.92  % 43,261  514  4.72  % 22,739  147  2.56  %
Other borrowings 88,714  1,254  5.61  % 86,621  1,227  5.62  % 76,372  1,020  5.30  %
Total interest-bearing liabilities $ 1,643,138  $ 15,768  3.81  % $ 1,601,906  $ 14,473  3.58  % $ 1,315,603  $ 5,822  1.76  %
Noninterest-bearing liabilities:
Noninterest-bearing deposits $ 420,019  $ 448,616  $ 477,301 
Other liabilities 32,917  28,740  24,414 
Total noninterest-bearing liabilities 452,936  477,356  501,715 
Stockholders’ Equity 207,324  202,955  176,769 
Total Liabilities and Stockholders’ Equity $ 2,303,398  $ 2,282,217  $ 1,994,087 
Net interest income $ 20,404  $ 20,731  $ 20,884 
Net interest spread(2)
2.73  % 2.84  % 3.84  %
Net interest margin(3)
3.69  % 3.78  % 4.38  %
Net interest margin - FTE(4)(5)
3.71  % 3.79  % 4.39  %
Cost of funds(6)
3.03  % 2.80  % 1.29  %
Cost of interest-bearing deposits 3.66  % 3.43  % 1.52  %
Cost of total deposits 2.86  % 2.63  % 1.09  %
(1)Includes nonaccrual loans.
(2)Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest-bearing liabilities.
(3)Net interest margin is a ratio of net interest income to average interest earning assets for the same period.
(4)Net interest margin - FTE is a ratio of fully-taxable equivalent net interest income to average interest earning assets for the same period. It assumes a 24.0% tax rate.
(5)Refer to “Reconciliation of Non-GAAP Financial Measures”.
(6)Includes total interest-bearing liabilities and noninterest deposits.






AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)
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Twelve Months Ended
December 31,
2023
December 31,
2022
Average
Balance
Interest Yield/Rate Average
Balance
Interest Yield/Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)
$ 1,711,006  $ 114,662  6.70  % $ 1,421,376  $ 74,936  5.27  %
Taxable securities 152,707  6,806  4.46  % 122,500  3,622  2.96  %
Nontaxable securities 47,340  977  2.06  % 56,255  1,253  2.23  %
Other interest-earnings assets 192,433  9,815  5.10  % 187,263  3,039  1.62  %
Total interest-earning assets $ 2,103,486  $ 132,260  6.29  % $ 1,787,394  $ 82,850  4.64  %
Allowance for credit losses (21,233) (16,883)
Noninterest-earning assets 129,486  122,535 
Total Assets $ 2,211,739  $ 1,893,046 
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts 90,231  82  0.09  % 109,786  100  0.09  %
Savings and money market accounts 851,351  28,124  3.30  % 754,830  5,988  0.79  %
Time deposits 480,871  17,162  3.57  % 263,021  2,818  1.07  %
FHLB advances 39,830  1,848  4.64  % 25,264  291  1.15  %
Other borrowings 87,023  4,932  5.67  % 51,115  2,315  4.53  %
Total interest-bearing liabilities $ 1,549,306  $ 52,148  3.37  % $ 1,204,016  $ 11,512  0.96  %
Noninterest-bearing liabilities:
Noninterest-bearing deposits $ 436,571  $ 496,486 
Other liabilities 28,182  18,437 
Total noninterest-bearing liabilities $ 464,753  $ 514,923 
Stockholders’ Equity 197,680  174,107 
Total Liabilities and Stockholders’ Equity $ 2,211,739  $ 1,893,046 
Net interest income $ 80,112  $ 71,338 
Net interest spread(2)
2.92  % 3.68  %
Net interest margin(3)
3.81  % 3.99  %
Net interest margin - FTE(4)(5)
3.82  % 4.01  %
Cost of funds(6)
2.63  % 0.68  %
Cost of interest-bearing deposits 3.19  % 0.79  %
Cost of total deposits 2.44  % 0.55  %
(1)Includes nonaccrual loans.
(2)Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest-bearing liabilities.
(3)Net interest margin is a ratio of net interest income to average interest earning assets for the same period.
(4)Net interest margin - FTE is a ratio of fully-taxable equivalent net interest income to average interest earning assets for the same period. It assumes a 24.0% tax rate.
(5)Refer to “Reconciliation of Non-GAAP Financial Measures”.
(6)Includes total interest-bearing liabilities and noninterest deposits.








LOAN COMPOSITION
(Dollars in thousands)
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December 31,
2023
September 30,
2023
December 31,
2022
Amount % of gross Amount % of gross Amount % of gross
Real estate mortgages:
Construction and development $ 242,960  12.9  % $ 229,188  12.9  % $ 255,736  16.1  %
Residential 224,603  11.9  % 224,499  12.6  % 167,891  10.5  %
Commercial 1,144,867  60.5  % 1,049,545  59.0  % 904,872  56.8  %
Commercial and industrial 269,961  14.3  % 268,283  15.0  % 256,553  16.1  %
Consumer and other 8,286  0.4  % 8,331  0.5  % 7,655  0.5  %
   Gross loans 1,890,677  100.0  % 1,779,846  100.0  % 1,592,707  100.0  %
Unearned income (6,169) (5,698) (5,543)
   Loans, net of unearned income 1,884,508  1,774,148  1,587,164 
Allowance for credit losses (24,378) (22,181) (20,156)
     Loans, net $ 1,860,130  $ 1,751,967  $ 1,567,008 


DEPOSIT COMPOSITION
(Dollars in thousands)
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December 31,
2023
September 30,
2023
December 31,
2022
Amount % of total Amount % of total Amount % of total
Noninterest-bearing transaction $ 437,959  21.7  % $ 418,125  21.8  % $ 460,977  26.8  %
Interest-bearing transaction 946,347  46.9  % 934,383  48.8  % 837,127  48.6  %
Savings 35,412  1.7  % 38,518  2.0  % 49,235  2.9  %
Time deposits, $250,000 and under 500,406  24.8  % 436,613  22.8  % 307,145  17.8  %
Time deposits, over $250,000 98,065  4.9  % 88,762  4.6  % 66,259  3.9  %
     Total deposits $ 2,018,189  100.0  % $ 1,916,401  100.0  % $ 1,720,743  100.0  %




Nonperfoming Assets
(Dollars in thousands)
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December 31,
2023
September 30,
2023
December 31,
2022
Nonaccrual loans $ 1,017  $ 1,082  $ 2,245 
Past due loans 90 days or more and still accruing interest 160  —  — 
Total nonperforming loans 1,177  1,082  2,245 
OREO 33  2,903  2,930 
Total nonperforming assets $ 1,210  $ 3,985  $ 5,175 
Troubled debt restructured loans – nonaccrual(1)
907  970  832 
Troubled debt restructured loans – accruing 1,095  1,052  1,292 
Total troubled debt restructured loans $ 2,002  $ 2,022  $ 2,124 
Allowance for credit losses $ 24,378  $ 22,181  $ 20,156 
Loans, net of unearned income at the end of the period $ 1,884,508  $ 1,774,148  $ 1,587,164 
Gross loans outstanding at the end of period $ 1,890,677  $ 1,779,846  $ 1,592,707 
Total assets $ 2,446,339  $ 2,296,527  $ 2,045,204 
Allowance for credit losses to nonperforming loans 2071.20  % 2050.00  % 897.82  %
Nonperforming loans to loans, net of unearned income 0.06  % 0.06  % 0.14  %
Nonperforming loans to gross loans 0.06  % 0.06  % 0.14  %
Nonperforming assets to gross loans and OREO 0.06  % 0.22  % 0.32  %
Nonperforming assets to total assets 0.05  % 0.17  % 0.25  %
Nonaccrual loans by category:
Real estate mortgages:
Construction & Development $ —  $ —  $ 67 
Residential Mortgages 252  289  565 
Commercial Real Estate Mortgages 765  785  1,278 
Commercial & Industrial —  312 
Consumer and other —  —  23 
         Total $ 1,017  $ 1,082  $ 2,245 

(1) Troubled debt restructured loans are excluded from nonperforming loans unless they otherwise meet the definition of nonaccrual loans or are more than 90 days past due.












Allowance for Credit Losses
(Dollars in thousands)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31, 2022
Average loans, net of unearned income $ 1,814,484  $ 1,740,582  $ 1,563,255  $ 1,711,006  $ 1,421,376 
Loans, net of unearned income 1,884,508  1,774,148  1,587,164  1,884,508  1,587,164 
Gross loans 1,890,677  1,779,846  1,592,707  1,890,677  1,592,707 
Allowance for credit losses at beginning of the period 22,181  21,385  18,423  20,156  14,844 
Impact of adoption of ASC 326 —  —  —  (1,285) — 
Charge-offs:
Construction and development —  —  66 
Residential —  —  —  — 
Commercial —  —  —  —  — 
Commercial and industrial 424  —  210  686  479 
Consumer and other —  18  26 
Total charge-offs 426  228  697  578 
Recoveries:
Construction and development —  —  —  —  — 
Residential 10  41  50 
Commercial —  —  —  —  — 
Commercial and industrial 39  —  54  205 
Consumer and other 16  18  19  30 
Total recoveries 44  26  23  114  285 
Net charge-offs (recoveries) $ 382  $ (23) $ 205  $ 583  $ 293 
Provision for credit losses $ 2,579  $ 773  $ 1,938  $ 6,090  $ 5,605 
Balance at end of the period $ 24,378  $ 22,181  $ 20,156  $ 24,378  $ 20,156 
Allowance for credit losses on unfunded commitments at beginning of the period $ 1,524  $ 1,495  $ —  $ —  $ — 
Impact of adoption of ASC 326 —  —  —  1,285  — 
Provision for credit losses on unfunded commitments (285) 29  —  (46) — 
Balance at the end of the period $ 1,239  $ 1,524  $ —  $ 1,239  $ — 
Allowance to loans, net of unearned income 1.29  % 1.25  % 1.27  % 1.29  % 1.27  %
Allowance to gross loans 1.29  % 1.25  % 1.27  % 1.29  % 1.27  %
Net charge-offs (recoveries) to average loans, net of unearned income(1)
0.08  % (0.01) % 0.05  % 0.03  % 0.02  %
Provision for credit losses to average loans, net of unearned income(1)
0.56  % 0.18  % 0.49  % 0.36  % 0.39  %
(1) Ratio is annualized.







Reconciliation of Non-GAAP Financial Measures
Noninterest Expense
In addition to reporting GAAP results, the Company reports non-GAAP financial measures in this earnings release and other disclosures. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.

The following table provides a reconciliation of the non-GAAP financial measures to their most directly comparable financial measure presented in accordance with GAAP.


















































Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands, except share and per share amounts)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Net income $ 8,896  $ 6,629  $ 10,592  $ 31,952  $ 27,071 
Add: One-time retirement related expenses —  —  —  1,571  — 
Add: Professional fees related to ERC —  (1,243) —  —  — 
Add: Net OREO losses
(154) (9) —  (156) — 
Less: Employee retention related revenue —  (5,100) —  —  — 
Less: Fee received on early loan payoff 1,863  —  —  1,863  — 
Less: Net gain on sale of branches —  —  2,372  —  2,372 
Less: BOLI benefit claim —  —  774  —  774 
Less: Net gain (loss) on securities 98  (12) (86) 555  (632)
Less: Tax effect (508) 926  (549) (241) (418)
Core net income $ 7,289  $ 9,563  $ 8,081  $ 31,190  $ 24,975 
Average assets $ 2,303,398  $ 2,282,217  $ 1,994,087  $ 2,211,739  $ 1,893,046 
Core return on average assets 1.26  % 1.66  % 1.61  % 1.41  % 1.32  %
Net income $ 8,896  $ 6,629  $ 10,592  $ 31,952  $ 27,071 
Add: One-time retirement related expenses —  —  —  1,571  — 
Add: Professional fees related to ERC —  (1,243) —  —  — 
Add: Net OREO losses (154) (9) —  (156) — 
Add: Provision 2,579  773  1,938  6,090  5,605 
Less: Employee retention related revenue —  (5,100) —  —  — 
Less: Fee received on early loan payoff 1,863  —  —  1,863  — 
Less: Net gain on sale of branches —  —  2,372  —  2,372 
Less: BOLI benefit claim —  —  774  —  774 
Less: Net gain (loss) on securities
98  (12) (86) 555  (632)
Add: Income taxes 2,330  1,866  2,521  9,068  7,725 
Pretax pre-provision core net income $ 11,690  $ 13,128  $ 11,991  $ 46,107  $ 37,887 
Average assets $ 2,303,398  $ 2,282,217  $ 1,994,087  $ 2,211,739  $ 1,893,046 
Pretax pre-provision core return on average assets 2.01  % 2.28  % 2.39  % 2.08  % 2.00  %
Net interest income $ 20,404  $ 20,731  $ 20,884  $ 80,112  $ 71,338 
Add: Fully-taxable equivalent adjustments(1)
99  70  84  312  335 
Net interest income - FTE $ 20,503  $ 20,801  $ 20,968  $ 80,424  $ 71,673 
Net interest margin 3.69  % 3.78  % 4.38  % 3.81  % 3.99  %
Effect of fully-taxable equivalent adjustments(1)
0.02  % 0.01  % 0.01  % 0.01  % 0.02  %
Net interest margin - FTE 3.71  % 3.79  % 4.39  % 3.82  % 4.01  %
Total stockholders' equity $ 214,964  $ 201,924  $ 181,719  $ 214,964  $ 181,719 
Less: Intangible assets 17,761  17,843  18,088  17,761  18,088 
Tangible common equity $ 197,203  $ 184,081  $ 163,631  $ 197,203  $ 163,631 
(1) Assumes a 24.0% tax rate.



Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands, except share and per share amounts)
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Three Months Ended Twelve Months Ended
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Core net income $ 7,289  $ 9,563  $ 8,081  $ 31,190  $ 24,975 
Diluted weighted average shares outstanding 9,021,358  9,040,687  8,932,585  9,038,004  8,949,669 
Diluted core earnings per share $ 0.81  $ 1.06  $ 0.90  $ 3.45  $ 2.79 
Common shares outstanding at year or period end 8,841,349  8,834,168  8,706,920  8,841,349  8,706,920 
Tangible book value per share $ 22.30  $ 20.84  $ 18.79  $ 22.30  $ 18.79 
Total assets at end of period $ 2,446,339  $ 2,296,527  $ 2,045,204  $ 2,446,339  $ 2,045,204 
Less: Intangible assets 17,761  17,843  18,088  17,761  18,088 
Adjusted assets at end of period $ 2,428,578  $ 2,278,684  $ 2,027,116  $ 2,428,578  $ 2,027,116 
Tangible common equity to tangible assets 8.12  % 8.08  % 8.07  % 8.12  % 8.07  %
Total average shareholders equity $ 207,324  $ 202,955  $ 176,769  $ 197,680  $ 174,107 
Less: Average intangible assets 17,809  17,893  18,134  17,932  18,236 
Average tangible common equity $ 189,515  $ 185,062  $ 158,635  $ 179,748  $ 155,871 
Net income to common shareholders $ 8,896  $ 6,629  $ 10,592  $ 31,952  $ 27,071 
Return on average tangible common equity 18.62  % 14.21  % 26.49  % 17.78  % 17.37  %
Average tangible common equity $ 189,515  $ 185,062  $ 158,635  $ 179,748  $ 155,871 
Core net income $ 7,289  $ 9,563  $ 8,081  $ 31,190  $ 24,975 
Core return on average tangible common equity 15.26  % 20.50  % 20.21  % 17.35  % 16.02  %
Net interest income $ 20,404  $ 20,731  $ 20,884  $ 80,112  $ 71,338 
Add: Noninterest income 3,118  (2,894) 4,603  8,874  8,677 
Less: Employee retention related revenue —  (5,100) —  —  — 
Less: Fee received on early loan payoff 1,863  —  —  1,863  — 
Less: Gain on sale of branches —  —  2,600  —  2,600 
Less: BOLI benefit claim —  —  774  —  774 
Less: Net gain (loss) on securities
98  (12) (86) 555  (632)
Operating revenue $ 21,561  $ 22,949  $ 22,199  $ 86,568  $ 77,273 
Expenses:
Total noninterest expense $ 9,717  $ 8,569  $ 10,436  $ 41,876  $ 39,614 
Less: One-time retirement related expenses —  —  —  1,571  — 
Less: Professional fees related to ERC —  (1,243) —  —  — 
Less: Net OREO losses (154) (9) —  (156) — 
Less: Loss on sale of branches —  —  228  —  228 
Adjusted noninterest expenses $ 9,871  $ 9,821  $ 10,208  $ 40,461  $ 39,386 
Core efficiency ratio 45.78  % 42.79  % 45.98  % 46.74  % 50.97  %


EX-99.2 3 ssbk-x4q23investorpresen.htm EX-99.2 ssbk-x4q23investorpresen
Q4 2023 Investor Presentation January 22, 2024


 
2 Important Notices and Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given recent events and trends in the banking industry and the inflationary environment. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and in other SEC filings under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. These statements are often, but not always, made through the use of words or phrases such as “may,” “can,” “should,” “could,” “to be,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “likely,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “target,” “project,” “would” and “outlook,” or the negative version of those words or other similar words or phrases of a future or forward-looking nature. Forward-looking statements appear in a number of places in this presentation and may include statements about business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions. Non-GAAP Financial Measures In addition to reporting GAAP results, the Company reports non-GAAP financial measures in this presentation and other disclosures. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our performance. While we believe that these non- GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies. For a reconciliation of the non-GAAP measures we use to the most comparable GAAP measures, see the Appendix to this presentation.


 
3 Branches (13) Legend Huntsville Birmingham Montgomery Columbus Atlanta Alabama Georgia 65 85 75 Anniston Auburn 20 85 75 85 65 65 59 Tuscaloosa LPOs (2) Quarterly Deposit ExcludingLoans / Deposits: 93.38% Overview of Southern States Bancshares, Inc. Q4 ‘23 Financial Highlights Quarterly Asset Growth(2): 25.9%Assets ($B): $2.4 NPLs / Loans: 0.06% Quarterly Loan Growth(2): 24.7%Gross Loans ($B): $1.9 ACL / Loans: 1.29% Quarterly Deposit Growth(3): 21.1%Deposits ($B): $2.0 YTD NCOs / Avg. Loans: 0.08% TCE / TA(1): 8.12% Core Net Income(1)($M): $7.3 Core ROAA(1): 1.26% NIM: 3.69% Core Efficiency Ratio(1): 45.78% Mobile Savannah Macon Valdosta Augusta Southern States Bancshares (Nasdaq: SSBK) was founded in August 2007 and priced its IPO on August 11, 2021 Management team with 200 years of collective experience in the banking industry and deep ties to local markets History of solid growth, top-tier profitability and a strong credit culture Bifurcated expansion strategy through organic growth and disciplined M&A Focused on being a dominant bank in our smaller markets and a competitive player in the larger metropolitan areas Diversified loan portfolio complemented by lower-cost, core funding base Source: Company Documents; financial data as of the three months ended 12/31/23 unless otherwise noted (1) Please refer to non-U.S. GAAP reconciliation in the appendix (2) Annualized (3) Annualized; includes a $62.5 million increase in brokered deposits in 4Q23 8.9%Brokered Growth(2):


 
4 $62.3 $69.2 $72.8 $88.1 $93.1 $70.7 $83.3 Columbus MSA Auburn- Opelika MSA Birmingham MSA Huntsville MSA Atlanta MSA Southeast Average National Average 1.6% 1.9% 4.7% 5.9% 6.6% 3.2% 2.1% Birmingham MSA Columbus MSA Atlanta MSA Huntsville MSA Auburn- Opelika MSA Southeast Average National Average Columbus, GA Major Employers Market Highlights Robust Market Dynamics Source: U.S. Bureau of Labor Statistics; S&P Global Market Intelligence; Fortune; Forbes; Money.com; moneygeek.com; Business Facilities; USA Today; Livability,com; US News; Auburn.edu; Columbus, Georgia Economic Development Note: Southeast defined as AL, AR, FL. GA, KY, LA, MS, NC. SC, TN, VA, and WV - 8th largest Metro Area in the USA - Ranked 10th largest economy in the country - Ranked 13th Best Places for Business and Careers by Forbes - 17 Fortune 500 companies headquartered in Atlanta - Largest market in Alabama, supported by strong steel, biotechnology, and banking industries - Ranked 2nd best US city for job seekers by MoneyGeek - University of Alabama Birmingham serves as an international leader in medicine and dentistry - Voted best place to live in the country by US News - Highest concentration of engineers in the US - Ranked #1 best city for STEM workers by Livability - Home of the Redstone Arsenal which includes the U.S. Space and Rocket Center, NASA’s Marshall Space Flight Center, and the U.S. Army Aviation and Missile Command - Auburn University contributes $5.6 billion annually and 27,000 jobs to the Alabama economy - Named top-five growth city in America by U-Haul - High-tech manufacturing and industrial hub for companies like Kia Motors, Hanwha Cimarron, and Niagara Bottling - Fort Benning Military Base • U.S. Army Infantry and Armor Training Post • Columbus Chamber of Commerce estimates annual economic impact of $4.8 billion - Major companies headquartered include Aflac and Total Systems Services, Inc. - Contains seven colleges and universities, with 83,000 students pursuing degrees in higher education Huntsville, AL Birmingham, AL Atlanta, GA ‘28 Projected Median HHI ($M) ‘23 – ‘28 Projected Population Growth (%) Auburn / Opelika, AL


 
5 Proven, Veteran Management Team Lynn Joyce SEVP & Chief Financial Officer Greg Smith SEVP & Chief Risk and Credit Officer Jack Swift SEVP & Chief Operating Officer Our senior management team, on average, has more than 25 years of banking experience Mark Chambers CEO and President • 2007-2019 SEVP & President Southeast Region Southern States Bank • 2004-2007 Market President Wachovia Bank • 1998-2004 Commercial Lender Aliant Bank • 1992-2013 EVP & CFO First Financial Bank, a NASDAQ listed Financial Institution • 1986-1992 Arthur Andersen & Co • 2006-2019 SEVP & CCO Southern States Bank • 1986-2006 Credit Admin, Commercial Loan Officer and Market President Regions Bank • 2006-2019 SEVP & President Central Region Southern States Bank • 1996-2006 Senior Vice President Colonial Bank • 1992-1996 Vice President SouthTrust Bank


 
6 Q4 2023 Results Highlights (1) Please refer to non-U.S. GAAP reconciliation in the appendix (2) Uninsured deposits are 30.51% of total deposits Operating Results Deposits/Liquidity Loans Capital Asset Quality • Net income of $8.9 million, or $0.99 per diluted share, and core net income (1) of $7.3 million, or $0.81 per diluted share (1) • ROAA of 1.53% and ROATCE of 18.62%; Core ROAA (1) of 1.26% and Core ROATCE (1) of 15.26% • Net interest margin of 3.69% • Efficiency ratio (1) of 41.48% and core efficiency ratio (1) of 45.78% • Monthly margin trends – October 3.69%, November 3.73%, and December 3.66% • Loan portfolio of $1.9 billion increased $110.8 million, or 6.2%, from Q3 2023 • Annualized loan growth of 24.7% from Q3 2023 • Average yield on loans of 6.91% improved 5 bps from 6.86% for Q3 2023 • Loans / deposits ratio of 93.38% compared to 92.58% for Q3 2023 • Deposits of $2.0 billion increased by $101.8 million, or 5.3%, from Q3 2023 (2) • Deposits, excluding brokered deposits, increased by $62.5 million, or 8.9% annualized, from Q3 2023 • Average cost of total deposits increased to 2.86% from 2.63% in Q3 2023 • Noninterest-bearing deposits comprised 21.70% of total deposits compared to 21.82% at Q3 2023 • Nonperforming loans to gross loans of 0.06% remained stable from Q3 2023 • Net charge-offs at $382,000, or 0.08% of average loans • Allowance for credit losses to gross loans of 1.29% compared to 1.25% at Q3 2023 • Nonperforming loans increased slightly to $1.2 million from $1.1 million at Q3 2023 • Announced and paid quarterly dividend of $0.09 per share • Tangible common equity to tangible assets (1) of 8.12%, compared to 8.08% at Q3 2023 • Tangible book value per share (1) of $22.30, up 7.0% from Q3 2023


 
7 $20.9 $19.5 $19.4 $20.7 $20.4 4.38% 4.07% 3.73% 3.78% 3.69% $16.0 $17.0 $18.0 $19.0 $20.0 $21.0 $22.0 4Q22 1Q23 2Q23 3Q23 4Q23 Net Interest Income Net Interest Margin Net Interest Income and Net Interest Margin Net Interest Margin Source: Company Documents; data as of 12/31/23 (Dollars in millions)


 
8 Time Deposits $367.6 Brokered Deposits $230.9 Noninterest-bearing Checking $438.0 Interest-bearing Checking $82.5 Money Market $863.8 Savings $35.4 Deposits by Type – $2.02B Deposit Portfolio Source: Company Documents; data as of 12/31/23 (1) Excludes brokered deposits; dollars in thousands Deposit Type Composition % Average Balance Commercial 63% $159.4 Retail 37% $38.3 Account Composition (1) (Dollars in millions)


 
9 OO-CRE 30.5% NOO-CRE 30.0% C&I 14.3% C & D 12.9% Residential 11.9% Consumer & Other 0.4% Loans by Type $1.88B Loan Portfolio Source: Company Documents; data as of 12/31/23 Loan Type Composition % Fixed 51.2% Variable 48.8% Loan Composition Loan Type Total Office Buildings $191.8 Industrial Warehouse / Heavy Manufacturing $176.2 Convenience Stores $153.4 Retail Warehouse / Light Manufacturing $134.0 Hotels / Motels $119.1 Multi-Family (5+) $107.8 Commercial Retail Building $87.2 Concentration Highlights(Dollars in millions)


 
10 <$1M 160 $1-5M 36 $5-10M 7 >$10M 5 Office Building Loans $191.8M Loan Portfolio – Office Building Source: Company Documents; data as of 12/31/23 Location Composition % Georgia 71% Alabama 25% Other 4% Loan Composition # of Stories Total Six Stories 2 Five stories 1 Four stories 5 Three stories 5 One & two stories 195 Office Building Type


 
11 $0.5 $3.9 $13.4 $3.4 $2.0 $2.2 - $1.2 $2.1 $1.8 $3.0 $1.8 $2.0 $2.1 - $2.0 $0.5 $0.6 $4.2 $10.2 $2.9 $2.9 0.2% 0.6% 2.5% 1.3% 0.4% 0.3% 0.1% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 2017 2018 2019 2020 2021 2022 4Q23 Nonaccruals ($mm) TDRs ($mm) OREO ($mm) NPAs / Loans + OREO $20.6 Nonperforming Assets by Type Asset Quality Source: Company Documents; data as of 12/31/23 Dollars in millions (1) TDRs reflect COVID-19 relief under the CARES Act and bank regulatory COVID-19 relief in 2020 and 2021 Reserves / Loans NCOs / Avg. Loans $3.2$3.1 $6.3 $15.4 (0.10%) 0.02% 0.57% 0.07% 0.00% $6.9 0.02% Comprehensive and conservative underwriting process Highly experienced bankers incentivized with equity ownership Commitment to a diverse loan portfolio while maintaining strong asset quality metrics Proactively manage loan concentrations with all collateral types capped at approximately 50% of risk- based capital Proactive approach to resolving problem credits 1.02% 1.11% 1.11% 1.22% 1.19% 1.27% 1.29% 2017 2018 2019 2020 2021 2022 4Q23 0.08% $7.2 (1)


 
12 $567 $704 $840 $1,030 $963 $1,241 $1,885 $67 $9 2017 2018 2019 2020 2021 2022 4Q23 $1,587 $1,250 $622 $776 $951 $1,140 $1,556 $1,721 $2,018 2017 2018 2019 2020 2021 2022 4Q23 $736 $888 $1,095 $1,333 $1,774 $1,266 $2,446 $67 $9 2017 2018 2019 2020 2021 2022 4Q23 $2,045 Net Income ($M)Total Deposits ($M) Total Assets ($M) Total Loans ($M) Growth History Source: Company Documents; data as of 12/31/23 PPP Loans PPP Loans $1,783 $5.6 $7.7 $5.6 $12.1 $18.6 $27.1 $32.0 $0.90 $0.81 $1.18 $1.56 $2.23 $3.02 $3.53 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 2017 2018 2019 2020 2021 2022 2023 Net Income Diluted EPS


 
13 Building Shareholder Value Our Strategic Focus Maintain focus on strong, profitable organic growth without compromising our credit quality Further develop and grow our core deposit franchise Expand into new markets by hiring commercial bankers Focus on high growth markets and further expand our Atlanta franchise Evaluate strategic acquisition opportunities Continue implementing technology to optimize customer service and provide efficient opportunities to scale the business Prudently manage capital between balance sheet growth and return to shareholders


 
14 Near-Term Outlook Loan balances expected to continue to grow at a modest pace Deposit balances expected to grow modestly Net interest income expected to be fairly flat as loans grow, though this will be somewhat offset by net interest margin declines Core noninterest income expected to be consistent with Q4 2023 Core noninterest expense is expected to be fairly consistent with Q4 2023 Credit metrics are currently strong and future provision levels are expected to consider both current and evolving economic conditions, as well as changes in credit Balanced approach to capital deployment with flexibility to support organic loan growth trajectory and cash dividend while evaluating stock repurchases Well-positioned to capitalize on additional accretive acquisition opportunities


 
Appendix


 
16 Non-GAAP Financial Measures Reconciliations Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 8,896 $ 6,629 $ 10,592 $ 31,952 $ 27,071 Add: One-time retirement related expenses — — — 1,571 — Add: Professional fees related to ERC — (1,243) — — — Add: Net OREO losses (154) (9) — (156) — Less: Employee retention related revenue — (5,100) — — — Less: Fee received on early loan payoff 1,863 — — 1,863 — Less: Net gain on sale of branches — — 2,372 — 2,372 Less: BOLI benefit claim — — 774 — 774 Less: Net gain (loss) on securities 98 (12) (86) 555 (632) Less: Tax effect (508) 926 (549) (241) (418) Core net income $ 7,289 $ 9,563 $ 8,081 $ 31,190 $ 24,975 Average assets $ 2,303,398 $ 2,282,217 $ 1,994,087 $ 2,211,739 $ 1,893,046 Core return on average assets 1.26 % 1.66 % 1.61 % 1.41 % 1.32 % Net income $ 8,896 $ 6,629 $ 10,592 $ 31,952 $ 27,071 Add: One-time retirement related expenses — — — 1,571 — Add: Professional fees related to ERC — (1,243) — — — Add: Net OREO losses (154) (9) — (156) — Add: Provision 2,579 773 1,938 6,090 5,605 Less: Employee retention related revenue — (5,100) — — — Less: Fee received on early loan payoff 1,863 — — 1,863 — Less: Net gain on sale of branches — — 2,372 — 2,372 Less: BOLI benefit claim — — 774 — 774 Less: Net gain (loss) on securities 98 (12) (86) 555 (632) Add: Income taxes 2,330 1,866 2,521 9,068 7,725 Pretax pre-provision core net income $ 11,690 $ 13,128 $ 11,991 $ 46,107 $ 37,887 Average assets $ 2,303,398 $ 2,282,217 $ 1,994,087 $ 2,211,739 $ 1,893,046 Pretax pre-provision core return on average assets 2.01 % 2.28 % 2.39 % 2.08 % 2.00 %


 
17 Non-GAAP Financial Measures Reconciliations Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net interest income $ 20,404 $ 20,731 $ 20,884 $ 80,112 $ 71,338 Add: Fully-taxable equivalent adjustments(1) 99 70 84 312 335 Net interest income - FTE $ 20,503 $ 20,801 $ 20,968 $ 80,424 $ 71,673 Net interest margin 3.69 % 3.78 % 4.38 % 3.81 % 3.99 % Effect of fully-taxable equivalent adjustments(1) 0.02 % 0.01 % 0.01 % 0.01 % 0.02 % Net interest margin - FTE 3.71 % 3.79 % 4.39 % 3.82 % 4.01 % Total stockholders' equity $ 214,964 $ 201,924 $ 181,719 $ 214,964 $ 181,719 Less: Intangible assets 17,761 17,843 18,088 17,761 18,088 Tangible common equity $ 197,203 $ 184,081 $ 163,631 $ 197,203 $ 163,631 (1) Assumes a 24.0% tax rate.


 
18 Non-GAAP Financial Measures Reconciliations Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Core net income $ 7,289 $ 9,563 $ 8,081 $ 31,190 $ 24,975 Diluted weighted average shares outstanding 9,021,358 9,040,687 8,932,585 9,038,004 8,949,669 Diluted core earnings per share $ 0.81 $ 1.06 $ 0.90 $ 3.45 $ 2.79 Common shares outstanding at year or period end 8,841,349 8,834,168 8,706,920 8,841,349 8,706,920 Tangible book value per share $ 22.30 $ 20.84 $ 18.79 $ 22.30 $ 18.79 Total assets at end of period $ 2,446,339 $ 2,296,527 $ 2,045,204 $ 2,446,339 $ 2,045,204 Less: Intangible assets 17,761 17,843 18,088 17,761 18,088 Adjusted assets at end of period $ 2,428,578 $ 2,278,684 $ 2,027,116 $ 2,428,578 $ 2,027,116 Tangible common equity to tangible assets 8.12 % 8.08 % 8.07 % 8.12 % 8.07 % Total average shareholders equity $ 207,324 $ 202,955 $ 176,769 $ 197,680 $ 174,107 Less: Average intangible assets 17,809 17,893 18,134 17,932 18,236 Average tangible common equity $ 189,515 $ 185,062 $ 158,635 $ 179,748 $ 155,871 Net income to common shareholders $ 8,896 $ 6,629 $ 10,592 $ 31,952 $ 27,071 Return on average tangible common equity 18.62 % 14.21 % 26.49 % 17.78 % 17.37 % Average tangible common equity $ 189,515 $ 185,062 $ 158,635 $ 179,748 $ 155,871 Core net income $ 7,289 $ 9,563 $ 8,081 $ 31,190 $ 24,975 Core return on average tangible common equity 15.26 % 20.50 % 20.21 % 17.35 % 16.02 %


 
19 Non-GAAP Financial Measures Reconciliations Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net interest income $ 20,404 $ 20,731 $ 20,884 $ 80,112 $ 71,338 Add: Noninterest income 3,118 (2,894) 4,603 8,874 8,677 Less: Employee retention related revenue — (5,100) — — — Less: Fee received on early loan payoff 1,863 — — 1,863 — Less: Gain on sale of branches — — 2,600 — 2,600 Less: BOLI benefit claim — — 774 — 774 Less: Net gain (loss) on securities 98 (12) (86) 555 (632) Operating revenue $ 21,561 $ 22,949 $ 22,199 $ 86,568 $ 77,273 Expenses: Total noninterest expense $ 9,717 $ 8,569 $ 10,436 $ 41,876 $ 39,614 Less: One-time retirement related expenses — — — 1,571 — Less: Professional fees related to ERC — (1,243) — — — Less: Net OREO losses (154) (9) — (156) — Less: Loss on sale of branches — — 228 — 228 Adjusted noninterest expenses $ 9,871 $ 9,821 $ 10,208 $ 40,461 $ 39,386 Core efficiency ratio 45.78 % 42.79 % 45.98 % 46.74 % 50.97 %