Southern States Bancshares, Inc. Announces Fourth Quarter 2021 Financial Results

Rhea-AI Summary

Southern States Bancshares reported a net income of $4.1 million or $0.44 per diluted share for Q4 2021, down from $4.9 million in Q3 2021. Excluding PPP loans, linked quarter loan growth was 40.9%. The net interest income rose to $14.1 million, a 3.3% increase from Q3 2021. However, noninterest income decreased by 30.2% to $1.8 million. The nonperforming loans improved to 0.16% of gross loans, while total deposits reached $1.6 billion, reflecting a steady growth trajectory.

Positive

• Loan growth excluding PPP loans of 40.9% in Q4 2021.
• Net interest income increased by 3.3% from Q3 2021.
• Nonperforming loans decreased to 0.16% of gross loans.

Negative

• Net income declined from $4.9 million in Q3 2021 to $4.1 million in Q4 2021.
• Noninterest income decreased by 30.2% compared to Q3 2021.
• Noninterest expense rose by 4.6% from Q3 2021.

Fourth Quarter 2021 Highlights

• Linked quarter loan growth was 36.3% annualized, or 40.9% annualized, excluding the impact of Paycheck Protection Program (PPP) loans
  
• Net income of $4.1 million, or $0.44 per diluted share; return on average assets (ROAA) of 0.99%; return on average stockholders’ equity (ROAE) of 9.15%; and return on average tangible common equity (ROATCE)⁽¹⁾ of 10.22%
  
• Core net income⁽¹⁾ of $4.3 million, or $0.47 per diluted share; core ROAA⁽¹⁾ of 1.04%; and core ROATCE⁽¹⁾ of 10.72%
  

(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., Jan. 24, 2022 (GLOBE NEWSWIRE) -- 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 $4.1 million, or $0.44 diluted earnings per share, for the fourth quarter of 2021. This compares to net income of $4.9 million, or $0.58 diluted earnings per share, for the third quarter of 2021, and net income of $3.3 million, or $0.43 diluted earnings per share, for the fourth quarter of 2020. The Company reported core net income of $4.3 million, or $0.47 diluted core earnings per share, for the fourth quarter of 2021. This compares to core net income of $4.0 million, or $0.48 diluted core earnings per share, for the third quarter of 2021, and core net income of $3.4 million, or $0.43 diluted core earnings per share, for the fourth quarter of 2020 (see “Reconciliation of Non-GAAP Financial Measures”).

Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, "Our execution on the strategies that have made Southern States a consistently high performing growth bank drove our strong 2021 performance. Our experienced bankers with deep ties to their attractive markets produced loan growth, excluding PPP loans, of 28.8% for the year, punctuated by annualized growth of 40.9% in the fourth quarter. Importantly, our asset quality metrics improved in 2021, reflecting our disciplined growth philosophy. Our nonperforming loans were down from the prior year to just 0.16% of gross loans. We successfully completed our initial public offering while building a healthy loan pipeline to begin 2022, and we are well-positioned to further enhance our franchise and create long-term value for our shareholders.”

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2021 was $14.1 million, an increase of 3.3% from $13.6 million for the third quarter of 2021. The increase was primarily attributable to an increase in interest-earning assets.

Relative to the fourth quarter of 2020, net interest income increased $2.8 million, or 25.3%. The increase was substantially the result of an increase in interest-earning assets.

Net interest margin for the fourth quarter of 2021 was 3.68%, compared to 3.77% for the third quarter of 2021. The decrease was primarily the result of a decline in the yield on interest-earning assets.

Relative to the fourth quarter of 2020, net interest margin decreased from 3.73%. The decrease was primarily the result of a decline in the yield on interest-earning assets that more than offset a decline in the cost of funds.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $1.8 million, a decrease of 30.2% from $2.5 million for the third quarter of 2021. The third quarter 2021 results included a bank owned life insurance ("BOLI") death benefit claim of $742,000 and a $189,000 net gain on securities.

Relative to the fourth quarter of 2020, noninterest income increased 7.7% from $1.6 million. In comparing the quarters, there was a decline in swap fees from the fourth quarter of 2020 that was more than offset by gains on the sales of SBA loans.

Noninterest Expense

Noninterest expense for the fourth quarter of 2021 was $9.6 million, an increase of 4.6% from $9.2 million for the third quarter of 2021. The increase was primarily attributable to legal fees and net losses related to OREO properties.

Relative to the fourth quarter of 2020, noninterest expense increased 13.8% from $8.4 million. The increase was primarily attributable to higher salaries and employee benefits expense as production personnel were added in the Georgia market, an increase in public company expenses, an increase in legal fees and the net OREO losses.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $1.3 billion at December 31, 2021, compared with $1.1 billion at September 30, 2021 and $1.0 billion at December 31, 2020. The $104.9 million increase in loans from September 30, 2021 was primarily attributable to an increase in commercial real estate loans.

PPP loans outstanding were $9.2 million at December 31, 2021, compared with $20.3 million and $66.6 million at September 30, 2021 and December 31, 2020, respectively. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the fourth quarter by $115.9 million, or 40.9% annualized, to $1.2 billion.

Deposits

Total deposits were $1.6 billion at December 31, 2021, compared with $1.3 billion at September 30, 2021 and $1.1 billion at December 31, 2020. The $220.1 million increase in total deposits from September 30, 2021 was due to increases of $161.4 million in noninterest-bearing and $58.7 million in interest-bearing accounts. The increase in non-interest checking was enhanced by approximately $100.0 million received from two customers that will likely be on deposit short-term.

Asset Quality

Nonperforming loans totaled $2.0 million, or 0.16% of gross loans, at December 31, 2021, compared with $3.3 million, or 0.29% of gross loans, at September 30, 2021, and $3.5 million, or 0.34% of gross loans, at December 31, 2020. The $1.3 million decrease in nonperforming loans from September 30, 2021 was primarily attributable to the sale of construction and development loans from one borrower. The $1.5 million reduction in nonperforming loans from December 31, 2020 was primarily attributable to one construction and development loan and one residential mortgage loan that were both paid off and one commercial real estate loan that was moved back to accrual status.

Net recoveries for the fourth quarter of 2021 were $15,000, or 0.00% of average loans on an annualized basis, compared to net recoveries of $8,000, or 0.00% of average loans on an annualized basis, for the third quarter of 2021, and net charge-offs of $857,000, or 0.34% of average loans on an annualized basis, for the fourth quarter of 2020.

The Company’s allowance for loan losses was 1.19% of total loans and 752.74% of nonperforming loans at December 31, 2021, compared with 1.23% of total loans and 426.15% of nonperforming loans at September 30, 2021.

OREO totaled $2.9 million at December 31, 2021, compared to $10.1 million at September 30, 2021 and $10.2 million at December 31, 2020. The decrease was substantially due to the sale of a large commercial parcel during December 2021.

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 15 branches in Alabama and Georgia and a loan production office 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 the current COVID-19 pandemic and uncertainty about its continuation. 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 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 earnings 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
(205) 820-8065
ljoyce@ssbank.bank

Matthew Keating
(310) 622-8230
ssbankir@finprofiles.com

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	December 31, 2021 (Unaudited)				September 30, 2021 (Unaudited)				December 31, 2020 (Audited)
Assets
Cash and due from banks	$	6,397			$	19,000			$	23,229
Interest-bearing deposits in banks		203,537				114,800				51,503
Federal funds sold		74,022				44,022				10,175
Total cash and cash equivalents		283,956				177,822				84,907
Securities available for sale, at fair value		132,172				113,317				114,001
Securities held to maturity, at amortized cost		19,672				19,678				—
Other equity securities, at fair value		9,232				9,227				5,017
Restricted equity securities, at cost		2,600				2,600				3,224
Loans held for sale		2,400				2,097				5,696
Loans, net of unearned income		1,250,300				1,145,447				1,030,115
Less allowance for loan losses		14,844				14,097				11,859
Loans, net		1,235,456				1,131,350				1,018,256
Premises and equipment, net		27,044				25,916				24,426
Accrued interest receivable		4,170				3,933				4,243
Bank owned life insurance		22,201				22,081				22,458
Annuities		12,888				12,968				12,903
Foreclosed assets		2,930				10,146				10,224
Goodwill		16,862				16,862				16,862
Core deposit intangible		1,500				1,566				1,764
Other assets		9,887				9,499				8,525
Total assets	$	1,782,970			$	1,559,062			$	1,332,506
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	541,546			$	380,111			$	290,867
Interest-bearing		1,014,905				956,211				848,794
Total deposits		1,556,451				1,336,322				1,139,661
Other borrowings		12,498				12,498				7,975
FHLB advances		25,950				26,900				30,900
Subordinated notes		—				—				4,493
Accrued interest payable		132				125				278
Other liabilities		10,741				8,996				8,543
Total liabilities		1,605,772				1,384,841				1,191,850
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	December 31, 2021 (Unaudited)				September 30, 2021 (Unaudited)				December 31, 2020 (Audited)
Stockholders' equity:
Common stock		45,064				45,064				38,391
Capital surplus		80,640				80,547				65,327
Retained earnings		49,858				46,611				34,183
Accumulated other comprehensive income		2,113				2,600				3,194
Unvested restricted stock		(477	)			(601	)			(439	)
Total stockholders' equity		177,198				174,221				140,656
Total liabilities and stockholders' equity	$	1,782,970			$	1,559,062			$	1,332,506
Shares issued and outstanding		9,012,857				9,012,857				7,678,195

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
	Three Months Ended										Year Ended December 31,
	December 31, 2021				September 30, 2021			December 31, 2020				2021				2020
	(Unaudited)				(Unaudited)			(Unaudited)			(Unaudited)				(Audited)
Interest income:
Loans, including fees	$	14,280			$	13,923		$	12,209		$	54,709			$	47,786
Taxable securities		459				402			377			1,593				1,317
Nontaxable securities		294				266			190			1,023				643
Other interest and dividends		138				143			49			452				539
Total interest income		15,171				14,734			12,825			57,777				50,285
Interest expense:
Deposits		955				1,034			1,363			4,310				7,854
Other borrowings		120				60			212			554				854
Total interest expense		1,075				1,094			1,575			4,864				8,708
Net interest income		14,096				13,640			11,250			52,913				41,577
Provision for loan losses		732				750			600			2,982				3,300
Net interest income after provision for loan losses		13,364				12,890			10,650			49,931				38,277
Noninterest income:
Service charges on deposit accounts		428				403			369			1,528				1,458
Swap fees		(6	)			101			342			931				1,405
SBA/USDA fees		533				130			47			3,968				756
Mortgage origination fees		269				393			309			1,465				1,529
Net gain (loss) on securities		(40	)			189			—			(57	)			742
Other operating income		567				1,293			559			2,968				2,651
Total noninterest income		1,751				2,509			1,626			10,803				8,541
Noninterest expenses:
Salaries and employee benefits		5,563				5,517			4,964			21,667				18,765
Equipment and occupancy expenses		943				908			922			3,640				3,682
Data processing fees		563				524			496			2,128				1,836
Regulatory assessments		263				248			252			952				775
Other operating expenses		2,280				1,988			1,813			8,048				7,127
Total noninterest expenses		9,612				9,185			8,447			36,435				32,185
Income before income taxes		5,503				6,214			3,829			24,299				14,633
Income tax expense		1,445				1,293			514			5,732				2,526
Net income	$	4,058			$	4,921		$	3,315		$	18,567			$	12,107
Basic earnings per share	$	0.45			$	0.59		$	0.43		$	2.26			$	1.58
Diluted earnings per share	$	0.44			$	0.58		$	0.43		$	2.23			$	1.56

The following table provides an analysis of the allowance for loan losses as of the dates indicated.

	Three Months Ended												Year Ended December 31,
	December 31, 2021				September 30, 2021				December 31, 2020					2021				2020
	(Dollars in thousands)
Average loans, net of unearned income	$	1,191,688			$	1,122,741			$	1,008,501			$	1,118,386			$	954,598
Loans, net of unearned income	$	1,250,300			$	1,145,447			$	1,030,115			$	1,250,300			$	1,030,115
Allowance for loan losses at beginning of the period	$	14,097			$	13,339			$	12,116			$	11,859			$	9,265
Charge-offs:
Construction and development		—				—				23				—				23
Residential		—				—				42				44				90
Commercial		—				—				794				—				794
Commercial and industrial		—				—				—				—				—
Consumer and other		—				—				4				2				19
Total charge-offs		—				—				863				46				926
Recoveries:
Construction and development		—				—				—				—				—
Residential		13				7				2				25				11
Commercial		—				—				—				—				—
Commercial and industrial		1				1				2				15				124
Consumer and other		1				—				2				9				85
Total recoveries		15				8				6				49				220
Net charge-offs (recovery)	$	(15	)		$	(8	)		$	857			$	(3	)		$	706
Provision for loan losses	$	732			$	750			$	600			$	2,982			$	3,300
Balance at end of period	$	14,844			$	14,097			$	11,859			$	14,844			$	11,859
Ratio of allowance to end of period loans		1.19	%			1.23	%			1.15	%			1.19	%			1.15	%
Ratio of net charge-offs (recovery) to average loans		0.00	%			0.00	%			0.08	%			0.00	%			0.07	%

The following table sets forth the allocation of the Company’s nonperforming assets among different asset categories as of the dates indicated. Nonperforming assets consist of nonperforming loans plus OREO and repossessed property. Nonperforming loans include nonaccrual loans and loans past due 90 days or more.

	December 31, 2021				September 30, 2021				December 31, 2020
	(Dollars in thousands)
Nonaccrual loans	$	1,972			$	3,308			$	3,418
Past due loans 90 days or more and still accruing interest		—				—				91
Total nonperforming loans		1,972				3,308				3,509
OREO		2,930				10,146				10,224
Total nonperforming assets	$	4,902			$	13,454			$	13,733
Troubled debt restructured loans – nonaccrual(1)		940				1,041				479
Troubled debt restructured loans - accruing		1,072				1,085				1,275
Total troubled debt restructured loans	$	2,012			$	2,126			$	1,754
Allowance for loan losses	$	14,844			$	14,097			$	11,859
Gross loans outstanding at the end of period	$	1,254,117			$	1,149,340			$	1,033,733
Allowance for loan losses to gross loans		1.18	%			1.23	%			1.15	%
Allowance for loan losses to nonperforming loans		752.74	%			426.15	%			337.96	%
Nonperforming loans to gross loans		0.16	%			0.29	%			0.34	%
Nonperforming assets to gross loans and OREO		0.39	%			1.16	%			1.32	%
Nonaccrual loans by category:
Real Estate:
Construction & Development	$	645			$	1,972			$	977
Residential Mortgages		362				339				857
Commercial Real Estate Mortgages		674				690				1,478
Commercial & Industrial		285				300				84
Consumer and other		6				7				22
	$	1,972			$	3,308			$	3,418

(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.

The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and average costs of our liabilities for the periods indicated. Yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

	Three Months Ended
	December 31, 2021										September 30, 2021										December 31, 2020
	Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Gross loans, net of unearned income(1)	$	1,191,688			$	14,280		4.75	%		$	1,122,741			$	13,923		4.92	%		$	1,008,501			$	12,209		4.82	%
Taxable securities		86,292			$	459		2.11	%			76,612				402		2.08	%			75,128				377		2.00	%
Nontaxable securities		53,909			$	294		2.16	%			48,162				266		2.20	%			28,483				190		2.65	%
Other interest-earnings assets		187,601			$	138		0.29	%			189,131				143		0.30	%			87,151				49		0.23	%
Total interest-earning assets	$	1,519,490			$	15,171		3.96	%		$	1,436,646			$	14,734		4.07	%		$	1,199,263			$	12,825		4.25	%
Allowance for loan losses		(14,421	)									(13,645	)									(12,018	)
Noninterest-earning assets		123,735										125,870										117,031
Total Assets	$	1,628,804									$	1,548,871									$	1,304,276
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		101,863				25		0.10	%			98,203				24		0.10	%			86,098				53		0.25	%
Savings and money market accounts		599,948				625		0.41	%			565,861				665		0.47	%			396,928				613		0.61	%
Time deposits		263,646				305		0.46	%			290,460				345		0.47	%			339,397				697		0.82	%
FHLB advances		25,950				22		0.34	%			31,520				34		0.43	%			24,204				52		0.86	%
Other borrowings		12,498				98		3.11	%			6,652				26		1.57	%			12,657				160		5.02	%
Total interest-bearing liabilities	$	1,003,905			$	1,075		0.42	%		$	992,696			$	1,094		0.44	%		$	859,284			$	1,575		0.73	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	439,142									$	384,207									$	297,995
Other liabilities		9,844										9,663										7,948
Total noninterest-bearing liabilities	$	448,986									$	393,870									$	305,943
Stockholders’ Equity		175,913										162,305										139,049
Total Liabilities and Stockholders’ Equity	$	1,628,804									$	1,548,871									$	1,304,276
Net interest income					$	14,096									$	13,640									$	11,250
Net interest spread(2)								3.54	%									3.63	%									3.52	%
Net interest margin(3)								3.68	%									3.77	%									3.73	%

(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.  

	Year Ended
	December 31, 2021										December 31, 2020
	Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Gross loans, net of unearned income(1)	$	1,118,386			$	54,709		4.89	%		$	954,598			$	47,786		5.01	%
Taxable securities		77,281				1,593		2.06	%			62,105				1,317		2.12	%
Nontaxable securities		45,144				1,023		2.27	%			21,881				643		2.94	%
Other interest-earnings assets		158,243				452		0.29	%			102,214				539		0.53	%
Total interest-earning assets	$	1,399,054			$	57,777		4.13	%		$	1,140,798			$	50,285		4.41	%
Allowance for loan losses		(13,276	)									(10,636	)
Noninterest-earning assets		124,336										111,278
Total Assets	$	1,510,114									$	1,241,440
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		96,503				91		0.09	%			82,407				184		0.22	%
Savings and money market accounts		527,484				2,680		0.51	%			369,833				2,901		0.78	%
Time deposits		298,883				1,539		0.51	%			354,124				4,769		1.35	%
FHLB advances		30,636				143		0.47	%			21,448				179		0.83	%
Other borrowings		11,097				411		3.72	%			12,523				675		5.39	%
Total interest-bearing liabilities	$	964,603			$	4,864		0.50	%		$	840,335			$	8,708		1.04	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	378,868									$	259,962
Other liabilities		9,366										7,202
Total noninterest-bearing liabilities	$	388,234									$	267,164
Stockholders’ Equity		157,277										133,941
Total Liabilities and Stockholders’ Equity	$	1,510,114									$	1,241,440
Net interest income						52,913									$	41,577
Net interest spread(2)								3.63	%									3.37	%
Net interest margin(3)								3.78	%									3.64	%

(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.

Per Share Information	Three Months Ended												Year Ended December 31,
	December 31, 2021				September 30, 2021				December 31, 2020					2021				2020
	(Dollars in thousands, except share and per share amounts)
Net income	$	4,058			$	4,921			$	3,315			$	18,567			$	12,107
Earnings per share - basic	$	0.45			$	0.59			$	0.43			$	2.26			$	1.58
Earnings per share - diluted	$	0.44			$	0.58			$	0.43			$	2.23			$	1.56
Weighted average shares outstanding		9,012,857				8,354,860				7,674,756				8,198,188				7,673,085
Diluted weighted average shares outstanding		9,125,872				8,467,460				7,770,142				8,316,536				7,765,863
Shares issued and outstanding		9,012,857				9,012,857				7,678,195				9,012,857				7,678,195
Total stockholders' equity	$	177,198				174,221			$	140,656			$	177,198			$	140,656
Book value per share	$	19.66			$	19.33			$	18.32			$	19.66			$	18.32
Performance Ratios	Three Months Ended												Year Ended December 31,
	December 31, 2021				September 30, 2021				December 31, 2020					2021				2020
Net interest margin		3.68	%			3.77	%			3.73	%			3.78	%			3.64	%
Net interest spread		3.54	%			3.63	%			3.52	%			3.63	%			3.37	%
Efficiency ratio		60.50	%			57.55	%			65.61	%			57.13	%			65.18	%
Return on average assets		0.99	%			1.26	%			1.01	%			1.23	%			0.98	%
Return on average stockholders’ equity		9.15	%			12.03	%			9.48	%			11.80	%			9.49	%

Core and PPP Loans	December 31, 2021			September 30, 2021				December 31, 2020
	(Dollars in thousands)
Core loans	1,244,914			$	1,129,075			$	967,177
PPP loans	9,203				20,265				66,556
Unearned income	(3,817	)			(3,893	)			(3,618	)
Loans, net of unearned income	1,250,300				1,145,447				1,030,115
Allowance for loan losses	(14,844	)			(14,097	)			(11,859	)
Loans, net	1,235,456			$	1,131,350			$	1,018,256

Reconciliation of Non-GAAP Financial Measures

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
	Three Months Ended												Year Ended December 31,
	December 31, 2021				September 30, 2021				December 31, 2020					2021				2020
	(Dollars in thousands, except share and per share amounts)
Net income	$	4,058			$	4,921			$	3,315			$	18,567			$	12,107
Add: Merger expenses		—				—				—				—				—
Add: Net OREO write-downs (gains)		227				—				51				219				844
Less: Gain on sale of USDA loan		—				—				—				2,806				—
Less: BOLI death benefits		—				742				—				742				615
Less: Gain (loss) on securities		(40	)			189				—				(57	)			742
Less: Tax effect		69				(52	)			12				(661	)			25
Core net income	$	4,256			$	4,042			$	3,354			$	15,956			$	11,569
Average assets	$	1,628,804			$	1,548,871			$	1,304,276			$	1,510,114			$	1,241,440
Core return on average assets		1.04	%			1.04	%			1.02	%			1.06	%			0.93	%
Net income	$	4,058			$	4,921			$	3,315			$	18,567			$	12,107
Add: Merger expenses		—				—				—				—				—
Add: Net OREO write-downs (gains)		227				—				51				219				844
Add: Provision		732				750				600				2,982				3,300
Less: Gain on sale of USDA loan		—				—				—				2,806				—
Less: BOLI death benefits		—				742				—				742				615
Less: Gain (loss) on securities		(40	)			189				—				(57	)			742
Add: Income taxes		1,445				1,293				514				5,732				2,526
Pretax pre-provision core net income	$	6,502			$	6,033			$	4,480			$	24,009			$	17,420
Average assets	$	1,628,804			$	1,548,871			$	1,304,276			$	1,510,114			$	1,241,440
Pretax pre-provision core return on average assets		1.58	%			1.55	%			1.37	%			1.59	%			1.40	%
Total stockholders' equity	$	177,198			$	174,221			$	140,656			$	177,198			$	140,656
Less: Intangible assets		18,362				18,428				18,626				18,362				18,626
Tangible common equity	$	158,836			$	155,793			$	122,030			$	158,836			$	122,030
Core net income	$	4,256			$	4,042			$	3,354			$	15,956			$	11,569
Diluted weighted average shares outstanding		9,125,872				8,467,460				7,770,142				8,316,536				7,765,863
Diluted core earnings per share	$	0.47			$	0.48			$	0.43			$	1.92			$	1.49
Common shares outstanding at year or period end		9,012,857				9,012,857				7,678,195				9,012,857				7,678,195
Tangible book value per share	$	17.62			$	17.29			$	15.89			$	17.62			$	15.89
Reconciliation of Non-GAAP Financial Measures
	Three Months Ended												Year Ended December 31,
	December 31, 2021				September 30, 2021				December 31, 2020					2021				2020
	(Dollars in thousands, except share and per share amounts)
Total assets at end of period	$	1,782,970			$	1,559,062			$	1,332,506			$	1,782,970			$	1,332,506
Less: Intangible assets		18,362				18,428				18,626				18,362				18,626
Adjusted assets at end of period	$	1,764,608			$	1,540,634			$	1,313,880			$	1,764,608			$	1,313,880
Tangible common equity to tangible assets		9.00	%			10.11	%			9.29	%			9.00	%			9.29	%
Total average stockholders’ equity	$	175,913			$	162,305			$	139,049				157,277				133,941
Less: Average intangible assets		18,402				18,470				18,664				18,501				18,764
Average tangible common equity	$	157,511			$	143,835			$	120,385			$	138,776			$	115,177
Net income to common shareholders	$	4,058			$	4,921			$	3,315			$	18,567			$	12,107
Return on average tangible common equity		10.22	%			13.57	%			10.95	%			13.38	%			10.51	%
Average tangible common equity	$	157,511			$	143,835			$	120,385			$	138,776			$	115,177
Core net income	$	4,256			$	4,042			$	3,354			$	15,956			$	11,569
Core return on average tangible common equity		10.72	%			11.15	%			11.08	%			11.50	%			10.04	%
Net interest income	$	14,096			$	13,640				11,250				52,913				41,577
Add: Noninterest income		1,751				2,509				1,626				10,803				8,541
Less: Gain on sale of USDA loan		—				—				—				2,806				—
Less: BOLI death benefits		—				742				—				742				615
Less: Gain (loss) on securities		(40	)			189				—				(57	)			742
Operating revenue	$	15,887			$	15,218			$	12,876			$	60,225			$	48,761
Expenses:
Total noninterest expense	$	9,612			$	9,185			$	8,447				36,435				32,185
Less: Merger expenses		—				—				—				—				—
Less: Net OREO write-down (gains)		227				—				51				219				844
Adjusted noninterest expenses	$	9,385			$	9,185			$	8,396			$	36,216			$	31,341
Core efficiency ratio		59.07	%			60.36	%			65.21	%			60.13	%			64.27	%

FAQ

What were Southern States Bancshares' earnings for Q4 2021?

Southern States Bancshares reported a net income of $4.1 million, or $0.44 per diluted share, for Q4 2021.

How did loan growth perform for Southern States Bancshares in Q4 2021?

Excluding PPP loans, linked quarter loan growth was 40.9% in Q4 2021.

What is the status of nonperforming loans for Southern States Bancshares as of Q4 2021?

Nonperforming loans improved to 0.16% of gross loans as of December 31, 2021.

What was the increase in net interest income for Southern States Bancshares in Q4 2021?

Net interest income for Q4 2021 increased by 3.3% from Q3 2021, totaling $14.1 million.

How much did noninterest income decrease for Southern States Bancshares in Q4 2021?

Noninterest income decreased by 30.2% to $1.8 million in Q4 2021 compared to Q3 2021.