Southern States Bancshares, Inc. Announces Second Quarter 2022 Financial Results

Rhea-AI Summary

Southern States Bancshares reported a strong second quarter of 2022, achieving net income of $5.2 million or $0.59 per diluted share, a rise from $4.6 million in Q1 2022. The company experienced an impressive 36.8% annualized loan growth quarter-over-quarter, driving net interest income up by 11.7% to $16.4 million. The net interest margin also improved to 3.84%, up 31 basis points. However, total stockholders’ equity slightly decreased to $167.9 million due to market conditions impacting securities portfolio values.

Positive

• Net income increased to $5.2 million from $4.6 million in Q1 2022.
• Core net income rose to $5.3 million, reflecting robust operational performance.
• Total loans increased by $120.1 million, primarily due to growth in commercial real estate loans.

Negative

• Total stockholders' equity decreased to $167.9 million, down from $169.2 million in Q1 2022.
• Noninterest income fell 31.3% year-over-year, indicating challenges in certain revenue streams.
• Provision for loan losses increased to $1.3 million due to robust loan growth.

Second Quarter 2022 Highlights

• Linked-quarter loan growth was 36.8% annualized
  
  
• Net income of $5.2 million, or $0.59 per diluted share
  
  
• Core net income⁽¹⁾ of $5.3 million, or $0.59 per diluted share⁽¹⁾
  
  
• Net interest margin (“NIM”) of 3.84%, up 31 basis points from the prior quarter
  
  
• NIM of 3.86% on a fully-taxable equivalent basis⁽¹⁾
  
  
• Return on average assets (“ROAA”) of 1.15%; return on average stockholders’ equity (“ROAE”) of 12.32%; and return on average tangible common equity (“ROATCE”)⁽¹⁾ of 13.80%
  
  
• Core ROAA⁽¹⁾ of 1.16%; and core ROATCE⁽¹⁾ of 13.89%
  

(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., July 25, 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 $5.2 million, or $0.59 diluted earnings per share, for the second quarter of 2022. This compares to net income of $4.6 million, or $0.50 diluted earnings per share, for the first quarter of 2022, and net income of $3.9 million, or $0.50 diluted earnings per share, for the second quarter of 2021. The Company reported core net income of $5.3 million, or $0.59 diluted core earnings per share, for the second quarter of 2022. This compares to core net income of $4.8 million, or $0.53 diluted core earnings per share, for the first quarter of 2022, and core net income of $3.9 million, or $0.50 diluted core earnings per share, for the second quarter of 2021 (see “Reconciliation of Non-GAAP Financial Measures”).

Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, “Our dedicated lending teams generated strong production in the second quarter, with linked-quarter annualized loan growth of 36.8% that helped bolster our net interest income. We made a concerted effort in 2021 to invest in more talent to capitalize on our robust deposit base and meet the steady demand we are seeing across our economically dynamic footprint. These new hires, in partnership with our long-tenured bankers, continue to pursue an abundance of opportunities, giving us confidence in ongoing growth in the second half of 2022.”

“As we grow, we remain disciplined with our expense control and prudent with our underwriting, ensuring that our solid asset quality remains a fixture of the Southern States story. Our nonperforming loans in the second quarter totaled just 0.25% of total loans,” Mr. Whatley continued. “Responsible growth has and will always be the centerpiece of our strategy, enabling us to deliver consistently for our shareholders across credit cycles.”

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2022 was $16.4 million, an increase of 11.7% from $14.7 million for the first quarter of 2022. The increase was primarily attributable to an increase in interest-earning assets coupled with a higher net interest margin.

Relative to the second quarter of 2021, net interest income increased $3.5 million, or 26.9%. The increase was substantially the result of an increase in interest-earning assets.

Net interest margin for the second quarter of 2022 was 3.84%, compared to 3.53% for the first quarter of 2022. The increase was primarily the result of a 34 basis point increase in the yield on interest-earning assets, partially offset by a 3 basis point increase in the cost of interest-bearing liabilities.

Relative to the second quarter of 2021, net interest margin increased from 3.75%. The increase was primarily due to an increase in the yield on interest-earning assets combined with a decrease in the cost of interest-bearing liabilities.

Noninterest Income

Noninterest income for the second quarter of 2022 was $1.4 million, an increase of 5.3% from $1.3 million for the first quarter of 2022. The increase was substantially the result of a $320,000 decline in the net loss on securities, partially offset by a $296,000 reduction in gains on sale of SBA/USDA loans from the first quarter of 2022.

Relative to the second quarter of 2021, noninterest income decreased 31.3% from $2.0 million. The decreases include reductions in swap fees, mortgage income and SBA income, which are reflective of the market conditions and timing.

Noninterest Expense

Noninterest expense for the second quarter of 2022 was $9.7 million, up from $9.3 million for the first quarter of 2022. The increase was primarily attributable to an increase in salaries and benefits as a result of additional employee staffing.

Relative to the second quarter of 2021, noninterest expense increased 6.0% from $9.1 million. The increase was primarily attributable to higher salaries and employee benefits expense as production personnel were added in the Georgia market, plus higher insurance and professional fees as a result of going public, net of a reduction in SBA expense associated with the Paycheck Protection Program (“PPP”) from the second quarter of 2021. This net increase was partially offset by a decrease in occupancy expense as a result of accelerated depreciation during the second quarter of 2021 on a formerly leased Birmingham branch location.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $1.4 billion at June 30, 2022, up $120.1 million from March 31, 2022 and up from $1.1 billion at June 30, 2021. The linked-quarter increase in loans was primarily attributable to an increase in commercial real estate loans in the Atlanta market.

Deposits

Total deposits were $1.6 billion at June 30, 2022, compared with $1.5 billion at March 31, 2022 and $1.3 billion at June 30, 2021. The $103.1 million net increase in total deposits from March 31, 2022 was due to an increase of $105.6 million in interest-bearing account balances that more than offset a slight decrease in noninterest-bearing deposits.

Asset Quality

Nonperforming loans totaled $3.6 million, or 0.25% of gross loans, at June 30, 2022, compared with $3.2 million, or 0.25% of gross loans, at March 31, 2022, and $2.2 million, or 0.20% of gross loans, at June 30, 2021. The $304,000 net increase in nonperforming loans from March 31, 2022 was primarily attributable to two commercial and industrial loans that were placed on nonaccrual and partially offset by one commercial real estate loan that was moved back to accruing status. The $1.4 million increase in nonperforming loans from June 30, 2021 was primarily attributable to two commercial and industrial loans, one commercial real estate loan and one residential mortgage loan that were placed on nonaccrual. These increases were partially offset by one commercial real estate loan being moved back to accruing status and one commercial and industrial loan that was ninety days past due but was subsequently paid off during the first quarter of 2022.

The Company recorded a provision for loan losses of $1.3 million for the second quarter of 2022, compared to $700,000 for the first quarter of 2022. The provision was primarily due to robust loan growth.

Net recoveries for the second quarter of 2022 were $11,000, or 0.00% of average loans on an annualized basis, compared to net charge-offs of $52,000, or 0.02% of average loans on an annualized basis, for the first quarter of 2022, and net charge-offs of $16,000, or 0.01% of average loans on an annualized basis, for the second quarter of 2021.

The Company’s allowance for loan losses was 1.18% of total loans and 473.44% of nonperforming loans at June 30, 2022, compared with 1.18% of total loans and 477.26% of nonperforming loans at March 31, 2022.

Capital

As of June 30, 2022, total stockholders’ equity was $167.9 million, compared with $169.2 million at March 31, 2022. The decrease of $1.2 million was primarily due to an increase in accumulated other comprehensive loss resulting from changes in the value of the available for sale securities portfolio due to rapid increases in interest rates during the quarter.

In connection with its recently announced stock repurchase program, the Company repurchased 58,258 shares of its common stock during the second quarter of 2022 at an average price of $21.03 per share.

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 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 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 Annual Report on Form 10-K for the year ended December 31, 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 

Kevin Dobbs
(310) 622-8245
ssbankir@finprofiles.com 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	June 30, 2022 (Unaudited)				March 31, 2022 (Unaudited)				December 31, 2021 (Audited)				June 30, 2021 (Unaudited)
Assets
Cash and due from banks	$	22,167			$	22,851			$	6,397			$	17,953
Interest-bearing deposits in banks		95,156				111,951				203,537				131,169
Federal funds sold		73,024				74,022				74,022				39,021
Total cash and cash equivalents		190,347				208,824				283,956				188,143
Securities available for sale, at fair value		151,749				151,027				132,172				105,617
Securities held to maturity, at amortized cost		19,662				19,667				19,672				19,683
Other equity securities, at fair value		6,958				8,937				9,232				8,985
Restricted equity securities, at cost		2,825				2,825				2,600				2,788
Loans held for sale		2,709				2,509				2,400				2,767
Loans, net of unearned income		1,430,205				1,310,070				1,250,300				1,097,559
Less allowance for loan losses		16,807				15,492				14,844				13,339
Loans, net		1,413,398				1,294,578				1,235,456				1,084,220
Premises and equipment, net		28,467				28,065				27,044				25,011
Accrued interest receivable		4,839				4,427				4,170				3,725
Bank owned life insurance		29,509				29,343				22,201				22,710
Annuities		15,540				15,523				12,888				12,941
Foreclosed assets		2,930				2,930				2,930				10,146
Goodwill		16,862				16,862				16,862				16,862
Core deposit intangible		1,368				1,434				1,500				1,632
Other assets		15,332				11,883				9,509				9,206
Total assets	$	1,902,495			$	1,798,834			$	1,782,592			$	1,514,436
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	512,598			$	515,110			$	541,546			$	369,479
Interest-bearing		1,132,348				1,026,729				1,014,905				943,131
Total deposits		1,644,946				1,541,839				1,556,451				1,312,610
Other borrowings		—				—				12,498				12,490
FHLB advances		25,000				25,950				25,950				31,900
Subordinated notes		47,013				47,154				—				—
Accrued interest payable		88				107				132				175
Other liabilities		17,501				14,595				10,363				8,358
Total liabilities		1,734,548				1,629,645				1,605,394				1,365,533
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	June 30, 2022 (Unaudited)				March 31, 2022 (Unaudited)				December 31, 2021 (Audited)				June 30, 2021 (Unaudited)
Stockholders' equity:
Common stock		43,458				43,749				45,064				38,582
Capital surplus		75,597				76,426				80,640				65,978
Retained earnings		58,039				53,604				49,858				42,385
Accumulated other comprehensive income (loss)		(8,439	)			(3,755	)			2,113				2,683
Unvested restricted stock		(708	)			(835	)			(477	)			(725	)
Total stockholders' equity		167,947				169,189				177,198				148,903
Total liabilities and stockholders' equity	$	1,902,495			$	1,798,834			$	1,782,592			$	1,514,436
Shares issued and outstanding		8,691,620				8,749,878				9,012,857				7,716,428

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
	For the Three Months Ended											For the Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021			June 30, 2022				June 30, 2021
Interest income:
Loans, including fees	$	16,265			$	14,766			$	13,484		$	31,031			$	26,505
Taxable securities		788				619				332			1,407				733
Nontaxable securities		309				299				255			608				462
Other interest and dividends		390				188				124			578				172
Total interest income		17,752				15,872				14,195			33,624				27,872
Interest expense:
Deposits		889				873				1,131			1,762				2,321
Other borrowings		498				345				171			843				374
Total interest expense		1,387				1,218				1,302			2,605				2,695
Net interest income		16,365				14,654				12,893			31,019				25,177
Provision for loan losses		1,304				700				750			2,004				1,500
Net interest income after provision for loan losses		15,061				13,954				12,143			29,015				23,677
Noninterest income:
Service charges on deposit accounts		480				445				337			925				698
Swap fees		21				15				279			36				836
SBA/USDA fees		93				388				439			481				3,304
Mortgage origination fees		213				286				396			499				802
Net gain (loss) on securities		(42	)			(361	)			27			(403	)			(206	)
Other operating income		639				560				567			1,199				1,108
Total noninterest income		1,404				1,333				2,045			2,737				6,542
Noninterest expenses:
Salaries and employee benefits		5,982				5,725				5,530			11,707				10,587
Equipment and occupancy expenses		719				705				909			1,424				1,789
Data processing fees		570				564				527			1,134				1,042
Regulatory assessments		262				263				221			525				441
Other operating expenses		2,119				2,033				1,919			4,152				3,779
Total noninterest expenses		9,652				9,290				9,106			18,942				17,638
Income before income taxes		6,813				5,997				5,082			12,810				12,581
Income tax expense		1,590				1,440				1,176			3,030				2,993
Net income	$	5,223			$	4,557			$	3,906		$	9,780			$	9,588
Basic earnings per share	$	0.60			$	0.51			$	0.51		$	1.11			$	1.25
Diluted earnings per share	$	0.59			$	0.50			$	0.50		$	1.09			$	1.23

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

	Three Months Ended												Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(Dollars in thousands)
Average loans, net of unearned income	$	1,359,320			$	1,278,413			$	1,091,139			$	1,319,090			$	1,078,915
Loans, net of unearned income	$	1,430,205			$	1,310,070			$	1,097,559			$	1,430,205			$	1,097,559
Allowance for loan losses at beginning of the period	$	15,492			$	14,844			$	12,605			$	14,844			$	11,859
Charge-offs:
Construction and development		—				66				—				66				—
Residential		7				—				28				7				44
Commercial		—				—				—				—				—
Commercial and industrial		—				—				—				—				—
Consumer and other		1				6				—				7				2
Total charge-offs		8				72				28				80				46
Recoveries:
Construction and development		—				—				—				—				—
Residential		18				17				3				35				5
Commercial		—				—				—				—				—
Commercial and industrial		—				—				2				—				13
Consumer and other		1				3				7				4				8
Total recoveries		19				20				12				39				26
Net charge-offs (recoveries)	$	(11	)		$	52			$	16			$	41			$	20
Provision for loan losses	$	1,304			$	700			$	750			$	2,004			$	1,500
Balance at end of period	$	16,807			$	15,492			$	13,339			$	16,807			$	13,339
Ratio of allowance to end of period loans		1.18	%			1.18	%			1.22	%			1.18	%			1.22	%
Ratio of net charge-offs (recoveries) to average loans		0.00	%			0.00	%			0.00	%			0.00	%			0.00	%

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.

	June 30, 2022				March 31, 2022				December 31, 2021				June 30, 2021
	(Dollars in thousands)
Nonaccrual loans	$	3,550			$	3,246			$	1,478			$	2,010
Past due loans 90 days or more and still accruing interest		—				—				494				144
Total nonperforming loans		3,550				3,246				1,972				2,154
OREO		2,930				2,930				2,930				10,146
Total nonperforming assets	$	6,480			$	6,176			$	4,902			$	12,300
Troubled debt restructured loans – nonaccrual(1)		676				904				940				695
Troubled debt restructured loans - accruing		1,323				1,058				1,072				1,096
Total troubled debt restructured loans	$	1,999			$	1,962			$	2,012			$	1,791
Allowance for loan losses	$	16,807			$	15,492			$	14,844			$	13,339
Gross loans outstanding at the end of period	$	1,435,089			$	1,314,066			$	1,254,117			$	1,101,677
Allowance for loan losses to gross loans		1.17	%			1.18	%			1.18	%			1.21	%
Allowance for loan losses to nonperforming loans		473.44	%			477.26	%			752.74	%			619.27	%
Nonperforming loans to gross loans		0.25	%			0.25	%			0.16	%			0.20	%
Nonperforming assets to gross loans and OREO		0.45	%			0.47	%			0.39	%			1.11	%
Nonaccrual loans by category:
Real estate mortgages:
Construction & Development	$	73			$	76			$	346			$	84
Residential Mortgages		563				510				167				250
Commercial Real Estate Mortgages		2,135				2,388				674				1,347
Commercial & Industrial		768				269				285				316
Consumer and other		11				3				6				13
	$	3,550			$	3,246			$	1,478			$	2,010

(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
	June 30, 2022										March 31, 2022										June 30, 2021
	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)	$	1,359,320			$	16,265		4.80	%		$	1,278,413			$	14,766		4.68	%		$	1,091,139			$	13,484		4.96	%
Taxable securities		121,677			$	788		2.60	%			106,820				619		2.35	%			67,785			$	332		1.96	%
Nontaxable securities		56,850			$	309		2.18	%			54,863				299		2.21	%			44,991			$	255		2.28	%
Other interest-earnings assets		172,175			$	390		0.91	%			244,202				188		0.31	%			176,542			$	124		0.28	%
Total interest-earning assets	$	1,710,022			$	17,752		4.16	%		$	1,684,298			$	15,872		3.82	%		$	1,380,457			$	14,195		4.12	%
Allowance for loan losses		(15,815	)									(15,041	)									(12,869	)
Noninterest-earning assets		127,230										117,758										123,784
Total Assets	$	1,821,437									$	1,787,015									$	1,491,372
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		114,743				27		0.09	%			110,983				26		0.09	%			97,202				24		0.10	%
Savings and money market accounts		735,845				625		0.34	%			675,504				591		0.36	%			501,155				713		0.57	%
Time deposits		208,774				237		0.46	%			237,411				256		0.44	%			317,522				394		0.50	%
FHLB advances		25,000				21		0.33	%			25,950				22		0.34	%			31,900				35		0.44	%
Other borrowings		47,066				477		4.07	%			32,924				323		3.98	%			12,535				136		4.36	%
Total interest-bearing liabilities	$	1,131,428			$	1,387		0.49	%		$	1,082,772			$	1,218		0.46	%		$	960,314			$	1,302		0.54	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	502,728									$	514,456									$	374,166
Other liabilities		17,243										12,543										9,409
Total noninterest-bearing liabilities	$	519,971									$	526,999									$	383,575
Stockholders’ Equity		170,038										177,244										147,483
Total Liabilities and Stockholders’ Equity	$	1,821,437									$	1,787,015									$	1,491,372
Net interest income					$	16,365									$	14,654									$	12,893
Net interest spread(2)								3.67	%									3.36	%									3.58	%
Net interest margin(3)								3.84	%									3.53	%									3.75	%
Net interest margin - FTE(4)(5)								3.86	%									3.55	%									3.77	%

(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 23.5% tax rate.
(5) Refer to “Reconciliation of Non-GAAP Financial Measures”.

	Six Months Ended
	June 30, 2022										June 30, 2021
	Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Gross loans, net of unearned income(1)	$	1,319,090			$	31,031		4.74	%		$	1,078,915			$	26,505		4.95	%
Taxable securities		114,289			$	1,407		2.48	%			73,040				733		2.02	%
Nontaxable securities		55,862			$	608		2.19	%			39,156				462		2.38	%
Other interest-earnings assets		207,990			$	578		0.56	%			127,620				172		0.27	%
Total interest-earning assets	$	1,697,231			$	33,624		4.00	%		$	1,318,731			$	27,872		4.26	%
Allowance for loan losses		(15,430	)									(12,506	)
Noninterest-earning assets		122,520										123,862
Total Assets	$	1,804,321									$	1,430,087
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing transaction accounts		112,874				53		0.09	%			92,914				42		0.09	%
Savings and money market accounts		705,841				1,217		0.35	%			471,145				1,391		0.60	%
Time deposits		223,013				492		0.45	%			321,075				888		0.56	%
FHLB advances		25,472				43		0.34	%			32,569				86		0.53	%
Other borrowings		40,034				800		4.03	%			12,644				288		4.59	%
Total interest-bearing liabilities	$	1,107,234			$	2,605		0.47	%		$	930,347			$	2,695		0.58	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	508,560									$	345,518
Other liabilities		14,906										8,973
Total noninterest-bearing liabilities	$	523,466									$	354,491
Stockholders’ Equity		173,621										145,249
Total Liabilities and Stockholders’ Equity	$	1,804,321									$	1,430,087
Net interest income					$	31,019									$	25,177
Net interest spread(2)								3.53	%									3.68	%
Net interest margin(3)								3.69	%									3.85	%
Net interest margin - FTE(4)(5)								3.70	%									3.87	%

(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 23.5% tax rate.
(5) Refer to “Reconciliation of Non-GAAP Financial Measures”.

Per Share Information	Three Months Ended												Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(Dollars in thousands, except share and per share amounts)
Net income	$	5,223			$	4,557			$	3,906			$	9,780			$	9,588
Earnings per share - basic	$	0.60			$	0.51			$	0.51			$	1.11			$	1.25
Earnings per share - diluted	$	0.59			$	0.50			$	0.50			$	1.09			$	1.23
Weighted average shares outstanding		8,740,295				8,935,384				7,691,084				8,818,327				7,691,084
Diluted weighted average shares outstanding		8,894,577				9,065,364				7,810,952				8,960,565				7,809,943
Shares issued and outstanding		8,691,620				8,749,878				7,716,428				8,691,620				7,716,428
Total stockholders' equity	$	167,947			$	169,189			$	148,903			$	167,947			$	148,903
Book value per share	$	19.32			$	19.34			$	19.30			$	19.32			$	19.30
Performance Ratios	Three Months Ended												Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net interest margin		3.84	%			3.53	%			3.75	%			3.69	%			3.85	%
Net interest spread		3.67	%			3.36	%			3.58	%			3.53	%			3.68	%
Efficiency ratio		54.19	%			56.83	%			61.07	%			55.45	%			55.25	%
Return on average assets		1.15	%			1.03	%			1.05	%			1.09	%			1.35	%
Return on average stockholders’ equity		12.32	%			10.43	%			10.62	%			11.36	%			13.31	%

Core and PPP Loans	June 30, 2022				March 31, 2022				December 31, 2021				June 30, 2021
	(Dollars in thousands)
Core loans	$	1,435,089			$	1,313,173			$	1,244,914			$	1,063,913
PPP loans		—				893				9,203				37,764
Unearned income		(4,884	)			(3,996	)			(3,817	)			(4,118	)
Loans, net of unearned income		1,430,205				1,310,070				1,250,300				1,097,559
Allowance for loan losses		(16,807	)			(15,492	)			(14,844	)			(13,339	)
Loans, net	$	1,413,398			$	1,294,578			$	1,235,456			$	1,084,220

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												Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(Dollars in thousands, except share and per share amounts)
Net income	$	5,223			$	4,557			$	3,906			$	9,780			$	9,588
Add: Merger expenses		—				—				—				—				—
Add: Net OREO gains		—				—				(8	)			—				(8	)
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: Gain (loss) on securities		(42	)			(361	)			27				(403	)			(206	)
Less: Tax effect		11				94				(9	)			105				(678	)
Core net income	$	5,254			$	4,824			$	3,880			$	10,078			$	7,658
Average assets	$	1,821,437			$	1,787,015			$	1,491,372			$	1,804,321			$	1,430,087
Core return on average assets		1.16	%			1.09	%			1.04	%			1.13	%			1.08	%
Net income	$	5,223			$	4,557			$	3,906			$	9,780			$	9,588
Add: Merger expenses		—				—				—				—				—
Add: Net OREO gains		—				—				(8	)			—				(8	)
Add: Provision		1,304				700				750				2,004				1,500
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: Gain (loss) on securities		(42	)			(361	)			27				(403	)			(206	)
Add: Income taxes		1,590				1,440				1,176				3,030				2,993
Pretax pre-provision core net income	$	8,159			$	7,058			$	5,797			$	15,217			$	11,473
Average assets	$	1,821,437			$	1,787,015			$	1,491,372			$	1,804,321			$	1,430,087
Pretax pre-provision core return on average assets		1.80	%			1.60	%			1.56	%			1.70	%			1.62	%
Net interest income	$	16,365			$	14,654			$	12,893			$	31,019			$	25,177
Add: Fully-taxable equivalent adjustments(1)		83				78				68				161				128
Net interest income - FTE	$	16,448			$	14,732			$	12,961			$	31,180			$	25,305
Net interest margin		3.84	%			3.53	%			3.75	%			3.69	%			3.85	%
Effect of fully-taxable equivalent adjustments(1)		0.02	%			0.02	%			0.02	%			0.01	%			0.02	%
Net interest margin - FTE		3.86	%			3.55	%			3.77	%			3.70	%			3.87	%
Total stockholders' equity	$	167,947			$	169,189			$	148,903			$	167,947			$	148,903
Less: Intangible assets		18,230				18,296				18,494				18,230				18,494
Less: Monitory interest not included in tangible assets	$	—			$	—			$	—			$	—			$	—
Tangible common equity	$	149,717			$	150,893			$	130,409			$	149,717			$	130,409
Reconciliation of Non-GAAP Financial Measures
	Three Months Ended												Six Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(Dollars in thousands, except share and per share amounts)
Core net income	$	5,254			$	4,824			$	3,880			$	10,078			$	7,658
Diluted weighted average shares outstanding		8,894,577				9,065,364				7,810,952				8,960,565				7,809,943
Diluted core earnings per share	$	0.59			$	0.53			$	0.50			$	1.12			$	0.98
Common shares outstanding at year or period end		8,691,620				8,749,878				7,716,428				8,691,620				7,716,428
Tangible book value per share	$	17.23			$	17.25			$	16.90			$	17.23			$	16.90
Total assets at end of period	$	1,902,495			$	1,798,834			$	1,514,436			$	1,902,495			$	1,514,436
Less: Intangible assets		18,230				18,296				18,494				18,230				18,494
Adjusted assets at end of period	$	1,884,265			$	1,780,538			$	1,495,942			$	1,884,265			$	1,495,942
Tangible common equity to tangible assets		7.95	%			8.47	%			8.72	%			7.95	%			8.72	%
Total average shareholders equity	$	170,038				177,244			$	147,483			$	173,621			$	145,249
Less: Average intangible assets		18,270				18,337				18,535				18,304				18,568
Less: Average monitory interest not included in tangible assets	$	—			$	—			$	—			$	—			$	—
Average tangible common equity	$	151,768			$	158,907			$	128,948			$	155,317			$	126,681
Net income to common shareholders	$	5,223			$	4,557			$	3,906			$	9,780			$	9,588
Return on average tangible common equity		13.80	%			11.63	%			12.15	%			12.70	%			15.26	%
Average tangible common equity	$	151,768			$	158,907			$	128,948			$	155,317			$	126,681
Core net income	$	5,254			$	4,824			$	3,880			$	10,078			$	7,658
Core return on average tangible common equity		13.89	%			12.31	%			12.07	%			13.08	%			12.19	%
Net interest income	$	16,365			$	14,654				12,893				31,019				25,177
Add: Noninterest income		1,404				1,333				2,045				2,737				6,542
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: Gain (loss) on securities		(42	)			(361	)			27				(403	)			(206	)
Operating revenue	$	17,811			$	16,348			$	14,911			$	34,159			$	29,119
Expenses:
Total noninterest expense	$	9,652			$	9,290			$	9,106			$	18,942			$	17,638
Less: Merger expenses		—				—				—				—				—
Less: Net OREO gains		—				—				(8	)			—				(8	)
Adjusted noninterest expenses	$	9,652			$	9,290			$	9,114			$	18,942			$	17,646
Core efficiency ratio		54.19	%			56.83	%			61.12	%			55.45	%			60.60	%

(1)  Assumes a 23.5% tax rate.

FAQ

What were the key financial highlights for SSBK in Q2 2022?

Southern States Bancshares reported net income of $5.2 million, a net interest margin of 3.84%, and an annualized loan growth of 36.8%.

How did Southern States Bancshares' loan portfolio change in Q2 2022?

The total loans outstanding increased by $120.1 million, reaching $1.4 billion, primarily driven by growth in commercial real estate loans.

What was the nonperforming loans ratio for SSBK in Q2 2022?

Nonperforming loans totaled $3.6 million, or 0.25% of gross loans, unchanged from Q1 2022.

How did the earnings per share for SSBK change in Q2 2022?

Earnings per diluted share for SSBK increased to $0.59 in Q2 2022, up from $0.50 in Q1 2022.

What factors contributed to the decrease in stockholders' equity for SSBK?

The decrease in stockholders' equity to $167.9 million was primarily due to changes in the value of the available-for-sale securities portfolio.