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

Rhea-AI Summary

In the third quarter of 2022, Southern States Bancshares (SSBK) reported a net income of $6.7 million ($0.75 per diluted share), reflecting a significant increase from $5.2 million in Q2 2022. Core net income also rose to $6.8 million ($0.77 per diluted share).

Loan growth was robust at 26.3% annualized, with total loans reaching $1.5 billion. Net interest income surged 18.8% from the prior quarter, driven by rising interest rates and increased interest-earning assets.

However, noninterest income fell 4.6% from Q2, primarily due to higher losses on securities.

Positive

• Linked-quarter loan growth of 26.3%, reaching total loans of $1.5 billion.
• Net interest income increased by 18.8% from the previous quarter to $19.4 million.
• Net income rose to $6.7 million from $5.2 million in Q2 2022.
• Net interest margin improved to 4.15%, up from 3.84% in Q2.

Negative

• Noninterest income decreased by 4.6% from the previous quarter, largely due to net losses on securities.
• Noninterest expense increased by 5.2% from Q2, attributed to higher fraud losses and increased salaries.

Third Quarter 2022 Highlights

• Linked-quarter loan growth was 26.3% annualized
  
  
• Net income of $6.7 million, or $0.75 per diluted share
  
  
• Core net income⁽¹⁾ of $6.8 million, or $0.77 per diluted share⁽¹⁾
  
  
• Net interest margin (“NIM”) of 4.15%, up 31 basis points from the prior quarter
  
  
• NIM of 4.17% on a fully-taxable equivalent basis⁽¹⁾
  
  
• Return on average assets (“ROAA”) of 1.35%; return on average stockholders’ equity (“ROAE”) of 15.42%; and return on average tangible common equity (“ROATCE”)⁽¹⁾ of 17.24%
  
  
• Core ROAA⁽¹⁾ of 1.37%; and core ROATCE⁽¹⁾ of 17.51%
  
  
• Efficiency ratio of 48.94%, an improvement from 54.19% for the prior quarter
  

^{(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., Oct. 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 $6.7 million, or $0.75 diluted earnings per share, for the third quarter of 2022. This compares to net income of $5.2 million, or $0.59 diluted earnings per share, for the second quarter of 2022, and net income of $4.9 million, or $0.58 diluted earnings per share, for the third quarter of 2021. The Company reported core net income of $6.8 million, or $0.77 diluted core earnings per share, for the third quarter of 2022. This compares to core net income of $5.3 million, or $0.59 diluted core earnings per share, for the second quarter of 2022, and core net income of $4.0 million, or $0.48 diluted core earnings per share, for the third quarter of 2021 (see “Reconciliation of Non-GAAP Financial Measures”).

Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, “Our team’s ongoing diligent business development efforts fueled robust annualized third quarter loan growth of 26.3%, extending the momentum we’ve generated throughout the past year. Our net interest income increased 18.8% from the second quarter and was up 42.5% from a year earlier on a combination of robust loan growth and increasing yields on interest-earning assets, which drove our expanded NIM.”

“As always, we are focused on disciplined, prudent expansion that minimizes risk and maintains our stellar credit quality. Our bank is dedicated to superior customer service and sound underwriting, key pillars of strength that we believe position the franchise for continued growth and improved profitability. This gives us confidence in our ability to deliver long-term value for our shareholders.”

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2022 was $19.4 million, an increase of 18.8% from $16.4 million for the second quarter of 2022. The increase was primarily attributable to rising interest rates, coupled with an increase in interest-bearing assets and partially offset by an increase in expense on interest-bearing liabilities.

Relative to the third quarter of 2021, net interest income increased $5.8 million, or 42.5%. The increase was substantially the result of an increase in interest-earning assets.

Net interest margin for the third quarter of 2022 was 4.15%, up from 3.84% for the second quarter of 2022. The increase was primarily the result of a 65 basis point increase in the yield on interest-earning assets, partially offset by a 46 basis point increase in the cost of interest-bearing liabilities.

Relative to the third quarter of 2021, net interest margin increased from 3.77%. The increase was primarily due to an increase in the yield on interest-earning assets that more than offset an increase in the cost of interest-bearing liabilities.

Noninterest Income

Noninterest income for the third quarter of 2022 was $1.3 million, a decrease of 4.6% from $1.4 million for the second quarter of 2022. The decrease was substantially the result of a $101,000 increase in the net loss on securities.

Relative to the third quarter of 2021, noninterest income decreased 46.6% from $2.5 million. The third quarter 2021 included a bank owned life insurance (“BOLI”) death benefit claim of $742,000 and a net gain on securities. The third quarter 2022 results included reductions in mortgage income and a net loss on securities.

Noninterest Expense

Noninterest expense for the third quarter of 2022 was $10.2 million, up from $9.7 million for the second quarter of 2022. The increase was substantially attributable to a $336,000 increase in fraud losses, of which a portion has since been recovered, and an increase in salaries and benefits as a result of additional incentive accruals based on operating results. The efficiency ratio for the third quarter improved to 48.94% from 54.19% in the second quarter.

Relative to the third quarter of 2021, noninterest expense increased 11.5% from $9.2 million. The increase was primarily attributable to higher salaries and incentive expense as production personnel were added in the Georgia market. Also contributing to the increase were fraud losses, of which a portion has since been recovered. These increases were partially offset by a decrease in occupancy expense as a result of accelerated depreciation during the third quarter of 2021 on a formerly leased Birmingham branch location and a reduction in SBA expense from the third quarter of 2021.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $1.5 billion at September 30, 2022, up $94.8 million from June 30, 2022 and up $379.5 million from September 30, 2021. The linked-quarter increase in loans was primarily attributable to increases in construction/development and commercial real estate loans in the Auburn, Alabama and Georgia markets.

Deposits

Total deposits were $1.8 billion at September 30, 2022, compared with $1.6 billion at June 30, 2022 and $1.3 billion at September 30, 2021. The $122.1 million net increase in total deposits in the third quarter was due to an increase of $135.1 million in interest-bearing account balances that more than offset a slight decrease in noninterest-bearing deposits.

Asset Quality

Nonperforming loans totaled $4.0 million, or 0.26% of gross loans, at September 30, 2022, compared with $3.6 million, or 0.25% of gross loans, at June 30, 2022, and $3.3 million, or 0.29% of gross loans, at September 30, 2021. The $400,000 net increase in nonperforming loans in the third quarter was primarily attributable to one commercial real estate loan and one commercial and industrial loan that were placed on nonaccrual and partially offset by one commercial and industrial loan that was sold. The $642,000 increase in nonperforming loans from September 30, 2021 was primarily attributable to three commercial real estate loans, one residential loan and one commercial and industrial loan that were placed on nonaccrual. These increases were partially offset by one residential loan being moved back to accruing status and multiple loans associated with one borrower being paid off.

The Company recorded a provision for loan losses of $1.7 million for the third quarter of 2022, compared to $1.3 million for the second quarter of 2022. The provision was due to robust loan growth as well as changes in our qualitative economic factors.

Net charge-offs for the third quarter of 2022 were $47,000, or 0.01% of average loans on an annualized basis, compared to net recoveries of $11,000, or 0.00% of average loans on an annualized basis, for the second quarter of 2022, and net recoveries of $8,000, or 0.00% of average loans on an annualized basis, for the third quarter of 2021.

The Company’s allowance for loan losses was 1.21% of total loans and 466.41% of nonperforming loans at September 30, 2022, compared with 1.18% of total loans and 473.44% of nonperforming loans at June 30, 2022.

Capital

As of September 30, 2022, total stockholders’ equity was $170.3 million, compared with $167.9 million at June 30, 2022. The increase of $2.4 million was primarily due to strong earnings growth that more than offset 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.

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 the inflationary environment, the COVID-19 pandemic and governmental responses. 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 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 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
(205) 820-8065
ljoyce@ssbank.bank

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

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	September 30, 2022 (Unaudited)				June 30, 2022 (Unaudited)				December 31, 2021 (Audited)				September 30, 2021 (Unaudited)
Assets
Cash and due from banks	$	17,394			$	22,167			$	6,397			$	19,000
Interest-bearing deposits in banks		165,637				95,156				203,537				114,800
Federal funds sold		63,031				73,024				74,022				44,022
Total cash and cash equivalents		246,062				190,347				283,956				177,822
Securities available for sale, at fair value		150,718				151,749				132,172				113,317
Securities held to maturity, at amortized cost		19,657				19,662				19,672				19,678
Other equity securities, at fair value		5,694				6,958				9,232				9,227
Restricted equity securities, at cost		2,791				2,825				2,600				2,600
Loans held for sale		1,643				2,709				2,400				2,097
Loans, net of unearned income		1,524,990				1,430,205				1,250,300				1,145,447
Less allowance for loan losses		18,423				16,807				14,844				14,097
Loans, net		1,506,567				1,413,398				1,235,456				1,131,350
Premises and equipment, net		28,585				28,467				27,044				25,916
Accrued interest receivable		5,699				4,839				4,170				3,933
Bank owned life insurance		29,677				29,509				22,201				22,081
Annuities		15,564				15,540				12,888				12,968
Foreclosed assets		2,930				2,930				2,930				10,146
Goodwill		16,862				16,862				16,862				16,862
Core deposit intangible		1,302				1,368				1,500				1,566
Other assets		18,974				15,332				9,509				9,499
Total assets	$	2,052,725			$	1,902,495			$	1,782,592			$	1,559,062
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	499,613			$	512,598			$	541,546			$	380,111
Interest-bearing		1,267,479				1,132,348				1,014,905				956,211
Total deposits		1,767,092				1,644,946				1,556,451				1,336,322
Other borrowings		19,978				—				12,498				12,498
FHLB advances		26,000				25,000				25,950				26,900
Subordinated notes		47,042				47,013				—				—
Accrued interest payable		359				88				132				125
Other liabilities		21,929				17,501				10,363				8,996
Total liabilities		1,882,400				1,734,548				1,605,394				1,384,841
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
	September 30, 2022 (Unaudited)				June 30, 2022 (Unaudited)				December 31, 2021 (Audited)				September 30, 2021 (Unaudited)
Stockholders' equity:
Common stock		43,529				43,458				45,064				45,064
Capital surplus		75,835				75,597				80,640				80,547
Retained earnings		63,956				58,039				49,858				46,611
Accumulated other comprehensive income (loss)		(12,403	)			(8,439	)			2,113				2,600
Unvested restricted stock		(592	)			(708	)			(477	)			(601	)
Total stockholders' equity		170,325				167,947				177,198				174,221
Total liabilities and stockholders' equity	$	2,052,725			$	1,902,495			$	1,782,592			$	1,559,062
Shares issued and outstanding		8,705,920				8,691,620				9,012,857				9,012,857

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
	For the Three Months Ended												For the Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
Interest income:
Loans, including fees	$	20,052			$	16,265			$	13,923			$	51,083			$	40,429
Taxable securities		1,010				788				402				2,417				1,134
Nontaxable securities		323				309				266				931				729
Other interest and dividends		1,135				390				143				1,713				315
Total interest income		22,520				17,752				14,734				56,144				42,607
Interest expense:
Deposits		2,489				889				1,034				4,251				3,355
Other borrowings		596				498				60				1,439				435
Total interest expense		3,085				1,387				1,094				5,690				3,790
Net interest income		19,435				16,365				13,640				50,454				38,817
Provision for loan losses		1,663				1,304				750				3,667				2,250
Net interest income after provision for loan losses		17,772				15,061				12,890				46,787				36,567
Noninterest income:
Service charges on deposit accounts		508				480				403				1,433				1,101
Swap fees		11				21				101				48				938
SBA/USDA fees		95				93				130				575				3,434
Mortgage origination fees		218				213				393				717				1,196
Net gain (loss) on securities		(143	)			(42	)			189				(546	)			(17	)
Other operating income		650				639				1,293				1,847				2,399
Total noninterest income		1,339				1,404				2,509				4,074				9,051
Noninterest expenses:
Salaries and employee benefits		6,152				5,982				5,517				17,859				16,104
Equipment and occupancy expenses		764				719				908				2,188				2,697
Data processing fees		599				570				524				1,733				1,565
Regulatory assessments		235				262				248				760				689
Other operating expenses		2,487				2,119				1,988				6,638				5,768
Total noninterest expenses		10,237				9,652				9,185				29,178				26,823
Income before income taxes		8,874				6,813				6,214				21,683				18,795
Income tax expense		2,174				1,590				1,293				5,204				4,287
Net income	$	6,700			$	5,223			$	4,921			$	16,479			$	14,508
Basic earnings per share	$	0.77			$	0.60			$	0.59			$	1.87			$	1.84
Diluted earnings per share	$	0.75			$	0.59			$	0.58			$	1.84			$	1.82

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

	Three Months Ended												Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	(Dollars in thousands)
Average loans, net of unearned income	$	1,480,735			$	1,359,320			$	1,122,741			$	1,373,564			$	1,093,684
Loans, net of unearned income	$	1,524,990			$	1,430,205			$	1,145,447			$	1,524,990			$	1,145,447
Allowance for loan losses at beginning of the period	$	16,807			$	15,492			$	13,339			$	14,844			$	11,859
Charge-offs:
Construction and development		—				—				—				66				—
Residential		—				7				—				7				44
Commercial		—				—				—				—				—
Commercial and industrial		269				—				—				269				—
Consumer and other		1				1				—				8				2
Total charge-offs		270				8				—				350				46
Recoveries:
Construction and development		—				—				—				—				—
Residential		11				18				7				46				12
Commercial		—				—				—				—				—
Commercial and industrial		204				—				1				204				14
Consumer and other		8				1				—				12				8
Total recoveries		223				19				8				262				34
Net charge-offs (recoveries)	$	47			$	(11	)		$	(8	)		$	88			$	12
Provision for loan losses	$	1,663			$	1,304			$	750			$	3,667			$	2,250
Balance at end of period	$	18,423			$	16,807			$	14,097			$	18,423			$	14,097
Ratio of allowance to end of period loans		1.21	%			1.18	%			1.23	%			1.21	%			1.23	%
Ratio of net charge-offs (recoveries) to average loans		0.00	%			0.00	%			0.00	%			0.01	%			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.

	September 30, 2022				June 30, 2022				December 31, 2021				September 30, 2021
	(Dollars in thousands)
Nonaccrual loans	$	3,950			$	3,550			$	1,478			$	3,308
Past due loans 90 days or more and still accruing interest		—				—				494				—
Total nonperforming loans		3,950				3,550				1,972				3,308
OREO		2,930				2,930				2,930				10,146
Total nonperforming assets	$	6,880			$	6,480			$	4,902			$	13,454
Troubled debt restructured loans – nonaccrual(1)		1,011				676				940				1,041
Troubled debt restructured loans - accruing		1,307				1,323				1,072				1,085
Total troubled debt restructured loans	$	2,318			$	1,999			$	2,012			$	2,126
Allowance for loan losses	$	18,423			$	16,807			$	14,844			$	14,097
Gross loans outstanding at the end of period	$	1,530,129			$	1,435,089			$	1,254,117			$	1,149,340
Allowance for loan losses to gross loans		1.20	%			1.17	%			1.18	%			1.23	%
Allowance for loan losses to nonperforming loans		466.41	%			473.44	%			752.74	%			426.15	%
Nonperforming loans to gross loans		0.26	%			0.25	%			0.16	%			0.29	%
Nonperforming assets to gross loans and OREO		0.45	%			0.45	%			0.39	%			1.16	%
Nonaccrual loans by category:
Real estate mortgages:
Construction & Development	$	70			$	73			$	346			$	1,972
Residential Mortgages		550				563				167				339
Commercial Real Estate Mortgages		2,888				2,135				674				690
Commercial & Industrial		434				768				285				300
Consumer and other		8				11				6				7
	$	3,950			$	3,550			$	1,478			$	3,308

(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
	September 30, 2022										June 30, 2022										September 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)	$	1,480,735			$	20,052		5.37	%		$	1,359,320			$	16,265		4.80	%		$	1,122,741			$	13,923		4.92	%
Taxable securities		128,932				1,010		3.11	%			121,677				788		2.60	%			76,612				402		2.08	%
Nontaxable securities		56,738				323		2.26	%			56,850				309		2.18	%			48,162				266		2.20	%
Other interest-earnings assets		192,699				1,135		2.34	%			172,175				390		0.91	%			189,131				143		0.30	%
Total interest-earning assets	$	1,859,104			$	22,520		4.81	%		$	1,710,022			$	17,752		4.16	%		$	1,436,646			$	14,734		4.07	%
Allowance for loan losses		(17,250	)									(15,815	)									(13,645	)
Noninterest-earning assets		124,702										127,230										125,870
Total Assets	$	1,966,556									$	1,821,437									$	1,548,871
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		114,517				26		0.09	%			114,743				27		0.09	%			98,203				24		0.10	%
Savings and money market accounts		811,349				1,644		0.80	%			735,845				625		0.34	%			565,861				665		0.47	%
Time deposits		281,931				819		1.15	%			208,774				237		0.46	%			290,460				345		0.47	%
FHLB advances		27,380				102		1.47	%			25,000				21		0.33	%			31,520				34		0.43	%
Other borrowings		47,659				494		4.12	%			47,066				477		4.07	%			6,652				26		1.57	%
Total interest-bearing liabilities	$	1,282,836			$	3,085		0.95	%		$	1,131,428			$	1,387		0.49	%		$	992,696			$	1,094		0.44	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	491,917									$	502,728									$	384,207
Other liabilities		19,401										17,243										9,663
Total noninterest-bearing liabilities	$	511,318									$	519,971									$	393,870
Stockholders’ Equity		172,402										170,038										162,305
Total Liabilities and Stockholders’ Equity	$	1,966,556									$	1,821,437									$	1,548,871
Net interest income					$	19,435									$	16,365									$	13,640
Net interest spread(2)								3.86	%									3.67	%									3.63	%
Net interest margin(3)								4.15	%									3.84	%									3.77	%
Net interest margin - FTE(4)(5)								4.17	%									3.86	%									3.79	%

(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 for the three and nine months ended September 30, 2022 and 2021 and a 23.5% tax rate for the three months ended June 30, 2022.
(5)   Refer to “Reconciliation of Non-GAAP Financial Measures”.

	Nine Months Ended
	September 30, 2022										September 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)	$	1,373,564			$	51,083		4.97	%		$	1,093,684			$	40,429		4.94	%
Taxable securities		119,224				2,417		2.71	%			74,244				1,134		2.04	%
Nontaxable securities		56,157				931		2.22	%			42,191				729		2.31	%
Other interest-earnings assets		202,837				1,713		1.13	%			148,349				315		0.28	%
Total interest-earning assets	$	1,751,782			$	56,144		4.29	%		$	1,358,468			$	42,607		4.19	%
Allowance for loan losses		(16,044	)									(12,890	)
Noninterest-earning assets		123,255										124,539
Total Assets	$	1,858,993									$	1,470,117
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing transaction accounts		113,427				78		0.09	%			94,696				66		0.09	%
Savings and money market accounts		741,397				2,862		0.52	%			503,064				2,056		0.55	%
Time deposits		242,869				1,311		0.72	%			310,758				1,233		0.53	%
FHLB advances		26,115				144		0.74	%			32,215				120		0.50	%
Other borrowings		42,604				1,295		4.06	%			10,625				315		3.96	%
Total interest-bearing liabilities	$	1,166,412			$	5,690		0.65	%		$	951,358			$	3,790		0.53	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	502,951									$	358,556
Other liabilities		16,420										9,207
Total noninterest-bearing liabilities	$	519,371									$	367,763
Stockholders’ Equity		173,210										150,996
Total Liabilities and Stockholders’ Equity	$	1,858,993									$	1,470,117
Net interest income					$	50,454									$	38,817
Net interest spread(2)								3.64	%									3.66	%
Net interest margin(3)								3.85	%									3.82	%
Net interest margin - FTE(4)(5)								3.87	%									3.84	%

(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 for the three and nine months ended September 30, 2022 and 2021 and a 23.5% tax rate for the three months ended June 30, 2022.
(5)   Refer to “Reconciliation of Non-GAAP Financial Measures”.

Per Share Information	Three Months Ended												Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	(Dollars in thousands, except share and per share amounts)
Net income	$	6,700			$	5,223			$	4,921			$	16,479			$	14,508
Earnings per share - basic	$	0.77			$	0.60			$	0.59			$	1.87			$	1.84
Earnings per share - diluted	$	0.75			$	0.59			$	0.58			$	1.84			$	1.82
Weighted average shares outstanding		8,693,745				8,740,295				8,354,860				8,797,720				7,861,780
Diluted weighted average shares outstanding		8,871,116				8,894,577				8,467,460				8,952,600				7,980,159
Shares issued and outstanding		8,705,920				8,691,620				9,012,857				8,705,920				9,012,857
Total stockholders' equity	$	170,325			$	167,947			$	174,221			$	170,325			$	174,221
Book value per share	$	19.56			$	19.32			$	19.33			$	19.56			$	19.33
Performance Ratios	Three Months Ended												Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
Net interest margin		4.15	%			3.84	%			3.77	%			3.85	%			3.82	%
Net interest spread		3.86	%			3.67	%			3.63	%			3.64	%			3.66	%
Efficiency ratio		48.94	%			54.19	%			57.55	%			52.98	%			56.02	%
Return on average assets		1.35	%			1.15	%			1.26	%			1.19	%			1.32	%
Return on average stockholders’ equity		15.42	%			12.32	%			12.03	%			12.72	%			12.85	%

Core and PPP Loans	September 30, 2022				June 30, 2022				December 31, 2021				September 30, 2021
	(Dollars in thousands)
Core loans	$	1,530,129			$	1,435,089			$	1,244,914			$	1,129,075
PPP loans		—				—				9,203				20,265
Unearned income		(5,139	)			(4,884	)			(3,817	)			(3,893	)
Loans, net of unearned income		1,524,990				1,430,205				1,250,300				1,145,447
Allowance for loan losses		(18,423	)			(16,807	)			(14,844	)			(14,097	)
Loans, net	$	1,506,567			$	1,413,398			$	1,235,456			$	1,131,350

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												Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	(Dollars in thousands, except share and per share amounts)
Net income	$	6,700			$	5,223			$	4,921			$	16,479			$	14,508
Add: Net OREO gains		—				—				—				—				(8	)
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: BOLI death benefits		—				—				742				—				742
Less: Gain (loss) on securities		(143	)			(42	)			189				(546	)			(17	)
Less: Tax effect		37				11				(52	)			142				(730	)
Core net income	$	6,806			$	5,254			$	4,042			$	16,883			$	11,699
Average assets	$	1,966,556			$	1,821,437			$	1,548,871			$	1,858,993			$	1,470,117
Core return on average assets		1.37	%			1.16	%			1.04	%			1.21	%			1.06	%
Net income	$	6,700			$	5,223			$	4,921			$	16,479			$	14,508
Add: Net OREO gains		—				—				—				—				(8	)
Add: Provision		1,663				1,304				750				3,667				2,250
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: BOLI death benefits		—				—				742				—				742
Less: Gain (loss) on securities		(143	)			(42	)			189				(546	)			(17	)
Add: Income taxes		2,174				1,590				1,293				5,204				4,287
Pretax pre-provision core net income	$	10,680			$	8,159			$	6,033			$	25,896			$	17,506
Average assets	$	1,966,556			$	1,821,437			$	1,548,871			$	1,858,993			$	1,470,117
Pretax pre-provision core return on average assets		2.15	%			1.80	%			1.55	%			1.86	%			1.59	%
Net interest income	$	19,435			$	16,365			$	13,640			$	50,454			$	38,817
Add: Fully-taxable equivalent adjustments(1)		86				83				72				251				203
Net interest income - FTE	$	19,521			$	16,448			$	13,712			$	50,705			$	39,020
Net interest margin		4.15	%			3.84	%			3.77	%			3.85	%			3.82	%
Effect of fully-taxable equivalent adjustments(1)		0.02	%			0.02	%			0.02	%			0.02	%			0.02	%
Net interest margin - FTE		4.17	%			3.86	%			3.79	%			3.87	%			3.84	%
Total stockholders' equity	$	170,325			$	167,947			$	174,221			$	170,325			$	174,221
Less: Intangible assets		18,164				18,230				18,428				18,164				18,428
Tangible common equity	$	152,161			$	149,717			$	155,793			$	152,161			$	155,793
Reconciliation of Non-GAAP Financial Measures
	Three Months Ended												Nine Months Ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	(Dollars in thousands, except share and per share amounts)
Core net income	$	6,806			$	5,254			$	4,042			$	16,883			$	11,699
Diluted weighted average shares outstanding		8,871,116				8,894,577				8,467,460				8,952,600				7,980,159
Diluted core earnings per share	$	0.77			$	0.59			$	0.48			$	1.89			$	1.47
Common shares outstanding at year or period end		8,705,920				8,691,620				9,012,857				8,705,920				9,012,857
Tangible book value per share	$	17.48			$	17.23			$	17.29			$	17.48			$	17.29
Total assets at end of period	$	2,052,725			$	1,902,495			$	1,559,062			$	2,052,725			$	1,559,062
Less: Intangible assets		18,164				18,230				18,428				18,164				18,428
Adjusted assets at end of period	$	2,034,561			$	1,884,265			$	1,540,634			$	2,034,561			$	1,540,634
Tangible common equity to tangible assets		7.48	%			7.95	%			10.11	%			7.48	%			10.11	%
Total average shareholders equity	$	172,402				170,038			$	162,305			$	173,210			$	150,996
Less: Average intangible assets		18,203				18,270				18,470				18,270				18,535
Average tangible common equity	$	154,199			$	151,768			$	143,835			$	154,940			$	132,461
Net income to common shareholders	$	6,700			$	5,223			$	4,921			$	16,479			$	14,508
Return on average tangible common equity		17.24	%			13.80	%			13.57	%			14.22	%			14.64	%
Average tangible common equity	$	154,199			$	151,768			$	143,835			$	154,940			$	132,461
Core net income	$	6,806			$	5,254			$	4,042			$	16,883			$	11,699
Core return on average tangible common equity		17.51	%			13.89	%			11.15	%			14.57	%			11.81	%
Net interest income	$	19,435			$	16,365				13,640				50,454				38,817
Add: Noninterest income		1,339				1,404				2,509				4,074				9,051
Less: Gain on sale of USDA loan		—				—				—				—				2,806
Less: BOLI death benefits		—				—				742				—				742
Less: Gain (loss) on securities		(143	)			(42	)			189				(546	)			(17	)
Operating revenue	$	20,917			$	17,811			$	15,218			$	55,074			$	44,337
Expenses:
Total noninterest expense	$	10,237			$	9,652			$	9,185			$	29,178			$	26,823
Less: Net OREO gains		—				—				—				—				(8	)
Adjusted noninterest expenses	$	10,237			$	9,652			$	9,185			$	29,178			$	26,831
Core efficiency ratio		48.94	%			54.19	%			60.36	%			52.98	%			60.52	%

(1)   Assumes a 24.0% tax rate for the three and nine months ended September 30, 2022 and 2021 and a 23.5% tax rate for the three months ended June 30, 2022.

FAQ

What were Southern States Bancshares' (SSBK) earnings in Q3 2022?

Southern States Bancshares reported a net income of $6.7 million, or $0.75 per diluted share, for Q3 2022.

How did SSBK's loan growth perform in Q3 2022?

SSBK experienced an annualized loan growth of 26.3% in Q3 2022, with total loans outstanding at $1.5 billion.

What is the net interest margin for SSBK in Q3 2022?

The net interest margin for SSBK in Q3 2022 was 4.15%, an increase from 3.84% in the previous quarter.

What were the key factors contributing to SSBK's profitability in Q3 2022?

Key factors included an increase in net interest income by 18.8% from the prior quarter due to rising interest rates and robust loan growth.