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

    Source: Nasdaq GlobeNewswire / 24 Jan 2022 07:00:02   America/New_York

    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 InformationThree 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 RatiosThree 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 LoansDecember 31,
    2021    		 September 30,
    2021    		 December 31,
    2020
      
     (Dollars in thousands)
          
    Core loans1,244,914  $1,129,075  $967,177 
    PPP loans9,203   20,265   66,556 
    Unearned income(3,817)  (3,893)  (3,618)
    Loans, net of unearned income1,250,300   1,145,447   1,030,115 
    Allowance for loan losses(14,844)  (14,097)  (11,859)
    Loans, net1,235,456  $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%
                        

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