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

ソース: Nasdaq GlobeNewswire / 26 10 2021 06:00:02 America/Chicago

Third Quarter 2021 Highlights

Linked quarter loan growth was 17.3% annualized, or 24.5% annualized, excluding the impact of Paycheck Protection Program (“PPP”) loans
Net income of $4.9 million, or $0.58 per diluted share; return on average assets (“ROAA”) of 1.26%; return on average stockholders’ equity (“ROAE”) of 12.03%; and return on average tangible common equity (“ROATCE”)⁽¹⁾ of 13.57%
Core net income⁽¹⁾ of $4.0 million, or $0.48 per diluted share; core ROAA⁽¹⁾ of 1.04%; and core ROATCE⁽¹⁾ of 11.15%
Initial public offering completed on August 16, 2021

^{(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. 26, 2021 (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 $4.9 million, or $0.58 diluted earnings per share, for the third quarter of 2021. This compares to net income of $3.9 million, or $0.50 diluted earnings per share, for the second quarter of 2021, and net income of $3.2 million, or $0.41 diluted earnings per share, for the third quarter of 2020. The Company reported core net income of $4.0 million, or $0.48 diluted core earnings per share, for the third quarter of 2021. This compares to core net income of $3.9 million, or $0.50 diluted core earnings per share, for the second quarter of 2021, and core net income of $2.7 million, or $0.35 diluted core earnings per share, for the third quarter of 2020 (see “Reconciliation of Non-GAAP Financial Measures”).

Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, “Our third quarter results demonstrated exceptionally strong loan growth, healthy profitability, and impressive credit quality. By continuing to execute on our strategic plan that focuses on organic growth in our attractive markets, we are well positioned to continue growing our franchise while leveraging our recent investments in people, infrastructure, and technology.”

“We are very pleased to have completed our initial public offering in August. Becoming a public company is an important next chapter in our history, but our focus remains squarely on understanding and valuing the needs of our clients. By remaining consistent with our core values and continuing to deliver high levels of personalized service, we believe that we will continue to enhance the value of our franchise over the long term,” said Mr. Whatley.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2021 was $13.6 million, an increase of 5.8% from $12.9 million for the second quarter of 2021. The increase was primarily attributable to an increase in interest-earning assets.

Relative to the third quarter of 2020, net interest income increased $2.7 million, or 24.2%. The increase was substantially the result of an increase in interest-earning assets.

Net interest margin for the third quarter of 2021 was 3.77%, compared to 3.75% for the second quarter of 2021. The increase was primarily the result of a decline in the cost of funds that more than offset a decline in the yield on interest-earning assets.

Relative to the third quarter of 2020, net interest margin increased from 3.71%. The increase was primarily due to a decline in the cost of funds that more than offset a decline in the yield on interest-earning assets.

Noninterest Income

Noninterest income for the third quarter of 2021 was $2.5 million, an increase of 22.7% from $2.0 million for the second quarter of 2021. Third quarter 2021 results included a bank owned life insurance ("BOLI") death benefit claim of $742,000 and $189,000 net gain on securities.

Relative to the third quarter of 2020, noninterest income increased 2.5% from $2.4 million. In comparing the quarters, there was a decline in swap fees from the third quarter of 2020 that was more than offset by a net gain on securities and a larger BOLI claim in the third quarter of 2021 compared to the claim in the second quarter of 2020.

Noninterest Expense

Noninterest expense for the third quarter of 2021 was $9.2 million, up from $9.1 million for the second quarter of 2021. The increase was primarily attributable to increased public company expenses in the third quarter.

Relative to the third quarter of 2020, noninterest expense increased 13.5% from $8.1 million. The increase was primarily attributable to higher salaries and employee benefits expense as production personnel were added in the Georgia market. These hires contributed to the growth in loans and profitability.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $1.1 billion at September 30, 2021, compared with $1.1 billion at June 30, 2021 and $1.0 billion at September 30, 2020. The $47.9 million increase in loans from June 30, 2021 was primarily attributable to an increases in construction and development loans that more than offset a decrease in PPP loans.

PPP loans outstanding were $20.3 million at September 30, 2021, compared to $37.8 million and $71.7 million at June 30, 2021 and September 30, 2020, respectively. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the third quarter by $65.2 million, or 24.5% annualized, to $1.1 billion.

Deposits

Total deposits were $1.3 billion at September 30, 2021, compared with $1.3 billion at June 30, 2021 and $1.1 billion at September 30, 2020. The $23.7 million increase in total deposits from June 30, 2021 was due to increases of $10.6 million in noninterest-bearing and $13.1 million in interest-bearing accounts.

Asset Quality

Nonperforming loans totaled $3.3 million, or 0.29% of gross loans, at September 30, 2021, compared with $2.2 million, or 0.20% of gross loans, at June 30, 2021, and $10.9 million, or 1.09% of gross loans, at September 30, 2020. The $1.2 million increase in nonperforming loans from June 30, 2021 was primarily attributable to construction and development loans associated with one borrower. The $7.6 million reduction in nonperforming loans from September 30, 2020 was primarily attributable to two properties that were foreclosed and moved to other real estate owned (“OREO”).

The Company recorded a provision for loan losses of $750,000 for the third quarter of 2021, unchanged from the second quarter of 2021. The provision was primarily due to loan growth.

Net recoveries for the third quarter of 2021 were $8,000, or 0.00% of average loans on an annualized basis, compared to net charge-offs of $16,000, or 0.00% of average loans on an annualized basis, for the second quarter of 2021, and net recoveries of $14,000, or 0.00% of average loans on an annualized basis, for the third quarter of 2020.

The Company’s allowance for loan losses was 1.23% of total loans and 426.15% of nonperforming loans at September 30, 2021, compared with 1.22% of total loans and 619.27% of nonperforming loans at June 30, 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 June 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)

	September 30, 2021 (Unaudited)			June 30, 2021 (Unaudited)			December 31, 2020 (Audited)			September 30, 2020 (Unaudited)
Assets
Cash and due from banks	$	19,000		$	17,953		$	23,229		$	16,718
Interest-bearing deposits in banks	114,800			131,169			51,503			24,121
Federal funds sold	44,022			39,021			10,175			66,389
Total cash and cash equivalents	177,822			188,143			84,907			107,228

Securities available for sale, at fair value	113,317			105,617			114,001			98,155
Securities held to maturity, at amortized cost	19,678			19,683			—			—
Other equity securities, at fair value	9,227			8,985			5,017			—
Restricted equity securities, at cost	2,600			2,788			3,224			3,137
Loans held for sale	2,097			2,767			5,696			3,575

Loans, net of unearned income	1,145,447			1,097,559			1,030,115			1,001,853
Less allowance for loan losses	14,097			13,339			11,859			12,116
Loans, net	1,131,350			1,084,220			1,018,256			989,737

Premises and equipment, net	25,916			25,011			24,426			24,890
Accrued interest receivable	3,933			3,725			4,243			4,471
Bank owned life insurance	22,081			22,710			22,458			22,328
Annuities	12,968			12,941			12,903			12,976
Foreclosed assets	10,146			10,146			10,224			7,582
Goodwill	16,862			16,862			16,862			16,862
Core deposit intangible	1,566			1,632			1,764			1,830
Other assets	9,499			9,206			8,525			7,269

Total assets	$	1,559,062		$	1,514,436		$	1,332,506		$	1,300,040

Liabilities and Stockholders' Equity

Liabilities:
Deposits:
Noninterest-bearing	$	380,111		$	369,479		$	290,867		$	285,467
Interest-bearing	956,211			943,131			848,794			828,143
Total deposits	1,336,322			1,312,610			1,139,661			1,113,610

Other borrowings	12,498			12,490			7,975			8,000
FHLB advances	26,900			31,900			30,900			28,850
Subordinated notes	—			—			4,493			4,490
Accrued interest payable	125			175			278			406
Other liabilities	8,996			8,358			8,543			7,318
Total liabilities	1,384,841			1,365,533			1,191,850			1,162,674

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)

	September 30, 2021 (Unaudited)			June 30, 2021 (Unaudited)			December 31, 2020 (Audited)			September 30, 2020 (Unaudited)
Stockholders' equity:
Common stock	45,064			38,582			38,391			38,374
Capital surplus	80,547			65,978			65,327			65,197
Retained earnings	46,611			42,385			34,183			31,482
Accumulated other comprehensive income	2,600			2,683			3,194			2,805
Unvested restricted stock	(601		)	(725		)	(439		)	(492		)

Total stockholders' equity	174,221			148,903			140,656			137,366

Total liabilities and stockholders' equity	$	1,559,062		$	1,514,436		$	1,332,506		$	1,300,040

Shares issued and outstanding	9,012,857			7,716,428			7,678,195			7,674,756

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2021		June 30, 2021		September 30, 2020		September 30, 2021			September 30, 2020
Interest income:
Loans, including fees	$	13,923	$	13,484	$	12,308	$	40,429		$	35,577
Taxable securities	402		332		346		1,134			940
Nontaxable securities	266		255		178		729			454
Other interest and dividends	143		124		67		315			489
Total interest income	14,734		14,195		12,899		42,607			37,460

Interest expense:
Deposits	1,034		1,131		1,694		3,355			6,491
Other borrowings	60		171		220		435			642
Total interest expense	1,094		1,302		1,914		3,790			7,133

Net interest income	13,640		12,893		10,985		38,817			30,327
Provision for loan losses	750		750		1,600		2,250			2,700
Net interest income after provision for loan losses	12,890		12,143		9,385		36,567			27,627

Noninterest income:
Service charges on deposit accounts	403		337		356		1,101			1,089
Swap fees	101		279		419		938			1,063
SBA/USDA fees	130		439		124		3,434			709
Mortgage origination fees	393		396		410		1,196			1,220
Net gain (loss) on securities	189		27		—		(17		)	742
Other operating income	1,293		567		1,139		2,399			2,093
Total noninterest income	2,509		2,045		2,448		9,051			6,916

Noninterest expenses:
Salaries and employee benefits	5,517		5,530		4,629		16,104			13,801
Equipment and occupancy expenses	908		909		949		2,697			2,760
Data processing fees	524		527		468		1,565			1,340
Regulatory assessments	248		221		210		689			523
Other operating expenses	1,988		1,919		1,834		5,768			5,315
Total noninterest expenses	9,185		9,106		8,090		26,823			23,739

Income before income taxes	6,214		5,082		3,743		18,795			10,804

Income tax expense	1,293		1,176		549		4,287			2,012

Net income	$	4,921	$	3,906	$	3,194	$	14,508		$	8,792

Basic earnings per share	$	0.59	$	0.51	$	0.42	$	1.84		$	1.15

Diluted earnings per share	$	0.58	$	0.50	$	0.41	$	1.82		$	1.13

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, 2021				June 30, 2021			September 30, 2020				September 30, 2021			September 30, 2020

	(Dollars in thousands)

Average loans, net of unearned income	$	1,122,741			$	1,091,139		$	994,066			$	1,093,684		$	936,500
Loans, net of unearned income	$	1,145,447			$	1,097,559		$	1,001,853			$	1,145,447		$	1,001,853
Allowance for loan losses at beginning of the period	$	13,339			$	12,605		$	10,502			$	11,859		$	9,265
Charge-offs:
Construction and development	—				—			—				—			—
Residential	—				28			1				44			48
Commercial	—				—			—				—			—
Commercial and industrial	—				—			—				—			—
Consumer and other	—				—			4				2			15
Total charge-offs	—				28			5				46			63
Recoveries:
Construction and development	—				—			—				—			—
Residential	7				3			7				12			9
Commercial	—				—			—				—			—
Commercial and industrial	1				2			10				14			122
Consumer and other	—				7			2				8			83
Total recoveries	8				12			19				34			214
Net charge-offs (recovery)	$	(8	)		$	16		$	(14	)		$	12		$	(151	)

Provision for loan losses	$	750			$	750		$	1,600			$	2,250		$	2,700
Balance at end of period	$	14,097			$	13,339		$	12,116			$	14,097		$	12,116
Ratio of allowance to end of period loans	1.23			%	1.22		%	1.21			%	1.23		%	1.21			%
Ratio of net charge-offs (recovery) to average loans	0.00			%	0.00		%	0.00			%	0.00		%	(0.02		)	%

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,			June 30,			December 31,			September 30,
	2021			2021			2020			2020

	(Dollars in thousands)

Nonaccrual loans	$	3,308		$	2,010		$	3,418		$	10,905
Past due loans 90 days or more and still accruing interest	—			144			91			21
Total nonperforming loans	3,308			2,154			3,509			10,926
OREO	10,146			10,146			10,224			6,582
Repossessed equipment⁽¹⁾	—			—			—			1,000
Total nonperforming assets	$	13,454		$	12,300		$	13,733		$	18,508

Troubled debt restructured loans – nonaccrual⁽²⁾	1,041			695			479			593
Troubled debt restructured loans - accruing	1,085			1,096			1,275			1,270
Total troubled debt restructured loans	$	2,126		$	1,791		$	1,754		$	1,863

Allowance for loan losses	$	14,097		$	13,339		$	11,859		$	12,116
Gross loans outstanding at the end of period	$	1,149,340		$	1,101,677		$	1,033,733		$	1,005,980
Allowance for loan losses to gross loans	1.23		%	1.21		%	1.15		%	1.20		%
Allowance for loan losses to nonperforming loans	426.15		%	619.27		%	337.96		%	110.89		%
Nonperforming loans to gross loans	0.29		%	0.20		%	0.34		%	1.09		%
Nonperforming assets to gross loans and OREO	1.16		%	1.11		%	1.32		%	1.83		%

Nonaccrual loans by category:
Real Estate:
Construction & Development	$	1,972		$	84		$	977		$	1,144
Residential Mortgages	339			250			857			913
Commercial Real Estate Mortgages	690			1,347			1,478			8,751
Commercial & Industrial	300			316			84			91
Consumer and other	7			13			22			6
	$	3,308		$	2,010		$	3,418		$	10,905

(1) Repossessed equipment was sold in October 2020.
(2) 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, 2021							June 30, 2021							September 30, 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)	$	1,122,741		$	13,923	4.92	%	$	1,091,139		$	13,484	4.96	%	$	994,066		$	12,308	4.93	%
Taxable securities	76,612			$	402	2.08	%	67,785			332		1.96	%	66,903			$	346	2.07	%
Nontaxable securities	48,162			$	266	2.20	%	44,991			255		2.28	%	25,577			$	178	2.76	%
Other interest-earnings assets	189,131			$	143	0.30	%	176,542			124		0.28	%	91,757			$	67	0.29	%
Total interest-earning assets	$	1,436,646		$	14,734	4.07	%	$	1,380,457		$	14,195	4.12	%	$	1,178,303		$	12,899	4.36	%
Allowance for loan losses	(13,645		)					(12,869		)					(10,755		)
Noninterest-earning assets	125,870							123,784							116,122
Total Assets	$	1,548,871						$	1,491,372						$	1,283,670

Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts	98,203			24		0.10	%	97,202			24		0.10	%	85,482			49		0.23	%
Savings and money market accounts	565,861			665		0.47	%	501,155			713		0.57	%	381,431			677		0.71	%
Time deposits	290,460			345		0.47	%	317,522			394		0.50	%	351,278			968		1.10	%
FHLB advances	31,520			34		0.43	%	31,900			35		0.44	%	29,207			57		0.77	%
Other borrowings	6,652			26		1.57	%	12,535			136		4.36	%	12,488			163		5.20	%
Total interest-bearing liabilities	$	992,696		$	1,094	0.44	%	$	960,314		$	1,302	0.54	%	$	859,886		$	1,914	0.89	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	384,207						$	374,166						$	279,164
Other liabilities	9,663							9,409							8,295
Total noninterest-bearing liabilities	$	393,870						$	383,575						$	287,459
Stockholders’ Equity	162,305							147,483							136,325
Total Liabilities and Stockholders’ Equity	$	1,548,871						$	1,491,372						$	1,283,670

Net interest income				$	13,640						$	12,893						$	10,985
Net interest spread(2)						3.63	%						3.58	%						3.47	%
Net interest margin(3)						3.77	%						3.75	%						3.71	%

(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.

	Nine Months Ended
	September 30, 2021							September 30, 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)	$	1,093,684		$	40,429	4.94	%	$	936,500		$	35,577	5.07	%
Taxable securities	74,244			1,134		2.04	%	57,733			940		2.17	%
Nontaxable securities	42,191			729		2.31	%	19,665			454		3.08	%
Other interest-earnings assets	148,349			315		0.28	%	107,271			489		0.61	%
Total interest-earning assets	$	1,358,468		$	42,607	4.19	%	$	1,121,169		$	37,460	4.46	%
Allowance for loan losses	(12,890		)					(10,173		)
Noninterest-earning assets	124,539							109,346
Total Assets	$	1,470,117						$	1,220,342

Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts	94,696			66		0.09	%	81,168			131		0.22	%
Savings and money market accounts	503,064			2,056		0.55	%	360,736			2,288		0.85	%
Time deposits	310,758			1,233		0.53	%	359,069			4,072		1.52	%
FHLB advances	32,215			120		0.50	%	20,522			126		0.82	%
Other borrowings	10,625			315		3.96	%	12,478			516		5.52	%
Total interest-bearing liabilities	$	951,358		$	3,790	0.53	%	$	833,973		$	7,133	1.14	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	358,556						$	247,192
Other liabilities	9,207							6,951
Total noninterest-bearing liabilities	$	367,763						$	254,143
Stockholders’ Equity	150,996							132,226
Total Liabilities and Stockholders’ Equity	$	1,470,117						$	1,220,342

Net interest income				$	38,817						$	30,327
Net interest spread(2)						3.66	%						3.32	%
Net interest margin(3)						3.82	%						3.61	%


Per Share Information	Three Months Ended									Nine Months Ended
	September 30, 2021			June 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020

	(Dollars in thousands, except share and per share amounts)

Net income	$	4,921		$	3,906		$	3,194		$	14,508		$	8,792
Earnings per share - basic	$	0.59		$	0.51		$	0.42		$	1.84		$	1.15
Earnings per share - diluted	$	0.58		$	0.50		$	0.41		$	1.82		$	1.13

Weighted average shares outstanding	8,354,860			7,691,084			7,666,336			7,861,780			7,666,336
Diluted weighted average shares outstanding	8,467,460			7,810,952			7,767,976			7,980,159			7,761,695
Shares issued and outstanding	9,012,857			7,716,428			7,674,756			9,012,857			7,674,756

Total stockholders' equity	$	174,221		$	148,903		$	137,366		$	174,221		$	137,366
Book value per share	$	19.33		$	19.30		$	17.90		$	19.33		$	17.90


Performance Ratios	Three Months Ended									Nine Months Ended
	September 30, 2021			June 30 2021			September 30, 2020			September 30, 2021			September 30, 2020

Net interest margin	3.77		%	3.75		%	3.71		%	3.82		%	3.61		%
Net interest spread	3.63		%	3.58		%	3.47		%	3.66		%	3.32		%
Efficiency ratio	57.55		%	61.07		%	60.23		%	56.02		%	65.04		%
Return on average assets	1.26		%	1.05		%	0.99		%	1.32		%	0.96		%
Return on average stockholders’ equity	12.03		%	10.62		%	9.32		%	12.85		%	9.22		%

Core and PPP Loans	September 30, 2021			June 30, 2021			December 31, 2020			September 30, 2020
	(Dollars in thousands)

Core loans	$	1,129,075		$	1,063,913		$	967,177		$	934,286
PPP loans	20,265				37,764		66,556			71,694
Unearned income	(3,893		)	(4,118		)	(3,618		)	(4,127		)
Loans, net of unearned income	1,145,447			1,097,559			1,030,115			1,001,853
Allowance for loan losses	(14,097		)	(13,339		)	(11,859		)	(12,116		)
Loans, net	$	1,131,350		$	1,084,220		$	1,018,256		$	989,737

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 tables provide 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, 2021				June 30, 2021				September 30, 2020			September 30, 2021				September 30, 2020

	(Dollars in thousands, except share and per share amounts)

Net income	$	4,921			$	3,906			$	3,194		$	14,508			$	8,792
Add: Net OREO write-downs (gains)	—				(8		)		219			(8		)		793
Less: Gain on sale of USDA loan	—				—				—			2,806				—
Less: BOLI death benefits	742				—				615			742				615
Less: Gain (loss) on securities	189				27				—			(17		)		742
Less: Tax effect	(52		)		(9		)		56			(730		)		12
*Core net income*	$	*4,042*			$	*3,880*			$	*2,742*		$	*11,699*			$	*8,216*
Average assets	$	1,548,871			$	1,491,372			$	1,283,670		$	1,470,117			$	1,220,342
*Core return on average assets*	*1.04*			%	*1.04*			%	*0.85*		%	*1.06*			%	*0.90*		%

Net income	$	4,921			$	3,906			$	3,194		$	14,508			$	8,792
Add: Net OREO write-downs (gains)	—				(8		)		219			(8		)		793
Add: Provision	750				750				1,600			2,250				2,700
Less: Gain on sale of USDA loan	—				—				—			2,806				—
Less: BOLI death benefits	742				—				615			742				615
Less: Gain (loss) on securities	189				27				—			(17		)		742
Add: Income taxes	1,293				1,176				549			4,287				2,012
*Pretax pre-provision core net income*	$	*6,033*			$	*5,797*			$	*4,947*		$	*17,506*			$	*12,940*
Average assets	$	1,548,871			$	1,491,372			$	1,283,670		$	1,470,117			$	1,220,342
*Pretax pre-provision core return on average assets*	*1.55*			%	*1.56*			%	*1.53*		%	*1.59*			%	*1.42*		%

Total stockholders' equity	$	174,221			$	148,903			$	137,366		$	174,221			$	137,366
Less: Intangible assets	18,428				18,494				18,692			18,428				18,692
Tangible common equity	$	155,793			$	130,409			$	118,674		$	155,793			$	118,674

Core net income	$	4,042			$	3,880			$	2,742		$	11,699			$	8,216
Diluted weighted average shares outstanding	8,467,460				7,810,952				7,767,976			7,980,159				7,761,695
*Diluted core earnings per share*	$	*0.48*			$	*0.50*			$	*0.35*		$	*1.47*			$	*1.06*

Common shares outstanding at year or period end	9,012,857				7,716,428				7,674,756			9,012,857				7,674,756
Tangible book value per share	$	17.29			$	16.90			$	15.46		$	17.29			$	15.46


Reconciliation of Non-GAAP Financial Measures

	Three Months Ended											Nine Months Ended
	September 30, 2021				June 30, 2021				September 30, 2020			September 30, 2021				September 30, 2020

	(Dollars in thousands, except share and per share amounts)

Total assets at end of period	$	1,559,062			$	1,514,436			$	1,300,040		$	1,559,062			$	1,300,040
Less: Intangible assets	18,428				18,494				18,692			18,428				18,692
Adjusted assets at end of period	$	1,540,634			$	1,495,942			$	1,281,348		$	1,540,634			$	1,281,348
*Tangible common equity to tangible assets*	*10.11*			%	*8.72*			%	*9.26*		%	*10.11*			%	*9.26*		%

Total average stockholders’ equity	$	162,305			147,483				$	136,325		$	150,996			$	132,226
Less: Average intangible assets	18,470				18,535				18,732			18,535				18,797
Average tangible common equity	$	143,835			$	128,948			$	117,593		$	132,461			$	113,429
Net income to common shareholders	$	4,921			$	3,906			$	3,194		$	14,508			$	8,792
*Return on average tangible common equity*	*13.57*			%	*12.15*			%	*10.81*		%	*14.64*			%	*10.35*		%
Average tangible common equity	$	143,835			$	128,948			$	117,593		$	132,461			$	113,429
Core net income	$	4,042			$	3,880			$	2,742		$	11,699			$	8,216
*Core return on average tangible common equity*	*11.15*			%	*12.07*			%	*9.28*		%	*11.81*			%	*9.68*		%

Net interest income	$	13,640			$	12,893			10,985			38,817				30,327
Add: Noninterest income	2,509				2,045				2,448			9,051				6,916
Less: Gain on sale of USDA loan	—				—				—			2,806				—
Less: BOLI death benefits	742				—				615			742				615
Less: Gain (loss) on securities	189				27				—			(17		)		742
Operating revenue	$	15,218			$	14,911			$	12,818		$	44,337			$	35,886

Expenses:
Total noninterest expense	$	9,185			$	9,106			$	8,090		$	26,823			$	23,739
Less: Net OREO write-down (gains)	—				(8		)		219			(8		)		793
Adjusted noninterest expenses	$	9,185			$	9,114			$	7,871		$	26,831			$	22,946
*Core efficiency ratio*	*60.36*			%	*61.12*			%	*61.41*		%	*60.52*			%	*63.94*		%

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

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