• Southern States Bancshares, Inc. Announces First Quarter 2023 Financial Results

    المصدر: Nasdaq GlobeNewswire / 24 أبريل 2023 16:05:01   America/New_York

    First Quarter 2023 Performance and Operational Highlights

    • Net income of $7.7 million, or $0.85 per diluted share

    • Core net income(1) of $7.3 million, or $0.80 per diluted share(1)

    • Net interest income of $19.5 million, a decrease of $1.3 million from the prior quarter

    • Net interest margin (“NIM”) of 4.07%, down 31 basis points from the prior quarter

    • NIM of 4.09% on a fully-taxable equivalent basis (“NIM - FTE”)(1)

    • Return on average assets (“ROAA”) of 1.51%; return on average stockholders’ equity (“ROAE”) of 16.67%; and return on average tangible common equity (“ROATCE”)(1) of 18.45%

    • Core ROAA(1) of 1.44%; and core ROATCE(1) of 17.51%

    • Efficiency ratio of 48.79%

    • Linked-quarter loan growth was 14.9% annualized

    • Linked-quarter deposit growth was 16.2% annualized

    • Repurchased $575,000 of common stock, representing 24,000 shares at an average price of $23.95 during the 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., April 24, 2023 (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 $7.7 million, or $0.85 diluted earnings per share, for the first quarter of 2023. This compares to net income of $10.6 million, or $1.18 diluted earnings per share, for the fourth quarter of 2022, and net income of $4.6 million, or $0.50 diluted earnings per share, for the first quarter of 2022. The Company reported core net income of $7.3 million, or $0.80 diluted core earnings per share, for the first quarter of 2023. This compares to core net income of $8.1 million, or $0.90 diluted core earnings per share, for the fourth quarter of 2022, and core net income of $4.8 million, or $0.53 diluted core earnings per share, for the first quarter of 2022 (see “Reconciliation of Non-GAAP Financial Measures”).


    CEO Commentary

    Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, “Despite the recent volatility in our industry, we continued to drive strong earnings, growing both loans and deposits and improving upon our already strong capital levels. After several quarters of Federal Reserve interest rate hikes, combined with increased competition for funding, our deposit betas accelerated in the first quarter and we continued to see a moderate deposit mix shift from noninterest-bearing to interest-bearing deposits, impacting our net interest margin. We are confident in our ability to strategically manage our deposit balances, which we believe reflects the diversity and durability of our franchise.’’

    Mr. Whatley continued, “We also continue to prudently meet the needs of clients across our vibrant and resilient footprint. We grew loans during the quarter by 14.9% annualized, while maintaining excellent credit quality. We are focused on selectively growing our loan portfolio while carefully managing asset quality and exercising disciplined expense management as we have throughout multiple economic cycles.’’

    Mr. Whatley concluded, “We are of course closely monitoring the fallout from recent regional bank failures. But it is important to emphasize that Southern States is focused on traditional banking services. The banks that failed had unique business models with idiosyncratic challenges that are unrelated to Southern States. We are confident our robust balance sheet and conservative underwriting principles position us well to navigate the current environment while delivering strong returns for our shareholders.”


    Net Interest Income and Net Interest Margin

     Three Months Ended % Change March 31, 2023 vs.
    March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2022 March 31, 2022
     (Dollars in thousands)    
              
    Average interest-earning assets$1,947,957  $1,893,069  $1,684,298  2.9% 15.7%
    Net interest income$19,546  $20,884  $14,654  (6.4)% 33.4%
    Net interest margin 4.07%  4.38%  3.53% (31) bps 54 bps
              


    Net interest income for the first quarter of 2023 was $19.5 million, a decrease of 6.4% from $20.9 million for the fourth quarter of 2022. The decrease was primarily attributable to the higher cost of deposits and other borrowings, which more than offset an increase in the yield on interest-earnings assets.

    Relative to the first quarter of 2022, net interest income increased $4.9 million, or 33.4%. The increase was partially the result of improvement in the yield on interest-earning assets, which outpaced the rise in deposit costs and other borrowings. In addition, we benefited from the significant organic growth over the last year.

    Net interest margin for the first quarter of 2023 was 4.07%, compared to 4.38% for the fourth quarter of 2022. The decrease was primarily due to higher interest rates paid on deposits, which outpaced the increase in yields on interest-earning assets.

    Relative to the first quarter of 2022, net interest margin increased from 3.53%. The increase was primarily due to a rapid increase in interest rates, which produced higher yields on interest-earning assets.


    Noninterest Income

     Three Months Ended % Change March 31, 2023 vs.
    March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2022 March 31, 2022
     (Dollars in thousands)    
              
    Service charges on deposit accounts$450  $431  $445  4.4% 1.1%
    Swap fees (4)  2   15  (300.0)% (126.7)%
    SBA/USDA fees 134   70   388  91.4% (65.5)%
    Mortgage origination fees 100   98   286  2.0% (65.0)%
    Net gain (loss) on securities 514   (86)  (361) (697.7)% (242.4)%
    Other operating income 592   4,088   560  (85.5)% 5.7%
    Total noninterest income$1,786  $4,603  $1,333  (61.2)% 34.0%
              


    Noninterest income for the first quarter of 2023 was $1.8 million, a decrease of 61.2% from $4.6 million for the fourth quarter of 2022. The fourth quarter 2022 results included a $2.6 million gain on the sale of two branches and a bank owned life insurance ("BOLI") benefit claim of $774,000. The first quarter decrease was partially offset by a realized net gain on securities during the quarter, compared to a net loss on securities during the previous quarter.

    Relative to the first quarter of 2022, noninterest income increased 34.0% from $1.3 million. The increase was primarily due to a realized net gain on securities during the first quarter of 2023 compared to a net loss on securities during the first quarter of 2022. This increase was partially offset by a decrease in SBA/USDA fees and mortgage fees during the first quarter of 2023.


    Noninterest Expense

     Three Months Ended % Change March 31, 2023 vs.
    March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2022 March 31, 2022
     (Dollars in thousands)    
              
    Salaries and employee benefits$6,311 $6,738 $5,725 (6.3)% 10.2%
    Equipment and occupancy expenses 683  730  705 (6.4)% (3.1)%
    Data processing fees 593  711  564 (16.6)% 5.1%
    Regulatory assessments 342  165  263 107.3% 30.0%
    Other operating expenses 2,229  2,092  2,033 6.5% 9.6%
    Total noninterest expenses$10,158 $10,436 $9,290 (2.7)% 9.3%
              


    Noninterest expense for the first quarter of 2023 was $10.2 million, a decrease of 2.7% from $10.4 million for the fourth quarter of 2022. The decrease was primarily attributable to a decrease in salaries and benefits as a result of expenses related to the issuance of restricted stock units in a deferred compensation plan during the fourth quarter of 2022 and partially offset by various increases in other operating expenses, none of which were individually significant. The fourth quarter 2022 results also included waivers of regulatory assessments from State regulators.

        
    Relative to the first quarter of 2022, noninterest expense increased 9.3% from $9.3 million. The increase was primarily attributable to an increase in salaries and benefits as a result of various equity, retirement and incentive plans.


    Loans and Credit Quality

     Three Months Ended % Change March 31, 2023 vs.
    March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2022 March 31, 2022
    (Dollars in thousands)    
              
    Core loans$1,650,929  $1,592,707  $1,313,173  3.7% 25.7%
    PPP loans —   —   893  —% NM 
    Gross loans 1,650,929   1,592,707   1,314,066  3.7% 25.6%
    Unearned income (5,614)  (5,543)  (3,996) 1.3% 40.5%
    Loans, net of unearned income (“Loans”)$1,645,315  $1,587,164  $1,310,070  3.7% 25.6%
    Average loans, net of unearned (“Average loans”)$1,609,564  $1,563,255  $1,278,413  3.0% 25.9%
              
    Nonperforming loans (“NPL”)$1,646  $2,245  $3,246  (26.7)% (49.3)%
    Provision for loan losses$1,181  $1,938  $700  (39.1)% 68.7%
    Allowance for loan losses (“ALLL”)$21,140  $20,156  $15,492  4.9% 36.5%
    Net charge-offs (recoveries)$197  $205  $52  (3.9)% 278.8%
    NPL to gross loans 0.10%  0.14%  0.25%    
    Net charge-offs (recoveries) to average loans(1) 0.05%  0.05%  0.02%    
    ALLL to loans 1.28%  1.27%  1.18%    
              
    (1) Ratio is annualized.         
    NM = Not meaningful         
              


    Loans, net of unearned income, were $1.6 billion at March 31, 2023, up $58.2 million from December 31, 2022 and up $335.2 million from March 31, 2022. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.

    Nonperforming loans totaled $1.6 million, or 0.10% of gross loans, at March 31, 2023, compared with $2.2 million, or 0.14% of gross loans, at December 31, 2022, and $3.2 million, or 0.25% of gross loans, at March 31, 2022. The $599,000 net decrease in nonperforming loans in the first quarter was primarily attributable to three loans that were returned to accruing status or charged-off. The $1.6 million net decrease in nonperforming loans from March 31, 2022 was primarily attributable to a significant commercial real estate loan being moved back to accruing status.

    The Company recorded a provision for loan losses of $1.2 million for the first quarter of 2023, compared to $1.9 million for the fourth quarter of 2022. The lower provision was primarily due to changes in our qualitative economic factors and less loan growth for the the quarter.

    Net charge-offs for the first quarter of 2023 were $197,000, or 0.05% of average loans, compared to net charge-offs of $205,000, or 0.05% of average loans, for the fourth quarter of 2022, and net charge-offs of $52,000, or 0.02% of average loans, for the first quarter of 2022.

    The Company’s allowance for loan losses was 1.28% of total loans and 1284.33% of nonperforming loans at March 31, 2023, compared with 1.27% of total loans and 897.82% of nonperforming loans at December 31, 2022.


    Deposits

     Three Months Ended % Change March 31, 2023 vs.
    March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2022 March 31, 2022
     (Dollars in thousands)    
              
    Noninterest-bearing deposits$433,832 $460,977 $515,110 (5.9)% (15.8)%
    Interest-bearing deposits 1,355,659  1,259,766  1,026,729 7.6% 32.0%
    Total deposits$1,789,491 $1,720,743 $1,541,839 4.0% 16.1%
              


    Total deposits were $1.8 billion at March 31, 2023, up from $1.7 billion at December 31, 2022 and $1.5 billion at March 31, 2022. The $68.7 million increase in total deposits in the first quarter was due to an increase of $95.9 million in interest-bearing account balances, partially offset by a $27.1 million decrease in noninterest-bearing deposits. Included in the increase was $35.1 million in brokered deposits.


    Capital

     March 31,
    2023    		 December 31,
    2022    		 March 31,
    2022
    Company Bank Company Bank Company Bank
               
    Tier 1 capital ratio to average assets8.89% 12.19% 8.82% 12.17% 8.75% 10.88%
    Risk-based capital ratios:           
    Common equity tier 1 (“CET1”) capital ratio9.00% 12.34% 8.86% 12.21% 9.90% 12.32%
    Tier 1 capital ratio9.00% 12.34% 8.86% 12.21% 9.90% 12.32%
    Total capital ratio14.41% 13.38% 14.34% 13.24% 13.97% 13.31%
                


    As of March 31, 2023, total stockholders’ equity was $189.7 million, up from $181.7 million at December 31, 2022. The increase of $7.9 million was substantially due to strong earnings growth.


    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 recent events and trends in the banking industry, 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, 2022 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 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   Kevin Dobbs
    (205) 820-8065   (310) 622-8245
    ljoyce@ssbank.bank   ssbankir@finprofiles.com


     
    SELECT FINANCIAL DATA
    (In thousands, except share and per share amounts)
          
     Three Months Ended
    March 31, 2023 December 31,
    2022    		 March 31, 2022
         
    Results of Operations     
    Interest income$28,699  $26,706  $15,872 
    Interest expense 9,153   5,822   1,218 
    Net interest income 19,546   20,884   14,654 
    Provision for loan losses 1,181   1,938   700 
    Net interest income after provision 18,365   18,946   13,954 
    Noninterest income 1,786   4,603   1,333 
    Noninterest expense 10,158   10,436   9,290 
    Income tax expense(1) 2,322   2,521   1,440 
    Net income$7,671  $10,592  $4,557 
    Core net income(2)$7,280  $8,081  $4,824 
          
    Share and Per Share Data     
    Shares issued and outstanding 8,723,763   8,706,920   8,749,878 
    Weighted average shares outstanding:     
    Basic 8,762,450   8,707,026   8,935,384 
    Diluted 9,044,490   8,932,585   9,065,364 
    Earnings per share:     
    Basic$0.87  $1.22  $0.51 
    Diluted$0.85  $1.18  $0.50 
    Core - diluted(2)$0.80  $0.90  $0.53 
    Book value per share$21.74  $20.87  $19.34 
    Tangible book value per share(2)$19.68  $18.79  $17.25 
    Cash dividends declared$0.09  $0.09  $0.09 
          
    Performance and Financial Ratios     
    ROAA 1.51%  2.11%  1.03%
    ROAE 16.67%  23.77%  10.43%
    Core ROAA(2) 1.44%  1.61%  1.09%
    ROATCE(2) 18.45%  26.49%  11.63%
    Core ROATCE(2) 17.51%  20.21%  12.31%
    NIM 4.07%  4.38%  3.53%
    NIM - FTE(2) 4.09%  4.39%  3.55%
    Net interest spread 3.33%  3.84%  3.36%
    Yield on loans 6.38%  6.05%  4.68%
    Yield on interest-earning assets 5.97%  5.60%  3.82%
    Cost of interest-bearing liabilities 2.64%  1.76%  0.46%
    Cost of funds(3) 2.01%  1.29%  0.31%
    Cost of interest-bearing deposits 2.42%  1.52%  0.35%
    Cost of total deposits 1.81%  1.09%  0.23%
    Noninterest deposits to total deposits 24.24%  26.79%  33.41%
    Total loans to total deposits 91.94%  92.24%  84.97%
    Efficiency ratio 48.79%  40.81%  56.83%
    Core efficiency ratio(2) 48.79%  45.98%  56.83%
          

    (1) Three months ended December 31, 2022 included a $540,000 investment tax credit.
    (2) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
    (3) Includes total interest-bearing liabilities and noninterest deposits.


    SELECT FINANCIAL DATA
    (In thousands)
          
     Three Months Ended
    March 31, 2023 December 31,
    2022    		 March 31, 2022
         
    Financial Condition (ending)     
    Total loans$1,645,315  $1,587,164  $1,310,070 
    Total securities 183,197   175,196   170,694 
    Total assets 2,134,337   2,045,204   1,798,834 
    Total noninterest bearing deposits 433,832   460,977   515,110 
    Total deposits 1,789,491   1,720,743   1,541,839 
    Total borrowings 131,372   117,295   73,104 
    Total liabilities 1,944,674   1,863,485   1,629,645 
    Total shareholders’ equity$189,663  $181,719  $169,189 
          
    Financial Condition (average)     
    Total loans$1,609,564  $1,563,255  $1,278,413 
    Total securities 192,348   188,765   161,683 
    Other interest-earning assets 146,045   141,049   244,202 
    Total interest-bearing assets 1,947,957   1,893,069   1,684,298 
    Total assets 2,057,005   1,994,087   1,787,015 
    Noninterest-bearing deposits 438,735   477,301   514,456 
    Interest-bearing deposits 1,300,632   1,216,492   1,023,898 
    Total deposits 1,739,367   1,693,793   1,538,354 
    Total borrowings 104,901   99,111   58,874 
    Total interest-bearing liabilities 1,405,533   1,315,603   1,082,772 
    Total shareholders’ equity$186,639  $176,769  $177,244 
          
    Asset Quality     
    Nonperforming loans$1,646  $2,245  $3,246 
    Other real estate owned (“OREO”)$2,930  $2,930  $2,930 
    Nonperforming assets (“NPA”)$4,576  $5,175  $6,176 
    Net charge-offs (recovery) to average loans(1) 0.05%  0.05%  0.02%
    Provision for loan losses to average loans(1) 0.30%  0.49%  0.22%
    ALLL to loans 1.28%  1.27%  1.18%
    ALLL to gross loans 1.28%  1.27%  1.18%
    ALLL to NPL 1284.33%  897.82%  477.26%
    NPL to loans 0.10%  0.14%  0.25%
    NPL to gross loans 0.10%  0.14%  0.25%
    NPA to gross loans and OREO 0.28%  0.32%  0.47%
    NPA to total assets 0.21%  0.25%  0.34%
          
    Regulatory and Other Capital Ratios     
    Total shareholders’ equity to total assets 8.89%  8.89%  9.41%
    Tangible common equity to tangible assets(2) 8.11%  8.07%  8.47%
    Tier 1 capital ratio to average assets 8.89%  8.82%  8.75%
    Risk-based capital ratios:     
    CET1 capital ratio 9.00%  8.86%  9.90%
    Tier 1 capital ratio 9.00%  8.86%  9.90%
    Total capital ratio 14.41%  14.34%  13.97%
          

    (1) Ratio is annualized.
    (2) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.


    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (In thousands)
          
     March 31, 2023 (Unaudited) December 31, 2022 (Audited) March 31, 2022 (Unaudited)
         
         
    Assets     
    Cash and due from banks$17,245  $15,260  $22,851 
    Interest-bearing deposits in banks 99,541   90,198   111,951 
    Federal funds sold 76,010   63,041   74,022 
    Total cash and cash equivalents 192,796   168,499   208,824 
          
    Securities available for sale, at fair value 163,550   155,544   151,027 
    Securities held to maturity, at amortized cost 19,647   19,652   19,667 
    Other equity securities, at fair value 3,806   4,444   8,937 
    Restricted equity securities, at cost 3,862   3,134   2,825 
    Loans held for sale 2,376   1,047   2,509 
          
    Loans, net of unearned income 1,645,315   1,587,164   1,310,070 
    Less allowance for loan losses 21,140   20,156   15,492 
    Loans, net 1,624,175   1,567,008   1,294,578 
          
    Premises and equipment, net 27,098   27,345   28,065 
    Accrued interest receivable 7,077   6,963   4,427 
    Bank owned life insurance 29,350   29,186   29,343 
    Annuities 15,489   15,478   15,523 
    Foreclosed assets 2,930   2,930   2,930 
    Goodwill 16,862   16,862   16,862 
    Core deposit intangible 1,144   1,226   1,434 
    Other assets 24,175   25,886   11,883 
          
    Total assets$2,134,337  $2,045,204  $1,798,834 
          
    Liabilities and Stockholders' Equity     
    Liabilities:     
    Deposits:     
    Noninterest-bearing$433,832  $460,977  $515,110 
    Interest-bearing 1,355,659   1,259,766   1,026,729 
    Total deposits 1,789,491   1,720,743   1,541,839 
          
    Other borrowings (16)  (19)  — 
    FHLB advances 45,000   31,000   25,950 
    Subordinated notes 86,388   86,314   47,154 
    Accrued interest payable 844   584   107 
    Other liabilities 22,967   24,863   14,595 
          
    Total liabilities 1,944,674   1,863,485   1,629,645 
          
    Stockholders' equity:     
    Common stock 43,798   43,714   43,749 
    Capital surplus 77,053   76,785   76,426 
    Retained earnings 80,642   73,764   53,604 
    Accumulated other comprehensive loss (9,846)  (11,048)  (3,755)
    Unvested restricted stock (965)  (477)  (835)
    Vested restricted stock units (1,019)  (1,019)  — 
          
    Total stockholders' equity 189,663   181,719   169,189 
          
    Total liabilities and stockholders' equity$2,134,337  $2,045,204  $1,798,834 


     
    CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share amounts)
          
     Three Months Ended
    March 31,
    2023    		 December 31,
    2022    		 March 31,
    2022
    (Unaudited) (Unaudited) (Unaudited)
    Interest income:     
    Loans, including fees$25,335  $23,853  $14,766 
    Taxable securities 1,383   1,206   619 
    Nontaxable securities 291   322   299 
    Other interest and dividends 1,690   1,325   188 
    Total interest income 28,699   26,706   15,872 
          
    Interest expense:     
    Deposits 7,768   4,655   873 
    Other borrowings 1,385   1,167   345 
    Total interest expense 9,153   5,822   1,218 
          
    Net interest income 19,546   20,884   14,654 
    Provision for loan losses 1,181   1,938   700 
    Net interest income after provision for loan losses 18,365   18,946   13,954 
          
    Noninterest income:     
    Service charges on deposit accounts 450   431   445 
    Swap fees (4)  2   15 
    SBA/USDA fees 134   70   388 
    Mortgage origination fees 100   98   286 
    Net gain (loss) on securities 514   (86)  (361)
    Other operating income 592   4,088   560 
    Total noninterest income 1,786   4,603   1,333 
          
    Noninterest expenses:     
    Salaries and employee benefits 6,311   6,738   5,725 
    Equipment and occupancy expenses 683   730   705 
    Data processing fees 593   711   564 
    Regulatory assessments 342   165   263 
    Other operating expenses 2,229   2,092   2,033 
    Total noninterest expenses 10,158   10,436   9,290 
          
    Income before income taxes 9,993   13,113   5,997 
          
    Income tax expense 2,322   2,521   1,440 
          
    Net income$7,671  $10,592  $4,557 
          
    Basic earnings per share$0.87  $1.22  $0.51 
          
    Diluted earnings per share$0.85  $1.18  $0.50 


     
    AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
    (Dollars in thousands)
                      
     Three Months Ended
    March 31, 2023 December 31, 2022 March 31, 2022
    Average
    Balance    		 Interest Yield/Rate Average
    Balance    		 Interest Yield/Rate Average
    Balance    		 Interest Yield/Rate
    Assets:                 
    Interest-earning assets:                 
    Loans, net of unearned income(1)$1,609,564  $25,335 6.38% $1,563,255  $23,853 6.05% $1,278,413  $14,766 4.68%
    Taxable securities 139,516   1,383 4.02%  132,222   1,206 3.62%  106,820   619 2.35%
    Nontaxable securities 52,832   291 2.24%  56,543   322 2.26%  54,863   299 2.21%
    Other interest-earnings assets 146,045   1,690 4.69%  141,049   1,325 3.73%  244,202   188 0.31%
    Total interest-earning assets$1,947,957  $28,699 5.97% $1,893,069  $26,706 5.60% $1,684,298  $15,872 3.82%
    Allowance for loan losses (20,493)      (19,374)      (15,041)    
    Noninterest-earning assets 129,541       120,392       117,758     
    Total Assets$2,057,005      $1,994,087      $1,787,015     
                      
    Liabilities and Stockholders’ Equity:                 
    Interest-bearing liabilities:                 
    Interest-bearing transaction accounts 93,951   20 0.08%  98,978   22 0.09%  110,983   26 0.09%
    Savings and money market accounts 806,001   5,040 2.54%  794,692   3,126 1.56%  675,504   591 0.36%
    Time deposits 400,680   2,708 2.74%  322,822   1,507 1.85%  237,411   256 0.44%
    FHLB advances 18,578   159 3.47%  22,739   147 2.56%  25,950   22 0.34%
    Other borrowings 86,323   1,226 5.76%  76,372   1,020 5.30%  32,924   323 3.98%
    Total interest-bearing liabilities$1,405,533  $9,153 2.64% $1,315,603  $5,822 1.76% $1,082,772  $1,218 0.46%
                      
    Noninterest-bearing liabilities:                 
    Noninterest-bearing deposits$438,735      $477,301      $514,456     
    Other liabilities 26,098       24,414       12,543     
    Total noninterest-bearing liabilities$464,833      $501,715      $526,999     
    Stockholders’ Equity 186,639       176,769       177,244     
    Total Liabilities and Stockholders’ Equity$2,057,005      $1,994,087      $1,787,015     
                      
    Net interest income  $19,546     $20,884     $14,654  
    Net interest spread(2)    3.33%     3.84%     3.36%
    Net interest margin(3)    4.07%     4.38%     3.53%
    Net interest margin - FTE(4)(5)    4.09%     4.39%     3.55%
    Cost of funds(6)    2.01%     1.29%     0.31%
    Cost of interest-bearing deposits    2.42%     1.52%     0.35%
    Cost of total deposits    1.81%     1.09%     0.23%


    (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 months ended March 31, 2023 and December 31, 2022 and a 23.5% tax rate for the three months ended March 31, 2022.
    (5)Refer to “Reconciliation of Non-GAAP Financial Measures”.
    (6)Includes total interest-bearing liabilities and noninterest deposits.

     
    LOAN COMPOSITION
    (Dollars in thousands)
                
     March 31, 2023 December 31, 2022 March 31, 2022
    Amount % of gross Amount % of gross Amount % of gross
               
    Real estate mortgages:           
    Construction and development$227,560  13.8% $255,736  16.1% $165,400  12.6%
    Residential 196,923  11.9%  167,891  10.5%  154,143  11.7%
    Commercial 948,251  57.5%  904,872  56.8%  765,685  58.3%
    Commercial and industrial 270,825  16.4%  256,553  16.1%  218,868  16.6%
    PPP loans —  —%  —  —%  893  0.1%
    Consumer and other 7,370  0.4%  7,655  0.5%  9,077  0.7%
    Gross loans 1,650,929  100.0%  1,592,707  100.0%  1,314,066  100.0%
    Unearned income (5,614)    (5,543)    (3,996)  
    Loans, net of unearned income 1,645,315     1,587,164     1,310,070   
    Allowance for loan losses (21,140)    (20,156)    (15,492)  
    Loans, net$1,624,175    $1,567,008    $1,294,578   


    DEPOSIT COMPOSITION
    (Dollars in thousands)
                
     March 31, 2023 December 31, 2022 March 31, 2022
    Amount % of total Amount % of total Amount % of total
               
                
    Noninterest-bearing transaction$433,833 24.2% $460,977 26.8% $515,110 33.4%
    Interest-bearing transaction 877,166 49.0%  837,127 48.6%  749,119 48.6%
    Savings 47,742 2.7%  49,235 2.9%  62,462 4.1%
    Time deposits, $250,000 and under 366,271 20.5%  307,145 17.8%  189,172 12.2%
    Time deposits, over $250,000 64,479 3.6%  66,259 3.9%  25,976 1.7%
    Total deposits$1,789,491 100.0% $1,720,743 100.0% $1,541,839 100.0%


    Nonperfoming Assets
    (Dollars in thousands)
          
     March 31, 2023 December 31, 2022 March 31, 2022
         
         
    Nonaccrual loans$1,646  $2,245  $3,246 
    Past due loans 90 days or more and still accruing interest —   —   — 
    Total nonperforming loans 1,646   2,245   3,246 
    OREO 2,930   2,930   2,930 
    Total nonperforming assets$4,576  $5,175  $6,176 
          
    Troubled debt restructured loans – nonaccrual(1) 805   832   904 
    Troubled debt restructured loans – accruing 1,272   1,292   1,058 
    Total troubled debt restructured loans$2,077  $2,124  $1,962 
          
    Allowance for loan losses$21,140  $20,156  $15,492 
    Loans, net of unearned income at the end of the period$1,645,315  $1,587,164  $1,310,070 
    Gross loans outstanding at the end of period$1,650,929  $1,592,707  $1,314,066 
    Total assets$2,134,337  $2,045,204  $1,798,834 
    Allowance for loan losses to nonperforming loans 1284.33%  897.82%  477.26%
    Nonperforming loans to loans, net of unearned income 0.10%  0.14%  0.25%
    Nonperforming loans to gross loans 0.10%  0.14%  0.25%
    Nonperforming assets to gross loans and OREO 0.28%  0.32%  0.47%
    Nonperforming assets to total assets 0.21%  0.25%  0.34%
          
    Nonaccrual loans by category:     
    Real estate mortgages:     
    Construction & Development$64  $67  $76 
    Residential Mortgages 267   565   510 
    Commercial Real Estate Mortgages 1,263   1,278   2,388 
    Commercial & Industrial 51   312   269 
    Consumer and other 1   23   3 
    Total$1,646  $2,245  $3,246 

    (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.


    Allowance for Loan Losses
    (Dollars in thousands)
          
     Three Months Ended
    March 31, 2023 December 31,
    2022    		 March 31, 2022
         
    Average loans, net of unearned income$1,609,564  $1,563,255  $1,278,413 
    Loans, net of unearned income$1,645,315  $1,587,164  $1,310,070 
    Gross loans$1,650,929  $1,592,707  $1,314,066 
    Allowance for loan losses at beginning of the period$20,156  $18,423  $14,844 
    Charge-offs:     
    Construction and development —   —   66 
    Residential —   —   — 
    Commercial —   —   — 
    Commercial and industrial 218   210   — 
    Consumer and other 6   18   6 
    Total charge-offs 224   228   72 
    Recoveries:     
    Construction and development —   —   — 
    Residential 11   4   17 
    Commercial —   —   — 
    Commercial and industrial 14   1   — 
    Consumer and other 2   18   3 
    Total recoveries 27   23   20 
    Net charge-offs (recoveries)$197  $205  $52 
          
    Provision for loan losses$1,181  $1,938  $700 
    Balance at end of period$21,140  $20,156  $15,492 
    Allowance to loans, net of unearned income 1.28%  1.27%  1.18%
    Allowance to gross loans 1.28%  1.27%  1.18%
    Net charge-offs (recoveries) to average loans, net of unearned income(1) 0.05%  0.05%  0.02%
    Provision for loan losses to average loans, net of unearned income(1) 0.30%  0.49%  0.22%

    (1) Ratio is annualized.


    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
    (Dollars in thousands, except share and per share amounts
          
     Three Months Ended
    March 31, 2023 December 31,
    2022    		 March 31, 2022
         
    Net income$7,671  $10,592  $4,557 
    Less: Net gain on sale of branches —   2,372   — 
    Less: BOLI benefit claim —   774   — 
    Less: Gain (loss) on securities 514   (86)  (361)
    Less: Tax effect (123)  (549)  94 
    Core net income$7,280  $8,081  $4,824 
    Average assets$2,057,005  $1,994,087  $1,787,015 
    Core return on average assets 1.44%  1.61%  1.09%
          
    Net income$7,671  $10,592  $4,557 
    Add: Provision 1,181   1,938   700 
    Less: Net gain on sale of branches —   2,372   — 
    Less: BOLI benefit claim —   774   — 
    Less: Gain (loss) on securities 514   (86)  (361)
    Add: Income taxes 2,322   2,521   1,440 
    Pretax pre-provision core net income$10,660  $11,991  $7,058 
    Average assets$2,057,005  $1,994,087  $1,787,015 
    Pretax pre-provision core return on average assets 2.10%  2.39%  1.60%
          
    Net interest income$19,546  $20,884  $14,654 
    Add: Fully-taxable equivalent adjustments(1) 85   84   78 
    Net interest income - FTE$19,631  $20,968  $14,732 
          
    Net interest margin 4.07%  4.38%  3.53%
    Effect of fully-taxable equivalent adjustments(1) 0.02%  0.01%  0.02%
    Net interest margin - FTE 4.09%  4.39%  3.55%
          
    Total stockholders' equity$189,663  $181,719  $169,189 
    Less: Intangible assets 18,006   18,088   18,296 
    Tangible common equity$171,657  $163,631  $150,893 
          
    (1) Assumes a 24.0% tax rate for the three months ended March 31, 2023 and December 31, 2022 and a 23.5% tax rate for the three months ended March 31, 2022.
          
          
          
    Reconciliation of Non-GAAP Financial Measures
    (Dollars in thousands, except share and per share amounts
          
     Three Months Ended
    March 31, 2023 December 31,
    2022    		 March 31, 2022
         
    Core net income$7,280  $8,081  $4,824 
    Diluted weighted average shares outstanding 9,044,490   8,932,585   9,065,364 
    Diluted core earnings per share$0.80  $0.90  $0.53 
          
    Common shares outstanding at year or period end 8,723,763   8,706,920   8,749,878 
    Tangible book value per share$19.68  $18.79  $17.25 
          
    Total assets at end of period$2,134,337  $2,045,204  $1,798,834 
    Less: Intangible assets 18,006   18,088   18,296 
    Adjusted assets at end of period$2,116,331  $2,027,116  $1,780,538 
    Tangible common equity to tangible assets 8.11%  8.07%  8.47%
          
    Total average shareholders equity$186,639  $176,769  $177,244 
    Less: Average intangible assets 18,055   18,134   18,337 
    Average tangible common equity$168,584  $158,635  $158,907 
    Net income to common shareholders$7,671  $10,592  $4,557 
    Return on average tangible common equity 18.45%  26.49%  11.63%
    Average tangible common equity$168,584  $158,635  $158,907 
    Core net income$7,280  $8,081  $4,824 
    Core return on average tangible common equity 17.51%  20.21%  12.31%
          
    Net interest income$19,546  $20,884  $14,654 
    Add: Noninterest income 1,786   4,603   1,333 
    Less: Gain on sale of branches —   2,600   — 
    Less: BOLI benefit claim —   774   — 
    Less: Gain (loss) on securities 514   (86)  (361)
    Operating revenue$20,818  $22,199  $16,348 
          
    Expenses:     
    Total noninterest expense$10,158  $10,436  $9,290 
    Less: Loss on sale of branches —   228   — 
    Adjusted noninterest expenses$10,158  $10,208  $9,290 
    Core efficiency ratio 48.79%  45.98%  56.83%

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