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

    来源: Nasdaq GlobeNewswire / 24 10月 2022 08:00:03   America/New_York

    Third Quarter 2022 Highlights

    • Linked-quarter loan growth was 26.3% annualized

    • Net income of $6.7 million, or $0.75 per diluted share

    • Core net income(1) of $6.8 million, or $0.77 per diluted share(1)

    • Net interest margin (“NIM”) of 4.15%, up 31 basis points from the prior quarter

    • NIM of 4.17% on a fully-taxable equivalent basis(1)

    • Return on average assets (“ROAA”) of 1.35%; return on average stockholders’ equity (“ROAE”) of 15.42%; and return on average tangible common equity (“ROATCE”)(1) of 17.24%

    • Core ROAA(1) of 1.37%; and core ROATCE(1) of 17.51%

    • Efficiency ratio of 48.94%, an improvement from 54.19% for the prior quarter

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

    ANNISTON, Ala., Oct. 24, 2022 (GLOBE NEWSWIRE) -- Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States” or the “Company”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today reported net income of $6.7 million, or $0.75 diluted earnings per share, for the third quarter of 2022. This compares to net income of $5.2 million, or $0.59 diluted earnings per share, for the second quarter of 2022, and net income of $4.9 million, or $0.58 diluted earnings per share, for the third quarter of 2021. The Company reported core net income of $6.8 million, or $0.77 diluted core earnings per share, for the third quarter of 2022. This compares to core net income of $5.3 million, or $0.59 diluted core earnings per share, for the second quarter of 2022, and core net income of $4.0 million, or $0.48 diluted core earnings per share, for the third quarter of 2021 (see “Reconciliation of Non-GAAP Financial Measures”).

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

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

    Net Interest Income and Net Interest Margin

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

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

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

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

    Noninterest Income

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

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

    Noninterest Expense

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

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

    Loan Portfolio

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

    Deposits

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

    Asset Quality

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

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

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

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

    Capital

    As of September 30, 2022, total stockholders’ equity was $170.3 million, compared with $167.9 million at June 30, 2022. The increase of $2.4 million was primarily due to strong earnings growth that more than offset an increase in accumulated other comprehensive loss resulting from changes in the value of the available for sale securities portfolio due to rapid increases in interest rates.

    About Southern States Bancshares, Inc.

    Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 13 branches in Alabama and Georgia and two loan production offices in Atlanta.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given the inflationary environment, the COVID-19 pandemic and governmental responses. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in other SEC filings under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

    These statements are often, but not always, made through the use of words or phrases such as “may,” “can,” “should,” “could,” “to be,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “likely,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “target,” “project,” “would” and “outlook,” or the negative version of those words or other similar words or phrases of a future or forward-looking nature. Forward-looking statements appear in a number of places in this press release and may include statements about business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions.

    Contact Information:
    Lynn Joyce
    (205) 820-8065
    ljoyce@ssbank.bank

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


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


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


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

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


    The following table sets forth the allocation of the Company’s nonperforming assets among different asset categories as of the dates indicated. Nonperforming assets consist of nonperforming loans plus OREO and repossessed property. Nonperforming loans include nonaccrual loans and loans past due 90 days or more.

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

    (1) Troubled debt restructured loans are excluded from nonperforming loans unless they otherwise meet the definition of nonaccrual loans or are more than 90 days past due.


    The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and average costs of our liabilities for the periods indicated. Yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

     Three Months Ended
     September 30, 2022 June 30, 2022 September 30, 2021
     Average
    Balance
     Interest Yield/
    Rate
     Average
    Balance
     Interest Yield/
    Rate
     Average
    Balance
     Interest Yield/
    Rate
     (Dollars in thousands)
    Assets:                 
    Interest-earning assets:                 
    Gross loans, net of unearned income(1)$1,480,735  $20,052 5.37% $1,359,320  $16,265 4.80% $1,122,741  $13,923 4.92%
    Taxable securities 128,932   1,010 3.11%  121,677   788 2.60%  76,612   402 2.08%
    Nontaxable securities 56,738   323 2.26%  56,850   309 2.18%  48,162   266 2.20%
    Other interest-earnings assets 192,699   1,135 2.34%  172,175   390 0.91%  189,131   143 0.30%
    Total interest-earning assets$1,859,104  $22,520 4.81% $1,710,022  $17,752 4.16% $1,436,646  $14,734 4.07%
    Allowance for loan losses (17,250)      (15,815)      (13,645)    
    Noninterest-earning assets 124,702       127,230       125,870     
    Total Assets$1,966,556      $1,821,437      $1,548,871     
                      
    Liabilities and Stockholders’ Equity:                 
    Interest-bearing liabilities:                 
    Interest-bearing transaction accounts 114,517   26 0.09%  114,743   27 0.09%  98,203   24 0.10%
    Savings and money market accounts 811,349   1,644 0.80%  735,845   625 0.34%  565,861   665 0.47%
    Time deposits 281,931   819 1.15%  208,774   237 0.46%  290,460   345 0.47%
    FHLB advances 27,380   102 1.47%  25,000   21 0.33%  31,520   34 0.43%
    Other borrowings 47,659   494 4.12%  47,066   477 4.07%  6,652   26 1.57%
    Total interest-bearing liabilities$1,282,836  $3,085 0.95% $1,131,428  $1,387 0.49% $992,696  $1,094 0.44%
                      
    Noninterest-bearing liabilities:                 
    Noninterest-bearing deposits$491,917      $502,728      $384,207     
    Other liabilities 19,401       17,243       9,663     
    Total noninterest-bearing liabilities$511,318      $519,971      $393,870     
    Stockholders’ Equity 172,402       170,038       162,305     
    Total Liabilities and Stockholders’ Equity$1,966,556      $1,821,437      $1,548,871     
                      
    Net interest income  $19,435     $16,365     $13,640  
    Net interest spread(2)    3.86%     3.67%     3.63%
    Net interest margin(3)    4.15%     3.84%     3.77%
    Net interest margin - FTE(4)(5)    4.17%     3.86%     3.79%

    (1)   Includes nonaccrual loans.
    (2)   Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest-bearing liabilities.
    (3)   Net interest margin is a ratio of net interest income to average interest earning assets for the same period.
    (4)   Net interest margin - FTE is a ratio of fully-taxable equivalent net interest income to average interest earning assets for the same period. It assumes a 24.0% tax rate for the three and nine months ended September 30, 2022 and 2021 and a 23.5% tax rate for the three months ended June 30, 2022.
    (5)   Refer to “Reconciliation of Non-GAAP Financial Measures”.


     Nine Months Ended
     September 30, 2022 September 30, 2021
     Average
    Balance
     Interest Yield/
    Rate
     Average
    Balance
     Interest Yield/
    Rate
     (Dollars in thousands)
    Assets:           
    Interest-earning assets:           
    Gross loans, net of unearned income(1)$1,373,564  $51,083 4.97% $1,093,684  $40,429 4.94%
    Taxable securities 119,224   2,417 2.71%  74,244   1,134 2.04%
    Nontaxable securities 56,157   931 2.22%  42,191   729 2.31%
    Other interest-earnings assets 202,837   1,713 1.13%  148,349   315 0.28%
    Total interest-earning assets$1,751,782  $56,144 4.29% $1,358,468  $42,607 4.19%
    Allowance for loan losses (16,044)      (12,890)    
    Noninterest-earning assets 123,255       124,539     
    Total Assets$1,858,993      $1,470,117     
                
    Liabilities and Stockholders’ Equity           
    Interest-bearing liabilities:           
    Interest-bearing transaction accounts 113,427   78 0.09%  94,696   66 0.09%
    Savings and money market accounts 741,397   2,862 0.52%  503,064   2,056 0.55%
    Time deposits 242,869   1,311 0.72%  310,758   1,233 0.53%
    FHLB advances 26,115   144 0.74%  32,215   120 0.50%
    Other borrowings 42,604   1,295 4.06%  10,625   315 3.96%
    Total interest-bearing liabilities$1,166,412  $5,690 0.65% $951,358  $3,790 0.53%
                
    Noninterest-bearing liabilities:           
    Noninterest-bearing deposits$502,951      $358,556     
    Other liabilities 16,420       9,207     
    Total noninterest-bearing liabilities$519,371      $367,763     
    Stockholders’ Equity 173,210       150,996     
    Total Liabilities and Stockholders’ Equity$1,858,993      $1,470,117     
                
    Net interest income  $50,454     $38,817  
    Net interest spread(2)    3.64%     3.66%
    Net interest margin(3)    3.85%     3.82%
    Net interest margin - FTE(4)(5)    3.87%     3.84%

    (1)   Includes nonaccrual loans.
    (2)   Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest-bearing liabilities.
    (3)   Net interest margin is a ratio of net interest income to average interest earning assets for the same period.
    (4)   Net interest margin - FTE is a ratio of fully-taxable equivalent net interest income to average interest earning assets for the same period. It assumes a 24.0% tax rate for the three and nine months ended September 30, 2022 and 2021 and a 23.5% tax rate for the three months ended June 30, 2022.
    (5)   Refer to “Reconciliation of Non-GAAP Financial Measures”.


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


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


    Reconciliation of Non-GAAP Financial Measures

    In addition to reporting GAAP results, the Company reports non-GAAP financial measures in this earnings release and other disclosures. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.

    The following table provides a reconciliation of the non-GAAP financial measures to their most directly comparable financial measure presented in accordance with GAAP.

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

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


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