News Release Details

First Quarter 2024 Performance and Operational Highlights

• Net income of $8.1 million, or $0.90 per diluted share
• Core net income⁽¹⁾ of $8.1 million, or $0.90 per diluted share⁽¹⁾
• Net interest income of $20.8 million, an increase of $435,000 from the prior quarter
• Net interest margin (“NIM”) of 3.59%, down 10 basis points from the prior quarter
• NIM of 3.60% on a fully-taxable equivalent basis (“NIM - FTE”)⁽¹⁾
• Return on average assets (“ROAA”) of 1.33%; return on average stockholders’ equity (“ROAE”) of 14.87%; and return on average tangible common equity (“ROATCE”)⁽¹⁾ of 16.17%
• Core ROAA⁽¹⁾ of 1.34%; and core ROATCE⁽¹⁾ of 16.19%
• Efficiency ratio of 46.90%
• Linked-quarter loan growth of 17.2% annualized
• Linked-quarter total deposits grew 18.3% annualized
• Linked-quarter total deposits, excluding brokered deposits, grew 7.1% annualized

⁽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 22, 2024 (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 $8.1 million, or $0.90 diluted earnings per share, for the first quarter of 2024. This compares to net income of $8.9 million, or $0.99 diluted earnings per share, for the fourth quarter of 2023, and net income of $7.7 million, or $0.85 diluted earnings per share, for the first quarter of 2023. The Company reported core net income of $8.1 million, or $0.90 diluted core earnings per share, for the first quarter of 2024. This compares to core net income of $7.3 million, or $0.81 diluted core earnings per share, for the fourth quarter of 2023, and core net income of $7.3 million, or $0.80 diluted core earnings per share, for the first quarter of 2023 (see “Reconciliation of Non-GAAP Financial Measures”).

Net interest income for the first quarter of 2024 was $20.8 million, an increase of 2.1% from $20.4 million for the fourth quarter of 2023. The increase was primarily driven by a higher yield on interest-earning assets resulting from growth at higher interest rates, which more than offset a higher cost of interest-bearing deposits due to both higher interest rates and competition.

Relative to the first quarter of 2023, net interest income increased $1.3 million, or 6.6%. The increase was substantially due to growth, which offset the decline in net interest margin.

Net interest margin for the first quarter of 2024 was 3.59%, compared to 3.69% for the fourth quarter of 2023. The decrease was primarily due to an increase in the cost of interest-bearing deposits, which was greater than the increase in the yield on interest-earning assets.

Relative to the first quarter of 2023, net interest margin decreased from 4.07%. The decrease was primarily the result of the rapid increase in interest rates, which accelerated the cost of interest-bearing liabilities at a greater pace than the yield received on interest-earning assets. A shift from noninterest-bearing deposits into interest-bearing deposits also had a negative impact on net interest margin.

Noninterest income for the first quarter of 2024 was $1.3 million, a decrease of 59.3% from $3.1 million for the fourth quarter of 2023. The fourth quarter of 2023 included a $1.9 million fee related to the early payoff of a $12.0 million purchased loan. As this was unusually large and atypical for the Bank, it was recorded as noninterest income instead of interest income, which would have impacted the net interest margin.

Relative to the first quarter of 2023, noninterest income decreased 29.0% from $1.8 million. The decrease was primarily due to a realized net loss on securities during the first quarter of 2024 compared to a net gain on securities during the first quarter of 2023.

Noninterest expense for the first quarter of 2024 was $10.4 million, an increase of 6.8% from $9.7 million for the fourth quarter of 2023. The increase was primarily due to an increase in salaries and benefits, substantially as a result of higher payroll taxes brought about by incentive expense paid during the first quarter of 2024. In addition, other operating expense increased primarily as a result of the recognition of a $49,000 provision for credit losses on unfunded loan commitments during the first quarter of 2024, compared to a $334,000 credit for credit losses on unfunded loan commitments during the fourth quarter of 2023. These increases were partially offset by net forgery/fraud recoveries and a decrease in legal fees incurred during the first quarter of 2024.

Relative to the first quarter of 2023, noninterest expense increased 2.1% from $10.2 million. The increase was primarily attributable to increases in other operating expense, including marginal increases in insured deposit program expense, provision for credit losses on unfunded commitments and expense associated with a new market tax credit.

Loans, net of unearned income, were $2.0 billion at March 31, 2024, up $80.6 million from December 31, 2023 and up $319.8 million from March 31, 2023. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.

Nonperforming loans totaled $3.4 million, or 0.17% of gross loans, at March 31, 2024, compared with $1.2 million, or 0.06% of gross loans, at December 31, 2023, and $1.6 million, or 0.10% of gross loans, at March 31, 2023. The $2.3 million net increase in nonperforming loans in the first quarter was primarily attributable to one significant commercial real estate loan and one significant commercial and industrial loan each being placed on nonaccrual status. The $1.8 million net increase in nonperforming loans from March 31, 2023 was primarily attributable to the two significant aforementioned loans. These increases were partially offset by one significant commercial real estate loan being paid off.

The Company recorded a provision for credit losses of $1.2 million for the first quarter of 2024, compared to $2.6 million for the fourth quarter of 2023. Provision in the first quarter of 2024 was based on loan growth, qualitative economic factors and individually analyzed loans.

Net charge-offs for the first quarter of 2024 were $470,000, or 0.10% of average loans on an annualized basis, compared to net charge-offs of $382,000, or 0.08% of average loans on an annualized basis, for the fourth quarter of 2023, and net charge-offs of $197,000, or 0.05% of average loans on an annualized basis, for the first quarter of 2023.

The Company’s allowance for credit losses was 1.28% of total loans and 729.66% of nonperforming loans at March 31, 2024, compared with 1.29% of total loans and 2071.20% of nonperforming loans at December 31, 2023. Allowance for credit losses on unfunded commitments was $1.3 million at March 31, 2024.

Total deposits were $2.1 billion at March 31, 2024, up from $2.0 billion at December 31, 2023 and $1.8 billion at March 31, 2023. The $91.6 million increase in total deposits in the first quarter was primarily due to an increase of $112.9 million in interest-bearing deposits, which includes a $60.2 million increase in brokered deposits, partially offset by a $21.3 million decrease in noninterest-bearing deposits. Total brokered deposits were $291.0 million at March 31, 2024.

As of March 31, 2024, total stockholders’ equity was $222.9 million, up from $215.0 million at December 31, 2023. The increase of $7.9 million was substantially due to earnings growth.

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.

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 and the inflationary environment. 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, 2023 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 our acquisition of Century Bank of Georgia, business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions.

(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(2) Includes total interest-bearing liabilities and noninterest deposits.

(1) We define core deposits as total deposits excluding brokered deposits and time deposits greater than $250,000.
(2) Ratio is annualized.
(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.

(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.
(5) Refer to “Reconciliation of Non-GAAP Financial Measures”.
(6) Includes total interest-bearing liabilities and noninterest deposits.

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

(1) Ratio is annualized.

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.