Southern States Bancshares, Inc. Announces Second Quarter 2022 Financial Results

July 25, 2022 at 8:00 AM EDT
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Second Quarter 2022 Highlights

  • Linked-quarter loan growth was 36.8% annualized

  • Net income of $5.2 million, or $0.59 per diluted share

  • Core net income(1) of $5.3 million, or $0.59 per diluted share(1)

  • Net interest margin (“NIM”) of 3.84%, up 31 basis points from the prior quarter

  • NIM of 3.86% on a fully-taxable equivalent basis(1)

  • Return on average assets (“ROAA”) of 1.15%; return on average stockholders’ equity (“ROAE”) of 12.32%; and return on average tangible common equity (“ROATCE”)(1) of 13.80%

  • Core ROAA(1) of 1.16%; and core ROATCE(1) of 13.89%

(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., July 25, 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 $5.2 million, or $0.59 diluted earnings per share, for the second quarter of 2022. This compares to net income of $4.6 million, or $0.50 diluted earnings per share, for the first quarter of 2022, and net income of $3.9 million, or $0.50 diluted earnings per share, for the second quarter of 2021. The Company reported core net income of $5.3 million, or $0.59 diluted core earnings per share, for the second quarter of 2022. This compares to core net income of $4.8 million, or $0.53 diluted core earnings per share, for the first quarter of 2022, and core net income of $3.9 million, or $0.50 diluted core earnings per share, for the second quarter of 2021 (see “Reconciliation of Non-GAAP Financial Measures”).

Stephen Whatley, Chairman and Chief Executive Officer of Southern States, said, “Our dedicated lending teams generated strong production in the second quarter, with linked-quarter annualized loan growth of 36.8% that helped bolster our net interest income. We made a concerted effort in 2021 to invest in more talent to capitalize on our robust deposit base and meet the steady demand we are seeing across our economically dynamic footprint. These new hires, in partnership with our long-tenured bankers, continue to pursue an abundance of opportunities, giving us confidence in ongoing growth in the second half of 2022.”

“As we grow, we remain disciplined with our expense control and prudent with our underwriting, ensuring that our solid asset quality remains a fixture of the Southern States story. Our nonperforming loans in the second quarter totaled just 0.25% of total loans,” Mr. Whatley continued. “Responsible growth has and will always be the centerpiece of our strategy, enabling us to deliver consistently for our shareholders across credit cycles.”

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2022 was $16.4 million, an increase of 11.7% from $14.7 million for the first quarter of 2022. The increase was primarily attributable to an increase in interest-earning assets coupled with a higher net interest margin.

Relative to the second quarter of 2021, net interest income increased $3.5 million, or 26.9%. The increase was substantially the result of an increase in interest-earning assets.

Net interest margin for the second quarter of 2022 was 3.84%, compared to 3.53% for the first quarter of 2022. The increase was primarily the result of a 34 basis point increase in the yield on interest-earning assets, partially offset by a 3 basis point increase in the cost of interest-bearing liabilities.

Relative to the second quarter of 2021, net interest margin increased from 3.75%. The increase was primarily due to an increase in the yield on interest-earning assets combined with a decrease in the cost of interest-bearing liabilities.

Noninterest Income

Noninterest income for the second quarter of 2022 was $1.4 million, an increase of 5.3% from $1.3 million for the first quarter of 2022. The increase was substantially the result of a $320,000 decline in the net loss on securities, partially offset by a $296,000 reduction in gains on sale of SBA/USDA loans from the first quarter of 2022.

Relative to the second quarter of 2021, noninterest income decreased 31.3% from $2.0 million. The decreases include reductions in swap fees, mortgage income and SBA income, which are reflective of the market conditions and timing.

Noninterest Expense

Noninterest expense for the second quarter of 2022 was $9.7 million, up from $9.3 million for the first quarter of 2022. The increase was primarily attributable to an increase in salaries and benefits as a result of additional employee staffing.

Relative to the second quarter of 2021, noninterest expense increased 6.0% from $9.1 million. The increase was primarily attributable to higher salaries and employee benefits expense as production personnel were added in the Georgia market, plus higher insurance and professional fees as a result of going public, net of a reduction in SBA expense associated with the Paycheck Protection Program (“PPP”) from the second quarter of 2021. This net increase was partially offset by a decrease in occupancy expense as a result of accelerated depreciation during the second quarter of 2021 on a formerly leased Birmingham branch location.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $1.4 billion at June 30, 2022, up $120.1 million from March 31, 2022 and up from $1.1 billion at June 30, 2021. The linked-quarter increase in loans was primarily attributable to an increase in commercial real estate loans in the Atlanta market.

Deposits

Total deposits were $1.6 billion at June 30, 2022, compared with $1.5 billion at March 31, 2022 and $1.3 billion at June 30, 2021. The $103.1 million net increase in total deposits from March 31, 2022 was due to an increase of $105.6 million in interest-bearing account balances that more than offset a slight decrease in noninterest-bearing deposits.

Asset Quality

Nonperforming loans totaled $3.6 million, or 0.25% of gross loans, at June 30, 2022, compared with $3.2 million, or 0.25% of gross loans, at March 31, 2022, and $2.2 million, or 0.20% of gross loans, at June 30, 2021. The $304,000 net increase in nonperforming loans from March 31, 2022 was primarily attributable to two commercial and industrial loans that were placed on nonaccrual and partially offset by one commercial real estate loan that was moved back to accruing status. The $1.4 million increase in nonperforming loans from June 30, 2021 was primarily attributable to two commercial and industrial loans, one commercial real estate loan and one residential mortgage loan that were placed on nonaccrual. These increases were partially offset by one commercial real estate loan being moved back to accruing status and one commercial and industrial loan that was ninety days past due but was subsequently paid off during the first quarter of 2022.

The Company recorded a provision for loan losses of $1.3 million for the second quarter of 2022, compared to $700,000 for the first quarter of 2022. The provision was primarily due to robust loan growth.

Net recoveries for the second quarter of 2022 were $11,000, or 0.00% of average loans on an annualized basis, compared to net charge-offs of $52,000, or 0.02% of average loans on an annualized basis, for the first quarter of 2022, and net charge-offs of $16,000, or 0.01% of average loans on an annualized basis, for the second quarter of 2021.

The Company’s allowance for loan losses was 1.18% of total loans and 473.44% of nonperforming loans at June 30, 2022, compared with 1.18% of total loans and 477.26% of nonperforming loans at March 31, 2022.

Capital

As of June 30, 2022, total stockholders’ equity was $167.9 million, compared with $169.2 million at March 31, 2022. The decrease of $1.2 million was primarily due to 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 during the quarter.

In connection with its recently announced stock repurchase program, the Company repurchased 58,258 shares of its common stock during the second quarter of 2022 at an average price of $21.03 per share.

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 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 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 Annual Report on Form 10-K for the year ended December 31, 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 

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


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
        
 June 30, 2022
(Unaudited)		 March 31, 2022
(Unaudited)		 December 31, 2021
(Audited)		 June 30, 2021
(Unaudited)
Assets       
Cash and due from banks$22,167  $22,851  $6,397  $17,953 
Interest-bearing deposits in banks 95,156   111,951   203,537   131,169 
Federal funds sold 73,024   74,022   74,022   39,021 
Total cash and cash equivalents 190,347   208,824   283,956   188,143 
        
Securities available for sale, at fair value 151,749   151,027   132,172   105,617 
Securities held to maturity, at amortized cost 19,662   19,667   19,672   19,683 
Other equity securities, at fair value 6,958   8,937   9,232   8,985 
Restricted equity securities, at cost 2,825   2,825   2,600   2,788 
Loans held for sale 2,709   2,509   2,400   2,767 
        
Loans, net of unearned income 1,430,205   1,310,070   1,250,300   1,097,559 
Less allowance for loan losses 16,807   15,492   14,844   13,339 
Loans, net 1,413,398   1,294,578   1,235,456   1,084,220 
        
Premises and equipment, net 28,467   28,065   27,044   25,011 
Accrued interest receivable 4,839   4,427   4,170   3,725 
Bank owned life insurance 29,509   29,343   22,201   22,710 
Annuities 15,540   15,523   12,888   12,941 
Foreclosed assets 2,930   2,930   2,930   10,146 
Goodwill 16,862   16,862   16,862   16,862 
Core deposit intangible 1,368   1,434   1,500   1,632 
Other assets 15,332   11,883   9,509   9,206 
        
Total assets$1,902,495  $1,798,834  $1,782,592  $1,514,436 
        
Liabilities and Stockholders' Equity       
        
Liabilities:       
Deposits:       
Noninterest-bearing$512,598  $515,110  $541,546  $369,479 
Interest-bearing 1,132,348   1,026,729   1,014,905   943,131 
Total deposits 1,644,946   1,541,839   1,556,451   1,312,610 
        
Other borrowings —   —   12,498   12,490 
FHLB advances 25,000   25,950   25,950   31,900 
Subordinated notes 47,013   47,154   —   — 
Accrued interest payable 88   107   132   175 
Other liabilities 17,501   14,595   10,363   8,358 
Total liabilities 1,734,548   1,629,645   1,605,394   1,365,533 
        
        
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
        
 June 30, 2022
(Unaudited)		 March 31, 2022
(Unaudited)		 December 31, 2021
(Audited)		 June 30, 2021
(Unaudited)
Stockholders' equity:       
Common stock 43,458   43,749   45,064   38,582 
Capital surplus 75,597   76,426   80,640   65,978 
Retained earnings 58,039   53,604   49,858   42,385 
Accumulated other comprehensive income (loss) (8,439)  (3,755)  2,113   2,683 
Unvested restricted stock (708)  (835)  (477)  (725)
        
Total stockholders' equity 167,947   169,189   177,198   148,903 
        
Total liabilities and stockholders' equity$1,902,495  $1,798,834  $1,782,592  $1,514,436 
        
Shares issued and outstanding 8,691,620   8,749,878   9,012,857   7,716,428 


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
          
 For the Three Months Ended For the Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
Interest income:         
Loans, including fees$16,265  $14,766  $13,484 $31,031  $26,505 
Taxable securities 788   619   332  1,407   733 
Nontaxable securities 309   299   255  608   462 
Other interest and dividends 390   188   124  578   172 
Total interest income 17,752   15,872   14,195  33,624   27,872 
          
Interest expense:         
Deposits 889   873   1,131  1,762   2,321 
Other borrowings 498   345   171  843   374 
Total interest expense 1,387   1,218   1,302  2,605   2,695 
          
Net interest income  16,365   14,654   12,893  31,019   25,177 
Provision for loan losses 1,304   700   750  2,004   1,500 
Net interest income after provision for loan losses 15,061   13,954   12,143  29,015   23,677 
          
Noninterest income:         
Service charges on deposit accounts 480   445   337  925   698 
Swap fees 21   15   279  36   836 
SBA/USDA fees 93   388   439  481   3,304 
Mortgage origination fees 213   286   396  499   802 
Net gain (loss) on securities (42)  (361)  27  (403)  (206)
Other operating income 639   560   567  1,199   1,108 
Total noninterest income 1,404   1,333   2,045  2,737   6,542 
          
Noninterest expenses:         
Salaries and employee benefits 5,982   5,725   5,530  11,707   10,587 
Equipment and occupancy expenses 719   705   909  1,424   1,789 
Data processing fees 570   564   527  1,134   1,042 
Regulatory assessments 262   263   221  525   441 
Other operating expenses 2,119   2,033   1,919  4,152   3,779 
Total noninterest expenses 9,652   9,290   9,106  18,942   17,638 
          
Income before income taxes 6,813   5,997   5,082  12,810   12,581 
          
Income tax expense 1,590   1,440   1,176  3,030   2,993 
          
Net income$5,223  $4,557  $3,906 $9,780  $9,588 
          
Basic earnings per share$0.60  $0.51  $0.51 $1.11  $1.25 
          
Diluted earnings per share$0.59  $0.50  $0.50 $1.09  $1.23 


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

 Three Months Ended Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
 (Dollars in thousands)
          
Average loans, net of unearned income$1,359,320  $1,278,413  $1,091,139  $1,319,090  $1,078,915 
Loans, net of unearned income$1,430,205  $1,310,070  $1,097,559  $1,430,205  $1,097,559 
Allowance for loan losses at beginning of the period$15,492  $14,844  $12,605  $14,844  $11,859 
Charge-offs:         
Construction and development —   66   —   66   — 
Residential 7   —   28   7   44 
Commercial —   —   —   —   — 
Commercial and industrial —   —   —   —   — 
Consumer and other 1   6   —   7   2 
Total charge-offs 8   72   28   80   46 
Recoveries:         
Construction and development —   —   —   —   — 
Residential 18   17   3   35   5 
Commercial —   —   —   —   — 
Commercial and industrial —   —   2   —   13 
Consumer and other 1   3   7   4   8 
Total recoveries 19   20   12   39   26 
Net charge-offs (recoveries)$(11) $52  $16  $41  $20 
          
Provision for loan losses$1,304  $700  $750  $2,004  $1,500 
Balance at end of period$16,807  $15,492  $13,339  $16,807  $13,339 
Ratio of allowance to end of period loans 1.18%  1.18%  1.22%  1.18%  1.22%
Ratio of net charge-offs (recoveries) to average loans 0.00%  0.00%  0.00%  0.00%  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.

 June 30,
2022		 March 31,
2022		 December 31,
2021		 June 30,
2021
 (Dollars in thousands)
        
Nonaccrual loans$3,550  $3,246  $1,478  $2,010 
Past due loans 90 days or more and still accruing interest —   —   494   144 
Total nonperforming loans 3,550   3,246   1,972   2,154 
OREO 2,930   2,930   2,930   10,146 
Total nonperforming assets$6,480  $6,176  $4,902  $12,300 
        
Troubled debt restructured loans – nonaccrual(1) 676   904   940   695 
Troubled debt restructured loans - accruing 1,323   1,058   1,072   1,096 
Total troubled debt restructured loans$1,999  $1,962  $2,012  $1,791 
        
Allowance for loan losses$16,807  $15,492  $14,844  $13,339 
Gross loans outstanding at the end of period$1,435,089  $1,314,066  $1,254,117  $1,101,677 
Allowance for loan losses to gross loans 1.17%  1.18%  1.18%  1.21%
Allowance for loan losses to nonperforming loans 473.44%  477.26%  752.74%  619.27%
Nonperforming loans to gross loans 0.25%  0.25%  0.16%  0.20%
Nonperforming assets to gross loans and OREO 0.45%  0.47%  0.39%  1.11%
        
Nonaccrual loans by category:       
Real estate mortgages:       
Construction & Development$73  $76  $346  $84 
Residential Mortgages 563   510   167   250 
Commercial Real Estate Mortgages 2,135   2,388   674   1,347 
Commercial & Industrial 768   269   285   316 
Consumer and other 11   3   6   13 
 $3,550  $3,246  $1,478  $2,010 

(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
 June 30, 2022 March 31, 2022 June 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)$1,359,320  $16,265 4.80% $1,278,413  $14,766 4.68% $1,091,139  $13,484 4.96%
Taxable securities 121,677  $788 2.60%  106,820   619 2.35%  67,785  $332 1.96%
Nontaxable securities 56,850  $309 2.18%  54,863   299 2.21%  44,991  $255 2.28%
Other interest-earnings assets 172,175  $390 0.91%  244,202   188 0.31%  176,542  $124 0.28%
Total interest-earning assets$1,710,022  $17,752 4.16% $1,684,298  $15,872 3.82% $1,380,457  $14,195 4.12%
Allowance for loan losses (15,815)      (15,041)      (12,869)    
Noninterest-earning assets 127,230       117,758       123,784     
Total Assets$1,821,437      $1,787,015      $1,491,372     
                  
Liabilities and Stockholders’ Equity:                 
Interest-bearing liabilities:                 
Interest-bearing transaction accounts 114,743   27 0.09%  110,983   26 0.09%  97,202   24 0.10%
Savings and money market accounts 735,845   625 0.34%  675,504   591 0.36%  501,155   713 0.57%
Time deposits 208,774   237 0.46%  237,411   256 0.44%  317,522   394 0.50%
FHLB advances 25,000   21 0.33%  25,950   22 0.34%  31,900   35 0.44%
Other borrowings 47,066   477 4.07%  32,924   323 3.98%  12,535   136 4.36%
Total interest-bearing liabilities$1,131,428  $1,387 0.49% $1,082,772  $1,218 0.46% $960,314  $1,302 0.54%
                  
Noninterest-bearing liabilities:                 
Noninterest-bearing deposits$502,728      $514,456      $374,166     
Other liabilities 17,243       12,543       9,409     
Total noninterest-bearing liabilities$519,971      $526,999      $383,575     
Stockholders’ Equity 170,038       177,244       147,483     
Total Liabilities and Stockholders’ Equity$1,821,437      $1,787,015      $1,491,372     
                  
Net interest income  $16,365     $14,654     $12,893  
Net interest spread(2)    3.67%     3.36%     3.58%
Net interest margin(3)    3.84%     3.53%     3.75%
Net interest margin - FTE(4)(5)    3.86%     3.55%     3.77%

(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 23.5% tax rate.
(5) Refer to “Reconciliation of Non-GAAP Financial Measures”.


 Six Months Ended
 June 30, 2022 June 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)$1,319,090  $31,031 4.74% $1,078,915  $26,505 4.95%
Taxable securities 114,289  $1,407 2.48%  73,040   733 2.02%
Nontaxable securities 55,862  $608 2.19%  39,156   462 2.38%
Other interest-earnings assets 207,990  $578 0.56%  127,620   172 0.27%
Total interest-earning assets$1,697,231  $33,624 4.00% $1,318,731  $27,872 4.26%
Allowance for loan losses (15,430)      (12,506)    
Noninterest-earning assets 122,520       123,862     
Total Assets$1,804,321      $1,430,087     
            
Liabilities and Stockholders’ Equity           
Interest-bearing liabilities:           
Interest-bearing transaction accounts 112,874   53 0.09%  92,914   42 0.09%
Savings and money market accounts 705,841   1,217 0.35%  471,145   1,391 0.60%
Time deposits 223,013   492 0.45%  321,075   888 0.56%
FHLB advances 25,472   43 0.34%  32,569   86 0.53%
Other borrowings 40,034   800 4.03%  12,644   288 4.59%
Total interest-bearing liabilities$1,107,234  $2,605 0.47% $930,347  $2,695 0.58%
            
Noninterest-bearing liabilities:           
Noninterest-bearing deposits$508,560      $345,518     
Other liabilities 14,906       8,973     
Total noninterest-bearing liabilities$523,466      $354,491     
Stockholders’ Equity 173,621       145,249     
Total Liabilities and Stockholders’ Equity$1,804,321      $1,430,087     
            
Net interest income  $31,019     $25,177  
Net interest spread(2)    3.53%     3.68%
Net interest margin(3)    3.69%     3.85%
Net interest margin - FTE(4)(5)    3.70%     3.87%

(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 23.5% tax rate.
(5) Refer to “Reconciliation of Non-GAAP Financial Measures”.

          
Per Share InformationThree Months Ended Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
 (Dollars in thousands, except share and per share amounts)
          
Net income$5,223  $4,557  $3,906  $9,780  $9,588 
Earnings per share - basic$0.60  $0.51  $0.51  $1.11  $1.25 
Earnings per share - diluted$0.59  $0.50  $0.50  $1.09  $1.23 
          
Weighted average shares outstanding 8,740,295   8,935,384   7,691,084   8,818,327   7,691,084 
Diluted weighted average shares outstanding 8,894,577   9,065,364   7,810,952   8,960,565   7,809,943 
Shares issued and outstanding 8,691,620   8,749,878   7,716,428   8,691,620   7,716,428 
          
Total stockholders' equity$167,947  $169,189  $148,903  $167,947  $148,903 
Book value per share$19.32  $19.34  $19.30  $19.32  $19.30 
          
          
Performance RatiosThree Months Ended Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
          
Net interest margin 3.84%  3.53%  3.75%  3.69%  3.85%
Net interest spread 3.67%  3.36%  3.58%  3.53%  3.68%
Efficiency ratio 54.19%  56.83%  61.07%  55.45%  55.25%
Return on average assets 1.15%  1.03%  1.05%  1.09%  1.35%
Return on average stockholders’ equity 12.32%  10.43%  10.62%  11.36%  13.31%


Core and PPP LoansJune 30,
2022		 March 31,
2022		 December 31,
2021		 June 30,
2021
 (Dollars in thousands)
        
Core loans$1,435,089  $1,313,173  $1,244,914  $1,063,913 
PPP loans —   893   9,203   37,764 
Unearned income (4,884)  (3,996)  (3,817)  (4,118)
Loans, net of unearned income 1,430,205   1,310,070   1,250,300   1,097,559 
Allowance for loan losses (16,807)  (15,492)  (14,844)  (13,339)
Loans, net$1,413,398  $1,294,578  $1,235,456  $1,084,220 


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 Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
 (Dollars in thousands, except share and per share amounts)
          
Net income$5,223  $4,557  $3,906  $9,780  $9,588 
Add: Merger expenses —   —   —   —   — 
Add: Net OREO gains —   —   (8)  —   (8)
Less: Gain on sale of USDA loan —   —   —   —   2,806 
Less: Gain (loss) on securities (42)  (361)  27   (403)  (206)
Less: Tax effect 11   94   (9)  105   (678)
Core net income$5,254  $4,824  $3,880  $10,078  $7,658 
Average assets$1,821,437  $1,787,015  $1,491,372  $1,804,321  $1,430,087 
Core return on average assets 1.16%  1.09%  1.04%  1.13%  1.08%
          
Net income$5,223  $4,557  $3,906  $9,780  $9,588 
Add: Merger expenses —   —   —   —   — 
Add: Net OREO gains —   —   (8)  —   (8)
Add: Provision 1,304   700   750   2,004   1,500 
Less: Gain on sale of USDA loan —   —   —   —   2,806 
Less: Gain (loss) on securities (42)  (361)  27   (403)  (206)
Add: Income taxes 1,590   1,440   1,176   3,030   2,993 
          
Pretax pre-provision core net income$8,159  $7,058  $5,797  $15,217  $11,473 
Average assets$1,821,437  $1,787,015  $1,491,372  $1,804,321  $1,430,087 
Pretax pre-provision core return on average assets 1.80%  1.60%  1.56%  1.70%  1.62%
          
Net interest income$16,365  $14,654  $12,893  $31,019  $25,177 
Add: Fully-taxable equivalent adjustments(1) 83   78   68   161   128 
Net interest income - FTE$16,448  $14,732  $12,961  $31,180  $25,305 
          
Net interest margin 3.84%  3.53%  3.75%  3.69%  3.85%
Effect of fully-taxable equivalent adjustments(1) 0.02%  0.02%  0.02%  0.01%  0.02%
Net interest margin - FTE 3.86%  3.55%  3.77%  3.70%  3.87%
          
Total stockholders' equity$167,947  $169,189  $148,903  $167,947  $148,903 
Less: Intangible assets 18,230   18,296   18,494   18,230   18,494 
Less: Monitory interest not included in tangible assets$—  $—  $—  $—  $— 
Tangible common equity$149,717  $150,893  $130,409  $149,717  $130,409 
          
          
Reconciliation of Non-GAAP Financial Measures
          
 Three Months Ended Six Months Ended
 June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
 (Dollars in thousands, except share and per share amounts)
          
Core net income$5,254  $4,824  $3,880  $10,078  $7,658 
Diluted weighted average shares outstanding 8,894,577   9,065,364   7,810,952   8,960,565   7,809,943 
Diluted core earnings per share$0.59  $0.53  $0.50  $1.12  $0.98 
          
Common shares outstanding at year or period end 8,691,620   8,749,878   7,716,428   8,691,620   7,716,428 
Tangible book value per share$17.23  $17.25  $16.90  $17.23  $16.90 
          
Total assets at end of period$1,902,495  $1,798,834  $1,514,436  $1,902,495  $1,514,436 
Less: Intangible assets 18,230   18,296   18,494   18,230   18,494 
Adjusted assets at end of period$1,884,265  $1,780,538  $1,495,942  $1,884,265  $1,495,942 
Tangible common equity to tangible assets 7.95%  8.47%  8.72%  7.95%  8.72%
          
Total average shareholders equity$170,038   177,244  $147,483  $173,621  $145,249 
Less: Average intangible assets 18,270   18,337   18,535   18,304   18,568 
Less: Average monitory interest not included in tangible assets$—  $—  $—  $—  $— 
Average tangible common equity$151,768  $158,907  $128,948  $155,317  $126,681 
Net income to common shareholders$5,223  $4,557  $3,906  $9,780  $9,588 
Return on average tangible common equity  13.80%  11.63%  12.15%  12.70%  15.26%
Average tangible common equity$151,768  $158,907  $128,948  $155,317  $126,681 
Core net income$5,254  $4,824  $3,880  $10,078  $7,658 
Core return on average tangible common equity 13.89%  12.31%  12.07%  13.08%  12.19%
          
Net interest income$16,365  $14,654   12,893   31,019   25,177 
Add: Noninterest income 1,404   1,333   2,045   2,737   6,542 
Less: Gain on sale of USDA loan —   —   —   —   2,806 
Less: Gain (loss) on securities (42)  (361)  27   (403)  (206)
Operating revenue$17,811  $16,348  $14,911  $34,159  $29,119 
          
Expenses:         
Total noninterest expense$9,652  $9,290  $9,106  $18,942  $17,638 
Less: Merger expenses —   —   —   —   — 
Less: Net OREO gains —   —   (8)  —   (8)
Adjusted noninterest expenses$9,652  $9,290  $9,114  $18,942  $17,646 
Core efficiency ratio 54.19%  56.83%  61.12%  55.45%  60.60%

(1)  Assumes a 23.5% tax rate.