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

October 26, 2021 at 7:00 AM EDT
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Third Quarter 2021 Highlights

  • Linked quarter loan growth was 17.3% annualized, or 24.5% annualized, excluding the impact of Paycheck Protection Program (“PPP”) loans

  • Net income of $4.9 million, or $0.58 per diluted share; return on average assets (“ROAA”) of 1.26%; return on average stockholders’ equity (“ROAE”) of 12.03%; and return on average tangible common equity (“ROATCE”)(1) of 13.57%

  • Core net income(1) of $4.0 million, or $0.48 per diluted share; core ROAA(1) of 1.04%; and core ROATCE(1) of 11.15%

  • Initial public offering completed on August 16, 2021

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

ANNISTON, Ala., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States” or the “Company”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today reported net income of $4.9 million, or $0.58 diluted earnings per share, for the third quarter of 2021. This compares to net income of $3.9 million, or $0.50 diluted earnings per share, for the second quarter of 2021, and net income of $3.2 million, or $0.41 diluted earnings per share, for the third quarter of 2020. The Company reported core net income of $4.0 million, or $0.48 diluted core earnings per share, for the third quarter of 2021. This compares to core net income of $3.9 million, or $0.50 diluted core earnings per share, for the second quarter of 2021, and core net income of $2.7 million, or $0.35 diluted core earnings per share, for the third quarter of 2020 (see “Reconciliation of Non-GAAP Financial Measures”).

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

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

Net Interest Income and Net Interest Margin

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

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

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

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

Noninterest Income

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

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

Noninterest Expense

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

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

Loan Portfolio

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

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

Deposits

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

Asset Quality

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

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

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

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

About Southern States Bancshares, Inc.

Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 15 branches in Alabama and Georgia and a loan production office in Atlanta.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given the current COVID-19 pandemic and uncertainty about its continuation. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 under the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

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

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

Matthew Keating
(310) 622-8230
ssbankir@finprofiles.com


 
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
        
 September 30,
2021
(Unaudited)		 June 30,
2021
(Unaudited)		 December 31,
2020
(Audited)		 September 30,
2020
(Unaudited)
Assets       
Cash and due from banks$19,000  $17,953  $23,229  $16,718 
Interest-bearing deposits in banks114,800  131,169  51,503  24,121 
Federal funds sold44,022  39,021  10,175  66,389 
Total cash and cash equivalents177,822  188,143  84,907  107,228 
        
Securities available for sale, at fair value113,317  105,617  114,001  98,155 
Securities held to maturity, at amortized cost19,678  19,683  —  — 
Other equity securities, at fair value9,227  8,985  5,017  — 
Restricted equity securities, at cost2,600  2,788  3,224  3,137 
Loans held for sale2,097  2,767  5,696  3,575 
        
Loans, net of unearned income1,145,447  1,097,559  1,030,115  1,001,853 
Less allowance for loan losses14,097  13,339  11,859  12,116 
Loans, net1,131,350  1,084,220  1,018,256  989,737 
        
Premises and equipment, net25,916  25,011  24,426  24,890 
Accrued interest receivable3,933  3,725  4,243  4,471 
Bank owned life insurance22,081  22,710  22,458  22,328 
Annuities12,968  12,941  12,903  12,976 
Foreclosed assets10,146  10,146  10,224  7,582 
Goodwill16,862  16,862  16,862  16,862 
Core deposit intangible1,566  1,632  1,764  1,830 
Other assets9,499  9,206  8,525  7,269 
        
Total assets$1,559,062  $1,514,436  $1,332,506  $1,300,040 
        
Liabilities and Stockholders' Equity       
        
Liabilities:       
Deposits:       
Noninterest-bearing$380,111  $369,479  $290,867  $285,467 
Interest-bearing956,211  943,131  848,794  828,143 
Total deposits1,336,322  1,312,610  1,139,661  1,113,610 
        
Other borrowings12,498  12,490  7,975  8,000 
FHLB advances26,900  31,900  30,900  28,850 
Subordinated notes—  —  4,493  4,490 
Accrued interest payable125  175  278  406 
Other liabilities8,996  8,358  8,543  7,318 
Total liabilities1,384,841  1,365,533  1,191,850  1,162,674 
        
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share amounts)
        
 September 30,
2021
(Unaudited)		 June 30,
2021
(Unaudited)		 December 31,
2020
(Audited)		 September 30,
2020
(Unaudited)
Stockholders' equity:       
Common stock45,064  38,582  38,391  38,374 
Capital surplus80,547  65,978  65,327  65,197 
Retained earnings46,611  42,385  34,183  31,482 
Accumulated other comprehensive income2,600  2,683  3,194  2,805 
Unvested restricted stock(601) (725) (439) (492)
        
Total stockholders' equity174,221  148,903  140,656  137,366 
        
Total liabilities and stockholders' equity$1,559,062  $1,514,436  $1,332,506  $1,300,040 
        
Shares issued and outstanding9,012,857  7,716,428  7,678,195  7,674,756 
            


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
          
 For the Three Months Ended For the Nine Months Ended
 September 30,
2021		 June 30,
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
Interest income:         
Loans, including fees$13,923  $13,484  $12,308  $40,429  $35,577 
Taxable securities402  332  346  1,134  940 
Nontaxable securities266  255  178  729  454 
Other interest and dividends143  124  67  315  489 
Total interest income14,734  14,195  12,899  42,607  37,460 
          
Interest expense:         
Deposits1,034  1,131  1,694  3,355  6,491 
Other borrowings60  171  220  435  642 
Total interest expense1,094  1,302  1,914  3,790  7,133 
          
Net interest income 13,640  12,893  10,985  38,817  30,327 
Provision for loan losses750  750  1,600  2,250  2,700 
Net interest income after provision for loan losses12,890  12,143  9,385  36,567  27,627 
          
Noninterest income:         
Service charges on deposit accounts403  337  356  1,101  1,089 
Swap fees101  279  419  938  1,063 
SBA/USDA fees130  439  124  3,434  709 
Mortgage origination fees393  396  410  1,196  1,220 
Net gain (loss) on securities189  27  —  (17) 742 
Other operating income1,293  567  1,139  2,399  2,093 
Total noninterest income2,509  2,045  2,448  9,051  6,916 
          
Noninterest expenses:         
Salaries and employee benefits5,517  5,530  4,629  16,104  13,801 
Equipment and occupancy expenses908  909  949  2,697  2,760 
Data processing fees524  527  468  1,565  1,340 
Regulatory assessments248  221  210  689  523 
Other operating expenses1,988  1,919  1,834  5,768  5,315 
Total noninterest expenses9,185  9,106  8,090  26,823  23,739 
          
Income before income taxes6,214  5,082  3,743  18,795  10,804 
          
Income tax expense1,293  1,176  549  4,287  2,012 
          
Net income$4,921  $3,906  $3,194  $14,508  $8,792 
          
Basic earnings per share$0.59  $0.51  $0.42  $1.84  $1.15 
          
Diluted earnings per share$0.58  $0.50  $0.41  $1.82  $1.13 
                    


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

 Three Months Ended Nine Months Ended
 September 30,
2021		 June 30,
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
  
 (Dollars in thousands)
          
Average loans, net of unearned income$1,122,741   $1,091,139   $994,066   $1,093,684   $936,500  
Loans, net of unearned income$1,145,447   $1,097,559   $1,001,853   $1,145,447   $1,001,853  
Allowance for loan losses at beginning of the period$13,339   $12,605   $10,502   $11,859   $9,265  
Charge-offs:                   
Construction and development—   —   —   —   —  
Residential—   28   1   44   48  
Commercial—   —   —   —   —  
Commercial and industrial—   —   —   —   —  
Consumer and other—   —   4   2   15  
Total charge-offs—   28   5   46   63  
Recoveries:         
Construction and development—   —   —   —   —  
Residential7   3   7   12   9  
Commercial—   —   —   —   —  
Commercial and industrial1   2   10   14   122  
Consumer and other—   7   2   8   83  
Total recoveries8   12   19   34   214  
Net charge-offs (recovery)$(8)  $16   $(14)  $12   $(151) 
          
Provision for loan losses$750   $750   $1,600   $2,250   $2,700  
Balance at end of period$14,097   $13,339   $12,116   $14,097   $12,116  
Ratio of allowance to end of period loans1.23 % 1.22 % 1.21 % 1.23 % 1.21 %
Ratio of net charge-offs (recovery) to average loans0.00 % 0.00 % 0.00 % 0.00 % (0.02)%
          


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

 September 30, June 30, December 31, September 30,
 2021 2021 2020 2020
  
 (Dollars in thousands)
        
Nonaccrual loans$3,308  $2,010  $3,418  $10,905 
Past due loans 90 days or more and still accruing interest—  144  91  21 
Total nonperforming loans3,308  2,154  3,509  10,926 
OREO10,146  10,146  10,224  6,582 
Repossessed equipment(1)—  —  —  1,000 
Total nonperforming assets$13,454  $12,300  $13,733  $18,508 
        
Troubled debt restructured loans – nonaccrual(2)1,041  695  479  593 
Troubled debt restructured loans - accruing1,085  1,096  1,275  1,270 
Total troubled debt restructured loans$2,126  $1,791  $1,754  $1,863 
        
Allowance for loan losses$14,097  $13,339  $11,859  $12,116 
Gross loans outstanding at the end of period$1,149,340  $1,101,677  $1,033,733  $1,005,980 
Allowance for loan losses to gross loans1.23% 1.21% 1.15% 1.20%
Allowance for loan losses to nonperforming loans426.15% 619.27% 337.96% 110.89%
Nonperforming loans to gross loans0.29% 0.20% 0.34% 1.09%
Nonperforming assets to gross loans and OREO1.16% 1.11% 1.32% 1.83%
        
Nonaccrual loans by category:       
Real Estate:       
Construction & Development$1,972  $84  $977  $1,144 
Residential Mortgages339  250  857  913 
Commercial Real Estate Mortgages690  1,347  1,478  8,751 
Commercial & Industrial300  316  84  91 
Consumer and other7  13  22  6 
 $3,308  $2,010  $3,418  $10,905 

(1) Repossessed equipment was sold in October 2020.
(2) Troubled debt restructured loans are excluded from nonperforming loans unless they otherwise meet the definition of nonaccrual loans or are more than 90 days past due.


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

 Three Months Ended
 September 30, 2021 June 30, 2021 September 30, 2020
 Average
Balance		 Interest Yield/Rate Average
Balance		 Interest Yield/Rate Average
Balance		 Interest Yield/Rate
  
 (Dollars in thousands)
Assets:                 
Interest-earning assets:                 
Gross loans, net of unearned income(1)$1,122,741  $13,923  4.92% $1,091,139  $13,484  4.96% $994,066  $12,308  4.93%
Taxable securities76,612  $402  2.08% 67,785  332  1.96% 66,903  $346  2.07%
Nontaxable securities48,162  $266  2.20% 44,991  255  2.28% 25,577  $178  2.76%
Other interest-earnings assets189,131  $143  0.30% 176,542  124  0.28% 91,757  $67  0.29%
Total interest-earning assets$1,436,646  $14,734  4.07% $1,380,457  $14,195  4.12% $1,178,303  $12,899  4.36%
Allowance for loan losses(13,645)     (12,869)     (10,755)    
Noninterest-earning assets125,870      123,784      116,122     
Total Assets$1,548,871      $1,491,372      $1,283,670     
                  
Liabilities and Stockholders’ Equity:                 
Interest-bearing liabilities:                 
Interest-bearing transaction accounts98,203  24  0.10% 97,202  24  0.10% 85,482  49  0.23%
Savings and money market accounts565,861  665  0.47% 501,155  713  0.57% 381,431  677  0.71%
Time deposits290,460  345  0.47% 317,522  394  0.50% 351,278  968  1.10%
FHLB advances31,520  34  0.43% 31,900  35  0.44% 29,207  57  0.77%
Other borrowings6,652  26  1.57% 12,535  136  4.36% 12,488  163  5.20%
Total interest-bearing liabilities$992,696  $1,094  0.44% $960,314  $1,302  0.54% $859,886  $1,914  0.89%
                  
Noninterest-bearing liabilities:                 
Noninterest-bearing deposits$384,207      $374,166      $279,164     
Other liabilities9,663      9,409      8,295     
Total noninterest-bearing liabilities$393,870      $383,575      $287,459     
Stockholders’ Equity162,305      147,483      136,325     
Total Liabilities and Stockholders’ Equity$1,548,871      $1,491,372      $1,283,670     
                  
Net interest income  $13,640      $12,893      $10,985   
Net interest spread(2)    3.63%     3.58%     3.47%
Net interest margin(3)    3.77%     3.75%     3.71%

(1)   Includes nonaccrual loans.
(2)   Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest-bearing liabilities.
(3)   Net interest margin is a ratio of net interest income to average interest earning assets for the same period.

 Nine Months Ended
 September 30, 2021 September 30, 2020
 Average
Balance		 Interest Yield/Rate Average
Balance		 Interest Yield/Rate
 (Dollars in thousands)
Assets:           
Interest-earning assets:           
Gross loans, net of unearned income(1)$1,093,684  $40,429  4.94% $936,500  $35,577  5.07%
Taxable securities74,244  1,134  2.04% 57,733  940  2.17%
Nontaxable securities42,191  729  2.31% 19,665  454  3.08%
Other interest-earnings assets148,349  315  0.28% 107,271  489  0.61%
Total interest-earning assets$1,358,468  $42,607  4.19% $1,121,169  $37,460  4.46%
Allowance for loan losses(12,890)     (10,173)    
Noninterest-earning assets124,539      109,346     
Total Assets$1,470,117      $1,220,342     
            
Liabilities and Stockholders’ Equity:           
Interest-bearing liabilities:           
Interest-bearing transaction accounts94,696  66  0.09% 81,168  131  0.22%
Savings and money market accounts503,064  2,056  0.55% 360,736  2,288  0.85%
Time deposits310,758  1,233  0.53% 359,069  4,072  1.52%
FHLB advances32,215  120  0.50% 20,522  126  0.82%
Other borrowings10,625  315  3.96% 12,478  516  5.52%
Total interest-bearing liabilities$951,358  $3,790  0.53% $833,973  $7,133  1.14%
            
Noninterest-bearing liabilities:           
Noninterest-bearing deposits$358,556      $247,192     
Other liabilities9,207      6,951     
Total noninterest-bearing liabilities$367,763      $254,143     
Stockholders’ Equity150,996      132,226     
Total Liabilities and Stockholders’ Equity$1,470,117      $1,220,342     
            
Net interest income  $38,817      $30,327   
Net interest spread(2)    3.66%     3.32%
Net interest margin(3)    3.82%     3.61%

(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.


          
Per Share InformationThree Months Ended Nine Months Ended
 September 30,
2021		 June 30,
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
  
 (Dollars in thousands, except share and per share amounts)
          
Net income$4,921  $3,906  $3,194  $14,508  $8,792 
Earnings per share - basic$0.59  $0.51  $0.42  $1.84  $1.15 
Earnings per share - diluted$0.58  $0.50  $0.41  $1.82  $1.13 
          
Weighted average shares outstanding8,354,860  7,691,084  7,666,336  7,861,780  7,666,336 
Diluted weighted average shares outstanding8,467,460  7,810,952  7,767,976  7,980,159  7,761,695 
Shares issued and outstanding9,012,857  7,716,428  7,674,756  9,012,857  7,674,756 
          
Total stockholders' equity$174,221  $148,903  $137,366  $174,221  $137,366 
Book value per share$19.33  $19.30  $17.90  $19.33  $17.90 
          
          
Performance RatiosThree Months Ended Nine Months Ended
 September 30,
2021		 June 30
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
          
Net interest margin3.77% 3.75% 3.71% 3.82% 3.61%
Net interest spread3.63% 3.58% 3.47% 3.66% 3.32%
Efficiency ratio57.55% 61.07% 60.23% 56.02% 65.04%
Return on average assets1.26% 1.05% 0.99% 1.32% 0.96%
Return on average stockholders’ equity12.03% 10.62% 9.32% 12.85% 9.22%


Core and PPP LoansSeptember 30,
2021		 June 30,
2021		 December 31,
2020		 September 30,
2020
 (Dollars in thousands)
        
Core loans$1,129,075  $1,063,913  $967,177  $934,286 
PPP loans20,265   37,764  66,556  71,694 
Unearned income(3,893) (4,118) (3,618) (4,127)
Loans, net of unearned income1,145,447  1,097,559  1,030,115  1,001,853 
Allowance for loan losses(14,097) (13,339) (11,859) (12,116)
Loans, net$1,131,350  $1,084,220  $1,018,256  $989,737 


Reconciliation of Non-GAAP Financial Measures

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

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

Reconciliation of Non-GAAP Financial Measures
          
 Three Months Ended Nine Months Ended
 September 30,
2021		 June 30,
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
  
 (Dollars in thousands, except share and per share amounts)
            
Net income$4,921   $3,906   $3,194   $14,508   $8,792  
Add: Net OREO write-downs (gains)—   (8)  219   (8)  793  
Less: Gain on sale of USDA loan—   —   —   2,806   —  
Less: BOLI death benefits742   —   615   742   615  
Less: Gain (loss) on securities189   27   —   (17)  742  
Less: Tax effect(52)  (9)  56   (730)  12  
Core net income$4,042   $3,880   $2,742   $11,699   $8,216  
Average assets$1,548,871   $1,491,372   $1,283,670   $1,470,117   $1,220,342  
Core return on average assets1.04 % 1.04 % 0.85 % 1.06 % 0.90 %
          
Net income$4,921   $3,906   $3,194   $14,508   $8,792  
Add: Net OREO write-downs (gains)—   (8)  219   (8)  793  
Add: Provision750   750   1,600   2,250   2,700  
Less: Gain on sale of USDA loan—   —   —   2,806   —  
Less: BOLI death benefits742   —   615   742   615  
Less: Gain (loss) on securities189   27   —   (17)  742  
Add: Income taxes1,293   1,176   549   4,287   2,012  
Pretax pre-provision core net income$6,033   $5,797   $4,947   $17,506   $12,940  
Average assets$1,548,871   $1,491,372   $1,283,670   $1,470,117   $1,220,342  
Pretax pre-provision core return on average assets1.55 % 1.56 % 1.53 % 1.59 % 1.42 %
          
Total stockholders' equity$174,221   $148,903   $137,366   $174,221   $137,366  
Less: Intangible assets18,428   18,494   18,692   18,428   18,692  
Tangible common equity$155,793   $130,409   $118,674   $155,793   $118,674  
          
Core net income$4,042   $3,880   $2,742   $11,699   $8,216  
Diluted weighted average shares outstanding8,467,460   7,810,952   7,767,976   7,980,159   7,761,695  
Diluted core earnings per share$0.48   $0.50   $0.35   $1.47   $1.06  
          
Common shares outstanding at year or period end9,012,857   7,716,428   7,674,756   9,012,857   7,674,756  
Tangible book value per share$17.29   $16.90   $15.46   $17.29   $15.46  
          
          
Reconciliation of Non-GAAP Financial Measures
          
 Three Months Ended Nine Months Ended
 September 30,
2021		 June 30,
2021		 September 30,
2020		 September 30,
2021		 September 30,
2020
  
 (Dollars in thousands, except share and per share amounts)
            
Total assets at end of period$1,559,062   $1,514,436   $1,300,040   $1,559,062   $1,300,040  
Less: Intangible assets18,428   18,494   18,692   18,428   18,692  
Adjusted assets at end of period$1,540,634   $1,495,942   $1,281,348   $1,540,634   $1,281,348  
Tangible common equity to tangible assets10.11 % 8.72 % 9.26 % 10.11 % 9.26 %
          
Total average stockholders’ equity$162,305   147,483   $136,325   $150,996   $132,226  
Less: Average intangible assets18,470   18,535   18,732   18,535   18,797  
Average tangible common equity$143,835   $128,948   $117,593   $132,461   $113,429  
Net income to common shareholders$4,921   $3,906   $3,194   $14,508   $8,792  
Return on average tangible common equity13.57 % 12.15 % 10.81 % 14.64 % 10.35 %
Average tangible common equity$143,835   $128,948   $117,593   $132,461   $113,429  
Core net income$4,042   $3,880   $2,742   $11,699   $8,216  
Core return on average tangible common equity11.15 % 12.07 % 9.28 % 11.81 % 9.68 %
          
Net interest income$13,640   $12,893   10,985   38,817   30,327  
Add: Noninterest income2,509   2,045   2,448   9,051   6,916  
Less: Gain on sale of USDA loan—   —   —   2,806   —  
Less: BOLI death benefits742   —   615   742   615  
Less: Gain (loss) on securities189   27   —   (17)  742  
Operating revenue$15,218   $14,911   $12,818   $44,337   $35,886  
          
Expenses:         
Total noninterest expense$9,185   $9,106   $8,090   $26,823   $23,739  
Less: Net OREO write-down (gains)—   (8)  219   (8)  793  
Adjusted noninterest expenses$9,185   $9,114   $7,871   $26,831   $22,946  
Core efficiency ratio60.36 % 61.12 % 61.41 % 60.52 % 63.94 %