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April 13, 2020
Stephen Whatley
Chief Executive Officer
Southern States Bancshares, Inc.
615 Quintard Ave.
Anniston, AL 36201
Re: Southern States Bancshares, Inc.
Draft Registration Statement on Form S-1
Submitted on March 19, 2020
CIK No. 0001689731
Dear Mr. Whatley:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1 filed March 19, 2020
Industry and Market Data, page ii
1. We note you indicate that the prospectus includes industry and market
data, and that you
have not independently verified this information and this information
could prove to be
inaccurate or incomplete. Please revise to clarify that, notwithstanding
the foregoing, you
believe this information is reliable.
Prospectus Summary
Our History and Growth, page 1
2. We note that you completed the acquisition of East Alabama Financial
Group, Inc. in
September 2019. We also note that you have included the financial
statements of East
Stephen Whatley
FirstName LastNameStephen Whatley
Southern States Bancshares, Inc.
Comapany NameSouthern States Bancshares, Inc.
April 13, 2020
April 2 2020 Page 2
Page 13,
FirstName LastName
Alabama Financial Group, Inc. in this filing as well as pro forma
information on page F-
45. Please address the following:
The pro forma information provided on page F-45 appears to include
information
required by ASC 805-10-50. Please revise to include this
information within your
notes to the consolidated financial statements (i.e., Note 2 -
Acquisition Activity on
page F-16).
Tell us your consideration and how you have complied with the
requirements of
providing full pro forma financial information in accordance
Article 11 of Regulation
S-X (i.e., a complete pro forma income statement for the period
ending December 31,
2019 along with footnotes supporting the pro forma adjustments).
Ensure your
response addresses your consideration of the specific criteria in
11-01(a)(1) and 11-
01(b)(1), as well as the preparation requirements in 11-02.
3. On page 6, in the first full paragraph, please clarify what "digital
banking products" you
offer and tell us whether they are different than your mobile and
online services. Please
make conforming revisions to the similar disclosure on page 85 of the
Business section.
Selected Historical Consolidated Financial Data and Other Information, page 12
4. We note your disclosure in footnote (1) on page 14 states that other
noninterest expense
includes $2.0 million received from State of Alabama Loan Guarantee
Fund dissolution
for 2019. However, the table you present on page 55 shows this $2.0
million amount
included in noninterest income, rather than noninterest expense.
Please revise your table
on page 12 to cross-reference to the appropriate line item where the
$2.0 million has been
recorded.
Non-GAAP Financial Measures, page 15
5. We note your calculation and reconciliation of pretax pre-provision
core net income
excludes a $2.0 million charge recognized through your provision
relating to
the dissolution of a loan guarantee program from the state of Alabama.
However, you do
not exclude the related $2.0 million gain. Please tell us how you
believe this presentation
is consistent with Question 100.03 of the Non-GAAP Financial Measures
C&DI.
Similarly, tell us whether you consider the $2.0 million gain to be a
recurring or non-
recurring item and your consideration of whether it should be excluded
from your core net
income as well.
Risk Factors
Southern States ability to pay dividends, page 34
6. Please quantify, to the extent practicable, the "certain capital
levels" referred to in this risk
factor, that the Bank must maintain, which may restrict the ability of
your Bank to pay
dividends to you, and your ability to pay dividends to your
stockholders.
Stephen Whatley
FirstName LastNameStephen Whatley
Southern States Bancshares, Inc.
Comapany NameSouthern States Bancshares, Inc.
April 13, 2020
April 3 2020 Page 3
Page 13,
FirstName LastName
Use of Proceeds, page 44
7. We note that one of the intended use of proceeds is the potential
acquisition of other banks
or closely related businesses. Please revise to disclose any current
plans for acquisitions
or revise to indicate you have no current plans.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 51
8. We note that you recognized a $2.0 million gain in noninterest income
during 2019 for
funds received from the State of Alabama as a result of the
dissolution of a loan guarantee
program that the Bank participated in. Please provide us with more
information about the
nature of this program and arrangement, including any relevant terms,
services, criteria
and reference to accounting guidance applied to account for the
arrangement.
Recently Issued Accounting Pronouncements, page 78
9. We note from your disclosures on page F-28 that you entered into
various lease
arrangements; however, you make no reference to your adoption or
pending adoption of
ASC 842. Please revise to include disclosures regarding your adoption
or plans for
adoption in future periods, including any necessary transition
disclosures. Refer to SAB
74 for additional guidance.
Principal and Selling Stockholders, page 110
10. Please disclose in a footnote the natural person or persons that have
voting and dispositive
control of the shares for any entities listed in the table. Examples
include Patriot Financial
Partners and Davis Partnership, L.P.
Exclusive Forum, page 116
11. We note your disclosure that your exclusive forum provision would not
apply to suits
brought to enforce any duty or liability created by the Securities Act
or Exchange Act.
Please ensure that the exclusive forum provision in your amended and
restated bylaws
states this clearly, or tell us how you will inform investors in
future filings that the
provision does not apply to any actions arising under the Securities
Act or Exchange Act.
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
General, page F-8
12. Please revise your disclosure to include a footnote addressing
subsequent events. Refer to
ASC 855.
Stephen Whatley
FirstName LastNameStephen Whatley
Southern States Bancshares, Inc.
Comapany NameSouthern States Bancshares, Inc.
April 13, 2020
April 4 2020 Page 4
Page 13,
FirstName LastName
Earnings Per Share, page F-14
13. We note your presentation of basic and diluted earnings per share. We
also note that you
have restricted stock and stock options; however, it is unclear how
you considered the
applicability of the two-class method in your earnings per share
computation. Please tell
us how you considered the application of the two-class method in
accordance with ASC
260-10-45-59A through 70, including a discussion of the dividend and
various other rights
of the restricted stock and stock options. To the extent that you are
applying the two-class
method, revise to clarify in your disclosures accordingly.
Accounting Standards Adopted, page F-15
14. We note that you adopted ASC 606 on January 1, 2018. As it relates to
your in-scope
revenue streams, please tell us where you have provided, or revise to
include, the
disclosures required by ASC 606-10-50. For example, tell us where or
revise to include
disclosures describing the nature of the services, performance
obligations and timing of
recognition for each in-scope revenue stream.
Accountants' Compilation Report, page F-87
15. We note that your independent accountant has included a compilation
report which states
that they have not audited or reviewed the accompanying financial
statements. Please note
compilation reports are not appropriate because the association of the
accountant provides
no basis for reliance. Please revise your document to remove the
Independent
Accountant's Compilation Report from your registration statement along
with any
references thereto. Additionally, although the staff does not require
your auditor's to file a
written review report, we do require that you engage an independent
accountant to review
your interim financial statements and related footnotes. Refer to Rule
10-01(d) of
Regulation S-X and PCAOB -- AU Section 722.
General
16. Please provide us mockups of any pages that include any additional
pictures or graphics to
be presented, including any accompanying captions. Please keep in
mind, in scheduling
your printing and distribution of the preliminary prospectus, that we
may have comments
after our review of these materials.
Stephen Whatley
Southern States Bancshares, Inc.
April 13, 2020
Page 5
You may contact Robert Klein at 202-551-3847 or Hugh West at
202-551-3872 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Susan Block at 202-551-3210 or Dietrich King at 202-551-8071 with any
other
questions.
FirstName LastNameStephen Whatley Sincerely,
Comapany NameSouthern States Bancshares, Inc.
Division of
Corporation Finance
April 13, 2020 Page 5 Office of Finance
FirstName LastName