Southern States Bancshares, Inc. Announces Fourth Quarter 2024 Financial Results

Fourth Quarter 2024 Performance and Operational Highlights

• Net income of $11.2 million, or $1.11 per diluted share
• Core net income⁽¹⁾ of $10.5 million, or $1.04 per diluted share⁽¹⁾
• Pretax pre-provision core net income⁽¹⁾ of $14.0 million
• Net interest income of $25.1 million, an increase of $804,000 from the prior quarter
• Net interest margin ("NIM") of 3.66%, up 1 basis point from the prior quarter
• Return on average assets ("ROAA") of 1.55%; return on average stockholders' equity ("ROAE") of 16.13%; and return on average tangible common equity ("ROATCE")⁽¹⁾ of 18.87%
• Core ROAA⁽¹⁾ of 1.45%; and core ROATCE⁽¹⁾ of 17.67%
• Efficiency ratio of 46.67%; and core efficiency ratio of 47.78%
• Linked-quarter loans grew 4.9% annualized
• Linked-quarter total deposits, excluding brokered deposits, grew 6.2% annualized
• Linked-quarter brokered deposits declined (22.7)%

ANNISTON, Ala., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Southern States Bancshares, Inc. 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 $11.2 million, or $1.11 diluted earnings per share, for the fourth quarter of 2024. This compares to net income of $7.4 million, or $0.76 diluted earnings per share, for the third quarter of 2024, and net income of $8.9 million, or $0.99 diluted earnings per share, for the fourth quarter of 2023. The Company reported core net income of $10.5 million, or $1.04 diluted core earnings per share, for the fourth quarter of 2024. This compares to core net income of $8.7 million, or $0.89 diluted core earnings per share, for the third quarter of 2024, and core net income of $7.3 million, or $0.81 diluted core earnings per share, for the fourth quarter of 2023 (see "Reconciliation of Non-GAAP Financial Measures").

Net interest income for the fourth quarter of 2024 was $25.1 million, an increase of 3.3% from $24.2 million for the third quarter of 2024. The increase was substantially due to a decrease in higher-cost brokered deposits as a result of calls and repayments at maturity and replaced with less expensive core deposits.

Relative to the fourth quarter of 2023, net interest income increased $4.6 million, or 22.8%. The increase was mainly driven by significant organic growth, coupled with the acquisition of Century Bank on July 31, 2024.

Net interest margin for the fourth quarter of 2024 was 3.66%, compared to 3.65% for the third quarter of 2024. The slight increase was primarily due to cost savings attributed to calls and repayments at maturity on higher-cost brokered deposits.

Relative to the fourth quarter of 2023, net interest margin decreased slightly from 3.69%. The decrease was primarily the result of the decrease in interest rates. The acquisition of Century Bank resulted in a positive impact to the net interest margin, effectively helping to reduce the cost of interest-bearing liabilities.

Noninterest income for the fourth quarter of 2024 was $3.0 million, an increase of 70.2% from $1.8 million for the third quarter of 2024. The Company applied for the Voluntary Disclosure Program ("VDP") associated with the ERC program during the third quarter of 2023 and received approval during the fourth quarter of 2024. The fourth quarter of 2024 included $1.2 million in ERC as a participant in the program.

Relative to the fourth quarter of 2023, noninterest income decreased 4.1% from $3.1 million. 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. The fourth quarter of 2024 included the $1.2 million in ERC discussed earlier. The acquisition of Century Bank on July 31, 2024 resulted in additional noninterest income during the fourth quarter of 2024.

Noninterest expense for the fourth quarter of 2024 was $13.1 million, a decrease of 4.5% from $13.7 million for the third quarter of 2024. The third quarter of 2024 included merger-related expenses of $1.5 million, of which $961,000 was not deductible for taxes, as a result of the acquisition of Century Bank. The fourth quarter of 2024 included professional fees paid to a third party related to ERC, along with an overall increase in noninterest expense as a result of the full-quarter recognition of the acquisition of Century Bank.

Relative to the fourth quarter of 2023, noninterest expense increased 34.5% from $9.7 million. The acquisition of Century Bank on July 31, 2024 resulted in additional noninterest expense during the fourth quarter of 2024.

Loans, net of unearned income, were $2.2 billion at December 31, 2024, up $27.4 million from September 30, 2024 and up $342.1 million from December 31, 2023. The linked-quarter increase in loans was primarily attributable to new business growth across our footprint. The year-over-year increase in loans was primarily attributable the new business growth across our footprint, coupled with the acquisition of Century Bank, which resulted in additional loans of $131.7 million at December 31, 2024.

Nonperforming loans totaled $6.5 million, or 0.29% of gross loans, at December 31, 2024, compared with $7.9 million, or 0.36% of gross loans, at September 30, 2024, and $1.2 million, or 0.06% of gross loans, at December 31, 2023. The $1.3 million net decrease in nonperforming loans from September 30, 2024 was primarily attributable to a significant commercial and industrial loan being paid down. The $5.4 million net increase in nonperforming loans from December 31, 2023, was primarily attributable to a significant commercial and industrial loan, which has since been paid down, and a commercial real estate loan being placed on nonaccrual status.

The Company recorded a provision for credit losses of $72,000 for the fourth quarter of 2024, compared to $2.6 million for the third quarter of 2024. Provision in the third quarter of 2024 included a $1.7 million provision as a result of the acquisition of Century Bank as well as additional provisions based on growth.

Net recoveries for the fourth quarter of 2024 were $205,000, or (0.04)% of average loans on an annualized basis, compared to net charge-offs of $350,000, or 0.07% of average loans on an annualized basis, for the third quarter of 2024, and net charge-offs of $382,000, or 0.08% of average loans on an annualized basis, for the fourth quarter of 2023. The net recoveries received in the fourth quarter of 2024 were primarily related to a pool of consumer loans charged-off in the third quarter. The charge-offs recorded during the third quarter of 2024 were substantially related to a purchased pool of consumer loans for which the borrower filed for bankruptcy. The loan was fully charged-off as of September 30, 2024.

The Company's allowance for credit losses was 1.27% of total loans and 433.77% of nonperforming loans at December 31, 2024, compared with 1.28% of total loans and 356.65% of nonperforming loans at September 30, 2024. Allowance for credit losses on unfunded commitments was $1.4 million at December 31, 2024.

Total deposits were $2.4 billion at December 31, 2024, down slightly from $2.4 billion at September 30, 2024 and up from $2.0 billion at December 31, 2023. The $9.2 million decrease in total deposits in the fourth quarter from the previous quarter was primarily due to a $44.1 million decrease in brokered deposits due to calls and maturation, partially offset by an increase of $29.1 million in noninterest-bearing deposits. Total brokered deposits were $150.0 million at December 31, 2024, compared to $194.2 million at September 30, 2024. Excluding brokered deposits, total deposits increased $34.9 million in the fourth quarter of 2024.

As of December 31, 2024, total stockholders' equity was $279.9 million, up from $271.4 million at September 30, 2024. The increase of $8.5 million was substantially due to strong earnings growth, partially offset by an increase in accumulated other comprehensive losses resulting from changes in the value of available for sale securities.

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.

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. 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. 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 modifications 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.

Noninterest Expense

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.