Third Quarter 2024 Performance and Operational Highlights
- Net income of $7.4 million, or $0.76 per diluted share
- Core net income(1) of $8.7 million, or $0.89 per diluted share(1)
- Core pretax pre-provision net income(1) of $13.8 million
- Net interest income of $24.2 million, an increase of $2.7 million from the prior quarter
- Net interest margin ("NIM”) of 3.65%, up 9 basis points from the prior quarter
- NIM of 3.66% on a fully-taxable equivalent basis ("NIM - FTE”)(1)
- Return on average assets ("ROAA”) of 1.05%; return on average stockholders' equity ("ROAE”) of 11.89%; and return on average tangible common equity ("ROATCE”)(1) of 13.35%
- Core ROAA(1) of 1.24%; and core ROATCE(1) of 15.74%
- Efficiency ratio of 52.79%; and core efficiency ratio of 46.96%
- Linked-quarter loans grew 36.3% annualized; and legacy loans grew 10.3% annualized
- Linked-quarter total deposits grew 44.8% annualized
- Linked-quarter total deposits, excluding brokered deposits, grew 71.5% annualized; and legacy total deposits, excluding brokered deposits grew 9.6% annualized
ANNISTON, Ala., Oct. 21, 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 $7.4 million, or $0.76 diluted earnings per share, for the third quarter of 2024. This compares to net income of $8.2 million, or $0.90 diluted earnings per share, for the second quarter of 2024, and net income of $6.6 million, or $0.73 diluted earnings per share, for the third quarter of 2023. The Company reported core net income of $8.7 million, or $0.89 diluted core earnings per share, for the third quarter of 2024. This compares to core net income of $9.1 million, or $1.00 diluted core earnings per share, for the second quarter of 2024, and core net income of $9.6 million, or $1.06 diluted core earnings per share, for the third quarter of 2023 (see "Reconciliation of Non-GAAP Financial Measures”).
CEO Commentary
| Mark Chambers, Chief Executive Officer and President of Southern States said, "The top highlight of our third quarter was the completion of the CBB Bancorp acquisition on August 1 as planned. I want to welcome our new colleagues who contributed to a seamless integration between two organizations that share a common culture. Our combination with Century Bank has strengthened our platform to drive loan and deposit growth across growing and attractive Georgia markets.” | ||||
| "Net interest income for the third quarter increased more than 12.4% to $24.2 million for the quarter largely reflecting the contribution from Century Bank. Net interest margin also increased 9 basis points to 3.65% from 3.56% quarter-over-quarter, which further reflects Century Bank's contribution.” | ||||
| "Finally, we were pleased to be recognized in Piper Sandler's Sm-All Stars: Class of 2024 for the third year in a row. The Sm-All Stars' objective is to identify the top performing U.S. small-cap banks and thrifts based on growth, profitability, credit quality, and capital strength. Our objective is to run a highly efficient bank, consistently deliver the highest level of customer satisfaction and increase value for our shareholders.” |
| Net Interest Income and Net Interest Margin | |||||||||||||||||
| Three Months Ended | % Change September 30, 2024 vs. | ||||||||||||||||
| September 30,
2024 | June 30, 2024 | September 30, 2023 | June 30, 2024 | September 30,
2023 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Average interest-earning assets | $ | 2,645,388 | $ | 2,440,425 | $ | 2,175,103 | 8.4 | % | 21.6 | % | |||||||
| Net interest income | $ | 24,246 | $ | 21,579 | $ | 20,731 | 12.4 | % | 17.0 | % | |||||||
| Net interest margin | 3.65 | % | 3.56 | % | 3.78 | % | 9 bps | (13) bps | |||||||||
Net interest income for the third quarter of 2024 was $24.2 million, an increase of 12.4% from $21.6 million in the second quarter of 2024. The increase was substantially due to the acquisition of Century Bank.
Relative to the third quarter of 2023, net interest income increased $3.5 million, or 17.0%. The increase was mainly driven by significant growth, partially as a result of the acquisition of Century Bank, which offset the decline in net interest margin.
Net interest margin for the third quarter of 2024 was 3.65%, compared to 3.56% for the second quarter of 2024. The increase was primarily due to a slight increase in the yield on interest-earning assets, coupled with a decrease in the cost of interest-bearing deposits. The acquisition of Century Bank had a positive impact and helped lift the margin for third quarter of 2024.
Relative to the third quarter of 2023, net interest margin decreased from 3.78%. The decrease was primarily the result of the increase in interest rates, which accelerated the cost of interest-bearing liabilities at a greater pace than the yield received on interest-earning assets. 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 | ||||||||||||||||
| Three Months Ended | % Change September 30, 2024 vs. | |||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | June 30, 2024 | September 30, 2023 | ||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Service charges on deposit accounts | $ | 532 | $ | 462 | $ | 442 | 15.2 | % | 20.4 | % | ||||||
| Swap (expense) fees | (9 | ) | 4 | 453 | 325.0 | % | 102.0 | % | ||||||||
| SBA/USDA fees | 179 | 58 | 74 | 208.6 | % | 141.9 | % | |||||||||
| Mortgage origination fees | 112 | 92 | 158 | 21.7 | % | (29.1 | )% | |||||||||
| Net gain (loss) on securities | 75 | 20 | (12 | ) | 275.0 | % | 725.0 | % | ||||||||
| Employee retention credit and related revenue ("ERC”) | - | - | (5,100 | ) | N/A | N/A | ||||||||||
| Other operating income | 868 | 732 | 1,091 | 18.6 | % | (20.4 | )% | |||||||||
| Total noninterest income | $ | 1,757 | $ | 1,368 | $ | (2,894 | ) | 28.4 | % | 160.7 | % | |||||
Noninterest income for the third quarter of 2024 was $1.8 million, an increase of 28.4% from $1.4 million in the second quarter of 2024. The acquisition of Century Bank on July 31, 2024 resulted in additional noninterest income during the third quarter of 2024. Apart from the acquisition, the increase was also due to increased SBA/USDA fees primarily resulting from the sales of loans during the third quarter of 2024, along with a larger realized net gain on securities during the third quarter of 2024 compared to the second quarter of 2023.
Relative to the third quarter of 2023, noninterest income increased 160.7% from a noninterest net expense of $2.9 million. The third quarter of 2023 included a $5.1 million payment to the Internal Revenue Service ("IRS”) for the return of the ERC, which was received during the second quarter of 2023. The IRS revised eligibility guidelines during the third quarter of 2023, and the Company applied for the Voluntary Disclosure Program and removed this from income and recorded a payable. The acquisition of Century Bank on July 31, 2024 resulted in additional noninterest income during the third quarter of 2024. The increase was partially offset by a decline in swap fees during the third quarter of 2024, substantially as a result of the Company not participating in any swap transactions.
| Noninterest Expense | |||||||||||||||
| Three Months Ended | % Change September 30, 2024 vs. | ||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | June 30, 2024 | September 30, 2023 | |||||||||||
| (Dollars in thousands) | |||||||||||||||
| Salaries and employee benefits | $ | 6,876 | $ | 6,112 | $ | 5,752 | 12.5 | % | 19.5 | % | |||||
| Equipment and occupancy expenses | 814 | 667 | 718 | 22.0 | % | 13.4 | % | ||||||||
| Data processing fees | 781 | 686 | 650 | 13.8 | % | 20.2 | % | ||||||||
| Regulatory assessments | 414 | 375 | 322 | 10.4 | % | 28.6 | % | ||||||||
| Professional fees related to ERC | - | - | (1,243 | ) | N/A | N/A | |||||||||
| Merger-related expenses | 1,511 | - | - | N/A | N/A | ||||||||||
| Other operating expenses | 3,291 | 3,571 | 2,370 | (7.8 | )% | 38.9 | % | ||||||||
| Total noninterest expenses | $ | 13,687 | $ | 11,411 | $ | 8,569 | 19.9 | % | 59.7 | % | |||||
Noninterest expense for the third quarter of 2024 was $13.7 million, an increase of 19.9% from $11.4 million in the second quarter of 2024. The acquisition of Century Bank on July 31, 2024 resulted in merger-related expenses of $1.5 million, of which $961,000 was not deductible for taxes. Also there were additional noninterest expenses related to Century Bank during the third quarter of 2024, primarily in salaries and employee benefits. The acquisition also gave rise to a $106,000 increase in amortization expense associated with the core deposit intangible. Also included in the third quarter of 2024 was approximately $250,000 in expenses associated with calling brokered deposits and collection expenses related to a problem loan.
Relative to the third quarter of 2023, noninterest expense increased 59.7% from $8.6 million. The acquisition of Century Bank on July 31, 2024 resulted in merger-related expenses of $1.5 million, along with additional noninterest expense during the third quarter of 2024. Salaries and employee benefits increased as a result of the acquisition and from a legacy standpoint. The third quarter of 2023 included a $1.2 million refund of professional fees related to the aforementioned return of ERC.
| Loans and Credit Quality | |||||||||||||||||
| Three Months Ended | % Change September 30, 2024 vs. | ||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | June 30, 2024 | September 30, 2023 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Gross loans | $ | 2,205,747 | $ | 2,021,877 | $ | 1,779,846 | 9.1 | % | 23.9 | % | |||||||
| Unearned income | (6,536 | ) | (6,443 | ) | (5,698 | ) | 1.4 | % | 14.7 | % | |||||||
| Loans, net of unearned income ("Loans”) | 2,199,211 | 2,015,434 | 1,774,148 | 9.1 | % | 24.0 | % | ||||||||||
| Average loans, net of unearned ("Average loans”) | $ | 2,134,318 | $ | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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