Fourth Quarter 2023 Performance and Operational Highlights
- Core net income(1) of $7.3 million, or $0.81 per diluted share(1)
- Net income of $8.9 million, or $0.99 per diluted share
- Net interest income of $20.4 million, a decrease of $327,000 from the prior quarter
- Net interest margin ("NIM") of 3.69%, down 9 basis points from the prior quarter
- NIM of 3.71% on a fully-taxable equivalent basis ("NIM - FTE")(1)
- Return on average assets ("ROAA") of 1.53%; return on average stockholders' equity ("ROAE") of 17.02%; and return on average tangible common equity ("ROATCE")(1) of 18.62%
- Core ROAA(1) of 1.26%; and core ROATCE(1) of 15.26%
- Efficiency ratio of 41.48%; and core efficiency ratio of 45.78%
- Linked-quarter loan growth was 24.7% annualized
- Linked-quarter total deposits grew 21.1% annualized
- Linked-quarter total deposits, excluding brokered deposits, grew 8.9% annualized
(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., Jan. 22, 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 $8.9 million, or $0.99 diluted earnings per share, for the fourth quarter of 2023. This compares to net income of $6.6 million, or $0.73 diluted earnings per share, for the third quarter of 2023, and net income of $10.6 million, or $1.18 diluted earnings per share, for the fourth quarter of 2022. The Company reported core net income of $7.3 million, or $0.81 diluted core earnings per share, for the fourth quarter of 2023. This compares to core net income of $9.6 million, or $1.06 diluted core earnings per share, for the third quarter of 2023, and core net income of $8.1 million, or $0.90 diluted core earnings per share, for the fourth quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures").
CEO Commentary
| Mark Chambers, Chief Executive Officer and President of Southern States, said, "We produced solid fourth quarter earnings, highlighted by annualized sequential loan growth of 24.7% and annualized deposit growth of 21.1%. Our bankers remain active across our vibrant footprint, cultivating new business relationships and winning market share. We continue to maintain a sharp focus on credit management to ensure the ongoing health of our loan portfolio as evidenced by our low level of nonperforming loans, which totaled just 0.06% of the overall portfolio." | ||||
| "Our results were impacted by ongoing funding expense pressure due to elevated interest rates and increased deposit costs. Our net interest margin, while robust at 3.69% to finish the year, declined nine basis points from the prior quarter. Our loan yields increased substantially throughout the year and rose five basis points in the fourth quarter, but this momentum was offset by higher deposit costs." | ||||
| "Overall, we delivered exceptional results and returns on behalf of our shareholders throughout 2023, further fortifying our foundation. We enter the new year with strong capital and liquidity positions, as well as pristine credit quality, putting Southern States in excellent position to pursue prudent growth in 2024." |
Net Interest Income and Net Interest Margin
| Three Months Ended | % Change December 31, 2023 vs. | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Average interest-earning assets | $ | 2,195,381 | $ | 2,175,103 | $ | 1,893,069 | 0.9 | % | 16.0 | % | |||||||
| Net interest income | $ | 20,404 | $ | 20,731 | $ | 20,884 | (1.6 | )% | (2.3 | )% | |||||||
| Net interest margin | 3.69 | % | 3.78 | % | 4.38 | % | (9 | )bps | (69 | )bps | |||||||
Net interest income for the fourth quarter of 2023 was $20.4 million, a decrease of 1.6% from $20.7 million for the third quarter of 2023. The decrease was primarily driven by a higher cost of interest-bearing deposits due to both rising interest rates and growth, which more than offset a higher yield on interest-earning assets resulting from a combination of rising rates and growth. The yield on loans benefited from significant linked-quarter growth.
Relative to the fourth quarter of 2022, net interest income decreased $480,000, or 2.3%. The decrease was substantially the result of the accelerated rise in the cost of interest-bearing liabilities due to the rapid rise in interest rates and growth, which outpaced a sharp improvement in the yield on interest-earning assets due to both year-over-year growth and higher interest rates. A portion of the growth in interest-bearing deposits is due to migration from noninterest-bearing into interest-bearing deposits.
Net interest margin for the fourth quarter of 2023 was 3.69%, compared to 3.78% for the third quarter of 2023. The decrease was primarily due to an increase in the cost of interest-bearing deposits, which was greater than the increase in the yield on interest-earning assets.
Relative to the fourth quarter of 2022, net interest margin decreased from 4.38%. The decrease was primarily the result of the rapid increase in interest rates, which accelerated the cost of interest-bearing liabilities at a greater pace than the yield received on interest-earning assets. A shift from noninterest-bearing deposits into interest-bearing deposits also had a negative impact on net interest margin.
Noninterest Income
| Three Months Ended | % Change December 31, 2023 vs. | |||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Service charges on deposit accounts | $ | 441 | $ | 442 | $ | 431 | (0.2 | )% | 2.3 | % | ||||||
| Swap fees | 70 | 453 | 2 | (84.5 | )% | 3400.0 | % | |||||||||
| SBA/USDA fees | 70 | 74 | 70 | (5.4 | )% | - | % | |||||||||
| Mortgage origination fees | 87 | 158 | 98 | (44.9 | )% | (11.2 | )% | |||||||||
| Net loss on securities | 98 | (12 | ) | (86 | ) | (916.7 | )% | (214.0 | )% | |||||||
| Employee retention credit and related revenue ("ERC") | - | (5,100 | ) | - | N/A | N/A | ||||||||||
| Other operating income | 2,352 | 1,091 | 4,088 | 115.6 | % | (42.5 | )% | |||||||||
| Total noninterest income | $ | 3,118 | $ | (2,894 | ) | $ | 4,603 | (207.7 | )% | (32.3 | )% | |||||
Noninterest income for the fourth quarter of 2023 was $3.1 million, compared to noninterest net expense of $2.9 million for the third quarter of 2023. The third quarter of 2023 included a $5.1 million payment to the IRS for the return of the ERC, which was received during the second quarter of 2023. After reviewing revised IRS guidelines during the third quarter of 2023, the Company determined to return the full $5.1 million to the IRS and recorded a payable. Also contributing to the increase during the fourth quarter of 2023 was a $1.9 million fee related to the early payoff of a $12.0 million purchased loan. As this is unusually large and atypical for the Bank, it was determined to record it as noninterest income instead of interest income, which would have impacted the net interest margin. The increase was partially offset by a $383,000 decrease in swap fees during the fourth quarter of 2023.
Relative to the fourth quarter of 2022, noninterest income decreased 32.3% from $4.6 million. The decrease was substantially due to a $2.6 million gain on the sale of two branches during the fourth quarter of 2022. This decrease was significantly offset by the aforementioned $1.9 million fee related to the early payoff of the $12.0 million loan in the fourth quarter of 2023.
Noninterest Expense
| Three Months Ended | % Change December 31, 2023 vs. | ||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||
| (Dollars in thousands) | |||||||||||||||
| Salaries and employee benefits | $ | 5,739 | $ | 5,752 | $ | 6,738 | (0.2 | )% | (14.8 | )% | |||||
| Equipment and occupancy expenses | 681 | 718 | 730 | (5.2 | )% | (6.7 | )% | ||||||||
| Data processing fees | 639 | 650 | 711 | (1.7 | )% | (10.1 | )% | ||||||||
| Regulatory assessments | 355 | 322 | 165 | 10.2 | % | 115.2 | % | ||||||||
| Professional fees related to ERC | - | (1,243 | ) | - | N/A | N/A | |||||||||
| Other operating expenses | 2,303 | 2,370 | 2,092 | (2.8 | )% | 10.1 | % | ||||||||
| Total noninterest expenses | $ | 9,717 | $ | 8,569 | $ | 10,436 | 13.4 | % | (6.9 | )% | |||||
Noninterest expense for the fourth quarter of 2023 was $9.7 million, an increase of 13.4% from $8.6 million for the third quarter of 2023. The increase was substantially related to the aforementioned return of ERC, which also resulted in a $1.2 million refund of professional fees related to the ERC, to which a receivable was recorded.
Relative to the fourth quarter of 2022, noninterest expense decreased 6.9% from $10.4 million. The decrease was primarily due to a decrease in salaries and benefits during the fourth quarter of 2023 and the recognition of a $285,000 credit for provision for unfunded loan commitments, which was not recognized during 2022. The fourth quarter of 2022 included expense associated with the issuance of restricted stock units in a deferred compensation plan which was significantly less in the fourth quarter of 2023. The decrease was partially offset by an increase in legal fees, in addition to an increase in FDIC insurance.
Loans and Credit Quality
| Three Months Ended | % Change December 31, 2023 vs. | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Gross loans | 1,890,677 | 1,779,846 | 1,592,707 | 6.2 | % | 18.7 | % | ||||||||||
| Unearned income | (6,169 | ) | (5,698 | ) | (5,543 | ) | 8.3 | % | 11.3 | % | |||||||
| Loans, net of unearned income ("Loans") | $ | 1,884,508 | $ | 1,774,148 | $ | 1,587,164 | 6.2 | % | 18.7 | % | |||||||
| Average loans, net of unearned ("Average loans") | $ | 1,814,484 | $ | 1,740,582 | $ | 1,563,255 | 4.2 | % | 16.1 | % | |||||||
| Nonperforming loans ("NPL") | $ | 1,177 | $ | 1,082 | $ | 2,245 | 8.8 | % | (47.6 | )% | |||||||
| Provision for credit losses | $ | 2,579 | $ | 773 | $ | 1,938 | 233.6 | % | 33.1 | % | |||||||
| Allowance for credit losses ("ACL") | $ | 24,378 | $ | 22,181 | $ | 20,156 | 9.9 | % | 20.9 | % | |||||||
| Net charge-offs (recoveries) | $ | 382 | $ | (23 | ) | $ | 205 | (1760.9 | )% | 86.3 | % | ||||||
| NPL to gross loans | 0.06 | % | 0.06 | % | 0.14 | % | |||||||||||
| Net charge-offs (recoveries) to average loans(1) | 0.08 | % | (0.01 | )% | 0.05 | % | |||||||||||
| ACL to loans | 1.29 | % | 1.25 | % | 1.27 | % | |||||||||||
| (1) Ratio is annualized. | |||||||||||||||||
Loans, net of unearned income, were $1.9 billion at December 31, 2023, up $110.4 million from September 30, 2023 and up $297.3 million from December 31, 2022. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.
Nonperforming loans totaled $1.2 million, or 0.06% of gross loans, at December 31, 2023, compared with $1.1 million, or 0.06% of gross loans, at September 30, 2023, and $2.2 million, or 0.14% of gross loans, at December 31, 2022. The $1.1 million net decrease in nonperforming loans from December 31, 2022, was primarily attributable to two loans that were paid-off, one loan that was charged-off and another loan that was moved back to accruing status.
The Company recorded a provision for credit losses of $2.6 million for the fourth quarter of 2023, compared to $773,000 for the third quarter of 2023. Provision in the fourth quarter of 2023 was based on loan growth, qualitative economic factors and individually analyzed loans.
Net charge-offs for the fourth quarter of 2023 were $382,000, or 0.08% of average loans on an annualized basis, compared to net recoveries of $(23,000), or (0.01)% of average loans on an annualized basis, for the third quarter of 2023, and net charge-offs of $205,000, or 0.05% of average loans on an annualized basis, for the fourth quarter of 2022.
The Company's allowance for credit losses was 1.29% of total loans and 2071.20% of nonperforming loans at December 31, 2023, compared with 1.25% of total loans and 2050.00% of nonperforming loans at September 30, 2023. Allowance for credit losses on unfunded commitments was $1.2 million at December 31, 2023.
Deposits
| Three Months Ended | % Change December 31, 2023 vs. | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Noninterest-bearing deposits | $ | 437,959 | $ | 418,125 | $ | 460,977 | 4.7 | % | (5.0) | )% | |||||||
| Interest-bearing deposits | 1,580,230 | 1,498,276 | 1,259,766 | 5.5 | % | 25.4 | % | ||||||||||
| Total deposits | $ | 2,018,189 | $ | 1,916,401 | $ | 1,720,743 | 5.3 | % | 17.3 | % | |||||||
| Uninsured deposits | $ | 615,651 | $ | 568,323 | $ | 600,977 | 8.3 | % | 2.4 | % | |||||||
| Uninsured deposits to total deposits | 30.51 | % | 29.66 | % | 34.93 | % | |||||||||||
| Noninterest deposits to total deposits | 21.70 | % | 21.82 | % | 26.79 | % | |||||||||||
Total deposits were $2.0 billion at December 31, 2023, up from $1.9 billion at September 30, 2023 and $1.7 billion at December 31, 2022. The $101.8 million increase in total deposits in the fourth quarter was primarily due to an increase of $82.0 in interest-bearing deposits, which includes a $62.5 million increase in brokered deposits, and an increase of $19.8 million in noninterest-bearing deposits. Total brokered deposits were $230.9 million at December 31, 2023.
Capital
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| Company | Bank | Company | Bank | Company | Bank | ||||||||||||
| Tier 1 capital ratio to average assets | 8.99 | % | 12.01 | % | 8.70 | % | 11.71 | % | 8.82 | % | 12.17 | % | |||||
| Risk-based capital ratios: | |||||||||||||||||
| Common equity tier 1 ("CET1") capital ratio | 9.18 | % | 12.28 | % | 9.32 | % | 12.55 | % | 8.86 | % | 12.21 | % | |||||
| Tier 1 capital ratio | 9.18 | % | 12.28 | % | 9.32 | % | 12.55 | % | 8.86 | % | 12.21 | % | |||||
| Total capital ratio | 14.26 | % | 13.42 | % | 14.60 | % | 13.67 | % | 14.34 | % | 13.24 | % | |||||
As of December 31, 2023, total stockholders' equity was $215.0 million, up from $201.9 million at September 30, 2023. The increase of $13.0 million was substantially due to earnings growth, coupled with a decrease in accumulated other comprehensive loss resulting from changes in the value of the available for sale securities portfolio.
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 13 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 recent events and trends in the banking industry and the inflationary environment. 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, 2022 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 business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions.
Contact Information
| Lynn Joyce | Kevin Dobbs | |||
| (205) 820-8065 | (310) 622-8245 | |||
| ljoyce@ssbank.bank | ssbankir@finprofiles.com |
| SELECT FINANCIAL DATA | |||||||||||||||||||
| (Dollars in thousands, except share and per share amounts) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||
| Results of Operations | |||||||||||||||||||
| Interest income | $ | 36,172 | $ | 35,204 | $ | 26,706 | $ | 132,260 | $ | 82,850 | |||||||||
| Interest expense | 15,768 | 14,473 | 5,822 | 52,148 | 11,512 | ||||||||||||||
| Net interest income | 20,404 | 20,731 | 20,884 | 80,112 | 71,338 | ||||||||||||||
| Provision for credit losses | 2,579 | 773 | 1,938 | 6,090 | 5,605 | ||||||||||||||
| Net interest income after provision | 17,825 | 19,958 | 18,946 | 74,022 | 65,733 | ||||||||||||||
| Noninterest income | 3,118 | (2,894 | ) | 4,603 | 8,874 | 8,677 | |||||||||||||
| Noninterest expense | 9,717 | 8,569 | 10,436 | 41,876 | 39,614 | ||||||||||||||
| Income tax expense | 2,330 | 1,866 | 2,521 | 9,068 | 7,725 | ||||||||||||||
| Net income | $ | 8,896 | $ | 6,629 | $ | 10,592 | $ | 31,952 | $ | 27,071 | |||||||||
| Core net income(1) | $ | 7,289 | $ | 9,563 | $ | 8,081 | $ | 31,190 | $ | 24,975 | |||||||||
| Share and Per Share Data | |||||||||||||||||||
| Shares issued and outstanding | 8,841,349 | 8,834,168 | 8,706,920 | 8,841,349 | 8,706,920 | ||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic | 8,864,734 | 8,846,018 | 8,707,026 | 8,809,590 | 8,774,860 | ||||||||||||||
| Diluted | 9,021,358 | 9,040,687 | 8,932,585 | 9,038,004 | 8,949,669 | ||||||||||||||
| Earnings per share: | |||||||||||||||||||
| Basic | $ | 1.00 | $ | 0.75 | $ | 1.22 | $ | 3.63 | $ | 3.08 | |||||||||
| Diluted | 0.99 | 0.73 | 1.18 | 3.53 | 3.02 | ||||||||||||||
| Core - diluted(1) | 0.81 | 1.06 | 0.90 | 3.45 | 2.79 | ||||||||||||||
| Book value per share | 24.31 | 22.86 | 20.87 | 24.31 | 20.87 | ||||||||||||||
| Tangible book value per share(1) | 22.30 | 20.84 | 18.79 | 22.30 | 18.79 | ||||||||||||||
| Cash dividends per common share | 0.09 | 0.09 | 0.09 | 0.36 | 0.36 | ||||||||||||||
| Performance and Financial Ratios | |||||||||||||||||||
| ROAA | 1.53 | % | 1.15 | % | 2.11 | % | 1.44 | % | 1.43 | % | |||||||||
| ROAE | 17.02 | % | 12.96 | % | 23.77 | % | 16.16 | % | 15.55 | % | |||||||||
| Core ROAA(1) | 1.26 | % | 1.66 | % | 1.61 | % | 1.41 | % | 1.32 | % | |||||||||
| ROATCE(1) | 18.62 | % | 14.21 | % | 26.49 | % | 17.78 | % | 17.37 | % | |||||||||
| Core ROATCE(1) | 15.26 | % | 20.50 | % | 20.21 | % | 17.35 | % | 16.02 | % | |||||||||
| NIM | 3.69 | % | 3.78 | % | 4.38 | % | 3.81 | % | 3.99 | % | |||||||||
| NIM - FTE(2) | 3.71 | % | 3.79 | % | 4.39 | % | 3.82 | % | 4.01 | % | |||||||||
| Net interest spread | 2.73 | % | 2.84 | % | 3.84 | % | 2.92 | % | 3.68 | % | |||||||||
| Yield on loans | 6.91 | % | 6.86 | % | 6.05 | % | 6.70 | % | 5.27 | % | |||||||||
| Yield on interest-earning assets | 6.54 | % | 6.42 | % | 5.60 | % | 6.29 | % | 4.64 | % | |||||||||
| Cost of interest-bearing liabilities | 3.81 | % | 3.58 | % | 1.76 | % | 3.37 | % | 0.96 | % | |||||||||
| Cost of funds(2) | 3.03 | % | 2.80 | % | 1.29 | % | 2.63 | % | 0.68 | % | |||||||||
| Cost of interest-bearing deposits | 3.66 | % | 3.43 | % | 1.52 | % | 3.19 | % | 0.79 | % | |||||||||
| Cost of total deposits | 2.86 | % | 2.63 | % | 1.09 | % | 2.44 | % | 0.55 | % | |||||||||
| Noninterest deposits to total deposits | 21.70 | % | 21.82 | % | 26.79 | % | 21.70 | % | 26.79 | % | |||||||||
| Core deposits to total deposits | 83.70 | % | 86.58 | % | 89.73 | % | 83.70 | % | 89.73 | % | |||||||||
| Uninsured deposits to total deposits | 30.51 | % | 29.66 | % | 34.93 | % | 30.51 | % | 34.93 | % | |||||||||
| Total loans to total deposits | 93.38 | % | 92.58 | % | 92.24 | % | 93.38 | % | 92.24 | % | |||||||||
| Efficiency ratio | 41.48 | % | 48.01 | % | 40.81 | % | 47.35 | % | 49.12 | % | |||||||||
| Core efficiency ratio(1) | 45.78 | % | 42.79 | % | 45.98 | % | 46.74 | % | 50.97 | % | |||||||||
(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.
| SELECT FINANCIAL DATA | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||
| Financial Condition (ending) | |||||||||||||||||||
| Total loans | $ | 1,884,508 | $ | 1,774,148 | $ | 1,587,164 | $ | 1,884,508 | $ | 1,587,164 | |||||||||
| Total securities | 198,632 | 189,496 | 175,196 | 198,632 | 175,196 | ||||||||||||||
| Total assets | 2,446,339 | 2,296,527 | 2,045,204 | 2,446,339 | 2,045,204 | ||||||||||||||
| Total noninterest bearing deposits | 437,959 | 418,125 | 460,977 | 437,959 | 460,977 | ||||||||||||||
| Total core deposits(1) | 1,689,266 | 1,659,291 | 1,543,981 | 1,689,266 | 1,543,981 | ||||||||||||||
| Total deposits | 2,018,189 | 1,916,401 | 1,720,743 | 2,018,189 | 1,720,743 | ||||||||||||||
| Total borrowings | 183,673 | 146,573 | 117,295 | 183,673 | 117,295 | ||||||||||||||
| Total liabilities | 2,231,375 | 2,094,603 | 1,863,485 | 2,231,375 | 1,863,485 | ||||||||||||||
| Total shareholders' equity | 214,964 | 201,924 | 181,719 | 214,964 | 181,719 | ||||||||||||||
| Financial Condition (average) | |||||||||||||||||||
| Total loans | $ | 1,814,484 | $ | 1,740,582 | $ | 1,563,255 | $ | 1,711,006 | $ | 1,421,376 | |||||||||
| Total securities | 209,074 | 201,830 | 188,765 | 200,047 | 178,755 | ||||||||||||||
| Total other interest-earning assets | 171,823 | 232,691 | 141,049 | 192,433 | 187,263 | ||||||||||||||
| Total interest-bearing assets | 2,195,381 | 2,175,103 | 1,893,069 | 2,103,486 | 1,787,394 | ||||||||||||||
| Total assets | 2,303,398 | 2,282,217 | 1,994,087 | 2,211,739 | 1,893,046 | ||||||||||||||
| Total noninterest-bearing deposits | 420,019 | 448,616 | 477,301 | 436,571 | 496,486 | ||||||||||||||
| Total interest-bearing deposits | 1,502,348 | 1,472,024 | 1,216,492 | 1,422,453 | 1,127,637 | ||||||||||||||
| Total deposits | 1,922,367 | 1,920,640 | 1,693,793 | 1,859,024 | 1,624,123 | ||||||||||||||
| Total borrowings | 140,790 | 129,882 | 99,111 | 126,853 | 76,379 | ||||||||||||||
| Total interest-bearing liabilities | 1,643,138 | 1,601,906 | 1,315,603 | 1,549,306 | 1,204,016 | ||||||||||||||
| Total shareholders' equity | 207,324 | 202,955 | 176,769 | 197,680 | 174,107 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Nonperforming loans | $ | 1,177 | $ | 1,082 | $ | 2,245 | $ | 1,177 | $ | 2,245 | |||||||||
| Other real estate owned ("OREO") | $ | 33 | $ | 2,903 | $ | 2,930 | $ | 33 | $ | 2,930 | |||||||||
| Nonperforming assets ("NPA") | $ | 1,210 | $ | 3,985 | $ | 5,175 | $ | 1,210 | $ | 5,175 | |||||||||
| Net charge-offs (recovery) to average loans(2) | 0.08 | % | (0.01) % | 0.05 | % | 0.03 | % | 0.02 | % | ||||||||||
| Provision for credit losses to average loans(2) | 0.56 | % | 0.18 | % | 0.49 | % | 0.36 | % | 0.39 | % | |||||||||
| ACL to loans | 1.29 | % | 1.25 | % | 1.27 | % | 1.29 | % | 1.27 | % | |||||||||
| ACL to gross loans | 1.29 | % | 1.25 | % | 1.27 | % | 1.29 | % | 1.27 | % | |||||||||
| ACL to NPL | 2071.20 | % | 2050.00 | % | 897.82 | % | 2071.20 | % | 897.82 | % | |||||||||
| NPL to loans | 0.06 | % | 0.06 | % | 0.14 | % | 0.06 | % | 0.14 | % | |||||||||
| NPL to gross loans | 0.06 | % | 0.06 | % | 0.14 | % | 0.06 | % | 0.14 | % | |||||||||
| NPA to gross loans and OREO | 0.06 | % | 0.22 | % | 0.32 | % | 0.06 | % | 0.32 | % | |||||||||
| NPA to total assets | 0.05 | % | 0.17 | % | 0.25 | % | 0.05 | % | 0.25 | % | |||||||||
| Regulatory and Other Capital Ratios | |||||||||||||||||||
| Total shareholders' equity to total assets | 8.79 | % | 8.79 | % | 8.89 | % | 8.79 | % | 8.89 | % | |||||||||
| Tangible common equity to tangible assets(3) | 8.12 | % | 8.08 | % | 8.07 | % | 8.12 | % | 8.07 | % | |||||||||
| Tier 1 capital ratio to average assets | 8.99 | % | 8.70 | % | 8.82 | % | 8.99 | % | 8.82 | % | |||||||||
| Risk-based capital ratios: | |||||||||||||||||||
| CET1 capital ratio | 9.18 | % | 9.32 | % | 8.86 | % | 9.18 | % | 8.86 | % | |||||||||
| Tier 1 capital ratio | 9.18 | % | 9.32 | % | 8.86 | % | 9.18 | % | 8.86 | % | |||||||||
| Total capital ratio | 14.26 | % | 14.60 | % | 14.34 | % | 14.26 | % | 14.34 | % | |||||||||
(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.
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||
| (Dollars in thousands) | |||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||
| (Unaudited) | (Unaudited) | (Audited) | |||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 19,710 | $ | 31,047 | $ | 15,260 | |||||
| Interest-bearing deposits in banks | 134,846 | 103,646 | 90,198 | ||||||||
| Federal funds sold | 96,095 | 81,487 | 63,041 | ||||||||
| Total cash and cash equivalents | 250,651 | 216,180 | 168,499 | ||||||||
| Securities available for sale, at fair value | 179,000 | 169,859 | 155,544 | ||||||||
| Securities held to maturity, at amortized cost | 19,632 | 19,637 | 19,652 | ||||||||
| Other equity securities, at fair value | 3,649 | 3,654 | 4,444 | ||||||||
| Restricted equity securities, at cost | 5,684 | 4,971 | 3,134 | ||||||||
| Loans held for sale | 450 | 1,799 | 1,047 | ||||||||
| Loans, net of unearned income | 1,884,508 | 1,774,148 | 1,587,164 | ||||||||
| Less allowance for credit losses | 24,378 | 22,181 | 20,156 | ||||||||
| Loans, net | 1,860,130 | 1,751,967 | 1,567,008 | ||||||||
| Premises and equipment, net | 26,426 | 26,694 | 27,345 | ||||||||
| Accrued interest receivable | 8,711 | 8,321 | 6,963 | ||||||||
| Bank owned life insurance | 29,884 | 29,697 | 29,186 | ||||||||
| Annuities | 15,036 | 15,266 | 15,478 | ||||||||
| Foreclosed assets | 33 | 2,903 | 2,930 | ||||||||
| Goodwill | 16,862 | 16,862 | 16,862 | ||||||||
| Core deposit intangible | 899 | 981 | 1,226 | ||||||||
| Other assets | 29,292 | 27,736 | 25,886 | ||||||||
| Total assets | $ | 2,446,339 | $ | 2,296,527 | $ | 2,045,204 | |||||
| Liabilities and Stockholders' Equity | |||||||||||
| Liabilities: | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing | $ | 437,959 | $ | 418,125 | $ | 460,977 | |||||
| Interest-bearing | 1,580,230 | 1,498,276 | 1,259,766 | ||||||||
| Total deposits | 2,018,189 | 1,916,401 | 1,720,743 | ||||||||
| Other borrowings | 26,994 | 4,991 | (19 | ) | |||||||
| FHLB advances | 70,000 | 55,000 | 31,000 | ||||||||
| Subordinated notes | 86,679 | 86,582 | 86,314 | ||||||||
| Accrued interest payable | 1,519 | 1,280 | 584 | ||||||||
| Other liabilities | 27,994 | 30,349 | 24,863 | ||||||||
| Total liabilities | 2,231,375 | 2,094,603 | 1,863,485 | ||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 44,479 | 44,307 | 43,714 | ||||||||
| Capital surplus | 78,361 | 77,671 | 76,785 | ||||||||
| Retained earnings | 102,523 | 94,429 | 73,764 | ||||||||
| Accumulated other comprehensive loss | (8,379 | ) | (13,126 | ) | (11,048 | ) | |||||
| Unvested restricted stock | (466 | ) | (580 | ) | (477 | ) | |||||
| Vested restricted stock units | (1,554 | ) | (777 | ) | (1,019 | ) | |||||
| Total stockholders' equity | 214,964 | 201,924 | 181,719 | ||||||||
| Total liabilities and stockholders' equity | $ | 2,446,339 | $ | 2,296,527 | $ | 2,045,204 | |||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||
| Interest income: | |||||||||||||||||
| Loans, including fees | $ | 31,613 | $ | 30,084 | $ | 23,853 | $ | 114,662 | $ | 74,936 | |||||||
| Taxable securities | 1,986 | 1,796 | 1,206 | 6,806 | 3,622 | ||||||||||||
| Nontaxable securities | 230 | 227 | 322 | 977 | 1,253 | ||||||||||||
| Other interest and dividends | 2,343 | 3,097 | 1,325 | 9,815 | 3,039 | ||||||||||||
| Total interest income | 36,172 | 35,204 | 26,706 | 132,260 | 82,850 | ||||||||||||
| Interest expense: | |||||||||||||||||
| Deposits | 13,869 | 12,732 | 4,655 | 45,368 | 8,906 | ||||||||||||
| Other borrowings | 1,899 | 1,741 | 1,167 | 6,780 | 2,606 | ||||||||||||
| Total interest expense | 15,768 | 14,473 | 5,822 | 52,148 | 11,512 | ||||||||||||
| Net interest income | 20,404 | 20,731 | 20,884 | 80,112 | 71,338 | ||||||||||||
| Provision for credit losses | 2,579 | 773 | 1,938 | 6,090 | 5,605 | ||||||||||||
| Net interest income after provision for credit losses | 17,825 | 19,958 | 18,946 | 74,022 | 65,733 | ||||||||||||
| Noninterest income: | |||||||||||||||||
| Service charges on deposit accounts | 441 | 442 | 431 | 1,790 | 1,863 | ||||||||||||
| Swap fees | 70 | 453 | 2 | 691 | 49 | ||||||||||||
| SBA/USDA fees | 70 | 74 | 70 | 344 | 646 | ||||||||||||
| Mortgage origination fees | 87 | 158 | 98 | 533 | 815 | ||||||||||||
| Net gain (loss) on securities | 98 | (12 | ) | (86 | ) | 555 | (632 | ) | |||||||||
| Employee retention credit and related revenue | - | (5,100 | ) | - | - | - | |||||||||||
| Other operating income | 2,352 | 1,091 | 4,088 | 4,961 | 5,936 | ||||||||||||
| Total noninterest income | 3,118 | (2,894 | ) | 4,603 | 8,874 | 8,677 | |||||||||||
| Noninterest expenses: | |||||||||||||||||
| Salaries and employee benefits | 5,739 | 5,752 | 6,738 | 25,665 | 24,597 | ||||||||||||
| Equipment and occupancy expenses | 681 | 718 | 730 | 2,776 | 2,918 | ||||||||||||
| Data processing fees | 639 | 650 | 711 | 2,528 | 2,444 | ||||||||||||
| Regulatory assessments | 355 | 322 | 165 | 1,198 | 925 | ||||||||||||
| Professional fees related to ERC | - | (1,243 | ) | - | - | - | |||||||||||
| Other operating expenses | 2,303 | 2,370 | 2,092 | 9,709 | 8,730 | ||||||||||||
| Total noninterest expenses | 9,717 | 8,569 | 10,436 | 41,876 | 39,614 | ||||||||||||
| Income before income taxes | 11,226 | 8,495 | 13,113 | 41,020 | 34,796 | ||||||||||||
| Income tax expense | 2,330 | 1,866 | 2,521 | 9,068 | 7,725 | ||||||||||||
| Net income | $ | 8,896 | $ | 6,629 | $ | 10,592 | $ | 31,952 | $ | 27,071 | |||||||
| Basic earnings per share | $ | 1.00 | $ | 0.75 | $ | 1.22 | $ | 3.63 | $ | 3.08 | |||||||
| Diluted earnings per share | $ | 0.99 | $ | 0.73 | $ | 1.18 | $ | 3.53 | $ | 3.02 | |||||||
| AVERAGE BALANCE SHEET AND NET INTEREST MARGIN | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||
| Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | |||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||
| Loans, net of unearned income(1) | $ | 1,814,484 | $ | 31,613 | 6.91 | % | $ | 1,740,582 | $ | 30,084 | 6.86 | % | $ | 1,563,255 | $ | 23,853 | 6.05 | % | |||||||||||
| Taxable securities | 163,537 | 1,986 | 4.82 | % | 156,364 | 1,796 | 4.56 | % | 132,222 | 1,206 | 3.62 | % | |||||||||||||||||
| Nontaxable securities | 45,537 | 230 | 2.00 | % | 45,466 | 227 | 1.98 | % | 56,543 | 322 | 2.26 | % | |||||||||||||||||
| Other interest-earnings assets | 171,823 | 2,343 | 5.41 | % | 232,691 | 3,097 | 5.28 | % | 141,049 | 1,325 | 3.73 | % | |||||||||||||||||
| Total interest-earning assets | $ | 2,195,381 | $ | 36,172 | 6.54 | % | $ | 2,175,103 | $ | 35,204 | 6.42 | % | $ | 1,893,069 | $ | 26,706 | 5.60 | % | |||||||||||
| Allowance for credit losses | (22,666 | ) | (21,606 | ) | (19,374 | ) | |||||||||||||||||||||||
| Noninterest-earning assets | 130,683 | 128,720 | 120,392 | ||||||||||||||||||||||||||
| Total Assets | $ | 2,303,398 | $ | 2,282,217 | $ | 1,994,087 | |||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
| Interest-bearing transaction accounts | 86,163 | 23 | 0.11 | % | 88,668 | 20 | 0.09 | % | 98,978 | 22 | 0.09 | % | |||||||||||||||||
| Savings and money market accounts | 885,548 | 8,445 | 3.78 | % | 867,066 | 7,767 | 3.55 | % | 794,692 | 3,126 | 1.56 | % | |||||||||||||||||
| Time deposits | 530,637 | 5,401 | 4.04 | % | 516,290 | 4,945 | 3.80 | % | 322,822 | 1,507 | 1.85 | % | |||||||||||||||||
| FHLB advances | 52,076 | 645 | 4.92 | % | 43,261 | 514 | 4.72 | % | 22,739 | 147 | 2.56 | % | |||||||||||||||||
| Other borrowings | 88,714 | 1,254 | 5.61 | % | 86,621 | 1,227 | 5.62 | % | 76,372 | 1,020 | 5.30 | % | |||||||||||||||||
| Total interest-bearing liabilities | $ | 1,643,138 | $ | 15,768 | 3.81 | % | $ | 1,601,906 | $ | 14,473 | 3.58 | % | $ | 1,315,603 | $ | 5,822 | 1.76 | % | |||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 420,019 | $ | 448,616 | $ | 477,301 | |||||||||||||||||||||||
| Other liabilities | 32,917 | 28,740 | 24,414 | ||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 452,936 | 477,356 | 501,715 | ||||||||||||||||||||||||||
| Stockholders' Equity | 207,324 | 202,955 | 176,769 | ||||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 2,303,398 | $ | 2,282,217 | $ | 1,994,087 | |||||||||||||||||||||||
| Net interest income | $ | 20,404 | $ | 20,731 | $ | 20,884 | |||||||||||||||||||||||
| Net interest spread(2) | 2.73 | % | 2.84 | % | 3.84 | % | |||||||||||||||||||||||
| Net interest margin(3) | 3.69 | % | 3.78 | % | 4.38 | % | |||||||||||||||||||||||
| Net interest margin - FTE(4)(5) | 3.71 | % | 3.79 | % | 4.39 | % | |||||||||||||||||||||||
| Cost of funds(6) | 3.03 | % | 2.80 | % | 1.29 | % | |||||||||||||||||||||||
| Cost of interest-bearing deposits | 3.66 | % | 3.43 | % | 1.52 | % | |||||||||||||||||||||||
| Cost of total deposits | 2.86 | % | 2.63 | % | 1.09 | % | |||||||||||||||||||||||
(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.
| AVERAGE BALANCE SHEET AND NET INTEREST MARGIN | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Twelve Months Ended | |||||||||||||||||||
| December 31, 2023 | December 31, 2022 | ||||||||||||||||||
| Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Loans, net of unearned income(1) | $ | 1,711,006 | $ | 114,662 | 6.70 | % | $ | 1,421,376 | $ | 74,936 | 5.27 | % | |||||||
| Taxable securities | 152,707 | 6,806 | 4.46 | % | 122,500 | 3,622 | 2.96 | % | |||||||||||
| Nontaxable securities | 47,340 | 977 | 2.06 | % | 56,255 | 1,253 | 2.23 | % | |||||||||||
| Other interest-earnings assets | 192,433 | 9,815 | 5.10 | % | 187,263 | 3,039 | 1.62 | % | |||||||||||
| Total interest-earning assets | $ | 2,103,486 | $ | 132,260 | 6.29 | % | $ | 1,787,394 | $ | 82,850 | 4.64 | % | |||||||
| Allowance for credit losses | (21,233 | ) | (16,883 | ) | |||||||||||||||
| Noninterest-earning assets | 129,486 | 122,535 | |||||||||||||||||
| Total Assets | $ | 2,211,739 | $ | 1,893,046 | |||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing transaction accounts | 90,231 | 82 | 0.09 | % | 109,786 | 100 | 0.09 | % | |||||||||||
| Savings and money market accounts | 851,351 | 28,124 | 3.30 | % | 754,830 | 5,988 | 0.79 | % | |||||||||||
| Time deposits | 480,871 | 17,162 | 3.57 | % | 263,021 | 2,818 | 1.07 | % | |||||||||||
| FHLB advances | 39,830 | 1,848 | 4.64 | % | 25,264 | 291 | 1.15 | % | |||||||||||
| Other borrowings | 87,023 | 4,932 | 5.67 | % | 51,115 | 2,315 | 4.53 | % | |||||||||||
| Total interest-bearing liabilities | $ | 1,549,306 | $ | 52,148 | 3.37 | % | $ | 1,204,016 | $ | 11,512 | 0.96 | % | |||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 436,571 | $ | 496,486 | |||||||||||||||
| Other liabilities | 28,182 | 18,437 | |||||||||||||||||
| Total noninterest-bearing liabilities | $ | 464,753 | $ | 514,923 | |||||||||||||||
| Stockholders' Equity | 197,680 | 174,107 | |||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 2,211,739 | $ | 1,893,046 | |||||||||||||||
| Net interest income | $ | 80,112 | $ | 71,338 | |||||||||||||||
| Net interest spread(2) | 2.92 | % | 3.68 | % | |||||||||||||||
| Net interest margin(3) | 3.81 | % | 3.99 | % | |||||||||||||||
| Net interest margin - FTE(4)(5) | 3.82 | % | 4.01 | % | |||||||||||||||
| Cost of funds(6) | 2.63 | % | 0.68 | % | |||||||||||||||
| Cost of interest-bearing deposits | 3.19 | % | 0.79 | % | |||||||||||||||
| Cost of total deposits | 2.44 | % | 0.55 | % | |||||||||||||||
(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.
| LOAN COMPOSITION | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||
| Amount | % of gross | Amount | % of gross | Amount | % of gross | |||||||||||||||
| Real estate mortgages: | ||||||||||||||||||||
| Construction and development | $ | 242,960 | 12.9 | % | $ | 229,188 | 12.9 | % | $ | 255,736 | 16.1 | % | ||||||||
| Residential | 224,603 | 11.9 | % | 224,499 | 12.6 | % | 167,891 | 10.5 | % | |||||||||||
| Commercial | 1,144,867 | 60.5 | % | 1,049,545 | 59.0 | % | 904,872 | 56.8 | % | |||||||||||
| Commercial and industrial | 269,961 | 14.3 | % | 268,283 | 15.0 | % | 256,553 | 16.1 | % | |||||||||||
| Consumer and other | 8,286 | 0.4 | % | 8,331 | 0.5 | % | 7,655 | 0.5 | % | |||||||||||
| Gross loans | 1,890,677 | 100.0 | % | 1,779,846 | 100.0 | % | 1,592,707 | 100.0 | % | |||||||||||
| Unearned income | (6,169 | ) | (5,698 | ) | (5,543 | ) | ||||||||||||||
| Loans, net of unearned income | 1,884,508 | 1,774,148 | 1,587,164 | |||||||||||||||||
| Allowance for credit losses | (24,378 | ) | (22,181 | ) | (20,156 | ) | ||||||||||||||
| Loans, net | $ | 1,860,130 | $ | 1,751,967 | $ | 1,567,008 | ||||||||||||||
| DEPOSIT COMPOSITION | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||
| Amount | % of total | Amount | % of total | Amount | % of total | ||||||||||||
| Noninterest-bearing transaction | $ | 437,959 | 21.7 | % | $ | 418,125 | 21.8 | % | $ | 460,977 | 26.8 | % | |||||
| Interest-bearing transaction | 946,347 | 46.9 | % | 934,383 | 48.8 | % | 837,127 | 48.6 | % | ||||||||
| Savings | 35,412 | 1.7 | % | 38,518 | 2.0 | % | 49,235 | 2.9 | % | ||||||||
| Time deposits, $250,000 and under | 500,406 | 24.8 | % | 436,613 | 22.8 | % | 307,145 | 17.8 | % | ||||||||
| Time deposits, over $250,000 | 98,065 | 4.9 | % | 88,762 | 4.6 | % | 66,259 | 3.9 | % | ||||||||
| Total deposits | $ | 2,018,189 | 100.0 | % | $ | 1,916,401 | 100.0 | % | $ | 1,720,743 | 100.0 | % | |||||
| Nonperfoming Assets | |||||||||||
| (Dollars in thousands) | |||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||
| Nonaccrual loans | $ | 1,017 | $ | 1,082 | $ | 2,245 | |||||
| Past due loans 90 days or more and still accruing interest | 160 | - | - | ||||||||
| Total nonperforming loans | 1,177 | 1,082 | 2,245 | ||||||||
| OREO | 33 | 2,903 | 2,930 | ||||||||
| Total nonperforming assets | $ | 1,210 | $ | 3,985 | $ | 5,175 | |||||
| Troubled debt restructured loans - nonaccrual(1) | 907 | 970 | 832 | ||||||||
| Troubled debt restructured loans - accruing | 1,095 | 1,052 | 1,292 | ||||||||
| Total troubled debt restructured loans | $ | 2,002 | $ | 2,022 | $ | 2,124 | |||||
| Allowance for credit losses | $ | 24,378 | $ | 22,181 | $ | 20,156 | |||||
| Loans, net of unearned income at the end of the period | $ | 1,884,508 | $ | 1,774,148 | $ | 1,587,164 | |||||
| Gross loans outstanding at the end of period | $ | 1,890,677 | $ | 1,779,846 | $ | 1,592,707 | |||||
| Total assets | $ | 2,446,339 | $ | 2,296,527 | $ | 2,045,204 | |||||
| Allowance for credit losses to nonperforming loans | 2071.20 | % | 2050.00 | % | 897.82 | % | |||||
| Nonperforming loans to loans, net of unearned income | 0.06 | % | 0.06 | % | 0.14 | % | |||||
| Nonperforming loans to gross loans | 0.06 | % | 0.06 | % | 0.14 | % | |||||
| Nonperforming assets to gross loans and OREO | 0.06 | % | 0.22 | % | 0.32 | % | |||||
| Nonperforming assets to total assets | 0.05 | % | 0.17 | % | 0.25 | % | |||||
| Nonaccrual loans by category: | |||||||||||
| Real estate mortgages: | |||||||||||
| Construction & Development | $ | - | $ | - | $ | 67 | |||||
| Residential Mortgages | 252 | 289 | 565 | ||||||||
| Commercial Real Estate Mortgages | 765 | 785 | 1,278 | ||||||||
| Commercial & Industrial | - | 8 | 312 | ||||||||
| Consumer and other | - | - | 23 | ||||||||
| Total | $ | 1,017 | $ | 1,082 | $ | 2,245 | |||||
(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.
| Allowance for Credit Losses | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||
| Average loans, net of unearned income | $ | 1,814,484 | $ | 1,740,582 | $ | 1,563,255 | $ | 1,711,006 | $ | 1,421,376 | |||||||||
| Loans, net of unearned income | 1,884,508 | 1,774,148 | 1,587,164 | 1,884,508 | 1,587,164 | ||||||||||||||
| Gross loans | 1,890,677 | 1,779,846 | 1,592,707 | 1,890,677 | 1,592,707 | ||||||||||||||
| Allowance for credit losses at beginning of the period | 22,181 | 21,385 | 18,423 | 20,156 | 14,844 | ||||||||||||||
| Impact of adoption of ASC 326 | - | - | - | (1,285 | ) | - | |||||||||||||
| Charge-offs: | |||||||||||||||||||
| Construction and development | - | 3 | - | 3 | 66 | ||||||||||||||
| Residential | - | - | - | - | 7 | ||||||||||||||
| Commercial | - | - | - | - | - | ||||||||||||||
| Commercial and industrial | 424 | - | 210 | 686 | 479 | ||||||||||||||
| Consumer and other | 2 | - | 18 | 8 | 26 | ||||||||||||||
| Total charge-offs | 426 | 3 | 228 | 697 | 578 | ||||||||||||||
| Recoveries: | |||||||||||||||||||
| Construction and development | - | - | - | - | - | ||||||||||||||
| Residential | 4 | 10 | 4 | 41 | 50 | ||||||||||||||
| Commercial | - | - | - | - | - | ||||||||||||||
| Commercial and industrial | 39 | - | 1 | 54 | 205 | ||||||||||||||
| Consumer and other | 1 | 16 | 18 | 19 | 30 | ||||||||||||||
| Total recoveries | 44 | 26 | 23 | 114 | 285 | ||||||||||||||
| Net charge-offs (recoveries) | $ | 382 | $ | (23 | ) | $ | 205 | $ | 583 | $ | 293 | ||||||||
| Provision for credit losses | $ | 2,579 | $ | 773 | $ | 1,938 | $ | 6,090 | $ | 5,605 | |||||||||
| Balance at end of the period | $ | 24,378 | $ | 22,181 | $ | 20,156 | $ | 24,378 | $ | 20,156 | |||||||||
| Allowance for credit losses on unfunded commitments at beginning of the period | $ | 1,524 | $ | 1,495 | $ | - | $ | - | $ | - | |||||||||
| Impact of adoption of ASC 326 | - | - | - | 1,285 | - | ||||||||||||||
| Provision for credit losses on unfunded commitments | (285 | ) | 29 | - | (46 | ) | - | ||||||||||||
| Balance at the end of the period | $ | 1,239 | $ | 1,524 | $ | - | $ | 1,239 | $ | - | |||||||||
| Allowance to loans, net of unearned income | 1.29 | % | 1.25 | % | 1.27 | % | 1.29 | % | 1.27 | % | |||||||||
| Allowance to gross loans | 1.29 | % | 1.25 | % | 1.27 | % | 1.29 | % | 1.27 | % | |||||||||
| Net charge-offs (recoveries) to average loans, net of unearned income(1) | 0.08 | % | (0.01 | )% | 0.05 | % | 0.03 | % | 0.02 | % | |||||||||
| Provision for credit losses to average loans, net of unearned income(1) | 0.56 | % | 0.18 | % | 0.49 | % | 0.36 | % | 0.39 | % | |||||||||
(1) Ratio is annualized.
Reconciliation of Non-GAAP Financial Measures
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.
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (Dollars in thousands, except share and per share amounts) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||
| Net income | $ | 8,896 | $ | 6,629 | $ | 10,592 | $ | 31,952 | $ | 27,071 | |||||||||
| Add: One-time retirement related expenses | - | - | - | 1,571 | - | ||||||||||||||
| Add: Professional fees related to ERC | - | (1,243 | ) | - | - | - | |||||||||||||
| Add: Net OREO losses | (154 | ) | (9 | ) | - | (156 | ) | - | |||||||||||
| Less: Employee retention related revenue | - | (5,100 | ) | - | - | - | |||||||||||||
| Less: Fee received on early loan payoff | 1,863 | - | - | 1,863 | - | ||||||||||||||
| Less: Net gain on sale of branches | - | - | 2,372 | - | 2,372 | ||||||||||||||
| Less: BOLI benefit claim | - | - | 774 | - | 774 | ||||||||||||||
| Less: Net gain (loss) on securities | 98 | (12 | ) | (86 | ) | 555 | (632 | ) | |||||||||||
| Less: Tax effect | (508 | ) | 926 | (549 | ) | (241 | ) | (418 | ) | ||||||||||
| Core net income | $ | 7,289 | $ | 9,563 | $ | 8,081 | $ | 31,190 | $ | 24,975 | |||||||||
| Average assets | $ | 2,303,398 | $ | 2,282,217 | $ | 1,994,087 | $ | 2,211,739 | $ | 1,893,046 | |||||||||
| Core return on average assets | 1.26 | % | 1.66 | % | 1.61 | % | 1.41 | % | 1.32 | % | |||||||||
| Net income | $ | 8,896 | $ | 6,629 | $ | 10,592 | $ | 31,952 | $ | 27,071 | |||||||||
| Add: One-time retirement related expenses | - | - | - | 1,571 | - | ||||||||||||||
| Add: Professional fees related to ERC | - | (1,243 | ) | - | - | - | |||||||||||||
| Add: Net OREO losses | (154 | ) | (9 | ) | - | (156 | ) | - | |||||||||||
| Add: Provision | 2,579 | 773 | 1,938 | 6,090 | 5,605 | ||||||||||||||
| Less: Employee retention related revenue | - | (5,100 | ) | - | - | - | |||||||||||||
| Less: Fee received on early loan payoff | 1,863 | - | - | 1,863 | - | ||||||||||||||
| Less: Net gain on sale of branches | - | - | 2,372 | - | 2,372 | ||||||||||||||
| Less: BOLI benefit claim | - | - | 774 | - | 774 | ||||||||||||||
| Less: Net gain (loss) on securities | 98 | (12 | ) | (86 | ) | 555 | (632 | ) | |||||||||||
| Add: Income taxes | 2,330 | 1,866 | 2,521 | 9,068 | 7,725 | ||||||||||||||
| Pretax pre-provision core net income | $ | 11,690 | $ | 13,128 | $ | 11,991 | $ | 46,107 | $ | 37,887 | |||||||||
| Average assets | $ | 2,303,398 | $ | 2,282,217 | $ | 1,994,087 | $ | 2,211,739 | $ | 1,893,046 | |||||||||
| Pretax pre-provision core return on average assets | 2.01 | % | 2.28 | % | 2.39 | % | 2.08 | % | 2.00 | % | |||||||||
| Net interest income | $ | 20,404 | $ | 20,731 | $ | 20,884 | $ | 80,112 | $ | 71,338 | |||||||||
| Add: Fully-taxable equivalent adjustments(1) | 99 | 70 | 84 | 312 | 335 | ||||||||||||||
| Net interest income - FTE | $ | 20,503 | $ | 20,801 | $ | 20,968 | $ | 80,424 | $ | 71,673 | |||||||||
| Net interest margin | 3.69 | % | 3.78 | % | 4.38 | % | 3.81 | % | 3.99 | % | |||||||||
| Effect of fully-taxable equivalent adjustments(1) | 0.02 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.02 | % | |||||||||
| Net interest margin - FTE | 3.71 | % | 3.79 | % | 4.39 | % | 3.82 | % | 4.01 | % | |||||||||
| Total stockholders' equity | $ | 214,964 | $ | 201,924 | $ | 181,719 | $ | 214,964 | $ | 181,719 | |||||||||
| Less: Intangible assets | 17,761 | 17,843 | 18,088 | 17,761 | 18,088 | ||||||||||||||
| Tangible common equity | $ | 197,203 | $ | 184,081 | $ | 163,631 | $ | 197,203 | $ | 163,631 | |||||||||
| (1) Assumes a 24.0% tax rate. | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (Dollars in thousands, except share and per share amounts) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||
| Core net income | $ | 7,289 | $ | 9,563 | $ | 8,081 | $ | 31,190 | $ | 24,975 | |||||||||
| Diluted weighted average shares outstanding | 9,021,358 | 9,040,687 | 8,932,585 | 9,038,004 | 8,949,669 | ||||||||||||||
| Diluted core earnings per share | $ | 0.81 | $ | 1.06 | $ | 0.90 | $ | 3.45 | $ | 2.79 | |||||||||
| Common shares outstanding at year or period end | 8,841,349 | 8,834,168 | 8,706,920 | 8,841,349 | 8,706,920 | ||||||||||||||
| Tangible book value per share | $ | 22.30 | $ | 20.84 | $ | 18.79 | $ | 22.30 | $ | 18.79 | |||||||||
| Total assets at end of period | $ | 2,446,339 | $ | 2,296,527 | $ | 2,045,204 | $ | 2,446,339 | $ | 2,045,204 | |||||||||
| Less: Intangible assets | 17,761 | 17,843 | 18,088 | 17,761 | 18,088 | ||||||||||||||
| Adjusted assets at end of period | $ | 2,428,578 | $ | 2,278,684 | $ | 2,027,116 | $ | 2,428,578 | $ | 2,027,116 | |||||||||
| Tangible common equity to tangible assets | 8.12 | % | 8.08 | % | 8.07 | % | 8.12 | % | 8.07 | % | |||||||||
| Total average shareholders equity | $ | 207,324 | $ | 202,955 | $ | 176,769 | $ | 197,680 | $ | 174,107 | |||||||||
| Less: Average intangible assets | 17,809 | 17,893 | 18,134 | 17,932 | 18,236 | ||||||||||||||
| Average tangible common equity | $ | 189,515 | $ | 185,062 | $ | 158,635 | $ | 179,748 | $ | 155,871 | |||||||||
| Net income to common shareholders | $ | 8,896 | $ | 6,629 | $ | 10,592 | $ | 31,952 | $ | 27,071 | |||||||||
| Return on average tangible common equity | 18.62 | % | 14.21 | % | 26.49 | % | 17.78 | % | 17.37 | % | |||||||||
| Average tangible common equity | $ | 189,515 | $ | 185,062 | $ | 158,635 | $ | 179,748 | $ | 155,871 | |||||||||
| Core net income | $ | 7,289 | $ | 9,563 | $ | 8,081 | $ | 31,190 | $ | 24,975 | |||||||||
| Core return on average tangible common equity | 15.26 | % | 20.50 | % | 20.21 | % | 17.35 | % | 16.02 | % | |||||||||
| Net interest income | $ | 20,404 | $ | 20,731 | $ | 20,884 | $ | 80,112 | $ | 71,338 | |||||||||
| Add: Noninterest income | 3,118 | (2,894 | ) | 4,603 | 8,874 | 8,677 | |||||||||||||
| Less: Employee retention related revenue | - | (5,100 | ) | - | - | - | |||||||||||||
| Less: Fee received on early loan payoff | 1,863 | - | - | 1,863 | - | ||||||||||||||
| Less: Gain on sale of branches | - | - | 2,600 | - | 2,600 | ||||||||||||||
| Less: BOLI benefit claim | - | - | 774 | - | 774 | ||||||||||||||
| Less: Net gain (loss) on securities | 98 | (12 | ) | (86 | ) | 555 | (632 | ) | |||||||||||
| Operating revenue | $ | 21,561 | $ | 22,949 | $ | 22,199 | $ | 86,568 | $ | 77,273 | |||||||||
| Expenses: | |||||||||||||||||||
| Total noninterest expense | $ | 9,717 | $ | 8,569 | $ | 10,436 | $ | 41,876 | $ | 39,614 | |||||||||
| Less: One-time retirement related expenses | - | - | - | 1,571 | - | ||||||||||||||
| Less: Professional fees related to ERC | - | (1,243 | ) | - | - | - | |||||||||||||
| Less: Net OREO losses | (154 | ) | (9 | ) | - | (156 | ) | - | |||||||||||
| Less: Loss on sale of branches | - | - | 228 | - | 228 | ||||||||||||||
| Adjusted noninterest expenses | $ | 9,871 | $ | 9,821 | $ | 10,208 | $ | 40,461 | $ | 39,386 | |||||||||
| Core efficiency ratio | 45.78 | % | 42.79 | % | 45.98 | % | 46.74 | % | 50.97 | % | |||||||||
