Second Quarter 2024 Performance and Operational Highlights
- Net income of $8.2 million, or $0.90 per diluted share
- Core net income(1) of $9.1 million, or $1.00 per diluted share(1)
- Net interest income of $21.6 million, an increase of $740,000 from the prior quarter
- Net interest margin ("NIM") of 3.56%, down 3 basis points from the prior quarter
- NIM of 3.57% on a fully-taxable equivalent basis ("NIM - FTE")(1)
- Return on average assets ("ROAA") of 1.29%; return on average stockholders' equity ("ROAE") of 14.55%; and return on average tangible common equity ("ROATCE")(1) of 15.79%
- Core ROAA(1) of 1.43%; and core ROATCE(1) of 17.44%
- Efficiency ratio of 49.78%; and core efficiency ratio of 44.75%
- Linked-quarter loans grew 10.3% annualized
- Linked-quarter total deposits grew 12.6% annualized
- Linked-quarter total deposits, excluding brokered deposits, grew 15.2% 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., July 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 $8.2 million, or $0.90 diluted earnings per share, for the second quarter of 2024. This compares to net income of $8.1 million, or $0.90 diluted earnings per share, for the first quarter of 2024, and net income of $8.8 million, or $0.98 diluted earnings per share, for the second quarter of 2023. The Company reported core net income of $9.1 million, or $1.00 diluted core earnings per share, for the second quarter of 2024. This compares to core net income of $8.1 million, or $0.90 diluted core earnings per share, for the first quarter of 2024, and core net income of $7.1 million, or $0.79 diluted core earnings per share, for the second quarter of 2023 (see "Reconciliation of Non-GAAP Financial Measures").
| CEO Commentary | ||||
| Mark Chambers, Chief Executive Officer and President of Southern States said, "We generated consistent growth in the second quarter with continued progress in business development adding high-quality loans and core deposits. We are seeing well-balanced loan growth across all our major areas of lending. Our total loan growth of 10.3% (annualized from the prior quarter) and total deposit growth of 12.6% reflected our ability to perform well through economic cycles." | ||||
| "We continue to be a high-performing bank with strong profitability metrics including ROATCE of 15.79%. Effective expense management resulted in our second highest core efficiency ratio of 44.75%." | ||||
| "Consistent with our prudent approach to risk management, we have a strong and durable foundation with high levels of capital reserves and strong credit quality. The addition of CBB Bancorp, which we expect to close on August 1, will strengthen our platform, drive loan and deposit growth, and expand our franchise in growing and attractive Georgia markets. Our two organizations are culturally aligned with a 'Customer First' mindset and we are excited to realize all the synergies that will benefit our customers, employees, shareholders, and the communities we serve." | ||||
| Net Interest Income and Net Interest Margin |
| Three Months Ended | % Change June 30, 2024 vs. | ||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2023 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Average interest-earning assets | $ | 2,440,425 | $ | 2,336,369 | $ | 2,091,998 | 4.5 | % | 16.7 | % | |||||||
| Net interest income | $ | 21,579 | $ | 20,839 | $ | 19,432 | 3.6 | % | 11.0 | % | |||||||
| Net interest margin | 3.56 | % | 3.59 | % | 3.73 | % | (3) | bps | (17) | bps | |||||||
Net interest income for the second quarter of 2024 was $21.6 million, an increase of 3.6% from $20.8 million in the first quarter of 2024. The increase was primarily driven by a higher yield on interest-earning assets resulting from growth at higher interest rates, which more than offset a higher cost of interest-bearing deposits due to both higher interest rates and competition.
Relative to the second quarter of 2023, net interest income increased $2.1 million, or 11.0%. The increase was mainly driven by growth, which offset the slight decline in net interest margin.
Net interest margin for the second quarter of 2024 was 3.56%, compared to 3.59% for the first quarter of 2024. 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 second quarter of 2023, net interest margin decreased from 3.73%. 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. 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 June 30, 2024 vs. | |||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2023 | ||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Service charges on deposit accounts | $ | 462 | $ | 463 | $ | 456 | (0.2 | )% | 1.3 | % | ||||||
| Swap fees | 4 | 15 | 173 | (73.3 | )% | (97.7 | )% | |||||||||
| SBA/USDA fees | 58 | 64 | 66 | (9.4 | )% | (12.1 | )% | |||||||||
| Mortgage origination fees | 92 | 96 | 188 | (4.2 | )% | (51.1 | )% | |||||||||
| Net gain (loss) on securities | 20 | (12 | ) | (45 | ) | (266.7 | )% | (144.4 | )% | |||||||
| Employee retention credit and related revenue ("ERC") | - | - | 5,100 | N/A | N/A | |||||||||||
| Other operating income | 732 | 642 | 924 | 14.0 | % | (20.8 | )% | |||||||||
| Total noninterest income | $ | 1,368 | $ | 1,268 | $ | 6,862 | 7.9 | % | (80.1 | )% | ||||||
Noninterest income for the second quarter of 2024 was $1.4 million, an increase of 7.9% from $1.3 million in the first quarter of 2024. The increase primarily reflected the purchase of additional bank owned life insurance ("BOLI") that resulted in increased BOLI income, a realized net gain on securities during the second quarter of 2024 compared to a net loss on securities during the first quarter of 2024, and an increase in interchange fees.
Relative to the second quarter of 2023, noninterest income decreased 80.1% from $6.9 million. In the second quarter of 2023, the Company received $5.1 million in ERC from the Internal Revenue Service ("IRS"), which was subsequently returned in the third quarter of 2023 as a result of revised IRS eligibility guidelines. Other operating income decreased as a result of the Company receiving less nonrecurring income from a third party during the second quarter of 2024. In addition, there was a decline in swap fees during the second quarter of 2024, substantially as a result of the Company not participating in any swap transactions.
| Noninterest Expense |
| Three Months Ended | % Change June 30, 2024 vs. | |||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2023 | ||||||||||
| (Dollars in thousands) | ||||||||||||||
| Salaries and employee benefits | $ | 6,112 | $ | 6,231 | $ | 7,863 | (1.9 | )% | (22.3 | )% | ||||
| Equipment and occupancy expenses | 667 | 689 | 694 | (3.2 | )% | (3.9 | )% | |||||||
| Data processing fees | 686 | 643 | 646 | 6.7 | % | 6.2 | % | |||||||
| Regulatory assessments | 375 | 360 | 180 | 4.2 | % | 108.3 | % | |||||||
| Professional fees related to ERC | - | - | 1,243 | N/A | N/A | |||||||||
| Other operating expenses | 3,571 | 2,452 | 2,806 | 45.6 | % | 27.3 | % | |||||||
| Total noninterest expenses | $ | 11,411 | $ | 10,375 | $ | 13,432 | 10.0 | % | (15.0 | )% | ||||
Noninterest expense for the second quarter of 2024 was $11.4 million, an increase of 10.0% from $10.4 million in the first quarter of 2024. The second quarter of 2024 included a $1.2 million wire fraud loss. This was not a systematic issue with systems, only a procedural incident. The increase was partially offset by a reduction in salaries and benefits during the second quarter of 2024, substantially due to higher payroll taxes and 401k matching brought about by incentive expense paid during the first quarter of 2024.
Relative to the second quarter of 2023, noninterest expense decreased 15.0% from $13.4 million. The decrease was primarily attributable to a decrease in salaries and benefits, substantially as a result of one-time retirement-related expenses of $1.6 million paid to our former CEO in May 2023 and professional fees paid to a third party during the second quarter of 2023 related to ERC, which were subsequently refunded during the third quarter of 2023. These decreases were significantly offset by the wire fraud loss the Company incurred during the second quarter of 2024. As previously mentioned, this was not a systematic issue with systems, only a procedural incident.
| Loans and Credit Quality |
| Three Months Ended | % Change June 30, 2024 vs. | ||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2023 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Gross loans | $ | 2,021,877 | $ | 1,971,396 | $ | 1,722,278 | 2.6 | % | 17.4 | % | |||||||
| Unearned income | (6,443 | ) | (6,247 | ) | (5,766 | ) | 3.1 | % | 11.7 | % | |||||||
| Loans, net of unearned income ("Loans") | 2,015,434 | 1,965,149 | 1,716,512 | 2.6 | % | 17.4 | % | ||||||||||
| Average loans, net of unearned ("Average loans") | $ | 1,987,533 | $ | 1,916,288 | $ | 1,676,816 | 3.7 | % | 18.5 | % | |||||||
| Nonperforming loans ("NPL") | $ | 3,784 | $ | 3,446 | $ | 1,010 | 9.8 | % | 274.7 | % | |||||||
| Provision for credit losses | $ | 1,067 | $ | 1,236 | $ | 1,557 | (13.7 | )% | (31.5 | )% | |||||||
| Allowance for credit losses ("ACL") | $ | 25,828 | $ | 25,144 | $ | 21,385 | 2.7 | % | 20.8 | % | |||||||
| Net charge-offs | $ | 383 | $ | 470 | $ | 27 | (18.5 | )% | 1318.5 | % | |||||||
| NPL to gross loans | 0.19 | % | 0.17 | % | 0.06 | % | |||||||||||
| Net charge-offs to average loans(1) | 0.08 | % | 0.10 | % | 0.01 | % | |||||||||||
| ACL to loans | 1.28 | % | 1.28 | % | 1.25 | % | |||||||||||
| (1) Ratio is annualized. | |||||||||||||||||
Loans, net of unearned income, were $2.0 billion at June 30, 2024, up $50.3 million from March 31, 2024 and up $298.9 million from June 30, 2023. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.
Nonperforming loans totaled $3.8 million, or 0.19% of gross loans, at June 30, 2024, compared with $3.4 million, or 0.17% of gross loans, at March 31, 2024, and $1.0 million, or 0.06% of gross loans, at June 30, 2023. The $338,000 net increase in nonperforming loans in the second quarter of 2024 was primarily attributable to a commercial and industrial loan that was added to nonaccrual status and partially offset by a commercial and industrial loan that was charged-off. The $2.8 million net increase in nonperforming loans from June 30, 2023, was primarily attributable to a significant commercial real estate loan and two commercial and industrial loans that were added to nonaccrual status.
The Company recorded a provision for credit losses of $1.1 million for the second quarter of 2024, compared to $1.2 million for the first quarter of 2024. Provision in the second quarter of 2024 was based primarily on loan growth along with qualitative economic factors and individually analyzed loans.
Net charge-offs for the second quarter of 2024 were $383,000, or 0.08% of average loans on an annualized basis, compared to net charge-offs of $470,000, or 0.10% of average loans on an annualized basis, for the first quarter of 2024, and net charge-offs of $27,000, or 0.01% of average loans on an annualized basis, for the second quarter of 2023. The charge-offs recorded during the the first and second quarters of 2024 were substantially related to the charge-off of approximately 70% of a purchased pool of consumer loans, as the borrower has filed for bankruptcy. This was a conservative approach based on uncertainty.
The Company's allowance for credit losses was 1.28% of total loans and 682.56% of nonperforming loans at June 30, 2024, compared with 1.28% of total loans and 729.66% of nonperforming loans at March 31, 2024. Allowance for credit losses on unfunded commitments was $1.2 million at June 30, 2024.
| Deposits |
| Three Months Ended | % Change June 30, 2024 vs. | ||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2023 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Noninterest-bearing deposits | $ | 416,068 | $ | 416,704 | $ | 449,433 | (0.2 | )% | (7.4 | )% | |||||||
| Interest-bearing deposits | 1,759,610 | 1,693,094 | 1,474,478 | 3.9 | % | 19.3 | % | ||||||||||
| Total deposits | $ | 2,175,678 | $ | 2,109,798 | $ | 1,923,911 | 3.1 | % | 13.1 | % | |||||||
| Uninsured deposits | $ | 645,283 | $ | 610,122 | $ | 553,084 | 5.8 | % | 16.7 | % | |||||||
| Uninsured deposits to total deposits | 29.66 | % | 28.92 | % | 28.75 | % | |||||||||||
| Noninterest deposits to total deposits | 19.12 | % | 19.75 | % | 23.36 | % | |||||||||||
Total deposits were $2.2 billion at June 30, 2024, up from $2.1 billion at March 31, 2024 and $1.9 billion at June 30, 2023. The $65.9 million increase in total deposits in the second quarter was primarily due to an increase of $66.5 million in interest-bearing deposits, which included a $2.7 million decrease in brokered deposits, partially offset by a $636,000 decrease in noninterest-bearing deposits. Total brokered deposits were $288.3 million at June 30, 2024, compared to 291.0 million at March 31, 2024.
| Capital |
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||||||||
| Company | Bank | Company | Bank | Company | Bank | ||||||||||||
| Tier 1 capital ratio to average assets | 8.72 | % | 11.52 | % | 8.79 | % | 11.67 | % | 8.70 | % | 11.82 | % | |||||
| Risk-based capital ratios: | |||||||||||||||||
| Common equity tier 1 ("CET1") capital ratio | 9.54 | % | 12.61 | % | 9.39 | % | 12.47 | % | 9.11 | % | 12.37 | % | |||||
| Tier 1 capital ratio | 9.54 | % | 12.61 | % | 9.39 | % | 12.47 | % | 9.11 | % | 12.37 | % | |||||
| Total capital ratio | 14.50 | % | 13.77 | % | 14.42 | % | 13.63 | % | 14.42 | % | 13.47 | % | |||||
As of June 30, 2024, total stockholders' equity was $230.6 million, up from $222.9 million at March 31, 2024. The increase of $7.7 million was substantially due to earnings growth.
| 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, 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.
| Contact Information | ||||
| Lynn Joyce | Margaret Boyce | |||
| (205) 820-8065 | (310) 622-8247 | |||
| ljoyce@ssbank.bank | ssbankir@finprofiles.com | |||
| SELECT FINANCIAL DATA | |||||||||||||||||||
| (Dollars in thousands, except share and per share amounts) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Results of Operations | |||||||||||||||||||
| Interest income | $ | 41,007 | $ | 38,736 | $ | 32,185 | $ | 79,743 | $ | 60,884 | |||||||||
| Interest expense | 19,428 | 17,897 | 12,753 | 37,325 | 21,906 | ||||||||||||||
| Net interest income | 21,579 | 20,839 | 19,432 | 42,418 | 38,978 | ||||||||||||||
| Provision for credit losses | 1,067 | 1,236 | 1,557 | 2,303 | 2,738 | ||||||||||||||
| Net interest income after provision | 20,512 | 19,603 | 17,875 | 40,115 | 36,240 | ||||||||||||||
| Noninterest income | 1,368 | 1,268 | 6,862 | 2,636 | 8,648 | ||||||||||||||
| Noninterest expense | 11,411 | 10,375 | 13,432 | 21,786 | 23,590 | ||||||||||||||
| Income tax expense | 2,271 | 2,377 | 2,549 | 4,648 | 4,871 | ||||||||||||||
| Net income | $ | 8,198 | $ | 8,119 | $ | 8,756 | $ | 16,317 | $ | 16,427 | |||||||||
| Core net income(1) | $ | 9,058 | $ | 8,128 | $ | 7,058 | $ | 17,186 | $ | 14,339 | |||||||||
| Share and Per Share Data | |||||||||||||||||||
| Shares issued and outstanding | 8,908,130 | 8,894,794 | 8,738,814 | 8,908,130 | 8,738,814 | ||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic | 8,957,608 | 8,913,477 | 8,763,635 | 8,935,542 | 8,763,046 | ||||||||||||||
| Diluted | 9,070,568 | 9,043,122 | 8,950,847 | 9,062,548 | 9,001,600 | ||||||||||||||
| Earnings per share: | |||||||||||||||||||
| Basic | $ | 0.91 | $ | 0.91 | $ | 1.00 | $ | 1.82 | $ | 1.87 | |||||||||
| Diluted | 0.90 | 0.90 | 0.98 | 1.80 | 1.82 | ||||||||||||||
| Core - diluted(1) | 1.00 | 0.90 | 0.79 | 1.90 | 1.59 | ||||||||||||||
| Book value per share | 25.88 | 25.06 | 22.57 | 25.88 | 22.57 | ||||||||||||||
| Tangible book value per share(1) | 23.91 | 23.07 | 20.52 | 23.91 | 20.52 | ||||||||||||||
| Cash dividends per common share | 0.09 | 0.09 | 0.09 | 0.18 | 0.18 | ||||||||||||||
| Performance and Financial Ratios | |||||||||||||||||||
| ROAA | 1.29 | % | 1.33 | % | 1.60 | % | 1.31 | % | 1.56 | % | |||||||||
| ROAE | 14.55 | % | 14.87 | % | 18.15 | % | 14.71 | % | 17.43 | % | |||||||||
| Core ROAA(1) | 1.43 | % | 1.34 | % | 1.29 | % | 1.38 | % | 1.36 | % | |||||||||
| ROATCE(1) | 15.79 | % | 16.17 | % | 20.01 | % | 15.98 | % | 19.25 | % | |||||||||
| Core ROATCE(1) | 17.44 | % | 16.19 | % | 16.13 | % | 16.83 | % | 16.80 | % | |||||||||
| NIM | 3.56 | % | 3.59 | % | 3.73 | % | 3.57 | % | 3.89 | % | |||||||||
| NIM - FTE(1) | 3.57 | % | 3.60 | % | 3.74 | % | 3.58 | % | 3.90 | % | |||||||||
| Net interest spread | 2.59 | % | 2.63 | % | 2.86 | % | 2.60 | % | 3.08 | % | |||||||||
| Yield on loans | 7.17 | % | 7.06 | % | 6.61 | % | 7.11 | % | 6.50 | % | |||||||||
| Yield on interest-earning assets | 6.76 | % | 6.67 | % | 6.17 | % | 6.71 | % | 6.08 | % | |||||||||
| Cost of interest-bearing liabilities | 4.17 | % | 4.04 | % | 3.31 | % | 4.11 | % | 3.00 | % | |||||||||
| Cost of funds(2) | 3.41 | % | 3.27 | % | 2.58 | % | 3.34 | % | 2.31 | % | |||||||||
| Cost of interest-bearing deposits | 4.07 | % | 3.92 | % | 3.12 | % | 4.00 | % | 2.79 | % | |||||||||
| Cost of total deposits | 3.27 | % | 3.12 | % | 2.38 | % | 3.20 | % | 2.11 | % | |||||||||
| Noninterest deposits to total deposits | 19.12 | % | 19.75 | % | 23.36 | % | 19.12 | % | 23.36 | % | |||||||||
| Core deposits to total deposits | 81.78 | % | 81.45 | % | 86.43 | % | 81.78 | % | 86.43 | % | |||||||||
| Uninsured deposits to total deposits | 29.66 | % | 28.92 | % | 28.75 | % | 29.66 | % | 28.75 | % | |||||||||
| Total loans to total deposits | 92.63 | % | 93.14 | % | 89.22 | % | 92.63 | % | 89.22 | % | |||||||||
| Efficiency ratio | 49.78 | % | 46.90 | % | 51.00 | % | 48.36 | % | 50.02 | % | |||||||||
| Core efficiency ratio(1) | 44.75 | % | 46.90 | % | 49.96 | % | 45.81 | % | 49.38 | % | |||||||||
(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 | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Financial Condition (ending) | |||||||||||||||||||
| Total loans | $ | 2,015,434 | $ | 1,965,149 | $ | 1,716,512 | $ | 2,015,434 | $ | 1,716,512 | |||||||||
| Total securities | 204,131 | 197,006 | 182,717 | 204,131 | 182,717 | ||||||||||||||
| Total assets | 2,572,011 | 2,510,975 | 2,277,803 | 2,572,011 | 2,277,803 | ||||||||||||||
| Total noninterest-bearing deposits | 416,068 | 416,704 | 449,433 | 416,068 | 449,433 | ||||||||||||||
| Total core deposits(1) | 1,779,253 | 1,718,333 | 1,662,855 | 1,779,253 | 1,662,855 | ||||||||||||||
| Total deposits | 2,175,678 | 2,109,798 | 1,923,911 | 2,175,678 | 1,923,911 | ||||||||||||||
| Total borrowings | 136,873 | 146,773 | 131,472 | 136,873 | 131,472 | ||||||||||||||
| Total liabilities | 2,341,430 | 2,288,094 | 2,080,553 | 2,341,430 | 2,080,553 | ||||||||||||||
| Total shareholders' equity | 230,581 | 222,881 | 197,250 | 230,581 | 197,250 | ||||||||||||||
| Financial Condition (average) | |||||||||||||||||||
| Total loans | $ | 1,987,533 | $ | 1,916,288 | $ | 1,676,816 | $ | 1,951,910 | $ | 1,643,376 | |||||||||
| Total securities | 210,678 | 208,954 | 196,731 | 209,816 | 194,552 | ||||||||||||||
| Total other interest-earning assets | 242,214 | 211,127 | 218,451 | 226,671 | 182,447 | ||||||||||||||
| Total interest-earning assets | 2,440,425 | 2,336,369 | 2,091,998 | 2,388,397 | 2,020,375 | ||||||||||||||
| Total assets | 2,553,010 | 2,447,278 | 2,200,843 | 2,500,144 | 2,129,328 | ||||||||||||||
| Total noninterest-bearing deposits | 420,885 | 416,141 | 438,987 | 418,513 | 438,862 | ||||||||||||||
| Total interest-bearing deposits | 1,729,682 | 1,633,307 | 1,412,047 | 1,681,494 | 1,356,648 | ||||||||||||||
| Total deposits | 2,150,567 | 2,049,448 | 1,851,034 | 2,100,007 | 1,795,510 | ||||||||||||||
| Total borrowings | 143,189 | 148,771 | 131,411 | 145,980 | 118,229 | ||||||||||||||
| Total interest-bearing liabilities | 1,872,871 | 1,782,078 | 1,543,458 | 1,827,474 | 1,474,877 | ||||||||||||||
| Total shareholders' equity | 226,527 | 219,622 | 193,516 | 223,075 | 190,096 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Nonperforming loans | $ | 3,784 | $ | 3,446 | $ | 1,010 | $ | 3,784 | $ | 1,010 | |||||||||
| Other real estate owned ("OREO") | $ | 33 | $ | 33 | $ | 2,870 | $ | 33 | $ | 2,870 | |||||||||
| Nonperforming assets ("NPA") | $ | 3,817 | $ | 3,479 | $ | 3,880 | $ | 3,817 | $ | 3,880 | |||||||||
| Net charge-offs to average loans(2) | 0.08 | % | 0.10 | % | 0.01 | % | 0.09 | % | 0.03 | % | |||||||||
| Provision for credit losses to average loans(2) | 0.22 | % | 0.26 | % | 0.37 | % | 0.24 | % | 0.34 | % | |||||||||
| ACL to loans | 1.28 | % | 1.28 | % | 1.25 | % | 1.28 | % | 1.25 | % | |||||||||
| ACL to gross loans | 1.28 | % | 1.28 | % | 1.24 | % | 1.28 | % | 1.24 | % | |||||||||
| ACL to NPL | 682.56 | % | 729.66 | % | 2117.33 | % | 682.56 | % | 2117.33 | % | |||||||||
| NPL to loans | 0.19 | % | 0.18 | % | 0.06 | % | 0.19 | % | 0.06 | % | |||||||||
| NPL to gross loans | 0.19 | % | 0.17 | % | 0.06 | % | 0.19 | % | 0.06 | % | |||||||||
| NPA to gross loans and OREO | 0.19 | % | 0.18 | % | 0.22 | % | 0.19 | % | 0.22 | % | |||||||||
| NPA to total assets | 0.15 | % | 0.14 | % | 0.17 | % | 0.15 | % | 0.17 | % | |||||||||
| Regulatory and Other Capital Ratios | |||||||||||||||||||
| Total shareholders' equity to total assets | 8.97 | % | 8.88 | % | 8.66 | % | 8.97 | % | 8.66 | % | |||||||||
| Tangible common equity to tangible assets(3) | 8.34 | % | 8.23 | % | 7.94 | % | 8.34 | % | 7.94 | % | |||||||||
| Tier 1 capital ratio to average assets | 8.72 | % | 8.79 | % | 8.70 | % | 8.72 | % | 8.70 | % | |||||||||
| Risk-based capital ratios: | |||||||||||||||||||
| CET1 capital ratio | 9.54 | % | 9.39 | % | 9.11 | % | 9.51 | % | 9.11 | % | |||||||||
| Tier 1 capital ratio | 9.54 | % | 9.39 | % | 9.11 | % | 9.51 | % | 9.11 | % | |||||||||
| Total capital ratio | 14.50 | % | 14.42 | % | 14.42 | % | 14.45 | % | 14.42 | % | |||||||||
(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) | |||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||
| (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | ||||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 21,598 | $ | 20,470 | $ | 19,710 | $ | 21,299 | |||||||
| Interest-bearing deposits in banks | 140,440 | 129,917 | 134,846 | 159,818 | |||||||||||
| Federal funds sold | 76,334 | 86,736 | 96,095 | 84,812 | |||||||||||
| Total cash and cash equivalents | 238,372 | 237,123 | 250,651 | 265,929 | |||||||||||
| Securities available for sale, at fair value | 184,510 | 177,379 | 179,000 | 163,075 | |||||||||||
| Securities held to maturity, at amortized cost | 19,621 | 19,627 | 19,632 | 19,642 | |||||||||||
| Other equity securities, at fair value | 3,658 | 3,638 | 3,649 | 3,762 | |||||||||||
| Restricted equity securities, at cost | 4,633 | 5,108 | 5,684 | 3,862 | |||||||||||
| Loans held for sale | 1,716 | 425 | 450 | 1,589 | |||||||||||
| Loans, net of unearned income | 2,015,434 | 1,965,149 | 1,884,508 | 1,716,512 | |||||||||||
| Less allowance for credit losses | 25,828 | 25,144 | 24,378 | 21,385 | |||||||||||
| Loans, net | 1,989,606 | 1,940,005 | 1,860,130 | 1,695,127 | |||||||||||
| Premises and equipment, net | 26,192 | 26,262 | 26,426 | 26,957 | |||||||||||
| Accrued interest receivable | 9,654 | 9,561 | 8,711 | 7,372 | |||||||||||
| Bank owned life insurance | 33,000 | 30,075 | 29,884 | 29,521 | |||||||||||
| Annuities | 15,918 | 15,939 | 15,036 | 15,359 | |||||||||||
| Foreclosed assets | 33 | 33 | 33 | 2,870 | |||||||||||
| Goodwill | 16,862 | 16,862 | 16,862 | 16,862 | |||||||||||
| Core deposit intangible | 735 | 817 | 899 | 1,062 | |||||||||||
| Other assets | 27,501 | 28,121 | 29,616 | 24,814 | |||||||||||
| Total assets | $ | 2,572,011 | $ | 2,510,975 | $ | 2,446,663 | $ | 2,277,803 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing | $ | 416,068 | $ | 416,704 | $ | 437,959 | $ | 449,433 | |||||||
| Interest-bearing | 1,759,610 | 1,693,094 | 1,580,230 | 1,474,478 | |||||||||||
| Total deposits | 2,175,678 | 2,109,798 | 2,018,189 | 1,923,911 | |||||||||||
| Other borrowings | 8,000 | 7,997 | 26,994 | (13 | ) | ||||||||||
| FHLB advances | 42,000 | 52,000 | 70,000 | 45,000 | |||||||||||
| Subordinated notes | 86,873 | 86,776 | 86,679 | 86,485 | |||||||||||
| Accrued interest payable | 2,024 | 1,805 | 1,519 | 1,063 | |||||||||||
| Other liabilities | 26,855 | 29,718 | 28,318 | 24,107 | |||||||||||
| Total liabilities | 2,341,430 | 2,288,094 | 2,231,699 | 2,080,553 | |||||||||||
| Stockholders' equity: | |||||||||||||||
| Common stock | 44,813 | 44,746 | 44,479 | 43,831 | |||||||||||
| Capital surplus | 79,248 | 79,282 | 78,361 | 77,101 | |||||||||||
| Retained earnings | 117,233 | 109,838 | 102,523 | 88,603 | |||||||||||
| Accumulated other comprehensive loss | (8,333 | ) | (8,401 | ) | (8,379 | ) | (10,799 | ) | |||||||
| Unvested restricted stock | (826 | ) | (1,030 | ) | (466 | ) | (709 | ) | |||||||
| Vested restricted stock units | (1,554 | ) | (1,554 | ) | (1,554 | ) | (777 | ) | |||||||
| Total stockholders' equity | 230,581 | 222,881 | 214,964 | 197,250 | |||||||||||
| Total liabilities and stockholders' equity | $ | 2,572,011 | $ | 2,510,975 | $ | 2,446,663 | $ | 2,277,803 | |||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Interest income: | ||||||||||||||||
| Loans, including fees | $ | 35,421 | $ | 33,628 | $ | 27,630 | $ | 69,049 | $ | 52,965 | ||||||
| Taxable securities | 2,039 | 1,981 | 1,641 | 4,020 | 3,024 | |||||||||||
| Nontaxable securities | 231 | 229 | 228 | 460 | 519 | |||||||||||
| Other interest and dividends | 3,316 | 2,898 | 2,686 | 6,214 | 4,376 | |||||||||||
| Total interest income | 41,007 | 38,736 | 32,185 | 79,743 | 60,884 | |||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 17,511 | 15,906 | 10,998 | 33,417 | 18,766 | |||||||||||
| Other borrowings | 1,917 | 1,991 | 1,755 | 3,908 | 3,140 | |||||||||||
| Total interest expense | 19,428 | 17,897 | 12,753 | 37,325 | 21,906 | |||||||||||
| Net interest income | 21,579 | 20,839 | 19,432 | 42,418 | 38,978 | |||||||||||
| Provision for credit losses | 1,067 | 1,236 | 1,557 | 2,303 | 2,738 | |||||||||||
| Net interest income after provision for credit losses | 20,512 | 19,603 | 17,875 | 40,115 | 36,240 | |||||||||||
| Noninterest income: | ||||||||||||||||
| Service charges on deposit accounts | 462 | 463 | 456 | 925 | 906 | |||||||||||
| Swap fees | 4 | 15 | 173 | 19 | 169 | |||||||||||
| SBA/USDA fees | 58 | 64 | 66 | 122 | 200 | |||||||||||
| Mortgage origination fees | 92 | 96 | 188 | 188 | 288 | |||||||||||
| Net gain (loss) on securities | 20 | (12 | ) | (45 | ) | 8 | 469 | |||||||||
| Employee retention credit and related revenue | - | - | 5,100 | - | 5,100 | |||||||||||
| Other operating income | 732 | 642 | 924 | 1,374 | 1,516 | |||||||||||
| Total noninterest income | 1,368 | 1,268 | 6,862 | 2,636 | 8,648 | |||||||||||
| Noninterest expenses: | ||||||||||||||||
| Salaries and employee benefits | 6,112 | 6,231 | 7,863 | 12,343 | 14,174 | |||||||||||
| Equipment and occupancy expenses | 667 | 689 | 694 | 1,356 | 1,377 | |||||||||||
| Data processing fees | 686 | 643 | 646 | 1,329 | 1,239 | |||||||||||
| Regulatory assessments | 375 | 360 | 180 | 735 | 522 | |||||||||||
| Professional fees related to ERC | - | - | 1,243 | - | 1,243 | |||||||||||
| Other operating expenses | 3,571 | 2,452 | 2,806 | 6,023 | 5,035 | |||||||||||
| Total noninterest expenses | 11,411 | 10,375 | 13,432 | 21,786 | 23,590 | |||||||||||
| Income before income taxes | 10,469 | 10,496 | 11,305 | 20,965 | 21,298 | |||||||||||
| Income tax expense | 2,271 | 2,377 | 2,549 | 4,648 | 4,871 | |||||||||||
| Net income | $ | 8,198 | $ | 8,119 | $ | 8,756 | $ | 16,317 | $ | 16,427 | ||||||
| Basic earnings per share | $ | 0.91 | $ | 0.91 | $ | 1.00 | $ | 1.82 | $ | 1.87 | ||||||
| Diluted earnings per share | $ | 0.90 | $ | 0.90 | $ | 0.98 | $ | 1.80 | $ | 1.82 | ||||||
| AVERAGE BALANCE SHEET AND NET INTEREST MARGIN | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||||||||||||||||||||
| 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) | $ | 1,987,533 | $ | 35,421 | 7.17 | % | $ | 1,916,288 | $ | 33,628 | 7.06 | % | $ | 1,676,816 | $ | 27,630 | 6.61 | % | |||||||||||
| Taxable securities | 165,141 | 2,039 | 4.97 | % | 163,586 | 1,981 | 4.87 | % | 151,107 | 1,641 | 4.36 | % | |||||||||||||||||
| Nontaxable securities | 45,537 | 231 | 2.04 | % | 45,368 | 229 | 2.03 | % | 45,624 | 228 | 2.00 | % | |||||||||||||||||
| Other interest-earnings assets | 242,214 | 3,316 | 5.51 | % | 211,127 | 2,898 | 5.52 | % | 218,451 | 2,686 | 4.93 | % | |||||||||||||||||
| Total interest-earning assets | $ | 2,440,425 | $ | 41,007 | 6.76 | % | $ | 2,336,369 | $ | 38,736 | 6.67 | % | $ | 2,091,998 | $ | 32,185 | 6.17 | % | |||||||||||
| Allowance for credit losses | (25,332 | ) | (24,313 | ) | (20,154 | ) | |||||||||||||||||||||||
| Noninterest-earning assets | 137,917 | 135,222 | 128,999 | ||||||||||||||||||||||||||
| Total Assets | $ | 2,553,010 | $ | 2,447,278 | $ | 2,200,843 | |||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
| Interest-bearing transaction accounts | 85,976 | 21 | 0.10 | % | 85,858 | 26 | 0.12 | % | 92,245 | 20 | 0.09 | % | |||||||||||||||||
| Savings and money market accounts | 929,930 | 9,229 | 3.99 | % | 902,361 | 8,804 | 3.92 | % | 845,742 | 6,872 | 3.26 | % | |||||||||||||||||
| Time deposits | 713,776 | 8,261 | 4.65 | % | 645,088 | 7,076 | 4.41 | % | 474,060 | 4,106 | 3.47 | % | |||||||||||||||||
| FHLB advances | 48,374 | 596 | 4.96 | % | 53,121 | 655 | 4.96 | % | 45,000 | 529 | 4.72 | % | |||||||||||||||||
| Other borrowings | 94,815 | 1,321 | 5.60 | % | 95,650 | 1,336 | 5.62 | % | 86,411 | 1,226 | 5.69 | % | |||||||||||||||||
| Total interest-bearing liabilities | $ | 1,872,871 | $ | 19,428 | 4.17 | % | $ | 1,782,078 | $ | 17,897 | 4.04 | % | $ | 1,543,458 | $ | 12,753 | 3.31 | % | |||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 420,885 | $ | 416,141 | $ | 438,987 | |||||||||||||||||||||||
| Other liabilities | 32,727 | 29,437 | 24,882 | ||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | $ | 453,612 | $ | 445,578 | $ | 463,869 | |||||||||||||||||||||||
| Stockholders' Equity | 226,527 | 219,622 | 193,516 | ||||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 2,553,010 | $ | 2,447,278 | $ | 2,200,843 | |||||||||||||||||||||||
| Net interest income | $ | 21,579 | $ | 20,839 | $ | 19,432 | |||||||||||||||||||||||
| Net interest spread(2) | 2.59 | % | 2.63 | % | 2.86 | % | |||||||||||||||||||||||
| Net interest margin(3) | 3.56 | % | 3.59 | % | 3.73 | % | |||||||||||||||||||||||
| Net interest margin - FTE(4)(5) | 3.57 | % | 3.60 | % | 3.74 | % | |||||||||||||||||||||||
| Cost of funds(6) | 3.41 | % | 3.27 | % | 2.58 | % | |||||||||||||||||||||||
| Cost of interest-bearing deposits | 4.07 | % | 3.92 | % | 3.12 | % | |||||||||||||||||||||||
| Cost of total deposits | 3.27 | % | 3.12 | % | 2.38 | % | |||||||||||||||||||||||
(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) | |||||||||||||||||||
| Six Months Ended | |||||||||||||||||||
| June 30, 2024 | June 30, 2023 | ||||||||||||||||||
| Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Loans, net of unearned income(1) | $ | 1,951,910 | $ | 69,049 | 7.11 | % | $ | 1,643,376 | $ | 52,965 | 6.50 | % | |||||||
| Taxable securities | 164,363 | 4,020 | 4.92 | % | 145,344 | 3,024 | 4.20 | % | |||||||||||
| Nontaxable securities | 45,453 | 460 | 2.04 | % | 49,208 | 519 | 2.13 | % | |||||||||||
| Other interest-earnings assets | 226,671 | 6,214 | 5.51 | % | 182,447 | 4,376 | 4.84 | % | |||||||||||
| Total interest-earning assets | $ | 2,388,397 | $ | 79,743 | 6.71 | % | $ | 2,020,375 | $ | 60,884 | 6.08 | % | |||||||
| Allowance for credit losses | (24,822 | ) | (20,315 | ) | |||||||||||||||
| Noninterest-earning assets | 136,569 | 129,268 | |||||||||||||||||
| Total Assets | $ | 2,500,144 | $ | 2,129,328 | |||||||||||||||
| Liabilities and Stockholders' Equity: | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing transaction accounts | 85,917 | 48 | 0.11 | % | 93,093 | 40 | 0.09 | % | |||||||||||
| Savings and money market accounts | 916,145 | 18,032 | 3.96 | % | 825,982 | 11,911 | 2.91 | % | |||||||||||
| Time deposits | 679,432 | 15,337 | 4.54 | % | 437,573 | 6,815 | 3.14 | % | |||||||||||
| FHLB advances | 50,747 | 1,251 | 4.96 | % | 31,862 | 688 | 4.35 | % | |||||||||||
| Other borrowings | 95,233 | 2,657 | 5.61 | % | 86,367 | 2,452 | 5.73 | % | |||||||||||
| Total interest-bearing liabilities | $ | 1,827,474 | $ | 37,325 | 4.11 | % | $ | 1,474,877 | $ | 21,906 | 3.00 | % | |||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 418,513 | $ | 438,862 | |||||||||||||||
| Other liabilities | 31,082 | 25,493 | |||||||||||||||||
| Total noninterest-bearing liabilities | $ | 449,595 | $ | 464,355 | |||||||||||||||
| Stockholders' Equity | 223,075 | 190,096 | |||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 2,500,144 | $ | 2,129,328 | |||||||||||||||
| Net interest income | $ | 42,418 | $ | 38,978 | |||||||||||||||
| Net interest spread(2) | 2.60 | % | 3.08 | % | |||||||||||||||
| Net interest margin(3) | 3.57 | % | 3.89 | % | |||||||||||||||
| Net interest margin - FTE(4)(5) | 3.58 | % | 3.90 | % | |||||||||||||||
| Cost of funds(6) | 3.34 | % | 2.31 | % | |||||||||||||||
| Cost of interest-bearing deposits | 4.00 | % | 2.79 | % | |||||||||||||||
| Cost of total deposits | 3.20 | % | 2.11 | % | |||||||||||||||
(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) | |||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||||||||||||||
| Amount | % of gross | Amount | % of gross | Amount | % of gross | Amount | % of gross | ||||||||||||||||||||
| Real estate mortgages: | |||||||||||||||||||||||||||
| Construction and development | $ | 242,573 | 12.0 | % | $ | 252,934 | 12.8 | % | $ | 242,960 | 12.9 | % | $ | 228,236 | 13.3 | % | |||||||||||
| Residential | 249,498 | 12.3 | % | 238,702 | 12.1 | % | 224,603 | 11.9 | % | 214,897 | 12.5 | % | |||||||||||||||
| Commercial | 1,222,739 | 60.5 | % | 1,182,634 | 60.0 | % | 1,144,867 | 60.5 | % | 1,011,815 | 58.7 | % | |||||||||||||||
| Commercial and industrial | 297,501 | 14.7 | % | 288,701 | 14.7 | % | 269,961 | 14.3 | % | 259,195 | 15.0 | % | |||||||||||||||
| Consumer and other | 9,566 | 0.5 | % | 8,425 | 0.4 | % | 8,286 | 0.4 | % | 8,135 | 0.5 | % | |||||||||||||||
| Gross loans | 2,021,877 | 100.0 | % | 1,971,396 | 100.0 | % | 1,890,677 | 100.0 | % | 1,722,278 | 100.0 | % | |||||||||||||||
| Unearned income | (6,443 | ) | (6,247 | ) | (6,169 | ) | (5,766 | ) | |||||||||||||||||||
| Loans, net of unearned income | 2,015,434 | 1,965,149 | 1,884,508 | 1,716,512 | |||||||||||||||||||||||
| Allowance for credit losses | (25,828 | ) | (25,144 | ) | (24,378 | ) | (21,385 | ) | |||||||||||||||||||
| Loans, net | $ | 1,989,606 | $ | 1,940,005 | $ | 1,860,130 | $ | 1,695,127 | |||||||||||||||||||
| DEPOSIT COMPOSITION | |||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||||||||||
| Amount | % of total | Amount | % of total | Amount | % of total | Amount | % of total | ||||||||||||||||
| Noninterest-bearing transaction | $ | 416,068 | 19.1 | % | $ | 416,704 | 19.7 | % | $ | 437,959 | 21.7 | % | $ | 449,433 | 23.3 | % | |||||||
| Interest-bearing transaction | 1,006,687 | 46.3 | % | 974,079 | 46.2 | % | 946,347 | 46.9 | % | 922,835 | 48.0 | % | |||||||||||
| Savings | 32,527 | 1.5 | % | 33,909 | 1.6 | % | 35,412 | 1.7 | % | 41,574 | 2.2 | % | |||||||||||
| Time deposits, $250,000 and under | 612,299 | 28.1 | % | 584,658 | 27.7 | % | 500,406 | 24.8 | % | 438,228 | 22.8 | % | |||||||||||
| Time deposits, over $250,000 | 108,097 | 5.0 | % | 100,448 | 4.8 | % | 98,065 | 4.9 | % | 71,841 | 3.7 | % | |||||||||||
| Total deposits | $ | 2,175,678 | 100.0 | % | $ | 2,109,798 | 100.0 | % | $ | 2,018,189 | 100.0 | % | $ | 1,923,911 | 100.0 | % | |||||||
| Nonperforming Assets | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||
| Nonaccrual loans | $ | 3,784 | $ | 3,446 | $ | 1,017 | $ | 1,010 | |||||||
| Past due loans 90 days or more and still accruing interest | - | - | 160 | - | |||||||||||
| Total nonperforming loans | 3,784 | 3,446 | 1,177 | 1,010 | |||||||||||
| OREO | 33 | 33 | 33 | 2,870 | |||||||||||
| Total nonperforming assets | $ | 3,817 | $ | 3,479 | $ | 1,210 | $ | 3,880 | |||||||
| Financial difficulty modification loans - nonaccrual(1) | 647 | 675 | 907 | 724 | |||||||||||
| Financial difficulty modification loans - accruing | 1,093 | 1,283 | 1,095 | 1,328 | |||||||||||
| Financial difficulty modification loans | $ | 1,740 | $ | 1,958 | $ | 2,002 | $ | 2,052 | |||||||
| Allowance for credit losses | $ | 25,828 | $ | 25,144 | $ | 24,378 | $ | 21,385 | |||||||
| Loans, net of unearned income at the end of the period | $ | 2,015,434 | $ | 1,965,149 | $ | 1,884,508 | $ | 1,716,512 | |||||||
| Gross loans outstanding at the end of period | $ | 2,021,877 | $ | 1,971,396 | $ | 1,890,677 | $ | 1,722,278 | |||||||
| Total assets | $ | 2,572,011 | $ | 2,510,975 | $ | 2,446,663 | $ | 2,277,803 | |||||||
| Allowance for credit losses to nonperforming loans | 682.56 | % | 729.66 | % | 2071.20 | % | 2117.33 | % | |||||||
| Nonperforming loans to loans, net of unearned income | 0.19 | % | 0.18 | % | 0.06 | % | 0.06 | % | |||||||
| Nonperforming loans to gross loans | 0.19 | % | 0.17 | % | 0.06 | % | 0.06 | % | |||||||
| Nonperforming assets to gross loans and OREO | 0.19 | % | 0.18 | % | 0.06 | % | 0.22 | % | |||||||
| Nonperforming assets to total assets | 0.15 | % | 0.14 | % | 0.05 | % | 0.17 | % | |||||||
| Nonaccrual loans by category: | |||||||||||||||
| Real estate mortgages: | |||||||||||||||
| Construction & Development | $ | - | $ | - | $ | - | $ | 33 | |||||||
| Residential Mortgages | 393 | 246 | 252 | 297 | |||||||||||
| Commercial Real Estate Mortgages | 2,182 | 2,422 | 765 | 671 | |||||||||||
| Commercial & Industrial | 1,209 | 778 | - | 9 | |||||||||||
| Consumer and other | - | - | - | - | |||||||||||
| Total | $ | 3,784 | $ | 3,446 | $ | 1,017 | $ | 1,010 | |||||||
(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.
| Allowance for Credit Losses | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Average loans, net of unearned income | $ | 1,987,533 | $ | 1,916,288 | $ | 1,676,816 | $ | 1,951,910 | $ | 1,643,376 | |||||||||
| Loans, net of unearned income | 2,015,434 | 1,965,149 | 1,716,512 | 2,015,434 | 1,716,512 | ||||||||||||||
| Gross loans | 2,021,877 | 1,971,396 | 1,722,278 | 2,021,877 | 1,722,278 | ||||||||||||||
| Allowance for credit losses at beginning of the period | 25,144 | 24,378 | 19,855 | 24,378 | 20,156 | ||||||||||||||
| Impact of adoption of ASC 326 | - | - | - | - | (1,285 | ) | |||||||||||||
| Charge-offs: | |||||||||||||||||||
| Construction and development | - | - | - | - | - | ||||||||||||||
| Residential | - | 11 | - | 11 | - | ||||||||||||||
| Commercial | 11 | 27 | - | 38 | - | ||||||||||||||
| Commercial and industrial | 384 | 442 | 44 | 826 | 262 | ||||||||||||||
| Consumer and other | 10 | 15 | - | 25 | 6 | ||||||||||||||
| Total charge-offs | 405 | 495 | 44 | 900 | 268 | ||||||||||||||
| Recoveries: | |||||||||||||||||||
| Construction and development | - | - | - | - | - | ||||||||||||||
| Residential | 6 | 8 | 17 | 14 | 28 | ||||||||||||||
| Commercial | - | - | - | - | - | ||||||||||||||
| Commercial and industrial | 15 | 16 | - | 31 | 14 | ||||||||||||||
| Consumer and other | 1 | 1 | - | 2 | 2 | ||||||||||||||
| Total recoveries | 22 | 25 | 17 | 47 | 44 | ||||||||||||||
| Net charge-offs | $ | 383 | $ | 470 | $ | 27 | $ | 853 | $ | 224 | |||||||||
| Provision for credit losses | $ | 1,067 | $ | 1,236 | $ | 1,557 | $ | 2,303 | $ | 2,738 | |||||||||
| Balance at end of the period | $ | 25,828 | $ | 25,144 | $ | 21,385 | $ | 25,828 | $ | 21,385 | |||||||||
| Allowance for credit losses on unfunded commitments at beginning of the period | $ | 1,288 | $ | 1,239 | $ | 1,285 | $ | 1,239 | $ | - | |||||||||
| Impact of adoption of ASC 326 | - | - | - | - | 1,285 | ||||||||||||||
| (Credit) provision for credit losses on unfunded commitments | (82 | ) | 49 | 210 | (33 | ) | 210 | ||||||||||||
| Balance at the end of the period | $ | 1,206 | $ | 1,288 | $ | 1,495 | $ | 1,206 | $ | 1,495 | |||||||||
| Allowance to loans, net of unearned income | 1.28 | % | 1.28 | % | 1.25 | % | 1.28 | % | 1.25 | % | |||||||||
| Allowance to gross loans | 1.28 | % | 1.28 | % | 1.24 | % | 1.28 | % | 1.24 | % | |||||||||
| Net charge-offs to average loans, net of unearned income(1) | 0.08 | % | 0.10 | % | 0.01 | % | 0.09 | % | 0.03 | % | |||||||||
| Provision for credit losses to average loans, net of unearned income(1) | 0.22 | % | 0.26 | % | 0.37 | % | 0.24 | % | 0.34 | % | |||||||||
(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 | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Net income | $ | 8,198 | $ | 8,119 | $ | 8,756 | $ | 16,317 | $ | 16,427 | |||||||||
| Add: One-time retirement related expenses | - | - | 1,571 | - | 1,571 | ||||||||||||||
| Add: Professional fees related to ERC | - | - | 1,243 | - | 1,243 | ||||||||||||||
| Add: Wire fraud loss | 1,155 | - | - | 1,155 | - | ||||||||||||||
| Add: Net OREO (gain) loss | (3 | ) | - | 7 | (3 | ) | 7 | ||||||||||||
| Less: Employee retention related revenue | - | - | 5,100 | - | 5,100 | ||||||||||||||
| Less: Net gain (loss) on securities | 20 | (12 | ) | (45 | ) | 8 | 469 | ||||||||||||
| Less: Tax effect | 272 | 3 | (536 | ) | 275 | (660 | ) | ||||||||||||
| Core net income | $ | 9,058 | $ | 8,128 | $ | 7,058 | $ | 17,186 | $ | 14,339 | |||||||||
| Average assets | $ | 2,553,010 | $ | 2,447,278 | $ | 2,200,843 | $ | 2,500,144 | $ | 2,129,328 | |||||||||
| Core return on average assets | 1.43 | % | 1.34 | % | 1.29 | % | 1.38 | % | 1.36 | % | |||||||||
| Net income | $ | 8,198 | $ | 8,119 | $ | 8,756 | $ | 16,317 | $ | 16,427 | |||||||||
| Add: One-time retirement related expenses | - | - | 1,571 | - | 1,571 | ||||||||||||||
| Add: Professional fees related to ERC | - | - | 1,243 | - | 1,243 | ||||||||||||||
| Add: Wire fraud loss | 1,155 | - | - | 1,155 | - | ||||||||||||||
| Add: Net OREO (gain) loss | (3 | ) | - | 7 | (3 | ) | 7 | ||||||||||||
| Add: Provision | 1,067 | 1,236 | 1,557 | 2,303 | 2,738 | ||||||||||||||
| Less: Employee retention related revenue | - | - | 5,100 | - | 5,100 | ||||||||||||||
| Less: Net gain (loss) on securities | 20 | (12 | ) | (45 | ) | 8 | 469 | ||||||||||||
| Add: Income taxes | 2,271 | 2,377 | 2,549 | 4,648 | 4,871 | ||||||||||||||
| Pretax pre-provision core net income | $ | 12,668 | $ | 11,744 | $ | 10,628 | $ | 24,412 | $ | 21,288 | |||||||||
| Average assets | $ | 2,553,010 | $ | 2,447,278 | $ | 2,200,843 | $ | 2,500,144 | $ | 2,129,328 | |||||||||
| Pretax pre-provision core return on average assets | 2.00 | % | 1.93 | % | 1.94 | % | 1.96 | % | 2.02 | % | |||||||||
| Net interest income | $ | 21,579 | $ | 20,839 | $ | 19,432 | $ | 42,418 | $ | 38,978 | |||||||||
| Add: Fully-taxable equivalent adjustments(1) | 73 | 73 | 65 | 146 | 143 | ||||||||||||||
| Net interest income - FTE | $ | 21,652 | $ | 20,912 | $ | 19,497 | $ | 42,564 | $ | 39,121 | |||||||||
| Net interest margin | 3.56 | % | 3.59 | % | 3.73 | % | 3.57 | % | 3.89 | % | |||||||||
| Effect of fully-taxable equivalent adjustments(1) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||
| Net interest margin - FTE | 3.57 | % | 3.60 | % | 3.74 | % | 3.58 | % | 3.90 | % | |||||||||
| Total stockholders' equity | $ | 230,581 | $ | 222,881 | $ | 197,250 | $ | 230,581 | $ | 197,250 | |||||||||
| Less: Intangible assets | 17,597 | 17,679 | 17,924 | 17,597 | 17,924 | ||||||||||||||
| Tangible common equity | $ | 212,984 | $ | 205,202 | $ | 179,326 | $ | 212,984 | $ | 179,326 | |||||||||
| (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 | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Core net income | $ | 9,058 | $ | 8,128 | $ | 7,058 | $ | 17,186 | $ | 14,339 | |||||||||
| Diluted weighted average shares outstanding | 9,070,568 | 9,043,122 | 8,950,847 | 9,062,548 | 9,001,600 | ||||||||||||||
| Diluted core earnings per share | $ | 1.00 | $ | 0.90 | $ | 0.79 | $ | 1.90 | $ | 1.59 | |||||||||
| Common shares outstanding at year or period end | 8,908,130 | 8,894,794 | 8,738,814 | 8,908,130 | 8,738,814 | ||||||||||||||
| Tangible book value per share | $ | 23.91 | $ | 23.07 | $ | 20.52 | $ | 23.91 | $ | 20.52 | |||||||||
| Total assets at end of period | $ | 2,572,011 | $ | 2,510,975 | $ | 2,277,803 | $ | 2,572,011 | $ | 2,277,803 | |||||||||
| Less: Intangible assets | 17,597 | 17,679 | 17,924 | 17,597 | 17,924 | ||||||||||||||
| Adjusted assets at end of period | $ | 2,554,414 | $ | 2,493,296 | $ | 2,259,879 | $ | 2,554,414 | $ | 2,259,879 | |||||||||
| Tangible common equity to tangible assets | 8.34 | % | 8.23 | % | 7.94 | % | 8.34 | % | 7.94 | % | |||||||||
| Total average shareholders equity | $ | 226,527 | $ | 219,622 | $ | 193,516 | $ | 223,075 | $ | 190,096 | |||||||||
| Less: Average intangible assets | 17,646 | 17,730 | 17,974 | 17,688 | 18,014 | ||||||||||||||
| Average tangible common equity | $ | 208,881 | $ | 201,892 | $ | 175,542 | $ | 205,387 | $ | 172,082 | |||||||||
| Net income to common shareholders | $ | 8,198 | $ | 8,119 | $ | 8,756 | $ | 16,317 | $ | 16,427 | |||||||||
| Return on average tangible common equity | 15.79 | % | 16.17 | % | 20.01 | % | 15.98 | % | 19.25 | % | |||||||||
| Average tangible common equity | $ | 208,881 | $ | 201,892 | $ | 175,542 | $ | 205,387 | $ | 172,082 | |||||||||
| Core net income | $ | 9,058 | $ | 8,128 | $ | 7,058 | $ | 17,186 | $ | 14,339 | |||||||||
| Core return on average tangible common equity | 17.44 | % | 16.19 | % | 16.13 | % | 16.83 | % | 16.80 | % | |||||||||
| Net interest income | $ | 21,579 | $ | 20,839 | $ | 19,432 | $ | 42,418 | $ | 38,978 | |||||||||
| Add: Noninterest income | 1,368 | 1,268 | 6,862 | 2,636 | 8,648 | ||||||||||||||
| Less: Employee retention related revenue | - | - | 5,100 | - | 5,100 | ||||||||||||||
| Less: Net gain (loss) on securities | 20 | (12 | ) | (45 | ) | 8 | 469 | ||||||||||||
| Operating revenue | $ | 22,927 | $ | 22,119 | $ | 21,239 | $ | 45,046 | $ | 42,057 | |||||||||
| Expenses: | |||||||||||||||||||
| Total noninterest expense | $ | 11,411 | $ | 10,375 | $ | 13,432 | $ | 21,786 | $ | 23,590 | |||||||||
| Less: One-time retirement related expenses | - | - | 1,571 | - | 1,571 | ||||||||||||||
| Less: Professional fees related to ERC | - | - | 1,243 | - | 1,243 | ||||||||||||||
| Less: Wire fraud loss | 1,155 | - | - | 1,155 | - | ||||||||||||||
| Less: Net OREO (gain) loss | (3 | ) | - | 7 | (3 | ) | 7 | ||||||||||||
| Adjusted noninterest expenses | $ | 10,259 | $ | 10,375 | $ | 10,611 | $ | 20,634 | $ | 20,769 | |||||||||
| Core efficiency ratio | 44.75 | % | 46.90 | % | 49.96 | % | 45.81 | % | 49.38 | % | |||||||||
