Document

Third Quarter 2024 Performance and Operational Highlights

•Net income of $7.4 million, or $0.76 per diluted share

•Core net income(1) of $8.7 million, or $0.89 per diluted share(1)

•Core pretax pre-provision net income(1) of $13.8 million

•Net interest income of $24.2 million, an increase of $2.7 million from the prior quarter

•Net interest margin (“NIM”) of 3.65%, up 9 basis points from the prior quarter

•NIM of 3.66% on a fully-taxable equivalent basis (“NIM - FTE”)(1)

•Return on average assets (“ROAA”) of 1.05%; return on average stockholders’ equity (“ROAE”) of 11.89%; and return on average tangible common equity (“ROATCE”)(1) of 13.35%

•Core ROAA(1) of 1.24%; and core ROATCE(1) of 15.74%

•Efficiency ratio of 52.79%; and core efficiency ratio of 46.96%

•Linked-quarter loans grew 36.3% annualized; and legacy loans grew 10.3% annualized

•Linked-quarter total deposits grew 44.8% annualized

•Linked-quarter total deposits, excluding brokered deposits, grew 71.5% annualized; and legacy total deposits, excluding brokered deposits grew 9.6% annualized

(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., October 21, 2024 – Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States” or the “Company”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today reported net income of $7.4 million, or $0.76 diluted earnings per share, for the third quarter of 2024. This compares to net income of $8.2 million, or $0.90 diluted earnings per share, for the second quarter of 2024, and net income of $6.6 million, or $0.73 diluted earnings per share, for the third quarter of 2023. The Company reported core net income of $8.7 million, or $0.89 diluted core earnings per share, for the third quarter of 2024. This compares to core net income of $9.1 million, or $1.00 diluted core earnings per share, for the second quarter of 2024, and core net income of $9.6 million, or $1.06 diluted core earnings per share, for the third quarter of 2023 (see “Reconciliation of Non-GAAP Financial Measures”).

CEO Commentary

Mark Chambers, Chief Executive Officer and President of Southern States said, “The top highlight of our third quarter was the completion of the CBB Bancorp acquisition on August 1 as planned. I want to welcome our new colleagues who contributed to a seamless integration between two organizations that share a common culture. Our combination with Century Bank has strengthened our platform to drive loan and deposit growth across growing and attractive Georgia markets.”

“Net interest income for the third quarter increased more than 12.4% to $24.2 million for the quarter largely reflecting the contribution from Century Bank. Net interest margin also increased 9 basis points to 3.65% from 3.56% quarter-over-quarter, which further reflects Century Bank’s contribution.”

“Finally, we were pleased to be recognized in Piper Sandler’s Sm-All Stars: Class of 2024 for the third year in a row. The Sm-All Stars’ objective is to identify the top performing U.S. small-cap banks and thrifts based on growth, profitability, credit quality, and capital strength. Our objective is to run a highly efficient bank, consistently deliver the highest level of customer satisfaction and increase value for our shareholders.”


	Three Months Ended						% Change September 30, 2024 vs.
	September 30, 2024		June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
	(Dollars in thousands)

Service charges on deposit accounts	$	532	$	462	$	442	15.2	%	20.4	%
Swap (expense) fees	(9)		4		453		325.0	%	102.0	%
SBA/USDA fees	179		58		74		208.6	%	141.9	%
Mortgage origination fees	112		92		158		21.7	%	(29.1)	%
Net gain (loss) on securities	75		20		(12)		275.0	%	725.0	%
Employee retention credit and related revenue (“ERC”)	—		—		(5,100)		N/A		N/A
Other operating income	868		732		1,091		18.6	%	(20.4)	%
Total noninterest income	$	1,757	$	1,368	$	(2,894)	28.4	%	160.7	%

Relative to the third quarter of 2023, noninterest income increased 160.7% from a noninterest net expense of $2.9 million. The third quarter of 2023 included a $5.1 million payment to the Internal Revenue Service (“IRS”) for the return of the ERC, which was received during the second quarter of 2023. The IRS revised eligibility guidelines during the third quarter of 2023, and the Company applied for the Voluntary Disclosure Program and removed this from income and recorded a payable. The acquisition of Century Bank on July 31, 2024 resulted in additional noninterest income during the third quarter of 2024. The increase was partially offset by a decline in swap fees during the third quarter of 2024, substantially as a result of the Company not participating in any swap transactions.


	Three Months Ended						% Change September 30, 2024 vs.
	September 30, 2024		June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
	(Dollars in thousands)

Salaries and employee benefits	$	6,876	$	6,112	$	5,752	12.5	%	19.5	%
Equipment and occupancy expenses	814		667		718		22.0	%	13.4	%
Data processing fees	781		686		650		13.8	%	20.2	%
Regulatory assessments	414		375		322		10.4	%	28.6	%
Professional fees related to ERC	—		—		(1,243)		N/A		N/A
Merger-related expenses	1,511		—		—		N/A		N/A
Other operating expenses	3,291		3,571		2,370		(7.8)	%	38.9	%
Total noninterest expenses	$	13,687	$	11,411	$	8,569	19.9	%	59.7	%

Noninterest expense for the third quarter of 2024 was $13.7 million, an increase of 19.9% from $11.4 million in the second quarter of 2024. The acquisition of Century Bank on July 31, 2024 resulted in merger-related expenses of $1.5 million, of which $961,000 was not deductible for taxes. Also there were additional noninterest expenses related to Century Bank during the third quarter of 2024, primarily in salaries and employee benefits. The acquisition also gave rise to a $106,000 increase in amortization expense associated with the core deposit intangible. Also included in the third quarter of 2024 was approximately $250,000 in expenses associated with calling brokered deposits and collection expenses related to a problem loan.


	Three Months Ended									% Change September 30, 2024 vs.
	September 30, 2024			June 30, 2024			September 30, 2023			June 30, 2024		September 30, 2023
	(Dollars in thousands)

Gross loans	$	2,205,747		$	2,021,877		$	1,779,846		9.1	%	23.9	%
Unearned income	(6,536)			(6,443)			(5,698)			1.4	%	14.7	%
Loans, net of unearned income (“Loans”)	2,199,211			2,015,434			1,774,148			9.1	%	24.0	%
Average loans, net of unearned (“Average loans”)	$	2,134,318		$	1,987,533		$	1,740,582		7.4	%	22.6	%

Nonperforming loans (“NPL”)	$	7,868		$	3,784		$	1,082		107.9	%	627.2	%
Provision for credit losses	$	2,583		$	1,067		$	773		142.1	%	234.2	%
Allowance for credit losses (“ACL”)	$	28,061		$	25,828		$	22,181		8.6	%	26.5	%
Net charge-offs (recoveries)	$	350		$	383		$	(23)		(8.6)	%	1621.7	%
NPL to gross loans	0.36		%	0.19		%	0.06		%
Net charge-offs (recoveries) to average loans(1)	0.07		%	0.08		%	(0.01)		%
ACL to loans	1.28		%	1.28		%	1.25		%

(1) Ratio is annualized.

Nonperforming loans totaled $7.9 million, or 0.36% of gross loans, at September 30, 2024, compared with $3.8 million, or 0.19% of gross loans, at June 30, 2024, and $1.1 million, or 0.06% of gross loans, at September 30, 2023. The $4.1 million net increase in nonperforming loans in the third quarter of 2024 was primarily attributable to a significant commercial and industrial loan that was added to nonaccrual status and partially offset by a commercial and industrial loan that was charged-off. The $6.8 million net increase in nonperforming loans from September 30, 2023, was primarily attributable to one significant commercial and industrial loan, another less significant commercial and industrial loan and one commercial real estate loan that were added to nonaccrual status. Significant collection efforts have been made on the large commercial and industrial loan and no loss is anticipated.

Net charge-offs for the third quarter of 2024 were $350,000, or 0.07% of average loans on an annualized basis, compared to net charge-offs of $383,000, or 0.08% of average loans on an annualized basis, for the second quarter of 2024, and net recoveries of $23,000, or (0.01)% of average loans on an annualized basis, for the third quarter of 2023. The charge-offs recorded during the the second and third quarters of 2024 were substantially related to a purchased pool of consumer loans for which the borrower filed for bankruptcy. The loan was fully charged-off as of September 30, 2024.

Total deposits were $2.4 billion at September 30, 2024, up from $2.2 billion at June 30, 2024 and $1.9 billion at September 30, 2023. The $244.9 million increase in total deposits in the third quarter was due to an increase of $130.2 million in noninterest-bearing deposits and a $114.7 million increase in interest-bearing deposits. The acquisition of Century Bank resulted in additional deposits of $304.4 million at September 30, 2024, or $183.4 million in interest-bearing deposits, none of which were brokered deposits, and $121.0 million in noninterest-bearing deposits. Total brokered deposits were $194.2 million at September 30, 2024, compared to $288.3 million at June 30, 2024. The Company used cash from the acquisition of Century Bank to call $52.3 million of brokered deposits, while another $41.9 million matured and were repaid.

This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given recent events and trends in the banking industry. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

These statements are often, but not always, made through the use of words or phrases such as “may,” “can,” “should,” “could,” “to be,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “likely,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “target,” “project,” “would” and “outlook,” or the negative version of those words or other similar words or phrases of a future or forward-looking nature. Forward-looking statements appear in a number of places in this press release and may include statements about our acquisition of Century Bank of Georgia, business strategy and prospects for growth, operations, ability to pay dividends, competition, regulation and general economic conditions.


SELECT FINANCIAL DATA
(Dollars in thousands, except share and per share amounts)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Results of Operations
Interest income	$	45,068		$	41,007		$	35,204		$	124,811		$	96,088
Interest expense	20,822			19,428			14,473			58,147			36,379
Net interest income	24,246			21,579			20,731			66,664			59,709
Provision for credit losses	2,583			1,067			773			4,885			3,511
Net interest income after provision	21,663			20,512			19,958			61,779			56,198
Noninterest income	1,757			1,368			(2,894)			4,393			5,755
Noninterest expense	13,687			11,411			8,569			35,473			32,159
Income tax expense	2,380			2,271			1,866			7,029			6,738
Net income	$	7,353		$	8,198		$	6,629		$	23,670		$	23,056
Core net income(1)	$	8,675		$	9,058		$	9,563		$	25,862		$	23,901

Share and Per Share Data
Shares issued and outstanding	9,882,350			8,908,130			8,834,168			9,882,350			8,834,168
Weighted average shares outstanding:
Basic	9,608,868			8,957,608			8,846,018			9,161,622			8,791,007
Diluted	9,725,884			9,070,568			9,040,687			9,297,778			9,016,603
Earnings per share:
Basic	$	0.76		$	0.91		$	0.75		$	2.58		$	2.62
Diluted	0.76			0.90			0.73			2.54			2.56
Core - diluted(1)	0.89			1.00			1.06			2.78			2.65
Book value per share	27.46			25.88			22.86			27.46			22.86
Tangible book value per share(1)	23.38			23.91			20.84			23.38			20.84
Cash dividends per common share	0.09			0.09			0.09			0.27			0.27

Performance and Financial Ratios
ROAA	1.05		%	1.29		%	1.15		%	1.22		%	1.41		%
ROAE	11.89		%	14.55		%	12.96		%	13.70		%	15.85		%
Core ROAA(1)	1.24		%	1.43		%	1.66		%	1.33		%	1.47		%
ROATCE(1)	13.35		%	15.79		%	14.21		%	15.05		%	17.47		%
Core ROATCE(1)	15.74		%	17.44		%	20.50		%	16.45		%	18.11		%
NIM	3.65		%	3.56		%	3.78		%	3.60		%	3.85		%
NIM - FTE(1)	3.66		%	3.57		%	3.79		%	3.61		%	3.87		%
Net interest spread	2.66		%	2.59		%	2.84		%	2.63		%	3.00		%
Yield on loans	7.21		%	7.17		%	6.86		%	7.15		%	6.62		%
Yield on interest-earning assets	6.78		%	6.76		%	6.42		%	6.74		%	6.20		%
Cost of interest-bearing liabilities	4.12		%	4.17		%	3.58		%	4.11		%	3.20		%
Cost of funds(2)	3.31		%	3.41		%	2.80		%	3.33		%	2.48		%
Cost of interest-bearing deposits	4.03		%	4.07		%	3.43		%	4.01		%	3.02		%
Cost of total deposits	3.19		%	3.27		%	2.63		%	3.20		%	2.29		%
Noninterest deposits to total deposits	22.57		%	19.12		%	21.82		%	22.57		%	21.82		%
Core deposits to total deposits	86.30		%	81.78		%	86.58		%	86.30		%	86.58		%
Uninsured deposits to total deposits	39.85		%	29.66		%	29.66		%	39.85		%	29.66		%
Total loans to total deposits	90.86		%	92.63		%	92.58		%	90.86		%	92.58		%
Efficiency ratio	52.79		%	49.78		%	48.01		%	49.98		%	49.47		%
Core efficiency ratio(1)	46.96		%	44.75		%	42.79		%	46.23		%	47.06		%


SELECT FINANCIAL DATA
(Dollars in thousands)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Financial Condition (ending)
Total loans	$	2,199,211		$	2,015,434		$	1,774,148		$	2,199,211		$	1,774,148
Total securities	217,692			204,131			189,496			217,692			189,496
Total assets	2,841,440			2,572,011			2,296,527			2,841,440			2,296,527
Total noninterest-bearing deposits	546,282			416,068			418,125			546,282			418,125
Total core deposits(1)	2,088,993			1,779,253			1,659,291			2,088,993			1,659,291
Total deposits	2,420,546			2,175,678			1,916,401			2,420,546			1,916,401
Total borrowings	121,083			136,873			146,573			121,083			146,573
Total liabilities	2,570,070			2,341,430			2,094,603			2,570,070			2,094,603
Total shareholders’ equity	271,370			230,581			201,924			271,370			201,924

Financial Condition (average)
Total loans	$	2,134,318		$	1,987,533		$	1,740,582		$	2,013,157		$	1,676,134
Total securities	223,750			210,678			201,830			214,494			197,005
Total other interest-earning assets	287,320			242,214			232,691			247,035			199,379
Total interest-earning assets	2,645,388			2,440,425			2,175,103			2,474,686			2,072,518
Total assets	2,777,215			2,553,010			2,282,217			2,593,175			2,180,851
Total noninterest-bearing deposits	490,450			420,885			448,616			442,667			442,149
Total interest-bearing deposits	1,874,861			1,729,682			1,472,024			1,746,420			1,395,529
Total deposits	2,365,311			2,150,567			1,920,640			2,189,087			1,837,678
Total borrowings	134,035			143,189			129,882			141,970			122,156
Total interest-bearing liabilities	2,008,896			1,872,871			1,601,906			1,888,390			1,517,685
Total shareholders’ equity	246,081			226,527			202,955			230,799			194,430

Asset Quality
Nonperforming loans	$	7,868		$	3,784		$	1,082		$	7,868		$	1,082
Other real estate owned (“OREO”)	$	33		$	33		$	2,903		$	33		$	2,903
Nonperforming assets (“NPA”)	$	7,901		$	3,817		$	3,985		$	7,901		$	3,985
Net charge-offs to average loans(2)	0.07		%	0.08		%	(0.01)		%	0.08		%	0.02		%
Provision for credit losses to average loans(2)	0.48		%	0.22		%	0.18		%	0.32		%	0.28		%
ACL to loans	1.28		%	1.28		%	1.25		%	1.28		%	1.25		%
ACL to gross loans	1.27		%	1.28		%	1.25		%	1.27		%	1.25		%
ACL to NPL	356.65		%	682.56		%	2050.00		%	356.65		%	2050.00		%
NPL to loans	0.36		%	0.19		%	0.06		%	0.36		%	0.06		%
NPL to gross loans	0.36		%	0.19		%	0.06		%	0.36		%	0.06		%
NPA to gross loans and OREO	0.36		%	0.19		%	0.22		%	0.36		%	0.22		%
NPA to total assets	0.28		%	0.15		%	0.17		%	0.28		%	0.17		%

Regulatory and Other Capital Ratios
Total shareholders’ equity to total assets	9.55		%	8.97		%	8.79		%	9.55		%	8.79		%
Tangible common equity to tangible assets(3)	8.25		%	8.34		%	8.08		%	8.25		%	8.08		%
Tier 1 capital ratio to average assets	8.64		%	8.72		%	8.70		%	8.64		%	8.70		%
Risk-based capital ratios:
CET1 capital ratio	9.36		%	9.54		%	9.32		%	9.36		%	9.32		%
Tier 1 capital ratio	9.36		%	9.54		%	9.32		%	9.36		%	9.32		%
Total capital ratio	14.18		%	14.50		%	14.60		%	14.18		%	14.60		%


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)

	September 30, 2024		June 30, 2024		December 31, 2023		September 30, 2023
	(Unaudited)		(Unaudited)		(Audited)		(Unaudited)

Assets
Cash and due from banks	$	24,225	$	21,598	$	19,710	$	31,047
Interest-bearing deposits in banks	182,559		140,440		134,846		103,646
Federal funds sold	71,072		76,334		96,095		81,487
Total cash and cash equivalents	277,856		238,372		250,651		216,180

Securities available for sale, at fair value	198,076		184,510		179,000		169,859
Securities held to maturity, at amortized cost	19,616		19,621		19,632		19,637
Other equity securities, at fair value	3,733		3,658		3,649		3,654
Restricted equity securities, at cost	4,418		4,633		5,684		4,971
Loans held for sale	415		1,716		450		1,799

Loans, net of unearned income	2,199,211		2,015,434		1,884,508		1,774,148
Less allowance for credit losses	28,061		25,828		24,378		22,181
Loans, net	2,171,150		1,989,606		1,860,130		1,751,967

Premises and equipment, net	32,319		26,192		26,426		26,694
Accrued interest receivable	10,114		9,654		8,711		8,321
Bank owned life insurance	39,159		33,000		29,884		29,697
Annuities	16,843		15,918		15,036		15,266
Foreclosed assets	33		33		33		2,903
Goodwill	30,980		16,862		16,862		16,862
Core deposit intangible	9,338		735		899		981
Other assets	27,390		27,501		29,616		27,736

Total assets	$	2,841,440	$	2,572,011	$	2,446,663	$	2,296,527

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	546,282	$	416,068	$	437,959	$	418,125
Interest-bearing	1,874,264		1,759,610		1,580,230		1,498,276
Total deposits	2,420,546		2,175,678		2,018,189		1,916,401

Other borrowings	7,976		8,000		26,994		4,991
FHLB advances	22,000		42,000		70,000		55,000
Subordinated notes	91,107		86,873		86,679		86,582
Accrued interest payable	2,214		2,024		1,519		1,280
Other liabilities	26,227		26,855		28,318		30,349

Total liabilities	2,570,070		2,341,430		2,231,699		2,094,603

Stockholders' equity:
Common stock	49,684		44,813		44,479		44,307
Capital surplus	106,046		79,248		78,361		77,671
Retained earnings	123,783		117,233		102,523		94,429
Accumulated other comprehensive loss	(5,866)		(8,333)		(8,379)		(13,126)
Unvested restricted stock	(723)		(826)		(466)		(580)
Vested restricted stock units	(1,554)		(1,554)		(1,554)		(777)

Total stockholders' equity	271,370		230,581		214,964		201,924

Total liabilities and stockholders' equity	$	2,841,440	$	2,572,011	$	2,446,663	$	2,296,527


CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest income:
Loans, including fees	$	38,690	$	35,421	$	30,084	$	107,739	$	83,049
Taxable securities	2,205		2,039		1,796		6,225		4,819
Nontaxable securities	243		231		227		704		747
Other interest and dividends	3,930		3,316		3,097		10,143		7,473
Total interest income	45,068		41,007		35,204		124,811		96,088

Interest expense:
Deposits	18,990		17,511		12,732		52,407		31,498
Other borrowings	1,832		1,917		1,741		5,740		4,881
Total interest expense	20,822		19,428		14,473		58,147		36,379

Net interest income	24,246		21,579		20,731		66,664		59,709
Provision for credit losses	2,583		1,067		773		4,885		3,511
Net interest income after provision for credit losses	21,663		20,512		19,958		61,779		56,198

Noninterest income:
Service charges on deposit accounts	532		462		442		1,458		1,348
Swap (expenses) fees	(9)		4		453		10		622
SBA/USDA fees	179		58		74		302		274
Mortgage origination fees	112		92		158		300		446
Net gain (loss) on securities	75		20		(12)		83		457
Employee retention credit and related revenue	—		—		(5,100)		—		—
Other operating income	868		732		1,091		2,240		2,608
Total noninterest income	1,757		1,368		(2,894)		4,393		5,755

Noninterest expenses:
Salaries and employee benefits	6,876		6,112		5,752		19,219		19,926
Equipment and occupancy expenses	814		667		718		2,170		2,095
Data processing fees	781		686		650		2,110		1,889
Regulatory assessments	414		375		322		1,149		844
Professional fees related to ERC	—		—		(1,243)		—		—
Merger-related expenses	1,511		—		—		1,511		—
Other operating expenses	3,291		3,571		2,370		9,314		7,405
Total noninterest expenses	13,687		11,411		8,569		35,473		32,159

Income before income taxes	9,733		10,469		8,495		30,699		29,794

Income tax expense	2,380		2,271		1,866		7,029		6,738

Net income	$	7,353	$	8,198	$	6,629	$	23,670	$	23,056

Basic earnings per share	$	0.76	$	0.91	$	0.75	$	2.58	$	2.62

Diluted earnings per share	$	0.76	$	0.90	$	0.73	$	2.54	$	2.56


AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)

	Three Months Ended
	September 30, 2024						June 30, 2024						September 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)	$	2,134,318	$	38,690	7.21	%	$	1,987,533	$	35,421	7.17	%	$	1,740,582	$	30,084	6.86	%
Taxable securities	177,164		2,205		4.95	%	165,141		2,039		4.97	%	156,364		1,796		4.56	%
Nontaxable securities	46,586		243		2.08	%	45,537		231		2.04	%	45,466		227		1.98	%
Other interest-earnings assets	287,320		3,930		5.44	%	242,214		3,316		5.51	%	232,691		3,097		5.28	%
Total interest-earning assets	$	2,645,388	$	45,068	6.78	%	$	2,440,425	$	41,007	6.76	%	$	2,175,103	$	35,204	6.42	%
Allowance for credit losses	(27,253)						(25,332)						(21,606)
Noninterest-earning assets	159,080						137,917						128,720
Total Assets	$	2,777,215					$	2,553,010					$	2,282,217

Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts	95,040		30		0.13	%	85,976		21		0.10	%	88,668		20		0.09	%
Savings and money market accounts	1,042,661		10,264		3.92	%	929,930		9,229		3.99	%	867,066		7,767		3.55	%
Time deposits	737,160		8,696		4.69	%	713,776		8,261		4.65	%	516,290		4,945		3.80	%
FHLB advances	36,130		455		5.01	%	48,374		596		4.96	%	43,261		514		4.72	%
Other borrowings	97,905		1,377		5.59	%	94,815		1,321		5.60	%	86,621		1,227		5.62	%
Total interest-bearing liabilities	$	2,008,896	$	20,822	4.12	%	$	1,872,871	$	19,428	4.17	%	$	1,601,906	$	14,473	3.58	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	490,450					$	420,885					$	448,616
Other liabilities	31,788						32,727						28,740
Total noninterest-bearing liabilities	$	522,238					$	453,612					$	477,356
Stockholders’ Equity	246,081						226,527						202,955
Total Liabilities and Stockholders’ Equity	$	2,777,215					$	2,553,010					$	2,282,217

Net interest income			$	24,246					$	21,579					$	20,731
Net interest spread(2)					2.66	%					2.59	%					2.84	%
Net interest margin(3)					3.65	%					3.56	%					3.78	%
Net interest margin - FTE(4)(5)					3.66	%					3.57	%					3.79	%
Cost of funds(6)					3.31	%					3.41	%					2.80	%
Cost of interest-bearing deposits					4.03	%					4.07	%					3.43	%
Cost of total deposits					3.19	%					3.27	%					2.63	%


AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)

	Nine Months Ended
	September 30, 2024						September 30, 2023
	Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)	$	2,013,157	$	107,739	7.15	%	$	1,676,134	$	83,049	6.62	%
Taxable securities	168,661		6,225		4.93	%	149,058		4,819		4.32	%
Nontaxable securities	45,833		704		2.05	%	47,947		747		2.08	%
Other interest-earnings assets	247,035		10,143		5.48	%	199,379		7,473		5.01	%
Total interest-earning assets	$	2,474,686	$	124,811	6.74	%	$	2,072,518	$	96,088	6.20	%
Allowance for credit losses	(25,638)						(20,750)
Noninterest-earning assets	144,127						129,083
Total Assets	$	2,593,175					$	2,180,851

Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts	88,980		78		0.12	%	91,602		59		0.09	%
Savings and money market accounts	958,625		28,296		3.94	%	839,827		19,679		3.13	%
Time deposits	698,815		24,033		4.59	%	464,100		11,760		3.39	%
FHLB advances	45,840		1,706		4.97	%	35,703		1,202		4.50	%
Other borrowings	96,130		4,034		5.60	%	86,453		3,679		5.69	%
Total interest-bearing liabilities	$	1,888,390	$	58,147	4.11	%	$	1,517,685	$	36,379	3.20	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	442,667					$	442,149
Other liabilities	31,319						26,587
Total noninterest-bearing liabilities	$	473,986					$	468,736
Stockholders’ Equity	230,799						194,430
Total Liabilities and Stockholders’ Equity	$	2,593,175					$	2,180,851

Net interest income			$	66,664					$	59,709
Net interest spread(2)					2.63	%					3.00	%
Net interest margin(3)					3.60	%					3.85	%
Net interest margin - FTE(4)(5)					3.61	%					3.87	%
Cost of funds(6)					3.33	%					2.48	%
Cost of interest-bearing deposits					4.01	%					3.02	%
Cost of total deposits					3.20	%					2.29	%


LOAN COMPOSITION
(Dollars in thousands)

	September 30, 2024				June 30, 2024				December 31, 2023				September 30, 2023
	Amount		% of gross		Amount		% of gross		Amount		% of gross		Amount		% of gross

Real estate mortgages:
Construction and development	$	245,275	11.1	%	$	242,573	12.0	%	$	242,960	12.9	%	$	229,188	12.9	%
Residential	293,150		13.3	%	249,498		12.3	%	224,603		11.9	%	224,499		12.6	%
Commercial	1,344,554		61.0	%	1,222,739		60.5	%	1,144,867		60.5	%	1,049,545		59.0	%
Commercial and industrial	310,540		14.1	%	297,501		14.7	%	269,961		14.3	%	268,283		15.0	%
Consumer and other	12,228		0.5	%	9,566		0.5	%	8,286		0.4	%	8,331		0.5	%
Gross loans	2,205,747		100.0	%	2,021,877		100.0	%	1,890,677		100.0	%	1,779,846		100.0	%
Unearned income	(6,536)				(6,443)				(6,169)				(5,698)
Loans, net of unearned income	2,199,211				2,015,434				1,884,508				1,774,148
Allowance for credit losses	(28,061)				(25,828)				(24,378)				(22,181)
Loans, net	$	2,171,150			$	1,989,606			$	1,860,130			$	1,751,967


DEPOSIT COMPOSITION
(Dollars in thousands)

	September 30, 2024				June 30, 2024				December 31, 2023				September 30, 2023
	Amount		% of total		Amount		% of total		Amount		% of total		Amount		% of total


Noninterest-bearing transaction	$	546,282	22.5	%	$	416,068	19.1	%	$	437,959	21.7	%	$	418,125	21.8	%
Interest-bearing transaction	1,124,706		46.5	%	1,006,687		46.3	%	946,347		46.9	%	934,383		48.8	%
Savings	53,565		2.2	%	32,527		1.5	%	35,412		1.7	%	38,518		2.0	%
Time deposits, $250,000 and under	558,600		23.1	%	612,299		28.1	%	500,406		24.8	%	436,613		22.8	%
Time deposits, over $250,000	137,393		5.7	%	108,097		5.0	%	98,065		4.9	%	88,762		4.6	%
Total deposits	$	2,420,546	100.0	%	$	2,175,678	100.0	%	$	2,018,189	100.0	%	$	1,916,401	100.0	%


Nonperforming Assets
(Dollars in thousands)

	September 30, 2024			June 30, 2024			December 31, 2023			September 30, 2023


Nonaccrual loans	$	7,803		$	3,784		$	1,017		$	1,082
Past due loans 90 days or more and still accruing interest	65			—			160			—
Total nonperforming loans	7,868			3,784			1,177			1,082
OREO	33			33			33			2,903

Total nonperforming assets	$	7,901		$	3,817		$	1,210		$	3,985

Financial difficulty modification loans – nonaccrual(1)	622			647			907			970
Financial difficulty modification loans – accruing	1,071			1,093			1,095			1,052
Financial difficulty modification loans	$	1,693		$	1,740		$	2,002		$	2,022

Allowance for credit losses	$	28,061		$	25,828		$	24,378		$	22,181
Loans, net of unearned income at the end of the period	$	2,199,211		$	2,015,434		$	1,884,508		$	1,774,148
Gross loans outstanding at the end of period	$	2,205,747		$	2,021,877		$	1,890,677		$	1,779,846
Total assets	$	2,841,440		$	2,572,011		$	2,446,663		$	2,296,527
Allowance for credit losses to nonperforming loans	356.65		%	682.56		%	2071.20		%	2050.00		%
Nonperforming loans to loans, net of unearned income	0.36		%	0.19		%	0.06		%	0.06		%
Nonperforming loans to gross loans	0.36		%	0.19		%	0.06		%	0.06		%
Nonperforming assets to gross loans and OREO	0.36		%	0.19		%	0.06		%	0.22		%
Nonperforming assets to total assets	0.28		%	0.15		%	0.05		%	0.17		%

Nonaccrual loans by category:
Real estate mortgages:
Construction & Development	$	—		$	—		$	—		$	—
Residential Mortgages	522			393			252			289
Commercial Real Estate Mortgages	2,155			2,182			765			785
Commercial & Industrial	5,126			1,209			—			8
Consumer and other	—			—			—			—
Total	$	7,803		$	3,784		$	1,017		$	1,082


Allowance for Credit Losses
(Dollars in thousands)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Average loans, net of unearned income	$	2,134,318		$	1,987,533		$	1,740,582		$	2,013,157		$	1,676,134
Loans, net of unearned income	2,199,211			2,015,434			1,774,148			2,199,211			1,774,148
Gross loans	2,205,747			2,021,877			1,779,846			2,205,747			1,779,846
Allowance for credit losses at beginning of the period	25,828			25,144			21,385			24,378			20,156
Impact of adoption of ASC 326	—			—			—			—			(1,285)
Charge-offs:
Construction and development	—			—			3			—			3
Residential	—			—			—			11			—
Commercial	119			11			—			157			—
Commercial and industrial	384			384			—			1,210			262
Consumer and other	—			10			—			25			6
Total charge-offs	503			405			3			1,403			271
Recoveries:
Construction and development	—			—			—			—			—
Residential	13			6			10			27			38
Commercial	—			—			—			—			—
Commercial and industrial	139			15			—			171			14
Consumer and other	1			1			16			3			18
Total recoveries	153			22			26			201			70
Net charge-offs (recoveries)	$	350		$	383		$	(23)		$	1,202		$	201

Provision for credit losses	$	2,583		$	1,067		$	773		$	4,885		$	3,511
Balance at end of the period	$	28,061		$	25,828		$	22,181		$	28,061		$	22,181

Allowance for credit losses on unfunded commitments at beginning of the period	$	1,206		$	1,288		$	1,495		$	1,239		$	—
Impact of adoption of ASC 326	—			—			—			—			1,285
Day 2 impact from acquisition	199			—			—			199			—
(Credit) provision for credit losses on unfunded commitments	—			(82)			29			(33)			239
Balance at the end of the period	$	1,405		$	1,206		$	1,524		$	1,405		$	1,524

Allowance to loans, net of unearned income	1.28		%	1.28		%	1.25		%	1.28		%	1.25		%
Allowance to gross loans	1.27		%	1.28		%	1.25		%	1.27		%	1.25		%
Net charge-offs (recoveries) to average loans, net of unearned income(1)	0.07		%	0.08		%	(0.01)		%	0.08		%	0.02		%
Provision for credit losses to average loans, net of unearned income(1)	0.48		%	0.22		%	0.18		%	0.32		%	0.28		%

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.


Reconciliation of Non-GAAP Financial Measures
(Dollars in thousands, except share and per share amounts)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Net income	$	7,353		$	8,198		$	6,629		$	23,670		$	23,056
Add: One-time retirement related expenses	—			—			—			—			1,571
Add: Professional fees related to ERC	—			—			(1,243)			—			—
Add: Wire fraud loss	—			1,155			—			1,155			—
Add: Merger-related expenses	1,511			—			—			1,511			—
Add: Net OREO gain	—			(3)			(9)			(3)			(2)

Less: Employee retention related revenue	—			—			(5,100)			—			—



Less: Net gain (loss) on securities	75			20			(12)			83			457
Less: Tax effect	114			272			926			388			267
Core net income	$	8,675		$	9,058		$	9,563		$	25,862		$	23,901
Average assets	$	2,777,215		$	2,553,010		$	2,282,217		$	2,593,175		$	2,180,851
Core return on average assets	1.24		%	1.43		%	1.66		%	1.33		%	1.47		%

Net income	$	7,353		$	8,198		$	6,629		$	23,670		$	23,056
Add: One-time retirement related expenses	—			—			—			—			1,571
Add: Professional fees related to ERC	—			—			(1,243)			—			—
Add: Wire fraud loss	—			1,155			—			1,155			—
Add: Merger-related expenses	1,511			—			—			1,511			—
Add: Net OREO gain	—			(3)			(9)			(3)			(2)
Add: Provision	2,583			1,067			773			4,885			3,511

Less: Employee retention related revenue	—			—			(5,100)			—			—



Less: Net gain (loss) on securities	75			20			(12)			83			457
Add: Income taxes	2,380			2,271			1,866			7,029			6,738
Pretax pre-provision core net income	$	13,752		$	12,668		$	13,128		$	38,164		$	34,417
Average assets	$	2,777,215		$	2,553,010		$	2,282,217		$	2,593,175		$	2,180,851
Pretax pre-provision core return on average assets	1.97		%	2.00		%	2.28		%	1.97		%	2.11		%

Net interest income	$	24,246		$	21,579		$	20,731		$	66,664		$	59,709
Add: Fully-taxable equivalent adjustments(1)	75			73			70			222			213
Net interest income - FTE	$	24,321		$	21,652		$	20,801		$	66,886		$	59,922

Net interest margin	3.65		%	3.56		%	3.78		%	3.60		%	3.85		%
Effect of fully-taxable equivalent adjustments(1)	0.01		%	0.01		%	0.01		%	0.01		%	0.02		%
Net interest margin - FTE	3.66		%	3.57		%	3.79		%	3.61		%	3.87		%

Total stockholders' equity	$	271,370		$	230,581		$	201,924		$	271,370		$	201,924
Less: Intangible assets	40,318			17,597			17,843			40,318			17,843

Tangible common equity	$	231,052		$	212,984		$	184,081		$	231,052		$	184,081

(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									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Core net income	$	8,675		$	9,058		$	9,563		$	25,862		$	23,901
Diluted weighted average shares outstanding	9,725,884			9,070,568			9,040,687			9,297,778			9,016,603
Diluted core earnings per share	$	0.89		$	1.00		$	1.06		$	2.78		$	2.65

Common shares outstanding at year or period end	9,882,350			8,908,130			8,834,168			9,882,350			8,834,168
Tangible book value per share	$	23.38		$	23.91		$	20.84		$	23.38		$	20.84

Total assets at end of period	$	2,841,440		$	2,572,011		$	2,296,527		$	2,841,440		$	2,296,527
Less: Intangible assets	40,318			17,597			17,843			40,318			17,843
Adjusted assets at end of period	$	2,801,122		$	2,554,414		$	2,278,684		$	2,801,122		$	2,278,684
Tangible common equity to tangible assets	8.25		%	8.34		%	8.08		%	8.25		%	8.08		%

Total average shareholders equity	$	246,081		$	226,527		$	202,955		$	230,799		$	194,430
Less: Average intangible assets	26,884			17,646			17,893			20,776			17,973
Average tangible common equity	$	219,197		$	208,881		$	185,062		$	210,023		$	176,457
Net income to common shareholders	$	7,353		$	8,198		$	6,629		$	23,670		$	23,056
Return on average tangible common equity	13.35		%	15.79		%	14.21		%	15.05		%	17.47		%
Average tangible common equity	$	219,197		$	208,881		$	185,062		$	210,023		$	176,457
Core net income	$	8,675		$	9,058		$	9,563		$	25,862		$	23,901
Core return on average tangible common equity	15.74		%	17.44		%	20.50		%	16.45		%	18.11		%

Net interest income	$	24,246		$	21,579		$	20,731		$	66,664		$	59,709
Add: Noninterest income	1,757			1,368			(2,894)			4,393			5,755

Less: Employee retention related revenue	—			—			(5,100)			—			—



Less: Net gain (loss) on securities	75			20			(12)			83			457
Operating revenue	$	25,928		$	22,927		$	22,949		$	70,974		$	65,007

Expenses:
Total noninterest expense	$	13,687		$	11,411		$	8,569		$	35,473		$	32,159
Less: One-time retirement related expenses	—			—			—			—			1,571
Less: Professional fees related to ERC	—			—			(1,243)			—			—
Less: Wire fraud loss	—			1,155			—			1,155			—
Less: Merger-related expenses	1,511			—			—			1,511			—
Less: Net OREO gain	—			(3)			(9)			(3)			(2)

Adjusted noninterest expenses	$	12,176		$	10,259		$	9,821		$	32,810		$	30,590
Core efficiency ratio	46.96		%	44.75		%	42.79		%	46.23		%	47.06		%


SOUTHERN STATES BANCSHARES, INC.			615 Quintard Avenue / Anniston, AL 36201 / (256) 241-1092