Southern States Bancshares, Inc. Announces Third Quarter 2023 Financial Results

Third Quarter 2023 Performance and Operational Highlights

• Core net income⁽¹⁾ of $9.6 million, or $1.06 per diluted share⁽¹⁾

• Net income of $6.6 million, or $0.73 per diluted share

• Net interest income of $20.7 million, an increase of $1.3 million from the prior quarter

• Net interest margin ("NIM") of 3.78%, up 5 basis points from the prior quarter

• NIM of 3.79% on a fully-taxable equivalent basis ("NIM - FTE")⁽¹⁾

• Return on average assets ("ROAA") of 1.15%; return on average stockholders' equity ("ROAE") of 12.96%; and return on average tangible common equity ("ROATCE")⁽¹⁾ of 14.21%

• Core ROAA⁽¹⁾ of 1.66%; and core ROATCE⁽¹⁾ of 20.50%

• Efficiency ratio of 48.01%; and core efficiency ratio of 42.79%

• Linked-quarter loan growth was 13.3% annualized

• Linked-quarter total deposits declined 1.5% annualized, primarily due to a reduction in brokered deposits

• Linked-quarter total deposits, excluding brokered deposits, increased 4.2% annualized from the prior quarter

^{(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., Oct. 23, 2023 (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 $6.6 million, or $0.73 diluted earnings per share, for the third quarter of 2023. This compares to net income of $8.8 million, or $0.98 diluted earnings per share, for the second quarter of 2023, and net income of $6.7 million, or $0.75 diluted earnings per share, for the third quarter of 2022. The Company reported core net income of $9.6 million, or $1.06 diluted core earnings per share, for the third quarter of 2023. This compares to core net income of $7.1 million, or $0.79 diluted core earnings per share, for the second quarter of 2023, and core net income of $6.8 million, or $0.77 diluted core earnings per share, for the third quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures").

CEO Commentary
Mark Chambers, Chief Executive Officer and President of Southern States, said, "Our business development teams continued to identify compelling opportunities in the third quarter, driving annualized sequential loan growth of 13.3% and maintaining the strong momentum we've generated over the past two years as we meet steady loan demand across our economically dynamic footprint."
"Our growth positioned the bank to capitalize on higher rates, with increased yields on earning assets driving a nearly 7% gain in net interest income from the second quarter and from a year earlier, bolstering our core earnings. As we pursue new business, we remain committed to diligent underwriting and robust credit quality. Our non-performing loans as a percentage of the overall loan portfolio totaled just 0.06%, consistent with the prior quarter."
"Importantly, we continue to fund our loan growth with a healthy deposit franchise. Our funding costs did increase during the third quarter to remain competitive in terms of price amid higher rates to keep our total deposit levels relatively stable. However, this was more than offset by our loan growth and gains in yields, and our net interest margin expanded by 5 basis points in the quarter as a result."

During the second quarter of 2023, the Company received a $5.1 million employee retention credit ("ERC"). The second quarter of 2023 included the $5.1 million ERC in noninterest income, and also included $1.2 million in noninterest expense for professional fees paid by the Company in obtaining the ERC. After reviewing the revised IRS guidelines pertaining to ERC issued during the third quarter, the Company determined to return the full $5.1 million ERC to the IRS and has recorded a payable. The Company will also receive a refund of all professional fees totaling $1.2 million related to ERC. Accordingly, the third quarter of 2023 reflects a $5.1 million reduction in noninterest income and a $1.2 million reduction in noninterest expense related to the return of the ERC. This was deemed a change in circumstance between the second and third quarters of 2023. The following table for the three months ended June 30, 2023 and the three months ended September 30, 2023 eliminates the effect of the ERC. There is no impact on the nine months ended September 30, 2023.

Results excluding ERC
	Three Months Ended								Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2023
Results of Operations
Interest income	$	35,204			$	32,185			$	96,088
Interest expense		14,473				12,753				36,379
Net interest income		20,731				19,432				59,709
Provision for credit losses		773				1,557				3,511
Net interest income after provision		19,958				17,875				56,198
Noninterest income		2,206				1,762				5,755
Noninterest expense		9,812				12,189				32,159
Income tax expense		2,843				1,572				6,738
Net income	$	9,509			$	5,876			$	23,056
Per Share Data
Earnings per share:
Basic	$	1.07			$	0.67			$	2.62
Diluted	$	1.05			$	0.66			$	2.56
Performance and Financial Ratios
ROAA		1.65	%			1.07	%			1.41		%
ROAE		18.59	%			12.18	%			15.85		%
Efficiency ratio		42.76	%			57.39	%			49.47		%

Net Interest Income and Net Interest Margin
	Three Months Ended												% Change September 30, 2023 vs.
	September 30, 2023				June 30, 2023				September 30, 2022				June 30, 2023			September 30, 2022
	(Dollars in thousands)
Average interest-earning assets	$	2,175,103			$	2,091,998			$	1,859,104			4.0	%		17.0	%
Net interest income	$	20,731			$	19,432			$	19,435			6.7	%		6.7	%
Net interest margin		3.78	%			3.73	%			4.15	%		5	bps		(37	) bps

Net interest income for the third quarter of 2023 was $20.7 million, an increase of 6.7% from $19.4 million for the second quarter of 2023. The increase was primarily driven by the impact of a higher yield on interest-earning assets due to both growth and higher interest rates, which more than offset a higher cost of interest-bearing deposits primarily due to rising interest rates.

Relative to the third quarter of 2022, net interest income increased $1.3 million, or 6.7%. The increase was primarily the result of a sharp improvement in the yield on interest-earning assets due to both year over year growth and higher interest rates, which outpaced the accelerated rise in costs on interest-bearing liabilities due to a rapid rise in interest rates, coupled with growth in interest-bearing liabilities. A portion of the growth in interest-bearing deposits is due to migration from noninterest-bearing into interest-bearing deposits.

Net interest margin for the third quarter of 2023 was 3.78%, compared to 3.73% for the second quarter of 2023. The increase was primarily due to an increase in the average balance and yield on interest-earning assets, which outpaced the combined effect of higher average balances and cost of interest-bearing deposits.

Relative to the third quarter of 2022, net interest margin decreased from 4.15%. The decrease was primarily due to a rapid increase in interest rates, which accelerated the cost on interest-bearing liabilities at a faster 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 September 30, 2023 vs.
	September 30, 2023				June 30, 2023				September 30, 2022				June 30, 2023			September 30, 2022
	(Dollars in thousands)
Service charges on deposit accounts	$	442			$	456			$	508			(3.1	)%		(13.0	)%
Swap fees		453				173				11			161.8	%		4018.2	%
SBA/USDA fees		74				66				95			12.1	%		(22.1	)%
Mortgage origination fees		158				188				218			(16.0	)%		(27.5	)%
Net loss on securities		(12	)			(45	)			(143	)		(73.3	)%		(91.6	)%
Employee retention credit and related revenue		(5,100	)			5,100				—			N/A			N/A
Other operating income		1,091				924				650			18.1	%		67.8	%
Total noninterest income	$	(2,894	)		$	6,862			$	1,339			(142.2	)%		(316.1	)%

Noninterest income for the third quarter of 2023 was reported as a $2.9 million net expense, compared to noninterest income of $6.9 million for the second quarter of 2023. The change in ERC eligibility between the second and third quarters of 2023 is substantially the reason for the significant variation. This decrease was partially offset by a $280,000 increase in swap fees during the third quarter of 2023.

Relative to the third quarter of 2022, noninterest income decreased 316.1% from $1.3 million. The decrease was substantially due to the aforementioned return of ERC. This decrease was partially offset by a $280,000 increase in swap fees during the third quarter of 2023 and $132,000 in dividend income realized on equity securities.

Noninterest Expense
	Three Months Ended										% Change September 30, 2023 vs.
	September 30, 2023				June 30, 2023			September 30, 2022			June 30, 2023			September 30, 2022
	(Dollars in thousands)
Salaries and employee benefits	$	5,752			$	7,863		$	6,152		(26.8	)%		(6.5	)%
Equipment and occupancy expenses		718				694			764		3.5	%		(6.0	)%
Data processing fees		650				646			599		0.6	%		8.5	%
Regulatory assessments		322				180			235		78.9	%		37.0	%
Professional fees related to ERC		(1,243	)			1,243			—		N/A			N/A
Other operating expenses		2,370				2,806			2,487		(15.5	)%		(4.7	)%
Total noninterest expenses	$	8,569			$	13,432		$	10,237		(36.2	)%		(16.3	)%

Noninterest expense for the third quarter of 2023 was $8.6 million, a decrease of 36.2% from $13.4 million for the second quarter of 2023. The decrease was substantially attributable to a decrease in salaries and benefits as a result of significantly less retirement expenses during the third quarter of 2023, in addition to several open positions. Additionally, the change in ERC eligibility resulted in a $1.2 million refund of professional fees related to the ERC. Provision for unfunded loan commitments decreased $181,000 during the third quarter of 2023.

Relative to the third quarter of 2022, noninterest expense decreased 16.3% from $10.2 million. The decrease was substantially due to the aforementioned refund of professional fees related to the ERC, a decrease in salaries and benefits as a result of a reduction in employees and a net reduction in forgery/fraud losses during the third quarter of 2023.

Loans and Credit Quality
	Three Months Ended												% Change September 30, 2023 vs.
	September 30, 2023				June 30, 2023				September 30, 2022				June 30, 2023			September 30, 2022
	(Dollars in thousands)
Gross loans		1,779,846				1,722,278				1,530,129			3.3	%		16.3		%
Unearned income		(5,698	)			(5,766	)			(5,139	)		(1.2	)%		10.9		%
Loans, net of unearned income ("Loans")	$	1,774,148			$	1,716,512			$	1,524,990			3.4	%		16.3		%
Average loans, net of unearned ("Average loans")	$	1,740,582			$	1,676,816			$	1,480,735			3.8	%		17.5		%
Nonperforming loans ("NPL")	$	1,082			$	1,010			$	3,950			7.1	%		(72.6		)%
Provision for credit losses	$	773			$	1,557			$	1,663			(50.4	)%		(53.5		)%
Allowance for credit losses ("ACL")	$	22,181			$	21,385			$	18,423			3.7	%		20.4		%
Net charge-offs (recoveries)	$	(23	)		$	27			$	47			(185.2	)%		(148.9		)%
NPL to gross loans		0.06	%			0.06	%			0.26	%
Net charge-offs (recoveries) to average loans(1)	(0.01		)%			0.01	%			0.01	%
ACL to loans		1.25	%			1.25	%			1.21	%
(1)   Ratio is annualized.

Loans, net of unearned income, were $1.8 billion at September 30, 2023, up $57.6 million from June 30, 2023 and up $249.2 million from September 30, 2022. The linked-quarter and year-over-year increases in loans were primarily attributable to new business growth across our footprint.

Nonperforming loans totaled $1.1 million, or 0.06% of gross loans, at September 30, 2023, compared with $1.0 million, or 0.06% of gross loans, at June 30, 2023, and $4.0 million, or 0.26% of gross loans, at September 30, 2022. The $72,000 net increase in nonperforming loans in the third quarter of 2023 was primarily attributable to a commercial real estate loan that was added to nonaccrual status and partially offset by a commercial real estate loan that moved back to accruing status. The $2.9 million net decrease in nonperforming loans from September 30, 2022, was primarily attributable to a significant commercial real estate loan being moved back to accruing status, two loans that were paid-off and one loan that was charged-off.

The Company recorded a provision for credit losses of $773,000 for the third quarter of 2023, compared to $1.6 million for the second quarter of 2023. Provision in the second quarter of 2023 was based on increases for qualitative economic factors as well as loan growth, whereas provision in the third quarter of 2023 was based solely on loan growth. The Company expects future provisions to be based on loan growth, unless credit issues arise.

Net recoveries for the third quarter of 2023 were $23,000, or (0.01)% of average loans on an annualized basis, compared to net charge-offs of $27,000, or 0.01% of average loans on an annualized basis, for the second quarter of 2023, and net charge-offs of $47,000, or 0.01% of average loans on an annualized basis, for the third quarter of 2022.

The Company's allowance for credit losses was 1.25% of total loans and 2050.00% of nonperforming loans at September 30, 2023, compared with 1.25% of total loans and 2117.33% of nonperforming loans at June 30, 2023. Allowance for credit losses on unfunded commitments was $1.5 million at September 30, 2023.

Deposits
	Three Months Ended												% Change September 30, 2023 vs.
	September 30, 2023				June 30, 2023				September 30, 2022				June 30, 2023			September 30, 2022
	(Dollars in thousands)
Noninterest-bearing deposits	$	418,125			$	449,433			$	499,613			(7.0	)%		(16.3	)%
Interest-bearing deposits		1,498,276				1,474,478				1,267,479			1.6	%		18.2	%
Total deposits	$	1,916,401			$	1,923,911			$	1,767,092			(0.4	)%		8.4	%
Uninsured deposits	$	568,323			$	553,084			$	707,371			2.8	%		(19.7	)%
Uninsured deposits to total deposits		29.66	%			28.75	%			40.03	%
Noninterest deposits to total deposits		21.82	%			23.36	%			28.27	%

Total deposits were $1.9 billion at September 30, 2023, down slightly from June 30, 2023 and up from $1.8 billion at September 30, 2022. The $7.5 million decrease in total deposits in the third quarter was primarily related to a reduction in brokered deposits of $25.9 million, partially offset by an $18.4 million increase in customer deposits. Total brokered deposits were $168.3 million at September 30, 2023.

Capital
	September 30, 2023						June 30, 2023						September 30, 2022
	Company			Bank			Company			Bank			Company			Bank
Tier 1 capital ratio to average assets	8.70	%		11.71	%		8.70	%		11.82	%		8.44	%		11.49	%
Risk-based capital ratios:
Common equity tier 1 ("CET1") capital ratio	9.32	%		12.55	%		9.11	%		12.37	%		8.73	%		11.89	%
Tier 1 capital ratio	9.32	%		12.55	%		9.11	%		12.37	%		8.73	%		11.89	%
Total capital ratio	14.60	%		13.67	%		14.42	%		13.47	%		12.26	%		12.87	%

As of September 30, 2023, total stockholders' equity was $201.9 million, up from $197.3 million at June 30, 2023. The increase of $4.7 million was substantially due to earnings growth, partially offset by an increase in accumulated other comprehensive loss resulting from changes in the value of the available for sale securities portfolio.

About Southern States Bancshares, Inc.

Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 13 branches in Alabama and Georgia and two loan production offices in Atlanta.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which reflect our current expectations and beliefs with respect to, among other things, future events and our financial performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. This may be especially true given recent events and trends in the banking industry and the inflationary environment. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the dates made, we cannot give any assurance that such expectations will prove correct and actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 under the section entitled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors". Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict.

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

Contact Information
Lynn Joyce	Kevin Dobbs
(205) 820-8065	(310) 622-8245
[email protected]	[email protected]

SELECT FINANCIAL DATA
(Dollars in thousands, except share and per share amounts)
	Three Months Ended												Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Results of Operations
Interest income	$	35,204			$	32,185			$	22,520			$	96,088			$	56,144
Interest expense		14,473				12,753				3,085				36,379				5,690
Net interest income		20,731				19,432				19,435				59,709				50,454
Provision for credit losses		773				1,557				1,663				3,511				3,667
Net interest income after provision		19,958				17,875				17,772				56,198				46,787
Noninterest income		(2,894	)			6,862				1,339				5,755				4,074
Noninterest expense		8,569				13,432				10,237				32,159				29,178
Income tax expense		1,866				2,549				2,174				6,738				5,204
Net income	$	6,629			$	8,756			$	6,700			$	23,056			$	16,479
Core net income(1)	$	9,563			$	7,058			$	6,806			$	23,901			$	16,883
Share and Per Share Data
Shares issued and outstanding		8,834,168				8,738,814				8,705,920				8,834,168				8,705,920
Weighted average shares outstanding:
Basic		8,846,018				8,763,635				8,693,745				8,791,007				8,797,720
Diluted		9,040,687				8,950,847				8,871,116				9,016,603				8,952,600
Earnings per share:
Basic	$	0.75			$	1.00			$	0.77			$	2.62			$	1.87
Diluted	$	0.73			$	0.98			$	0.75			$	2.56			$	1.84
Core - diluted(1)	$	1.06			$	0.79			$	0.77			$	2.65			$	1.89
Book value per share	$	22.86			$	22.57			$	19.56			$	22.86			$	19.56
Tangible book value per share(1)	$	20.84			$	20.52			$	17.48			$	20.84			$	17.48
Cash dividends per common share	$	0.09			$	0.09			$	0.09			$	0.27			$	0.27
Performance and Financial Ratios
ROAA		1.15	%			1.60	%			1.35	%			1.41	%			1.19	%
ROAE		12.96	%			18.15	%			15.42	%			15.85	%			12.72	%
Core ROAA(1)		1.66	%			1.29	%			1.37	%			1.47	%			1.21	%
ROATCE(1)		14.21	%			20.01	%			17.24	%			17.47	%			14.22	%
Core ROATCE(1)		20.50	%			16.13	%			17.51	%			18.11	%			14.57	%
NIM		3.78	%			3.73	%			4.15	%			3.85	%			3.85	%
NIM - FTE(2)		3.79	%			3.74	%			4.17	%			3.87	%			3.87	%
Net interest spread		2.84	%			2.86	%			3.86	%			3.00	%			3.64	%
Yield on loans		6.86	%			6.61	%			5.37	%			6.62	%			4.97	%
Yield on interest-earning assets		6.42	%			6.17	%			4.81	%			6.20	%			4.29	%
Cost of interest-bearing liabilities		3.58	%			3.31	%			0.95	%			3.20	%			0.65	%
Cost of funds(2)		2.80	%			2.58	%			0.69	%			2.48	%			0.46	%
Cost of interest-bearing deposits		3.43	%			3.12	%			0.82	%			3.02	%			0.52	%
Cost of total deposits		2.63	%			2.38	%			0.58	%			2.29	%			0.36	%
Noninterest deposits to total deposits		21.82	%			23.36	%			28.27	%			21.82	%			28.27	%
Core deposits to total deposits		86.58	%			86.18	%			92.17	%			86.58	%			92.17	%
Uninsured deposits to total deposits		29.66	%			28.75	%			40.03	%			29.66	%			40.03	%
Total loans to total deposits		92.58	%			89.22	%			86.30	%			92.58	%			86.30	%
Efficiency ratio		48.01	%			51.00	%			48.94	%			49.47	%			52.98	%
Core efficiency ratio(1)		42.79	%			49.96	%			48.94	%			47.06	%			52.98	%

<sup>(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.</sup>

SELECT FINANCIAL DATA
(Dollars in thousands)
	Three Months Ended												Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Financial Condition (ending)
Total loans	$	1,774,148			$	1,716,512			$	1,524,990			$	1,774,148			$	1,524,990
Total securities		189,496				182,717				170,375				189,496				170,375
Total assets		2,296,527				2,277,803				2,052,725				2,296,527				2,052,725
Total noninterest bearing deposits		418,125				449,433				499,613				418,125				499,613
Total core deposits(1)		1,659,291				1,657,961				1,628,660				1,659,291				1,628,660
Total deposits		1,916,401				1,923,911				1,767,092				1,916,401				1,767,092
Total borrowings		146,573				131,472				93,020				146,573				93,020
Total liabilities		2,094,603				2,080,553				1,882,400				2,094,603				1,882,400
Total shareholders' equity		201,924				197,250				170,325				201,924				170,325
Financial Condition (average)
Total loans	$	1,740,582			$	1,676,816			$	1,480,735			$	1,676,134			$	1,373,564
Total securities		201,830				196,731				185,670				197,005				175,381
Total other interest-earning assets		232,691				218,451				192,699				199,379				202,837
Total interest-bearing assets		2,175,103				2,091,998				1,859,104				2,072,518				1,751,782
Total assets		2,282,217				2,200,843				1,966,556				2,180,851				1,858,993
Total noninterest-bearing deposits		448,616				438,987				491,917				442,149				502,951
Total interest-bearing deposits		1,472,024				1,412,047				1,207,797				1,395,529				1,097,693
Total deposits		1,920,640				1,851,034				1,699,714				1,837,678				1,600,644
Total borrowings		129,882				131,411				75,039				122,156				68,719
Total interest-bearing liabilities		1,601,906				1,543,458				1,282,836				1,517,685				1,166,412
Total shareholders' equity		202,955				193,516				172,402				194,430				173,210
Asset Quality
Nonperforming loans	$	1,082			$	1,010			$	3,950			$	1,082			$	3,950
Other real estate owned ("OREO")	$	2,903			$	2,870			$	2,930			$	2,903			$	2,930
Nonperforming assets ("NPA")	$	3,985			$	3,880			$	6,880			$	3,985			$	6,880
Net charge-offs (recovery) to average loans(2)	(0.01)         %					0.01	%			0.01	%			0.02	%			0.01	%
Provision for credit losses to average loans(2)		0.18	%			0.37	%			0.45	%			0.28	%			0.36	%
ACL to loans		1.25	%			1.25	%			1.21	%			1.25	%			1.21	%
ACL to gross loans		1.25	%			1.24	%			1.20	%			1.25	%			1.20	%
ACL to NPL		2050.00	%			2117.33	%			466.41	%			2050.00	%			466.41	%
NPL to loans		0.06	%			0.06	%			0.26	%			0.06	%			0.26	%
NPL to gross loans		0.06	%			0.06	%			0.26	%			0.06	%			0.26	%
NPA to gross loans and OREO		0.22	%			0.22	%			0.45	%			0.22	%			0.45	%
NPA to total assets		0.17	%			0.17	%			0.34	%			0.17	%			0.34	%
Regulatory and Other Capital Ratios
Total shareholders' equity to total assets		8.79	%			8.66	%			8.30	%			8.79	%			8.30	%
Tangible common equity to tangible assets(3)		8.08	%			7.94	%			7.48	%			8.08	%			7.48	%
Tier 1 capital ratio to average assets		8.70	%			8.70	%			8.44	%			8.70	%			8.44	%
Risk-based capital ratios:
CET1 capital ratio		9.32	%			9.11	%			8.73	%			9.32	%			8.73	%
Tier 1 capital ratio		9.32	%			9.11	%			8.73	%			9.32	%			8.73	%
Total capital ratio		14.60	%			14.42	%			12.26	%			14.60	%			12.26	%

<sup>(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.</sup>

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
	September 30, 2023				June 30, 2023				December 31, 2022				September 30, 2022
	(Unaudited)				(Unaudited)				(Audited)				(Unaudited)
Assets
Cash and due from banks	$	31,047			$	21,299			$	15,260			$	17,394
Interest-bearing deposits in banks		103,646				159,818				90,198				165,637
Federal funds sold		81,487				84,812				63,041				63,031
Total cash and cash equivalents		216,180				265,929				168,499				246,062
Securities available for sale, at fair value		169,859				163,075				155,544				150,718
Securities held to maturity, at amortized cost		19,637				19,642				19,652				19,657
Other equity securities, at fair value		3,654				3,762				4,444				5,694
Restricted equity securities, at cost		4,971				3,862				3,134				2,791
Loans held for sale		1,799				1,589				1,047				1,643
Loans, net of unearned income		1,774,148				1,716,512				1,587,164				1,524,990
Less allowance for credit losses		22,181				21,385				20,156				18,423
Loans, net		1,751,967				1,695,127				1,567,008				1,506,567
Premises and equipment, net		26,694				26,957				27,345				28,585
Accrued interest receivable		8,321				7,372				6,963				5,699
Bank owned life insurance		29,697				29,521				29,186				29,677
Annuities		15,266				15,359				15,478				15,564
Foreclosed assets		2,903				2,870				2,930				2,930
Goodwill		16,862				16,862				16,862				16,862
Core deposit intangible		981				1,062				1,226				1,302
Other assets		27,736				24,814				25,886				18,974
Total assets	$	2,296,527			$	2,277,803			$	2,045,204			$	2,052,725
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	418,125			$	449,433			$	460,977			$	499,613
Interest-bearing		1,498,276				1,474,478				1,259,766				1,267,479
Total deposits		1,916,401				1,923,911				1,720,743				1,767,092
Other borrowings		4,991				(13	)			(19	)			19,978
FHLB advances		55,000				45,000				31,000				26,000
Subordinated notes		86,582				86,485				86,314				47,042
Accrued interest payable		1,280				1,063				584				359
Other liabilities		30,349				24,107				24,863				21,929
Total liabilities		2,094,603				2,080,553				1,863,485				1,882,400
Stockholders' equity:
Common stock		44,307				43,831				43,714				43,529
Capital surplus		77,671				77,101				76,785				75,835
Retained earnings		94,429				88,603				73,764				63,956
Accumulated other comprehensive loss		(13,126	)			(10,799	)			(11,048	)			(12,403	)
Unvested restricted stock		(580	)			(709	)			(477	)			(592	)
Vested restricted stock units		(777	)			(777	)			(1,019	)			—
Total stockholders' equity		201,924				197,250				181,719				170,325
Total liabilities and stockholders' equity	$	2,296,527			$	2,277,803			$	2,045,204			$	2,052,725

CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
	Three Months Ended												Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023			September 30, 2022
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)			(Unaudited)
Interest income:
Loans, including fees	$	30,084			$	27,630			$	20,052			$	83,049		$	51,083
Taxable securities		1,796				1,641				1,010				4,819			2,417
Nontaxable securities		227				228				323				747			931
Other interest and dividends		3,097				2,686				1,135				7,473			1,713
Total interest income		35,204				32,185				22,520				96,088			56,144
Interest expense:
Deposits		12,732				10,998				2,489				31,498			4,251
Other borrowings		1,741				1,755				596				4,881			1,439
Total interest expense		14,473				12,753				3,085				36,379			5,690
Net interest income		20,731				19,432				19,435				59,709			50,454
Provision for credit losses		773				1,557				1,663				3,511			3,667
Net interest income after provision for credit losses		19,958				17,875				17,772				56,198			46,787
Noninterest income:
Service charges on deposit accounts		442				456				508				1,348			1,433
Swap fees		453				173				11				622			48
SBA/USDA fees		74				66				95				274			575
Mortgage origination fees		158				188				218				446			717
Net (loss) gain on securities		(12	)			(45	)			(143	)			457			(546	)
Employee retention credit and related revenue		(5,100	)			5,100				—				—			—
Other operating income		1,091				924				650				2,608			1,847
Total noninterest income		(2,894	)			6,862				1,339				5,755			4,074
Noninterest expenses:
Salaries and employee benefits		5,752				7,863				6,152				19,926			17,859
Equipment and occupancy expenses		718				694				764				2,095			2,188
Data processing fees		650				646				599				1,889			1,733
Regulatory assessments		322				180				235				844			760
Professional fees related to ERC		(1,243	)			1,243				—				—			—
Other operating expenses		2,370				2,806				2,487				7,405			6,638
Total noninterest expenses		8,569				13,432				10,237				32,159			29,178
Income before income taxes		8,495				11,305				8,874				29,794			21,683
Income tax expense		1,866				2,549				2,174				6,738			5,204
Net income	$	6,629			$	8,756			$	6,700			$	23,056		$	16,479
Basic earnings per share	$	0.75			$	1.00			$	0.77			$	2.62		$	1.87
Diluted earnings per share	$	0.73			$	0.98			$	0.75			$	2.56		$	1.84

AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)
	Three Months Ended
	September 30, 2023										June 30, 2023										September 30, 2022
	Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)	$	1,740,582			$	30,084		6.86	%		$	1,676,816			$	27,630		6.61	%		$	1,480,735			$	20,052		5.37	%
Taxable securities		156,364				1,796		4.56	%			151,107				1,641		4.36	%			128,932				1,010		3.11	%
Nontaxable securities		45,466				227		1.98	%			45,624				228		2.00	%			56,738				323		2.26	%
Other interest-earnings assets		232,691				3,097		5.28	%			218,451				2,686		4.93	%			192,699				1,135		2.34	%
Total interest-earning assets	$	2,175,103			$	35,204		6.42	%		$	2,091,998			$	32,185		6.17	%		$	1,859,104			$	22,520		4.81	%
Allowance for credit losses		(21,606	)									(20,154	)									(17,250	)
Noninterest-earning assets		128,720										128,999										124,702
Total Assets	$	2,282,217									$	2,200,843									$	1,966,556
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		88,668				20		0.09	%			92,245				20		0.09	%			114,517				26		0.09	%
Savings and money market accounts		867,066				7,767		3.55	%			845,742				6,872		3.26	%			811,349				1,644		0.80	%
Time deposits		516,290				4,945		3.80	%			474,060				4,106		3.47	%			281,931				819		1.15	%
FHLB advances		43,261				514		4.72	%			45,000				529		4.72	%			27,380				102		1.47	%
Other borrowings		86,621				1,227		5.62	%			86,411				1,226		5.69	%			47,659				494		4.12	%
Total interest-bearing liabilities	$	1,601,906			$	14,473		3.58	%		$	1,543,458			$	12,753		3.31	%		$	1,282,836			$	3,085		0.95	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	448,616									$	438,987									$	491,917
Other liabilities		28,740										24,882										19,401
Total noninterest-bearing liabilities		477,356										463,869										511,318
Stockholders' Equity		202,955										193,516										172,402
Total Liabilities and Stockholders' Equity	$	2,282,217									$	2,200,843									$	1,966,556
Net interest income					$	20,731									$	19,432									$	19,435
Net interest spread(2)								2.84	%									2.86	%									3.86	%
Net interest margin(3)								3.78	%									3.73	%									4.15	%
Net interest margin - FTE(4)(5)								3.79	%									3.74	%									4.17	%
Cost of funds(6)								2.80	%									2.58	%									0.69	%
Cost of interest-bearing deposits								3.43	%									3.12	%									0.82	%
Cost of total deposits								2.63	%									2.38	%									0.58	%

<sup>(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.</sup>

AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
(Dollars in thousands)
	Nine Months Ended
	September 30, 2023										September 30, 2022
	Average Balance				Interest			Yield/Rate			Average Balance				Interest			Yield/Rate
Assets:
Interest-earning assets:
Loans, net of unearned income(1)	$	1,676,134			$	83,049		6.62	%		$	1,373,564			$	51,083		4.97	%
Taxable securities		149,058				4,819		4.32	%			119,224				2,417		2.71	%
Nontaxable securities		47,947				747		2.08	%			56,157				931		2.22	%
Other interest-earnings assets		199,379				7,473		5.01	%			202,837				1,713		1.13	%
Total interest-earning assets	$	2,072,518			$	96,088		6.20	%		$	1,751,782			$	56,144		4.29	%
Allowance for credit losses		(20,750	)									(16,044	)
Noninterest-earning assets		129,083										123,255
Total Assets	$	2,180,851									$	1,858,993
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing transaction accounts		91,602				59		0.09	%			113,427				78		0.09	%
Savings and money market accounts		839,827				19,679		3.13	%			741,397				2,862		0.52	%
Time deposits		464,100				11,760		3.39	%			242,869				1,311		0.72	%
FHLB advances		35,703				1,202		4.50	%			26,115				144		0.74	%
Other borrowings		86,453				3,679		5.69	%			42,604				1,295		4.06	%
Total interest-bearing liabilities	$	1,517,685			$	36,379		3.20	%		$	1,166,412			$	5,690		0.65	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	$	442,149									$	502,951
Other liabilities		26,587										16,420
Total noninterest-bearing liabilities	$	468,736									$	519,371
Stockholders' Equity		194,430										173,210
Total Liabilities and Stockholders' Equity	$	2,180,851									$	1,858,993
Net interest income					$	59,709									$	50,454
Net interest spread(2)								3.00	%									3.64	%
Net interest margin(3)								3.85	%									3.85	%
Net interest margin - FTE(4)(5)								3.87	%									3.87	%
Cost of funds(6)								2.48	%									0.46	%
Cost of interest-bearing deposits								3.02	%									0.52	%
Cost of total deposits								2.29	%									0.36	%

<sup>(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.</sup>

LOAN COMPOSITION
(Dollars in thousands)
	September 30, 2023							June 30, 2023							December 31, 2022							September 30, 2022
	Amount				% of gross			Amount				% of gross			Amount				% of gross			Amount				% of gross
Real estate mortgages:
Construction and development	$	229,188			12.9	%		$	228,236			13.3	%		$	255,736			16.1	%		$	222,159			14.5	%
Residential		224,499			12.6	%			214,897			12.5	%			167,891			10.5	%			164,296			10.7	%
Commercial		1,049,545			59.0	%			1,011,815			58.7	%			904,872			56.8	%			889,942			58.2	%
Commercial and industrial		268,283			15.0	%			259,195			15.0	%			256,553			16.1	%			243,577			15.9	%
Consumer and other		8,331			0.5	%			8,135			0.5	%			7,655			0.5	%			10,155			0.7	%
Gross loans		1,779,846			100.0	%			1,722,278			100.0	%			1,592,707			100.0	%			1,530,129			100.0	%
Unearned income		(5,698	)						(5,766	)						(5,543	)						(5,139	)
Loans, net of unearned income		1,774,148							1,716,512							1,587,164							1,524,990
Allowance for credit losses		(22,181	)						(21,385	)						(20,156	)						(18,423	)
Loans, net	$	1,751,967						$	1,695,127						$	1,567,008						$	1,506,567

DEPOSIT COMPOSITION
(Dollars in thousands)
	September 30, 2023						June 30, 2023						December 31, 2022						September 30, 2022
	Amount			% of total			Amount			% of total			Amount			% of total			Amount			% of total
Noninterest-bearing transaction	$	418,125		21.8	%		$	449,433		23.3	%		$	460,977		26.8	%		$	499,613		28.3	%
Interest-bearing transaction		934,383		48.8	%			922,835		48.0	%			837,127		48.6	%			855,350		48.4	%
Savings		38,518		2.0	%			41,574		2.2	%			49,235		2.9	%			78,687		4.5	%
Time deposits, $250,000 and under		436,613		22.8	%			438,228		22.8	%			307,145		17.8	%			266,491		15.0	%
Time deposits, over $250,000		88,762		4.6	%			71,841		3.7	%			66,259		3.9	%			66,951		3.8	%
Total deposits	$	1,916,401		100.0	%		$	1,923,911		100.0	%		$	1,720,743		100.0	%		$	1,767,092		100.0	%

Nonperforming Assets
(Dollars in thousands)
	September 30, 2023				June 30, 2023				December 31, 2022				September 30, 2022
Nonaccrual loans	$	1,082			$	1,010			$	2,245			$	3,950
Past due loans 90 days or more and still accruing interest		—				—				—				—
Total nonperforming loans		1,082				1,010				2,245				3,950
OREO		2,903				2,870				2,930				2,930
Total nonperforming assets	$	3,985			$	3,880			$	5,175			$	6,880
Troubled debt restructured loans – nonaccrual(1)		970				724				832				1,011
Troubled debt restructured loans – accruing		1,052				1,328				1,292				1,307
Total troubled debt restructured loans	$	2,022			$	2,052			$	2,124			$	2,318
Allowance for credit losses	$	22,181			$	21,385			$	20,156			$	18,423
Loans, net of unearned income at the end of the period	$	1,774,148			$	1,716,512			$	1,587,164			$	1,524,990
Gross loans outstanding at the end of period	$	1,779,846			$	1,722,278			$	1,592,707			$	1,530,129
Total assets	$	2,296,527			$	2,277,803			$	2,045,204			$	2,052,725
Allowance for credit losses to nonperforming loans		2050.00	%			2117.33	%			897.82	%			466.41	%
Nonperforming loans to loans, net of unearned income		0.06	%			0.06	%			0.14	%			0.26	%
Nonperforming loans to gross loans		0.06	%			0.06	%			0.14	%			0.26	%
Nonperforming assets to gross loans and OREO		0.22	%			0.22	%			0.32	%			0.45	%
Nonperforming assets to total assets		0.17	%			0.17	%			0.25	%			0.34	%
Nonaccrual loans by category:
Real estate mortgages:
Construction & Development	$	—			$	33			$	67			$	70
Residential Mortgages		289				297				565				550
Commercial Real Estate Mortgages		785				671				1,278				2,888
Commercial & Industrial		8				9				312				434
Consumer and other		—				—				23				8
Total	$	1,082			$	1,010			$	2,245			$	3,950

^{(1) Troubled debt restructured loans are excluded from nonperforming loans unless they otherwise meet the definition of nonaccrual loans or are more than 90 days past due.}

Allowance for Credit Losses
(Dollars in thousands)
	Three Months Ended												Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Average loans, net of unearned income	$	1,740,582			$	1,676,816			$	1,480,735			$	1,676,134			$	1,373,564
Loans, net of unearned income	$	1,774,148			$	1,716,512			$	1,524,990			$	1,774,148			$	1,524,990
Gross loans	$	1,779,846			$	1,722,278			$	1,530,129			$	1,779,846			$	1,530,129
Allowance for credit losses at beginning of the period	$	21,385			$	19,855			$	16,807			$	20,156			$	14,844
Impact of adoption of ASC 326	$	—			$	—			$	—			$	(1,285	)		$	—
Charge-offs:
Construction and development		3				—				—				3				66
Residential		—				—				—				—				7
Commercial		—				—				—				—				—
Commercial and industrial		—				44				269				262				269
Consumer and other		—				—				1				6				8
Total charge-offs		3				44				270				271				350
Recoveries:
Construction and development		—				—				—				—				—
Residential		10				17				11				38				46
Commercial		—				—				—				—				—
Commercial and industrial		—				—				204				14				204
Consumer and other		16				—				8				18				12
Total recoveries		26				17				223				70				262
Net charge-offs (recoveries)	$	(23	)		$	27			$	47			$	201			$	88
Provision for credit losses	$	773			$	1,557			$	1,663			$	3,511			$	3,667
Balance at end of the period	$	22,181			$	21,385			$	18,423			$	22,181			$	18,423
Allowance for credit losses on unfunded commitments at beginning of the period	$	1,495			$	1,285			$	—			$	—			$	—
Impact of adoption of ASC 326		—				—				—				1,285				—
Provision for credit losses on unfunded commitments		29				210				—				239				—
Balance at the end of the period	$	1,524			$	1,495			$	—			$	1,524			$	—
Allowance to loans, net of unearned income		1.25	%			1.25	%			1.21	%			1.25	%			1.21	%
Allowance to gross loans		1.25	%			1.24	%			1.20	%			1.25	%			1.20	%
Net charge-offs (recoveries) to average loans, net of unearned income(1)	(0.01		)%			0.01	%			0.01	%			0.02	%			0.01	%
Provision for credit losses to average loans, net of unearned income(1)		0.18	%			0.37	%			0.45	%			0.28	%			0.36	%

^{(1) Ratio is annualized.}

Reconciliation of Non-GAAP Financial Measures

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												Nine Months Ended
	September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net income	$	6,629			$	8,756			$	6,700			$	23,056			$	16,479
Add:  One-time retirement related expenses		—				1,571				—				1,571				—
Add:  Professional fees related to ERC		(1,243	)			1,243				—				—				—
Add:  Net OREO (losses) gains		(9	)			7				—				(2	)			—
Less: Employee retention related revenue		(5,100	)			5,100				—				—				—
Less: (Loss) gain on securities		(12	)			(45	)			(143	)			457				(546	)
Less: Tax effect		926				(536	)			37				267				142
Core net income	$	9,563			$	7,058			$	6,806			$	23,901			$	16,883
Average assets	$	2,282,217			$	2,200,843			$	1,966,556			$	2,180,851			$	1,858,993
Core return on average assets		1.66	%			1.29	%			1.37	%			1.47	%			1.21	%
Net income	$	6,629			$	8,756			$	6,700			$	23,056			$	16,479
Add:  One-time retirement related expenses		—				1,571				—				1,571				—
Add:  Professional fees related to ERC		(1,243	)			1,243				—				—				—
Add:  Net OREO (losses) gains		(9	)			7				—				(2	)			—
Add:  Provision		773				1,557				1,663				3,511				3,667
Less: Employee retention related revenue		(5,100	)			5,100				—				—				—
Less: (Loss) gain on securities		(12	)			(45	)			(143	)			457				(546	)
Add:  Income taxes		1,866				2,549				2,174				6,738				5,204
Pretax pre-provision core net income	$	13,128			$	10,628			$	10,680			$	34,417			$	25,896
Average assets	$	2,282,217			$	2,200,843			$	1,966,556			$	2,180,851			$	1,858,993
Pretax pre-provision core return on average assets		2.28	%			1.94	%			2.15	%			2.11	%			1.86	%
Net interest income	$	20,731			$	19,432			$	19,435			$	59,709			$	50,454
Add:  Fully-taxable equivalent adjustments(1)		70				65				86				213				251
Net interest income - FTE	$	20,801			$	19,497			$	19,521			$	59,922			$	50,705
Net interest margin		3.78	%			3.73	%			4.15	%			3.85	%			3.85	%
Effect of fully-taxable equivalent adjustments(1)		0.01	%			0.01	%			0.02	%			0.02	%			0.02	%
Net interest margin - FTE		3.79	%			3.74	%			4.17	%			3.87	%			3.87	%
Total stockholders' equity	$	201,924			$	197,250			$	170,325			$	201,924			$	170,325
Less:  Intangible assets		17,843				17,924				18,164				17,843				18,164
Tangible common equity	$	184,081			$	179,326			$	152,161			$	184,081			$	152,161

^{(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, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Core net income	$	9,563			$	7,058			$	6,806			$	23,901			$	16,883
Diluted weighted average shares outstanding		9,040,687				8,950,847				8,871,116				9,016,603				8,952,600
Diluted core earnings per share	$	1.06			$	0.79			$	0.77			$	2.65			$	1.89
Common shares outstanding at year or period end		8,834,168				8,738,814				8,705,920				8,834,168				8,705,920
Tangible book value per share	$	20.84			$	20.52			$	17.48			$	20.84			$	17.48
Total assets at end of period	$	2,296,527			$	2,277,803			$	2,052,725			$	2,296,527			$	2,052,725
Less:  Intangible assets		17,843				17,924				18,164				17,843				18,164
Adjusted assets at end of period	$	2,278,684			$	2,259,879			$	2,034,561			$	2,278,684			$	2,034,561
Tangible common equity to tangible assets		8.08	%			7.94	%			7.48	%			8.08	%			7.48	%
Total average shareholders equity	$	202,955			$	193,516			$	172,402			$	194,430			$	173,210
Less:  Average intangible assets		17,893				17,974				18,203				17,973				18,270
Average tangible common equity	$	185,062			$	175,542			$	154,199			$	176,457			$	154,940
Net income to common shareholders	$	6,629			$	8,756			$	6,700			$	23,056			$	16,479
Return on average tangible common equity		14.21	%			20.01	%			17.24	%			17.47	%			14.22	%
Average tangible common equity	$	185,062			$	175,542			$	154,199			$	176,457			$	154,940
Core net income	$	9,563			$	7,058			$	6,806			$	23,901			$	16,883
Core return on average tangible common equity		20.50	%			16.13	%			17.51	%			18.11	%			14.57	%
Net interest income	$	20,731			$	19,432			$	19,435			$	59,709			$	50,454
Add:  Noninterest income		(2,894	)			6,862				1,339				5,755				4,074
Less: Employee retention related revenue		(5,100	)			5,100				—				—				—
Less: (Loss) gain on securities		(12	)			(45	)			(143	)			457				(546	)
Operating revenue	$	22,949			$	21,239			$	20,917			$	65,007			$	55,074
Expenses:
Total noninterest expense	$	8,569			$	13,432			$	10,237			$	32,159			$	29,178
Less: One-time retirement related expenses		—				1,571				—				1,571				—
Less: Professional fees related to ERC		(1,243	)			1,243				—				—				—
Less: Net OREO (losses) gains		(9	)			7				—				(2	)			—
Adjusted noninterest expenses	$	9,821			$	10,611			$	10,237			$	30,590			$	29,178
Core efficiency ratio		42.79	%			49.96	%			48.94	%			47.06	%			52.98	%