Southern BancShares N C : Quarterly Report – March 2024

Southern BancShares (N.C.), Inc.

Consolidated Comparative

Quarterly Report

Executive Offices

P.O. Box 729

116 East Main Street

Mount Olive, NC 28365

919.658.7022

Southern Bank Customer Care

855.275.7226

Shareholders Contact Center

800.821.0655 ext. 7074

www.southernbank.com

March 31, 2024

© 2024 Southern Bank - (TD)

Year to Date March 31,

Southern BancShares (N.C.), Inc. and Subsidiaries		Year to Date	Percent
Financial Highlights (Unaudited)		March 31,	Change
(Dollars in thousands, except per share data)		2024		2023	YTD
SUMMARY BALANCE SHEET
ASSETS
Cash, due from banks and overnight funds sold	$	94,584	$	192,254	-51%
Investments		1,645,893		1,620,839	2%
Loans less allowance for credit loss of $33,964 and $32,198		3,135,068		2,849,633	10%
Other assets		181,874		207,208	-12%
Total assets	$	5,057,419	$	4,869,934	4%
LIABILITIES
Deposits:	$	1,317,263	$	1,403,925	-6%
Noninterest-bearing deposits
Interest-bearing deposits		2,822,211		2,712,031	4%
Total deposits		4,139,474		4,115,956	1%
Borrowings		378,660		358,451	6%
Other liabilities		46,238		41,059	13%
Total liabilities		4,564,372		4,515,466	1%
SHAREHOLDERS' EQUITY		1,724		1,736	-1%
Preferred stock
Common stock		382		390	-2%
Surplus		27,043		27,043	0%
Retained earnings		644,988		507,593	27%
Accumulated other comprehensive loss		(181,090)		(182,294)	-1%
Total shareholders' equity		493,047		354,468	39%
Total liabilities and shareholders' equity	$	5,057,419	$	4,869,934	4%
EARNINGS PERFORMANCE
Interest income	$	46,750	$	39,258	19%
Interest expense		16,814		9,441	78%
Net interest income		29,936		29,817	0%
Provision (recovery) for loan losses		555		(322)	-272%
Noninterest income		54,437		52,792	3%
Noninterest expense		25,931		24,618	5%
Income before income taxes		57,887		58,313	-1%
Income tax expense		12,168		12,107	1%
Net income	$	45,719	$	46,206	-1%
Net income per share		595.24		591.35
Return on average assets		3.64%		3.93%
Return on average equity		38.84%		61.71%

ADDITIONAL DISCLOSURE - ACCOUNTING FOR INVESTMENTS IN MARKETABLE EQUITY SECURITIES

Pursuant to Accounting Standards Update 2016-01: Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), equity investments must be measured at fair value with changes in fair value recognized in net income. For the quarters ended March 31, 2024 and 2023, unrealized gains on equity investments of $47.5 million and $46.4 million, respectively were included in noninterest income, and $10.0 million and $9.7 million, respectively in deferred tax expense related to the change in fair value of equity investments. While ASU 2016-01 has no impact on the book value per common share, the impact on net income is as follows:

		2024		2023
Net income as reported	$	45,719	$	46,206
Less impact of ASU 2016-01		(37,552)		(36,661)
Net income excluding the impact of ASU 2016-01	$	8,167	$	9,545
Return on average assets excluding the impact of ASU 2016-01		0.65%		0.81%
Return on average equity excluding the impact of ASU 2016-01		6.94%		12.75%

ADDITIONAL DISCLOSURE - REPURCHASE OF THE COMPANY'S COMMON AND PREFERRED STOCK

On January 17, 2023, the Company's Board of Directors approved a stock repurchase program that expired on March 31, 2024 and authorized the repurchase of up to 4,000 shares of the Company's outstanding common stock. The repurchase program stipulated that the aggregate dollar amount paid during any consecutive twelve-month period to repurchase shares of common stock, through open market and privately negotiated transactions, and shares of preferred stock, through privately negotiated transactions, shall not equal or exceed 3% of the Company's consolidated shareholders' equity. The following table indicates the number of shares of each class and the amount paid to repurchase shares during the three-month period ended March 31, 2024.

	For the Quarter Ended
	March 31, 2024
	# Shares	Repurchase Cost
Common	335	$	1,941
Series B preferred	624		8
Series C preferred	-		-

A similar resolution was approved on January 16, 2024, which authorizes the repurchase of up to 4,000 shares of the Company's outstanding common stock between April 1, 2024 and March 31, 2025. The repurchase program stipulates that the aggregate dollar amount paid during any consecutive twelve-month period to repurchase shares of common stock, through open market and privately negotiated transactions, and shares of preferred stock, through privately negotiated transactions, shall not equal or exceed 3% of the Company's consolidated shareholders' equity.