South Atlantic Bancshares, Inc. Reports Earnings of $0.58 per Diluted Common Share for the Quarter Ended March 31, 2026

Noninterest expense increased $419.0 thousand, or 4.3 percent, for the three months ended March 31, 2026, compared to the same three-month period during 2025. The increase was driven primarily by an increase of $599.0 thousand, or 11.1 percent, in compensation and employee benefits. That increase was partially offset by a $129.0 thousand, or 5.7 percent, decrease in other non interest expense, as well as a decrease of $56.0 thousand, or 6.2 percent, in data processing and software expense.

The increase in net interest income of 11.5 percent for the three months ended March 31, 2026 and the increase in noninterest income of 16.8 percent, partially offset by the increase in noninterest expense of 4.3 percent for the three months ended March 31, 2026 when compared to the same three-month period in 2025, resulted in improvement to the Company's efficiency ratio (non-GAAP) by 4.7 percentage points to 62.98 percent for the quarter ended March 31, 2026.        

Financial Performance 
Dollars in Thousands Except Per Share Data

Noninterest Income/Expense
Dollars in Thousands

Balance Sheet Activity

Total assets increased $64.5 million, or 3.5 percent, to $1.93 billion as of March 31, 2026, compared to $1.87 billion as of March 31, 2025. The increase in total assets during the comparable quarters was driven primarily by an increase in loans of $97.5 million, or 7.1 percent, offset by a decrease in cash and cash equivalents of $23.5 million, or 24.4 percent, and a decrease in investment securities of $10.4 million, or 3.4 percent.

Total deposits increased $26.7 million, or 1.7 percent, compared to the quarter ended March 31, 2025, driven by growth of interest-bearing customer deposits. The increase in total deposits during the comparable quarters was partially offset by a decrease in brokered funding $21.3 million, or 26.3 percent, when compared to the same period of 2025. Outstanding borrowings (excluding subordinated debt) increased $17.0 million, or 13.1 percent, for the quarter ended March 31, 2026. Shareholders' equity totaled $138.4 million as of March 31, 2026, an increase of $20.1 million, or 16.9 percent, from March 31, 2025, primarily driven by $17.3 million in earnings during the preceding four quarters ended March 31, 2026 as well as a reduction in the unrealized loss on the Company's investment portfolio of $4.1 million, partially offset by the declaration and payment of an ordinary cash dividend of $750.0 thousand on the Company's common stock during the first quarter of 2026.

The Company reported 7,589,514 total shares of common stock outstanding as of March 31, 2026. The increase of 13,641 shares of common stock outstanding during the three months ended March 31, 2026 was due to the exercise during the period of stock options granted. Tangible book value (non-GAAP) increased $0.48 per share, or 2.8 percent, to $17.53 per share as of March 31, 2026, when compared to $17.05 per share as of December 31, 2025.

Balance Sheets
Dollars in Thousands

Net Interest Margin

Net interest margin decreased 11 basis points to 3.24 percent for the three months ended March 31, 2026, compared to 3.35 percent for the quarter ended December 31, 2025, and a 19 basis point increase when compared to 3.05 percent for the three months ended March 31, 2025. The yield on interest earning assets decreased by 11 basis points during the first quarter of 2026 to 5.41 percent from 5.52 percent for the fourth quarter of 2025, while cost of funds were unchanged at 2.25 percent.

Net Interest Margin Analysis

 Dollars in Millions

Credit Quality

We continue to see excellent credit quality in our markets through March 31, 2026, with no loans classified as non-accrual, and one loan past due greater than 30 days as of March 31, 2026.

The Company recorded a provision for credit losses of $300 thousand during the three months ended March 31, 2026, compared to a provision of $600 thousand for the three months ended December 31, 2025 and a provision of $397 thousand for the three months ended March 31, 2025.  

The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas, persistent ambiguity surrounding U.S. trade and tariff policies, and geopolitical instability. Accordingly, additional provisions for credit losses may be necessary in future periods.

Credit Quality Analysis

Performance Ratios

The Bank's capital position remains above the regulatory thresholds required to be deemed "well-capitalized," as shown in the table below, with a total risk-based capital ratio of 12.32 percent and leverage ratio of 9.27 percent as of March 31, 2026. The Company currently operates under the Small Bank Holding Company Policy Statement of the Board of Governors of the Federal Reserve System (the "Federal Reserve") and, therefore, is not currently subject to the Federal Reserve's consolidated capital reporting requirements.

Regulatory Capital Ratios 

About South Atlantic Bancshares, Inc.

South Atlantic Bancshares, Inc. (OTCQX: SABK) is a registered bank holding company based in Myrtle Beach, South Carolina with approximately $1.9 billion in total assets as of March 31, 2026. The Company's banking subsidiary, South Atlantic Bank, is a full-service financial institution spanning the entire coastal area of South Carolina, and is locally owned, controlled and operated. The Bank operates twelve locations in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, Summerville and Beaufort, South Carolina. The Bank specializes in providing personalized community banking services to individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products, including mortgage, and treasury management, including South Atlantic Bank goMobile, the Bank's mobile banking app. The Bank also offers internet banking, no-fee ATM access, checking, certificates of deposit and money market accounts, merchant services, mortgage loans, remote deposit capture, and more. For more information, visit www.SouthAtlantic.bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures include tangible book value, tangible book value per share, cost of funds, and efficiency ratio. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains, among other things, certain statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements with references to a future period or statements preceded by, followed by, or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "outlook" or similar terms or expressions. These statements are based upon the current beliefs and good faith expectations of the Company's management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control). These risks, uncertainties and other factors may cause the actual results, performance, and achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences include, but are not limited to: (i) the impact on us or our customers of a decline in general economic conditions, and any regulatory responses thereto; (ii) slower economic growth rates or potential recession in the United States and our market areas; (iii) uncertainty or perceived instability in the banking industry as a whole; (iv) increased competition for deposits among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of current and future monetary policies of the Board of Governors of the Federal Reserve System; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending, borrowing and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for the United States long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, military conflicts (including the conflicts in the Middle East, the possible expansion of such conflicts and potential geopolitical and economic consequences), acts of terrorism, geopolitical instability, domestic civil unrest or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) the impact of tariffs, sanctions and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers; (xv) competition and market expansion opportunities; (xvi) changes in non-interest expenditures or in the anticipated benefits of such expenditures; (xvii) the receipt of required regulatory approvals; (xviii) changes in tax laws; (xix) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; (xx) potential costs related to the impacts of climate change; (xxi) current or future litigation, regulatory examinations or other legal and/or regulatory actions; (xxii) changes in accounting principles and standards, including those related to loan loss recognition under the current expected credit loss, or CECL, methodology; and (xxiii) changes in applicable laws, regulations or policies in the United States, including those affecting our business, operations, pricing, products or services. These forward-looking statements are based on current information and/or management's good faith belief as to future events. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Any forward-looking statements contained in this press release are made as of the date hereof, and the Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by applicable law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Information contained herein, other than information as of December 31, 2025, is unaudited. All financial data should be read in conjunction with the notes to the consolidated financial statements of the Company and the Bank as of and for the fiscal year ended December 31, 2025, as contained in the Company's 2025 Annual Report located on the Company's website.

Available Information

The Company maintains an Internet web site at www.southatlantic.bank/about-us/investor-relations. The Company makes available, free of charge, on its web site the Company's annual meeting materials, annual reports, quarterly earnings reports, and other press releases. In addition, the OTC Markets Group maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company (at www.otcmarkets.com/stock/SABK/overview).

The Company routinely posts important information for investors on its web site (under www.southatlantic.bank and, more specifically, under the Investor Relations tab at www.southatlantic.bank/about-us/investor-relations). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under the OTC Markets Group OTCQX Rules for U.S. Banks. Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, OTC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company's web site is not incorporated by reference into, and is not a part of, this press release.

Member FDIC

* Non-GAAP financial measure, please see non-GAAP reconciliation at conclusion of this earnings press release

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SOURCE South Atlantic Bank