SOUTHERN COMMUNITY
BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL REPORT
DECEMBER 31, 2021
SOUTHERN COMMUNITY BANCSHARES, INC. | |
AND SUBSIDIARY | |
CONSOLIDATED FINANCIAL REPORT | |
DECEMBER 31, 2021 | |
TABLE OF CONTENTS | |
Page | |
INDEPENDENT AUDITOR'S REPORT............................................................................................................................ | 1-2 |
CONSOLIDATED FINANCIAL STATEMENTS | |
Consolidated balance sheets .............................................................................................................................................. | 3 |
Consolidated statements of income ................................................................................................................................... | 4 |
Consolidated statements of comprehensive income......................................................................................................... | 5 |
Consolidated statements of stockholders' equity............................................................................................................. | 6 |
Consolidated statements of cash flows.............................................................................................................................. | 7 |
Notes to consolidated financial statements .................................................................................................................. | 8-31 |
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Southern Community Bancshares, Inc.
Cullman, Alabama
Opinion
We have audited the accompanying consolidated financial statements of Southern Community Bancshares, Inc. and Subsidiary, which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Southern Community Bancshares, Inc. and Subsidiary as of December 31, 2021 and 2020, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Southern Community Bancshares, Inc. and Subsidiary and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Southern Community Bancshares, Inc. and Subsidiary's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
2000 SOUTHBRIDGE PARKWAY, SUITE 501 • BIRMINGHAM, AL 35209 • 205-445-2880 • 888-277-0020 • FAX 205-445-2940 • www.mjcpa.com
Members of The American Institute of Certified Public Accountants
In performing an audit in accordance with generally accepted auditing standards, we:
- Exercise professional judgement and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Southern Community Bancshares, Inc. and Subsidiary's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Southern Community Bancshares, Inc. and Subsidiary's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Birmingham, Alabama
March 1, 2022
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SOUTHERN COMMUNITY BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2021 AND 2020
Assets | 2021 | 2020 | |||
Cash and due from banks | $ | 979,128 | $ | 947,274 | |
Interest-bearing deposits in banks | 20,979,618 | 17,586,525 | |||
Cash and cash equivalents | 21,958,746 | 18,533,799 | |||
Investment securities available for sale | 867,376 | 1,320,614 | |||
Other investment securities | 436,800 | 753,500 | |||
Loans held for sale | 250,295 | 215,119 | |||
Loans | 93,311,045 | 95,634,475 | |||
Less allowance for loan losses | 1,566,269 | 1,567,684 | |||
Loans, net | 91,744,776 | 94,066,791 | |||
Property and equipment, net | 5,007,245 | 5,114,610 | |||
Accrued interest receivable | 390,013 | 416,614 | |||
Bank-owned life insurance | 2,331,833 | 2,273,042 | |||
Other assets | 538,496 | 603,301 | |||
Total assets | $ | 123,525,580 | $ | 123,297,390 | |
Liabilities and Stockholders' Equity | |||||
Liabilities: | |||||
Deposits: | |||||
Noninterest-bearing | $ | 19,163,062 | $ | 15,414,887 | |
Interest-bearing | 81,654,079 | 82,936,779 | |||
Total deposits | 100,817,141 | 98,351,666 | |||
Other borrowings | 10,000,000 | 13,000,000 | |||
Accrued interest payable | 43,369 | 90,262 | |||
Other liabilities | 164,492 | 343,658 | |||
Total liabilities | 111,025,002 | 111,785,586 | |||
Stockholders' equity | |||||
Preferred stock, $.01 par value; 100,000 shares authorized; no shares issued | - | - | |||
Common stock, $.01 par value; 2,845,568 shares authorized; 982,918 shares | |||||
issued and 484,896 and 486,996 shares outstanding | |||||
at December 31, 2021 and 2020, respectively | 9,830 | 9,830 | |||
Additional paid-in capital | 9,185,915 | 9,188,905 | |||
Retained earnings | 9,644,044 | 8,640,105 | |||
Unearned compensation | (43,275) | (59,775) | |||
Treasury stock, at cost; 498,022 and 495,922 shares held at | |||||
December 31, 2021 and 2020, respectively | (6,305,474) | (6,284,474) | |||
Accumulated other comprehensive income | 9,538 | 17,213 | |||
Total stockholders' equity | 12,500,578 | 11,511,804 | |||
Total liabilities and stockholders' equity | $ | 123,525,580 | $ | 123,297,390 | |
See Notes to Consolidated Financial Statements.
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