8-K
SOUTHERN FIRST BANCSHARES INC (SFST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 18, 2024
Southern First Bancshares, Inc.
(Exact name of registrant as specified in its charter)
South Carolina
(State or other jurisdiction of incorporation)
| 000-27719 | 58-2459561 |
|---|---|
| (Commission File Number) | (IRS Employer Identification No.) |
| 6 Verdae Boulevard, Greenville, SC | 29607 |
| (Address of principal executive offices) | (Zip Code) |
(864) 679-9000
(Registrant's telephone number, including area code)
100 Verdae Boulevard, Suite100, Greenville, SC
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | SFST | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 2.02. Results of Operations and Financial Condition.
On July 18, 2024, Southern First Bancshares, Inc., holding company for Southern First Bank, issued a press release announcing its financial results for the period ended June 30, 2024. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 7.01 Regulation FD Disclosure.
A copy of a slide presentation also highlighting Southern First Bancshares, Inc. financial results for the period ended June 30, 2024 is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation also will be available on our website, www.southernfirst.com, under the “Investor Relations” section.
ITEM 9.01. Financial Statements and Exhibits.
| (d) Exhibits | The following exhibit index lists the exhibits that are either filed or furnished with the Current Report on Form 8-K. |
|---|
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Earnings Press Release for period ended June 30, 2024. |
| 99.2 | Slide Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SOUTHERN FIRST BANCSHARES, INC. | |
|---|---|
| By: | /s/ Christian J. Zych |
| Name: | Christian J. Zych |
| Title: | Chief Financial Officer |
July 18, 2024
Exhibit 99.1
SouthernFirst Reports Results for Second Quarter 2024
Greenville,South Carolina, July 18, 2024 – Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three-month period ended June 30, 2024.
“We reported solid performance in the second quarter with improved profitability across all measures. Loans and core deposits were modestly down, as expected, as we continue to focus on disciplined pricing on both sides of the balance sheet. Noninterest-bearing deposit growth was excellent, which reflects the strength of our team. We are expanding profitable client relationships by delivering a unique, authentic service experience. Economic conditions across all our markets remain positive, but we are constantly aware of the broader environment and remain diligent and conservative. Our focus on building a strong, high-quality balance sheet with measured, deliberate growth has been paying off in our financial results,” stated Art Seaver, the Company’s Chief Executive Officer. “We are balancing our objective of delivering high performance today with our patience in building an even stronger company for the future. Part of this effort is attracting high-quality talent to our Southern First team and we did just that this quarter with the addition of Chris Zych as Chief Financial Officer. Chris’s depth of experience and success in banking over the years will be an asset to us.”
2024Second Quarter Highlights
| ● | Net income was $3.0 million and diluted earnings per common share were $0.37 for Q2 2024 | ||||
|---|---|---|---|---|---|
| ● | Total loans were $3.6 billion at Q2 2024, a decrease of $21.2 million, or 2.35% annualized, from Q1 2024 | ||||
| ● | Total deposits were $3.5 billion at Q2 2024, a decrease of $812 thousand, or 0.09% annualized, from Q1 2024 | ||||
| ● | Nonperforming assets to total assets were 0.27% and past due loans to total loans were 0.30% at Q2 2024 | ||||
| ● | Net interest margin was 1.98% for Q2 2024, compared to 1.94% for Q1 2024 | ||||
| ● | Book value per common share increased to $39.09 at Q2 2024 | ||||
| Quarter Ended | |||||
| --- | --- | --- | --- | --- | --- |
| June 30 | March 31 | December 31 | September 30 | June 30 | |
| 2024 | 2024 | 2023 | 2023 | 2023 | |
| Earnings<br> ( in thousands, except per share data): | |||||
| Net<br> income available to common shareholders | 2,999 | 2,522 | 4,167 | 4,098 | 2,458 |
| Earnings<br> per common share, diluted | 0.37 | 0.31 | 0.51 | 0.51 | 0.31 |
| Total<br> revenue(1) | 23,051 | 21,309 | 21,390 | 22,094 | 21,561 |
| Net<br> interest margin (tax-equivalent)(2) | 1.98% | 1.94% | 1.92% | 1.97% | 2.05% |
| Return<br> on average assets(3) | 0.29% | 0.25% | 0.40% | 0.40% | 0.26% |
| Return<br> on average equity(3) | 3.81% | 3.22% | 5.39% | 5.35% | 3.27% |
| Efficiency<br> ratio(4) | 80.87% | 84.94% | 79.61% | 78.31% | 80.67% |
| Noninterest<br> expense to average assets (3) | 1.81% | 1.81% | 1.64% | 1.69% | 1.82% |
| Balance<br> Sheet ( in thousands): | |||||
| Total<br> loans(5) | 3,622,521 | 3,643,766 | 3,602,627 | 3,553,632 | 3,537,616 |
| Total<br> deposits | 3,459,869 | 3,460,681 | 3,379,564 | 3,347,771 | 3,433,018 |
| Core<br> deposits(6) | 2,788,223 | 2,807,473 | 2,811,499 | 2,866,574 | 2,880,507 |
| Total<br> assets | 4,109,849 | 4,105,704 | 4,055,789 | 4,019,957 | 4,002,107 |
| Book<br> value per common share | 39.09 | 38.65 | 38.63 | 37.57 | 37.42 |
| Loans<br> to deposits | 104.70% | 105.29% | 106.60% | 106.15% | 103.05% |
| Holding<br> Company Capital Ratios(7): | |||||
| Total<br> risk-based capital ratio | 12.77% | 12.59% | 12.57% | 12.56% | 12.40% |
| Tier<br> 1 risk-based capital ratio | 10.80% | 10.63% | 10.60% | 10.58% | 10.42% |
| Leverage<br> ratio | 8.27% | 8.44% | 8.14% | 8.17% | 8.48% |
| Common<br> equity tier 1 ratio(8) | 10.39% | 10.22% | 10.19% | 10.17% | 10.00% |
| Tangible<br> common equity(9) | 7.76% | 7.68% | 7.70% | 7.56% | 7.53% |
| Asset<br> Quality Ratios: | |||||
| Nonperforming<br> assets/total assets | 0.27% | 0.09% | 0.10% | 0.11% | 0.08% |
| Classified<br> assets/tier one capital plus allowance for credit losses | 4.22% | 3.99% | 4.25% | 4.72% | 4.68% |
| Loans<br> 30 days or more past due/loans(5) | 0.30% | 0.36% | 0.37% | 0.13% | 0.07% |
| Net<br> charge-offs/average loans(5) (YTD annualized) | 0.07% | 0.03% | 0.00% | 0.01% | 0.03% |
| Allowance<br> for credit losses/loans(5) | 1.11% | 1.11% | 1.13% | 1.16% | 1.16% |
| Allowance<br> for credit losses/nonaccrual loans | 357.95% | 1,109.13% | 1,026.58% | 953.25% | 1,363.11% |
All values are in US Dollars.
[Footnotes to table located on page 6]
1
incomestatements – Unaudited
| Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| Jun 30 | Mar 31 | Dec 31 | Sept 30 | Jun 30 | ||
| (in<br> thousands, except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Interest income | ||||||
| Loans | $ | 46,545 | 45,605 | 44,758 | 43,542 | 41,089 |
| Investment<br> securities | 1,418 | 1,478 | 1,674 | 1,470 | 706 | |
| Federal<br> funds sold | 2,583 | 1,280 | 2,703 | 2,435 | 891 | |
| Total<br> interest income | 50,546 | 48,363 | 49,135 | 47,447 | 42,686 | |
| Interest expense | ||||||
| Deposits | 28,216 | 26,932 | 27,127 | 25,130 | 25,937 | |
| Borrowings | 2,802 | 2,786 | 2,948 | 2,972 | 1,924 | |
| Total<br> interest expense | 31,018 | 29,718 | 30,075 | 28,102 | 23,861 | |
| Net<br> interest income | 19,528 | 18,645 | 19,060 | 19,345 | 18,825 | |
| Provision<br> (reversal) for credit losses | 500 | (175) | (975) | (500) | 910 | |
| Net<br> interest income after provision for credit losses | 19,028 | 18,820 | 20,035 | 19,845 | 17,915 | |
| Noninterest income | ||||||
| Mortgage<br> banking income | 1,923 | 1,164 | 868 | 1,208 | 1,337 | |
| Service<br> fees on deposit accounts | 423 | 387 | 371 | 356 | 331 | |
| ATM<br> and debit card income | 587 | 544 | 565 | 588 | 536 | |
| Income<br> from bank owned life insurance | 384 | 377 | 361 | 349 | 338 | |
| Other<br> income | 206 | 192 | 165 | 248 | 194 | |
| Total<br> noninterest income | 3,523 | 2,664 | 2,330 | 2,749 | 2,736 | |
| Noninterest expense | ||||||
| Compensation<br> and benefits | 11,290 | 10,857 | 9,401 | 10,231 | 10,287 | |
| Occupancy | 2,552 | 2,557 | 2,718 | 2,562 | 2,518 | |
| Outside<br> service and data processing costs | 1,962 | 1,846 | 2,000 | 1,744 | 1,705 | |
| Insurance | 965 | 955 | 937 | 1,243 | 897 | |
| Professional<br> fees | 582 | 618 | 581 | 504 | 751 | |
| Marketing | 389 | 369 | 364 | 293 | 335 | |
| Other | 903 | 898 | 1,027 | 725 | 900 | |
| Total<br> noninterest expenses | 18,643 | 18,100 | 17,028 | 17,302 | 17,393 | |
| Income<br> before provision for income taxes | 3,908 | 3,384 | 5,337 | 5,293 | 3,258 | |
| Income tax expense | 909 | 862 | 1,170 | 1,195 | 800 | |
| Net income available to common shareholders | $ | 2,999 | 2,522 | 4,167 | 4,098 | 2,458 |
| Earnings<br> per common share – Basic | $ | 0.37 | 0.31 | 0.51 | 0.51 | 0.31 |
| Earnings<br> per common share – Diluted | 0.37 | 0.31 | 0.51 | 0.51 | 0.31 | |
| Basic<br> weighted average common shares | 8,126 | 8,110 | 8,056 | 8,053 | 8,051 | |
| Diluted<br> weighted average common shares | 8,141 | 8,142 | 8,080 | 8,072 | 8,069 |
[Footnotes to table located on page 6]
Net income for the second quarter of 2024 was $3.0 million, or $0.37 per diluted share, a $477 thousand increase from the first quarter of 2024 and a $541 thousand increase from the second quarter of 2023. Net interest income increased $883 thousand during the second quarter of 2024, compared to the first quarter of 2024, and increased $703 thousand, compared to the second quarter of 2023. The increase in net interest income from the prior quarter and prior year was driven by additional interest income on our interest-earning assets.
The provision for credit losses was $500 thousand for the second quarter of 2024, compared to a reversal of $175 thousand during the first quarter of 2024. The second quarter provision for credit losses includes a $750 thousand provision related to the loan portfolio which was driven by an increase in the level of charge-offs we experienced during the quarter, combined with an increase in the specific reserve on individually assessed loans. In addition, the provision for credit losses includes a $250 thousand reversal in the provision for unfunded commitments due to a decrease in the balance of unfunded commitments at June 30, 2024.
Noninterest income was $3.5 million for the second quarter of 2024, compared to $2.7 million for the first quarter of 2024. Mortgage banking income continues to be the largest component of our noninterest income at $1.9 million for the second quarter of 2024 compared to $1.2 million for the first quarter of 2024.
Noninterest expense for the second quarter of 2024 was $18.6 million, a $543 thousand increase from the first quarter of 2024. The increase in noninterest expense from the previous quarter was driven by an increase in compensation and benefits
2
expense as well as an increase in outside service and data processing costs. The increase in compensation and benefits expenses was due primarily to an increase in salaries and commissions expense, while the increase in outside service and data processing costs was driven by an increase in software licensing and maintenance costs.
Our effective tax rate was 23.3% for the second quarter of 2024 as compared to 25.5% for the first quarter of 2024. The lower tax rate in the second quarter of 2024 was primarily related to the effect of equity compensation transactions during the quarter.
Netinterest income and margin - Unaudited
| For<br> the Three Months Ended | |||
|---|---|---|---|
| June<br> 30, 2024 | March<br> 31, 2024 | June<br> 30, 2023 | |
| (dollars<br> in thousands) | Average<br> Balance | Average<br> Balance | Average<br> Balance |
| Interest-earning assets | |||
| Federal<br> funds sold and interest-bearing deposits | 186,584 | 89,969 | 71,004 |
| Investment<br> securities, taxable | 133,507 | 137,271 | 93,922 |
| Investment<br> securities, nontaxable^(2)^ | 8,027 | 8,097 | 10,200 |
| Loans^(10)^ | 3,645,595 | 3,622,972 | 3,511,225 |
| Total<br> interest-earning assets | 3,973,713 | 3,858,309 | 3,686,351 |
| Noninterest-earning<br> assets | 165,093 | 159,813 | 155,847 |
| Total<br> assets | 4,138,806 | 4,018,122 | 3,842,198 |
| Interest-bearing liabilities | |||
| NOW<br> accounts | 302,881 | 295,774 | 297,234 |
| Savings<br> & money market | 1,611,991 | 1,620,521 | 1,727,009 |
| Time<br> deposits | 898,878 | 801,734 | 573,095 |
| Total<br> interest-bearing deposits | 2,813,750 | 2,718,029 | 2,597,338 |
| FHLB<br> advances and other borrowings | 240,000 | 241,319 | 135,922 |
| Subordinated<br> debentures | 36,360 | 36,333 | 36,251 |
| Total<br> interest-bearing liabilities | 3,090,110 | 2,995,681 | 2,769,511 |
| Noninterest-bearing<br> liabilities | 731,843 | 707,890 | 771,388 |
| Shareholders’<br> equity | 316,853 | 314,551 | 301,299 |
| Total<br> liabilities and shareholders’ equity | 4,138,806 | 4,018,122 | 3,842,198 |
| Net<br> interest spread | |||
| Net<br> interest income (tax equivalent) / margin | |||
| Less: tax-equivalent<br> adjustment^(2)^ | |||
| Net<br> interest income |
All values are in US Dollars.
[Footnotes to table located on page 6]
Net interest income was $19.5 million for the second quarter of 2024, an $883 thousand increase from the first quarter of 2024, driven by a $2.2 million increase in interest income, on a tax-equivalent basis, partially offset by a $1.3 million increase in interest expense. The increase in interest income was driven by a $96.6 million increase in average federal funds sold and interest-bearing deposit balances, combined with a higher yield on our loan portfolio. Our net interest margin, on a tax-equivalent basis, was 1.98% for the second quarter of 2024, a four-basis point increase from 1.94% for the first quarter of 2024. During the second quarter of 2024, the yield on our loan portfolio increased by nine-basis points, while the cost of our interest-bearing deposits increased by only six-basis points, as compared to the first quarter of 2024, resulting in an increase in net interest margin for the period. In addition, our non-interest bearing deposits increased 6.94%, on an annualized basis, during the second quarter of 2024.
3
Balancesheets - Unaudited
| Ending Balance | |||||
|---|---|---|---|---|---|
| June 30 | March 31 | December 31 | September 30 | June 30 | |
| (in<br> thousands, except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 |
| Assets | |||||
| Cash<br> and cash equivalents: | |||||
| Cash<br> and due from banks | 21,567 | 13,925 | 28,020 | 17,395 | 24,742 |
| Federal<br> funds sold | 164,432 | 144,595 | 119,349 | 127,714 | 170,145 |
| Interest-bearing<br> deposits with banks | 8,828 | 8,789 | 8,801 | 7,283 | 10,183 |
| Total<br> cash and cash equivalents | 194,827 | 167,309 | 156,170 | 152,392 | 205,070 |
| Investment<br> securities: | |||||
| Investment<br> securities available for sale | 121,353 | 125,996 | 134,702 | 144,035 | 91,548 |
| Other<br> investments | 18,653 | 18,499 | 19,939 | 19,600 | 12,550 |
| Total<br> investment securities | 140,006 | 144,495 | 154,641 | 163,635 | 104,098 |
| Mortgage<br> loans held for sale | 14,759 | 11,842 | 7,194 | 7,117 | 15,781 |
| Loans<br> (5) | 3,622,521 | 3,643,766 | 3,602,627 | 3,553,632 | 3,537,616 |
| Less<br> allowance for credit losses | (40,157) | (40,441) | (40,682) | (41,131) | (41,105) |
| Loans,<br> net | 3,582,364 | 3,603,325 | 3,561,945 | 3,512,501 | 3,496,511 |
| Bank<br> owned life insurance | 53,263 | 52,878 | 52,501 | 52,140 | 51,791 |
| Property<br> and equipment, net | 91,533 | 93,007 | 94,301 | 95,743 | 96,964 |
| Deferred<br> income taxes | 12,339 | 12,321 | 12,200 | 13,078 | 12,356 |
| Other<br> assets | 20,758 | 20,527 | 16,837 | 23,351 | 19,536 |
| Total<br> assets | 4,109,849 | 4,105,704 | 4,055,789 | 4,019,957 | 4,002,107 |
| Liabilities | |||||
| Deposits | 3,459,869 | 3,460,681 | 3,379,564 | 3,347,771 | 3,433,018 |
| FHLB<br> Advances | 240,000 | 240,000 | 275,000 | 275,000 | 180,000 |
| Subordinated<br> debentures | 36,376 | 36,349 | 36,322 | 36,295 | 36,268 |
| Other<br> liabilities | 54,856 | 53,418 | 52,436 | 56,993 | 51,307 |
| Total<br> liabilities | 3,791,101 | 3,790,448 | 3,743,322 | 3,716,059 | 3,700,593 |
| Shareholders’<br> equity | |||||
| Preferred<br> stock - .01 par value; 10,000,000 shares authorized | - | - | - | - | - |
| Common<br> Stock - .01 par value; 20,000,000 shares authorized | 82 | 82 | 81 | 81 | 81 |
| Nonvested<br> restricted stock | (4,710) | (5,257) | (3,596) | (4,065) | (4,051) |
| Additional<br> paid-in capital | 124,174 | 124,159 | 121,777 | 121,757 | 120,912 |
| Accumulated<br> other comprehensive loss | (11,866) | (11,797) | (11,342) | (15,255) | (12,710) |
| Retained<br> earnings | 211,068 | 208,069 | 205,547 | 201,380 | 197,282 |
| Total<br> shareholders’ equity | 318,748 | 315,256 | 312,467 | 303,898 | 301,514 |
| Total<br> liabilities and shareholders’ equity | 4,109,849 | 4,105,704 | 4,055,789 | 4,019,957 | 4,002,107 |
| Common<br> Stock | |||||
| Book<br> value per common share | 39.09 | 38.65 | 38.63 | 37.57 | 37.42 |
| Stock<br> price: | |||||
| High | 30.36 | 38.71 | 37.15 | 30.18 | 31.34 |
| Low | 25.70 | 29.80 | 25.16 | 24.22 | 21.33 |
| Period<br> end | 29.24 | 31.76 | 37.10 | 26.94 | 24.75 |
| Common<br> shares outstanding | 8,155 | 8,156 | 8,088 | 8,089 | 8,058 |
All values are in US Dollars.
[Footnotes to table located on page 6]
4
Assetquality measures - Unaudited
| Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| June 30 | March 31 | December 31 | September 30 | June 30 | ||
| (dollars<br> in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Nonperforming Assets | ||||||
| Commercial | ||||||
| Non-owner<br> occupied RE | $ | 7,949 | 1,410 | 1,423 | 1,615 | 754 |
| Commercial<br> business | 829 | 488 | 319 | 404 | 137 | |
| Consumer | ||||||
| Real<br> estate | 1,875 | 1,380 | 985 | 1,228 | 1,053 | |
| Home<br> equity | 565 | 367 | 1,236 | 1,068 | 1,072 | |
| Other | - | 1 | - | - | - | |
| Total<br> nonaccrual loans | 11,218 | 3,646 | 3,963 | 4,315 | 3,016 | |
| Other<br> real estate owned | - | - | - | - | - | |
| Total<br> nonperforming assets | $ | 11,218 | 3,646 | 3,963 | 4,315 | 3,016 |
| Nonperforming<br> assets as a percentage of: | ||||||
| Total<br> assets | 0.27% | 0.09% | 0.10% | 0.11% | 0.08% | |
| Total<br> loans | 0.31% | 0.10% | 0.11% | 0.12% | 0.09% | |
| Classified<br> assets/tier 1 capital plus allowance for credit losses | 4.22% | 3.99% | 4.25% | 4.72% | 4.68% | |
| Quarter Ended | ||||||
| June 30 | March 31 | December 31 | September 30 | June 30 | ||
| (dollars<br> in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Allowance for Credit Losses | ||||||
| Balance,<br> beginning of period | $ | 40,441 | 40,682 | 41,131 | 41,105 | 40,435 |
| Loans<br> charged-off | (1,049) | (424) | (119) | (42) | (440) | |
| Recoveries<br> of loans previously charged-off | 15 | 183 | 310 | 168 | 15 | |
| Net<br> loans (charged-off) recovered | (1,034) | (241) | 191 | 126 | (425) | |
| Provision<br> for (reversal of) credit losses | 750 | - | (640) | (100) | 1,095 | |
| Balance,<br> end of period | $ | 40,157 | 40,441 | 40,682 | 41,131 | 41,105 |
| Allowance<br> for credit losses to gross loans | 1.11 % | 1.11 % | 1.13 % | 1.16 % | 1.16 % | |
| Allowance<br> for credit losses to nonaccrual loans | 357.95 % | 1,109.13 % | 1,026.58 % | 953.25 % | 1,363.11 % | |
| Net<br> charge-offs (recoveries) to average loans QTD (annualized) | 0.11<br> % | 0.03<br> % | (0.02<br> %) | (0.01<br> %) | 0.05<br> % |
Total nonperforming assets increased by $7.6 million during the second quarter of 2024, and represented 0.27% of total assets, an increase compared to 0.09% for the first quarter of 2024. The increase in nonperforming assets was driven by four new relationships, totaling $8.0 million, placed on nonaccrual during the second quarter of 2024, with one commercial relationship totaling $6.9 million related to the assisted living industry. In addition, our classified asset ratio increased to 4.22% for the second quarter of 2024 from 3.99% in the first quarter of 2024.
At June 30, 2024, the allowance for credit losses was $40.2 million, or 1.11% of total loans, compared to $40.4 million, or 1.11% of total loans at March 31, 2024. We had net charge-offs of $1.0 million, or 0.11% annualized, for the second quarter of 2024, compared to net charge-offs of $241 thousand, or 0.03% annualized, for the first quarter of 2024. We recorded a $750 thousand provision for credit losses related to the loan portfolio during the second quarter of 2024, compared to no provision related to the loan portfolio for the first quarter of 2024.
5
LOANCOMPOSITION - Unaudited
| Quarter<br> Ended | ||||||
|---|---|---|---|---|---|---|
| June 30 | March 31 | December 31 | September 30 | June 30 | ||
| (dollars<br> in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Commercial | ||||||
| Owner<br> occupied RE | $ | 642,008 | 631,047 | 631,657 | 637,038 | 613,874 |
| Non-owner<br> occupied RE | 917,034 | 944,530 | 942,529 | 937,749 | 951,536 | |
| Construction | 144,968 | 157,464 | 150,680 | 119,629 | 115,798 | |
| Business | 527,017 | 520,073 | 500,161 | 500,253 | 511,719 | |
| Total<br> commercial loans | 2,231,027 | 2,253,114 | 2,225,027 | 2,194,669 | 2,192,927 | |
| Consumer | ||||||
| Real<br> estate | 1,126,155 | 1,101,573 | 1,082,429 | 1,074,679 | 1,047,904 | |
| Home<br> equity | 189,294 | 184,691 | 183,004 | 180,856 | 185,584 | |
| Construction | 32,936 | 53,216 | 63,348 | 54,210 | 61,044 | |
| Other | 43,109 | 51,172 | 48,819 | 49,218 | 50,157 | |
| Total<br> consumer loans | 1,391,494 | 1,390,652 | 1,377,600 | 1,358,963 | 1,344,689 | |
| Total<br> gross loans, net of deferred fees | 3,622,521 | 3,643,766 | 3,602,627 | 3,553,632 | 3,537,616 | |
| Less—allowance<br> for credit losses | (40,157) | (40,441) | (40,682) | (41,131) | (41,105) | |
| Total<br> loans, net | $ | 3,582,364 | 3,603,325 | 3,561,945 | 3,512,501 | 3,496,511 |
DEPOSITCOMPOSITION - Unaudited
| Quarter<br> Ended | |||||
|---|---|---|---|---|---|
| June 30 | March 31 | December 31 | September 30 | June 30 | |
| (dollars<br> in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
| Non-interest<br> bearing | 683,291 | 671,708 | 674,167 | 675,409 | 698,084 |
| Interest<br> bearing: | |||||
| NOW<br> accounts | 293,875 | 293,064 | 310,218 | 306,667 | 308,762 |
| Money<br> market accounts | 1,562,786 | 1,603,796 | 1,605,278 | 1,685,736 | 1,692,900 |
| Savings | 28,739 | 32,248 | 31,669 | 34,737 | 36,243 |
| Time,<br> less than 250,000 | 219,532 | 206,657 | 190,167 | 125,506 | 114,691 |
| Time<br> and out-of-market deposits, 250,000 and over | 671,646 | 653,208 | 568,065 | 519,716 | 582,338 |
| Total<br> deposits | 3,459,869 | 3,460,681 | 3,379,564 | 3,347,771 | 3,433,018 |
All values are in US Dollars.
| Footnotes to tables: |
|---|
| (1)<br> Total revenue is the sum of net interest income and noninterest income. |
| (2)<br> The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield<br> on a taxable basis. |
| (3)<br> Annualized for the respective three-month period. |
| (4)<br> Noninterest expense divided by the sum of net interest income and noninterest income. |
| (5)<br> Excludes mortgage loans held for sale. |
| (6)<br> Excludes out of market deposits and time deposits greater than $250,000 totaling $671,646,000. |
| (7)<br> June 30, 2024 ratios are preliminary. |
| (8)<br> The common equity tier 1 ratio is calculated as the sum of common equity divided by risk-weighted assets. |
| (9)<br> The tangible common equity ratio is calculated as total equity less preferred stock divided<br> by total assets. |
| (10)<br> Includes mortgage loans held for sale. |
AboutSouthern First Bancshares
Southern First Bancshares, Inc., Greenville, South Carolina is a registered bank holding company incorporated under the laws of South Carolina. The company’s wholly owned subsidiary, Southern First Bank, is the second largest bank headquartered in South Carolina. Southern First Bank has been providing financial services since 1999 and now operates in 12 locations in the Greenville, Columbia, and Charleston markets of South Carolina as well as the Charlotte, Triangle and Triad regions of North Carolina and Atlanta, Georgia. Southern First Bancshares has consolidated assets of approximately $4.1 billion and its common stock is traded on The NASDAQ Global Market under the symbol “SFST.” More information can be found at www.southernfirst.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “preliminary”, “intend,” “plan,” “future, “target,” “continue,” “lasting,” “building,” and “project,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved.
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The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which the company conducts operations may be different than expected; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan and deposit growth as well as pricing of each product, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, changes affecting oversight of the financial services industry or consumer protection; (5) the impact of changes to Congress and the Presidential election on the regulatory landscape and capital markets; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could continue to have a negative impact on the company; (7) changes in interest rates, which may continue to affect the company’s net income, interest expense, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of the company’s assets, including its investment securities; (8) elevated inflation which may cause adverse risk to the overall economy, and could indirectly pose challenges to our clients and to our business; (9) any increase in FDIC assessments which have increased and may continue to increase our cost of doing business; and (10) changes in accounting principles, policies, practices, or guidelines. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do 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 law.
FINANCIAL & MEDIA CONTACT:
ART SEAVER 864-679-9010
WEB SITE: www.southernfirst.com
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Exhibit 99.2
