Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three-month period ended September 30, 2024.
https://mma.prnewswire.com/media/1813496/Southern_First_logo.jpg
“Our third quarter results continued our positive momentum and outlook this year. Our focus on building a high-quality balance sheet again rewarded us with outstanding asset quality performance, which is among the industry’s best. We are well-positioned for increasing profitability in this operating environment despite persistent growth headwinds and uncertain interest rate moves by the Fed,” stated Art Seaver, the Company’s Chief Executive Officer. “This quarter we executed on opportunities to lower our funding costs, which is reflected in our solid margin expansion. Our team did an outstanding job of growing core checking accounts by 21%, annualized. Loan growth was flat due to our deliberate actions around disciplined pricing and high credit quality standards. We also believe that business growth may be waiting for additional clarity on interest rates, the political environment and global influences on the economy. Meanwhile, we are taking care of our clients and developing strong business pipelines one relationship at a time with relentless relationship banking and exceptional service.”
Third Quarter 2024 Highlights
— Net income of $4.4 million and diluted earnings per common share of $0.54
— Total loans of $3.6 billion and total deposits of $3.5 billion
— Nonperforming assets to total assets of 0.28% and net recoveries of $9 thousand
— Net interest margin of 2.08% for Q3 2024, compared to 1.98% for Q2 2024
— Book value per common share of $40.04 and TCE ratio of 7.82%
Quarter Ended
September 30 June 30 March 31 December 31 September 30
2024 2024 2024 2023 2023
Earnings ($ in thousands, except per share data):
Net income available to common shareholders $ 4,382 2,999 2,522 4,167 4,098
Earnings per common share, diluted 0.54 0.37 0.31 0.51 0.51
Total revenue(1) 23,766 23,051 21,309 21,390 22,094
Net interest margin (tax-equivalent)(2) 2.08% 1.98% 1.94% 1.92% 1.97%
Return on average assets(3) 0.43% 0.29% 0.25% 0.40% 0.40%
Return on average equity(3) 5.40% 3.81% 3.22% 5.39% 5.35%
Efficiency ratio(4) 75.90% 80.87% 84.94% 79.61% 78.31%
Noninterest expense to average assets (3) 1.75% 1.81% 1.81% 1.64% 1.69%
Balance Sheet ($ in thousands):
Total loans(5) $ 3,619,556 3,622,521 3,643,766 3,602,627 3,553,632
Total deposits 3,518,825 3,459,869 3,460,681 3,379,564 3,347,771
Core deposits(6) 2,705,429 2,788,223 2,807,473 2,811,499 2,866,574
Total assets 4,174,631 4,109,849 4,105,704 4,055,789 4,019,957
Book value per common share 40.04 39.09 38.65 38.63 37.57
Loans to deposits 102.86% 104.70% 105.29% 106.60% 106.15%
Holding Company Capital Ratios(7):
Total risk-based capital ratio 12.61% 12.77% 12.59% 12.57% 12.56%
Tier 1 risk-based capital ratio 10.99% 10.80% 10.63% 10.60% 10.58%
Leverage ratio 8.50% 8.27% 8.44% 8.14% 8.17%
Common equity tier 1 ratio(8) 10.58% 10.39% 10.22% 10.19% 10.17%
Tangible common equity(9) 7.82% 7.76% 7.68% 7.70% 7.56%
Asset Quality Ratios:
Nonperforming assets/total assets 0.28% 0.27% 0.09% 0.10% 0.11%
Classified assets/tier one capital plus allowance for credit losses 4.35% 4.22% 3.99% 4.25% 4.72%
Loans 30 days or more past due/loans(5) 0.16% 0.30% 0.36% 0.37% 0.13%
Net charge-offs/average loans(5) (YTD annualized) 0.05% 0.07% 0.03% 0.00% 0.01%
Allowance for credit losses/loans(5) 1.11% 1.11% 1.11% 1.13% 1.16%
Allowance for credit losses/nonaccrual loans 346.78% 357.95% 1,109.13% 1,026.58% 953.25%
[Footnotes to table located on page 6]
INCOME STATEMENTS - Unaudited
Quarter Ended
Sept 30 Jun 30 Mar 31 Dec 31 Sept 30
(in thousands, except per share data) 2024 2024 2024 2023 2023
Interest income
Loans $ 47,550 46,545 45,605 44,758 43,542
Investment securities 1,412 1,418 1,478 1,674 1,470
Federal funds sold 2,209 2,583 1,280 2,703 2,435
Total interest income 51,171 50,546 48,363 49,135 47,447
Interest expense
Deposits 27,725 28,216 26,932 27,127 25,130
Borrowings 2,855 2,802 2,786 2,948 2,972
Total interest expense 30,580 31,018 29,718 30,075 28,102
Net interest income 20,591 19,528 18,645 19,060 19,345
Provision (reversal) for credit losses - 500 (175) (975) (500)
Net interest income after provision for credit losses 20,591 19,028 18,820 20,035 19,845
Noninterest income
Mortgage banking income 1,449 1,923 1,164 868 1,208
Service fees on deposit accounts 455 423 387 371 356
ATM and debit card income 599 587 544 565 588
Income from bank owned life insurance 401 384 377 361 349
Other income 271 206 192 165 248
Total noninterest income 3,175 3,523 2,664 2,330 2,749
Noninterest expense
Compensation and benefits 10,789 11,290 10,857 9,401 10,231
Occupancy 2,595 2,552 2,557 2,718 2,562
Outside service and data processing costs 1,930 1,962 1,846 2,000 1,744
Insurance 1,025 965 955 937 1,243
Professional fees 548 582 618 581 504
Marketing 319 389 369 364 293
Other 833 903 898 1,027 725
Total noninterest expenses 18,039 18,643 18,100 17,028 17,302
Income before provision for income taxes 5,727 3,908 3,384 5,337 5,293
Income tax expense 1,345 909 862 1,170 1,195
Net income available to common shareholders $ 4,382 2,999 2,522 4,167 4,098
Earnings per common share - Basic $ 0.54 0.37 0.31 0.51 0.51
Earnings per common share - Diluted 0.54 0.37 0.31 0.51 0.51
Basic weighted average common shares 8,064 8,126 8,110 8,056 8,053
Diluted weighted average common shares 8,089 8,141 8,142 8,080 8,072
[Footnotes to table located on page 6]
Net income for the third quarter of 2024 was $4.4 million, or $0.54 per diluted share, a $1.4 million increase from the second quarter of 2024 and a $284 thousand increase from the third quarter of 2023. Net interest income increased $1.1 million during the third quarter of 2024, compared to the second quarter of 2024, and increased $1.2 million, compared to the third 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.
There was no provision for credit losses for the third quarter of 2024, compared to a provision for credit losses of $500 thousand during the second quarter of 2024. There was no provision during the third quarter due to loans remaining flat and low charge-offs during the quarter.
Noninterest income was $3.2 million for the third quarter of 2024, compared to $3.5 million for the second quarter of 2024. Mortgage banking income continues to be the largest component of our noninterest income at $1.4 million for the third quarter of 2024 compared to $1.9 million for the second quarter of 2024.
Noninterest expense for the third quarter of 2024 was $18.0 million, a $604 thousand decrease from the second quarter of 2024. The decrease in noninterest expense from the previous quarter was driven by a decrease in compensation and benefits expense. The decrease in compensation and benefits expenses was due primarily to a decrease in commissions expense and certain employee benefits expenses.
Our effective tax rate was 23.5% for the third quarter of 2024 as compared to 23.3% for the second quarter of 2024.
NET INTEREST INCOME AND MARGIN - Unaudited
For the Three Months Ended
September 30, 2024 June 30, 2024 September 30, 2023
(dollars in thousands) Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate(3) Balance Expense Rate(3) Balance Expense Rate(3)
Interest-earning assets
Federal funds sold and interest- $ 158,222 $ 2,209 5.55% $ 186,584 $ 2,583 5.57% $ 181,784 $ 2,435 5.31%
bearing deposits
Investment securities, taxable 137,087 1,370 3.98% 133,507 1,376 4.15% 148,239 1,429 3.82%
Investment securities, nontaxable(2) 8,047 55 2.70% 8,027 55 2.73% 7,799 55 2.77%
Loans(10) 3,629,050 47,550 5.21% 3,645,595 46,545 5.14% 3,554,478 43,542 4.86%
Total interest-earning assets 3,932,406 51,184 5.18% 3,973,713 50,559 5.12% 3,892,300 47,461 4.84%
Noninterest-earning assets 158,550 165,093 159,103
Total assets $4,090,956 $4,138,806 $4,051,403
Interest-bearing liabilities
NOW accounts $ 314,669 835 1.06% $ 302,881 621 0.82% $ 297,028 620 0.83%
Savings & money market 1,523,834 15,287 3.99% 1,611,991 16,324 4.07% 1,748,638 16,908 3.84%
Time deposits 909,192 11,603 5.08% 898,878 11,271 5.04% 648,949 7,602 4.65%
Total interest-bearing deposits 2,747,695 27,725 4.01% 2,813,750 28,216 4.03% 2,694,615 25,130 3.70%
FHLB advances and other borrowings 240,065 2,297 3.81% 240,000 2,247 3.77% 264,141 2,414 3.63%
Subordinated debentures 36,261 558 6.12% 36,360 555 6.14% 36,278 558 6.10%
Total interest-bearing liabilities 3,024,021 30,580 4.02% 3,090,110 31,018 4.04% 2,995,034 28,102 3.72%
Noninterest-bearing liabilities 744,025 731,843 752,433
Shareholders' equity 322,910 316,853 303,936
Total liabilities and shareholders' $4,090,956 $4,138,806 $4,051,403
equity
Net interest spread 1.16% 1.08% 1.12%
Net interest income (tax equivalent) / $20,604 2.08% $19,541 1.98% $19,359 1.97%
margin
Less: tax-equivalent adjustment(2) 13 13 14
Net interest income $20,591 $19,528 $19,345
[Footnotes to table located on page 6]
Net interest income was $20.6 million for the third quarter of 2024, a $1.1 million increase from the second quarter of 2024, driven by a $625 thousand increase in interest income, on a tax-equivalent basis, and a $438 thousand decrease in interest expense. The increase in interest income was driven by a $1.0 million increase in interest income on loans resulting from loans being originated and renewed at higher rates than much of our loan portfolio. Our net interest margin, on a tax-equivalent basis, was 2.08% for the third quarter of 2024, a ten-basis point increase from 1.98% for the second quarter of 2024. During the third quarter of 2024, the yield on our loan portfolio increased by seven-basis points, while the cost of our interest-bearing deposits decreased by two-basis points, as compared to the second quarter of 2024, resulting in an increase in net interest margin for the period.
BALANCE SHEETS - Unaudited
Ending Balance
September 30 June 30 March 31 December 31 September 30
(in thousands, except per share data) 2024 2024 2024 2023 2023
Assets
Cash and cash equivalents:
Cash and due from banks $ 25,289 21,567 13,925 28,020 17,395
Federal funds sold 226,110 164,432 144,595 119,349 127,714
Interest-bearing deposits with banks 9,176 8,828 8,789 8,801 7,283
Total cash and cash equivalents 260,575 194,827 167,309 156,170 152,392
Investment securities:
Investment securities available for sale 134,597 121,353 125,996 134,702 144,035
Other investments 19,640 18,653 18,499 19,939 19,600
Total investment securities 154,237 140,006 144,495 154,641 163,635
Mortgage loans held for sale 8,602 14,759 11,842 7,194 7,117
Loans (5) 3,619,556 3,622,521 3,643,7663,602,627 3,553,632
Less allowance for credit losses (40,166) (40,157) (40,441) (40,682) (41,131)
Loans, net 3,579,390 3,582,364 3,603,3253,561,945 3,512,501
Bank owned life insurance 53,663 53,263 52,878 52,501 52,140
Property and equipment, net 90,158 91,533 93,007 94,301 95,743
Deferred income taxes 11,595 12,339 12,321 12,200 13,078
Other assets 16,411 20,758 20,527 16,837 23,351
Total assets $ 4,174,631 4,109,849 4,105,7044,055,789 4,019,957
Liabilities
Deposits $ 3,518,825 3,459,869 3,460,6813,379,564 3,347,771
FHLB Advances 240,000 240,000 240,000 275,000 275,000
Subordinated debentures 24,903 36,376 36,349 36,322 36,295
Other liabilities 64,365 54,856 53,418 52,436 56,993
Total liabilities 3,848,093 3,791,101 3,790,4483,743,322 3,716,059
Shareholders' equity
Preferred stock - $.01 par value; 10,000,000 shares authorized - - - - -
Common Stock - $.01 par value; 20,000,000 shares authorized 82 82 82 81 81
Nonvested restricted stock (4,219) (4,710) (5,257) (3,596) (4,065)
Additional paid-in capital 124,288 124,174 124,159 121,777 121,757
Accumulated other comprehensive loss (9,063) (11,866) (11,797) (11,342) (15,255)
Retained earnings 215,450 211,068 208,069 205,547 201,380
Total shareholders' equity 326,538 318,748 315,256 312,467 303,898
Total liabilities and shareholders' equity $ 4,174,631 4,109,849 4,105,7044,055,789 4,019,957
Common Stock
Book value per common share $ 40.04 39.09 38.65 38.63 37.57
Stock price:
High 36.45 30.36 38.71 37.15 30.18
Low 27.70 25.70 29.80 25.16 24.22
Period end 34.08 29.24 31.76 37.10 26.94
Common shares outstanding 8,156 8,155 8,156 8,088 8,089
[Footnotes to table located on page 6]
ASSET QUALITY MEASURES - Unaudited
Quarter Ended
September 30 June 30 March 31 December 31 September 30
(dollars in thousands) 2024 2024 2024 2023 2023
Nonperforming Assets
Commercial
Non-owner occupied RE $ 7,904 7,949 1,410 1,423 1,615
Commercial business 838 829 488 319 404
Consumer
Real estate 2,448 1,875 1,380 985 1,228
Home equity 393 565 367 1,236 1,068
Other - - 1 - -
Total nonaccrual loans 11,583 11,218 3,646 3,963 4,315
Other real estate owned - - - - -
Total nonperforming assets $ 11,583 11,218 3,646 3,963 4,315
Nonperforming assets as a percentage of:
Total assets 0.28% 0.27% 0.09% 0.10% 0.11%
Total loans 0.32% 0.31% 0.10% 0.11% 0.12%
Classified assets/tier 1 capital plus allowance for credit losses 4.35% 4.22% 3.99% 4.25% 4.72%
Quarter Ended
September 30 June 30 March 31 December 31 September 30
(dollars in thousands) 2024 2024 2024 2023 2023
Allowance for Credit Losses
Balance, beginning of period $ 40,157 40,441 40,682 41,131 41,105
Loans charged-off (118) (1,049) (424) (119) (42)
Recoveries of loans previously charged-off 127 15 183 310 168
Net loans (charged-off) recovered 9 (1,034) (241) 191 126
Provision for (reversal of) credit losses - 750 - (640) (100)
Balance, end of period $ 40,166 40,157 40,441 40,682 41,131
Allowance for credit losses to gross loans 1.11% 1.11% 1.11% 1.13% 1.16%
Allowance for credit losses to nonaccrual loans 346.78% 357.95% 1,109.13% 1,026.58% 953.25%
Net charge-offs (recoveries) to average loans QTD (annualized) 0.00% 0.11% 0.03% (0.02%) (0.01%)
Totalnonperforming assets increased by $365 thousand during the third quarter of 2024, and represented 0.28% of total assets, compared to 0.27% for the second quarter of 2024. The increase in nonperforming assets was driven by three new relationships, totaling $698 thousand, placed on nonaccrual during the third quarter of 2024, offset by one relationship returning to accrual status and several large paydowns on existing nonaccrual loans. In addition, our classified asset ratio was 4.35% for the third quarter of 2024 compared to 4.22% for the second quarter of 2024.
At September 30, 2024 and June 30, 2024, the allowance for credit losses was $40.2 million, or 1.11% of total loans. We had net recoveries of $9 thousand, or 0.00% annualized, for the third quarter of 2024, compared to net charge-offs of $1.0 million, or 0.11% annualized, for the second quarter of 2024. We did not record a provision for credit losses related to the loan portfolio during the third quarter of 2024, compared to a $750 thousand provision for credit losses related to the loan portfolio for the second quarter of 2024.
LOAN COMPOSITION - Unaudited
Quarter Ended
September 30 June 30 March 31 December 31 September 30
(dollars in thousands) 2024 2024 2024 2023 2023
Commercial
Owner occupied RE $ 642,608 642,008 631,047 631,657 637,038
Non-owner occupied RE 917,642 917,034 944,530 942,529 937,749
Construction 144,665 144,968 157,464 150,680 119,629
Business 521,535 527,017 520,073 500,161 500,253
Total commercial loans 2,226,450 2,231,027 2,253,114 2,225,027 2,194,669
Consumer
Real estate 1,132,371 1,126,155 1,101,573 1,082,429 1,074,679
Home equity 195,383 189,294 184,691 183,004 180,856
Construction 21,582 32,936 53,216 63,348 54,210
Other 43,770 43,109 51,172 48,819 49,218
Total consumer loans 1,393,106 1,391,494 1,390,652 1,377,600 1,358,963
Total gross loans, net of deferred fees 3,619,556 3,622,521 3,643,766 3,602,627 3,553,632
Less-allowance for credit losses (40,166) (40,157) (40,441) (40,682) (41,131)
Total loans, net $ 3,579,390 3,582,364 3,603,325 3,561,945 3,512,501
DEPOSIT COMPOSITION - Unaudited
Quarter Ended
September 30 June 30 March 31 December 31 September 30
(dollars in thousands) 2024 2024 2024 2023 2023
Non-interest bearing $ 689,749 683,291 671,708 674,167 675,409
Interest bearing:
NOW accounts 339,412 293,875 293,064 310,218 306,667
Money market accounts 1,423,403 1,562,786 1,603,796 1,605,278 1,685,736
Savings 29,283 28,739 32,248 31,669 34,737
Time, less than $250,000 223,582 219,532 206,657 190,167 125,506
Time and out-of-market deposits, $250,000 and over 813,396 671,646 653,208 568,065 519,716
Total deposits $ 3,518,825 3,459,869 3,460,681 3,379,564 3,347,771
Footnotes to tables: (1) Total revenue is the sum of net interest income and noninterest income. (2) The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield on a taxable basis. (3) Annualized for the respective three-month period. (4) Noninterest expense divided by the sum of net interest income and noninterest income. (5) Excludes mortgage loans held for sale. (6) Excludes out of market deposits and time deposits greater than $250,000 totaling $813,396,000. (7) September 30, 2024 ratios are preliminary. (8) The common equity tier 1 ratio is calculated as the sum of common equity divided by risk-weighted assets. (9) The tangible common equity ratio is calculated as total equity less preferred stock divided by total assets. (10) Includes mortgage loans held for sale.
ABOUT SOUTHERN FIRST BANCSHARESSouthern 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 $4.2 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 STATEMENTSCertain 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.
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
https://c212.net/c/img/favicon.png?sn=CL36080&sd=2024-10-22
View original content to download multimedia:https://www.prnewswire.com/news-releases/southern-first-reports-results-for-third-quarter-2024-302282149.html
SOURCE Southern First Bancshares, Inc.
https://rt.newswire.ca/rt.gif?NewsItemId=CL36080&Transmission_Id=202410220715PR_NEWS_USPR_____CL36080&DateId=20241022
COMTEX_459015870/1005/2024-10-22T07:15:24