Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three and twelve months ended December 31, 2024.
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“Our financial performance this quarter reflects continued momentum in margin and gives us great optimism as a starting point for 2025. Asset quality remained outstanding with excellent performance metrics and a positive outlook. Our balance sheet performed as we expected with the Fed's interest rate cuts, and our margin continued to expand each quarter this year. Our capital ratios remain strong, and we are pleased with our growth in book value to $40.47 to end the year.” stated Art Seaver, Chief Executive Officer. “After 25 years, we are proud of the company we have built and our continued mission to impact lives in the communities we serve. We are well-positioned with a strong balance sheet and healthy pipelines to continue the positive trends in performance and generating value for our shareholders.”
2024 Fourth Quarter Highlights
— Net income of $5.6 million and diluted earnings per common share of $0.70, up 30% over last quarter and 37% compared to Q4 2023
— Total loans of $3.6 billion and total deposits of $3.4 billion
— Nonperforming assets to total assets of 0.27% and past due loans to total loans of 0.25%
— Net interest margin of 2.25%, compared to 2.08% for Q3 2024 and 1.92% for Q4 2023
— Book value per common share of $40.47 and a TCE ratio of 8.08%
Quarter Ended December 31 September 30 June 30 March 31 December 31 2024 2024 2024 2024 2023Earnings ($ in thousands, except per share data):Net income available to common shareholders $ 5,627 4,382 2,999 2,522 4,167Earnings per common share, diluted 0.70 0.54 0.37 0.31 0.51Total revenue(1) 25,237 23,766 23,051 21,309 21,390Net interest margin (tax-equivalent)(2) 2.25% 2.08% 1.98% 1.94% 1.92%Return on average assets(3) 0.54% 0.43% 0.29% 0.25% 0.40%Return on average equity(3) 6.80% 5.40% 3.81% 3.22% 5.39%Efficiency ratio(4) 73.48% 75.90% 80.87% 84.94% 79.61%Noninterest expense to average assets (3) 1.78% 1.75% 1.81% 1.81% 1.64%Balance Sheet ($ in thousands):Total loans(5) $ 3,631,767 3,619,556 3,622,521 3,643,766 3,602,627Total deposits 3,435,765 3,518,825 3,459,869 3,460,681 3,379,564Core deposits(6) 2,661,736 2,705,429 2,788,223 2,807,473 2,811,499Total assets 4,087,593 4,174,631 4,109,849 4,105,704 4,055,789Book value per common share 40.47 40.04 39.09 38.65 38.63Loans to deposits 105.70% 102.86% 104.70% 105.29% 106.60%Holding Company Capital Ratios(7):Total risk-based capital ratio 12.70% 12.61% 12.77% 12.59% 12.56%Tier 1 risk-based capital ratio 11.16% 10.99% 10.80% 10.63% 10.59%Leverage ratio 8.55% 8.50% 8.27% 8.44% 8.14%Common equity tier 1 ratio(8) 10.75% 10.58% 10.39% 10.22% 10.18%Tangible common equity(9) 8.08% 7.82% 7.76% 7.68% 7.70%Asset Quality Ratios:Nonperforming assets/total assets 0.27% 0.28% 0.27% 0.09% 0.10%Classified assets/tier one capital plus allowance for credit losses 4.25% 4.35% 4.22% 3.99% 4.25%Loans 30 days or more past due/loans(5) 0.25% 0.16% 0.30% 0.36% 0.37%Net charge-offs (recoveries)/average loans(5) (YTD annualized) 0.04% 0.05% 0.07% 0.03% 0.00%Allowance for credit losses/loans(5) 1.10% 1.11% 1.11% 1.11% 1.13%Allowance for credit losses/nonaccrual loans 366.94% 346.78% 357.95% 1,109.13% 1,026.58%[Footnotes to table located on page 6]
INCOME STATEMENTS – Unaudited Quarter Ended Twelve Months Ended Dec 31 Sept 30 Jun 30 Mar 31 Dec 31 December 31(in thousands, except per share data) 2024 2024 2024 2024 2023 2024 2023Interest incomeLoans $ 47,163 47,550 46,545 45,605 44,758 186,863 166,137Investment securities 1,504 1,412 1,418 1,478 1,674 5,812 4,463Federal funds sold 2,465 2,209 2,583 1,280 2,703 8,537 6,998Total interest income 51,132 51,171 50,546 48,363 49,135 201,212 177,598Interest expenseDeposits 25,901 27,725 28,216 26,932 27,127 108,774 91,373Borrowings 2,773 2,855 2,802 2,786 2,948 11,216 8,571Total interest expense 28,674 30,580 31,018 29,718 30,075 119,990 99,944Net interest income 22,458 20,591 19,528 18,645 19,060 81,222 77,654Provision (reversal) for credit losses (200) – 500 (175) (975) 125 1,260Net interest income after provision for credit losses 22,658 20,591 19,028 18,820 20,035 81,097 76,394Noninterest incomeMortgage banking income 1,024 1,449 1,923 1,164 868 5,560 4,036Service fees on deposit accounts 499 455 423 387 371 1,764 1,382ATM and debit card income 607 599 587 544 565 2,337 2,245Income from bank owned life insurance 407 401 384 377 361 1,569 1,379Other income 242 271 206 192 165 911 818Total noninterest income 2,779 3,175 3,523 2,664 2,330 12,141 9,860Noninterest expenseCompensation and benefits 10,610 10,789 11,290 10,857 9,401 43,546 40,275Occupancy 2,587 2,595 2,552 2,557 2,718 10,291 10,255Outside service and data processing costs 2,003 1,930 1,962 1,846 2,000 7,741 7,078Insurance 1,077 1,025 965 955 937 4,022 3,766Professional fees 656 548 582 618 581 2,404 2,496Marketing 335 319 389 369 364 1,412 1,357Other 1,276 833 903 898 1,027 3,910 3,600Total noninterest expenses 18,544 18,039 18,643 18,100 17,028 73,326 68,827Income before provision for income taxes 6,893 5,727 3,908 3,384 5,337 19,912 17,427Income tax expense 1,266 1,345 909 862 1,170 4,382 4,001Net income available to common shareholders $ 5,627 4,382 2,999 2,522 4,167 15,530 13,426Earnings per common share – Basic $ 0.70 0.54 0.37 0.31 0.51 1.92 1.67Earnings per common share – Diluted 0.70 0.54 0.37 0.31 0.51 1.91 1.66Basic weighted average common shares 8,023 8,064 8,126 8,110 8,056 8,081 8,047Diluted weighted average common shares 8,097 8,089 8,141 8,142 8,080 8,117 8,078[Footnotes to table located on page 6]
Net income for the fourth quarter of 2024 was $5.6 million, or $0.70 per diluted share, a $1.2 million increase from the third quarter of 2024 and a $1.5 million increase from the fourth quarter of 2023. Net interest income increased $1.9 million during the fourth quarter of 2024, compared to the third quarter of 2024, and increased $3.4 million, compared to the fourth quarter of 2023. The increase in net interest income from the prior quarter and prior year was primarily driven by an increase in interest income on loans and a decrease in interest expense on deposits.
There was a reversal of the provision for credit losses of $200 thousand for the fourth quarter of 2024, compared to no provision for credit losses during the third quarter of 2024 and a reversal of the provision for credit losses of $975 thousand during the fourth quarter of 2023. The provision reversal during the fourth quarter of 2024 includes a $250 thousand reversal of the provision for credit losses and a $50 thousand increase in the reserve for unfunded commitments. The reversal of the provision for credit losses was driven by lower expected loss rates and few charge-offs, while the increase in the reserve for unfunded commitments was driven by an increase in the balance of unfunded commitments at December 31, 2024, compared to the previous quarter and year.
Noninterest income was $2.8 million for the fourth quarter of 2024, compared to $3.2 million for the third quarter of 2024, and $2.3 million for the fourth quarter of 2023. Mortgage banking income continues to be the largest component of our noninterest income at $1.0 million in fee revenue for the fourth quarter of 2024, $1.4 million for the third quarter of 2024, and $868 thousand for the fourth quarter of 2023. Mortgage closing volume increased in the fourth quarter of 2024; however, the linked quarter decrease in fee revenue is attributable to more loans being held in the loan portfolio with fewer sold into the secondary market.
Noninterest expense for the fourth quarter of 2024 was $18.5 million, a $505 thousand increase from the third quarter of 2024, and a $1.5 million increase from the fourth quarter of 2023. The increase in noninterest expense from the previous quarter was driven by an increase in professional fees and other noninterest expense, which includes increases in business tax expense, collection costs and dues and subscription expenses. The increase in noninterest expense from the previous year related primarily to increases in compensation and benefits, insurance, and other noninterest expenses.
Our effective tax rate was 18.4% for the fourth quarter of 2024, 23.5% for the third quarter of 2024, and 21.9% for the fourth quarter of 2023. The lower tax rate in the fourth quarter of 2023 compared to the prior quarter and prior year primarily relates to the effect of equity compensation transactions and return to provision differences on our actual tax rate during the quarter compared to what was estimated during the year.
NET INTEREST INCOME AND MARGIN – Unaudited For the Three Months Ended December 31, 2024 September 30, 2024 December 31,2023(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 assetsFederal funds sold and interest-bearing deposits $ 203,065 $ 2,465 4.83% $ 158,222 $ 2,209 5.55% $ 197,482 $ 2,703 5.43%Investment securities, taxable 145,932 1,462 3.99% 137,087 1,370 3.98% 151,969 1,632 4.26%Investment securities, nontaxable(2) 7,988 55 2.72% 8,047 55 2.70% 7,831 55 2.76%Loans(10) 3,620,765 47,163 5.18% 3,629,050 47,550 5.21% 3,586,863 44,758 4.95%Total interest-earning assets 3,977,750 51,145 5.12% 3,932,406 51,184 5.18% 3,944,145 49,148 4.94%Noninterest-earning assets 158,779 158,550 174,717Total assets $4,136,529 $4,090,956 $4,118,862Interest-bearing liabilitiesNOW accounts $ 300,902 693 0.92% $ 314,669 835 1.06% $ 301,424 656 0.86%Savings & money market 1,492,534 13,525 3.61% 1,523,834 15,287 3.99% 1,697,144 17,042 3.98%Time deposits 992,335 11,683 4.68% 909,192 11,603 5.08% 759,839 9,429 4.92%Total interest-bearing deposits 2,785,771 25,901 3.70% 2,747,695 27,725 4.01% 2,758,407 27,127 3.90%FHLB advances and other borrowings 240,000 2,295 3.80% 240,065 2,297 3.81% 257,880 2,387 3.67%Subordinated debentures 24,903 478 7.64% 36,261 558 6.12% 36,305 561 6.13%Total interest-bearing liabilities 3,050,674 28,674 3.74% 3,024,021 30,580 4.02% 3,052,592 30,075 3.91%Noninterest-bearing liabilities 756,636 744,025 759,413Shareholders' equity 329,219 322,910 306,857Total liabilities and shareholders' equity $4,136,529 $4,090,956 $4,118,862Net interest spread 1.38% 1.16% 1.04%Net interest income (tax equivalent) / margin $22,471 2.25% $20,604 2.08% $19,073 1.92%Less: tax-equivalent adjustment(2) 13 13 13Net interest income $22,458 $20,591 $19,060[Footnotes to table located on page 6]
Net interest income was $22.5 million for the fourth quarter of 2024, a $1.9 million increase from the third quarter of 2024, driven by a $1.9 million decrease in interest expense. The decrease in interest expense was driven by a 31 basis point reduction in rate on our interest-bearing deposits over the previous quarter. In comparison to the fourth quarter of 2023, net interest income increased $3.4 million, resulting primarily from an 18-basis point increase in the average yield on our interest-earning assets. Our net interest margin, on a tax-equivalent basis, was 2.25% for the fourth quarter of 2024, a 17 basis point increase from 2.08% for the third quarter of 2024 and a 33 basis point increase from 1.92% for the fourth quarter of 2023.
BALANCE SHEETS – Unaudited Ending Balance December 31 September 30 June 30 March 31 December 31(in thousands, except per share data) 2024 2024 2024 2024 2023AssetsCash and cash equivalents:Cash and due from banks $ 22,553 25,289 21,567 13,925 28,020Federal funds sold 128,452 226,110 164,432 144,595 119,349Interest-bearing deposits with banks 11,858 9,176 8,828 8,789 8,801Total cash and cash equivalents 162,863 260,575 194,827 167,309 156,170Investment securities:Investment securities available for sale 132,127 134,597 121,353 125,996 134,702Other investments 19,490 19,640 18,653 18,499 19,939Total investment securities 151,617 154,237 140,006 144,495 154,641Mortgage loans held for sale 4,565 8,602 14,759 11,842 7,194Loans (5) 3,631,767 3,619,556 3,622,521 3,643,766 3,602,627Less allowance for credit losses (39,914) (40,166) (40,157) (40,441) (40,682)Loans, net 3,591,853 3,579,390 3,582,364 3,603,325 3,561,945Bank owned life insurance 54,070 53,663 53,263 52,878 52,501Property and equipment, net 88,794 90,158 91,533 93,007 94,301Deferred income taxes 13,467 11,595 12,339 12,321 12,200Other assets 20,364 16,411 20,758 20,527 16,837Total assets $ 4,087,593 4,174,631 4,109,849 4,105,704 4,055,789LiabilitiesDeposits $ 3,435,765 3,518,825 3,459,869 3,460,681 3,379,564FHLB Advances 240,000 240,000 240,000 240,000 275,000Subordinated debentures 24,903 24,903 36,376 36,349 36,322Other liabilities 56,481 64,365 54,856 53,418 52,436Total liabilities 3,757,149 3,848,093 3,791,101 3,790,448 3,743,322Shareholders' equityPreferred stock – $.01 par value; 10,000,000 shares authorized – – – – -Common Stock – $.01 par value; 10,000,000 shares authorized 82 82 82 82 81Nonvested restricted stock (3,884) (4,219) (4,710) (5,257) (3,596)Additional paid-in capital 124,641 124,288 124,174 124,159 121,777Accumulated other comprehensive loss (11,472) (9,063) (11,866) (11,797) (11,342)Retained earnings 221,077 215,450 211,068 208,069 205,547Total shareholders' equity 330,444 326,538 318,748 315,256 312,467Total liabilities and shareholders' equity $ 4,087,593 4,174,631 4,109,849 4,105,704 4,055,789Common StockBook value per common share $ 40.47 40.04 39.09 38.65 38.63Stock price:High 44.86 36.45 30.36 38.71 37.15Low 33.26 27.70 25.70 29.80 25.16Period end 39.75 34.08 29.24 31.76 37.10Common shares outstanding 8,165 8,156 8,155 8,156 8,088[Footnotes to table located on page 6]
ASSET QUALITY MEASURES – Unaudited Quarter Ended December 31 September 30 June 30 March 31 December 31(dollars in thousands) 2024 2024 2024 2024 2023Nonperforming AssetsCommercialNon-owner occupied RE $ 7,641 7,904 7,949 1,410 1,423Commercial business 1,016 838 829 488 319ConsumerReal estate 1,908 2,448 1,875 1,380 985Home equity 312 393 565 367 1,236Other – – – 1 -Total nonaccrual loans 10,877 11,583 11,218 3,646 3,963Other real estate owned – – – – -Total nonperforming assets $ 10,877 11,583 11,218 3,646 3,963Nonperforming assets as a percentage of:Total assets 0.27% 0.28% 0.27% 0.09% 0.10%Total loans 0.30% 0.32% 0.31% 0.10% 0.11%Classified assets/tier 1 capital plus allowance for credit 4.25% 4.35% 4.22% 3.99% 4.25%losses Quarter Ended December 31 September 30 June 30 March 31 December 31(dollars in thousands) 2024 2024 2024 2024 2023Allowance for Credit LossesBalance, beginning of period $ 40,166 40,157 40,441 40,682 41,131Loans charged-off (143) (118) (1,049) (424) (119)Recoveries of loans previously charged-off 141 127 15 183 310Net loans (charged-off) recovered (2) 9 (1,034) (241) 191Provision for (reversal of) credit losses (250) – 750 – (640)Balance, end of period $ 39,914 40,166 40,157 40,441 40,682Allowance for credit losses to gross loans 1.10% 1.11% 1.11% 1.11% 1.13%Allowance for credit losses to nonaccrual loans 366.94% 346.78% 357.95% 1,109.13% 1,026.58%Net charge-offs (recoveries) to average loans QTD 0.00% 0.00% 0.11% 0.03% (0.02%)(annualized)
Totalnonperforming assets decreased by $706 thousand during the fourth quarter of 2024, representing 0.27% of total assets compared to 0.28% for the third quarter of 2024 and 0.10% for the fourth quarter of 2023. While we added four new relationships to nonaccrual status during the fourth quarter of 2024, there were also seven relationships which either returned to accrual status or paid off during the quarter. In addition, our classified asset ratio decreased to 4.25% for the fourth quarter of 2024 from 4.35% in the third quarter of 2024 and remained unchanged at 4.25% in the fourth quarter of 2023.
At December 31, 2024, the allowance for credit losses was $39.9 million, or 1.10% of total loans, compared to $40.2 million, or 1.11% of total loans at September 30, 2024, and $40.7 million, or 1.13% of total loans, at December 31, 2023. We had net charge-offs of $2 thousand, or 0.00% annualized, for the fourth quarter of 2024, compared to net recoveries of $9 thousand for the third quarter of 2024 and net recoveries of $191 thousand for the fourth quarter of 2023. There was a reversal of the provision for credit losses of $250 thousand for the fourth quarter of 2024, compared to no provision for credit losses for the third quarter of 2024 and a reversal of the provision of credit losses of $640 thousand for the fourth quarter of 2023. The provision reversal was driven by lower expected loss rates resulting from low charge-offs during the quarter and year.
LOAN COMPOSITION – Unaudited Quarter Ended December 31 September 30 June 30 March 31 December 31(dollars in thousands) 2024 2024 2024 2024 2023CommercialOwner occupied RE $ 651,597 642,608 642,008 631,047 631,657Non-owner occupied RE 924,367 917,642 917,034 944,530 942,529Construction 103,204 144,665 144,968 157,464 150,680Business 556,117 521,535 527,017 520,073 500,161Total commercial loans 2,235,285 2,226,450 2,231,027 2,253,114 2,225,027ConsumerReal estate 1,128,629 1,132,371 1,126,155 1,101,573 1,082,429Home equity 204,897 195,383 189,294 184,691 183,004Construction 20,874 21,582 32,936 53,216 63,348Other 42,082 43,770 43,109 51,172 48,819Total consumer loans 1,396,482 1,393,106 1,391,494 1,390,652 1,377,600Total gross loans, net of deferred fees 3,631,767 3,619,556 3,622,521 3,643,766 3,602,627Less-allowance for credit losses (39,914) (40,166) (40,157) (40,441) (40,682)Total loans, net $ 3,591,853 3,579,390 3,582,364 3,603,325 3,561,945
DEPOSIT COMPOSITION – Unaudited Quarter Ended December 31 September 30 June 30 March 31 December 31(dollars in thousands) 2024 2024 2024 2024 2023Non-interest bearing $ 683,081 689,749 683,291 671,708 674,167Interest bearing:NOW accounts 314,588 339,412 293,875 293,064 310,218Money market accounts 1,438,530 1,423,403 1,562,786 1,603,796 1,605,278Savings 31,976 29,283 28,739 32,248 31,669Time, less than $250,000 193,562 223,582 219,532 206,657 190,167Time and out-of-market deposits, $250,000 and over 774,028 813,396 671,646 653,208 568,065Total deposits $ 3,435,765 3,518,825 3,459,869 3,460,681 3,379,564
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 $774,028,000.(7) December 31, 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 FIRSTBANCSHARESSouthern 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 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,” “target,” “continue,” “lasting,” 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 office of the President 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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