Southern First Reports Second Quarter 2025 Results | SFST Stock News

, /PRNewswire/ -- Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the six months ended June 30, 2025. "Our second quarter results reflect the strength of our team who continues to generate high-quality, profitable growth in our vibrant markets. We had another quarter of solid margin expansion, a testament to our pricing focus and discipline on both sides of the balance sheet. This quarter was one of the highest revenue generating quarters in our 25-year history with total revenue growing 24% over the same quarter a year ago. Our business pipelines are strong, which will provide for healthy growth in the foreseeable future, supported by our solid balance sheet. Our asset quality is among the best in the industry. We are not immune to the potential effects of the broader and ever-changing operating environment, but we are confident in our ability to deliver improving financial performance as we have demonstrated so far this year," stated Art Seaver, Chief Executive Officer. "This quarter we were proud to announce the addition of three new Board members, who are located across our markets and have already begun to make valuable contributions to the leadership of our company through their incredible backgrounds of community involvement and professional expertise. We also continue to attract highly talented and experienced bankers who share our passion for impacting lives by delivering the highest level of client and community service. They provide excellent opportunities to add depth in existing areas and to expand within our footprint. We have a great sense of enthusiasm and optimism about our outlook for the remainder of this year and beyond."2025 Second Quarter Highlights Diluted earnings per common share of $0.81, up $0.16, or 25%, from Q1 2025, and $0.44, or 119%, compared to Q2 2024Net interest margin of 2.50%, compared to 2.41% for Q1 2025 and 1.98% for Q2 2024Total loans of $3.7 billion, up 7% (annualized) from Q1 2025; core deposits of $2.9 billion, up 7% (annualized) from Q1 2025Nonperforming assets to total assets of 0.27% and past due loans to total loans of 0.14%Book value per common share of $42.23 increased 9% (annualized) from Q1 2025 and 8% compared to Q2 2024; Tangible Common Equity (TCE) ratio of 8.02%Quarter EndedJune 30March 31December 31September 30June 3020252025202420242024Earnings ($ in thousands, except per share data):Net income available to common shareholders$6,5815,2665,6274,3822,999Earnings per common share, diluted0.810.650.700.540.37Total revenue(1)28,62926,49725,23723,76623,051Net interest margin (tax-equivalent)(2) 2.50%2.41%2.25%2.08%1.98%Return on average assets(3)0.63%0.52%0.54%0.43%0.29%Return on average equity(3)7.71%6.38%6.80%5.40%3.81%Efficiency ratio(4)67.54%71.08%73.48%75.90%80.87%Noninterest expense to average assets (3)1.86%1.87%1.78%1.75%1.81%Balance Sheet ($ in thousands):Total loans(5)$3,746,8413,683,9193,631,7673,619,5563,622,521Total deposits3,636,3293,620,8863,435,7653,518,8253,459,869Core deposits(6)2,867,1932,820,1942,661,7362,705,4292,788,223Total assets4,308,0674,284,3114,087,5934,174,6314,109,849Book value per common share42.2341.3340.4740.0439.09Loans to deposits103.04%101.74%105.70%102.86%104.70%Holding Company Capital Ratios(7):Total risk-based capital ratio 12.63%12.69%12.70%12.61%12.77%Tier 1 risk-based capital ratio 11.11%11.15%11.16%10.99%10.80%Leverage ratio 8.73%8.79%8.55%8.50%8.27%Common equity tier 1 ratio(8)10.71%10.75%10.75%10.58%10.39%Tangible common equity(9)8.02%7.88%8.08%7.82%7.76%Asset Quality Ratios:Nonperforming assets/total assets0.27%0.26%0.27%0.28%0.27%Classified assets/tier one capital plus allowance for credit losses 4.28%4.24%4.25%4.35%4.22%Accruing loans 30 days or more past due/loans(5)0.14%0.27%0.18%0.09%0.06%Net charge-offs (recoveries)/average loans(5) (YTD annualized)0.00%0.00%0.04%0.05%0.07%Allowance for credit losses/loans(5)1.10%1.10%1.10%1.11%1.11%Allowance for credit losses/nonaccrual loans362.35%378.09%366.94%346.78%357.95%[Footnotes to table located on page 6]INCOME STATEMENTS – UnauditedQuarter EndedJun 30 2025 -Jun 30Mar 31Dec 31Sept 30Jun 30Jun 30 2024(in thousands, except per share data)20252025202420242024% ChangeInterest incomeLoans$48,99247,08547,16347,55046,5455.26%Investment securities1,3571,4031,5041,4121,418(4.30%)Federal funds sold1,9691,1592,4652,2092,583(23.77%) Total interest income52,31849,64751,13251,17150,5463.51%Interest expenseDeposits24,30023,56925,90127,72528,216(13.88%)Borrowings2,7232,6952,7732,8552,802(2.82%) Total interest expense 27,02326,26428,67430,58031,018(12.88%)Net interest income 25,29523,38322,45820,59119,52829.53%Provision (reversal) for credit losses 700750(200)-50040.00%Net interest income after provision for credit losses24,59522,63322,65820,59119,02829.26%Noninterest income Mortgage banking income1,5691,4241,0241,4491,923(18.41%)Service fees on deposit accounts56753949945542334.04%ATM and debit card income586552607599587(0.17%)Income from bank owned life insurance4134034074013847.55%Other income199196242271206(3.40%) Total noninterest income3,3343,1142,7793,1753,523(5.36%)Noninterest expense Compensation and benefits11,67411,30410,61010,78911,2903.40%Occupancy2,5232,5482,5872,5952,552(1.14%)Outside service and data processing costs2,1892,0372,0031,9301,96211.57%Insurance9101,0101,0771,025965(5.70%)Professional fees6095096565485824.64%Marketing3973743353193892.06%Other1,0341,0541,27683390314.40% Total noninterest expenses19,33618,83618,54418,03918,6433.72%Income before provision for income taxes8,5936,9116,8935,7273,908119.88%Income tax expense2,0121,6451,2661,345909121.34%Net income available to common shareholders$6,5815,2665,6274,3822,999119.44%Earnings per common share – Basic$0.810.650.700.540.37Earnings per common share – Diluted0.810.650.700.540.37Basic weighted average common shares8,1198,0788,0238,0648,126Diluted weighted average common shares8,1348,1118,0978,0898,141[Footnotes to table located on page 6]Net income for the second quarter of 2025 was $6.6 million, or $0.81 per diluted share, a $1.3 million increase from the first quarter of 2025 and a $3.6 million increase from the second quarter of 2024. Net interest income increased $1.9 million during the second quarter of 2025, compared to the first quarter of 2025, and increased $5.8 million, compared to the second quarter of 2024. The increase in net interest income from the prior quarter and prior year was primarily driven by an increase in interest income on loans, combined with a decrease in interest expense on deposits.The provision for credit losses was $700 thousand for the second quarter of 2025 compared to a provision for credit losses of $750 thousand for the first quarter of 2025 and $500 thousand for the second quarter of 2024. The provision during the second quarter of 2025 includes a $650 thousand provision for credit losses and a $50 thousand provision for the reserve for unfunded commitments. The provision for credit losses in the second quarter of 2025 was primarily driven by a $62.9 million increase in total loans.Noninterest income was $3.3 million for the second quarter of 2025, compared to $3.1 million for the first quarter of 2025, and $3.5 million for the second quarter of 2024. Mortgage banking income continues to be the largest component of noninterest income at $1.6 million in fee revenue for the second quarter of 2025, $1.4 million for the first quarter of 2025, and $1.9 million for the second quarter of 2024. Mortgage origination volume increased slightly in the second quarter of 2025, driving the increase in revenue from the prior quarter.Noninterest expense for the second quarter of 2025 was $19.3 million, a $500 thousand increase from the first quarter of 2025, and a $693 thousand increase from the second quarter of 2024. The increase in noninterest expense from the previous quarter was driven by an increase in compensation and benefits, outside service and data processing costs, and professional fees, offset in part by a decrease in insurance expense. The increase in noninterest expense from the previous year related primarily to increases in compensation and benefits, outside service and data processing costs, and other noninterest expenses.The effective tax rate was 23.4% for the second quarter of 2025, 23.8% for the first quarter of 2025, and 23.3% for the second quarter of 2024. The changes in the effective tax rate are driven by the effect of equity compensation transactions during the quarter.NET INTEREST INCOME AND MARGIN - UnauditedFor the Three Months Ended June 30, 2025March 31, 2025June 30, 2024(dollars in thousands)AverageBalanceIncome/ExpenseYield/Rate(3)AverageBalanceIncome/ExpenseYield/Rate(3)AverageBalanceIncome/ExpenseYield/Rate(3)Interest-earning assetsFederal funds sold and interest-bearing deposits$ 179,095$ 1,9694.41%$ 107,821$ 1,1594.36%$ 186,584$ 2,5835.57% Investment securities, taxable141,8981,3153.72%143,6091,3613.84%133,5071,3764.15% Investment securities, nontaxable(2)7,740552.83%7,914552.80%8,027552.73% Loans(10)3,724,06448,9925.28%3,673,91247,0855.20%3,645,59546,5455.14% Total interest-earning assets4,052,79752,3315.18%3,933,25649,6605.12%3,973,71350,5595.12% Noninterest-earning assets154,051157,053165,093 Total assets$4,206,848$4,090,309$4,138,806Interest-bearing liabilitiesNOW accounts$ 331,8117520.91%$ 306,7075970.79%$ 302,8816210.82%Savings & money market1,566,34513,3983.43%1,520,63212,7503.40%1,611,99116,3244.07%Time deposits942,88010,1504.32%930,28210,2224.46%898,87811,2715.04%Total interest-bearing deposits2,841,03624,3003.43%2,757,62123,5693.47%2,813,75028,2164.03%FHLB advances and other borrowings240,0002,2703.79%240,0002,2443.79%240,0002,2473.77%Subordinated debentures24,9034537.30%24,9034517.34%36,3605556.14%Total interest-bearing liabilities3,105,93927,0233.49%3,022,52426,2643.52%3,090,11031,0184.04%Noninterest-bearing liabilities758,626732,761731,843Shareholders' equity342,283335,024316,853Total liabilities and shareholders' equity$4,206,848$4,090,309$4,138,806Net interest spread1.69%1.60%1.08%Net interest income (tax equivalent) / margin$25,3082.50%$23,3962.41%$19,5411.98%Less: tax-equivalent adjustment(2)131313Net interest income$25,295$23,383$19,528[Footnotes to table located on page 6]Net interest income was $25.3 million for the second quarter of 2025, a $1.9 million increase from the first quarter of 2025, driven by a $2.7 million increase in interest income, partially offset by a $759 thousand increase in interest expense. The increase in interest income was driven by an increase in the yield on interest-earning assets, as loan yield increased eight basis points and the yield on Federal funds sold and interest-bearing deposits increased by five basis points over the previous quarter, combined with a four basis point decrease in the rate on our interest-bearing deposits over the previous quarter. In comparison to the second quarter of 2024, net interest income increased $5.8 million, resulting primarily from a 60 basis point decrease in the cost of interest-bearing deposits. Net interest margin, on a tax-equivalent basis, was 2.50% for the second quarter of 2025, a nine basis point increase from 2.41% for the first quarter of 2025 and a 52 basis point increase from 1.98% for the second quarter of 2024.BALANCE SHEETS - UnauditedEnding BalanceJun 30 2025 – Jun 30Mar 31Dec 31Sep 30Jun 30Jun 30 2024(in thousands, except per share data)20252025202420242024% ChangeAssetsCash and cash equivalents: Cash and due from banks$25,18424,90422,55325,28921,56716.77% Federal funds sold180,834263,612128,452226,110164,4329.97% Interest-bearing deposits with banks65,01416,54111,8589,1768,828636.45% Total cash and cash equivalents271,032305,057162,863260,575194,82739.11%Investment securities: Investment securities available for sale128,867131,290132,127134,597121,3536.19% Other investments19,90619,92719,49019,64018,6536.72% Total investment securities148,773151,217151,617154,237140,0066.26%Mortgage loans held for sale10,73911,5244,5658,60214,759(27.24%)Loans (5)3,746,8413,683,9193,631,7673,619,5563,622,5213.43%Less allowance for credit losses (41,285)(40,687)(39,914)(40,166)(40,157)2.81% Loans, net3,705,5563,643,2323,591,8533,579,3903,582,3643.44%Bank owned life insurance54,88654,47354,07053,66353,2633.05%Property and equipment, net85,92187,36988,79490,15891,533(6.13%)Deferred income taxes12,97113,08013,46711,59512,3395.12%Other assets18,18918,35920,36416,41120,758(12.38%) Total assets$4,308,0674,284,3114,087,5934,174,6314,109,8494.82%LiabilitiesDeposits $3,636,3293,620,8863,435,7653,518,8253,459,8695.10%FHLB Advances240,000240,000240,000240,000240,0000.00%Subordinated debentures 24,90324,90324,90324,90336,376(31.54%)Other liabilities61,37360,92456,48164,36554,85611.88% Total liabilities3,962,6053,946,7133,757,1493,848,0933,791,1014.52%Shareholders' equityPreferred stock - $.01 par value; 10,000,000 shares authorized-----Common Stock - $.01 par value; 10,000,000 shares authorized8282828282Nonvested restricted stock(2,774)(3,372)(3,884)(4,219)(4,710)(41.10%)Additional paid-in capital124,839124,561124,641124,288124,1740.54%Accumulated other comprehensive loss(9,609)(10,016)(11,472)(9,063)(11,866)(19.02%)Retained earnings232,924226,343221,077215,450211,06810.35% Total shareholders' equity345,462337,598330,444326,538318,7488.38% Total liabilities and shareholders' equity $4,308,0674,284,3114,087,5934,174,6314,109,8494.82%Common StockBook value per common share$42.2341.3340.4740.0439.098.03%Stock price: High38.5138.5044.8636.4530.3626.84% Low30.6131.8833.2627.7025.7019.11% Period end38.0332.9239.7534.0829.2430.06%Common shares outstanding8,1818,1698,1658,1568,1550.32%[Footnotes to table located on page 6]ASSET QUALITY MEASURES - UnauditedQuarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20252025202420242024Nonperforming AssetsCommercial Non-owner occupied RE$6,9416,9507,6417,9047,949 Commercial business7171,0871,016838829Consumer Real estate3,0282,4141,9082,4481,875 Home equity708310312393565 Other-----Total nonaccrual loans11,39410,76110,87711,58311,218Other real estate owned275275---Total nonperforming assets$11,66911,03610,87711,58311,218Nonperforming assets as a percentage of: Total assets0.27%0.26%0.27%0.28%0.27% Total loans0.31%0.30%0.30%0.32%0.31%Classified assets/tier 1 capital plus allowance for credit losses4.28%4.24%4.25%4.35%4.22%Quarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20252025202420242024Allowance for Credit LossesBalance, beginning of period$40,68739,91440,16640,15740,441Loans charged-off(68)(78)(143)(118)(1,049)Recoveries of loans previously charged-off1610114112715 Net loans (charged-off) recovered(52)23(2)9(1,034)Provision for (reversal of) credit losses650750(250)-750Balance, end of period$41,28540,68739,91440,16640,157Allowance for credit losses to gross loans1.10%1.10%1.10%1.11%1.11%Allowance for credit losses to nonaccrual loans362.35%378.09%366.94%346.78%357.95%Net charge-offs (recoveries) to average loans QTD (annualized)0.01%0.00%0.00%0.00%0.11%Total nonperforming assets were $11.7 million at June 30, 2025, representing 0.27% of total assets compared to 0.26% for the first quarter of 2025 and 0.27% for the second quarter of 2024. In addition, the classified asset ratio increased only slightly to 4.28% for the second quarter of 2025 from 4.24% in the first quarter of 2025 and 4.22% in the second quarter of 2024.At June 30, 2025, the allowance for credit losses was $41.3 million, or 1.10% of total loans, compared to $40.7 million, or 1.10% of total loans at March 31, 2025, and $40.2 million, or 1.11% of total loans, at June 30, 2024. We had net charge-offs of $52 thousand, or 0.01% annualized, for the second quarter of 2025, compared to net recoveries of $23 thousand for the first quarter of 2025 and net charge-offs of $1.0 million for the second quarter of 2024. There was a provision for credit losses of $650 thousand for the second quarter of 2025, compared to a provision for credit losses of $750 thousand for the first quarter of 2025 and a $750 thousand provision for credit losses for the second quarter of 2024. The provision during the second quarter was primarily driven by growth in the loan portfolio during the quarter.LOAN COMPOSITION - UnauditedQuarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20252025202420242024CommercialOwner occupied RE$686,424673,865651,597642,608642,008Non-owner occupied RE939,163926,246924,367917,642917,034Construction68,42190,021103,204144,665144,968Business589,661561,337556,117521,535527,017Total commercial loans2,283,6692,251,4692,235,2852,226,4502,231,027ConsumerReal estate1,164,1871,147,3571,128,6291,132,3711,126,155Home equity 234,608223,061204,897195,383189,294Construction25,21023,54020,87421,58232,936Other39,16738,49242,08243,77043,109Total consumer loans1,463,1721,432,4501,396,4821,393,1061,391,494Total gross loans, net of deferred fees 3,746,8413,683,9193,631,7673,619,5563,622,521Less—allowance for credit losses(41,285)(40,687)(39,914)(40,166)(40,157)Total loans, net$3,705,5563,643,2323,591,8533,579,3903,582,364DEPOSIT COMPOSITION - UnauditedQuarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20252025202420242024Non-interest bearing$761,492671,609683,081689,749683,291Interest bearing: NOW accounts341,903371,052314,588339,412293,875 Money market accounts1,537,4001,563,1811,438,5301,423,4031,562,786 Savings32,33432,94531,97629,28328,739 Time, less than $250,000194,064181,407193,562223,582219,532 Time and out-of-market deposits, $250,000 and over769,136800,692774,028813,396671,646Total deposits$3,636,3293,620,8863,435,7653,518,8253,459,869Footnotes 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 $769,136,000.(7) June 30, 2025 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 $4.3 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) trade wars or a potential recession 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 864-679-9010WEB SITE: www.southernfirst.comSOURCE Southern First Bancshares, Inc.