Southern First reports fourth quarter 2024 results

January 28, 2025

Southern First Bancshares, Inc., holding company for Southern First Bank, today announced its financial results for the three and twelve months ended December 31, 2024.

“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%

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 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.

Total nonperforming 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.

 

ABOUT SOUTHERN 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.