GREENVILLE, S.C., Oct. 19,
2023 /PRNewswire/ -- 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, 2023.
"Our team generated improved performance over the prior quarter
as evidenced by the growth in book value, general margin stability,
capital accretion, and outstanding credit quality," stated
Art Seaver, the Company's Chief
Executive Officer. "While the monetary policy of the Federal
Reserve has increased interest rates dramatically and resulted in a
significant decline in loan demand, we are proud of our efforts to
grow client relationships and support the needs of our clients and
communities."
2023 Third Quarter Highlights
- Net income was $4.1
million and diluted earnings per common share were
$0.51 for Q3 2023
- Core deposits remained at $2.9 billion at Q3 2023, compared to Q2 2023 and
increased 5% from Q3 2022
- Total loans increased 2% (annualized) to
$3.6 billion at Q3 2023, compared to
Q2 2023 and increased 17%, from $3.0
billion at Q3 2022
- Book value per common share increased to
$37.57 at Q3 2023, or 4%, over Q3
2022
- Credit quality remains strong with nonperforming
assets to total assets of 0.11% and past due loans to total loans
of 0.13% at Q3 2023
- Net interest margin was 1.97% for Q3 2023, compared
to 2.05% for Q2 2023 and 3.19% for Q3 2022
- Improvement in common equity tier 1 and risk-based
capital ratios during Q3 2023, compared to Q2 2023
|
|
Quarter
Ended
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Earnings ($ in
thousands, except per share data):
|
|
|
|
|
|
|
|
Net income available to
common shareholders
|
$
|
4,098
|
2,458
|
2,703
|
5,492
|
8,413
|
|
Earnings per common
share, diluted
|
|
0.51
|
0.31
|
0.33
|
0.68
|
1.04
|
|
Total
revenue(1)
|
|
22,094
|
21,561
|
22,468
|
25,826
|
28,134
|
|
Net interest margin
(tax-equivalent)(2)
|
|
1.97 %
|
2.05 %
|
2.36 %
|
2.88 %
|
3.19 %
|
|
Return on average
assets(3)
|
|
0.40 %
|
0.26 %
|
0.30 %
|
0.63 %
|
1.00 %
|
|
Return on average
equity(3)
|
|
5.35 %
|
3.27 %
|
3.67 %
|
7.44 %
|
11.57 %
|
|
Efficiency
ratio(4)
|
|
78.31 %
|
80.67 %
|
76.12 %
|
63.55 %
|
57.03 %
|
|
Noninterest expense to
average assets (3)
|
|
1.69 %
|
1.82 %
|
1.89 %
|
1.87 %
|
1.92 %
|
|
Balance Sheet ($
in thousands):
|
|
|
|
|
|
|
|
Total
loans(5)
|
$
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
3,030,027
|
|
Total
deposits
|
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
3,001,452
|
|
Core
deposits(6)
|
|
2,866,574
|
2,880,507
|
2,946,567
|
2,759,112
|
2,723,592
|
|
Total assets
|
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
3,439,669
|
|
Book value per common
share
|
|
37.57
|
37.42
|
37.16
|
36.76
|
35.99
|
|
Loans to
deposits
|
|
106.15 %
|
103.05 %
|
99.74 %
|
104.45 %
|
100.95 %
|
|
Holding Company
Capital Ratios(7):
|
|
|
|
|
|
|
|
Total risk-based
capital ratio
|
|
12.56 %
|
12.40 %
|
12.67 %
|
12.91 %
|
13.58 %
|
|
Tier 1 risk-based
capital ratio
|
|
10.58 %
|
10.42 %
|
10.66 %
|
10.88 %
|
11.49 %
|
|
Leverage
ratio
|
|
8.17 %
|
8.48 %
|
8.80 %
|
9.17 %
|
9.44 %
|
|
Common equity tier 1
ratio(8)
|
|
10.17 %
|
10.00 %
|
10.23 %
|
10.44 %
|
11.02 %
|
|
Tangible common
equity(9)
|
|
7.56 %
|
7.53 %
|
7.60 %
|
7.98 %
|
8.37 %
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
Nonperforming assets/
total assets
|
|
0.11 %
|
0.08 %
|
0.12 %
|
0.07 %
|
0.08 %
|
|
Classified assets/tier
one capital plus allowance for credit losses
|
|
4.72 %
|
4.68 %
|
5.10 %
|
4.71 %
|
5.24 %
|
|
Loans 30 days or more
past due/ loans(5)
|
|
0.13 %
|
0.07 %
|
0.11 %
|
0.11 %
|
0.07 %
|
|
Net charge-offs
(recoveries)/average loans(5) (YTD
annualized)
|
|
0.01 %
|
0.03 %
|
0.01 %
|
(0.05 %)
|
(0.06 %)
|
|
Allowance for credit
losses/loans(5)
|
|
1.16 %
|
1.16 %
|
1.18 %
|
1.18 %
|
1.20 %
|
|
Allowance for credit
losses/nonaccrual loans
|
|
953.25 %
|
1,363.11 %
|
854.33 %
|
1,470.74 %
|
1,388.87 %
|
|
[Footnotes to
table located on page 6]
|
|
INCOME STATEMENTS
– Unaudited
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
(in thousands, except
per share data)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Interest
income
|
|
|
|
|
|
|
|
Loans
|
$
|
43,542
|
41,089
|
36,748
|
33,939
|
29,752
|
|
Investment
securities
|
|
1,470
|
706
|
613
|
562
|
506
|
|
Federal funds
sold
|
|
2,435
|
891
|
969
|
525
|
676
|
|
Total interest
income
|
|
47,447
|
42,686
|
38,330
|
35,026
|
30,934
|
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
|
25,130
|
21,937
|
17,179
|
10,329
|
5,021
|
|
Borrowings
|
|
2,972
|
1,924
|
727
|
578
|
459
|
|
Total interest
expense
|
|
28,102
|
23,861
|
17,906
|
10,907
|
5,480
|
|
Net interest
income
|
|
19,345
|
18,825
|
20,424
|
24,119
|
25,454
|
|
Provision for (reversal
of) credit losses
|
|
(500)
|
910
|
1,825
|
2,325
|
950
|
|
Net interest income
after provision for credit losses
|
|
19,845
|
17,915
|
18,599
|
21,794
|
24,504
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Mortgage banking
income
|
|
1,208
|
1,337
|
622
|
291
|
1,230
|
|
Service fees on deposit
accounts
|
|
356
|
331
|
325
|
316
|
318
|
|
ATM and debit card
income
|
|
588
|
536
|
555
|
558
|
542
|
|
Income from bank owned
life insurance
|
|
349
|
338
|
332
|
344
|
315
|
|
Other income
|
|
248
|
194
|
210
|
198
|
275
|
|
Total
noninterest income
|
|
2,749
|
2,736
|
2,044
|
1,707
|
2,680
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
10,231
|
10,287
|
10,356
|
9,576
|
9,843
|
|
Occupancy
|
|
2,562
|
2,518
|
2,457
|
2,666
|
2,442
|
|
Outside service and
data processing costs
|
|
1,744
|
1,705
|
1,629
|
1,521
|
1,529
|
|
Insurance
|
|
1,243
|
897
|
689
|
551
|
507
|
|
Professional
fees
|
|
504
|
751
|
660
|
788
|
555
|
|
Marketing
|
|
293
|
335
|
366
|
282
|
338
|
|
Other
|
|
725
|
900
|
947
|
1,029
|
832
|
|
Total
noninterest expenses
|
|
17,302
|
17,393
|
17,104
|
16,413
|
16,046
|
|
Income before provision
for income taxes
|
|
5,293
|
3,258
|
3,539
|
7,088
|
11,138
|
|
Income tax
expense
|
|
1,195
|
800
|
836
|
1,596
|
2,725
|
|
Net income available
to common shareholders
|
$
|
4,098
|
2,458
|
2,703
|
5,492
|
8,413
|
|
|
|
|
|
|
|
|
Earnings per common
share – Basic
|
$
|
0.51
|
0.31
|
0.34
|
0.69
|
1.06
|
|
Earnings per common
share – Diluted
|
|
0.51
|
0.31
|
0.33
|
0.68
|
1.04
|
|
Basic weighted average
common shares
|
|
8,053
|
8,051
|
8,026
|
7,971
|
7,972
|
|
Diluted weighted
average common shares
|
|
8,072
|
8,069
|
8,092
|
8,071
|
8,065
|
|
[Footnotes to table
located on page 6]
|
Net income for the third quarter of 2023 was $4.1 million, or $0.51 per diluted share, a $1.6 million increase from the second quarter of
2023 and a $4.3 million decrease from
the third quarter of 2022. Net interest income increased
$520 thousand for the third quarter
of 2023, compared to the second quarter of 2023, and decreased
$6.1 million, compared to the third
quarter of 2022. The increase in net interest income from the prior
quarter was primarily driven by an increase in interest income on
loans and federal funds sold. The decrease in net interest income
from the prior year was driven primarily by an increase in interest
expense on our deposit accounts related to the Federal Reserve's
525-basis point interest rate hikes during the past 19
months.
There was a reversal of the provision for credit losses of
$500 thousand for the third quarter
of 2023, compared to a provision of $910
thousand for the second quarter of 2023 and a provision of
$950 thousand for the third quarter
of 2022. The provision reversal during the third quarter of
2023 includes a $100 thousand
reversal of the provision for credit losses and a $400 thousand reversal of the reserve for
unfunded commitments. The reversal of the provision for credit
losses was driven by lower expected loss rates, while the reversal
of the reserve for unfunded commitments was driven by a decrease in
the balance of unfunded commitments at September 30, 2023, compared to the previous
quarter and year.
Noninterest income was $2.7
million for each of the third quarter of 2023, the second
quarter of 2023, and the third quarter of 2022. Mortgage banking
income continues to be the largest component of our noninterest
income at $1.2 million for the third
quarter of 2023, $1.3 million for the
second quarter of 2023, and $1.2
million for the third quarter of 2022.
Noninterest expense for the third quarter of 2023 was
$17.3 million, a $91 thousand decrease from the second quarter of
2023, and a $1.3 million increase
from the third quarter of 2022. The decrease in noninterest expense
from the previous quarter was driven by decreases in professional
fees and other noninterest expenses, while the increase from the
prior year related to increases in compensation and benefits,
outside service and data processing costs, and insurance expenses.
Compensation and benefits expenses increased from the previous
year, driven by annual salary increases and the hiring of new team
members. Outside service and data processing costs increased due to
an increase in software licensing and maintenance costs, while
insurance costs increased due to higher FDIC insurance
premiums.
Our effective tax rate was 22.6% for the third quarter of 2023,
24.6% for the second quarter of 2023, and 24.5% for the third
quarter of 2022. The lower tax rate in the third quarter of 2023 as
compared to the previous quarters of 2023 relates primarily to the
effect of equity compensation transactions and return to provision
differences on our tax rate during the quarter.
|
NET INTEREST INCOME
AND MARGIN - Unaudited
|
|
|
|
|
|
|
For the Three Months Ended
|
|
September 30, 2023
|
June 30, 2023
|
September 30,2022
|
|
(dollars in
thousands)
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate(3)
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate(3)
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate(3)
|
|
Interest-earning
assets
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold and
interest-bearing deposits
|
$ 181,784
|
$ 2,435
|
5.31 %
|
$ 71,004
|
$ 891
|
5.03 %
|
$ 122,071
|
$ 676
|
2.20 %
|
|
Investment
securities, taxable
|
148,239
|
1,429
|
3.82 %
|
93,922
|
623
|
2.66 %
|
91,462
|
449
|
1.95 %
|
|
Investment
securities, nontaxable(2)
|
7,799
|
55
|
2.77 %
|
10,200
|
108
|
4.24 %
|
10,160
|
74
|
2.89 %
|
|
Loans(10)
|
3,554,478
|
43,542
|
4.86 %
|
3,511,225
|
41,089
|
4.69 %
|
2,941,350
|
29,752
|
4.01 %
|
|
Total interest-earning assets
|
3,892,300
|
47,461
|
4.84 %
|
3,686,351
|
42,711
|
4.65 %
|
3,165,043
|
30,951
|
3.88 %
|
|
Noninterest-earning assets
|
159,103
|
|
|
155,847
|
|
|
159,233
|
|
|
|
Total assets
|
$4,051,403
|
|
|
$3,842,198
|
|
|
$3,324,726
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
NOW accounts
|
$
297,028
|
620
|
0.83 %
|
$
297,234
|
537
|
0.72 %
|
$
361,500
|
178
|
0.20 %
|
|
Savings & money
market
|
1,748,638
|
16,908
|
3.84 %
|
1,727,009
|
15,298
|
3.55 %
|
1,417,181
|
3,663
|
1.03 %
|
|
Time
deposits
|
648,949
|
7,602
|
4.65 %
|
573,095
|
6,102
|
4.27 %
|
361,325
|
1,180
|
1.30 %
|
|
Total interest-bearing
deposits
|
2,694,615
|
25,130
|
3.70 %
|
2,597,338
|
21,937
|
3.39 %
|
2,140,006
|
5,021
|
0.93 %
|
|
FHLB advances and other
borrowings
|
264,141
|
2,414
|
3.63 %
|
135,922
|
1,382
|
4.08 %
|
1,357
|
10
|
2.92 %
|
|
Subordinated
debentures
|
36,278
|
558
|
6.10 %
|
36,251
|
542
|
6.00 %
|
36,169
|
449
|
4.93 %
|
|
Total interest-bearing
liabilities
|
2,995,034
|
28,102
|
3.72 %
|
2,769,511
|
23,861
|
3.46 %
|
2,177,532
|
5,480
|
1.00 %
|
|
Noninterest-bearing
liabilities
|
752,433
|
|
|
771,388
|
|
|
858,202
|
|
|
|
Shareholders'
equity
|
303,936
|
|
|
301,299
|
|
|
288,542
|
|
|
|
Total liabilities and
shareholders' equity
|
$4,051,403
|
|
|
$3,842,198
|
|
|
$3,324,276
|
|
|
|
Net interest
spread
|
|
|
1.12 %
|
|
|
1.19 %
|
|
|
2.88 %
|
|
Net interest income
(tax equivalent) / margin
|
|
$19,359
|
1.97 %
|
|
$18,850
|
2.05 %
|
|
$25,471
|
3.19 %
|
|
Less:
tax-equivalent adjustment(2)
|
|
14
|
|
|
25
|
|
|
17
|
|
|
Net interest
income
|
|
$19,345
|
|
|
$18,825
|
|
|
$25,454
|
|
|
[Footnotes to table
located on page 6]
|
Net interest income was $19.3
million for the third quarter of 2023, a $520 thousand increase from the second quarter of
2023, driven by a $4.8 million
increase in interest income, partially offset by a $4.2 million increase in interest expense, on a
taxable basis. The increase in interest income was driven by
$205.9 million growth in average
interest-earning assets at an average rate of 4.84%, a 19-basis
points increase over the previous quarter, partially offset by
$225.5 million growth in average
interest-bearing liabilities at an average cost of 3.72%, an
increase of 26-basis points from the second quarter of 2023.
In comparison to the third quarter of 2022, net interest income
decreased $6.1 million, resulting
primarily from $554.6 million growth
in average interest-bearing deposit balances during the 12 months
ended September 30, 2023, combined
with a 277-basis point increase in deposit rates. Our net
interest margin, on a tax-equivalent basis, was 1.97% for the third
quarter of 2023, an 8-basis point decrease from 2.05% for the
second quarter of 2023 and a 122-basis point decrease from 3.19%
for the third quarter of 2022. As a result of the Federal
Reserve's 300-basis point interest rate hikes during the past 12
months, the rate on our interest-bearing liabilities has increased
by 272-basis points during the third quarter of 2023 in comparison
to the third quarter of 2022. However, the yield on our
interest-earning assets, driven by our loan portfolio, has
increased by only 96-basis points during the same time period,
resulting in the lower net interest margin during the third quarter
of 2023.
|
BALANCE SHEETS -
Unaudited
|
|
|
|
|
|
|
|
Ending
Balance
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
(in thousands, except
per share data)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Cash and due
from banks
|
$
|
17,395
|
24,742
|
22,213
|
18,788
|
16,530
|
|
Federal funds
sold
|
|
127,714
|
170,145
|
242,642
|
101,277
|
139,544
|
|
Interest-bearing
deposits with banks
|
|
7,283
|
10,183
|
7,350
|
50,809
|
4,532
|
|
Total cash and cash equivalents
|
|
152,392
|
205,070
|
272,205
|
170,874
|
160,606
|
|
Investment
securities:
|
|
|
|
|
|
|
|
Investment
securities available for sale
|
|
144,035
|
91,548
|
94,036
|
93,347
|
91,521
|
|
Other
investments
|
|
19,600
|
12,550
|
10,097
|
10,833
|
5,449
|
|
Total investment securities
|
|
163,635
|
104,098
|
104,133
|
104,180
|
96,970
|
|
Mortgage loans held for
sale
|
|
7,117
|
15,781
|
6,979
|
3,917
|
9,243
|
|
Loans
(5)
|
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
3,030,027
|
|
Less allowance for
credit losses
|
|
(41,131)
|
(41,105)
|
(40,435)
|
(38,639)
|
(36,317)
|
|
Loans, net
|
|
3,512,501
|
3,496,511
|
3,377,510
|
3,234,724
|
2,993,710
|
|
Bank owned life
insurance
|
|
52,140
|
51,791
|
51,453
|
51,122
|
50,778
|
|
Property and equipment,
net
|
|
95,743
|
96,964
|
97,806
|
99,183
|
99,530
|
|
Deferred income
taxes
|
|
13,078
|
12,356
|
12,087
|
12,522
|
18,425
|
|
Other assets
|
|
23,351
|
19,536
|
15,967
|
15,459
|
10,407
|
|
Total assets
|
$
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
3,439,669
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits
|
$
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
3,001,452
|
|
FHLB
Advances
|
|
275,000
|
180,000
|
125,000
|
175,000
|
60,000
|
|
Subordinated
debentures
|
|
36,295
|
36,268
|
36,241
|
36,214
|
36,187
|
|
Other
liabilities
|
|
56,993
|
51,307
|
50,775
|
52,391
|
54,245
|
|
Total liabilities
|
|
3,716,059
|
3,700,593
|
3,638,790
|
3,397,469
|
3,151,884
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Preferred stock - $.01
par value; 10,000,000 shares authorized
|
|
-
|
-
|
-
|
-
|
-
|
|
Common Stock - $.01 par
value; 10,000,000 shares authorized
|
|
81
|
81
|
80
|
80
|
80
|
|
Nonvested restricted
stock
|
|
(4,065)
|
(4,051)
|
(4,462)
|
(3,306)
|
(3,348)
|
|
Additional paid-in
capital
|
|
121,757
|
120,912
|
120,683
|
119,027
|
118,433
|
|
Accumulated other
comprehensive loss
|
|
(15,255)
|
(12,710)
|
(11,775)
|
(13,410)
|
(14,009)
|
|
Retained
earnings
|
|
201,380
|
197,282
|
194,824
|
192,121
|
186,629
|
|
Total shareholders' equity
|
|
303,898
|
301,514
|
299,350
|
294,512
|
287,785
|
|
Total liabilities and shareholders' equity
|
$
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
3,439,669
|
|
Common
Stock
|
|
|
|
|
|
|
|
Book value per common
share
|
$
|
37.57
|
37.42
|
37.16
|
36.76
|
35.99
|
|
Stock price:
|
|
|
|
|
|
|
|
High
|
|
30.18
|
31.34
|
45.05
|
49.50
|
47.16
|
|
Low
|
|
24.22
|
21.33
|
30.70
|
41.46
|
41.66
|
|
Period
end
|
|
26.94
|
24.75
|
30.70
|
45.75
|
41.66
|
|
Common shares
outstanding
|
|
8,089
|
8,058
|
8,048
|
8,011
|
7,997
|
|
[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)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Nonperforming
Assets
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
Non-owner
occupied RE
|
$
|
1,615
|
754
|
1,384
|
247
|
253
|
|
Commercial
business
|
|
404
|
137
|
1,196
|
182
|
79
|
|
Consumer
|
|
|
|
|
|
|
|
Real
estate
|
|
1,228
|
1,053
|
1,075
|
1,099
|
904
|
|
Home
equity
|
|
1,068
|
1,072
|
1,078
|
1,099
|
1,379
|
|
Total nonaccrual
loans
|
|
4,315
|
3,016
|
4,733
|
2,627
|
2,615
|
|
Other real estate
owned
|
|
-
|
-
|
-
|
-
|
-
|
|
Total nonperforming
assets
|
$
|
4,315
|
3,016
|
4,733
|
2,627
|
2,615
|
|
Nonperforming assets as
a percentage of:
|
|
|
|
|
|
|
|
Total
assets
|
|
0.11 %
|
0.08 %
|
0.12 %
|
0.07 %
|
0.08 %
|
|
Total
loans
|
|
0.12 %
|
0.09 %
|
0.14 %
|
0.08 %
|
0.09 %
|
|
Classified assets/tier
1 capital plus allowance for credit losses
|
|
4.72 %
|
4.68 %
|
5.10 %
|
4.71 %
|
5.24 %
|
|
|
|
|
|
Quarter
Ended
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Allowance for Credit
Losses
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
$
|
41,105
|
40,435
|
38,639
|
36,317
|
34,192
|
|
Loans
charged-off
|
|
(42)
|
(440)
|
(161)
|
-
|
-
|
|
Recoveries of loans
previously charged-off
|
|
168
|
15
|
102
|
22
|
1,600
|
|
Net loans
(charged-off) recovered
|
|
126
|
(425)
|
(59)
|
22
|
1,600
|
|
Provision for (reversal
of) credit losses
|
|
(100)
|
1,095
|
1,855
|
2,300
|
525
|
|
Balance, end of
period
|
$
|
41,131
|
41,105
|
40,435
|
38,639
|
36,317
|
|
Allowance for credit
losses to gross loans
|
|
1.16 %
|
1.16 %
|
1.18 %
|
1.18 %
|
1.20 %
|
|
Allowance for credit
losses to nonaccrual loans
|
|
953.25 %
|
1,363.11 %
|
854.33 %
|
1,470.74 %
|
1,388.87 %
|
|
Net charge-offs to
average loans QTD (annualized)
|
|
0.01 %
|
0.03 %
|
0.01 %
|
0.00 %
|
(0.22 %)
|
Total nonperforming assets increased by $1.3 million during the third quarter of 2023,
representing 0.11% of total assets, compared to 0.08% for both the
second quarter of 2023 and the third quarter of 2022. The increase
in nonperforming assets during the third quarter of 2023 resulted
primarily from four commercial loan relationships and two consumer
loan relationships that were added to nonaccrual status. In
addition, our classified asset ratio increased slightly to 4.72%
for the third quarter of 2023 from 4.68% in the second quarter of
2023 and from 5.24% in the third quarter of 2022.
At both September 30, 2023 and
June 30, 2023, the allowance for
credit losses was $41.1 million, or
1.16% of total loans, compared to $36.3
million, or 1.20% of total loans, at September 30, 2022. We had net recoveries of
$126 thousand, or 0.01% annualized,
for the third quarter of 2023, compared to net charge-offs of
$425 thousand for the second quarter
of 2023 and net recoveries of $1.6
million for the third quarter of 2022. There was a reversal
of the provision for credit losses of $100
thousand for the third quarter of 2023, compared to a
provision of $1.1 million for the
second quarter of 2023 and a provision of $525 thousand for the third quarter of 2022. The
provision reversal was driven by lower expected loss rates
resulting from low charge-offs, combined with stable loan portfolio
balances during the quarter.
|
LOAN COMPOSITION
- Unaudited
|
|
|
|
Quarter Ended
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Commercial
|
|
|
|
|
|
|
|
Owner occupied
RE
|
$
|
637,038
|
613,874
|
615,094
|
612,901
|
572,972
|
|
Non-owner occupied
RE
|
|
937,749
|
951,536
|
928,059
|
862,579
|
799,569
|
|
Construction
|
|
119,629
|
115,798
|
94,641
|
109,726
|
85,850
|
|
Business
|
|
500,253
|
511,719
|
495,161
|
468,112
|
419,312
|
|
Total commercial
loans
|
|
2,194,669
|
2,192,927
|
2,132,955
|
2,053,318
|
1,877,703
|
|
Consumer
|
|
|
|
|
|
|
|
Real estate
|
|
1,074,679
|
1,047,904
|
993,258
|
931,278
|
873,471
|
|
Home equity
|
|
180,856
|
185,584
|
180,974
|
179,300
|
171,904
|
|
Construction
|
|
54,210
|
61,044
|
71,137
|
80,415
|
77,798
|
|
Other
|
|
49,218
|
50,157
|
39,621
|
29,052
|
29,151
|
|
Total consumer
loans
|
|
1,358,963
|
1,344,689
|
1,284,990
|
1,220,045
|
1,152,324
|
|
Total gross loans, net
of deferred fees
|
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
3,030,027
|
|
Less—allowance for
credit losses
|
|
(41,131)
|
(41,105)
|
(40,435)
|
(38,639)
|
(36,317)
|
|
Total loans,
net
|
$
|
3,512,501
|
3,496,511
|
3,377,510
|
3,234,724
|
2,993,710
|
|
|
DEPOSIT COMPOSITION
- Unaudited
|
|
|
|
Quarter Ended
|
|
|
September
30
|
June
30
|
March
31
|
December
31
|
September
30
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
|
Non-interest
bearing
|
$
|
675,409
|
698,084
|
740,534
|
804,115
|
791,050
|
|
Interest
bearing:
|
|
|
|
|
|
|
|
NOW
accounts
|
|
306,667
|
308,762
|
303,743
|
318,030
|
357,862
|
|
Money
market accounts
|
|
1,685,736
|
1,692,900
|
1,748,562
|
1,506,418
|
1,452,958
|
|
Savings
|
|
34,737
|
36,243
|
39,706
|
40,673
|
42,335
|
|
Time, less
than $250,000
|
|
125,506
|
114,691
|
106,679
|
89,877
|
79,387
|
|
Time and
out-of-market deposits, $250,000 and over
|
|
519,716
|
582,338
|
487,550
|
374,751
|
277,860
|
|
Total
deposits
|
$
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
3,001,452
|
|
|
|
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.
|
|
(7) September 30,
2023 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 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 $4.0 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," "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 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 causes 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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SOURCE Southern First Bancshares, Inc.