Southern First Reports Third Quarter 2025 Results

GREENVILLE, S.C., Oct. 28, 2025 /PRNewswire/ -- Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the nine months ended September 30, 2025.

"Our third quarter financial performance clearly shows the steady momentum that continued this quarter, in line with our expectations. Our team remains highly focused on executing our plans for increased profitability and high-quality loan growth, funded by client retail deposits, which is core to our full relationship banking strategy. Superior asset quality metrics and margin expansion are the result of our intentional and disciplined approach. We have again achieved historically high revenue growth over the same quarter last year, at a rate which was two and a half times our expense growth. This expanded profitability further strengthened capital levels, providing ample support for our strong business pipelines. Although we maintain a cautious outlook and actively monitor for emerging risks, our markets have continued to exhibit vibrant and sustainable growth momentum," stated Art Seaver, Chief Executive Officer. "We continue to attract and retain experienced bankers who share our commitment to outstanding client service, delivered with a personal touch, and to supporting our local communities. Our Southeastern markets remain healthy and resilient, and we are well positioned to benefit from the opportunities created by ongoing banking industry consolidation. This quarter's results reinforce our optimism in the financial outlook for the remainder of the year."

2025 Third Quarter Highlights

Quarter Ended

September 30

June 30

March 31

December 31

September 30

2025

2024

Earnings ($ in thousands, except per share data):

Net income available to common shareholders

8,662

6,581

5,266

5,627

4,382

Earnings per common share, diluted

1.07

0.81

0.65

0.70

0.54

Total revenue (1)

31,129

28,629

26,497

25,237

23,766

Net interest margin (tax-equivalent) (2)

2.62 %

2.50 %

2.41 %

2.25 %

2.08 %

Return on average assets (3)

0.80 %

0.63 %

0.52 %

0.54 %

0.43 %

Return on average equity (3)

9.78 %

7.71 %

6.38 %

6.80 %

5.40 %

Efficiency ratio (4)

60.86 %

67.54 %

71.08 %

73.48 %

75.90 %

Noninterest expense to average assets (3)

1.74 %

1.86 %

1.87 %

1.78 %

1.75 %

Balance Sheet ($ in thousands):

Total loans (5)

3,789,021

3,746,841

3,683,919

3,631,767

3,619,556

Total deposits

3,676,417

3,636,329

3,620,886

3,435,765

3,518,825

Core deposits (6)

2,884,604

2,867,193

2,820,194

2,661,736

2,705,429

Total assets

4,358,589

4,308,067

4,284,311

4,087,593

4,174,631

Book value per common share

43.51

42.23

41.33

40.47

40.04

Loans to deposits

103.06 %

103.04 %

101.74 %

105.70 %

102.86 %

Holding Company Capital Ratios (7):

Total risk-based capital ratio

12.79 %

12.63 %

12.69 %

12.70 %

12.61 %

Tier 1 risk-based capital ratio

11.26 %

11.11 %

11.15 %

11.16 %

10.99 %

Leverage ratio

8.72 %

8.73 %

8.79 %

8.55 %

8.50 %

Common equity tier 1 ratio (8)

10.88 %

10.71 %

10.75 %

10.58 %

Tangible common equity (9)

8.18 %

8.02 %

7.88 %

8.08 %

7.82 %

Asset Quality Ratios:

Nonperforming assets/total assets

0.27 %

0.26 %

0.27 %

0.28 %

Classified assets/tier one capital plus allowance for credit losses

3.90 %

4.28 %

4.24 %

4.25 %

4.35 %

Accruing loans 30 days or more past due/loans (5)

0.18 %

0.14 %

0.27 %

0.18 %

0.09 %

Net charge-offs (recoveries)/average loans (5) (YTD annualized)

0.00 %

0.04 %

0.05 %

Allowance for credit losses/loans (5)

1.10 %

1.11 %

Allowance for credit losses/nonaccrual loans

364.50 %

362.35 %

378.09 %

366.94 %

346.78 %

[Footnotes to table located on page 6]

INCOME STATEMENTS – Unaudited

Quarter Ended

Sept 30 2025 -

Sept 30

Jun 30

Mar 31

Dec 31

Sept 30

Sept 30 2024

(in thousands, except per share data)

2025

2024

% Change

Interest income

Loans

50,999

48,992

47,085

47,163

47,550

7.25 %

Investment securities

1,342

1,357

1,403

1,504

1,412

(4.96 %)

Federal funds sold

2,645

1,969

1,159

2,465

2,209

19.74 %

Total interest income

54,986

52,318

49,647

51,132

51,171

7.46 %

Interest expense

Deposits

24,703

24,300

23,569

25,901

27,725

(10.90 %)

Borrowings

2,754

2,723

2,695

2,773

2,855

(3.54 %)

Total interest expense

27,457

27,023

26,264

28,674

30,580

(10.21 %)

Net interest income

27,529

25,295

23,383

22,458

20,591

33.69 %

Provision (reversal of) for credit losses

850

700

750

(200)

100 %

Net interest income after provision for credit losses

26,679

24,595

22,633

22,658

20,591

29.57 %

Noninterest income

Mortgage banking income

1,600

1,569

1,424

1,024

1,449

10.42 %

Service fees on deposit accounts

625

567

539

499

455

37.36 %

ATM and debit card income

601

586

552

607

599

0.33 %

Income from bank owned life insurance

439

413

403

407

401

9.48 %

Other income

335

199

196

242

271

23.62 %

Total noninterest income

3,600

3,334

3,114

2,779

3,175

13.39 %

Noninterest expense

Compensation and benefits

11,299

11,674

11,304

10,610

10,789

4.73 %

Occupancy

2,447

2,523

2,548

2,587

2,595

(5.70 %)

Outside service and data processing costs

2,158

2,189

2,037

2,003

1,930

11.81 %

Insurance

961

910

1,010

1,077

1,025

(6.24 %)

Professional fees

605

609

509

656

548

10.40 %

Marketing

412

397

374

335

319

29.15 %

Other

1,064

1,034

1,054

1,276

833

27.73 %

Total noninterest expenses

18,946

19,336

18,836

18,544

18,039

5.03 %

Income before provision for income taxes

11,333

8,593

6,911

6,893

5,727

97.89 %

Income tax expense

2,671

2,012

1,645

1,266

1,345

98.59 %

Net income available to common shareholders

8,662

6,581

5,266

5,627

4,382

97.67 %

Earnings per common share – Basic

1.08

0.81

0.65

0.70

0.54

Earnings per common share – Diluted

1.07

0.81

0.65

0.70

0.54

Basic weighted average common shares

8,031

8,036

8,078

8,023

8,064

Diluted weighted average common shares

8,080

8,051

8,111

8,097

8,089

[Footnotes to table located on page 6]

Net income for the third quarter of 2025 was $8.7 million, or $1.07 per diluted share, a $2.1 million increase from the second quarter of 2025 and a $4.3 million increase from the third quarter of 2024. Net interest income increased $2.2 million during the third quarter of 2025, compared to the second quarter of 2025, and increased $6.9 million, compared to the third 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 $850 thousand for the third quarter of 2025 compared to a provision for credit losses of $700 thousand for the second quarter of 2025 and no provision for credit losses for the third quarter of 2024. The provision during the third quarter of 2025 includes a $500 thousand provision for credit losses and a $350 thousand provision for the reserve for unfunded commitments. The provision for credit losses in the third quarter of 2025 was primarily driven by a change in qualitative factors related to an increase in past due loans and risk migration among our commercial business and non-owner occupied loans.

Noninterest income was $3.6 million for the third quarter of 2025, compared to $3.3 million for the second quarter of 2025, and $3.2 million for the third quarter of 2024. Mortgage banking income continues to be the largest component of noninterest income at $1.6 million in fee revenue for the third and second quarters of 2025, and $1.4 million for the third quarter of 2024. In addition, service fees on deposit accounts increased 10% over the prior quarter and 37% over the prior year.

Noninterest expense for the third quarter of 2025 was $18.9 million, a $390 thousand decrease from the second quarter of 2025, and a $907 thousand increase from the third quarter of 2024. The decrease in noninterest expense from the previous quarter was driven by a decrease in compensation and benefits and occupancy expenses, offset in part by an increase 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, offset in part by a decrease in occupancy.

The effective tax rate was 23.6% for the third quarter of 2025, 23.4% for the second quarter of 2025, and 23.5% for the third 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 - Unaudited

For the Three Months Ended

September 30, 2025

June 30, 2025

September 30, 2024

(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

$ 238,552

$ 2,645

4.40 %

$ 179,095

$ 1,969

4.41 %

$ 158,222

$ 2,209

5.55 %

Investment securities, taxable

141,143

1,307

3.67 %

141,898

1,315

3.72 %

137,087

1,370

3.98 %

Investment securities, nontaxable (2)

7,811

2.31 %

7,740

2.83 %

8,047

2.70 %

Loans (10)

3,783,885

50,999

5.35 %

3,724,064

48,992

5.28 %

3,629,050

47,550

5.21 %

Total interest-earning assets

4,171,391

54,996

5.23 %

4,052,797

52,331

5.18 %

3,932,406

51,184

5.18 %

Noninterest-earning assets

150,552

154,051

158,550

Total assets

$4,321,943

$4,206,848

$4,090,956

Interest-bearing liabilities

NOW accounts

$ 329,301

746

0.90 %

$ 331,811

752

0.91 %

$ 314,669

835

1.06 %

Savings & money market

1,599,710

13,509

3.35 %

1,566,345

13,398

3.43 %

1,523,834

15,287

3.99 %

Time deposits

984,078

10,448

4.21 %

942,880

10,150

4.32 %

909,192

11,603

5.08 %

Total interest-bearing deposits

2,913,089

24,703

3.36 %

2,841,036

24,300

3.43 %

2,747,695

27,725

4.01 %

FHLB advances and other borrowings

240,087

2,296

3.79 %

240,000

2,270

3.79 %

240,065

2,297

3.81 %

Subordinated debentures

24,903

458

7.30 %

24,903

453

7.30 %

36,261

558

6.12 %

Total interest-bearing liabilities

3,178,079

27,457

3.43 %

3,105,939

27,023

3.49 %

3,024,021

30,580

4.02 %

Noninterest-bearing liabilities

792,575

758,626

744,025

Shareholders' equity

351,289

342,283

322,910

Total liabilities and shareholders' equity

$4,321,943

$4,206,848

$4,090,956

Net interest spread

1.80 %

1.69 %

1.16 %

Net interest income (tax equivalent) / margin

$27,539

2.62 %

$25,308

2.50 %

$20,604

2.08 %

Less: tax-equivalent adjustment (2)

Net interest income

$27,529

$25,295

$20,591

[Footnotes to table located on page 6]

Net interest income was $27.5 million for the third quarter of 2025, a $2.2 million increase from the second quarter of 2025, driven by a $2.7 million increase in interest income, partially offset by a $434 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 seven basis points over the previous quarter. In addition, the cost of our interest-bearing deposits decreased seven basis points over the previous quarter. In comparison to the third quarter of 2024, net interest income increased $6.9 million, resulting primarily from a 65 basis point decrease in the cost of interest-bearing deposits. Net interest margin, on a tax-equivalent basis, was 2.62% for the third quarter of 2025, a 12 basis point increase from 2.50% for the second quarter of 2025 and a 54 basis point increase from 2.08% for the third quarter of 2024.

BALANCE SHEETS - Unaudited

Ending Balance

Sept 30 2025 -

Sept 30

Jun 30

Mar 31

Dec 31

Sept 30

Sept 30 2024

(in thousands, except per share data)

2025

2024

% Change

Assets

Cash and cash equivalents:

Cash and due from banks

24,600

25,184

24,904

22,553

25,289

(2.72 %)

Federal funds sold

178,534

180,834

263,612

128,452

226,110

(21.04 %)

Interest-bearing deposits with banks

79,769

65,014

16,541

11,858

9,176

769.32 %

Total cash and cash equivalents

282,903

271,032

305,057

162,863

260,575

8.57 %

Investment securities:

Investment securities available for sale

131,040

128,867

131,290

132,127

134,597

(2.64 %)

Other investments

20,066

19,906

19,927

19,490

19,640

2.17 %

Total investment securities

151,106

148,773

151,217

151,617

154,237

(2.03 %)

Mortgage loans held for sale

6,906

10,739

11,524

4,565

8,602

(19.72 %)

Loans (5)

3,789,021

3,746,841

3,683,919

3,631,767

3,619,556

4.68 %

Less allowance for credit losses

(41,799)

(41,285)

(40,687)

(39,914)

(40,166)

4.07 %

Loans, net

3,747,222

3,705,556

3,643,232

3,591,853

3,579,390

4.69 %

Bank owned life insurance

55,324

54,886

54,473

54,070

53,663

3.10 %

Property and equipment, net

84,586

85,921

87,369

88,794

90,158

(6.18 %)

Deferred income taxes

12,657

12,971

13,080

13,467

11,595

9.16 %

Other assets

17,885

18,189

18,359

20,364

16,411

8.98 %

Total assets

4,358,589

4,308,067

4,284,311

4,087,593

4,174,631

4.41 %

Liabilities

Deposits

3,676,417

3,636,329

3,620,886

3,435,765

3,518,825

4.48 %

FHLB Advances

240,000

0.00 %

Subordinated debentures

24,903

0.00 %

Other liabilities

60,921

61,373

60,924

56,481

64,365

(5.35 %)

Total liabilities

4,002,241

3,962,605

3,946,713

3,757,149

3,848,093

4.01 %

Shareholders' equity

Preferred stock - $.01 par value; 10,000,000 shares authorized

Common Stock - $.01 par value; 10,000,000 shares authorized

Nonvested restricted stock

(1,929)

(2,774)

(3,372)

(3,884)

(4,219)

(54.28 %)

Additional paid-in capital

125,035

124,839

124,561

124,641

124,288

0.60 %

Accumulated other comprehensive loss

(8,426)

(9,609)

(10,016)

(11,472)

(9,063)

(7.03 %)

Retained earnings

241,586

232,924

226,343

221,077

215,450

12.13 %

Total shareholders' equity

356,348

345,462

337,598

330,444

326,538

9.13 %

Total liabilities and shareholders' equity

4,358,589

4,308,067

4,284,311

4,087,593

4,174,631

4.41 %

Common Stock

Book value per common share

43.51

42.23

41.33

40.47

40.04

8.67 %

Stock price:

High

45.54

38.51

38.50

44.86

36.45

24.94 %

Low

38.74

30.61

31.88

33.26

27.70

39.86 %

Period end

44.12

38.03

32.92

39.75

34.08

29.46 %

Common shares outstanding

8,189

8,181

8,169

8,165

8,156

0.40 %

[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)

2025

2024

Nonperforming Assets

Commercial

Owner occupied RE

262

Non-owner occupied RE

6,911

6,941

6,950

7,641

7,904

Commercial business

195

717

1,087

1,016

838

Consumer

Real estate

3,394

3,028

2,414

1,908

2,448

Home equity

705

708

310

312

393

Other

Total nonaccrual loans

11,467

11,394

10,761

10,877

11,583

Other real estate owned

275

Total nonperforming assets

11,742

11,669

11,036

10,877

11,583

Nonperforming assets as a percentage of:

Total assets

0.27 %

0.26 %

0.27 %

0.28 %

Total loans

0.31 %

0.30 %

0.32 %

Classified assets/tier 1 capital plus allowance for credit losses

3.90 %

4.28 %

4.24 %

4.25 %

4.35 %

Quarter Ended

September 30

June 30

March 31

December 31

September 30

(dollars in thousands)

2025

2024

Allowance for Credit Losses

Balance, beginning of period

41,285

40,687

39,914

40,166

40,157

Loans charged-off

(55)

(68)

(78)

(143)

(118)

Recoveries of loans previously charged-off

101

141

127

Net loans (charged-off) recovered

(52)

(2)

Provision for (reversal of) credit losses

500

650

750

(250)

Balance, end of period

41,799

41,285

40,687

39,914

40,166

Allowance for credit losses to gross loans

1.10 %

1.11 %

Allowance for credit losses to nonaccrual loans

364.50 %

362.35 %

378.09 %

366.94 %

346.78 %

Net charge-offs (recoveries) to average loans QTD (annualized)

0.00 %

0.01 %

0.00 %

Total nonperforming assets were $11.7 million at September 30, 2025, representing 0.27% of total assets compared to 0.27% for the second quarter of 2025 and 0.28% for the third quarter of 2024. In addition, the classified asset ratio decreased to 3.90% for the third quarter of 2025 from 4.28% in the second quarter of 2025 and 4.35% in the third quarter of 2024.

At September 30, 2025, the allowance for credit losses was $41.8 million, or 1.10% of total loans, compared to $41.3 million, or 1.10% of total loans at June 30, 2025, and $40.2 million, or 1.11% of total loans, at September 30, 2024. We had net recoveries of $14 thousand, for the third quarter of 2025, compared to net charge-offs of $52 thousand for the second quarter of 2025 and net recoveries of $9 thousand for the third quarter of 2024. There was a provision for credit losses of $500 thousand for the third quarter of 2025, compared to a provision for credit losses of $650 thousand for the second quarter of 2025 and no provision for credit losses for the third quarter of 2024. The provision during the third quarter of 2025 was primarily driven by changes in qualitative factors related to an increase in past due loans and risk migration among our commercial business and non-owner occupied loans.

LOAN COMPOSITION - Unaudited

Quarter Ended

September 30

June 30

March 31

December 31

September 30

(dollars in thousands)

2025

2024

Commercial

Owner occupied RE

705,383

686,424

673,865

651,597

642,608

Non-owner occupied RE

943,304

939,163

926,246

924,367

917,642

Construction

71,928

68,421

90,021

103,204

144,665

Business

604,411

589,661

561,337

556,117

521,535

Total commercial loans

2,325,026

2,283,669

2,251,469

2,235,285

2,226,450

Consumer

Real estate

1,159,693

1,164,187

1,147,357

1,128,629

1,132,371

Home equity

239,996

234,608

223,061

204,897

195,383

Construction

25,842

25,210

23,540

20,874

21,582

Other

38,464

39,167

38,492

42,082

43,770

Total consumer loans

1,463,995

1,463,172

1,432,450

1,396,482

1,393,106

Total gross loans, net of deferred fees

3,789,021

3,746,841

3,683,919

3,631,767

3,619,556

Less—allowance for credit losses

(41,799)

(41,285)

(40,687)

(39,914)

(40,166)

Total loans, net

3,747,222

3,705,556

3,643,232

3,591,853

3,579,390

DEPOSIT COMPOSITION - Unaudited

Quarter Ended

September 30

June 30

March 31

December 31

September 30

(dollars in thousands)

2025

2024

Non-interest bearing

736,518

761,492

671,609

683,081

689,749

Interest bearing:

NOW accounts

343,615

341,903

371,052

314,588

339,412

Money market accounts

1,572,738

1,537,400

1,563,181

1,438,530

1,423,403

Savings

29,381

32,334

32,945

31,976

29,283

Time, less than $250,000

202,353

194,064

181,407

193,562

223,582

Time and out-of-market deposits, $250,000 and over

791,812

769,136

800,692

774,028

813,396

Total deposits

3,676,417

3,636,329

3,620,886

3,435,765

3,518,825

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 $791,812,000.

(7) September 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 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 $4.4 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 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, government shutdowns, 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 are 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

SOURCE Southern First Bancshares, Inc.