GREENVILLE, S.C., Jan. 18,
2024 /PRNewswire/ -- 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, 2023.
"We are pleased with our fourth quarter results as we saw
further growth in book value, stability in net interest margin and
strong credit quality," stated Art
Seaver, the Company's Chief Executive Officer. "We are
beginning 2024 with excellent momentum and a proven ability to grow
organic and high quality client relationships in every market we
serve."
2023 Fourth Quarter Highlights
- Net income was $4.2 million
and diluted earnings per common share were $0.51 for Q4 2023
- Book value per common share increased to $38.63 at Q4 2023, or 5%, over Q4
2022
- Total loans increased 5% (annualized) to $3.6 billion at Q4 2023, compared to Q3 2023 and
increased 10%, from $3.3 billion at
Q4 2022
- Credit quality remains strong with nonperforming
assets to total assets of 0.10% and past due loans to total loans
of 0.37% at Q4 2023
- Total deposits increased to $3.4
billion at Q4 2023, compared to $3.3
billion at Q3 2023 and increased 8% from Q4
2022
- Net interest margin was 1.92% for Q4 2023, compared to
1.97% for Q3 2023 and 2.88% for Q4 2022
|
|
Quarter
Ended
|
|
|
December
31
|
September
30
|
June
30
|
March
31
|
December
31
|
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Earnings ($ in
thousands, except per share data):
|
|
|
|
|
|
|
|
Net income available to
common shareholders
|
$
|
4,167
|
4,098
|
2,458
|
2,703
|
5,492
|
|
Earnings per common
share, diluted
|
|
0.51
|
0.51
|
0.31
|
0.33
|
0.68
|
|
Total
revenue(1)
|
|
21,390
|
22,094
|
21,561
|
22,468
|
25,826
|
|
Net interest margin
(tax-equivalent)(2)
|
|
1.92 %
|
1.97 %
|
2.05 %
|
2.36 %
|
2.88 %
|
|
Return on average
assets(3)
|
|
0.40 %
|
0.40 %
|
0.26 %
|
0.30 %
|
0.63 %
|
|
Return on average
equity(3)
|
|
5.39 %
|
5.35 %
|
3.27 %
|
3.67 %
|
7.44 %
|
|
Efficiency
ratio(4)
|
|
79.61 %
|
78.31 %
|
80.67 %
|
76.12 %
|
63.55 %
|
|
Noninterest expense to
average assets (3)
|
|
1.64 %
|
1.69 %
|
1.82 %
|
1.89 %
|
1.87 %
|
|
Balance Sheet ($
in thousands):
|
|
|
|
|
|
|
|
Total
loans(5)
|
$
|
3,602,627
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
|
Total
deposits
|
|
3,379,564
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
|
Core
deposits(6)
|
|
2,811,499
|
2,866,574
|
2,880,507
|
2,946,567
|
2,759,112
|
|
Total assets
|
|
4,055,789
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
|
Book value per common
share
|
|
38.63
|
37.57
|
37.42
|
37.16
|
36.76
|
|
Loans to
deposits
|
|
106.60 %
|
106.15 %
|
103.05 %
|
99.74 %
|
104.45 %
|
|
Holding Company
Capital Ratios(7):
|
|
|
|
|
|
|
|
Total risk-based
capital ratio
|
|
12.56 %
|
12.56 %
|
12.40 %
|
12.67 %
|
12.91 %
|
|
Tier 1 risk-based
capital ratio
|
|
10.59 %
|
10.58 %
|
10.42 %
|
10.66 %
|
10.88 %
|
|
Leverage
ratio
|
|
8.14 %
|
8.17 %
|
8.48 %
|
8.80 %
|
9.17 %
|
|
Common equity tier 1
ratio(8)
|
|
10.18 %
|
10.17 %
|
10.00 %
|
10.23 %
|
10.44 %
|
|
Tangible common
equity(9)
|
|
7.70 %
|
7.56 %
|
7.53 %
|
7.60 %
|
7.98 %
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
Nonperforming assets/
total assets
|
|
0.10 %
|
0.11 %
|
0.08 %
|
0.12 %
|
0.07 %
|
|
Classified assets/tier
one capital plus allowance for credit losses
|
|
4.25 %
|
4.72 %
|
4.68 %
|
5.10 %
|
4.71 %
|
|
Loans 30 days or more
past due/ loans(5)
|
|
0.37 %
|
0.13 %
|
0.07 %
|
0.11 %
|
0.11 %
|
|
Net charge-offs
(recoveries)/average loans(5) (YTD
annualized)
|
|
0.00 %
|
0.01 %
|
0.03 %
|
0.01 %
|
(0.05 %)
|
|
Allowance for credit
losses/loans(5)
|
|
1.13 %
|
1.16 %
|
1.16 %
|
1.18 %
|
1.18 %
|
|
Allowance for credit
losses/nonaccrual loans
|
|
1,026.58 %
|
953.25 %
|
1,363.11 %
|
854.33 %
|
1,470.74 %
|
|
[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)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
2023
|
2022
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
44,758
|
43,542
|
41,089
|
36,748
|
33,939
|
|
166,137
|
114,233
|
|
Investment
securities
|
|
1,674
|
1,470
|
706
|
613
|
562
|
|
4,463
|
1,990
|
|
Federal funds
sold
|
|
2,703
|
2,435
|
891
|
969
|
525
|
|
6,998
|
1,439
|
|
Total interest
income
|
|
49,135
|
47,447
|
42,686
|
38,330
|
35,026
|
|
177,598
|
117,662
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
27,127
|
25,130
|
25,937
|
17,179
|
10,329
|
|
91,373
|
18,102
|
|
Borrowings
|
|
2,948
|
2,972
|
1,924
|
727
|
578
|
|
8,571
|
1,939
|
|
Total interest
expense
|
|
30,075
|
28,102
|
23,861
|
17,906
|
10,907
|
|
99,944
|
20,041
|
|
Net interest
income
|
|
19,060
|
19,345
|
18,825
|
20,424
|
24,119
|
|
77,654
|
97,621
|
|
Provision (reversal)
for credit losses
|
|
(975)
|
(500)
|
910
|
1,825
|
2,325
|
|
1,260
|
6,155
|
|
Net interest income
after provision for credit losses
|
|
20,035
|
19,845
|
17,915
|
18,599
|
21,794
|
|
76,394
|
91,466
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
income
|
|
868
|
1,208
|
1,337
|
622
|
291
|
|
4,036
|
4,198
|
|
Service fees on deposit
accounts
|
|
371
|
356
|
331
|
325
|
187
|
|
1,382
|
782
|
|
ATM and debit card
income
|
|
565
|
588
|
536
|
555
|
575
|
|
2,245
|
2,225
|
|
Income from bank owned
life insurance
|
|
361
|
349
|
338
|
332
|
344
|
|
1,379
|
1,289
|
|
Loss on disposal of
fixed assets
|
|
-
|
-
|
-
|
-
|
-
|
|
-
|
(394)
|
|
Other income
|
|
165
|
248
|
194
|
210
|
310
|
|
818
|
1,480
|
|
Total
noninterest income
|
|
2,330
|
2,749
|
2,736
|
2,044
|
1,707
|
|
9,860
|
9,580
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
9,401
|
10,231
|
10,287
|
10,356
|
9,576
|
|
40,275
|
38,790
|
|
Occupancy
|
|
2,718
|
2,562
|
2,518
|
2,457
|
2,666
|
|
10,255
|
9,105
|
|
Other real estate owned
expenses
|
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
|
Outside service and
data processing costs
|
|
2,000
|
1,744
|
1,705
|
1,629
|
1,521
|
|
7,078
|
6,112
|
|
Insurance
|
|
937
|
1,243
|
897
|
689
|
551
|
|
3,766
|
1,686
|
|
Professional
fees
|
|
581
|
504
|
751
|
660
|
788
|
|
2,496
|
2,635
|
|
Marketing
|
|
364
|
293
|
335
|
366
|
282
|
|
1,357
|
1,216
|
|
Other
|
|
1,027
|
725
|
900
|
947
|
1,029
|
|
3,600
|
3,389
|
|
Total
noninterest expenses
|
|
17,028
|
17,302
|
17,393
|
17,104
|
16,413
|
|
68,827
|
62,933
|
|
Income before provision
for income taxes
|
|
5,337
|
5,293
|
3,258
|
3,539
|
7,088
|
|
17,427
|
38,113
|
|
Income tax
expense
|
|
1,170
|
1,195
|
800
|
836
|
1,596
|
|
4,001
|
8,998
|
|
Net income available
to common shareholders
|
$
|
4,167
|
4,098
|
2,458
|
2,703
|
5,492
|
|
13,426
|
29,115
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – Basic
|
$
|
0.51
|
0.51
|
0.31
|
0.34
|
0.69
|
|
1.67
|
3.66
|
|
Earnings per common
share – Diluted
|
|
0.51
|
0.51
|
0.31
|
0.33
|
0.68
|
|
1.66
|
3.61
|
|
Basic weighted average
common shares
|
|
8,056
|
8,053
|
8,051
|
8,026
|
7,971
|
|
8,047
|
7,958
|
|
Diluted weighted
average common shares
|
|
8,080
|
8,072
|
8,069
|
8,092
|
8,071
|
|
8,078
|
8,072
|
|
[Footnotes to table
located on page 6]
|
Net income for the fourth quarter of 2023 was $4.2 million, or $0.51 per diluted share, a $69 thousand increase from the third quarter of
2023 and a $1.3 million decrease from
the fourth quarter of 2022. Net interest income decreased
$285 thousand during the fourth
quarter of 2023, compared to the third quarter of 2023, and
decreased $5.1 million, compared to
the fourth quarter of 2022. The decrease in net interest income
from the prior quarter and prior year was primarily driven by an
increase in interest expense on deposit accounts as deposit costs
continued to reprice in relation to the Federal Reserve's 525-basis
point interest rate hikes over the past two years.
There was a reversal of the provision for credit losses of
$975 thousand for the fourth quarter
of 2023, compared to a reversal of $500
thousand during the third quarter of 2023 and a provision of
$2.3 million during the fourth
quarter of 2022. The provision reversal during the fourth
quarter of 2023 includes a $640
thousand reversal of the provision for credit losses and a
$335 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 December 31, 2023, compared to the previous
quarter and year.
Noninterest income was $2.3
million for the fourth quarter of 2023, compared to
$2.7 million for the third quarter of
2023, and $1.7 million for the fourth
quarter of 2022. Mortgage banking income continues to be the
largest component of our noninterest income at $868 thousand for the fourth quarter of 2023,
$1.2 million for the third quarter of
2023, and $291 thousand for the
fourth quarter of 2022.
Noninterest expense for the fourth quarter of 2023 was
$17.0 million, a $274 thousand decrease from the third quarter of
2023, and a $615 thousand increase
from the fourth quarter of 2022. The decrease in noninterest
expense from the previous quarter was driven by a decrease in
compensation and benefits expense, while the increase from the
prior year related primarily to increases in outside service and
data processing costs and insurance expenses. The decrease in
compensation and benefits expenses during the current quarter was
due primarily to lower bonus and commissions expenses, combined
with a decrease in various benefit-related expenses. In
addition, the increase in outside service and data processing costs
from the prior quarter and prior year was driven by an increase in
software licensing and maintenance costs, while insurance costs
increased over the prior year due to higher FDIC insurance
premiums.
Our effective tax rate was 21.9% for the fourth quarter of 2023,
22.6% for the third quarter of 2023, and 22.5% for the fourth
quarter of 2022. The lower tax rate in the fourth quarter of 2023
as compared to the prior quarter and prior year 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
|
|
December 31,
2023
|
September 30,
2023
|
December
31,2022
|
|
(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
|
$ 197,482
|
$ 2,703
|
5.43 %
|
$ 181,784
|
$ 2,435
|
5.31 %
|
$ 60,176
|
$ 525
|
3.46 %
|
|
Investment
securities, taxable
|
151,969
|
1,632
|
4.26 %
|
148,239
|
1,429
|
3.82 %
|
86,594
|
515
|
2.36 %
|
|
Investment
securities, nontaxable(2)
|
7,831
|
55
|
2.76 %
|
7,799
|
55
|
2.77 %
|
9,987
|
61
|
2.42 %
|
|
Loans(10)
|
3,586,863
|
44,758
|
4.95 %
|
3,554,478
|
43,542
|
4.86 %
|
3,165,061
|
33,939
|
4.25 %
|
|
Total interest-earning assets
|
3,944,145
|
49,148
|
4.94 %
|
3,892,300
|
47,461
|
4.84 %
|
3,321,818
|
35,040
|
4.18 %
|
|
Noninterest-earning assets
|
174,717
|
|
|
159,103
|
|
|
162,924
|
|
|
|
Total assets
|
$4,118,862
|
|
|
$4,051,403
|
|
|
$3,484,742
|
|
|
|
Interest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
NOW accounts
|
$
301,424
|
656
|
0.86 %
|
$
297,028
|
620
|
0.83 %
|
$
343,541
|
379
|
0.44 %
|
|
Savings & money
market
|
1,697,144
|
17,042
|
3.98 %
|
1,748,638
|
16,908
|
3.84 %
|
1,529,532
|
7,657
|
1.99 %
|
|
Time
deposits
|
759,839
|
9,429
|
4.92 %
|
648,949
|
7,602
|
4.65 %
|
405,907
|
2,293
|
2.24 %
|
|
Total interest-bearing
deposits
|
2,758,407
|
27,127
|
3.90 %
|
2,694,615
|
25,130
|
3.70 %
|
2,278,980
|
10,329
|
1.80 %
|
|
FHLB advances and other
borrowings
|
257,880
|
2,387
|
3.67 %
|
264,141
|
2,414
|
3.63 %
|
7,594
|
81
|
4.23 %
|
|
Subordinated
debentures
|
36,305
|
561
|
6.13 %
|
36,278
|
558
|
6.10 %
|
36,197
|
497
|
5.45 %
|
|
Total interest-bearing
liabilities
|
3,052,592
|
30,075
|
3.91 %
|
2,995,034
|
28,102
|
3.72 %
|
2,322,771
|
10,907
|
1.86 %
|
|
Noninterest-bearing
liabilities
|
759,413
|
|
|
752,433
|
|
|
869,314
|
|
|
|
Shareholders'
equity
|
306,857
|
|
|
303,936
|
|
|
292,657
|
|
|
|
Total liabilities and
shareholders' equity
|
$4,118,862
|
|
|
$4,051,403
|
|
|
$3,484,742
|
|
|
|
Net interest
spread
|
|
|
1.04 %
|
|
|
1.12 %
|
|
|
2.32 %
|
|
Net interest income
(tax equivalent) / margin
|
|
$19,073
|
1.92 %
|
|
$19,359
|
1.97 %
|
|
$24,133
|
2.88 %
|
|
Less:
tax-equivalent adjustment(2)
|
|
13
|
|
|
14
|
|
|
14
|
|
|
Net interest
income
|
|
$19,060
|
|
|
$19,345
|
|
|
$24,119
|
|
|
[Footnotes to table
located on page 6]
|
Net interest income was $19.1
million for the fourth quarter of 2023, a $285 thousand decrease from the third quarter of
2023, driven by a $2.0 million
increase in interest expense, partially offset by a $1.7 million increase in interest income, on a
tax-equivalent basis. The increase in interest expense was driven
by a $57.6 million increase in
average interest-bearing liabilities at an average cost of 3.91%, a
19-basis points increase over the previous quarter, partially
offset by a $51.8 million increase in
average interest-earning assets at an average rate of 4.94%, an
increase of 10-basis points from the third quarter of 2023.
In comparison to the fourth quarter of 2022, net interest income
decreased $5.1 million, resulting
primarily from a $729.8 million
increase in average interest-bearing liabilities during the 12
months ended December 31, 2023,
combined with a 205-basis point increase in the average cost.
Our net interest margin, on a tax-equivalent basis, was 1.92% for
the fourth quarter of 2023, a 5-basis point decrease from 1.97% for
the third quarter of 2023 and a 96-basis point decrease from 2.88%
for the fourth quarter of 2022. As a result of the
significant increase in the federal funds rate over the past two
years, the rates on our non-maturity deposits have increased and
continue to increase more quickly than the yield on our
interest-earning assets, resulting in the lower net interest margin
during 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)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Cash and due
from banks
|
$
|
28,020
|
17,395
|
24,742
|
22,213
|
18,788
|
|
Federal funds
sold
|
|
119,349
|
127,714
|
170,145
|
242,642
|
101,277
|
|
Interest-bearing
deposits with banks
|
|
8,801
|
7,283
|
10,183
|
7,350
|
50,809
|
|
Total cash and cash equivalents
|
|
156,170
|
152,392
|
205,070
|
272,205
|
170,874
|
|
Investment
securities:
|
|
|
|
|
|
|
|
Investment
securities available for sale
|
|
134,702
|
144,035
|
91,548
|
94,036
|
93,347
|
|
Other
investments
|
|
19,939
|
19,600
|
12,550
|
10,097
|
10,833
|
|
Total investment securities
|
|
154,641
|
163,635
|
104,098
|
104,133
|
104,180
|
|
Mortgage loans held for
sale
|
|
7,194
|
7,117
|
15,781
|
6,979
|
3,917
|
|
Loans
(5)
|
|
3,602,627
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
|
Less allowance for
credit losses
|
|
(40,682)
|
(41,131)
|
(41,105)
|
(40,435)
|
(38,639)
|
|
Loans, net
|
|
3,561,945
|
3,512,501
|
3,496,511
|
3,377,510
|
3,234,724
|
|
Bank owned life
insurance
|
|
52,501
|
52,140
|
51,791
|
51,453
|
51,122
|
|
Property and equipment,
net
|
|
94,301
|
95,743
|
96,964
|
97,806
|
99,183
|
|
Deferred income
taxes
|
|
12,200
|
13,078
|
12,356
|
12,087
|
12,522
|
|
Other assets
|
|
16,837
|
23,351
|
19,536
|
15,967
|
15,459
|
|
Total assets
|
$
|
4,055,789
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
|
Liabilities
|
|
|
|
|
|
|
|
Deposits
|
$
|
3,379,564
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
|
FHLB
Advances
|
|
275,000
|
275,000
|
180,000
|
125,000
|
175,000
|
|
Subordinated
debentures
|
|
36,322
|
36,295
|
36,268
|
36,241
|
36,214
|
|
Other
liabilities
|
|
52,436
|
56,993
|
51,307
|
50,775
|
52,391
|
|
Total liabilities
|
|
3,743,322
|
3,716,059
|
3,700,593
|
3,638,790
|
3,397,469
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Preferred stock - $.01
par value; 10,000,000 shares authorized
|
|
-
|
-
|
-
|
-
|
-
|
|
Common Stock - $.01 par
value; 10,000,000 shares authorized
|
|
81
|
81
|
81
|
80
|
80
|
|
Nonvested restricted
stock
|
|
(3,596)
|
(4,065)
|
(4,051)
|
(4,462)
|
(3,306)
|
|
Additional paid-in
capital
|
|
121,777
|
121,757
|
120,912
|
120,683
|
119,027
|
|
Accumulated other
comprehensive loss
|
|
(11,342)
|
(15,255)
|
(12,710)
|
(11,775)
|
(13,410)
|
|
Retained
earnings
|
|
205,547
|
201,380
|
197,282
|
194,824
|
192,121
|
|
Total shareholders' equity
|
|
312,467
|
303,898
|
301,514
|
299,350
|
294,512
|
|
Total liabilities and shareholders' equity
|
$
|
4,055,789
|
4,019,957
|
4,002,107
|
3,938,140
|
3,691,981
|
|
Common
Stock
|
|
|
|
|
|
|
|
Book value per common
share
|
$
|
38.63
|
37.57
|
37.42
|
37.16
|
36.76
|
|
Stock price:
|
|
|
|
|
|
|
|
High
|
|
37.15
|
30.18
|
31.34
|
45.05
|
49.50
|
|
Low
|
|
25.16
|
24.22
|
21.33
|
30.70
|
41.46
|
|
Period
end
|
|
37.10
|
26.94
|
24.75
|
30.70
|
45.75
|
|
Common shares
outstanding
|
|
8,088
|
8,089
|
8,058
|
8,048
|
8,011
|
|
[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)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Nonperforming
Assets
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
Non-owner
occupied RE
|
$
|
1,423
|
1,615
|
754
|
1,384
|
247
|
|
Commercial
business
|
|
319
|
404
|
137
|
1,196
|
182
|
|
Consumer
|
|
|
|
|
|
|
|
Real
estate
|
|
985
|
1,228
|
1,053
|
1,075
|
1,099
|
|
Home
equity
|
|
1,236
|
1,068
|
1,072
|
1,078
|
1,099
|
|
Total nonaccrual
loans
|
|
3,963
|
4,315
|
3,016
|
4,733
|
2,627
|
|
Other real estate
owned
|
|
-
|
-
|
-
|
-
|
-
|
|
Total nonperforming
assets
|
$
|
3,963
|
4,315
|
3,016
|
4,733
|
2,627
|
|
Nonperforming assets as
a percentage of:
|
|
|
|
|
|
|
|
Total
assets
|
|
0.10 %
|
0.11 %
|
0.08 %
|
0.12 %
|
0.07 %
|
|
Total
loans
|
|
0.11 %
|
0.12 %
|
0.09 %
|
0.14 %
|
0.08 %
|
|
Classified assets/tier
1 capital plus allowance for credit losses
|
|
4.25 %
|
4.72 %
|
4.68 %
|
5.10 %
|
4.71 %
|
|
|
Quarter
Ended
|
|
|
December
31
|
September
30
|
June
30
|
March
31
|
December
31
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Allowance for Credit
Losses
|
|
|
|
|
|
|
|
Balance, beginning of
period
|
$
|
41,131
|
41,105
|
40,435
|
38,639
|
36,317
|
|
Loans
charged-off
|
|
(119)
|
(42)
|
(440)
|
(161)
|
-
|
|
Recoveries of loans
previously charged-off
|
|
310
|
168
|
15
|
102
|
22
|
|
Net loans
(charged-off) recovered
|
|
191
|
126
|
(425)
|
(59)
|
22
|
|
Provision for (reversal
of) credit losses
|
|
(640)
|
(100)
|
1,095
|
1,855
|
2,300
|
|
Balance, end of
period
|
$
|
40,682
|
41,131
|
41,105
|
40,435
|
38,639
|
|
Allowance for credit
losses to gross loans
|
|
1.13 %
|
1.16 %
|
1.16 %
|
1.18 %
|
1.18 %
|
|
Allowance for credit
losses to nonaccrual loans
|
|
1,026.58 %
|
953.25 %
|
1,363.11 %
|
854.33 %
|
1,470.74 %
|
|
Net charge-offs
(recoveries) to average loans QTD (annualized)
|
|
(0.02 %)
|
(0.01 %)
|
0.05 %
|
0.01 %
|
0.00 %
|
Total nonperforming assets decreased by $352 thousand during the fourth quarter of 2023,
and represented 0.10% of total assets, a decrease compared to 0.11%
for the third quarter of 2023 and an increase compared to 0.07% for
the fourth quarter of 2022. While we added two new relationships to
nonaccrual during the fourth quarter of 2023, there were also three
relationships 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 2023 from 4.72% in the third
quarter of 2023 and from 4.71% in the fourth quarter of 2022.
At December 31, 2023, the
allowance for credit losses was $40.7
million, or 1.13% of total loans, compared to $41.1 million, or 1.16% of total loans at
September 30, 2023, and $38.6 million, or 1.18% of total loans, at
December 31, 2022. We had net
recoveries of $191 thousand, or 0.02%
annualized, for the fourth quarter of 2023, compared to net
recoveries of $126 thousand for the
third quarter of 2023 and net recoveries of $22 thousand for the fourth quarter of 2022.
There was a reversal of the provision for credit losses of
$640 thousand for the fourth quarter
of 2023, compared to a reversal of $100
thousand for the third quarter of 2023 and a provision of
$2.3 million for the fourth quarter
of 2022. The provision reversal was driven by lower expected loss
rates resulting from low charge-offs during the quarter and year,
combined with a lower specific reserve for individually assessed
loans during the current quarter as several loans were paid off or
returned to accruing status.
|
LOAN COMPOSITION
- Unaudited
|
|
|
|
Quarter
Ended
|
|
|
December
31
|
September
30
|
June
30
|
March
31
|
December
31
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Commercial
|
|
|
|
|
|
|
|
Owner occupied
RE
|
$
|
631,657
|
637,038
|
613,874
|
615,094
|
612,901
|
|
Non-owner occupied
RE
|
|
942,529
|
937,749
|
951,536
|
928,059
|
862,579
|
|
Construction
|
|
150,680
|
119,629
|
115,798
|
94,641
|
109,726
|
|
Business
|
|
500,161
|
500,253
|
511,719
|
495,161
|
468,112
|
|
Total commercial
loans
|
|
2,225,027
|
2,194,669
|
2,192,927
|
2,132,955
|
2,053,318
|
|
Consumer
|
|
|
|
|
|
|
|
Real estate
|
|
1,082,429
|
1,074,679
|
1,047,904
|
993,258
|
931,278
|
|
Home equity
|
|
183,004
|
180,856
|
185,584
|
180,974
|
179,300
|
|
Construction
|
|
63,348
|
54,210
|
61,044
|
71,137
|
80,415
|
|
Other
|
|
48,819
|
49,218
|
50,157
|
39,621
|
29,052
|
|
Total consumer
loans
|
|
1,377,600
|
1,358,963
|
1,344,689
|
1,284,990
|
1,220,045
|
|
Total gross loans, net
of deferred fees
|
|
3,602,627
|
3,553,632
|
3,537,616
|
3,417,945
|
3,273,363
|
|
Less—allowance for
credit losses
|
|
(40,682)
|
(41,131)
|
(41,105)
|
(40,435)
|
(38,639)
|
|
Total loans,
net
|
$
|
3,561,945
|
3,512,501
|
3,496,511
|
3,377,510
|
3,234,724
|
|
DEPOSIT COMPOSITION
- Unaudited
|
|
|
|
Quarter
Ended
|
|
|
December
31
|
September
30
|
June
30
|
March
31
|
December
31
|
|
(dollars in
thousands)
|
|
2023
|
2023
|
2023
|
2023
|
2022
|
|
Non-interest
bearing
|
$
|
674,167
|
675,409
|
698,084
|
740,534
|
804,115
|
|
Interest
bearing:
|
|
|
|
|
|
|
|
NOW
accounts
|
|
310,218
|
306,667
|
308,762
|
303,743
|
318,030
|
|
Money
market accounts
|
|
1,605,278
|
1,685,736
|
1,692,900
|
1,748,562
|
1,506,418
|
|
Savings
|
|
31,669
|
34,737
|
36,243
|
39,706
|
40,673
|
|
Time, less
than $250,000
|
|
190,167
|
125,506
|
114,691
|
106,679
|
89,877
|
|
Time and
out-of-market deposits, $250,000 and over
|
|
568,065
|
519,716
|
582,338
|
487,550
|
374,751
|
|
Total
deposits
|
$
|
3,379,564
|
3,347,771
|
3,433,018
|
3,426,774
|
3,133,864
|
|
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
$568,065,000.
|
|
(7) December 31,
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 $4.1 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 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 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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SOURCE Southern First Bancshares, Inc.
