Southern First Reports Second Quarter 2026 Results

Southern First Reports Second Quarter 2026 Results

PR Newswire

GREENVILLE, S.C., July 21, 2026

GREENVILLE, S.C., July 21, 2026 /PRNewswire/ -- Southern First Bancshares, Inc. (NASDAQ: SFST) (Southern First), today announced its financial results for the three months ended June 30, 2026. Strong loan growth and continued margin expansion drove year-over-year net interest income growth of 28%. Net income was $11.2 million and diluted earnings per share was $1.20, representing a $0.39, or 48% increase over the second quarter of 2025, and a slight increase from the first quarter of 2026. Return on average assets was 0.96%, up 33 basis points over the second quarter of last year, and tangible common equity to assets was 9.62%, up 160 basis points from the second quarter of 2025. Key asset quality metrics were consistent both on a linked quarter and year-over-year basis. Net charge-offs were approximately $96 thousand, or 0.01% of average loans, annualized, and nonperforming assets were 0.27% of total assets. Provision for credit losses decreased by $275 thousand from the prior quarter, and the allowance for credit losses represented 1.10% of loans.

"Our second quarter 2026 results continue to show impressive momentum. We increased retail client deposits by $184 million in the second quarter, representing a 22% annualized growth rate, and our loan portfolio grew at an annualized rate of 9% during the quarter. Our efficient business model, vibrant markets, and focus on organic growth are creating value for our clients and our shareholders. Our second quarter net income was $11.2 million, a 70% increase from the same quarter last year and a 13% increase over the first quarter of 2026. We also strengthened our capital position by raising gross proceeds of $65.2 million and issuing 1.2 million additional common shares earlier in the quarter to support our strong growth expectations. As planned, we redeemed a portion of our subordinated notes, which were subject to phase-out from regulatory capital treatment and carried a higher interest rate. We are proud of our team and our accomplishments this quarter, which we believe positions us for continued success in the second half of 2026," stated Art Seaver, Chief Executive Officer.Financial Highlights – Second Quarter 2026:EarningsDiluted earnings per common share was $1.20, up $0.39 or 48% compared to the second quarter of 2025 and up by $0.01 from the first quarter of 2026Net income improved to $11.2 million, a $4.6 million increase or 70% compared to the second quarter of 2025 and a $1.3 million increase or 13%, compared to the first quarter of 2026Total revenue was $35.9 million, an increase of $7.2 million or 25% year-over-year and $2.1 million on a linked quarter basisNet interest income improved by $7.1 million or 28% year-over-year driven primarily by new loan volumeNet interest margin was 2.87%, a 37-basis point increase from 2.50% for the second quarter of 2025 and a one basis point decrease from the first quarter of 2026, which included a one-time increase in interest income from the repayment of a $5.1 million nonperforming loanNoninterest income was $3.5 million compared to $3.3 million for the second quarter of 2025Service fees on deposit accounts increased 53% compared to the second quarter of 2025 and 15% from last quarter due in part to an increased focus on treasury management servicesNoninterest expense to average assets was 1.75%, compared to 1.86% for the second quarter of 2025Return on average equity was 10.28%, compared to 7.71% for the second quarter of 2025Return on average assets was 0.96%, compared to 0.63% for the second quarter of 2025Balance Sheet Total loans were $4.0 billion, up $88 million or 9% (annualized) from the first quarter of 2026Retail deposits were $3.6 billion, up $184 million or 22% (annualized) from the first quarter of 2026Wholesale deposits were reduced by $181.3 million, or 32% from the second quarter of 2025 and $122.3 million or 98% (annualized) from the first quarter of 2026Book value per common share was $47.77, an increase of 15% (annualized) from the first quarter of 2026Tangible common equity (TCE) ratio was 9.62%, up 133 basis points on a linked quarter basis and up from 8.02% for the second quarter of 2025Common Equity Tier 1 ratio (CET1) was 12.81%, up 178 basis points from the first quarter of 2026 and up from 10.71% for the second quarter 2025Book value per share, tangible common equity ratio and Common Equity Tier 1 ratio were each positively affected by our recent capital raise of $65.2 millionAsset QualityNonperforming assets to total assets were 0.27%, compared to 0.26% for the linked quarter, while accruing loans 30 days or more past due to total loans decreased to 0.10%, compared to 0.20% for the first quarterClassified assets/Tier 1 capital plus allowance for credit losses was 3.15% compared to 3.25% for the linked quarter endProvision for credit losses was $1.0 million and includes a $950 thousand provision for loan losses and a $75 thousand provision for unfunded commitments driven by new loan growth; allowance for credit losses to total loans remained at 1.10% for the quarterNet charge-offs were 0.01% as a percentage of average loans on an annualized basisSELECTED FINANCIAL DATAQuarter EndedJune 30March 31December 31September 30June 302Q26 vs 2Q2520262026202520252025$ Change% ChangeIncome Statement Summary ($ in thousands):Net interest income$32,37030,25928,74427,52925,2957,07528.0 %Noninterest income3,5083,5403,0903,6003,3341745.2 %Total Revenue35,87833,79931,83431,12928,6297,24925.3 %Provision for credit losses1,0251,30065085070032546.4 %Noninterest expense20,39320,01518,41618,94619,3361,0575.5 %Income before income tax expense14,46012,48412,76811,3338,5935,86768.3 %Income tax expense3,2652,5972,9112,6712,0121,25362.3 %Net income available to common shareholders11,1959,8879,8578,6626,5814,61470.1 %Earnings ($ in thousands, except per share data):Earnings per common share, diluted1.201.191.201.060.810.3948.2 %Net interest margin (tax-equivalent)(1) 2.87 %2.88 %2.72 %2.62 %2.50 %­­—­­—Return on average assets(2)0.96 %0.91 %0.90 %0.80 %0.63 %­­—­­—Return on average equity(2)10.28 %10.67 %10.77 %9.78 %7.71 %­­—­­—Efficiency ratio(3)56.84 %59.22 %57.85 %60.86 %67.54 %­­—­­—Noninterest expense to average assets (2)1.75 %1.84 %1.68 %1.74 %1.86 %­­—­­—Balance Sheet ($ in thousands):Total loans(4)$4,030,2553,942,2193,845,1243,789,0213,746,841283,4147.6 %Total deposits3,935,4523,873,4553,716,8033,676,4173,636,329299,1238.2 %Retail deposits(5)3,556,0453,371,7213,163,9143,108,4113,075,631480,41415.6 %Total assets4,700,1714,578,4024,403,4944,358,5894,308,067392,1049.1 %Book value per common share47.7746.0044.8943.5142.235.5413.1 %Loans to deposits102.41 %101.78 %103.45 %103.06 %103.04 %­­—­­—Holding Company Capital Ratios(6):Total risk-based capital ratio 14.42 %12.83 %12.89 %12.79 %12.63 %­­—­­—Tier 1 risk-based capital ratio 13.19 %11.40 %11.44 %11.26 %11.11 %­­—­­—Leverage ratio 10.11 %9.05 %8.93 %8.72 %8.73 %­­—­­—Common Equity Tier 1 ratio(7)12.82 %11.03 %11.06 %10.88 %10.71 %­­—­­—Tangible common equity(8)9.62 %8.29 %8.37 %8.18 %8.02 %­­—­­—Asset Quality Ratios:Nonperforming assets/total assets0.27 %0.26 %0.32 %0.27 %0.27 %­­—­­—Classified assets/Tier 1 capital plus allowance forcredit losses 3.15 %3.25 %4.28 %3.97 %4.35 %­­—­­—Accruing loans 30 days or more past due/loans(4)0.10 %0.20 %0.14 %0.18 %0.14 %­­—­­—Net charge-offs (recoveries)/average loans(4) (YTD annualized)0.01 %0.01 %0.00 %0.00 %0.00 %­­—­­—Allowance for credit losses/loans(4)1.10 %1.10 %1.10 %1.10 %1.10 %­­—­­—Allowance for credit losses/nonaccrual loans395.41 %378.22 %305.65 %364.50 %362.35 %­­—­­—INCOME STATEMENTS – UnauditedQuarter EndedJun 30Mar 31Dec 31Sept 30Jun 302Q26 vs 2Q25(in thousands, except per share data)20262026202520252025$ Change% ChangeInterest incomeLoans$53,07751,25751,06950,99948,9924,0858.3 %Investment securities1,5041,3991,2681,3421,35714710.8 %Federal funds sold3,5501,9552,1932,6451,9691,58180.3 % Total interest income58,13154,61154,53054,98652,3185,81311.1 %Interest expenseDeposits23,09421,69723,05224,70324,300(1,206)(5.0 %)Borrowings2,6672,6552,7342,7542,723(56)(2.1 %) Total interest expense 25,76124,35225,78627,45727,023(1,262)(4.7 %)Net interest income 32,37030,25928,74427,52925,2957,07528.0 %Provision for credit losses 1,0251,30065085070032546.4 %Net interest income after provision for credit losses31,34528,95928,09426,67924,5956,75027.4 %Noninterest income Mortgage banking income1,3231,4931,6891,6001,569(246)(15.7 %)Service fees on deposit accounts86675663462556729952.7 %ATM and debit card income6515886386015866511.1 %Income from bank owned life insurance4574464504394134410.7 %Loss on sale of securities--(515)---0.0 %Other income211257194335199126.0 % Total noninterest income3,5083,5403,0903,6003,3341745.2 %Noninterest expense Compensation and benefits12,25211,98010,52911,29911,6745785.0 %Occupancy2,5512,4902,4652,4472,523281.1 %Outside service and data processing costs2,4162,2672,1442,1582,18922710.4 %Insurance858892994961910(52)(5.7 %)Professional fees78267573260560917328.4 %Marketing423399346412397266.5 %Other1,1111,3121,2061,0641,034777.4 % Total noninterest expenses20,39320,01518,41618,94619,3361,0575.5 %Income before provision for income taxes14,46012,48412,76811,3338,5935,86768.3 %Income tax expense3,2652,5972,9112,6712,0121,25362.3 %Net income available to common shareholders$11,1959,8879,8578,6626,5814,61470.1 %Earnings per common share – Basic$1.221.211.221.070.810.4150.6 %Earnings per common share – Diluted1.201.191.201.060.810.3948.2 %Basic weighted average common shares9,1858,1638,1068,0918,0901,09513.5 %Diluted weighted average common shares9,3198,2938,2298,1768,1241,19514.7 %[Footnotes to table located on page 6]NET INTEREST INCOME AND MARGIN - UnauditedFor the Three Months Ended June 30, 2026March 31, 2026June 30, 2025(dollars in thousands)AverageBalanceIncome/ExpenseYield/Rate(2)AverageBalanceIncome/ExpenseYield/Rate(2)AverageBalanceIncome/ExpenseYield/Rate(2)Interest-earning assetsFederal funds sold and interest-bearing deposits$ 384,694$ 3,5503.70 %$ 211,039$ 1,9563.76 %$ 179,095$ 1,9694.41 % Investment securities, taxable147,8861,4734.00 %141,3091,3683.93 %141,8981,3153.72 % Investment securities, nontaxable(1)6,283402.57 %6,332402.58 %7,740552.83 % Loans(9)3,978,63953,0775.35 %3,899,00251,2575.33 %3,724,06448,9925.28 % Total interest-earning assets4,517,50258,1405.16 %4,257,68254,6215.20 %4,052,79752,3315.18 % Noninterest-earning assets157,905156,466154,051 Total assets$4,675,407$4,414,148$4,206,848Interest-bearing liabilitiesNOW accounts$ 500,9781,7381.39 %$ 421,5271,1021.06 %$ 331,8117520.91 %Savings & money market1,752,54812,9082.95 %1,649,24811,8192.91 %1,566,34513,3983.43 %Time deposits871,5638,4483.89 %895,1018,7763.98 %942,88010,1504.32 %Total interest-bearing deposits3,125,08923,0942.96 %2,965,87621,6972.97 %2,841,03624,3003.43 %FHLB advances and other borrowings240,0002,2523.76 %240,0002,2453.79 %240,0002,2703.79 %Subordinated debentures24,7774156.72 %24,9034116.69 %24,9034537.30 %Total interest-bearing liabilities3,389,86625,7613.05 %3,230,77924,3533.06 %3,105,93927,0233.49 %Noninterest-bearing liabilities848,704807,686758,626Shareholders' equity436,837375,683342,283Total liabilities and shareholders' equity$4,675,407$4,414,148$4,206,848Net interest spread2.11 %2.15 %1.69 %Net interest income (tax equivalent) / margin$32,3792.87 %$30,2682.88 %$25,3082.50 %Less: tax-equivalent adjustment(1)9913Net interest income$32,370$30,259$25,295[Footnotes to table located on page 6]BALANCE SHEETS - UnauditedEnding BalanceJun 30Mar 31Dec 31Sept 30Jun 302Q26 vs 2Q25(in thousands, except per share data)20262026202520252025$ Change% ChangeAssetsCash and cash equivalents: Cash and due from banks$30,10232,72327,82124,60025,1844,91819.5 % Federal funds sold259,049228,235183,473178,534180,83478,21543.3 % Interest-bearing deposits with banks72,48381,81858,28979,76965,0147,46911.5 % Total cash and cash equivalents361,634342,776269,583282,903271,03290,60233.4 %Investment securities: Investment securities available for sale144,388124,224127,730131,040128,86715,52112.0 % Other investments20,48420,37720,06320,06619,9065782.9 % Total investment securities164,872144,601147,793151,106148,77316,09910.8 %Mortgage loans held for sale8,59413,72311,5696,90610,739(2,145)(20.0 %)Loans (4)4,030,2553,942,2193,845,1243,789,0213,746,841283,4147.6 %Less allowance for credit losses (44,232)(43,378)(42,280)(41,799)(41,285)(2,947)7.1 % Loans, net3,986,0233,898,8413,802,8443,747,2223,705,556280,4677.6 %Bank owned life insurance56,67756,22155,77555,32454,8861,7923.3 %Property and equipment, net88,00688,58083,46584,58685,9212,0852.4 %Deferred income taxes13,94613,81213,70212,65712,9719757.5 %Other assets20,41919,84818,76317,88518,1892,22912.3 % Total assets$4,700,1714,578,4024,403,4944,358,5894,308,067392,1049.1 %LiabilitiesDeposits $3,935,4523,873,4553,716,8033,676,4173,636,329299,1238.2 %FHLB Advances240,000240,000240,000240,000240,000-0.0 %Subordinated debentures 13,40324,90324,90324,90324,903(11,500)(46.2 %)Other liabilities59,04860,63153,13160,92161,373(2,325)(3.8 %) Total liabilities4,247,9034,198,9894,034,8374,002,2413,962,605285,2987.2 %Shareholders' equityPreferred stock - $.01 par value; 10,000,000 sharesauthorized-------Common Stock - $.01 par value; 10,000,000 sharesauthorized95828282821315.9 %Nonvested restricted stock(912)(1,302)(1,338)(1,929)(2,774)1,862(67.1 %)Additional paid-in capital188,932127,168125,924125,035124,83964,09351.3 %Accumulated other comprehensive loss(8,372)(7,865)(7,454)(8,426)(9,609)1,237(12.9 %)Retained earnings272,525261,330251,443241,586232,92439,60117.0 % Total shareholders' equity452,268379,413368,657356,348345,462106,80630.9 % Total liabilities and shareholders' equity $4,700,1714,578,4024,403,4944,358,5894,308,067392,1049.1 %Common StockBook value per common share$47.7746.0044.8943.5142.235.5413.1 %Stock price: High61.5161.0855.5045.5438.5123.0059.7 % Low54.9551.2641.1538.7430.6124.3479.5 % Period end61.1054.5051.5244.1238.0323.0760.7 %Common shares outstanding9,4688,2488,2138,1898,1811,28715.7 %[Footnotes to table located on page 6]ASSET QUALITY MEASURES - UnauditedQuarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20262026202520252025Nonperforming AssetsCommercial Owner occupied RE$2,6672,317259262- Non-owner occupied RE2,0301,7126,9176,9116,941 Commercial business1,330909189195717Consumer Real estate4,8055,7865,7633,3943,028 Home equity354745705705708Total nonaccrual loans11,18611,46913,83311,46711,394Other real estate owned1,375475275275275Total nonperforming assets$12,56111,94414,10811,74211,669Nonperforming assets as a percentage of: Total assets0.27 %0.26 %0.32 %0.27 %0.27 % Total loans0.31 %0.30 %0.37 %0.31 %0.31 %Classified assets/Tier 1 capital plus allowance for creditlosses3.15 %3.25 %4.28 %3.97 %4.35 %Accruing loans 30 days or more past due/loans(4)0.10 %0.20 %0.14 %0.18 %0.14 %Quarter EndedJune 30March 31December 31September 30June 30(dollars in thousands)20262026202520252025Allowance for Credit LossesBalance, beginning of period$43,37842,28041,79941,28540,687Loans charged-off(155)(78)(150)(55)(68)Recoveries of loans previously charged-off5926816916 Net loans (charged-off) recovered(96)(52)(69)14(52)Provision for credit losses9501,150550500650Balance, end of period$44,23243,37842,28041,79941,285Allowance for credit losses to gross loans1.10 %1.10 %1.10 %1.10 %1.10 %Allowance for credit losses to nonaccrual loans395.41 %378.22 %305.65 %364.50 %362.35 %Net charge-offs (recoveries) to average loans QTD (annualized)0.01 %0.01 %0.01 %0.00 %0.01 %[Footnotes to table located on page 6]LOAN COMPOSITION - UnauditedQuarter EndedJun 30Mar 31Dec 31Sept 30Jun 302Q26 vs 2Q25(dollars in thousands)20262026202520252025$ Change% ChangeCommercialOwner occupied RE$755,419759,602736,979705,383686,42468,99510.1 %Non-owner occupied RE967,698950,696956,812943,304939,16328,5353.0 %Construction66,10569,46363,66671,92868,421(2,316)(3.4 %)Business713,017677,742619,667604,411589,661123,35620.9 %Total commercial loans2,502,2392,457,5032,377,1242,325,0262,283,669218,5709.6 %ConsumerReal estate1,167,2821,148,1291,153,2851,159,6931,164,1873,0950.3 %Home equity 273,017262,530248,685239,996234,60838,40916.4 %Construction36,37133,87924,99725,84225,21011,16144.3 %Other51,34640,17841,03338,46439,16712,17931.1 %Total consumer loans1,528,0161,484,7161,468,0001,463,9951,463,17264,8444.4 %Total gross loans, net of deferred fees 4,030,2553,942,2193,845,1243,789,0213,746,841283,4147.6 %Less—allowance for credit losses(44,232)(43,378)(42,280)(41,799)(41,285)(2,947)7.1 %Total loans, net$3,986,0233,898,8413,802,8443,747,2223,705,556280,4677.6 %Yield on average loans5.35 %5.33 %5.29 %5.35 %5.28 %­­—­­—DEPOSIT COMPOSITION - UnauditedQuarter EndedJun 30Mar 31Dec 31Sept 30Jun 302Q26 vs 2Q25(dollars in thousands)20262026202520252025$ Change% ChangeNon-interest bearing$799,246799,692732,287736,518761,49237,7545.0 %Interest bearing: NOW accounts538,443495,657423,270343,615341,903196,54057.5 % Money market accounts1,765,6971,652,1251,573,0391,572,7381,537,400228,29714.8 % Savings29,46030,33229,47029,38132,334(2,874)(8.9 %) Time deposits, less than $250,000175,971170,496180,783202,353194,064(18,093)(9.3 %) Time deposits, $250,000 and over(10)626,635725,153777,954791,812769,136(142,501)(18.5 %)Total deposits$3,935,4523,873,4553,716,8033,676,4173,636,329299,1238.2 %Total retail deposits3,556,0453,371,7213,163,9143,108,4113,075,631480,41415.6 %Total wholesale deposits379,407501,734552,889568,006560,697(181,290)(32.3 %)Cost of average deposits2.37 %2.37 %2.50 %2.69 %2.75 %­­—­­—Cost of average retail deposits2.11 %2.06 %2.18 %2.36 %2.42 %­­—­­—Loans to deposits102.41 %101.78 %103.45 %103.06 %103.04 %­­—­­—Footnotes to tables: (1) 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. (2) Annualized for the respective three-month period. (3) Noninterest expense divided by the sum of net interest income and noninterest income. (4) Excludes mortgage loans held for sale. (5) Excludes out of market (wholesale) deposits totaling $379.4 million. (6) June 30, 2026 ratios are preliminary. (7) The Common Equity Tier 1 ratio is calculated as the sum of common equity divided by risk-weighted assets. (8) The tangible common equity ratio is calculated as total equity less preferred stock divided by total assets. (9) Includes mortgage loans held for sale.(10) Includes out of market depositsABOUT 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 $4.7 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, 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.MEDIA CONTACT:ART SEAVER 864-679-9010FINANCIAL CONTACT:CHRIS ZYCH 864-679-9070WEB SITE: www.southernfirst.com