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Southern First Reports Fourth Quarter 2025 Results
GREENVILLE, S.C., Jan. 22, 2026 /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, 2025.
"We are very pleased to report our fourth quarter financial performance, which was our strongest of 2025 and clearly demonstrates the continued momentum we achieved throughout the year. We maintained solid loan growth, funded by even stronger growth in client deposits. Our full banking relationship strategy continues to drive improving financial returns, including an expanding net interest margin that increased 10 basis points from last quarter and 36 basis points over last year. We continue to strengthen our balance sheet with higher capital levels and have again achieved outstanding asset quality. Our team remains highly motivated and intentional about improving financial performance while delivering client service at levels that are second to none, and that commitment was clearly reflected in our results this quarter and throughout the year. We are fortunate to operate in some of the strongest markets in the Southeast and will continue expanding our teams to grow our business in the disciplined manner that has defined our success. While we remain mindful of broader economic conditions and factors impacting our business, our markets have proven to be resilient and offer tremendous growth opportunities that we intend to fully capitalize on," stated Art Seaver, Chief Executive Officer. "Looking ahead to the new year, we are optimistic and have high expectations for continued financial performance improvement. Our business pipeline is strong and our team is ready. We expect to build on our track record of attracting experienced bankers who share our commitment to exceptional client service and to supporting our local communities, which remains at the core of everything we do."
2025 Fourth Quarter Highlights
- Diluted earnings per common share of $1.21, up $0.14, or 13%, from Q3 2025, and up $0.51, or 73%, compared to Q4 2024
- Net interest margin of 2.72%, compared to 2.62% for Q3 2025 and 2.25% for Q4 2024
- Total loans of $3.8 billion, up 6% from Q4 2024; Total deposits of $3.7 billion, up 8% from Q4 2024; Core deposits of $2.9 billion, up 8% from Q4 2024
- Nonperforming assets to total assets of 0.32% and past due loans to total loans of 0.13%
- Book value per common share of $44.89 increased 3% from Q3 2025 and increased 11% compared to Q4 2024; Tangible Common Equity (TCE) ratio of 8.37%
| | | Quarter Ended | ||||
| | | December 31 | September 30 | June 30 | March 31 | December 31 |
| | | 2025 | 2025 | 2025 | 2025 | 2024 |
| Earnings ($ in thousands, except per share data): | | | | | | |
| Net income available to common shareholders | $ | 9,857 | 8,662 | 6,581 | 5,266 | 5,627 |
| Earnings per common share, diluted | | 1.21 | 1.07 | 0.81 | 0.65 | 0.70 |
| Total revenue(1) | | 31,834 | 31,129 | 28,629 | 26,497 | 25,237 |
| Net interest margin (tax-equivalent)(2) | | 2.72 % | 2.62 % | 2.50 % | 2.41 % | 2.25 % |
| Return on average assets(3) | | 0.90 % | 0.80 % | 0.63 % | 0.52 % | 0.54 % |
| Return on average equity(3) | | 10.77 % | 9.78 % | 7.71 % | 6.38 % | 6.80 % |
| Efficiency ratio(4) | | 57.85 % | 60.86 % | 67.54 % | 71.08 % | 73.48 % |
| Noninterest expense to average assets (3) | | 1.68 % | 1.74 % | 1.86 % | 1.87 % | 1.78 % |
| Balance Sheet ($ in thousands): | | | | | | |
| Total loans(5) | $ | 3,845,124 | 3,789,021 | 3,746,841 | 3,683,919 | 3,631,767 |
| Total deposits | | 3,716,803 | 3,676,417 | 3,636,329 | 3,620,886 | 3,435,765 |
| Core deposits(6) | | 2,884,163 | 2,884,604 | 2,867,193 | 2,820,194 | 2,661,736 |
| Total assets | | 4,403,494 | 4,358,589 | 4,308,067 | 4,284,311 | 4,087,593 |
| Book value per common share | | 44.89 | 43.51 | 42.23 | 41.33 | 40.47 |
| Loans to deposits | | 103.45 % | 103.06 % | 103.04 % | 101.74 % | 105.70 % |
| Holding Company Capital Ratios(7): | | | | | | |
| Total risk-based capital ratio | | 12.89 % | 12.79 % | 12.63 % | 12.69 % | 12.70 % |
| Tier 1 risk-based capital ratio | | 11.44 % | 11.26 % | 11.11 % | 11.15 % | 11.16 % |
| Leverage ratio | | 8.93 % | 8.72 % | 8.73 % | 8.79 % | 8.55 % |
| Common equity tier 1 ratio(8) | | 11.06 % | 10.88 % | 10.71 % | 10.75 % | 10.75 % |
| Tangible common equity(9) | | 8.37 % | 8.18 % | 8.02 % | 7.88 % | 8.08 % |
| Asset Quality Ratios: | | | | | | |
| Nonperforming assets/total assets | | 0.32 % | 0.27 % | 0.27 % | 0.26 % | 0.27 % |
| Classified assets/tier one capital plus allowance for credit losses | | 4.22 % | 3.90 % | 4.28 % | 4.24 % | 4.25 % |
| Accruing loans 30 days or more past due/loans(5) | | 0.13 % | 0.18 % | 0.14 % | 0.27 % | 0.18 % |
| Net charge-offs (recoveries)/average loans(5) (YTD annualized) | | 0.00 % | 0.00 % | 0.00 % | 0.00 % | 0.04 % |
| Allowance for credit losses/loans(5) | | 1.10 % | 1.10 % | 1.10 % | 1.10 % | 1.10 % |
| Allowance for credit losses/nonaccrual loans | | 305.65 % | 364.50 % | 362.35 % | 378.09 % | 366.94 % |
| [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) | | 2025 | 2025 | 2025 | 2025 | 2024 | | 2025 | 2024 |
| Interest income | | | | | | | | | |
| Loans | $ | 51,069 | 50,999 | 48,992 | 47,085 | 47,163 | | 198,145 | 186,863 |
| Investment securities | | 1,268 | 1,342 | 1,357 | 1,403 | 1,504 | | 5,370 | 5,812 |
| Federal funds sold | | 2,193 | 2,645 | 1,969 | 1,159 | 2,465 | | 7,966 | 8,537 |
| Total interest income | | 54,530 | 54,986 | 52,318 | 49,647 | 51,132 | | 211,481 | 201,212 |
| Interest expense | | | | | | | | | |
| Deposits | | 23,052 | 24,703 | 24,300 | 23,569 | 25,901 | | 95,624 | 108,774 |
| Borrowings | | 2,734 | 2,754 | 2,723 | 2,695 | 2,773 | | 10,906 | 11,216 |
| Total interest expense | | 25,786 | 27,457 | 27,023 | 26,264 | 28,674 | | 106,530 | 119,990 |
| Net interest income | | 28,744 | 27,529 | 25,295 | 23,383 | 22,458 | | 104,951 | 81,222 |
| Provision (reversal) for credit losses | | 650 | 850 | 700 | 750 | (200) | | 2,950 | 125 |
| Net interest income after provision for credit losses | | 28,094 | 26,679 | 24,595 | 22,633 | 22,658 | | 102,001 | 81,097 |
| Noninterest income | | | | | | | | | |
| Mortgage banking income | | 1,689 | 1,600 | 1,569 | 1,424 | 1,024 | | 6,282 | 5,560 |
| Service fees on deposit accounts | | 634 | 625 | 567 | 539 | 499 | | 2,365 | 1,764 |
| ATM and debit card income | | 638 | 601 | 586 | 552 | 607 | | 2,377 | 2,337 |
| Income from bank owned life insurance | | 450 | 439 | 413 | 403 | 407 | | 1,705 | 1,569 |
| Loss on sale of securities | | (515) | - | - | - | - | | (515) | - |
| Other income | | 194 | 335 | 199 | 196 | 242 | | 924 | 911 |
| Total noninterest income | | 3,090 | 3,600 | 3,334 | 3,114 | 2,779 | | 13,138 | 12,141 |
| Noninterest expense | | | | | | | | | |
| Compensation and benefits | | 10,529 | 11,299 | 11,674 | 11,304 | 10,610 | | 44,806 | 43,546 |
| Occupancy | | 2,465 | 2,447 | 2,523 | 2,548 | 2,587 | | 9,983 | 10,291 |
| Outside service and data processing costs | | 2,144 | 2,158 | 2,189 | 2,037 | 2,003 | | 8,528 | 7,741 |
| Insurance | | 994 | 961 | 910 | 1,010 | 1,077 | | 3,875 | 4,022 |
| Professional fees | | 732 | 605 | 609 | 509 | 656 | | 2,455 | 2,404 |
| Marketing | | 346 | 412 | 397 | 374 | 335 | | 1,529 | 1,412 |
| Other | | 1,206 | 1,064 | 1,034 | 1,054 | 1,276 | | 4,358 | 3,910 |
| Total noninterest expenses | | 18,416 | 18,946 | 19,336 | 18,836 | 18,544 | | 75,534 | 73,326 |
| Income before provision for income taxes | | 12,768 | 11,333 | 8,593 | 6,911 | 6,893 | | 39,605 | 19,912 |
| Income tax expense | | 2,911 | 2,671 | 2,012 | 1,645 | 1,266 | | 9,239 | 4,382 |
| Net income available to common shareholders | $ | 9,857 | 8,662 | 6,581 | 5,266 | 5,627 | | 30,366 | 15,530 |
| | | | | | | | | | |
| Earnings per common share – Basic | $ | 1.23 | 1.08 | 0.81 | 0.65 | 0.70 | | 3.77 | 1.92 |
| Earnings per common share – Diluted | | 1.21 | 1.07 | 0.81 | 0.65 | 0.70 | | 3.75 | 1.91 |
| Basic weighted average common shares | | 8,045 | 8,031 | 8,036 | 8,078 | 8,023 | | 8,048 | 8,081 |
| Diluted weighted average common shares | | 8,123 | 8,080 | 8,051 | 8,111 | 8,097 | | 8,091 | 8,117 |
| [Footnotes to table located on page 6] | |||||||||
Net income for the fourth quarter of 2025 was $9.9 million, or $1.21 per diluted share, a $1.2 million increase from the third quarter of 2025 and a $4.2 million increase from the fourth quarter of 2024. Net interest income increased $1.2 million during the fourth quarter of 2025, as compared to the third quarter of 2025, and increased $6.3 million, as compared to the fourth 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 $650 thousand for the fourth quarter of 2025 compared to a provision for credit losses of $850 thousand for the third quarter of 2025 and a $200 thousand reversal of the provision for credit losses for the fourth quarter of 2024. The provision during the fourth quarter of 2025 includes a $550 thousand provision for credit losses and a $100 thousand provision for the reserve for unfunded commitments. The provision for credit losses in the fourth quarter of 2025 was primarily driven by an increase in the impairment on individually evaluated loans.
Noninterest income was $3.1 million for the fourth quarter of 2025, compared to $3.6 million for the third quarter of 2025, and $2.8 million for the fourth quarter of 2024. Mortgage banking income continues to be the largest component of noninterest income at $1.7 million in fee revenue for the fourth quarter of 2025 and $1.0 million for the fourth quarter of 2024. The decrease in noninterest income from the previous quarter was driven by a $515 thousand loss on the sale of securities, as we executed transactions in our portfolio as part of our overall balance sheet and interest rate risk management strategies.
Noninterest expense for the fourth quarter of 2025 was $18.4 million, a $530 thousand decrease from the third quarter of 2025, and a $128 thousand decrease from the fourth quarter of 2024. The decrease in noninterest expense from the previous quarter was driven by a decrease in compensation and benefits primarily related to a reduction in group medical insurance expense, offset in part by an increase in professional fees and other noninterest expenses. The decrease in noninterest expense from the previous year related primarily to decreases in compensation and benefits, occupancy, and insurance expense, offset in part by an increase in outside service and data processing costs.
The effective tax rate was 22.8% for the fourth quarter of 2025, 23.6% for the third quarter of 2025, and 18.4% for the fourth 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 | |||||||
| | December 31, 2025 | September 30, 2025 | December 31, 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 | $ 218,291 | $ 2,193 | 3.99 % | $ 238,552 | $ 2,645 | 4.40 % | $ 203,065 | $ 2,465 | 4.83 % |
| Investment securities, taxable | 138,616 | 1,229 | 3.52 % | 141,143 | 1,307 | 3.67 % | 145,932 | 1,462 | 3.99 % |
| Investment securities, nontaxable(2) | 7,641 | 51 | 2.63 % | 7,811 | 45 | 2.31 % | 7,988 | 55 | 2.72 % |
| Loans(10) | 3,830,741 | 51,069 | 5.29 % | 3,783,885 | 50,999 | 5.35 % | 3,620,765 | 47,163 | 5.18 % |
| Total interest-earning assets | 4,195,289 | 54,542 | 5.16 % | 4,171,391 | 54,996 | 5.23 % | 3,977,750 | 51,145 | 5.12 % |
| Noninterest-earning assets | 151,515 | | | 150,552 | | | 158,779 | | |
| Total assets | $4,346,804 | | | $4,321,943 | | | $4,136,529 | | |
| Interest-bearing liabilities | | | | | | | | | |
| NOW accounts | $ 360,509 | 834 | 0.92 % | $ 329,301 | 746 | 0.90 % | $ 300,902 | 693 | 0.92 % |
| Savings & money market | 1,614,469 | 12,530 | 3.08 % | 1,599,710 | 13,509 | 3.35 % | 1,492,534 | 13,525 | 3.61 % |
| Time deposits | 937,557 | 9,688 | 4.10 % | 984,078 | 10,448 | 4.21 % | 992,335 | 11,683 | 4.68 % |
| Total interest-bearing deposits | 2,912,535 | 23,052 | 3.14 % | 2,913,089 | 24,703 | 3.36 % | 2,785,771 | 25,901 | 3.70 % |
| FHLB advances and other borrowings | 240,000 | 2,295 | 3.79 % | 240,087 | 2,296 | 3.79 % | 240,000 | 2,295 | 3.80 % |
| Subordinated debentures | 24,903 | 439 | 6.99 % | 24,903 | 458 | 7.30 % | 24,903 | 478 | 7.64 % |
| Total interest-bearing liabilities | 3,177,438 | 25,786 | 3.22 % | 3,178,079 | 27,457 | 3.43 % | 3,050,674 | 28,674 | 3.74 % |
| Noninterest-bearing liabilities | 806,235 | | | 792,575 | | | 756,636 | | |
| Shareholders' equity | 363,131 | | | 351,289 | | | 329,219 | | |
| Total liabilities and shareholders' equity | $4,346,804 | | | $4,321,943 | | | $4,136,529 | | |
| Net interest spread | | | 1.94 % | | | 1.80 % | | | 1.38 % |
| Net interest income (tax equivalent) / margin | | $28,756 | 2.72 % | | $27,539 | 2.62 % | | $22,471 | 2.25 % |
| Less: tax-equivalent adjustment(2) | | 12 | | | 10 | | | 13 | |
| Net interest income | | $28,744 | | | $27,529 | | | $22,458 | |
| [Footnotes to table located on page 6] | |||||||||
Net interest income was $28.7 million for the fourth quarter of 2025, a $1.2 million increase from the third quarter of 2025, driven by a $1.7 million decrease in interest expense. The decrease in interest expense was driven by a 22 basis point decrease in the cost of our interest-bearing deposits over the previous quarter. In comparison to the fourth quarter of 2024, net interest income increased $6.3 million, resulting primarily from $218 million growth in the average balances of our interest-earning assets combined with a 56 basis point decrease in the cost of interest-bearing deposits. Net interest margin, on a tax-equivalent basis, was 2.72% for the fourth quarter of 2025, a 10 basis point increase from 2.62% for the third quarter of 2025 and a 47 basis point increase from 2.25% for the fourth quarter of 2024.
| BALANCE SHEETS - Unaudited | |||||||||
| | | | | | | | |||
| | | Ending Balance | | Dec 31 2025 - | |||||
| | | Dec 31 | Sept 30 | Jun 30 | Mar 31 | Dec 31 | | Dec 31 2024 | |
| (in thousands, except per share data) | | 2025 | 2025 | 2025 | 2025 | 2024 | | % Change | |
| Assets | | | | | | | | | |
| Cash and cash equivalents: | | | | | | | | | |
| Cash and due from banks | $ | 27,821 | 24,600 | 25,184 | 24,904 | 22,553 | | 23.36 % | |
| Federal funds sold | | 183,473 | 178,534 | 180,834 | 263,612 | 128,452 | | 42.83 % | |
| Interest-bearing deposits with banks | | 58,289 | 79,769 | 65,014 | 16,541 | 11,858 | | 391.56 % | |
| Total cash and cash equivalents | | 269,583 | 282,903 | 271,032 | 305,057 | 162,863 | | 65.53 % | |
| Investment securities: | | | | | | | | | |
| Investment securities available for sale | | 127,730 | 131,040 | 128,867 | 131,290 | 132,127 | | (3.33 %) | |
| Other investments | | 20,063 | 20,066 | 19,906 | 19,927 | 19,490 | | 2.94 % | |
| Total investment securities | | 147,793 | 151,106 | 148,773 | 151,217 | 151,617 | | (2.52 %) | |
| Mortgage loans held for sale | | 11,569 | 6,906 | 10,739 | 11,524 | 4,565 | | 153.43 % | |
| Loans (5) | | 3,845,124 | 3,789,021 | 3,746,841 | 3,683,919 | 3,631,767 | | 5.87 % | |
| Less allowance for credit losses | | (42,280) | (41,799) | (41,285) | (40,687) | (39,914) | | 5.93 % | |
| Loans, net | | 3,802,844 | 3,747,222 | 3,705,556 | 3,643,232 | 3,591,853 | | 5.87 % | |
| Bank owned life insurance | | 55,775 | 55,324 | 54,886 | 54,473 | 54,070 | | 3.15 % | |
| Property and equipment, net | | 83,465 | 84,586 | 85,921 | 87,369 | 88,794 | | (6.00 %) | |
| Deferred income taxes | | 13,702 | 12,657 | 12,971 | 13,080 | 13,467 | | 1.75 % | |
| Other assets | | 18,763 | 17,885 | 18,189 | 18,359 | 20,364 | | (7.86 %) | |
| Total assets | $ | 4,403,494 | 4,358,589 | 4,308,067 | 4,284,311 | 4,087,593 | | 7.73 % | |
| Liabilities | | | | | | | | | |
| Deposits | $ | 3,716,803 | 3,676,417 | 3,636,329 | 3,620,886 | 3,435,765 | | 8.18 % | |
| FHLB Advances | | 240,000 | 240,000 | 240,000 | 240,000 | 240,000 | | 0.00 % | |
| Subordinated debentures | | 24,903 | 24,903 | 24,903 | 24,903 | 24,903 | | 0.00 % | |
| Other liabilities | | 53,131 | 60,921 | 61,373 | 60,924 | 56,481 | | (5.93 %) | |
| Total liabilities | | 4,034,837 | 4,002,241 | 3,962,605 | 3,946,713 | 3,757,149 | | 7.39 % | |
| Shareholders' equity | | | | | | | | | |
| Preferred stock - $.01 par value; 10,000,000 shares authorized | | - | - | - | - | - | | - | |
| Common Stock - $.01 par value; 10,000,000 shares authorized | | 82 | 82 | 82 | 82 | 82 | | - | |
| Nonvested restricted stock | | (1,338) | (1,929) | (2,774) | (3,372) | (3,884) | | (65.55 %) | |
| Additional paid-in capital | | 125,924 | 125,035 | 124,839 | 124,561 | 124,641 | | 1.03 % | |
| Accumulated other comprehensive loss | | (7,454) | (8,426) | (9,609) | (10,016) | (11,472) | | (35.02 %) | |
| Retained earnings | | 251,443 | 241,586 | 232,924 | 226,343 | 221,077 | | 13.74 % | |
| Total shareholders' equity | | 368,657 | 356,348 | 345,462 | 337,598 | 330,444 | | 11.56 % | |
| Total liabilities and shareholders' equity | $ | 4,403,494 | 4,358,589 | 4,308,067 | 4,284,311 | 4,087,593 | | 7.73 % | |
| Common Stock | | | | | | | | | |
| Book value per common share | $ | 44.89 | 43.51 | 42.23 | 41.33 | 40.47 | | 10.92 % | |
| Stock price: | | | | | | | | | |
| High | | 55.50 | 45.54 | 38.51 | 38.50 | 44.86 | | 23.72 % | |
| Low | | 41.15 | 38.74 | 30.61 | 31.88 | 33.26 | | 23.72 % | |
| Period end | | 51.52 | 44.12 | 38.03 | 32.92 | 39.75 | | 29.61 % | |
| Common shares outstanding | | 8,213 | 8,189 | 8,181 | 8,169 | 8,165 | | 0.59 % | |
| [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) | | 2025 | 2025 | 2025 | 2025 | 2024 |
| Nonperforming Assets | | | | | | |
| Commercial | | | | | | |
| Owner occupied RE | $ | 259 | 262 | - | - | - |
| Non-owner occupied RE | | 6,917 | 6,911 | 6,941 | 6,950 | 7,641 |
| Commercial business | | 189 | 195 | 717 | 1,087 | 1,016 |
| Consumer | | | | | | |
| Real estate | | 5,763 | 3,394 | 3,028 | 2,414 | 1,908 |
| Home equity | | 705 | 705 | 708 | 310 | 312 |
| Total nonaccrual loans | | 13,833 | 11,467 | 11,394 | 10,761 | 10,877 |
| Other real estate owned | | 275 | 275 | 275 | 275 | - |
| Total nonperforming assets | $ | 14,108 | 11,742 | 11,669 | 11,036 | 10,877 |
| Nonperforming assets as a percentage of: | | | | | | |
| Total assets | | 0.32 % | 0.27 % | 0.27 % | 0.26 % | 0.27 % |
| Total loans | | 0.37 % | 0.31 % | 0.31 % | 0.30 % | 0.30 % |
| Classified assets/tier 1 capital plus allowance for credit losses | | 4.22 % | 3.90 % | 4.28 % | 4.24 % | 4.25 % |
| | | Quarter Ended | ||||
| | | December 31 | September 30 | June 30 | March 31 | December 31 |
| (dollars in thousands) | | 2025 | 2025 | 2025 | 2025 | 2024 |
| Allowance for Credit Losses | | | | | | |
| Balance, beginning of period | $ | 41,799 | 41,285 | 40,687 | 39,914 | 40,166 |
| Loans charged-off | | (150) | (55) | (68) | (78) | (143) |
| Recoveries of loans previously charged-off | | 81 | 69 | 16 | 101 | 141 |
| Net loans (charged-off) recovered | | (69) | 14 | (52) | 23 | (2) |
| Provision for (reversal of) credit losses | | 550 | 500 | 650 | 750 | (250) |
| Balance, end of period | $ | 42,280 | 41,799 | 41,285 | 40,687 | 39,914 |
| Allowance for credit losses to gross loans | | 1.10 % | 1.10 % | 1.10 % | 1.10 % | 1.10 % |
| Allowance for credit losses to nonaccrual loans | | 305.65 % | 364.50 % | 362.35 % | 378.09 % | 366.94 % |
| Net charge-offs (recoveries) to average loans QTD (annualized) | | 0.01 % | 0.00 % | 0.01 % | 0.00 % | 0.00 % |
Total nonperforming assets were $14.1 million at December 31, 2025, representing 0.32% of total assets compared to 0.27% for the third quarter of 2025 and 0.27% for the fourth quarter of 2024. In addition, the classified asset ratio increased to 4.22% for the fourth quarter of 2025 from 3.90% in the third quarter of 2025 and decreased from 4.25% in the fourth quarter of 2024.
At December 31, 2025, the allowance for credit losses was $42.3 million, or 1.10% of total loans, compared to $41.8 million, or 1.10% of total loans at September 30, 2025, and $39.9 million, or 1.10% of total loans, at December 31, 2024. We had net charge-offs of $69 thousand for the fourth quarter of 2025, compared to net recoveries of $14 thousand for the third quarter of 2025 and net charge-offs of $2 thousand for the fourth quarter of 2024. There was a provision for credit losses of $550 thousand for the fourth quarter of 2025, compared to a provision for credit losses of $500 thousand for the third quarter of 2025 and a reversal of the provision for credit losses of $250 thousand for the fourth quarter of 2024. The provision during the fourth quarter of 2025 was primarily driven by additional impairment on our individually evaluated loans.
| LOAN COMPOSITION - Unaudited | ||||||
| | ||||||
| | | Quarter Ended | ||||
| | | December 31 | September 30 | June 30 | March 31 | December 31 |
| (dollars in thousands) | | 2025 | 2025 | 2025 | 2025 | 2024 |
| Commercial | | | | | | |
| Owner occupied RE | $ | 736,979 | 705,383 | 686,424 | 673,865 | 651,597 |
| Non-owner occupied RE | | 956,812 | 943,304 | 939,163 | 926,246 | 924,367 |
| Construction | | 63,666 | 71,928 | 68,421 | 90,021 | 103,204 |
| Business | | 619,667 | 604,411 | 589,661 | 561,337 | 556,117 |
| Total commercial loans | | 2,377,124 | 2,325,026 | 2,283,669 | 2,251,469 | 2,235,285 |
| Consumer | | | | | | |
| Real estate | | 1,153,285 | 1,159,693 | 1,164,187 | 1,147,357 | 1,128,629 |
| Home equity | | 248,685 | 239,996 | 234,608 | 223,061 | 204,897 |
| Construction | | 24,997 | 25,842 | 25,210 | 23,540 | 20,874 |
| Other | | 41,033 | 38,464 | 39,167 | 38,492 | 42,082 |
| Total consumer loans | | 1,468,000 | 1,463,995 | 1,463,172 | 1,432,450 | 1,396,482 |
| Total gross loans, net of deferred fees | | 3,845,124 | 3,789,021 | 3,746,841 | 3,683,919 | 3,631,767 |
| Less—allowance for credit losses | | (42,280) | (41,799) | (41,285) | (40,687) | (39,914) |
| Total loans, net | $ | 3,802,844 | 3,747,222 | 3,705,556 | 3,643,232 | 3,591,853 |
| DEPOSIT COMPOSITION - Unaudited | ||||||
| | ||||||
| | | Quarter Ended | ||||
| | | December 31 | September 30 | June 30 | March 31 | December 31 |
| (dollars in thousands) | | 2025 | 2025 | 2025 | 2025 | 2024 |
| Non-interest bearing | $ | 732,287 | 736,518 | 761,492 | 671,609 | 683,081 |
| Interest bearing: | | | | | | |
| NOW accounts | | 423,270 | 343,615 | 341,903 | 371,052 | 314,588 |
| Money market accounts | | 1,573,039 | 1,572,738 | 1,537,400 | 1,563,181 | 1,438,530 |
| Savings | | 29,470 | 29,381 | 32,334 | 32,945 | 31,976 |
| Time, less than $250,000 | | 180,783 | 202,353 | 194,064 | 181,407 | 193,562 |
| Time and out-of-market deposits, $250,000 and over | | 777,954 | 791,812 | 769,136 | 800,692 | 774,028 |
| Total deposits | $ | 3,716,803 | 3,676,417 | 3,636,329 | 3,620,886 | 3,435,765 |
| 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 $777,954,000. | |
| (7) December 31, 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
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SOURCE Southern First Bancshares, Inc.
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