GREENVILLE, S.C., Jan. 24, 2023 /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, 2022.
"Southern First continues to attract talented bankers, and clients are moving their relationships to Southern First at a record pace," stated Art Seaver, the company's Chief Executive Officer. "In the fourth quarter of 2022, our team generated the largest loan growth quarter in our company's history. While this transitional interest rate cycle of the Federal Reserve is weakening our current margin, we continue to grow book value and are excited about our momentum as we head into the new year."
2022 Fourth Quarter Highlights
- Net income was $5.5 million, compared to $12.0 million for Q4 2021
- Diluted earnings per common share were $0.68 per share, compared to $1.49 for Q4 2021
- Total loans increased 31% to $3.3 billion, compared to $2.5 billion at Q4 2021
- Total deposits increased 22% to $3.1 billion at Q4 2022, compared to $2.6 billion at Q4 2021
- Book value per common share increased to $36.76, or 5%, over Q4 2021
|
|
Quarter Ended
|
|
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
Earnings ($ in thousands, except per share data):
|
|
|
|
|
|
|
|
Net income available to common shareholders
|
$
|
5,492
|
8,413
|
7,240
|
7,970
|
12,005
|
|
Earnings per common share, diluted
|
|
0.68
|
1.04
|
0.90
|
0.98
|
1.49
|
|
Total revenue(1)
|
|
25,826
|
28,134
|
27,149
|
26,091
|
26,194
|
|
Net interest margin (tax-equivalent)(2)
|
|
2.88 %
|
3.19 %
|
3.35 %
|
3.37 %
|
3.35 %
|
|
Return on average assets(3)
|
|
0.63 %
|
1.00 %
|
0.92 %
|
1.10 %
|
1.66 %
|
|
Return on average equity(3)
|
|
7.44 %
|
11.57 %
|
10.31 %
|
11.60 %
|
17.61 %
|
|
Efficiency ratio(4)
|
|
63.55 %
|
57.03 %
|
58.16 %
|
56.28 %
|
56.25 %
|
|
Noninterest expense to average assets (3)
|
|
1.87 %
|
1.92 %
|
2.02 %
|
2.03 %
|
2.06 %
|
|
Balance Sheet ($ in thousands):
|
|
|
|
|
|
|
|
Total loans(5)
|
$
|
3,273,363
|
3,030,027
|
2,845,205
|
2,660,675
|
2,489,877
|
|
Total deposits
|
|
3,133,864
|
3,001,452
|
2,870,158
|
2,708,174
|
2,563,826
|
|
Core deposits(6)
|
|
2,759,112
|
2,723,592
|
2,588,283
|
2,541,113
|
2,479,412
|
|
Total assets
|
|
3,691,981
|
3,439,669
|
3,287,663
|
3,073,234
|
2,925,548
|
|
Book value per common share
|
|
36.76
|
35.99
|
35.39
|
34.90
|
35.07
|
|
Loans to deposits
|
|
104.45 %
|
100.95 %
|
99.13 %
|
98.25 %
|
97.12 %
|
|
Holding Company Capital Ratios(7):
|
|
|
|
|
|
|
|
Total risk-based capital ratio
|
|
12.91 %
|
13.58 %
|
13.97 %
|
14.37 %
|
14.90 %
|
|
Tier 1 risk-based capital ratio
|
|
10.88 %
|
11.49 %
|
11.83 %
|
12.18 %
|
12.65 %
|
|
Leverage ratio
|
|
9.17 %
|
9.44 %
|
9.71 %
|
10.12 %
|
10.18 %
|
|
Common equity tier 1 ratio(8)
|
|
10.44 %
|
11.02 %
|
11.33 %
|
11.65 %
|
12.09 %
|
|
Tangible common equity(9)
|
|
7.98 %
|
8.37 %
|
8.60 %
|
9.06 %
|
9.50 %
|
|
Asset Quality Ratios:
|
|
|
|
|
|
|
|
Nonperforming assets/ total assets
|
|
0.07 %
|
0.08 %
|
0.09 %
|
0.15 %
|
0.17 %
|
|
Classified assets/tier one capital plus allowance for credit losses
|
|
4.71 %
|
5.24 %
|
7.29 %
|
7.83 %
|
12.61 %
|
|
Loans 30 days or more past due/ loans(5)
|
|
0.11 %
|
0.07 %
|
0.10 %
|
0.13 %
|
0.09 %
|
|
Net charge-offs (recoveries)/average loans(5) (YTD annualized)
|
|
(0.05 %)
|
(0.06 %)
|
0.02 %
|
0.00 %
|
0.06 %
|
|
Allowance for credit losses/loans(5)
|
|
1.18 %
|
1.20 %
|
1.20 %
|
1.24 %
|
1.22 %
|
|
Allowance for credit losses/nonaccrual loans
|
|
1,470.74 %
|
1,388.87 %
|
1,166.70 %
|
726.88 %
|
625.16 %
|
|
[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)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
33,939
|
29,752
|
26,610
|
23,931
|
23,661
|
|
114,233
|
91,599
|
|
Investment securities
|
|
562
|
506
|
448
|
474
|
410
|
|
1,990
|
1,335
|
|
Federal funds sold
|
|
525
|
676
|
180
|
59
|
66
|
|
1,439
|
233
|
|
Total interest income
|
|
35,026
|
30,934
|
27,238
|
24,464
|
24,137
|
|
117,662
|
93,167
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
10,329
|
5,021
|
1,844
|
908
|
900
|
|
18,102
|
3,909
|
|
Borrowings
|
|
578
|
459
|
510
|
392
|
380
|
|
1,939
|
1,526
|
|
Total interest expense
|
|
10,907
|
5,480
|
2,354
|
1,300
|
1,280
|
|
20,041
|
5,435
|
|
Net interest income
|
|
24,119
|
25,454
|
24,884
|
23,164
|
22,857
|
|
97,621
|
87,732
|
|
Provision (reversal) for loan losses
|
|
2,325
|
950
|
1,775
|
1,105
|
(4,200)
|
|
6,155
|
(12,400)
|
|
Net interest income after provision for loan losses
|
|
21,794
|
24,504
|
23,109
|
22,059
|
27,057
|
|
91,466
|
100,132
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking income
|
|
291
|
1,230
|
1,184
|
1,494
|
1,931
|
|
4,198
|
11,376
|
|
Service fees on deposit accounts
|
|
187
|
194
|
209
|
191
|
200
|
|
782
|
757
|
|
ATM and debit card income
|
|
575
|
559
|
563
|
528
|
560
|
|
2,225
|
2,092
|
|
Income from bank owned life insurance
|
|
344
|
315
|
315
|
315
|
312
|
|
1,289
|
1,231
|
|
Loss on disposal of fixed assets
|
|
-
|
-
|
(394)
|
-
|
-
|
|
(394)
|
-
|
|
Other income
|
|
310
|
382
|
388
|
399
|
334
|
|
1,480
|
1,645
|
|
Total noninterest income
|
|
1,707
|
2,680
|
2,265
|
2,927
|
3,337
|
|
9,580
|
17,101
|
|
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
9,576
|
9,843
|
9,915
|
9,456
|
9,208
|
|
38,790
|
36,103
|
|
Occupancy
|
|
2,666
|
2,442
|
2,219
|
1,778
|
2,081
|
|
9,105
|
6,956
|
|
Other real estate owned expenses
|
|
-
|
-
|
-
|
-
|
-
|
|
-
|
385
|
|
Outside service and data processing costs
|
|
1,521
|
1,529
|
1,528
|
1,533
|
1,395
|
|
6,112
|
5,468
|
|
Insurance
|
|
551
|
507
|
367
|
260
|
342
|
|
1,686
|
1,149
|
|
Professional fees
|
|
788
|
555
|
693
|
599
|
682
|
|
2,635
|
2,589
|
|
Marketing
|
|
282
|
338
|
329
|
269
|
260
|
|
1,216
|
905
|
|
Other
|
|
1,029
|
832
|
737
|
790
|
767
|
|
3,389
|
2,875
|
|
Total noninterest expenses
|
|
16,413
|
16,046
|
15,788
|
14,685
|
14,735
|
|
62,933
|
56,430
|
|
Income before provision for income taxes
|
|
7,088
|
11,138
|
9,586
|
10,301
|
15,659
|
|
38,113
|
60,803
|
|
Income tax expense
|
|
1,596
|
2,725
|
2,346
|
2,331
|
3,654
|
|
8,998
|
14,092
|
|
Net income available to common shareholders
|
$
|
5,492
|
8,413
|
7,240
|
7,970
|
12,005
|
|
29,115
|
46,711
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share – Basic
|
$
|
0.69
|
1.06
|
0.91
|
1.00
|
1.52
|
|
3.66
|
5.96
|
|
Earnings per common share – Diluted
|
|
0.68
|
1.04
|
0.90
|
0.98
|
1.49
|
|
3.61
|
5.85
|
|
Basic weighted average common shares
|
|
7,971
|
7,972
|
7,945
|
7,932
|
7,877
|
|
7,958
|
7,844
|
|
Diluted weighted average common shares
|
|
8,071
|
8,065
|
8,075
|
8,096
|
8,057
|
|
8,072
|
7,989
|
|
[Footnotes to table located on page 6]
|
|
Net income for the fourth quarter of 2022 was $5.5 million, or $0.68 per diluted share, a $2.9 million decrease from the third quarter of 2022 and a $6.5 million decrease from the fourth quarter of 2021. Net interest income decreased $1.3 million for the fourth quarter of 2022, compared to the third quarter of 2022, and increased $1.3 million, or 5.5%, compared to the fourth quarter of 2021. The decrease in net interest income from the prior quarter was driven by an increase in interest expense on our deposit accounts related to the Federal Reserve's 425-basis point increase in the federal funds rate. The increase in net interest income from the fourth quarter of 2021 related to growth in our loan portfolio, partially offset by the higher interest expense on our deposit accounts.
The provision for credit losses was $2.3 million for the fourth quarter of 2022, compared to $950 thousand for the third quarter of 2022 and a reversal of $4.2 million for the fourth quarter of 2021. The provision expense during the fourth quarter of 2022, calculated under the Current Expected Credit Loss ("CECL") methodology adopted effective January 1, 2022, includes a $2.3 million provision for loan losses and a $25 thousand provision for unfunded commitments. The increased provision during the fourth quarter was driven by $243.3 million of loan growth. The reversal in the provision during the fourth quarter of 2021 was driven by improvement in economic conditions after the onset of the pandemic.
Noninterest income totaled $1.7 million for the fourth quarter of 2022, a $973 thousand decrease from the third quarter of 2022 and a $1.6 million decrease from the fourth quarter of 2021. In prior quarters, mortgage banking income has been the largest component of our noninterest income; however, due to lower mortgage origination volume during the past 12 months, combined with our strategy to keep a larger percentage of these loans in our portfolio, mortgage banking income decreased to $291 thousand from prior quarter income of $1.2 million and from income of $1.9 million for the prior year.
Noninterest expense for the fourth quarter of 2022 was $16.4 million, a $367 thousand increase from the third quarter of 2022, and a $1.7 million increase from the fourth quarter of 2021. The increase in noninterest expense from the previous quarter was driven by increases in occupancy, professional fees, and other noninterest expenses, while the increase from the prior year related to increases in compensation and benefits, occupancy, insurance and other noninterest expenses. In comparison to the prior quarter, the increases in occupancy, professional fees and other noninterest expenses were due to higher property tax expenses, an increase in legal and accounting/audit costs, as well as an increase in FDIC insurance premiums. Compensation and benefits expense increased from the prior year primarily due to the hiring of new team members, combined with annual salary increases, while the increase in occupancy expense relates to costs associated with the relocation of our headquarters. In addition, our insurance costs increased during 2022 due to higher FDIC insurance premiums and our noninterest expense increase reflects higher travel and entertainment costs as well as an increase in fraud losses.
Our effective tax rate was 22.5% for the fourth quarter, a decrease from 24.5% for the prior quarter of 2022 and 23.3% for the fourth quarter of 2021. The lower tax rate in the fourth quarter of 2022 relates to the greater impact of our tax-exempt and equity compensation transactions on our tax rate during the quarter.
|
NET INTEREST INCOME AND MARGIN - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
December 31, 2022
|
September 30, 2022
|
December 31, 2021
|
|
(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
|
$ 60,176
|
$ 525
|
3.46 %
|
$ 122,071
|
$ 676
|
2.20 %
|
$ 138,103
|
$ 66
|
0.19 %
|
|
Investment securities, taxable
|
86,594
|
515
|
2.36 %
|
91,462
|
449
|
1.95 %
|
107,181
|
351
|
1.30 %
|
|
Investment securities, nontaxable(2)
|
9,987
|
61
|
2.42 %
|
10,160
|
74
|
2.89 %
|
11,695
|
75
|
2.56 %
|
|
Loans(10)
|
3,165,061
|
33,939
|
4.25 %
|
2,941,350
|
29,752
|
4.01 %
|
2,452,677
|
23,661
|
3.83 %
|
|
Total interest-earning assets
|
3,321,818
|
35,040
|
4.18 %
|
3,165,043
|
30,951
|
3.88 %
|
2,709,656
|
24,153
|
3.54 %
|
|
Noninterest-earning assets
|
162,924
|
|
|
159,233
|
|
|
153,284
|
|
|
|
Total assets
|
$3,484,742
|
|
|
$3,324,726
|
|
|
$2,862,940
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
NOW accounts
|
$ 343,541
|
379
|
0.44 %
|
$ 361,500
|
178
|
0.20 %
|
$ 330,067
|
64
|
0.08 %
|
|
Savings & money market
|
1,529,532
|
7,657
|
1.99 %
|
1,417,181
|
3,663
|
1.03 %
|
1,278,930
|
637
|
0.20 %
|
|
Time deposits
|
405,907
|
2,293
|
2.24 %
|
361,325
|
1,180
|
1.30 %
|
155,708
|
199
|
0.51 %
|
|
Total interest-bearing deposits
|
2,278,980
|
10,329
|
1.80 %
|
2,140,006
|
5,021
|
0.93 %
|
1,764,705
|
900
|
0.20 %
|
|
FHLB advances and other borrowings
|
7,594
|
81
|
4.23 %
|
1,357
|
10
|
2.92 %
|
-
|
-
|
- %
|
|
Subordinated debentures
|
36,197
|
497
|
5.45 %
|
36,169
|
449
|
4.93 %
|
36,089
|
380
|
4.18 %
|
|
Total interest-bearing liabilities
|
2,322,771
|
10,907
|
1.86 %
|
2,177,532
|
5,480
|
1.00 %
|
1,800,794
|
1,280
|
0.28 %
|
|
Noninterest-bearing liabilities
|
869,314
|
|
|
858,202
|
|
|
791,700
|
|
|
|
Shareholders' equity
|
292,657
|
|
|
288,542
|
|
|
270,446
|
|
|
|
Total liabilities and shareholders' equity
|
$3,484,742
|
|
|
$3,324,276
|
|
|
$2,862,940
|
|
|
|
Net interest spread
|
|
|
2.32 %
|
|
|
2.88 %
|
|
|
3.26 %
|
|
Net interest income (tax equivalent) / margin
|
|
$24,133
|
2.88 %
|
|
$25,471
|
3.19 %
|
|
$22,873
|
3.35 %
|
|
Less: tax-equivalent adjustment(2)
|
|
14
|
|
|
17
|
|
|
16
|
|
|
Net interest income
|
|
$24,119
|
|
|
$25,454
|
|
|
$22,857
|
|
|
[Footnotes to table located on page 6]
|
|
|
|
Net interest income was $24.1 million for the fourth quarter of 2022, a $1.3 million decrease from the third quarter, driven by a $5.4 million increase in interest expense, partially offset by a $4.1 million increase in interest income, on a taxable basis. The increase in interest expense was driven by $139.0 million growth in average interest-bearing deposit balances at an average rate of 1.80%, an 87-basis points increase over the previous quarter, partially offset by $223.7 million growth in average loan balances at a yield of 4.25%, an increase of 24-basis points from the third quarter of 2022. In comparison to the fourth quarter of 2021, net interest income increased $1.3 million, resulting primarily from $712.4 million growth in average loan balances during 2022, combined with a 42-basis point increase in loan yield. Our net interest margin, on a tax-equivalent basis, was 2.88% for the fourth quarter of 2022, a 31-basis point decrease from 3.19% from the third quarter of 2022 and a 47-basis point decrease from 3.35% for the fourth quarter of 2021. As a result of the Federal Reserve's 425-basis point interest rate hikes during 2022, the yield on our interest-earning assets has increased by 64-basis points during the fourth quarter of 2022 in comparison to the fourth quarter of 2021. However, the rate on our interest-bearing liabilities, specifically our interest-bearing deposits, has increased by 158-basis points during the same time period, resulting in the lower net interest margin during the fourth quarter of 2022.
|
BALANCE SHEETS - Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
|
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
|
|
(in thousands, except per share data)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
$
|
18,788
|
16,530
|
21,090
|
20,992
|
21,770
|
|
|
Federal funds sold
|
|
101,277
|
139,544
|
124,462
|
95,093
|
86,882
|
|
|
Interest-bearing deposits with banks
|
|
50,809
|
4,532
|
36,538
|
33,131
|
58,557
|
|
|
Total cash and cash equivalents
|
|
170,874
|
160,606
|
182,090
|
149,216
|
167,209
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
Investment securities available for sale
|
|
93,347
|
91,521
|
98,991
|
106,978
|
120,281
|
|
|
Other investments
|
|
10,833
|
5,449
|
5,065
|
4,104
|
4,021
|
|
|
Total investment securities
|
|
104,180
|
96,970
|
104,056
|
111,082
|
124,302
|
|
|
Mortgage loans held for sale
|
|
3,917
|
9,243
|
18,329
|
17,840
|
13,556
|
|
|
Loans (5)
|
|
3,273,363
|
3,030,027
|
2,845,205
|
2,660,675
|
2,489,877
|
|
|
Less allowance for credit losses
|
|
(38,639)
|
(36,317)
|
(34,192)
|
(32,944)
|
(30,408)
|
|
|
Loans, net
|
|
3,234,724
|
2,993,710
|
2,811,013
|
2,627,731
|
2,459,469
|
|
|
Bank owned life insurance
|
|
51,122
|
50,778
|
50,463
|
50,148
|
49,833
|
|
|
Property and equipment, net
|
|
99,183
|
99,530
|
96,674
|
95,129
|
92,370
|
|
|
Deferred income taxes
|
|
12,522
|
18,425
|
15,078
|
10,635
|
8,397
|
|
|
Other assets
|
|
15,459
|
10,407
|
9,960
|
10,859
|
10,412
|
|
|
Total assets
|
$
|
3,691,981
|
3,439,669
|
3,287,663
|
3,072,640
|
2,925,548
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Deposits
|
$
|
3,133,864
|
3,001,452
|
2,870,158
|
2,708,174
|
2,563,826
|
|
|
FHLB Advances
|
|
175,000
|
60,000
|
50,000
|
-
|
-
|
|
|
Subordinated debentures
|
|
36,214
|
36,187
|
36,160
|
36,133
|
36,106
|
|
|
Other liabilities
|
|
52,391
|
54,245
|
48,708
|
49,809
|
47,715
|
|
|
Total liabilities
|
|
3,397,469
|
3,151,884
|
3,005,026
|
2,794,116
|
2,647,647
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
Preferred stock - $.01 par value; 10,000,000 shares authorized
|
|
-
|
-
|
-
|
-
|
-
|
|
|
Common Stock - $.01 par value; 10,000,000 shares authorized
|
|
80
|
80
|
80
|
80
|
79
|
|
|
Nonvested restricted stock
|
|
(3,306)
|
(3,348)
|
(3,230)
|
(3,425)
|
(1,435)
|
|
|
Additional paid-in capital
|
|
119,027
|
118,433
|
117,714
|
117,286
|
114,226
|
|
|
Accumulated other comprehensive loss
|
|
(13,410)
|
(14,009)
|
(10,143)
|
(6,393)
|
(740)
|
|
|
Retained earnings
|
|
192,121
|
186,629
|
178,216
|
170,976
|
165,771
|
|
|
Total shareholders' equity
|
|
294,512
|
287,785
|
282,637
|
278,524
|
277,901
|
|
|
Total liabilities and shareholders' equity
|
$
|
3,691,981
|
3,439,669
|
3,287,663
|
3,072,640
|
2,925,548
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
Book value per common share
|
$
|
36.76
|
35.99
|
35.39
|
34.90
|
35.07
|
|
|
Stock price:
|
|
|
|
|
|
|
|
|
High
|
|
49.50
|
47.16
|
50.09
|
65.02
|
64.73
|
|
|
Low
|
|
41.46
|
41.66
|
42.25
|
50.84
|
52.73
|
|
|
Period end
|
|
45.75
|
41.66
|
43.59
|
50.84
|
62.49
|
|
|
Common shares outstanding
|
|
8,011
|
7,997
|
7,986
|
7,981
|
7,925
|
|
|
[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)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
Nonperforming Assets
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
Non-owner occupied RE
|
$
|
247
|
253
|
259
|
265
|
270
|
|
Commercial business
|
|
182
|
79
|
-
|
-
|
-
|
|
Consumer
|
|
|
|
|
|
|
|
Real estate
|
|
207
|
-
|
183
|
739
|
989
|
|
Home equity
|
|
195
|
197
|
200
|
815
|
653
|
|
Nonaccruing troubled debt restructurings
|
|
1,796
|
2,086
|
2,289
|
2,713
|
2,952
|
|
Total nonaccrual loans
|
|
2,627
|
2,615
|
2,931
|
4,532
|
4,864
|
|
Other real estate owned
|
|
-
|
-
|
-
|
-
|
-
|
|
Total nonperforming assets
|
$
|
2,627
|
2,615
|
2,931
|
4,532
|
4,864
|
|
Nonperforming assets as a percentage of:
|
|
|
|
|
|
|
|
Total assets
|
|
0.07 %
|
0.08 %
|
0.09 %
|
0.15 %
|
0.17 %
|
|
Total loans
|
|
0.08 %
|
0.09 %
|
0.10 %
|
0.17 %
|
0.20 %
|
|
Accruing troubled debt restructurings (TDRs)
|
$
|
4,503
|
4,683
|
3,558
|
3,241
|
3,299
|
|
Classified assets/tier 1 capital plus allowance for credit losses
|
|
4.71 %
|
5.24 %
|
7.29 %
|
7.83 %
|
12.61 %
|
|
|
|
|
|
Quarter Ended
|
|
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
|
(dollars in thousands)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
Allowance for Credit Losses
|
|
|
|
|
|
|
|
Balance, beginning of period
|
$
|
36,317
|
34,192
|
32,944
|
30,408
|
36,075
|
|
CECL adjustment
|
|
-
|
-
|
-
|
1,500
|
-
|
|
Loans charged-off
|
|
-
|
-
|
(316)
|
(169)
|
(1,509)
|
|
Recoveries of loans previously charged-off
|
|
22
|
1,600
|
39
|
180
|
42
|
|
Net loans (charged-off) recovered
|
|
22
|
1,600
|
(277)
|
11
|
(1,467)
|
|
Provision for credit losses
|
|
2,300
|
525
|
1,525
|
1,025
|
(4,200)
|
|
Balance, end of period
|
$
|
38,639
|
36,317
|
34,192
|
32,944
|
30,408
|
|
Allowance for credit losses to gross loans
|
|
1.18 %
|
1.20 %
|
1.20 %
|
1.24 %
|
1.22 %
|
|
Allowance for credit losses to nonaccrual loans
|
|
1,470.74 %
|
1,388.87 %
|
1,166.70 %
|
726.88 %
|
625.22 %
|
|
Net charge-offs to average loans QTD (annualized)
|
|
0.00 %
|
(0.22 %)
|
0.04 %
|
0.00 %
|
0.24 %
|
|
Total nonperforming assets remained at $2.6 million for the fourth quarter of 2022, representing 0.07% of total assets, compared to 0.08% in the third quarter of 2022. During the fourth quarter of 2022, our classified asset ratio improved to 4.71% from 12.61% in the fourth quarter of 2021. The improvement over the fourth quarter of 2021 was primarily the result of six hotel loans, or $18.5 million in the aggregate, we upgraded from substandard during 2022.
Effective January 1, 2022, we early adopted the CECL methodology for estimating credit losses, which resulted in an increase of $1.5 million to our allowance for credit losses and an increase of $2.0 million to our reserve for unfunded commitments. The tax-effected impact of these two items totaled $2.8 million and was recorded as an adjustment to our retained earnings as of January 1, 2022.
On December 31, 2022, the allowance for credit losses was $38.6 million, or 1.18% of total loans, compared to $36.3 million, or 1.20% of total loans, at September 30, 2022, and $30.4 million, or 1.22% of total loans, at December 31, 2021. We had negligible net recoveries of $22 thousand for the fourth quarter of 2022 compared to net recoveries of $1.6 million for the third quarter of 2022 and net charge-offs of $1.5 million for the fourth quarter of 2021. There was a provision for credit losses of $2.3 million for the fourth quarter of 2022 compared to a provision of $525 thousand for the third quarter of 2022 and a reversal of $4.2 million for the fourth quarter of 2021.
|
LOAN COMPOSITION - Unaudited
|
|
|
|
Quarter Ended
|
|
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
|
(dollars in thousands)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
Commercial
|
|
|
|
|
|
|
|
Owner occupied RE
|
$
|
612,901
|
572,972
|
551,544
|
527,776
|
488,965
|
|
Non-owner occupied RE
|
|
862,579
|
799,569
|
741,263
|
705,811
|
666,833
|
|
Construction
|
|
109,726
|
85,850
|
84,612
|
75,015
|
64,425
|
|
Business
|
|
468,112
|
419,312
|
389,790
|
352,932
|
333,049
|
|
Total commercial loans
|
|
2,053,318
|
1,877,703
|
1,767,209
|
1,661,534
|
1,553,272
|
|
Consumer
|
|
|
|
|
|
|
|
Real estate
|
|
931,278
|
873,471
|
812,130
|
745,667
|
694,401
|
|
Home equity
|
|
179,300
|
171,904
|
161,512
|
155,678
|
154,839
|
|
Construction
|
|
80,415
|
77,798
|
76,878
|
72,627
|
59,846
|
|
Other
|
|
29,052
|
29,151
|
27,476
|
25,169
|
27,519
|
|
Total consumer loans
|
|
1,220,045
|
1,152,324
|
1,077,996
|
999,141
|
936,605
|
|
Total gross loans, net of deferred fees
|
|
3,273,363
|
3,030,027
|
2,845,205
|
2,660,675
|
2,489,877
|
|
Less—allowance for credit losses
|
|
(38,639)
|
(36,317)
|
(34,192)
|
(32,944)
|
(30,408)
|
|
Total loans, net
|
$
|
3,234,724
|
2,993,710
|
2,811,013
|
2,627,731
|
2,459,469
|
|
DEPOSIT COMPOSITION - Unaudited
|
|
|
|
Quarter Ended
|
|
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
|
(dollars in thousands)
|
|
2022
|
2022
|
2022
|
2022
|
2021
|
|
Non-interest bearing
|
$
|
804,115
|
791,050
|
799,169
|
779,262
|
768,650
|
|
Interest bearing:
|
|
|
|
|
|
|
|
NOW accounts
|
|
318,030
|
357,862
|
364,189
|
416,322
|
401,788
|
|
Money market accounts
|
|
1,506,418
|
1,452,958
|
1,320,329
|
1,238,866
|
1,201,099
|
|
Savings
|
|
40,673
|
42,335
|
41,944
|
41,630
|
39,696
|
|
Time, less than $250,000
|
|
32,469
|
79,387
|
62,340
|
57,972
|
61,122
|
|
Time and out-of-market deposits, $250,000 and over
|
|
432,159
|
277,860
|
282,187
|
174,122
|
91,471
|
|
Total deposits
|
$
|
3,133,864
|
3,001,452
|
2,870,158
|
2,708,174
|
2,563,826
|
|
Footnotes to tables:
|
|
|
(1) Total revenue is the sum of net interest income and noninterest income.
|
|
(2) The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield on a taxable basis.
|
|
(3) Annualized for the respective three-month period.
|
|
(4) Noninterest expense divided by the sum of net interest income and noninterest income.
|
|
(5) Excludes mortgage loans held for sale.
|
|
(6) Excludes out of market deposits and time deposits greater than $250,000.
|
|
(7) December 31, 2022 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 $3.7 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 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," "intend," "plan," "target," 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 have a negative impact on the company; (7) changes in interest rates, which may 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; and (8) 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 CONTACT: MIKE DOWLING 864-679-9070
MEDIA CONTACT: ART SEAVER 864-679-9010
WEB SITE: www.southernfirst.com
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SOURCE Southern First Bancshares, Inc.
