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.