SFST Southern First Bancshares Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)    December 28, 2023          

Southern First Bancshares, Inc.

(Exact name of registrant as specified in its charter)

          South Carolina          

(State or other jurisdiction of incorporation)

	000-27719			58-2459561
	(Commission File Number)			(IRS Employer Identification No.)
	6 Verdae Boulevard, Greenville, SC			29607
	(Address of principal executive offices)			(Zip Code)

          (864) 679-9000          

(Registrant's telephone number, including area code)

   100 Verdae Boulevard, Suite 100, Greenville, SC   

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SFST	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

ITEM 1.01  Entry into a Material Definitive Agreement.

On December 28, 2023, Southern First Bancshares, Inc. (the "Company") entered into a Loan Agreement (the "Loan Agreement") with TIB, National Association (the "Lender") providing for a revolving multiple advances loan of up to an aggregate principal amount of $15,000,000.  This Loan Agreement replaces a similar facility held with another institution which matured on December 20, 2023. Borrowings under the Loan Agreement accrue interest at The Wall Street Journal Prime Rate plus 0.25% per annum.  In connection with entering into the Loan Agreement, the Company issued to the Lender a Promissory Note dated as of December 28, 2023 (the “Promissory Note”) in the amount of up to $15,000,000. Maturity of the Promissory Note will be 14 months from the closing date.  During this time, interest only payments will be due quarterly.  The Company may at its option prepay the Promissory Note, in whole or in part, at any time without penalty, plus accrued interest in the amount prepaid to the date of prepayment.

The Loan Agreement contains customary representations, warranties, covenants and events of default, including, without limitation, covenants pertaining to investments and acquisitions and certain financial and capital ratios.  An event of default will occur under the Loan Agreement if, among other things, the Company fails to timely comply with its obligations under the Loan Agreement or breaches its representations or covenants under the Loan Agreement (in each case, subject to applicable cure periods), or either the Company or its wholly-owned banking subsidiary, Southern First Bank (the “Bank”), commences or becomes the subject a bankruptcy or similar proceeding.

The obligations of the Company under the Loan Agreement are secured by a pledge of all of the capital stock of the Bank pursuant to a Pledge Agreement dated as of December 28, 2023 between the Company and the Lender (the "Pledge Agreement").  In the event of a default by the Company under the Loan Agreement, the Lender may terminate the commitments made under the Loan Agreement, declare all amounts outstanding to be payable immediately and exercise or pursue any other remedy permitted under the Loan Agreement or the Pledge Agreement, or conferred upon Lender by operation of law.

The descriptions contained herein of the Loan Agreement, the Promissory Note and the Pledge Agreement are qualified in their entirety by reference to the terms of such documents, each of which is attached hereto as an exhibit and incorporated herein by this reference.

Item 2.03  Creation of a Direct Financial Obligation.

The relevant disclosure set forth in Item 1.01 above is incorporated herein by reference in response to this Item 2.03.

ITEM 9.01.   Financial Statements and Exhibits.

(d)  Exhibits

The following exhibit index lists the exhibits that are either filed or furnished with the Current Report on Form 8-K.

EXHIBIT INDEX

Exhibit No.	Description
10.1	Loan Agreement, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association.
10.2	Promissory Note, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association.
10.3	Pledge Agreement, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SOUTHERN FIRST BANCSHARES, INC.
	By:	/s/ D. Andrew Borrmann
	Name:    D. Andrew Borrmann
	Title:      Chief Financial Officer

January 3, 2024

Exhibit 10.1

LOAN AGREEMENT

The undersigned, Southern First Bancshares, Inc., a South Carolina corporation (the “Borrower”), with its mailing address located at the address set forth on the signature pages hereof, has requested that TIB, National Association (the “Lender”) extend a loan (the “Loan”) to Borrower to be evidenced by Borrower’s promissory note dated of even date herewith, in the maximum stated principal sum of $15,000,000.00, payable to the order of Lender as therein specified (together with all renewals, extensions and rearrangements thereof, the “Note”). In consideration of Lender making the Loan, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower agrees with Lender as follows:

1.

Definitions. Capitalized terms as used in this Loan Agreement (the “Agreement”) and not otherwise defined herein shall have the meanings as contained on the attached Schedule A.

2.

Repayment of Loan. Borrower shall repay the Loan, plus accrued interest thereon, as provided in the Note.

3.

Collateral. To secure full and complete payment and performance of the Obligations, Borrower shall execute and deliver or cause to be executed and delivered the documents described below covering the collateral described in this Section (which, together with any other property and collateral which may now or hereafter secure the Obligations or any part thereof, is sometimes herein called the “Collateral”):

(a)

Borrower shall grant to Lender a first priority security interest in all of the capital common stock of the Bank, now owned or hereafter acquired by Borrower, and all products and proceeds thereof (the “Pledged Stock”), pursuant to the Pledge Agreement. Lender shall be delivered and retain possession of the original certificate or certificates representing the Pledged Stock, together with stock powers duly executed in blank by Borrower.

(b)

Borrower consents to the filing of any Uniform Commercial Code financing statements Lender deems necessary or desirable to evidence and perfect its liens and security interests in the Collateral.

4.

A.   Conditions Precedent. The obligation of Lender to make the Loan (or initial advance thereof, if applicable) is subject to the condition precedent that Lender shall have received all of the following, each dated (unless otherwise indicated) the date hereof, in form and substance satisfactory to Lender:

(a)

Note. The Note executed by Borrower.

(b)

Pledge Agreement. The Pledge Agreement executed by Borrower and Grantor.

(c)

Pledged Stock. The original certificate(s) representing the Pledged Stock, accompanied by stock powers duly executed in blank by Borrower and Grantor.

(d)

Additional Information. Such additional documents, instruments, and information as Lender or its legal counsel may reasonably request, including any information listed in any Schedules attached hereto.

 

B.   Conditions Precedent to All Advances. To the extent the Loan includes advances which may be made after the Closing Date, the obligation of the Lender to thereafter make any advance under the Loan is subject to the following additional conditions precedent:

(a)

Advance Request Form. Lender shall have received an advance request form in a form satisfactory to Lender, dated the date of such requested advance, executed by an authorized officer of the Borrower;

(b)

No Default. No Event of Default, and no event which with the giving of notice or lapse of time or both would be an Event of Default, shall have occurred and be continuing, or would result from such advance;

LOAN AGREEMENT (Loan No. 40568)	Page 1

(c)

Representations and Warranties. All of the representations and warranties contained in the Loan Documents shall be true and correct on and as of the date of such advance with the same force and effect as if such representations and warranties had been made on and as of such date;

(d)

No Material Adverse Change. No material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower or any of its Subsidiaries shall have occurred since the date of the most recent financial statements of Borrower and Bank delivered to Lender;

(e)

Additional Documentation. Lender shall have received such additional approvals or documents as the Lender or its legal counsel may reasonably request;

(f)

Omitted; and

(g)

Timeline. No advances shall be made after any Conversion Date, as defined in the Note,

if applicable.

5.

Representations and Warranties. To induce Lender to enter into this Agreement, Borrower represents and warrants to Lender that:

(a)

Borrower (i) is a corporation duly organized, validly existing, and in good standing under the laws of South Carolina; (ii) has all requisite corporate power to own assets and carry on its business as now being or as proposed to be conducted; and (iii) is qualified to do business in all jurisdictions in which the nature of its business makes such qualifications necessary and where failure to so qualify would have a material adverse effect on its business, financial condition, or operations. The Bank is a state banking association duly organized, validly existing and in good standing under the applicable laws of the United States and the State of South Carolina.

(b)

The execution, delivery and performance by Borrower of this Agreement, the Note and other Loan Documents have been duly authorized by all necessary action of Borrower and are not in contravention of any law, rule or regulation or of the terms of any agreement or instrument to which Borrower is a party or by which it may be bound or of Borrower’s certificate of formation/articles of incorporation or bylaws.

(c)

This Agreement, the Note and the other Loan Documents, when delivered, shall constitute the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with their respective terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to the enforcement of creditors’ rights.

(d)

No litigation or governmental proceeding is pending, or to the knowledge of Borrower, threatened against or affecting Borrower or Bank, which may result in any material adverse change in Borrower’s or Bank’s business, properties or operations.

(e)

Unless described on Schedule B attached hereto, (1) Borrower has no Debt except Debt to Lender and (2) none of Borrower’s or Bank’s assets are subject to any Lien except Liens to Lender.

(f)

Borrower has the unrestricted right to pledge the Collateral as contemplated by the Loan Documents. There are no existing subscriptions, options, warrants, calls, or rights (including preemptive rights) to acquire, and no existing Debt, securities or other instruments convertible into or exchangeable for capital stock of the Bank.

(g)

No certificate or statement (including without limitation financial statements) herewith or heretofore delivered by Borrower to Lender in connection therewith, or in connection with any transaction contemplated hereby, contains any untrue statement of a material fact or fails to state any material fact necessary to keep the statements contained therein from being misleading and there has been no material adverse change in Borrower’s or Bank’s financial condition and operations subsequent to the date of the most recent financial statements of Borrower and Bank delivered to Lender.

LOAN AGREEMENT (Loan No. 40568)	Page 2

6.

Affirmative Covenants. Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or Lender has any commitment hereunder, Borrower will observe and perform the following affirmative covenants, unless Lender shall otherwise consent in writing:

(a)

Borrower will furnish to Lender as soon as available, and in any event within one hundred twenty (120) days after the end of each fiscal year of Borrower, a copy of the annual audit report of Borrower and Bank for such fiscal year containing, on a consolidated and unconsolidated basis, balance sheets, statements of income, statements of changes in financial position and cash flows as at the end of such fiscal year and for the 12-month period then ended, in each case setting forth in comparative form the figures for the preceding fiscal year, all in reasonable detail and audited and certified by independent certified public accountants of recognized standing reasonably acceptable to Lender, to the effect that such report has been prepared in accordance with GAAP.

(b)

To the extent that Lender is unable to readily obtain online, within ten (10) days of Lender’s written request, Borrower will deliver to Lender copies of financial reports of Borrower for such period, prepared in conformity with GAAP, and which fairly and accurately states Borrower’s financial condition at such time (including all assets, liabilities, contingent liabilities, and cash flow); such financial reports shall include without limitation a copy of Borrower’s most recent Federal Reserve Form Y-9SP or Form Y-9LP, Federal Reserve Form Y-6, as well as any Federal Reserve Form Y-10 if applicable. In addition, to the extent that Lender is unable to readily obtain online, within ten (10) days of Lender’s written request, Borrower will deliver to Lender copies of all Call Reports as filed with the Federal Financial Institutions Examination Council as well as copies of the Uniform Bank Performance Report for Bank prepared by the Federal Financial Institutions Examination Council or any successor entity.

(c)

As soon as available, and in any event within thirty (30) days after the end of each calendar quarter, Borrower shall furnish to Lender a Watch List or other report identifying the Classified Assets and Criticized Assets of Bank.

(d)

Upon Lender’s request, but not more frequently than once per calendar quarter, Borrower shall deliver or cause to be delivered to Lender the directors’ report from any meetings during the calendar quarter ending prior to such request.

(e)

Promptly, and in any event, prior to January 31st of each and every year during the term of the Loan (including renewals, modifications, and/or extensions thereof), Borrower shall and shall cause Bank to deliver to Lender its fiscal budget for the forthcoming year.

(f)

Borrower will cause Bank to maintain at all times a liquidity position determined by the ratio of total deposits to total loans which is in accordance with the guidelines recommended by applicable federal bank regulatory authorities and is deemed satisfactory at each regulatory examination of Bank.

(g)

Borrower will preserve and maintain its present existence and good standing in jurisdictions where Borrower is organized and operates. Borrower will continue its business or activities as presently conducted by obtaining licenses, permits and bonds where needed. Borrower will obtain Lender’s prior written consent before ceasing business or engaging in any line of business that is materially different from its present business.

(h)

Borrower will promptly inform Lender of any litigation against Borrower or Bank or affecting any of Borrower’s or Bank’s property, if such litigation or potential litigation that would reasonably be expected to, in the event of an unfavorable outcome, have a material adverse effect on Borrower’s or Bank’s financial condition or that would reasonably be expected to cause an Event of Default.

(i)

Borrower will notify Lender within ten (10) days of Borrower’s discovery of the occurrence of an Event of Default or event which with the giving of notice or lapse of time or both would constitute an Event of Default.

(j)

If, at any time Lender in its sole but reasonable discretion believes that it is advisable that the loan portfolio of Bank should be reviewed during any year during the term of the Loan, Borrower will provide or cause to be provided to Lender a third party loan review of Bank’s loan portfolio conducted by an independent third

LOAN AGREEMENT (Loan No. 40568)	Page 3

party acceptable to Lender, such review to begin within ninety (90) days after Lender’s written request therefor. Borrower shall provide such reviews annually if Bank is the subject of any regulatory action.

(k)

Borrower will promptly furnish to Lender written notice of (i) the issuance of any notice of charges, cease and desist order (temporary or otherwise) or order to take affirmative action by any governmental or regulatory authority against Borrower or Bank or any director, officer, employee, agent, or other person participating in the conduct of the affairs of Borrower or Bank, (ii) the service of any notice of intention to remove from office or notice of intention to suspend from office by any governmental or regulatory authority upon any director or officer of Borrower or Bank, (iii) the issuance of a notice of termination of the status of Bank as an insured bank under the Federal Deposit Insurance Corporation Act, as amended, or (iv) the commencement of any action, issuance of any order, or the occurrence of any other event between any governmental or regulatory authority the result of which would prohibit, limit or otherwise in any manner restrict the payment of dividends or flow of monies or benefits from Bank; provided however, Borrower shall not be required to furnish written notice of the foregoing actions if such notification would violate the confidentiality rights associated with such action.

(l)

Borrower shall maintain, and cause Bank to maintain, insurance of the kinds, covering the risks and in the relative proportionate amounts carried by Bank consistent with past practices, and at Lender’s request, deliver to Lender evidence of the maintenance of such insurance.

(m)

Borrower will promptly furnish to Lender, at Lender’s request and within Lender’s sole discretion, such additional financial or other information concerning the assets, liabilities, operations and transactions of Borrower, and/or Bank as Lender may from time to time request.

7.

Negative Covenants. Borrower covenants and agrees that, as long as the Obligations or any part thereof are outstanding or Lender has any commitment hereunder, Borrower will perform and observe the following negative covenants as noted applicable to this transaction unless Lender shall otherwise consent in writing:

(a)

Borrower will not permit:

(1)

þ    Bank’s Classified Assets to at any time exceed thirty-five percent (35.00%) of the Tier 1 Capital plus allowance for loan and lease losses of Bank;

(2)

þ    Bank’s Leverage Ratio to at any time be less than eight percent (8.00%), if elected to be reported in the most recent Call Report filed by Bank; or Bank’s Community Bank Leverage Ratio to at any time be less than nine percent (9.00%), if elected to be reported in the most recent Call Report filed by Bank; and

(3)

o    Bank’s Common Equity Tier 1 Ratio to at any time be less than_N/A__percent (_N/A_%);

(4)

o    Bank’s Tier 1 Capital Ratio to at any time be less than_N/A__percent (_N/A_%);

(5)

o    Bank’s Total Capital Ratio to at any time be less than_N/A_percent (_N/A_%);

(6)

þ    Bank’s Tier 1 Capital to at any time be less than $300,000,000.00;

(7)

þ    Bank’s Return on Average Assets to be less than one-quarter of one percent (0.25%) at any fiscal quarter end;

(8)

o    Its Debt Service Coverage Ratio to be less than _N/A_ times, measured _N/A_upon receipt of and based upon financial information delivered in accordance with Section 6;

LOAN AGREEMENT (Loan No. 40568)	Page 4

(9)

o    The ratio of Bank’s Total Loans to Total Assets to at any time be greater than _N/A_percent (_N/A_%);

(10)

o    The ratio of Bank’s Total Loans to Total Deposits to at any time be greater than _N/A_percent (_N/A_%)

(11)

o    Bank’s Total Reported Loans for Construction, Land Development, and other Land Loans to exceed_N/A_% of Bank’s Total Risk Based Capital;

(12)

o    Bank’s Total Reported Commercial Real Estate Loans to at any time exceed_N/A_% of Bank’s Total Risk Based Capital;

(13)

o    Bank’s aggregate capital expenditures to exceed $ N/A during any calendar year during the term hereof; and

(14)

þ    Bank’s Texas Ratio to at any time be greater than twenty-five percent (25.00%).

(b)

Borrower will not permit any Person to acquire Control of Borrower (for purposes hereof, “Control” shall mean as set forth in 12 CFR §303.81(c), as further interpreted by the Federal Reserve under the Change in Bank Control Act, but shall provide prompt notice to Lender of any change in Control resulting in any new Person controlling more than ten percent (10%) of any voting stock of Borrower..

(c)

Borrower will not and will not permit Bank to sell, lease, or otherwise dispose of any of its assets used or useful in its business, except in the regular course of business for reasonably equivalent cash consideration.

(d)

Borrower will not incur, create, assume, or permit to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except Liens in favor of Lender (provided, however, that the foregoing shall not apply to Liens for taxes which are not delinquent or which are being contested in good faith [with bond or other security reasonably acceptable to Lender if Lender so requires], mechanic’s and materialmen’s Liens with respect to obligations which are not overdue or which are being contested in good faith, and Liens resulting from deposits to secure the payments of workers’ compensation or other social security or to secure the performance of bids or contracts in the ordinary course of business).

(e)

During the existence of an Event of Default, or if doing so would cause an Event of Default (or an event which, with the giving of notice, or passage of time, or both, would be an Event of Default), Borrower will not declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations) on account of its capital stock, or redeem, purchase, retire or otherwise acquire any of its capital stock, or set apart any money for a sinking or other analogous fund for any dividend or other distribution on its capital stock or for any redemption, purchase, retirement, or other acquisition of any of its capital stock, or grant or issue any capital stock or any warrant, right or option pertaining to its capital stock, or issue any security convertible into capital stock, or permit any of its Subsidiaries to grant or issue any capital stock or any warrant, right or operation pertaining to its capital stock or purchase any capital stock of Borrower or another Subsidiary.

(f)

Borrower will not permit the incurrence, creation, assumption, or existence of Debt of Borrower aggregating over $500,000.00 outstanding at any time, except Debt to Lender or Debt subordinate to Debt to Lender and as may be shown on Schedule B.

8.

Event of Default. Without in any way impairing the demand nature of the Note, each of the following shall be deemed an “Event of Default”:

(a)

Borrower shall fail to pay when due any monetary Obligations.

(b)

A cease and desist order shall be issued or shall be drafted or recommended against the Bank by any regulatory authority.

LOAN AGREEMENT (Loan No. 40568)	Page 5

(c)

Borrower, Bank, or any Obligated Party shall commence a voluntary proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, receivership, conservatorship, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, conservator, or other similar official of it or a substantial part of its property or shall consent to any such relief or to the appointment of or taking possession by any such official in such a proceeding commenced against it or shall make a general assignment for the benefit of creditors or shall generally fail to pay its debts as they become due or shall take any corporate action to authorize any of the foregoing or shall be subject to any proceeding to accomplish a comparable arrangement.

(d)

An involuntary proceeding shall be commenced against the Borrower, Bank, or any Obligated Party seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, receivership, conservatorship, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, conservator, or other similar official for it or a substantial part of its property, and such involuntary proceeding shall remain undismissed and unstayed for a period of thirty (30) days.

(e)

Borrower, Bank or any Obligated Party shall fail to pay when due any principal or interest on any Debt (other than the Obligations), or the maturity of any such Debt shall have been accelerated, or any such Debt shall have been required to be prepaid prior to the stated maturity thereof, or any event shall have occurred and be continuing that, with the giving of notice or lapse of time or both, would permit any holder or holders of such Debt or any Person acting on behalf of such holder or holders to accelerate the maturity thereof or require any such prepayment.

(f)

This Agreement or any other Loan Document shall cease to be in full force and effect or shall be declared null and void or the validity or enforceability thereof shall be contested or challenged by Borrower or any of Borrower’s shareholders, or Borrower shall deny that it has any further liability or obligation under any of the Loan Documents.

(g)

Borrower shall fail, at any time, to own and have pledged to Lender at least % of the issued and outstanding shares of capital stock of Bank, or such security interest in favor of Lender shall at any time fail to be a first priority perfected lien and security interest.

(h)

Any representation or warranty made or deemed made by the Borrower, Bank or any Obligated Party in any Loan Document or in any certificate, report, notice or financial statement furnished at any time in connection with this Agreement shall be false, misleading, or erroneous in any material respect when made or deemed to have been made.

(i)

Borrower, Bank or any Obligated Party shall fail to perform, observe, or comply with any other covenant, agreement or term contained in this Agreement or any other Loan Document and such failure continues for fifteen (15) days after written notice of such failure to Borrower.

9.

Rights of Lender. Upon the occurrence of an Event of Default, Lender may without notice terminate its commitment to lend hereunder and declare the Obligations or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable, without demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, all of which are hereby expressly waived; provided, however, that upon the occurrence of an Event of Default under Section 8(c) or Section 8(d), the commitment of Lender to lend hereunder shall automatically terminate, and the Obligations shall become immediately due and payable without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, all of which are hereby expressly waived. Upon the occurrence of any Event of Default, Lender may exercise all rights and remedies available to it in law, or in equity, under the Loan Documents, or otherwise.

10.

Applicable Law. This Agreement and all other documents and instruments executed pursuant hereto or in connection herewith and the transactions contemplated hereby are made and performable in Dallas County, Texas and shall be governed by and construed in accordance with the laws of the State of Texas and the applicable laws of the United States of America.

LOAN AGREEMENT (Loan No. 40568)	Page 6

11.

Severability. The unenforceability of any provision of this Agreement shall not affect the enforceability or validity of any other provision hereof.

12.

Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. Delivery of an executed counterpart by fax or pdf shall be effective as delivery of an original signature.

13.

Miscellaneous. No modification, consent, amendment or waiver of any provision of this Agreement, nor consent to any departure by Borrower therefrom, shall be effective unless the same shall be in writing and signed by an officer of Lender, and then shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances. No delay or omission by Lender in exercising any power or right hereunder shall impair any such right or power or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such power preclude other or further exercise thereof, or the exercise of any other right or power hereunder. All rights and remedies of Lender hereunder are cumulative of each other and of every other right or remedy which Lender may otherwise have at law or in equity or under any other contract or document, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise or other rights or remedies. All accounting terms not specifically defined herein shall be construed in accordance with GAAP on the basis used by Borrower in prior years. This Agreement is binding upon Borrower, its successors and assigns, and inures to the benefit of Lender, its successors and assigns; provided, however, that Borrower may not assign its rights or obligations hereunder without Lender’s prior written consent.

14.

Expenses of Lender. Borrower agrees to pay, on demand, all reasonable costs and expenses incurred by Lender in connection with the preparation, negotiation, execution and administration of this Agreement and the other Loan Documents and the transactions contemplated hereby, including reasonable costs and expenses incurred by Lender in connection with any and all amendments, modifications, supplements to, and ongoing administration of this Agreement and the other Loan Documents, including without limitation the reasonable costs and fees of Lender’s legal counsel, and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under this Agreement or any other Loan Document.

15.

Fees. Borrower agrees to pay to Lender a Non-Usage Fee (herein so called) on the Maturity Date (as defined in the Note), which Non-usage Fee will be $37,500.00 less the interest accrued under the Note on or prior to the Maturity Date

16.

INDEMNIFICATION. EXCEPT FOR LENDER’S GROSS NEGLIGENCE OR WILFUL MISCONDUCT, BORROWER HEREBY INDEMNIFIES LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLDS EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (i) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (ii) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (iii) ANY BREACH BY BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, OR (iv) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER

PROCEEDING RELATING TO ANY OF THE FOREGOING. Without limiting any provision of this Agreement or of any other Loan Document, it is the express intention of the parties hereto that each person to be indemnified under this Section shall be indemnified from and held harmless against any and all losses, liabilities, claims, damages, penalties, judgments, costs, and expenses (including attorneys’ fees) arising out of or resulting from the sole or contributory negligence of the person to be indemnified.

17.

Limitation of Liability. Neither Lender nor any affiliate, officer, director, employee, attorney, or agent of Lender shall have any liability with respect to, and Borrower hereby waives, releases, and agrees not to sue

LOAN AGREEMENT (Loan No. 40568)	Page 7

any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by Borrower in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. Borrower hereby waives, releases, and agrees not to sue Lender or any of Lender’s affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.

18.

Participations. Lender shall have the right at any time and from time to time to grant participations in the Note and any other Loan Documents. Each participant shall be entitled to receive all information received by Lender regarding the creditworthiness of Borrower, including without limitation, information required to be disclosed to a participant to Banking Circular 181 (Rev. August 2, 1984), issued by the Comptroller of the Currency (whether the participant is subject to the circular or not).

19.

Notices. All notices and other communications provided for in this Agreement and the other Loan Documents to which Borrower is a party shall be given or made in writing and mailed by certified mail return receipt requested, or delivered by hand or nationally recognized overnight delivery service to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof; or, as to any party at such other address as shall be designated by such party in a notice to the other party given in accordance with this Section. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a notice transmitted by mail or overnight delivery service, when duly deposited in the mails or the day following delivery to such service, in each case given or addressed as aforesaid.

20.

Entire Agreement. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this

Agreement and the other Loan Documents to which Borrower is a party may be amended or waived only by an instrument in writing signed by the parties hereto. The terms of this Agreement shall control to the extent of any direct conflict with the terms of the other Loan Documents; however, the parties acknowledge and agree that the other Loan Documents contain terms supplemental to the terms of this Agreement.

21.

WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

22.

USA Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow such Lender to identify Borrower in accordance with the Act.

23.

Special Provisions. The following schedules, if checked and attached hereto, are hereby incorporated herein for all purposes:

(a)

o    Schedule 1: Key Man Life Insurance;

(b)

o    Schedule 2: Guarantor(s);

(c)

þ    Schedule 3: Hybrid Liquidity Ratio;

LOAN AGREEMENT (Loan No. 40568)	Page 8

(d)

o    Schedule 4: Other: _____________________________.

Executed to be effective as of December 28, 2023.

[Balance of Page Intentionally Left Blank]

LOAN AGREEMENT (Loan No. 40568)	Page 9

	Very truly yours,
	Southern First Bancshares, Inc., a South Carolina corporation
	By:	/s/ D. Andrew Borrmann
		D. Andrew Borrmann, Chief Financial
	Officer
	Address for Notices:
	Southern First Bank 6 Verdae Boulevard
	Greenville, South Carolina 29607
	Telephone:       864-679-9000
	Attention:         D. Andrew Borrmann, CFO

Accepted and Agreed to:

TIB, NATIONAL ASSOCIATION

By:	/s/ B. Windol Cook
	B. Windol Cook, Senior Vice President Address

for Notices:

11701 Luna Road

Farmers Branch, TX 75234

Telephone:	972-444-3653
Attention:	Katie Lawton

LOAN AGREEMENT (Loan No. 40568)	Signature Page
	Page 10

SCHEDULE A

DEFINITIONS

The terms defined herein shall have the following meanings for the purpose of this Agreement, and the singular shall include the plural, and vice versa, unless otherwise specifically required by the context:

“Average Assets” means a year-to-date average of the average assets reported in the Report of Condition Schedule RC-

K. Thus for the first quarter of the year the average assets from Call Schedule RC-K quarter will appear, while at the end- of-year, assets for all four quarters would be averaged.

“Bank” means Southern First Bank a South Carolina state bank.

“Book Value” means, at any time for any share of common stock of Bank, Bank’s Equity Capital divided by the total number of shares of common stock of Bank outstanding at such time.

“Business Day” means any day on which commercial banks are not authorized or required to close in Farmers Branch, Dallas County, Texas.

“Call Report” means Reports of Condition and Reports of Income of Bank as filed with the Federal Financial Institutions Examination Council.

“Cash Flow” means, the summation of all net income after taxes, defined as the consolidated net income of the bank holding company and all of its subsidiaries, plus interest expense of only the holding company, less Preferred Stock Dividends, less 35% tax distribution on all Sub-S banks or income tax benefit on all C-Corp banks on an annualized basis.

“Classified Assets” means, at any particular time, all assets of Bank classified as “Loss,” “Doubtful,” or “Substandard” or in any equivalent category by Bank or any governmental or regulatory authority.

“Closing Date” means December, 28, 2023.

“Collateral” has the meaning specified in Section 3.

“Common Equity Tier 1 Capital Ratio” means, at any particular time, the ratio of Common Equity Tier 1 Capital to Risk-Weighted Assets of the Bank determined in accordance with the Call Report Instructions.

“Community Bank Leverage Ratio” has the meaning given by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.

“Criticized Assets” means, at any particular time, all assets of the Bank classified as “Loss,” “Doubtful,” “Substandard,” or “other Assets Especially Mentioned,” or in any equivalent category by the Bank or any governmental or regulatory authority.

“Current Maturities of Long-Term Debt” means interest expense and principal payments (if applicable) on Borrower’s debt with Lender, plus any principal and interest payments on Guarantor’s personal financial statement and/or credit bureau report (or the long-term debt of any entities for which Guarantor is advancing such payments), with respect to the indicated time period.

“Debt” means as to any Person at any time (without duplication): ( i ) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable of such Person arising in the ordinary course of business which are not past due by more than ninety (90) days unless such trade accounts payable are being contested in good faith by appropriate proceedings, (iv) all obligations of such Person under any lease

LOAN AGREEMENT (Loan No. 40568)	Schedule A
	Page 11

which, in conformity with GAAP, is required to be capitalized for balance sheet purposes, (v) all obligations of such Person under guaranties, endorsements (other than for collection or deposit in the ordinary course of business), assumptions or other contingent obligations, in respect of, or to purchase or otherwise acquire, any obligation or indebtedness of any other Person, or any other obligation, contingent or otherwise, of such Person directly or indirectly protecting the holder of any obligation or indebtedness of any other Person against loss (whether by partnership arrangements, agreements to keep well, to purchase assets, goods, securities, or services, to take or pay or otherwise), (vi) all obligations secured by a Lien existing on property owned by such Person, whether or not the obligations secured thereby have been assumed by such Person or are non-recourse to the credit of such Person, (vii) reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments, (viii) all liabilities of such Person in respect of unfunded vested benefits under any employee benefit plan of Borrower or any Subsidiary and (ix) all obligations under interest rate swap and similar hedging agreements.

“Debt Service Coverage Ratio” means, the Net Income of Bank less Borrower’s expenses and dividends, plus Borrower’s interest expense divided by annual debt service on the Note and any other Debt payments during such time period including, without limitation, any payments on the debt listed on Schedule B attached hereto.

“Equity Capital” means, at any particular time, the total equity capital of the Bank determined in accordance with the Instructions (the “Call Report Instructions”) to the Call Reports as most recently promulgated by the Federal Financial Institutions Examination Council.

“Event of Default” has the meaning specified in Section 8.

“GAAP” means generally accepted accounting principles, applied on a consistent basis, as set forth in Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question. Accounting principles are applied on a “consistent basis” when the accounting principles observed in a current period are comparable in all material respects to those accounting principles applied in a preceding period.

“Grantor” means ____________________(if not completed, Grantor shall mean Borrower).

“Guarantors” means the Persons identified on Schedule 2 as guarantying the Loan, if any.

“Key Man Policy” means the key man life insurance policy(ies) described on Schedule 1, if applicable.

“Leverage Ratio” means, at any particular time, the ratio of Tier 1 Capital to Average Assets of the Bank determined in accordance with the Call Report Instructions.

“Lien” means any lien, mortgage, security interest, tax lien, financing statement, pledge, charge, hypothecation, assignment, preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise.

“Loan Documents” means this Agreement and all promissory notes, security agreements, pledge agreements, guaranties, and other instruments, documents, and agreements now or hereafter executed and delivered pursuant to or in connection with this Agreement and any future renewals, extensions, and amendments hereto or thereto.

“Maximum Rate” means the maximum rate of nonusurious interest permitted from day to day by applicable law, including as to Chapter 303, Texas Finance Code, as amended from time to time (and as the same may be incorporated by reference in other Texas statutes), but otherwise without limitation, that rate based upon the “weekly rate ceiling” and calculated after taking into account any and all relevant fees, payments, and other charges in respect of the Loan Documents which are deemed to be interest under applicable law.

“Net Income” means net income (loss) attributable to Bank, in accordance with the Call Report Instructions.

LOAN AGREEMENT (Loan No. 40568)	Schedule A
	Page 12

“Non-Performing Assets” means loans on nonaccrual, loans on which the interest rate has been reduced as troubled debt restructurings, loans which have been past due for ninety (90) days or more, and other real estate and other assets which are owned due to foreclosure or as a result of the exercise of legal remedies where such real estate or other assets were mortgaged or taken as security for loans.

“Obligated Party” means Grantor, any Guarantor or other Person who is or becomes party to any agreement that guarantees or secures payment and performance of the Obligations or any part thereof.

“Obligations” means all obligations, indebtedness, and liabilities of Borrower to Lender, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, including, without limitation, the obligations, indebtedness, and liabilities of Borrower under this Agreement, the Note, and the other Loan Documents, and all interest accruing thereon and all attorneys’ fees and other expenses incurred in the enforcement or collection thereof.

“Person” means any individual, corporation, business trust, association, company, partnership, joint venture, or other entity.

“Pledge Agreement” means the Pledge Agreement(s) of Borrower and/or Grantor in favor of Lender of even date herewith, as the same may be amended, supplemented, or modified.

“Pledged Stock” has the meaning specified in Section 3(a).

“Return on Average Assets" means, for the applicable reporting period, the ratio, expressed as a percentage, of Bank’s Net Income year-to-date annualized to Bank’s Average Assets determined at the end of the applicable period being analyzed.

“Subsidiary” means any corporation or bank of which more than fifty percent (50%) of the issued and outstanding securities having ordinary voting power for the election of a majority of directors is owned or controlled, directly or indirectly, by Borrower, by Borrower and one or more other Subsidiaries, or by one or more other Subsidiaries.

“Tangible Equity Capital” means Equity Capital less Goodwill and Other Intangible Assets of the Bank determined in accordance with the Call Report Instructions.

“Texas Ratio” means, at any particular time, the ratio of Bank’s Non-Performing Assets to Tangible Equity Capital (plus loan loss reserve if not included therein).

“Tier 1 Capital” means, at any particular time, the Tier 1 Capital of the Bank determined in accordance with the Call Report Instructions.

“Tier 1 Capital Ratio” means, at any particular time, the ratio of Tier 1 Capital to Risk-Weighted Assets of the Bank determined in accordance with the Call Report Instructions

“Total Assets” means, at any particular time, all amounts which, in conformity with GAAP, would be included as assets on a balance sheet of Bank determined in accordance with the Call Report Instructions.

“Total Capital Ratio” means, at any particular time, the ratio of combined Tier 1 Capital and Tier 2 Capital to Risk-Weighted Assets of the Bank determined in accordance with the Call Report Instructions.

“Total Debt Service” means, at any particular time, the summation of the contractually obligated amounts due based on the outstanding balance plus any requested advances on revolving lines of credit, advancing lines of credit and term notes at TIB plus other annual debt service from Trust Preferred subordinated debt, subordinated debts and all other miscellaneous debt service (to include all lines of credit and term debt with other financial institutions) on an annualized basis.

LOAN AGREEMENT (Loan No. 40568)	Schedule A
	Page 13

Defined terms (i.e., terms delineated with capital letters) not otherwise defined herein shall be given the meanings commonly ascribed to them by the FFIEC, FDIC, state banking authorities or other authority, as reasonably determined by Lender.

LOAN AGREEMENT (Loan No. 40568)	Schedule A
	Page 14

SCHEDULE B

EXISTING DEBT and LIENS

On September 30, 2019, the Company entered into Subordinated Note Purchase Agreements (collectively, the “Purchase Agreement”) with certain qualified institutional buyers and accredited investors (the “Purchasers”) pursuant to which the Company sold and issued $23.0 million in aggregate principal amount of its 4.75% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes were offered and sold by the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and the provisions of Regulation D promulgated thereunder (the “Private Placement”). The Notes have a ten- year term and, from and including the date of issuance to but excluding September 30, 2024, will bear interest at a fixed annual rate of 4.75%, payable semi-annually in arrears, for the first five years of the term. From and including September 30, 2024 to but excluding the maturity date or early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate (which is expected to be Three- Month Term SOFR) plus 340.8 basis points, payable quarterly in arrears.

LOAN AGREEMENT (Loan No. 40568)	Schedule B
	Page 15

SCHEDULE 1

KEY MAN LIFE INSURANCE

o       Borrower shall assign or cause to be assigned to Lender as security for the Obligations a Key Man Policy on the life of _______________________________              issued by an insurance company acceptable to Lender in the minimum amount of $_____________________, which shall be assigned to Lender as security for the Obligations and maintained in good standing, by punctual payment of the premiums due thereon. In the event of the death of the insured, Borrower will give prompt notice thereof to Lender and Lender will have the right, but not the obligation, to collect and apply all or a portion of the proceeds of the Key Man Policy to the prepayment of the Obligations, together with accrued interest thereon.

LOAN AGREEMENT (Loan No. 40568)	Schedule 1
	Page 16

SCHEDULE 2

GUARANTOR(S)

o       Each Guarantor shall execute and deliver to Lender a Guaranty Agreement (collectively, the “Guaranty Agreements”) guaranteeing to Lender payment of the Obligations in form and substance satisfactory to Lender and limited to the respective principal amount set forth below plus all accrued interest, attorney fees and costs of collection.

(a)       For each individual Person, as soon as available, and in any event within forty-five (45) days after the anniversary date of the previous financial statement of such Guarantor delivered to Lender, Borrower will cause to be provided to Lender a copy of (i) an unaudited financial report of each of the Guarantors for the previous twelve (12) months, such report to include such Guarantor’s actual cash flow statement for such year, certified by the appropriate Guarantor, prepared in conformity with sound accounting principles consistently applied, and which fairly and accurately states each such Guarantor’s financial condition (including all assets, liabilities equity, and contingent liabilities), and (ii) a projected cash flow statement for such Guarantor for the forthcoming year. For each non-individual Person, as soon as available, and in any event within forty-five (45) days after the fiscal year end of such Guarantor delivered to Lender, Borrower will cause to be provided to Lender a copy of (iii) an unaudited financial report of each of the Guarantors for the previous twelve (12) months, such report to include such Guarantor’s actual financial information for such year, certified by the appropriate Guarantor, prepared in conformity with sound accounting principles consistently applied, and which fairly and accurately states each such Guarantor’s financial condition (including all assets, liabilities, equity, and income), and (iv) a projected cash flow statement for such Guarantor for the forthcoming year.

Guarantor	Principal Amount

LOAN AGREEMENT (Loan No. 40568)	Schedule 4
	Page 17

SCHEDULE 3

HYBRID LIQUIDITY RATIO

þ	Bank shall be required to maintain a hybrid Primary plus Secondary Liquidity Ratio of 25.00% or greater, to be measured quarterly, commencing December 31, 2023. The formulaic composition of this ratio is displayed below. Borrower shall require each Bank to provide to Lender its liquidity report on a calendar quarter basis within thirty (30) days of each calendar quarter end.

Primary Liquidity	Insert Date_______________
Cash
Due from Banks
Total Cash and Due from Banks	$0
Fed Funds Sold
Securities Available as Collateral @FMV
Less Utilized Collateralizing Securities (Pledged)
Short-Term Cash Equivalents	$0
Total Primary Liquidity	$0
Secondary Liquidity
Net Loan Balances AFS and Pledged at FRB & FHLB*
Less-Utilized Collateralizing Loans/Letters of Credit (Used)
Net Secondary	$0
Total Secondary Liquidity (FRB & FHLB)	$0
Total Primary and Secondary Liquidity	$0
Total Assets Primary and Secondary Liquidity Ratio	#DIV/0!

*FRB Primary Credit; FHLB Blanket  

LOAN AGREEMENT (Loan No. 40568)	Schedule 4
	Page 18

SCHEDULE 4

OTHER SPECIAL PROVISIONS

LOAN AGREEMENT (Loan No. 40568)	Schedule 4
	Page 19

Exhibit 10.2

IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THIS NOTE MAY REQUIRE A “BALLOON” PAYMENT OF ALL UNPAID PRINCIPAL AND ACCRUED BUT UNPAID INTEREST ON THE MATURITY DATE. THE UNPAID PRINCIPAL INDEBTEDNESS EVIDENCED BY THIS NOTE IS PAYABLE IN FULL AT MATURITY. MAKER MUST REPAY THE ENTIRE UNPAID PRINCIPAL BALANCE OF THIS NOTE AND ACCRUED BUT UNPAID INTEREST THEN DUE. PAYEE IS UNDER NO OBLIGATION TO REFINANCE THIS NOTE AT THAT TIME.

TIB, NATIONAL ASSOCIATION

PROMISSORY NOTE

(Loan No. 40568)

$15,000,000.00

December 28, 2023

FOR VALUE RECEIVED, the undersigned, SOUTHERN FIRST BANCSHARES, INC., a South Carolina corporation (“Maker”), promises to pay to the order of TIB, NATIONAL ASSOCIATION (“Payee”) the maximum principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00), or so much thereof as shall be advanced hereunder, on demand, or if not sooner demanded, then at or before the maturity of this Note, with interest on the unpaid balance outstanding from time to time at the rate or rates specified below, both principal and interest payable as provided below in lawful money of the United States of America at the address of Payee set forth below or at such other place as from time to time may be designated by the holder of this Note.

I. Interest Rates and Payments

Prior to default or maturity, the unpaid principal of this Note from time to time outstanding shall bear interest at the rate (“Rate”) of interest per annum equal to the rate reported in the Credit Markets section (or similar section) of The Wall Street Journal as the U.S. “Prime Rate,” as announced from time to time (floating daily), automatically fluctuating upward and downward with each announcement without notice to Maker or any other person (the “Index”) plus one-quarter of one percent (0.25%), provided, however, that in no event shall the Rate exceed the maximum interest rate permitted under applicable law (“Maximum Rate”). If applicable law provides for a ceiling, that ceiling shall be the indicated rate ceiling. All interest accruing under this Note shall be calculated on the basis of a 360-day year applied to the actual number of days elapsed.

Quarterly payments of interest on the unpaid principal balance of this Note shall be due and payable on March 28, 2024, and on the same date of each June, September, and December thereafter through and including February 28, 2025 (“Maturity Date”), on which date all unpaid principal of and accrued interest on this Note shall be due and payable, which may be a balloon payment. Any payment received later than ten (10) days from the due date thereof must be accompanied by a late fee payment in the amount of five percent (5%) of the amount of such payment. All principal and interest which is matured or otherwise past due under this Note shall bear interest at the Maximum Rate, or, if no such rate is designated under applicable law, at the rate of eighteen percent (18%) per annum.

Advances hereunder shall be in accordance with the Loan Agreement (herein so called) of even date herewith between Maker and Payee. Maker shall have the right to prepay, without penalty, at any time and from time to time prior to maturity, all or any part of the unpaid principal balance of this Note and all or any part of the unpaid interest accrued to the date of such prepayment, provided that any such principal thus paid is accompanied by accrued interest on such principal. Maker may borrow, repay, and reborrow up to the principal face amount of this Note; provided, however, that (1) such borrowings or reborrowings be in accordance with the requirements in the Loan Agreement between Maker and Payee of even date herewith, and (2) at no time shall the total outstanding principal amount hereunder exceed the face value of this Note. It is contemplated that by reason of prepayments hereon there may be times when no indebtedness is owing hereunder; but,

notwithstanding such occurrences, this Note shall remain valid and shall be in full force and effect subsequent to each such occurrence until the Maturity Date.

II. Security

This Note is secured by, Inter alia, a Pledge Agreement (the “Pledge Agreement”) of even date herewith from Maker to Payee, to which Pledge Agreement reference is made for a description of the property covered thereby and the nature and extent of the rights and powers of the holder of this Note in respect of such property.

III. Right to Accelerate Upon Default

In addition to the demand feature hereof, the holder of this Note shall have the option of declaring the principal balance hereof and the interest accrued hereon to be immediately due and payable upon the occurrence of an Event of Default under the Loan Agreement (this Note, the Pledge Agreement, the Loan Agreement, and any such other documents are called the “Loan Documents” below), and the continuance of such default for a relevant grace or notice period provided therein, if any.

IV. Waiver of Conditions and Defenses to Liability

Maker and any other party who is or becomes liable to pay all or any part of this Note, or who grants any lien or security interest to secure all or any part of this Note (each called an “other liable party” below), including but not limited to any drawer, acceptor, endorser, guarantor, surety or accommodation party, severally waive presentment for payment, demand, notice of demand and of dishonor and nonpayment of this Note, notice of intention to accelerate the maturity of this Note, protest and notice of protest, diligence in collecting, and the bringing of suit against any other party.

Further, Maker and any other liable party severally waive any notice of or defense based upon any agreement or consent of the holder of this Note made or given from time to time, before or after maturity, to any of the following: the acceleration, renewal or extension of this Note; a change in the time or manner of payments required by this Note; a change in the rates of interest specified in this Note; acceptance or surrender of security; a substitution of security or subordination, amendment or release of security; an addition or release of any other liable party; changes of any sort whatever in the terms of payment of this Note or in the manner of doing business with Maker; and any settlement or compromise with Maker or any other liable party on such terms as the holder of this Note may deem appropriate in its sole and absolute discretion.

The holder of this Note may apply all moneys received from Maker or others, or from any security (whether held under a security instrument or not), in such manner upon the indebtedness evidenced or secured by any Loan Documents (whether then due or not) as such holder may determine to be in its best interest, without in any way being required to marshal assets or to apply all or any part of such moneys upon any particular part of such indebtedness. The holder of this Note is not required to retain, hold, protect, exercise due care with respect to, perfect security interests in or otherwise assure or safeguard any security for this Note, and no failure by the holder of this Note to do any of the foregoing and no exercise or failure to exercise by such holder of any other right or remedy shall in any way affect any of Maker’s or any other liable party’s obligations hereunder or under other Loan Documents or affect any security or give Maker or any other liable party any recourse against the holder of this Note.

V. Usury Savings Provision

It is the intent of Maker and Payee in the execution of this Note and all other Loan Documents to contract in strict compliance with applicable usury law. In furtherance thereof, Maker and Payee stipulate and agree that none of the terms and provisions contained in this Note, or in any other instrument executed in connection herewith, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, interest at a rate in excess of the Maximum Rate. Neither Maker nor any guarantors, endorsers or other parties now or hereafter becoming liable for payment of this Note shall ever be obligated or required to pay interest on this Note at a rate in excess of the Maximum Rate, and the provisions of this paragraph shall control over all other provisions of this Note and any other Loan Documents now or hereafter executed which may be in apparent conflict herewith. Payee expressly disavows any intention to charge or collect excessive unearned interest or finance charges in the event the maturity of this Note is accelerated. If the maturity of this Note shall be

accelerated for any reason or if the principal of this Note is paid prior to the end of the term of this Note, and as a result thereof the interest received for the actual period of existence of the loan evidenced by this Note exceeds the applicable maximum lawful rate, the holder of this Note shall credit the amount of such excess against the principal balance of this Note then outstanding and thereby shall render inapplicable any and all penalties of any kind provided by applicable law as a result of such excess interest; provided, however, that if the principal hereof has been paid in full, such excess shall be refunded to Maker. If the holder of this Note shall receive money (or anything else) which is determined to constitute interest and which would increase the effective interest rate on this Note or the other indebtedness secured by the Loan Documents to a rate in excess of that permitted by applicable law, the amount determined to constitute interest in excess of the lawful rate shall be credited against the principal balance of this Note then outstanding or, if the principal balance has been paid in full, refunded to Maker, in which event any and all penalties of any kind under applicable law as a result of such excess interest shall be inapplicable. If the holder of this Note shall not actually receive, but shall contract for, request or demand, a payment of money (or anything else) which is determined to constitute interest and which would increase the effective interest rate contracted for or charged on this Note or the other indebtedness evidenced or secured by the Loan Documents to a rate in excess of that permitted by applicable law, the holder of this Note shall be entitled, following such determination, to waive or rescind the contractual claim, request or demand for the amount determined to constitute interest in excess of the lawful rate, in which event any and all penalties of any kind under applicable law as a result of such excess interest shall be inapplicable. By execution of this Note Maker acknowledges that Maker believes the loan evidenced by this Note to be non-usurious and agrees that if, at any time, Maker should have reason to believe that such loan is in fact usurious, Maker will give the holder of this Note notice of such condition and Maker agrees that the holder shall have sixty (60) days in which to make appropriate refund or other adjustment in order to correct such condition if in fact such exists. Additionally, if, from any circumstance whatsoever, fulfillment of any provision hereof or any other Loan Documents shall, at the time fulfillment of such provision be due, involve transcending the Maximum Rate then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Rate. The term “applicable law” as used in this Note shall mean the laws of the State of Texas or the laws of the United States, whichever laws allow the greater rate of interest, as such laws now exist or may be changed or amended or come into effect in the future.

VI. Miscellaneous

Should the indebtedness represented by this Note or any part thereof be collected at law or in equity or through any bankruptcy, receivership, probate or other court proceedings or if this Note is placed in the hands of attorneys for collection after default, Maker and all endorsers, guarantors and sureties of this Note jointly and severally agree to pay to the holder of this Note in addition to the principal and interest due and payable hereon all the costs and expenses of the holder in enforcing this Note including, without limitation, reasonable attorneys’ fees and legal expenses.

This Note and the rights, duties and liabilities of the parties hereunder or arising from or relating in any way to the indebtedness evidenced by this Note or the transaction of which such indebtedness is a part shall be governed by and construed in accordance with the law of the State of Texas and the law of the United States applicable to transactions within such State.

No amendment of this Note shall be binding unless expressed in a writing executed by Maker and the holder of this Note.

Maker certifies, represents, and warrants to Payee that the proceeds hereof are to be used for a commercial purpose and not for personal, family, household, or agricultural purposes.

THE PARTIES HERETO VOLUNTARILY AND KNOWINGLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN CONNECTION WITH, OR RELATED TO ANY OF THE LOAN DOCUMENTS.

THIS NOTE AND ALL OTHER DOCUMENTS AND INSTRUMENTS EXECUTED PURSUANT HERETO OR IN CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY ARE MADE AND PERFORMABLE IN DALLAS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. MAKER IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY TEXAS OR FEDERAL COURT SITTING IN DALLAS

COUNTY, TEXAS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, AND MAKER HEREBY AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY TEXAS OR FEDERAL COURT SITTING IN DALLAS COUNTY, TEXAS (OR SUCH OTHER COUNTY IN TEXAS) MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO MAKER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE FIVE DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

Maker’s Address:	MAKER:
6 Verdae Boulevard	SOUTHERN FIRST BANCSHARES, INC.,
Greenville, South Carolina 29607	a South Carolina corporation
	By:	/s/ D. Andrew Borrmann
		D. Andrew Borrmann, Chief Financial Officer

Payee’s Address:

TIB, NATIONAL ASSOCIATION

11701 Luna Road

Farmers Branch, Texas 75234

Exhibit 10.3

Loan No. 40568	Pledge Agreement	Date: As of December 28, 2023

SECURED PARTY: TIB, NATIONAL ASSOCIATION 11701 Luna Road Farmers Branch, Texas 75234	BORROWER: SOUTHERN FIRST BANCSHARES, INC. 6 Verdae Boulevard Greenville, South Carolina 29607
Borrower is:       o Individual       x Corporation      o Partnership       o Other ____________________ Address is Borrower’s:   o Residence     x Place of Business    o Chief Executive Office if more than one place of business

A.

Security Interest. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower (hereinafter referred to as “Borrower,” whether one or more) pledges, assigns and grants to Secured Party a security interest and lien in the Collateral (hereinafter defined) to secure the payment and the performance of the Obligations (hereinafter defined).

B.

Collateral. The security interest is granted in the following collateral (the “Collateral”):

1.       100% (i.e. currently 850,000 shares, evidenced by stock certificate No. 001) of the outstanding Common Stock of Southern First Bank, Greenville, South Carolina.

2.       Reserved.

3.       All additions, substitutes and replacements for and proceeds of the above Collateral (including all income and benefits resulting from any of the above, such as dividends payable or distributable in cash (but only with respect to dividends payable after an Event of Default), property or stock; interest, premium and principal payments; redemption proceeds and subscription rights; and shares or other proceeds of conversions or splits of any securities in the Collateral). Any investment property and/or securities received by Borrower, which shall comprise such additions, substitutes and replacements for, or proceeds of, the Collateral, shall be held in trust for Secured Party and shall be delivered immediately to Secured Party. Any cash proceeds shall be held in trust for Secured Party and upon demand shall be delivered immediately to Secured Party.

4.       The balance of every deposit account of Borrower maintained with Secured Party and any other claim of Borrower against Secured Party, now or hereafter existing, liquidated or unliquidated, and all money, instruments, investment property, securities, documents, chattel paper, credits, claims, demands, income, and any other property, rights and interests of Borrower which at any time shall come into the possession or custody or under the control of Secured Party or any of its agents or affiliates, for any purpose, and the proceeds of any thereof. Secured Party shall be deemed to have possession of any of the Collateral in transit to or set apart for it or any of its agents or affiliates.

C.

Obligations.

1.       Description of Obligations. The following obligations (“Obligations”) are secured by this Agreement: (a) All debts, obligations, liabilities and agreements of Borrower to Secured Party, now or hereafter existing, arising directly or indirectly between Borrower and Secured Party whether absolute or contingent, joint or several, secured or unsecured, due or not due, contractual or tortious, liquidated or unliquidated, arising by

operation of law or otherwise, and all renewals, extensions or rearrangement of any of the above; (b) All costs incurred by Secured Party to obtain, preserve, perfect and enforce this Agreement and maintain, preserve, collect and enforce the Collateral; (c) All debts, obligations, liabilities and agreements of Borrower to Secured Party under this Agreement; (d) Interest on the above amounts determined in accordance with applicable agreements between Secured Party and Borrower; (e) All indebtedness, liabilities and obligations of Borrower to Secured Party under the Loan Agreement dated even date herewith (the “Loan Agreement”) between Borrower and Secured Party and all renewals, extensions and modifications thereof; (f) all indebtedness, liabilities and obligations of Borrower to Secured Party under that certain Promissory Note dated of even date herewith in the maximum stated principal amount of $15,000,000.00 (the “Note”) payable by Borrower to the order of Secured Party and all renewals, extensions and modifications thereof; (g) all reasonable expenses of Secured Party, including reasonable fees and expenses of Secured Party’s counsel, incident to the enforcement of payment of all obligations of the Borrower by any action or participation in, or in connection with a case or proceeding under the Bankruptcy Code, or any successor statute thereto..

In the event any amount paid to Secured Party on any of the Obligations is subsequently recovered from Secured Party in or as a result of any bankruptcy, insolvency or fraudulent conveyance proceeding involving an obligor of the Obligations other than Borrower, Borrower shall be liable to Secured Party for the amounts so recovered up to the fair market value of the Collateral whether or not the Collateral has been released or the security interest terminated. In the event the Collateral has been released or the security interest terminated, the fair market value of the Collateral shall be determined, at Secured Party’s option, as of the date the Collateral was released, the security interest terminated, or said amounts were recovered.

2.       Use of Proceeds. The proceeds of any indebtedness or obligation secured by the Collateral will not be used directly or indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any indebtedness incurred for such purpose or otherwise in a manner which would violate Regulations T or U.

D.

Borrower’s Warranties. Borrower hereby represents and warrants to Secured Party as follows:

1.       Financing Statements. Except as may be noted by schedule attached hereto and incorporated herein by reference, no financing statement covering the Collateral is or will be on file in any public office, except the financing statements relating to this security interest or previously granted to Secured Party, and no security interest, other than the one herein created or previously granted to Secured Party, has attached or been perfected in the Collateral or any part thereof and is now in force or effect.

2.       Ownership. Borrower owns the Collateral free from any setoff, claim, restriction, lien, security interest or encumbrance except liens for taxes not yet due and payable and the security interest hereunder or previously granted to Secured Party.

3.       Power and Authority. Borrower has full power and authority to make this Agreement, and all necessary consents and approvals of any persons, entities, governmental or regulatory authorities and securities exchanges have been obtained to effectuate the validity of this Agreement.

E.

Borrower’s Covenants. Until full payment and performance of all of the Obligations and termination or expiration of any obligation or commitment of Secured Party to make advances or loans to Borrower, unless Secured Party otherwise consents in writing:

1.       Obligations and This Agreement. Borrower shall perform all of its agreements herein and in any other agreements between it and Secured Party.

2.       Ownership of Collateral. Borrower shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein adverse to Secured Party. Borrower shall keep the Collateral free from all liens and security interests except those for taxes not yet due and payable and the security interest hereby created.

3.       Secured Party’s Costs. Borrower shall pay all costs necessary to obtain, preserve, perfect, defend and enforce the security interest created by this Agreement, collect the Obligations, and preserve, defend, enforce

and collect the Collateral, including but not limited to taxes, assessments, reasonable attorney’s fees, legal expenses and expenses of sales. Whether the Collateral is or is not in Secured Party’s possession, and without any obligation to do so and without waiving Borrower’s default for failure to make any such payment, Secured Party at its option may pay any such costs and expenses and discharge encumbrances on the Collateral, and such payments shall be a part of the Obligations and bear interest at the rate set out in the Obligations. Borrower agrees to reimburse Secured Party on demand for any costs so incurred.

4.       Information and Inspection. Borrower shall (i) promptly furnish, as permitted by law, Secured Party any information with respect to the Collateral reasonably requested by Secured Party; (ii) allow Secured Party or its representatives to inspect and copy, or furnish Secured Party or its representatives with copies of, all records relating to the Collateral and the Obligations; and (iii) promptly furnish Secured Party or its representatives with any other information Secured Party may reasonably request.

5.       Additional Documents. Borrower shall sign and deliver any papers furnished by Secured Party which are necessary or desirable in the judgment of Secured Party to obtain, maintain and perfect the security interest hereunder and to enable Secured Party to comply with any federal or state law in order to obtain or perfect Secured Party’s interest in the Collateral or to obtain proceeds of the Collateral.

6.       Notice of Changes. Borrower shall notify Secured Party immediately of (i) any material change in the Collateral, (ii) a change in Borrower’s residence or location, (iii) a change in any matter warranted or represented by Borrower in this Agreement, or in any of the loan documents relating to the Obligations or furnished to Secured Party pursuant to this Agreement, and (iv) the occurrence of an Event of Default as defined herein.

7.       Possession of Collateral. Borrower shall deliver a copy of this Agreement (or other notice acceptable to Secured Party) to any Broker, financial intermediary, or any other person in possession of any of the Collateral or on whose books the interest of Borrower in the Collateral appears, and such delivery shall constitute notice to such person of Secured Party’s security interest in the Collateral and shall constitute Borrower’s instruction to such person to note Secured Party’s security interest on their books and records, or deliver to Secured Party certificates or other evidence of the Collateral promptly upon Secured Party’s request. Borrower shall deliver all investment securities and other instruments and documents which are a part of the Collateral and in Borrower’s possession to Secured Party immediately, or if hereafter acquired, immediately following acquisition, in a form suitable for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank with signatures appropriately guaranteed in form and substance suitable to Secured Party.

8.       Change of Name/Status. Without the consent of Secured Party (not to be unreasonably withheld), Borrower shall not change its name, change its corporate structure or status, use any trade name or engage in any business not reasonably related to its business as presently conducted; provided, however, that Borrower may restructure as an S-corporation or such other structure so long as the value of the Collateral is not negatively impacted nor is the prospect for satisfaction of the Obligations impaired.

9.       Power of Attorney. Borrower appoints Secured Party and any officer thereof as Borrower’s attorney-in-fact with full power in Borrower’s name and on Borrower’s behalf to do every act which Borrower is obligated to do or may be required to do hereunder; however, nothing in this paragraph shall be construed to obligate Secured Party to take any action hereunder nor shall Secured Party be liable to Borrower for failure to take any action hereunder. This appointment shall be deemed a power coupled with an interest and shall not be terminable as long as the Obligations are outstanding and shall not terminate on the disability or incompetence of Borrower. Without limiting the generality of the foregoing, if an Event of Default has occurred and is continuing, Secured Party shall have the right and power to receive, indorse and collect all checks and other orders for the payment of money made payable to Borrower representing any dividend, interest payment or other distribution payable in respect of the Collateral or any part thereof.

10.       Other Parties and Other Collateral. No renewal or extensions of or any other indulgence with respect to the Obligations or any part thereof, no modification of the document(s) evidencing the Obligations, no release of any security, no release of any person (including any maker, indorser, guarantor or surety) liable on the Obligations, no delay in enforcement of payment, and no delay or omission or lack of diligence or care in exercising

any right or power with respect to the Obligations or any security therefor or guaranty thereof or under this Agreement shall in any manner impair or affect the rights of Secured Party under any law, hereunder, or under any other agreement pertaining to the Collateral. Secured Party need not file suit or assert a claim for personal judgment against any person for any part of the Obligations or seek to realize upon any other security for the Obligations, before foreclosing or otherwise realizing upon the Collateral. Borrower waives any right that can be waived to the benefit of or to require or control application of any other security or proceeds thereof, and agrees that Secured Party shall have no duty or obligation to Borrower to apply to the Obligations any such other security or proceeds thereof

11.       Waivers by Borrower. Borrower waives notice of the creation, advance, increase, existence, extension or renewal of, and of any indulgence with respect to, the Obligations; waives presentment, demand, notice of dishonor, and protest; waives notice of the amount of the Obligations outstanding at any time, notice of any change in financial condition of any person liable for the Obligations or any part thereof, notice of any Event of Default, and all other notices respecting the Obligations; and agrees that maturity of the Obligations and any part thereof may be accelerated, extended or renewed one or more times by Secured Party in its discretion, without notice to Borrower. Borrower waives any right to require that any action be brought against any other person or to require that resort be had to any other security or to any balance of any deposit account. Borrower further waives any right of subrogation or to enforce any right of action against any other Borrower until the Obligations are paid in full.

F.

Rights and Powers of Secured Party.

1.       General. If an Event of Default has occurred and is continuing, Secured Party, without liability to Borrower, may: take control of proceeds, including stock received as dividends or by reason of stock splits; release the Collateral in its possession to any Borrower, temporarily or otherwise; reject as unsatisfactory any property hereafter offered by Borrower as Collateral; take control of funds generated by the Collateral, such as cash dividends, interest and proceeds, and use same to reduce any part of the Obligations and exercise all other rights which an owner of such Collateral may exercise, except the right to vote or dispose of the Collateral before an Event of Default; and at any time after an Event of Default transfer any of the Collateral or evidence thereof into its own name or that of its nominee. Secured Party shall not be liable for failure to collect any account or instruments, or for any act or omission on the part of Secured Party, its officers, agents or employees, except for its or their own willful misconduct or gross negligence. The foregoing rights and powers of Secured Party will be in addition to, and not a limitation upon, any rights and powers of Secured Party given by law, elsewhere in this Agreement, or otherwise.

2.       Convertible Collateral. Secured Party may present for conversion any Collateral which is convertible into any other instrument or investment security or a combination thereof with cash, but Secured Party shall not have any duty to present for conversion any Collateral unless it shall have received from Borrower detailed written instructions to that effect at a time reasonably far in advance of the final conversion date to make such conversion possible.

G.

Default.

1.       Event of Default. For purposes of this Agreement, the term “Event of Default” shall have the same meaning given that term in the Loan Agreement.

2.       Rights and Remedies. If an Event of Default has occurred and is continuing, then, in each and every such case, Secured Party may, without (a) presentment, demand, or protest, (b) notice of default, dishonor, demand, non-payment, or protest, (c) notice of intent to accelerate all or any part of the Obligations, (d) notice of acceleration of all or any part of the Obligations, or (e) notice of any other kind, all of which Borrower hereby expressly waives (except for any notice required under this Agreement, any other loan document or which may not be waived under applicable law), at any time thereafter exercise and/or enforce any of the following rights and remedies, at Secured Party’s option:

A.       Acceleration. The Obligations shall, at Secured Party’s option, become immediately due and payable, and the obligation, if any, of Secured Party to permit further borrowings under the Obligations shall at Secured Party’s option immediately cease and terminate.

B.       Liquidation of Collateral. Sell, or instruct any Agent or Broker to sell, all or any part of the Collateral in a public or private sale, direct any Agent or Broker to liquidate all or any part of any Account and deliver all proceeds thereof to Secured Party, and apply all proceeds to the payment of any or all of the Obligations in such order and manner as Secured Party shall, in its discretion, choose, or exercise any remedy provided for in Section F or G hereof, in the Loan Agreement or in the Note.

C.       Uniform Commercial Code. All of the rights, powers and remedies of a secured creditor under the Uniform Commercial Code (“UCC’) as adopted in the jurisdiction to which Secured Party is subject under this Agreement.

D.       Right of Set Off. Without notice or demand to Borrower, set off and apply against any and all of the Obligations any and all deposits (general or special, time or demand, provisional or final) and any other indebtedness, at any time held or owing by Secured Party or by any of Secured Party’s affiliates or correspondents to or for the credit of the account of Borrower or any guarantor or indorser of Borrower’s Obligations.

Borrower specifically understands and agrees that any sale by Secured Party of all or part of the Collateral pursuant to the terms of this Agreement may be effected by Secured Party at times and in manners which could result in the proceeds of such sale as being significantly and materially less than might have been received if such sale had occurred at different times or in different manners, and Borrower hereby releases Secured Party and its officers and representatives from and against any and all obligations and liabilities arising out of or related to the timing or manner of any such sale.

If, in the opinion of Secured Party, there is any question that a public sale or distribution of any Collateral will violate any state or federal securities law, Secured Party may offer and sell such Collateral in a transaction exempt from registration under federal securities law, and any such sale made in good faith by Secured Party shall be deemed ‘‘commercially reasonable.’’

H.

General

1.       Parties Bound. Secured Party’s rights hereunder shall inure to the benefit of its successors and assigns, and in the event of any assignment or transfer of any of the Obligations or the Collateral, Secured Party thereafter shall be fully discharged from any responsibility with respect to the Collateral so assigned or transferred, but Secured Party shall retain all rights and powers hereby given with respect to any of the Obligations or the Collateral not so assigned or transferred. All representations, warranties and agreements of Borrower, if more than one, are joint and several and all shall be binding upon the personal representatives, heirs, successors and assigns of Borrower.

2.       Waiver. No delay of Secured Party in exercising any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. No waiver by Secured Party of any right hereunder or of any default by Borrower shall be binding upon Secured Party unless in writing, and no failure by Secured Party to exercise any power or right hereunder or waiver of any default by Borrower shall operate as a waiver of any other or further exercise of such right or power or of any further default. Each right, power and remedy of Secured Party as provided for herein or in any of the loan documents related to the Obligations, or which shall now or hereafter exist at law or in equity or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by Secured Party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Secured Party of any or all other such rights, powers or remedies.

3.       Agreement Continuing. This Agreement shall constitute a continuing agreement. This Agreement shall apply to all future as well as existing transactions, whether or not of the character contemplated at the date of this Agreement, and if all transactions between Secured Party and Borrower shall be closed at any time, shall be equally applicable to any new transactions thereafter. Provisions of this Agreement, unless by their terms exclusive, shall be in addition to other agreements between the parties. Time is of the essence of this Agreement. Notwithstanding the foregoing, in the event that all Obligations are fully and finally paid and all

commitments of the Secured Party to extend credit to Borrower have been terminated, then this Agreement shall be terminated, and all Collateral shall, at the request of the Borrower be released.

4.       Definitions. Unless the context indicates otherwise, definitions in the UCC apply to words and phrases in this Agreement; if UCC definitions conflict, Article 8 and/or 9 definitions apply.

5.       Notice. Notice shall be deemed reasonable if mailed postage prepaid at least five (5) days before the related action (or if the UCC elsewhere specifies a longer period, such longer period) to the address of Borrower given above. Each notice, request and demand shall be deemed given or made, if sent by mail, upon the earlier of the date of receipt or five (5) days after deposit in the U.S. Mail, first class postage prepaid, or if sent by any other means, upon delivery.

6.       Modifications. No provision hereof shall be modified or limited except by a written agreement expressly referring hereto and to the provisions so modified or limited and signed by Borrower and Secured Party. The provisions of this Agreement shall not be modified or limited by course of conduct or usage of trade.

7.       Partial Invalidity. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision herein, and the invalidity or unenforceability of any provision of any loan document related to the Obligations to any person or circumstance shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances.

8.       Applicable Law and Venue. This Agreement has been delivered in the State of Texas and shall, except for perfection and enforcement matters that may be required by applicable law to be governed by the laws of another state, be construed in accordance with the laws of that State. It is performable by Borrower in the county or city of Secured Party’s address set out above and Borrower expressly waives any objection as to venue in any such location. Wherever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

9.       Financing Statement. To the extent permitted by applicable law, a carbon, photographic or other reproduction of this Agreement or any financing statement covering the Collateral shall be sufficient as a financing statement, and Secured Party is authorized to file this Agreement or any other financing statements it determines to be necessary or prudent.

THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written.

SECURED PARTY:			BORROWER:
TIB, NATIONAL ASSOCIATION			SOUTHERN FIRST BANCSHARES, INC.,
			a South Carolina corporation
By:	/s/B. Windol Cook		By:	/s/D. Andrew Borrmann
	B. Windol Cook, Senior Vice President			D. Andrew Borrmann, Chief Financial Officer

v3.23.4

Cover	Dec. 28, 2023
Entity Addresses [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 28, 2023
Entity File Number	000-27719
Entity Registrant Name	Southern First Bancshares, Inc.
Entity Central Index Key	0001090009
Entity Tax Identification Number	58-2459561
Entity Incorporation, State or Country Code	SC
Entity Address, Address Line One	6 Verdae Boulevard
Entity Address, City or Town	Greenville
Entity Address, State or Province	SC
Entity Address, Postal Zip Code	29607
City Area Code	864
Local Phone Number	679-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	SFST
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Former Address [Member]
Entity Addresses [Line Items]
Entity Address, Address Line One	100 Verdae Boulevard
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Greenville
Entity Address, State or Province	SC

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