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 April 28, 2020



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.)  
 
100 Verdae Boulevard, Suite 100, Greenville, SC   29607  
(Address of principal executive offices) (Zip Code)

(864) 679-9000
(Registrant's telephone number, including area code)
 
Not Applicable
(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):

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

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.


ITEM 2.02. Results of Operations and Financial Condition

On April 28, 2020, Southern First Bancshares, Inc., holding company for Southern First Bank, issued a press release announcing its financial results for the period ended March 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No.

Exhibit

99.1       Earnings Press Release for period ended March 31, 2020.


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/ Michael D. Dowling
Name:    Michael D. Dowling
Title: Chief Financial Officer                      

April 28, 2020


EXHIBIT INDEX

Exhibit Number Description
99.1       Earnings Press Release for the period ended March 31, 2020.


Exhibit 99.1

Southern First Reports Results for First Quarter 2020

Greenville, South Carolina, April 28, 2020 – Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three-month period ended March 31, 2020.

“As we find ourselves in the middle of this COVID-19 pandemic, the focus of our company has shifted to caring for our clients and team and focusing on the changing risk elements of our economy,” stated Art Seaver, the company’s Chief Executive Officer. “While our core earnings were solid, we felt it was prudent to increase our loan loss provision based on the rising unemployment and economic uncertainty in our markets related to COVID-19.”

2020 First Quarter Highlights

Net income of $2.8 million, compared to $6.0 million for Q1 2019
Diluted earnings per common share of $0.36 per share, compared to $0.78 for Q1 2019
Loan loss provision of $6.0 million, compared to $300 thousand for Q1 2019

COVID-19 Update

Payment modifications related to COVID-19 on 428 loans for $380.2 million through Q1 2020
Identification of nine specific targeted industries in order to monitor credit exposure
Active lender in the SBA Paycheck Protection Program (“PPP”)
Offices operating in a drive-thru only mode, as applicable
Approximately 70% of team members working remotely

Quarter Ended
March 31 December 31 September 30 June 30 March 31
2020 2019 2019 2019 2019
Earnings ($ in thousands, except per share data):                              
Net income available to common shareholders $      2,832 7,198 7,412 7,239 6,009
Earnings per common share, diluted 0.36 0.92 0.95 0.93 0.78
Total revenue(1) 22,014 21,136 21,675 20,629 18,812
Net interest margin (tax-equivalent)(2) 3.43 % 3.41 % 3.36 % 3.43 % 3.52 %
Return on average assets(3) 0.51 % 1.32 % 1.37 % 1.43 % 1.28 %
Return on average equity(3) 5.42 % 14.18 % 15.20 % 15.72 % 13.74 %
Efficiency ratio(4) 56.20 % 51.92 % 52.98 % 55.11 % 56.60 %
Noninterest expense to average assets (3) 2.23 % 2.01 % 2.12 % 2.24 % 2.26 %
Balance Sheet ($ in thousands):
Total Loans(5) $ 2,030,261 1,943,525 1,838,427 1,809,355 1,733,964
Total deposits 2,025,698 1,876,124 1,899,295 1,854,008 1,758,235
Core deposits(6) 1,804,027 1,656,005 1,690,294 1,619,722 1,527,755
Total assets 2,372,249 2,267,195 2,201,626 2,116,044 2,014,426
Loans to deposits 100.23 % 103.59 % 96.80 % 97.59 % 98.62 %
Holding Company Capital Ratios(7):
Total risk-based capital ratio 13.59 % 13.73 % 13.63 % 12.31 % 12.43 %
Tier 1 risk-based capital ratio 11.29 % 11.63 % 11.51 % 11.40 % 11.48 %
Leverage ratio 10.00 % 10.10 % 9.82 % 9.95 % 10.17 %
Common equity tier 1 ratio(8) 10.63 % 10.94 % 10.80 % 10.67 % 10.72 %
Tangible common equity(9) 8.87 % 9.08 % 9.02 % 8.97 % 8.99 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets 0.42 % 0.30 % 0.32 % 0.27 % 0.30 %
Net charge-offs as a percentage of average loans(5) (YTD annualized) 0.04 % 0.08 % 0.09 % 0.03 % 0.00 %
Allowance for loan losses as a percentage of loans(5) 1.11 % 0.86 % 0.86 % 0.89 % 0.93 %
Allowance for loan losses as a percentage of nonaccrual loans 226.14 %         244.95 %           225.50 % 277.91 % 265.35 %
[Footnotes to table located on page 7]

1



INCOME STATEMENTS - Unaudited
 
Quarter Ended
Mar 31 Dec 31 Sept 30 June 30 Mar 31
(in thousands, except per share data) 2020 2019 2019 2019 2019
Interest income
Loans       $      23,367       23,124       22,817       22,098       20,889
Investment securities 396 438 576 539 549
Federal funds sold 103 334 663 451 174
Total interest income 23,866 23,896 24,056 23,088 21,612
Interest expense
Deposits 5,174 5,771 6,409 6,175 5,375
Borrowings 594 492 368 374 419
Total interest expense 5,768 6,263 6,777 6,549 5,794
Net interest income 18,098 17,633 17,279 16,539 15,818
Provision for loan losses 6,000 1,050 650 300 300
Net interest income after provision for loan losses 12,098 16,583 16,629 16,239 15,518
Noninterest income
Mortgage banking income 2,668 2,181 3,055 2,830 1,857
Service fees on deposit accounts 262 260 271 265 265
ATM and debit card income 398 441 464 443 380
Income from bank owned life insurance 270 281 282 222 216
Gain on sale of securities, net - 719 2 3 3
Loss on extinguishment of debt - (1,496 ) - - -
Other income 318 1,117 322 327 273
Total noninterest income 3,916 3,503 4,396 4,090 2,994
Noninterest expense
Compensation and benefits 7,871 7,175 7,668 7,399 6,783
Occupancy 1,536 1,429 1,416 1,343 1,339
Outside service and data processing costs 1,192 1,109 1,073 1,045 960
Insurance 320 70 145 280 318
Professional fees 497 447 399 414 439
Marketing 258 208 237 236 260
Other 698 535 546 651 549
Total noninterest expenses 12,372 10,973 11,484 11,368 10,648
Income before provision for income taxes 3,642 9,113 9,541 8,961 7,864
Income tax expense 810 1,915 2,129 1,722 1,855
Net income available to common shareholders $ 2,832 7,198 7,412 7,239 6,009
 
Earnings per common share – Basic $ 0.37 0.94 0.98 0.97 0.81
Earnings per common share – Diluted 0.36 0.92 0.95 0.93 0.78
Basic weighted average common shares 7,679 7,608 7,548 7,496 7,459
Diluted weighted average common shares 7,827 7,811 7,781 7,756 7,742

[Footnotes to table located on page 7]

Net income for the first quarter of 2020 was $2.8 million, a 52.9% decrease over the first quarter of 2019, while net interest income increased 14.4% for the first quarter of 2020 compared to the first quarter of 2019. The increase in net interest income was driven by growth in interest-earning assets, combined with a reduction in interest expense on interest-bearing deposits. In addition, the provision for loan losses increased to $6.0 million for the three months ended March 31, 2020, compared to $300 thousand for the three months ended March 31, 2019. The increased provision during the first quarter of 2020 is driven by the COVID-19 pandemic and qualitative adjustment factors related to the uncertain economic conditions, as well as an increase in past due and non-accrual loans at March 31, 2020.

Noninterest income increased $922 thousand, or 30.8%, during the three months ended March 31, 2020 compared to the three months ended March 31, 2019, driven primarily by higher mortgage banking income as a result of the favorable mortgage rate environment.

2


Noninterest expense increased $1.7 million, or 16.2%, for the first quarter of 2020 compared to the first quarter of 2019. The increase in noninterest expense during the three-month period ended March 31, 2020 was related primarily to increases in compensation and benefits, occupancy, and data processing and related costs as we continue to expand our footprint in South Carolina, North Carolina, and Georgia. Included in noninterest expense are mortgage banking expenses of $1.8 million and $1.1 million for the three months ended March 31, 2020 and 2019, respectively.

Our effective tax rate was 22.2% and 23.6% for the three-month periods ended March 31, 2020 and 2019, respectively.

NET INTEREST INCOME AND MARGIN - Unaudited
 
For the Three Months Ended
March 31, 2020 December 31, 2019 March 31, 2019
Average   Income/ Yield/ Average   Income/ Yield/ Average   Income/ Yield/
(dollars in thousands) Balance Expense Rate(3) Balance Expense Rate(3) Balance Expense Rate(3)
Interest-earning assets
Federal funds sold and interest-bearing deposits       $   46,101       $   103       0.90 %       $   72,563       $   334       1.83 %       $   30,656       $   174       2.30 %
Investment securities, taxable 66,640 381 2.30 % 69,712 417 2.37 % 71,876 508 2.87 %
Investment securities, nontaxable(2) 3,815 19 2.05 % 3,249 27 3.33 % 5,427 53 3.98 %
Loans(10) 2,003,554 23,367 4.69 % 1,908,067 23,124 4.81 % 1,715,570 20,889 4.94 %
Total interest-earning assets 2,120,110 23,870 4.53 % 2,053,591 23,902 4.62 % 1,823,529 21,624 4.81 %
Noninterest-earning assets 111,338 115,686 86,431
Total assets $ 2,231,448 $ 2,169,277 $ 1,909,960
Interest-bearing liabilities
NOW accounts $ 227,688 168 0.30 % $ 221,248 169 0.30 % $ 186,070 86 0.19 %
Savings & money market 956,588 3,369 1.42 % 927,734 3,799 1.62 % 780,115 3,300 1.72 %
Time deposits 329,664 1,637 2.00 % 326,615 1,803 2.19 % 371,694 1,989 2.17 %
Total interest-bearing deposits 1,513,940 5,174 1.37 % 1,475,597 5,771 1.55 % 1,337,879 5,375 1.63 %
FHLB advances and other borrowings 43,470 158 1.46 % 6,420 46 2.78 % 31,302 256 3.32 %
Subordinated debentures 35,900 436 4.88 % 35,896 446 4.93 % 13,403 163 4.93 %
Total interest-bearing liabilities 1,593,310 5,768 1.46 % 1,517,913 6,263 1.64 % 1,382,584 5,794 1.70 %
Noninterest-bearing liabilities 427,992 450,025 349,988
Shareholders’ equity 210,146 201,339 177,388
Total liabilities and shareholders’ equity $ 2,231,448 $ 2,169,277 $ 1,909,960
Net interest spread 3.07 % 2.98 % 3.11 %
Net interest income (tax equivalent) / margin $ 18,102 3.43 % $ 17,639 3.41 % $ 15,830 3.52 %
Less: tax-equivalent adjustment(2) 4 6 12
Net interest income $ 18,098 $ 17,633 $ 15,818

[Footnotes to table located on page 7]

Net interest income was $18.1 million for the first quarter of 2020, a $465 thousand increase from the fourth quarter of 2019 and a $2.3 million increase from the first quarter of 2019. The increase in net interest income as compared to the fourth quarter of 2019 resulted primarily from growth in our loan portfolio and lower costing deposit balances, partially offset by a reduction in cash and investment securities. The increase in net interest income in the first quarter of 2020, compared to the same period in 2019, was primarily due to loan growth and a reduction in the cost of our interest-bearing deposits. Our net interest margin, on a tax-equivalent basis, was 3.43% for the first quarter of 2020, a two-basis point increase from 3.41% for the fourth quarter of 2019 and a nine-basis point decrease from 3.52% for the first quarter of 2019. Our average interest-earning assets increased by $66.5 million during the first quarter of 2020, compared to the fourth quarter of 2019, resulting in interest income of $23.9 million, with a yield of 4.53%, while our average interest-bearing liabilities increased by $75.4 million, resulting in interest expense of $5.8 million, at a cost of 1.46%. While our average loans grew by $95.5 million during the first quarter of 2020, compared to the fourth quarter of 2019, our average federal funds sold and interest-bearing deposits decreased by $26.5 million during the same period, and the yield on interest-earning assets declined by nine basis points. In addition, our average interest-bearing liabilities, which consist primarily of interest-bearing deposits, increased by $75.4 million, during the first quarter of 2020, compared to the fourth quarter of 2019, and our total cost of funds declined 18 basis points during the same period. With the recent Federal Reserve moves that lowered the federal funds rate by 150 basis points during March 2020, we expect to experience continued pressure on our net interest margin.

3



BALANCE SHEETS - Unaudited
 
Ending Balance
March 31 December 31 September 30 June 30 March 31
(in thousands, except per share data) 2020 2019 2019 2019 2019
Assets                              
Cash and cash equivalents:
Cash and due from banks $      17,521 19,196 44,349 12,220 16,853
Federal funds sold 83,314 89,256 19,215 64,520 75,207
Interest-bearing deposits with banks 40,277 19,364 70,959 40,044 25,246
Total cash and cash equivalents 141,112 127,816 134,523 116,784 117,306
Investment securities:
Investment securities available for sale 70,507 67,694 89,427 75,252 73,300
Other investments 5,341 6,948 3,307 3,311 3,309
Total investment securities 75,848 74,642 92,734 78,563 76,609
Mortgage loans held for sale 34,948 27,046 40,630 24,509 9,393
Loans (5) 2,030,261 1,943,525 1,838,427 1,809,355 1,733,964
Less allowance for loan losses (22,462 ) (16,642 ) (15,848 ) (16,144 ) (16,051 )
Loans, net 2,007,799 1,926,883 1,822,579 1,793,211 1,717,913
Bank owned life insurance 40,281 40,011 39,730 39,448 34,226
Property and equipment, net 58,656 58,478 54,846 48,262 47,262
Deferred income taxes 4,087 4,275 8,970 7,049 3,877
Other assets 9,518 8,044 7,614 8,218 7,840
Total assets $ 2,372,249 2,267,195 2,201,626 2,116,044 2,014,426
Liabilities
Deposits $ 2,025,698 1,876,124 1,899,295 1,854,008 1,758,235
Federal Home Loan Bank advances 65,000 110,000 25,000 25,000 25,000
Subordinated debentures 35,917 35,890 35,887 13,403 13,403
Other liabilities 35,159 39,321 42,950 33,779 36,602
Total liabilities 2,161,774 2,061,335 2,003,132 1,926,190 1,833,240
Shareholders’ equity
Preferred stock - $.01 par value; 10,000,000 shares authorized - - - - -
Common Stock - $.01 par value; 10,000,000 shares authorized 77 77 76 76 75
Nonvested restricted stock (1,105 ) (803 ) (919 ) (887 ) (993 )
Additional paid-in capital 107,529 106,152 105,378 104,354 103,600
Accumulated other comprehensive income (loss) 410 (298 ) 424 188 (379 )
Retained earnings 103,564 100,732 93,535 86,123 78,883
Total shareholders’ equity 210,475 205,860 198,494 189,854 181,186
Total liabilities and shareholders’ equity $ 2,372,249 2,267,195 2,201,626 2,116,044 2,014,426
Common Stock
Book value per common share $ 27.27 26.83 26.05 25.12 24.14
Stock price:
High 42.72 44.32 41.69 39.16 39.10
Low 21.64 37.94 36.27 33.97 31.63
Period end 28.37 42.49 39.85 39.16 33.87
Common shares outstanding 7,718 7,673 7,619 7,558 7,506
[Footnotes to table located on page 7]

4



ASSET QUALITY MEASURES - Unaudited
 
Quarter Ended
March 31 December 31 September 30 June 30 March 31
(dollars in thousands) 2020 2019 2019 2019 2019
Nonperforming Assets                              
Commercial
Owner occupied RE $ - - - - -
Non-owner occupied RE 3,268 188 1,963 372 403
Construction - - - - -
Commercial business 231 235 198 65 72
Consumer
Real estate 1,821 1,829 1,637 1,710 1,840
Home equity 427 431 467 442 1,249
Construction - - - - -
Other - - - - -
Nonaccruing troubled debt restructurings 4,186 4,111 2,763 3,220 2,485
Total nonaccrual loans 9,933 6,794 7,028 5,809 6,049
Other real estate owned - - - - -
Total nonperforming assets $ 9,933 6,794 7,028 5,809 6,049
Nonperforming assets as a percentage of:
Total assets 0.42 % 0.30 % 0.32 % 0.27 % 0.30 %
Total loans 0.49 % 0.35 % 0.38 % 0.32 % 0.35 %
Accruing troubled debt restructurings (TDRs) $ 7,939 5,219 5,791 6,935 6,839
 
  Quarter Ended
March 31 December 31 September 30 June 30 March 31
(dollars in thousands) 2020 2019 2019 2019 2019
Allowance for Loan Losses
Balance, beginning of period $      16,642 15,848 16,144 16,051 15,762
Loans charged-off (266 ) (275 ) (963 ) (237 ) (41 )
Recoveries of loans previously charged-off 86 19 17 30 30
Net loans charged-off (180 ) (256 ) (946 ) (207 ) (11 )
Provision for loan losses 6,000 1,050 650 300 300
Balance, end of period $ 22,462 16,642 15,848 16,144 16,051
Allowance for loan losses to gross loans 1.11 % 0.86 % 0.86 % 0.89 % 0.93 %
Allowance for loan losses to nonaccrual loans 226.14 %         244.95 %           225.50 % 277.91 %   265.35 %
Net charge-offs to average loans QTD (annualized) 0.04 % 0.06 % 0.21 % 0.06 % 0.00 %

Total nonperforming assets increased by $3.1 million to $9.9 million for the first quarter of 2020, compared to the fourth quarter of 2019, which represents 0.42% of total assets, an increase of 12 basis points. The increase in nonperforming assets was primarily a result of $3.2 million of loans added to nonaccrual status, driven by one commercial real estate loan. The allowance for loan losses as a percentage of nonaccrual loans was 226.14% at March 31, 2020, compared to 244.95% at December 31, 2019 and 265.35% at March 31, 2019.

At March 31, 2020, the allowance for loan losses was $22.5 million, or 1.11% of total loans, compared to $16.6 million, or 0.86% of total loans, at December 31, 2019 and $16.1 million, or 0.93% of total loans, at March 31, 2019. Net charge-offs were $180,000, or 0.04% on an annualized basis, for the first quarter of 2020 compared to $256,000, or 0.06% of net charge-offs, annualized, for the fourth quarter of 2019. Net charge-offs were $11,000 for the first quarter of 2019. The provision for loan losses was $6.0 million for the first quarter of 2020 compared to $1.1 million for the fourth quarter of 2019 and $300 thousand for the first quarter of 2019. The increased provision during the first quarter of 2020 is driven by the COVID-19 pandemic and qualitative adjustment factors related to the uncertain economic conditions, as well as an increase in past due and non-accrual loans at March 31, 2020.

As we work to assist clients affected by the pandemic, we are granting loan modifications or deferrals to certain borrowers on a short-term basis of three to six months. As of March 31, 2020, over 400 clients had requested loan payment deferrals or payments of interest only on loans totaling $380.2 million, of which 93.3% were commercial loans. At March 31, 2020, non-performing assets were not yet materially impacted by the economic pressures of COVID-19; however, accruing TDRs increased by $2.9 million due to loan modifications related to three client relationships already experiencing financial difficulty prior to the pandemic. In addition, as we closely monitor credit risk and our exposure to increased loan losses resulting from the impact of COVID-19 on our commercial clients, we have identified nine portfolios to monitor during this crisis. The table below identifies these segments as well as the outstanding and committed loan balances for each industry.

5



     
March 31, 2020
% of
% of Total Total Committed Total
Balance Loans Committed Balance Modified
(dollars in thousands) Outstanding Outstanding Balance Outstanding Balance % Modified
Religious organizations       $      56,306            2.8 %       88,422            63.6 %       1,539            2.7 %
Entertainment facilities 4,605 0.2 % 9,464 48.7 % 255 5.5 %
Hotels 82,227 4.1 % 104,155 78.9 % 6,050 7.4 %
Personal care businesses 1,349 0.1 % 1,385 97.4 % 137 10.2 %
Restaurants 48,352 2.4 % 53,526 90.3 % 3,673 7.6 %
Sports facilities 22,229 1.1 % 22,882 97.1 % 683 3.1 %
Travel related businesses 3,328 0.2 % 4,085 81.5 % 555 16.7 %
Private healthcare facilities 36,462 1.8 % 41,899 87.0 % 12,531 34.4 %
Non-essential retail 154,450 7.6 % 160,702 96.1 % 13,843 9.0 %
Total $ 409,308 20.2 % 486,520 84.1 % 39,266 9.6 %

LOAN COMPOSITION - Unaudited
 
Quarter Ended
March 31 December 31 September 30 June 30 March 31
(dollars in thousands) 2020 2019 2019 2019 2019
Commercial
Owner occupied RE       $      422,124       407,851       392,896       390,727          386,256
Non-owner occupied RE 534,846 501,878 481,865 455,346 423,953
Construction 74,758 80,486 75,710 85,065 80,561
Business 317,702 308,123 290,154 292,564 281,502
Total commercial loans 1,349,430 1,298,338 1,240,625 1,223,702 1,172,272
Consumer
Real estate 427,697 398,245 346,512 342,100 330,538
Home equity 183,099 179,738 174,611 170,861 167,146
Construction 45,240 41,471 49,548 46,247 39,838
Other 24,795 25,733 27,131 26,445 24,170
Total consumer loans 680,831 645,187 597,802 585,653 561,692
Total gross loans, net of deferred fees 2,030,261 1,943,525 1,838,427 1,809,355 1,733,964
Less—allowance for loan losses (22,462 ) (16,642 ) (15,848 ) (16,144 ) (16,051 )
Total loans, net $ 2,007,799 1,926,883 1,822,579 1,793,211 1,717,913
 
DEPOSIT COMPOSITION - Unaudited
 
Quarter Ended
March 31 December 31 September 30 June 30 March 31
(dollars in thousands) 2020 2019 2019 2019 2019
Non-interest bearing $ 437,855 397,331 414,704 368,906 359,754
Interest bearing:
NOW accounts 260,320 228,680 230,676 229,109 211,613
Money market accounts 979,861 898,923 891,784 857,478 791,490
Savings 19,563 16,258 15,912 15,180 15,451
Time, less than $100,000 43,596 47,941 55,501 59,382 61,331
Time and out-of-market deposits, $100,000 and over 284,503 286,991 290,718 323,953 318,596
Total deposits $ 2,025,698 1,876,124 1,899,295 1,854,008 1,758,235

6


____________________

Footnotes to tables:

(1)

Total revenue is the sum of net interest income and noninterest income.

(2)

The tax-equivalent adjustment to net interest income adjusts the yield for assets earning tax-exempt income to a comparable yield on a taxable basis.

(3)

Annualized for the respective three-month period.

(4)

Noninterest expense divided by the sum of net interest income and noninterest income.

(5)

Excludes mortgage loans held for sale.

(6)

Excludes out of market deposits and time deposits greater than $250,000.

(7)

March 31, 2020 ratios are preliminary.

(8)

The common equity tier 1 ratio is calculated as the sum of common equity divided by risk-weighted assets.

(9)

The tangible common equity ratio is calculated as total equity less preferred stock divided by total assets.

(10)

Includes mortgage loans held for sale.

ABOUT SOUTHERN FIRST BANCSHARES
Southern First Bancshares, Inc., Greenville, South Carolina is a registered bank holding company incorporated under the laws of South Carolina. The company’s wholly-owned subsidiary, Southern First Bank, is the third largest bank headquartered in South Carolina. Southern First Bank has been providing financial services since 1999 and now operates in 13 locations in the Greenville, Columbia, and Charleston markets of South Carolina as well as the Triangle and Triad regions of North Carolina and Atlanta, Georgia. Southern First Bancshares has consolidated assets of approximately $2.4 billion and its common stock is traded on the NASDAQ Global Market under the symbol “SFST.” More information can be found at www.southernfirst.com.

FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which the company conducts operations may be different than expected, including, but not limited to, due to the negative impacts and disruptions resulting from the recent outbreak of the novel coronavirus, or COVID-19, on the economies and communities the company serves, which may have an adverse impact on the company’s business, operations and performance, and could have a negative impact on the company’s credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act, or the “CARES Act”; (5) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (6) changes in interest rates, which may affect the company’s net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of the company’s assets, including its investment securities; and (7) changes in accounting principles, policies, practices, or guidelines. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

 

FINANCIAL CONTACT: MIKE DOWLING  864-679-9070

MEDIA CONTACT: ART SEAVER  864-679-9010

WEB SITE: www.southernfirst.com

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