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)   July 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 July 28, 2020, Southern First Bancshares, Inc., holding company for Southern First Bank, issued a press release announcing its financial results for the period ended June 30, 2020. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

ITEM 7.01 Regulation FD Disclosure.

A copy of a slide presentation also highlighting Southern First Bancshares, Inc. financial results for the period ended June 30, 2020 is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation also will be available on our website, www.southernfirst.com, under the “Investor Relations” section.

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
99.1       Earnings Press Release for period ended June 30, 2020.
99.2 Slide Presentation.

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

July 28, 2020

Exhibit 99.1


Southern First Reports Results for Second Quarter 2020

Greenville, South Carolina, July 28, 2020 – Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three and six-month period ended June 30, 2020.

“In this current environment, our focus continues to be on the care of our team and clients,” stated Art Seaver, the company’s Chief Executive Officer. “This was a quarter that witnessed significant activity around the PPP program, and I am proud of our team for their passion to help our clients. We remain diligent in our focus on risk in this environment and in continuing to impact lives – the mission of our company.”

2020 Second Quarter Highlights
●

Net income of $4.7 million, compared to $7.2 million for Q2 2019

●

Diluted earnings per common share of $0.60 per share, compared to $0.93 for Q2 2019

●

Loan loss provision of $10.2 million, compared to $300 thousand for Q2 2019


COVID-19 Update
●

Payment modifications on 863 loans for $647.1 million

○

56% of modifications, or $362.1 million, returned to original payment status

●

Loans within nine targeted industries represent 43% of total modifications

○

41% of target industry modifications, or $150.0 million, returned to original payment status

●

Completed sale of $97.5 million PPP loan portfolio, recognizing net SBA fees of $2.2 million in Q2 2020

●

Columbia office, South Carolina consolidation as a result of success in digital strategies


Quarter Ended
June 30 March 31 December 31 September 30 June 30
    2020     2020     2019     2019     2019
Earnings ($ in thousands, except per share data):
Net income available to common shareholders $    4,678 2,832 7,198 7,412 7,239
Earnings per common share, diluted 0.60 0.36 0.92 0.95 0.93
Total revenue(1) 28,981 22,014 21,136 21,675 20,629
Net interest margin (tax-equivalent)(2) 3.42% 3.43% 3.41% 3.36% 3.43%
Return on average assets(3) 0.77% 0.51% 1.32% 1.37% 1.43%
Return on average equity(3) 8.78% 5.42% 14.18% 15.20% 15.72%
Efficiency ratio(4) 43.63% 56.20% 51.92% 52.98% 55.11%
Noninterest expense to average assets (3) 2.09% 2.23% 2.01% 2.12% 2.24%
Balance Sheet ($ in thousands):
Total loans(5) $ 2,036,801 2,030,261 1,943,525 1,838,427 1,809,355
Total deposits 2,188,643 2,025,698 1,876,124 1,899,295 1,854,008
Core deposits(6) 1,991,005 1,804,027 1,656,005 1,690,294 1,619,722
Total assets 2,482,295 2,372,249 2,267,195 2,201,626 2,116,044
Loans to deposits 93.06% 100.23% 103.59% 96.80% 97.59%
Holding Company Capital Ratios(7):
Total risk-based capital ratio 13.76% 13.59% 13.73% 13.63% 12.31%
Tier 1 risk-based capital ratio 11.37% 11.29% 11.63% 11.51% 11.40%
Leverage ratio 9.38% 10.00% 10.10% 9.82% 9.95%
Common equity tier 1 ratio(8) 10.72% 10.63% 10.94% 10.80% 10.67%
Tangible common equity(9) 8.71% 8.87% 9.08% 9.02% 8.97%
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets 0.36% 0.42% 0.30% 0.32% 0.27%
Net charge-offs as a percentage of average loans(5) (YTD annualized) 0.12% 0.04% 0.08% 0.09% 0.03%
Allowance for loan losses as a percentage of loans(5) 1.55% 1.11% 0.86% 0.86% 0.89%
Allowance for loan losses as a percentage of nonaccrual loans 350.74% 226.14% 244.95% 225.50% 277.91%
[Footnotes to table located on page 7]

1

COVID-19 IMPACT
As a result of the uncertain economic conditions brought about by the COVID-19 pandemic, our business and that of many of our clients has been impacted significantly. In order to maintain the safety of our team and our clients, we shifted approximately 70% of our team to working remotely and began operating in a drive-thru only mode with “in-person” client meetings by appointment in late March 2020. This strategy, combined with digital technology, has proven to be extremely effective, highlighting a number of possibilities for operational improvements, including consolidating our three Columbia, South Carolina offices into one location. We believe that this office combination will create a new synergy among our Columbia team, assist with staffing challenges and facilitate a renewed sense of service to our clients. The consolidation is expected to take place on September 30, 2020.

In an effort to assist our clients through this challenging time, we became an approved SBA lender in March 2020 and processed 853 loans under the Payroll Protection Program (“PPP”) for a total of $97.5 million, receiving SBA lender fee income of $3.9 million. As the regulations and guidance for PPP loans and the forgiveness process continued to change and evolve, management recognized the operational risk and complexity associated with this portfolio and decided to pursue the sale of the PPP loan portfolio to a third party better suited to support and serve our PPP clients through the loan forgiveness process. This loan sale will allow our team to focus on serving our clients and proactively monitor and address credit risk brought on by the pandemic. On June 26, 2020 we completed the sale of our PPP loan portfolio to The Loan Source Inc., together with its servicing partner ACAP SME LLC, and immediately recognized SBA lender fee income of $2.2 million, net of sale and processing costs.

Beginning late in the first quarter of 2020, we began granting loan modifications or deferrals to certain borrowers affected by the pandemic on a short-term basis of three to six months. As of June 30, 2020, our clients had requested loan payment deferrals or payments of interest only on 863 loans totaling $647.1 million, of which 90.0% were commercial loans. As of June 30, 2020, 56% of these loans have reached the end of their deferral period and are beginning to resume normal payments. At June 30, 2020, non-performing assets were not yet materially impacted by the economic pressures of COVID-19; however, accruing TDRs increased by $2.9 million during the first quarter of 2020 due to loan modifications related to three client relationships who were experiencing financial difficulty prior to the pandemic.

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 loan categories to monitor during this crisis. The table below identifies these segments as well as the outstanding and committed loan balances for each industry. Of the $276.9 million of loans modified in these categories, 54% have begun to resume normal payments.

       
June 30, 2020
% of
% of Total Total Committed Total
Balance Loans Committed Balance Modified
(dollars in thousands)       Outstanding       Outstanding       Balance       Outstanding       Balance       % Modified
Religious organizations $      60,088 3.0% 90,439 66.4% 33,671 56.0%
Entertainment facilities 4,745 0.2% 9,325 50.9% 845 17.8%
Hotels 84,163 4.1% 104,049 80.9% 74,383 88.4%
Personal care businesses 1,356 0.1% 1,395 97.2% 572 42.2%
Restaurants 14,467 0.7% 15,977 90.5% 9,889 68.4%
Sports facilities 22,098 1.1% 22,768 97.1% 21,064 95.3%
Travel related businesses 3,325 0.2% 4,082 81.5% 3,080 92.6%
Private healthcare facilities 36,054 1.8% 41,116 87.7% 24,857 68.9%
Non-essential retail 191,674 9.4% 199,873 95.9% 108,508 56.6%
Total $      417,970 20.5% 489,024 85.5% 276,869 66.2%
[Footnotes to table located on page 7]

2


INCOME STATEMENTS – Unaudited        
         
Quarter Ended Six Months Ended
  Jun 30 Mar 31 Dec 31 Sept 30 June 30 June 30
(in thousands, except per share data)      2020      2020      2019      2019      2019      2020      2019
Interest income
Loans $      23,554 23,367 23,124 22,817 22,098 46,921 42,988
Investment securities 384 396 438 576 539 780 1,087
Federal funds sold 53 103 334 663 451 155 625
Total interest income 23,991 23,866 23,896 24,056 23,088 47,856 44,700
Interest expense
Deposits 3,627 5,174 5,771 6,409 6,175 8,802 11,550
Borrowings 590 594 492 368 374 1,184 793
Total interest expense 4,217 5,768 6,263 6,777 6,549 9,986 12,343
Net interest income 19,774 18,098 17,633 17,279 16,539 37,870 32,357
Provision for loan losses 10,200 6,000 1,050 650 300 16,200 600
Net interest income after provision for loan losses 9,574 12,098 16,583 16,629 16,239 21,670 31,757
Noninterest income
Mortgage banking income 5,776 2,668 2,181 3,055 2,830 8,444 4,687
Service fees on deposit accounts 197 262 260 271 265 459 530
ATM and debit card income 394 398 441 464 443 793 823
Income from bank owned life insurance 270 270 281 282 222 540 438
Gain on sale of securities, net - - 719 2 3 - -
Loss on extinguishment of debt (37) - (1,496) - - (37) -
Net lender fees on PPP loan sale 2,247 - - - - 2,247 -
Other income 360 318 1,117 322 327 679 606
Total noninterest income 9,207 3,916 3,503 4,396 4,090 13,125 7,084
Noninterest expense
Compensation and benefits 8,450 7,871 7,175 7,668 7,399 16,322 14,182
Occupancy 1,498 1,536 1,429 1,416 1,343 3,033 2,682
Outside service and data processing costs 1,228 1,192 1,109 1,073 1,045 2,420 2,005
Insurance 298 320 70 145 280 619 598
Professional fees 527 497 447 399 414 1,023 853
Marketing 101 258 208 237 236 359 496
Other 542 698 535 546 651 1,240 1,200
Total noninterest expenses 12,644 12,372 10,973 11,484 11,368 25,016 22,016
Income before provision for income taxes 6,137 3,642 9,113 9,541 8,961 9,779 16,825
Income tax expense 1,459 810 1,915 2,129 1,722 2,269 3,576
Net income available to common shareholders $ 4,678 2,832 7,198 7,412 7,239 7,510 13,249
 
Earnings per common share – Basic $ 0.61 0.37 0.94 0.98 0.97 0.98 1.77
Earnings per common share – Diluted 0.60 0.36 0.92 0.95 0.93 0.96 1.71
Basic weighted average common shares 7,722 7,679 7,608 7,548 7,496 7,701 7,478
Diluted weighted average common shares 7,819 7,827 7,811 7,781 7,756 7,823 7,749
[Footnotes to table located on page 7]

Net income for the second quarter of 2020 was $4.7 million, or $0.60 per diluted share, a $1.8 million increase from the first quarter of 2020 and a $2.6 million decrease from the second quarter of 2019. For the six months ended June 30, 2020, net income was $7.5 million, a decrease of 43.3% over the six months ended June 30, 2019.

Net interest income increased $1.7 million for the second quarter of 2020 compared with the first quarter of 2020, reflecting an increase in loan balances and a reduction in deposit costs. In comparison to the second quarter of 2019, net interest income increased $3.2 million, or 19.6%. Net interest income for the first six months of 2020 increased 17.0% compared with the first half of 2019.

The provision for loan losses increased to $10.2 million for the second quarter of 2020, compared to $6.0 million for the first quarter and $300 thousand for the second quarter of 2019. The increased provision during the second quarter of 2020 was driven by qualitative factors related to the uncertain economic conditions created by the COVID-19 pandemic. The provision for loan losses totaled $16.2 million for the first six months of 2020 compared to $600 thousand for the first six months of 2019.

3

Noninterest income totaled $9.2 million for the second quarter of 2020, a $5.3 million increase from the first quarter of 2020, and $5.1 million increase from the second quarter of 2019. The primary drivers of the increases were mortgage banking income resulting from the favorable mortgage rate environment and net SBA lender fee income of $2.2 million received on PPP loans originated and then sold to a third party.

Noninterest expense for the second quarter of 2020 increased $272 thousand compared with the first quarter of 2020 and $1.3 million compared with the second quarter of 2019. The increases were due primarily to higher compensation and benefits expense related to mortgage banking.

Our effective tax rate was 23.8% for the second quarter of 2020, 22.2% for the first quarter of 2020, and 19.2% for the second quarter of 2019. The higher tax rate this quarter relates to the favorable tax impact of stock option transactions in the prior periods.

NET INTEREST INCOME AND MARGIN - Unaudited
 
For the Three Months Ended
June 30, 2020 March 31, 2020 June 30, 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 $   100,009 $   53 0.21% $   46,101 $  103 0.90% $   71,905 $   451 2.52%
Investment securities, taxable 68,669 339 1.99% 66,640 381 2.30% 74,172 501 2.71%
Investment securities, nontaxable(2) 6,749 58 3.48% 3,815 19 2.05% 5,288 49 3.74%
Loans(10) 2,150,717 23,554 4.40% 2,003,554 23,367 4.69% 1,786,532 22,098 4.96%
Total interest-earning assets 2,326,144 24,004 4.15% 2,120,110 23,870 4.53% 1,937,897 23,099 4.78%
Noninterest-earning assets 107,054 111,338 94,673
Total assets $ 2,433,198 $ 2,231,448 $ 2,032,570
Interest-bearing liabilities
NOW accounts $  252,465 91 0.14% $  227,688 168 0.30% $ 199,118 140 0.28%
Savings & money market 975,539 2,069 0.85% 956,588 3,369 1.42% 849,570 3,879 1.83%
Time deposits 318,379 1,467 1.85% 329,664 1,637 2.00% 381,593 2,156 2.27%
Total interest-bearing deposits 1,546,383 3,627 0.94% 1,513,940 5,174 1.37% 1,430,281 6,175 1.73%
FHLB advances and other borrowings 80,898 175 0.87% 43,470 158 1.46% 25,136 217 3.46%
Subordinated debentures 35,926 415 4.65% 35,900 436 4.88% 13,403 157 4.70%
Total interest-bearing liabilities 1,663,207 4,217 1.02% 1,593,310 5,768 1.46% 1,468,820 6,549 1.79%
Noninterest-bearing liabilities 555,746 427,992 379,023
Shareholders’ equity 214,245 210,146 184,727
Total liabilities and shareholders’ equity $  2,433,198 $ 2,231,448 $ 2,032,570
Net interest spread 3.13% 3.07% 2.99%
Net interest income (tax equivalent) / margin $   19,787 3.42% $   18,102 3.43% $ 16,550 3.43%
Less: tax-equivalent adjustment(2) 13 4 11
Net interest income $ 19,774 $ 18,098 $ 16,539
[Footnotes to table located on page 7]

Net interest income was $19.8 million for the second quarter of 2020, a $1.7 million increase from the first quarter of 2020. Interest income increased by $134 thousand while interest expense decreased by $1.6 million due primarily to a 43 basis point reduction in deposit costs. While average loan balances increased by $147.2 million, loan yield decreased by 29 basis points, neutralizing the impact to interest income. In comparison with the second quarter of 2019, net interest income increased $3.2 million due to higher loan balances and lower deposit costs, partially offset by lower yields on interest-earning assets and a higher subordinated debt balance. Our net interest margin, on a tax-equivalent basis, was 3.42% for the second quarter of 2020, a slight decrease from 3.43% for the first quarter of 2020 and the second quarter of 2019. Lower deposit costs nearly offset the lower loan yield during the second quarter of 2019, decreasing the impact to net interest margin.

4


BALANCE SHEETS - Unaudited
 
Ending Balance
      June 30       March 31       December 31       September 30       June 30
(in thousands, except per share data) 2020 2020 2019 2019 2019
Assets
Cash and cash equivalents:
Cash and due from banks $      47,292 17,521 19,196 44,349 12,220
Federal funds sold 87,743 40,277 89,256 19,215 64,520
Interest-bearing deposits with banks 103,371 83,314 19,364 70,959 40,044
Total cash and cash equivalents 238,406 141,112 127,816 134,523 116,784
Investment securities:
Investment securities available for sale 70,997 70,507 67,694 89,427 75,252
Other investments 2,610 5,341 6,948 3,307 3,311
Total investment securities 73,607 75,848 74,642 92,734 78,563
Mortgage loans held for sale 44,169 34,948 27,046 40,630 24,509
Loans (5) 2,036,801 2,030,261 1,943,525 1,838,427 1,809,355
Less allowance for loan losses (31,602) (22,462) (16,642) (15,848) (16,144)
Loans, net 2,005,199 2,007,799 1,926,883 1,822,579 1,793,211
Bank owned life insurance 40,551 40,281 40,011 39,730 39,448
Property and equipment, net 61,344 58,656 58,478 54,846 48,262
Deferred income taxes 4,017 4,087 4,275 8,970 7,049
Other assets 15,002 9,518 8,044 7,614 8,218
Total assets $ 2,482,295 2,372,249 2,267,195 2,201,626 2,116,044
Liabilities
Deposits $ 2,188,643 2,025,698 1,876,124 1,899,295 1,854,008
Federal Home Loan Bank advances - 65,000 110,000 25,000 25,000
Subordinated debentures 35,944 35,917 35,890 35,887 13,403
Other liabilities 41,554 35,159 39,321 42,950 33,779
Total liabilities 2,266,141 2,161,774 2,061,335 2,003,132 1,926,190
Shareholders’ equity
Preferred stock - $.01 par value; 10,000,000 shares authorized - - - - -
Common Stock - $.01 par value; 10,000,000 shares authorized 77 77 77 76 76
Nonvested restricted stock (1,001) (1,105) (803) (919) (887)
Additional paid-in capital 108,031 107,529 106,152 105,378 104,354
Accumulated other comprehensive income (loss) 805 410 (298) 424 188
Retained earnings 108,242 103,564 100,732 93,535 86,123
Total shareholders’ equity 216,154 210,475 205,860 198,494 189,854
Total liabilities and shareholders’ equity $ 2,482,295 2,372,249 2,267,195 2,201,626 2,116,044
Common Stock
Book value per common share $ 27.95 27.27 26.83 26.05 25.12
Stock price:
High 30.49 42.72 44.32 41.69 39.16
Low 24.21 21.64 37.94 36.27 33.97
Period end 27.71 28.37 42.49 39.85 39.16
Common shares outstanding 7,735 7,718 7,673 7,619 7,558
[Footnotes to table located on page 7]

5


ASSET QUALITY MEASURES - Unaudited
 
Quarter Ended
June 30 March 31 December 31 September 30 June 30
(dollars in thousands) 2020 2020 2019 2019 2019
Nonperforming Assets Commercial
Owner occupied RE $      - - - - -
Non-owner occupied RE 2,428 3,268 188 1,963 372
Construction - - - - -
Commercial business 229 231 235 198 65
Consumer
Real estate 1,324 1,821 1,829 1,637 1,710
Home equity 360 427 431 467 442
Construction - - - - -
Other - - - - -
Nonaccruing troubled debt restructurings 4,669 4,186 4,111 2,763 3,220
Total nonaccrual loans 9,010 9,933 6,794 7,028 5,809
Other real estate owned - - - - -
Total nonperforming assets $ 9,010 9,933 6,794 7,028 5,809
Nonperforming assets as a percentage of:
Total assets 0.36% 0.42% 0.30% 0.32% 0.27%
Total loans 0.44% 0.49% 0.35% 0.38% 0.32%
Accruing troubled debt restructurings (TDRs) $ 7,332 7,939 5,219 5,791 6,935
 
Quarter Ended
      June 30       March 31       December 31       September 30       June 30
(dollars in thousands) 2020 2020 2019 2019 2019
Allowance for Loan Losses
Balance, beginning of period $ 22,462 16,642 15,848 16,144 16,051
Loans charged-off (1,083) (266) (275) (963) (237)
Recoveries of loans previously charged-off 23 86 19 17 30
Net loans charged-off (1,060) (180) (256) (946) (207)
Provision for loan losses 10,200 6,000 1,050 650 300
Balance, end of period $ 31,602 22,462 16,642 15,848 16,144
Allowance for loan losses to gross loans 1.55 % 1.11 % 0.86 % 0.86 % 0.89 %
Allowance for loan losses to nonaccrual loans 350.74 % 226.14 % 244.95 % 225.50 % 277.91 %
Net charge-offs to average loans QTD (annualized) 0.24 % 0.04 % 0.06 % 0.21 % 0.06 %

Total nonperforming assets decreased by $923 thousand to $9.0 million for the second quarter of 2020, representing 0.36% of total assets, a decrease of six basis points compared to the first quarter of 2020. The decrease in nonperforming assets was primarily a result of a $912 thousand charge-off on one commercial real estate loan. The allowance for loan losses as a percentage of nonaccrual loans was 350.74% at June 30, 2020, compared to 226.14% at March 31, 2020 and 277.91% at June 30, 2019.

At June 30, 2020, the allowance for loan losses was $31.6 million, or 1.55% of total loans, compared to $22.5 million, or 1.11% of total loans, at March 31, 2020 and $16.1 million, or 0.89% of total loans, at June 30, 2019. Net charge-offs were $1.1 million, or 0.24% on an annualized basis, for the second quarter of 2020 compared to $180 thousand, or 0.04% of net charge-offs, annualized, for the first quarter of 2020. Net charge-offs were $207,000 for the second quarter of 2019. The provision for loan losses was $10.2 million for the second quarter of 2020 compared to $6.0 million for the first quarter of 2020 and $300 thousand for the second quarter of 2019. The increased provision during the second quarter of 2020 was driven by the COVID-19 pandemic and qualitative adjustment factors related to the uncertain economic conditions at June 30, 2020.

6


LOAN COMPOSITION - Unaudited
 
Quarter Ended
      June 30       March 31       December 31       September 30       June 30
(dollars in thousands) 2020 2020 2019 2019 2019
Commercial
Owner occupied RE $      420,858 422,124 407,851 392,896 390,727
Non-owner occupied RE 554,566 534,846 501,878 481,865 455,346
Construction 71,761 74,758 80,486 75,710 85,065
Business 310,212 317,702 308,123 290,154 292,564
Total commercial loans 1,357,397 1,349,430 1,298,338 1,240,625 1,223,702
Consumer
Real estate 437,742 427,697 398,245 346,512 342,100
Home equity 173,739 183,099 179,738 174,611 170,861
Construction 45,629 45,240 41,471 49,548 46,247
Other 22,294 24,795 25,733 27,131 26,445
Total consumer loans 679,404 680,831 645,187 597,802 585,653
Total gross loans, net of deferred fees 2,036,801 2,030,261 1,943,525 1,838,427 1,809,355
Less—allowance for loan losses (31,602) (22,462) (16,642) (15,848) (16,144)
Total loans, net $ 2,005,199 2,007,799 1,926,883 1,822,579 1,793,211

DEPOSIT COMPOSITION - Unaudited
 
Quarter Ended
      June 30       March 31       December 31       September 30       June 30
(dollars in thousands) 2020 2020 2019 2019 2019
Non-interest bearing $      573,548 437,855 397,331 414,704 368,906
Interest bearing:
NOW accounts 285,953 260,320 228,680 230,676 229,109
Money market accounts 1,006,233 979,861 898,923 891,784 857,478
Savings 22,675 19,563 16,258 15,912 15,180
Time, less than $100,000 41,610 43,596 47,941 55,501 59,382
Time and out-of-market deposits, $100,000 and over 258,624 284,503 286,991 290,718 323,953
Total deposits $ 2,188,643 2,025,698 1,876,124 1,899,295 1,854,008

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) June 30, 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 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 $2.5 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.

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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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