EX-99.1 2 sfst4287851_ex99-1.htm EARNINGS PRESS RELEASE FOR PERIOD ENDED DECEMBER 31, 2023.

Exhibit 99.1

Southern First Reports Results for 2023

Greenville, South Carolina, January 18, 2024 – Southern First Bancshares, Inc. (NASDAQ: SFST), holding company for Southern First Bank, today announced its financial results for the three and twelve months ended December 31, 2023.

“We are pleased with our fourth quarter results as we saw further growth in book value, stability in net interest margin and strong credit quality,” stated Art Seaver, the Company’s Chief Executive Officer. “We are beginning 2024 with excellent momentum and a proven ability to grow organic and high quality client relationships in every market we serve.”

2023 Fourth Quarter Highlights

· | Net income was $4.2 million and diluted earnings per common share were $0.51 for Q4 2023

· | Book value per common share increased to $38.63 at Q4 2023, or 5%, over Q4 2022

· | Total loans increased 5% (annualized) to $3.6 billion at Q4 2023, compared to Q3 2023 and increased 10%, from $3.3 billion at Q4 2022

· | Credit quality remains strong with nonperforming assets to total assets of 0.10% and past due loans to total loans of 0.37% at Q4 2023

· | Total deposits increased to $3.4 billion at Q4 2023, compared to $3.3 billion at Q3 2023 and increased 8% from Q4 2022

· | Net interest margin was 1.92% for Q4 2023, compared to 1.97% for Q3 2023 and 2.88% for Q4 2022

|  | Quarter Ended
|  | December 31 | September 30 | June 30 | March 31 | December 31
|  | 2023 | 2023 | 2023 | 2023 | 2022
Earnings ($ in thousands, except per share data): |  |  |  |  |  |
Net income available to common shareholders | $ | 4,167 | 4,098 | 2,458 | 2,703 | 5,492
Earnings per common share, diluted |  | 0.51 | 0.51 | 0.31 | 0.33 | 0.68
Total revenue(1) |  | 21,390 | 22,094 | 21,561 | 22,468 | 25,826
Net interest margin (tax-equivalent)(2) |  | 1.92% | 1.97% | 2.05% | 2.36% | 2.88%
Return on average assets(3) |  | 0.40% | 0.40% | 0.26% | 0.30% | 0.63%
Return on average equity(3) |  | 5.39% | 5.35% | 3.27% | 3.67% | 7.44%
Efficiency ratio(4) |  | 79.61% | 78.31% | 80.67% | 76.12% | 63.55%
Noninterest expense to average assets (3) |  | 1.64% | 1.69% | 1.82% | 1.89% | 1.87%
Balance Sheet ($ in thousands): |  |  |  |  |  |
Total loans(5) | $ | 3,602,627 | 3,553,632 | 3,537,616 | 3,417,945 | 3,273,363
Total deposits |  | 3,379,564 | 3,347,771 | 3,433,018 | 3,426,774 | 3,133,864
Core deposits(6) |  | 2,811,499 | 2,866,574 | 2,880,507 | 2,946,567 | 2,759,112
Total assets |  | 4,055,789 | 4,019,957 | 4,002,107 | 3,938,140 | 3,691,981
Book value per common share |  | 38.63 | 37.57 | 37.42 | 37.16 | 36.76
Loans to deposits |  | 106.60% | 106.15% | 103.05% | 99.74% | 104.45%
Holding Company Capital Ratios(7): |  |  |  |  |  |
Total risk-based capital ratio |  | 12.56% | 12.56% | 12.40% | 12.67% | 12.91%
Tier 1 risk-based capital ratio |  | 10.59% | 10.58% | 10.42% | 10.66% | 10.88%
Leverage ratio |  | 8.14% | 8.17% | 8.48% | 8.80% | 9.17%
Common equity tier 1 ratio(8) |  | 10.18% | 10.17% | 10.00% | 10.23% | 10.44%
Tangible common equity(9) |  | 7.70% | 7.56% | 7.53% | 7.60% | 7.98%
Asset Quality Ratios: |  |  |  |  |  |
Nonperforming assets/ total assets |  | 0.10% | 0.11% | 0.08% | 0.12% | 0.07%
Classified assets/tier one capital plus allowance for credit losses |  | 4.25% | 4.72% | 4.68% | 5.10% | 4.71%
Loans 30 days or more past due/ loans(5) |  | 0.37% | 0.13% | 0.07% | 0.11% | 0.11%
Net charge-offs (recoveries)/average loans(5) (YTD annualized) |  | 0.00% | 0.01% | 0.03% | 0.01% | (0.05%)
Allowance for credit losses/loans(5) |  | 1.13% | 1.16% | 1.16% | 1.18% | 1.18%
Allowance for credit losses/nonaccrual loans |  | 1,026.58% | 953.25% | 1,363.11% | 854.33% | 1,470.74%

[Footnotes to table located on page 6]

1

income statements – Unaudited

|  | Quarter Ended |  | Twelve Months Ended
|  | Dec 31 | Sept 30 | Jun 30 | Mar 31 | Dec 31 |  | December 31
(in thousands, except per share data) |  | 2023 | 2023 | 2023 | 2023 | 2022 |  | 2023 | 2022
Interest income |  |  |  |  |  |  |  |  |
Loans | $ | 44,758 | 43,542 | 41,089 | 36,748 | 33,939 |  | 166,137 | 114,233
Investment securities |  | 1,674 | 1,470 | 706 | 613 | 562 |  | 4,463 | 1,990
Federal funds sold |  | 2,703 | 2,435 | 891 | 969 | 525 |  | 6,998 | 1,439
Total interest income |  | 49,135 | 47,447 | 42,686 | 38,330 | 35,026 |  | 177,598 | 117,662
Interest expense |  |  |  |  |  |  |  |  |
Deposits |  | 27,127 | 25,130 | 25,937 | 17,179 | 10,329 |  | 91,373 | 18,102
Borrowings |  | 2,948 | 2,972 | 1,924 | 727 | 578 |  | 8,571 | 1,939
Total interest expense |  | 30,075 | 28,102 | 23,861 | 17,906 | 10,907 |  | 99,944 | 20,041
Net interest income |  | 19,060 | 19,345 | 18,825 | 20,424 | 24,119 |  | 77,654 | 97,621
Provision (reversal) for credit losses |  | (975) | (500) | 910 | 1,825 | 2,325 |  | 1,260 | 6,155
Net interest income after provision for credit losses |  | 20,035 | 19,845 | 17,915 | 18,599 | 21,794 |  | 76,394 | 91,466
Noninterest income |  |  |  |  |  |  |  |  |
Mortgage banking income |  | 868 | 1,208 | 1,337 | 622 | 291 |  | 4,036 | 4,198
Service fees on deposit accounts |  | 371 | 356 | 331 | 325 | 187 |  | 1,382 | 782
ATM and debit card income |  | 565 | 588 | 536 | 555 | 575 |  | 2,245 | 2,225
Income from bank owned life insurance |  | 361 | 349 | 338 | 332 | 344 |  | 1,379 | 1,289
Loss on disposal of fixed assets |  | - | - | - | - | - |  | - | (394)
Other income |  | 165 | 248 | 194 | 210 | 310 |  | 818 | 1,480
Total noninterest income |  | 2,330 | 2,749 | 2,736 | 2,044 | 1,707 |  | 9,860 | 9,580
Noninterest expense |  |  |  |  |  |  |  |  |
Compensation and benefits |  | 9,401 | 10,231 | 10,287 | 10,356 | 9,576 |  | 40,275 | 38,790
Occupancy |  | 2,718 | 2,562 | 2,518 | 2,457 | 2,666 |  | 10,255 | 9,105
Other real estate owned expenses |  | - | - | - | - | - |  | - | -
Outside service and data processing costs |  | 2,000 | 1,744 | 1,705 | 1,629 | 1,521 |  | 7,078 | 6,112
Insurance |  | 937 | 1,243 | 897 | 689 | 551 |  | 3,766 | 1,686
Professional fees |  | 581 | 504 | 751 | 660 | 788 |  | 2,496 | 2,635
Marketing |  | 364 | 293 | 335 | 366 | 282 |  | 1,357 | 1,216
Other |  | 1,027 | 725 | 900 | 947 | 1,029 |  | 3,600 | 3,389
Total noninterest expenses |  | 17,028 | 17,302 | 17,393 | 17,104 | 16,413 |  | 68,827 | 62,933
Income before provision for income taxes |  | 5,337 | 5,293 | 3,258 | 3,539 | 7,088 |  | 17,427 | 38,113
Income tax expense |  | 1,170 | 1,195 | 800 | 836 | 1,596 |  | 4,001 | 8,998
Net income available to common shareholders | $ | 4,167 | 4,098 | 2,458 | 2,703 | 5,492 |  | 13,426 | 29,115
Earnings per common share – Basic | $ | 0.51 | 0.51 | 0.31 | 0.34 | 0.69 |  | 1.67 | 3.66
Earnings per common share – Diluted |  | 0.51 | 0.51 | 0.31 | 0.33 | 0.68 |  | 1.66 | 3.61
Basic weighted average common shares |  | 8,056 | 8,053 | 8,051 | 8,026 | 7,971 |  | 8,047 | 7,958
Diluted weighted average common shares |  | 8,080 | 8,072 | 8,069 | 8,092 | 8,071 |  | 8,078 | 8,072

[Footnotes to table located on page 6]

Net income for the fourth quarter of 2023 was $4.2 million, or $0.51 per diluted share, a $69 thousand increase from the third quarter of 2023 and a $1.3 million decrease from the fourth quarter of 2022. Net interest income decreased $285 thousand during the fourth quarter of 2023, compared to the third quarter of 2023, and decreased $5.1 million, compared to the fourth quarter of 2022. The decrease in net interest income from the prior quarter and prior year was primarily driven by an increase in interest expense on deposit accounts as deposit costs continued to reprice in relation to the Federal Reserve’s 525-basis point interest rate hikes over the past two years.

There was a reversal of the provision for credit losses of $975 thousand for the fourth quarter of 2023, compared to a reversal of $500 thousand during the third quarter of 2023 and a provision of $2.3 million during the fourth quarter of 2022. The provision reversal during the fourth quarter of 2023 includes a $640 thousand reversal of the provision for credit losses and a $335 thousand reversal of the reserve for unfunded commitments. The reversal of the provision for credit losses was driven by lower expected loss rates, while the reversal of the reserve for unfunded commitments was driven by a decrease in the balance of unfunded commitments at December 31, 2023, compared to the previous quarter and year.

2

Noninterest income was $2.3 million for the fourth quarter of 2023, compared to $2.7 million for the third quarter of 2023, and $1.7 million for the fourth quarter of 2022. Mortgage banking income continues to be the largest component of our noninterest income at $868 thousand for the fourth quarter of 2023, $1.2 million for the third quarter of 2023, and $291 thousand for the fourth quarter of 2022.

Noninterest expense for the fourth quarter of 2023 was $17.0 million, a $274 thousand decrease from the third quarter of 2023, and a $615 thousand increase from the fourth quarter of 2022. The decrease in noninterest expense from the previous quarter was driven by a decrease in compensation and benefits expense, while the increase from the prior year related primarily to increases in outside service and data processing costs and insurance expenses. The decrease in compensation and benefits expenses during the current quarter was due primarily to lower bonus and commissions expenses, combined with a decrease in various benefit-related expenses. In addition, the increase in outside service and data processing costs from the prior quarter and prior year was driven by an increase in software licensing and maintenance costs, while insurance costs increased over the prior year due to higher FDIC insurance premiums.

Our effective tax rate was 21.9% for the fourth quarter of 2023, 22.6% for the third quarter of 2023, and 22.5% for the fourth quarter of 2022. The lower tax rate in the fourth quarter of 2023 as compared to the prior quarter and prior year relates primarily to the effect of equity compensation transactions and return to provision differences on our tax rate during the quarter.

Net interest income and margin - Unaudited

|  | For the Three Months Ended
| December 31, 2023 | September 30, 2023 | December 31,2022
(dollars in thousands) | Average Balance | Income/ Expense | Yield/ Rate(3) | Average Balance | Income/ Expense | Yield/ Rate(3) | Average Balance | Income/ Expense | Yield/ Rate(3)
Interest-earning assets |  |  |  |  |  |  |  |  |
Federal funds sold and interest-bearing deposits | $ | 197,482 | $ | 2,703 | 5.43% | $ | 181,784 | $ | 2,435 | 5.31% | $ | 60,176 | $ | 525 | 3.46%
Investment securities, taxable | 151,969 | 1,632 | 4.26% | 148,239 | 1,429 | 3.82% | 86,594 | 515 | 2.36%
Investment securities, nontaxable(2) | 7,831 | 55 | 2.76% | 7,799 | 55 | 2.77% | 9,987 | 61 | 2.42%
Loans(10) | 3,586,863 | 44,758 | 4.95% | 3,554,478 | 43,542 | 4.86% | 3,165,061 | 33,939 | 4.25%
Total interest-earning assets | 3,944,145 | 49,148 | 4.94% | 3,892,300 | 47,461 | 4.84% | 3,321,818 | 35,040 | 4.18%
Noninterest-earning assets | 174,717 |  |  | 159,103 |  |  | 162,924 |  |
Total assets | $ | 4,118,862 |  |  | $ | 4,051,403 |  |  | $ | 3,484,742 |  |
Interest-bearing liabilities |  |  |  |  |  |  |  |  |
NOW accounts | $ | 301,424 | 656 | 0.86% | $ | 297,028 | 620 | 0.83% | $ | 343,541 | 379 | 0.44%
Savings & money market | 1,697,144 | 17,042 | 3.98% | 1,748,638 | 16,908 | 3.84% | 1,529,532 | 7,657 | 1.99%
Time deposits | 759,839 | 9,429 | 4.92% | 648,949 | 7,602 | 4.65% | 405,907 | 2,293 | 2.24%
Total interest-bearing deposits | 2,758,407 | 27,127 | 3.90% | 2,694,615 | 25,130 | 3.70% | 2,278,980 | 10,329 | 1.80%
FHLB advances and other borrowings | 257,880 | 2,387 | 3.67% | 264,141 | 2,414 | 3.63% | 7,594 | 81 | 4.23%
Subordinated debentures | 36,305 | 561 | 6.13% | 36,278 | 558 | 6.10% | 36,197 | 497 | 5.45%
Total interest-bearing liabilities | 3,052,592 | 30,075 | 3.91% | 2,995,034 | 28,102 | 3.72% | 2,322,771 | 10,907 | 1.86%
Noninterest-bearing liabilities | 759,413 |  |  | 752,433 |  |  | 869,314 |  |
Shareholders’ equity | 306,857 |  |  | 303,936 |  |  | 292,657 |  |
Total liabilities and shareholders’ equity | $ | 4,118,862 |  |  | $ | 4,051,403 |  |  | $ | 3,484,742 |  |
Net interest spread |  |  | 1.04% |  |  | 1.12% |  |  | 2.32%
Net interest income (tax equivalent) / margin |  | $ | 19,073 | 1.92% |  | $ | 19,359 | 1.97% |  | $ | 24,133 | 2.88%
Less:tax-equivalent adjustment(2) |  | 13 |  |  | 14 |  |  | 14 |
Net interest income |  | $ | 19,060 |  |  | $ | 19,345 |  |  | $ | 24,119 |

[Footnotes to table located on page 6]

Net interest income was $19.1 million for the fourth quarter of 2023, a $285 thousand decrease from the third quarter of 2023, driven by a $2.0 million increase in interest expense, partially offset by a $1.7 million increase in interest income, on a tax-equivalent basis. The increase in interest expense was driven by a $57.6 million increase in average interest-bearing liabilities at an average cost of 3.91%, a 19-basis points increase over the previous quarter, partially offset by a $51.8 million increase in average interest-earning assets at an average rate of 4.94%, an increase of 10-basis points from the third quarter of 2023. In comparison to the fourth quarter of 2022, net interest income decreased $5.1 million, resulting primarily from a $729.8 million

3

increase in average interest-bearing liabilities during the 12 months ended December 31, 2023, combined with a 205-basis point increase in the average cost. Our net interest margin, on a tax-equivalent basis, was 1.92% for the fourth quarter of 2023, a 5-basis point decrease from 1.97% for the third quarter of 2023 and a 96-basis point decrease from 2.88% for the fourth quarter of 2022. As a result of the significant increase in the federal funds rate over the past two years, the rates on our non-maturity deposits have increased and continue to increase more quickly than the yield on our interest-earning assets, resulting in the lower net interest margin during the fourth quarter of 2023.

Balance sheets - Unaudited

|  | Ending Balance
|  | December 31 | September 30 | June 30 | March 31 | December 31
(in thousands, except per share data) |  | 2023 | 2023 | 2023 | 2023 | 2022
Assets |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |
Cash and due from banks | $ | 28,020 | 17,395 | 24,742 | 22,213 | 18,788
Federal funds sold |  | 119,349 | 127,714 | 170,145 | 242,642 | 101,277
Interest-bearing deposits with banks |  | 8,801 | 7,283 | 10,183 | 7,350 | 50,809
Total cash and cash equivalents |  | 156,170 | 152,392 | 205,070 | 272,205 | 170,874
Investment securities: |  |  |  |  |  |
Investment securities available for sale |  | 134,702 | 144,035 | 91,548 | 94,036 | 93,347
Other investments |  | 19,939 | 19,600 | 12,550 | 10,097 | 10,833
Total investment securities |  | 154,641 | 163,635 | 104,098 | 104,133 | 104,180
Mortgage loans held for sale |  | 7,194 | 7,117 | 15,781 | 6,979 | 3,917
Loans (5) |  | 3,602,627 | 3,553,632 | 3,537,616 | 3,417,945 | 3,273,363
Less allowance for credit losses |  | (40,682) | (41,131) | (41,105) | (40,435) | (38,639)
Loans, net |  | 3,561,945 | 3,512,501 | 3,496,511 | 3,377,510 | 3,234,724
Bank owned life insurance |  | 52,501 | 52,140 | 51,791 | 51,453 | 51,122
Property and equipment, net |  | 94,301 | 95,743 | 96,964 | 97,806 | 99,183
Deferred income taxes |  | 12,200 | 13,078 | 12,356 | 12,087 | 12,522
Other assets |  | 16,837 | 23,351 | 19,536 | 15,967 | 15,459
Total assets | $ | 4,055,789 | 4,019,957 | 4,002,107 | 3,938,140 | 3,691,981
Liabilities |  |  |  |  |  |
Deposits | $ | 3,379,564 | 3,347,771 | 3,433,018 | 3,426,774 | 3,133,864
FHLB Advances |  | 275,000 | 275,000 | 180,000 | 125,000 | 175,000
Subordinated debentures |  | 36,322 | 36,295 | 36,268 | 36,241 | 36,214
Other liabilities |  | 52,436 | 56,993 | 51,307 | 50,775 | 52,391
Total liabilities |  | 3,743,322 | 3,716,059 | 3,700,593 | 3,638,790 | 3,397,469
Shareholders’ equity |  |  |  |  |  |
Preferred stock - $.01 par value; 10,000,000 shares authorized |  | - | - | - | - | -
Common Stock - $.01 par value; 10,000,000 shares authorized |  | 81 | 81 | 81 | 80 | 80
Nonvested restricted stock |  | (3,596) | (4,065) | (4,051) | (4,462) | (3,306)
Additional paid-in capital |  | 121,777 | 121,757 | 120,912 | 120,683 | 119,027
Accumulated other comprehensive loss |  | (11,342) | (15,255) | (12,710) | (11,775) | (13,410)
Retained earnings |  | 205,547 | 201,380 | 197,282 | 194,824 | 192,121
Total shareholders’ equity |  | 312,467 | 303,898 | 301,514 | 299,350 | 294,512
Total liabilities and shareholders’ equity | $ | 4,055,789 | 4,019,957 | 4,002,107 | 3,938,140 | 3,691,981
Common Stock |  |  |  |  |  |
Book value per common share | $ | 38.63 | 37.57 | 37.42 | 37.16 | 36.76
Stock price: |  |  |  |  |  |
High |  | 37.15 | 30.18 | 31.34 | 45.05 | 49.50
Low |  | 25.16 | 24.22 | 21.33 | 30.70 | 41.46
Period end |  | 37.10 | 26.94 | 24.75 | 30.70 | 45.75
Common shares outstanding |  | 8,088 | 8,089 | 8,058 | 8,048 | 8,011

[Footnotes to table located on page 6]

4

Asset quality measures - Unaudited

|  | Quarter Ended
|  | December 31 | September 30 | June 30 | March 31 | December 31
(dollars in thousands) |  | 2023 | 2023 | 2023 | 2023 | 2022
Nonperforming Assets |  |  |  |  |  |
Commercial |  |  |  |  |  |
Non-owner occupied RE | $ | 1,423 | 1,615 | 754 | 1,384 | 247
Commercial business |  | 319 | 404 | 137 | 1,196 | 182
Consumer |  |  |  |  |  |
Real estate |  | 985 | 1,228 | 1,053 | 1,075 | 1,099
Home equity |  | 1,236 | 1,068 | 1,072 | 1,078 | 1,099
Total nonaccrual loans |  | 3,963 | 4,315 | 3,016 | 4,733 | 2,627
Other real estate owned |  | - | - | - | - | -
Total nonperforming assets | $ | 3,963 | 4,315 | 3,016 | 4,733 | 2,627
Nonperforming assets as a percentage of: |  |  |  |  |  |
Total assets |  | 0.10% | 0.11% | 0.08% | 0.12% | 0.07%
Total loans |  | 0.11% | 0.12% | 0.09% | 0.14% | 0.08%
Classified assets/tier 1 capital plus allowance for credit losses |  | 4.25% | 4.72% | 4.68% | 5.10% | 4.71%

|  | Quarter Ended
|  | December 31 | September 30 | June 30 | March 31 | December 31
(dollars in thousands) |  | 2023 | 2023 | 2023 | 2023 | 2022
Allowance for Credit Losses |  |  |  |  |  |
Balance, beginning of period | $ | 41,131 | 41,105 | 40,435 | 38,639 | 36,317
Loans charged-off |  | (119) | (42) | (440) | (161) | -
Recoveries of loans previously charged-off |  | 310 | 168 | 15 | 102 | 22
Net loans (charged-off) recovered |  | 191 | 126 | (425) | (59) | 22
Provision for (reversal of) credit losses |  | (640) | (100) | 1,095 | 1,855 | 2,300
Balance, end of period | $ | 40,682 | 41,131 | 41,105 | 40,435 | 38,639
Allowance for credit losses to gross loans |  | 1.13% | 1.16% | 1.16% | 1.18% | 1.18%
Allowance for credit losses to nonaccrual loans |  | 1,026.58% | 953.25% | 1,363.11% | 854.33% | 1,470.74%
Net charge-offs (recoveries) to average loans QTD (annualized) |  | (0.02%) | (0.01%) | 0.05% | 0.01% | 0.00%

Total nonperforming assets decreased by $352 thousand during the fourth quarter of 2023, and represented 0.10% of total assets, a decrease compared to 0.11% for the third quarter of 2023 and an increase compared to 0.07% for the fourth quarter of 2022. While we added two new relationships to nonaccrual during the fourth quarter of 2023, there were also three relationships either returned to accrual status or paid off during the quarter. In addition, our classified asset ratio decreased to 4.25% for the fourth quarter of 2023 from 4.72% in the third quarter of 2023 and from 4.71% in the fourth quarter of 2022.

At December 31, 2023, the allowance for credit losses was $40.7 million, or 1.13% of total loans, compared to $41.1 million, or 1.16% of total loans at September 30, 2023, and $38.6 million, or 1.18% of total loans, at December 31, 2022. We had net recoveries of $191 thousand, or 0.02% annualized, for the fourth quarter of 2023, compared to net recoveries of $126 thousand for the third quarter of 2023 and net recoveries of $22 thousand for the fourth quarter of 2022. There was a reversal of the provision for credit losses of $640 thousand for the fourth quarter of 2023, compared to a reversal of $100 thousand for the third quarter of 2023 and a provision of $2.3 million for the fourth quarter of 2022. The provision reversal was driven by lower expected loss rates resulting from low charge-offs during the quarter and year, combined with a lower specific reserve for individually assessed loans during the current quarter as several loans were paid off or returned to accruing status.

5

LOAN COMPOSITION - Unaudited

|  | Quarter Ended
|  | December 31 | September 30 | June 30 | March 31 | December 31
(dollars in thousands) |  | 2023 | 2023 | 2023 | 2023 | 2022
Commercial |  |  |  |  |  |
Owner occupied RE | $ | 631,657 | 637,038 | 613,874 | 615,094 | 612,901
Non-owner occupied RE |  | 942,529 | 937,749 | 951,536 | 928,059 | 862,579
Construction |  | 150,680 | 119,629 | 115,798 | 94,641 | 109,726
Business |  | 500,161 | 500,253 | 511,719 | 495,161 | 468,112
Total commercial loans |  | 2,225,027 | 2,194,669 | 2,192,927 | 2,132,955 | 2,053,318
Consumer |  |  |  |  |  |
Real estate |  | 1,082,429 | 1,074,679 | 1,047,904 | 993,258 | 931,278
Home equity |  | 183,004 | 180,856 | 185,584 | 180,974 | 179,300
Construction |  | 63,348 | 54,210 | 61,044 | 71,137 | 80,415
Other |  | 48,819 | 49,218 | 50,157 | 39,621 | 29,052
Total consumer loans |  | 1,377,600 | 1,358,963 | 1,344,689 | 1,284,990 | 1,220,045
Total gross loans, net of deferred fees |  | 3,602,627 | 3,553,632 | 3,537,616 | 3,417,945 | 3,273,363
Less—allowance for credit losses |  | (40,682) | (41,131) | (41,105) | (40,435) | (38,639)
Total loans, net | $ | 3,561,945 | 3,512,501 | 3,496,511 | 3,377,510 | 3,234,724

DEPOSIT COMPOSITION - Unaudited

|  | Quarter Ended
|  | December 31 | September 30 | June 30 | March 31 | December 31
(dollars in thousands) |  | 2023 | 2023 | 2023 | 2023 | 2022
Non-interest bearing | $ | 674,167 | 675,409 | 698,084 | 740,534 | 804,115
Interest bearing: |  |  |  |  |  |
NOW accounts |  | 310,218 | 306,667 | 308,762 | 303,743 | 318,030
Money market accounts |  | 1,605,278 | 1,685,736 | 1,692,900 | 1,748,562 | 1,506,418
Savings |  | 31,669 | 34,737 | 36,243 | 39,706 | 40,673
Time, less than $250,000 |  | 190,167 | 125,506 | 114,691 | 106,679 | 89,877
Time and out-of-market deposits, $250,000 and over |  | 568,065 | 519,716 | 582,338 | 487,550 | 374,751
Total deposits | $ | 3,379,564 | 3,347,771 | 3,433,018 | 3,426,774 | 3,133,864

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 totaling $568,065,000.

(7) December 31, 2023 ratios are preliminary.

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

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

(10) Includes mortgage loans held for sale.

About Southern First Bancshares

Southern First Bancshares, Inc., Greenville, South Carolina is a registered bank holding company incorporated under the laws of South Carolina. The company’s wholly owned subsidiary, Southern First Bank, is the second largest bank headquartered in South Carolina. Southern First Bank has been providing financial services since 1999 and now operates in 12 locations in the Greenville, Columbia, and Charleston markets of South Carolina as well as the Charlotte, Triangle and Triad regions of North Carolina and Atlanta, Georgia. Southern First Bancshares has consolidated assets of approximately $4.1 billion and its common stock is traded on The NASDAQ Global Market under the symbol “SFST.” More information can be found at www.southernfirst.com.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release contain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “preliminary”, “intend,” “plan,” “target,” “continue,” “lasting,” and “project,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not

6

be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which the company conducts operations may be different than expected; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan and deposit growth as well as pricing of each product, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, changes affecting oversight of the financial services industry or consumer protection; (5) the impact of changes to Congress on the regulatory landscape and capital markets; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could continue to have a negative impact on the company; (7) changes in interest rates, which may continue to affect the company’s net income, interest expense, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of the company’s assets, including its investment securities; (8) elevated inflation which may cause adverse risk to the overall economy, and could indirectly pose challenges to our clients and to our business; (9) any increase in FDIC assessments which have increased and may continue to increase our cost of doing business; and (10) 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 & MEDIA CONTACT:

ART SEAVER 864-679-9010

WEB SITE: www.southernfirst.com

7