Southern First Bancshares, Inc.

What they do

The company operates as a bank holding company whose primary business is serving as holding company for Southern First Bank, a South Carolina state bank that takes demand and savings deposits insured by the FDIC and makes commercial, consumer and mortgage loans. It runs 8 offices in Greenville, Columbia and Charleston, South Carolina; 3 in Raleigh, Greensboro and Charlotte, North Carolina; and 1 in Atlanta, Georgia. It also opened a Dream Mortgage Center loan production office in Columbia, South Carolina in 2023 and expects to open a retail office in Cary, North Carolina in late 2026. It describes its operating style as the ClientFIRST model, using relationship teams of bankers rather than a large branch network.

Revenue drivers

• Net interest income — The largest revenue source, earned from commercial, consumer and mortgage loans funded by deposits; net interest income grew $7.1 million, or 28%, year over year in Q2 2026.
• Retail deposits — Retail deposits were $3.6 billion at Q2 2026, up $184 million, or 22% annualized, from Q1 2026; the company says its offices average approximately $263.7 million in total deposits.
• Noninterest income — Includes service fees on deposit accounts, which rose 53% year over year in Q2 2026 partly from increased focus on treasury management; total noninterest income was $3.5 million versus $3.3 million in Q2 2025.

Recent performance

For Q2 2026, net income was $11.2 million and diluted EPS was $1.20, up 48% year over year and up $0.01 from Q1 2026. Total revenue was $35.9 million, up 25% year over year, and net interest margin was 2.87%, up 37 basis points from 2.50% in Q2 2025. Total loans reached $4.0 billion, up $88 million, or 9% annualized, from Q1 2026. Return on average assets was 0.96% and return on average equity was 10.28%. Asset quality was steady, with net charge-offs of about $96 thousand, or 0.01% of average loans annualized, nonperforming assets at 0.27% of total assets, and the allowance for credit losses at 1.10% of loans.

Strategy

Management emphasizes organic growth in its existing markets, an efficient ClientFIRST relationship-banking model, and lower branch counts with larger deposit balances per office. During Q2 2026 the company raised gross proceeds of $65.2 million and issued 1.2 million additional common shares, and it redeemed a portion of subordinated notes that were being phased out of regulatory capital treatment. It is investing in IT systems and technology, including mobile, online banking and cash management, to support low-cost deposit growth. It continues to expand, with a planned retail office in Cary, North Carolina in late 2026, and cited a growing focus on treasury management services. The stated goal is continued profitable growth while remaining fundamentally sound.

Risks

• Concentrated geographic and real estate exposure — The loan portfolio is concentrated in commercial, consumer and mortgage loans across South Carolina, North Carolina and Georgia markets, and the company lists credit losses from declining real estate values and real estate-related concentration as risk factors.
• Interest rate and margin pressure — Changes in the interest rate environment could reduce anticipated or actual margins, and the company lists changes in monetary policy and interest rate volatility as risks affecting liquidity and asset values.
• Deposit competition and funding — Deposit flows may be negatively affected by rates paid by competitors, general interest rate levels, regulatory capital requirements and returns available on alternative investments, according to the company's risk factors.
• Regulatory and capital requirements — The company cites examinations by regulatory authorities, possible requirements to increase the allowance for credit losses or write down assets, and the need to maintain capital ratios as risks.

Outlook

CEO Art Seaver said the Q2 2026 results position the company for continued success in the second half of 2026, citing strong loan growth, retail deposit growth and capital raised during the quarter. The company expects to open a retail office in Cary, North Carolina in late 2026. It notes that results for the three and six months ended June 30, 2026 are not necessarily indicative of results for the full year or any future period.