Exhibit
99.1
Southern First
Reports Results
for Second Quarter of 2013
Greenville, South Carolina,
July 23, 2013
– Southern First Bancshares, Inc. (NASDAQ:
SFST), holding company for Southern First Bank, today announced that
net income available to the common shareholders for the second quarter of 2013 was
$1.1 million, or $0.25 per diluted share, compared to $589 thousand, or $0.13
per diluted share, for the second quarter of 2012. For the six months ended
June 30, 2013, net income to common shareholders was $1.9 million, or $0.43 per
diluted share. In comparison, net income to common shareholders for the six
months ended June 30, 2012 was $988 thousand, or $0.23 per diluted share.
2013 Second Quarter
Operating Highlights
•
Net income to common shareholders increased 88% to $1.1
million during the 2nd quarter of 2013 compared to the prior year
•
Net interest margin for the 2nd quarter of 2013
increased to 3.70% compared to 3.61% in 2012
•
Loan balances increased 11% to $687.5 million at June 30,
2013 compared to $618.9 million in 2012
•
Core deposits increased 11% to $474.3 million at June 30,
2013 compared to $426.6 million in 2012
•
Nonperforming assets improved to 0.82% at June 30, 2013
compared to 1.70% in 2012
“Southern First
recorded record earnings this quarter as we continue to grow organically,
improve our margin, and significantly reduce credit costs. Our Greenville,
Columbia, and Charleston markets are all capitalizing on new client
opportunities, creating the momentum in loan and deposit growth and overall performance,”
stated Art Seaver, the company’s CEO.
|
|
Quarter Ended
|
|
|
June 30
|
March 31
|
December 31
|
September 30
|
June 30
|
|
|
|
2013
|
2013
|
2012
|
2012
|
2012
|
|
Earnings ($ in thousands, except per share data):
|
|
|
|
|
|
|
|
Net
income
|
$
|
1,300
|
961
|
1,133
|
1,226
|
815
|
|
Net
income to common shareholder
|
|
1,109
|
784
|
929
|
842
|
589
|
|
Earnings
per common share, diluted (1)
|
|
0.25
|
0.18
|
0.21
|
0.20
|
0.13
|
|
Total
revenue, net of gain/loss on investment securities (2)
|
|
8,008
|
7,760
|
7,677
|
7,699
|
7,123
|
|
Net
interest margin (tax-equivalent)(3)
|
|
3.70%
|
3.69%
|
3.66%
|
3.72%
|
3.61%
|
|
Asset Quality Ratios:
|
|
|
|
|
|
|
|
Nonperforming assets as a percentage of total assets
|
|
0.82%
|
1.07%
|
1.24%
|
1.43%
|
1.70%
|
|
Net charge-offs as a percentage of average loans (YTD annualized)
|
|
0.43%
|
0.52%
|
0.71%
|
0.71%
|
0.75%
|
|
Allowance for loan losses as a percentage of total loans
|
|
1.39%
|
1.41%
|
1.41%
|
1.45%
|
1.48%
|
|
Allowance for loan losses as a percentage of nonperforming loans
|
|
172.48%
|
148.49%
|
111.32%
|
100.49%
|
88.07%
|
|
Capital Ratios (4):
|
|
|
|
|
|
|
|
Total
risk-based capital ratio
|
|
12.56%
|
12.76%
|
12.88%
|
12.97%
|
13.34%
|
|
Tier
1 risk-based capital ratio
|
|
11.31%
|
11.51%
|
11.63%
|
11.72%
|
12.09%
|
|
Leverage
ratio
|
|
9.33%
|
9.46%
|
9.63%
|
9.76%
|
9.83%
|
|
Common
equity tier 1 ratio (5)
|
|
7.16%
|
7.17%
|
7.25%
|
7.14%
|
7.45%
|
|
Other
($ in thousands):
|
|
|
|
|
|
|
|
Gross loans
|
$
|
687,482
|
665,244
|
645,949
|
637,659
|
618,874
|
|
Core deposits
|
|
474,296
|
460,237
|
427,936
|
429,183
|
426,640
|
|
Total deposits
|
|
632,072
|
612,394
|
576,299
|
574,439
|
554,417
|
|
Total assets
|
|
839,007
|
821,705
|
797,998
|
780,415
|
759,632
|
|
Average
Balances ($ in thousands):
|
|
|
|
|
|
|
|
Loans
|
$
|
672,930
|
657,616
|
638,198
|
631,238
|
610,570
|
|
Deposits
|
|
614,411
|
586,904
|
580,992
|
561,647
|
557,530
|
|
Assets
|
|
829,059
|
810,197
|
788,882
|
767,791
|
762,508
|
|
Equity
|
|
64,931
|
64,683
|
64,495
|
63,685
|
64,286
|
|
(1) Per share amounts for the 2012 periods have been restated to
reflect the 10% stock dividend in 2013.
|
|
(2)
Total revenue is the sum of net interest income and noninterest income.
|
|
(3)
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.
|
|
(4)
June 30, 2013 ratios are preliminary.
|
|
(5)
The common equity tier 1 ratio is calculated as the sum of tier 1 capital
less preferred stock divided by risk-weighted assets.
|
Operating
Results
Effective April 1, 2013, Southern First
Bank, N.A., the wholly owned subsidiary of Southern First Bancshares, Inc.,
converted from a national bank charter to a South Carolina state bank charter, changing
its name from Southern First Bank, N.A. to Southern First Bank.
Net interest
margin for the second quarter of 2013 was 3.70%, compared to 3.69% for the
prior quarter, and 3.61% for the second quarter of 2012. The primary driver
of the increased net interest margin is the $68.6 million growth in loan
balances during the past twelve months, combined with the 36 basis point
decrease in the cost of our interest bearing liabilities.
During the second quarter
of 2013, the company recorded total credit costs of $736 thousand compared to $1.5
million during the second quarter of 2012. The $736 thousand in credit costs
during the second quarter of 2013 related primarily to the provision for loan
losses, partially offset by a net gain of $14 thousand on the sale and
management of other real estate owned. In addition, loan charge-offs for the quarter
were $560 thousand, or 0.33% of average loans on an annual basis, and related
primarily to two commercial loans. Comparatively, the company recorded a loan
loss provision of $1.3 million and loss related to the sale of real estate
owned of $176 thousand during the second quarter of 2012. For the six months
ended June 30, 2013, total credit costs were $1.9 million, consisting of a $1.9
million provision for loan losses and net loss of $6 thousand from the sale and
management of other real estate owned. Total credit costs were $2.9 million
during the six months ended June 30, 2012 and related to a $2.5 million
provision for loan losses and $454 thousand of net loss from the sale and
management of other real estate owned. The company’s allowance for loan losses
was $9.6 million, or 1.39%, of loans at June 30, 2013 which provides approximately
172% coverage of nonaccrual loans, compared to $9.1 million, or 1.48%, of loans
at June 30, 2012.
Noninterest income
was $878 thousand and $741 thousand for the three months ended June 30, 2013
and 2012, respectively. For the six months ended June 30, 2013 and 2012,
noninterest income was $1.8 million and $1.6 million, respectively. The
increase in noninterest income during the three and six month periods ended
June 30, 2013 relates primarily to increases in loan fee income and service
fees on deposit accounts. A significant portion of our loan fee income relates
to income derived from mortgage originations which was $222 thousand and $459
thousand for the three and six months ended June 30, 2013, respectively.
Comparatively, mortgage origination income was $169 thousand and $338 thousand
for the three and six months ended June 30, 2012, respectively.
Noninterest expense
was $5.3 million and $4.7 million for the three months ended June 30, 2013 and
2012, respectively, and $10.5 million and $9.4 million for the six months ended
June 30, 2013 and 2012, respectively. The increase in noninterest expense
during the 2013 periods relates primarily to increases in salaries and benefits,
occupancy and data processing and related costs, partially offset by decreases
in costs associated with real estate owned and insurance expenses. Noninterest
expenses for the first six months of 2013 include costs associated with our two
new retail offices which were opened in December 2012.
Nonperforming
assets decreased to $6.9 million, or 0.82%, of total assets as of June 30, 2013. Comparatively, nonperforming assets were $12.9
million, or 1.70%, of total assets at June 30, 2012. Of the $6.9 million in
total nonperforming assets as of June 30, 2013, nonperforming loans represent $5.6
million and other real estate owned represents $1.3 million. Comparatively, of
the $12.9 million in total nonperforming assets at June 30, 2012, nonperforming
loans represented $10.4 million and other real estate owned represented $2.6
million. Classified assets improved to 34% of tier 1 capital plus the
allowance for loan losses at June 30, 2013, compared to 44% at June 30, 2012.
Gross loans
were $687.5 million as of June 30, 2013 compared to $646.0 million at December
31, 2012 and $618.9 million at June 30, 2012. Core deposits, which exclude
out-of-market deposits and time deposits of $100,000 or more, increased to $474.3
million at June 30, 2013 compared to $427.9 million at December 31, 2012 and $426.6
million as of June 30, 2012.
Shareholders’ equity totaled $63.6 million
as of June 30, 2013, compared to $63.2 million at June 30, 2012. During the
first six months of 2013, the Company redeemed a total of $1.0 million of its
outstanding preferred stock from three of its preferred shareholders. As of
June 30, 2013, the Company’s capital ratios continue to exceed the regulatory
requirements for a “well capitalized” institution.
2
Financial
Highlights - Unaudited
|
|
Quarter
Ended
|
2nd
Qtr
|
Six
Months Ended
|
YTD
|
|
|
June
30
|
2013-2012
|
June
30
|
2013 -
2012
|
|
(in thousands,
except earnings per share)
|
|
2013
|
2012
|
%
Change
|
2013
|
2012
|
%
Change
|
|
Earnings Summary
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
8,912
|
8,534
|
4.4 %
|
17,655
|
17,091
|
3.3 %
|
|
Interest expense
|
|
1,782
|
2,156
|
(17.4)%
|
3,647
|
4,583
|
(20.4)%
|
|
Net interest income
|
|
7,130
|
6,378
|
11.8%
|
14,008
|
12,508
|
12.0 %
|
|
Provision for loan losses
|
|
750
|
1,275
|
(41.2)%
|
1,875
|
2,475
|
(24.2)%
|
|
Noninterest income
|
|
878
|
741
|
18.5%
|
1,760
|
1,578
|
11.5 %
|
|
Noninterest expense
|
|
5,301
|
4,655
|
13.9%
|
10,531
|
9,434
|
11.6 %
|
|
Income before provision for income taxes
|
|
1,957
|
1,189
|
64.6%
|
3,362
|
2,177
|
54.4 %
|
|
Income tax expense
|
|
657
|
374
|
75.7%
|
1,100
|
674
|
63.2 %
|
|
Net income
|
|
1,300
|
815
|
59.5%
|
2,262
|
1,503
|
50.5 %
|
|
Preferred stock dividends
|
|
191
|
216
|
(11.6)%
|
389
|
432
|
(10.0)%
|
|
Discount accretion
|
|
-
|
106
|
n/m
|
-
|
179
|
n/m
|
|
Redemption of preferred stock
|
|
-
|
96
|
n/m
|
20
|
96
|
n/m
|
|
Net income available to common shareholders
|
$
|
1,109
|
589
|
88.3%
|
1,893
|
988
|
91.6 %
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares (6)
|
|
4,269
|
4,226
|
1.0 %
|
4,266
|
4,224
|
1.0 %
|
|
Diluted weighted average common shares (6)
|
|
4,424
|
4,437
|
(0.3)%
|
4,397
|
4,352
|
1.0 %
|
|
|
|
|
|
|
|
|
|
Earnings per common share - Basic (6
|
$
|
0.26
|
0.14
|
85.7 %
|
0.44
|
0.23
|
91.3 %
|
|
Earnings per common share - Diluted (6)
|
|
0.25
|
0.13
|
92.3 %
|
0.43
|
0.23
|
87.0 %
|
|
|
Quarter Ended
|
2nd
Qtr
|
Quarter Ended
|
|
|
June
30
|
2013-2012
|
March
31
|
December
31
|
September 30
|
|
|
2013
|
2012
|
% Change
|
2013
|
2012
|
2012
|
|
Balance Sheet Highlights
|
|
|
|
|
|
|
|
|
Assets
|
$
|
839,007
|
759,632
|
10.4 %
|
821,705
|
797,998
|
780,415
|
|
Investment securities
|
|
75,599
|
74,231
|
1.8 %
|
82,708
|
86,016
|
71,891
|
|
Loans
|
|
687,482
|
618,874
|
11.1 %
|
665,244
|
645,949
|
637,659
|
|
Allowance for loan losses
|
|
9,561
|
9,131
|
4.7 %
|
9,367
|
9,091
|
9,254
|
|
Other real estate owned
|
|
1,310
|
2,555
|
(48.7)%
|
2,522
|
1,719
|
1,976
|
|
Noninterest bearing deposits
|
|
94,079
|
94,008
|
0.1 %
|
86,377
|
80,880
|
87,403
|
|
Interest bearing deposits
|
|
537,993
|
460,409
|
16.9 %
|
526,017
|
495,419
|
487,036
|
|
Total deposits
|
|
632,072
|
554,417
|
14.0 %
|
612,394
|
576,299
|
574,439
|
|
Other borrowings
|
|
124,100
|
122,700
|
1.1 %
|
124,100
|
137,290
|
124,100
|
|
Junior subordinated debentures
|
|
13,403
|
13,403
|
-
|
13,403
|
13,403
|
13,403
|
|
Shareholders’ equity
|
|
63,562
|
63,171
|
0.6 %
|
64,426
|
64,125
|
63,287
|
|
Common Stock
|
|
|
|
|
|
|
|
|
Book value per common share (6)
|
$
|
11.30
|
11.22
|
0.7 %
|
11.39
|
11.26
|
11.08
|
|
Stock price (6):
|
|
|
|
|
|
|
|
|
High
|
|
11.35
|
8.18
|
38.8 %
|
11.26
|
9.00
|
8.65
|
|
Low
|
|
10.28
|
6.24
|
64.7 %
|
8.41
|
7.96
|
7.32
|
|
Period end
|
|
10.99
|
7.73
|
42.2 %
|
10.45
|
8.45
|
8.15
|
|
Common shares outstanding (6)
|
|
4,269
|
4,226
|
1.0 %
|
4,268
|
4,247
|
4,240
|
|
Other
|
|
|
|
|
|
|
|
|
Return on average assets (7)
|
|
0.63%
|
0.43%
|
46.5 %
|
0.48%
|
0.57%
|
0.64%
|
|
Return on average equity (7)
|
|
8.03%
|
5.12%
|
56.8 %
|
6.03%
|
6.99%
|
7.66%
|
|
Loans to deposits
|
|
108.77%
|
111.63%
|
(2.6)%
|
108.63%
|
112.09%
|
111.01%
|
|
Efficiency ratio (8)
|
|
66.37%
|
62.89%
|
5.5 %
|
67.14%
|
62.98%
|
61.80%
|
|
Team
members
|
|
134
|
117
|
14.5 %
|
131
|
125
|
121
|
|
(6) Shares and per share amounts for the 2012 period have been
restated to reflect the 10% stock dividend in 2013.
|
|
(7 Annualized based on
quarterly net income.
|
|
(8) Noninterest
expense divided by the sum of net interest income and noninterest income,
excluding real estate activity and gain on sale of investments.
|
3
Asset quality
measures - Unaudited
|
|
|
2nd Qtr
|
Quarter Ended
|
|
|
June 30
|
2013-2012
|
March 31
|
December 31
|
September 30
|
|
(dollars in
thousands)
|
|
2013
|
2012
|
%
Change
|
2013
|
2012
|
2012
|
|
Nonperforming Assets
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
Owner occupied RE
|
$
|
292
|
599
|
(51.3)%
|
294
|
155
|
588
|
|
Non-owner occupied RE
|
|
568
|
1,476
|
(61.5)%
|
1,215
|
1,255
|
1,350
|
|
Construction
|
|
938
|
1,005
|
(6.7)%
|
1,006
|
1,006
|
1,005
|
|
Commercial business
|
|
490
|
507
|
(3.4)%
|
202
|
202
|
372
|
|
Consumer
|
|
|
|
|
|
|
|
|
Real estate
|
|
171
|
286
|
(40.2)%
|
116
|
119
|
122
|
|
Home equity
|
|
491
|
558
|
(12.0)%
|
575
|
577
|
365
|
|
Construction
|
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
|
|
-
|
-
|
-
|
-
|
44
|
-
|
|
Nonaccruing
troubled debt restructurings
|
|
2,594
|
5,937
|
(56.3)%
|
2,900
|
4,809
|
5,407
|
|
Total
nonaccrual loans
|
|
5,544
|
10,368
|
(46.5)%
|
6,308
|
8,167
|
9,209
|
|
Other
real estate owned
|
|
1,310
|
2,555
|
(48.7)%
|
2,522
|
1,719
|
1,976
|
|
Total
nonperforming assets
|
$
|
6,854
|
12,923
|
(47.0)%
|
8,830
|
9,886
|
11,185
|
|
Nonperforming
assets as a percentage of:
|
|
|
|
|
|
|
|
|
Total assets
|
|
0.82%
|
1.70%
|
(51.8)%
|
1.07%
|
1.24%
|
1.43%
|
|
Total loans
|
|
1.00%
|
2.09%
|
(52.2)%
|
1.33%
|
1.53%
|
1.75%
|
|
Accruing
troubled debt restructurings
|
$
|
9,833
|
8,569
|
14.8 %
|
8,997
|
9,421
|
8,591
|
|
|
Quarter Ended
|
2nd Qtr
|
Six Months Ended
|
YTD
|
|
|
June 30
|
2013-2012
|
June
30
|
2013 – 2012
|
|
|
2013
|
2012
|
Change
|
2013
|
2012
|
% Change
|
|
Allowance
for Loan Losses
|
|
|
|
|
|
|
|
|
Balance, beginning of period
|
$
|
9,367
|
9,196
|
1.9 %
|
9,091
|
8,925
|
1.9 %
|
|
Loans charged-off
|
|
(560)
|
(1,345)
|
(58.4)%
|
(1,504)
|
(2,287)
|
(34.2)%
|
|
Recoveries of loans previously charged-off
|
|
4
|
5
|
(20.0)%
|
99
|
18
|
450.0%
|
|
Net loans charged-off
|
|
(556)
|
(1,340)
|
(58.5)%
|
(1,405)
|
(2,269)
|
(38.1)%
|
|
Provision for loan losses
|
|
750
|
1,275
|
(41.2)%
|
1,875
|
2,475
|
(24.2)%
|
|
Balance, end of period
|
$
|
9,561
|
9,131
|
4.7 %
|
9,561
|
9,131
|
4.7 %
|
|
Allowance
for loan losses to gross loans
|
|
1.39 %
|
1.48 %
|
(6.1)%
|
1.39 %
|
1.48 %
|
(6.1)%
|
|
Allowance for loan losses to nonaccrual loans
|
|
172.48 %
|
88.07 %
|
95.8 %
|
172.48 %
|
88.07 %
|
95.8 %
|
|
Net
charge-offs to average loans (annualized)
|
|
0.33 %
|
0.88 %
|
(62.5)%
|
0.43 %
|
0.75 %
|
(42.7)%
|
|
AVERAGE YIELD/RATE - Unaudited
|
|
|
|
Quarter
Ended
|
|
|
June 30
|
March 31
|
December 31
|
September 30
|
June 30
|
|
|
2013
|
2013
|
2012
|
2012
|
2012
|
|
|
Yield/Rate(9)
|
|
Interest-earning assets
|
|
|
|
|
|
|
Federal funds sold
|
0.25%
|
0.24%
|
0.27%
|
0.23%
|
0.26%
|
|
Investment
securities, taxable
|
1.95%
|
2.06%
|
2.33%
|
2.19%
|
2.45%
|
|
Investment
securities, nontaxable
|
4.10%
|
4.07%
|
4.19%
|
4.76%
|
4.81%
|
|
Loans
|
5.04%
|
5.10%
|
5.18%
|
5.26%
|
5.28%
|
|
Total
interest-earning assets
|
4.61%
|
4.68%
|
4.75%
|
4.86%
|
4.82%
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
NOW accounts
|
0.26%
|
0.31%
|
0.45%
|
0.55%
|
0.60%
|
|
Savings & money
market
|
0.33%
|
0.28%
|
0.37%
|
0.37%
|
0.39%
|
|
Time deposits
|
0.91%
|
1.09%
|
1.15%
|
1.19%
|
1.37%
|
|
Total
interest-bearing deposits
|
0.55%
|
0.65%
|
0.76%
|
0.79%
|
0.89%
|
|
Note payable and
other borrowings
|
2.99%
|
2.85%
|
3.23%
|
3.35%
|
3.37%
|
|
Junior subordinated
debentures
|
2.60%
|
2.60%
|
2.64%
|
2.79%
|
2.76%
|
|
Total
interest-bearing liabilities
|
1.07%
|
1.16%
|
1.29%
|
1.36%
|
1.43%
|
|
Net interest spread
|
3.54%
|
3.52%
|
3.46%
|
3.50%
|
3.39%
|
|
Net interest income (tax equivalent) / margin
|
3.70%
|
3.69%
|
3.66%
|
3.72%
|
3.61%
|
|
(9) Annualized for the respective
three month period.
|
4
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
consists of Southern First Bank, the 9th largest bank headquartered in South
Carolina. Since 1999 Southern First Bancshares has been providing financial
services and now operates in eight locations in the Greenville, Columbia, and
Charleston markets of South Carolina. Southern First Bancshares has assets of approximately
$839 million and its common stock is traded in 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 we conduct operations
may be different than expected resulting in, among other things, a
deterioration in the credit quality or a reduced demand for credit, including
the resultant effect on the company’s loan portfolio and allowance for loan
losses; (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 the U.S. legal and regulatory framework;
and (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. 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.
FINANCIAL CONTACT: MIKE DOWLING 864-679-9070
MEDIA CONTACT: ART SEAVER 864-679-9010
WEB SITE: www.southernfirst.com
5
