Core Viewpoint - Southern First (SFST) has shown strong stock performance, with a 12.3% increase over the past month and a 17.3% gain since the start of the year, outperforming the Zacks Finance sector and the Zacks Banks - Southeast industry [1][2]. Financial Performance - Southern First reported an EPS of $1.07 in its last earnings report, exceeding the consensus estimate of $0.89 [2]. - For the current fiscal year, the company is expected to post earnings of $3.42 per share on revenues of $115.77 million, reflecting a 79.06% change in EPS and a 23.99% change in revenues [3]. - For the next fiscal year, earnings are projected to be $4.07 per share on revenues of $130.42 million, indicating a year-over-year change of 19.01% in EPS and 12.65% in revenues [3]. Valuation Metrics - Southern First has a Value Score of B, a Growth Score of B, and a Momentum Score of A, resulting in a combined VGM Score of A [6]. - The stock currently trades at 13.6 times the current fiscal year EPS estimates, which is a premium compared to the peer industry average of 10.7 times [7]. - On a trailing cash flow basis, the stock trades at 18.2 times, again above the peer group's average of 10.7 times [7]. Zacks Rank - Southern First holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [8]. - The company meets the criteria for selection based on Zacks Rank and Style Scores, indicating potential for future growth [9]. Industry Comparison - The Banks - Southeast industry is performing well, ranking in the top 14% of all industries, providing a favorable environment for both Southern First and its peer, Home Bancorp, Inc. (HBCP) [12]. - HBCP also has a Zacks Rank of 2 (Buy) and has shown strong earnings performance, indicating a competitive landscape within the industry [10][11].

Financial Performance - Net income to common shareholders for Q3 2025 was $8.7 million, a 97.7% increase from $4.4 million in Q3 2024, with diluted EPS rising to $1.07 from $0.54[117]. - For the nine months ended September 30, 2025, net income to common shareholders was $20.5 million, up 106.1% from $9.9 million in the same period of 2024, with diluted EPS increasing to $2.54 from $1.22[118]. - Noninterest income for the third quarter of 2025 was $3.6 million, a 13.4% increase from $3.2 million in the third quarter of 2024, with mortgage banking income rising by 10.4%[143]. - Total noninterest income for the first nine months of 2025 reached $10.0 million, up 7.3% from $9.4 million in the same period of 2024, driven by a 36.8% increase in service fees on deposit accounts[144]. - Noninterest expense for the third quarter of 2025 was $18.9 million, a 5.0% increase from $18.0 million in the third quarter of 2024, primarily due to higher compensation and benefits[146]. - The efficiency ratio improved to 66.2% in the third quarter of 2025 from 75.9% in the same quarter of 2024, reflecting increased net interest income[148]. Assets and Liabilities - Total assets increased by 6.6% to $4.36 billion as of September 30, 2025, compared to $4.09 billion at December 31, 2024[114]. - Total liabilities and shareholders' equity as of September 30, 2025, were $4.00 billion and $356.3 million, respectively, compared to $3.76 billion and $330.4 million at December 31, 2024[114]. - Loans increased to $3.79 billion as of September 30, 2025, from $3.63 billion at December 31, 2024[114]. - Deposits rose to $3.68 billion as of September 30, 2025, compared to $3.44 billion at December 31, 2024[114]. - As of September 30, 2025, cash and cash equivalents totaled $282.9 million, representing 6.5% of total assets, compared to $162.9 million or 4.0% of total assets at December 31, 2024[182]. - Investment securities amounted to $151.1 million at September 30, 2025, or 3.5% of total assets, slightly down from $151.6 million or 3.7% of total assets at December 31, 2024[182]. Interest Income and Margin - Net interest income for Q3 2025 was $27.5 million, a 33.7% increase from $20.6 million in Q3 2024, driven by a $3.8 million increase in interest income[119]. - The net interest margin (TE) increased by 54 basis points to 2.62% in Q3 2025 compared to 2.08% in Q3 2024, primarily due to a decrease in the cost of interest-bearing liabilities[124]. - Average interest-earning assets grew by $239.0 million in Q3 2025, while the average yield on these assets increased by five basis points to 5.23%[124]. - Net interest spread improved to 1.80% in Q3 2025, up from 1.16% in Q3 2024, reflecting a 64 basis point increase due to lower rates on interest-bearing liabilities[127]. - For the first nine months of 2025, net interest income was $76.2 million, a 29.7% increase compared to $58.8 million in 2024, driven by a decrease in interest expense[138]. Credit Quality - The provision for credit losses was recorded at $850,000 in Q3 2025, compared to no provision in Q3 2024, due to an increase in past due loans[140]. - The allowance for credit losses was $41.8 million, or 1.10% of outstanding loans, providing coverage of 364.50% of nonperforming loans as of September 30, 2025, compared to $39.9 million or 1.10% of outstanding loans and 366.94% coverage at December 31, 2024[166]. - Nonperforming assets remained stable, with no loans 90 days past due and still accruing as of September 30, 2025[160]. - As of September 30, 2025, nonperforming assets totaled $11.7 million, representing 0.27% of total assets and 0.31% of gross loans, compared to $10.9 million or 0.27% of total assets and 0.30% of gross loans at December 31, 2024[161]. Capital and Ratios - Total shareholders' equity increased to $356.3 million at September 30, 2025, up from $330.4 million at December 31, 2024, primarily due to net income of $20.5 million during the first nine months of 2025[190]. - Return on average assets improved to 0.65% for the nine months ended September 30, 2025, compared to 0.38% for the year ended December 31, 2024[192]. - Total capital to risk-weighted assets ratio was 12.72% as of September 30, 2025, exceeding the minimum requirement of 8.00%[196]. - Tier 1 capital to risk-weighted assets ratio stood at 11.47% as of September 30, 2025, above the minimum requirement of 6.00%[196]. - Common equity Tier 1 capital to risk-weighted assets ratio was 11.47% as of September 30, 2025, surpassing the minimum requirement of 4.50%[196]. Risk Management - The company plans to manage interest rate risk through various asset liability management strategies[128]. - The company actively manages interest rate risk through asset/liability management, aiming to maintain an appropriate balance between interest-sensitive assets and liabilities[209]. - The forecasted impact on net interest income shows a decrease of 6.96% under a scenario of a 300 basis points increase in interest rates[212]. - A 200 basis points increase in interest rates is projected to decrease net interest income by 3.84%[212]. - A 100 basis points increase in interest rates is expected to decrease net interest income by 1.51%[212]. - A decrease of 300 basis points in interest rates is projected to increase net interest income by 3.02%[212]. Client and Market Position - The company maintains a client-focused business model, emphasizing exceptional client service as a competitive advantage[114]. - The company received a "satisfactory" rating in its most recent Community Reinvestment Act performance evaluation[207]. - The company is not involved in off-balance sheet contractual relationships that could significantly impact earnings[202].

Core Insights - Southern First (SFST) reported a revenue of $31.13 million for the quarter ended September 2025, marking a 31% increase year-over-year [1] - Earnings per share (EPS) reached $1.07, up from $0.54 in the same quarter last year, with an EPS surprise of +20.22% compared to the consensus estimate of $0.89 [1] - The revenue exceeded the Zacks Consensus Estimate by +4.25% [1] Financial Performance Metrics - Efficiency ratio improved to 60.9%, better than the estimated 65.3% by analysts [4] - Net Interest Margin remained stable at 2.6%, matching analyst expectations [4] - Total Noninterest Income was reported at $3.6 million, surpassing the average estimate of $3.47 million [4] - Net Interest Income was $27.53 million, exceeding the average estimate of $26.38 million [4] Stock Performance - Southern First's shares have returned -4.7% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Viewpoint - Southern First (SFST) reported quarterly earnings of $1.07 per share, exceeding the Zacks Consensus Estimate of $0.89 per share, and showing a significant increase from $0.54 per share a year ago, indicating strong financial performance [1][2] Financial Performance - The company achieved revenues of $31.13 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.25% and up from $23.77 million year-over-year [2] - Over the last four quarters, Southern First has consistently exceeded consensus EPS estimates, achieving this four times [2] Stock Performance - Southern First shares have increased approximately 6.2% since the beginning of the year, while the S&P 500 has gained 16.9%, indicating underperformance relative to the broader market [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.95 on revenues of $30.79 million, and for the current fiscal year, it is $3.30 on revenues of $115.77 million [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which may influence future stock performance [6] Industry Context - The Banks - Southeast industry, to which Southern First belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Performance - Net income for Q3 2025 was $8.7 million, or $1.07 per diluted share, representing a 32% increase from Q2 2025 and a 98% increase from Q3 2024[5] - Total revenue for Q3 2025 reached $31.1 million, up 8.7% from $28.6 million in Q2 2025 and 30.8% from $23.8 million in Q3 2024[4] - Noninterest income for Q3 2025 was $3.6 million, a 13.39% increase from $3.3 million in Q2 2025, driven by a 10% increase in service fees on deposit accounts[8] - Noninterest expense decreased to $18.9 million, down from $19.3 million in Q2 2025, but up from $18.0 million in Q3 2024[10] - The effective tax rate for Q3 2025 was 23.6%, slightly up from 23.4% in Q2 2025[11] Loan and Deposit Growth - Total loans increased to $3.79 billion, a 4% annualized growth from Q2 2025, while core deposits rose to $2.88 billion, up 2% annualized from Q2 2025[5] - Loans increased to $3.79 billion as of September 30, 2025, representing a 4.68% increase from the previous year[14] - Total deposits amounted to $3.68 billion at September 30, 2025, up from $3.64 billion in the second quarter of 2025[19] - Owner-occupied real estate loans increased to $705.4 million at September 30, 2025, from $686.4 million in the previous quarter[18] - Non-owner occupied real estate loans were $943.3 million, slightly up from $939.2 million in the second quarter of 2025[18] Asset Quality - Nonperforming assets to total assets remained stable at 0.27%, with past due loans at 0.18% of total loans[5] - Total nonperforming assets were $11.7 million at September 30, 2025, representing 0.27% of total assets, unchanged from the second quarter of 2025 and down from 0.28% in the third quarter of 2024[15] - The classified asset ratio decreased to 3.90% for the third quarter of 2025 from 4.28% in the second quarter of 2025[15] Credit Losses - The provision for credit losses was $850 thousand in Q3 2025, compared to $700 thousand in Q2 2025, reflecting an increase in past due loans[7] - The allowance for credit losses increased to $41.8 million, or 1.10% of total loans, compared to $41.3 million, also 1.10% of total loans at June 30, 2025[16] - Net recoveries for the third quarter of 2025 were $14 thousand, compared to net charge-offs of $52 thousand in the second quarter of 2025[16] - The provision for credit losses was $500 thousand for the third quarter of 2025, down from $650 thousand in the second quarter of 2025[16] Interest Income and Margin - Net interest income for Q3 2025 was $27.5 million, an increase of $2.2 million from Q2 2025, driven by a $2.7 million increase in interest income[13] - Net interest margin improved to 2.62% in Q3 2025, compared to 2.50% in Q2 2025 and 2.08% in Q3 2024[5] - The yield on interest-earning assets increased by seven basis points from the previous quarter, while the cost of interest-bearing deposits decreased by seven basis points[13] - Net interest margin on a tax-equivalent basis was 2.62% for Q3 2025, up 12 basis points from Q2 2025 and 54 basis points from Q3 2024[13] Balance Sheet Highlights - Total assets as of September 30, 2025, were $4.36 billion, a 4.41% increase from $4.17 billion a year earlier[14] - Total liabilities were $4.00 billion, reflecting a 4.01% increase from $3.85 billion a year earlier[14] - Shareholders' equity increased to $356.3 million, a 9.13% increase from $326.5 million a year earlier[14] - The book value per common share rose to $43.51, an 8.67% increase from $40.04 a year earlier[14] - The stock price at the end of the period was $44.12, a 29.46% increase from $34.08 a year earlier[14] - Total cash and cash equivalents increased by 8.57% to $282.9 million compared to the previous year[14] Company Overview - The company operates in 12 locations across South Carolina and parts of North Carolina and Georgia, with consolidated assets of approximately $4.4 billion[22]

Core Insights - Southern First Bancshares (NASDAQ: SFST) is a small regional bank holding company with a market capitalization of $353 million, primarily operating in the Southeastern US, which often leads to it being overlooked by investors [1] Company Overview - The company is characterized as a small regional bank, indicating a niche market presence and potential for growth opportunities that may not be fully recognized by the broader market [1] Investment Perspective - The article suggests that the best investment opportunities often arise from stocks that are less widely followed or those that do not accurately reflect the current market opportunities, implying that Southern First Bancshares may present such an opportunity [1]

Core Insights - Southern First Bancshares (NASDAQ: SFST) is a small regional bank holding company with a market capitalization of $353 million, primarily operating in the Southeastern US, which often leads to it being overlooked by investors [1] Company Overview - The company is characterized as a small regional bank, indicating a niche market presence and potential for growth opportunities that may not be fully recognized by the broader market [1] Investment Perspective - The article suggests that the best investment opportunities often arise from stocks that are less widely followed or those that do not accurately reflect the current market opportunities, implying that Southern First Bancshares may present such an opportunity [1]

Financial Performance - Net income for the three months ended June 30, 2025, was $6.6 million, compared to $3.0 million for the same period in 2024, representing a 120% increase [119]. - Diluted earnings per share (EPS) rose to $0.81 for Q2 2025, up from $0.37 in Q2 2024 [119]. - Net interest income for Q2 2025 was $25.3 million, a 29.5% increase from $19.5 million in Q2 2024 [121]. - For the first half of 2025, net interest income rose to $48.7 million, up 27.5% from $38.2 million in the same period of 2024, driven by a $7.5 million decrease in interest expense [139]. - Noninterest income for Q2 2025 was $3.3 million, a decrease of $189,000 or 5.4% from Q2 2024, with mortgage banking income down by $354,000 or 18.4% [145]. - Noninterest expense for Q2 2025 was $19.3 million, an increase of $693,000 or 3.7% from Q2 2024, primarily due to higher compensation and benefits expenses [149]. - The efficiency ratio improved to 67.5% in Q2 2025 from 80.9% in Q2 2024, reflecting increased net interest income [151]. Assets and Liabilities - Total assets increased to $4.31 billion, a 5.4% rise from $4.09 billion at December 31, 2024 [116]. - Total liabilities at June 30, 2025, were $3.96 billion, compared to $3.76 billion at December 31, 2024 [116]. - Shareholders' equity increased to $345.5 million at June 30, 2025, from $330.4 million at December 31, 2024 [116]. - Cash and cash equivalents totaled $271.0 million at June 30, 2025, representing 6.3% of total assets [184]. - Retail deposits increased to $3.08 billion, or 84.6% of total deposits, while wholesale deposits were $560.7 million, or 15.4% of total deposits at June 30, 2025 [174]. Loans and Credit Quality - Loans amounted to $3.75 billion at June 30, 2025, up from $3.63 billion at December 31, 2024 [116]. - Average loan balances increased by $78.5 million year-over-year for Q2 2025, contributing to a six basis point increase in yield on interest-earning assets [129]. - The loan portfolio increased by $115.1 million or 6.39% annualized in the first half of 2025, driven by increases in consumer and commercial loans [157]. - The provision for credit losses was $700,000 in Q2 2025, compared to $500,000 in Q2 2024, reflecting growth in the loan portfolio [142]. - Nonperforming assets totaled $11.7 million or 0.27% of total assets as of June 30, 2025, compared to $10.9 million or 0.27% at December 31, 2024 [163]. - As of June 30, 2025, the allowance for credit losses was $41.3 million, representing 1.10% of outstanding loans and providing coverage of 362.35% of nonperforming loans [168]. Interest Income and Expense - Net interest margin (TE) improved to 2.50% in Q2 2025, compared to 1.98% in Q2 2024 [127]. - Interest expense on interest-bearing deposits decreased by $3.9 million, contributing to the increase in net interest income [121]. - Average interest-earning assets grew by $79.1 million, with an average yield increase to 5.18% [127]. - Net interest spread improved to 1.69% in Q2 2025 from 1.08% in Q2 2024, driven by a 61 basis point increase due to a decrease in interest-bearing liabilities [130]. - The average yield on loans increased by 14 basis points to 5.24% in the first half of 2025, contributing to the overall increase in interest income [135]. Capital Ratios and Risk Management - The bank maintained a total capital ratio of 12.58% as of June 30, 2025, exceeding the minimum requirement of 8.00% [198]. - Tier 1 capital ratio was 11.33% at June 30, 2025, above the minimum requirement of 6.00% [198]. - Common equity Tier 1 capital ratio stood at 11.33% as of June 30, 2025, surpassing the minimum requirement of 4.50% [198]. - The company actively manages interest rate risk through asset/liability management to ensure adequate liquidity and balance between interest-sensitive assets and liabilities [211]. - The asset/liability management committee (ALCO) meets quarterly to monitor interest rate sensitivity within board-approved limits [211]. Interest Rate Sensitivity - As of June 30, 2025, a 300 basis points increase in interest rates is projected to decrease net interest income by 7.07% [213]. - A 200 basis points increase in interest rates is expected to reduce net interest income by 4.03% [213]. - A 100 basis points increase in interest rates will lead to a decrease of 1.64% in net interest income [213]. - A decrease of 100 basis points in interest rates is anticipated to increase net interest income by 1.67% [213]. - A decrease of 200 basis points in interest rates is projected to boost net interest income by 5.78% [213]. - A decrease of 300 basis points in interest rates is expected to enhance net interest income by 15.43% [213]. Accounting and Market Risks - The company does not expect recently issued accounting standards to have a material impact on consolidated financial statements upon adoption [209]. - Market risks primarily arise from interest rate risk related to lending, investing, and borrowing activities [210].

Core Viewpoint - Southern First (SFST) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in a company's earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [1][2]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4][6]. Recent Developments for Southern First - For the fiscal year ending December 2025, Southern First is expected to earn $3.05 per share, unchanged from the previous year, but analysts have raised their estimates by 14% over the past three months [8]. - The upgrade to Zacks Rank 1 indicates an improvement in Southern First's underlying business, which is likely to drive the stock price higher as investors respond positively to this trend [5][10]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Insights - Three stocks with strong buy rankings and momentum characteristics are highlighted for investors: Charles Schwab, Texas Capital Bancshares, and Southern First Bancshares [1][2][3][4] Company Summaries - **Charles Schwab (SCHW)**: - Zacks Rank: 1 (Strong Buy) - Current year earnings estimate increased by 6.5% over the last 60 days - Share price increased by 19.4% over the last three months, outperforming the S&P 500's 15.2% gain - Momentum Score: A [1][2] - **Texas Capital Bancshares (TCBI)**: - Zacks Rank: 1 (Strong Buy) - Current year earnings estimate increased by 8.2% over the last 60 days - Share price increased by 30% over the last three months, significantly outperforming the S&P 500's 15.2% gain - Momentum Score: A [2][3] - **Southern First Bancshares (SFST)**: - Zacks Rank: 1 (Strong Buy) - Current year earnings estimate increased by 14.2% over the last 60 days - Share price increased by 33.3% over the last three months, also outperforming the S&P 500's 15.2% gain - Momentum Score: A [3][4]