[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) Southern First Bancshares' Q2 2025 performance shows strong revenue growth, margin expansion, and strategic advancements [CEO Statement & Strategic Highlights](index=1&type=section&id=CEO%20Statement%20%26%20Strategic%20Highlights) CEO highlights strong Q2 2025 revenue growth, margin expansion, and strategic initiatives - Total revenue grew **24%** over the same quarter a year ago, marking one of the highest revenue generating quarters in the company's 25-year history[2](index=2&type=chunk) - The company achieved solid margin expansion due to focused pricing and discipline on both sides of the balance sheet[2](index=2&type=chunk) - Three new Board members were added, bringing valuable contributions through their community involvement and professional expertise[2](index=2&type=chunk) - The company continues to attract highly talented and experienced bankers, providing opportunities for depth in existing areas and expansion[2](index=2&type=chunk) [Key Financial Highlights (Q2 2025)](index=1&type=section&id=Key%20Financial%20Highlights%20%28Q2%202025%29) Q2 2025 shows significant improvements in diluted EPS, net interest margin, loan/deposit growth, and asset quality | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------------- | :------ | :------ | :------ | :-------------------------------- | :-------------------------------- | | Net income available to common shareholders ($ thousands) | 6,581 | 5,266 | 2,999 | +119.4% | +24.9% | | Earnings per common share, diluted | 0.81 | 0.65 | 0.37 | +118.9% | +24.6% | | Total revenue ($ thousands) | 28,629 | 26,497 | 23,051 | +24.2% | +8.0% | | Net interest margin (tax-equivalent) | 2.50% | 2.41% | 1.98% | +52 bps | +9 bps | | Return on average assets | 0.63% | 0.52% | 0.29% | +34 bps | +11 bps | | Return on average equity | 7.71% | 6.38% | 3.81% | +390 bps | +133 bps | | Efficiency ratio | 67.54% | 71.08% | 80.87% | -1333 bps | -354 bps | | Total loans ($ thousands) | 3,746,841 | 3,683,919 | 3,622,521 | +3.4% | +1.7% (7% annualized) | | Total deposits ($ thousands) | 3,636,329 | 3,620,886 | 3,459,869 | +5.1% | +0.4% | | Core deposits ($ thousands) | 2,867,193 | 2,820,194 | 2,788,223 | +2.8% | +1.7% (7% annualized) | | Total assets ($ thousands) | 4,308,067 | 4,284,311 | 4,109,849 | +4.8% | +0.6% | | Book value per common share | 42.23 | 41.33 | 39.09 | +8.0% | +2.2% (9% annualized) | | Tangible common equity | 8.02% | 7.88% | 7.76% | +26 bps | +14 bps | | Nonperforming assets/total assets | 0.27% | 0.26% | 0.27% | 0 bps | +1 bps | | Allowance for credit losses/loans | 1.10% | 1.10% | 1.11% | -1 bps | 0 bps | [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Analysis of income statement, balance sheet, and asset quality, detailing key financial drivers [Income Statement Overview](index=2&type=section&id=Income%20Statement%20Overview) Q2 2025 net income increased significantly, driven by higher net interest income and noninterest income growth [Net Interest Income and Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income and margin analysis details interest income, expense, and their impact on profitability | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------------------- | :-------------------------------- | | Total interest income | 52,318 | 49,647 | 50,546 | +3.51% | +5.38% | | Total interest expense | 27,023 | 26,264 | 31,018 | -12.88% | +2.89% | | Net interest income | 25,295 | 23,383 | 19,528 | +29.53% | +8.18% | | Net interest margin (tax-equivalent) | 2.50% | 2.41% | 1.98% | +52 bps | +9 bps | - The increase in net interest income was driven by a **$2.7 million** increase in interest income, partially offset by a **$759 thousand** increase in interest expense, quarter-over-quarter[12](index=12&type=chunk) - Loan yield increased **eight basis points** and the yield on Federal funds sold and interest-bearing deposits increased by **five basis points** over the previous quarter, contributing to higher interest income[12](index=12&type=chunk) - A **four basis point** decrease in the rate on interest-bearing deposits over the previous quarter helped reduce interest expense[12](index=12&type=chunk) [Noninterest Income](index=2&type=section&id=Noninterest%20Income) Overview of noninterest income components, highlighting mortgage banking and service fees on deposit accounts | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------------------- | :-------------------------------- | | Total noninterest income | 3,334 | 3,114 | 3,523 | -5.36% | +7.06% | | Mortgage banking income | 1,569 | 1,424 | 1,923 | -18.41% | +10.18% | | Service fees on deposit accounts | 567 | 539 | 423 | +34.04% | +5.20% | - Mortgage banking income remained the largest component of noninterest income, increasing from **$1.4 million** in Q1 2025 to **$1.6 million** in Q2 2025 due to a slight increase in mortgage origination volume[8](index=8&type=chunk) [Noninterest Expense](index=3&type=section&id=Noninterest%20Expense) Analysis of noninterest expenses, focusing on compensation, benefits, and data processing costs | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------------------- | :-------------------------------- | | Total noninterest expenses | 19,336 | 18,836 | 18,643 | +3.72% | +2.65% | | Compensation and benefits | 11,674 | 11,304 | 11,290 | +3.40% | +3.27% | | Outside service and data processing costs | 2,189 | 2,037 | 1,962 | +11.57% | +7.46% | - The quarter-over-quarter increase in noninterest expense was driven by higher compensation and benefits, outside service and data processing costs, and professional fees, partially offset by a decrease in insurance expense[9](index=9&type=chunk) [Provision for Credit Losses](index=2&type=section&id=Provision%20for%20Credit%20Losses) Details on provision for credit losses, including components and primary drivers behind reported amounts | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------------------- | :-------------------------------- | | Provision for credit losses | 700 | 750 | 500 | +40.00% | -6.67% | - The provision for credit losses in Q2 2025 included **$650 thousand** for credit losses and **$50 thousand** for the reserve for unfunded commitments[7](index=7&type=chunk) - The provision was primarily driven by a **$62.9 million** increase in total loans during the quarter[7](index=7&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) Summary of net income and diluted EPS, along with income tax expense and effective tax rate | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change (Q2 2025 vs Q2 2024) | QoQ Change (Q2 2025 vs Q1 2025) | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------------------- | :-------------------------------- | | Net income available to common shareholders | 6,581 | 5,266 | 2,999 | +119.44% | +24.98% |\ | Earnings per common share – Diluted | 0.81 | 0.65 | 0.37 | +118.92% | +24.62% |\ | Income tax expense | 2,012 | 1,645 | 909 | +121.34% | +22.31% |\ | Effective tax rate | 23.4% | 23.8% | 23.3% | +0.1% | -0.4% | - Net income for Q2 2025 increased by **$1.3 million** from Q1 2025 and **$3.6 million** from Q2 2024[6](index=6&type=chunk) - The effective tax rate remained relatively stable, with minor fluctuations driven by equity compensation transactions[10](index=10&type=chunk) [Balance Sheet Overview](index=4&type=section&id=Balance%20Sheet%20Overview) Balance sheet as of June 30, 2025, shows growth in assets, loans, deposits, and shareholders' equity | Metric | Jun 30, 2025 ($ thousands) | Mar 31, 2025 ($ thousands) | Jun 30, 2024 ($ thousands) | YoY Change (Jun 30, 2025 vs Jun 30, 2024) | QoQ Change (Jun 30, 2025 vs Mar 31, 2025) | | :-------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------------------------ | :------------------------------------------ |\ | Total assets | 4,308,067 | 4,284,311 | 4,109,849 | +4.82% | +0.55% |\ | Total cash and cash equivalents | 271,032 | 305,057 | 194,827 | +39.11% | -11.20% |\ | Total investment securities | 148,773 | 151,217 | 140,006 | +6.26% | -1.61% |\ | Loans, net | 3,705,556 | 3,643,232 | 3,582,364 | +3.44% | +1.71% |\ | Total liabilities | 3,962,605 | 3,946,713 | 3,791,101 | +4.52% | +0.40% |\ | Deposits | 3,636,329 | 3,620,886 | 3,459,869 | +5.10% | +0.43% |\ | Core deposits ($ thousands) | 2,867,193 | 2,820,194 | 2,788,223 | +2.8% | +1.7% (7% annualized) |\ | Total shareholders' equity | 345,462 | 337,598 | 318,748 | +8.38% | +2.33% | - Interest-bearing deposits with banks saw a substantial year-over-year increase of **636.45%**, reaching **$65.0 million**[13](index=13&type=chunk) - Subordinated debentures decreased by **31.54%** year-over-year, from **$36.38 million** to **$24.90 million**[13](index=13&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality remained stable in Q2 2025, with low nonperforming assets and increased allowance for credit losses [Nonperforming Assets](index=5&type=section&id=Nonperforming%20Assets) Detailed analysis of nonperforming assets, including composition and ratios relative to total assets and loans | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | | :------------------------------------------ | :-------------------- | :-------------------- | :-------------------- | | Total nonperforming assets | 11,669 | 11,036 | 11,218 | | Nonperforming assets as a percentage of: | | | | | Total assets | 0.27% | 0.26% | 0.27% | | Total loans | 0.31% | 0.30% | 0.31% | | Classified assets/tier 1 capital plus allowance for credit losses | 4.28% | 4.24% | 4.22% | - Nonperforming assets to total assets remained stable at **0.27%** in Q2 2025, consistent with Q2 2024[14](index=14&type=chunk) - The classified asset ratio increased slightly to **4.28%** in Q2 2025 from **4.24%** in Q1 2025[14](index=14&type=chunk) [Allowance for Credit Losses & Net Charge-offs](index=5&type=section&id=Allowance%20for%20Credit%20Losses%20%26%20Net%20Charge-offs) Review of allowance for credit losses and net charge-offs, detailing changes and relationship to loan growth | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | | :------------------------------------------ | :-------------------- | :-------------------- | :-------------------- | | Allowance for credit losses (end of period) | 41,285 | 40,687 | 40,157 | | Allowance for credit losses to gross loans | 1.10% | 1.10% | 1.11% | | Net charge-offs (recoveries) | (52) | 23 | (1,034) | | Net charge-offs (recoveries) to average loans QTD (annualized) | 0.01% | 0.00% | 0.11% | | Provision for credit losses | 650 | 750 | 750 | - The allowance for credit losses increased to **$41.3 million**, or **1.10%** of total loans, at June 30, 2025, from **$40.7 million** at March 31, 2025[15](index=15&type=chunk) - Net charge-offs were **$52 thousand** (**0.01%** annualized) for Q2 2025, compared to net recoveries of **$23 thousand** in Q1 2025 and net charge-offs of **$1.0 million** in Q2 2024[15](index=15&type=chunk) [Detailed Financial Data](index=2&type=section&id=Detailed%20Financial%20Data) Comprehensive unaudited financial statements, including income statements, balance sheets, asset quality, and loan/deposit compositions [Income Statements (Unaudited)](index=2&type=section&id=Income%20Statements%20%28Unaudited%29) Detailed unaudited income statements provide a breakdown of interest income, expenses, and net income | (in thousands, except per share data) | Jun 30 2025 | Mar 31 2025 | Dec 31 2024 | Sept 30 2024 | Jun 30 2024 | | :------------------------------------ | :---------- | :---------- | :---------- | :----------- | :---------- | | Interest income | | | | | | | Loans | $ 48,992 | $ 47,085 | $ 47,163 | $ 47,550 | $ 46,545 | | Investment securities | 1,357 | 1,403 | 1,504 | 1,412 | 1,418 | | Federal funds sold | 1,969 | 1,159 | 2,465 | 2,209 | 2,583 | | **Total interest income** | **52,318** | **49,647** | **51,132** | **51,171** | **50,546** | | Interest expense | | | | | | | Deposits | 24,300 | 23,569 | 25,901 | 27,725 | 28,216 | | Borrowings | 2,723 | 2,695 | 2,773 | 2,855 | 2,802 | | **Total interest expense** | **27,023** | **26,264** | **28,674** | **30,580** | **31,018** | | **Net interest income** | **25,295** | **23,383** | **22,458** | **20,591** | **19,528** | | Provision (reversal) for credit losses | 700 | 750 | (200) | - | 500 | | **Net interest income after provision for credit losses** | **24,595** | **22,633** | **22,658** | **20,591** | **19,028** | | Noninterest income | | | | | | | Mortgage banking income | 1,569 | 1,424 | 1,024 | 1,449 | 1,923 | | Service fees on deposit accounts | 567 | 539 | 499 | 455 | 423 | | ATM and debit card income | 586 | 552 | 607 | 599 | 587 | | Income from bank owned life insurance | 413 | 403 | 407 | 401 | 384 | | Other income | 199 | 196 | 242 | 271 | 206 | | **Total noninterest income** | **3,334** | **3,114** | **2,779** | **3,175** | **3,523** | | Noninterest expense | | | | | | | Compensation and benefits | 11,674 | 11,304 | 10,610 | 10,789 | 11,290 | | Occupancy | 2,523 | 2,548 | 2,587 | 2,595 | 2,552 | | Outside service and data processing costs | 2,189 | 2,037 | 2,003 | 1,930 | 1,962 | | Insurance | 910 | 1,010 | 1,077 | 1,025 | 965 | | Professional fees | 609 | 509 | 656 | 548 | 582 | | Marketing | 397 | 374 | 335 | 319 | 389 | | Other | 1,034 | 1,054 | 1,276 | 833 | 903 | | **Total noninterest expenses** | **19,336** | **18,836** | **18,544** | **18,039** | **18,643** | | Income before provision for income taxes | 8,593 | 6,911 | 6,893 | 5,727 | 3,908 | | Income tax expense | 2,012 | 1,645 | 1,266 | 1,345 | 909 | | **Net income available to common shareholders** | **$ 6,581** | **$ 5,266** | **$ 5,627** | **$ 4,382** | **$ 2,999** |\ | Earnings per common share – Basic | $ 0.81 | $ 0.65 | $ 0.70 | $ 0.54 | $ 0.37 |\ | Earnings per common share – Diluted | 0.81 | 0.65 | 0.70 | 0.54 | 0.37 | [Net Interest Income and Margin (Unaudited)](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin%20%28Unaudited%29) Table details average balances, income/expense, and yields/rates for interest-earning assets and liabilities | (dollars in thousands) | June 30, 2025 Average Balance | June 30, 2025 Income/Expense | June 30, 2025 Yield/Rate | March 31, 2025 Average Balance | March 31, 2025 Income/Expense | March 31, 2025 Yield/Rate | June 30, 2024 Average Balance | June 30, 2024 Income/Expense | June 30, 2024 Yield/Rate | | :------------------------------------ | :---------------------------- | :--------------------------- | :----------------------- | :----------------------------- | :---------------------------- | :------------------------ | :---------------------------- | :--------------------------- | :----------------------- | | Interest-earning assets | | | | | | | | | | | Federal funds sold and interest-bearing deposits | $ 179,095 | $ 1,969 | 4.41% | $ 107,821 | $ 1,159 | 4.36% | $ 186,584 | $ 2,583 | 5.57% | | Investment securities, taxable | 141,898 | 1,315 | 3.72% | 143,609 | 1,361 | 3.84% | 133,507 | 1,376 | 4.15% | | Investment securities, nontaxable | 7,740 | 55 | 2.83% | 7,914 | 55 | 2.80% | 8,027 | 55 | 2.73% | | Loans | 3,724,064 | 48,992 | 5.28% | 3,673,912 | 47,085 | 5.20% | 3,645,595 | 46,545 | 5.14% | | **Total interest-earning assets** | **4,052,797** | **52,331** | **5.18%** | **3,933,256** | **49,660** | **5.12%** | **3,973,713** | **50,559** | **5.12%** | | Interest-bearing liabilities | | | | | | | | | | | NOW accounts | $ 331,811 | 752 | 0.91% | $ 306,707 | 597 | 0.79% | $ 302,881 | 621 | 0.82% | | Savings & money market | 1,566,345 | 13,398 | 3.43% | 1,520,632 | 12,750 | 3.40% | 1,611,991 | 16,324 | 4.07% | | Time deposits | 942,880 | 10,150 | 4.32% | 930,282 | 10,222 | 4.46% | 898,878 | 11,271 | 5.04% | | **Total interest-bearing deposits** | **2,841,036** | **24,300** | **3.43%** | **2,757,621** | **23,569** | **3.47%** | **2,813,750** | **28,216** | **4.03%** | | FHLB advances and other borrowings | 240,000 | 2,270 | 3.79% | 240,000 | 2,244 | 3.79% | 240,000 | 2,247 | 3.77% | | Subordinated debentures | 24,903 | 453 | 7.30% | 24,903 | 451 | 7.34% | 36,360 | 555 | 6.14% | | **Total interest-bearing liabilities** | **3,105,939** | **27,023** | **3.49%** | **3,022,524** | **26,264** | **3.52%** | **3,090,110** | **31,018** | **4.04%** | | Net interest spread | | | 1.69% | | | 1.60% | | | 1.08% | | Net interest income (tax equivalent) / margin | | $25,308 | 2.50% | | $23,396 | 2.41% | | $19,541 | 1.98% | [Balance Sheets (Unaudited)](index=4&type=section&id=Balance%20Sheets%20%28Unaudited%29) Unaudited balance sheets detail assets, liabilities, and shareholders' equity at various quarter-ends | (in thousands, except per share data) | Jun 30 2025 | Mar 31 2025 | Dec 31 2024 | Sep 30 2024 | Jun 30 2024 | | :------------------------------------ | :---------- | :---------- | :---------- | :---------- | :---------- | | Assets | | | | | | | Cash and due from banks | $ 25,184 | $ 24,904 | $ 22,553 | $ 25,289 | $ 21,567 | | Federal funds sold | 180,834 | 263,612 | 128,452 | 226,110 | 164,432 | | Interest-bearing deposits with banks | 65,014 | 16,541 | 11,858 | 9,176 | 8,828 | | **Total cash and cash equivalents** | **271,032** | **305,057** | **162,863** | **260,575** | **194,827** | | Investment securities available for sale | 128,867 | 131,290 | 132,127 | 134,597 | 121,353 | | Other investments | 19,906 | 19,927 | 19,490 | 19,640 | 18,653 | | **Total investment securities** | **148,773** | **151,217** | **151,617** | **154,237** | **140,006** | | Mortgage loans held for sale | 10,739 | 11,524 | 4,565 | 8,602 | 14,759 | | Loans | 3,746,841 | 3,683,919 | 3,631,767 | 3,619,556 | 3,622,521 | | Less allowance for credit losses | (41,285) | (40,687) | (39,914) | (40,166) | (40,157) | | **Loans, net** | **3,705,556** | **3,643,232** | **3,591,853** | **3,579,390** | **3,582,364** | | Bank owned life insurance | 54,886 | 54,473 | 54,070 | 53,663 | 53,263 | | Property and equipment, net | 85,921 | 87,369 | 88,794 | 90,158 | 91,533 | | Deferred income taxes | 12,971 | 13,080 | 13,467 | 11,595 | 12,339 | | Other assets | 18,189 | 18,359 | 20,364 | 16,411 | 20,758 | | **Total assets** | **$ 4,308,067** | **$ 4,284,311** | **$ 4,087,593** | **$ 4,174,631** | **$ 4,109,849** | | Liabilities | | | | | | | Deposits | $ 3,636,329 | $ 3,620,886 | $ 3,435,765 | $ 3,518,825 | $ 3,459,869 | | FHLB Advances | 240,000 | 240,000 | 240,000 | 240,000 | 240,000 | | Subordinated debentures | 24,903 | 24,903 | 24,903 | 24,903 | 36,376 | | Other liabilities | 61,373 | 60,924 | 56,481 | 64,365 | 54,856 | | **Total liabilities** | **3,962,605** | **3,946,713** | **3,757,149** | **3,848,093** | **3,791,101** | | Shareholders' equity | | | | | | | Common Stock | 82 | 82 | 82 | 82 | 82 | | Nonvested restricted stock | (2,774) | (3,372) | (3,884) | (4,219) | (4,710) | | Additional paid-in capital | 124,839 | 124,561 | 124,641 | 124,288 | 124,174 | | Accumulated other comprehensive loss | (9,609) | (10,016) | (11,472) | (9,063) | (11,866) | | Retained earnings | 232,924 | 226,343 | 221,077 | 215,450 | 211,068 | | **Total shareholders' equity** | **345,462** | **337,598** | **330,444** | **326,538** | **318,748** | | **Total liabilities and shareholders' equity** | **$ 4,308,067** | **$ 4,284,311** | **$ 4,087,593** | **$ 4,174,631** | **$ 4,109,849** |\ | Book value per common share | $ 42.23 | $ 41.33 | $ 40.47 | $ 40.04 | $ 39.09 |\ | Common shares outstanding | 8,181 | 8,169 | 8,165 | 8,156 | 8,155 | [Asset Quality Measures (Unaudited)](index=5&type=section&id=Asset%20Quality%20Measures%20%28Unaudited%29) Detailed unaudited asset quality measures include nonperforming assets, key ratios, and allowance for credit losses | (dollars in thousands) | June 30 2025 | March 31 2025 | December 31 2024 | September 30 2024 | June 30 2024 | | :------------------------------------------ | :----------- | :------------ | :--------------- | :---------------- | :----------- | | Nonperforming Assets | | | | | | | Commercial | | | | | | | Non-owner occupied RE | $ 6,941 | $ 6,950 | $ 7,641 | $ 7,904 | $ 7,949 | | Commercial business | 717 | 1,087 | 1,016 | 838 | 829 | | Consumer | | | | | | | Real estate | 3,028 | 2,414 | 1,908 | 2,448 | 1,875 | | Home equity | 708 | 310 | 312 | 393 | 565 | | Other | - | - | - | - | - | | **Total nonaccrual loans** | **11,394** | **10,761** | **10,877** | **11,583** | **11,218** | | Other real estate owned | 275 | 275 | - | - | - | | **Total nonperforming assets** | **$ 11,669** | **$ 11,036** | **$ 10,877** | **$ 11,583** | **$ 11,218** | | Nonperforming assets as a percentage of: | | | | | | | Total assets | 0.27% | 0.26% | 0.27% | 0.28% | 0.27% | | Total loans | 0.31% | 0.30% | 0.30% | 0.32% | 0.31% | | Classified assets/tier 1 capital plus allowance for credit losses | 4.28% | 4.24% | 4.25% | 4.35% | 4.22% | | Allowance for Credit Losses | | | | | | | Balance, beginning of period | $ 40,687 | $ 39,914 | $ 40,166 | $ 40,157 | $ 40,441 | | Loans charged-off | (68) | (78) | (143) | (118) | (1,049) | | Recoveries of loans previously charged-off | 16 | 101 | 141 | 127 | 15 | | Net loans (charged-off) recovered | (52) | 23 | (2) | 9 | (1,034) | | Provision for (reversal of) credit losses | 650 | 750 | (250) | - | 750 | | **Balance, end of period** | **$ 41,285** | **$ 40,687** | **$ 39,914** | **$ 40,166** | **$ 40,157** | | Allowance for credit losses to gross loans | 1.10% | 1.10% | 1.10% | 1.11% | 1.11% | | Allowance for credit losses to nonaccrual loans | 362.35% | 378.09% | 366.94% | 346.78% | 357.95% | | Net charge-offs (recoveries) to average loans QTD (annualized) | 0.01% | 0.00% | 0.00% | 0.00% | 0.11% | [Loan Composition (Unaudited)](index=6&type=section&id=Loan%20Composition%20%28Unaudited%29) Detailed loan portfolio breakdown by commercial and consumer categories across multiple quarters | (dollars in thousands) | June 30 2025 | March 31 2025 | December 31 2024 | September 30 2024 | June 30 2024 | | :------------------------------------ | :----------- | :------------ | :--------------- | :---------------- | :----------- | | Commercial | | | | | | | Owner occupied RE | $ 686,424 | $ 673,865 | $ 651,597 | $ 642,608 | $ 642,008 | | Non-owner occupied RE | 939,163 | 926,246 | 924,367 | 917,642 | 917,034 | | Construction | 68,421 | 90,021 | 103,204 | 144,665 | 144,968 | | Business | 589,661 | 561,337 | 556,117 | 521,535 | 527,017 | | **Total commercial loans** | **2,283,669** | **2,251,469** | **2,235,285** | **2,226,450** | **2,231,027** | | Consumer | | | | | | | Real estate | 1,164,187 | 1,147,357 | 1,128,629 | 1,132,371 | 1,126,155 | | Home equity | 234,608 | 223,061 | 204,897 | 195,383 | 189,294 | | Construction | 25,210 | 23,540 | 20,874 | 21,582 | 32,936 | | Other | 39,167 | 38,492 | 42,082 | 43,770 | 43,109 | | **Total consumer loans** | **1,463,172** | **1,432,450** | **1,396,482** | **1,393,106** | **1,391,494** | | **Total gross loans, net of deferred fees** | **3,746,841** | **3,683,919** | **3,631,767** | **3,619,556** | **3,622,521** | | Less—allowance for credit losses | (41,285) | (40,687) | (39,914) | (40,166) | (40,157) | | **Total loans, net** | **$ 3,705,556** | **$ 3,643,232** | **$ 3,591,853** | **$ 3,579,390** | **$ 3,582,364** | [Deposit Composition (Unaudited)](index=6&type=section&id=Deposit%20Composition%20%28Unaudited%29) Deposit composition table outlines non-interest bearing and various interest-bearing accounts | (dollars in thousands) | June 30 2025 | March 31 2025 | December 31 2024 | September 30 2024 | June 30 2024 | | :------------------------------------ | :----------- | :------------ | :--------------- | :---------------- | :----------- | | Non-interest bearing | $ 761,492 | $ 671,609 | $ 683,081 | $ 689,749 | $ 683,291 | | Interest bearing: | | | | | | | NOW accounts | 341,903 | 371,052 | 314,588 | 339,412 | 293,875 | | Money market accounts | 1,537,400 | 1,563,181 | 1,438,530 | 1,423,403 | 1,562,786 | | Savings | 32,334 | 32,945 | 31,976 | 29,283 | 28,739 | | Time, less than $250,000 | 194,064 | 181,407 | 193,562 | 223,582 | 219,532 | | Time and out-of-market deposits, $250,000 and over | 769,136 | 800,692 | 774,028 | 813,396 | 671,646 | | **Total deposits** | **$ 3,636,329** | **$ 3,620,886** | **$ 3,435,765** | **$ 3,518,825** | **$ 3,459,869** | [Additional Information](index=6&type=section&id=Additional%20Information) Background on Southern First Bancshares, forward-looking statements, and contact details [About Southern First Bancshares](index=6&type=section&id=About%20Southern%20First%20Bancshares) Southern First Bancshares, a South Carolina-based bank holding company, operates in 12 locations with $4.3 billion in assets - Southern First Bank is the **second largest bank** headquartered in South Carolina[21](index=21&type=chunk) - The bank operates in **12 locations** across Greenville, Columbia, and Charleston markets of South Carolina, Charlotte, Triangle and Triad regions of North Carolina, and Atlanta, Georgia[21](index=21&type=chunk) - Consolidated assets are approximately **$4.3 billion**[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) Cautionary statement on forward-looking information, highlighting risks and uncertainties - Forward-looking statements are identified by words such as 'believe,' 'expect,' 'anticipate,' 'estimate,' and 'plan,' and are subject to risks and uncertainties[22](index=22&type=chunk) - Key risk factors include increased competitive pressures, general economic strength, changes in loan delinquencies and charge-offs, regulatory and legislative changes, adverse capital market conditions, interest rate fluctuations, and potential recessions[23](index=23&type=chunk) - The company does not undertake any obligation to update forward-looking statements, except as required by law[23](index=23&type=chunk) [Financial & Media Contact](index=7&type=section&id=Financial%20%26%20Media%20Contact) Contact information for financial and media inquiries is provided - Contact: Art Seaver at **864-679-9010**[24](index=24&type=chunk) - Website: **www.southernfirst.com**[24](index=24&type=chunk)

Financial Performance - Earnings per share increased to $0.81, a 25% increase QoQ and a 119% increase YoY[11] - Net interest margin increased to 2.50%, up from 2.41% in Q1 2025 and 1.98% in Q2 2024[11] - Book value per share increased to $42.23, a 9% annualized increase QoQ and an 8% increase YoY[11] - Total revenue reached a historically high level, driven by solid growth and pricing discipline[13, 14] Balance Sheet & Asset Quality - Total assets reached $4.3 billion[4] - Total loans amounted to $3.7 billion, with 7% annualized growth from Q1 2025[4, 22] - Total deposits reached $3.6 billion, including core deposits of $2.9 billion with 7% annualized growth from Q1 2025[4, 22] - Nonperforming assets (NPAs) stood at 0.27% of total assets[4, 27] Strategic Focus - The company operates 12 banking offices in 8 high-growth Southeast metro markets[9] - The company's Tier 1 RBC is 11.11%[9] - The company's office portfolio has a total credit exposure of $237 million, representing 5.4% of total loans[33]

Core Viewpoint - Southern First (SFST) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the consensus outlook suggesting a significant impact on its near-term stock price based on actual results compared to estimates [1][3]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.65 per share, reflecting a year-over-year increase of +75.7% [3]. - Revenues are projected to reach $26.56 million, which is an increase of 15.2% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 2.82% higher in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Southern First matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. Earnings Surprise History - In the last reported quarter, Southern First exceeded the expected earnings of $0.61 per share, achieving $0.65, which was a surprise of +6.56% [13]. - The company has successfully beaten consensus EPS estimates in each of the last four quarters [14]. Industry Comparison - Synovus Financial (SNV), another player in the Southeast banking industry, is expected to report earnings of $1.25 per share, indicating a year-over-year change of +7.8% [18]. - Synovus's revenues are anticipated to be $583.84 million, up 90.7% from the previous year, with a consensus EPS estimate revised 1% higher in the last 30 days [19].

Core Viewpoint - Southern First Bancshares, Inc. has appointed three new board members to enhance its leadership and community engagement as it continues to grow its banking operations [1][5]. Company Overview - Southern First Bancshares, Inc. is a registered bank holding company based in Greenville, South Carolina, and operates Southern First Bank, the second largest bank headquartered in South Carolina [5]. - The company has consolidated assets of approximately $4.1 billion and trades on NASDAQ under the symbol "SFST" [5]. New Board Members - **Jennie Cluverius**: An experienced trial lawyer and shareholder at Maynard Nexsen, PC, specializing in labor and employment law. She holds a bachelor's degree from Clemson University and a J.D. from the University of South Carolina School of Law [2]. - **Darrin Goss**: Currently the President and CEO of the Coastal Community Foundation, with a background in community service and education. He has a bachelor's degree from Wofford College and a master's degree from North Greenville University [3]. - **Billy McClatchey**: CEO of Chaucer Creek Capital, with a focus on the Southeastern multifamily market. He has experience in mergers and acquisitions and holds an undergraduate degree from Duke University and an MBA from the University of North Carolina [4]. Leadership Statement - Art Seaver, CEO of Southern First Bancshares, expressed excitement about the new board members, highlighting their leadership qualities and community ties, which will aid in the bank's growth and impact [5].

Financial Performance - Net income for the first quarter of 2025 was $5.3 million, a 112% increase from $2.5 million in the same period of 2024[121] - Diluted earnings per share (EPS) rose to $0.65 for Q1 2025, up from $0.31 in Q1 2024[121] - Net interest income increased by 25.4% to $23.4 million in Q1 2025, compared to $18.6 million in Q1 2024[123] - Noninterest income rose to $3.1 million in Q1 2025, a $450,000, or 16.9%, increase from $2.7 million in Q1 2024, with mortgage banking income increasing by $260,000, or 22.3%[139] - Total noninterest expense for Q1 2025 was $18.8 million, a $736,000, or 4.1%, increase from $18.1 million in Q1 2024, primarily due to higher compensation and benefits expenses[141] - The efficiency ratio improved to 71.1% in Q1 2025 from 84.9% in Q1 2024, reflecting the increase in net interest income[143] - Return on average assets improved to 0.52% for the three months ended March 31, 2025, compared to 0.38% for the year ended December 31, 2024[186] - Return on average equity increased to 6.38% as of March 31, 2025, up from 4.84% at December 31, 2024[186] Asset and Liability Management - Total assets increased by 4.8% to $4.28 billion as of March 31, 2025, compared to $4.09 billion at December 31, 2024[119] - Average interest-earning assets grew by $70.5 million year-over-year, with a yield increase of 10 basis points to 5.12%[129] - Average interest-bearing liabilities increased by $26.8 million, with the rate decreasing by 46 basis points to 3.52%[129] - Loans totaled $3.68 billion as of March 31, 2025, compared to $3.63 billion at December 31, 2024[119] - Deposits rose to $3.62 billion at March 31, 2025, up from $3.44 billion at December 31, 2024[119] - Retail deposits increased to $3.02 billion, representing 83.4% of total deposits at March 31, 2025, up from $2.89 billion or 84.0% at December 31, 2024[165] - The loan-to-deposit ratio was 102% at March 31, 2025, down from 106% at December 31, 2024[165] Credit Quality and Loss Provisions - The provision for credit losses was $750,000 in Q1 2025, compared to a reversal of $175,000 in Q1 2024, driven by growth in the loan portfolio[137] - The allowance for credit losses was $40.7 million, or 1.10% of outstanding loans, providing coverage of 378.09% of nonperforming loans as of March 31, 2025, compared to $39.9 million or 1.10% of outstanding loans and 366.94% coverage at December 31, 2024[159] - As of March 31, 2025, nonperforming assets totaled $11.0 million, representing 0.26% of total assets and 0.30% of gross loans, compared to $10.9 million or 0.27% of total assets and 0.30% of gross loans at December 31, 2024[154] - Individually evaluated loans totaled $12.1 million as of March 31, 2025, with a reserve of approximately $1.8 million allocated in the allowance for credit losses[158] Capital and Equity - Total shareholders' equity increased to $337.6 million at March 31, 2025, up from $330.4 million at December 31, 2024, primarily due to net income of $5.3 million during the first three months of 2025[185] - Total capital to risk-weighted assets ratio was 12.63% as of March 31, 2025, exceeding the minimum requirement of 8.00%[191] - Tier 1 capital to risk-weighted assets ratio stood at 11.38% as of March 31, 2025, above the minimum requirement of 6.00%[191] Interest Rate Risk Management - Interest rate risk is the principal market risk faced by the company, arising from lending, investing, deposit gathering, and borrowing activities[204] - The company actively manages interest rate risk through asset/liability management, with an internal committee meeting no less than quarterly[205] - A forecasted impact on net interest income shows a decrease of 6.72% with a 300 basis point increase in interest rates, while a decrease of 24.47% is projected with a 300 basis point decrease[207] - The company has a board risk committee that meets quarterly to oversee interest rate sensitivity within board-approved limits[205] Accounting and Regulatory Matters - The company does not expect recently issued accounting standards to have a material impact on consolidated financial statements upon adoption[203] - The company has adopted various accounting policies that involve significant estimates and assumptions, which could materially impact reported results[200] - The company has not paid cash dividends to shareholders since inception, as cash dividends from the Bank are subject to legal limitations and regulatory capital requirements[193]

Company Performance - Southern First (SFST) reported quarterly earnings of $0.65 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, and showing a significant increase from $0.31 per share a year ago, representing an earnings surprise of 6.56% [1] - The company posted revenues of $26.5 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.95%, compared to $21.31 million in the same quarter last year [2] - Over the last four quarters, Southern First has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - Southern First shares have declined approximately 18.7% since the beginning of the year, while the S&P 500 has decreased by 12.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.65 on revenues of $26.31 million, and for the current fiscal year, it is $2.67 on revenues of $106.66 million [7] - The estimate revisions trend for Southern First is currently favorable, leading to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Banks - Southeast industry, to which Southern First belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q1 2025 was $5.3 million, or $0.65 per diluted share, representing a 109% increase compared to Q1 2024[5] - Total revenue for Q1 2025 reached $26.5 million, up from $21.3 million in Q1 2024, marking a 24% year-over-year increase[4] - Noninterest income for Q1 2025 was $3.1 million, up 16.89% from $2.7 million in Q1 2024[9] - Noninterest expense increased to $18.8 million, a 4.07% rise compared to Q1 2024[10] - The effective tax rate for Q1 2025 was 23.8%, compared to 25.5% in Q1 2024[11] Asset Quality - Nonperforming assets to total assets ratio was 0.26%, indicating strong asset quality[5] - Total nonperforming assets were $11.0 million at March 31, 2025, representing 0.26% of total assets compared to 0.27% for the fourth quarter of 2024 and 0.09% for the first quarter of 2024[16] - The allowance for credit losses was $40.7 million, or 1.10% of total loans, at March 31, 2025, unchanged from 1.10% at December 31, 2024[17] - The classified asset ratio remained stable at 4.24% for the first quarter of 2025, compared to 4.25% in the fourth quarter of 2024[16] Loan and Deposit Growth - Total loans increased to $3.7 billion, reflecting a 6% annualized growth over Q4 2024[5] - Total deposits reached $3.621 billion, reflecting a 4.63% increase from $3.436 billion in Q1 2024[15] - Total gross loans, net of deferred fees, increased to $3.68 billion at March 31, 2025, from $3.63 billion at December 31, 2024[19] - Total deposits rose to $3.62 billion at March 31, 2025, compared to $3.44 billion at December 31, 2024[20] - Core deposits rose to $2.8 billion, a significant 23% annualized increase from Q4 2024[5] Interest Income and Margin - Net interest income for Q1 2025 was $23.4 million, an increase of $925 thousand from Q4 2024, driven by a $2.4 million decrease in interest expense[13] - Net interest margin improved to 2.41% in Q1 2025, compared to 1.94% in Q1 2024[5] - The net interest margin on a tax-equivalent basis improved to 2.41% in Q1 2025, up 16 basis points from 2.25% in Q4 2024 and 47 basis points from 1.94% in Q1 2024[13] - The cost of interest-bearing deposits decreased by 23 basis points from the previous quarter, contributing to the reduction in interest expense[13] Equity and Stock Performance - Shareholders' equity increased to $337.6 million, a 7.09% rise from $330.4 million in Q4 2024[15] - The book value per common share increased to $41.33, a 6.99% increase from $40.47 in Q4 2024[15] - The stock price at the end of the period was $32.92, a 3.65% increase from $39.75 in Q4 2024[15] Credit Losses - The provision for credit losses was $750 thousand, compared to a reversal of $175 thousand in Q1 2024[8] - Net recoveries for the first quarter of 2025 were $23 thousand, or 0.00% annualized, compared to net charge-offs of $2 thousand for the fourth quarter of 2024[17] - The provision for credit losses was $750 thousand for the first quarter of 2025, driven by growth in the loan portfolio[17] Company Overview - The company operates in 12 locations across South Carolina and parts of North Carolina and Georgia, with consolidated assets of approximately $4.3 billion[23]

Core Insights - Southern First Bancshares, Inc. reported strong financial results for Q1 2025, highlighting exceptional loan and deposit growth, solid margin expansion, and excellent asset quality [2][5][21] - The company is well-positioned for potential economic uncertainties and is focused on increasing profitability while supporting community initiatives [2][5] Financial Performance - Net income for Q1 2025 was $5.3 million, or $0.65 per diluted share, representing a 109% increase compared to Q1 2024 [5][6] - Total revenue reached $26.5 million, up from $21.3 million in Q1 2024, driven by increased net interest income and noninterest income [3][5] - Net interest margin improved to 2.41%, compared to 1.94% in Q1 2024 [5][11] Loan and Deposit Growth - Total loans increased to $3.7 billion, reflecting a 6% annualized growth over Q4 2024 [5][19] - Core deposits rose to $2.8 billion, marking a 23% annualized increase from Q4 2024 [5][19] Asset Quality - Nonperforming assets represented 0.26% of total assets, a slight decrease from 0.27% in Q4 2024 [15][16] - The allowance for credit losses was $40.7 million, or 1.10% of total loans, consistent with previous quarters [16][19] Noninterest Income and Expenses - Noninterest income totaled $3.1 million, up from $2.7 million in Q1 2024, with mortgage banking income being the largest component [8][9] - Noninterest expenses increased to $18.8 million, driven by higher compensation and benefits [9][10] Capital Ratios - The total risk-based capital ratio stood at 12.69%, indicating strong capital adequacy [3][14] - The tangible common equity ratio was reported at 7.88% [5][14]

Core Insights - Southern First Bancshares, Inc. has promoted Wes Wilbanks to Chief Credit Officer and Executive Vice President, reflecting the company's commitment to leadership in credit management [1][2][3] Company Overview - Southern First Bancshares, Inc. is a registered bank holding company based in Greenville, South Carolina, with consolidated assets of approximately $4.1 billion [4] - The company operates Southern First Bank, the second largest bank headquartered in South Carolina, providing financial services since 1999 across 13 locations in South Carolina and parts of North Carolina and Georgia [4] Leadership and Experience - Wes Wilbanks joined Southern First in 2021 as Senior Credit Risk Officer, bringing 25 years of banking experience, including 11 years in senior credit roles at a regional bank [2] - As Chief Credit Officer, Wilbanks aims to support the growth and risk management goals of Southern First and enhance client service [2][3]

Financial Performance - Net income available to common shareholders rose to $15.5 million in 2024, up from $13.4 million in 2023, reflecting a 15.67% increase [281]. - Net interest income for 2024 was $81.2 million, a 4.6% increase from $77.7 million in 2023, driven by a $23.6 million rise in interest income [295]. - Noninterest income grew to $12.1 million in 2024, compared to $9.9 million in 2023, indicating a strong performance in fee-based services [284]. - The efficiency ratio improved slightly to 78.54% in 2024 from 78.65% in 2023, indicating better cost management [284]. - The return on average assets increased to 0.38% in 2024 from 0.34% in 2023, showing enhanced profitability [284]. - Total shareholders' equity increased to $330.4 million at December 31, 2024, from $312.5 million at December 31, 2023, primarily due to net income of $15.5 million [366]. - Net income for 2024 was $15,530,000, representing an increase of 15.6% from $13,426,000 in 2023 [420]. - Comprehensive income for 2024 was $15,400,000, slightly down from $15,494,000 in 2023 [420]. Asset and Liability Management - Total assets increased to $4.09 billion as of December 31, 2024, from $4.06 billion in 2023, with loans comprising $3.63 billion [279]. - Total liabilities increased to $3.757 billion in 2024 from $3.743 billion in 2023, a growth of approximately 0.37% [414]. - Cash and cash equivalents amounted to $162.9 million (4.0% of total assets) at December 31, 2024, compared to $156.2 million (3.9%) at December 31, 2023 [360]. - The investment securities portfolio was $151.6 million as of December 31, 2024, representing approximately 3.7% of total assets, with an unrealized loss of $14.5 million [325]. - Total contractual obligations due by December 31, 2024, amount to $1,021.3 million, including $967.6 million in certificates of deposit [389]. Credit Quality and Loss Provisions - The provision for credit losses decreased to $125,000 in 2024 from $1.26 million in 2023, reflecting improved asset quality [284]. - The allowance for credit losses totaled $39.9 million, or 1.10% of gross loans, compared to $40.7 million, or 1.13% in 2023 [314]. - Net charge-offs for 2024 were $1.3 million, representing 0.04% of the average outstanding loan portfolio, while nonperforming assets increased to 0.27% of total assets [315]. - The provision for credit losses for the year ended December 31, 2024, was $125,000, a significant decrease from $1.3 million in 2023 [312]. - The allowance for credit losses decreased to $39.9 million (1.10% of outstanding loans) at December 31, 2024, from $40.7 million (1.13%) at December 31, 2023, due to historically low loan charge-offs [348]. Loan and Deposit Growth - Deposits increased to $3.44 billion in 2024, up from $3.38 billion in 2023, marking a 1.66% growth [284]. - Total loans outstanding at December 31, 2024, were $3.63 billion, a slight increase from $3.60 billion at December 31, 2023 [330]. - Average loans for the years ended December 31, 2024 and 2023 were $3.63 billion and $3.50 billion, respectively, showing an increase of approximately 3.7% [330]. - Home equity lines of credit totaled $204.9 million as of December 31, 2024, an increase from $183.0 million as of December 31, 2023, representing an increase of approximately 12.5% [332]. - Total deposits amounted to $3.44 billion at December 31, 2024, with retail deposits representing 84.0% and brokered deposits at 16.0% [353]. Interest Income and Expense - Interest income for 2024 reached $201.2 million, compared to $177.6 million in 2023, with 92.9% of this income derived from loans [296]. - Interest expense for 2024 was $120.0 million, an increase from $99.9 million in 2023 and $20.0 million in 2022, with deposits accounting for 90.7% of total interest expense in 2024 [297]. - The net interest margin (tax-equivalent) was 2.06% for 2024, stable compared to 2.07% in 2023, but down from 3.19% in 2022 [302]. - The net interest spread decreased to 1.16% in 2024 from 1.21% in 2023, reflecting a 39 basis point increase in yield on interest-earning assets [306]. - The average cost of interest-bearing liabilities increased by 44 basis points in 2024, driven by a $268.7 million increase in average time deposits [305]. Regulatory Capital Ratios - As of December 31, 2024, the total capital ratio is 12.66%, exceeding the regulatory minimum of 10% [372]. - The Tier 1 capital ratio stands at 11.41%, above the required minimum of 8% [372]. - Common equity Tier 1 capital ratio is 11.41%, surpassing the minimum requirement of 6.5% [372]. - The company maintains a capital conservation buffer of 2.5% on top of minimum risk-based capital requirements [371]. Operational Efficiency - Total noninterest expenses for 2024 were $73.3 million, a 6.5% increase from $68.8 million in 2023, with compensation and benefits expenses rising by $3.3 million, or 8.1% [321]. - The efficiency ratio was 78.5% for 2024, slightly improved from 78.7% in 2023, indicating a smaller increase in revenue relative to expenses [323]. - Income tax expense for 2024 was $4.4 million, with an effective tax rate of 22.0%, down from 23.0% in 2023 [324]. Internal Controls and Compliance - Management's internal control over financial reporting was deemed effective as of December 31, 2024, following an evaluation based on COSO criteria [394]. - The Company maintained effective internal control over financial reporting as of December 31, 2024, according to the audit opinion [405].