Southern First(US:SFST)2025-03-03 20:39Financial 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].