Southern First(US:SFST)2026-02-24 19:43Financial Performance - Net income available to common shareholders for 2025 was $30.4 million, a 95.53% increase from $15.5 million in 2024, with diluted EPS rising to $3.72 from $1.91[285][288] - Noninterest income for 2025 was $13.1 million, an increase of $997,000 or 8.2% from $12.1 million in 2024, primarily due to higher mortgage banking income and service fees on deposit accounts[329] - Total noninterest expenses for 2025 were $75.5 million, a $2.2 million increase from $73.3 million in 2024, mainly due to a $1.3 million rise in compensation and benefits[332] - Income tax expense for 2025 was $9.2 million, with an effective tax rate of 23.3%, compared to $4.4 million and 22.0% in 2024[336] - Total shareholders' equity increased to $368.7 million in 2025, up from $330.4 million in 2024, primarily due to net income of $30.4 million[380] Asset and Liability Management - Total assets increased to $4.40 billion as of December 31, 2025, up from $4.09 billion in 2024, representing a growth of 7.73%[283] - Total deposits rose to $3.72 billion in 2025, an increase of 8.18% from $3.44 billion in 2024[288] - The loan-to-deposit ratio was 103% as of December 31, 2025, down from 106% in 2024[367] - Cash and cash equivalents amounted to $269.6 million, or 6.1% of total assets, as of December 31, 2025[374] - The bank has unused borrowing capacity from the FHLB of $836.5 million as of December 31, 2025[376] Loan and Credit Quality - Total loans outstanding increased to $3.85 billion as of December 31, 2025, from $3.63 billion in 2024, reflecting a growth of $213.4 million[345] - The allowance for credit losses was $42.3 million as of December 31, 2025, with a ratio of allowance for credit losses to total loans at 1.10%[288] - Nonperforming assets to total loans increased to 0.37% in 2025 from 0.30% in 2024, indicating a slight deterioration in asset quality[288] - The provision for credit losses for 2025 was $3.0 million, compared to $125,000 in 2024 and $1.3 million in 2023, reflecting a $213.4 million increase in loan growth[320] - Nonaccrual loans were 0.36% of gross loans as of December 31, 2025, compared to 0.30% in 2024, with total nonaccrual loans increasing by $3.0 million during the year[354] Interest Income and Expense - Net interest income for 2025 reached $105.0 million, a 29.2% increase from $81.2 million in 2024, driven by a decrease in interest expense and an increase in interest income[301] - Interest income for 2025 was $211.5 million, an increase from $201.2 million in 2024 and $177.6 million in 2023, with 93.7% of this income derived from loans[302] - Interest expense decreased to $106.5 million in 2025 from $120.0 million in 2024, primarily due to repricing of the deposit portfolio in response to declining market interest rates[303] - The net interest margin improved to 2.57% in 2025, compared to 2.06% in 2024, reflecting better management of earning assets[288] - The net interest spread improved to 1.76% in 2025, compared to 1.16% in 2024, reflecting a 60 basis point increase driven by a decrease in the cost of interest-bearing liabilities[314] Capital and Risk Management - The total risk-based capital ratio was 12.89% as of December 31, 2025, indicating a strong capital position relative to risk-weighted assets[288] - Tier 1 capital ratio was 11.61% as of December 31, 2025, exceeding the minimum requirement of 8%[386] - The bank maintained a total capital ratio of 12.85% as of December 31, 2025, above the required 10%[386] - The company actively manages interest rate risk through asset/liability management to minimize adverse impacts on earnings from market interest rate changes[395] - Market risk primarily arises from interest rate risk, with minimal exposure to foreign currency exchange rate risk and commodity price risk[394] Deposits and Funding - Retail deposits reached $3.16 billion, accounting for 85.1% of total deposits, while brokered deposits were $552.9 million, or 14.9% of total deposits[367] - Total deposits increased to $3.57 billion in 2025, up 2.68% from $3.44 billion in 2024[369] - Core deposits were $2.88 billion, $2.66 billion, and $2.81 billion at December 31 for 2025, 2024, and 2023, respectively[369] - Average transaction account balances rose by $81.2 million, or 3.2%, while average time deposit balances increased by $48.2 million, or 5.4%[369] - Commitments under letters of credit were $20.4 million as of December 31, 2025, up from $16.2 million in 2024[392]