Executive Summary

Q1 2025 delivered continued margin expansion and solid growth: net income $5.3M and diluted EPS $0.65 (+109% y/y; -7% q/q) on total revenue of $26.5M (+24% y/y; +5% q/q) . EPS exceeded S&P Global consensus by $0.04 (+6.6%)*.
Net interest margin rose to NB 2.41% (+16 bps q/q; +47 bps y/y) as deposit costs fell 23 bps NB sequentially; net interest income increased $ PSU 0.9M q/q (+$4.7M y/y) with disciplined funding cost management .
Core deposits grew 23% annualized q/q to $2.82B; loans grew 6% annualized q/q to $3.68B; loans-to-deposits improved to 101.7% from 105.7% in Q4 .
Asset quality remained strong (NPAs/Assets 0.26%; net recoveries ~0.00% annualized), though past dues rose to 0.27% (from 0.18% in Q4); ACL/Loans steady at 1.10% .
Management emphasized confidence in improving profitability without further Fed cuts and preparedness for macro uncertainty tied to trade resid and tariffs; tone remained positive on balance sheet strength and growth pipelines .

What/log Went Well and Roo Wrong

What Went Well

Margin expansion and funding cost improvement: NIM 2.41% (+16 bps q/q) as cost of interest-bearing deposits fell 23 bps sequentially; net interest income rose $0.9M q/q (+$4.7M y/y) . CEO: “another quarter of solid margin expansion… confident in our ability to increase profitability without [additional Fed moves]” .
Core deposit and loan growth: Core deposits $2.82B (+23% annualized q/q); loans $3.68B (+6% annualized q/q); loans/deposits improved to 101. sop 74% from 105.70% NB . “We had exceptional loan and deposit growth” — Art Seaver, CEO .
Asset quality and efficiency: NPAs/Assets 0.26% (down from pipeline household resid PSA 0 UIL.27% q spur lag) with net recoveries 0.00% annualized; efficiency ratio improved to NB 71.08% from 73. psa sop Megh in q4 sup 1: NB .

** sop Did sop Wrong** sop

EPS down qtr-on-qtr: $0.65 vs $0.70 in Q4 (‑7% q/q) despite revenue growth, driven primarily by a $0.75M credit loss provision in Q1 vs a $(0.20)M reversal in Q4 .
Past dues ticked up: accruing loans ≥30 days past due rose to 0.27% of loans (from 0.18% in Q4), suggesting some normalization even as absolute levels remain low .
Noninterest expense rose: $18.84M vs $18.54M in Q4 (+$0.29M), led by higher compensation and data processing costs; noninterest expense/avg assets increased to 1.87% from 1.78% .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Total Revenue ($M)	21.31	25.24	26.50
Diluted EPS ($)	0.31	0.70	0.65
Net Interest Margin (tax‑equiv)	1.94%	2.25%	2.41%
Efficiency Ratio	84.94%	73.48%	71.08%
Net Interest Income ($M)	18.65	22.46	23.38
Noninterest Income ($M)	2.66	2.78	3.11
Provision for Credit Losses ($M)	(0.18)	(0.20)	0.75
ROAA	0.25%	0.54%	0.52%
ROAE	3.22%	6.80%	6.38%

KPIs and Balance Sheet

KPI	Q1 2024	Q4 2024	Q1 2025
Loans ($B)	3.64	3.632	3.684
Deposits ($B)	3.461	3.436	3.621
Core Deposits ($B)	2.807	2.662	2.820
Loans/Deposits	105.29%	105.70%	101.74%
NPAs/Assets	0.09%	0.27%	0.26%
Past Dues (≥30d)/Loans	0.32%	0.18%	0.27%
ACL/Loans	1.11%	1.10%	1.10%
Net Charge‑offs (Recoveries)/Avg Loans (QTD annualized)	0.03%	0.00%	0.00%
TCE Ratio	7.68%	8.08%	7.88%
Book Value/Share ($)	38.65	40.47	41.33

Loan & Deposit Mix (Selected categories; period-end)

Category ($M)	Q4 2024	Q1 2025
Owner‑Occupied CRE Loans	651.6	673.9
Non‑Owner‑Occupied CRE Loans	924.4	926.2
Construction (Total)	124.1 (103.2 commercial; 20.9 consumer)	113.6 (90.0 commercial; 23.5 consumer)
Commercial & Industrial	556.1	561.3
Consumer Real Estate	1,128.6	1,147.4
Home Equity	204.9	223.1
Non‑interest Bearing Deposits	683.1	671.6
Money Market Accounts	1,438.5	1,563.2
Time ≥$250K & Out‑of‑Market	774.0	800.7

Drivers and context:

NII rose as the cost on interest‑bearing deposits dropped 23 bps q/q; NIM up 16 bps q/q .
Mortgage banking income improved to $1.42M from $1.02M in Q4 on higher origination volume .
Provision expense of $0.75M reflects ~$52.2M quarterly loan growth; net recoveries of $23K .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal quantitative guidance (revenue, EPS, margins, opex, tax rate, dividends)	FY/Q2 2025+	Not provided	Not provided	Maintained (no formal guidance)
Management qualitative outlook	2025	“Optimism as a starting point for 2025; margin expanding; asset quality outstanding” (Q4 commentary)	“Confident in increasing profitability without further Fed moves; prepared for uncertainty tied to trade/tariff events; capital ratios strong”	Tone maintained/upbeat

Earnings Call Themes & Trends

Note: We did not locate a Q1 2025 earnings call transcript in our document set; themes below synthesize multi‑quarter management commentary from press materials.

Topic	Previous Mentions (Q3’24 & Q4’24)	Current Period (Q1’25)	Trend
Net interest margin & deposit costs	Executed to lower funding costs; NIM rose to 2.08% in Q3 ; expanded further to 2.25% in Q4 with cost of interest‑bearing deposits down 31 bps q/q	NIM 2.41% (+16 bps q/q) as deposit costs fell 23 bps; confident in further profitability improvement without Fed cuts	Improving
Loan & deposit growth	Q3: deliberate loan pricing, core checking +21% annualized; Q4: balanced loan/deposit base	Loans +6% annualized; core deposits +23% annualized; L/D improved to 101.7%	Improving
Asset quality	Among industry’s best; NPAs/Assets 0.28% (Q3), 0.27% (Q4); minimal charge‑offs	NPAs/Assets 0.26%; net recoveries ~0.00% annualized; past dues 0.27%	Stable
Mortgage banking	Q3: $1.45M; Q4: $1.02M with more loans held on balance sheet	$1.42M on higher origination volume	Rebounding
Capital & TCE	TCE 7.82% (Q3), 8.08% (Q4); BVPS $40.47	TCE 7.88%; BVPS $41.33	Stable/slightly lower TCE; BVPS up
Macro/Fed & tariffs	Q3: uncertainty on rates; Q4: margin benefited from Fed cuts	Prepared for macro instability tied to trade/tariff events; no dependence on further Fed moves	Cautiously constructive

Management Commentary

“We had exceptional loan and deposit growth and another quarter of solid margin expansion. We are well positioned for any additional Fed moves but are confident in our ability to increase profitability without them… Asset quality… remains excellent… Our capital ratios are strong…” — Art Seaver, CEO .
Q4 backdrop: “Our financial performance this quarter reflects continued momentum in margin… Asset quality remained outstanding… margin continued to expand each quarter this year.” — CEO .
Q3 context: “Executed on opportunities to lower funding costs… solid margin expansion… disciplined pricing and high credit quality standards.” — CEO .

Other relevant Q1 press release:

Promotion of Wes Wilbanks to Chief Credit Officer, reinforcing credit leadership and risk management focus .

Q&A Highlights

We did not find a Q1 2025 earnings call transcript or Q&A in our document set. No Q&A highlights are available. If a transcript is published subsequently, we can update with analyst themes and management clarifications.

Estimates Context

Metric	Q1 2025 Consensus	Actual	Surprise
EPS (Primary)	$0.61*	$0.65	+$0.04 (+6.6%)*
Revenue	N/A*	$26.50M	N/A*

Values marked with * retrieved from S&P Global (Capital IQ). EPS consensus based on 1 estimate; revenue consensus not available in S&P Global for this period.*

Implications:

The modest EPS beat was driven by NIM expansion and deposit cost declines offsetting a return to positive provisioning; upside vs consensus appears to reflect faster‑than‑expected funding cost normalization and better noninterest income (mortgage fees) .

Key Takeaways for Investors

Margin trajectory remains favorable: NIM rose to 2.41% with deposit costs down 23 bps q/q; continued funding cost normalization is the principal lever for near‑term EPS upside .
Balanced growth with improving funding mix: core deposits +23% annualized and loans +6% annualized q/q improved the loans‑to‑deposits ratio to ~102%, reducing reliance on higher‑cost funding .
Credit remains a support, not a swing factor: NPAs/Assets 0.26%, net recoveries near zero; provisioning was growth‑driven rather than loss‑driven .
Efficiency improving but still a lever: ratio at 71% (from 85% y/y); further NIM gains and disciplined opex can compress this toward peer levels, enhancing operating leverage .
Mortgage banking helped the quarter; sustained volume could provide incremental fee income amid stable to lower rates .
Watch list: past dues ticked up (0.27% vs 0.18%), TCE dipped to 7.88% from 8.08% (Q4); monitor credit migration and capital buffer as growth resumes .
Near‑term trading catalysts: ongoing NIM expansion, core deposit momentum, stable credit metrics, and any updates on deposit pricing trajectory or macro impacts from trade/tariff developments .

Appendix: Additional Data and Sources

Q1 2025 results and tables: 8‑K and press release exhibits .
Prior quarters for trend: Q4 2024 8‑K ; Q3 2024 8‑K .
Management personnel update (credit): Wilbanks promoted to CCO .

SOUTHERN FIRST BANCSHARES INC (SFST)·Q1 2025 Earnings Summary