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SF

SOUTHERN FIRST BANCSHARES INC (SFST)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS was $0.81, a strong beat versus S&P Global consensus of $0.65*, driven by continued net interest margin expansion to 2.50% and disciplined deposit pricing . Estimates values retrieved from S&P Global.
  • Total revenue grew to $28.63M, above the $26.80M* S&P Global consensus, reflecting higher loan yields and lower deposit costs; NIM rose 9 bps sequentially and 52 bps YoY . Estimates values retrieved from S&P Global.
  • Asset quality remained strong: NPAs/Assets at 0.27%, past due loans/loans at 0.14%; allowance at 1.10% of loans, with minimal net charge-offs (0.01% annualized) .
  • Capital actions: Board authorized up to $5MM (~2%) share repurchase (June 17), increasing capital flexibility and potential support for per-share metrics .
  • Management highlighted one of the highest revenue-generating quarters in the company’s 25-year history and expressed optimism about pipelines and outlook; the beats are a positive stock-reaction catalyst per third-party coverage .

What Went Well and What Went Wrong

What Went Well

  • One of the highest revenue quarters in 25 years; “total revenue growing 24% over the same quarter a year ago” (CEO Art Seaver) .
  • Margin expansion: NIM increased to 2.50% (up 9 bps QoQ; +52 bps YoY), with loan yields +8 bps QoQ and deposit costs -4 bps QoQ .
  • Asset quality strong: NPAs/Assets 0.27%, past due loans/loans 0.14%, allowance 1.10% of loans; minimal net charge-offs (0.01% annualized) .

What Went Wrong

  • Noninterest expense increased $0.5M sequentially (to $19.3M), driven by compensation, data processing, and professional fees .
  • Mortgage banking income decreased YoY (Q2 2025: $1.569M vs Q2 2024: $1.923M), despite a slight QoQ pickup with origination volume .
  • Classified asset ratio ticked up slightly QoQ (4.28% vs 4.24%), though still stable YoY (4.22%) .

Financial Results

Summary KPIs and P&L vs prior periods

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$23.051 $25.237 $26.497 $28.629
Diluted EPS ($USD)$0.37 $0.70 $0.65 $0.81
Net Interest Margin (%)1.98% 2.25% 2.41% 2.50%
Efficiency Ratio (%)80.87% 73.48% 71.08% 67.54%
Net Income ($USD Millions)$2.999 $5.627 $5.266 $6.581
ROAA (%)0.29% 0.54% 0.52% 0.63%
ROAE (%)3.81% 6.80% 6.38% 7.71%

Actual vs S&P Global Consensus (Q2 2025)

MetricActualS&P Global Consensus*Surprise ($)Surprise (%)
EPS ($USD)$0.81 $0.65*$0.16+24.6%
Total Revenue ($USD Millions)$28.629 $26.800*$1.829+6.8%
Estimates values retrieved from S&P Global.

Balance Sheet and Asset Quality

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Loans ($USD Billions)$3.623 $3.632 $3.684 $3.747
Total Deposits ($USD Billions)$3.460 $3.436 $3.621 $3.636
Core Deposits ($USD Billions)$2.788 $2.662 $2.820 $2.867
Book Value/Share ($USD)$39.09 $40.47 $41.33 $42.23
TCE Ratio (%)7.76% 8.08% 7.88% 8.02%
NPAs/Assets (%)0.27% 0.27% 0.26% 0.27%
Past Due Loans/Loans (%)0.06% 0.25% 0.27% 0.14%
Allowance/Loans (%)1.11% 1.10% 1.10% 1.10%

Noninterest Income Breakdown

Component ($USD Millions)Q2 2024Q4 2024Q1 2025Q2 2025
Mortgage Banking Income$1.923 $1.024 $1.424 $1.569
Service Fees on Deposits$0.423 $0.499 $0.539 $0.567
ATM & Debit Card Income$0.587 $0.607 $0.552 $0.586
BOLI Income$0.384 $0.407 $0.402 $0.413
Other Income$0.206 $0.242 $0.197 $0.199
Total Noninterest Income$3.523 $2.779 $3.114 $3.334

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue, EPS, Margins, OpEx, OI&E, Tax RateFY/Q3-Q4 2025None providedNone providedMaintained (no formal guidance)
Share Repurchase AuthorizationAnnounced 06-17-2025NoneUp to $5MM (~2% of common)New authorization
DividendsQ2 2025None announcedNone announcedMaintained

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available in the document set. Themes are drawn from company press releases.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Net Interest Margin/Deposit CostsNIM expanded to 2.25% in Q4; deposit costs fell 31 bps QoQ ; NIM rose to 2.41% in Q1; deposit costs down 23 bps QoQ NIM 2.50%; loan yields +8 bps QoQ; deposit rates -4 bps QoQ Continued expansion
Asset QualityNPAs/Assets 0.27%; allowance 1.10%; minimal net charge-offs in Q4 ; NPAs/Assets 0.26% in Q1; allowance 1.10% NPAs/Assets 0.27%; past-due 0.14%; allowance 1.10%; charge-offs 0.01% annualized Stable, strong
Loan & Deposit GrowthLoans $3.632B; deposits $3.436B (Q4) ; Q1 loans $3.684B; deposits $3.621B Loans $3.747B; deposits $3.636B; core deposits $2.867B Healthy growth
Mortgage BankingQ4 fee revenue $1.024M; Q1 $1.424M with higher origination $1.569M; slight QoQ increase; YoY lower Modest recovery QoQ
Capital ActionsNo repurchase in Q4/Q1 cited $5MM share repurchase authorization New positive action
Macro/RegulatoryCautious on operating environment; tariffs/trade mentioned (Q1) “Not immune to broader environment,” confident outlook Ongoing caution

Management Commentary

  • “We had another quarter of solid margin expansion… This quarter was one of the highest revenue generating quarters in our 25-year history… Our business pipelines are strong… Our asset quality is among the best in the industry.” — Art Seaver, CEO .
  • Q2 drivers: higher yields on interest-earning assets and disciplined deposit pricing reduced funding costs, lifting NIM and net interest income .
  • Operational investments increased noninterest expense (compensation, data processing, professional fees), partially offset by lower insurance expense .

Q&A Highlights

A full Q2 2025 earnings call transcript was not available in the document set; no Q&A themes or guidance clarifications could be extracted from a call transcript [ListDocuments earnings-call-transcript: none].

Estimates Context

  • S&P Global consensus EPS for Q2 2025 was $0.65* (2 estimates); actual EPS $0.81, a beat of $0.16* . Estimates values retrieved from S&P Global.
  • S&P Global consensus revenue for Q2 2025 was $26.80M* (1 estimate); reported revenue $28.63M, a beat of $1.83M* . Estimates values retrieved from S&P Global.
  • Limited coverage (2 EPS estimates; 1 revenue estimate) suggests consensus may need to revise upward to reflect expanding NIM and deposit cost relief [GetEstimates].

Key Takeaways for Investors

  • Margin expansion is intact (NIM 2.50% vs 2.41% QoQ; 1.98% YoY), supported by higher loan yields and easing deposit costs — a structural driver of earnings trajectory .
  • Strong asset quality (NPAs/Assets 0.27%; minimal net charge-offs) reduces tail-risk and supports loan growth without outsized provisioning needs .
  • Core deposit growth ($2.867B) and stable total deposits ($3.636B) underpin funding stability; watch mix shifts as rates evolve .
  • Operating expenses ticked higher; efficiency improved to 67.54% — monitor execution on cost discipline as growth continues .
  • Capital return optionality improved via $5MM repurchase authorization; potential EPS/book value accretion depending on buyback pace and valuation .
  • Mortgage banking shows modest sequential recovery; overall noninterest income remains diversified, but YoY mortgage fees are lower — sensitivity to housing cycle persists .
  • With beats vs consensus and consistent margin/credit trends, near-term sentiment is favorable; absence of formal guidance keeps focus on quarterly execution and NIM trajectory .