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SF

SOUTHERN FIRST BANCSHARES INC (SFST)·Q3 2025 Earnings Summary

Executive Summary

  • Clean beat and accelerating momentum: EPS $1.07 rose 32% QoQ and 98% YoY on NIM expansion to 2.62% and improved efficiency (60.9% vs 67.5% in Q2) . Versus S&P Global consensus, EPS beat by $0.18 and revenue exceeded by ~$0.9M, with only 2 EPS and 1 revenue estimates contributing to consensus (thin coverage)* .
  • Margin drivers: Loan yields increased 7 bps QoQ while the cost of interest-bearing deposits fell 7 bps, lifting net interest income $2.2M QoQ to $27.5M .
  • Core growth with stable credit: Loans $3.79B (+4% annualized QoQ) and core deposits $2.88B (+2% annualized QoQ); NPAs were 0.27% of assets, past dues 0.18%, and ACL/loans held at 1.10% .
  • Capital building: Book value/share rose to $43.51 and TCE ratio to 8.18%, both higher sequentially and YoY, supporting continued balance sheet growth .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and operating leverage: NIM rose 12 bps QoQ to 2.62% (up 54 bps YoY), while the efficiency ratio improved to 60.86% from 67.54% in Q2, driving EPS to $1.07 .
  • Positive growth with disciplined funding: Loans reached $3.79B (+4% annualized QoQ) and core deposits reached $2.88B (+2% annualized QoQ), consistent with a “full relationship banking” strategy .
  • Management tone constructive: “We have again achieved historically high revenue growth… two and a half times our expense growth,” and “Superior asset quality metrics and margin expansion are the result of our intentional and disciplined approach,” said CEO Art Seaver .

What Went Wrong

  • Provision ticked up: Provision for credit losses rose to $850K (from $700K in Q2), driven by qualitative factors tied to increased past dues and risk migration in commercial business and non-owner occupied real estate .
  • Deposit costs remain elevated: Interest-bearing deposit cost was 3.36% (down 7 bps QoQ but still a headwind versus long-run normals) .
  • Loans/deposits remain >100%: L/D ratio was 103.06% (roughly flat QoQ), implying continued reliance on higher-cost funding or slower deposit growth if loan pipelines stay strong .

Financial Results

Income & Profitability (USD)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total revenue ($MM)$23.77 $26.50 $28.63 $31.13
Net interest income ($MM)$20.59 $23.38 $25.30 $27.53
Diluted EPS ($)$0.54 $0.65 $0.81 $1.07
Net interest margin (TE)2.08% 2.41% 2.50% 2.62%
Efficiency ratio75.90% 71.08% 67.54% 60.86%
ROAA0.43% 0.52% 0.63% 0.80%
ROAE5.40% 6.38% 7.71% 9.78%

Actual vs S&P Global Consensus (Q3 2025)

MetricConsensusActual
EPS ($)0.89*1.07
Revenue ($MM)30.20*31.13

Values marked with * are retrieved from S&P Global.

  • EPS beat by $0.18 (driven by NIM expansion and operating leverage) . Revenue outpaced consensus by ~+$0.9M as net interest income rose $2.2M QoQ .
  • S&P Global consensus detail: EPS mean $0.89 (2 estimates), revenue mean $30.2M (1 estimate)*.

Balance Sheet & Capital

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total loans ($B)$3.620 $3.684 $3.747 $3.789
Total deposits ($B)$3.519 $3.621 $3.636 $3.676
Core deposits ($B)$2.705 $2.820 $2.867 $2.885
Total assets ($B)$4.175 $4.284 $4.308 $4.359
Loans/Deposits102.86% 101.74% 103.04% 103.06%
Book value/share ($)40.04 41.33 42.23 43.51
Tangible Common Equity (TCE)7.82% 7.88% 8.02% 8.18%

Asset Quality

MetricQ3 2024Q1 2025Q2 2025Q3 2025
NPAs / Assets0.28% 0.26% 0.27% 0.27%
Past due (≥30d) / Loans0.09% 0.27% 0.14% 0.18%
Classified assets / Tier 1 + ACL4.35% 4.24% 4.28% 3.90%
Net charge-offs (annualized)0.00% 0.00% 0.01% 0.00%
ACL / Loans1.11% 1.10% 1.10% 1.10%
ACL / Nonaccrual loans346.78% 378.09% 362.35% 364.50%

Q3 2025 KPIs – Mix

  • Loan composition ($MM): Owner-occupied CRE $705.4; Non-owner CRE $943.3; Construction $71.9; C&I $604.4; 1-4 family RE $1,159.7; Home equity $240.0; Consumer construction $25.8; Other consumer $38.5 .
  • Deposit composition ($MM): Non-interest bearing $736.5; NOW $343.6; Money market $1,572.7; Savings $29.4; Time < $250K $202.4; Time & out-of-market ≥ $250K $791.8 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company financial guidanceFY/Q4 2025None issuedNone issuedN/A
  • No quantitative guidance provided in 8-K/press release; commentary remained constructive on pipelines, profitability, and markets .

Earnings Call Themes & Trends

Note: No earnings call transcript was available on filings/IR as of this writing; themes synthesized from Q1–Q3 press releases.

TopicQ1 2025 MentionsQ2 2025 MentionsQ3 2025 (Current)Trend
Net interest marginNIM 2.41%; positioned for improving profitability without Fed moves NIM 2.50%; pricing discipline on both sides of balance sheet NIM 2.62%; loan yields +7 bps, deposit costs −7 bps QoQ Improving
Asset quality“Remains excellent”; NPAs 0.26% NPAs 0.27%; stable NPAs 0.27%; classified assets ratio improved to 3.90% Stable/positive
Core funding & deposit mixCore deposits +23% annualized QoQ Core deposits +7% annualized QoQ Core deposits +2% annualized QoQ Growth moderating
Loan growth & pipelinesLoans +6% annualized QoQ; strong pipelines Loans +7% annualized QoQ; “one of the highest revenue” quarters Loans +4% annualized QoQ; continued high-quality growth Still positive
Operating leverageEfficiency 71.1% Efficiency 67.5% Efficiency 60.9% Improving
Macro/tonePrepared for uncertainty; tariff events monitored Ever-changing environment; confident in improving performance Cautiously optimistic; consolidation presents opportunity Constructive

Management Commentary

  • “We have again achieved historically high revenue growth over the same quarter last year, at a rate which was two and a half times our expense growth.” — Art Seaver, CEO .
  • “Superior asset quality metrics and margin expansion are the result of our intentional and disciplined approach.” — Art Seaver .
  • “Our team remains highly focused on executing our plans for increased profitability and high-quality loan growth, funded by client retail deposits.” — Art Seaver .

Q&A Highlights

  • No Q3 2025 earnings call transcript was found on filings or the company’s IR site as of this analysis; therefore, Q&A themes and guidance clarifications were not available to review .

Estimates Context

  • S&P Global consensus for Q3 2025: EPS $0.89 (2 ests)* and revenue $30.20M (1 est)* vs actual EPS $1.07 and revenue $31.13M; both metrics beat, implying potential upward estimate revisions for forward periods given sustained NIM expansion and stable credit .
    Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Positive inflection continues: EPS acceleration (to $1.07) on sustained NIM improvement (2.62%) and better efficiency (60.9%) suggests operating leverage is intact into Q4 .
  • Funding costs easing: 7 bps QoQ reduction in interest-bearing deposit costs, with core deposit growth remaining positive, supports margin resiliency even without rate cuts .
  • Credit benign: NPAs steady at 0.27% and coverage robust (ACL/nonaccrual ~365%); watch past dues (0.18%) and provisioning (up to $850K) as early-cycle guards rather than stress .
  • Capital build supports growth: Book value/share and TCE ratio improved again, providing capacity to fund pipelines without dilutive actions near term .
  • Thin Street coverage: Only 2 EPS and 1 revenue estimates drove consensus, magnifying beat optics and potential for estimate revisions/valuation re-rating with further delivery* .
  • Trading setup: Narrative likely driven by continued NIM expansion, deposit cost discipline, and stable credit; risks include a reversal in deposit pricing trends or a pickup in criticized/classified migration .

Values marked with * are retrieved from S&P Global.

Additional references:

  • Company Q3 2025 press release (PDF) and IR News page .
  • Q3 2025 8-K with Exhibit 99.1 (press release) and summary tables .
  • Prior quarter press releases Q2 and Q1 2025 for trend context .