Executive Summary

Q4 2024 delivered accelerating profitability: net income $5.63M and diluted EPS $0.70, up 30% q/q and 37% y/y on strong NIM expansion and lower deposit costs .
Net interest margin rose 17 bps q/q to 2.25% (33 bps y/y) as the average rate on interest-bearing deposits fell 31 bps; net interest income increased $1.87M q/q to $22.46M .
Asset quality remained excellent: NPA/Assets 0.27%, Loans 30+ days past due 0.25%, ACL/Loans 1.10%; minimal net charge-offs and a $200K provision reversal driven by lower expected loss rates .
Book value per share rose to $40.47 and TCE ratio improved to 8.08%; capital ratios remained strong despite deposit mix shifts and loan-to-deposit ratio at 105.7% .
Catalysts: continued NIM expansion from funding cost relief, pristine credit metrics, and book value accretion; watch mortgage banking volatility and rising noninterest expense .

What Went Well and What Went Wrong

What Went Well

Margin momentum: “Our financial performance this quarter reflects continued momentum in margin… our margin continued to expand each quarter this year” – CEO Art Seaver .
Asset quality: “Asset quality remained outstanding with excellent performance metrics and a positive outlook” – CEO commentary, with NPA/Assets 0.27% and ACL/Loans 1.10% .
Funding cost relief: Interest-bearing deposit cost down 31 bps q/q; NIM up to 2.25% and net interest income +$1.9M q/q .

What Went Wrong

Noninterest income softness: Mortgage banking fees fell to $1.0M as more loans were retained on balance sheet versus sold; total noninterest income declined to $2.78M q/q .
Expense pressure: Noninterest expense rose $505K q/q (compared to Q3), driven by higher professional fees and other items (business taxes, collections, dues/subscriptions) .
Deposit mix and L/D: Deposits declined q/q to $3.44B while L/D increased to 105.7%; time/out-of-market deposits remained elevated at $774M, impacting funding mix .

Financial Results

Core P&L and Profitability (oldest → newest)

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($MM)	$21.39	$23.05	$23.77	$25.24
Net Interest Income ($MM)	$19.06	$19.53	$20.59	$22.46
Noninterest Income ($MM)	$2.33	$3.52	$3.18	$2.78
Diluted EPS ($)	$0.51	$0.37	$0.54	$0.70
Net Interest Margin (tax-eq)	1.92%	1.98%	2.08%	2.25%
ROAA (%)	0.40%	0.29%	0.43%	0.54%
Efficiency Ratio (%)	79.61%	80.87%	75.90%	73.48%
Effective Tax Rate (%)	21.9%	23.3%	23.5%	18.4%

Notes:

Q4 NIM expansion primarily from 31 bps lower rate on interest-bearing deposits; average asset yields also improved 18 bps y/y .
Q4 provision reversal of $200K reflected low charge-offs and lower expected loss rates; includes $250K loan ACL reversal and $50K increase for unfunded commitments .

Balance Sheet and Capital

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Loans ($MM)	$3,602.63	$3,622.52	$3,619.56	$3,631.77
Deposits ($MM)	$3,379.56	$3,459.87	$3,518.83	$3,435.77
Core Deposits ($MM)	$2,811.50	$2,788.22	$2,705.43	$2,661.74
Total Assets ($MM)	$4,055.79	$4,109.85	$4,174.63	$4,087.59
Loans/Deposits (%)	106.60%	104.70%	102.86%	105.70%
Book Value/Share ($)	$38.63	$39.09	$40.04	$40.47
TCE Ratio (%)	7.70%	7.76%	7.82%	8.08%

Asset Quality

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
NPA/Assets (%)	0.10%	0.27%	0.28%	0.27%
Loans 30+ Days (%)	0.37%	0.30%	0.16%	0.25%
ACL/Loans (%)	1.13%	1.11%	1.11%	1.10%
Net Charge-offs (YTD ann.) (%)	0.00%	0.07%	0.05%	0.04%

Loan and Deposit Composition (Q4 2024 vs Q3 2024)

Category	Q3 2024 ($MM)	Q4 2024 ($MM)
Commercial – Non-owner occ. RE	$917.64	$924.37
Commercial – Owner occ. RE	$642.61	$651.60
Commercial – Construction	$144.67	$103.20
Commercial – Business	$521.54	$556.12
Consumer – Real estate	$1,132.37	$1,128.63
Consumer – Home equity	$195.38	$204.90
Time ≥$250K & out-of-market deposits	$813.40	$774.03
Money Market	$1,423.40	$1,438.53
Non-interest-bearing	$689.75	$683.08
Total Deposits	$3,518.83	$3,435.77

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY/Q4 2024	Not provided	Not provided	Maintained (no formal guidance)

Management did not issue quantitative revenue/EPS/NIM, OpEx, OI&E, tax-rate, or dividend guidance; commentary emphasized margin momentum, asset quality, and strong capital .

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available in our document system; none found in our search of company materials for the period. Themes are inferred from quarterly press releases.

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
Net interest margin	Q2: NIM +4 bps q/q to 1.98% on higher loan yields; Q3: NIM +10 bps q/q to 2.08% with deposit cost down 2 bps	NIM +17 bps q/q to 2.25% as deposit rates fell 31 bps	Improving
Funding costs / deposit mix	Q2: Increased time/out-of-market deposits; noninterest-bearing grew; Q3: cost actions lowered funding costs	Deposit cost down; time/out-of-market deposits still high ($774M)	Mixed but improving cost
Asset quality	Q2: NPA/Assets rose to 0.27% from 0.09% on few relationships; Q3: 0.28% with net recoveries	NPA/Assets 0.27%, few charge-offs; ACL/Loans 1.10%	Stable/strong
Mortgage banking	Q2: $1.92M; Q3: $1.45M; liquidity in secondary market	Q4: $1.02M as more loans retained vs sold	Softer
Capital and book value	Q2: BVPS $39.09; TCE 7.76%; Q3: BVPS $40.04; TCE 7.82%	BVPS $40.47; TCE 8.08%	Strengthening
Tax rate	Q2: 23.3%; Q3: 23.5%	Q4: 18.4% due to equity comp and return-to-provision differences	Lower

Management Commentary

“Our financial performance this quarter reflects continued momentum in margin… Asset quality remained outstanding… Our balance sheet performed as we expected with the Fed’s interest rate cuts… Book value to $40.47 to end the year.” – Art Seaver, CEO .
“We are well-positioned with a strong balance sheet and healthy pipelines to continue the positive trends in performance and generating value for our shareholders.” – CEO .

Q&A Highlights

No Q4 2024 earnings call transcript was found in our document system or company materials; therefore, no Q&A highlights or guidance clarifications are available for this period [List: 0 transcripts] .

Estimates Context

We attempted to retrieve S&P Global Wall Street consensus for Q4 2024 EPS and revenue; data was unavailable due to request limit exceeded. As a result, we cannot quantify beats/misses versus consensus at this time [GetEstimates error].
Mechanically, the 17 bps q/q NIM expansion and 31 bps reduction in deposit costs support upward pressure on modeled net interest income and EPS for forward periods, subject to mix and balance dynamics .

Key Takeaways for Investors

Margin inflection continued: NIM up to 2.25% with deposit cost relief; expect this to be the primary driver of near-term earnings trajectory .
Credit remains a differentiator: exceptionally low charge-offs and strong ACL coverage underpin risk-adjusted returns and capital preservation .
Capital and book value accretion: BVPS at $40.47 and TCE 8.08% provide flexibility amid deposit mix normalization and modest loan growth .
Watch expense discipline: q/q OpEx increased; sustaining efficiency gains (73.48%) will be key to operating leverage if noninterest income remains soft .
Mortgage banking variability: fee revenue down as more loans retained; beneficial to NII but reduces fee diversification; monitor secondary market activity .
Funding mix risk: elevated time/out-of-market deposits ($774M) and L/D 105.7% warrant attention; further core deposit growth would enhance funding resilience .
No formal guidance: narrative centers on margin and asset quality; absent quantified guidance, model drivers are NIM, deposit costs, and credit outcomes .

Additional context: Post-quarter, the company appointed a Chief Retail Experience Officer (Feb 20, 2025), reinforcing focus on client service and retail franchise execution .

Sources: Q4 2024 press release and 8-K with exhibits ; Q3 and Q2 press releases/8-Ks for trend analysis .

SOUTHERN FIRST BANCSHARES INC (SFST)·Q4 2024 Earnings Summary