Exhibit 99.1
FINANCIAL CONTACT: JIM AUSTIN 864-679-9070
MEDIA CONTACT: EDDIE TERRELL 864-679-9016
WEB SITE: www.southernfirst.com
Southern First Reaches $600 Million in Assets as of Third Quarter 2007
Greenville, SC, October 16, 2007 - Southern First Bancshares, Inc. (NASDAQ: SFST) holding company for Southern First Bank, NA, today announced that total assets grew to $614.3 million as of September 30, 2007, compared to $495.1 million at September 30, 2006, an increase of 24.1%. Loans were $483.7 million at September 30, 2007, an increase of $93.3 million or 23.9%, when compared with $390.4 million at September 30, 2006. Deposits grew 22.1% to $415.1 million at September 30, 2007, compared to $340.0 million at September 30, 2006.
As a result of our cost to expansion into the Columbia market, net income for the first nine months of 2007 declined to $2.7 million, or $0.82 per diluted share, a 5.9% decrease when compared to $2.8 million, or $0.87 per diluted share for the same period in 2006.
Net income for the third quarter of 2007 also declined to $957 thousand, or $0.30 per diluted share, a 6.2% decrease in net income when compared to $1.0 million, or $0.32 per diluted share, for the same period in 2006.
As a result of the significant increase in average assets and the slight decline in net income, our return on average assets for the third quarter of 2007 was 0.66% compared to 0.86% for the same quarter in 2006. Return on average shareholders' equity for the third quarter in 2007 was 10.50% compared to 12.25% for the third quarter in 2006. The company's efficiency ratio (noninterest expense divided by the sum of net interest income and noninterest income) was 59.64% for the 2007 third quarter compared to 48.71% for the 2006 third quarter. The increase in the efficiency ratio resulted from the expenses relating to our expansion, exceeding the initial revenue to be realized from the new growth in assets.
“We are extremely pleased with our third quarter results as our investments in infrastructure are having an immediate impact,” said Art Seaver, Chief Executive Officer. “Loans have increased 24% since September 30, 2006, enabling our company to exceed $600 million in total assets. Our initiatives to grow retail deposits continue to be successful as the number of transaction accounts has increased 18% during the last year.”
Non-performing assets declined $1.6 million during the third quarter of 2007 and now represent 0.54% of total assets at September 30, 2007 compared to .86% at June 30, 2007 and .39% at September 30, 2006..
The Company’s book value per share was $12.59 as of September 30, 2007, while the closing stock price was $19.00 per share.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations projected growth, or loan quality, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, greater than expected non-interest expenses, excessive loan losses and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. For a more detailed description of factors that could cause or contribute to such differences, please see our filings with the Securities and Exchange Commission.
Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
-1-
SUMMARY CONSOLIDATED FINANCIAL DATA
Our summary consolidated financial data as of and for the three and nine months ended September 30, 2007 and 2006 have not been audited but, in the opinion of our management, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles.
| Three Months | Nine Months |
|---|
| Ended September 30,
| Ended September 30,
|
|---|
| 2007
| 2006
| 2007
| 2006
|
|---|
| (Dollars and shares in thousands, except per share data) |
|---|
| Summary Results of Operations Data: | | | | | | | | | | | | | | |
| Interest income | | | $ | 10,280 | | $ | 8,134 | | $ | 28,984 | | $ | 22,258 | |
| Interest expense | | | | 5,857 | | | 4,441 | | | 16,627 | | | 11,642 | |
|
| |
| |
| |
| |
| Net interest income | | | | 4,423 | | | 3,693 | | | 12,357 | | | 10,616 | |
| Provision for loan losses | | | | 450 | | | 400 | | | 1,290 | | | 1,200 | |
|
| |
| |
| |
| |
| Net interest income after | | | | | | | | | | | | | | |
| provision for loan losses | | | | 3,973 | | | 3,293 | | | 11,067 | | | 9,416 | |
| Noninterest income | | | | 247 | | | 113 | | | 989 | | | 403 | |
| Noninterest expense | | | | 2,785 | | | 1,854 | | | 8,112 | | | 5,413 | |
|
| |
| |
| |
| |
| Income before taxes | | | | 1,435 | | | 1,552 | | | 3,944 | | | 4,406 | |
| Income tax expense | | | | 478 | | | 532 | | | 1,278 | | | 1,574 | |
|
| |
| |
| |
| |
| Net income | | | $ | 957 | | $ | 1,020 | | $ | 2,666 | | $ | 2,832 | |
|
| |
| |
| |
| |
| Per Share Data: | | | | | | | | | | | | | | |
| Net income, basic | | | $ | 0.33 | | $ | 0.35 | | $ | 0.91 | | $ | 0.97 | |
| Net income, diluted | | | $ | 0.30 | | $ | 0.32 | | $ | 0.82 | | $ | 0.87 | |
| Book value | | | $ | 12.59 | | $ | 11.36 | | $ | 12.59 | | $ | 11.36 | |
| Weighted average number of shares outstanding: | | | | | | | | | | | | | | |
| Basic | | | | 2,946 | | | 2,934 | | | 2,941 | | | 2,931 | |
| Diluted | | | | 3,236 | | | 3,232 | | | 3,241 | | | 3,238 | |
| Performance Ratios: | | | | | | | | | | | | | | |
| Return on average assets (1) | | | | 0.66 | % | | 0.86 | % | | 0.64 | % | | 0.86 | % |
| Return on average equity (1) | | | | 10.50 | % | | 12.25 | % | | 10.07 | % | | 11.79 | % |
| Net interest margin (1) | | | | 3.14 | % | | 3.25 | % | | 3.07 | % | | 3.35 | % |
| Efficiency ratio (2) | | | | 59.64 | % | | 48.71 | % | | 60.78 | % | | 49.13 | % |
| Growth Ratios and Other Data: | | | | | | | | | | | | | | |
| Percentage change in net income from the same | | | | (6.19 | )% | | | | | (5.86 | )% | | | |
| period of the previous year | | | | | | | | | | | | | | |
| Percentage change in diluted net income per share | | | | | | | | | | | | | | |
| from the same period of the previous year | | | | (6.25 | )% | | | | | (5.75 | )% | | | |
Continued
-2-
SUMMARY OF CONSOLIDATED FINANCIAL DATA, CONTINUED
| | At September 30,
|
|---|
| | 2007
| 2006
|
|---|
| | (Dollars in thousands) |
|---|
| | | Summary Balance Sheet Data: | | | | | | | | |
| | | Assets | | | $ | 614,271 | | $ | 495,139 | |
| | | Investment securities | | | | 107,029 | | | 78,952 | |
| | | Loans (3) | | | | 483,698 | | | 390,360 | |
| | | Allowance for loan losses | | | | 5,447 | | | 4,620 | |
| | | Deposits | | | | 415,064 | | | 339,960 | |
| | | Securities sold under agreement to repurchase | | | | 10,000 | | | - | |
| | | Federal Home Loan Bank Advances | | | | 133,500 | | | 104,500 | |
| | | Junior subordinate debentures | | | | 13,403 | | | 13,403 | |
| | | Shareholders’ equity | | | | 37,092 | | | 33,334 | |
| | | | | | | | | | | |
| | | Asset Quality Ratios: | | | | | | | | |
| | | Nonperforming assets, past due and restructured | | | | | | | | |
| | | loans to total loans (3) | | | | 0.69 | % | | 0.37 | % |
| | | Nonperforming assets, past due and restructured | | | | | | | | |
| | | loans to total assets | | | | 0.54 | % | | 0.29 | % |
| | | Net charge-offs year to date to average | | | | | | | | |
| | | total loans (3)(4) | | | | 0.24 | % | | 0.39 | % |
| | | Allowance for loan losses to nonperforming loans | | | | 184.41 | % | | 712.54 | % |
| | | Allowance for loan losses to total loans (3) | | | | 1.13 | % | | 1.18 | % |
| | | | | | | | | | | |
| | | Capital Ratios: | | | | | | | | |
| | | Average equity to average assets | | | | 6.31 | % | | 7.31 | % |
| | | Leverage ratio | | | | 8.66 | % | | 9.90 | % |
| | | Tier 1 risk-based capital ratio | | | | 10.08 | % | | 12.02 | % |
| | | Total risk-based capital ratio | | | | 11.17 | % | | 13.22 | % |
| | | | | | | | | | | |
| | | Growth Ratios and Other Data: | | | | | | | | |
| | | Percentage change in assets | | | | 24.06 | % | | | |
| | | Percentage change in loans (3) | | | | 23.91 | % | | | |
| | | Percentage change in deposits | | | | 22.09 | % | | | |
| | | Percentage change in equity | | | | 11.27 | % | | | |
| | | Loans to deposit ratio (3) | | | | 116.54 | % | | | |
| (1) | Annualized for the three and nine month periods. |
| (2) | Computed by dividing noninterest expense by the sum of net interest income and noninterest income. |
| (3) | Includes nonperforming loans. (4) Annualized for the nine month period. |
| (4) | Annualized for the nine month period. |
-3-
