Southern First Bancshares, Inc. reported net income of $12.2 million for the three months ended September 30, 2026, a 41% increase from the same period in 2025. The Greenville, South Carolina-based bank attributed the earnings growth to strong loan expansion and an increase in net interest margin.
Diluted earnings per share reached $1.28, up $0.22 or 21% from the third quarter of 2025. The company's net interest margin expanded to 3.02%, a 40-basis point improvement over the 2.62% recorded in the prior year. This margin growth was driven primarily by new loan volume, which contributed to a 26% year-over-year increase in net interest income.
Total revenue for the quarter was $37.5 million, an increase of $6.4 million compared to the third quarter of 2025. While net interest income grew significantly, noninterest income declined to $2.9 million from $3.6 million in the year-earlier period. The company stated this decrease was due to retaining a larger percentage of mortgage loans rather than selling them to the secondary market. However, service fees on deposit accounts rose 45% compared to the third quarter of 2025, partly due to a greater focus on treasury management services.
Art Seaver, Chief Executive Officer, noted that the bank increased retail client deposits by $163 million during the quarter, representing an 18% annualized growth rate. The loan portfolio grew by $145 million, or 14% annualized, during the same period. Seaver stated that the team focused on organic growth and disciplined expense management to capture profitable opportunities across its markets.
Balance sheet metrics showed total loans reaching $4.2 billion. Retail deposits stood at $3.7 billion, while wholesale deposits were reduced by $181.5 million from the third quarter of 2025. Book value per common share increased to $48.68, an 8% annualized increase from the second quarter of 2026.
Capital ratios remained stable, with the Common Equity Tier 1 ratio at 12.75% and the tangible common equity ratio at 9.47%. The tangible common equity ratio was up from 8.18% in the third quarter of 2025, though it decreased by 15 basis points from the second quarter of 2026.
Asset quality metrics indicated nonperforming assets accounted for 0.30% of total assets, compared to 0.27% in the linked quarter. Net charge-offs were approximately $719 thousand, or 0.07% of average loans on an annualized basis. The provision for credit losses totaled $1.4 million, including a $1.2 million provision for loan losses and a $220 thousand provision for unfunded commitments driven by new loan growth. The allowance for credit losses represented 1.07% of total loans at the end of the quarter.