Southern First third quarter earnings enhance
Southern First Bancshares, holding company for Southern First Bank, N.A. today announced that net income for the third quarter of 2012 was $1.2 million compared to $483 thousand for the third quarter of 2011. After dividends paid on preferred stock, net income available to the common shareholders was $842 thousand compared to $197 thousand for the third quarter of 2011.
For the nine months ended September 30, 2012, net income was $2.7 million and net income to common shareholders was $1.8 million. In comparison, net income for the nine months ended September 30, 2011 was $1.7 million and the net income to common shareholders was $793 thousand.
Net income increased 154% to $1.2 million during the 3rd quarter of 2012 compared to the prior year; Net interest margin for the 3rd quarter of 2012 increased to 3.72% compared to 3.36% in 2011; Loan balances increased to $637.7 million as of September 30, 2012 compared to $591.1 million in 2011; Nonperforming assets improved to 1.43% at 3rd quarter 2012 compared to 1.65% in 2011; strong loan production in new Charleston, South Carolina market.
Our third quarter earnings represent the strongest quarterly earnings performance in our company’s history, stated Art Seaver, the company’s CEO. We continue to experience solid loan growth and are particularly excited about the early production from our Charleston team. While our East Bay Street office in Charleston will not physically open until November, we have already booked over $8 million in loans outstanding. This loan growth, coupled with our continued margin expansion and fee income, has clearly impacted our earnings momentum. Our continued focus on reducing nonperforming assets and credit costs is evident as our nonperform- ing asset ratio is at the lowest level in nearly four years.
Net interest margin for the third quarter of 2012 improved to 3.72% from 3.61% for the second quarter of 2012, and increased 36 basis points from 3.36% for the third quarter of 2011. Net interest margin for the nine months ended September 30, 2012 was 3.60% compared to 3.27% for the nine months ended September 30, 2011. The primary driver of the increased net interest margin is the $46.6 million growth in loan balances during the past twelve months, combined with the 50 basis point decrease in the cost of our interest bearing liabilities.
During the third quarter of 2012, the company recorded total credit costs of $1.4 million compared to $1.7 million during the third quarter of 2011. Of the $1.4 million in credit costs, $1.1 million related to the provision for loan losses while $267 thousand related primarily to a loss and write-down on two properties in other real estate owned. In addition, loan charge-offs for the quarter were $1.0 million and related primarily to three commercial loans and one residential property. Comparatively, the company recorded a loan loss provision of $1.7 million and expenses related to real estate owned of $16 thousand during the third quarter of 2011. For the nine months ended September 30, 2012, total credit costs were $4.3 million, consisting of a $3.6 million provision for loan losses and expenses of $720 thousand related to expenses from the sale and management of other real estate owned. Total credit costs were $4.1 million during the nine months ended September 30, 2011 and related to a $3.1 million provision for loan losses and $1.1 million of expenses from the sale and management of other real estate owned. The company’s allowance for loan losses was $9.3 million, or 1.45%, of loans at September 30, 2012 which provides approximately 100% coverage of non-performing loans.