South­ern First third quar­ter earn­ings en­hance

The Pak Banker - - Front Page -

GREENVILLE

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.

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