Southern First Loan Growth Accelerates to 14% Annualized

The Tip Desk · November 8, 2026 · 3 min read

Net interest income reached $34.7 million as the margin hit 3.02% and net income was $12.2 million, or $1.28 a share.

Southern First Bancshares (SFST), parent of Southern First Bank, the second-largest bank headquartered in South Carolina, reported net interest income of $34.7 million for the three months ended September 30, 2026, up 26% from a year earlier, as loan growth accelerated and the net interest margin kept expanding.

The company said new loan volume was the primary driver of that year-over-year increase. Net interest margin was 3.02%, 40 basis points above 2.62% in the third quarter of 2025 and 15 basis points above 2.87% in the second quarter of 2026. Average loans were $4.10 billion and the average loan yield was 5.42%.

Total loans were $4.2 billion at quarter-end, up $145 million, or 14% annualized, from the second quarter of 2026, after 9% annualized growth in that prior quarter. Commercial loans were $2.61 billion and consumer loans $1.57 billion.

Retail deposits were $3.7 billion, up $163 million, or 18% annualized, from the second quarter, after $184 million of growth in that period. Wholesale deposits were $386.5 million. Cost of average deposits was 2.35%; cost of average retail deposits was 2.16%. Loans to deposits were 101.71%.

Net income was $12.2 million, or $1.28 a share diluted, up 41% from the third quarter of 2025 and 9% from the second quarter of 2026. Return on average assets was 1.03% and return on average equity was 10.54%. Total revenue was $37.5 million.

Noninterest income was $2.9 million. The company attributed the year-over-year decline to retaining a larger percentage of mortgage loans rather than selling them to the secondary market; mortgage banking income was $638 thousand. Service fees on deposit accounts were $906 thousand, which the company tied in part to an increased focus on treasury management services.

Noninterest expense was $20.3 million. The efficiency ratio improved to 54.10% from 56.84% in the second quarter of 2026. Noninterest expense to average assets was 1.71%.

Provision for credit losses was $1.4 million, including a $1.2 million loan-loss provision and a $220 thousand unfunded-commitment provision that the company said was driven by new loan growth. The allowance for credit losses was 1.07% of loans. Net charge-offs were $719 thousand, or 0.07% of average loans annualized. Nonperforming assets were 0.30% of total assets. Accruing loans 30 days or more past due were 0.09% of loans.

Common Equity Tier 1 was 12.75%, down seven basis points from the second quarter of 2026, after the second-quarter equity raise and partial subordinated-debt redemption. Tangible common equity was 9.47%. Book value per common share was $48.68.

Chief Executive Officer Art Seaver said the company increased retail client deposits by $163 million and grew the loan portfolio by $145 million during the quarter, and that it further expanded margin and improved overall profitability metrics. He said the third-quarter results put the company in a position to finish strong in 2026.