Southern First earnings beat estimates at $1.28 per share in third quarter
Key Facts
Southern First Bancshares reported earnings per share of $1.28 for the third quarter of 2026, beating analysts' estimates as its net interest margin improved and profit rose from the previous quarter. According to Investing.com, earnings per share exceeded analysts' estimate of $1.26, putting the company's earnings above expectations for the period. The earnings release filed with the U.S. Securities and Exchange Commission showed quarterly net income of $12.2 million. Revenue for the same period totaled $37.5 million, according to the official statement from the Greenville, South Carolina-based company. Management attributed third-quarter growth in net interest income primarily to new loan volume, as the margin widened from its year-earlier level.
The results follow net income of $11.2 million in the second quarter of 2026, according to the company's earnings announcement for that period. Diluted earnings per share for that quarter were $1.20, below the level reported in the company's third-quarter results. Southern First began the year with net income of $9.9 million in the first quarter, according to its earnings release for that period. Diluted earnings per share were $1.19 at the time, before rising in the following quarter's results. Quarterly earnings thus continued to rise across the reported periods of the year, both in net income and earnings per share, according to a comparison of the company's first-, second- and third-quarter announcements.
In its interest-related operations, the net interest margin reached 3.02% in the third quarter of 2026, according to the earnings release filed with the U.S. regulator. That compares with a margin of 2.62% in the third quarter of 2025, representing a year-on-year expansion of 40 basis points, according to the company. The margin stood at 2.87% in the second quarter of 2026, extending its improvement in the subsequent period. Explaining the growth in net interest income, management said in the earnings release that it was "primarily driven by new loan volume." Total loans at the end of the third quarter stood at about $4.2 billion, according to the same statement, which linked growth in interest income to new lending activity during the period.
On deposits, Southern First said retail deposits totaled about $3.7 billion at the end of the third quarter of 2026. In terms of credit risk coverage, the allowance for credit losses represented 1.07% of loans at the end of the same period, according to the earnings release. Management linked earnings momentum to opportunities to reprice balance sheet items in its investor presentation accompanying the quarterly earnings announcement. It listed improving funding costs among the factors underpinning its outlook for continued momentum, alongside repricing opportunities. The presentation also cited the efficiency of the operating model as another factor supporting profitability, as part of its assessment of the company's performance and the factors influencing the earnings trajectory.
The third-quarter results follow the company's completion of a stock offering in the spring of 2026, which raised gross proceeds of about $65.2 million in April, before discounts and expenses. In its offering pricing announcement, Southern First said support for organic growth initiatives was among the potential uses of the proceeds. Its stated uses also included providing capital to its banking subsidiary, among the announced purposes for the funding raised through the offering. The company listed the redemption or repurchase of outstanding indebtedness among those purposes, including subordinated debt, according to the offering announcement. It also identified funding working capital needs as another potential use of the proceeds, whose gross amount was reported in its first-quarter earnings announcement.
Looking ahead, management forecast continued improvement in the net interest margin in the investor presentation accompanying its third-quarter 2026 results. It said in the presentation that "continued improvement in the net interest margin is expected," including margin expansion in its outlook for subsequent performance. It added that further interest rate cuts by the Federal Reserve would accelerate that expansion. Management thus linked the pace of future improvement to the path of U.S. interest rates, alongside the balance sheet repricing opportunities cited in its presentation. Its outlook for earnings momentum also drew on improving funding costs and the efficiency of the operating model, according to the factors it outlined to investors when announcing the results.