Southern First Bancshares, Inc., is the holding company for Southern First Bank. The company was established in 1999 and is headquartered in Greenville, South Carolina, and expanded to Columbia, South Carolina in 2007 and Charleston, South Carolina in 2012.

Greenville, Columbia and Charleston represent the largest banking markets in South Carolina. Each market has approximately $10 billion in deposits and has grown in excess of 9% annually over the past 5 years. Our unique model, dynamic markets and experienced bank team provide the basis for the continued success of our company.

2012 Highlights


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Shareholder Letter

Dear Fellow Shareholders,

Your team of bankers at Southern First Bancshares worked diligently in 2012 to create a distinguishing value for our clients and shareholders. Southern First continues to grow client relationships and improve the fundamental profitability of its operations. While we are proud of the operating performance of Southern First in 2012, we are also excited about the strategic accomplishments that position your company for growth and performance in the future.

2012 Operating Highlights

Valuation increases 43%:
The value of your investment in Southern First improved 43% in 2012. While your stock price appreciated nicely in 2012, the current valuation still represents only 75% of the company’s tangible book value. Based on the continued performance momentum, Southern First announced another stock dividend that was distributed in February of 2013 and continued to improve the liquidity of your investment.

Net income increases 85%:
Southern First recorded net income of $3.9 million in 2012, an 85% increase over the $2.1 million in earnings recorded in 2011. The growth in earnings is a result of solid loan growth, improved net interest margin, increases in fee income and lower credit costs.

Margin improvement:
Net interest margin for the year 2012 was 3.61% compared to 3.30% for the year 2011. The primary drivers of the increasing margin are the growth in loan balances coupled with the significant decrease in the overall cost of our funding. The bank lowered its total cost of liabilities from 1.88% in 2011 to 1.41% in 2012.

Strong increase in noninterest income:
The company increased noninterest income by 36% in 2012 centered primarily in mortgage origination income, service fees on deposit accounts, and gains on the sale of investment securities. The company bolstered its investment in mortgage capabilities in 2012 and recorded mortgage origination income of $912 thousand for the year, a 23% increase over 2011.

Significant decline in nonperforming assets:
One of our accomplishments for 2012 is the improvement of asset quality through our team’s concentrated focus on managing risk and cleaning up our balance sheet. As a result, total nonperforming assets decreased $4.1 million during the year and totaled $9.9 million or 1.24% of total assets at year-end. Net charge-offs improved to .71% in 2012 compared to .81% in 2011.

2012 Strategic Highlights

Charleston expansion:
Southern First announced its expansion to the Charleston market in July 2012 and opened our first office at 480 East Bay Street in early December. Len Howell was hired as Executive Vice President in July and brings over 20 years of experience and knowledge of the Charleston market. At year-end 2012, our Charleston team had grown to 8 total bankers that are generating new client relationships at a pace exceeding our expectations.

TARP program exit:
Southern First exited the US Treasury’s TARP program following the government auction of TARP securities in June of 2012. This auction facilitated our desired capital plan and Southern First has redeemed a cumulative $1.5 million of its preferred stock through the first quarter of 2013.

Regulatory agreement satisfied:
On January 3, 2013, the Office of the Comptroller of the Currency notified the Bank that it was no longer subject to the Formal Agreement entered into on June 8, 2010, nor was it subject to the Individual Minimum Capital Ratios (“IMCR”) established for the Bank on May 24, 2010. The Formal Agreement and subsequent IMCR were driven by the OCC’s findings in an on-site examination of the Bank in 2009 in which the OCC desired the Bank to enhance practices and procedures in the areas of credit risk management, credit underwriting, liquidity, and funds management.


We have built a great team at Southern First and enter 2013 with tremendous momentum. With four offices in Greenville, three offices in Columbia, and our first office in Charleston, Southern First is well positioned to serve the three largest markets in South Carolina.

Our vision at Southern First is to create a unique client experience. Our “Client FIRST” model provides a senior banker and consistent support team to every client to ensure consistency and a superior level of professional service. This model continues to grow client relationships and our company now totals approximately $800 million in total assets.

Southern First has an outstanding opportunity to continue delivering a unique value to our clients and shareholders. We have the capacity to grow and have assembled a team that is focused on performance. Banking is a simple business – doing it well, however, is very difficult. We have a passion to build a great banking company and we enter 2013 with tremendous momentum. Thank you for your continued support.

art justin jimmy




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Report of Independent Registered Public Accounting Firm

To The Board of Directors,

We have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Southern First Bancshares, Inc., and Subsidiary as of December 31, 2012, and 2011, and the related consolidated statements of income, shareholders’ equity and comprehensive income (loss) and cash flows for each of the years in the three-year period ended December 31, 2012, (not presented herein); and in our report dated March 5, 2013, we expressed an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in conformity with U.S. generally accepted accounting principles in relation to the consolidated financial statements from which it has been derived.

Greenville, South Carolina
March 5, 2013


Forward-Looking Statements
  Forward-looking statements in this annual report, such as statements relating to future plans and expectations, are subject to risks and uncertainties, such as a downturn in the economy, greater than expected non-interest expenses, excessive loan losses and other matters, which could cause actual results to differ materially from the future plans and expectations anticipated by such forward-looking statements. For a more detailed description of factors that could cause such differences, please see our Annual Report on Form 10-K. We undertake no duty to update forward-looking statements.

Common Stock
  Southern First Bancshares, Inc., holding company for Southern First Bank, is traded on the NASDAQ Global Market under the symbol SFST. A copy of Southern First Bancshares, Inc.‘s, Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, is available at no charge by contacting the Investor Relations Officer listed below or on the company’s web site at www.SouthernFirst.com.

Annual Shareholders Meeting
The Annual Meeting of Shareholders of Southern First Bancshares, Inc., will be held at the Poinsett Club, 807 E. Washington Street, Greenville, South Carolina, on Tuesday, May 21, 2013, at 5:00 PM.

Independent Registered Public Accounting Firm
Elliott Davis LLC
P.O. Box 6286
Greenville, South Carolina 29606

General Counsel
Nelson Mullins Riley & Scarborough LLP
P.O. Box 10084
Greenville, South Carolina 29603

Transfer Agent and Registrar
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016

Investor Relations Officer
Michael D. Dowling, Chief Financial Officer
Southern First Bancshares, Inc.
P.O. Box 17465
Greenville, South Carolina 29606


Southern First Bancshares, Inc.
100 Verdae Boulevard, Suite 100
Greenville, South Carolina 29607

Download the 2012 Annual Report
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