Southern First Bancshares Releases Preliminary Q1 2026 Results: Strong Profit Growth and Asset Quality Improvements

Southern First Bancshares, Inc. (NASDAQ: SFST) has released its preliminary unaudited financial results for the first quarter ended March 31, 2026. These results, although subject to final review and audit, provide a detailed look at the Company’s robust performance and continued growth trajectory, offering several key takeaways for current and prospective investors.

Key Highlights from Preliminary Q1 2026 Results

• Surge in Net Income: Net income for Q1 2026 is expected to be approximately \$9.9 million, up significantly (+88%) from \$5.266 million in Q1 2025. This marks a substantial year-over-year improvement and demonstrates the bank’s strong profitability momentum.
• Improved Net Interest Income and Margin: Net interest income is anticipated to reach about \$30.3 million, up from \$28.7 million in Q4 2025. The net interest margin (tax-equivalent basis) is estimated at 2.88%, an improvement from 2.72% in the prior quarter. This is attributed to continued balance sheet repricing and a notable 13 basis point decline in the cost of total deposits.
• Balance Sheet Growth:
  • Total loans (excluding loans held for sale) are estimated at \$3.94 billion, up from \$3.85 billion as of December 31, 2025.
  • Total deposits are approximately \$3.87 billion, up from \$3.72 billion in the previous quarter.
  • Retail deposits have increased to \$3.37 billion from \$3.16 billion, reflecting a 27% annualized growth rate for retail deposits, 17% for total deposits, and 10% for loans.
  • Wholesale (brokered) deposits have declined by approximately 9.3% to \$501.7 million, indicating a positive shift in deposit mix.
• Controlled Noninterest Expense: Noninterest expense rose to about \$20.0 million, compared with \$18.4 million in Q4 2025. The increase is primarily attributed to seasonal rises in compensation and benefits.
• Solid Asset Quality:
  • Nonperforming assets as a percentage of total assets improved to 0.26%, down from 0.32% in the prior quarter—a decline of approximately 15% in nonperforming asset balances.
  • Annualized net charge-offs to average loans remained very low at 0.01%, underscoring strong credit discipline.
  • Provision for credit losses was approximately \$1.3 million, including \$150,000 for unfunded commitments.
• Robust Capital Position:
  • Tangible common equity to tangible assets: 8.3%
  • Tier 1 leverage ratio: 9.1%
  • Common equity Tier 1 capital ratio: 11.0%
  • Tier 1 risk-based capital ratio: 11.4%
  • Total risk-based capital ratio: 12.8%
• Efficiency Ratio: The GAAP-based efficiency ratio is expected to be 59.2%, up from 57.9% in Q4 2025. The increase is due to higher noninterest expenses, but the ratio remains within a reasonable range for a growing institution.

Price-Sensitive Insights for Shareholders

• Exceptional Earnings Growth: The near doubling in net income year-over-year is likely to positively affect investor sentiment and could be a significant share price catalyst.
• Deposit Mix Improvement: The shift away from wholesale deposits toward retail deposits enhances funding stability and reduces interest expense risks, an important positive for long-term valuation.
• Asset Quality and Capital Strength: Continued improvement in asset quality metrics and maintenance of strong capital ratios should reassure investors regarding the Company’s risk profile and ability to support further growth or capital distribution.
• Deposit Cost Management: The 13 basis point reduction in total deposit costs, combined with margin expansion, highlights effective balance sheet management in a dynamic rate environment.

Important Cautions

• Preliminary Nature of Results: The financial results are preliminary and unaudited, based on management’s internal estimates. Final results may differ materially as the Company completes its financial closing procedures and considers subsequent events.
• Forward-Looking Statement Risk: These results contain forward-looking statements subject to various risks and uncertainties which could materially affect actual outcomes.

Conclusion

Southern First Bancshares’ preliminary Q1 2026 results point to significant profitability, strong loan and deposit growth, improving asset quality, and a well-capitalized balance sheet. These positive developments are likely to be viewed favorably by the market and have the potential to move the Company’s share price. However, investors should be mindful of the preliminary and unaudited nature of these results and monitor for final figures and further Company updates.

Disclaimer: The information in this article is based on preliminary, unaudited results provided by Southern First Bancshares as of April 15, 2026. These results are subject to change upon completion of customary financial closing and audit procedures. Investors should not place undue reliance on these estimates and are encouraged to review the Company’s final financial statements and SEC filings for confirmed figures and additional disclosures. This article does not constitute investment advice.

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