Southern First Bancshares posted a sharp jump in second-quarter 2026 earnings as loan growth, deposit growth and a wider margin pushed revenue and profit higher than both the prior quarter and a year ago.
Net income available to common shareholders rose to $11.2 million from $6.6 million in the second quarter of 2025, up 70.1%. Diluted earnings per share increased to $1.20 from $0.81, a gain of 48.2%. Versus the first quarter, net income climbed from $9.9 million and EPS edged up from $1.19.
Total revenue reached $35.9 million, up 25.3% from $28.6 million a year earlier and up $2.1 million from the first quarter. Net interest income rose 28.0% year over year to $32.4 million from $25.3 million, and increased from $30.3 million in the prior quarter. The net interest margin widened to 2.87% from 2.50% a year ago, though it slipped one basis point from 2.88% in the first quarter.
Loan growth remained a major driver. Total loans ended the quarter at $4.03 billion, up $283.4 million, or 7.6%, from $3.75 billion a year earlier and up $88.0 million from the first quarter. Average loans were $3.98 billion, compared with $3.72 billion in the year-earlier quarter. Interest income on loans rose to $53.1 million from $49.0 million a year ago.
Deposits also expanded. Total deposits rose to $3.94 billion from $3.64 billion a year earlier, an increase of $299.1 million, or 8.2%. Retail deposits climbed to $3.56 billion from $3.08 billion, up $480.4 million, or 15.6%. On a linked-quarter basis, retail deposits increased by $184 million, or 22% annualized, to $3.56 billion. Wholesale deposits fell to $379.4 million from $560.7 million a year earlier, down $181.3 million, or 32%.
Profitability ratios improved. Return on average assets increased to 0.96% from 0.63% a year earlier, while return on average equity rose to 10.28% from 7.71%. The efficiency ratio improved to 56.84% from 67.54% in the second quarter of 2025.
Noninterest income increased to $3.5 million from $3.3 million a year earlier. Service fees on deposit accounts rose to $866,000 from $567,000, up 52.7%. Mortgage banking income declined to $1.3 million from $1.6 million a year earlier.
Noninterest expense increased to $20.4 million from $19.3 million a year ago, up 5.5%. Compensation and benefits rose to $12.3 million from $11.7 million, outside service and data processing costs increased to $2.4 million from $2.2 million, and professional fees climbed to $782,000 from $609,000.
Asset quality stayed steady. Nonperforming assets were 0.27% of total assets, unchanged from a year earlier and up slightly from 0.26% in the first quarter. Accruing loans 30 days or more past due fell to 0.10% of loans from 0.14% a year earlier and 0.20% in the first quarter. Net charge-offs were 0.01% of average loans on an annualized basis, flat with the prior quarter. The allowance for credit losses remained 1.10% of loans.
Capital ratios strengthened. Book value per common share rose to $47.77 from $42.23 a year earlier, up 13.1%. Tangible common equity increased to 9.62% from 8.02%, while common equity tier 1 rose to 12.82% from 10.71%. Total risk-based capital was 14.42%, compared with 12.63% a year ago. The company said these ratios were lifted by its $65.2 million capital raise, which also increased diluted weighted average shares to 9.3 million from 8.1 million a year earlier.
On the balance sheet, total assets climbed to $4.70 billion from $4.31 billion a year earlier, up $392.1 million, or 9.1%. Cash and cash equivalents increased to $361.6 million from $271.0 million. Loans-to-deposits improved to 102.41% from 103.04% a year earlier. Subordinated debentures fell to $13.4 million from $24.9 million after the redemption of a portion of the notes. Today the company's shares have moved -2.38% to a price of $59.93. Check out the company's full 8-K submission here.
