Southern First Bancshares reported third-quarter 2026 net income of $12.2 million, up $3.6 million, or 41.2%, from $8.7 million a year earlier and up $1.0 million, or 9.2%, from $11.2 million in the second quarter. Diluted earnings per share rose to $1.28 from $1.06 in the third quarter of 2025 and from $1.20 in the prior quarter.
Total revenue reached $37.5 million, increasing $6.4 million, or 20.6%, from a year earlier and $1.7 million from the second quarter. Net interest income climbed to $34.7 million from $27.5 million a year ago, a gain of $7.1 million, or 25.9%, and rose $2.3 million from the prior quarter. Net interest margin widened to 3.02% from 2.62% a year earlier and from 2.87% in the second quarter.
Loan growth was a major driver. Total loans ended the quarter at $4.18 billion, up $386.5 million, or 10.2%, from $3.79 billion a year earlier and up $145.3 million from the second quarter. Average loans were $4.10 billion, compared with $3.78 billion a year earlier. Loan interest income rose to $56.1 million from $51.0 million in the third quarter of 2025.
Deposits increased to $4.11 billion from $3.68 billion a year earlier, a gain of $428.8 million, or 11.7%, and retail deposits rose to $3.72 billion from $3.11 billion, up $610.3 million, or 19.6%. Retail deposits also increased $162.6 million from the second quarter. Wholesale deposits fell to $386.5 million from $568.0 million a year earlier, a decline of $181.5 million, or 32.0%.
The balance sheet expanded to $4.88 billion in assets from $4.36 billion a year earlier, up $522.3 million, or 12.0%. Book value per common share increased to $48.68 from $43.51 a year earlier and from $47.77 in the second quarter.
Profitability ratios improved. Return on average assets rose to 1.03% from 0.80% a year earlier, while return on average equity increased to 10.54% from 9.78%. The efficiency ratio improved to 54.10% from 60.86% a year earlier. Noninterest expense rose to $20.3 million from $18.9 million, up $1.4 million, or 7.2%, but remained roughly flat versus the second quarter.
Noninterest income fell to $2.9 million from $3.6 million a year ago, down $736,000, or 20.4%, with mortgage banking income dropping to $638,000 from $1.6 million. That decline was partly offset by service fees on deposit accounts, which increased to $906,000 from $625,000, up 45.0%.
Credit costs increased. Provision for credit losses rose to $1.4 million from $850,000 a year earlier and from $1.0 million in the second quarter. Net charge-offs were $719,000, or 0.07% of average loans annualized. Nonperforming assets were 0.30% of total assets, compared with 0.27% in the second quarter and 0.27% a year earlier. The allowance for credit losses stood at 1.07% of loans, versus 1.10% at both comparison periods.
Capital strengthened from a year earlier. Tangible common equity to assets was 9.47%, up from 8.18%, and common equity tier 1 capital was 12.74%, up from 10.88%. Following these announcements, the company's shares moved -1.14%, and are now trading at a price of $59.13. For more information, read the company's full 8-K submission here.
