Southern First Bancshares, Inc. (SFST): Business Model Canvas [10-2024 Updated]
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Southern First Bancshares, Inc. (SFST) Bundle
Discover the dynamic business model of Southern First Bancshares, Inc. (SFST), a key player in the financial sector. This innovative institution leverages strategic partnerships and a robust loan portfolio to deliver exceptional banking services. With a focus on personalized customer relationships and competitive offerings, SFST caters to a diverse clientele that includes individuals, small businesses, and real estate developers. Dive deeper into the components of their business model canvas to understand how SFST positions itself for success in a competitive market.
Southern First Bancshares, Inc. (SFST) - Business Model: Key Partnerships
IntraFi Promontory Network for Deposit Insurance
Southern First Bancshares, Inc. has established a partnership with the IntraFi Promontory Network, which allows the bank to offer aggregate FDIC insurance for deposits exceeding $250,000. This capability enables the bank to attract and retain significant deposits from customers concerned about insurance limits. As of September 30, 2024, the bank had $813.4 million in time deposits that met or exceeded the FDIC insurance limit, up from $568.1 million at December 31, 2023.
Financial Institutions for Credit Lines
The bank maintains credit lines with various financial institutions to enhance its liquidity and funding capabilities. Notably, as of September 30, 2024, Southern First Bancshares had a $15.0 million line of credit with a financial institution, which remained unused. This line of credit was issued on December 28, 2023, at an interest rate of the U.S. Prime Rate plus 0.25%, maturing on February 28, 2025.
Regulatory Bodies for Compliance and Oversight
Southern First Bancshares collaborates closely with regulatory bodies to ensure compliance with banking regulations and oversight requirements. As of September 30, 2024, the bank reported total assets of $4.09 billion and maintained a well-capitalized status with a CAMELS rating of 1 or 2, which allows it to hold reciprocal deposits up to the lesser of 20% of its total liabilities or $5 billion without those deposits being classified as brokered.
| Partnership | Type | Financial Impact | Remarks |
|---|---|---|---|
| IntraFi Promontory Network | Deposit Insurance | $813.4 million (as of Sep 30, 2024) | Provides access to aggregate FDIC insurance |
| Financial Institutions | Credit Lines | $15.0 million (unused) | Enhances liquidity and funding options |
| Regulatory Bodies | Compliance | $4.09 billion (total assets) | Ensures adherence to banking regulations |
Southern First Bancshares, Inc. (SFST) - Business Model: Key Activities
Offering loans and financial services
Southern First Bancshares, Inc. primarily generates income through its loan portfolio. As of September 30, 2024, the total gross loans, net of deferred fees, amounted to $3.62 billion, up from $3.60 billion at December 31, 2023. The composition of the loan portfolio is as follows:
| Loan Type | Amount (in thousands) | % of Total |
|---|---|---|
| Commercial Loans | $2,226,450 | 61.5% |
| Consumer Loans | $1,393,106 | 38.5% |
| Total Loans | $3,619,556 | 100.0% |
The average yield on loans increased to 4.33% as of September 30, 2024, compared to 4.10% at December 31, 2023. This growth in the loan portfolio is indicative of the bank's focus on providing various financial services, including residential mortgages, commercial lending, and consumer loans.
Managing liquidity and capital resources
Liquidity management is critical for Southern First Bancshares, Inc. to meet operational needs and maintain depositor confidence. As of September 30, 2024, cash and cash equivalents totaled $260.6 million, representing 6.2% of total assets. The bank maintains multiple sources of liquidity:
- Federal funds purchased lines of credit totaling $128.5 million, with no borrowings against these lines as of September 30, 2024.
- Pledged amounts available with the Federal Reserve Discount Window were $172.8 million.
- Unused borrowing capacity from the Federal Home Loan Bank (FHLB) stood at $716.7 million.
The bank's capital resources are robust, with total shareholders’ equity reaching $326.5 million as of September 30, 2024, up from $312.5 million at year-end 2023. This increase is attributed to net income of $9.9 million for the first nine months of 2024, alongside stock option exercises and equity compensation expenses.
Compliance with banking regulations
Compliance with regulatory standards is essential for Southern First Bancshares, Inc. to operate effectively within the financial services industry. The bank adheres to capital adequacy guidelines under Basel III, ensuring it maintains sufficient Tier 1 and total capital ratios. As of September 30, 2024, the bank's capital ratios exceeded the minimum requirements, confirming its 'well capitalized' status.
The efficiency ratio, which measures the bank's noninterest expense relative to its revenue, improved to 75.9% for the third quarter of 2024, compared to 78.3% for the same period in 2023. This improvement reflects effective management of operational costs while generating revenue.
Southern First Bancshares, Inc. (SFST) - Business Model: Key Resources
Loan Portfolio
The loan portfolio of Southern First Bancshares, Inc. (SFST) is a crucial asset, amounting to $3.62 billion as of September 30, 2024. This portfolio is diversified across various categories, ensuring a balanced risk profile and stable income generation.
| Loan Type | Amount (in thousands) | % of Total |
|---|---|---|
| Commercial Loans | $2,226,450 | 61.5% |
| Consumer Loans | $1,393,106 | 38.5% |
| Total Gross Loans | $3,619,556 | 100.0% |
Core Deposits and Credit Lines
Core deposits are essential for funding the bank's lending activities and maintaining liquidity. As of September 30, 2024, total deposits stood at $3,429.7 million, with notable increases in time deposits exceeding $250,000, which reached $813.4 million. This reflects a substantial growth from $568.1 million at the end of 2023.
| Deposit Type | Amount (in thousands) | Average Rate |
|---|---|---|
| Noninterest-bearing Demand Deposits | $669,911 | 0.00% |
| Interest-bearing Demand Deposits | $304,479 | 0.93% |
| Money Market Accounts | $1,555,198 | 4.10% |
| Savings Accounts | $30,026 | 0.23% |
| Time Deposits (less than $250,000) | $213,748 | 4.66% |
| Time Deposits (greater than $250,000) | $656,330 | 5.14% |
| Total Deposits | $3,429,692 | 3.22% |
Experienced Management Team
Southern First Bancshares benefits from a highly experienced management team, which plays a vital role in the strategic direction and operational execution of the bank. The team has a proven track record in the banking industry, contributing to the organization’s stability and growth. The management's expertise is reflected in the bank's operational metrics, including a net interest margin of 2.08% for the third quarter of 2024, an improvement from 1.97% in the previous year.
| Performance Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Interest Margin | 2.08% | 1.97% |
| Net Income (in thousands) | $4,382 | $4,098 |
| Efficiency Ratio | 75.9% | 78.3% |
Southern First Bancshares, Inc. (SFST) - Business Model: Value Propositions
Access to large FDIC-insured deposits
As of September 30, 2024, Southern First Bancshares, Inc. reported total deposits of $3.52 billion, with retail deposits comprising approximately 83.3% ($2.93 billion) of total deposits. The bank's wholesale deposits accounted for 16.7% ($588.5 million) of total deposits. The institution maintains a loan-to-deposit ratio of 103%, indicating a healthy balance between loans issued and deposits.
To attract larger deposits, Southern First has partnered with the IntraFi Promontory Network, enabling customers to access aggregate FDIC insurance beyond the standard $250,000 limit. As of the third quarter of 2024, time deposits exceeding $250,000 amounted to $813.4 million, a substantial increase from $568.1 million at December 31, 2023.
Comprehensive financial services for individuals and businesses
Southern First Bancshares offers a full suite of financial services catering to both individuals and businesses. For the third quarter of 2024, the bank reported a net interest income of $20.6 million, reflecting a 6.4% increase from $19.3 million in the same period of 2023. Additionally, the bank's noninterest income for the same quarter reached $3.2 million, a 15.5% increase from $2.8 million year-over-year.
Key components of the bank's noninterest income include:
- Mortgage banking income: $1.5 million for Q3 2024, up 20% from Q3 2023.
- Service fees on deposit accounts: $455,000 for Q3 2024, a 27.8% increase compared to the previous year.
- ATM and debit card income: $599,000 for Q3 2024.
Competitive interest rates on loans
Southern First Bancshares maintains competitive interest rates on its loan offerings. The average consumer real estate loan as of September 30, 2024, had a principal balance of $470,000 with an average rate of 4.33%. The overall loan portfolio increased by $16.9 million or 0.47% in the first nine months of 2024.
The bank's net interest margin (TE) for Q3 2024 was 2.08%, an increase from 1.97% in Q3 2023, demonstrating effective management of interest-earning assets. The average yield on interest-earning assets rose to 5.18% in Q3 2024, up 34 basis points from the previous year.
| Loan Type | Average Principal Balance | Average Rate |
|---|---|---|
| Consumer Real Estate | $470,000 | 4.33% |
| Commercial Loans | $2,226,450 | N/A |
Southern First Bancshares, Inc. (SFST) - Business Model: Customer Relationships
Personalized banking services
Southern First Bancshares, Inc. (SFST) emphasizes personalized banking services to enhance customer relationships. As of September 30, 2024, the company reported total deposits of $3.52 billion, with retail deposits constituting 83.3% of total deposits. The bank focuses on providing tailored financial products, including consumer loans and mortgage services, which accounted for significant portions of their loan portfolio. For instance, the consumer real estate loan segment grew to $1.13 billion, representing 31.3% of total loans.
Focus on trust and transparency
SFST prioritizes trust and transparency in its customer interactions. The bank maintains a robust allowance for credit losses, recorded at $40.2 million, which is 1.11% of outstanding loans and provides a coverage ratio of 346.78% for nonperforming loans. This proactive approach aims to assure customers of the bank's financial health and reliability. Additionally, the bank's return on average assets stood at 0.32%, indicating effective management of assets to generate income.
Regular communication through various channels
Regular communication is integral to SFST's customer relationship strategy. The bank utilizes multiple channels, including digital platforms, to engage with customers. For the first nine months of 2024, SFST reported noninterest income of $9.36 million, a 24.4% increase from the previous year, driven by service fees on deposit accounts and mortgage banking income. This reflects the bank's commitment to maintaining an open dialogue with customers and adapting services based on their needs.
| Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Deposits | $3.52 billion | $3.38 billion | 4.1% |
| Retail Deposits (% of Total) | 83.3% | 88.8% | -5.5% |
| Consumer Real Estate Loans | $1.13 billion | $1.08 billion | 4.0% |
| Noninterest Income | $9.36 million | $7.53 million | 24.4% |
| Return on Average Assets | 0.32% | 0.34% | -5.9% |
| Allowance for Credit Losses | $40.2 million | $40.7 million | -1.2% |
In summary, Southern First Bancshares, Inc. employs a multifaceted approach to customer relationships, focusing on personalized services, trust, and consistent communication.
Southern First Bancshares, Inc. (SFST) - Business Model: Channels
Branch locations in key markets
As of September 30, 2024, Southern First Bancshares, Inc. operates multiple branch locations strategically positioned in key markets. These branches are integral to the bank's strategy of enhancing customer engagement and service delivery. The bank's total deposits reached approximately $3.52 billion, with retail deposits constituting about 83.3% of this total, amounting to $2.93 billion.
Online banking platform
The online banking platform of Southern First Bancshares, Inc. has been a significant channel for customer interaction. The platform is designed to facilitate seamless banking experiences, allowing customers to manage their accounts, transfer funds, and apply for loans online. The bank's net interest income for the third quarter of 2024 was reported at $20.6 million, reflecting a 6.4% increase from $19.3 million in the same quarter of the previous year, driven by increased online banking activity.
Customer service via phone and email
Customer service is another vital channel for Southern First Bancshares, Inc. The bank provides support through phone and email, ensuring that customer inquiries and issues are promptly addressed. The efficiency ratio, a measure of operating efficiency, improved to 75.9% in the third quarter of 2024 from 78.3% in the same period in 2023, indicating enhanced service delivery and customer satisfaction.
| Channel | Details | Financial Impact |
|---|---|---|
| Branch Locations | Key markets with multiple branches | Total deposits of $3.52 billion, with retail deposits at $2.93 billion (83.3%) |
| Online Banking | Seamless account management and loan applications | Net interest income of $20.6 million in Q3 2024, up 6.4% YoY |
| Customer Service | Support via phone and email | Efficiency ratio improved to 75.9% in Q3 2024 |
Southern First Bancshares, Inc. (SFST) - Business Model: Customer Segments
Individuals seeking personal loans
Southern First Bancshares, Inc. (SFST) targets individual customers looking for personal loans. As of September 30, 2024, the average consumer real estate loan had a principal balance of $470,000 with an average rate of 4.33%.
The total consumer loan portfolio stood at $1.39 billion, representing approximately 38.5% of total gross loans, which amounted to $3.62 billion.
Small to medium-sized businesses
SFST serves small to medium-sized enterprises (SMEs) by providing commercial loans that cater to their operational and growth needs. The total commercial loan portfolio as of September 30, 2024, was $2.23 billion, accounting for 61.5% of the total loan portfolio.
The breakdown of commercial loans included:
- Owner-occupied real estate: $642.6 million (17.8%)
- Non-owner occupied real estate: $917.6 million (25.3%)
- Construction loans: $144.7 million (4.0%)
- Business loans: $521.5 million (14.4%)
Real estate investors and developers
Real estate investors and developers constitute a significant customer segment for SFST, as a substantial portion of their loan portfolio is secured by real estate. At September 30, 2024, approximately 84.4% of total loans were collateralized by real estate.
The composition of the real estate loan portfolio is as follows:
| Loan Type | Amount (in thousands) | % of Total Loans |
|---|---|---|
| Commercial Owner-occupied RE | $642,608 | 17.8% |
| Commercial Non-owner occupied RE | $917,642 | 25.3% |
| Consumer Real Estate | $1,132,371 | 31.3% |
| Home Equity | $195,383 | 5.4% |
The real estate sector is pivotal for SFST's lending strategy, as it not only provides a stable collateral base but also contributes to the overall growth of the bank's loan portfolio.
Southern First Bancshares, Inc. (SFST) - Business Model: Cost Structure
Operating expenses related to branch maintenance
As of September 30, 2024, Southern First Bancshares, Inc. reported total occupancy expenses of $2.6 million for the third quarter, which included costs associated with branch maintenance and operation. For the nine months ended September 30, 2024, occupancy costs totaled $7.7 million.
| Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | 9M 2024 (in thousands) | 9M 2023 (in thousands) |
|---|---|---|---|---|
| Occupancy Costs | $2,595 | $2,562 | $7,704 | $7,537 |
Interest expenses on deposits and borrowings
For the first nine months of 2024, total interest expenses amounted to $91.3 million, representing a significant increase compared to $69.9 million for the same period in 2023. The increase in interest expenses is attributed to rising rates on interest-bearing deposits and borrowings.
| Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | 9M 2024 (in thousands) | 9M 2023 (in thousands) |
|---|---|---|---|---|
| Total Interest Expense | $30,580 | $28,102 | $91,316 | $69,868 |
Compliance and regulatory costs
Southern First Bancshares incurred various compliance and regulatory costs, including professional fees related to regulatory requirements. In Q3 2024, professional fees amounted to $548,000, compared to $504,000 in Q3 2023. For the nine months ended September 30, 2024, these costs totaled $1.7 million.
| Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | 9M 2024 (in thousands) | 9M 2023 (in thousands) |
|---|---|---|---|---|
| Professional Fees | $548 | $504 | $1,748 | $1,914 |
Southern First Bancshares, Inc. (SFST) - Business Model: Revenue Streams
Interest Income from Loans
For the nine months ended September 30, 2024, Southern First Bancshares, Inc. reported total interest income from loans of $139.7 million, compared to $121.4 million for the same period in 2023, reflecting a year-over-year increase of 15.0%.
As of September 30, 2024, the average loan balance was $3.63 billion with a yield of 5.14%. This was an increase from an average loan balance of $3.47 billion with a yield of 4.68% in the previous year.
The composition of loans includes:
- Commercial loans: $2.23 billion (61.5% of total loans)
- Consumer loans: $1.39 billion (38.5% of total loans)
The net interest income for the third quarter of 2024 was $20.6 million, a 6.4% increase from $19.3 million in Q3 2023.
Fee Income from Banking Services
Noninterest income for the first nine months of 2024 was $9.4 million, which is a 24.4% increase from $7.5 million for the same period in 2023. This increase was driven by:
- Mortgage banking income: $4.3 million (an increase of 43.2% year-over-year)
- Service fees on deposit accounts: $1.3 million (a 25.1% increase year-over-year)
In Q3 2024, total noninterest income was reported at $3.2 million, up from $2.8 million in Q3 2023, marking a 15.5% increase.
Investment Income from Securities
Investment income from securities for the first nine months of 2024 amounted to $4.18 million, compared to $2.66 million in the same period of 2023, reflecting a significant increase due to higher yields on taxable and nontaxable investment securities.
At September 30, 2024, the company reported total investment securities of $154.2 million, which constituted 3.7% of total assets.
The table below summarizes the income streams for Southern First Bancshares, Inc.:
| Revenue Stream | 2024 (9 months) | 2023 (9 months) | Increase (%) |
|---|---|---|---|
| Interest Income from Loans | $139.7 million | $121.4 million | 15.0% |
| Fee Income from Banking Services | $9.4 million | $7.5 million | 24.4% |
| Investment Income from Securities | $4.18 million | $2.66 million | 57.3% |
Article updated on 8 Nov 2024
Resources:
- Southern First Bancshares, Inc. (SFST) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Southern First Bancshares, Inc. (SFST)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Southern First Bancshares, Inc. (SFST)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.