Southern First Grows Assets 23% To Exceed $625 Million at December 31, 2007

GREENVILLE, S.C., Jan. 15 /PRNewswire-FirstCall/ -- Southern First
Bancshares, Inc. (Nasdaq: SFST), (previously named Greenville First
Bancshares, Inc.), the holding company for Southern First Bank, NA, today
announced that total assets grew to $628.1 million as of December 31, 2007,
compared to $509.3 million at December 31, 2006, an increase of 23.3%. Loans
were $508.9 million at December 31, 2007, an increase of $106.7 million or
26.5%, when compared with $402.2 million at December 31, 2006. Deposits grew
19.5% to $412.8 million at December 31, 2007, compared to $345.5 million at
December 31, 2006.
Our net income for the year ended December 31, 2007 declined to $3.4
million, or $1.06 per diluted share, an 11.9% decrease when compared to $3.9
million, or $1.20 per diluted share for the same period in 2006. The decline
in net income resulted from the cost of expansion to the Columbia market,
increased overhead and infrastructure expenses to support future growth, and
the increase in loan loss provision related to record growth in the loan
portfolio.
Net income for the fourth quarter of 2007 declined to $770 thousand, or
$0.24 per diluted share, a 28.0% decrease in net income when compared to $1.1
million, or $0.33 per diluted share, for the same period in 2006. During the
fourth quarter of 2007, the bank recorded a provision of $760 thousand,
related to both the growth in loans and the increase in nonperforming loans.
During the fourth quarter of 2006, the related provision was $450 thousand.
As a result of the significant increase in average assets and the decline
in net income, our return on average assets for the year ended December 31,
2007 was 0.60% compared to 0.85% for the same period in 2006. Return on
average shareholders' equity for 2007 was 9.40% compared to 11.95% for 2006.
The company's efficiency ratio (noninterest expense divided by the sum of net
interest income and noninterest income) was 60.41% for 2007 compared to 49.24%
for 2006. The increase in the efficiency ratio also resulted from expenses
relating to our expansion.
"2007 has been a year of tremendous growth for our company. Loans
increased 26.5% or $106.7 million while deposits increased $67.3 million or
19.5%. Our Columbia office has been instrumental in achieving this level of
growth, contributing $62.5 million in loans and $10.2 million in deposits,"
said Art Seaver, Chief Executive Officer. "Our investments in infrastructure
have enabled us to expand our presence in both the Greenville and Columbia
markets. We look forward to continue our growth momentum in 2008 with the
opening of two retail offices, one in the Greenville market and one in the
Columbia market."
Non-performing assets increased $1.6 million to $4.9 million during the
fourth quarter of 2007 and now represent 0.78% of total assets at December 31,
2007 compared to 0.54% at September 30, 2007 and 0.49% at December 31, 2006.
The $4.9 million in nonperforming loans at December 31, 2007, represents
primarily two commercial loans. The first one has a carrying value of $1.9
million and the second one has a carrying value of $2.2 million. We have
aggressively recognized our exposure on the second loan, charging off $1.1
million during 2007. The write-down on this loan represents 86.1% of the net
charge-offs for 2007. Both of the loans are secured by real estate. The
allowance for loan losses was $5.8 million or 1.13% of gross loans at December
31, 2007 compared to $4.9 million or 1.23% at December 31, 2006.
The Company's book value per share was $12.99 as of December 31, 2007,
while the closing stock price was $13.70 per share.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating to future plans and expectations
projected growth, or loan quality, and are thus prospective. Such forward-
looking statements are subject to risks, uncertainties, and other factors,
such as a downturn in the economy, greater than expected non-interest
expenses, excessive loan losses and other factors, which could cause actual
results to differ materially from future results expressed or implied by such
forward-looking statements. For a more detailed description of factors that
could cause or contribute to such differences, please see our filings with the
Securities and Exchange Commission.
Although we believe that the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove to be
inaccurate. Therefore, we can give no assurance that the results contemplated
in the forward-looking statements will be realized. The inclusion of this
forward-looking information should not be construed as a representation by our
company or any person that future events, plans, or expectations contemplated
by our company will be achieved. We undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.

FINANCIAL CONTACT: JIM AUSTIN 864-679-9070
MEDIA CONTACT: EDDIE TERRELL 864-679-9016
WEB SITE: www.southernfirst.com

SUMMARY CONSOLIDATED FINANCIAL DATA
Our summary consolidated financial data as of and for the three months and
year ended December 31, 2007 and three months ended December 31, 2006 have not
been audited but, in the opinion of our management, contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
our financial position and results of operations for such periods in
accordance with generally accepted accounting principles.

Three Months Years
Ended December 31, Ended December 31,
2007 2006 2007 2006
(Dollars and shares in thousands, except per share data)

Summary Results of
Operations Data:
Interest income $10,536 $8,670 $39,520 $30,929
Interest expense 6,154 4,937 22,781 16,579
Net interest income 4,238 3,733 16,739 14,350
Provision for loan losses 760 450 2,050 1,650
Net interest income
after provision for
loan losses 3,622 3,283 14,689 12,700
Noninterest income 273 177 1,262 579
Noninterest expense 2,762 1,938 10,875 7,351
Income before taxes 1,133 1,522 5,076 5,928
Income tax expense 363 453 1,641 2,027
Net income $770 $1,069 $3,435 $3,901

Per Share Data:
Net income, basic $0.26 $0.36 $1.17 $1.33
Net income, diluted $0.24 $0.33 $1.06 $1.20
Book value $12.99 $11.79 $12.99 $11.79

Weighted average number
of shares outstanding:
Basic 2,946 2,934 2,942 2,932
Diluted 3,212 3,240 3,235 3,238

Performance Ratios:
Return on average
assets (1) 0.50% 0.83% 0.60% 0.85%
Return on average
equity (1) 8.00% 12.38% 9.40% 11.95%
Net interest margin (1) 2.92% 3.04% 3.03% 3.26%
Efficiency ratio (2) 59.35% 49.57% 60.41% 49.24%

Growth Ratios and
Other Data:
Percentage change
in net income from
the same period of
the previous year (28.02)% (11.93)%
Percentage change in
diluted net income
per share from the
same period of the
previous year (27.27)% (11.67)%

At December 31,
2007 2006
(Dollars in thousands)
Summary Balance Sheet Data:
Assets $628,129 $509,344
Federal Funds Sold 9,257 7,466
Investment securities 87,507 74,304
Loans (3) 508,850 402,183
Allowance for loan losses 5,751 4,949
Deposits 412,820 345,504
Federal Home Loan Bank Advances 138,500 108,500
Other long-term borrowings 20,020 -
Junior subordinate debentures 13,403 13,403
Shareholders' equity 38,278 34,583

Asset Quality Ratios:
Nonperforming assets, past due and
restructured loans to total loans (3) 0.96% 0.62%
Nonperforming assets, past due and
restructured loans to total assets 0.78% 0.49%
Net charge-offs year to date to average
total loans (3) 0.27% 0.32%
Allowance for loan losses to
nonperforming loans 124.06% 332.46%
Allowance for loan losses to total loans (3) 1.13% 1.23%

Capital Ratios:
Average equity to average assets 6.35% 7.15%
Leverage ratio 8.31% 9.40%
Tier 1 risk-based capital ratio 10.02% 11.90%
Total risk-based capital ratio 11.15% 13.10%

Growth Ratios and Other Data:
Percentage change in assets 23.32%
Percentage change in loans (3) 26.52%
Percentage change in deposits 19.48%
Percentage change in equity 10.68%
Loans to deposit ratio (3) 123.26%

(1) Annualized for the three month periods.
(2) Computed by dividing noninterest expense by the sum of net interest
income on a tax equivalent basis and noninterest income, net of
securities gains or losses.
(3) Includes nonperforming loans.

SOURCE Southern First Bancshares, Inc.

Financial, Jim Austin, +1-864-679-9070, or Media, Eddie Terrell,
+1-864-679-9016, both of Southern First Bancshares, Inc.