Item 9A. Controls and Procedures
Item
9A. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
Based
on our management’s evaluation (with the participation of our principal executive officer and principal financial officer), as
of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended,
(the “Exchange Act”)) are effective to ensure that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange
Commission rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosure.
For
management’s report on internal control over financial reporting and the attestation report thereon issued by our independent registered
public accounting firm, see Item 8. Financial Statements and Supplementary Data.
Internal
Control over Financial Reporting
There
was no change in our internal control over financial reporting during our fourth quarter of fiscal 2024 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
Item
9B. Other Information
ITEM
1.01 Entry into a Material Definitive Agreement.
On
February 28, 2025, the Company entered into a Modification of Loan (the “Modification Agreement”) amending both the Loan
Agreement (“Loan Agreement”) and the Promissory Note (the “Promissory Note”), each dated as of December 28, 2023,
by and between the Company and TIB, National Association (the “Lender”). The Loan Agreement and Promissory Note provide for
a revolving multiple advances loan of up to an aggregate principal amount of $15.0 million. Reference is made to Exhibits 10.1 and 10.2
to the Company’s Current Report on Form 8-K filed January 3, 2024, which are incorporated herein by reference, for a further description
of the Loan Agreement and Promissory Note with the Lender. The definition of capitalized terms, if not so defined herein, may be found
in the Modification Agreement.
The
Modification Agreement extends the revolving line of credit to a maturity date of March 5, 2026. The Company also agrees under
the Modification Agreement to pay the Lender a Non-Usage Fee of 0.25%, which fee shall be $37,500 less the interest accrued and paid
under the Note, and collected on the Maturity Date. On March 3, 2025, there was a zero principal balance outstanding borrowed under
the Promissory Note.
The
description contained herein of the Modification Agreement does not purport to be complete and is qualified in its entirety by reference
to the terms of such document, a copy of which is filed as an exhibit to this Annual Report on Form 10-K and is incorporated herein by
reference.
ITEM
2.03 Creation of a Direct Financial Obligation.
The
relevant disclosure set forth in Item 1.01 above is incorporated herein by reference in response to this Item 2.03
Trading
Plans
During
the three months ended December 31, 2024, no director or “officer” of the Company adopted or terminated a “Rule 10b5-1
trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation
S-K.
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Item
9C. Disclosures Regarding Foreign Jurisdictions
that Prevent Inspections
Not
applicable
PART
III
Item
10. Directors, Executive Officers and Corporate Governance.
In
response to this Item, this information is contained in our Proxy Statement for the Annual Meeting of Shareholders to be held on May
20, 2025 and is incorporated herein by reference.
Item
11. Executive Compensation.
In
response to this Item, this information is contained in our Proxy Statement for the Annual Meeting of Shareholders to be held on May
20, 2025 and is incorporated herein by reference.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.
In
response to this Item, the information required by Item 201(d) is contained in Item 5 of this report. The other information required
by this item is contained in our Proxy Statement for the Annual Meeting of Shareholders to be held on May 20, 2025 and is incorporated
herein by reference.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
The
information is contained in our Proxy Statement for the Annual Meeting of Shareholders to be held on May 20, 2025 is incorporated herein
by reference.
Item
14. Principal Accounting Fees and Services.
In
response to this Item, this information is contained in our Proxy Statement for the Annual Meeting of Shareholders to be held on May
20, 2025 and is incorporated herein by reference.
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Table of Contents
Item
15. Exhibits, Financial Statement Schedules
(a)
(1)
Financial Statements
The following consolidated financial statements are located in Item 8 of this report.
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024, 2023 and 2022
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
Notes to the Consolidated Financial Statements
(2)
Financial
Statement Schedules
These
schedules have been omitted because they are not required, are not applicable or have been included in our consolidated financial
statements.
(3)
Exhibits
See
the “Exhibit Index” immediately following the signature page of this report.
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Table of Contents
EXHIBIT
INDEX
3.1
Amended and Restated Articles, as amended, of Southern First Bancshares, Inc. (effective May 30, 2024). (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on July 31, 2024).
3.2
Amended and Restated Bylaws dated March 18, 2008 (incorporated by reference to Exhibit 3.4 of the Company’s Form 10-K filed March 24, 2008).
3.3
Amendment to Amended and Restated Bylaws dated March 18, 2008 (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on November 2, 2020).
4.1
Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 of the Company’s Form 10-K filed on March 2, 2020).
4.2
Form of certificate of common stock (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form SB-2, File No. 333-83851).
4.3
Indenture dated as of September 30, 2019 between Southern First Bancshares, Inc. and UMB Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on September 30, 2019).
4.4
Form of 4.75% Fixed-to-Floating Subordinated Note due 2029 of Southern First Bancshares, Inc. (incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed on September 30, 2019).
4.5
Form of Global 4.75% Fixed-to-Floating Subordinated Note due 2029 of Southern First Bancshares, Inc. (incorporated by reference to the Exhibit 2 to Exhibit 4.1 of the Company’s Form 8-K filed on September 30, 2019).
10.1
Southern First Bancshares, Inc. 2010 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed April 6, 2010).*
10.2
Amendment to Southern First Bancshares, Inc. 2010 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on April 15, 2014).*
10.3
Amendment to Southern First Bancshares, Inc. 2010 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on April 14, 2015).*
10.4
Form of Award Agreement for Stock Options (incorporated by reference to Exhibit 4.6 of the Company’s Form S-8 filed on August 12, 2010).*
10.5
Form of Award Agreement for Restricted Stock (incorporated by reference to Exhibit 4.7 of the Company’s Form S-8 filed on August 12, 2010).*
10.6
Sublease Agreement between Greenville First Bank, N.A. and Augusta Road Holdings, LLC dated February 26, 2004 (incorporated by reference to Exhibit 10.6 of the Company’s Form 10-QSB for the period ended June 30, 2004).
10.7
R. Arthur Seaver, Jr. Amended and Restated Employment Agreement (incorporated by reference to Exhibit 10.5 of the Company’s Form 8-K filed October 3, 2013).*
10.8
Calvin C. Hurst Employment Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on August 1, 2023).*
10.9
Amendment to Employment Agreement by and between Southern First Bank and Calvin C. Hurst, dated May 6, 2024 (incorporated by reference to Exhibit 10.2 of Southern First Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on May 7, 2024).*
10.10
Form of Split Dollar Agreement between certain executives and Southern First Bancshares, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed February 18, 2009).*
10.11
Form of Southern First Bank, N.A. Salary Continuation Agreement dated December 17, 2008 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed December 23, 2008). *
10.12
Form of First Amendment to Southern First Bank, N.A. Salary Continuation Agreement dated December 17, 2008 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed December 23, 2008).*
10.13
Michael D. Dowling Salary Continuation Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed October 3, 2013).*
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10.14
R. Arthur Seaver, Jr. Second Amendment to Salary Continuation Agreement (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed October 3, 2013).*
10.15
Southern First Bancshares, Inc. 2016 Equity Incentive Plan (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on April 12, 2016).*
10.16
Form of Award Agreement for Stock Options (incorporated by reference to Exhibit 4.6 of the Company’s Form S-8 filed on August 18, 2016).*
10.17
Form of Award Agreement for Restricted Stock (incorporated by reference to Exhibit 4.7 of the Company’s Form S-8 filed on August 18, 2016).*
10.18
Amendment dated as of January 31, 2019 to R. Arthur Seaver, Jr. Amended and Restated Employment Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on February 6, 2019).*
10.19
William Marion Aiken, III Employment Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on May 2, 2023).*
10.20
Amendment to Employment Agreement by and between Southern First Bank and William M. Aiken, III, dated May 6, 2024 (incorporated by reference to Exhibit 10.3 of Southern First Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on May 7, 2024).*
10.21
Form of Subordinated Note Purchase Agreement dated as of September 30, 2019 by and among Southern First Bancshares, Inc. and certain qualified institutional buyers and accredited investors (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on September 30, 2019).
10.22
Form of Registration Rights Agreement dated as of September 30, 2019 by and among Southern First Bancshares, Inc. and certain qualified institutional buyers and accredited investors (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on September 30, 2019).
10.23
Loan Agreement, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 3, 2024).
10.24
Promissory Note, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on January 3, 2024).
10.25
Pledge Agreement, dated as of December 28, 2023, by and between Southern First Bancshares, Inc. and TIB, National Association (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on January 3, 2024).
10.26
Amendment to the Southern First Bancshares, Inc. 2020 Equity Incentive Plan (incorporated by reference to Appendix A of the Company’s Proxy Statement for its 2024 Annual Meeting of Shareholders filed on April 3, 2024).*
10.27
Employment Agreement by and between Southern First Bank and Christian Zych, dated May 6, 2024 (incorporated by reference to Exhibit 10.1 of Southern First Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on May 7, 2024).*
10.28
Amendment to the Southern First Bancshares, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 24, 2025).*
10.29
Form of Restricted Stock Unit Grant Notice (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on January 24, 2025).*
10.30
Modification of Loan, dated as of February 28, 2025, by and between the Company and TIB, National Association.
19.1
Insider Trading Policy .
21
Subsidiaries.
23
Consent of Independent Public Accountants.
24
Power of Attorney (contained herein as part of the signature pages).
31.1
Rule 13a-14(a) Certification of the Principal Executive Officer.
31.2
Rule 13a-14(a) Certification of the Principal Financial Officer.
32
Section 1350 Certifications of the Principal Executive Officer and Principal Financial Officer.
114
Table of Contents
97
Incentive
Compensation Recovery Policy, effective November 21, 2023 (incorporated by reference to Exhibit 97 of the Company’s Form
10-K filed on March 5, 2024.
101
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in eXtensible Business Reporting Language (XBRL); (i) the Consolidated Balance Sheets at December 31, 2023 and December 31, 2022, (ii) Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021, (iii) Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income for the years ended December 31, 2023, 2022, and 2021, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021, and (iv) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Management
contract or compensatory plan or arrangement
115
Table of Contents
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SOUTHERN
FIRST BANCSHARES, INC.
Date: March
3, 2025
By:
/s/R.
Arthur Seaver, Jr.
Chief
Executive Officer
KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints R. Arthur Seaver, Jr., his true and
lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange Commission, granting unto the attorney-in-fact and agent
full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that the attorney-in-fact
and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
Signature
Title
Date
/s/R.
Arthur Seaver, Jr.
Director,
Chief Executive Officer
March
3, 2025
R.
Arthur Seaver, Jr.
(Principal
Executive Officer)
/s/Christian
J. Zych
Chief
Financial Officer
March
3, 2025
Christian
J. Zych
(Principal
Financial Officer)
/s/Julie
A. Fairchild
Chief
Accounting Officer
March
3, 2025
Julie
A. Fairchild
(Principal
Accounting Officer)
/s/Andrew
B. Cajka, Jr.
Director
March
3, 2025
Andrew
B. Cajka, Jr.
/s/Mark
A. Cothran
Director
March
3, 2025
Mark
A. Cothran
/s/Leighton
M. Cubbage
Director
March
3, 2025
Leighton
M. Cubbage
/s/David
G. Ellison
Director
March
3, 2025
David
G. Ellison
/s/Anne
S. Ellefson
Director
March
3, 2025
Anne
S. Ellefson
/s/
Terry Grayson-Caprio
Director
March
3, 2025
Terry
Grayson-Caprio
/s/Tecumseh
Hooper, Jr.
Director
March
3, 2025
Tecumseh
Hooper, Jr.
/s/Rudolph
G. Johnstone, III M.D.
Director
March
3, 2025
Rudolph
G. Johnstone, III, M.D.
/s/
Ray A. Lattimore
Director
March
3, 2025
Ray
A. Lattimore
/s/Anna
T. Locke
Director
March
3, 2025
Anna
T. Locke
/s/
William A. Maner, IV
Director
March
3, 2025
William
A. Maner, IV
/s/James
B. Orders, III
Director,
Chairman
March
3, 2025
James
B. Orders, III
116