UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2024
OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 000-27719

Southern First Bancshares, Inc.

(Exact name of registrant as specified in its charter)

South Carolina		58-2459561
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6 Verdae Boulevard
Greenville, S.C.		29607
(Address of principal executive offices)		(Zip Code)

864-679-9000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SFST	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller Reporting Company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 8,159,847 shares of common stock, par value $0.01 per share, were issued and outstanding as of October 29, 2024.

		Page
PART I – CONSOLIDATED FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Shareholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44

Item 4.	Controls and Procedures	44

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	45



	September 30,			December 31,
(dollars in thousands, except share data)	2024			2023
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	25,289			28,020
Federal funds sold		226,110			119,349
Interest-bearing deposits with banks		9,176			8,801
Total cash and cash equivalents		260,575			156,170
Investment securities:
Investment securities available for sale		134,597			134,702
Other investments		19,640			19,939
Total investment securities		154,237			154,641
Mortgage loans held for sale		8,602			7,194
Loans		3,619,556			3,602,627
Less allowance for credit losses		(40,166	)		(40,682	)
Loans, net		3,579,390			3,561,945
Bank owned life insurance		53,663			52,501
Property and equipment, net		90,158			94,301
Deferred income taxes, net		11,595			12,200
Other assets		16,411			16,837
Total assets	$	4,174,631			4,055,789
LIABILITIES
Deposits	$	3,518,825			3,379,564
FHLB advances and related debt		240,000			275,000
Subordinated debentures		24,903			36,322
Other liabilities		64,365			52,436
Total liabilities		3,848,093			3,743,322
SHAREHOLDERS’ EQUITY
Preferred stock, par value $.01 per share, 10,000,000 shares authorized		-			-
Common stock, par value $.01 per share, 20,000,000 shares authorized, 8,156,097 shares issued and outstanding at September 30, 2024; 10,000,000 shares authorized, 8,088,186 shares issued and outstanding at December 31, 2023.		82			81
Nonvested restricted stock		(4,219	)		(3,596	)
Additional paid-in capital		124,288			121,777
Accumulated other comprehensive loss		(9,063	)		(11,342	)
Retained earnings		215,450			205,547
Total shareholders’ equity		326,538			312,467
Total liabilities and shareholders’ equity	$	4,174,631			4,055,789



	For the three months					For the nine months
	ended September 30,					ended September 30,
(dollars in thousands, except share data)	2024		2023			2024		2023
Interest income
Loans	$	47,550		43,542			139,700		121,380
Investment securities		1,412		1,470			4,308		2,788
Federal funds sold and interest-bearing deposits with banks		2,209		2,435			6,072		4,295
Total interest income		51,171		47,447			150,080		128,463
Interest expense
Deposits		27,725		25,130			82,873		64,245
Borrowings		2,855		2,972			8,443		5,623
Total interest expense		30,580		28,102			91,316		69,868
Net interest income		20,591		19,345			58,764		58,595
Provision for (reversal of) credit losses		-		(500	)		325		2,235
Net interest income after provision for (reversal of) credit losses		20,591		19,845			58,439		56,360
Noninterest income
Mortgage banking income		1,449		1,208			4,536		3,167
Service fees on deposit accounts		455		356			1,265		1,011
ATM and debit card income		599		588			1,730		1,680
Income from bank owned life insurance		401		349			1,162		1,018
Other income		271		249			669		653
Total noninterest income		3,175		2,750			9,362		7,529
Noninterest expenses
Compensation and benefits		10,789		10,231			32,936		30,874
Occupancy		2,595		2,562			7,704		7,537
Outside service and data processing costs		1,930		1,744			5,738		5,078
Insurance		1,025		1,243			2,945		2,829
Professional fees		548		504			1,748		1,914
Marketing		319		293			1,077		994
Other		833		725			2,634		2,573
Total noninterest expenses		18,039		17,302			54,782		51,799
Income before income tax expense		5,727		5,293			13,019		12,090
Income tax expense		1,345		1,195			3,116		2,831
Net income	$	4,382		4,098			9,903		9,259
Earnings per common share
Basic	$	0.54		0.51			1.22		1.15
Diluted		0.54		0.51			1.22		1.15
Weighted average common shares outstanding
Basic		8,064,283		8,052,926			8,100,003		8,043,410
Diluted		8,089,176		8,072,408			8,123,846		8,077,830



	For the three months ended September 30,						For the nine months ended September 30,
(dollars in thousands)	2024			2023			2024			2023
Net income	$	4,382			4,098			9,903			9,259
Other comprehensive income (loss):
Unrealized gain (loss) on securities available for sale:
Unrealized holding gain (loss) arising during the period, pretax		3,548			(3,221	)		2,884			(2,333	)
Tax benefit (expense)		(745	)		676			(605	)		488
Other comprehensive income (loss)		2,803			(2,545	)		2,279			(1,845	)
Comprehensive income	$	7,185			1,553			12,182			7,414


	For the three months ended September 30,
	Common stock				Preferred stock				Nonvested restricted			Additional paid-in		Accumulated other comprehensive			Retained
(dollars in thousands, except share data)	Shares		Amount		Shares		Amount		stock			capital		income (loss)			earnings		Total
June 30, 2023		8,058,438	$	81		-	$	-	$	(4,051	)	$	120,912	$	(12,710	)	$	197,282	$	301,514
Net income Preferred stock		-		-		-		-		-			-		-			4,098		4,098
Proceeds from exercise of stock options		14,250		-		-		-		-			312		-			-		312
Issuance of restricted stock, net of forfeitures Retained earnings		15,950		-		-		-		(388	)		388		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		374			-		-			-		374
Compensation expense related to stock options, net of tax Common stock		-		-		-		-		-			145		-			-		145
Other comprehensive loss		-		-		-		-		-			-		(2,545	)		-		(2,545	)
Additional paid-in capital
September 30, 2023		8,088,638	$	81		-	$	-	$	(4,065	)	$	121,757	$	(15,255	)	$	201,380	$	303,898

June 30, 2024		8,155,097	$	82		-	$	-	$	(4,710	)	$	124,174	$	(11,866	)	$	211,068	$	318,748
Net income		-		-		-		-		-			-		-			4,382		4,382
Proceeds from exercise of stock options		1,000		-		-		-		-			23		-			-		23
Issuance of restricted stock, net of forfeitures		-		-		-		-		-			-		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		491			-		-			-		491
Compensation expense related to stock options, net of tax		-		-		-		-		-			91		-			-		91
Other comprehensive income		-		-		-		-		-			-		2,803			-		2,803

September 30, 2024		8,156,097	$	82		-	$	-	$	(4,219	)	$	124,288	$	(9,063	)	$	215,450	$	326,538

	For the nine months ended September 30,
	Common stock				Preferred stock				Nonvested restricted			Additional paid-in		Accumulated other comprehensive			Retained
(dollars in thousands, except share data)	Shares		Amount		Shares		Amount		stock			capital		income (loss)			earnings		Total
December 31, 2022		8,011,045	$	80		-		-	$	(3,306	)	$	119,027	$	(13,410	)	$	192,121	$	294,512
Net income		-		-		-		-		-			-		-			9,259		9,259
Proceeds from exercise of stock options		25,250		-		-		-		-			497		-			-		497
Issuance of restricted stock, net of forfeitures		52,343		1		-		-		(1,824	)		1,823		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		1,065			-		-			-		1,065
Compensation expense related to stock options, net of tax		-		-		-		-		-			410		-			-		410
Other comprehensive loss		-		-		-		-		-			-		(1,845	)		-		(1,845	)

September 30, 2023		8,088,638	$	81		-	$	-	$	(4,065	)	$	121,757	$	(15,255	)	$	201,380	$	303,898

December 31, 2023		8,088,186	$	81		-	$	-	$	(3,596	)	$	121,777	$	(11,342	)	$	205,547	$	312,467
Net income		-		-		-		-		-			-		-			9,903		9,903
Proceeds from exercise of stock options		12,000		-		-		-		-			190		-			-		190
Issuance of restricted stock, net of forfeitures		55,911		1		-		-		(2,035	)		2,034		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		1,412			-		-			-		1,412
Compensation expense related to stock options, net of tax		-		-		-		-		-			287		-			-		287
Other comprehensive income		-		-		-		-		-			-		2,279			-		2,279

September 30, 2024		8,156,097	$	82		-	$	-	$	(4,219	)	$	124,288	$	(9,063	)	$	215,450	$	326,538



	For the nine months ended September 30,
(dollars in thousands)	2024			2023
Operating activities
Net income	$	9,903			9,259
Adjustments to reconcile net income to cash provided by operating activities:
Provision for credit losses		325			2,235
Depreciation and other amortization		3,623			3,611
Accretion and amortization of securities discounts and premium, net		437			142
Net change in operating leases		114			188
Compensation expense related to stock options and restricted stock grants		1,699			1,475
Gain on sale of loans held for sale		(4,354	)		(2,793	)
Loans originated and held for sale		(148,745	)		(112,930	)
Proceeds from sale of loans held for sale		151,691			112,523
Increase in cash surrender value of bank owned life insurance		(1,162	)		(1,018	)
Increase in deferred tax asset		-			(66	)
Decrease (increase) in other assets		426			(7,892	)
Increase in other liabilities		13,408			6,059
Net cash provided by operating activities		27,365			10,793
Investing activities
Increase (decrease) in cash realized from:
Increase in loans, net		(18,195	)		(280,627	)
Purchase of property and equipment		(567	)		(1,120	)
Purchase of investment securities:
Available for sale		(20,513	)		(58,204	)
Other investments		(4,301	)		(49,949	)
Payments and maturities, calls and repayments of investment securities:
Available for sale		23,065			5,039
Other investments		4,600			41,182
Net cash used for investing activities		(15,911	)		(343,679	)
Financing activities
Increase (decrease) in cash realized from:
Increase in deposits, net		139,261			213,907
Increase (decrease) in Federal Home Loan Bank advances and other borrowings, net		(35,000	)		100,000
Decrease in subordinated debentures		(11,500	)		-
Proceeds from the exercise of stock options		190			497
Net cash provided by financing activities		92,951			314,404
Net increase (decrease) in cash and cash equivalents		104,405			(18,482	)
Cash and cash equivalents at beginning of the period		156,170			170,874
Cash and cash equivalents at end of the period	$	260,575			152,392
Supplemental information
Cash paid for
Interest	$	87,129			64,390
Income taxes		2,235			586
Schedule of non-cash transactions
Unrealized gain (loss) on securities, net of income taxes		2,279			(1,845	)
Right-of-use assets obtained in exchange for lease obligations:
Operating Leases		-			147



	September 30, 2024
	Amortized		Gross Unrealized				Fair
(dollars in thousands) Corporate bonds [Member]	Cost		Gains		Losses		Value
Available for sale Asset-backed securities [Member]
Corporate bonds US treasuries [Member]	$	2,128		-		181		1,947
US treasuries		999		-		75		924
US government agencies US government agencies [Member]		18,113		4		1,431		16,686
State and political subdivisions		22,450		-		2,427		20,023
Asset-backed securities Mortgage-backed securities [Member]		34,271		70		76		34,265
Mortgage-backed securities		68,108		35		7,391		60,752
Total investment securities available for sale	$	146,069		109		11,581		134,597

	December 31, 2023
		Amortized	Gross Unrealized					Fair
		Cost		Gains		Losses		Value
Available for sale
Corporate bonds	$	2,147		-		237		1,910
US treasuries		9,495		1		102		9,394
US government agencies		20,594		-		1,938		18,656
State and political subdivisions		22,642		11		2,912		19,741
Asset-backed securities		33,450		2		216		33,236
Mortgage-backed securities		60,730		-		8,965		51,765
Total investment securities available for sale	$	149,058		14		14,370		134,702



	September 30, 2024
	Less than one year					One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
Corporate bonds Corporate bonds [Member]	$	-		-		$	-		-		$	1,947		2.02	%	$	-		-		$	1,947		2.02	%
US treasuries		-		-			924		1.27	%		-		-			-		-			924		1.27	%
US government agencies US government agencies [Member]		-		-			4,239		1.08	%		12,447		4.56	%		-		-			16,686		3.67	%
State and political subdivisions		-		-			1,331		1.96	%		6,101		1.98	%		12,591		2.13	%		20,023		2.07	%
Asset-backed securities Asset-backed securities [Member]		-		-			49		(0.12	%)		-		-			34,216		6.70	%		34,265		6.69	%
Mortgage-backed securities Mortgage-backed securities [Member]		-		-			6,689		1.28	%		7,865		3.01	%		46,198		2.37	%		60,752		2.33	%
Total investment securities Total investment securities [Member]	$	-		-		$	13,232		1.28	%	$	28,360		3.40	%	$	93,005		3.93	%	$	134,597		3.56	%

																December 31, 2023
	Less than one year					One to five years					Five to ten years					Over ten years					Total
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Available for sale
Corporate bonds	$	-		-		$	-		-		$	1,910		2.01	%	$	-		-		$	1,910		2.01	%
US treasuries		8,497		5.42	%		897		1.27	%		-		-			-		-			9,394		5.02	%
US government agencies		970		0.45	%		2,385		1.00	%		15,301		4.41	%		-		-			18,656		3.77	%
State and political subdivisions		-		-			906		1.94	%		5,769		1.89	%		13,066		2.15	%		19,741		2.06	%
Asset-backed securities		-		-			296		(6.13	%)		-		-			32,940		6.63	%		33,236		6.57	%
Mortgage-backed securities		-		-			4,795		1.15	%		5,400		1.59	%		41,570		2.00	%		51,765		1.87	%
Total investment securities	$	9,467		4.91	%	$	9,279		0.98	%	$	28,380		3.20	%	$	87,576		3.76	%	$	134,702		3.55	%



													September 30, 2024
	Less than 12 months						12 months or longer						Total
(dollars in thousands)	#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		-	$	-	$	-		1	$	1,947	$	181		1	$	1,947	$	181
US treasuries		-		-		-		1		924		75		1		924		75
US government agencies		-		-		-		9		10,582		1,431		9		10,582		1,431
State and political subdivisions		2		757		2		30		19,266		2,425		32		20,023		2,427
Asset-backed		4		9,575		44		8		7,124		32		12		16,699		76
Mortgage-backed securities		5		7,303		23		61		47,929		7,368		66		55,232		7,391
Total investment securities		11	$	17,635	$	69		110	$	87,772	$	11,512		121	$	105,407	$	11,581

													December 31, 2023
	Less than 12 months						12 months or longer						Total
(dollars in thousands)	#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		-	$	-	$	-		1	$	1,910	$	237		1	$	1,910	$	237
US treasuries		-		-		-		1		897		102		1		897		102
US government agencies		2		7,533		50		10		11,123		1,888		12		18,656		1,938
State and political subdivisions		-		-		-		30		18,964		2,912		30		18,964		2,912
Asset-backed		8		26,746		145		7		4,866		71		15		31,612		216
Mortgage-backed securities		2		2,869		36		62		48,896		8,929		64		51,765		8,965
Total investment securities		12	$	37,148	$	231		111	$	86,656	$	14,139		123	$	123,804	$	14,370

Schedule of investments

(dollars in thousands)	September 30, 2024		December 31, 2023
Federal Home Loan Bank stock	$	14,516		16,063
Other nonmarketable investments		4,721		3,473
Investment in Trust Preferred subsidiaries		403		403
Total other investments	$	19,640		19,939



	September 30, 2024						December 31, 2023
(dollars in thousands)Commercial [Member]	Amount			% of Total			Amount			% of Total
Commercial
Owner occupied REOwner occupied RE [Member]	$	642,608			17.8	%	$	631,657			17.5	%
Non-owner occupied RE		917,642			25.3	%		942,529			26.2	%
ConstructionConstruction [Member]		144,665			4.0	%		150,680			4.2	%
BusinessBusiness [Member]		521,535			14.4	%		500,161			13.9	%
Total commercial loansConsumer [Member]		2,226,450			61.5	%		2,225,027			61.8	%
Consumer
Real estateReal estate [Member]		1,132,371			31.3	%		1,082,429			30.0	%
Home equityHome equity [Member]		195,383			5.4	%		183,004			5.1	%
ConstructionNon-owner occupied RE [Member]		21,582			0.6	%		63,348			1.7	%
OtherOther [Member]		43,770			1.2	%		48,819			1.4	%
Total consumer loans		1,393,106			38.5	%		1,377,600			38.2	%
Total gross loans, net of deferred fees		3,619,556			100.0	%		3,602,627			100.0	%
Less—allowance for credit losses		(40,166	)					(40,682	)
Total loans, net	$	3,579,390					$	3,561,945



	September 30, 2024
(dollars in thousands)	One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	15,557		205,224		380,526		41,301		642,608
Non-owner occupied RE		103,329		512,610		281,197		20,506		917,642
Construction		30,589		64,016		50,060		-		144,665
Business		122,565		244,825		149,858		4,287		521,535
Total commercial loans		272,040		1,026,675		861,641		66,094		2,226,450
Consumer
Real estate		19,871		71,492		295,998		745,010		1,132,371
Home equity		2,810		33,445		154,758		4,370		195,383
Construction		4,514		2,500		11,601		2,967		21,582
Other		7,207		32,731		3,023		809		43,770
Total consumer loans		34,402		140,168		465,380		753,156		1,393,106
Total gross loans, net of deferred fees	$	306,442		1,166,843		1,327,021		819,250		3,619,556

					December 31, 2023
(dollars in thousands)	One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	17,358		177,203		395,130		41,966		631,657
Non-owner occupied RE		68,601		517,622		331,727		24,579		942,529
Construction		26,762		64,432		59,486		-		150,680
Business		114,432		194,416		186,927		4,386		500,161
Total commercial loans		227,153		953,673		973,270		70,931		2,225,027
Consumer
Real estate		10,593		51,956		301,095		718,785		1,082,429
Home equity		2,716		27,578		147,855		4,855		183,004
Construction		-		252		39,459		23,637		63,348
Other		11,157		33,592		3,265		805		48,819
Total consumer loans		24,466		113,378		491,674		748,082		1,377,600
Total gross loans, net of deferred fees	$	251,619		1,067,051		1,464,944		819,013		3,602,627



	September 30, 2024			December 31, 2023
		Interest Rate			Interest Rate
(dollars in thousands)		Fixed	Floating or Adjustable		Fixed	Floating or Adjustable
Commercial
Owner occupied RE	$	601,086	25,965		605,199	9,100
Non-owner occupied RE		710,377	103,936		768,048	105,880
Construction		81,430	32,646		81,326	42,592
Business		272,599	126,371		293,920	91,809
Total commercial loans		1,665,492	288,918		1,748,493	249,381
Consumer
Real estate		1,112,500	-		1,071,836	-
Home equity		10,616	181,957		11,441	168,847
Construction		17,068	-		63,348	-
Other		8,564	27,999		11,525	26,137
Total consumer loans		1,148,748	209,956		1,158,150	194,984
Total gross loans, net of deferred fees	$	2,814,240	498,874		2,906,643	444,365



															September 30, 2024
(dollars in thousands)	2024		2023		2022		2021		2020			Prior			Revolving			Revolving Converted to Term		Total
Commercial
Owner occupied RE
Pass	$	44,238		44,567		180,574		125,436		68,270			150,019			85			239		613,428
Watch		488		-		3,377		1,464		8,898			11,121			-			-		25,348
Special Mention		-		-		167		-		-			2,857			-			-		3,024
Substandard		-		-		-		-		-			808			-			-		808
Total Owner occupied RE		44,726		44,567		184,118		126,900		77,168			164,805			85			239		642,608

Non-owner occupied RE
Pass		32,690		74,224		312,722		157,108		100,908			195,151			344			-		873,147
Watch		-		959		4,568		438		1,645			11,444			-			-		19,054
Special Mention		-		-		-		7,630		-			8,938			-			-		16,568
Substandard		-		-		969		300		-			7,604			-			-		8,873
Total Non-owner occupied RE		32,690		75,183		318,259		165,476		102,553			223,137			344			-		917,642
Current period gross write-offs		-		-		-		-		-			(1,029	)		-			-		(1,029	)

Construction
Pass		18,696		30,478		76,088		19,403		-			-			-			-		144,665
Total Construction		18,696		30,478		76,088		19,403		-			-			-			-		144,665

Business
Pass		33,201		43,582		119,984		40,840		16,377			54,153			173,489			313		481,939
Watch		-		142		16,665		2,020		1,442			5,434			9,398			131		35,232
Special Mention		663		96		817		-		67			1,101			-			209		2,953
Substandard		-		-		-		143		362			309			597			-		1,411
Total Business		33,864		43,820		137,466		43,003		18,248			60,997			183,484			653		521,535
Current period gross write-offs		-		-		-		-		(347	)		(18	)		(72	)		-		(437	)
Total Commercial loans		129,976		194,048		715,931		354,782		197,969			448,939			183,913			892		2,226,450

Consumer
Real estate
Pass		61,766		150,755		287,584		270,022		163,332			159,210			-			-		1,092,669
Watch		-		760		5,573		7,472		5,488			5,525			-			-		24,818
Special Mention		-		141		2,702		1,504		988			4,816			-			-		10,151
Substandard		213		275		334		1,215		976			1,720			-			-		4,733
Total Real estate		61,979		151,931		296,193		280,213		170,784			171,271			-			-		1,132,371


	December 31, 2023
(dollars in thousands)	2023		2022			2021		2020			2019		Prior			Revolving			Revolving Converted to Term			Total
Commercial
Owner occupied RE
Pass	$	42,846		180,654			138,549		64,818			59,880		110,502			85			166			597,500
Watch		-		3,460			460		15,997			3,525		6,616			-			-			30,058
Special Mention		-		181			-		-			-		3,057			-			-			3,238
Substandard		-		-			-		-			-		861			-			-			861
Total Owner occupied RE		42,846		184,295			139,009		80,815			63,405		121,036			85			166			631,657

Non-owner occupied RE
Pass		84,617		298,063			162,697		107,364			59,260		163,990			9,249			-			885,240
Watch		1,007		3,260			9,914		533			5,545		10,630			-			-			30,889
Special Mention		-		-			7,759		-			8,252		879			-			-			16,890
Substandard		-		-			313		-			8,088		1,109			-			-			9,510
Total Non-owner occupied RE		85,624		301,323			180,683		107,897			81,145		176,608			9,249			-			942,529
Current period gross write-offs		-		(200	)		-		-			-		(42	)		-			-			(242	)

Construction
Pass		27,262		86,161			24,399		11,459			-		-			-			-			149,281
Watch		-		1,399			-		-			-		-			-			-			1,399
Total Construction		27,262		87,560			24,399		11,459			-		-			-			-			150,680

Business
Pass		48,705		134,999			48,557		18,868			17,292		47,708			146,745			1,431			464,305
Watch		127		15,867			1,833		1,010			842		3,584			7,570			506			31,339
Special Mention		241		961			98		857			184		447			150			97			3,035
Substandard		-		-			155		-			132		1,195			-			-			1,482
Total Business		49,073		151,827			50,643		20,735			18,450		52,934			154,465			2,034			500,161
Current period gross write-offs		-		-			-		(28	)		-		-			(15	)		(22	)		(65	)
Total Commercial loans		204,805		725,005			394,734		220,906			163,000		350,578			163,799			2,200			2,225,027

Consumer
Real estate
Pass		144,179		273,585			278,138		176,395			66,087		105,383			-			-			1,043,767
Watch		490		5,658			8,230		3,917			2,051		3,890			-			-			24,236
Special Mention		143		2,499			1,657		1,291			2,220		3,360			-			-			11,170
Substandard		-		-			635		817			318		1,486			-			-			3,256
Total Real estate		144,812		281,742			288,660		182,420			70,676		114,119			-			-			1,082,429

Home equity
Pass		-		-			-		-			-		-			171,003			-			171,003
Watch		-		-			-		-			-		-			6,393			-			6,393
Special Mention		-		-			-		-			-		-			4,283			-			4,283
Substandard		-		-			-		-			-		-			1,325			-			1,325
Total Home equity		-		-			-		-			-		-			183,004			-			183,004
Current period gross write-offs		-		-			-		-			-		-			(438	)		-			(438	)

Construction
Pass		14,339		39,893			9,116		-			-		-			-			-			63,348
Total Construction		14,339		39,893			9,116		-			-		-			-			-			63,348

Other
Pass		1,278		2,551			2,361		1,457			803		2,604			36,549			-			47,603
Watch		9		29			348		-			15		163			58			-			622
Special Mention		33		333			-		-			23		82			41			-			512
Substandard		-		-			75		-			-		-			7			-			82
Total Other		1,320		2,913			2,784		1,457			841		2,849			36,655			-			48,819
Current period gross write-offs		-		-			-		-			-		-			(16	)		-			(16	)
Total Consumer loans		160,471		324,548			300,560		183,877			71,517		116,968			219,659			-			1,377,600
Total loans	$	365,276		1,049,553			695,294		404,783			234,517		467,546			383,458			2,200			3,602,627
Total Current period gross write-offs		-		(200	)		-		(28	)		-		(42	)		(469	)		(22	)		(761	)



	September 30, 2024
(dollars in thousands)	Accruing 30- 59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	163		-		-		-		642,445		642,608
Non-owner occupied RE		-		-		-		7,904		909,738		917,642
Construction		-		-		-		-		144,665		144,665
Business		1,454		556		-		838		518,687		521,535
Consumer
Real estate		754		239		-		2,448		1,128,930		1,132,371
Home equity		101		-		-		393		194,889		195,383
Construction		-		-		-		-		21,582		21,582
Other		4		-		-		-		43,766		43,770
Total loans	$	2,476		795		-		11,583		3,604,702		3,619,556
Total loans over 90 days past due		-		-		-		-		-		2,073

	December 31, 2023
(dollars in thousands)	Accruing 30- 59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	74		-		-		-		631,583		631,657
Non-owner occupied RE		8,102		-		-		1,423		933,004		942,529
Construction		-		-		-		-		150,680		150,680
Business		567		-		-		319		499,275		500,161
Consumer
Real estate		1,750		-		-		985		1,079,694		1,082,429
Home equity		601		30		-		1,236		181,137		183,004
Construction		-		-		-		-		63,348		63,348
Other		25		25		-		-		48,769		48,819
Total loans	$	11,119		55		-		3,963		3,587,490		3,602,627
Total loans over 90 days past due		-		-		-		-		-		1,300


	September 30, 2024								December 31, 2023
	Nonaccrual		Nonaccrual				Nonaccrual		Nonaccrual
	loans		loans		Total		loans		loans		Total
	with no		with an		nonaccrual		with no		with an		nonaccrual
(dollars in thousands)	allowance		allowance		loans		allowance		allowance		loans
Commercial
Non-owner occupied RE	$	5,432		2,472		7,904	$	653		770		1,423
Business		-		838		838		164		155		319
Total commercial		5,432		3,310		8,742		817		925		1,742
Consumer
Real estate		1,735		713		2,448		-		985		985
Home equity		318		75		393		343		893		1,236
Total consumer		2,053		788		2,841		343		1,878		2,221
Total nonaccrual loans	$	7,485		4,098		11,583	$	1,160		2,803		3,963

Schedule of nonperforming assets

(dollars in thousands)	September 30, 2024			December 31, 2023
Nonaccrual loans	$	11,583			3,963
Other real estate owned		-			-
Total nonperforming assets	$	11,583			3,963
Nonperforming assets as a percentage of:
Total assets		0.28	%		0.10	%
Gross loans		0.32	%		0.11	%
Total loans over 90 days past due	$	2,073			1,300
Loans over 90 days past due and still accruing		-			-

Schedule of activity related to the allowance for credit losses

							Three months ended September 30, 2024
	Commercial																			Consumer
(dollars in thousands)	Owner occupied RE		Non- owner occupied RE		Construction		Business			Real Estate		Home Equity			Construction		Other			Total
Balance, beginning of period	$	5,467		10,562		1,331		7,236			12,397		2,479			278		407			40,157
Provision for credit losses for loans		-		-		-		-			-		-			-		-			-
Loan charge-offs		-		-		-		(72	)		-		(45	)		-		(1	)		(118	)
Loan recoveries		-		-		-		73			-		4			-		50			127
Net loan recoveries (charge-offs)		-		-		-		1			-		(41	)		-		49			9
Balance, end of period	$	5,467		10,562		1,331		7,237			12,397		2,438			278		456			40,166
Net recoveries to average loans (annualized)																					0.00	%
Allowance for credit losses to gross loans																					1.11	%
Allowance for credit losses to nonperforming loans																					346.78	%



									Three months ended September 30, 2023
	Commercial																						Consumer
(dollars in thousands)	Owner occupied RE		Non-owner occupied RE			Construction			Business			Real Estate		Home Equity			Construction			Other			Total
Balance, beginning of period	$	5,896		11,584			1,331			8,152			10,395		2,521			684			542			41,105
Provision for credit losses for loans		300		(247	)		(34	)		(148	)		191		(20	)		(102	)		(40	)		(100	)
Loan charge-offs		-		(1	)		-			(42	)		-		-			-			-			(43	)
Loan recoveries		-		154			-			13			-		2			-			-			169
Net loan recoveries (charge-offs)		-		153			-			(29	)		-		2			-			-			126
Balance, end of period	$	6,196		11,490			1,297			7,975			10,586		2,503			582			502			41,131
Net recoveries to average loans (annualized)																								(0.01	)%
Allowance for credit losses to gross loans																								1.16	%
Allowance for credit losses to nonperforming loans																								953.25	%



										Nine months ended September 30, 2024
	Commercial												Consumer
(dollars in thousands)	Owner occupied RE			Non-owner occupied RE			Construction			Business			Real Estate		Home Equity			Construction			Other			Total
Balance, beginning of period	$	6,118			11,167			1,594			7,385			10,647		2,600			677			494			40,682
Provision for credit losses for loans		(651	)		424			(263	)		190			1,750		(244	)		(399	)		(57	)		750
Loan charge-offs		-			(1,029	)		-			(437	)		-		(45	)		-			(80	)		(1,591	)
Loan recoveries		-			-			-			99			-		127			-			99			325
Net loan recoveries (charge-offs)		-			(1,029	)		-			(338	)		-		82			-			19			(1,266	)
Balance, end of period	$	5,467			10,562			1,331			7,237			12,397		2,438			278			456			40,166
Net charge-offs to average loans (annualized)																									0.05	%
Allowance for credit losses to gross loans																									1.11	%
Allowance for credit losses to nonperforming loans																									346.78	%


								Nine months ended September 30, 2023
	Commercial																					Consumer
(dollars in thousands)	Owner occupied RE		Non- owner occupied RE			Construction		Business			Real Estate		Home Equity			Construction			Other			Total
Balance, beginning of period	$	5,867		10,376			1,292		7,861			9,487		2,551			893			312			38,639
Provision for credit losses for loans		329		1,138			5		120			1,099		278			(311	)		192			2,850
Loan charge-offs		-		(209	)		-		(43	)		-		(389	)		-			(2	)		(643	)
Loan recoveries		-		185			-		37			-		63			-			-			285
Net loan recoveries (charge-offs)		-		(24	)		-		(6	)		-		(326	)		-			(2	)		(358	)
Balance, end of period	$	6,196		11,490			1,297		7,975			10,586		2,503			582			502			41,131
Net charge-offs to average loans (annualized)																							0.01	%
Allowance for credit losses to gross loans																							1.16	%
Allowance for credit losses to nonperforming loans																							953.25	%



					September 30, 2024
	Real		Business
(dollars in thousands)	estate		assets		Other		Total
Commercial
Non-owner occupied RE	$	7,240		-		-		7,240
Business		461		234		-		695
Total commercial		7,701		234		-		7,935
Consumer
Real estate		1,891		-		-		1,891
Home equity		393		-		-		393
Total consumer		2,284		-		-		2,284
Total	$	9,985		234		-		10,219



	Three months ended September 30,
(dollars in thousands)	2024			2023
Balance, beginning of period	$	1,406			2,565
Provision for (reversal of) credit losses		-			(400	)
Balance, end of period	$	1,406			2,165
Unfunded Loan Commitments	$	699,888			780,581
Reserve for Unfunded Commitments to Unfunded Loan Commitments		0.20	%		0.28	%


	Nine months ended September 30,
(dollars in thousands)	2024			2023
Balance, beginning of period	$	1,831			2,780
Provision for (reversal of) credit losses		(425	)		(615	)
Balance, end of period	$	1,406			2,165
Unfunded Loan Commitments	$	699,888			780,581
Reserve for Unfunded Commitments to Unfunded Loan Commitments		0.20	%		0.28	%



			September 30, 2024
				Fair Value
(dollars in thousands)	Notional		Balance Sheet Location	Asset/(Liability)
Derivatives designated as hedging instruments:
Fair value swap Fair value swap [Member]	$	300,000	Other liabilities	$	(3,063	)

Derivatives not designated as hedging instruments:
Mortgage loan interest rate lock commitments		28,937	Other assets		354
MBS forward sales commitments MBS forward sales commitments [Member]		19,000	Other liabilities		(48	)
Total derivative financial instruments	$	347,937		$	(2,757	)



	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2024			2023			2024			2023
Gain (loss) on fair value hedging relationship:
Hedged asset/liability	$	3,063			6,250		$	3,063			6,250
Fair value derivative designated as hedging instrument		(2,962	)		(6,251	)		(2,973	)		(6,285	)
Total gain (loss) recognized in interest income on loans	$	101			(1	)	$	90			(35	)

	Level 1 – Quoted market price in active markets
	Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include certain debt and equity securities that are traded in an active exchange market.

	Level 2 – Significant other observable inputs
	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include fixed income securities and mortgage-backed securities that are held in the Company’s available-for-sale portfolio and valued by a third-party pricing service, as well as certain individually evaluated loans.



			September 30, 2024
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale
Corporate bonds	$	-		1,947		-		1,947
US treasuries		-		924		-		924
US government agencies		-		16,686		-		16,686
State and political subdivisions		-		20,023		-		20,023
Asset-backed securities		-		34,265		-		34,265
Mortgage-backed securities		-		60,752		-		60,752
Mortgage loans held for sale		-		8,602		-		8,602
Mortgage loan interest rate lock commitments		-		354		-		354
Total assets measured at fair value on a recurring basis	$	-		143,553		-		143,553
Liabilities
Derivative liability		-		3,063		-		3,063
MBS forward sales commitments		-		48		-		48
Total liabilities measured at fair value on a recurring basis	$	-		3,111		-		3,111



	As of September 30, 2024
(dollars in thousands) Level 1 [Member]	Level 1		Level 2		Level 3		Total
Assets
Individually evaluated loans Level 2 [Member]	$	-		8,954		1,812		10,766
Total assets measured at fair value on a nonrecurring basis	$	-		8,954		1,812		10,766

	As of December 31, 2023
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Individually evaluated loans Level 3 [Member]	$	-		1,160		2,976		4,136
Total assets measured at fair value on a nonrecurring basis	$	-		1,160		2,976		4,136


	Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Individually evaluated loans	Appraised Value/ Discounted Cash Flows	Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal	0-25%



					September 30, 2024
(dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Other investments, at cost	$	19,640		19,640		-		-		19,640
Loans¹		3,567,000		3,302,316		-		-		3,302,316
Financial Liabilities:
Deposits		3,518,825		3,348,532		-		3,348,532		-
Subordinated debentures		24,903		28,200		-		28,200		-



	Operating
(dollars in thousands)	Leases
2024	$	531
2025		2,157
2026		2,210
2027		2,267
2028		2,015
Thereafter		20,187
Total undiscounted lease payments		29,367
Discount effect of cash flows		5,777
Total lease liability	$	23,590