SFST

Southern First is a $4.40B-asset South Carolina regional bank whose FY2025 earnings snapped back hard: net income jumped +95.5% to $30.4M and diluted EPS +94.8% to $3.72, recovering from the 2023–24 trough ($13.4M then $15.5M) that a squeezed net interest margin inflicted on the whole small-bank group. Operating cash flow ($30.5M, +19.2%) corroborates the reported earnings, capex is negligible ($581K), and the auditor (Elliott Davis) issued an unqualified opinion on both statements and internal controls — so the numbers are clean, not an accrual mirage. Balance sheet is sound: equity grew +11.6% to $369M, retained earnings +13.7% to $251M, and cash ballooned +65.5% to $270M, giving a real liquidity cushion. The ~10.9x liabilities/equity ratio looks scary out of context but is normal bank leverage (deposits fund the book).

The catch is quality and price. Even after the profit doubling, ROE is only 8.2% — below the ~10-12% a well-run bank earns and below a reasonable cost of equity, meaning the franchise is not yet creating much economic value per dollar of capital. Against that, the stock trades at 16.4x earnings and roughly 1.37x book value ($44.84/share book vs. $61.19 price). Paying ~1.4x book for an 8% ROE bank is full: the market is already capitalizing a continued margin recovery. Note the provided 'revenue' of $6.28M, 483% 'net margin' and 80x P/S are artifacts of a fee-only XBRL tag (RevenueFromContractWithCustomerIncludingAssessedTax) that omits net interest income — they are not usable for a bank, so I anchor on EPS, ROE, book value and P/E instead.