UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

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Southern First Bancshares, Inc.

(Name of Registrant as Specified inIn Its Charter)

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SOUTHERN FIRST BANCSHARES, INC.

100
6
Verdae Boulevard Suite 100

| Greenville, South Carolina 29607

Notice of Annual Meeting of Shareholders

[PRELIMINARY PROXY STATEMENT]

To Be Held on May 21, 2024

Dear Fellow Shareholder:

We cordially invite you to attend the 20092024 Annual Meeting of Shareholders (the “Annual Meeting”) of Southern First Bancshares, Inc. (the “Company” or “Southern First”), the holding company for Southern First Bank.Bank (the “Bank”). At the meeting, we will report on our performance in 20082023 and answer your questions. We are excited about our accomplishments in 2008 and look forward to discussing both our accomplishments and our future plans with you. We hope that you can attend the meeting and look forward to seeing you there.

This letter serves as your official notice that we will hold the meeting on May 19, 200921, 2024 at The Poinsett Clubthe Bank’s principal executive office located at 807 East Washington Street,6 Verdae Boulevard, Greenville, South Carolina, at 5:00 p.m.9:30 a.m. Eastern Standard Time, for the following purposes:

1.                   To elect three members to the Board of Directors;

2.                   To vote on an advisory, non-binding resolution approving the compensation of the Company’s named executive officers as determined by the Compensation Committee and the Board of Directors; and

3.                   To transact any other business that may properly come before the meeting or any adjournment of the meeting.

1.To elect four directors to serve a one-year term;
2.To approve an amendment to the Articles of Incorporation of Southern First Bancshares, Inc. to increase the number of authorized shares of common stock to 20,000,000;
3.To approve an amendment to the Southern First Bancshares, Inc. 2020 Equity Incentive Plan to extend its term for an additional three years;
4.To approve the compensation of our named executive officers as disclosed in the accompanying proxy statement (this is a non-binding, advisory vote);
5.To ratify the appointment of Elliott Davis, LLC as our independent registered public accountant for the year ending December 31, 2024; and
6.To transact any other business that may properly come before the meeting or any adjournment of the meeting.

Shareholders owning our common stock at the close of business on March 23, 200922, 2024 are entitled to attend and vote at the meeting.Annual Meeting. The enclosed proxy statement and proxy are first being sent to our shareholders on or about April 8, 2024. A complete list of these shareholders will be available at the company’sour offices prior to the meeting. If your shares are held in “street name,” you will need to obtain a proxy form from the institution that holds your shares in order to vote at our annual meeting.

In making your own decision regarding whether to attend the annual meeting, we advise our shareholders to take into account the current health environment and the risks to your personal health and the health of others. You have a number of ways to vote (mail-in proxy, on-line or telephone) in addition to voting by ballot if you are present in person at the meeting, and we encourage you to use them.

Important Notice of Internet Availability. This proxy statement and the Annual Report on Form 10-K for the year ended December 31, 2023 are available to the public for viewing on the Internet at http://www.edocumentview.com/sfst. Directions to the annual meeting can be obtained by contacting Ms. Elizabeth Smeak at 864.679.9000.

Please use this opportunity to take part in the affairs of your company by voting on the business to come before this meeting. Even if you plan to attend the meeting, we encourage you to complete and return the enclosed proxy to us as promptly as possible.  

By order of the Board of Directors,
 
Greenville, South Carolina
April 8, 2024
R. Arthur Seaver, Jr.
Chief Executive Officer

 

                                               ��                                                                                                                        By order of the Board of Directors,

                                                                                                                                                                          ;

                                                                                                                                                                         R. Arthur Seaver, Jr.

                                                                        Chief Executive Officer

Greenville, South Carolina

[April 8, 2009]


 

[PRELIMINARY PROXY STATEMENT]

SOUTHERN FIRST BANCSHARES, INC.


100 Verdae Boulevard, Suite 100


Greenville, South Carolina 29607

Proxy Statement for Annual Meeting of


Shareholders to be Held on May 19, 2009
21, 2024

Our boardBoard of directorsDirectors is soliciting proxies for the 20092024 Annual Meeting of Shareholders. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. We encourage you to read it carefully.

Voting InformationIn this proxy statement, “we,” “us,” “our,” “Southern First,” or the “Company” refer to Southern First Bancshares, Inc., the “Bank” refers to Southern First Bank, and “you” and “your” refer to each shareholder of Southern First Bancshares, Inc.

VOTING INFORMATION

The boardRecord Date; Shares Outstanding

Our Board of Directors set March 23, 200922, 2024 as the record date for the meeting. Shareholders owning our common stock at the close of business on that date are entitled to attend and vote and to attendat the meeting, with each share entitled to one vote. If you are a registered shareholder who wishes to vote at our annual meeting, you may do so by delivering your proxy card in person at the meeting.  “Street name” shareholders who wish to vote at our annual meeting will need to obtain a proxy form from the institution that holds their shares.  There were 3,044,6838,156,109 shares of common stock outstanding on the record date.  A majority of the outstanding shares of common stock entitled to vote at the meeting will constitute a quorum. We will count abstentions and broker non-votes, which are described below,

Shares Held in determining whether a quorum exists.Street Name

Many of our shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. If you hold our shares in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and these materials are being forwarded to you by your broker or nominee, which is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares as you decide and are also invited to attend the annual meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the meeting unless you obtain a signed proxy from the shareholder of record giving you the right to vote the shares. Your broker or nominee has enclosed or provided a voting instruction card for you to use to direct your broker or nominee how to vote these shares.

Quorum and Adjournment

A majority of the outstanding shares of common stock represented at the meeting will constitute a quorum. If a share is represented for any purpose at the meeting by the presence of the registered owner or a person holding a valid proxy for the registered owner, it is deemed to be present for the purposes of establishing a quorum. Therefore, valid proxies which are marked "Abstain" or "Withhold" or as to which no vote is marked, including proxies submitted by brokers who are the record owners of shares but who lack the power to vote such shares (so-called "broker non-votes"), will be included in determining the number of votes present or represented at the meeting. If a quorum is not present or represented at the meeting, the shareholders entitled to vote, present in person or represented by proxy, have the power to adjourn the meeting from time to time until a quorum is present or represented. If any such adjournment is for a period of less than 30 days, no notice, other than an announcement at the meeting, is required to be given of the adjournment. If the adjournment is for 30 days or more, notice of the adjourned meeting will be given in accordance with our Bylaws. Our directors, officers and employees may solicit proxies for the reconvened meeting in person or by mail, telephone or other means. At any such reconvened meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. Once a quorum has been established, it will not be destroyed by the departure of shares prior to the adjournment of the meeting.

Required Vote

Provided a quorum is established at the annual meeting, directors will be elected by a plurality of the votes cast at the meeting. Shareholders of the Company do not have cumulative voting rights in the election of directors. The proposal to amend our Articles of Incorporation to increase the number of authorized shares of common stock requires the approval of two-thirds of the votes entitled to be cast on the proposal. Abstentions and broker non-votes will have the effect of a vote “against” this proposal. The proposal to amend our 2020 Equity Incentive Plan requires the approval of a majority of the shares having voting power, present in person or represented by proxy (meaning that of the shares represented at the meeting and entitled to vote, a majority of them must be voted “for” the proposal of it be approved). Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal. Other matters to be considered and acted upon at the meeting, including (i) the proposal to approve, as a non-binding advisory vote, the compensation of our named executive officers and (ii) the proposal to ratify, as a non-binding advisory vote, the appointment of Elliott Davis, LLC (“Elliott Davis”) as our independent registered public accountant for the year ending December 31, 2024, require that the votes cast in favor of the matter exceed the number of votes cast against or abstain with respect to the matter, provided a quorum has been established. Broker non-votes and the failure to return a signed proxy will have no effect on the outcome of such matters.

Stockbrokers are generally permitted by their regulatory authorities to vote shares held by them for their customers on matters considered by the regulatory authorities to be routine, even if the stockbrokers have not received voting instructions from their customers. If the regulatory authorities do not consider a matter routine, then a stockbroker is generally prohibited from voting a customer’s shares on the matter unless the customer has given voting instructions on that matter to the stockbroker. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions ONLY with respect to the ratification of our independent registered public accountant – but not with respect to any of the other proposals to be voted on at the annual meeting. Because the proposals to elect directors, to amend our Articles of Incorporation to increase the number of authorized shares of common stock, to amend our 2020 Equity Incentive Plan, and to approve, as a non-binding advisory vote, the compensation of our named executive officers are not considered to be routine matters, it is important that you provide instructions to your bank or broker if your shares are held in street name so that your vote with respect to these matters is counted. Stockbrokers and banks holding shares for their customers will not have the ability to cast votes with respect to these matters unless they have received instructions from their customers. Your stockbroker or bank will not vote on these non-routine matters if you do not give voting instructions with respect to these matters.

Appointed Proxies

When you sign the enclosed proxy card, you appoint James B. Orders, III and Fred Gilmer, Jr.Andrew B. Cajka as your representatives at the meeting. Mr. Orders and Mr. GilmerCajka will vote your proxy as you have instructed them on the proxy card. If you submit a proxy but do not specify how you would like it to be voted, Mr. Orders and Mr. GilmerCajka will vote your proxy for“FOR” the election to the board of directors of all nominees listed below under “Election of Directors” andDirectors,” “FOR” the amendment to our Articles of Incorporation to increase the number of authorized shares of common stock, “FOR” the amendment to our 2020 Equity Incentive Plan to extend its term for an additional three years, “FOR” the non-binding advisory resolution approvingto approve the compensation of the Company’sour named executive officers as determined bydisclosed in this proxy statement, and “FOR” the compensation committee and the boardratification of directors.  We are not aware of any other matters to be considered at the meeting.  However,our independent registered public accountant. In addition, if any other matters come before the meeting, Mr. Orders and Mr. GilmerCajka will vote your proxy on such matters in accordance with their judgment.

Revocability of Proxies and Changes to Your Vote

A majority or moreIf you are a shareholder of the outstandingrecord (i.e., you hold your shares directly instead of common stock entitled to vote at the meeting will constitutethrough a quorum.  We will include abstentions and broker non-votes in determining whether a quorum exists.  Assuming in each case that a quorum is present: 

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Youbrokerage account), you may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this by signing and delivering another proxy with a later date or by voting in person at the meeting. Brokers whoIf you hold your shares for the accountsthrough a brokerage account, you must contact your brokerage firm to revoke your proxy.

Solicitation of their clients may vote these shares either as directed by their clients or in their own discretion if permitted by the exchange or other organization of which they are members.  Proxies that brokers do not vote on some proposals but that they do vote on others are referred to as "broker non-votes" with respect to the proposals not voted upon.  A broker non-vote does not count as a vote in favor of or against a particular proposal for which the broker has no discretionary voting authority.  In addition, if a shareholder abstains from voting on a particular proposal, the abstention does not count as a vote in favor of or against the proposal.

We are paying for the costs of preparing and mailing the proxy materials and of reimbursing brokers and others for their expenses ofin forwarding copies of the proxy materials to our shareholders. Upon written or oral request, we will promptly deliver a separate copy of our annual report, our annual report on Form 10-K, or this proxy statement to our shareholders at a shared address to which a single copy of the document was delivered.Our directors, officers and employees may assist in soliciting proxies but will not receive additional compensation for doing so.

so. We are distributing this proxy statement on or about [April 8, 2009].2

 

Important NoticeAvailability of Internet Availability.Information  The proxy statement, 2008

Our 2023 Annual Report to Shareholders on Form 10-K, including financial statements and financial statement schedules, but not the exhibits to the Form 10-K, and the enclosed annual report overview2024 Notice of Annual Meeting and Proxy Statement are available on the following website, http://www.edocumentview.com/sfst or through the U.S. Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. This information may be obtained without charge upon written request to Southern First Bancshares, Inc. Please direct your requests to Southern First Bancshares, Inc., P.O. Box 17465, Greenville, South Carolina 29606, Attention: Corporate Secretary. Copies of exhibits to the public for viewing onForm 10-K may be requested at the Internet at cost of 30 cents per page from the Company.

http:// www.cfpproxy.com/6431.  Householding of Proxy MaterialsDirections

Only one copy of our proxy materials is being delivered to two or more shareholders who share an address unless we have received contrary instructions from one or more of the Annual Meeting can be obtained by contacting Ms. Ellen Kish at 864.679.9000.

Upon written or oralholders. However, upon request by any shareholder, we will deliver a copyone or more additional copies of our Form 10-K, this proxy statement and the enclosed annual report overviewour 2023 Annual Report on Form 10-K to our shareholders at a shared address to which a single copy of the documentdocuments was delivered. Accordingly, shareholders should contact us either by phone at 864.679.9000 or in writing to Southern First Bancshares, Inc., P.O. Box 17465, Greenville, South Carolina 29606, Attention: Corporate Secretary, if they wish to receive any additional copies of our proxy materials. Shareholders who share an address and are currently receiving multiple copies of our proxy materials may contact us at the same phone number or address if they wish to receive a single copy of our proxy materials in the future.

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PROPOSAL NO. 1:
ELECTION OF DIRECTORS

Proposal No. 1:

ElectionAt the 2023 annual meeting of Directors

The Boardshareholders, our shareholders approved an amendment to the Articles of Directors is divided into three classes with staggered terms, so thatIncorporation to phase out the termsclassified structure of only approximately one-thirdour board of directors. Per the board members expire at each annual meeting. The current terms ofsuch amendment, for this Annual Meeting in 2024, the Class I directors will expireup for election would be elected for a one-year term and at this Annual Shareholders Meeting.  The termsthe 2025 annual meeting of shareholders the Class I and Class II directors expireup for election would be elected for a one-year term. Thereafter, at the 2010 Annual Shareholders Meeting.  The2026 annual meeting of shareholders, the entire board of directors would be elected to one-year terms, thereby eliminating the classified structure of the Class III directors will expire at the 2011 Annual Shareholders Meeting.our board of directors. Our current directors and their classes are:

Class I

I*

Class IIClass III
Mark A. Cothran

Leighton M. CubbageAndrew B. Cajka
Rudolph G. Johnstone, III, M.D.

David G. EllisonAnne S. Ellefson
R. Arthur Seaver, Jr.

Class II

Leighton M. Cubbage

David G. Ellison

Terry Grayson-CaprioTecumseh Hooper, Jr.
Anna T. LockeJames B. Orders, III

Ray A. Lattimore
William B. Sturgis

Class III

Andrew B. Cajka

Anne  S. Ellefson

Fred Gilmer, Jr.

Tecumseh Hooper, Jr.

A. Maner, IV

*Standing for re-election at this annual meeting.

                ShareholdersAt the Annual Meeting, shareholders will elect threefour nominees as Class I directors at the meeting to serve a three-yearone-year term, expiring at the 2012 Annual Meeting of Shareholders.in 2025. The directors will be elected by a plurality of the votes cast at the meeting.  Thismeeting, which means that the threefour nominees receiving the highest number of votes will be elected. Shareholders do not have cumulative voting rights with respect to the election of directors.

The Board of Directors recommends that you elect Mark A. Cothran, Rudolph G. Johnstone, III, M.D. and R. Arthur Seaver, Jr. as Class I directors.

If you submit a proxy but do not specify how you would like it to be voted, Mr. Orders and Mr. GilmerCajka will vote your proxy to elect Messrs.Mr. Cothran, Dr. Johnstone, Mr. Seaver and Seaver.Ms. Locke as Class I directors. If any of these nominees isare unable or failsfail to accept nomination or election (which we do not anticipate), Mr. Orders and Mr. GilmerCajka will vote instead for a replacement to be recommended by the board of directors, unless you specifically instruct otherwise in the proxy.

The Board of Directors unanimously recommends that you vote “FOR” the election of Mark A. Cothran, Rudolph G. Johnstone, III, M.D., R. Arthur Seaver, Jr., and Anna T. Locke as Class I directors.

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Biographical Information for Each Nominee for Director

Set forth below is certain information about the Class Icurrent nominees, each of whom is also a director of our subsidiary, Southern First Bank:the Bank.

Mark A. Cothran 51,66, Class I director, has served as director of the Company since 1999. Mr. Cothran is the president and owner of Cothran Properties, LLC, a private real estate development company in Greenville, South Carolina.  HeCarolina, and he has been with Cothran Properties, LLC since 1986. Mr. Cothran received his bachelor’s degree in finance and banking from the University of South Carolina in 1980 and is a licensed real estate broker in the State of South Carolina. He currently serveshas served on the Tax and Legislative Committee and the National Business Park Forum of the National Association of Industrial and Office Properties (NAIOP) for which he is also the past chairman. He is also the immediate past president of the state chapter of NAIOP. He has served on the board of directors of the Greenville Chamber of Commerce, the Chamber of Commerce’s Economic Development Board, and on the Advisory Board of Greenville National Bank. He currently serves onBank, and the board of directors of General Wholesale Distributors, Inc. and Long Focus Capital Management, LLC. His extensive experience in real estate and development activities, along with his long-term ties to our local community, provide him with a valuable understanding of the key markets we serve.

Rudolph G. “Trip” Johnstone, III, M.D., 48,63, Class I director, has served as a director of the Company since 1999. Dr. Johnstone is a physician who has practiced with Allergy Partners of the Cross Creek Asthma, Allergy, and Immunology medical clinicUpstate since 1992. He graduated from Washington & Lee University in 1982 with a degree in biology and from the Medical University of South Carolina in 1986. Dr. Johnstone served on the consultingadvisory board to Greenville National Bank from 1995 until 1998. He isserves on the board of directors of Allergy Partners, PA and is a past president of the Southeastern Asthma, Allergy, and Immunology Society. Dr. Johnstone has an extensive knowledge of and a connection to the medical community, a targeted market for the bank, which enhances his ability to contribute to the Company as a director.

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R. Arthur “Art” Seaver, Jr., 45,60, Class I director, is the chief executive officer ofhas served as our company and our bank.Chief Executive Officer since 1999. He has over 2237 years of banking experience. From 1986 until 1992, Mr. Seaver held various positions with The Citizens & Southern National Bank of South Carolina. From 1992 until February 1999, he was with Greenville National Bank, which was acquired by Regions Bank in 1998. He was the senior vice president in lending and was also responsible for managing Greenville National Bank’s deposit strategies prior to leaving to form Greenville Firstthe Bank. Mr. Seaver is a 1986 graduate of Clemson University with a bachelor’s degree in financial management and a 1999 graduate of the BAI Graduate School of Community Bank Management. He currently serves on the Board of Directors for the Phillis Wheatly Community Center in Greenville, South Carolina. He previously served as a member of the Community Depository Institutions Advisory Council of the Federal Reserve Bank of Richmond. He is currently ona past member of the board of the Palmetto Society for the United Way, and the St. Francis Foundation, and is past Chairmanchairman of the Community Bankers Council ofBoard for the South Carolina Bankers Association.  Past organizations thatAssociation and past chair of the United Way of Greenville County Board of Trustees. In addition, he has worked with includeorganizations including the United Way of Greenville County, Leadership Greenville, the Greenville Chamber of Commerce, the South Carolina Network of Business and Education Partnership, Junior League, Junior Achievement, the Greenville Convention and Visitors Bureau, the United Way, and the First Presbyterian Church.Church in Greenville. Mr. Seaver’s experience in banking and vision for our company give him the leadership and consensus building skills that provide significant insight and expertise to the board. In addition, his involvement with various local and nonprofit organizations provides him with a valuable understanding of the communities we serve.

Anna T. Locke, 47, Class I director, has served as director of the Company since 2018. Ms. Locke is the president and owner of A.T. Locke, PC, an outsourced accounting management company. Prior to starting her own business in 2004, Ms. Locke was with Elliott Davis, a regional accounting firm headquartered in Greenville, South Carolina. Ms. Locke is a 1998 magna cum laude graduate of Clemson University and a certified public accountant. Ms. Locke is a past member of Vistage International and the Accounting Advisory Committees for both Greenville Technical College and Clemson University and former Treasurer of InnoVision Awards Organization. Ms. Locke has previously served on the board for the Center for Developmental Services, NEXT School, Certified Development Corporation of South Carolina, the Greater Greer Chamber of Commerce and Friends of the Guardian ad Litem. Ms. Locke’s financial expertise and experience with various local businesses and non-profit organizations provide her with a valuable perspective as director.

Our Other Directors

Set forth below is also information about our other directors each of the company's other directors and each of its executive officers.  Each of the following directorswhom is also a director of our subsidiary bank.the Bank.

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Andrew B. Cajka

James M. “Jim” Austin,, 64, Class III 52, is an executive vice president and the chief financial officer of our company and the bank.  Hedirector, has over 30 years of experience in the financial services industry.  From 1978 to 1983, Mr. Austin was employed by KPMG Peat Marwick, specializing in bank audits.  Mr. Austin was employed from 1983 to 1995 with American Federal Bankserved as controller and senior vice president.  From 1995 until 1997, Mr. Austin was the senior vice president and chief financial officer of Regional Management Corporation, and from December 1997 until June 1999, he was thea director of corporate finance for HomeGold Financial, Inc.the Company since 1999. Mr. Austin is a 1978 graduate of the University of South Carolina with degrees in both accounting and finance.  He is also a Certified Public Accountant and graduate of the University of Georgia’s Executive Management’s Savings Bank program.  In addition, he is a graduate of Leadership Greenville.  He has served on the community boards of River Place Festival, Junior Achievement, and Pendleton Place, and he is the past president of the Financial Manager’s Society of South Carolina and former board member of the Young Manager’s Division of the Community of Financial Institutions of South Carolina.  He is past chairman of the board of directors for the Center for Development Services.  He is active in the First Presbyterian Church and a current board member of the Greenville Free Medical Clinic.  Mr. Austin is the past chairman and current vice chairman of Fidelity’s National User Group board of directors.

Gwen G. Bridges, 47, is an executive vice president and risk management officer of our bank.She has over 19 years of banking experience.  From 1984 to 1985 Ms. Bridges was employed by Ernst and Young.  From 1985 to 1999 she worked in the banking and financial services industry, serving in various accounting and finance roles.  Prior to joining the bank, she was Vice President and Treasurer of Regional Management Corporation.  Ms. Bridges is a 1984 graduate of Clemson University with a bachelor’s degree in Accounting.  She has also completed the South Carolina Bankers School.  She currently serves on the Women in Banking Committee of the United Way.

Andrew B. Cajka 49, Class III director, is the founder and president of Southern Hospitality Group, LLC, a private hotel management and development company in Greenville, South Carolina. Prior to starting his own business, Mr. Cajka was a managing member of Hyatt Hotels Corporation from 1986 until 1998. He is a 1982 graduate of Bowling Green State University. In 2022 he received the designation of Honorary Alumnus of Clemson University and was awarded the 2020 South Carolina Hotelier of the year. He currently serves as viceis a past chairman of the board for St. Joseph’s High School, asClemson University Research Foundation. He is also an executive member of the One Spartanburg Chamber Board of Directors and Chairman of the Spartanburg Tourism Council. He is a past chairman of the Greenville County Research and Technology Development board, and as a board member for the Metropolitan Arts Council,past chairman of Visit Greenville SC and the Red Cross. HeConvention and Visitors Bureau, past chairman of the Greenville Tech Hospitality Board, and past vice chairman of the board for St. Joseph’s High School. Mr. Cajka is a previousan active board member of the BMW Nationwide Tournament advisory board. Mr. CajkaCharity Golf Tournament. He has served as a board member of the Urban League, Upstate Red Cross, the Metropolitan Arts Council and the Thornblade Board of Governors. Additionally, Mr. Cajka previously served on the board of directors for the Greenville Chamber of Commerce and is past president of the downtown area council, as well as past chairman of Greenville Hospital Foundation Board and past chairman of the Children’s Hospital. HeMr. Cajka has substantial development and management experience in the hospitality industry and is extensively involved in the local community, both of which enhance his ability to serve as a past chairman and present treasurerdirector.

Leighton M. Cubbage, 71, Class II director, has served as director of the Greenville ConventionCompany since 1999. Mr. Cubbage is the co-founder and Visitors Bureau and past chairman of the Greenville Tech Hospitality Board. 

Leighton M. Cubbage, 56, Class II director,Allie Capital and Serrus Capital Partners, both private real estate investment companies. Previously, he was the co-founder, president, and chief operating officer of Corporate Telemanagement Group in Greenville, South Carolina from 1989 until 1995. Since 1995, Mr. Cubbage has been a private investor maintaining investment interests in a real estate company, a weekly newspaper and car dealerships, and an electric hybrid trucking company.dealerships. He is a 1977 graduate of Clemson University with a bachelor’s degree in political science. Mr. Cubbage waspreviously served as chairman of the Greenville Hospital System board of trustees, and was a former member of the Greenville Technical College Foundation Board. He currently servesBoard and has served on the board of directors of the Greenville Chamber of Commerce.Commerce, Clemson Spiro College of Entrepreneurship and Homes of Hope. Mr. Cubbage was chosen by the South Carolina Governor as Chairman of the South Carolina Venture Capital Authority and was inducted into the Clemson University Spiro Entrepreneurial Institute Hall of Fame in 2011. In 1993, he graduated from the University of North Carolina at Chapel Hill’s Advanced Management Program. Mr. Cubbage’s leadership experience, extensive knowledge of the technology industry and corporate management enhance his ability to contribute to the Company as a director.

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Anne S. Ellefson, 54,69, Class III director, has served as a director of the Company since 2001. Mrs. Ellefson is an attorney and in 2020 retired from her position as Vice President-Deputy General Counsel at Prisma Health, a not-for-profit health organization, having been with Prisma Health, and its predecessor, Greenville Health System, since 2014. She was formerly a shareholder with Haynsworth Sinkler Boyd, P.A., where she has practiced law since 1979.from 1979 through 2013. Mrs. Ellefson is a 1976 graduate of the University of South Carolina where she received a bachelor’s degree and a 1979 graduate of the University of South Carolina School of Law. Mrs. Ellefson previously served on advisory boards at both United Carolina Bank and BB&T.&T Bank. She is a past chairman of the Greater Greenville Chamber of Commerce and the United Way of Greenville County and currently servesformerly served on the Board of Directors of the South Carolina Chamber of Commerce andCommerce. She served as a member of the Board of Governors of the South Carolina Bar (where she also served as President), was President of the Board of Directors of the South Carolina Educational Television Endowment.Endowment, and served as chair of South Carolina Technology & Aviation Center (SCTAC). She currently serves as chair of the Hollingsworth Fund and Verdae Development, Inc. and is also the past President of the South Carolina Bar Foundation. In addition, she serves on the board of the Greenville Local Development Corporation. Mrs. Ellefson has extensive legal experience, with a specialization in real estate, and significant leadership activities in local and state chamber and other development organizations, all of which give her useful insights and a valuable understanding of the key markets we serve.

David G. Ellison, 59,74, Class II director, has beenserved as director of the Company since 2001. Mr. Ellison is currently a Wealth Management Advisor with Northwestern Mutual, where he retired as managing director in 2010, after 28 years of Northwestern Mutual Financial Network since 1983.service in that role. Mr. Ellison is a 1972 graduate of Furman University where he received a bachelor’s degree and a 1976 graduate of the Clemson-Furman University Program where he received a mastermaster’s in business administration. Mr. Ellison is serving a third term on the board of trusteesserves as an Emeritus Trustee of Furman University, where he is also a former board chair. He is a past president of both the Furman Alumni Association and Furman Paladin Club.  HeClub and has also served on the board of trustees for United Way of Greenville County.  He isCounty and as a prior commissioner of the Greenville Housing Authority. Mr. Ellison has extensive financial experience primarily in the insurance industry and has corporate governance experience with a number of nonprofit organizations which provide a valuable perspective as a director.

Terry Grayson-Caprio, 60, Class II director, has served as director of the Company since 2021. In 2020, Ms. Grayson-Caprio retired from KPMG after 35 years where she was most recently the Managing Partner of the firm’s South Carolina practice. As Managing

5

Partner, she was responsible for the state’s business operations including key accounts, business development, talent management, market development, facilities, and financial management. She currently serves as Board Director for The Caldwell Partners International (TSX: CWL) where she is chair of the Compensation Committee. She also serves on the Board of Directors for the following organizations: the South Carolina Governor’s School for the Arts and Humanities Foundation, the Winthrop University Foundation and the South Carolina Environmental Law Project. Ms. Grayson-Caprio is a trusted business leader to both domestic and international companies, a persuasive communicator, and a critical thinker which provide her with a valuable perspective as a director.

Frederick “Fred” Gilmer, Jr.Tecumseh “Tee” Hooper, 72,Jr., 76, Class III director, ishas served as a retired senior vice president of our bank with over 49 years of experience in the financial services industry.  Mr. Gilmer was involved with the organization of Southern Bank and Trust Company and has held executive positions with two other banks in the Greenville area.  He graduated from the University of Georgia in 1958 and the LSU Graduate School of Bankingdirector of the South in Baton Rouge, Louisiana in 1970.  He is a graduate of Leadership Greenville and has served numerous organizations, including the Greenville Rotary Club, the YMCA, the United Way, and the First Presbyterian Church.  He also is a past board member of Family Children Service, Goodwill Industries, Downtown Area Council, Greenville Little Theater, Greenville Cancer Society, South Carolina Arthritis Foundation, Freedom Weekend Aloft, and the Greenville Chamber of Commerce.

Frederick “Fred” Gilmer, III, 44,is an executive vice president and the senior lending officer of our bank.  He has over 21 years of banking experience.  From 1987 until 1999,Company since 1999. Mr. Gilmer held various management positions with Wachovia Bank, N.A., including commercial lending, city executive, and vice president in private banking.  Mr. Gilmer is a 1986 graduate of Clemson University with a bachelor’s degree in management.  He is also a graduate of Leadership Greenville.  He has served on the community boards of Bon Secours St. Francis Foundation and the Metro YMCA, and he is a past chairman of Cleveland Street YMCA.  Other activities include Greenville Chamber of Commerce, United Way loan executive, Greenville Convention and Visitors Bureau, and Rotary Club of Greenville.  He is active at Buncombe Street United Methodist Church, serving in various roles.

Tecumseh “Tee” Hooper Jr., 61, Class III director, is a private investor.   Mr. Hooper is the chief executive officer of General Wholesale Distributors, LLC, a Trane HVAC distributor in the state of South Carolina.  Mr. Hooper is alsoinvestor and chairman of the board of FGP International Inc., ana private executive search and temporary placement service company, and Sign Crafters, USA, a sign manufacturing and service company.he has been with FGP International Inc. since 2003. He is also a director of Peregrine Energy, Inc., an energy management company.  Mr. Hooper was the president of Modern Office Machines/IKON Office Solutions in Greenville, South Carolina, from 1982 through 2001.2001, chief executive officer of Profit Lab from 2001 through 2006, chief executive officer of General Wholesale Distributor from 2007 through 2016, and chief executive officer of Sign Crafters, USA, LLC, from 2016 through 2018. Mr. Hooper graduated from The Citadel in 1969 with a degree in business administration, and he received a mastermaster’s in business administration from the University of South Carolina in 1971. Mr. Hooper has served the community as a board member of the Greenville Chamber of Commerce, Camp Greenville, YMCA Metropolitan, and the United Way, and as past president of the Greenville Urban League. Mr. Hooper has also served on the board of directors for Leadership Greenville, Leadership South Carolina, and also served as chairman of the South Carolina Department of Transportation, and of the Patriots Point Development Authority in Charleston. He is a former member of The Citadel Board of Visitors and serves on the boards of Verdae Development and Upstate Warrior Solution and Prisma Upstate. Mr. Hooper’s deep ties to the Greenville community, varied business career in executive management, and experience with key government agencies provide him with a valuable perspective as a director.

6


Ray A. Lattimore, 64, Class III director, has served as director of the Company since 2021. Since 1996, Mr. Lattimore has served as founder, President, and Chief Executive Officer of Marketplace Professional Staffing, a staffing firm which provides high quality, value-added recruiting and staffing solutions to leading regional, national, and international companies. He also founded Marketplace Real Estate Holdings, a real estate firm located in Greenville, South Carolina that invests in residential and commercial real estate. Mr. Lattimore currently serves as Chairman of the Greenville Technical College Area Commission Board of Directors, Director of the Phillis Wheatley Community Center Board of Directors, where he was a former chairman, and is on the Strategic Planning Committee of the Bon Secours Saint Francis Health System Board. Mr. Lattimore is a respected community leader and a dynamic speaker on entrepreneurship, minority enterprises, and wealth creation, which enhances his ability to serve as a director.

William A. Maner, IV, 61, Class III director, has served as a director of the Company since 2021. From 2006 to 2018, Mr. Maner served as a founding partner of Edge Capital, an investment firm based in Atlanta, Georgia, and has served as an Advisory Director for the firm since 2018. He also serves as an Advisory Director of Lazear Capital Partners, an ESOP M&A firm, based in Columbus, Ohio since 2020. Mr. Maner previously worked for Arthur Andersen, as a certified public accountant, and for Morgan Stanley as an investment banker. He was also the Chief Financial Officer for ExGov, an early-stage Internet company. Mr. Maner graduated from Washington & Lee University in 1985 with a degree in commerce, and he received a master’s in business administration from the Darden School of Business at the University of Virginia in 1990. Mr. Maner currently serves on the Board of Directors of the Atlanta Youth Project. Mr. Maner’s ties to the Atlanta community, a key market for the bank, enhances his ability to serve on our board of directors.

James B. Orders, III, 7156,, Class II director, ishas served as director the Company and chairman of our board of directors.  Sincedirectors since 1999. From 1986 he has beento 2014, Mr. Orders was the president of Park Place Corporation, a private company engaged in the manufacture and sale of mattresses to the wholesale market.  Mr. Orders is chairman of Comfortaire Corporation and a director of Orders Realty Co., Inc., a real estate development and management company that is a wholly-owned subsidiary of Park Place Corporation. He attended Clemson University from 1970 until 1974. Mr. Orders is a past president of the International Sleep Products Association, a past president of the Downtown Rotary Club, a past member of the advisory board of Greenville National Bank and a past member of the advisory board of Carolina First Bank. He currentlyis a past board member and board chairman of Cox Industries, Inc., a private company that specialized in the manufacture and distribution of treated wood products. Mr. Orders has executive management experience in national sales markets in addition to experience in the South Carolina real estate market. His leadership abilities and long connection to the local communities we serve enhance his ability to serve on our board of directors.

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BOARD DIVERSITY

In accordance with The Nasdaq Stock Market (“NASDAQ”) Listing Rule 2606, each NASDAQ-listed company must disclose annually information on each director’s voluntary self-identified characteristics. The table below includes information on the diversity of the board of directors based upon such information voluntarily provided by each director. Information on the diversity of the board of directors for 2023 is disclosed in our proxy statement for the 2023 annual meeting of shareholders filed with the SEC on April 6, 2023.

Board Diversity Matrix (As of March 15, 2024)
Total Number of Directors    13   
Gender Identity Female Male Non-Binary Did Not Disclose
Gender
Directors 3 9 - 1
         
Demographic Background       
African American or Black - 1 - -
Alaskan Native or Native American - - - -
Asian - - - -
Hispanic or Latinx - - - -
Native Hawaiian or Pacific Islander - - - -
White 3 7 - -
Two or More Races or Ethnicities - - - -
LGBTQ+ - - - -
Did Not Disclose Demographic    1   

BOARD SKILLS

The matrix below summarizes the skills and experience of the board of directors’ nominees for election at the Annual Meeting. The Governance and Nominating Committee utilizes a matrix approach that tracks each director’s and director nominee’s experience and qualifications in a tabular format to assist the committee in maintaining a well-rounded, diverse and effective board of directors. The matrix does not encompass all of the knowledge, skills, or experiences of our directors, and the fact that a particular qualification, skill, or experience is not listed does not mean that a director does not possess it. In addition, the absence of a particular qualification, skill, or experience with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area, taking into consideration the qualifications for membership on each of the standing committees of the board of directors. The type and degree of qualification, skill and experience listed below may vary among members of the board of directors.

Knowledge, Skills and ExperienceCajkaCothranCubbageEllefsonEllisonGrayson-
Caprio
HooperJohnstoneLattimoreLockeManerOrdersSeaver
Entrepreneurship
Team Building
Strategy Development
Capital Acquisition & Management
Service Excellence
Community Support
Regulatory Compliance
Culture Building
Financial Expertise – SEC Definition
Risk Management
Information Technology
ESG Experience
Other Public Company Boards
Banking Industry Expertise

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Biographical Information for Our Executive Officers Who are Not Directors

Our executive officers, as such term is defined in Rule 3b-7 of the Securities Exchange Act of 1934 (the “Exchange Act”), consist of R. Arthur Seaver, Jr., the chief executive officer of the Company and the Bank, Calvin C. Hurst, president of the Company and the Bank, William M. Aiken, III, chief risk officer of the Company and the Bank, and Silvia T. King, chief human resources officer of the Company and the Bank. In addition, D. Andrew Borrmann served as executive vice president and chief financial officer of the Company and the Bank from April 17, 2023 until his resignation effective March 29, 2024, and Michael D. Dowling served as our executive vice president and chief financial officer of the Company and the Bank from 2011 and also as chief operating officer of the Company and the Bank from 2019 until his resignation effective February 15, 2023. Biographical information for each of our executive officers is provided below (other than Mr. Seaver). Because Mr. Seaver also serves on the boardsour board of Lay Christian Association and Cox Industries.directors, we have provided his biographical information above with our other directors.

Calvin C. Hurst

F. Justin Strickland, 45, , is42, has served as the president of our companyCompany and our bank.  HeBank since August 2022 and previously served as our chief banking officer since March 2019. Mr. Hurst has over 2315 years of banking experience. From 1985 until 1993,2006 to 2019, Mr. Strickland held various positions with The Citizens & Southern NationalHurst worked for several large financial institutions serving as a commercial underwriter, commercial relationship manager, and most recently as a regional vice president for TD Bank of South Carolina.  From 1993 until November 2006, he was with Carolina First Bank.  From 1999 until November 2006, he held the position of South Carolina Midlands Market President.beginning in 2016. Mr. StricklandHurst is a 19852005 graduate of theFurman University, of South Carolina with a bachelor’sBachelor’s degree in financeBusiness Administration and the LSU Graduate School of Banking of the South in Baton Rouge, Louisiana in 1996.  He is the past Chairman of the Greater Columbia Chamber of Commerce and the Chairman of the SC Bankers Association. He is also chairman of the Finance Committee of the Children’s Trust Fund of South Carolina.  He formerly held the positionEconomics.

William M. Aiken, III, 50, has served as treasurer of the Saluda Shoal Foundation and is a past member of the boards of Columbia Urban League, Palmetto Health Foundation (past chairman), Junior Achievement (past chairman), the SC Bankers School (past chairman), and the Boy Scouts – Indiana Water Council.  He is an active member of Saxe Gotha Presbyterian Church.  He was a prior Chairman of the SC Bankers Association /Young Bankers Division where he received the SC Outstanding Young Bankers Award in 1999.  He has been a member in the past with the Rotary Club, Sertoma Club, Business Association of Columbia, Salvation Army, and the United Way.

Michael M. “Mike” Strickland, 51, is ansenior executive vice president and the chief portfolio risk officer of our companyCompany and our Bank since 2021 and previously served as an executive credit risk officer since 2020.  Mr. Aiken has worked in the bank.  Hebanking industry for over 25 years. Beginning in 1996, he has over 24 years of banking experience.  From 1984 to 1986, Mr. Strickland was employed by The State of Floridaserved in various roles at several financial institutions, including most recently as a Financial Examiner for the Division of Securities.  From 1986 to 1991, he was employed by the Federal Deposit Insurance Corporationchief commercial credit officer at SouthState Bank from 2019 through August 2020 as a commissioned bank examiner.  From 1991 to 1992, Mr. Strickland was employed by ComSouth Bancshareswell as a senior vice presidentcommercial loan administrator with responsibilities over internal audit and loan review.  From 1991 to 2005, Mr. Strickland was employed by The South Financial Group where he was executive vice president and corporate risk manager.  From 2005 to 2007, Mr. Strickland was employed by Bankers-Solutions, LLC, athat bank consulting company, where he served as shareholder and chief executive officer.  Mr. Stricklandfrom 2012 until 2018.  He is a 19841996 graduate of Florida StateClemson University, with a degree in finance and a 1996 graduate of the Stonier Graduate School of Banking.  HeFinancial Management.

Silvia T. King, 46, has served on the complianceas chief human resources officer of our Company and credit committeesour Bank since March 2018. Ms. King has over 20 years of the South Carolina Bankers Association. He hasHuman Resources leadership experience, serving in various human resource and senior management roles with Monsanto Company and Select Comfort Corporation. From 2009 to 2016, Ms. King served on the community boards of Junior Achievement, McCarter Community Pool, South Carolina State PTAas senior human resources consultant for FGP International, a professional staffing and League Academy PTA.  He is the past president of Lake Forest Elementary PTAhuman resources consulting firm in Greenville, and is the president elect for Wade Hampton High School PTSA.  He is activefrom 2016 to 2018 as a human resources instructor with e-Cornell University. Ms. King holds degrees in Aldersgate United Methodist church.

William B. Sturgis, 74, Class II director, held various executive positions with W.R. Grace & Co. from 1984 until his retirement in 1997, including executive vice president of W.R. Grace’s worldwide packaging operationsPsychology and president of its North American Cryovac Division.  Mr. Sturgis graduatedInternational Marketing from Clemson University in 1957 withand a Master of Human Resources degree in chemical engineeringfrom the University of South Carolina.

PROPOSAL NO. 2:

AMEND OUR ARTICLES OF INCORPORATION TO

INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

Summary of Proposed Amendments

Our board of directors has adopted a resolution recommending that the shareholders approve the amendment to our Amended and is a graduateRestated Articles of Incorporation to increase the Advanced Management Program at Harvard.  He is active with Clemson University, serving on the Foundation Board, and the Engineering and Science Advisory Board.  He is a Trusteenumber of the First Presbyterian Church in Greenville.authorized shares of common stock (the “Amendment”).

J. Edward “Eddie” Terrell, 46, is an executive vice presidentOur Articles of our bank.  He is primarily responsible for marketing and deposit strategies.  He has over 24 years of business experience.  He was the co-founder of NewSouth Communications, Inc. in Greenville, South Carolina from 1997 until 2003 and executive vice president of customer operations.  Mr. Terrell was the executive vice president of customer operations for Corporate Telemanagement Group in Greenville, South Carolina from 1990 until 1995.  From 1995 until 1996, Mr. Terrell was the regional vice president for customer operations with LCI International.  He is a 1984 graduate of The Citadel, with a bachelor’s degree in English.  He serves onIncorporation currently provide that the board of directors are authorized to issue up to 10,000,000 shares of common stock. If Proposal No. 2 is passed, the Presbyterian Community Foundation,number of authorized shares would increase by 10,000,000 shares for a new total of 20,000,000 authorized shares of common stock.

Rationale and Recommendation

Our board of directors believes that it is advisable to have a greater number of authorized shares of common stock available for issuance. We may issue additional common shares to grant common shares under current or future equity compensation plans for our directors, officers, and employees, and in connection with various general corporate programs and purposes. We may also in the Development Councilfuture, from time to time, consider acquisitions and mergers as opportunities arise, stock splits, and other public or private financings to

8

provide us with capital, any or all of which any or all of which may involve the issuance of additional shares of common stock or securities convertible into shares of common stock. The additional common shares will

·give us the flexibility to meet our future needs for unreserved common shares without the expense and delay associated with obtaining shareholder approval to affect an increase in authorized common shares when needed, and
·enhance our ability to respond promptly to opportunities for increasing our capital levels through public or private offerings of our common stock, acquisitions and mergers, and stock splits.

Principal Effects on Outstanding Common Stock

If the Amendment is approved, the additional authorized shares of common stock may be issued for such consideration, cash or otherwise, at such times and in such amounts as the Children’s Hospital andboard of directors may determine without further shareholder approval—except to the extent that shareholder approval is active at First Presbyterian Church and several local community organizations.

Family and Business Relationships.  Dr. Rudolph G. Johnstone, III, director, is Fred Gilmer, Jr.’s stepson and Fred Gilmer, III, executive vice president, is Fred Gilmer Jr.’s son.  No other director hasrequired by applicable laws, rules or regulations. The authorization of additional shares of common stock will not, by itself, have any effect on the rights of present shareholders. The additional 10,000,000 shares to be authorized will be a family relationship with any other director or executive officerpart of the company.existing class of common stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently issued and outstanding.

The following table illustrates the effect the Amendment would have on the number of shares of common stock available for issuance.

  

As of
December 31,
2023

 

If the
Amendment
is Adopted

Shares of common stock authorized 10,000,000 20,000,000
Shares of common stock issued and outstanding 8,088,186 8,088,186
Shares of common stock reserved for issuance1 331,349 331,349
Shares of common stock available for future issuance 1,580,465 11,580,465

1 Pursuant to outstanding stock options.

Director Mark Cothran serves onVote Required; Authority of the Board of Directors for General Wholesale Distributors,to Issue Common Stock

If the Amendment is approved by the affirmative vote of two-thirds of the shares of our common stock outstanding on the record date (the only class of our capital stock outstanding and entitled to vote), the Amendment will become effective if, and when, Articles of Amendment effecting such Amendment are filed by the Company with the Secretary of State of South Carolina. Approval of the Amendment by the shareholders will not require that the Articles of Amendment be filed, and our board of directors may decide to delay the filing of the Amendment or abandon and not file this amendment after shareholder approval.

The board of directors has expressly conditioned its submission of the Amendment to a privately-held company,vote by the Company’s shareholders on the board’s right to delay the filing of which director, Tee Hooper,the Amendment or to abandon and not file the Amendment after shareholder approval. The board would make any such decision to delay or abandon the filing of the Amendment in the exercise of its fiduciary duties and based on the facts and circumstances known to the board of directors at the time of its decision(s).

The full text of the proposed Amendment to our Amended and Restated Articles of Incorporation is attached to this proxy statement as Appendix A.

The board of directors unanimously recommends that you vote “FOR” the Chief Executive Officer. Amendment to our Articles of Incorporation to increase the number of authorized shares of common stock.

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7


PROPOSAL NO. 2:3:
AMEND OUR 2020 EQUITY INCENTIVE PLAN
TO EXTEND ITS TERM FOR THREE YEARS MORE THAN ITS CURRENT TERM

Background of 2020 Equity Incentive Plan

On March 17, 2020, our board of directors adopted, and on May 12, 2020, our shareholders approved, the 2020 Southern First Bancshares, Inc. Equity Incentive Plan (the “Plan”) that provides for the grant of up to 450,000 shares in the form of stock options, restricted stock awards and other forms of equity to our officers, employees, directors, advisors, and consultants. As of March 15, 2024, 263,347 shares of common stock remained available for issuance as either restricted stock or stock options under the Plan.

Summary of Proposed Amendments

Our board of directors has adopted a resolution recommending that the shareholders approve the amendment to the Plan. The Plan currently has a term that expires on March 17, 2025, the fifth anniversary of the effective date of the Plan. This amendment would extend the term of the Plan for another three years until March 17, 2028, the eighth anniversary of the effective date of the Plan.

Purpose of the Plan

We believe we have been able to attract highly qualified personnel to the Company and the Bank in part through the use of stock option grants and awards of restricted stock, and that it is desirable to have the continued ability to attract additional personnel and to return and reward exceptional performance by employees through other awards that encourage stock ownership and proprietary interest in the Company. The board of directors believes that the amendment to the Plan provides a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company rest, and whose present and potential contributions to the Company are of importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the Company. By providing such individuals with additional incentive and reward opportunities, the board believes that the continuation of the Plan enhances the profitable growth of the Company.

Shares Subject to the Plan

The Plan provides for awards of both stock options and restricted stock. Currently, 263,347 shares of common stock remained available for issuance as restricted stock or as stock options under the Plan.

Stock options granted to participants under the Plan may be either incentive stock options, under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), options that are not subject to the provisions of Section 422 of the Code, or nonqualified options. Stock options entitle the recipient to purchase shares of common stock at the exercise price specified in the award agreement. The administrator, at its discretion, determines the number of option shares, the term of the option, the exercise price (subject to the minimum price described above), the vesting schedule and performance conditions (if any), and any other terms and conditions.

Amendment and Termination of the Plan

The board of directors may amend or terminate the Plan, provided that shareholder approval will be required to (i) increase the total number of shares reserved for issuance under the Plan, or (ii) change the class of recipients eligible to participate in the 2020 Equity Incentive Plan. No amendment shall adversely affect any of the rights of any holder of any award without the holder's consent. The administrator may accept surrender of outstanding stock options or restricted stock under the Plan and grant new awards in substitution for them; provided that the administrator will not exchange underwater stock options without prior shareholder approval. The Plan, if amended as proposed, shall terminate in any event on March 17, 2028, eight years after its effective date.

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Vote Required

This amendment is being submitted to the shareholders of the Company pursuant to the terms of the Plan, Section 162(m) of the Code, and NASDAQ Listing Rule 5635(c). If a quorum is present at the annual meeting, this amendment will be approved if a majority of the shares having voting power, present in person or represented by proxy (meaning that of the shares represented at the meeting and entitled to vote, a majority of them must be voted “for” the proposal of it be approved). Abstentions will have the same effect as a vote “against” this proposal, and broker non-votes will have no effect on the vote for this proposal. This amendment will become effective if, and when, our board of directors deems it so. The board of directors may decide to delay abandon this amendment after shareholder approval. The board would make any such decision to delay or abandon this amendment in the exercise of its fiduciary duties and based on the facts and circumstances known to the board of directors at the time of its decision(s).

The full text of the proposed amendment to the Plan is attached to this proxy statement as Appendix B.

The board of directors unanimously recommends that you vote “FOR” the amendment to our 2020 Equity Incentive Plan to extend its term for an additional three years.

PROPOSAL NO. 4
NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION


OF THE NAMED EXECUTIVE OFFICERS

This proposal, commonly known as a "say-on-pay" proposal, givesPursuant to rules adopted by the Company's shareholdersSEC under the opportunityDodd-Frank Act Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, we are asking you to endorse or not endorse the Company's executive pay program and policies through the following resolution:

"Resolved, that the shareholders approve the compensation of theour named executive officers as disclosed indescribed under “Compensation of Directors and Executive Officers” and the Summary Compensation Table and intabular disclosure regarding named executive officer compensation (together with the other tables and related discussion includedaccompanying narrative disclosure) elsewhere in this proxy statement."

As described below under the heading “Compensation Overview,” we seek to align the interests of our named executive officers with the interests of our shareholders. Therefore, our compensation programs are designed to reward our named executive officers for the achievement of strategic and operational goals and the achievement of increased shareholder value, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. We believe that our compensation policies and procedures are competitive and focused on performance and are strongly aligned with the long-term interest of our shareholders. We encourage

The proposal described below, commonly known as a “Say-on-Pay” proposal, gives you as a shareholder the opportunity to reviewexpress your views regarding the compensation of our discussion and the tables includednamed executive officers by voting to approve or not approve such compensation as described in this proxy statement. Recent legislation and new regulations will impact our compensation practices because we sold preferred stock to the United States Treasury in the first quarter of 2009 under its Capital Purchase Program. Key details of these new laws will be determined only after the Treasury and the SEC issue new regulations. As a result, we cannot reliably predict what changes we will be required to make to our compensation programs, if any. We will fully comply with all applicable requirements as they become known to us and as long as the preferred stock, under the Capital Purchase Program, is outstanding.

Under the America Recovery and Reinvestment Act of 2009, yourThis vote is advisory and will not be binding upon ourus, the board of directors.directors, or our compensation committee. However, we, the board, and the compensation committee and the Board of Directors will take into account the outcome of the vote when considering future executive compensation arrangements. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described elsewhere in this proxy statement in accordance with the compensation disclosure rules of the SEC.

The board of directors believes our compensation policies and procedures achieve the aforementioned objectives, and therefore recommend shareholders vote “FOR” the proposal through the following resolution:

“Resolved, that the compensation of the named executive officers named in the Summary Compensation Table of Southern First Bancshares, Inc.’s Proxy Statement for the 2024 Annual Meeting of Shareholders, including the tabular and narrative compensation disclosures, is hereby approved.”

If a quorum is present at the annual meeting, this proposal will be approved if the votes cast in favor of the matter exceed the number of votes cast against or abstain with respect to the matter. Broker non-votes and the failure to return a signed proxy will have no effect on the outcome of the vote on this matter.

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The Boardboard of Directorsdirectors unanimously recommends a vote FOR“FOR” the approval of the compensation of the named executive officers.

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Compensation of Directors and Executive Officersofficers as disclosed in this proxy statement.

PROPOSAL NO. 5
RATIFICATION OF APPOINTMENT OF
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANT

Although we are not required to seek shareholder ratification on the selection of our accountants, we believe obtaining shareholder ratification is desirable. In the event the appointment of Elliott Davis is not ratified by the required vote, the audit committee will re-evaluate the engagement of our independent auditors. Even if the shareholders do ratify the appointment, our audit committee has the discretion to appoint a different independent registered public accounting firm at any time during the year if the audit committee believes that such a change would be in the best interest of us and our shareholders. We expect that a representative from Elliott Davis will attend the meeting and will be available to respond to appropriate questions from shareholders. The following table showsrepresentative will also have an opportunity to make a statement if he or she desires to do so.

If a quorum is present at the compensation we paid to our three most highly compensated named executive officers, including our chief executive officer, forAnnual Meeting, this proposal will be approved if the years ended December 31, 2008, 2007 and 2006.

Summary Compensation Table

Name and Principal Position

 

Year

 

Salary

 

Bonus

(1)

 

Stock Awards(2)

 

Option Awards (2)

 

Non-Equity Incentive Plan Compensation (3)

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings

 

All Other Compensation (4)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

R. Arthur Seaver, Jr.

 

2008

 

$

238,750

 

$

100,000 

 

 $

 

 $

 

 $

— 

 

 $

24,266 

 

 $

29,209 

 

 $

392,225 

 

Chief Executive Officer of the

 

2007

 

220,833

 

140,000 

 

 

 

 

18,447 

 

38,684 

 

417,964 

 

 

Company and the Bank

 

2006

 

171,171

 

130,000 

 

 

 

 

8,412 

 

24,898 

 

334,481 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F. Justin Strickland (5)

 

2008

 

197,917 

 

85,000

 

13,519

 

19,464

 

 

9,521 

 

28,816 

 

354,237 

 

President of the Company

 

2007

 

175,000 

 

 

13,519

 

13,200

 

120,500 

 

12,546 

 

28,681 

 

363,446 

and the Bank

2006

28,494 

55,000 

3,229 

86,723 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fred Gilmer, III

 

2008

 

151,458 

 

 

 

3,130 

 

69,500 

 

13,022 

 

28,012 

 

265,122 

 

Executive Vice President

 

2007

 

139,000 

 

 

 

 

96,425 

 

11,557 

 

28,347 

 

275,329 

 

 

of the Bank

 

2006

 

130,910 

 

 

 

 

93,375 

 

5,270 

 

19,734 

 

249,289 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Duevotes cast in favor of the proposal exceed the votes cast against or abstain with respect to the subjective nature of Mr. Seaver and Mr. Strickland’s Incentive Plan Compensation, it has been classified as “Bonus” for purposes ofproposal. Because this table.

(2) See the discussion of assumptions used in the valuation of stock and option awards in Note 16, “Warrants and Stock Options and Grant Plans” in the Company’s Annual Reportproposal is a “routine” matter, if you do not submit voting instructions to your broker, your broker may exercise its discretion to vote your shares on Form 10-K for the year ended December 31, 2008.

(3) Amounts awarded for each fiscal year under the Southern First Incentive Plan were paid in the subsequent fiscal year.

(4) All other compensation includes the following items: (a) company contributions under the 401(k) Plan, (b) car allowance or value attributable to personal use of company provided automobiles, (c) club dues, (d) premiums for the portion of the death benefits shared by the company with the named executive officers pursuant to bank owned life insurance and (e) premiums for life, accident and long-term disability insurance policies.  The amount attributable to each such perquisite or benefit for each named executive officer does not exceed the greater of $25,000 or ten percent of the total amount of perquisites received by such named executive officer.

(5) Mr. Strickland joined our company in November of 2006.this proposal.

9


Outstanding Equity Awards at Fiscal Year-End

The following table shows the number of shares covered by both exercisable and non-exercisable options owned by the individuals named in the Summary Compensation Table as of December 31, 2008, as well as the related exercise prices and expiration dates.  Options are granted pursuant to the Plan.

 

 

Option Awards

 

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

Market

 

 

 

 

 

 

 

 

 

 

Number of

 

Value of

 

 

 

 

 

 

 

 

 

 

Shares or

 

Shares or

 

 

 

 

 

 

 

 

 

 

Units of

 

Units of

 

 

 

 

 

 

Option

 

Option

 

Stock that

 

Stock that

 

 

 

 

Non-

 

Exercise

 

Expiration

 

Have not

 

Have not

Name

 

Exercisable

 

Exercisable(1)

 

Price

 

Date

 

Vested(2)

 

Vested

 

 

 

 

 

 

 

 

 

 

 

 

 

R. Arthur Seaver, Jr.

 

 94,875 

 

 

 $

6.06 

 

3/21/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F. Justin Strickland

 

5,000 

 

5,000

 

21.70 

 

11/10/2016

 

1,875 

 

17,250 

 

 

 

5,000

 

13.50 

 

1/15/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fred Gilmer, III

 

8,250 

 

 

6.06 

 

3/21/2010

 

 

 

 

4,125 

 

 

6.06 

 

2/20/2011

 

 

 

 

 

 

6,600 

 

 

6.88 

 

1/15/2012

 

 

 

 

 

 

8,250 

 

 

7.79 

 

1/21/2013

 

 

 

 

 

 

8,250 

 

 

16.36 

 

1/20/2014

 

 

 

 

 

 

 

2,500 

 

13.50 

 

1/15/2018

 

 

 

 

(1) All of the unvested options have an expiration date of ten years following the date of grant and vest in four equal increments on the first four anniversaries of the applicable date of grant.

(2) Mr. Strickland's unvested shares of stock vest equally over three years beginning on January 11, 2009.

Employment Agreements

We entered into an employment agreement with Art Seaver on November 17, 2008, for an annually renewing three-year term, pursuant to which he serves as the chief executive officer, and a director of both our company and our subsidiary bank.  As of March 13, 2009, Mr. Seaver receives a minimum annual salary of $247,500, plus his yearly medical insurance premium.  He also receives an annual increase in his salary equal to the previous year’s salary times the increase in the Consumer Price Index during the previous year.  The board of directors may increase Mr. Seaver’s salary above this level, but not below it.  He is eligible to receive an annual bonus of up to 5%unanimously recommends that shareholders vote “FOR” the ratification of the net pre-tax incomeappointment of Elliott Davis as our bank, if the bank meets performance goals set by the board.  Mr. Seaver’s annual salary and bonus amounts are subject to the limitations imposed under the U.S. Treasury’s Capital Purchase Program due to the Bank’s participation in the program.  He is also eligible to participate in any management incentive program of the bank or any long-term equity incentive program and is eligible for grants of stock options and other awards thereunder.  Mr. Seaver was granted options to purchase a number of shares of common stock equal to 5% of the number of shares sold in our initialindependent registered public offering, or 97,875 shares (adjusted for the 3 for 2 stock split and 10 percent stock dividend).  These options were granted in 2000 in connection with the bank’s opening, vested over a five-year period and have a term of ten years.  Additionally, Mr. Seaver participates in the bank’s retirement, welfare, and other benefit programs and is entitled to a life insurance policy and an accident liability policy and reimbursement for automobile expenses, club dues, and travel and business expenses.

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Mr. Seaver’s employment agreement also provides that following termination of his employment and for a period of 12 months thereafter, he may not (a) compete with the company, the bank, or any of its affiliates by, directly or indirectly, forming, serving as an organizer, director or officer of, or consultant to, or acquiring or maintaining more than 1% passive investment in, a depository financial institution or holding company thereof if such depository institution or holding company has one or more offices or branches within radius of thirty miles from the main office of the company or any branch office of the company, (b) solicit major customers of the bank for the purpose of providing financial services, or (c) solicit employees of the bank for employment.  If Mr. Seaver terminates his employment for good cause as that term is defined in the employment agreement or if he is terminated following a change in control of Southern First Bancshares as defined in the agreement, he will be entitled to severance compensation of his then current monthly salary for a period of 12 months, plus accrued bonus, and all outstanding options and incentives shall vest immediately.

We also entered into employment agreements on November 17, 2008 with Justin Strickland to serve as President of our company, Jim Austin to serve as chief financial officer and an executive vice president of our company and the bank, Fred Gilmer, III to serve as an executive vice president of the bank, and Eddie Terrell to serve as an executive vice president of the bank.  Each agreement has an annually renewing two-year term.  As of March 13, 2009, Messrs. Strickland, Austin, Gilmer, and Terrell are paid a salary of $206,000, $171,000, 160,500, and $150,000, respectively, which may be increased annually by the board of directors.  They are also eligible to participate in any of our pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other employee benefit plans and programs.  In addition, Messrs. Austin, Gilmer and Terrell are each entitled to receive either an automobile owned or leased by us or an automobile allowance of $700 per month while Mr. Strickland receives an automobile allowance of $750.

Each employment agreement also provides that during the term of employment and for a period of 12 months following termination, Messrs. Austin, Gilmer, Terrell, and Strickland may not (a) compete with us by, directly or indirectly, forming, serving as an organizer, director or officer of, employee or agent, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company thereof if such depository institution or holding company has one or more offices or branches within 30 miles of our main office or any other offices, (b) solicit our clients with which they had contact in connection with products and services provided by us for the purpose of providing financial services, or (c) solicit our employees.  If Messrs. Austin, Gilmer, Terrell, or Strickland terminate their employment for good reason or if they are terminated following a change in control of our company, they will be entitled to severance compensation of their then current monthly salary for a period of 12 months, plus accrued bonus, and all outstanding options and incentives will vest immediately.

On February 27, 2009, in connection with our participation in the Capital Purchase Program established by the U.S. Department of the Treasury (“Treasury”) under the Emergency Economic Stabilization Act of 2008 (as amended, “EESA”), each of Messrs. Seaver, Strickland and Gilmer, III, among others, entered into letter agreements with the Company amending the compensation, bonus, incentive and other benefit plans, arrangements and policies and agreements (including any so-called “golden parachute” provisions) as may be necessary, during the period that Treasury owns any debt or equity securities of the Company acquired pursuant to the Capital Purchase Program to comply with Section 111 of the EESA, including prohibitions on certain severance payments in connection with a termination of employment under certain circumstances and required to and a requirement to return to the Company any bonus or incentive compensation paid to the named executive officer by the Company during the covered period if such bonus or incentive compensation is paid based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria. These letter amendments were identical except that the letter amendment for Mr. Seaver also states that he is prohibited from receiving from the Company any bonus, retention award, or incentive compensation until such time as Treasury ceases to own any debt or equity securities of the Company acquired pursuant to the Capital Purchase Program, except for certain long term restricted stock payments and certain previously granted bonus payments to the extent permitted by EESA.  

11


Director Compensation

The following table shows the fees paid to each of our non-employee directors for board meeting and committee meeting attendance in 2008.  None of our non-employee directors received any stock awards or options, non-equity incentive plan compensation, deferred compensation or any other compensationaccounting firm for the year endedending December 31, 2008.

Fees

Earned or

Paid in

Name

Cash

Andrew B. Cajka, Jr.

 $

16,550 

Mark A. Cothran

14,300 

Leighton M. Cubbage

9,900 

Anne S. Ellefson

15,400 

David G. Ellison

14,950 

Fred Gilmer, Jr.

4,400 

Tecumseh Hooper, Jr.

14,300 

Rudolph G. Johnstone, III

13,750 

James B. Orders, III

16,000 

William B. Sturgis

11,250 

 $

130,800 

In 2008, we paid each of our non-employee directors $550 for each board meeting they attended and $550 for each committee meeting they attended.  On September 1, 2008 Fred Gilmer, Jr. retired from employment with the bank and began receiving non-employee compensation.  In addition, beginning in 2009, we plan to pay our outside directors $600 for each board meeting they attend and $600 for each committee meeting they attend.  The chairmen of the board and committees are paid an additional $100 for each meeting they attend. 

12


Security Ownership of Certain

Beneficial Owners and Management

2024.

GeneralMEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

Attendance at Board, Committee and Annual Shareholders’ Meetings

The following table shows how much common stock in the company is owned by the directors, certain executive officers, and owners of more than 5% of the outstanding common stock, as of March 13, 2009.  Unless otherwise indicated, the mailing address for each beneficial owner is care of Southern First Bancshares, Inc., 100 Verdae Boulevard, Suite 100, Greenville, South Carolina 29607.

Name

 

Number of

Shares Owned(1)

 

Right

To

Acquire(2)

 

Percentage of

Beneficial

Ownership(3)

 

 

 

 

 

 

 

James M. Austin, III

 

20,950 

 

41,875 

 

2.04 %

Gwen G. Bridges

 

— 

 

2,275 

 

0.07 %

Andrew B. Cajka, Jr.

 

16,500 

 

8,250 

 

0.81 %

Mark A. Cothran

 

72,023 

 

 

2.37 %

Leighton M. Cubbage

 

120,770 

 

66,000 

 

6.00 %

Anne S. Ellefson

 

10,670 

 

 

0.35 %

David G. Ellison

 

24,856 

 

 

0.82 %

Fred Gilmer, Jr.

 

43,832 

 

15,486 

 

1.94 %

Fred Gilmer, III

 

3,300 

 

36,100 

 

1.28 %

Tecumseh Hooper, Jr.

 

21,450 

 

12,375 

 

1.11 %

Rudolph G. Johnstone, III

 

28,085 

 

 

0.92 %

James B. Orders, III

 

41,417 

 

16,500 

 

1.89 %

R. Arthur Seaver, Jr.

 

19,800 

 

104,775 

 

3.96 %

F. Justin Strickland

 

5,800 

 

8,750 

 

0.48 %

Mike Strickland

 

567 

 

 

0.02 %

William B. Sturgis

 

49,858 

 

4,500 

 

1.78 %

J. Edward Terrell

 

4,057 

 

16,500 

 

0.67 %

 

 

 

 

 

 

 

All directors and executive officers as a group (17 persons)

 

483,935 

 

333,386 

 

24.19 %

(1)         Includes shares for which the named person has sole voting and investment power, has shared voting and investment power with a spouse, or holds in an IRA or other retirement plan program, unless otherwise indicated in these footnotes.

(2)              Includes shares that may be acquired within 60 days of the date of this prospectus by exercising vested stock options and warrants but does not include any unvested stock options or warrants.  Each of the following directors served as an organizer ofDuring 2023, our bank: Andrew B. Cajka, Jr., Mark A. Cothran, Leighton M. Cubbage, Fred Gilmer, Jr., Tee Hooper, Jr., Trip Johnstone, III, James B. Orders, III, R. Arthur Seaver, Jr., and William B. Sturgis.  Each of these directors received a warrant to purchase one share of common stock at a purchase price of $6.06 per share for every two shares purchased by that individual in our initial public offering as compensation for the risks taken in forming the bank, including their personal guarantees of the original line of credit.  These warrants cover an aggregate of 123,111 and are exercisable until January 10, 2010.  For Jim Austin, Gwen Bridges, Fred Gilmer, Jr., Fred Gilmer, III, Art Seaver, and Justin Strickland, the right to acquire column includes employee stock options to purchase 41,875 shares, 2,275 shares, 9,900 shares, 36,100 shares, 94,875 shares, and 8,750 shares, respectively.

(3)              For each individual, this percentage is determined by assuming the named person exercises all options and warrants which he or she has the right to acquire within 60 days, but that no other persons exercise any options or warrants.  For the directors and executive officers as a group, this percentage is determined by assuming that each director and executive officer exercises all options and warrants which he or she has the right to acquire within 60 days, but that no other persons exercise any options or warrants.  The calculations are based on 3,044,863 shares of common stock outstanding on March 13, 2009.

13


Meetings and Committees of the Board of Directors

                During the year ended December 31, 2008, the board of directors of the company held 12nine meetings and the board of directors of the bank held 12nine meetings. All of the directors of the companyCompany and the bankBank attended at least 75% of the aggregate of such board meetings and the meetings of each committee on which they served except for Mr. Cubbage who attended one of the three Personnel Committee meetings held during 2008.

served.

Although we do not have a formal policy regarding attendance by members of the board of directors at our annual shareholdersshareholders’ meetings, directors are encouraged to attend theour annual meeting of Southern First Bancshares, Inc.  Tenshareholders’ meeting. All of the eleventhen-serving directors were present at the 2008 annual meeting2023 Annual Meeting of Shareholders.

Code of Ethics

We expect all of our employees to conduct themselves honestly and ethically, particularly in handling actual and apparent conflicts of interest and providing full, accurate, and timely disclosure to the public.

We have adopted a Code of Ethics that is specifically applicable to our senior management and financial officers, including our principal executive officer, our principal financial officer, and controller. The full text of our Code of Ethics, and any amendments thereto, are (or will be in the case of any amendments) available on our website, https://www.southernfirst.com/, under the “Investors” link at the bottom. We intend to post on our website all disclosures that are required by law or NASDAQ listing standards concerning any amendments to, or waivers from, the Code of Ethics.

12

Stock Ownership Guidelines

We believe that it is in our best interest and that of our shareholders to align the personal financial interests of our directors and officers with those of our shareholders. While the board of directors has not implemented stock ownership guidelines for our directors and named executive officers, the board periodically analyzes the ownership of such individuals and believes that their personal financial interests are aligned with those of our shareholders.

Prohibitions on Hedging and Pledging

Communications with Shareholders

We consider it improper and inappropriate for our directors, officers and employees to engage in short-term or speculative transactions in our securities or in other transactions in our securities that may lead to inadvertent violations of the insider trading laws. Accordingly, under our Insider Trading Policy:

·we prohibit the sale of any of our securities “short”;
·we prohibit hedging or monetization transactions, such as prepaid variable forwards, equity swaps, collars and exchange funds, which allow a director, officer or employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock; and
·we discourage, and require preclearance of, holding our securities in a margin account or pledging our securities as collateral for a loan.

Board Leadership Structure and Role in Risk Oversight

We are focused on our corporate governance practices and value independent board oversight as an essential component of strong corporate performance to enhance shareholder value. Our commitment to independent oversight is demonstrated by the fact that a majority of our directors are independent. In addition, all of the members of our board of directors’ audit, compensation, and nominating and corporate governance committees are independent.

Our board of directors has implemented a processbelieves that it is preferable for shareholdersone of our independent directors to serve as chairman of the companyboard. The person our board of directors elected as chairman, James B. Orders, III, has been one of our directors since 1999 and is a long-time resident of our primary market area. We believe it is our chairman’s responsibility to send communicationsguide the board as it provides leadership to our executive management, while our chief executive officer’s responsibility is to manage the Company. As directors continue to be faced with more oversight responsibility than ever before, we believe it is beneficial to have separate individuals in the role of chairman and chief executive officer. Traditionally, we have maintained the separateness of the roles of the chairman and the chief executive officer. In making this decision to have an independent chairman, our board of directors considered the time and attention that Mr. Seaver is required to devote to managing our day-to-day operations as the chief executive officer. By having another director serve as chairman of our board of directors, Mr. Seaver is able to focus his entire energy on running the Company. This also ensures there is no duplication of effort between the chairman and the chief executive officer. We believe this board leadership structure is appropriate in maximizing the effectiveness of board oversight and in providing perspective to our business that is independent from executive management. We recognize that different board leadership structures may be appropriate for companies in different situations. We will continue to reexamine our corporate governance policies and leadership structures on an ongoing basis to ensure that they continue to meet our needs.

Our audit and risk committees are primarily responsible for overseeing our risk management processes on behalf of the full board of directors. The audit committee focuses on financial reporting risk and oversight of the internal audit process, receiving reports from management at least quarterly regarding the adequacy and effectiveness of internal control systems. Our risk committee receives quarterly reports regarding our assessment of risks as well as reviewing credit and market risk (including liquidity and interest rate risk), and operational risk (including compliance and legal risk). Strategic and reputation risk are also regularly considered by this committee. The risk committee also receives reports from management addressing the most serious risks affecting our day-to-day operation and reports regularly to the board.  Any shareholder desiringfull board of directors, which also considers our entire risk profile. The full board of directors focuses on certain significant risks we face and on certain aspects of our general risk management strategy. Management is responsible for the day-to-day risk management processes. We believe this division of responsibility is the most effective approach for addressing the risks we face and that our board leadership structure supports this approach.

13

With respect to communicatecybersecurity, on a quarterly basis, our audit committee receive reports on cybersecurity risks and preparedness from management. While our audit committee, and the board of directors to which it reports, oversees our cybersecurity risk management, our management and Information Technology department are responsible for the day-to-day cybersecurity risk management processes. Formal security awareness training is conducted regularly to increase overall employee awareness about cyber threats. Threat from cyber-attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. Our systems and those of our customers and third-party service providers are under constant threat and it is possible that we could experience a significant event in the future. While we believe that our cybersecurity programs are appropriate and have been effective to prevent material incidents thus far, risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers. We maintain a cyber insurance policy that is designed to reduce the risk of loss resulting from cyber security breaches.

Director Independence

Under the listing standards of NASDAQ, independent directors must constitute a majority of a listed company’s board of directors. A director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board orof directors has evaluated the independence of each director based on the independence criteria under NASDAQ rules and has determined that 11 of our 13 directors are independent, specifically, each of Messrs. Cajka, Cubbage, Ellison, Hooper, Johnstone, Lattimore, Maner and Orders and Mss. Ellefson, Grayson-Caprio and Locke is an independent director. As part of this evaluation, our board of directors considered the current and prior relationships that each independent director has with specific individualus and all other facts and circumstances our board of directors may so dodeemed relevant in determining their independence, including the beneficial ownership of our shares by writing toeach independent director, and the secretarymatters discussed under “Certain Relationships and Related Party Transactions.”

Our board of directors determined that the following directors are not independent: Mr. Seaver (our chief executive officer) and Mr. Cothran.

Committees of the company, at Southern First Bancshares, Inc., 100 Verdae Boulevard, Suite 100, Greenville, South Carolina 29607.  Board of Directors

The secretary has been instructedfollowing chart shows the current composition of the committees of our board of directors, the number of meetings held by the board to promptly forward all such communications to the addressees indicated thereon.

Board Independence

Mr. Cajka, Mr. Cubbage, Ms. Ellefson, Mr. Ellison, Mr. Hooper, Mr. Orderseach committee during 2023, and Mr. Sturgiswhich directors are “independent” directors, based upon the independence criteria set forth in Rule 4350 of the corporate governance listing standards of NASDAQ. The NASDAQ Stock Market.

Committees of the Board of Directors

The company’s board of directors has appointed four committees, including an audit personnel,committee, nominating and finance committee. corporate governance committee, and compensation committee are comprised exclusively of independent directors.

DirectorIndependentBoard
(9 Meetings)
Risk
(4 Meetings)
Audit
(5 Meetings)
Nominating
& Corporate
Governance

(2 Meetings)
Compensation
(2 Meetings)
Andrew B. Cajka, Jr.•  Chair
Mark A. Cothran
Leighton M. Cubbage
Anne S. Ellefson•  Chair
David G. Ellison•  Chair
Terry Grayson-Caprio•  Chair
Tecumseh Hooper, Jr.
Rudolph G. Johnstone, III
Ray A. Lattimore
Anna T. Locke
William A. Maner, IV
James B. Orders, III•  Chair
R. Arthur Seaver, Jr.

14

 

Audit Committee

The audit committee is composedcomprised of six independent directors, Messrs. Cajka, Cubbage, and Orders and Mss. Ellefson, Grayson-Caprio and Locke, with Mr. Cajka Mr. Hooper, Ms. Ellefson, Mr. Sturgis,serving as chair. Our board of directors has also determined that Terry Grayson-Caprio and Mr. Cubbage.  Each of these members is considered “independent” under Rule 4350Anna T. Locke are “Audit Committee financial experts” for purposes of the corporate governance listing standardsrules and regulations of The NASDAQ Stock Market.the SEC adopted pursuant to the Sarbanes-Oxley Act of 2002. The audit committee, which met five times in 2008. 

None of the current members of the audit committee nor any other member of our board qualifies as an “audit committee financial expert” as defined under the rules of the Securities and Exchange Commission.  As a relatively small public company, it is difficult to identify qualified candidates who meet all of the qualification of a audit committee financial expert and are willing to serve on our board.  At the present, we do not know if or when we will appoint a new board member that qualifies as an audit committee financial expert.

Although none of the members of our audit committee qualify as "financial experts" as defined in the SEC rules, each of our audit committee members has made valuable contributions to the company and its shareholders as members of the audit committee.  The board has determined that each member is fully qualified to monitor the performance of management, the public disclosures by the company of its financial condition and performance, our internal accounting operations, and our independent auditors.

14


The audit committee functions are set forth in its charter, which was adopted on September 19, 2000 and later amended on June 15, 2004.  A copy of the audit committee charter is available on our website, www.southernfirst.com.  The audit committee2023, has the responsibility of reviewing our financial statements, evaluating internal accounting controls, reviewing reports of regulatory authorities and determining that all audits and examinations required by law are performed. The committee recommends to the board of directors the appointment of the independent auditors for the next fiscal year, reviews and approves the auditor’s audit plans and reviews with the independent auditors the results of the audit and management’s responses. The audit committee is responsible for overseeing the entire audit function and appraising the effectiveness of internal and external audit efforts. The audit committee reports its findings to the board of directors.

Report of the Audit Committee of the Board

The report of the audit committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filingoperates under a written charter, which is available on our website, https://www.southernfirst.com/, under the Securities Act“Investors” link at the bottom.

Risk Committee

The risk committee is comprised of 1933 orseven directors, Messrs. Cajka, Cothran, Ellison, Hooper, Johnstone, Lattimore and Maner, with Mr. Ellison serving as chair. The risk committee met four times in 2023 and is responsible for overseeing and reviewing our risk functions consistent with our strategy and risk appetite, monitoring key business and regulatory compliance risks and overseeing policies and monitoring for capital adequacy, market/earnings risk, credit risk, liquidity risk, compliance/regulatory risk, reputation/strategic risk and operational risk. The risk committee operates under a written charter, which is available on our website, https:// www.southernfirst.com/, under the Securities Exchange Act“Investors” link at the bottom.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee (the “nominating committee”) is comprised of 1934, except to the extent that the company specifically incorporates the information containedthree independent directors, Messrs. Cajka and Orders and Ms. Grayson-Caprio, with Ms. Grayson-Caprio serving as chair. The nominating committee, which met twice in the report by reference, and shall not be deemed filed under such acts.

                The audit committee reviewed and discussed with management the audited financial statements.  The audit committee discussed with the independent auditors the matters required to be discussed by the Statement on Auditing Standards No. 61.  The audit committee received from the independent auditors the written disclosures and letters required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence and has discussed with the independent auditors, the independent auditor’s independence from the company and its management.  In reliance on the reviews and discussions referred to above, the audit committee recommended2023, recommends nominees for election to our board of directors that the audited financial statements be included inat our Annual Report on SEC Form 10-K for the fiscal year ended December 31, 2008 for filing with the SEC.

                The report of the audit committee is included herein at the direction of its members Mr. Cajka, Mr. Hooper, Mrs. Ellefson, Mr. Sturgis, and Mr. Cubbage.

Personnel Committee

            The personnel committee, which we also refer to as the compensation committee, was composed of voting members Mr. Sturgis, Mr. Cubbage, Mr. Ellison, and Mr. Orders.  In addition, Mr. Cothran and Dr. Johnstone served on the committee as non-voting members.  Mr. Sturgis, Mr. Cubbage, Mr. Ellison, and Mr. Orders are each considered “independent” under Rule 4350 of corporate governance listing standards of The NASDAQ Stock Market, and Mr. Cothran and Dr. Johnstone are not considered to be independent.   Our entire board of directors, including a majority of independent directors, considers and approves all matters recommended by the personnel committee.  The personnel committee met three times in 2008.  The personnel committee has the responsibility of annually reviewing all benefit plans of the bank as well as the performance of the chief executive officer.  The 2009 personnel committee is composed only of voting members Mr. Sturgis, Mr. Cubbage, Mr. Ellison, and Mr. Orders. 

The personnel committee of the board of directors recommends all compensation and awards to executive and senior officers, which includes the chief executive officer, president, five executive vice presidents, and eight senior vice presidents, to the entire board of directors for approval. Generally, on its own initiative the Personnel Committee reviews the performance and compensation of the chief executive and president and, following discussions with those individuals and, where it deems appropriate, Benmark or another appropriate compensation advisor, assist in determining their compensation levels. For the remaining executive and senior officers, the chief executive officer makes recommendations to the Personnel Committee that generally, with minor adjustments, have been approved.  With respect to equity compensation awarded to others, the Personnel Committee, with the approval of the entire board of directors, grants restricted stock, generally based upon the recommendation of the chief executive officer, and has delegated option granting authority for non-executive officers to the chief executive officer. The Compensation Committee must also meet at least semiannually to discuss and evaluate employee compensation plans in light of an assessment of any risk posed to the Company from such plans.  The Compensation Committee must also certify that it has reviewed the senior executive officers' compensation arrangements with a view toward ensuring that they do not create incentives to take unnecessary or excessive risks that threaten the value of the Company.

A copy of the personnel committee charter is available on our website, www.southernfirst.com.

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Finance Committee

                The finance committee is composed of Mr. Orders, Mr. Cajka, Mr. Cothran, Mrs. Ellefson, Mr. Ellison, Mr. Gilmer, Mr. Hooper, Dr. Johnstone and Mr. Seaver.  The finance committee met 12 times in 2008.  The finance committee has the responsibility of reviewing the loan policy, investment policy, and the bank’s asset/liability structure.

Nominating Committee

                During 2008, the nominating committee was composed of Mr. Cubbage, Mr. Ellison, Mr. Orders and Mr. Sturgis.  Each of these directors is considered “independent” under Rule 4350 of the corporate governance listing standards of The NASDAQ Stock Market.  The nominating committee met once in 2008.  The nominating committee recommends nominees for election to the board.annual meetings. The board of directors, including a majority of the independent directors, then selects the nominees for election to the board.  On June 15, 2004, we adopted a formal nominating committee charter which is available on our website, www.southernfirst.com.

For directors previously elected by shareholders to serve on the board and whose terms of service are expiring, the nominating committee considers whether to recommend to the board the nomination of those directors for re-election for another term of service.directors. The nominating committee also considers whether to recommend to the board of directors the nomination of persons to serve as directors whose nominations have been recommended by shareholders. Our nominating committee charter is available on our website, https://www.southernfirst.com/ under the “Investors” link at the bottom.

We are increasingly focused on key Environmental, Social and Governance risks and on providing transparency around our Corporate Sustainability efforts. Our nominating committee is charged with overseeing our Corporate Sustainability strategies. In March 2024, we issued our fourth annual Corporate Impact Report. For more information on our focus and enhancement of our Corporate Sustainability efforts, please visit our website, https://www.southernfirst.com/, under the “Investors” link at the bottom and then under “Corporate Overview” and “Corporate Sustainability,” which information is not incorporated by reference into this proxy statement.

Any shareholder may recommend the nomination of any person to serve on the board.board of directors. Our policy is to require a shareholder to submit the name of the person to our corporate secretary in writing no later than (i) with respect to an election to be held at an annual meeting of shareholders, 90 days in advance of such meeting; and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, no more than seven days after notice of the special meeting is given to shareholders. Each notice must set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the shareholder is a holder of record of stock of the companyCompany entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (iv) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission,SEC, had the nominee been nominated, or intended to be nominated, by the board of directors; and (v) the consent of each nominee to serve as a director of the companyCompany if so elected. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

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The nominating committee considershas not adopted a numberformal policy with regard to the consideration of factorsdiversity in identifying director nominees. In determining whether to recommend to the board the nomination of any person for election as a director.  While no single factor is determinative, the following factors are considered bydirector nominee, the nominating committee in evaluating any potential nominee: 

•         educational background, work experience, business acumen,

•         ability to grasp businessmembers consider and financial concepts, knowledge or experience related to banking or financial services, 

•         previous service on  boards (particularly of public companies),

•         willingness and ability to devote time and energy todiscuss diversity, among other factors, with a view toward the duties of a director,

•         a desire and ability to help enhance shareholder value,

•         reputation in the community,

•         character,

•         whether the nominee has any history of criminal convictions or violation of SEC rules,

•         actual or potential conflicts of interest, and

•         any other factor that the nominating committee considers relevant to a person’s potential service on the board of directors.

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The board of directors also considers the foregoing criteria in determining whether to nominate any person for election by the shareholders.

In determining whether to nominate any person for election by the shareholders, the board assesses the appropriate sizeneeds of the board of directors as a whole. The nominating committee members generally conceptualize diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint, professional experience, education, skill and other qualities or attributes that contribute to board heterogeneity, when identifying and recommending director nominees. The nominating committee believes that the inclusion of diversity as one of many factors considered in selecting director nominees is consistent with our bylaws,the committee’s goal of creating a board of directors that best serves the needs of the Company and whether any vacancies onthe interest of its shareholders.

The nominating committee has performed a review of the experiences, qualifications, attributes and skills of the board’s current membership, including the director nominees for election to the board are expected due to retirement or otherwise.  If vacancies are anticipated, or otherwise arise,of directors and the other members of the board, will consider various potential candidates for director recommended byand believes that the nominating committee.  Candidates may come to the attention of the nominating committee or board through a variety of sources including, but not limited to, current members of the board, shareholders, or other persons.  The nominating committeeincluding the director nominees, as a whole possess a variety of complementary skills and board of directors consider properly submitted recommendations by shareholders who are not our directors, officers, or employees oncharacteristics, including the same basis as candidates recommended by any other person.following:

·successful business or professional experience;
·various areas of expertise or experience which are desirable to our current business, such as financial, general management practices, planning, legal, marketing, technology, banking and financial services;
·personal characteristics such as character, integrity and accountability, as well as sound business judgment and personal reputation;
·residence in the bank’s service area;
·willingness and ability to commit the necessary time to fully discharge the responsibilities of board membership to the affairs of the Company;
·leadership and consensus building skills; and
·a commitment to our success.

We do not pay a third party to assist in identifying and evaluating director candidates.

Compensation Committee

CodeOur compensation committee is comprised of Ethicssix independent directors, Ms. Ellefson and Messrs. Cubbage, Hooper, Johnstone, Maner, and Orders, with Ms. Ellefson serving as chair. The committee met twice during 2023.

                We expect allThe compensation committee may form and delegate authority to subcommittees as it deems appropriate, though it has not formed or delegated authority to any such subcommittee to date. The compensation committee is responsible for annually reviewing the performance of our employeesnamed executive officers and reviews all compensation and awards to conduct themselves honestlyour executive and ethically, particularlysenior officers. In addition, the compensation committee may engage compensation advisors to assist in handling actualdetermining compensation levels. The compensation committee has the exclusive authority and apparent conflictsresponsibility to determine all aspects of interestexecutive compensation, and providing full, accurate,seeks input and timely disclosurerecommendations from the chief executive officer for the executive and senior officers. With respect to equity compensation awards to non-executive officers, the compensation committee has delegated restricted stock and option granting authority to our chief executive officer. As a part of its duties, the compensation committee must certify that it has reviewed the named executive officers’ compensation arrangements with a view toward ensuring that they do not create incentives to take unnecessary or excessive risks that threaten the value of the Company.

The compensation committee operates under a written charter, which is available on our website, https://www.southernfirst.com/, under the “Investors” link at the bottom.

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AUDIT COMMITTEE MATTERS

Report of the Audit Committee of the Board

The information contained in this report shall not be subject to the public.liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference in future filings with the SEC except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act.

We have adopted a CodeThe audit committee has reviewed and discussed with management the audited financial statements. The audit committee has discussed with the independent auditors the matters required to be discussed by the applicable requirements of Ethics that is specificallythe Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The audit committee has received from the independent auditors the written disclosures and the letter required by applicable requirements of the PCAOB and has discussed with them their independence from the Company and its management. In reliance on the reviews and discussions referred to above, the audit committee recommended to our seniorboard of directors that the audited financial statements be included in our Annual Report and referenced on SEC Form 10-K for the fiscal year ended December 31, 2023.

The report of the audit committee is included herein at the direction of its members, Messrs. Cajka, Cubbage and Orders and Mss. Ellefson, Grayson-Caprio, and Locke.

Audit and Related Fees

Elliott Davis was our auditor during the year ended December 31, 2023. A representative of Elliott Davis will be present at the annual meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement if he or she desires to do so. The following table shows the fees that we paid for services performed by Elliott Davis in fiscal years ended December 31, 2023 and 2022:

 
 Year Ended December 31,
 2023 2022
Audit Fees$  220,000   318,050
Audit-Related Fees- -
Tax Fees37,450 33,500
Other Fees10,750 25,750
Total$  268,200   377,300

Audit Fees. This category includes the aggregate fees billed or to be billed for each of the last two fiscal years for professional services rendered by Elliott Davis for the audit of our annual consolidated financial statements and employee benefit plan and review of our quarterly reports on Form 10-Q.

Audit-Related Fees. This category includes the aggregate fees billed for non-audit serves, exclusive of the fees disclosed relating to audit fees, during the fiscal years ended December 31, 2023 and 2022.

Tax Fees. This category includes the aggregate fees billed or to be billed for tax services rendered in the preparation of state and federal tax returns for the Company and the Bank.

Other Fees. This category includes the aggregate fees billed for non-audit services, exclusive of the fees disclosed relating to audit fees. During the years ended December 31, 2023 and 2022, these fees include procedures related to audit requirements by the Department of Housing and Urban Development (“HUD”) related to the Bank’s involvement in the Federal Housing Administration lending program. In addition, a cost segregation study was performed on the Company’s new headquarters building in Greenville, South Carolina during the year ended December 31, 2022 which is also included in these fees.

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Oversight of Accountants; Approval of Accounting Fees. Under the provisions of its charter, the audit committee is responsible for the appointment, compensation, retention and oversight of the work of the independent auditor. All of the accounting services and fees reflected in the table above were reviewed and approved by the audit committee, and none of the services were performed by individuals who were not employees of the independent auditor. In addition, the board of directors approves an annual budget for professional audit fees that includes all fees paid to the independent auditors.

Pre-Approval Policy. In general, the audit committee is required to pre-approve all audit and non-audit services performed by the independent auditor to assure that the provision of such services does not impair the auditor’s independence. The independent auditors provide the audit committee with an annual engagement letter outlining the scope of the audit and permissible non-audit services proposed for the fiscal year, along with a fee proposal. The scope and fee proposal is reviewed with the internal auditor, the audit committee chair, and, when appropriate, our management for their input (but not their approval). Once approved by the audit committee, the services outlined in the engagement letter will have specific approval. All other audit and financialpermissible non-audit services that have not been approved in connection with the independent auditor’s engagement letter for the applicable year must be specifically pre-approved by the audit committee under the same process as noted above, where practicable. The independent auditors shall not perform any prohibited non-audit services described in Section 10A(g) of the Exchange Act. The audit committee must specifically pre-approve any proposed services that exceed pre-approved cost levels. All services provided by Elliott Davis, and all fees related thereto, were approved pursuant to the pre-approval policy.

The audit committee believes that the independent auditor can provide tax services to us, such as tax compliance, tax planning and tax advice, without impairing the auditor’s independence. The audit committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations.

COMPENSATION DISCUSSION AND ANALYSIS

The following discussion provides a description of our decision-making process and philosophy for compensating our named executive officers includingin 2023. This discussion also describes the material components of our 2023 compensation program. This discussion should be read together with the compensation tables for our named executive officers located in this proxy statement.

Our “named executive officers” are the individuals who served as our principal executive officer, our principal financial officer, and our principalthree other most highly compensated executive officers who serve as policymakers who were serving as executive officers at the end of 2023. Our named executive officers as of December 31, 2023 are noted in the following table, along with their positions:

NameTitle
R. Arthur Seaver, Jr.Chief Executive Officer
Calvin C. HurstPresident
D. Andrew Borrmann(1)Former Chief Financial Officer
William M. Aiken, IIIChief Risk Officer
Silvia T. KingChief Human Resources Officer
Michael D. Dowling(2)Former Chief Operating Officer/Chief Financial Officer
(1)Mr. Borrmann was appointed Chief Financial Officer of the Company and the Bank effective April 17, 2023 and resigned from the Company and the Bank effective March 29, 2024.
(2)Mr. Dowling resigned from the Company and the Bank effective February 15, 2023.

Overview and Executive Summary

Business Overview.We are primarily engaged in the business of accepting demand and savings deposits insured by the Federal Deposit Insurance Corporation, and providing commercial, consumer and mortgage loans to the general public. We operate our Bank using a simple and efficient style of banking that is focused on providing core banking products and services to our clients through a team of talented and experienced bankers. We believe this model results in a consistent and superior level of professional service that

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provides us with a distinct competitive advantage by enabling us to build and maintain long-term relationships with desirable clients, enhancing the quality and stability of our funding and lending operations and positioning us to take advantage of future growth opportunities in our existing markets. We also believe that this client focused culture has led to our successful expansion into new markets in the past, and will enable us to be successful if we seek to expand into new markets in the future.

Key Financial Highlights:

·Net income was $13.4 million for the year ended December 31, 2023, a 53.9% decrease from $29.1 million for the year ended December 31, 2022.
·Total loans were $3.6 billion at December 31, 2023, a $329.3 million, or 10.1%, increase from 2022.
·Total deposits were $3.4 billion at December 31, 2023, a $245.7 million, or 7.8%, increase from 2022.
·Net charge-offs to average total loans were 0.00% for the year ended December 31, 2023 as compared to net recoveries to average total loans of (0.05%) for the year ended December 31, 2022.
·Book value increased 5.1% to $38.63 per share at December 31, 2023 from $36.76 per share at December 31, 2022.

Compensation Objectives and Philosophy. The goal of our compensation program is to align the interests of management with those of our shareholders while minimizing undue risk-taking. We compensate our executive and senior officers through a mix of base salary, bonuses and equity compensation designed to recruit, reward, and retain until retirement our talented management team. In addition, we seek to align management's incentives with the long-term interests of our shareholders.

Our executive compensation program is intended to accomplish the following objectives:

pay for performance;
tie equity compensation to long-term value creation for our shareholders;
align the financial interests of our named executive officers with those of our shareholders;
maintain a corporate environment that encourages stability and a long-term focus for both us and our management;
maintain a program that:
oclearly motivates personnel to perform and succeed according to our current goals;
oattracts and retains key personnel critical to our long-term success; and
odoes not encourage undue risk-taking; and
seeks to ensure that management:
ofulfills its oversight responsibility to its constituents which include stockholders, clients, employees, the community and government regulatory agencies;
oconforms its business conduct to the highest ethical standards;
oremains free from any influences that could impair or appear to impair the objectivity and impartiality of its judgments or treatment of our constituents; and
ocontinues to avoid any conflict between its responsibilities to us and each individual’s personal interests.

Best-Practice Compensation Approaches. To support long-term value creation, we follow good governance practices, including the following:

Pay for performance, minimum performance requirements and capped payoutsWe have structured compensation so that a meaningful portion of pay for our executive officers is subject to the attainment of key performance objectives.
Appropriate risk-takingWe annually review our compensation programs to ensure that they do not encourage excessive risk-taking.
Limited perquisitesWe do not offer excessive perquisites and those perquisites we do offer are limited and primarily serve to enhance our executives’ business development activities.
No golden-parachute excise tax gross-upsWe do not provide our executive officers excise tax gross-ups on benefits or under any change in control provisions or agreements.

“Double-trigger” severance benefits in the event of a change in controlOur change in control provisions require a double trigger.
No repricing or exchanges of underwater stock optionsOur 2020 Equity Incentive Plan both prohibits the repricing or exchange of underwater stock options without stockholder approval.
No hedging or pledgingOur executive officers and directors are prohibited from hedging our securities, and pledging our securities requires prior approval.
Annual say on pay voteThe Company both seeks and values stockholder feedback and holds a say on pay vote every year.

Our compensation philosophy is supported by elements of our executive compensation program such as (i) base salary; (ii) annual incentives; (iii) equity compensation; (iv) retirement/deferred compensation; and (v) additional benefits. These compensation elements provide a balanced mix of guaranteed compensation and variable, at-risk compensation with an emphasis on annual and long-term incentives.

Base Salaries. We aim to provide our named executive officers with a base salary that is commensurate with similar financial institutions in our market area and appropriate for the overall responsibility of the individual based on experience, performance and any other unique factors or qualifications such as the difficulty of replacing the officer with someone of comparable experience and skill.

    
Name2023 Base Salary(1)2022 Base Salary% Change
R. Arthur Seaver, Jr.$   515,000$   510,0000.98%
Calvin C. Hurst309,000300,0003.00%
Michael D. Dowling364,000354,0002.82%
D. Andrew Borrmann310,000-n/a
William M. Aiken, III257,500250,0003.00%
Silvia T. King190,500185,0002.97%
(1)The amount identified as 2023 base salary represents an annual amount for twelve months of service. Mr. Borrmann began employment with the Company effective April 27, 2023 and Mr. Dowling resigned from his role with the Company effective February 15, 2023.

Bonuses/Incentive Plan. We have established a short-term incentive plan in order to reward our named executive officers for annual achievement based on our overall strategic plan which includes company-wide performance measures such as the following:

·Net income;
·Retail deposit growth;
·Loan growth;
·Loan charge-offs percentage;
·Average non-performing assets ratio:
·Net interest margin;
·Talent acquisition; and
·Satisfactory compliance scores.

The incentive plan for our named executive officers is based on the compensation committee’s review of all key financial measures and performance related to our strategic plan as a whole. The evaluation of these various incentive components is more subjective in nature than objective without specific financial targets and objectives. The committee also considers whether or not the anticipated incentive pay is within the percentage of total compensation that they have chosen to use as a guide for the allocation of total compensation. In contrast, detailed incentive plans are developed annually for other senior officers based on the key financial measures included in our overall strategic plan.

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We do not believe that an “all or nothing” approach is appropriate for incentive compensation. Rather, the evaluation of the Company’s performance is such that the recipient can receive part of an award in the event that acceptable, but not the desired, results are achieved. Awards are made at various levels depending on objective quantifiable measures of accomplishments.

    
Name2023 Bonus(1)2022 Bonus% Change
R. Arthur Seaver, Jr.$ 90,000$ 175,000(48.57%)
Calvin C. Hurst100,000155,000(35.48%)
D. Andrew Borrmann80,000-n/a
William M. Aiken, III70,00089,700(21.96%)
Silvia T. King35,00055,000(36.36%)
Michael D. Dowling-155,000n/a
(1)Mr. Borrmann began employment with the Company effective April 27, 2023 and Mr. Dowling resigned from his role with the Company effective February 15, 2023.

Equity Compensation. At various times, we issue additional compensation to our named executive officers and senior officers in the form of equity compensation in order to further align management and shareholder interests and to reward management for cumulative performance and increases in shareholder value. The awards may be issued in the form of incentive stock option grants, nonstatutory stock option grants and restricted stock awards. In 2023, the Compensation Committee determined that restricted stock awards were the preferred form of equity compensation for the Company and did not issue any stock options as equity compensation.

Option exercise prices are established at market value on the grant date and vesting provisions for granted stock options and restricted stock are at the discretion of the compensation committee and executive management. Upon termination, unexercised options are forfeited and made available for future grants. We fund the option shares and restricted stock from authorized but unissued shares.

With the exception of significant promotions and new hires, we generally make these awards at the first meeting of the compensation committee each year following the availability of the financial results for the prior year. In 2024, the determination of equity awards granted to our named executive officers will be based on guidelines regarding certain performance measures calculated over the prior cumulative three-year period. Equity awards granted pursuant to these guidelines will be calculated based on a percentage of salary, tied to our cumulative performance with respect to tangible book value growth, net charge-offs as a percentage of average loans, and total shareholder return in relation to certain target, stretch and maximum goals over such three-year period. Under these guidelines, following are the performance metrics and goals:

Performance Measure

Target
(1-Star Value *)

Stretch
(2-Star Value **)

Maximum
(3-Star Value ***)

Growth in Tangible Book Value15%20%30%
Cumulative Charge-offs< 75 bps< 55 bps< 40 bps
Total Shareholder Return15%20%30%

A value of zero to three stars will be awarded to each performance metric based on the actual results calculated over the cumulative prior three-year period. For illustration, if the target goal is not met on any one of the performance measures, then no star value will be awarded for that single performance measure. If the target goal is met for each of the performance metrics, then one star will be awarded for each metric for a total of three stars, and per the below table, each named executive officer will be entitled to equity awards in an amount equal to the applicable percentage of base salary related to the achievement of three stars. Further, if the target goal is met on any two performance metrics and the stretch goal is met on the remaining performance metric, then four stars will be awarded and each named executive officer will be entitled to equity awards in an amount equal to the applicable percentage of base salary related to such four star achievement. For the avoidance of doubt, if the actual performance achieved falls between the target, stretch, or maximum goal, the minimum level achieved will be awarded. For example, if tangible book value growth achieved is 17%, then one star will be awarded to such achievement.

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The number of shares actually granted will be determined by the closing stock price of the respective grant date. Any equity awards granted pursuant to these guidelines will vest over four years to provide a strong retainage tool.

Achievements% of Base Salary for
the Equity Award
for Mr. Seaver
% of Base Salary
for the Equity
Award for Mr.
Hurst
% of Base Salary
for the Equity
Award for Mr.
Borrmann
% of Base Salary
for the Equity
Award for Mr.
Aiken
% of Base Salary
for the Equity
Award for Ms. King
9 Stars120%100%85%80%50%
8 Stars100%85%80%70%40%
7 Stars85%80%75%60%30%
6 Stars60%60%60%50%25%
5 Stars50%50%50%40%20%
4 Stars40%40%40%30%15%
3 Stars30%30%30%20%10%

Retirement/Deferred Compensation. We have a 401(k) plan pursuant to which we match 100% of the first 2% of the employee’s salary, and 50% of the next 4% of the employee’s salary. In addition, we supplemented the retirement planning by adopting a salary continuation plan for certain management at the level of senior vice president or above, including a majority of our named executive officers. This plan was designed to enhance our ability to retain executives over the long-term and to provide a partial offset to shortfalls in the percentage of income provided for retirement by our 401(k). Pursuant to this plan, we accrue retirement benefits at the levels necessary so that the net present value of the anticipated cost of the salary continuation plan is accrued at the time the officer reaches the age of 65. When we calculate targeted overall compensation for our senior management, we factor in the benefits expense related to both the 401(k) and the accrued individual cost of the salary continuation plan. Additional details regarding the supplemental retirement plan are provided below following the Pension Benefits Table.

Perquisites and Other Benefits. We annually review the perquisites that our named executive officers and other senior officers receive. The primary perquisites for these individuals are additional levels of life insurance, the payment of the monthly dues for one golf or social club, and an automobile or an automobile allowance. We encourage our named executive officers and other senior officers to belong to a golf or social club so that they have an appropriate entertainment forum for clients and appropriate interaction with their communities.

Our named executive officers also participate in our other benefit plans on the same terms as other employees. These plans include medical insurance, life insurance and a medical reimbursement plan.

Severance and Change in Control Agreements

Severance Benefits. We believe we should provide reasonable severance benefits to our named executive officers. These severance benefits should reflect the fact that it may be difficult to find comparable employment within a short period of time.

For additional information regarding severance benefits, see “Potential Payments Upon Termination or Change in Control” below and information about the employment agreements with the named executive officers that follows the Grants of Plan Based Awards table.

Change in Control. Our named executive officers and other employees have built Southern First into the Company that it is today, and we believe that it is important to protect them in the event of a change in control. Further, it is our belief that the interests of shareholders will be best served if the interests of our named executive officers are aligned with them, and providing change in control benefits should eliminate, or at least reduce, the potential reluctance of our named executive officers to pursue potential change in control transactions that may be in the best interests of shareholders. As such, our chief executive officer, Mr. Seaver, has a renewable employment agreement with us for a term of three years and our president, Mr. Hurst, and Chief Risk Officer, Mr. Aiken, have renewable employment agreements with us for a term of two years.

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Under the terms of the employment agreements, if Messrs. Seaver, Hurst and Aiken are terminated without “cause” or terminate employment for “good reason" following a change in control, the executive is entitled to receive severance compensation and any bonus accrued or unpaid through the date of termination. Mr. Seaver’s agreement entitles him to receive severance compensation equal to three years of base salary, while Mr. Hurst’s, and Mr. Aiken’s agreements provide for severance compensation equal to two years of base salary. We believe that these levels are comparable to our competition.

In addition, under the terms of the employment agreements, in the event of a change in control, we will also continue to partially fund health insurance benefits for the legally required COBRA period or until the employee obtains comparable benefits pursuant to a subsequent employer’s benefit plans. Further, all restrictions on any outstanding incentive awards granted to the employee and incentive plans become 100% vested, and all stock options and stock appreciation rights granted to the employee will also become immediately exercisable. See “Compensation Arrangements – Employment Agreements” for additional information regarding the employment agreements.

We have also entered into salary continuation agreements with our named executive officers which provide, among other things, that upon a change in control the Bank will pay to the executive a change in control benefit equal to his accrual balance at his normal retirement age, without additional discount for the time value of money in one lump-sum payment within three days after the change in control. If a change in control occurs at any time during the salary continuation benefit payment period and if when the change in control occurs the executive is receiving the normal retirement benefit, the early termination benefit, or the disability benefit, the Bank will pay the present value, calculated at the discount rate or rates established by the plan administrator, of the remaining salary continuation benefits to the executive in a single lump-sum payment within three days after the change in control. See “Compensation Arrangements – Salary Continuation Agreements” and “Pension Benefits” for additional information regarding the salary continuation agreements.

Compensation Process

Our compensation committee, is responsible for annually reviewing the performance of our named executive officers and reviews all compensation and awards to executive and senior officers. In addition, the compensation committee may engage compensation advisors to assist it in determining compensation levels. The compensation committee has the exclusive authority and responsibility to determine all aspects of executive compensation, and seeks input and recommendations from the Chief Executive Officer for the other named executive officers. The committee operates under a written charter that establishes its responsibilities and reviews the charter annually to ensure that the scope of the charter is consistent with the committee’s role.

Role of the Named Executive Officers. Our named executive officers and the compensation committee work together to establish, review and evaluate performance goals for our incentive compensation plans. While these executives provide input into our corporate strategic goals for future performance periods, the committee carefully reviews these recommended goals before giving its final approval, and evaluates and determines whether such goals have been achieved. We believe this process ensures that performance goals will be appropriately balanced between short- and long-term incentives and will be motivating and challenging as well as attainable.

Role of the Compensation Consultant. Every two to three years, we engage a consultant firm to assist with trends and benchmarks related to executive compensation. In 2021, the Company engaged McLagan, an Aon Company, to provide limited independent consulting services related to our executive compensation. In considering the retention of McLagan, the Company assessed McLagan’s independence in light of SEC rules and NASDAQ listing standards and determined that McLagan was independent and its work did not create any conflicts of interest.

McLagan provided the following services to us in 2021:

·Recommended a compensation peer group of publicly-traded financial institutions;
·Reviewed the competitiveness of our compensation programs for our named executive officers, including base salary, annual incentives, long-term incentives, employment contracts and retirement benefits; and
·Commented on the design of our incentive programs relative to the practices of our peers and alignment with our culture and business strategy.

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Benchmarking. The compensation committee did not use the compensation peer group provided by McLagan in 2021 to perform compensation benchmarking but rather utilized broader-based compensation third-party industry surveys to obtain an additional understanding of what is current market practice among US-based community banks. The compensation committee, however, did rely on the input of McLagan on how the design of our incentive programs aligns with our culture and business strategy.

Risk Considerations. The compensation committee reviews the risks and rewards associated with the Company’s compensation programs from time to time. This review assesses the material elements of executive and non-executive employee compensation and has concluded that our policies and practices do not create risk that is reasonably likely to have a material adverse effect on the Company. We believe that our compensation programs encourage and reward prudent business judgment and appropriate risk taking over the short-term and long-term.

Stock Ownership Guidelines. We believe that it is in our best interest and that of our shareholders to align the personal financial interests of our directors and officers with those of our shareholders. While the board of directors has not implemented stock ownership guidelines for our directors and named executive officers, the board periodically analyzes the ownership of such individuals and believes that their personal financial interests are aligned with those of our shareholders.

Tax and Accounting Considerations. In consultation with our advisors, we evaluate the tax and accounting treatment of each of our compensation programs at the time of adoption and on an annual basis to ensure an understanding of the financial impact of the program. To preserve maximum flexibility in the design and implementation of our compensation program, we have not adopted a formal policy that requires all compensation to be tax deductible. However, to the greatest extent possible, it is our intent to structure our compensation programs in a tax efficient manner.

Stock Compensation Grant and Award Practices; Timing Issues. As a general matter, the compensation committee’s process is independent of any consideration of the timing of the release of material non-public information, including with respect to the determination of grant dates or stock option exercise prices. Similarly, we have never timed the release of material non-public information to affect the value of executive compensation. In general, the release of such information reflects long-established timetables for the disclosure of material non-public information such as earnings reports or, with respect to other events reportable under federal securities laws, the applicable requirements of such laws with respect to timing of disclosure. The compensation committee’s decisions are reviewed by the full board of directors.

Targeted Overall Compensation. We establish targeted overall compensation for our named executive officers by first understanding the market value for these individuals in our regions. We seek to provide our executives with the incentive to earn above market compensation by accomplishing significant goals related to their respective role within the Company.

Under our compensation structure, the mix of base salary, bonus and equity compensation generally varies depending upon level. For our named executive officers, we generally seek the mix to include a base salary of 50-60%, a bonus of 10-30%, and equity compensation of 15-30% of total compensation.

In allocating compensation among these elements, we believe that the compensation of our senior-most levels of management – the levels of management having the greatest ability to influence our performance – should be significantly weighted on performance. Therefore, we typically offer our executives a slightly lower base salary (approximately 90% of what we believe to be average market base salary) with the potential to earn a higher than market bonus and a higher than market overall compensation. We select allocations that we believe are consistent with our overall compensation philosophy as described above.

The amount of equity awarded has been based primarily on the executive officer’s areas of responsibility. The objective of the awards is to align management with the same interest as shareholders. From time to time additional equity awards may be granted to officers based on performance, assumption of additional responsibilities and duties and other factors.

Role of Shareholder Say on Pay Vote. As required by the Dodd-Frank Act, we held an advisory vote on the compensation of our executive officers (“say on pay”) at our 2023 Annual Meeting of Shareholders. At the 2023 Annual Meeting of Shareholders 67.34% of the votes cast on the say on pay proposal were cast in support of the compensation of our named executive officers. A majority of the votes cast by our shareholders at our 2019 Annual Meeting of Shareholders were in favor of holding this vote on an annual basis. Based

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on the results of this advisory vote, our board of directors elected a frequency of every year to conduct an advisory vote on compensation of our named executive officers.

While the 2023 shareholder vote reflected strong support for our executive compensation programs, the compensation committee, board of directors and management have continued to refine compensation programs in an effort to further align interest of the executives with those of our shareholders and to strengthen the linkage of pay for performance.

Clawback Policy.  The compensation committee believes it is appropriate to adjust or recover incentive awards or payments in the event the financial reporting measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of an award or payment. As required under SEC and NASDAQ rules, the board of directors approved the Incentive Compensation Recovery Policy effective November 21, 2023. The policy generally requires recovery of any erroneously awarded incentive-based compensation (calculated based on the error that was subsequently corrected in an accounting restatement), regardless of any misconduct or knowledge of the officer who received the compensation. But recovery is generally not required if the compensation was received before the person began serving as an officer, or the person did not serve as an officer at any time during clawback period. A clawback will be triggered by both a “Big R” restatement — one that corrects an error in previously issued financial statements that is material to the previously issued financial statement and requires a Form 8-K filing — as well as a “little r” restatement — one that corrects an error that would result in a material misstatement if the error was corrected in the current period or left uncorrected in the current period and generally does not require filing a Form 8-K.

Regulatory Considerations. As a publicly-traded financial institution, we must contend with several often overlapping layers of regulations when considering and implementing compensation-related decisions. These regulations do not set specific parameters within which compensation decisions must be made, but do require the compensation committee to be mindful of the risks that often go hand-in-hand with compensation programs designed to incentivize the achievement of better than average performance. While the regulatory focus on risk assessment has been heightened over the last several years, the incorporation of general concepts of risk assessment into compensation decisions is not a recent development.

The compensation committee continues to believe in and practice a sensible approach to balancing risk-taking and rewarding reasonable, but not necessarily easily attainable, goals and this has always been a component of its overall assessment of the compensation plans, programs and arrangements it has put in place for our named executive officers. The compensation committee believes we have adequate policies and procedures in place to balance and control any risk-taking that may be incentivized by the employee compensation plans. The compensation committee further believes that such policies and procedures will work to limit the risk that any employee would manipulate reporting earnings in an effort to enhance his or her compensation.

In making decisions about executive compensation, in addition to the above, we also consider the impact of other regulatory provisions, including: the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), such as Code Section 162(m) that may limit the tax deductibility of certain compensation; Code Section 409A regarding nonqualified deferred compensation; and Code Section 280G regarding excise taxes and deduction limitations on golden parachute payments made in connection with a change in control. In making decisions about executive compensation, we also consider how various elements of compensation will impact our financial results. For example, we consider the impact of FASB ASC Topic 718, which requires us to recognize the compensation cost of grants of equity awards based upon the grant date fair value of those awards.

The compensation committee has not adopted a formal policy regarding tax deductibility of compensation paid to our executive officers, and may determine it is appropriate to provide compensation that may exceed deductibility limits in order to recognize performance, meet market demands, retain key executives, and take into account other appropriate considerations.

Compensation Committee Report

The compensation committee consisting of Ms. Ellefson and Messrs. Cubbage, Hooper, Johnstone, Maner and Orders has reviewed and discussed the foregoing Compensation Discussion & Analysis contained in this Proxy Statement with management. Based upon such review, the related discussions and such other matters deemed relevant and appropriate to the Compensation Committee, the Compensation Committee has recommended to our board of directors that the Compensation of Directors and Executive officers be included in this Proxy Statement and incorporated by reference into our 2023 Form 10-K.

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The information contained in this review shall not be subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference in future filings with the SEC except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.

The report of the compensation committee is included herein at the direction of its members, Ms. Ellefson and Messrs. Cubbage, Hooper, Johnstone, Maner and Orders.

EXECUTIVE COMPENSATION

The following table shows the compensation we paid to our named executive officers for the years ended December 31, 2023, 2022 and 2021.

Summary Compensation Table

Name and Principal Position as of December 31, 2022YearSalary

Bonus
(1)

Stock
Awards
(2)(3)

Option
Awards
(2)(4)
Non-Equity
Incentive Plan
Compensation

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(5)

All Other
Compensation
(6)
Total
R. Arthur Seaver, Jr.2023$515,000$90,000$ 130,350$             -$               -  $               -$   69,968$   805,318
Chief Executive Officer2022510,000175,000 122,280             -         -     50,741   72,583   930,604
 2021495,000170,000 78,900 239,335      -     240,559   55,685   1,279,479
Calvin C. Hurst2023309,000100,00086,900---45,668541,568
President2022300,000155,00091,710--9,33646,683602,729
 2021223,500140,00039,450127,645-20,80942,822594,226
Michael D. Dowling(7)202345,000- 86,900 --22,31212,473166,685
Chief Operating Officer2022354,000155,000 91,710 --17,37047,442665,522
and Chief Financial Officer2021340,000155,000 59,175 159,557-91,74848,353853,833
D. Andrew Borrmann(8)2023219,500105,00043,890---13,348381,738
     Chief Financial Officer         
William M. Aiken, III(9)2023257,50070,000 86,900---30,278444,678
     Chief Risk Officer2022250,00089,700 61,140---30,754431,594
 2021220,00085,000 -39,889--17,650362,539
Silvia T. King2023190,50035,00026,070---30,924282,494
Chief Human Resource2022185,00055,00036,684--6,97728,634312,295
Officer2021175,00052,250 -31,911-18,13925,860303,160
(1)These amounts reflect an annual discretionary bonus award determined by the compensation committee and paid in the subsequent fiscal year.
(2)The value for each of these awards is its grant date fair value calculated by multiplying the number of shares subject to the award by the market price per share on the date such award was granted, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 and is the closing price as reported on NASDAQ as of each valuation date. See the discussion of assumptions used in the valuation of stock and option awards in Note 19 “Stock-Based Compensation” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
(3)

On January 17, 2023, Mr. Seaver received an award of 3,000 shares of restricted stock, Messrs. Hurst, Dowling and Aiken each received an award of 2,000 shares of restricted stock, and Ms. King received an award of 600 shares of restricted stock, and on April 18, 2023, Mr. Borrmann received an award of 1,500 shares of restricted stock under the Company’s 2020 Equity Incentive Plan. On January 18, 2022, Mr. Seaver received an award of 2,000 shares of restricted stock, Messrs. Dowling and Hurst each received an award of 1,500 shares of restricted stock, Mr. Aiken received an award of 1,000 shares of restricted stock, and Ms. King received an award of 600 shares of restricted stock under the Company’s 2020 Equity Incentive Plan. On January 19, 2021, Mr. Seaver received an award of 2,000 shares of restricted stock, Mr. Dowling received an award of 1,500 shares of restricted stock and Mr. Hurst received an award of 1,000 shares of restricted stock under the Company’s 2016 Equity Incentive Plan.


The restricted stock vests ratably over four years, except for 1,000 shares of restricted stock granted to Mr. Aiken on January 17, 2023, which have a cliff vesting period of five years.
(4)On January 19, 2021, Mr. Seaver received a grant of stock options to purchase 15,000 shares of the Company’s common stock, Mr. Dowling received a grant of stock options to purchase 10,000 shares, Mr. Hurst received a grant of stock options to purchase 8,000 shares, Mr. Aiken received a grant of stock options to purchase 2,500 shares, and Ms. King received a grant of stock options to purchase 2,000 shares, which each had a per share fair value of $15.96.
(5)As of December 31, 2023, the value of the Company’s Nonqualified Deferred Compensation Plan had decreased in value due to an increase in the discount rate used to calculate the present value of the deferred benefit.  For Mr. Seaver, the change in pension value for the year ended December 31, 2023 was a decrease of $144,501, for Mr. Hurst, the change was a decrease of $9,598, and for Ms. King the change was a decrease of $9,350.
(6)All other compensation includes the following items: (a) Company contributions under the 401(k) Plan, (b) car allowance or value attributable to personal use of Company provided automobiles, (c) club dues, (d) premiums for the portion of the death benefits shared by the Company with the named executive officers pursuant to bank owned life insurance and (e) premiums for medical, life, accident and long-term disability insurance policies. None of these benefits exceed $10,000 except for medical insurance premiums of $12,228 paid for Mr. Hurst and Ms. King; employer 401(k) contributions of $10,223 paid for Mr. Aiken, $12,330 paid for Mr. Hurst, and $13,320 paid for Mr. Seaver; and country club dues of $14,104 paid for Mr. Seaver.

(7) 

Mr. Dowling resigned from the Company and the Bank effective February 15, 2023.

(8) 

Mr. Borrmann joined the Company and the Bank effective April 17, 2023 and resigned from the Company and the Bank effective March 29, 2024.

(9) 

Mr. Aiken joined the Company in 2020 but was not a named executive officer prior to 2021.

Grants of Plan-Based Awards

The following table provides a summary regarding plan-based equity and non-equity incentive awards granted to the named executive officers in 2023. Discretionary cash bonus awards made in January 2024 for the year ended December 31, 2023, as shown in the Summary Compensation Table, are as follows: R. Arthur Seaver, Jr. - $90,000, Calvin C. Hurst - $100,000, D. Andrew Borrmann - $80,000, William M. Aiken - $70,000 and Silvia T. King - $35,000.

        
NameGrant
Date
Estimated
Future
Payouts Under
Non-Equity
Incentive Plan
Awards($)
Estimated
Future
Payouts
Under Equity
Incentive
Plan
Awards($)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
All Other Option
Awards: Number
of Securities
Underlying
Options

Exercise
or Base
Price of
Option
Awards

($/Sh)

Grant Date
Fair Value of
Stock and
Option
Awards ($)(1)
        
R. Arthur Seaver, Jr.1/17/20233,000-$              -$  130,350
Calvin C. Hurst1/17/2023--2,000--86,900
D. Andrew Borrmann4/18/20231,500--43,890
Michael D. Dowling1/17/2023--2,000--86,900
William M. Aiken, III1/17/2023--2,000--86,900
Silvia T. King1/17/2023--600--26,070
(1)This amount represents the fair market value of all restricted stock awards made during the fiscal year 2023. The fair market value for stock awards is based on the closing market price of the stock on the date of grant which was $43.45 per share on January 17, 2023 and $29.26 on April 18, 2023.

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Outstanding Equity Awards at Fiscal Year End

The following table shows the number of shares covered by both exercisable and non-exercisable options and stock awards owned by our named executive officers as of December 31, 2023, as well as the related exercise prices and expiration dates for the option awards. Option awards have been granted pursuant to the 2010 Stock Incentive Plan, the 2016 Equity Incentive Plan and the 2020 Equity Incentive Plan. All stock option information has been adjusted to reflect all prior stock splits and dividends.

 Option Awards Stock Awards
     Market
    Number ofValue of
    Shares orShares or
 Number of Securities   Units ofUnits of
 Underlying UnexercisedOptionOption Stock thatStock that
 Options(#)ExerciseExpiration Have NotHave Not
NameExercisableUnexercisable(1)Price($)Date Vested(#)Vested(#)
R. Arthur Seaver, Jr.10,000-13.4301/21/2024 6,125227,238
 10,000-16.7801/20/2025 --
 10,000-23.0001/19/2026 --
 10,000-35.6501/17/2027 --
 8,000-42.8001/16/2028 --
 8,000-32.3201/15/2029 --
 6,0002,00042.7201/21/2030 --
 7,5007,50039.4501/19/2031 --
Calvin C. Hurst4,000-35.3504/16/2029 3,625134,488
 3,0001,00042.7201/21/2030 --
 6,0002,00025.1005/19/2030 --
 4,0004,00039.4501/19/2031 --
D. Andrew Borrmann---- 1,50055,650
Michael D. Dowling---- --
William M. Aiken, III2,25075025.4908/18/2030 3,000111,300
 1,2501,25039.4501/19/2031 --
Silvia T. King2,000-45.5003/20/2028 1,05038,955
 625-32.3201/15/2029 --
 1,12537542.7201/21/2030 --
 1,0001,00039.4501/19/2031 --
(1)All of the unvested options have an expiration date of ten years following the date of grant and vest in four equal increments on the first four anniversaries of the applicable date of grant.

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Option Exercises and Stock Vested

      
 Option Awards Stock Awards
NameNumber of
Shares
Acquired on
Exercise (#)
Value Realized
on Exercise ($)(1)
 Number of
Shares
Acquired on
Vesting (#)
Value Realized
on Vesting
($)(2)
R. Arthur Seaver, Jr.      $                -  2,125 $   91,189 
Calvin C. Hurst 1,125 41,523 
D. Andrew Borrmann 
Michael D. Dowling10,00056,700 1,75075,238
William M. Aiken, III 500 17,638 
Silvia T. King 150 6,339 
(1)Value realized is based on the difference between our common stock closing price on the date of exercise and the option exercise price.
(2)Value realized is based on the market value of the underlying shares on the vesting date.

Equity Compensation Plan Information

The following table contains certain information as of December 31, 2023, relating to securities authorized for issuance under our equity compensation plans. All stock option information has been adjusted to reflect prior stock splits and dividends.

Plan Category Number of
securities
 to be issued upon
exercise
of outstanding
options,
 warrants and
rights(a)
Weighted-
average
exercise price of
outstanding
options,
 warrants and
rights (b)

Number of securities
remaining available for
future issuance under
equity compensation
plans (c)
(excluding securities
reflected in column(a))

Equity compensation plans approved by security holders331,349$ 35.51319,058
Equity compensation plans not approved by security holdersNonen/an/a
Total331,349$ 35.51319,058

Compensation Arrangements

Employment Agreements.The Company and the Bank are parties to an amended and restated employment agreement with R. Arthur Seaver, Jr., dated September 30, 2013, pursuant to which he serves as the Chief Executive Officer of both our Company and the Bank. The agreement renews annually on January 31st for an additional year, so that the then-remaining term of the agreement is three years. As of March 15, 2024, Mr. Seaver receives a minimum annual salary of $515,000, which may be increased annually by the board of directors. He is also eligible to participate in any of our pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other employee benefit plans and programs and receives an automobile owned by the bank.

Mr. Seaver’s employment agreement also provides that during the term of employment and for a period of 12 months following termination, Mr. Seaver may not (a) compete with us by, directly or indirectly, forming, serving as an organizer, director or officer of, employee or agent, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company thereof if such depository institution or holding company has one or more offices or branches within 30 miles of our main office or any other offices, (b) solicit our clients with which he had contact in connection with products and services provided by us for the purpose of providing financial services, or (c) solicit our employees. If Mr. Seaver is terminated without cause, as defined in the employment agreement, he will be entitled to severance compensation equal to his then current monthly salary for a period of 12 months, plus accrued bonus. If, following a change in control of our Company, Mr. Seaver is terminated without cause, or if he terminates his employment for good reason, as defined in the employment agreement, he will be entitled to severance compensation

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of three times his then current monthly salary paid in equal monthly installments over a period of 12 months, plus accrued bonus and all outstanding options and incentives will vest immediately. If, following a change in control of our Company, he is terminated without cause or he terminates his employment for good reason, he would receive continuation of health insurance for an 18-month period during which he would be required to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year.

As of December 31, 2023, the Company and the Bank were parties to (i) an amended and restated employment agreement with Calvin C. Hurst to serve as President of the Company and the Bank, and (ii) an employment agreement with William M. Aiken, III to serve as Chief Risk Officer of the Company and the Bank. Each agreement renews annually on January 31st for an additional year, so that the then-remaining term of the agreement is two years. As of March 15, 2024, Messrs. Hurst and Aiken are paid a salary of $355,000, and $264,500, respectively, which may be increased annually by the board of directors. They are also eligible to participate in any of our pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other employee benefit plans and programs. In addition, Mr. Hurst and Mr. Aiken receive a monthly automobile allowance.

If Mr. Hurst or Mr. Aiken, as applicable, is terminated without cause, as defined in the employment agreement, he will be entitled to severance compensation equal to his then current monthly salary for a period of 12 months, plus accrued bonus. If, following a change in control of our Company, Mr. Hurst or Mr. Aiken is terminated without cause, or if he terminates his employment for good reason, as defined in the employment agreement, he will be entitled to severance compensation of two times his then current monthly salary paid in equal monthly installments over a period of 12 months, plus accrued bonus and all outstanding options and incentives will vest immediately. If, following a change in control of our Company, either officer is terminated without cause or he terminate his employment for good reason, he would receive continuation of health insurance for an 18-month period during which he would be required to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year.

Each employment agreement provides that during the term of employment and for a period of 12 months following termination, Messrs. Hurst and Aiken may not (a) compete with us by, directly or indirectly, forming, serving as an organizer, director or officer of, employee or agent, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company thereof if such depository institution or holding company has one or more offices or branches within 30 miles of our main office or any other offices, (b) solicit our clients with which they had contact in connection with products and services provided by us for the purpose of providing financial services, or (c) solicit our employees.

Salary Continuation Agreements. The Bank is a party to salary continuation agreements with Messrs. Seaver and Hurst and Ms. King as of December 31, 2023, and a party to a salary continuation agreement with Mr. Dowling, who resigned from the Company and the Bank effective February 15, 2023. Unless a separation from service or a change in control (as defined in the salary continuation agreements) occurs before the retirement age set forth in each agreement, the salary continuation agreements provide for an annual supplemental retirement benefit to be paid to each of the executives in 12 equal monthly installments payable on the first day of each month, beginning with the month immediately after the month in which the executive attains the normal retirement age and for the executive’s lifetime with a 15-year term certain period. Under the terms of the agreements, Mr. Seaver will receive an annual supplemental retirement benefit of $250,000, Mr. Hurst will receive $75,000 and Ms. King will receive $50,000. Mr. Aiken does not have a salary continuation agreement with the Company as of December 31, 2023. As to Mr. Dowling, due to his resignation on February 15, 2023 prior to his normal retirement age, when he attains the normal retirement age, he would be eligible to receive an early termination benefit of $49,204 annually based on his previously vested amounts during his employment with the bank.

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Pension Benefits

         
    Number Present Payments
    Of Years Value of During
    Credited Accumulated Last Fiscal
Name(1) Plan Name Service Benefit(2) Year
R. Arthur Seaver, Jr. Southern First Bank, Salary Continuation Agreement 17 $ 1,703,868  $          —
Michael D. Dowling(3) Southern First Bank, Salary Continuation Agreement 10 483,608  
Calvin C. Hurst Southern First Bank, Salary Continuation Agreement 4 46,399  
Silvia T. King Southern First Bank, Salary Continuation Agreement 5 49,394  
(1)D. Andrew Borrmann and William M. Aiken, III do not have a Salary Continuation Agreement with the Company as of December 31, 2023.
(2)SERP amounts represent the aggregate liability carried on the Company’s books for each of the identified named executive officers as of December 31, 2023.
(3)Mr. Dowling resigned from the Company and the Bank effective February 15, 2023.

Provided such executive has been continuously employed by the Bank for five consecutive years from the effective date of the salary continuation agreement, if an early termination occurs (defined as separation from service before normal retirement age for reasons other than death, disability, termination for cause, or after a change in control), each of Messrs. Seaver and, Dowling early termination benefit is calculated by taking the accrual balance (as defined in the salary continuation agreement) existing at the end of the month immediately before the month in which separation from service occurs, compounding this accrual balance forward to the executive’s normal retirement age taking into account interest at the discount rate or rates established by the plan administrator, and amortizing this resulting amount for the executive’s lifetime with a 15-year term certain period, beginning with the executive’s normal retirement age. The early termination benefit for Mr. Hurst and Ms. King is calculated by taking the accrual balance (as defined in the salary continuation agreement) existing at the end of the month immediately before the month in which separation from service occurs. We will pay this annual early termination benefit as calculated to the executive in 12 equal monthly installments payable on the first day of each month, beginning with the later of (x) the seventh month after the executive’s separation from service, or (y) the month immediately after the month in which the executive attains the normal retirement age and for the executive’s lifetime with a 15-year term certain period. However, all of the executive’s early termination benefits will be forfeited if at any time from the date of the executive’s early termination and for a period of one year thereafter, the executive (without the prior written consent of the Bank) competes with the Bank, the Company, or any of its subsidiaries, directly or indirectly, by engaging in forming, by serving as an organizer, director, officer of, employee or agent, or consultant to, or by acquiring or maintaining more than a one percent passive investment in, a depository financial institution or holding company thereof if such depository financial institution or holding company has or establishes one or more offices or branches which are located within 30 miles of any office or branch of the Bank in existence at the date of the executive’s early termination. Although Mr. Dowling is no longer employed by us, he is still bound by these restrictive covenants from his salary continuation agreement.

Upon Mr. Seaver’s separation from service because of disability (as defined in the salary continuation agreement) before normal retirement age, the executive’s disability benefit is calculated by taking the accrual balance existing at the end of the month immediately before the month in which separation from service occurs, compounding this accrual balance forward to the executive’s normal retirement age taking into account interest at the discount rate or rates established by the plan administrator, and amortizing this resulting amount over the executive’s lifetime with a 15-year term certain period, beginning with the executive’s normal retirement age. The early termination benefit for Mr. Hurst and Ms. King is calculated by taking the accrual balance (as defined in the salary continuation agreement) existing at the end of the month immediately before the month in which separation from service occurs. Beginning with the later of (x) the seventh month after the executive’s separation from service, or (y) the month immediately after the month in which the executive attains the normal retirement age, the Bank will pay the disability benefit to the executive in 12 equal monthly installments on the first day of each month and for the executive’s lifetime with a 15-year term certain period.

If Messrs. Seaver or Hurst or Ms. King die in active service to the Company before normal retirement age, the executive’s beneficiary will be entitled to an amount equal to the executive’s accrual balance at the time of the executive’s death, payable within 60 days of the executive’s death.

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If Messrs. Seaver or Hurst or Ms. King die before any separation from service and the executive is receiving the executive’s normal retirement benefit, but the executive has not received the executive’s normal retirement benefit for the full 15-year term certain period, the executive’s beneficiary will be entitled to, at the Company’s sole discretion upon the executive’s death, either: (i) the present value, calculated at the discount rate or rates established by the plan administrator, at the executive’s death of the executive’s remaining salary continuation benefits, paid to the executive’s beneficiary in a lump-sum within 60 days of the executive’s death; or (ii) the executive’s remaining salary continuation benefits, paid to the executive’s beneficiary in 12 equal monthly installments payable on the first day of each month for the 15-year term certain period.

If Messrs. Seaver or Hurst or Ms. King die after separation from service and the executive is entitled to the early termination benefit or the disability benefit, but has not started receiving such benefits because the executive has not reached the normal retirement age, the executive’s beneficiary will be entitled to a lump-sum benefit equaling the present value, calculated at the discount rate or rates established by the plan administrator, at the executive’s death of the accrual balance which existed at the end of the month immediately before the month in which separation from service occurred, after compounding this accrual balance forward to the executive’s normal retirement age taking into account interest at the discount rate or rates established by the plan administrator. Assuming the two discount rates referred to in the previous sentence are the same, the resulting lump-sum benefit would be the executive’s accrual balance which existed at the end of the month immediately before the month in which separation from service occurred. We will pay this lump-sum benefit to the executive’s beneficiary within 60 days of the executive’s death.

If the executive dies after separation from service and the executive is receiving the normal retirement benefit, the early termination benefit, or the disability benefit, the executive’s beneficiary will be entitled to, at the Bank’s sole discretion upon the executive’s death, either: (i) the present value, calculated at the discount rate or rates established by the plan administrator, at the executive’s death of the executive’s remaining salary continuation benefits as determined under the applicable section of the salary continuation agreement, paid to the executive’s beneficiary in a lump-sum within 60 days of the executive’s death; or (ii) the executive’s remaining salary continuation benefits as determined under the applicable section of the salary continuation agreement, in the amounts specified in the applicable section, paid to the executive’s beneficiary at the times specified in the applicable section.

We will not pay any benefits under the salary continuation agreements and the agreements will terminate if separation from service is the result of termination for cause (as defined in the executive’s employment agreement or if the executive is not a party to an employment agreement containing a definition of termination for cause, as defined in the salary continuation agreement).

To offset the annual expense accruals for the benefits payable to the executives under the salary continuation agreements, we acquired bank-owned life insurance (“BOLI”). It is anticipated that the BOLI will provide full cost recovery of the benefits paid to the executives under the salary continuation agreements upon their deaths.

Potential Payments Upon Termination or Change in Control

The table below reflects the amount of compensation payable to each of Messrs. Seaver, Hurst and Aiken in the event of termination of such executive’s employment by the Company in the case of termination without cause and, in the case of good reason termination following a change in control, by such named executive officer. The amounts shown assume that the termination occurred on December 29, 2023, which was the last trading day of the calendar year ended December 31, 2023, and at a price per share of the Company’s common stock equal to the closing market price as of that date. These amounts are estimates of the amounts which would have been paid out to the executive officer upon termination as of that date under the specified circumstances. The actual amounts to be paid out can only be determined at the time of such executive officer’s separation from the Company. Ms. King does not have an employment agreement with the Company and as such is not entitled to compensation payable in the event of a change in control.

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Name and Principal Position(1)Salary(2)Bonus(3)Salary
Continuation
Plan(4)
Continuation
of Medical
Benefits(5)
Acceleration
and
Continuation
of Equity
Awards
Total
Termination
Benefits
R. Arthur Seaver, Jr.      
CEO and Director of the Company and the Bank      
Termination without cause$   515,00090,0001,703,868227,2382,536,106
Good reason termination or termination without cause, each after change in control1,545,00090,0002,696,2358,100227,2384,566,573
       

Calvin C. Hurst

      
President of the Company and the Bank      
Termination without cause309,000100,00046,399158,488618,887
Good reason termination or termination without cause, each after change in control618,000100,00075,00011,520158,488963,008
       

William M. Aiken, III

      
Chief Risk Officer of the Company and the Bank      
Termination without cause257,50070,000-120,008447,508
Good reason termination or termination without cause, each after change in control515,00070,000--120,008705,008
(1)Silvia T. King does not have an employment agreement with the Company as of December 31, 2023.
(2)In the event of a termination without cause before a change in control, salary is paid in equal monthly installments for a period of 12 months following termination. In the event of termination without cause after a change in control or good reason termination after a change in control, salary is paid in equal monthly installments for a period of 12 months following termination as follows: Mr. Seaver will be paid a salary equal to three times his current salary and Messrs. Hurst and Aiken will be paid a salary equal to two times their respective current salary.
(3)Includes all bonus amounts earned or accrued through the date of termination.
(4)In the event of a termination without cause before a change in control, the amount represents the aggregate liability carried on the Company’s books for Messrs. Seaver and Hurst as of December 31, 2023. In the event of termination without cause after a change in control or a good reason termination after a change in control, for Mr. Seaver, the amount reflects the present value of the SERP amount as of his normal retirement age and for Mr. Hurst, the amount reflects the greater of $75,000 or aggregate liability at the time of the change in control.
(5)Reflects the estimate of all future premiums which will be paid for medical benefits using the premium rates in effect at December 31, 2023. Continuation of benefits is for an 18-month period during which the named executive officer would be required to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year.

The following discussion relates to certain named executive officers’ respective employment agreements. Ms. King does not have an employment agreement with the Company.

“Cause” generally will be deemed to exist where the named executive officer has been convicted of a crime involving moral turpitude, has stolen from us, has violated his non-competition or confidentiality obligations, or, following a cure period, has been grossly negligent in fulfillment of his responsibilities. “Good reason” generally will exist where an employee’s position or compensation has been decreased (other than as part of a company-wide compensation reduction) or where the employee has been required to relocate. A more detailed description of “cause,” good reason” and “change in control” is set forth below.

If the named executive officer’s employment is terminated for cause or upon voluntary termination, the named executive officer shall receive only any sums due as base salary and/or reimbursement of expenses through the date of such termination.

If the named executive officer’s employment is terminated upon the death of the named executive officer, the named executive officer’s estate shall receive any sums due as base salary and/or reimbursement of expenses through the end of the month during which death occurred and any bonus earned or accrued through the date of death. Regardless of death, all prior calendar year earned bonuses must be paid within two months after the end of the calendar year in which they arise.

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If the named executive officer becomes incapacitated and later terminated as a result of disability, the Company shall continue to pay the executive his full base salary at the rate then in effect and all perquisites and other benefits (other than any bonus) until the executive becomes eligible for benefits under any long-term disability plan or insurance program maintained by the Company, provided that the amount of any such payments to the executive shall be reduced by the sum of the amounts, if any, payable to the executive for the same period under any disability benefit or pension plan of the Company or any of its subsidiaries. Furthermore, the executive shall receive any bonus earned or accrued under the Bonus Plan through the date of incapacity (including any amounts awarded for previous years but which were not yet vested) and a pro rata share of any bonus with respect to the current fiscal year which had been earned as of the date of the executive’s incapacity.

Additional payments that may be made to named executive officers under certain circumstances under their respective salary continuation agreement are described in the narrative that follows the Pension Benefits table above.

For purposes of this discussion, the terms cause, good reason, and change in control, as defined in the named executive officers’ employment agreements, are defined as follows:

“Change in control” generally means the occurrence of any of the following events, unless the event is a result of a non-control acquisition:

·The members of our board of directors as of the date of the employment agreement, who are referred to as incumbent directors, together with additional directors whose election or nomination was approved by a majority of the incumbent directors and who did not assume office as a result of an actual or threatened solicitation of proxies or consents by a person other than the board of directors, which additional directors are also referred to as incumbent directors, cease for any reason to constitute at least fifty percent of the board of directors.
·A person, group or entity other than the Company, acquires our common stock, and immediately after which such person, group or entity has beneficial ownership of 20% or more of the combined voting power of our common stock.
·Approval by our shareholders of: (i) a merger, consolidation, or reorganization; (ii) a complete liquidation or dissolution; or (iii) an agreement for the sale or other disposition of all or substantially all of our assets.
·Regulatory approval (or notice of no disapproval) is granted by the Federal Reserve, the OCC, the FDIC, or any other regulatory authority for permission to acquire control of the Company or any of our banking subsidiaries, provided that if the applicable transaction that has been approved by our board of directors then the change in control will not be deemed to occur until the closing of the transaction.

A “non-control acquisition” generally means a merger, consolidation or reorganization in which:

·our shareholders immediately before the merger, consolidation or reorganization own, immediately after such transaction, at least 50% of the combined voting power of the voting securities of the surviving corporation resulting from such merger, consolidation or reorganization in substantially the same proportion as their ownership of our voting securities immediately before such merger, consolidation or reorganization; and
·immediately following the merger, consolidation or reorganization, the number of directors on the board of directors of the surviving corporation who were incumbent directors at least equal the number of directors who were affiliated with or appointed by the other party to the merger, consolidation or reorganization.

“Good reason” generally means the occurrence after a change in control of any of the events or conditions described below:

·an adverse change in an employee’s status, title, position or responsibilities at any time within 90 days preceding the date of a change in control or at any time thereafter;
·a reduction to the employee’s base salary or any failure to pay the employee any compensation or benefits to which the employee is entitled within five days of the due date;
·a relocation of an employee at any place outside a 30-mile radius from the employee’s current work location immediately prior to the change in control except for reasonably required travel that is not greater than the travel requirements before the change in control;
·the failure by us to (A) continue any material compensation or employee benefit plan in which the employee was participating at any time within 90 days preceding the date of a change in control or at any time thereafter, unless replaced with a plan

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providing substantially equivalent compensation or benefits, or (B) provide the employee with compensation and benefits, in the aggregate, at least equal to those provided for under each other employee benefit plan, program and practice in which the employee was participating at any time within 90 days preceding the date of a change in control or at any time thereafter;

·the insolvency or the filing of a petition for bankruptcy of the Company which petition is not dismissed within sixty days;
·any material breach by the Company of any material provision of the employment agreement;
·any purported termination of the employee’s employment for cause by us which does not comply with the terms of the employment agreement; or
·our failure to obtain an agreement, satisfactory to the employee, from any successor or assign to assume and agree to perform the employment agreement.

Any event or condition described above which occurs prior to a change in control but which the employee reasonably demonstrates (A) was at the request of a third party, or (B) otherwise arose in connection with a change in control which actually occurs, shall constitute good reason for purposes of the employment agreement, notwithstanding that it occurred prior to the change in control.

“Cause” generally means any of the following:

·a willful act (including, without limitation, a dishonest or fraudulent act) or a grossly negligent act, or the willful or grossly negligent omission to act by the executive, which is intended to cause, causes or is reasonably likely to cause material harm to the Company (including harm to its business reputation);
·an indictment for the commission or perpetration by the executive of any felony or any crime involving dishonesty, moral turpitude or fraud;
·a material breach by the executive of the employment agreement that remains uncured ten days following written notice;
·notice from a regulatory agency with jurisdiction over the Company of its intention to institute certain formal or informal regulatory action against the executive or the Company, provided that, if the applicable matters relating to the executive’s performance are susceptible of cure, such matters remain uncured to the satisfaction of the regulatory agency 30 days after receipt of the notice from the regulatory agency;
·disorderly conduct by the executive that materially disrupts the Company’s business operations to a level which is materially detrimental to the Company’s best interest, that, if susceptible of cure remains uncured ten days following written notice to the executive; or
·the failure of the executive to devote his full business time and attention to his employment as provided under the employment agreement that, if susceptible of cure, remains uncured 30 days following written notice to the executive of such failure.

Endorsement Split Dollar Agreements. We consider adequate life insurance coverage for executives to be an essential element of the compensation necessary to retain, attract and reward excellent service. We entered into endorsement split dollar insurance agreements effective January 1, 2009, with Mr. Seaver, and on November 1, 2012 with Mr. Dowling, entitling each executive to designate the beneficiary of a specified portion of the death benefits payable under bank-owned policies on the executive’s life. The executive’s right to designate a beneficiary of the life insurance death benefit expires when the executive’s employment terminates or when the executive attains age 65, whichever occurs first. Accordingly, Mr. Dowling’s entitlement under this agreement ended on February 15, 2023, with his resignation of employment. The death benefit payable to the executive’s beneficiary is the lesser of (x) 100% of the policy’s net death proceeds, meaning the total death benefit minus the policy’s cash surrender value, or (y) three times the executives salary. The bank is entitled to all insurance policy death proceeds remaining after payment of the death benefit to the executive’s beneficiary.

This bank-owned life insurance financing method is not expected to result in any material cost to the bank, but it is expected to increase the bank’s non-interest income in future operating periods. Because the bank intends to hold the bank-owned life insurance until the death of the insureds, the increase of cash surrender value should be tax-free income under current federal income tax law. The collection of death benefits on the life insurance policies, which is likewise tax free under current federal and state income taxation, is expected to enhance our return as well. The combination of tax-preferred income generated by the increasing cash value of the insurance policy, the tax-free insurance death benefit, and fully tax-deductible benefit payments to participants enables a bank to provide this significant benefit to executives through attractive cost-recovery financing.

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Employee Compensation as compared to the Compensation of our Chief Executive Officer; Pay Ratio Disclosure

As of December 31, 2023, the pay ratio for total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was 11 to 1. For the period ending December 31, 2023, the median of the annual total compensation of all our employees, with the exception of R. Arthur Seaver, Jr., our Chief Executive Officer, was $75,454, and the annual total compensation of Mr. Seaver was $805,318.

We completed the following steps to identify the median of the annual total compensation of all our employees and to determine the annual total compensation of our median employee and CEO.

1.As of December 31, 2023, our employee population consisted of approximately 297 individuals, including any full-time, part-time, temporary, or seasonal employees employed on that date. This date was selected because it aligned with a payroll cycle and allowed us to identify employees in a reasonably efficient manner.
2.To find the median of the annual total compensation of all our employees (other than our chief executive officer), we used wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for fiscal year 2023. In making this determination, we annualized the compensation of full-time and part-time permanent employees who were employed on December 31, 2023, but did not work for us for the entire year. No full-time equivalent adjustments were made for part-time employees.
3.We identified our median employee using this compensation measure and methodology, which was consistently applied to all our employees included in the calculation.
4.After identifying the median employee, we added together all of the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $75,454.

Total compensation for Mr. Seaver represents the amount reported in the “Total” column of our 2023 Summary Compensation Table and includes salary, bonus, stock awards, option awards, nonqualified deferred compensation and other compensation.

Pay Versus Performance

In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we provide the following disclosure regarding executive compensation for our CEO and non-CEO named executive officers (“NEOs”) and Company performance for the fiscal years listed below.

         
        
     Value of Initial Fixed $100 Investment Based on:(4)  
YearSummary
Compensation
Table Total for
CEO(1)
Compensation
Actually Paid to
CEO(1)(2)(3)
Average
Summary
Compensation
Table Total for
Non-CEO NEOs(1)
Average
Compensation
Actually Paid to
Non-CEO
NEOs(1)(2)(3)
Southern
First Total
Shareholder
Return
S&P US BMI
Banks –
Southeast
Region Total
Shareholder
Return

Net
Income
($ in
thousands)

Growth in
Tangible
Book
Value(5)
2023$       805,318763,495363,433222,899$   87.31$   107.45$  13,4265.09%
2022       930,645648,353503,035318,392   107.67   104.16  29,1154.82%
20211,279,4791,940,915528,440889,758147.07128.0646,71119.41%
20201,252,932918,502463,220454,17883.2089.6618,3289.47%

(1)R. Arthur Seaver, Jr. was our CEO for each year presented. The individuals comprising the Non-CEO NEOs are Messrs. Dowling, Strickland, and Hurst and Ms. King for 2020, Messrs. Dowling, Hurst, and Aiken and Ms. King for 2021 and 2022, and Messrs. Dowling, Hurst, Borrmann, and Aiken and Ms. King for 2023.
(2)The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.
(3)Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the CEO and the Non-CEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are

36

the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table, excluding negative values. Amounts in the Inclusion of Pension Service Cost are based on the service cost for services rendered during the listed year.

(4)The Peer Group Total Share Return (“TSR”) set forth in this table utilizes the S&P US BMI Banks – Southeast Bank Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2020, through the end of the listed year in the Company and in the S&P US BMI Banks – Southeast Bank Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
(5)We determined Growth in Tangible Book Value (“TBV”) to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our CEO and Non-CEO NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2022 and 2021, and we may determine a different financial performance measure to be the most important financial performance measure in future years.

       
YearSummary
Compensation Table
Total for CEO
Exclusion of
Change in Pension
Value for CEO
Exclusion of Stock
Awards and
Option Awards for
CEO
Inclusion of
Pension Service
Cost for CEO

Inclusion of
Equity Values
for CEO

Compensation
Actually Paid
to CEO

2023$       805,318-(130,350)92,686(4,159)763,495
2022       930,645(50,741)(122,280)108,328(217,558)648,353
20211,279,479(240,559)(318,235)112,7301,107,5001,940,915
20201,252,932(341,801)(212,024)104,024115,371918,502

       
YearAverage Summary
Compensation Table
Total for Non-CEO
NEOs
Average Exclusion
of Change in
Pension Value for
Non-CEO NEOs
Average Exclusion
of Stock Awards
and Option
Awards for Non-
CEO Named
Executive Officers
Average Inclusion
of Pension Service
Cost for Non-CEO
NEOs
Average Inclusion
of Equity Values
for Non-CEO NEOs
Average
Compensation
Actually Paid to
Non-CEO NEOs
2023    $    363,433(4,462)(66,132)4,598(74,538)222,899
2022       503,035(8,421)(70,311)18,527(124,438)318,392
2021528,440(32,674)(114,407)20,391488,008889,758
2020463,220(37,862)(90,460)18,131101,149454,178

The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

     
YearYear-End Fair Value of
Equity Awards Granted
During Year That
Remained Unvested as of
Last Day of Year for CEO
Change in Fair Value from
Last Day of Prior Year to
Last Day of Year of
Unvested Equity Awards
for CEO
Change in Fair Value
from Last Day of Prior
Year to Vesting Date of
Unvested Equity
Awards that Vested
During Year for CEO
Total - Inclusion of
Equity Values for CEO
2023$       111,300(88,220)(27,239)(4,159)
2022       91,500(291,290)(17,768)(217,558)
2021640,991436,18630,3231,107,500
2020184,919(57,293)(12,255)115,371

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YearAverage Year-End Fair
Value of Equity Awards
Granted During Year
That Remained Unvested
as of Last Day of Year for
Non-CEO NEOs
Average Change in Fair
Value from Last Day of
Prior Year to Last Day of
Year of Unvested Equity
Awards for Non-CEO NEOs
Average Change in Fair
Value from Last Day of
Prior Year to Vesting
Date of Unvested
Equity Awards that
Vested During Year for
Non-CEO NEOs
Total - Average
Inclusion of
Equity Values for Non-
CEO NEOs
2023$      45,262(19,426)(22,155)(74,538)
2022      45,750(134,948)(35,240)(124,438)
2021232,561224,09231,355488,008
2020132,399(21,197)(10,053)101,149

Relationship Between Compensation Actually Paid and Company Performance

The graph below shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and our tangible book value over the four fiscal years ending December 31, 2023.

Compensation Actually Paid vs. Tangible Book Value

The graph below shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and our cumulative total shareholder return over the four fiscal years ending December 31, 2023. In addition, the table below shows the relationship between our cumulative total shareholder return and the S&P US BMI Banks – Southeast Region index total shareholder return over that same period.

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Compensation Actually Paid vs. Company Cumulative TSR

The graph below shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our other NEOs and our net income over the four fiscal years ending December 31, 2023.

Compensation Actually Paid vs. Net Income

We consider the following to be the most important financial performance measures we use to link compensation actually paid to our NEOs for 2023, to company performance. The measures below are not ranked.

·Tangible Book Value
·Net Charge-offs as a Percentage of Average Loans
·Total Shareholder Return

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While we utilize several performance measures to align executive compensation with performance, all of those measures are not presented in the Pay for Performance table. Moreover, we generally seek to incentivize long-term performance, and therefore do not specifically align the Company’s performance measures with compensation that is actually paid (as defined by SEC rules) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay for Performance table.

While we do not consider net income to be one of the most important financial performance measures in determining overall compensation, it does impact the compensation actually paid to our CEO and other named executive officers as it is correlated with tangible book value.

Net charge-offs as a percentage of average loans also impacts the compensation actually paid to our CEO and other named executive officers because one third of the payout under our long-term incentive plan is based upon our cumulative net charge-offs during the three-year measurement period.

Our TSR directly impacts the compensation actually paid to our CEO and other named executive officers and is the primary driver of the difference between the Summary Compensation Table amounts and Compensation Actually Paid amounts in the above table. This results from the high percentage of compensation delivered through equity awards which are tied directly to share price.

DIRECTOR COMPENSATION

The following table shows the compensation paid to each of our non-employee directors for board and committee meeting attendance in 2023. None of our non-employee directors received any other compensation for the year ended December 31, 2023.

Name (1)

Fees Earned or
Paid in Cash

Andrew B. Cajka, Jr.$   54,500
Mark A. Cothran44,300
Leighton M. Cubbage46,500
Anne S. Ellefson47,500
David G. Ellison46,300
Terry Grayson-Caprio48,600
Tecumseh Hooper. Jr.46,500
Rudolph G. Johnstone, III46,500
Ray A. Lattimore44,300
Anna T. Locke45,400
William A. Maner, IV46,500
James B. Orders, III54,300
$ 571,200
(1)There were no outstanding stock options held by non-employee directors at December 31, 2023. Stock options held at December 31, 2023 by Mr. Seaver are included in the table for the named executive officers under the heading entitled “Outstanding Equity Awards at Fiscal Year End.”

In 2023, we paid each of our non-employee directors a monthly retainer of $2,500 and an additional $1,100 for each board and committee meeting they attended. The chairs of the board and committees were paid an additional $500 for each meeting they attended.

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BENEFICIAL OWNERSHIP OF CERTAIN PARTIES

The following table sets forth the number and percentage of outstanding shares that exceed 5% beneficial ownership (determined in accordance with Rule 13d-3 under the Exchange Act) by any single person or group, as known by the Company:

Name of Beneficial OwnerNumber of
Shares of
Common Stock
Owned
Right to
Acquire
Percentage
of Beneficial
 Ownership
T. Rowe Price Investment Management, Inc. (1)798,699-9.87%
BlackRock, Inc. (2)794,259-9.82%
FJ Capital Management LLC(3)791,009-9.78%
The Banc Funds Company, L.L.C. (4)418,573-5.18%
(1)The mailing address for T. Rowe Price Investment Management, Inc. is 101 E. Pratt Street, Baltimore, MD 21202. The T. Rowe Price Investment Management, Inc. information set forth in this proxy statement is based on information set forth in a Schedule 13G, filed by T. Rowe Price Investment Management, Inc. with the SEC on February 14, 2024, reporting that T. Rowe Price Investment Management, Inc. has sole voting power over 326,463 shares and sole dispositive power over 798,699 shares.
(2)The mailing address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. The BlackRock, Inc. information set forth in this proxy statement is based on information set forth in a Schedule 13G, as amended, filed by BlackRock, Inc. with the SEC on January 24, 2024, reporting that BlackRock, Inc. has sole voting power over 753,753 shares and sole dispositive power over 794,259 shares. According to this Schedule 13G, the following subsidiaries of BlackRock, Inc. hold shares of our common stock, none of which beneficially owns 5% or greater of our outstanding shares: Aperio Group, LLC, BlackRock Advisors, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., and BlackRock Investment Management, LLC.
(3)The mailing address for FJ Capital Management LLC is 7901 Jones Branch Drive, Suite 210. McLean, VA 22102. The FJ Capital Management LLC information set forth in this proxy statement is based on information set forth in a Schedule 13G, as amended, filed by FJ Capital Management LLC with the SEC on February 7, 2024, reporting that FJ Capital Management LLC, Financial Opportunity Fund LLC, and Martin Friedman each have shared voting power over 791,009 shares and shared dispositive power over 791,009 shares.
(4)The mailing address for The Banc Funds Company, L.L.C., (“TBFC”) is 150 South Wacker Drive, Suite 2725, Chicago, IL 60606. TBFC information set forth in this proxy statement is based on information set forth in a Schedule 13G, as amended, filed by TBFC with the SEC on February 9, 2024, reporting that jointly Banc Fund IX L.P. (“BF IX”), an Illinois Limited Partnership, and Banc Fund X L.P. (“BF X”), an Illinois Limited Partnership, and TBFC Financial Technologies Fund L.P. (collectively, the “Reporting Persons”) have sole voting and dispositive power over 418,573 shares. The general partner of BF IX is MidBan IX L.P. (“MidBan IX”), whose principal business is to be a general partner of BF IX. The general partner of BF X is MidBan X L.P. (“MidBan X”), whose principal business is to be a general partner of BF X. The general partner of TBFC Financial Technologies Fund L.P. is MidBan XI L.P. (“MidBan XI”), whose principal business is to be a general partner of TBFC Financial Technologies Fund L.P. The general partner of MidBan IX, MidBan X, and MidBan XI is TBFC, whose principal business is to be a general partner of MidBan IX, MidBan X, and MidBan XI. TBFC is an Illinois corporation whose principal shareholder is Charles J. Moore. Mr. Moore has been the manager of BF IX, BF X, and TBFC Financial Technologies Fund L.P., since their respective inceptions. As manager, Mr. Moore has voting and dispositive power over the securities held by each of these entities. As the controlling member of TBFC, Mr. Moore will control TBFC, and therefore each of the Partnership entities directly and indirectly controlled by TBFC.

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BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth, as of March 15, 2024, the number and percentage of outstanding shares of our common stock beneficially owned by (i) each director and nominee for director of the Company, (ii) each named executive officer, and controllers.  A copy(iii) all executive officers and directors as a group. Unless otherwise indicated, the mailing address for each beneficial owner is care of this Code of Ethics is available without charge to shareholders upon request to the secretary of the company, at Southern First Bancshares, Inc., 1006 Verdae Boulevard, Suite 100, Greenville, South Carolina 29607.


Name and Address
Number of
Shares
Owned(1)
Right to
Acquire(2)
Percentage
of Beneficial
 Ownership(3)
Directors   
Andrew B. Cajka, Jr.11,901-0.15%
Mark A. Cothran(4)101,791-1.25%
Leighton M. Cubbage66,932-0.82%
Anne S. Ellefson7,312-0.09%
David G. Ellison49,876-0.61%
Terry Grayson-Caprio3,240-0.04%
Tecumseh Hooper, Jr.42,397-0.52%
Rudolph G. Johnstone, III29,881-0.37%
Ray A. Lattimore2,635-0.03%
Anna T. Locke2,132-0.03%
William A, Maner, IV2,000-0.02%
James B. Orders, III57,007-0.70%
Named Executive Officers   
R. Arthur Seaver, Jr.93,47065,2501.71%
Calvin C. Hurst11,99522,0000.62%
D. Andrew Borrmann(5)13,500-0.14%
William M. Aiken, III11,6694,1250.15%
Silvia T. King2,9835,6250.09%
Executive officers and directors as a group (17 persons)510,72097,0007.62%
(1)As reported to the Company by the directors, nominees and executive officers.
(2)Includes shares that may be acquired within 60 days of the date of this proxy statement by exercising vested stock options (or stock options that will vest within 60 days of the date of this proxy statement), but does not include any unvested stock options.
(3)For each individual, this percentage is determined by assuming the named person exercises all options which he or she has the right to acquire within 60 days, but that no other persons exercise any options. For the directors and executive officers as a group, this percentage is determined by assuming that each director and executive officer exercises all options which he or she has the right to acquire within 60 days, but that no other persons exercise any options. The calculations are based on 8,156,109 shares of common stock outstanding on March 15, 2024.
(4)Includes 47,000 shares pledged as collateral to secure personal indebtedness over which Mr. Cothran retains voting rights.
(5)Mr. Borrmann resigned from the Company and the Bank effective March 29, 2024.

Certain Relationships and Related Transactions

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

We enter into banking and other transactions in the ordinary course of business with our directors and officers of the companyCompany and the bank and their affiliates. Our policies and procedures related to these transactions are not in writing, but are reflected by our course of conduct. It isThese transactions, which would be reviewed and approved in advance by our policy that these transactions beaudit committee, are made on substantially the same terms (including price, or interest rates, repayment terms, and collateral) as those prevailing at the time for comparable transactions with unrelated parties. WeLoans do not expect these transactions to involve more than the normal riskrisks of collectibilityrepayment nor present other

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unfavorable features to us.features. Loans to individual directors and officers must also comply with our bank'sbank’s lending policies and statutory lending limits, and directors with a personal interest in any loan application are excluded from the consideration of the loan application.  We intend for all

The aggregate dollar amount of our transactionsloans outstanding to persons affiliated with our affiliates to bethe bank was approximately $25.3 million at December 31, 2023 and $17.2 million at December 31, 2022.

Compensation Committee Interlocks and Insider Participation

The members of the compensation during fiscal year 2023 were Messrs. Cubbage, Hooper, Johnstone, Maner and Orders and Ms. Ellefson. No member of this committee was at any time during 2023 or at any other time an officer or employee of the Company or any of its subsidiaries, and no member of this committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. No executive officer of the Company has served on terms no less favorable to us than could be obtained from an unaffiliated third party and it is our policythe board of directors or compensation committee of any other entity that they be approved byhas or has had one or more executive officers who served as a majoritymember of disinterested directors.the compensation committee during 2023.

Interests of Management and Others in Certain Transactions

The bank purchased various signage for its Woodruff Road and Lexington offices during 2008 from the same vendor used in the past for such signage.  During 2008 and 2007, one of the bank’s directors, Mr. Hooper, acted as chairman of the board for the respective company.  The bank paid approximately $71,000 and $31,000 to the company for the years ended December 31, 2008 and 2007, respectively.  The bank is of the opinion that the cost of signage represents market costs that could have been obtained in similar “arms length” transactions.

                    In January 2008, the bank entered into a commitment with a company partially owned indirectly by James B. Orders, III, one of the Bank’s directors.  John Orders and David Orders, who are siblings of James B. Orders, III, indirectly own the remaining interest in the company.  James B. Orders, III and these siblings are involved in the management of the parent company.  The bank has committed to pay the company a development fee up to $550,000 in three annual installments related to the development and construction of the Company’s regional headquarters in Cayce, South Carolina.  The bank paid the first and second installments of approximately $189,000 in January 2008 and 2009, respectively.  The bank is of the opinion that the development fees represent market costs that could have been obtained in similar “arms length” transactions.

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                  On July 28, 2006, the bank purchased $5.0 million of bank owned life insurance from Northwestern Mutual Insurance Company.  The purchase was made through an agency that is owned by director, David Ellison.  Mr. Ellison received a commission of $60,000.  At approximately the same time, the bank purchased a $3.0 million bank owned life insurance policy from an independent third party.  The terms and conditions of both the $5.0 million and $3.0 million insurance policies are substantially the same.  Therefore, the bank is of the opinion that the $5.0 million policy was obtained at a cost that was consistent with the cost in a similar “arms length” transaction.  This transaction was approved by our personnel committee, with Mr. Ellison abstaining from the decision, and then ratified by the board of directors. 

                    On September 20, 2005, the bank entered into a ten year, five month lease with various renewal options on its new main office building.  The company moved the corporate office and branch operation, to the new leased space in the first quarter of 2007.  Mr. Cothran, a director of the bank and real estate developer by occupation, assisted the bank in the negotiation of the lease.  The lessor paid Mr. Cothran a leasing agency fee of $164,414, of which $82,207 was paid in 2005 and the remainder in 2007 when the bank occupied the building.

                    The bank alsoBank has a land lease with a company owned by our director, Mr. Cothran, on the property for aone of our branch office,offices, with monthly payments of $4,804.$9,120. In addition, the bank hadperiodically enters into various consulting agreements with the directorMr. Cothran for development, administration and advisory services related to the purchase of property and construction of current and future branch office sites. Beginning in 2006, the bank has also contracted withPayments totaling $300,000 were made to Mr. Cothran on an annual basis to provide property management services for each of its branch offices.  The bank paid Mr. Cothran approximately $20,000 for these services during 2008 and $41,000the year ended December 31, 2021, per the Development Services Agreement dated April 9, 2019, as amended from time to time. There were no payments to the director for these services during 2007.2023.

The bankBank is of the opinion that the lease payments and consulting fees paid to Mr. Cothrandevelopment, administration and advisory payments represent market costs that could have been obtained in similar “arms“arm’s length” transactions.

DELINQUENT SECTION 16(A) REPORTS

Independent Certified Public Accountants

Elliott Davis, LLC was our auditor during the fiscal year ended December 31, 2008. A representative of Elliott Davis, LLC will be present at the annual meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement if he or she desires to do so.  The following table shows the fees that we paid for services performed in fiscal years ended December 31, 2008 and 2007:

 

Years Ended December 31,

 

2008

 

2007

 

 

 

 

Audit Fees

 $

71,000 

 

 $

61,200 

Other Fees

6,500 

 

3,170 

Tax Fees

9,600 

 

6,410 

 

 

 

 

Total

 $

87,100 

 

 $

70,780 

Audit Fees.  This category includes the aggregate fees billed for professional services rendered by the independent auditors during the company’s 2008 and 2007 fiscal years for the audit of the company’s consolidated annual financial statements and quarterly reports on Form 10-Q.

Other Fees.  This category includes the aggregate fees billed for non-audit services, exclusive of the fees disclosed relating to audit fees, during the fiscal years ended December 31, 2008 and 2007.  Other fees in 2008 consisted primarily of services related to the analysis of the South Carolina New Jobs Tax Credits.  Other fees in 2007 consisted primarily of 401(k) plan services. 

Tax Fees.  This category includes the aggregate fees billed for tax services rendered in the preparation of federal and state income tax returns for the company and its subsidiaries.

Oversight of Accountants; Approval of Accounting Fees.  The board of directors approves an annual budget for professional audit fees that includes all fees paid to the independent auditors.

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Compensation/Benefits Committee Interlocks and Insider Participation.

                 Our board of directors had a personnel committee composed of Messrs. Sturgis, Cubbage, Ellison, and Orders during 2008.  In addition, Mr. Cothran and Dr. Johnstone served on the committee during 2008, as non-voting members.  No member of the personnel committee was an officer or employee of the company or any of its subsidiaries during the year ended December 31, 2008 or was formerly an officer or employee of the company or any of its subsidiaries, or had any relationship otherwise requiring disclosure. Our Chief Executive Officer, however, did participate in deliberations regarding other executive officers.  He was not involved in any decisions regarding his own compensation.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

                As required by Section 16(a) of the Securities Exchange Act of 1934,requires our officers and directors and executive officers and certain other individuals are required to report periodically their ownershippersons who own more than 10% of our common stock to file reports of ownership and any changes in ownership towith the SEC. Based solely on aour review of Forms 3, 4,these forms and 5written representations from the officers and any representations made to us, it appearsdirectors, we believe that all such reports for these personsSection 16(a) filing requirements were filed in a timely fashionmet during 2008,fiscal 2023, except that Form 3s for(i) Mr. Gilmer, III, Ms. Bridges, and Mr. Mike Strickland and Form 4s relatedBorrmann, an executive officer, inadvertently neglected to timely report the acquisition of 1,500 shares of restricted stock options granted for Mr. Justin Strickland, Mr. Austin, Mr. Gilmer, III and Ms. Bridges were filed after the required period due to management oversight.  In addition,made on April 18, 2023, which error has since been corrected in filing a Form 4 for Mr. Sturgis was filed after the required period due to management oversighton April 21, 2023, and a Form 4 was filed after the required period for Mr. Ellison and Mr. Terrell due to untimely notificationan acquisition of the transaction. 

Equity Compensation Plan Information

The following table sets forth equity compensation plan information at December 31, 2008.  The number of shares and the exercise prices for options and warrants has been adjusted for the 3 for 2 stock split in 2003 and the subsequent 10% stock dividend in 2006.

Plan Category

Number of securities

to be issued

upon exercise of outstanding options, warrants and rights (a)

Weighted-average

exercise price of outstanding options, warrants and rights (b)

Number of securities

remaining available for

future issuance under

equity compensation plans (c)

(excluding securities

reflected in column(a))

 

 

 

 

Equity compensation plans

 

 

 

approved by security holders

 

 

 

 

 

 

 

   Stock options (1)..........................

278,665 

 

 $

9.29 

 

113,698 

 

   Restricted stock............................

1,875 

 

 

21.63 

 

8,500 

 

 

 

 

 

Equity compensation plans not

 

 

 

approved by security holders(2)...

 

123,110 

 

 $

6.06 

 

 

 

 

 

 

 

 Total.................................................

 

403,650 

 

 $

8.38 

 

 

122,198 

 

(1)   The number of200 shares of common stock available under the 2000 Greenville First Bancshares, Inc. Stock Incentive Plan automatically increases each time we issue additional shares so that it continuesmade on May 16, 2023, which error has since been corrected in filing a Form 4 on May 22, 2023, (ii) Mr. Lattimore, a director, inadvertently neglected to equal 15%timely report an acquisition of our total outstanding shares.  Our board of directors has approved 436,4242,119 shares of common stock made on February 2, 2023, which error has since been corrected in filing a Form 4 on February 7, 2023, and (iii) Ms. Locke, a director, inadvertently neglected to be issued as stock options.

(2)   Eachtimely report an acquisition of our organizers received, for no additional consideration, a warrant to purchase one share115 shares of common stock for $6.06 per share for every two shares purchased during our initial public offering.  The warrants are represented by separate warrant agreements.  One third of the warrants vestedmade on each of the first three anniversaries of the date of our initial public offering, and they are exercisableMay 17, 2023, which error has since been corrected in whole or in part during the ten year period following that date.  The warrants may not be assigned, pledged, or hypothecated in any way.  The 123,110 of shares issued pursuant to the exercise of such warrants are transferable, subject to compliance with applicable securities laws.  If the South Carolina Board of Financial Institutions or the FDIC issuesfiling a capital directive or other order requiring the bank to obtain additional capital, the warrants will be forfeited, if not immediately exercised.Form 4 on May 22, 2023.

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SHAREHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING OF SHAREHOLDERS

Shareholder Proposals for the 2010 Annual Meeting of Shareholders

If shareholders wish a proposal to be included in our proxy statement and form of proxy relating to the 2010 annual meeting,2025 Annual Meeting of Shareholders, they must deliver a written copy of their proposal to our principal executive offices no later than December 11, 2009.9, 2024. To ensure prompt receipt by the company,Company, the proposal should be sent certified mail, return receipt requested. Proposals must comply with our bylaws relating to shareholder proposals in order to be included in our proxy materials.

If you would like to submit a director nomination, it must be received by our Corporate Secretary at the address below no later than the close of business on February 20, 2025. Any matter, including any director nomination, must comply with our bylaws.

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It is our policy that any shareholder proposal (including any shareholder proposal not submitted under Rule 14a-8) to be made at an annual meeting, but which is not requested to be included in the our proxy materials, must be delivered to theour corporate secretary of the company between 30 and 60 days prior to the annual meeting; provided, however, that if less than 31 days’ notice of the meeting is given to shareholders, the notice must be delivered within 10 days following the day on which notice of the meeting was mailed to shareholders.

[April 8, 2009]

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PROXY SOLICITED FOR ANNUAL MEETING

OF SHAREHOLDERS OF

SOUTHERN FIRST BANCSHARES, INC.

to To be held on May 19, 2009

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby constitutes and appoints James B. Orders, III and Fred Gilmer, Jr., each of them, his or her true and lawful agents and proxies with full power of substitution in each,timely for the 2025 annual meeting, a shareholder proposal must be delivered to represent and vote, as indicated below, all of the shares of common stock of Southern First Bancshares, Inc., P.O. Box 17465, Greenville, South Carolina 29606, Attention: Corporate Secretary, no earlier than March 22, 2025 and no later than April 21, 2025.

Finally, in addition to satisfying the foregoing requirements under our bylaws, to comply with Rule 14a-19, the SEC’s universal proxy rule, for our 2025 annual meeting of shareholders, a shareholder who intends to solicit proxies in support of director nominees, other than the Company’s nominees must provide notice that sets forth the undersigned wouldinformation required by Rule 14a-19 by March 22, 2025.

SHAREHOLDER COMMUNICATIONS

We do not have a formal process by which shareholders may communicate with our board of directors. Historically, however, the chairman of the board or the nominating committee has undertaken responsibility for responding to questions and concerns expressed by shareholders. In the view of our board of directors, this approach has been sufficient to ensure that questions and concerns raised by shareholders are adequately addressed. Any shareholder desiring to communicate with the Board may do so by writing to Southern First Bancshares, Inc., P.O. Box 17465, Greenville, South Carolina 29606, Attention: Corporate Secretary.

OTHER BUSINESS

We do not know of any other business to be entitled to votepresented at the 2024 Annual Meeting of Shareholders. If any other matters are properly brought before the 2024 Annual Meeting of Shareholders, however, it is the intention of the company to be held on May 19, 2009 at The Poinsett Club at 807 East Washington Street, Greenville, South Carolina, at 5:00 p.m. local time, and at any postponement or adjournment thereof, upon the matters describedpersons named in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement, receipt of which is acknowledged.  These proxies are directedproxy to vote onsuch proxy in accordance with their best judgment.

April 8, 2024

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Appendix A

PROPOSED AMENDMENT TO SOUTHERN FIRST BANCSHARES, INC.’S
ARTICLES OF INCORPORATION

ARTICLE THREE
CAPITALIZATION

The Corporation shall have the matters described in the Noticeauthority, exercisable by its board of Annual Meeting of Shareholders and Proxy Statement as follows:

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder.  If no direction is made, this proxy will be voted: “FOR” Proposal No. 1 to elect the three identified Class I directors, to serve onissue up to 10,000,00020,000,000 shares of voting common stock, par value $.01 per share, and to issue up to 10,000,000 shares of preferred stock, par value $.01 per share. The board of directors shall have the Boardauthority to specify the preferences, limitations and relative rights of Directors for three-year terms, and “FOR” the nonbinding resolution to approve the compensationeach class of preferred stock.

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Appendix B

PROPOSED AMENDMENT TO SOUTHERN FIRST BANCSHARES, INC.’S
2020 EQUITY INCENTIVE PLAN

Section 18.       Term of Plan.

The Plan shall be effective as of the named executive officers.  The proxies may vote in their judgment upon such other business, if any, as may properly come before the meeting, and matters incidentalEffective Date. No Award shall be granted pursuant to the conductPlan on or after the fiftheighth anniversary of the meeting.

                                    1.                   PROPOSALEffective Date, but Awards granted under the Plan prior to elect the three identified Class I directors to serve for three year terms

                                        Mark A. Cothran                                                     R. Arthur Seaver, Jr.

                                        Rudolph G. Johnstone, III, M.D.

                                   FOR all nominees                                                           WITHHOLD AUTHORITY

                                        listed (except as marked to                                                                to vote for all nominees

                                        the contrary)

(INSTRUCTION:  To withhold authority to vote for any individual nominee(s), write that nominee’s name(s) in the space provided below).

                                    ____________________________________________________________________

                                    2.                    PROPOSAL of a nonbinding resolution to approve the compensationfiftheighth anniversary of the named executive officersEffective Date may extend beyond the fiftheighth anniversary of the Effective Date pursuant to the terms of the Award as determined byprovided for under the Compensation CommitteePlan and the Boardterms of Directors.

                         FOR                                   AGAINST                                         ABSTAIN

                                    Dated:, 2009                               Dated: , 2009

                                    Signature of Shareholder(s)                                                                               Signature of Shareholder(s)

                                    Please print name clearly                                                                   Please print name clearly

Please sign exactly as name or names appear on your stock certificate.  Where more than one owner is shown on your stock certificate, each owner should sign.  Persons signing in a fiduciary or representative capacity shall give full title.  If a corporation, please sign in full corporate name by authorized officer.  If a partnership, please sign in partnership name by authorized person.

the applicable Award Agreement.

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