DEF 14A of Southern First Bancshares Inc, Apr 3, 2024

DEF 14A of Southern First Bancshares Inc

Filed Apr 3, 2024 · FY20230001206774-24-000334

Open on EDGAR

  1. Biographical Information for Each Nominee for Director

    Biographical Information for Each Nominee for Director Set forth below is certain information about the current nominees, each of whom is also a director of the Bank. Mark A. Cothran, 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, 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 has 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 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, the Advisory Board of Greenville National Bank, 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., 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 Upstate 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 advisory board to Greenville National Bank from 1995 until 1998. He serves 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. R. Arthur “Art” Seaver, Jr., 60, Class I director, has served as our Chief Executive Officer since 1999. He has over 37 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 the 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 a past member of the board of the St. Francis Foundation, past chairman of the Board for the South Carolina Bankers Association and past chair of the United Way of Greenville County Board of Trustees. In addition, he has worked with organizations 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 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.

  2. Our Other Directors

    Our Other Directors Set forth below is information about our other directors each of whom is also a director of the Bank. Andrew B. Cajka, 64, Class III director, has served as a director of the Company since 1999. Mr. Cajka 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 is a past chairman of the Clemson 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, past chairman of Visit Greenville SC and the Convention 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 an active board member of the BMW Charity 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. Mr. 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 director. Leighton M. Cubbage, 71, Class II director, has served as director of the Company since 1999. Mr. Cubbage is the co-founder and chairman of 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 weekly newspaper and car dealerships. He is a 1977 graduate of Clemson University with a bachelor’s degree in political science. Mr. Cubbage previously served as chairman of the Greenville Hospital System board of trustees, was a former member of the Greenville Technical College Foundation Board and has served on the board of directors of the Greenville Chamber of 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. Anne S. Ellefson, 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 practiced law 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 Bank. She is a past chairman of the Greater Greenville Chamber of Commerce and the United Way of Greenville County and formerly served on the Board of Directors of the South Carolina Chamber of Commerce. 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, 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 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, 74, Class II director, has served 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 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 master’s in business administration. Mr. Ellison serves 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 and has also served on the board of trustees for United Way of Greenville County 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 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.

  3. Our Other Directors

    Tecumseh “Tee” Hooper, Jr., 76, Class III director, has served as a director of the Company since 1999. Mr. Hooper is a private investor and chairman of the board of FGP International Inc., a private executive search and temporary placement service company, and he has been with FGP International Inc. since 2003. He was the president of Modern Office Machines/IKON Office Solutions in Greenville, South Carolina, from 1982 through 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 master’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. 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, 71, Class II director, has served as director the Company and chairman of our board of directors since 1999. From 1986 to 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. 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 is 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.

  4. BOARD DIVERSITY

    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.

  5. BOARD DIVERSITY

    | 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 | | |

  6. BOARD SKILLS

    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.

  7. BOARD SKILLS

    | Knowledge, Skills and Experience | Cajka | Cothran | Cubbage | Ellefson | Ellison | Grayson- Caprio | Hooper | Johnstone | Lattimore | Locke | Maner | Orders | Seaver | | 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 | | | | | | | | | | | • | | • |

  8. Biographical Information for Our Executive Officers Who are Not Directors

    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 our board of directors, we have provided his biographical information above with our other directors. Calvin C. Hurst, 42, has served as the president of our Company and our Bank since August 2022 and previously served as our chief banking officer since March 2019. Mr. Hurst has over 15 years of banking experience. From 2006 to 2019, Mr. Hurst 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 beginning in 2016. Mr. Hurst is a 2005 graduate of Furman University, with a Bachelor’s degree in Business Administration and Economics. William M. Aiken, III, 50, has served as a senior executive vice president and chief risk officer of our Company and our Bank since 2021 and previously served as an executive credit risk officer since 2020. Mr. Aiken has worked in the banking industry for over 25 years. Beginning in 1996, he has served in various roles at several financial institutions, including most recently as chief commercial credit officer at SouthState Bank from 2019 through August 2020 as well as a senior commercial loan administrator with that bank from 2012 until 2018. He is a 1996 graduate of Clemson University, with a degree in Financial Management. Silvia T. King, 46, has served as chief human resources officer of our Company and our Bank since March 2018. Ms. King has over 20 years of Human 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 as senior human resources consultant for FGP International, a professional staffing and human resources consulting firm in Greenville, and from 2016 to 2018 as a human resources instructor with e-Cornell University. Ms. King holds degrees in Psychology and International Marketing from Clemson University and a Master of Human Resources degree from the University of South Carolina. PROPOSAL NO. 2:

  9. Overview and Executive Summary

    | ● | tie equity compensation to long-term value creation for our shareholders; |

  10. Overview and Executive Summary

    | ● | maintain a corporate environment that encourages stability and a long-term focus for both us and our management; |

  11. Overview and Executive Summary

    | o | attracts and retains key personnel critical to our long-term success; and |

  12. Overview and Executive Summary

    | Pay for performance, minimum performance requirements and capped payouts | We 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-taking | We annually review our compensation programs to ensure that they do not encourage excessive risk-taking. | | Limited perquisites | We 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-ups | We do not provide our executive officers excise tax gross-ups on benefits or under any change in control provisions or agreements. |

  13. Overview and Executive Summary

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

  14. Overview and Executive Summary

    | Name | 2023 Bonus(1) | 2022 Bonus | % Change | | R. Arthur Seaver, Jr. | $90,000 | $175,000 | (48.57%) | | Calvin C. Hurst | 100,000 | 155,000 | (35.48%) | | D. Andrew Borrmann | 80,000 | - | n/a | | William M. Aiken, III | 70,000 | 89,700 | (21.96%) | | Silvia T. King | 35,000 | 55,000 | (36.36%) | | Michael D. Dowling | - | 155,000 | n/a |

  15. Overview and Executive Summary

    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:

  16. Overview and Executive Summary

    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. 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.

  17. Overview and Executive Summary

    | 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 Stars | 120% | 100% | 85% | 80% | 50% | | 8 Stars | 100% | 85% | 80% | 70% | 40% | | 7 Stars | 85% | 80% | 75% | 60% | 30% | | 6 Stars | 60% | 60% | 60% | 50% | 25% | | 5 Stars | 50% | 50% | 50% | 40% | 20% | | 4 Stars | 40% | 40% | 40% | 30% | 15% | | 3 Stars | 30% | 30% | 30% | 20% | 10% |

  18. Severance and Change in Control Agreements

    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. 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.

  19. Compensation Process

    | • | Recommended a compensation peer group of publicly-traded financial institutions; |

  20. Compensation Process

    | • | 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 |

  21. Compensation Process

    | • | Commented on the design of our incentive programs relative to the practices of our peers and alignment with our culture and business strategy. |

  22. Compensation Process

    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.

  23. Summary Compensation Table

    Summary Compensation Table

  24. Summary Compensation Table

    | Name and Principal Position as of December 31, 2022 | Year | Salary | 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 Officer | 2022 | 510,000 | 175,000 | 122,280 | - | - | 50,741 | 72,583 | 930,604 | | | 2021 | 495,000 | 170,000 | 78,900 | 239,335 | - | 240,559 | 55,685 | 1,279,479 | | Calvin C. Hurst | 2023 | 309,000 | 100,000 | 86,900 | - | - | - | 45,668 | 541,568 | | President | 2022 | 300,000 | 155,000 | 91,710 | - | - | 9,336 | 46,683 | 602,729 | | | 2021 | 223,500 | 140,000 | 39,450 | 127,645 | - | 20,809 | 42,822 | 594,226 | | Michael D. Dowling(7) | 2023 | 45,000 | - | 86,900 | - | - | 22,312 | 12,473 | 166,685 | | Chief Operating Officer | 2022 | 354,000 | 155,000 | 91,710 | - | - | 17,370 | 47,442 | 665,522 | | and Chief Financial Officer | 2021 | 340,000 | 155,000 | 59,175 | 159,557 | - | 91,748 | 48,353 | 853,833 | | D. Andrew Borrmann(8) | 2023 | 219,500 | 105,000 | 43,890 | - | - | - | 13,348 | 381,738 | | Chief Financial Officer | | | | | | | | | | | William M. Aiken, III(9) | 2023 | 257,500 | 70,000 | 86,900 | - | - | - | 30,278 | 444,678 | | Chief Risk Officer | 2022 | 250,000 | 89,700 | 61,140 | - | - | - | 30,754 | 431,594 | | | 2021 | 220,000 | 85,000 | - | 39,889 | - | - | 17,650 | 362,539 | | Silvia T. King | 2023 | 190,500 | 35,000 | 26,070 | - | - | - | 30,924 | 282,494 | | Chief Human Resource | 2022 | 185,000 | 55,000 | 36,684 | - | - | 6,977 | 28,634 | 312,295 | | Officer | 2021 | 175,000 | 52,250 | - | 31,911 | - | 18,139 | 25,860 | 303,160 |

  25. Summary Compensation Table

    | (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. |

  26. Summary Compensation Table

    | 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. |

  27. Grants of Plan-Based Awards

    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.

  28. Grants of Plan-Based Awards

    | Name | Grant 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. | 1/17/2023 | - | - | 3,000 | - | $ - | $130,350 | | Calvin C. Hurst | 1/17/2023 | - | - | 2,000 | - | - | 86,900 | | D. Andrew Borrmann | 4/18/2023 | - | - | 1,500 | - | - | 43,890 | | Michael D. Dowling | 1/17/2023 | - | - | 2,000 | - | - | 86,900 | | William M. Aiken, III | 1/17/2023 | - | - | 2,000 | - | - | 86,900 | | Silvia T. King | 1/17/2023 | - | - | 600 | - | - | 26,070 |

  29. Grants of Plan-Based Awards

    | (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. |

  30. Outstanding Equity Awards at Fiscal Year End

    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.

  31. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | Stock Awards | | | | | | | | | Market | | | | | | | Number of | Value of | | | | | | | Shares or | Shares or | | | Number of Securities | | | | Units of | Units of | | | Underlying Unexercised | | Option | Option | Stock that | Stock that | | | Options(#) | | Exercise | Expiration | Have Not | Have Not | | Name | Exercisable | Unexercisable(1) | Price($) | Date | Vested(#) | Vested(#) | | R. Arthur Seaver, Jr. | 10,000 | - | 13.43 | 01/21/2024 | 6,125 | 227,238 | | | 10,000 | - | 16.78 | 01/20/2025 | - | - | | | 10,000 | - | 23.00 | 01/19/2026 | - | - | | | 10,000 | - | 35.65 | 01/17/2027 | - | - | | | 8,000 | - | 42.80 | 01/16/2028 | - | - | | | 8,000 | - | 32.32 | 01/15/2029 | - | - | | | 6,000 | 2,000 | 42.72 | 01/21/2030 | - | - | | | 7,500 | 7,500 | 39.45 | 01/19/2031 | - | - | | Calvin C. Hurst | 4,000 | - | 35.35 | 04/16/2029 | 3,625 | 134,488 | | | 3,000 | 1,000 | 42.72 | 01/21/2030 | - | - | | | 6,000 | 2,000 | 25.10 | 05/19/2030 | - | - | | | 4,000 | 4,000 | 39.45 | 01/19/2031 | - | - | | D. Andrew Borrmann | - | - | - | - | 1,500 | 55,650 | | Michael D. Dowling | - | - | - | - | - | - | | William M. Aiken, III | 2,250 | 750 | 25.49 | 08/18/2030 | 3,000 | 111,300 | | | 1,250 | 1,250 | 39.45 | 01/19/2031 | - | - | | Silvia T. King | 2,000 | - | 45.50 | 03/20/2028 | 1,050 | 38,955 | | | 625 | - | 32.32 | 01/15/2029 | - | - | | | 1,125 | 375 | 42.72 | 01/21/2030 | - | - | | | 1,000 | 1,000 | 39.45 | 01/19/2031 | - | - |

  32. Outstanding Equity Awards at Fiscal Year End

    | (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. |

  33. Outstanding Equity Awards at Fiscal Year End

    Option Exercises and Stock Vested

  34. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | Stock Awards | | | Name | Number 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. Dowling | 10,000 | 56,700 | 1,750 | 75,238 | | William M. Aiken, III | - | - | 500 | 17,638 | | Silvia T. King | - | - | 150 | 6,339 |

  35. Outstanding Equity Awards at Fiscal Year End

    | (1) Value realized is based on the difference between our common stock closing price on the date of exercise and the option exercise price. |

  36. Outstanding Equity Awards at Fiscal Year End

    | (2) Value realized is based on the market value of the underlying shares on the vesting date. |

  37. Outstanding Equity Awards at Fiscal Year End

    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.

  38. Outstanding Equity Awards at Fiscal Year End

    | 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 | 331,349 | $35.51 | 319,058 | | Equity compensation plans not approved by security holders | None | n/a | n/a | | Total | 331,349 | $35.51 | 319,058 |

  39. Outstanding Equity Awards at Fiscal Year End

    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 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.

  40. Pension Benefits

    Pension Benefits

  41. 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 | — |

  42. Pension Benefits

    | (1) D. Andrew Borrmann and William M. Aiken, III do not have a Salary Continuation Agreement with the Company as of December 31, 2023. |

  43. Pension Benefits

    | (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. |

  44. Pension Benefits

    | (3) Mr. Dowling resigned from the Company and the Bank effective February 15, 2023. |

  45. Pension Benefits

    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. 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.

  46. Potential Payments Upon Termination or Change in Control

    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.

  47. Potential Payments Upon Termination or Change in Control

    | 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 | $515,000 | 90,000 | 1,703,868 | - | 227,238 | 2,536,106 | | Good reason termination or termination without cause, each after change in control | 1,545,000 | 90,000 | 2,696,235 | 8,100 | 227,238 | 4,566,573 | | Calvin C. Hurst | | | | | | | | President of the Company and the Bank | | | | | | | | Termination without cause | 309,000 | 100,000 | 46,399 | - | 158,488 | 618,887 | | Good reason termination or termination without cause, each after change in control | 618,000 | 100,000 | 75,000 | 11,520 | 158,488 | 963,008 | | William M. Aiken, III | | | | | | | | Chief Risk Officer of the Company and the Bank | | | | | | | | Termination without cause | 257,500 | 70,000 | - | - | 120,008 | 447,508 | | Good reason termination or termination without cause, each after change in control | 515,000 | 70,000 | - | - | 120,008 | 705,008 |

  48. Potential Payments Upon Termination or Change in Control

    | (1) Silvia T. King does not have an employment agreement with the Company as of December 31, 2023. |

  49. Potential Payments Upon Termination or Change in Control

    | (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. |

  50. Potential Payments Upon Termination or Change in Control

    | (3) Includes all bonus amounts earned or accrued through the date of termination. |

  51. Potential Payments Upon Termination or Change in Control

    | (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. |

  52. Potential Payments Upon Termination or 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. |

  53. Potential Payments Upon Termination or Change in Control

    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. 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:

  54. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  55. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  56. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  57. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  58. Potential Payments Upon Termination or Change in Control

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

  59. Potential Payments Upon Termination or Change in Control

    | • | 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 |

  60. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  61. Potential Payments Upon Termination or Change in Control

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

  62. Potential Payments Upon Termination or Change in Control

    | • | 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; |

  63. Potential Payments Upon Termination or Change in Control

    | • | 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; |

  64. Potential Payments Upon Termination or Change in Control

    | • | 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; |

  65. Potential Payments Upon Termination or 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 |

  66. Potential Payments Upon Termination or Change in Control

    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;

  67. Potential Payments Upon Termination or Change in Control

    | • | the insolvency or the filing of a petition for bankruptcy of the Company which petition is not dismissed within sixty days; |

  68. Potential Payments Upon Termination or Change in Control

    | • | any material breach by the Company of any material provision of the employment agreement; |

  69. Potential Payments Upon Termination or Change in Control

    | • | any purported termination of the employee’s employment for cause by us which does not comply with the terms of the employment agreement; or |

  70. Potential Payments Upon Termination or Change in Control

    | • | our failure to obtain an agreement, satisfactory to the employee, from any successor or assign to assume and agree to perform the employment agreement. |

  71. Potential Payments Upon Termination or Change in Control

    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:

  72. Potential Payments Upon Termination or Change in Control

    | • | 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); |

  73. Potential Payments Upon Termination or Change in Control

    | • | an indictment for the commission or perpetration by the executive of any felony or any crime involving dishonesty, moral turpitude or fraud; |

  74. Potential Payments Upon Termination or Change in Control

    | • | a material breach by the executive of the employment agreement that remains uncured ten days following written notice; |

  75. Potential Payments Upon Termination or Change in Control

    | • | 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; |

  76. Potential Payments Upon Termination or Change in Control

    | • | 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 |

  77. Potential Payments Upon Termination or Change in Control

    | • | 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. |

  78. Potential Payments Upon Termination or Change in Control

    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.

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

    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.

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

    | 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. |

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

    | 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. |

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

    | 3. | We identified our median employee using this compensation measure and methodology, which was consistently applied to all our employees included in the calculation. |

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

    | 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. |

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

    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.

  85. Pay Versus Performance

    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.

  86. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based on:(4) | | | | | Year | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(1)(2)(3) | Average Summary Compensation Table Total for Non-CEO NEOs(1) | Average Compensation Actually Paid to Non-CEO NEOs(1)(2)(3) | Southern First Total Shareholder Return | S&P US BMI Banks – Southeast Region Total Shareholder Return | Net Income ($ in thousands) | Growth in Tangible Book Value(5) | | 2023 | $805,318 | 763,495 | 363,433 | 222,899 | $87.31 | $107.45 | $13,426 | 5.09% | | 2022 | 930,645 | 648,353 | 503,035 | 318,392 | 107.67 | 104.16 | 29,115 | 4.82% | | 2021 | 1,279,479 | 1,940,915 | 528,440 | 889,758 | 147.07 | 128.06 | 46,711 | 19.41% | | 2020 | 1,252,932 | 918,502 | 463,220 | 454,178 | 83.20 | 89.66 | 18,328 | 9.47% |

  87. Pay Versus Performance

    | (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. |

  88. Pay Versus Performance

    | (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. |

  89. Pay Versus Performance

    | (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 |

  90. Pay Versus Performance

    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.

  91. Pay Versus Performance

    | (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. |

  92. Pay Versus 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. |

  93. Pay Versus Performance

    | Year | Summary 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 | | 2021 | 1,279,479 | (240,559) | (318,235) | 112,730 | 1,107,500 | 1,940,915 | | 2020 | 1,252,932 | (341,801) | (212,024) | 104,024 | 115,371 | 918,502 |

  94. Pay Versus Performance

    | Year | Average 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 | | 2021 | 528,440 | (32,674) | (114,407) | 20,391 | 488,008 | 889,758 | | 2020 | 463,220 | (37,862) | (90,460) | 18,131 | 101,149 | 454,178 |

  95. Pay Versus Performance

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

  96. Pay Versus Performance

    | Year | Year-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) | | 2021 | 640,991 | 436,186 | 30,323 | 1,107,500 | | 2020 | 184,919 | (57,293) | (12,255) | 115,371 |

  97. Pay Versus Performance

    | Year | Average 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) | | 2021 | 232,561 | 224,092 | 31,355 | 488,008 | | 2020 | 132,399 | (21,197) | (10,053) | 101,149 |

  98. Relationship Between Compensation Actually Paid and Company Performance

    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.

  99. Relationship Between Compensation Actually Paid and Company Performance

    | Compensation Actually Paid vs. Tangible Book Value | | |

  100. 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 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.

  101. Relationship Between Compensation Actually Paid and Company Performance

    | Compensation Actually Paid vs. Company Cumulative TSR | | |

  102. 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 net income over the four fiscal years ending December 31, 2023.

  103. Relationship Between Compensation Actually Paid and Company Performance

    | Compensation Actually Paid vs. Net Income | | |

  104. Relationship Between Compensation Actually Paid and Company Performance

    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.

  105. Relationship Between Compensation Actually Paid and Company Performance

    | • | Tangible Book Value |

  106. Relationship Between Compensation Actually Paid and Company Performance

    | • | Net Charge-offs as a Percentage of Average Loans |

  107. Relationship Between Compensation Actually Paid and Company Performance

    | • | Total Shareholder Return |

  108. Relationship Between Compensation Actually Paid and Company Performance

    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.

  109. DIRECTOR COMPENSATION

    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.

  110. DIRECTOR COMPENSATION

    | Name (1) | Fees Earned or Paid in Cash | | Andrew B. Cajka, Jr. | $54,500 | | Mark A. Cothran | 44,300 | | Leighton M. Cubbage | 46,500 | | Anne S. Ellefson | 47,500 | | David G. Ellison | 46,300 | | Terry Grayson-Caprio | 48,600 | | Tecumseh Hooper. Jr. | 46,500 | | Rudolph G. Johnstone, III | 46,500 | | Ray A. Lattimore | 44,300 | | Anna T. Locke | 45,400 | | William A. Maner, IV | 46,500 | | James B. Orders, III | 54,300 | | | $571,200 |

  111. DIRECTOR COMPENSATION

    | (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.” |

  112. DIRECTOR COMPENSATION

    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. 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:

  113. DIRECTOR COMPENSATION

    | Name of Beneficial Owner | Number 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% |

  114. DIRECTOR COMPENSATION

    | (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. |

  115. DIRECTOR COMPENSATION

    | (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. |

  116. DIRECTOR COMPENSATION

    | (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. |

  117. DIRECTOR COMPENSATION

    | (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. |