Staff Report
Published July 5, 2012

The U.S. Treasury said it made approximately $15 million by auctioning off the preferred shares it owned in Greenville-based Southern First Bancshares Inc.

The Treasury acquired 17,299 preferred shares in the Upstate bank for $17.3 million in 2009 as part of the Troubled Asset Relief Program, or TARP.

Southern First said Tuesday it acquired 1,000 of the shares for $904,000. The remaining 16,299 shares were acquired by third parties. The Treasury would not release the names of the purchasers.

Southern First CEO Art Seaver said the bank had been working to retire those shares and could still retire the remaining preferred shares in the future. Acquiring 1,000 shares will allow the bank to save $50,000 in dividend payments, he said. The preferred stock pays a 5% annual dividend until 2013, when it will increase to 9%.

Southern First Bancshares is the holding company for Greenville First Bank, which operates in the Upstate, and Southern First Bank, which has locations in the Midlands.

The Treasury began auctioning its shares in Southern First in late June along with its shares in six other banks:

• Fidelity Southern Corp. of Atlanta — 48,200 shares at $900.60 per share for approximately $43 million in net proceeds;
• Firstbank Corp. of Michigan — 33,000 shares at $941.01 per share for approximately $31 million in net proceeds;
• First Citizens Banc Corp. of Ohio — 23,184 shares at $906.00 per share for approximately $21 million in net proceeds;
• MetroCorp Bancshares Inc. of Houston — 45,000 shares at $981.17 per share for approximately $43 million in net proceeds;
• Peoples Bancorp of North Carolina Inc. — 25,054 shares at $933.36 per share for approximately $23 million in net proceeds;
• Pulaski Financial Corp. of St. Louis — 32,538 shares at $888.00 per share for approximately $28 million in net proceeds.

The auction was set to close Tuesday, subject to certain conditions. The aggregate net proceeds to the Treasury from the seven offerings are expected to be approximately $204 million, which was 11% above the minimum prices set for the auctions, the Treasury said.

Including these auctions, the Treasury said it has recovered $264 billion from TARP’s bank programs to date through repayments, dividends, interest and other income, which is a $19 billion return compared to the $245 billion initially invested.

The Treasury continues to wind down its TARP ownership and the next auction will be later this month. Details have not been released.

Southern First was among 20 South Carolina-based banks to receive a combined $650 million in investments from the Treasury through the TARP program. Following auctions and TARP repayments, eight of those banks are no longer part of the program. The Treasury also auctioned its shares in First Financial Holdings Inc. of Charleston.

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Treasury Department to sell stock in Charleston-based bank
SCBT to repay TARP, offer shares
Greenville bank receives more TARP, seeks to privatize
Southern First reports net loss after TARP payments