Southern First Bancshares (SFST) in Greenville, S.C., used a private placement to convert preferred stock tied to the Troubled Asset Relief Program into common stock.

The $890 million-asset company said in a regulatory filing Tuesday that it sold 475,000 shares of common stock to affiliates of EJF Capital on Monday for nearly $6.2 million. Southern First used about $4 million in proceeds from the sale to redeem more than 4,000 shares of preferred stock held by EJF. The company said the transaction would save it $200,000 in annual dividends.

As part of the transaction, EFJ has agreed to resell the common stock it obtained from Southern First.

EJF's affiliates obtained its preferred stock through one of the Treasury Department's auctions of Tarp shares. Southern First bought 1,000 of its own shares through that auction. Roughly 11,000 shares of preferred stock, valued at $11.2 million, is still held by other parties, the filing said.

Separately, Southern First disclosed that its fourth-quarter earnings rose 34% from a year earlier, to $1.2 million.

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