SecProbe.io

July 23, 2010

James M. Austin, III Chief Financial Officer Southern First Bancshares, Inc. 100 Verdae Boulevard, Suite 100 Greenville, South Carolina 29606
Re: Southern First Bancshares, Inc.
Form 10-K for the fiscal year ended December 31, 2009 Form 10-Q for the quarterly  period ended March 31, 2010
  File No. 000-27719

Dear Mr. Austin:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within te n business days by providing the requested
information, including a draft of your proposed disclosures to be made in future filings, or by
advising us when you will provide the requested  response.  If you do not believe our comments
apply to your facts and circumstances or do not believe future revisions are appropriate, please
tell us why in your response.
 After reviewing the information you provide in response to these comments, including
the draft of your proposed disclosures, we may have additional comments.

Form 10-Q for the quarterly period ended March 31, 2010

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Investments, page 22

1. Please provide us with, and revise future filings to include, a table similar to that provided on page 62 of your December 31, 2009 Form 10-K detailing the amortized cost, gross unrealized gains, gross unrealized losses a nd fair value for each category of investments for which other
than temporary impairments have not been reco gnized in earnings (inc luding investments for
which a portion of an other-than-temporary has been recognized in other comprehensive income).  Also provide us with, and revise futu re filings to include, a table similar to that
provided on page 63 of your December 31, 2009 Form 10-K detailing the information
requested in the preceding sentence segregated  by those investments that have been in a
continuous unrealized loss position for less than 12 months and those that have been in a
continuous unrealized loss position for 12 months  or longer.  Refer to ASC 320-10-50-6a and

James M. Austin, III
Chief Financial Officer Southern First Bancshares, Inc.
July 23, 2010 Page 2

ASC 320-10-50-7 in preparing your response and note that this disc losure is required in all
annual and quarterly filings.
 2. As a related matter, please refer to ASC 320-10- 50-6b to provide us with, and revise future
filings to include, an enhanced discussion of  your private label collateralized mortgage
obligations that are in a conti nuous loss position.  Your  response and the revised disclosure in
future filings should provide sufficient information to allow financial statement users to understand the quantitative disclosures and th e information that you considered (both
positive and negative) in reaching the conclusion that the impairments are not other-than-temporary.  For example, please consider disclosing additional information to describe the characteristics of the underlying collateral (e .g., types of mortgages, vintage, geographic
concentrations, average FICO scores, etc), performance indicators of the underlying assets
(e.g., quantification of default rates, relevant  delinquency and foreclosure statistics and
trends, etc), quantification of excess collateral, changes in credit ratings, and quantification of
any changes in the major components of your internal cash flow model that occurred during the periods presented.
 3. We note your disclosure that you have the ability and intent to hold all securities within the
portfolio until they mature or  until the value recovers and th erefore you do not consider these
investments to be other-than-temporarily impa ired at March 31, 2010.  In future filings,
please revise this language to be consiste nt with ASC 320-10-35- 33, which clarified the
interaction of factors that shoul d be considered when determini ng whether a debt security is
other-than-temporarily impaired from an assertion of intent and ability to hold a security for a
period of time sufficient to allow for an anticipate d recovery in fair valu e to an assessment of
whether (a) one has the intent to sell the security , or (b) it is more likely than not that one will
be required to sell the security pr ior to its anticipated recovery.
 Loans, page 24

 4. Please tell us, and consider revising future filin gs to disclose, whether you have noticed an
increase in any loan categories such as commercial loans or any other applicable loans, such
as construction loans, that have been extended at maturity for which you have not considered
the loans to be impaired due to the existence of guarantees.  If so, please provide us with the following information and consider enhancing your  disclosure in future filings accordingly:

• The types of extensions being made, whethe r loan terms are being adjusted from the
original terms, and whether you consider thes e types of loans as collateral-dependent;

• To the extent you extend loans at or near ma turity at the existing loan rate due to the
existence of a guarantee, tell us how you consider whether it is a troubled debt
restructuring;

James M. Austin, III
Chief Financial Officer Southern First Bancshares, Inc.
July 23, 2010 Page 3

• In detail, how you evaluate the financial wh erewithal of the guar antor, addressing the
type of financial information reviewed, how current and objec tive the information
reviewed is, and how often the review is performed;

• How you evaluate the guarantor’s reputation and willingness to work with you and how
this translates into your determination of the ultimate provision or charge-off recorded;

• How many times you have sought performance u nder the guarantee di scussing the extent
of the successes.  As part of your respons e, discuss the decision making process you go
through in deciding whether to pursue the guarantor and whether there are circumstances
you would not seek to en force the guarantee;

• Quantify the dollar amount of loans in which your carrying value is in excess of the appraised value but not considered impaired due to the existence of guarantees; and

• When the impaired loan is carried at a value th at is in excess of the appraised value due to
the guarantee from the borrower, address in detail how you evaluate and determine the
realizable value of the borrower guarantee. Specifically discuss the extent of your
willingness to enforce the guarantee.
 Provision and Allowance for Loan Losses, page 25

 5. We note your disclosure on pages 9 and 26 de scribing your methodology for measuring loans
for impairment (e.g., using collateral value, mark et value of similar de bt, enterprise value,
liquidation value and discounted cash flows) and that you had approximately $4.4 million of impaired loans with a specific allowance of  $1.4 million and $8.0 million of impaired loans
without a specific allowance at March 31, 2010.  We also note your disclosure page 10 that all impaired loans were classified as level 2 due to fair value being determined based on an
observable market price or a curr ent appraised value.  As it relates to these loans, please
provide us with the following information as of March 31, 2010 and revise your future filings
accordingly:

• The amount of loans measured using each of the methodologies disclosed (i.e., collateral
value, market value of similar debt, enterp rise value, liquidation value and discounted
cash flows);

• As it relates to collateral dependent loans, a comprehens ive discussion of the methods
used to estimate the fair value, including an  in-depth discussion of the appraisal process,
how often you obtain updated appraisals for your collateral and in the event you use automated valuation methodologies, procedures  you perform to valida te the results of
these valuation methodologies in  the event they are not base d on current appraisal data;

• How you define “current” appraisal;

James M. Austin, III
Chief Financial Officer Southern First Bancshares, Inc.
July 23, 2010 Page 4

• The approximate amount or percentage of im paired loans for which the Company relied
on current third party appraisals of the collatera l to assist in measuring impairment versus
those for which current apprai sals were not available;

• The typical timing surrounding the recogni tion of a collateral dependent lending
relationship and respective loans as nonpe rforming, when you order and receive an
appraisal, and the subsequent recognition of any provision or related charge-off. In this
regard, tell us if there have been any significant time lapses during this process;

• In more detail, the procedures you perform to  monitor these loans be tween the receipt of
an original appraisal a nd the updated appraisal;

• Whether you have charged-off an amount differe nt from what was determined to be the
fair value of the collateral as presented in the appraisal for any pe riod presented.  If so,
please tell us the amount of the difference and corresponding reasons for the difference,
as applicable;
• How you account for any partially charged-off loans subsequent to receiving an updated
appraisal. In this regard, specifically tell us your policies regarding whether or not these
loans return to performing or remain non-performing status, in additi on to whether or not
any of the terms of the original  loans have been modified (e .g. loan extension, changes to
interest rates, etc);

• In the event that you do not use external appraisals to fair value the underlying collateral
for impaired loans or in cases where the appr aisal has not been updated to reflect current
market conditions, please provide us with  a comprehensive response which discusses
your process and procedures for estimating the fa ir value of the collat eral for these loans;
and
• For those loans you determined that no speci fic valuation allowance was necessary, the
substantive reasons to su pport this conclusion.

In the event these policies vary by loan t ype, please consider providing disaggregated
disclosures to explain your policy for measur ing impairment.  In addition, please provide
similarly enhanced disclosure in your fair value footnote as it relates to these assets that are
measured at fair value on a nonrecurring basis.
              We urge all persons who are res ponsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

James M. Austin, III
Chief Financial Officer Southern First Bancshares, Inc.  July 23, 2010 Page 5

            In responding to our comments, please provide a written statement from the company
acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclo sure in the filing;

• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of  the United States.

You may contact Benjamin Phi ppen, Staff Accountant at (202) 551-3697 or me at (202)
551-3423 with any other questions.
Sincerely,

Amit Pande Accounting Branch Chief