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ServisFirst Bancshares, Inc.
850 Shades Creek Parkway Suite 200
Birmingham, AL 35209-4510

 

(205) 949-0302

Investor Relations Contact
Mr. Davis S. Mange
(205) 949-3420
dmange@servisfirstbank.com

Transfer Agent
By Regular Mail
Computershare
P.O. BOX 30170
College Station, TX 77842

 

By Overnight Delivery
Computershare
211 Quality Circle Suite 210
College Station, TX 77845

 

(800) 368-5948

 

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Press Releases

ServisFirst Bancshares, Inc. Announces Results For Third Quarter of 2014 And Agreement to Acquire Metro Bancshares, Inc. in Atlanta, Georgia

Oct 20, 2014

BIRMINGHAM, Ala., Oct. 20, 2014 /PRNewswire/ -- ServisFirst Bancshares, Inc. ("ServisFirst") (NASDAQ: SFBS), the holding company for ServisFirst Bank, today announced earnings and operating results for the quarter and nine months ended September 30, 2014, and simultaneously announced today the signing of a definitive agreement and plan of merger ("Agreement") with Metro Bancshares, Inc. As discussed below, according to the terms of the Agreement, ServisFirst will acquire all of the outstanding stock of Metro Bancshares, Inc.

THIRD QUARTER 2014 HIGHLIGHTS:

  • Net income for the third quarter increased 30% year over year
  • Third quarter annualized loan and deposit growth of 14% and 25%, respectively, on a linked quarter basis
  • Diluted earnings per share of $0.54 for the third quarter, a 10% increase year over year
  • 25% growth in non-interest-bearing demand deposits year over year
  • Announced acquisition of Metro Bancshares, Inc. in Atlanta

Tom Broughton, President and CEO, said, "We are pleased with our loan and deposit growth rates of 14% and 25%, respectively."  Bud Foshee, CFO, stated, "Strong loan and deposit growth combined with excellent credit quality continue to drive our strong earnings performance."

ACQUISITION OF METRO BANCSHARES, INC.:

Metro Bancshares, Inc. is the holding company for Metro Bank, which operates three banking offices in the Atlanta metropolitan area.  As of September 30, 2014, Metro Bank reported approximately $223.5 million in assets, $140.6 million in loans and $195.9 million in deposits.

Tom Broughton, President and CEO of ServisFirst Bank, commented, "Ken Barber is an outstanding banker who has been a friend for many years.  We look forward to Ken and his team joining our company.  This will represent a strategic merger as an entry point into the Atlanta market."

Ken Barber, President and CEO of Metro Bank, commented, "We are very excited about joining the great team that Tom has assembled at ServisFirst. The resources that will be available to us will allow our team to grow our existing business in the metro Atlanta area at a much greater rate than we could have imagined as an independent bank."

The proposed merger of Metro Bancshares, Inc. with and into ServisFirst has been approved by the boards of directors of each company and is expected to close in the first quarter of 2015. Under the terms of the Agreement, assuming an average closing price of ServisFirst common stock of $28.83 per share, which was the closing price of ServisFirst common stock on October 17, 2014, ServisFirst would issue approximately 636,720 shares of its common stock and pay approximately $22,825,000 in cash, representing approximately $41,182,000 in aggregate consideration, which includes amounts payable to Metro option and warrant holders. The actual value of the total consideration may be greater or less than such amount, depending on the actual market value of ServisFirst common stock prior to the closing. Assuming an average closing price of $28.83 per share, the consideration to common shareholders would be approximately 52% in stock and 48% in cash, which percentages may fluctuate. Simultaneously with the closing of the transaction, Metro Bancshares, Inc. will merge with and into ServisFirst, and Metro Bank will merge with and into ServisFirst Bank. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of Metro Bancshares, Inc.'s shareholders.

Additional information regarding the merger has been provided in a presentation available at www.sec.gov.

 

FINANCIAL SUMMARY

(in Thousands except share and per share amounts)














Period Ending

September 30,

2014


Period Ending

June 30,

2014


% Change

From Period

Ending June

30, 2014 to

Period Ending

September 30,

2014


Period Ending

September 30,

2013


% Change

From Period

Ending

September 30,

2013 to Period

Ending

September 30,

2014

QUARTERLY OPERATING RESULTS



















Net Income


$

14,002



$

11,585



21

%


$

10,812



30

%

Net Income Available to Common Stockholders


$

13,902



$

11,469



21

%


$

10,712



30

%

Diluted Earnings Per Share


$

0.54



$

0.46



17

%


$

0.49



10

%

Return on Average Assets



1.45

%



1.28

%






1.31

%




Return on Average Common Stockholders' Equity



15.89

%



15.03

%






18.47

%




Average Diluted Shares Outstanding



25,952,883




24,823,590







21,965,733
























Core Net Income*


$

14,002



$

12,740



10

%


$

10,812



30

%

Core Net Income Available to Common Stockholders*


$

13,902



$

12,624



10

%


$

10,712



30

%

Core Diluted Earnings Per Share*


$

0.54



$

0.51



6

%


$

0.49



10

%

Core Return on Average Assets*



1.45

%



1.41

%






1.31

%




Core Return on Average Common Stockholders' Equity*



15.89

%



16.54

%






18.47

%























YEAR-TO-DATE OPERATING RESULTS



















Net Income


$

37,345










$

29,749



26

%

Net Income Available to Common Stockholders


$

37,029










$

29,449



26

%

Diluted Earnings Per Share


$

1.51










$

1.37



10

%

Return on Average Assets



1.37

%










1.31

%




Return on Average Common Stockholders' Equity



16.17

%










18.34

%




Average Diluted Shares Outstanding



24,598,250











21,965,733
























Core Net Income*


$

38,957










$

29,749



31

%

Core Net Income Available to Common Stockholders*


$

38,641










$

29,449



31

%

Core Diluted Earnings Per Share*


$

1.57










$

1.37



15

%

Core Return on Average Assets*



1.43

%










1.31

%




Core Return on Average Common Stockholders' Equity*



16.88

%










18.34

%























BALANCE SHEET



















Total Assets


$

3,952,799



$

3,762,684



5

%


$

3,396,153



16

%

Loans



3,159,772




3,053,989



3

%



2,731,973



16

%

Non-interest-bearing Demand Deposits



794,553




729,163



9

%



635,153



25

%

Total Deposits



3,352,766




3,157,642



6

%



2,919,217



15

%

Stockholders' Equity



393,136




380,074



3

%



276,300



42

%




















* Core measures exclude non-routine expenses in the first and second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets.  For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.

 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $14.0 million and net income available to common stockholders of $13.9 million for the quarter ended September 30, 2014, compared to net income of $10.8 million and net income available to common stockholders of $10.7 million for the same quarter in 2013.  Basic and diluted earnings per common share were $0.56 and $0.54, respectively, for the third quarter of 2014, compared to $0.51 and $0.49, respectively, for the third quarter of 2013.

Return on average assets was 1.45% and return on average common stockholders' equity was 15.89% for the  third quarter of 2014, compared to 1.31% and 18.47%, respectively, for the third quarter of 2013.

Net interest income was $33.3 million for the third quarter of 2014, compared to $32.0 million for the second quarter of 2014 and $29.0 million for the third quarter of 2013.  The net interest margin in the third quarter of 2014 was 3.65%, a 9 basis point decrease from the second quarter of 2014 and 4 basis point decrease from the third quarter of 2013.  The increase in net interest income on a linked quarter basis is attributable to a $99.1 million increase in average loans outstanding, a $76.7 million increase in average non-interest-bearing deposits and a $41.0 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.  The lower net interest margin is primarily the result of higher balances in federal funds at other banks, which earn a lower interest rate. 

Average loans for the third quarter of 2014 were $3.09 billion, an increase of $99.1 million, or 3%, over average loans of $2.99 billion for the second quarter of 2014, and an increase of $450.6 million, or 17%, over average loans of $2.64 billion for the third quarter of 2013.

Average total deposits for the third quarter of 2014 were $3.21 billion, an increase of $154.4 million, or 5%, over average total deposits of $3.06 billion for the second quarter of 2014, and an increase of $393.8 million, or 14%, over average total deposits of $2.82 billion for the third quarter of 2013.

The Company's asset quality remained strong in the third quarter of 2014.  At September 30, 2014, non-performing assets to total assets were 0.61%, an increase of 0.08% compared to the first two quarters of 2014.  Net credit charge-offs to average loans were 0.17%, a 0.01% increase from the second quarter of 2014 and unchanged compared to the first quarter of 2014.  We recorded a $2.7 million provision for loan losses in the third quarter of 2014 compared to $2.4 million in the second quarter of 2014 and $3.0 million in the third quarter of 2013.  Growth in loans and improving credit quality has resulted in our loan loss reserve as a percent of loans remaining relatively stable, increasing one basis point to 1.09% at September 30, 2014 as compared to 1.08% for June 30 and March 31, 2014.  In management's opinion, the reserve is adequate and was determined by consistent application of ServisFirst Bank's methodology for calculating its reserve for loan losses.

Non-interest income increased $737,000 during the third quarter of 2014, or 32%, compared to the third quarter of 2013.  Deposit service charges increased by $349,000, or 42%, resulting from an increase in the number of accounts and transactions.  Increases in the cash surrender value of our life insurance contracts resulted from added investments in contracts during the third quarter of 2014.

Non-interest expense for the third quarter of 2014 increased $3.2 million, or 27%, to $15.3 million from $12.1 million in the third quarter of 2013.  Salary and benefit expense for the third quarter of 2014 increased $842,000, or 12%, to $7.9 million from $7.0 million in the third quarter of 2013, and decreased $1.2 million, or 13%, on a linked quarter basis.  Included in salary and benefit expense for the first and second quarters of 2014 are non-routine expenses of $703,000 and $1.8 million, respectively, resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets.  This expense impacted our diluted earnings per share for the first and second quarters of 2014 by $0.02 and $0.05, respectively.  We historically accounted for these options under the provisions of FASB ASC 718-10, Compensation – Stock Compensation, and now have determined to recognize as an expense the fair value of these vested options in accordance with the provisions of the FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees.  The change in accounting treatment is a non-cash item and does not impact the Company's operating activities or cash from operations.  Other operating expense for the third quarter of 2014 increased $1.9 million, or 73%, to $4.4 million from $2.5 million in the third quarter of 2013.  This was primarily the result of write downs of investments in tax credit partnerships of $1.4 million for the third quarter of 2014 compared to $53,000 in the same quarter in 2013.  We recognized tax credits of $1.9 million during the third quarter of 2014 from these investments.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

As discussed in more detail in the section titled "Detailed Financials," we recorded a non-routine expense of $703,000 for the first quarter of 2014 resulting from the correction  of our accounting for vested stock options previously granted to members of our advisory boards in our Dothan, Huntsville and Montgomery, Alabama markets, and we recorded a non-routine expense of $1.8 million for the second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our Mobile, Alabama and Pensacola, Florida markets.  This change in accounting treatment is a non-cash item and does not impact our operating activities or cash from operations.  The non-GAAP financial measures included in this press release of our results for the third quarter of 2014 and the first nine months of 2014 are "core net income," "core net income available to common stockholders," "core diluted earnings per share," "core return on average assets" and "core return on average common stockholders' equity."  Each of these five core financial measures excludes the impact of the non-routine expense attributable to the correction of our accounting for vested stock options.  None of the other periods included in this press release are affected by this correction.

"Core net income" is defined as net income, adjusted by the net effect of the non-routine expense.

"Core net income available to common stockholders" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.

"Core diluted earnings per share" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.

"Core return on average assets" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.

"Core return of average common stockholders' equity" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders' equity.

We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use.  The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures for the nine months ended September 30, 2014 and the three month period ended June 30, 2014.  Dollars are in thousands, except share and per share data.

 

(Dollars in Thousands)












For the Nine Months

Ended September

30, 2014


For the Three

Months Ended June

30, 2014

Provision for income taxes - GAAP


$

14,965



$

5,476



Adjustments:










Adjustment for non-routine expense



865




619


Core provision for income taxes


$

15,830



$

6,095












Return on average assets - GAAP



1.37

%



1.28

%

Net income - GAAP


$

37,345



$

11,585



Adjustments:










Adjustment for non-routine expense



1,612




1,155


Core net income


$

38,957



$

12,740


Average assets


$

3,653,777



$

3,635,506


Core return on average assets



1.43

%



1.41

%











Return on average common stockholders' equity



16.17

%



15.03

%

Net income available to common stockholders - GAAP


$

37,029



$

11,469



Adjustments:










Adjustment for non-routine expense



1,612




1,155


Core net income available to common stockholders


$

38,641



$

12,624


Average common stockholders' equity


$

306,144



$

306,050


Core return on average common stockholders' equity



16.88

%



16.54

%











Earnings per share - diluted - GAAP


$

1.51



$

0.46


Weighted average shares outstanding, diluted



24,598,250




24,823,590


Core diluted earnings per share


$

1.57



$

0.51


 

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Montgomery, Mobile and Dothan, Alabama, Pensacola, Florida and Nashville, Tennessee.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC).  Copies of its filings may be obtained through the SEC's website at www.sec.gov or at http://servisfirstbancshares.investorroom.com/.

About Metro Bancshares, Inc.

Metro Bancshares, Inc. operates as the bank holding company for Metro Bank, which provides general banking business in Douglasville, Georgia. It offers a range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, money market accounts, individual retirement accounts, regular interest bearing statement savings accounts, and certificates of deposit. The company also provides commercial loans, real estate loans, home equity loans, and consumer/installment loans. In addition, it offers consumer services, such as cashier's checks, Internet banking services, and direct deposit services. The company was founded in 2007 and is based in Douglasville, Georgia.

Webcast

As previously announced, ServisFirst will host a live audio webcast to discuss third quarter results beginning at 5 p.m. ET on October 20, 2014. The webcast can be accessed at www.servisfirstbancshares.com in the "Events and Webcasts" section. A replay of the call will be available until October 31, 2014.

Additional Information

This release contains, and the remarks by ServisFirst's management on the live audio webcast may contain, forward-looking statements within the meaning of the securities laws giving ServisFirst's expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," "positions," "prospects" or "potential," by future conditional verbs such as "will," "would," "should," "could" or "may", or by variations of such words or by similar expressions. These forward-looking statements are not guarantees of future performance and are subject to numerous assumptions, risks and uncertainties, many of which are outside of ServisFirst's control and which may change over time and cause actual results to differ materially from those expressed or implied by the forward-looking statements. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-looking Statements" and "Risk Factors" in our most recent Annual Report on Form 10-K/A and to our other filings with the U.S. Securities and Exchange Commission ("SEC"). Forward-looking statements speak only as of the date they are made, and ServisFirst assumes no duty to update forward-looking statements. 

In addition to factors previously disclosed in ServisFirst's reports filed with the SEC and those identified elsewhere in this release, the following factors among others, could cause actual results to differ materially from forward-looking statements or historical performance:  ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Metro Bancshares, Inc.'s shareholders, on the expected terms and schedule; delay in closing the merger; business disruption following the merger; the attitudes and preferences of its customers; ability to successfully integrate and profitably operate acquired businesses; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; competitive conditions; economic condition; and the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures.

In connection with the proposed merger, ServisFirst intends to file with the SEC a registration statement on Form S-4, which will include a proxy statement/prospectus, and other relevant materials in connection with the proposed merger transaction involving ServisFirst and Metro Bancshares, Inc. Investors and security holders are urged to read the proxy statement/prospectus regarding the proposed merger transaction when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC on the SEC's website at http://www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the SEC by ServisFirst at http://servisfirstbancshares.investorroom.com/, or by telephone at (205) 949-0302.

ServisFirst, Metro and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders of Metro in connection with the merger transaction. Information regarding directors and executive officers of ServisFirst and Metro and their respective interests in the proposed transaction will be available in the proxy statement/prospectus of ServisFirst and Metro described above and other relevant materials to be filed with the SEC.

Contact: ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com

 


SELECTED FINANCIAL HIGHLIGHTS

(UNAUDITED)

(In thousands except share and per share data)
























3rd Quarter 2014


2nd Quarter 2014


1st Quarter 2014


4th Quarter 2013


3rd Quarter 2013

CONSOLIDATED STATEMENT OF INCOME





















Interest income


$

36,857



$

35,424



$

34,281



$

33,725



$

32,499


Interest expense



3,538




3,446




3,432




3,610




3,534


Net interest income



33,319




31,978




30,849




30,115




28,965


Provision for loan losses



2,748




2,438




2,314




2,356




3,034


Net interest income after provision for loan losses



30,571




29,540




28,535




27,759




25,931


Non-interest income



3,006




2,938




2,175




2,371




2,269


Non-interest expense



15,315




15,417




13,723




12,298




12,067


Income before income tax



18,262




17,061




16,987




17,832




16,133


Provision for income tax



4,260




5,476




5,229




5,964




5,321


Net income



14,002




11,585




11,758




11,868




10,812


Preferred stock dividends



100




116




100




116




100


Net income available to common stockholders


$

13,902



$

11,469



$

11,658



$

11,752



$

10,712


Earnings per share - basic


$

0.56



$

0.49



$

0.53



$

0.55



$

0.51


Earnings per share - diluted


$

0.54



$

0.46



$

0.51



$

0.53



$

0.49























Average diluted shares outstanding



25,952,883




24,823,590




22,985,670




22,359,351




21,965,733























CONSOLIDATED BALANCE SHEET DATA





















Total assets


$

3,952,799



$

3,762,684



$

3,572,914



$

3,520,699



$

3,396,153


Loans



3,159,772




3,053,989




2,937,797




2,858,868




2,731,973


Debt securities



332,351




325,432




309,475




298,494




289,515


Non-interest-bearing demand deposits



794,553




729,163




662,834




650,456




635,153


Total deposits



3,352,766




3,157,642




3,031,041




3,019,642




2,919,217


Borrowings



19,965




19,957




19,949




19,940




19,932


Stockholders' equity


$

393,136



$

380,074



$

312,283



$

297,192



$

276,300























Shares outstanding



24,791,436




24,749,436




22,574,436




22,050,036




21,229,041


Book value per share


$

14.25



$

13.74



$

12.06



$

11.67



$

11.13


Tangible book value per share (1)


$

14.25



$

13.74



$

12.06



$

11.67



$

11.13























SELECTED FINANCIAL RATIOS





















Net interest margin



3.65

%



3.74

%



3.80

%



3.67

%



3.69

%

Return on average assets



1.45

%



1.28

%



1.36

%



1.36

%



1.31

%

Return on average common stockholders' equity



15.89

%



15.03

%



17.83

%



18.86

%



18.47

%

Efficiency ratio



42.16

%



44.15

%



41.55

%



37.86

%



38.63

%

Non-interest expense to average earning assets



1.66

%



1.78

%



1.66

%



1.48

%



1.52

%

Tangible common equity to total tangible assets (1)



8.93

%



9.04

%



7.62

%



7.31

%



6.96

%






















CAPITAL RATIOS





















Total Capital to Risk-Weighted Assets:



13.70

%



13.74

%



11.94

%



11.73

%



11.40

%

Tier 1 Capital to Risk-Weighted Assets:



12.02

%



12.04

%



10.22

%



10.00

%



9.66

%

Tier 1 Capital to Average Assets:



10.18

%



10.32

%



8.81

%



8.48

%



8.28

%






















(1) Non-GAAP financial measures.  "Tangible book value per share" and "tangible common equity to total tangible assets" are not measures of financial performance recognized by generally accepted accounting principles in the United States, or GAAP;   However, because the Company has no intangible assets, there is no reconciliation of these non-GAAP financial measures.

 


CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)












September 30, 2014


September 30, 2013


% Change

ASSETS









Cash and due from banks

$

59,483


$

71,833


(17)

%

Interest-bearing balances due from depository institutions


277,984



185,657


50

%

Federal funds sold


6,566



7,923


(17)

%


Cash and cash equivalents


344,033



265,413


30

%

Available for sale debt securities, at fair value


302,303



256,385


18

%

Held to maturity debt securities (fair value of $30,248 and $32,671 at










September 30, 2014 and 2013, respectively)


30,048



33,130


(9)

%

Restricted equity securities


3,418



3,738


(9)

%

Mortgage loans held for sale


9,037



11,592


(22)

%

Loans


3,159,772



2,731,973


16

%

Less allowance for loan losses


(34,442)



(28,927)


19

%


Loans, net


3,125,330



2,703,046


16

%

Premises and equipment, net


7,958



8,518


(7)

%

Accrued interest and dividends receivable


10,882



9,604


13

%

Deferred tax asset, net


15,620



9,160


71

%

Other real estate owned and repossessed assets


6,940



14,258


(51)

%

Bank owned life insurance contracts


85,639



68,460


25

%

Other assets


11,591



12,849


(10)

%


Total assets

$

3,952,799


$

3,396,153


16

%

LIABILITIES AND STOCKHOLDERS' EQUITY









Liabilities:









Deposits:










Non-interest-bearing

$

794,553


$

635,153


25

%


Interest-bearing


2,558,213



2,284,064


12

%



Total deposits


3,352,766



2,919,217


15

%

Federal funds purchased


178,230



170,090


5

%

Other borrowings


19,965



19,932


0

%

Accrued interest payable


2,204



4,553


(52)

%

Other liabilities


6,498



6,061


7

%


Total liabilities


3,559,663



3,119,853


14

%

Stockholders' equity:










Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001











(liquidation preference $1,000), net of discount; 40,000 shares authorized,











40,000 shares issued and outstanding at September 30, 2014 and 2013


39,958



39,958


-

%


Preferred stock, par value $0.001 per share; 1,000,000 authorized and 960,000 currently undesignated


-



-


-

%


Common stock, par value $0.0003 per share; 50,000,000 shares authorized;











24,791,436 shares issued and outstanding at September 30, 2014 and











21,229,041 shares issued and outstanding at September 30, 2013


25



21


19

%


Additional paid-in capital


184,797



113,441


63

%


Retained earnings


163,414



118,377


38

%


Accumulated other comprehensive income


4,690



4,503


4

%


Noncontrolling interest


252



-


100

%



Total stockholders' equity


393,136



276,300


42

%


Total liabilities and stockholders' equity

$

3,952,799


$

3,396,153


16

%

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)















Three Months Ended September 30,


Nine Months Ended September 30,



2014


2013


2014


2013

Interest income:













Interest and fees on loans

$

34,662


$

30,475


$

100,164


$

86,667


Taxable securities


1,131



980



3,354



2,851


Nontaxable securities


877



858



2,618



2,537


Federal funds sold


38



44



118



77


Other interest and dividends


149



142



308



224


   Total interest income


36,857



32,499



106,562



92,356

Interest expense:













Deposits


3,123



3,131



9,164



8,628


Borrowed funds


415



403



1,252



1,381


   Total interest expense


3,538



3,534



10,416



10,009


   Net interest income


33,319



28,965



96,146



82,347

Provision for loan losses


2,748



3,034



7,500



10,652


   Net interest income after provision for loan losses


30,571



25,931



88,646



71,695

Non-interest income:













Service charges on deposit accounts


1,172



823



3,097



2,391


Mortgage banking


582



402



1,540



2,154


Securities gains


3



-



3



131


Increase in cash surrender value life insurance


549



491



1,631



1,446


Other operating income


700



553



1,848



1,517


   Total non-interest income


3,006



2,269



8,119



7,639

Non-interest expense:













Salaries and employee benefits


7,890



7,048



24,685



19,783


Equipment and occupancy expense


1,437



1,272



4,212



3,852


Professional services


829



443



1,877



1,329


FDIC and other regulatory assessments


533



405



1,578



1,263


Other real estate owned expense


220



357



1,005



951


Other operating expense


4,406



2,542



11,098



8,013


   Total non-interest expense


15,315



12,067



44,455



35,191


   Income before income tax


18,262



16,133



52,310



44,143

Provision for income tax


4,260



5,321



14,965



14,394


         Net income


14,002



10,812



37,345



29,749


Dividends on preferred stock


100



100



316



300


         Net income available to common stockholders

$

13,902


$

10,712


$

37,029


$

29,449

Basic earnings per common share

$

0.56


$

0.51


$

1.64


$

1.45

Diluted earnings per common share

$

0.54


$

0.49


$

1.57


$

1.37

 


LOANS BY TYPE













(UNAUDITED)













(In thousands)















3rd Quarter 2014


2nd Quarter 2014


1st Quarter 2014


4th Quarter 2013


3rd Quarter 2013

Commercial, financial and agricultural

$

1,382,607


$

1,362,757


$

1,306,058


$

1,278,649


$

1,222,953

Real estate - construction


194,506



178,033



157,127



151,868



156,595

Real estate - mortgage:
















Owner-occupied commercial


773,432



708,294



711,067



710,372



667,401


1-4 family mortgage


314,778



296,220



285,368



278,621



262,144


Other mortgage


443,245



457,845



428,391



391,396



379,490

Subtotal: Real estate - mortgage


1,531,455



1,462,359



1,424,826



1,380,389



1,309,035

Consumer


51,204



50,840



49,786



47,962



43,390

Total loans

$

3,159,772


$

3,053,989


$

2,937,797


$

2,858,868


$

2,731,973

 

SUMMARY OF LOAN LOSS EXPERIENCE

(Dollars in thousands)



3rd Quarter 2014


2nd Quarter 2014


1st Quarter 2014


4th Quarter 2013


3rd Quarter 2013

Reserve for loan losses:




















Beginning balance

$

32,984



$

31,728



$

30,663



$

28,927



$

28,757


Loans charged off:





















Commercial financial and agricultural


531




142




1,222




95




849



Real estate - construction


610




325




23




557




394



Real estate - mortgage:


149




890




4




25




1,746



Consumer


131




18




58




38




42




Total charge off


1,421




1,375




1,307




715




3,031


Recoveries:





















Commercial financial and agricultural


-




1




45




16




13



Real estate - construction


97




180




8




70




124



Real estate - mortgage:


14




10




4




9




24



Consumer


20




2




1




-




6




Total recoveries


131




193




58




95




167



Net charge-off


1,290




1,182




1,249




620




2,864



Provision for loan losses


2,748




2,438




2,314




2,356




3,034



Ending balance

$

34,442



$

32,984



$

31,728



$

30,663



$

28,927

























Reserve for loan losses to total loans


1.09

%



1.08

%



1.08

%



1.07

%



1.06

%


Reserve for loan losses to total average






















loans


1.11

%



1.10

%



1.09

%



1.11

%



1.09

%


Net charge-offs to total average loans


0.17

%



0.16

%



0.17

%



0.09

%



0.43

%


Provision for loan losses to total average






















loans


0.35

%



0.33

%



0.32

%



0.34

%



0.46

%


Nonperforming assets:






















Nonaccrual loans

$

16,078



$

13,193



$

9,084



$

9,621



$

9,396




Loans 90+ days past due and accruing


1,190




-




110




115




-




Other real estate owned and






















   repossessed assets


6,940




6,739




9,752




12,861




14,258



Total

$

24,208



$

19,932



$

18,946



$

22,597



$

23,654

























Nonperforming loans to total loans


0.55

%



0.43

%



0.31

%



0.35

%



0.34

%


Nonperforming assets to total assets


0.61

%



0.53

%



0.53

%



0.64

%



0.70

%


Nonperforming assets to earning assets


0.62

%



0.54

%



0.55

%



0.66

%



0.72

%


Reserve for loan losses to nonaccrual loans


214.22

%



250.01

%



349.27

%



318.71

%



307.87

%
























Restructured accruing loans

$

2,067



$

7,030



$

9,411



$

9,689



$

6,233

























Restructured accruing loans to total loans


0.07

%



0.23

%



0.32

%



0.35

%



0.23

%

 


TROUBLED DEBT RESTRUCTURINGS (TDRs)

(In thousands)




3rd Quarter

2014


2nd Quarter

2014


1st Quarter

2014


4th Quarter

2013


3rd Quarter

2013

Beginning balance:

$

9,217



$

13,478



$

14,168



$

8,433



$

9,406



Additions


-




1,409




-




7,996




-
























Net (paydowns) / advances


(802)




(5,080)




235




(2,261)




(52)



Charge-offs


(483)




(590)




(925)




-




(921)




$

7,932



$

9,217



$

13,478



$

14,168



$

8,433


 


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)




3rd Quarter

2014


2nd Quarter

2014


1st Quarter

2014


4th Quarter

2013


3rd Quarter

2013

Interest income:
















Interest and fees on loans

$

34,662


$

33,250


$

32,252


$

31,618


$

30,475


Taxable securities


1,131



1,126



1,097



1,052



980


Nontaxable securities


877



870



871



870



858


Federal funds sold


38



43



42



51



44


Other interest and dividends


149



135



19



134



142


   Total interest income


36,857



35,424



34,281



33,725



32,499


Deposits


3,123



3,027



3,014



3,202



3,131


Borrowed funds


415



419



418



408



403


   Total interest expense


3,538



3,446



3,432



3,610



3,534


   Net interest income


33,319



31,978



30,849



30,115



28,965

Provision for loan losses


2,748



2,438



2,314



2,356



3,034


   Net interest income after provision for loan losses


30,571



29,540



28,535



27,759



25,931

Non-interest income:
















Service charges on deposit accounts


1,172



1,057



868



837



823


Mortgage banking


582



674



284



344



402


Securities gains


3



-



-



-



-


Increase in cash surrender value life insurance


549



546



536



548



491


Other operating income


700



661



487



642



553


   Total non-interest income


3,006



2,938



2,175



2,371



2,269


Salaries and employee benefits


7,890



9,098



7,697



6,541



7,048


Equipment and occupancy expense


1,437



1,409



1,366



1,350



1,272


Professional services


829



532



516



480



443


FDIC and other regulatory assessments


533



528



517



536



405


Other real estate owned expense


220



298



487



475



357


Other operating expense


4,406



3,552



3,140



2,916



2,542


   Total non-interest expense


15,315



15,417



13,723



12,298



12,067


   Income before income tax


18,262



17,061



16,987



17,832



16,133

Provision for income tax


4,260



5,476



5,229



5,964



5,321


       Net income


14,002



11,585



11,758



11,868



10,812


Dividends on preferred stock


100



116



100



116



100


         Net income available to common stockholders

$

13,902


$

11,469


$

11,658


$

11,752


$

10,712

Basic earnings per common share

$

0.56


$

0.49


$

0.53


$

0.55


$

0.51

Diluted earnings per common share

$

0.54


$

0.46


$

0.51


$

0.53


$

0.49

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS - UNAUDITED

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)





















3rd Quarter 2014


2nd Quarter 2014


1st Quarter 2014


4th Quarter 2013


3rd Quarter 2013






























Average Balance


Yield / Rate


Average Balance


Yield / Rate


Average Balance


Yield / Rate


Average Balance


Yield / Rate


Average Balance


Yield / Rate

Assets:































Interest-earning assets:
































Loans, net of unearned income (1)

































Taxable


$

3,081,435


4.44

%


$

2,978,631


4.46

%


$

2,892,433


4.52

%


$

2,754,955


4.54

%


$

2,640,444


4.56

%



Tax-exempt (2)



12,043


4.95




15,803


3.24




14,550


3.30




5,669


4.37




2,483


5.96



Mortgage loans held for sale



6,861


3.64




8,048


3.24




4,496


2.80




5,956


3.66




12,531


2.66



Debt securities:

































Taxable



195,220


2.31




188,148


2.40




174,842


2.54




166,027


2.49




152,135


2.56




Tax-exempt (2)



126,512


4.08




123,897


4.11




122,686


4.13




120,161


4.11




118,001


4.13





Total securities (3)



321,732


3.01




312,045


3.08




297,528


3.20




286,188


3.17




270,136


3.24



Federal funds sold



57,625


0.27




41,388


0.37




54,895


0.31




68,710


0.25




62,192


0.28



Restricted equity securities



3,418


3.83




3,446


7.57




3,738


-




3,738


2.55




3,738


2.65



Interest-bearing balances with banks



185,716


0.25




121,532


0.25




82,279


0.09




173,521


0.29




161,169


0.29



Total interest-earning assets



3,668,830


4.03

%



3,480,893


4.13

%



3,349,919


4.21

%



3,298,737


4.11

%



3,152,693


4.14

%

Non-interest-earning assets:
































Cash and due from banks



58,340






57,387






56,082






53,062






45,314





Net premises and equipment



8,310






8,377






8,724






8,944






9,052





Allowance for loan losses,

































accrued interest and

































other assets



86,901






88,849






85,532






98,586






76,477







Total assets


$

3,822,381





$

3,635,506





$

3,500,257





$

3,459,329





$

3,283,536






































Interest-bearing liabilities:
































Interest-bearing deposits:
































Checking


$

484,291


0.26

%


$

482,115


0.27

%


$

478,678


0.27

%


$

472,751


0.27

%


$

432,453


0.28

%


Savings



26,584


0.28




25,406


0.28




25,081


0.27




21,755


0.27




21,602


0.29



Money market



1,555,091


0.44




1,472,346


0.44




1,416,645


0.45




1,420,771


0.47




1,356,197


0.47



Time deposits



394,158


1.05




402,613


1.08




412,622


1.10




412,254


1.13




408,600


1.16



Federal funds purchased



187,629


0.28




195,809


0.28




195,967


0.28




176,967


0.28




168,121


0.28



Other borrowings



19,961


5.62




19,953


5.69




19,945


5.75




19,936


5.63




19,928


5.63



Total interest-bearing liabilities



2,667,714


0.53

%



2,598,242


0.53

%



2,548,938


0.55

%



2,524,434


0.57

%



2,406,901


0.58

%

Non-interest-bearing liabilities:
































Non-interest-bearing

































demand



751,831






675,098






641,450






640,476






599,379





Other liabilities



15,838






16,158






4,724






7,226






7,250





Stockholders' equity



382,025






341,120






300,512






282,549






266,427





Unrealized gains on securities and

































derivatives



4,973






4,888






4,634






4,644






3,580







Total liabilities and


































stockholders' equity


$

3,822,381





$

3,635,506





$

3,500,257





$

3,459,329





$

3,283,536




Net interest spread





3.51

%





3.60

%





3.67

%





3.54

%





3.56

%

Net interest margin





3.65

%





3.74

%





3.80

%





3.67

%





3.69

%



































(1)

Average loans include loans on which the accrual of interest has been discontinued.

(2)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 35%.

(3)

Unrealized gains on available-for-sale debt securities are excluded from the yield calculation.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/servisfirst-bancshares-inc-announces-results-for-third-quarter-of-2014-and-agreement-to-acquire-metro-bancshares-inc-in-atlanta-georgia-810110248.html

SOURCE ServisFirst Bancshares, Inc.


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