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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 Second Quarter Of 2015

Jul 20, 2015

BIRMINGHAM, Ala., July 20, 2015 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2015.

SECOND QUARTER 2015 HIGHLIGHTS:

  • Net income for the second quarter increased 25% year over year
  • Second quarter annualized loan growth of 28% on a linked quarter basis
  • Diluted earnings per share of $0.54 for the second quarter, a 17% increase year over year
  • Continued strong asset quality with non-performing assets to total assets of 0.38% at quarter-end and annualized net charge-offs of 0.15%
  • Added more producers during first six months of 2015 than in any equivalent period in our ten year history

Tom Broughton, President and CEO, said, "We are pleased to welcome seven new producers to our company in the second quarter, for a total of 19 new producers year to date, excluding officers added through the Metro Bank (Atlanta) acquisition."  Bud Foshee, CFO, stated, "The improvement in net interest margin in the quarter, combined with strong loan growth, gives us strong fundamentals from which to build for the balance of 2015."

 

FINANCIAL SUMMARY (UNAUDITED)















(in Thousands except share and per share amounts)








































Period Ending
June 30, 2015


Period Ending
March 31, 2015


% Change
From Period
Ending March
31, 2015 to
Period Ending
June 30, 2015


Period Ending
June 30, 2014


% Change
From Period
Ending June
30, 2014 to
Period Ending
June 30, 2015


QUARTERLY OPERATING RESULTS




















Net Income


$

14,469



$

13,055



11

%


$

11,585



25

%


Net Income Available to Common Stockholders


$

14,346



$

12,955



11

%


$

11,469



25

%


Diluted Earnings Per Share


$

0.54



$

0.49



10

%


$

0.46



17

%


Return on Average Assets



1.31

%



1.26

%






1.28

%





Return on Average Common Stockholders' Equity



14.06

%



13.55

%






15.03

%





Average Diluted Shares Outstanding



26,426,036




26,237,980







24,823,590




























Core Net Income*


$

14,469



$

14,822



(2)

%


$

12,740



14

%


Core Net Income Available to Common Stockholders*


$

14,346



$

14,722



(3)

%


$

12,624



14

%


Core Diluted Earnings Per Share*


$

0.54



$

0.56



(4)

%


$

0.51



6

%


Core Return on Average Assets*



1.31

%



1.43

%






1.41

%





Core Return on Average Common Stockholders' Equity*



14.06

%



15.39

%






16.54

%



























YEAR-TO-DATE OPERATING RESULTS




















Net Income


$

27,524










$

23,343



18

%


Net Income Available to Common Stockholders


$

27,301










$

23,127



18

%


Diluted Earnings Per Share


$

1.04










$

0.97



7

%


Return on Average Assets



1.29

%










1.32

%





Return on Average Common Stockholders' Equity



13.81

%










15.61

%





Average Diluted Shares Outstanding



26,332,527











23,909,707




























Core Net Income*


$

29,291










$

24,955



17

%


Core Net Income Available to Common Stockholders*


$

29,068










$

24,739



17

%


Core Diluted Earnings Per Share*


$

1.10










$

1.03



7

%


Core Return on Average Assets*



1.37

%










1.41

%





Core Return on Average Common Stockholders' Equity*



14.70

%










16.70

%



























BALANCE SHEET




















Total Assets


$

4,492,539



$

4,393,342



2

%


$

3,762,684



19

%


Loans



3,863,734




3,607,852



7

%



3,053,989



27

%


Non-interest-bearing Demand Deposits



926,577




866,743



7

%



729,163



27

%


Total Deposits



3,729,132




3,638,763



2

%



3,157,642



18

%


Stockholders' Equity



454,487




441,458



3

%



380,074



20

%
























* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.


 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $14.5 million and net income available to common stockholders of $14.3 million for the quarter ended June 30, 2015, compared to net income of $11.6 million and net income available to common stockholders of $11.5 million for the same quarter in 2014.  Basic and diluted earnings per common share were $0.56 and $0.54, respectively, for the second quarter of 2015, compared to $0.49 and $0.46, respectively, for the second quarter of 2014.

Return on average assets was 1.31% and return on average equity was 14.06% for the second quarter of 2015, compared to 1.28% and 15.03%, respectively, for the second quarter of 2014.

Net interest income was $40.2 million for the second quarter of 2015, compared to $37.0 million for the first quarter of 2015 and $32.0 million for the second quarter of 2014.  The net interest margin in the second quarter of 2015 was 3.88%, an 8 basis point increase from the first quarter of 2015 and 14 basis point increase from the second quarter of 2014.  The increase in net interest income on a linked quarter basis is attributable to a $239.2 million increase in average loans outstanding, a $94.7 million increase in non-interest-bearing deposits and a $21.4 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans increased 4 basis points to 4.51% on a linked quarter basis.

Average loans for the second quarter of 2015 were $3.74 billion, an increase of $239.2 million, or 7%, over average loans of $3.50 billion for the first quarter of 2015, and an increase of $747.3 million, or 25%, over average loans of $2.99 billion for the second quarter of 2014.

Average total deposits for the second quarter of 2015 were $3.66 billion, an increase of $191.4 million, or 6%, over average total deposits of $3.47 billion for the first quarter of 2015, and an increase of $601.6 million, or 20%, over average total deposits of $3.06 billion for the second quarter of 2014.

Non-performing assets to total assets were 0.38% for the second quarter of 2015, a decrease of two basis points compared to 0.40% for the first quarter of 2015 and a decrease of fifteen basis points compared to 0.53% for the second quarter of 2014.  Net credit charge-offs to average loans  were 0.15%, a seven basis point increase compared to 0.08% for the first quarter of 2015 and a one basis point decrease compared to 0.16% for the second quarter of 2014.  We recorded a $4.1 million provision for loan losses in the second quarter of 2015 compared to $2.4 million in the first quarter of 2015 and $2.4 million in the second quarter of 2014.  The $1.7 million increase in loan loss provision in the second quarter is primarily attributable to loan growth combined with new impairment and charge-off of two large commercial loans.  The allowance for loan loss as a percentage of total loans remained unchanged at 1.04% for June 30, 2015 and March 31, 2015 and decreased four basis points compared to 1.08% at June 30, 2014.  In management's opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank's methodology for calculating its allowance for loan losses.

Non-interest income increased $567,000 during the second quarter of 2015, or 19%, compared to the second quarter of 2014.  Deposit service charges increased by $219,000, or 21%, resulting from higher balances and 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 second quarter of 2015 increased $2.8 million, or 18%, to $18.2 million from $15.4 million in the second quarter of 2014, and decreased $0.5 million, or 3%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2015 increased $1.3 million, or 15%, to $10.4 million from $9.1 million in the second quarter of 2014, and increased $1.4 million, or 16%, on a linked quarter basis.  Salary and benefit expenses for the second quarter of 2014 included non-routine expense of $1.8 million resulting from the accelerated vesting of stock options previously granted to members of our advisory boards in our markets.  Excluding this non-routine expense, salary and benefit expenses increased $3.1 million, or 42%.  This increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets.  Merger expenses during the first quarter of 2015 related to our acquisition of Metro Bancshares were $2.1 million.  Other operating expense for the second quarter of 2015 increased $1.0 million, or 29%, to $4.6 million from $3.6 million in the second of 2014.  This was primarily the result of increased loan origination expenses, increased federal reserve bank charges from our correspondent bank clearing activities, and amortization of the core deposit intangible asset resulting from the Metro Bancshares acquisition.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the merger of Metro Bank with and into the Bank, and recorded an expense of $500,000 resulting from the initial funding of reserves for unfunded loan commitments for the first quarter of 2015, consistent with guidance provided in the Federal Reserve Bank's Inter-agency Policy Statement SR 06-17.  We recorded non-routine expenses of $2.5 million during the first half of 2014 resulting from a correction of our accounting for vested stock options and acceleration of vesting for unvested stock options previously granted to members of our advisory boards in our markets.  This change in accounting treatment is a non-cash item and did not impact our operating activities or cash from operations.  Core financial measures included in this press release 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 expenses attributable to merger expenses, the initial funding of reserves for unfunded loan commitments, the correction of our accounting for vested stock options and the acceleration of vesting of unvested stock options, and are all considered non-GAAP financial measures.  Other non-GAAP financial measures included in this press release are "tangible common stockholders' equity," "total tangible assets," "tangible book value per share," and "tangible common equity to total tangible assets."  All non-GAAP financial measures are more fully explained below.

"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.

"Tangible common stockholders' equity" is defined as common stockholders' equity, adjusted by the total of goodwill and other identifiable intangible assets.

"Total tangible assets" is defined as total assets, adjusted by the total of goodwill and other identifiable intangible assets.

"Tangible book value per share" is defined as tangible common stockholders' equity divided by the number of common shares outstanding.

"Tangible common equity to total tangible assets" is defined as tangible common equity divided by total tangible assets.

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 three months ended March 31, 2015 and six month comparative periods ended June 30, 2015 and 2014 included in this press release.  Dollars are in thousands, except share and per share data.

 




For the Three Months Ended March 31, 2015


For the Six Months Ended June 30, 2015


For the Six Months Ended June 30, 2014

Provision for income taxes - GAAP


$

5,903



$

12,875



$

10,705



Adjustments:














Adjustment for non-routine expense



829




830




865


Core provision for income taxes


$

6,732



$

13,705



$

11,570
















Return on average assets - GAAP



1.26

%



1.29

%



1.32

%

Net income - GAAP


$

13,055



$

27,524



$

23,343



Adjustments:














Adjustment for non-routine expense



1,767




1,767




1,612


Core net income


$

14,822



$

29,291



$

24,955


Average assets


$

4,193,413



$

4,307,778



$

3,568,159


Core return on average assets



1.43

%



1.37

%



1.41

%















Return on average common stockholders' equity



13.55

%



13.81

%



15.61

%

Net income available to common stockholders - GAAP


$

12,955



$

27,301



$

23,127



Adjustments:














Adjustment for non-routine expense



1,767




1,767




1,612


Core net income available to common stockholders


$

14,722



$

29,068



$

24,739


Average common stockholders' equity


$

387,870



$

398,678



$

298,713


Core return on average common stockholders' equity



15.39

%



14.70

%



16.70

%















Earnings per share - diluted - GAAP


$

0.49



$

1.04



$

0.97


Weighted average shares outstanding, diluted



26,237,980




26,332,527




23,909,707


Core diluted earnings per share


$

0.56



$

1.10



$

1.03
















Book value per share


$

15.65



$

16.05



$

13.74


Total common stockholders' equity - GAAP



401,500




414,529




340,116



Adjustments:














Adjusted for goodwill and other identifiable intangible assets



18,069




18,060




-


Tangible common stockholders' equity


$

383,431



$

396,469



$

340,116


Tangible book value per share


$

14.95



$

15.35



$

13.74
















Stockholders' equity to total assets



10.05

%



10.13

%



10.10

%

Total assets - GAAP


$

4,393,342



$

4,485,091



$

3,762,684



Adjustments:














Adjusted for goodwill and other identifiable intangible assets



18,069




18,060




-


Total tangible assets



4,375,273




4,467,031




3,762,684


Tangible common equity to total tangible assets



8.76

%



8.88

%



10.10

%

 

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, Atlanta, Georgia, Charleston, South Carolina 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/.

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  The words "believe," "expect," "anticipate," "project," "plan," "intend," "will," "would," "might" and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.'s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.  Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions.  The foregoing list of factors is not exhaustive. 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 and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made.  ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at http://servisfirstbancshares.investorroom.com/  or by calling (205) 949-0302.

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


 


SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

















(In thousands except share and per share data)





























2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


3rd Quarter 2014


2nd Quarter 2014


CONSOLIDATED STATEMENT OF INCOME






















Interest income


$

44,209



$

40,783



$

38,163



$

36,857



$

35,424



Interest expense



3,998




3,746




3,703




3,538




3,446



Net interest income



40,211




37,037




34,460




33,319




31,978



Provision for loan losses



4,062




2,405




2,759




2,748




2,438



Net interest income after provision for loan losses



36,149




34,632




31,701




30,571




29,540



Non-interest income



3,505




3,077




3,110




3,006




2,938



Non-interest expense



18,213




18,751




13,143




15,315




15,417



Income before income tax



21,441




18,958




21,668




18,262




17,061



Provision for income tax



6,972




5,903




6,636




4,260




5,476



Net income



14,469




13,055




15,032




14,002




11,585



Preferred stock dividends



123




100




115




100




116



Net income available to common stockholders


$

14,346



$

12,955



$

14,917



$

13,902



$

11,469



Earnings per share - basic


$

0.56



$

0.51



$

0.60



$

0.56



$

0.49



Earnings per share - diluted


$

0.54



$

0.49



$

0.58



$

0.54



$

0.46



Average diluted shares outstanding



26,426,036




26,237,980




25,697,531




25,726,313




24,823,590

























CONSOLIDATED BALANCE SHEET DATA






















Total assets


$

4,492,539



$

4,393,342



$

4,098,679



$

3,952,799



$

3,762,684



Loans



3,863,734




3,607,852




3,359,858




3,159,772




3,053,989



Debt securities



335,008




336,505




327,665




332,351




325,432



Non-interest-bearing demand deposits



926,577




866,743




810,460




794,553




729,163



Total deposits



3,729,132




3,638,763




3,398,160




3,352,766




3,157,642



Borrowings



21,016




21,278




19,973




19,965




19,957



Stockholders' equity


$

454,487



$

441,458



$

407,213



$

393,136



$

380,074

























Shares outstanding



25,826,198




26,653,610




24,801,518




24,791,436




24,749,436



Book value per share


$

16.05



$

15.65



$

14.81



$

14.25



$

13.74



Tangible book value per share (1)


$

15.35



$

14.95



$

14.81



$

14.25



$

13.74

























SELECTED FINANCIAL RATIOS






















Net interest margin



3.88

%



3.80

%



3.56

%



3.65

%



3.74

%


Return on average assets



1.31

%



1.26

%



1.47

%



1.45

%



1.28

%


Return on average common stockholders' equity



14.06

%



13.55

%



16.39

%



15.89

%



15.03

%


Efficiency ratio



41.66

%



46.74

%



34.98

%



42.16

%



44.15

%


Non-interest expense to average earning assets



1.73

%



1.90

%



1.34

%



1.66

%



1.78

%
























CAPITAL RATIOS (2)






















Common equity tier 1 capital to risk-weighted assets (3)



9.60

%



9.93

%



N/A




N/A




N/A



Tier 1 capital to risk-weighted assets



10.58

%



10.98

%



11.75

%



12.02

%



12.04

%


Total capital to risk-weighted assets



12.04

%



12.49

%



13.38

%



13.70

%



13.74

%


Tier 1 capital to average assets



9.88

%



10.07

%



9.91

%



10.18

%



10.32

%


Tangible common equity to total tangible assets (1)



8.86

%



8.76

%



8.96

%



8.93

%



9.04

























(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.


(2) Regulatory capital ratios for most recent period are preliminary.


(3) Basel III final capital rules, including the new Common Equity Tier 1 Capital to Risk-Weighted Assets ratio, became effective for the Company on January 1, 2015.


 


CONSOLIDATED BALANCE SHEETS (UNAUDITED)









(Dollars in thousands)















June 30, 2015


June 30, 2014


% Change


ASSETS











Cash and due from banks


$

49,731


$

76,893


(35)

%


Interest-bearing balances due from depository institutions



69,104



199,990


(65)

%


Federal funds sold



17,622



3,044


479

%



Cash and cash equivalents



136,457



279,927


(51)

%


Available for sale debt securities, at fair value



305,985



294,254


4

%


Held to maturity debt securities (fair value of $29,348 and $31,446 at












June 30, 2015 and 2014, respectively)



29,023



31,178


(7)

%


Restricted equity securities



4,954



3,418


45

%


Mortgage loans held for sale



11,722



11,675


0

%


Loans



3,863,734



3,053,989


27

%


Less allowance for loan losses



(40,020)



(32,984)


21

%



Loans, net



3,823,714



3,021,005


27

%


Premises and equipment, net



15,563



7,745


101

%


Goodwill and other identifiable intangible assets



18,060



-





Other assets



147,061



113,482


30

%



Total assets


$

4,492,539


$

3,762,684


19

%


LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:












Non-interest-bearing


$

926,577


$

729,163


27

%



Interest-bearing



2,802,555



2,428,479


15

%




Total deposits



3,729,132



3,157,642


18

%


Federal funds purchased



273,095



181,070


51

%


Other borrowings



21,016



19,957


5

%


Other liabilities



14,809



23,941


(38)

%



Total liabilities



4,038,052



3,382,610


19

%


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 June 30, 2015 and 2014



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;













25,833,698 shares issued and 25,826,198 outstanding at June 30, 2015 and













24,749,436 shares issued and outstanding at June 30, 2014



26



25


4

%



Additional paid-in capital



209,074



183,765


14

%



Retained earnings



201,303



150,769


34

%



Accumulated other comprehensive income



3,749



5,305


(29)

%



Noncontrolling interest



377



252


50

%




Total stockholders' equity



454,487



380,074


20

%



Total liabilities and stockholders' equity


$

4,492,539


$

3,762,684


19

%


 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)
















Three Months Ended June 30,


Six Months Ended June 30,






2015


2014


2015


2014


Interest income:















Interest and fees on loans


$

42,105


$

33,250


$

80,751


$

65,502



Taxable securities



1,104



1,126



2,232



2,223



Nontaxable securities



874



870



1,734



1,741



Federal funds sold



24



43



101



85



Other interest and dividends



102



135



174



154



   Total interest income



44,209



35,424



84,992



69,705


Interest expense:















Deposits



3,512



3,027



6,782



6,041



Borrowed funds



486



419



962



837



   Total interest expense



3,998



3,446



7,744



6,878



   Net interest income



40,211



31,978



77,248



62,827


Provision for loan losses



4,062



2,438



6,467



4,752



   Net interest income after provision for loan losses



36,149



29,540



70,781



58,075


Non-interest income:















Service charges on deposit accounts



1,276



1,057



2,483



1,925



Mortgage banking



735



674



1,189



958



Securities gains



-



-



29



-



Increase in cash surrender value life insurance



660



546



1,308



1,082



Other operating income



834



661



1,573



1,148



   Total non-interest income



3,505



2,938



6,582



5,113


Non-interest expense:















Salaries and employee benefits



10,426



9,098



19,434



16,795



Equipment and occupancy expense



1,634



1,409



3,295



2,775



Professional services



665



532



1,233



1,048



FDIC and other regulatory assessments



626



528



1,246



1,045



Other real estate owned expense



289



298



503



785



Merger expense



4



-



2,100



-



Other operating expense



4,569



3,552



9,153



6,692



   Total non-interest expense



18,213



15,417



36,964



29,140



   Income before income tax



21,441



17,061



40,399



34,048


Provision for income tax



6,972



5,476



12,875



10,705



         Net income



14,469



11,585



27,524



23,343



Dividends on preferred stock



123



116



223



216



         Net income available to common stockholders


$

14,346


$

11,469


$

27,301


$

23,127


Basic earnings per common share


$

0.56


$

0.49


$

1.07


$

1.01


Diluted earnings per common share


$

0.54


$

0.46


$

1.04


$

0.97


 


LOANS BY TYPE (UNAUDITED)













(In thousands)


































2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


3rd Quarter 2014


2nd Quarter 2014

Commercial, financial and agricultural


$

1,630,134


$

1,543,531


$

1,495,092


$

1,382,607


$

1,362,757

Real estate - construction



219,607



219,005



208,769



194,506



178,033

Real estate - mortgage:

















Owner-occupied commercial



930,719



869,724



793,917



773,432



708,294


1-4 family mortgage



392,245



375,770



333,455



314,778



296,220


Other mortgage



627,099



545,668



471,363



443,245



457,845

Subtotal: Real estate - mortgage



1,950,063



1,791,162



1,598,735



1,531,455



1,462,359

Consumer



63,930



54,154



57,262



51,204



50,840

Total loans


$

3,863,734


$

3,607,852


$

3,359,858


$

3,159,772


$

3,053,989

 


SUMMARY OF LOAN LOSS EXPERIENCE
(UNAUDITED)
















(Dollars in thousands)
























2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


3rd Quarter 2014


2nd Quarter 2014


Allowance for loan losses:






















Beginning balance


$

37,356



$

35,629



$

34,442



$

32,984



$

31,728



Loans charged off:























Commercial financial and agricultural



1,151




77




416




531




142




Real estate - construction



93




382




309




610




325




Real estate - mortgage



208




433




922




149




890




Consumer



19




5




21




131




18





Total charge offs



1,471




897




1,668




1,421




1,375



Recoveries:























Commercial financial and agricultural



6




19




2




-




1




Real estate - construction



65




99




37




97




180




Real estate - mortgage



2




101




46




14




10




Consumer



-




-




11




20




2





Total recoveries



73




219




96




131




193




Net charge-offs



1,398




678




1,572




1,290




1,182




Provision for loan losses



4,062




2,405




2,759




2,748




2,438




Ending balance


$

40,020



$

37,356



$

35,629



$

34,442



$

32,984





























Allowance for loan losses to total loans



1.04

%



1.04

%



1.06

%



1.09

%



1.08

%



Allowance for loan losses to total average
























loans



1.07

%



1.07

%



1.10

%



1.11

%



1.10

%



Net charge-offs to total average loans



0.15

%



0.08

%



0.19

%



0.17

%



0.16

%



Provision for loan losses to total average
























loans



0.44

%



0.28

%



0.34

%



0.35

%



0.33

%



Nonperforming assets:
























Nonaccrual loans


$

8,194



$

8,361



$

9,125



$

16,078



$

13,193





Loans 90+ days past due and accruing



470




553




925




1,190




-





Other real estate owned and
























  repossessed assets



8,235




8,638




6,840




6,940




6,739




Total


$

16,899



$

17,552



$

16,890



$

24,208



$

19,932





























Nonperforming loans to total loans



0.22

%



0.25

%



0.30

%



0.55

%



0.43

%



Nonperforming assets to total assets



0.38

%



0.40

%



0.41

%



0.61

%



0.53

%



Nonperforming assets to earning assets



0.38

%



0.41

%



0.42

%



0.62

%



0.54

%



Reserve for loan losses to nonaccrual loans



488.41

%



446.79

%



390.45

%



214.22

%



250.01

%




























Restructured accruing loans


$

8,279



$

8,280



$

8,295



$

2,067



$

7,030





























Restructured accruing loans to total loans



0.21

%



0.23

%



0.25

%



0.07

%



0.23

%




























TROUBLED DEBT RESTRUCTURINGS (TDRs)
(UNAUDITED)

















(In thousands)























2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


3rd Quarter 2014


2nd Quarter 2014



Beginning balance:


$

8,280



$

8,992



$

7,932



$

9,217



$

13,478





Additions



-




-




6,250




-




1,409





Net (paydowns) / advances



(1)




(381)




(4,492)




(802)




(5,080)





Charge-offs



-




(331)




(698)




(483)




(590)








$

8,279



$

8,280



$

8,992



$

7,932



$

9,217



 


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)









(In thousands except per share data)


























2nd Quarter
2015


1st Quarter
2015


4th Quarter
2014


3rd Quarter
2014


2nd Quarter
2014


Interest income:


















Interest and fees on loans


$

42,105


$

38,646


$

35,902


$

34,662


$

33,250



Taxable securities



1,104



1,128



1,143



1,131



1,126



Nontaxable securities



874



860



871



877



870



Federal funds sold



24



77



41



38



43



Other interest and dividends



102



72



206



149



135



   Total interest income



44,209



40,783



38,163



36,857



35,424


Interest expense:


















Deposits



3,512



3,270



3,256



3,123



3,027



Borrowed funds



486



476



447



415



419



   Total interest expense



3,998



3,746



3,703



3,538



3,446



   Net interest income



40,211



37,037



34,460



33,319



31,978


Provision for loan losses



4,062



2,405



2,759



2,748



2,438



   Net interest income after provision for loan losses



36,149



34,632



31,701



30,571



29,540


Non-interest income:


















Service charges on deposit accounts



1,276



1,207



1,168



1,172



1,057



Mortgage banking



735



454



507



582



674



Securities gains



-



29



-



3



-



Increase in cash surrender value life insurance



660



648



649



549



546



Other operating income



834



739



786



700



661



   Total non-interest income



3,505



3,077



3,110



3,006



2,938


Non-interest expense:


















Salaries and employee benefits



10,426



9,008



6,332



7,890



9,098



Equipment and occupancy expense



1,634



1,661



1,335



1,437



1,409



Professional services



665



568



558



829



532



FDIC and other regulatory assessments



626



620



516



533



528



Other real estate owned expense



289



214



528



220



298



Merger expense



4



2,096



-



-



-



Other operating expense



4,569



4,584



3,874



4,406



3,552



   Total non-interest expense



18,213



18,751



13,142



15,315



15,417



   Income before income tax



21,441



18,958



21,668



18,262



17,061


Provision for income tax



6,972



5,903



6,636



4,260



5,476



       Net income



14,469



13,055



15,032



14,002



11,585



Dividends on preferred stock



123



100



115



100



116



         Net income available to common stockholders


$

14,346


$

12,955


$

14,917


$

13,902


$

11,469


Basic earnings per common share


$

0.56


$

0.51


$

0.60


$

0.56


$

0.49


Diluted earnings per common share


$

0.54


$

0.49


$

0.58


$

0.54


$

0.46


 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)


ON A FULLY TAXABLE-EQUIVALENT BASIS


(Dollars in thousands)














































2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


3rd Quarter 2014


2nd Quarter 2014








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


$

3,731,699


4.51

%


$

3,492,363


4.47

%


$

3,215,400


4.41

%


$

3,081,435


4.44

%


$

2,978,631


4.46

%




Tax-exempt (2)



10,005


5.01




10,180


5.10




10,367


4.94




12,043


4.25




15,803


3.25




Mortgage loans held for sale



12,718


2.21




6,884


2.12




3,410


6.05




6,861


3.64




8,048


3.24




Debt securities:


































Taxable



193,848


2.28




198,104


2.28




195,533


2.32




195,220


2.31




188,148


2.40





Tax-exempt (2)



136,104


3.93




129,525


4.02




127,909


4.19




126,512


4.08




123,897


4.10






Total securities (3)



329,952


2.96




327,629


2.97




323,442


3.06




321,732


3.01




312,045


3.07




Federal funds sold



26,638


0.36




39,438


0.27




68,640


0.24




57,625


0.27




41,388


0.37




Restricted equity securities



4,953


3.16




4,354


3.63




3,418


3.95




3,418


3.83




3,446


7.57




Interest-bearing balances with banks



97,482


0.26




119,195


0.28




273,496


0.26




185,716


0.25




121,532


0.25




Total interest-earning assets



4,213,447


4.26

%



4,000,043


4.18

%



3,898,173


3.94

%



3,668,830


4.03

%



3,480,893


4.13

%


Non-interest-earning assets:

































Cash and due from banks



58,347






61,911






58,973






58,340






57,387






Net premises and equipment



16,323






13,847






8,315






8,310






8,377






Allowance for loan losses,


































accrued interest and


































other assets



129,233






117,612






101,831






86,901






88,849








Total assets


$

4,417,350





$

4,193,413





$

4,067,292





$

3,822,381





$

3,635,506









































Interest-bearing liabilities:

































Interest-bearing deposits:

































Checking


$

579,650


0.27

%


$

553,569


0.26

%


$

511,451


0.26

%


$

484,291


0.26

%


$

482,115


0.27

%



Savings



37,697


0.28




36,128


0.28




28,806


0.29




26,584


0.28




25,406


0.28




Money market



1,653,708


0.45




1,618,715


0.44




1,645,533


0.45




1,555,091


0.44




1,472,346


0.44




Time deposits



480,140


1.05




446,084


1.05




395,598


1.03




394,158


1.05




402,613


1.08




Federal funds purchased



275,888


0.29




270,549


0.28




231,135


0.28




187,629


0.28




195,809


0.28




Other borrowings



21,238


5.40




20,455


5.65




19,969


5.62




19,961


5.62




19,953


5.69




Total interest-bearing liabilities



3,048,321


0.53

%



2,925,500


0.52

%



2,832,492


0.52

%



2,667,714


0.53

%



2,598,242


0.53

%


Non-interest-bearing liabilities:

































Non-interest-bearing


































demand



908,020






813,340






823,738






751,831






675,098






Other liabilities



11,793






6,745






9,969






15,838






16,158






Stockholders' equity



444,302






422,847






395,981






382,025






341,120






Unrealized gains on securities and


































derivatives



4,914






4,981






5,112






4,973






4,888








Total liabilities and




































stockholders' equity


$

4,417,350





$

4,193,413





$

4,067,292





$

3,822,381





$

3,635,506





Net interest spread





3.73

%





3.66

%





3.42

%





3.50

%





3.60

%


Net interest margin





3.88

%





3.80

%





3.56

%





3.65

%





3.74

%






































(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.


 

SOURCE ServisFirst Bancshares, Inc.


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