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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 Fourth Quarter Of 2015

Jan 25, 2016

BIRMINGHAM, Ala., Jan. 25, 2016 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2015.

Fourth Quarter 2015 Highlights:

  • Diluted earnings per share increased 28% from $0.58 to $0.74 year over year
  • Diluted earnings per share increased 21% from $0.61 to $0.74 on a linked quarter basis
  • Net income for the quarter increased 31% year over year
  • Organic loan and deposit growth for the year of 20% and 18%, respectively
  • Fourth quarter annualized loan and deposit growth of 17% and 18%, respectively, on a linked quarter basis
  • Entry into the Tampa Bay, Florida area with hire of a new regional CEO

Tom Broughton, President and CEO, said, "We are pleased to welcome our new banking team in the Tampa Bay area led by Greg Bryant, a highly experienced and well known banker in the area."  Bud Foshee, CFO, stated, "2015 was a strong year in financial performance and growth." 

ServisFirst announces the hiring of Greg Bryant as Executive Vice President and Regional CEO.  A temporary loan production office will be opened in Pasco County, for up to a year before a permanent office is established in Tampa Bay, Florida.  Greg was formerly the President & CEO of Bay Cities Bank prior to the sale of the bank.

FINANCIAL SUMMARY (UNAUDITED)




















(in Thousands except share and per share amounts)














































Period Ending December 31,
2015


Period Ending September 30,
2015


% Change
From Period
Ending
September 30,

2015 to Period
Ending
December 31,
2015


Period Ending December 31,
2014


% Change
From Period
Ending
December 31,
2014 to Period
Ending
December 31,
2015


QUARTERLY OPERATING RESULTS




















Net Income


$

19,750



$

16,266



21

%


$

15,032



31

%


Net Income Available to Common Stockholders


$

19,726



$

16,233



22

%


$

14,917



32

%


Diluted Earnings Per Share


$

0.74



$

0.61



21

%


$

0.58



28

%


Return on Average Assets



1.55

%



1.38

%






1.47

%





Return on Average Common Stockholders' Equity



17.75

%



15.52

%






16.39

%





Average Diluted Shares Outstanding



26,595,239




26,506,334







25,697,531




























YEAR-TO-DATE OPERATING RESULTS




















Net Income


$

63,540










$

52,377



21

%


Net Income Available to Common Stockholders


$

63,260










$

51,946



22

%


Diluted Earnings Per Share


$

2.39










$

2.09



14

%


Return on Average Assets



1.38

%










1.39

%





Return on Average Common Stockholders' Equity



15.30

%










16.23

%





Average Diluted Shares Outstanding



26,442,554











24,818,221




























Core Net Income*


$

65,307










$

53,989



21

%


Core Net Income Available to Common Stockholders*


$

65,027










$

53,558



21

%


Core Diluted Earnings Per Share*


$

2.46










$

2.16



14

%


Core Return on Average Assets*



1.42

%










1.44

%





Core Return on Average Common Stockholders' Equity*



15.73

%










16.74

%



























BALANCE SHEET




















Total Assets


$

5,095,509



$

4,772,601



7

%


$

4,098,679



24

%


Loans



4,216,375




4,044,242



4

%



3,359,858



25

%


Non-interest-bearing Demand Deposits



1,053,467




1,029,354



2

%



810,460



30

%


Total Deposits



4,223,888




4,044,634



4

%



3,398,160



24

%


Stockholders' Equity



449,147




431,194



4

%



407,213



10

%
























* 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 $19.8 million and net income available to common stockholders of $19.7 million for the quarter ended December 31 2015, compared to net income of $15.0 million and net income available to common stockholders of $14.9 million for the same quarter in 2014.  Basic and diluted earnings per common share were $0.76 and $0.74, respectively, for the fourth quarter of 2015, compared to $0.60 and $0.58, respectively, for the fourth quarter of 2014.

Return on average assets was 1.55% and return on average common stockholders' equity was 17.75% for the fourth quarter of 2015, compared to 1.47% and 16.39%, respectively, for the fourth quarter of 2014.

Net interest income was $43.2 million for the fourth quarter of 2015, compared to $41.9 million for the third quarter of 2015 and $34.5 million for the fourth quarter of 2014.  The increase in net interest income on a linked quarter basis is attributable to a $197.1 million increase in average loans outstanding and a $74.0 million increase in non-interest-bearing deposits, both resulting in a positive mix change in our balance sheet.  The Company completed a private placement of $34.75 million of its 5% Subordinated Notes due July 15, 2025 during the third quarter of 2015, which partially offset the positive mix change attributable to the increase in average loans and non-interest-bearing deposits.  The net interest margin in the fourth quarter of 2015 was 3.56%, a 21 basis point decrease from the third quarter of 2015 and unchanged from the fourth quarter of 2014.  Excess liquidity during the fourth quarters of 2015 and 2014 drives an unfavorable volume component change when compared to their respective comparable linked quarters.  The average yield on loans decreased 9 basis points to 4.44% on a linked quarter basis.  Three basis points of this decrease are attributable to a $318,000 decrease in the accretion on acquired loans.  Excluding accretion on acquired loans, the net interest margin decreased 22 basis points from the third quarter to the fourth quarter of 2015.  Average rates paid on interest-bearing liabilities increased from 0.58% in the third quarter to 0.60% in the fourth quarter of 2015.  The higher rates paid on federal funds purchased from our correspondent banks was the result of the 0.25% increase in the Federal Reserve's targeted rate in early December 2015. 

Average loans for the fourth quarter of 2015 were $4.12 billion, an increase of $197.1 million, or 5%, over average loans of $3.93 billion for the third quarter of 2015, and an increase of $896.9 million, or 28%, over average loans of $3.23 billion for the fourth quarter of 2014.

Average total deposits for the fourth quarter of 2015 were $4.21 billion, an increase of $288.1 million, or 7%, over average total deposits of $3.92 billion for the third quarter of 2015, and an increase of $805.7 million, or 24%, over average total deposits of $3.41 billion for the fourth quarter of 2014.

Non-performing assets to total assets were 0.26% for the fourth quarter of 2015, a decrease of 8 basis points compared to 0.34% for the third quarter of 2015 and a decrease of 15 basis points compared to 0.41% for the fourth quarter of 2014.  Net credit charge-offs to average loans were 0.24%, a 19 basis point increase compared to 0.05% for the third quarter of 2015 and a 5 basis point increase compared to 0.19% for the fourth quarter of 2014.  We recorded a $3.3 million provision for loan losses in the fourth quarter of 2015 compared to $3.1 million in the third quarter of 2015 and $2.8 million in the fourth quarter of 2014.  The allowance for loan loss as a percentage of total loans was 1.03% at December 31, 2015, a decrease of 2 basis points compared to 1.05% at September 30, 2015 and a decrease of 3 basis points compared to 1.06% at December 31, 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 loss.

Non-interest income increased $449,000 during the fourth quarter of 2015, or 14%, compared to the fourth quarter of 2014.  Service charges on deposit accounts increased $158,000, or 14%, compared to the fourth quarter of 2014, resulting from an increase in the number of accounts and transactions.  Mortgage banking revenue increased $113,000, or 22%, compared to the fourth quarter of 2014.  Interchange income on credit card transactions, included in other operating income, increased $140,000, or 25%, compared to the fourth quarter of 2014, resulting from an increase in the number of credit card accounts.

Non-interest expense for the fourth quarter of 2015 increased $5.9 million, or 45%, to $19.1 million from $13.1 million in the fourth quarter of 2014, and increased $754,000, or 4%, on a linked quarter basis.  Salary and benefit expense for the fourth quarter of 2015 increased $2.6 million, or 41%, to $8.9 million from $6.3 million in the fourth quarter of 2014, and decreased $1.7 million, or 16%, on a linked quarter basis.  We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015 and reversed $1.0 million of accrued incentive pay during the fourth quarter of 2014.  Excluding these reversals, salary and benefit expenses increased $3.6 million year over year and increased $0.3 million on a linked quarter basis.  The year-over-year increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets and Birmingham.  Other operating expense for the fourth quarter of 2015 increased $3.0 million, or 79%, to $6.9 million from $3.9 million in the fourth quarter of 2014, and increased $2.5 million, or 57%, on a linked quarter basis.  Included in these increases were $2.4 million of write-downs in equity investments in tax credit partnerships during the fourth quarter of 2015.

Tax expense for the fourth quarter of 2015 decreased $2.1 million compared to the fourth quarter of 2014, and decreased $3.4 million on a linked quarter basis.  Effective tax rates for the fourth quarter of 2015, third quarter of 2015 and fourth quarter of 2014 were 18.81%, 33.00% and 30.63%, respectively.  The lower rate in the fourth quarter of 2015 was primarily the result of recognition of federal historic tax credits.

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 on 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 years ended December 31, 2015 and December 31, 2014 included in this press release.  Dollars are in thousands, except share and per share data.

 




2015


2014

Provision for income taxes - GAAP


$

25,465



$

21,601



Adjustments:










Adjustment for non-routine expense



829




865


Core provision for income taxes


$

26,294



$

22,466












Return on average assets - GAAP



1.38

%



1.39

%

Net income - GAAP


$

63,540



$

52,377



Adjustments:










Adjustment for non-routine expense



1,767




1,612


Core net income


$

65,307



$

53,989


Average assets


$

4,591,860



$

3,757,932


Core return on average assets



1.42

%



1.44

%











Return on average common stockholders' equity



15.30

%



16.23

%

Net income available to common stockholders - GAAP


$

63,260



$

51,946



Adjustments:










Adjustment for non-routine expense



1,767




1,612


Core net income available to common stockholders


$

65,027



$

53,558


Average common stockholders' equity


$

413,445



$

320,005


Core return on average common stockholders' equity



15.73

%



16.74

%











Earnings per share - diluted - GAAP


$

2.39



$

2.09


Weighted average shares outstanding, diluted



26,442,554




24,818,221


Core diluted earnings per share


$

2.46



$

2.16












Book value per share


$

17.29



$

14.81


Total common stockholders' equity - GAAP



449,147




367,255



Adjustments:










Adjusted for goodwill and other identifiable intangible assets



15,330




-


Tangible common stockholders' equity


$

433,817



$

367,255


Tangible book value per share


$

16.70



$

14.81












Common stockholders' equity to total assets



8.81

%



8.96

%

Total assets - GAAP


$

5,095,509



$

4,098,679



Adjustments:










Adjusted for goodwill and other identifiable intangible assets



15,330




-


Total tangible assets



5,080,179




4,098,679


Tangible common equity to total tangible assets



8.54

%



8.96

%

 

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 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. 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)
























4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


CONSOLIDATED STATEMENT OF INCOME






















Interest income


$

48,451



$

46,532



$

44,209



$

40,783



$

38,163



Interest expense



5,290




4,670




3,998




3,746




3,703



Net interest income



43,161




41,862




40,211




37,037




34,460



Provision for loan losses



3,308




3,072




4,062




2,405




2,759



Net interest income after provision for loan losses



39,853




38,790




36,149




34,632




31,701



Non-interest income



3,559




3,822




3,505




3,077




3,110



Non-interest expense



19,086




18,332




18,213




18,751




13,143



Income before income tax



24,326




24,280




21,441




18,958




21,668



Provision for income tax



4,576




8,014




6,972




5,903




6,636



Net income



19,750




16,266




14,469




13,055




15,032



Preferred stock dividends



24




33




123




100




115



Net income available to common stockholders


$

19,726



$

16,233



$

14,346



$

12,955



$

14,917



Earnings per share - basic


$

0.76



$

0.63



$

0.56



$

0.51



$

0.60



Earnings per share - diluted


$

0.74



$

0.61



$

0.54



$

0.49



$

0.58



Average diluted shares outstanding



26,595,239




26,506,334




26,426,036




26,237,980




25,697,531

























CONSOLIDATED BALANCE SHEET DATA






















Total assets


$

5,095,509



$

4,772,601



$

4,492,539



$

4,393,342



$

4,098,679



Loans



4,216,375




4,044,242




3,863,734




3,607,852




3,359,858



Debt securities



370,364




334,635




335,008




336,505




327,665



Non-interest-bearing demand deposits



1,053,467




1,029,354




926,577




866,743




810,460



Total deposits



4,223,888




4,044,634




3,729,132




3,638,763




3,398,160



Borrowings



55,748




55,728




21,016




21,278




19,973



Stockholders' equity


$

449,147



$

431,194



$

454,487



$

441,458



$

407,213

























Shares outstanding



25,972,698




25,903,698




25,826,198




25,653,610




24,801,518



Book value per share


$

17.29



$

16.65



$

16.05



$

15.65



$

14.81



Tangible book value per share (1)


$

16.70



$

15.96



$

15.35



$

14.95



$

14.81

























SELECTED FINANCIAL RATIOS






















Net interest margin



3.56

%



3.77

%



3.88

%



3.80

%



3.56

%


Return on average assets



1.55

%



1.38

%



1.31

%



1.26

%



1.47

%


Return on average common stockholders' equity



17.75

%



15.52

%



14.06

%



13.55

%



16.39

%


Efficiency ratio



40.85

%



40.13

%



41.66

%



46.74

%



34.98

%


Non-interest expense to average earning assets



1.56

%



1.63

%



1.73

%



1.90

%



1.34

%
























CAPITAL RATIOS (2)






















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



9.72

%



9.59

%



9.60

%



9.93

%



N/A



Tier 1 capital to risk-weighted assets



9.73

%



9.60

%



10.58

%



10.98

%



11.75

%


Total capital to risk-weighted assets



11.95

%



11.89

%



12.05

%



12.49

%



13.38

%


Tier 1 capital to average assets



8.55

%



8.83

%



9.88

%



10.07

%



9.91

%


Tangible common equity to total tangible assets (1)



8.54

%



8.70

%



8.86

%



8.76

%



8.96

%
























(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)















December 31, 2015


December 31, 2014


% Change


ASSETS











Cash and due from banks


$

46,614


$

48,519


(4)

%


Interest-bearing balances due from depository institutions



270,836



248,054


9

%


Federal funds sold



34,785



891


3,804

%



Cash and cash equivalents



352,235



297,464


18

%


Available for sale debt securities, at fair value



342,938



298,310


15

%


Held to maturity debt securities (fair value of $27,910 and $29,974 at












December 31, 2015 and 2014, respectively)



27,426



29,355


(7)

%


Restricted equity securities



4,954



3,921


26

%


Mortgage loans held for sale



8,249



5,984


38

%


Loans



4,216,375



3,359,858


25

%


Less allowance for loan losses



(43,419)



(35,629)


22

%



Loans, net



4,172,956



3,324,229


26

%


Premises and equipment, net



19,434



7,815


149

%


Goodwill and other identifiable intangible assets



15,330



-





Other assets



151,987



131,601


15

%



Total assets


$

5,095,509


$

4,098,679


24

%


LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:












Non-interest-bearing


$

1,053,467


$

810,460


30

%



Interest-bearing



3,170,421



2,587,700


23

%




Total deposits



4,223,888



3,398,160


24

%


Federal funds purchased



352,360



264,315


33

%


Other borrowings



55,748



19,973


179

%


Other liabilities



14,366



9,018


59

%



Total liabilities



4,646,362



3,691,466


26

%


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,













no shares issued and outstanding at December 31, 2015, and













40,000 shares issued and outstanding at December 31, 2014



-



39,958


(100)

%



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













960,000 currently undesignated



-



-


-

%



Common stock, par value $0.001 per share; 50,000,000 shares authorized;













25,972,698 shares issued and outstanding at December 31, 2015 and













24,801,518 shares issued and outstanding at December 31, 2014



26



25


4

%



Additional paid-in capital



211,546



185,397


14

%



Retained earnings



234,150



177,091


32

%



Accumulated other comprehensive income



3,048



4,490


(32)

%



Noncontrolling interest



377



252


50

%




Total stockholders' equity



449,147



407,213


10

%



Total liabilities and stockholders' equity


$

5,095,509


$

4,098,679


24

%


 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)







(In thousands except per share data)


















Three Months Ended December 31,


Year Ended December 31,






2015


2014


2015


2014


Interest income:















Interest and fees on loans


$

46,150


$

35,902


$

171,302


$

136,066



Taxable securities



1,058



1,143



4,331



4,497



Nontaxable securities



875



871



3,499



3,489



Federal funds sold



46



41



127



159



Other interest and dividends



322



206



716



514



   Total interest income



48,451



38,163



179,975



144,725


Interest expense:















Deposits



4,294



3,256



14,894



12,420



Borrowed funds



996



447



2,810



1,699



   Total interest expense



5,290



3,703



17,704



14,119



   Net interest income



43,161



34,460



162,271



130,606


Provision for loan losses



3,308



2,759



12,847



10,259



   Net interest income after provision for loan losses



39,853



31,701



149,424



120,347


Non-interest income:















Service charges on deposit accounts



1,326



1,168



5,088



4,265



Mortgage banking



620



507



2,682



2,047



Securities gains



-



-



29



3



Increase in cash surrender value life insurance



630



649



2,621



2,280



Other operating income



983



786



3,543



2,634



   Total non-interest income



3,559



3,110



13,963



11,229


Non-interest expense:















Salaries and employee benefits



8,884



6,332



38,913



31,017



Equipment and occupancy expense



1,519



1,335



6,389



5,547



Professional services



706



558



2,607



2,435



FDIC and other regulatory assessments



733



516



2,660



2,094



Other real estate owned expense



324



528



1,227



1,533



Merger expense



-



-



2,100



-



Other operating expense



6,920



3,874



20,486



14,972



   Total non-interest expense



19,086



13,143



74,382



57,598



   Income before income tax



24,326



21,668



89,005



73,978


Provision for income tax



4,576



6,636



25,465



21,601



         Net income



19,750



15,032



63,540



52,377



Dividends on preferred stock



24



115



280



431



         Net income available to common stockholders


$

19,726


$

14,917


$

63,260


$

51,946


Basic earnings per common share


$

0.76


$

0.60


$

2.46


$

2.18


Diluted earnings per common share


$

0.74


$

0.58


$

2.39


$

2.09


 


LOANS BY TYPE (UNAUDITED)
















(In thousands)




































4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014

Commercial, financial and agricultural


$

1,760,479


$

1,683,819


$

1,642,182


$

1,554,020


$

1,504,652

Real estate - construction



243,267



232,895



219,607



219,005



208,769

Real estate - mortgage:

















Owner-occupied commercial



1,014,669



978,721



930,719



869,724



793,917


1-4 family mortgage



444,134



417,012



392,245



375,770



333,455


Other mortgage



698,779



677,822



627,099



545,668



471,363

Subtotal: Real estate - mortgage



2,157,582



2,073,555



1,950,063



1,791,162



1,598,735

Consumer



55,047



53,973



51,882



43,665



47,702

Total loans


$

4,216,375


$

4,044,242


$

3,863,734


$

3,607,852


$

3,359,858

 


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)



















(Dollars in thousands)
























4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014


Allowance for loan losses:






















Beginning balance


$

42,574



$

40,020



$

37,356



$

35,629



$

34,442



Loans charged off:























Commercial financial and agricultural



2,186




388




1,151




77




416




Real estate - construction



161




31




93




382




309




Real estate - mortgage



463




-




208




433




922




Consumer



21




126




19




5




21





Total charge offs



2,831




545




1,471




897




1,668



Recoveries:























Commercial financial and agricultural



241




13




6




19




2




Real estate - construction



61




13




65




99




37




Real estate - mortgage



65




1




2




101




46




Consumer



1




-




-




-




11





Total recoveries



368




27




73




219




96




Net charge-offs



2,463




518




1,398




678




1,572




Provision for loan losses



3,308




3,072




4,062




2,405




2,759




Ending balance


$

43,419



$

42,574



$

40,020



$

37,356



$

35,629





























Allowance for loan losses to total loans



1.03

%



1.05

%



1.04

%



1.04

%



1.06

%



Allowance for loan losses to total average
























loans



1.05

%



1.08

%



1.07

%



1.07

%



1.10

%



Net charge-offs to total average loans



0.24

%



0.05

%



0.15

%



0.08

%



0.19

%



Provision for loan losses to total average
























loans



0.32

%



0.31

%



0.44

%



0.28

%



0.34

%



Nonperforming assets:
























Nonaccrual loans


$

7,767



$

9,850



$

8,194



$

8,361



$

9,125





Loans 90+ days past due and accruing



1




524




470




553




925





Other real estate owned and
























   repossessed assets



5,392




6,068




8,235




8,638




6,840




Total


$

13,160



$

16,442



$

16,899



$

17,552



$

16,890





























Nonperforming loans to total loans



0.18

%



0.26

%



0.22

%



0.25

%



0.30

%



Nonperforming assets to total assets



0.26

%



0.34

%



0.38

%



0.40

%



0.41

%



Nonperforming assets to earning assets



0.26

%



0.35

%



0.38

%



0.41

%



0.42

%



Reserve for loan losses to nonaccrual loans



559.02

%



432.22

%



488.41

%



446.79

%



390.45

%




























Restructured accruing loans


$

6,782



$

8,266



$

8,279



$

8,280



$

8,292





























Restructured accruing loans to total loans



0.16

%



0.20

%



0.21

%



0.23

%



0.25

%




























TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
















(In thousands)























4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


4th Quarter 2014



Beginning balance:


$

8,266



$

8,279



$

8,280



$

8,992



$

7,932





Additions



-




-




-




-




6,250





Net (paydowns) / advances



(83)




(13)




(1)




(381)




(4,492)





Charge-offs



(447)




-




-




(331)




(698)








$

7,736



$

8,266



$

8,279



$

8,280



$

8,992



 


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)















4th Quarter 2015


3rd Quarter 2015


2nd Quarter
2015


1st Quarter 2015


4th Quarter 2014


Interest income:


















Interest and fees on loans


$

46,150


$

44,401


$

42,105


$

38,646


$

35,902



Taxable securities



1,058



1,041



1,104



1,128



1,143



Nontaxable securities



875



890



874



860



871



Federal funds sold



46



32



24



77



41



Other interest and dividends



322



168



102



72



206



   Total interest income



48,451



46,532



44,209



40,783



38,163


Interest expense:


















Deposits



4,294



3,818



3,512



3,270



3,256



Borrowed funds



996



852



486



476



447



   Total interest expense



5,290



4,670



3,998



3,746



3,703



   Net interest income



43,161



41,862



40,211



37,037



34,460


Provision for loan losses



3,308



3,072



4,062



2,405



2,759



   Net interest income after provision for loan losses



39,853



38,790



36,149



34,632



31,701


Non-interest income:


















Service charges on deposit accounts



1,326



1,279



1,276



1,207



1,168



Mortgage banking



620



873



735



454



507



Securities gains



-



-



-



29



-



Increase in cash surrender value life insurance



630



683



660



648



649



Other operating income



983



987



834



739



786



   Total non-interest income



3,559



3,822



3,505



3,077



3,110


Non-interest expense:


















Salaries and employee benefits



8,884



10,595



10,426



9,008



6,332



Equipment and occupancy expense



1,519



1,575



1,634



1,661



1,335



Professional services



706



668



665



568



558



FDIC and other regulatory assessments



733



681



626



620



516



Other real estate owned expense



324



400



289



214



528



Merger expense



-



-



-



2,096



-



Other operating expense



6,920



4,413



4,573



4,584



3,874



   Total non-interest expense



19,086



18,332



18,213



18,751



13,142



   Income before income tax



24,326



24,280



21,441



18,958



21,668


Provision for income tax



4,576



8,014



6,972



5,903



6,636



       Net income



19,750



16,266



14,469



13,055



15,032



Dividends on preferred stock



24



33



123



100



115



         Net income available to common stockholders


$

19,726


$

16,233


$

14,346


$

12,955


$

14,917


Basic earnings per common share


$

0.76


$

0.63


$

0.56


$

0.51


$

0.60


Diluted earnings per common share


$

0.74


$

0.61


$

0.54


$

0.49


$

0.58


 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)


ON A FULLY TAXABLE-EQUIVALENT BASIS


(Dollars in thousands)














































4th Quarter 2015


3rd Quarter 2015



2nd Quarter 2015


1st Quarter 2015


4th 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


$

4,113,044


4.44

%


$

3,915,778


4.48

%


$

3,731,699


4.51

%


$

3,492,363


4.47

%


$

3,215,400


4.41

%




Tax-exempt (2)



9,639


4.98




9,802


4.98




10,005


5.00




10,180


5.03




10,367


4.98




Mortgage loans held for sale



4,362


4.27




7,714


4.32




12,718


2.21




6,884


2.12




3,410


6.05




Debt securities:


































Taxable



193,982


2.18




189,941


2.19




193,848


2.28




198,104


2.28




195,533


2.32





Tax-exempt (2)



139,435


3.88




139,543


3.95




136,104


3.93




129,525


4.02




127,909


4.19






Total securities (3)



333,417


2.89




329,484


2.94




329,952


2.96




327,629


2.97




323,442


3.06




Federal funds sold



33,255


0.55




24,860


0.51




26,638


0.36




39,438


0.27




68,640


0.24




Restricted equity securities



4,954


4.24




4,954


4.16




4,953


3.16




4,354


3.63




3,418


3.95




Interest-bearing balances with banks



366,771


0.29




168,548


0.27




97,482


0.26




119,195


0.28




273,496


0.26




Total interest-earning assets



4,865,442


3.99

%



4,461,140


4.18

%



4,213,447


4.26

%



4,000,043


4.18

%



3,898,173


3.94

%


Non-interest-earning assets:

































Cash and due from banks



62,037






63,259






58,347






61,911






58,973






Net premises and equipment



19,609






18,961






16,323






13,847






8,315






Allowance for loan losses,


































accrued interest and


































other assets



124,241






127,778






129,233






117,612






101,831








Total assets


$

5,071,329





$

4,671,136





$

4,417,350





$

4,193,413





$

4,067,292









































Interest-bearing liabilities:

































Interest-bearing deposits:

































Checking


$

611,521


0.30

%


$

593,550


0.28

%


$

579,650


0.27

%


$

553,569


0.26

%


$

511,451


0.26

%



Savings



39,590


0.29




37,281


0.30




37,697


0.28




36,128


0.28




28,806


0.29




Money market



2,048,453


0.49




1,817,997


0.47




1,653,708


0.45




1,618,715


0.44




1,645,533


0.45




Time deposits



503,217


1.00




485,137


0.99




480,140


1.05




446,084


1.05




395,598


1.03




Federal funds purchased



295,530


0.37




246,168


0.31




275,888


0.29




270,549


0.28




231,135


0.28




Other borrowings



55,805


5.11




50,509


5.18




21,238


5.40




20,455


5.65




19,969


5.62




Total interest-bearing liabilities



3,554,116


0.59

%



3,230,642


0.57

%



3,048,321


0.53

%



2,925,500


0.52

%



2,832,492


0.52

%


Non-interest-bearing liabilities:

































Non-interest-bearing


































demand



1,062,795






988,756






908,020






813,340






823,738






Other liabilities



13,469






23,738






11,793






6,745






9,969






Stockholders' equity



436,928






424,113






444,302






422,847






395,981






Unrealized gains on securities and


































derivatives



4,021






3,911






4,914






4,981






5,112








Total liabilities and




































stockholders' equity


$

5,071,329





$

4,671,136





$

4,417,350





$

4,193,413





$

4,067,292





Net interest spread





3.40

%





3.61

%





3.73

%





3.66

%





3.42

%


Net interest margin





3.56

%





3.77

%





3.88

%





3.80

%





3.56

%






































(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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