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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 First Quarter 2016

Apr 18, 2016

BIRMINGHAM, Ala., April 18, 2016 /PRNewswire/ -- ServisFirst Bancshares, Inc. ("ServisFirst") (NASDAQ: SFBS), the holding company for ServisFirst Bank, today announced earnings and operating results for the quarter ended March 31, 2016.

First Quarter 2016 Highlights:

  • Net income of $17.6 million, a 35% increase year over year
  • Diluted EPS of $0.66, a 35% increase year over year
  • Core diluted EPS increased 18% year over year
  • Loans and deposits increased 20% and 19%, respectively, year over year
  • Production team increased by eight to 122, five in our newest region, the Tampa Bay area of Florida

Tom Broughton, President and CEO, said, "We are pleased with loan and deposit growth across all regions to start the year off, and believe our new main offices in Mobile, Charleston and Nashville will only bolster our growth opportunities through improved visibility in those markets."  Bud Foshee, CFO, stated, "We got off to a good start for 2016 and will continue to focus our efforts on improving net interest margins and maintaining quality customer service."

FINANCIAL SUMMARY




















(in Thousands except share and per share amounts)
























Period Ending

March 31, 2016


Period Ending

December 31, 2015


% Change

From Period

Ending December

31, 2015 to

Period Ending

March 31,

2016


Period Ending

March 31, 2015


% Change

From Period

Ending March

31, 2015 to

Period Ending

March 31,

2016


QUARTERLY OPERATING RESULTS




















Net Income


$

17,649



$

19,750



(11)

%


$

13,055



35

%


Net Income Available to Common Stockholders


$

17,649



$

19,726



(11)

%


$

12,955



36

%


Diluted Earnings Per Share


$

0.66



$

0.74



(11)

%


$

0.49



35

%


Return on Average Assets



1.35

%



1.55

%






1.26

%





Return on Average Common Stockholders' Equity



15.38

%



17.75

%






13.55

%





Average Diluted Shares Outstanding



26,566,810




26,595,239







26,237,980




























Core Net Income*


$

17,649



$

19,750



(11)

%


$

14,822



19

%


Core Net Income Available to Common Stockholders*


$

17,649



$

19,726



(11)

%


$

14,722



20

%


Core Diluted Earnings Per Share*


$

0.66



$

0.74



(11)

%


$

0.56



18

%


Core Return on Average Assets*



1.35

%



1.55

%






1.43

%





Core Return on Average Common Stockholders' Equity*



15.38

%



17.75

%






15.39

%



























BALANCE SHEET




















Total Assets


$

5,378,596



$

5,095,509



6

%


$

4,393,342



22

%


Loans



4,340,900




4,216,375



3

%



3,607,852



20

%


Non-interest-bearing Demand Deposits



1,070,275




1,053,467



2

%



866,743



23

%


Total Deposits



4,339,747




4,223,888



3

%



3,638,763



19

%


Stockholders' Equity



470,937




449,147



5

%



441,458



7

%
























* 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 and net income available to common stockholders of $17.6 million for the quarter ended March 31, 2016, compared to net income of $13.1 million and net income available to common stockholders of $13.0 million for the same quarter in 2015.  Net income for the quarter ended March 31, 2016 benefitted from growth in average loans of $117.7 million from the previous quarter and lower charge offs of loans.  Basic and diluted earnings per common share were $0.68 and $0.66, respectively, for the first quarter of 2016, compared to $0.51 and $0.49, respectively, for the first quarter of 2015.

Return on average assets was 1.35% and return on average common stockholders' equity was 15.38% for the first quarter of 2016, compared to 1.26% and 13.55%, respectively, for the first quarter of 2015.

Net interest income was $44.2 million for the first quarter of 2016, compared to $43.2 million for the fourth quarter of 2015 and $37.0 million for the first quarter of 2015.  The net interest margin in the first quarter of 2016 was 3.57%, a one basis point increase from the fourth quarter of 2015 and a 23 basis point decrease from the first quarter of 2015.  Average loans outstanding increased $117.7 million on a linked quarter basis, and average stockholders' equity increased $20.6 million, all resulting in a positive mix variance in net interest margin.  The average yield on loans increased four basis points to 4.48% on a linked quarter basis, resulting in a positive rate variance in net interest margin.  However, this was offset by a two basis point increase in the average rate paid on interest-bearing deposits.  Excess liquidity in the form of balances kept on deposit at the Federal Reserve and funds sold to our correspondent banks remained higher than normal for the first quarter, resulting in a negative mix variance in net interest margin. 

Average loans for the first quarter of 2016 were $4.24 billion, an increase of $117.7 million, or 3%, over average loans of $4.12 billion for the fourth quarter of 2015, and an increase of $737.8 million, or 21%, over average loans of $3.50 billion for the first quarter of 2015.  All of our regions, except one, experienced growth in loans during the first quarter.

Average total deposits for the first quarter of 2016 were flat at $4.27 billion compared to average total deposits of $4.27 billion for the fourth quarter of 2015, and increased $0.8 billion, or 23%, over average total deposits of $3.47 billion for the first quarter of 2015.  All of our regions, except one, experienced growth in deposits during the first quarter on an ending basis.

Non-performing assets to total assets were 0.20%, a decrease of six basis points compared to 0.26% for the fourth quarter of 2015 and a decrease of 20 basis points compared to 0.40% for the first quarter of 2015.  Net credit charge-offs to average loans were 0.03%, a 21 basis point decrease compared to 0.24% for the fourth quarter of 2015 and a five basis point decrease compared to 0.08% for the first quarter of 2015.  We recorded a $2.1 million provision for loan losses in the first quarter of 2016, a decrease of $1.2 million compared to $3.3 million in the fourth quarter of 2015 and a decrease of $0.3 million compared to $2.4 million in the first quarter of 2015.  The loan loss reserve as a percentage of total loans increased one basis point to 1.04% at March 31, 2016, compared to 1.03% at December 31, 2015 and was flat compared to 1.04% at March 31, 2015.  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 $649,000 in the first quarter of 2016, or 21%, compared to the first quarter of 2015.  Deposit service charges increased $100,000 in the first quarter of 2016, or 8%, compared to the first quarter of 2015.  Mortgage banking income increased $214,000 in the first quarter of 2016, or 47%, compared to the first quarter of 2015 as a result of increased production and improved pricing margins.  Credit card income increased $371,000 in the first quarter of 2016, or 78%, compared to the first quarter of 2015, primarily as a result of increases in volume of activity on existing accounts.  The number of credit card accounts also increased by 411, or 8.4%, during this time.

Non-interest expense for the first quarter of 2016 increased $830,000, or 4%, to $19.6 million from $18.8 million in the first quarter of 2015.  Excluding merger expenses related to our acquisition of Metro Bancshares, Inc. during the first quarter of 2015, non-interest expense increased $2.9 million, or 18%, from the first quarter of 2015 to the first quarter of 2016.  Salary and benefit expense for the first quarter of 2016 increased $2.1 million, or 23%, to $11.1 million from $9.0 million in the first quarter of 2015, and increased $2.2 million, or 25%, on a linked quarter basis.  Eight new sales officers were added during the first quarter of 2016, with five of these comprising our team in the Tampa Bay area of Florida, our newest region.  Occupancy expense increased $324,000, or 20%, from the first quarter of 2015 to the first quarter of 2016, and increased $466,000, or 31%, on a linked quarter basis.  New main offices were opened in our Mobile, Alabama, Charleston, South Carolina and Nashville, Tennessee regions during the first quarter of 2016.  Also, we accelerated depreciation of leasehold improvements for our headquarters building in Birmingham, Alabama to coincide with the date we move into our new headquarters building, which we anticipate will be in 2017.  Other operating expense for the first quarter of 2016 was relatively flat at $4.6 million compared to the first quarter of 2015.  Excluding $500,000 in expense for the initial funding of reserves for unfunded loan commitments as of March 31, 2015, consistent with guidance provided in the Federal Reserve Bank's Inter-agency Policy Statement SR 06-17, other operating expense increased by 12% from the first quarter of 2015 to the first quarter of 2016.  Increases in service charges from the Federal Reserve of $126,000 from the first quarter of 2015 to the first quarter of 2016 are the result of continued increases in clearing services for our correspondent bank clients.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

As discussed in more detail in the section titled "Detailed Financials," 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 as of March 31, 2015, consistent with guidance provided in the Federal Reserve Bank's Inter-agency Policy Statement SR 06-17.  The non-GAAP financial measures included in this press release of our results for the first quarter of 2015 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 merger expenses and the initial funding of a reserve for unfunded loan commitments.  None of the other periods included in this press release are affected by such non-routine expenses.

"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.

We present tangible book value per share and the ratio of tangible common equity to total tangible assets in our Selected Financial Highlights table.  Our acquisition of Metro resulted in goodwill and other identifiable intangible assets, which are subtracted from equity and assets in the computation of tangible book value per share and tangible common equity to 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 first quarter of 2015.  Dollars are in thousands, except share and per share data.




As Of and For the

Period Ended

March 31, 2016


As Of and For the

Period Ended

March 31, 2015


Provision for income taxes - GAAP






$

5,903




Adjustments:











Adjustment for non-routine expense







829



Core provision for income taxes






$

6,732














Return on average assets - GAAP







1.26

%


Net income - GAAP






$

13,055




Adjustments:











Adjustment for non-routine expense







1,767



Core net income






$

14,822



Average assets






$

4,193,413



Core return on average assets







1.43

%













Return on average common stockholders' equity







13.55

%


Net income available to common stockholders - GAAP






$

12,955




Adjustments:











Adjustment for non-routine expense







1,767



Core net income available to common stockholders






$

14,722



Average common stockholders' equity






$

387,870



Core return on average common stockholders' equity







15.39

%













Earnings per share - diluted - GAAP






$

0.49



Weighted average shares outstanding, diluted







26,237,980



Core diluted earnings per share






$

0.56














Book value per share


$

17.99



$

15.65



Total common stockholders' equity - GAAP



470,937




401,500




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



15,239




18,069



Tangible common stockholders' equity


$

455,698



$

383,431



Tangible bookvalue per share


$

17.40



$

14.95














Stockholders' equity to total assets



8.76

%



10.05

%


Total assets - GAAP


$

5,378,596



$

4,393,342




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



15,239




18,069



Total tangible assets


$

5,363,357



$

4,375,273



Tangible common equity to total tangible assets



8.50

%



8.76

%


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 and Tampa Bay area, 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 www.servisfirstbank.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)





















1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


CONSOLIDATED STATEMENT OF INCOME






















Interest income


$

49,961



$

48,451



$

46,532



$

44,209



$

40,783



Interest expense



5,782




5,290




4,670




3,998




3,746



Net interest income



44,179




43,161




41,862




40,211




37,037



Provision for loan losses



2,059




3,308




3,072




4,062




2,405



Net interest income after provision for loan losses



42,120




39,853




38,790




36,149




34,632



Non-interest income



3,726




3,559




3,822




3,505




3,077



Non-interest expense



19,581




19,086




18,332




18,213




18,751



Income before income tax



26,265




24,326




24,280




21,441




18,958



Provision for income tax



8,616




4,576




8,014




6,972




5,903



Net income



17,649




19,750




16,266




14,469




13,055



Preferred stock dividends



-




24




33




123




100



Net income available to common stockholders


$

17,649



$

19,726



$

16,233



$

14,346



$

12,955



Earnings per share - basic


$

0.68



$

0.76



$

0.63



$

0.56



$

0.51



Earnings per share - diluted


$

0.66



$

0.74



$

0.61



$

0.54



$

0.49



Average diluted shares outstanding



26,566,810




26,595,239




26,506,334




26,426,036




26,237,980

























CONSOLIDATED BALANCE SHEET DATA






















Total assets


$

5,378,596



$

5,095,509



$

4,772,601



$

4,492,539



$

4,393,342



Loans



4,340,900




4,216,375




4,044,242




3,863,734




3,607,852



Debt securities



362,106




370,364




334,635




335,008




336,505



Non-interest-bearing demand deposits



1,070,275




1,053,467




1,029,354




926,577




866,743



Total deposits



4,339,747




4,223,888




4,044,634




3,729,132




3,638,763



Borrowings



55,543




55,748




55,728




21,016




21,278



Stockholders' equity


$

470,937



$

449,147



$

431,194



$

454,487



$

441,458

























Shares outstanding



26,182,698




25,972,698




25,903,698




25,826,198




25,653,610



Book value per share


$

17.99



$

17.29



$

16.65



$

16.05



$

15.65



Tangible book value per share (1)


$

17.40



$

16.70



$

15.96



$

15.35



$

14.95

























SELECTED FINANCIAL RATIOS






















Net interest margin



3.57

%



3.56

%



3.77

%



3.88

%



3.80

%


Return on average assets



1.35

%



1.55

%



1.38

%



1.31

%



1.26

%


Return on average common stockholders' equity



15.38

%



17.75

%



15.52

%



14.06

%



13.55

%


Efficiency ratio



40.87

%



40.85

%



40.13

%



41.66

%



46.74

%


Non-interest expense to average earning assets



1.56

%



1.56

%



1.63

%



1.73

%



1.90

%
























CAPITAL RATIOS (2)






















Common equity tier 1 capital to risk-weighted assets:



9.90

%



9.72

%



9.59

%



9.60

%



9.93

%


Tier 1 capital to risk-weighted assets:



9.91

%



9.73

%



9.60

%



10.58

%



10.98

%


Total capital to risk-weighted assets



12.12

%



11.95

%



11.89

%



12.05

%



12.49

%


Tier 1 capital to average assets:



8.65

%



8.55

%



8.83

%



9.88

%



10.07

%


Tangible common equity to total tangible assets (1)



8.50

%



8.54

%



8.70

%



8.86

%



8.76

%
























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


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


 


CONSOLIDATED BALANCE SHEETS (UNAUDITED)











(In thousands)















March 31, 2016


March 31, 2015


% Change


ASSETS











Cash and cash equivalents



525,637



299,679


75

%


Available for sale debt securities, at fair value



334,567



307,379


9

%


Held to maturity debt securities (fair value of $28,409 and $29,886 at












March 31, 2016 and 2015, respectively)



27,539



29,126


(5)

%


Restricted equity securities



5,667



4,953


14

%


Mortgage loans held for sale



5,090



12,384


(59)

%


Loans



4,340,900



3,607,852


20

%


Less allowance for loan losses



(45,145)



(37,356)


21

%



Loans, net



4,295,755



3,570,496


20

%


Premises and equipment, net



20,989



16,082


31

%


Goodwill and other identifiable intangible assets



15,239



18,069


(16)

%


Other assets



148,113



135,174


10

%



Total assets


$

5,378,596


$

4,393,342


22

%


LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:












Non-interest-bearing


$

1,070,275


$

866,743


23

%



Interest-bearing



3,269,472



2,772,020


18

%




Total deposits



4,339,747



3,638,763


19

%


Federal funds purchased



497,885



280,900


77

%


Other borrowings



55,543



21,278


161

%


Other liabilities



14,484



10,943


32

%



Total liabilities



4,907,659



3,951,884


24

%


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 March 31, 2016 and 40,000 shares













issued and outstanding at March 31, 2015



-



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;













26,182,698 shares issued and outstanding at March 31, 2016 and













25,653,610 shares issued and outstanding at March 31, 2015



26



26


-

%



Additional paid-in capital



215,948



207,374


4

%



Retained earnings



249,701



188,507


32

%



Accumulated other comprehensive income



4,885



5,216


(6)

%



Noncontrolling interest



377



377


-

%




Total stockholders' equity



470,937



441,458


7

%



Total liabilities and stockholders' equity


$

5,378,596


$

4,393,342


22

%


 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)





(In thousands except per share data)











Three Months Ended March 31,






2016


2015


Interest income:









Interest and fees on loans


$

47,247


$

38,646



Taxable securities



1,269



1,128



Nontaxable securities



858



860



Federal funds sold



73



77



Other interest and dividends



514



72



   Total interest income



49,961



40,783


Interest expense:









Deposits



4,361



3,270



Borrowed funds



1,421



476



   Total interest expense



5,782



3,746



   Net interest income



44,179



37,037


Provision for loan losses



2,059



2,405



   Net interest income after provision for loan losses



42,120



34,632


Non-interest income:









Service charges on deposit accounts



1,307



1,207



Mortgage banking



668



454



Securities gains



-



29



Increase in cash surrender value life insurance



624



648



Other operating income



1,127



739



   Total non-interest income



3,726



3,077


Non-interest expense:









Salaries and employee benefits



11,067



9,008



Equipment and occupancy expense



1,985



1,661



Professional services



738



568



FDIC and other regulatory assessments



750



620



Other real estate owned expense



449



214



Merger expenses



-



2,096



Other operating expense



4,592



4,584



   Total non-interest expense



19,581



18,751



   Income before income tax



26,265



18,958


Provision for income tax



8,616



5,903



         Net income



17,649



13,055



Dividends on preferred stock



-



100



         Net income available to common stockholders


$

17,649


$

12,955


Basic earnings per common share


$

0.68


$

0.51


Diluted earnings per common share


$

0.66


$

0.49


 


LOANS BY TYPE

















(UNAUDITED)

















(In thousands)




















1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


Commercial, financial and agricultural


$

1,799,132


$

1,760,479


$

1,683,819


$

1,642,182


$

1,554,020


Real estate - construction



254,254



243,267



232,895



219,607



219,005


Real estate - mortgage:


















Owner-occupied commercial



1,055,852



1,014,669



978,721



930,719



869,724



1-4 family mortgage



458,032



444,134



417,012



392,245



375,770



Other mortgage



723,542



698,779



677,822



627,099



545,668


Subtotal: Real estate - mortgage



2,237,426



2,157,582



2,073,555



1,950,063



1,791,162


Consumer



50,088



55,047



53,973



51,882



43,665


Total loans


$

4,340,900


$

4,216,375


$

4,044,242


$

3,863,734


$

3,607,852


 

SUMMARY OF LOAN LOSS EXPERIENCE



















(Dollars in thousands)
























1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015


Reserve for loan losses:






















Beginning balance


$

43,419



$

42,574



$

40,020



$

37,356



$

35,629



Loans charged off:























Commercial financial and agricultural



50




2,186




388




1,151




77




Real estate - construction



381




161




31




93




382




Real estate - mortgage:



-




463




-




208




433




Consumer



18




21




126




19




5





Total charge offs



449




2,831




545




1,471




897



Recoveries:























Commercial financial and agricultural



3




241




13




6




19




Real estate - construction



16




61




13




65




99




Real estate - mortgage:



97




65




1




2




101




Consumer



-




1




-




-




-





Total recoveries



116




368




27




73




219




Net charge-offs



333




2,463




518




1,398




678




Provision for loan losses



2,059




3,308




3,072




4,062




2,405




Ending balance


$

45,145



$

43,419



$

42,574



$

40,020



$

37,356





























Reserve for loan losses to total loans



1.04

%



1.03

%



1.05

%



1.04

%



1.04

%



Reserve for loan losses to total average
























loans



1.06

%



1.05

%



1.08

%



1.07

%



1.07

%



Net charge-offs to total average loans



0.03

%



0.24

%



0.05

%



0.15

%



0.08

%



Provision for loan losses to total average
























loans



0.20

%



0.32

%



0.31

%



0.44

%



0.28

%



Nonperforming assets:
























Nonaccrual loans


$

6,133



$

7,767



$

9,850



$

8,194



$

8,361





Loans 90+ days past due and accruing



417




1




524




470




553





Other real estate owned and
























   repossessed assets



4,044




5,392




6,068




8,235




8,638




Total


$

10,594



$

13,160



$

16,442



$

16,899



$

17,552





























Nonperforming loans to total loans



0.15

%



0.18

%



0.26

%



0.22

%



0.25

%



Nonperforming assets to total assets



0.20

%



0.26

%



0.34

%



0.38

%



0.40

%



Nonperforming assets to earning assets



0.20

%



0.26

%



0.35

%



0.38

%



0.41

%



Reserve for loan losses to nonaccrual loans



736.10

%



559.02

%



432.22

%



488.41

%



446.79

%




























Restructured accruing loans


$

6,763



$

6,782



$

8,266



$

8,279



$

8,280





























Restructured accruing loans to total loans



0.16

%



0.16

%



0.20

%



0.21

%



0.23

%


 


TROUBLED DEBT RESTRUCTURINGS (TDRs)



















(In thousands)



























1st Quarter

2016


4th Quarter

2015


3rd Quarter

2015


2nd Quarter

2015


1st Quarter

2015


Beginning balance:


$

7,736



$

8,266



$

8,279



$

8,280



$

8,992




Net (paydowns) / advances



(19)




(83)




(13)




(1)




(381)




Transfers to other real estate owned



(954)




-




-




-




-




Charge-offs



-




(447)




-




-




(331)








$

6,763



$

7,736



$

8,266



$

8,279



$

8,280



 


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)















1st Quarter

2016


4th Quarter

2015


3rd Quarter

2015


2nd Quarter

2015


1st Quarter

2015


Interest income:


















Interest and fees on loans


$

47,247


$

46,150


$

44,401


$

42,105


$

38,646



Taxable securities



1,269



1,058



1,041



1,104



1,128



Nontaxable securities



858



875



890



874



860



Federal funds sold



73



46



32



24



77



Other interest and dividends



514



322



168



102



72



   Total interest income



49,961



48,451



46,532



44,209



40,783


Interest expense:


















Deposits



4,361



4,294



3,818



3,512



3,270



Borrowed funds



1,421



996



852



486



476



   Total interest expense



5,782



5,290



4,670



3,998



3,746



   Net interest income



44,179



43,161



41,862



40,211



37,037


Provision for loan losses



2,059



3,308



3,072



4,062



2,405



   Net interest income after provision for loan losses



42,120



39,853



38,790



36,149



34,632


Non-interest income:


















Service charges on deposit accounts



1,307



1,326



1,279



1,276



1,207



Mortgage banking



668



620



873



735



454



Securities gains



-



-



-



-



29



Increase in cash surrender value life insurance



624



630



683



660



648



Other operating income



1,127



983



987



834



739



   Total non-interest income



3,726



3,559



3,822



3,505



3,077


Non-interest expense:


















Salaries and employee benefits



11,067



8,884



10,595



10,426



9,008



Equipment and occupancy expense



1,985



1,519



1,575



1,634



1,661



Professional services



738



706



668



665



568



FDIC and other regulatory assessments



750



733



681



626



620



Other real estate owned expense



449



324



400



289



214



Merger expense



-



-



-



-



2,096



Other operating expense



4,592



6,920



4,413



4,573



4,584



   Total non-interest expense



19,581



19,086



18,332



18,213



18,751



   Income before income tax



26,265



24,326



24,280



21,441



18,958


Provision for income tax



8,616



4,576



8,014



6,972



5,903



       Net income



17,649



19,750



16,266



14,469



13,055



Dividends on preferred stock



-



24



33



123



100



         Net income available to common stockholders


$

17,649


$

19,726


$

16,233


$

14,346


$

12,955


Basic earnings per common share


$

0.68


$

0.76


$

0.63


$

0.56


$

0.51


Diluted earnings per common share


$

0.66


$

0.74


$

0.61


$

0.54


$

0.49


 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS - UNAUDITED


ON A FULLY TAXABLE-EQUIVALENT BASIS


(Dollars in thousands)










1st Quarter 2016


4th Quarter 2015



3rd Quarter 2015


2nd Quarter 2015


1st Quarter 2015








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


$

4,230,057


4.48

%


$

4,113,044


4.44

%


$

3,915,778


4.48

%


$

3,731,699


4.51

%


$

3,492,363


4.47

%




Tax-exempt (2)



10,281


5.56




9,639


4.98




9,802


4.98




10,005


5.00




10,180


5.03






Total loans, net of unearned




































income



4,240,338


4.48




4,122,683


4.44




3,925,580


4.48




3,741,704


4.51




3,502,543


4.48




Mortgage loans held for sale



6,084


4.63




4,362


4.27




7,714


4.32




12,718


2.21




6,884


2.12




Debt securities:


































Taxable



221,722


2.29




193,982


2.16




189,941


2.17




193,848


2.29




198,104


2.31





Tax-exempt (2)



137,745


3.79




139,435


3.85




139,543


3.91




136,104


3.94




129,525


4.07






Total securities (3)



359,467


2.86




333,417


2.87




329,484


2.91




329,952


2.97




327,629


3.01




Federal funds sold



48,390


0.61




33,255


0.55




24,860


0.51




26,638


0.36




39,438


0.27




Restricted equity securities



4,962


3.81




4,954


4.24




4,954


4.16




4,953


3.16




4,354


3.63




Interest-bearing balances with banks



373,339


0.51




366,771


0.29




168,548


0.27




97,482


0.26




119,195


0.28




Total interest-earning assets



5,032,580


4.03

%



4,865,442


3.99

%



4,461,140


4.18

%



4,213,447


4.26

%



4,000,043


4.18

%


Non-interest-earning assets:

































Cash and due from banks



61,596






62,037






63,259






58,347






61,911






Net premises and equipment



21,023






19,609






18,961






16,323






13,847






Allowance for loan losses, accrued


































interest and other assets



126,491






124,241






127,778






129,233






117,612








Total assets


$

5,241,690





$

5,071,329





$

4,671,136





$

4,417,350





$

4,193,413









































Interest-bearing liabilities:

































Interest-bearing deposits:


































Checking


$

665,039


0.35

%


$

611,521


0.30

%


$

593,550


0.28

%


$

579,650


0.27

%


$

553,569


0.26

%




Savings



41,055


0.29




39,590


0.29




37,281


0.30




37,697


0.28




36,128


0.28





Money market



1,979,727


0.51




2,048,453


0.49




1,817,997


0.47




1,653,708


0.45




1,618,715


0.44





Time deposits



507,605


1.00




503,217


1.00




485,137


0.99




480,140


1.05




446,084


1.05




Total interest-bearing deposits



3,193,426


0.55




3,202,781


0.54




2,933,965


0.52




2,751,195


0.51




2,654,496


0.50




Federal funds purchased



441,309


0.64




295,530


0.37




246,168


0.31




275,888


0.29




270,549


0.28




Other borrowings



55,630


5.19




55,805


5.11




50,509


5.18




21,238


5.40




20,455


5.67




Total interest-bearing liabilities



3,690,365


0.63

%



3,554,116


0.59

%



3,230,642


0.57

%



3,048,321


0.53

%



2,945,500


0.52

%


Non-interest-bearing liabilities:

































Non-interest-bearing


































demand



1,077,613






1,062,795






988,756






908,020






813,340






Other liabilities



12,194






13,469






23,738






11,793






6,745






Stockholders' equity



457,218






436,928






424,113






444,302






422,847






Unrealized gains on securities and


































derivatives



4,300






4,021






3,911






4,914






4,981








Total liabilities and




































stockholders' equity


$

5,241,690





$

5,071,329





$

4,671,136





$

4,417,350





$

4,193,413





Net interest spread





3.40

%





3.40

%





3.61

%





3.73

%





3.67

%


Net interest margin





3.57

%





3.56

%





3.77

%





3.88

%





3.80

%






































(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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