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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 2016

Jul 18, 2016

BIRMINGHAM, Ala., July 18, 2016 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2016.

SECOND Quarter 2016 Highlights:

  • Net income of $38.8 million and diluted EPS of $1.46 for the six months ended June 30, 2016
  • Diluted EPS of $0.71 for second quarter of 2016, a 31% increase year over year
  • Core diluted EPS* for the six months ended June 30, 2016 increased 33% year over year as 2015 results were impacted by acquisition expenses
  • Loans and deposits increased 17% and 24%, respectively, year over year
  • Loans and deposits increased 18% and 26%, respectively, for the second quarter on an annualized basis
  • Early adoption of Accounting Standard Update 2016-09 results in upward revision of first quarter 2016 diluted EPS to $0.75 (further details are contained in this press release)

Tom Broughton, President and CEO, said, "Our strong loan pipeline points to improved economic conditions within our Southeastern U.S. footprint."  Bud Foshee, CFO, stated, "Strong loan and deposit growth coupled with excellent credit quality continue to drive growth and net income."

 

FINANCIAL SUMMARY (UNAUDITED)




















(in Thousands except share and per share amounts)














































Period Ending
June 30, 2016


Period Ending
March 31, 2016


% Change
From Period Ending
March 31, 2016
to Period Ending
June 30, 2016


Period Ending
June 30, 2015


% Change
From Period Ending
June 30, 2015
to Period Ending
June 30, 2016


QUARTERLY OPERATING RESULTS




















Net Income


$

18,876



$

19,956



(5)

%


$

14,469



30

%


Net Income Available to Common Stockholders


$

18,853



$

19,956



(6)

%


$

14,346



31

%


Diluted Earnings Per Share


$

0.71



$

0.75



(5)

%


$

0.54



31

%


Return on Average Assets



1.37

%



1.53

%






1.31

%





Return on Average Common Stockholders' Equity



15.79

%



17.39

%






14.06

%





Average Diluted Shares Outstanding



26,726,284




26,566,810







26,426,036




























YEAR-TO-DATE OPERATING RESULTS




















Net Income


$

38,832










$

27,524



41

%


Net Income Available to Common Stockholders


$

38,809










$

27,301



42

%


Diluted Earnings Per Share


$

1.46










$

1.04



40

%


Return on Average Assets



1.45

%










1.29

%





Return on Average Common Stockholders' Equity



16.57

%










13.81

%





Average Diluted Shares Outstanding



26,646,547











26,332,527




























Core Net Income*


$

38,832










$

29,291



33

%


Core Net Income Available to Common Stockholders*


$

38,809










$

29,068



34

%


Core Diluted Earnings Per Share*


$

1.46










$

1.10



33

%


Core Return on Average Assets*



1.45

%










1.37

%





Core Return on Average Common Stockholders' Equity*



16.57

%










14.70

%



























BALANCE SHEET




















Total Assets


$

5,646,055



$

5,378,599



5

%


$

4,492,539



26

%


Loans



4,539,338




4,340,900



5

%



3,863,734



17

%


Non-interest-bearing Demand Deposits



1,185,668




1,070,275



11

%



926,577



28

%


Total Deposits



4,664,795




4,339,747



7

%



3,729,132



25

%


Stockholders' Equity



489,097




470,940



4

%



454,487



8

%
























* 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 $18.9 million for the quarter ended June 30, 2016, compared to net income of $14.5 million and net income available to common stockholders of $14.3 million for the same quarter in 2015.  Basic and diluted earnings per common share were $0.72 and $0.71, respectively, for the second quarter of 2016, compared to $0.56 and $0.54, respectively, for the second quarter of 2015.

Return on average assets was 1.37% and return on average equity was 15.79% for the second quarter of 2016, compared to 1.31% and 14.06%, respectively, for the second quarter of 2015.

Net interest income was $45.9  million for the second quarter of 2016, compared to $44.2 million for the first quarter of 2016 and $40.2 million for the second quarter of 2015.  The net interest margin in the second quarter of 2016 was 3.51%, a six basis point decrease from the first quarter of 2016 and 37 basis point decrease from the second quarter of 2015.  The increase in net interest income on a linked quarter basis is attributable to a $182.1 million increase in average loans outstanding, a $64.9 million increase in non-interest-bearing deposits and a $18.8 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans decreased by one basis point to 4.47% on a linked quarter basis.

Average loans for the second quarter of 2016 were $4.42 billion, an increase of $182.1 million, or 4%, over average loans of $4.24 billion for the first quarter of 2016, and an increase of $680.7 million, or 18%, over average loans of $3.74 billion for the second quarter of 2015.

Average total deposits for the second quarter of 2016 were $4.48 billion, an increase of $208.4 million, or 5%, over average total deposits of $4.27 billion for the first quarter of 2016, and an increase of $820.2 million, or 22%, over average total deposits of $3.66 billion for the second quarter of 2015.

Non-performing assets to total assets were 0.17% for the second quarter of 2016, a decrease of three basis points compared to 0.20% for the first quarter of 2016 and a decrease of 21 basis points compared to 0.38% for the second quarter of 2015.  Net credit charge-offs to average loans were 0.18%, a 15 basis point increase compared to 0.03% for the first quarter of 2016 and a three basis point increase compared to 0.15% for the second quarter of 2015.  We recorded a $3.8 million provision for loan losses in the second quarter of 2016 compared to $2.1 million in the first quarter of 2016 and $4.1 million in the second quarter of 2015.  The allowance for loan loss as a percentage of total loans was unchanged at 1.04% for June 30, 2016 and March 31, 2016 as well as June 30, 2015.  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 $417,000 during the second quarter of 2016, or 12%, compared to the second quarter of 2015.  Mortgage banking revenue increased by $166,000 in the second quarter of 2016, or 23%, compared to the second quarter of 2015, resulting from improved operations, translating to increased net gains on sales.  Credit card income increased $125,000 in the second quarter of 2016, or 24%, compared to the second quarter of 2015, resulting from a 31% increase in the volume of spending on ServisFirst Bank cards and a 54% increase in spending on our agent banks' cards.

Non-interest expense for the second quarter of 2016 increased $1.4 million, or 8%, to $19.5 million from $18.1 million in the second quarter of 2015, and increased $214,000, or 1%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2016 increased $307,000, or 3%, to $10.7 million from $10.4 million in the second quarter of 2015, and decreased $334,000, or 3%, on a linked quarter basis.  Equipment and Occupancy expense increased $389,000, or 24%, to $2.0 million in the second quarter of 2016, from $1.6 million in the second quarter of 2015.  This increase in equipment and occupancy expense was attributable to new offices in our Charleston, South Carolina and Nashville, Tennessee regions, each of which were relocations from temporary facilities we previously occupied.  We also accelerated depreciation of leasehold improvements in our Birmingham, Alabama headquarters building to coincide with our anticipated move date to our new headquarters building, which we anticipate will be in the second half of 2017.  Professional services expense increased $334,000, or 50%, to $999,000 in the second quarter of 2016, from $665,000 in the second quarter of 2015, primarily the result of legal fees accrued for current pending litigation.  Other operating expense for the second quarter of 2016 increased $407,000, or 9%, to $4.9 million from $4.5 million in the second quarter of 2015.  This was primarily the result of higher data processing expenses related to increased online banking transaction volumes and an upgrade of our correspondent banking platform, 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. These increases were offset by lower costs incurred related to nonperforming loans.

Income tax expense increased $586,000, or 8%, to $7.6 million in the second quarter of 2016, compared to $7.0 million in the second quarter of 2015, and increased $992,000, or 8%, to $13.9 million in the six month period ended June 30, 2016, compared to $12.9 million in the six month period ended June 30, 2015.  In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09  using the modified retrospective method.  We recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $1.3 million in the second quarter of 2016 and retrospectively recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $2.3 million in the first quarter of 2016.  Previously under generally accepted accounting principles, such credits were reflected within additional paid-in capital.

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.  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, 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 as of and for the six month comparative periods ended June 30, 2016 and 2015 included in this press release.  Dollars are in thousands, except share and per share data.

 




As Of June 30, 2016


As Of and For the
Six Months Ended
June 30, 2015


Provision for income taxes - GAAP






$

12,875




Adjustments:











Adjustment for non-routine expense







830



Core provision for income taxes






$

13,705














Return on average assets - GAAP







1.29

%


Net income - GAAP






$

27,524




Adjustments:











Adjustment for non-routine expense







1,767



Core net income






$

29,291



Average assets






$

4,307,778



Core return on average assets







1.37

%













Return on average common stockholders' equity







13.81

%


Net income available to common stockholders - GAAP






$

27,301




Adjustments:











Adjustment for non-routine expense







1,767



Core net income available to common stockholders






$

29,068



Average common stockholders' equity






$

398,678



Core return on average common stockholders' equity







14.70

%













Earnings per share - diluted - GAAP






$

1.04



Weighted average shares outstanding, diluted







26,332,527



Core diluted earnings per share






$

1.10














Book value per share


$

18.63



$

16.05



Total common stockholders' equity - GAAP



489,097




414,529




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



15,154




18,060



Tangible common stockholders' equity


$

473,943



$

396,469



Tangible book value per share


$

18.05



$

15.35














Stockholders' equity to total assets



8.66

%



10.13

%


Total assets - GAAP


$

5,646,055



$

4,485,091




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



15,154




18,060



Total tangible assets



5,630,901




4,467,031



Tangible common equity to total tangible assets



8.42

%



8.88

%


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, 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 2016


1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


CONSOLIDATED STATEMENT OF INCOME






















Interest income


$

52,050



$

49,961



$

48,451



$

46,532



$

44,209



Interest expense



6,159




5,782




5,290




4,670




3,998



Net interest income



45,891




44,179




43,161




41,862




40,211



Provision for loan losses



3,800




2,059




3,308




3,072




4,062



Net interest income after provision for loan losses



42,091




42,120




39,853




38,790




36,149



Non-interest income



3,847




3,435




3,475




3,738




3,430



Non-interest expense



19,504




19,290




19,002




18,248




18,138



Income before income tax



26,434




26,265




24,326




24,280




21,441



Provision for income tax



7,558




6,309




4,576




8,014




6,972



Net income



18,876




19,956




19,750




16,266




14,469



Preferred stock dividends



23




-




24




33




123



Net income available to common stockholders


$

18,853



$

19,956



$

19,726



$

16,233



$

14,346



Earnings per share - basic


$

0.72



$

0.76



$

0.76



$

0.63



$

0.56



Earnings per share - diluted


$

0.71



$

0.75



$

0.74



$

0.61



$

0.54



Average diluted shares outstanding



26,726,284




26,566,810




26,595,239




26,506,334




26,426,036

























CONSOLIDATED BALANCE SHEET DATA






















Total assets


$

5,646,055



$

5,378,599



$

5,095,509



$

4,772,601



$

4,492,539



Loans



4,539,338




4,340,900




4,216,375




4,044,242




3,863,734



Debt securities



347,706




362,106




370,364




334,635




335,008



Non-interest-bearing demand deposits



1,185,668




1,070,275




1,053,467




1,029,354




926,577



Total deposits



4,664,795




4,339,747




4,223,888




4,044,634




3,729,132



Borrowings



55,450




55,543




55,748




55,728




21,016



Stockholders' equity


$

489,097



$

470,940



$

449,147



$

431,194



$

454,487

























Shares outstanding



26,251,948




26,182,698




25,972,698




25,903,698




25,826,198



Book value per share


$

18.63



$

17.99



$

17.29



$

16.65



$

16.05



Tangible book value per share (1)


$

18.05



$

17.40



$

16.70



$

15.96



$

15.35

























SELECTED FINANCIAL RATIOS






















Net interest margin



3.51

%



3.57

%



3.56

%



3.77

%



3.88

%


Return on average assets



1.37

%



1.53

%



1.55

%



1.38

%



1.31

%


Return on average common stockholders' equity



15.79

%



17.39

%



17.75

%



15.52

%



14.06

%


Efficiency ratio



39.21

%



40.51

%



40.75

%



40.02

%



41.56

%


Non-interest expense to average earning assets



1.50

%



1.56

%



1.56

%



1.63

%



1.73

%
























CAPITAL RATIOS (2)






















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



9.83

%



9.90

%



9.72

%



9.59

%



9.60

%


Tier 1 capital to risk-weighted assets



9.84

%



9.91

%



9.73

%



9.60

%



10.58

%


Total capital to risk-weighted assets



11.98

%



12.12

%



11.95

%



11.89

%



12.05

%


Tier 1 capital to average assets



8.52

%



8.65

%



8.55

%



8.83

%



9.88

%


Tangible common equity to total tangible assets (1)



8.42

%



8.50

%



8.54

%



8.70

%



8.86

%
























(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, 2016


June 30, 2015


% Change


ASSETS











Cash and due from banks


$

54,985


$

49,731


11

%


Interest-bearing balances due from depository institutions



417,703



69,104


504

%


Federal funds sold



116,038



17,622


558

%



Cash and cash equivalents



588,726



136,457


331

%


Available for sale debt securities, at fair value



321,044



305,985


5

%


Held to maturity debt securities (fair value of $27,717 and $29,348 at












June 30, 2016 and 2015, respectively)



26,662



29,023


(8)

%


Restricted equity securities



5,671



4,954


14

%


Mortgage loans held for sale



7,933



11,722


(32)

%


Loans



4,539,338



3,863,734


17

%


Less allowance for loan losses



(46,998)



(40,020)


17

%



Loans, net



4,492,340



3,823,714


17

%


Premises and equipment, net



23,221



15,563


49

%


Goodwill and other identifiable intangible assets



15,154



18,060


(16)

%


Other assets



165,304



147,061


12

%



Total assets


$

5,646,055


$

4,492,539


26

%


LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:












Non-interest-bearing


$

1,185,668


$

926,577


28

%



Interest-bearing



3,479,127



2,802,555


24

%




Total deposits



4,664,795



3,729,132


25

%


Federal funds purchased



423,430



273,095


55

%


Other borrowings



55,450



21,016


164

%


Other liabilities



13,283



14,809


(10)

%



Total liabilities



5,156,958



4,038,052


28

%


Stockholders' equity:












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













(liquidation preference $1,000), net of discount; no shares authorized,













or outstanding at June 30, 2016, and 40,000 authorized, issued and













outstanding at June 30, 2015



-



39,958


(100)

%



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













1,000,000 shares undesignated at June 30, 2016, and 960,000 shares













undesignated at June 30, 2015



-



-


-

%



Common stock, par value $0.001 per share; 100,000,000 shares authorized and













26,251,948 shares issued and outstanding at June 30, 2016 and 50,000,000













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



26



26


-

%



Additional paid-in capital



214,525



209,074


3

%



Retained earnings



268,765



201,303


34

%



Accumulated other comprehensive income



5,404



3,749


44

%



Noncontrolling interest



377



377


-

%




Total stockholders' equity



489,097



454,487


8

%



Total liabilities and stockholders' equity


$

5,646,055


$

4,492,539


26

%


 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)


















Three Months Ended June 30,


Six Months Ended June 30,






2016


2015


2016


2015


Interest income:















Interest and fees on loans


$

49,210


$

42,105


$

96,457


$

80,751



Taxable securities



1,238



1,104



2,507



2,232



Nontaxable securities



834



874



1,692



1,734



Federal funds sold



210



24



283



101



Other interest and dividends



558



102



1,072



174



   Total interest income



52,050



44,209



102,011



84,992


Interest expense:















Deposits



4,589



3,512



8,950



6,782



Borrowed funds



1,570



486



2,991



962



   Total interest expense



6,159



3,998



11,941



7,744



   Net interest income



45,891



40,211



90,070



77,248


Provision for loan losses



3,800



4,062



5,859



6,467



   Net interest income after provision for loan losses



42,091



36,149



84,211



70,781


Non-interest income:















Service charges on deposit accounts



1,306



1,276



2,613



2,483



Mortgage banking



901



735



1,569



1,189



Securities gains



(3)



-



(3)



29



Increase in cash surrender value life insurance



655



660



1,279



1,308



Other operating income



988



759



1,823



1,355



   Total non-interest income



3,847



3,430



7,281



6,364


Non-interest expense:















Salaries and employee benefits



10,733



10,426



21,800



19,434



Equipment and occupancy expense



2,023



1,634



4,008



3,295



Professional services



999



665



1,737



1,233



FDIC and other regulatory assessments



803



626



1,553



1,246



Other real estate owned expense



41



289



490



503



Merger expense



-



4



-



2,100



Other operating expense



4,905



4,494



9,205



8,935



   Total non-interest expense



19,504



18,138



38,793



36,746



   Income before income tax



26,434



21,441



52,699



40,399


Provision for income tax



7,558



6,972



13,867



12,875



         Net income



18,876



14,469



38,832



27,524



Dividends on preferred stock



23



123



23



223



         Net income available to common stockholders


$

18,853


$

14,346


$

38,809


$

27,301


Basic earnings per common share


$

0.72


$

0.56


$

1.48


$

1.07


Diluted earnings per common share


$

0.71


$

0.54


$

1.46


$

1.04


 

LOANS BY TYPE (UNAUDITED)
















(In thousands)




































2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015

Commercial, financial and agricultural


$

1,895,870


$

1,799,132


$

1,760,479


$

1,683,819


$

1,642,182

Real estate - construction



251,144



254,254



243,267



232,895



219,607

Real estate - mortgage:

















Owner-occupied commercial



1,117,514



1,055,852



1,014,669



978,721



930,719


1-4 family mortgage



494,733



458,032



444,134



417,012



392,245


Other mortgage



725,336



723,542



698,779



677,822



627,099

Subtotal: Real estate - mortgage



2,337,583



2,237,426



2,157,582



2,073,555



1,950,063

Consumer



54,741



50,088



55,047



53,973



51,882

Total loans


$

4,539,338


$

4,340,900


$

4,216,375


$

4,044,242


$

3,863,734

 

SUMMARY OF LOAN LOSS EXPERIENCE
(UNAUDITED)



















(Dollars in thousands)
























2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015


Allowance for loan losses:






















Beginning balance


$

45,145



$

43,419



$

42,574



$

40,020



$

37,356



Loans charged off:























Commercial financial and agricultural



1,412




50




2,186




388




1,151




Real estate - construction



355




381




161




31




93




Real estate - mortgage



191




-




463




-




208




Consumer



31




18




21




126




19





Total charge offs



1,989




449




2,831




545




1,471



Recoveries:























Commercial financial and agricultural



1




3




241




13




6




Real estate - construction



39




16




61




13




65




Real estate - mortgage



2




97




65




1




2




Consumer



-




-




1




-




-





Total recoveries



42




116




368




27




73




Net charge-offs



1,947




333




2,463




518




1,398




Provision for loan losses



3,800




2,059




3,308




3,072




4,062




Ending balance


$

46,998



$

45,145



$

43,419



$

42,574



$

40,020





























Allowance for loan losses to total loans



1.04

%



1.04

%



1.03

%



1.05

%



1.04

%



Allowance for loan losses to total average
























loans



1.06

%



1.06

%



1.05

%



1.08

%



1.07

%



Net charge-offs to total average loans



0.18

%



0.03

%



0.24

%



0.05

%



0.15

%



Provision for loan losses to total average
























loans



0.34

%



0.20

%



0.32

%



0.31

%



0.44

%



Nonperforming assets:
























Nonaccrual loans


$

4,730



$

6,133



$

7,767



$

9,850



$

8,194





Loans 90+ days past due and accruing



423




417




1




524




470





Other real estate owned and
























   repossessed assets



4,260




4,044




5,392




6,068




8,235




Total


$

9,413



$

10,594



$

13,160



$

16,442



$

16,899





























Nonperforming loans to total loans



0.11

%



0.15

%



0.18

%



0.26

%



0.22

%



Nonperforming assets to total assets



0.17

%



0.20

%



0.26

%



0.34

%



0.38

%



Nonperforming assets to earning assets



0.17

%



0.20

%



0.26

%



0.35

%



0.38

%



Reserve for loan losses to nonaccrual loans



993.62

%



736.10

%



559.02

%



432.22

%



488.41

%




























Restructured accruing loans


$

6,753



$

6,763



$

6,782



$

8,266



$

8,279





























Restructured accruing loans to total loans



0.15

%



0.16

%



0.16

%



0.20

%



0.21

%




























TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
















(In thousands)























2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


3rd Quarter 2015


2nd Quarter 2015



Beginning balance:


$

6,763



$

7,736



$

8,266



$

8,279



$

8,280





Net (paydowns) / advances



(10)




(19)




(83)




(13)




(1)





Transfers to other real estate owned



-




(954)




-




-




-





Charge-offs



-




-




(447)




-




-








$

6,753



$

6,763



$

7,736



$

8,266



$

8,279



 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)















2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


3rd Quarter
2015


2nd Quarter
2015


Interest income:


















Interest and fees on loans


$

49,210


$

47,247


$

46,150


$

44,401


$

42,105



Taxable securities



1,238



1,269



1,058



1,041



1,104



Nontaxable securities



834



858



875



890



874



Federal funds sold



210



73



46



32



24



Other interest and dividends



558



514



322



168



102



   Total interest income



52,050



49,961



48,451



46,532



44,209


Interest expense:


















Deposits



4,611



4,361



4,294



3,818



3,512



Borrowed funds



1,548



1,421



996



852



486



   Total interest expense



6,159



5,782



5,290



4,670



3,998



   Net interest income



45,891



44,179



43,161



41,862



40,211


Provision for loan losses



3,800



2,059



3,308



3,072



4,062



   Net interest income after provision for loan losses



42,091



42,120



39,853



38,790



36,149


Non-interest income:


















Service charges on deposit accounts



1,306



1,307



1,326



1,279



1,276



Mortgage banking



901



668



620



873



735



Securities gains



(3)



-



-



-



-



Increase in cash surrender value life insurance



655



624



630



683



660



Other operating income



988



836



899



903



759



   Total non-interest income



3,847



3,435



3,475



3,738



3,430


Non-interest expense:


















Salaries and employee benefits



10,733



11,067



8,884



10,595



10,426



Equipment and occupancy expense



2,023



1,985



1,519



1,575



1,634



Professional services



999



738



706



668



665



FDIC and other regulatory assessments



803



750



733



681



626



Other real estate owned expense



41



449



324



400



289



Other operating expense



4,905



4,301



6,836



4,329



4,498



   Total non-interest expense



19,504



19,290



19,002



18,248



18,138



   Income before income tax



26,434



26,265



24,326



24,280



21,441


Provision for income tax



7,558



6,309



4,576



8,014



6,972



       Net income



18,876



19,956



19,750



16,266



14,469



Dividends on preferred stock



23



-



24



33



123



         Net income available to common stockholders


$

18,853


$

19,956


$

19,726


$

16,233


$

14,346


Basic earnings per common share


$

0.72


$

0.76


$

0.76


$

0.63


$

0.56


Diluted earnings per common share


$

0.71


$

0.75


$

0.74


$

0.61


$

0.54


 

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)


ON A FULLY TAXABLE-EQUIVALENT BASIS


(Dollars in thousands)














































2nd Quarter 2016


1st Quarter 2016



4th Quarter 2015


3rd Quarter 2015


2nd 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


$

4,406,107


4.47

%


$

4,230,057


4.48

%


$

4,113,044


4.44

%


$

3,915,778


4.48

%


$

3,731,699


4.51

%




Tax-exempt (2)



16,315


4.51




10,281


5.56




9,639


4.98




9,802


4.98




10,005


5.00






Total loans, net of




































unearned income



4,422,422


4.47




4,240,338


4.48




4,122,683


4.44




3,925,580


4.48




3,741,704


4.51




Mortgage loans held for sale



7,323


3.62




6,084


4.63




4,362


4.27




7,714


4.32




12,718


2.21




Debt securities:


































Taxable



208,113


2.38




221,722


2.29




193,982


2.16




189,941


2.17




193,848


2.29





Tax-exempt (2)



135,954


3.73




137,763


3.79




139,435


3.85




139,543


3.91




136,104


3.94






Total securities (3)



344,067


2.91




359,485


2.86




333,417


2.87




329,484


2.91




329,952


2.97




Federal funds sold



144,206


0.59




48,390


0.60




33,255


0.55




24,860


0.51




26,638


0.36




Restricted equity securities



5,659


3.62




4,962


3.81




4,954


4.24




4,954


4.16




4,953


3.16




Interest-bearing balances with banks



393,782


0.52




373,339


0.51




366,771


0.29




168,548


0.27




97,482


0.26




Total interest-earning assets



5,317,459


3.97

%



5,032,598


4.03

%



4,865,442


3.99

%



4,461,140


4.18

%



4,213,447


4.26

%


Non-interest-earning assets:

































Cash and due from banks



65,318






61,578






62,037






63,259






58,347






Net premises and equipment



23,241






21,023






19,609






18,961






16,323






Allowance for loan losses, accrued


































interest and other assets



127,640






126,491






124,241






127,778






129,233








Total assets


$

5,533,658





$

5,241,690





$

5,071,329





$

4,671,136





$

4,417,350









































Interest-bearing liabilities:

































Interest-bearing deposits:

































Checking


$

691,776


0.36

%


$

665,039


0.35

%


$

611,521


0.30

%


$

593,550


0.28

%


$

579,650


0.27

%



Savings



41,546


0.30




41,055


0.29




39,590


0.29




37,281


0.30




37,697


0.28




Money market



2,105,420


0.52




1,979,727


0.51




2,048,453


0.49




1,817,997


0.47




1,653,708


0.45




Time deposits



498,151


1.01




507,605


1.00




503,217


1.00




485,137


0.99




480,140


1.05





Total interest-bearing deposits



3,336,893


0.56




3,193,426


0.55




3,202,781


0.54




2,933,965


0.52




2,751,195


0.51




Federal funds purchased



505,076


0.64




441,309


0.64




295,530


0.37




246,168


0.31




275,888


0.29




Other borrowings



55,521


5.20




55,630


5.19




55,805


5.11




50,509


5.18




21,238


5.40




Total interest-bearing liabilities



3,897,490


0.64

%



3,690,365


0.63

%



3,554,116


0.59

%



3,230,642


0.57

%



3,048,321


0.53

%


Non-interest-bearing liabilities:

































Non-interest-bearing


































demand



1,142,541






1,077,613






1,062,795






988,756






908,020






Other liabilities



13,301






12,194






13,469






23,738






11,793






Stockholders' equity



475,917






457,218






436,928






424,113






444,302






Unrealized gains on securities and


































derivatives



4,409






4,300






4,021






3,911






4,914








Total liabilities and




































stockholders' equity


$

5,533,658





$

5,241,690





$

5,071,329





$

4,671,136





$

4,417,350





Net interest spread





3.33

%





3.40

%





3.40

%





3.61

%





3.73

%


Net interest margin





3.51

%





3.57

%





3.56

%





3.77

%





3.88

%






































(1)

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


 

 

SOURCE ServisFirst Bancshares, Inc.


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