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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 and Year Ended 2016

Jan 30, 2017

BIRMINGHAM, Ala., Jan. 30, 2017 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2016.

FOURTH QUARTER AND YEAR ENDED 2016 HIGHLIGHTS:

  • 2-for-1 stock split in December 2016
  • Diluted EPS increased 27% from $1.20 to $1.52 year over year
  • Diluted EPS increased 3% from $0.39 to $0.40 on a linked quarter basis
  • Loans and deposits increased 24% and 27%, respectively, for the fourth quarter on an annualized basis
  • Loans and deposits increased 16% and 28%, respectively, year over year

Tom Broughton, President and CEO, said, "We are pleased to report a year of record growth in net income, loans and deposits while maintaining pristine credit quality."  Bud Foshee, CFO, stated, "Our new regions of Nashville, Tennessee, Atlanta, Georgia, Charleston, South Carolina and Tampa Bay, Florida all made solid progress in 2016."

FINANCIAL SUMMARY (UNAUDITED)




















(in Thousands except share and per share amounts)










































On December 20, 2016, the Company effected a two-for-one split of its common stock in the form of a stock dividend.  All share and per share information in this release has been adjusted to give effect to this stock split.




























Period Ending
December 31,
2016


Period Ending
September 30,
2016


% Change
From Period
Ending
September
30, 2016 to
Period Ending
December 31,
2016


Period Ending
December 31,
2015


% Change
From Period
Ending
December 31,
2015 to Period
Ending
December 31,
2016


QUARTERLY OPERATING RESULTS




















Net Income


$

21,738



$

20,909



4

%


$

19,750



10

%


Net Income Available to Common Stockholders


$

21,714



$

20,909



4

%


$

19,726



10

%


Diluted Earnings Per Share


$

0.40



$

0.39



3

%


$

0.37



8

%


Return on Average Assets



1.39

%



1.39

%






1.55

%





Return on Average Common Stockholders' Equity



16.71

%



16.66

%






17.75

%





Average Diluted Shares Outstanding



53,961,160




53,879,328







53,190,478




























YEAR-TO-DATE OPERATING RESULTS




















Net Income


$

81,479










$

63,540



28

%


Net Income Available to Common Stockholders


$

81,432










$

63,260



29

%


Diluted Earnings Per Share


$

1.52










$

1.20



27

%


Return on Average Assets



1.42

%










1.38

%





Return on Average Common Stockholders' Equity



16.63

%










15.30

%





Average Diluted Shares Outstanding



53,608,372











52,885,108




























Core Net Income*


$

81,479










$

65,307



25

%


Core Net Income Available to Common Stockholders*


$

81,432










$

65,027



25

%


Core Diluted Earnings Per Share*


$

1.52










$

1.23



24

%


Core Return on Average Assets*



1.42

%










1.42

%





Core Return on Average Common Stockholders' Equity*



16.63

%










15.73

%



























BALANCE SHEET




















Total Assets


$

6,370,448



$

6,002,621



6

%


$

5,095,509



25

%


Loans



4,911,770




4,631,821



6

%



4,216,375



16

%


Non-interest-bearing Demand Deposits



1,281,605




1,269,726



1

%



1,053,467



22

%


Total Deposits



5,420,311




5,081,128



7

%



4,223,888



28

%


Stockholders' Equity



522,889




507,866



3

%



449,147



16

%
























* 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 $21.7 million for the quarter ended December 31, 2016, compared to net income of $19.8 million and net income available to common stockholders of $19.7 million for the same quarter in 2015.  Basic and diluted earnings per common share were $0.41 and $0.40 respectively, for the fourth quarter of 2016, compared to $0.38 and $0.37, respectively, for the fourth quarter of 2015.

Return on average assets was 1.39% and return on average equity was 16.71% for the fourth quarter of 2016, compared to 1.55% and 17.75%, respectively, for the fourth quarter of 2015.

Net interest income was $49.1 million for the fourth quarter of 2016, compared to $47.9 million for the third quarter of 2016 and $43.2 million for the fourth quarter of 2015.  The net interest margin in the fourth quarter of 2016 was 3.30%, a five basis point decrease from the third quarter of 2016 and 26 basis point decrease from the fourth quarter of 2015.  The increase in net interest income on a linked quarter basis is attributable to a $126.1 million increase in average loans outstanding, a $39.3 million increase in average non-interest-bearing deposits and a $17.6 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans decreased by two basis points to 4.45% on a linked quarter basis.

Average loans for the fourth quarter of 2016 were $4.70 billion, an increase of $126.1 million, or 3%, over average loans of $4.58 billion for the third quarter of 2016, and an increase of $580.2 million, or 14%, over average loans of $4.12 billion for the fourth quarter of 2015.

Average total deposits for the fourth quarter of 2016 were $5.27 billion, an increase of $291.7 million, or 6%, over average total deposits of $4.98 billion for the third quarter of 2016, and an increase of $1.01 billion, or 24%, over average total deposits of $4.27 billion for the fourth quarter of 2015.

Non-performing assets to total assets were 0.34% for the fourth quarter of 2016, an increase of 18 basis points compared to 0.16% for the third quarter of 2016 and an increase of eight basis points compared to 0.26% for the fourth quarter of 2015.  One loan with a balance of approximately $6.2 million, which was greater than 90 days past due and accruing as of December 31, 2016, has paid current as of the date of this earnings release.  This loan represented 10 basis points of the non-performing assets ratio as of December 31, 2016.  Net credit charge-offs to average loans were 0.09%, a four basis point decrease compared to 0.13% for the third quarter of 2016 and a 15 basis point decrease compared to 0.24% for the fourth quarter of 2015.  We recorded a $4.1 million provision for loan losses in the fourth quarter of 2016 compared to $3.5 million in the third quarter of 2016 and $3.3 million in the fourth quarter of 2015.  The allowance for loan loss as a percentage of total loans was 1.06% for December 31, 2016 compared to 1.05% at September 30, 2016 and 1.03% at December 31, 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 $2.5 million during the fourth quarter of 2016, or 71%, compared to the fourth quarter of 2015.  Mortgage banking revenue increased by $424,000 in the fourth quarter of 2016, or 68%, compared to the fourth quarter of 2015, resulting from a 38% increase in the number of loans originated and improved operations, translating to increased net gains on sales.  Credit card income increased $411,000 in the fourth quarter of 2016, or 64%, compared to the fourth quarter of 2015, resulting from an 89% increase in the volume of spending on ServisFirst Bank cards and a 29% increase in spending on our agent banks' cards.  We recognized a $1.3 million gain on the sale of fixed assets during the fourth quarter of 2016.

Non-interest expense for the fourth quarter of 2016 increased $3.0 million, or 16%, to $22.0 million from $19.0 million in the fourth quarter of 2015, and increased $1.8 million, or 9%, on a linked quarter basis.  Salary and benefit expense for the fourth quarter of 2016 increased $2.3 million, or 26%, to $11.2 million from $8.9 million in the fourth quarter of 2015, and increased $200,000, or 2%, on a linked quarter basis.  We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015.  Excluding this reversal, salary and benefit expenses increased $300,000, or 3%, from the fourth quarter of 2015 to the fourth quarter of 2016.  Equipment and Occupancy expense increased $358,000, or 24% to $1.9 million in the fourth quarter of 2016, from $1.5 million in the fourth 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 $352,000, or 50%, to $1.1 million in the fourth quarter of 2016, from $706,000 in the fourth quarter of 2015, primarily the result of legal fees accrued for pending litigation.  FDIC assessments increased $339,000, or 46%, to $1.1 million in the fourth quarter of 2016, from $733,000 in the fourth quarter of 2015.  This increase was the result of higher assessment rates under the new assessment calculation rule adopted by the FDIC effective at the beginning of the second quarter 2016, and growth in assets.

Income tax expense increased $2.7 million, or 59%, to $7.3 million in the fourth quarter of 2016, compared to $4.6 million in the fourth quarter of 2015, and increased $3.8 million, or 15%, to $29.3 million in the year ended December 31, 2016, compared to $25.5 million in the year ended December 31, 2015.  In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09 using the modified retrospective method.  We have recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $54,000 in the fourth quarter of 2016 and $4.8 million for the year ended December 31, 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 and 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 annual comparative periods ended December 31, 2016 and 2015 included in this press release.  Dollars are in thousands, except share and per share data.

 





As of December 31, 2016


As Of and For the
Year Ended
December 31, 2015


Return on average assets - GAAP







1.38

%


Net income - GAAP






$

63,540




Adjustments:











Merger expenses - Metro Bancshares, Inc.







2,096




Initial reserve for unfunded loan commitments







500





Tax (benefit) of adjustments







(829)



Core net income - non-GAAP*






$

65,307



Average assets






$

4,591,860



Core return on average assets - non-GAAP*







1.42

%














Return on average common stockholders' equity - GAAP







15.30

%


Net income available to common stockholders - GAAP






$

63,260




Adjustments:











Merger expenses - Metro Bancshares, Inc.







2,096




Initial reserve for unfunded loan commitments







500





Tax (benefit) of adjustments







(829)



Core net income available to common stockholders - non-GAAP*






$

65,027



Average common stockholders' equity






$

413,445



Core return on average common stockholders' equity - non-GAAP*







15.73

%














Earnings per share - diluted - GAAP






$

1.20



Weighted average shares outstanding, diluted - GAAP







52,885,108



Core diluted earnings per share - non-GAAP*






$

1.23















Book value per share - GAAP


$

9.93



$

8.65



Total common stockholders' equity - GAAP



522,889




449,147




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



14,996




15,330



Tangible common stockholders' equity - non-GAAP


$

507,893



$

433,817



Tangible book value per share - non-GAAP


$

9.65



$

8.35















Stockholders' equity to total assets - GAAP



8.21

%



8.81

%


Total assets - GAAP


$

6,370,448



$

5,095,509




Adjustments:











Adjusted for goodwill and other identifiable intangible assets



14,996




15,330



Total tangible assets - non-GAAP


$

6,355,452



$

5,080,179



Tangible common equity to total tangible assets - non-GAAP



7.99

%



8.54

%


*  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 on Non-GAAP Financial Measures" above.

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)
























4th Quarter 2016


3rd Quarter 2016


2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


CONSOLIDATED STATEMENT OF INCOME






















Interest income


$

56,200



$

54,691



$

52,050



$

49,961



$

48,451



Interest expense



7,091




6,773




6,159




5,782




5,290



Net interest income



49,109




47,918




45,891




44,179




43,161



Provision for loan losses



4,075




3,464




3,800




2,059




3,308



Net interest income after provision for loan losses



45,034




44,454




42,091




42,120




39,853



Non-interest income



6,039




4,791




3,847




3,435




3,475



Non-interest expense



22,037




20,162




19,504




19,290




19,002



Income before income tax



29,036




29,083




26,434




26,265




24,326



Provision for income tax



7,298




8,174




7,558




6,309




4,576



Net income



21,738




20,909




18,876




19,956




19,750



Preferred stock dividends



24




-




23




-




24



Net income available to common stockholders


$

21,714



$

20,909



$

18,853



$

19,956



$

19,726



Earnings per share - basic (1)


$

0.41



$

0.40



$

0.36



$

0.38



$

0.38



Earnings per share - diluted (1)


$

0.40



$

0.39



$

0.36



$

0.38



$

0.37



Average diluted shares outstanding



53,961,160




53,879,328




53,452,568




53,133,620




53,190,478

























CONSOLIDATED BALANCE SHEET DATA






















Total assets


$

6,370,448



$

6,002,621



$

5,646,055



$

5,378,599



$

5,095,509



Loans



4,949,282




4,657,284




4,539,338




4,340,900




4,216,375



Debt securities



447,427




377,270




347,706




362,106




370,364



Non-interest-bearing demand deposits



1,281,605




1,269,726




1,185,668




1,070,275




1,053,467



Total deposits



5,420,311




5,081,128




4,664,795




4,339,747




4,223,888



Borrowings



55,262




55,356




55,450




55,543




55,637



Stockholders' equity


$

522,889



$

507,866



$

489,097



$

470,940



$

449,147

























Shares outstanding



52,636,896




52,610,896




52,503,896




52,365,396




51,945,396



Book value per share


$

9.93



$

9.65



$

9.32



$

8.99



$

8.65



Tangible book value per share (2)


$

9.65



$

9.37



$

9.03



$

8.70



$

8.35

























SELECTED FINANCIAL RATIOS






















Net interest margin



3.30

%



3.35

%



3.51

%



3.57

%



3.56

%


Return on average assets



1.39

%



1.39

%



1.37

%



1.53

%



1.55

%


Return on average common stockholders' equity



16.71

%



16.66

%



15.79

%



17.39

%



17.75

%


Efficiency ratio



39.96

%



38.25

%



39.21

%



40.51

%



40.75

%


Non-interest expense to average earning assets



1.46

%



1.39

%



1.50

%



1.56

%



1.56

%
























CAPITAL RATIOS (3)






















Common equity tier 1 capital to risk-weighted assets



9.78

%



9.91

%



9.83

%



9.90

%



9.72

%


Tier 1 capital to risk-weighted assets



9.78

%



9.92

%



9.84

%



9.91

%



9.73

%


Total capital to risk-weighted assets



11.84

%



12.03

%



11.98

%



12.12

%



11.95

%


Tier 1 capital to average assets



8.22

%



8.20

%



8.52

%



8.65

%



8.55

%


Tangible common equity to total tangible assets (2)



7.99

%



8.23

%



8.42

%



8.50

%



8.54

%
























(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.



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


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


 

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)











(Dollars in thousands)















December 31, 2016


December 31, 2015


% Change


ASSETS











Cash and due from banks


$

56,855


$

46,614


22

%


Interest-bearing balances due from depository institutions



566,707



270,836


109

%


Federal funds sold



160,435



34,785


361

%



Cash and cash equivalents



783,997



352,235


123

%


Available for sale debt securities, at fair value



422,375



342,938


23

%


Held to maturity debt securities (fair value of $63,302 and $27,910 at












December 31, 2016 and 2015, respectively)



62,564



27,426


128

%


Restricted equity securities



1,024



4,954


(79)

%


Mortgage loans held for sale



4,675



8,249


(43)

%


Loans



4,911,770



4,216,375


16

%


Less allowance for loan losses



(51,893)



(43,419)


20

%



Loans, net



4,859,877



4,172,956


16

%


Premises and equipment, net



40,314



19,434


107

%


Goodwill and other identifiable intangible assets



14,996



15,330


(2)

%


Other assets



180,626



151,987


19

%



Total assets


$

6,370,448


$

5,095,509


25

%


LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:












Non-interest-bearing


$

1,281,605


$

1,053,467


22

%



Interest-bearing



4,138,706



3,170,421


31

%




Total deposits



5,420,311



4,223,888


28

%


Federal funds purchased



355,944



352,360


1

%


Other borrowings



55,262



55,637


(1)

%


Other liabilities



16,042



14,477


11

%



Total liabilities



5,847,559



4,646,362


26

%


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 December 31, 2016, and 40,000 shares authorized, no shares issued and outstanding













at December 31, 2015



-



-


-

%



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













at December 31, 2016, and 1,000,000 authorized and 960,000 shares undesignated at













December 31, 2015



-



-


-

%



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













52,636,896 shares issued and outstanding at December 31, 2016, and













51,945,396 shares issued and outstanding at December 31, 2015



53



26


104

%



Additional paid-in capital



215,932



211,546


2

%



Retained earnings



307,151



234,150


31

%



Accumulated other comprehensive (loss) income



(624)



3,048


(120)

%



Noncontrolling interest



377



377


-

%




Total stockholders' equity



522,889



449,147


16

%



Total liabilities and stockholders' equity


$

6,370,448


$

5,095,509


25

%


 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)


















Three Months Ended December 31,


Year Ended December 31,






2016


2015


2016


2015


Interest income:
















Interest and fees on loans


$

52,533


$

46,150


$

200,463


$

171,302



Taxable securities



1,604



1,058



5,343



4,331



Nontaxable securities



785



875



3,300



3,499



Federal funds sold



377



46



1,007



127



Other interest and dividends



901



322



2,789



716



   Total interest income



56,200



48,451



212,902



179,975


Interest expense:















Deposits



5,817



4,294



20,169



14,894



Borrowed funds



1,274



996



5,636



2,810



   Total interest expense



7,091



5,290



25,805



17,704



   Net interest income



49,109



43,161



187,097



162,271


Provision for loan losses



4,075



3,308



13,398



12,847



   Net interest income after provision for loan losses



45,034



39,853



173,699



149,424


Non-interest income:















Service charges on deposit accounts



1,375



1,326



5,355



5,088



Mortgage banking



1,044



620



3,725



2,682



Securities gains



-



-



(3)



29



Increase in cash surrender value life insurance



745



630



2,794



2,621



Other operating income



2,875



899



6,241



3,157



   Total non-interest income



6,039



3,475



18,112



13,577


Non-interest expense:















Salaries and employee benefits



11,197



8,884



43,955



38,913



Equipment and occupancy expense



1,877



1,519



7,985



6,389



Professional services



1,058



706



3,977



2,607



FDIC and other regulatory assessments



1,072



733



3,400



2,660



Other real estate owned expense



91



324



759



1,227



Merger expense



-



-



-



2,100



Other operating expense



6,742



6,836



20,917



20,100



   Total non-interest expense



22,037



19,002



80,993



73,996



   Income before income tax



29,036



24,326



110,818



89,005


Provision for income tax



7,298



4,576



29,339



25,465



         Net income



21,738



19,750



81,479



63,540



Dividends on preferred stock



24



24



47



280



         Net income available to common stockholders


$

21,714


$

19,726


$

81,432


$

63,260


Basic earnings per common share (1)


$

0.41


$

0.38


$

1.55


$

1.23


Diluted earnings per common share (1)


$

0.40


$

0.37


$

1.52


$

1.20


















(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.


 

LOANS BY TYPE (UNAUDITED)
















(In thousands)




































4th Quarter 2016


3rd Quarter 2016


2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015

Commercial, financial and agricultural


$

1,982,267


$

1,885,315


$

1,892,870


$

1,799,132


$

1,760,479

Real estate - construction



335,085



292,721



251,144



254,254



243,267

Real estate - mortgage:

















Owner-occupied commercial



1,171,719



1,138,308



1,117,514



1,055,852



1,014,669


1-4 family mortgage



536,805



520,394



494,733



458,032



444,134


Other mortgage



830,683



740,127



725,336



723,542



698,779

Subtotal: Real estate - mortgage



2,539,207



2,398,829



2,337,583



2,237,426



2,157,582

Consumer



55,211



54,957



54,741



50,088



55,047

Total loans


$

4,911,770


$

4,631,822


$

4,536,338


$

4,340,900


$

4,216,375

 

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)



















(Dollars in thousands)
























4th Quarter 2016


3rd Quarter 2016


2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015


Allowance for loan losses:






















Beginning balance


$

48,933



$

46,998



$

45,145



$

43,419



$

42,574



Loans charged off:























Commercial financial and agricultural



1,059




1,270




1,412




50




2,186




Real estate - construction



-




79




355




381




161




Real estate - mortgage



45




144




191




-




463




Consumer



82




81




31




18




21





Total charge offs



1,186




1,574




1,989




449




2,831



Recoveries:























Commercial financial and agricultural



10




35




1




3




241




Real estate - construction



12




9




39




16




61




Real estate - mortgage



46




1




2




97




65




Consumer



3




-




-




-




1





Total recoveries



71




45




42




116




368




Net charge-offs



1,115




1,529




1,947




333




2,463




Provision for loan losses



4,075




3,464




3,800




2,059




3,308




Ending balance


$

51,893



$

48,933



$

46,998



$

45,145



$

43,419





























Allowance for loan losses to total loans



1.06

%



1.05

%



1.04

%



1.04

%



1.03

%



Allowance for loan losses to total average
























loans



1.10

%



1.07

%



1.06

%



1.06

%



1.05

%



Net charge-offs to total average loans



0.09

%



0.13

%



0.18

%



0.03

%



0.24

%



Provision for loan losses to total average
























loans



0.34

%



0.30

%



0.34

%



0.20

%



0.32

%



Nonperforming assets:
























Nonaccrual loans


$

10,624



$

6,647



$

4,730



$

6,133



$

7,767





Loans 90+ days past due and accruing



6,263




43




423




417




1





Other real estate owned and
























   repossessed assets



4,988




3,035




4,260




4,044




5,392




Total


$

21,875



$

9,725



$

9,413



$

10,594



$

13,160





























Nonperforming loans to total loans



0.34

%



0.14

%



0.11

%



0.15

%



0.18

%



Nonperforming assets to total assets



0.34

%



0.16

%



0.17

%



0.20

%



0.26

%



Nonperforming assets to earning assets



0.35

%



0.16

%



0.17

%



0.20

%



0.26

%



Reserve for loan losses to nonaccrual loans



488.45

%



736.17

%



993.62

%



736.10

%



559.02

%




























Restructured accruing loans


$

558



$

6,738



$

6,753



$

6,763



$

6,782





























Restructured accruing loans to total loans



0.01

%



0.14

%



0.15

%



0.16

%



0.16

%




























TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
















(In thousands)























4th Quarter 2016


3rd Quarter 2016


2nd Quarter 2016


1st Quarter 2016


4th Quarter 2015



Beginning balance:


$

6,738



$

6,753



$

6,763



$

7,736



$

8,266





Net (paydowns) / advances



554




(15)




(10)




(19)




(83)





Transfers to other real estate owned



-




-




-




(954)




-





Charge-offs



-




-




-




-




(447)








$

7,292



$

6,738



$

6,753



$

6,763



$

7,736



 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)











(In thousands except per share data)















4th Quarter
2016


3rd Quarter
2016


2nd Quarter
2016


1st Quarter
2016


4th Quarter
2015


Interest income:


















Interest and fees on loans


$

52,533


$

51,598


$

49,210


$

47,247


$

46,150



Taxable securities



1,604



1,107



1,238



1,269



1,058



Nontaxable securities



785



823



834



858



875



Federal funds sold



377



347



210



73



46



Other interest and dividends



901



816



558



514



322



   Total interest income



56,200



54,691



52,050



49,961



48,451


Interest expense:


















Deposits



5,817



5,358



4,611



4,361



4,294



Borrowed funds



1,274



1,415



1,548



1,421



996



   Total interest expense



7,091



6,773



6,159



5,782



5,290



   Net interest income



49,109



47,918



45,891



44,179



43,161


Provision for loan losses



4,075



3,464



3,800



2,059



3,308



   Net interest income after provision for loan losses



45,034



44,454



42,091



42,120



39,853


Non-interest income:


















Service charges on deposit accounts



1,375



1,367



1,306



1,307



1,326



Mortgage banking



1,044



1,112



901



668



620



Securities gains



-



-



(3)



-



-



Increase in cash surrender value life insurance



745



770



655



624



630



Other operating income



2,875



1,542



988



836



899



   Total non-interest income



6,039



4,791



3,847



3,435



3,475


Non-interest expense:


















Salaries and employee benefits



11,197



10,958



10,733



11,067



8,884



Equipment and occupancy expense



1,877



2,100



2,023



1,985



1,519



Professional services



1,058



1,182



999



738



706



FDIC and other regulatory assessments



1,072



775



803



750



733



Other real estate owned expense



91



178



41



449



324



Other operating expense



6,742



4,969



4,905



4,301



6,836



   Total non-interest expense



22,037



20,162



19,504



19,290



19,002



   Income before income tax



29,036



29,083



26,434



26,265



24,326


Provision for income tax



7,298



8,174



7,558



6,309



4,576



       Net income



21,738



20,909



18,876



19,956



19,750



Dividends on preferred stock



24



-



23



-



24



         Net income available to common stockholders


$

21,714


$

20,909


$

18,853


$

19,956


$

19,726


Basic earnings per common share (1)


$

0.41


$

0.40


$

0.36


$

0.38


$

0.38


Diluted earnings per common share (1)


$

0.40


$

0.39


$

0.36


$

0.38


$

0.37





















(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.


 

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)


ON A FULLY TAXABLE-EQUIVALENT BASIS


(Dollars in thousands)










4th Quarter 2016


3rd Quarter 2016


2nd Quarter 2016


1st Quarter 2016


4th 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


$

4,676,565


4.45

%


$

4,554,900


4.47

%


$

4,406,107


4.47

%


$

4,230,057


4.48

%


$

4,113,044


4.44

%




Tax-exempt (2)



26,344


4.74




21,939


4.37




16,315


4.54




10,281


5.59




9,639


4.94






Total loans, net of




































unearned income



4,702,909


4.45




4,576,839


4.47




4,422,422


4.47




4,240,338


4.48




4,122,683


4.44




Mortgage loans held for sale



6,271


3.36




6,724


3.79




7,323


3.62




6,084


4.63




4,362


4.27




Debt securities:


































Taxable



295,608


2.17




224,825


2.19




208,113


2.38




221,722


2.29




193,982


2.18





Tax-exempt (2)



134,748


3.54




135,272


3.73




135,954


3.73




137,763


3.79




139,435


3.88






Total securities (3)



430,356


2.60




360,097


2.77




344,067


2.91




359,485


2.86




333,417


2.89




Federal funds sold



242,211


0.62




217,158


0.64




144,206


0.59




48,390


0.61




33,255


0.55




Restricted equity securities



3,042


8.24




5,658


4.01




5,659


3.62




4,962


3.81




4,954


4.24




Interest-bearing balances with banks



601,143


0.55




590,675


0.51




393,782


0.52




373,339


0.51




366,771


0.29




Total interest-earning assets



5,985,932


3.77

%



5,757,151


3.81

%



5,317,459


3.97

%



5,032,598


4.03

%



4,865,442


3.99

%


Non-interest-earning assets:

































Cash and due from banks



55,593






58,809






65,318






61,578






62,037






Net premises and equipment



30,421






25,000






23,241






21,023






19,609






Allowance for loan losses, accrued


































interest and other assets



140,721






145,804






127,640






126,491






124,241








Total assets


$

6,212,667





$

5,986,764





$

5,533,658





$

5,241,690





$

5,071,329









































Interest-bearing liabilities:

































Interest-bearing deposits:

































Checking


$

735,115


0.37

%


$

696,100


0.37

%


$

691,776


0.36

%


$

665,039


0.35

%


$

611,521


0.30

%



Savings



51,845


0.32




43,569


0.30




41,546


0.30




41,055


0.29




39,590


0.29




Money market



2,669,513


0.56




2,471,829


0.55




2,105,420


0.52




1,979,727


0.51




2,048,453


0.49




Time deposits



527,100


1.00




519,653


0.99




498,151


1.01




507,605


1.00




503,217


1.00





Total interest-bearing deposits



3,983,573


0.58




3,731,151


0.57




3,336,893


0.56




3,193,426


0.55




3,202,781


0.53




Federal funds purchased



353,029


0.63




436,415


0.64




505,076


0.64




441,309


0.64




295,530


0.37




Other borrowings



55,315


5.16




55,410


5.15




55,521


5.20




55,630


5.19




55,805


5.11




Total interest-bearing liabilities



4,391,917


0.64

%



4,222,976


0.64

%



3,897,490


0.64

%



3,690,365


0.63

%



3,554,116


0.59

%


Non-interest-bearing liabilities:

































Non-interest-bearing


































demand deposits



1,289,448






1,250,139






1,142,541






1,077,613






1,062,795






Other liabilities



14,399






14,376






13,301






12,194






13,469






Stockholders' equity



514,245






494,248






475,917






457,218






436,928






Unrealized gains on securities and


































derivatives



2,658






5,025






4,409






4,300






4,021








Total liabilities and




































stockholders' equity


$

6,212,667





$

5,986,764





$

5,533,658





$

5,241,690





$

5,071,329





Net interest spread





3.13

%





3.18

%





3.34

%





3.40

%





3.40

%


Net interest margin





3.30

%





3.35

%





3.51

%





3.57

%





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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