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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 2017

Apr 17, 2017

BIRMINGHAM, Ala., April 17, 2017 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter ended March 31, 2017.

FIRST QUARTER HIGHLIGHTS:

  • Loans increased 20% for the first quarter on an annualized basis
  • Loans and deposits increased 19% and 24%, respectively, year over year
  • Diluted EPS increased 11% from $0.38 to $0.42 year over year
  • Quarterly dividend increased 25% as previously announced
  • Tampa Bay Main office opened in March 2017, replacing the Pascoe County loan production office

Tom Broughton, President and CEO, said, “We are pleased with our loan growth in the first quarter which is typically the slowest growth quarter of the year.  Business activity around our Southeastern footprint has greatly improved in 2017 to date.”  Bud Foshee, CFO, stated, “Our efficiency ratio has improved from 40.5% to 37.6% year over year.”

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 for prior periods in this release has been adjusted to give effect to this stock split.
 
                                           
        Period Ending 
March 31, 2017
  Period Ending 
December 31, 2016
  % Change 
From Period 
Ending 
December 31, 
2016 to 
Period Ending 
March 31, 
2017
  Period Ending 
March 31, 2016
  % Change 
From Period 
Ending March 
31, 2016 to 
Period Ending 
March 31, 
2017
 
QUARTERLY OPERATING RESULTS                                      
Net Income   $ 22,519     $ 21,738     4   %   $ 19,956     13 %  
Net Income Available to Common Stockholders   $ 22,519     $ 21,714     4   %   $ 19,956     13 %  
Diluted Earnings Per Share   $ 0.42     $ 0.40     5   %   $ 0.38     11 %  
Return on Average Assets     1.45 %     1.39 %           1.53 %        
Return on Average Common Stockholders' Equity     17.09 %     16.71 %           17.39 %        
Average Diluted Shares Outstanding     54,133,722       53,961,160             53,133,620          
                                           
                                           
BALANCE SHEET                                      
Total Assets   $ 6,336,165     $ 6,370,448     (1 ) %   $ 5,378,599     18 %  
Loans     5,151,984       4,911,770     5   %     4,340,900     19 %  
Non-interest-bearing Demand Deposits     1,292,440       1,281,605     1   %     1,070,275     21 %  
Total Deposits     5,361,532       5,420,311     (1 ) %     4,339,747     24 %  
Stockholders' Equity     545,148       522,889     4   %     470,940     16 %  

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $22.5 million for the quarter ended March 31, 2017, compared to net income and net income available to common stockholders of $20.0 million for the same quarter in 2016.  Basic and diluted earnings per common share were $0.43 and $0.42, respectively, for the first quarter of 2017, compared to $0.38 for both basic and diluted earnings per share for the first quarter of 2016.

Return on average assets was 1.45% and return on average equity was 17.09% for the first quarter of 2017, compared to 1.53% and 17.39%, respectively, for the first quarter of 2016.

Net interest income was $52.1 million for the first quarter of 2017, compared to $49.1 million for the fourth quarter of 2016 and $44.2 million for the first quarter of 2016.  The net interest margin in the first quarter of 2017 was 3.53%, an increase of 23 basis points from the fourth quarter of 2016 and a decrease of four basis points from the first quarter of 2016.  The increase in net interest income on a linked quarter basis is attributable to a $301.3 million increase in average loans outstanding and a $17.5 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet.  A $35.0 million decrease in average non-interest-bearing deposits offset the positive mix change caused by increases in loans and stockholders’ equity, while a $313.2 million decrease in federal funds sold and interest-bearing balances with banks added to the positive mix change.  The average yield on loans increased by six basis points to 4.51% on a linked quarter basis.  This was primarily the result of repricing of loans following the Federal Reserve Bank’s increase of interest rates in December 2016 and again in March 2017.

Average loans for the first quarter of 2017 were $5.00 billion, an increase of $301.3 million, or 6.4%, over average loans of $4.70 billion for the fourth quarter of 2016, and an increase of $763.9 million, or 18.0%, over average loans of $4.24 billion for the first quarter of 2016.

Average total deposits for the first quarter of 2017 were $5.32 billion, an increase of $45.4 million, or 0.9%, over average total deposits of $5.27 billion for the fourth quarter of 2016, and an increase of $1.05 billion, or 24.6%, over average total deposits of $4.27 billion for the first quarter of 2016.

Non-performing assets to total assets were 0.27% for the first quarter of 2017, a decrease of seven basis points compared to 0.34% for the fourth quarter of 2016 and an increase of seven basis points compared to 0.20% for the first quarter of 2016.  Net credit charge-offs to average loans were 0.24%, a 15 basis point increase compared to 0.09% for the fourth quarter of 2016 and a 21 basis point increase compared to 0.03% for the first quarter of 2016.  We recorded a $5.0 million provision for loan losses in the first quarter of 2017 compared to $4.1 million in the fourth quarter of 2016 and $2.1 million in the first quarter of 2016.  The allowance for loan loss as a percentage of total loans was 1.05% at March 31, 2017 compared to 1.06% at December 31, 2016 and 1.04% at March 31, 2016.  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 $1.1 million during the first quarter of 2017, or 32%, compared to the first quarter of 2016.  Mortgage revenue increased $231,000, or 35%, to $899,000 during the first quarter of 2017, compared to $668,000 during the first quarter of 2016.  Credit card revenue increased $710,000, or 151%, to $1.2 million during the first quarter of 2017, compared to $469,000 during the first quarter of 2016.   

Non-interest expense for the first quarter of 2017 increased $2.0 million, or 10%, to $21.3 million from $19.3 million in the first quarter of 2016, and decreased $770,000, or 3%, on a linked quarter basis.  Salary and benefit expense for the first quarter of 2017 increased $646,000, or 6%, to $11.7 million from $11.1 million in the first quarter of 2016, and increased $516,000, or 5%, on a linked quarter basis.  We added seven production officers and had two terminations during the first quarter of 2017.  Equipment and occupancy expense increased $265,000, or 13%, to $2.3 million in the first quarter of 2017, from $2.0 million in the first quarter of 2016.  This increase in equipment and occupancy expense was attributable to new offices in our Tampa Bay, Florida and Charleston, South Carolina regions, which were relocations from temporary facilities we previously occupied.  Our efficiency ratio for the first quarter of 2017, fourth quarter of 2016 and first quarter of 2016 was 37.58%, 39.96% and 40.51%, respectively.

Income tax expense increased $1.5 million, or 24%, to $7.8 million in the first quarter of 2017, compared to $6.3 million in the first quarter of 2016.  In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09 using the modified retrospective method.  Accordingly, we recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $2.1 million in the first quarter of 2017, compared to $2.3 million in the first quarter of 2016.  Our effective tax rate for the first quarter of 2017 and 2016 was 25.8% and 24.0%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.  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 comparative periods presented in this press release.  Dollars are in thousands, except share and per share data.

        At March 31, 
2017
  At December 31, 
2016
  At September 30, 
2016
  At June 30, 
2016
  At March 31, 
2016
 
Book value per share - GAAP   $ 10.32     $ 9.93     $ 9.65     $ 9.32     $ 8.99    
Total common stockholders' equity - GAAP     545,148       522,889       507,886       489,097       470,940    
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     14,924       14,996       15,073       15,154       15,239    
Tangible common stockholders' equity - non-GAAP   $ 530,224     $ 507,893     $ 492,813     $ 473,943     $ 455,701    
Tangible book value per share - non-GAAP   $ 10.04     $ 9.65     $ 9.37     $ 9.03     $ 8.70    
                                               
Stockholders' equity to total assets - GAAP     8.60 %     8.21 %     8.46 %     8.66 %     8.76 %  
Total assets - GAAP   $ 6,336,165     $ 6,370,448     $ 6,002,621     $ 5,646,055     $ 5,378,596    
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     14,924       14,996       15,073       15,154       15,239    
Total tangible assets - non-GAAP   $ 6,321,241     $ 6,355,452     $ 5,987,548     $ 5,630,901     $ 5,363,357    
Tangible common equity to total tangible assets - non-GAAP     8.39 %     7.99 %     8.23 %     8.42 %     8.50 %  

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.

                                     
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)  
(In thousands except share and per share data)  
    1st Quarter 2017   4th Quarter 2016   3rd Quarter 2016   2nd Quarter 2016   1st Quarter 2016  
CONSOLIDATED STATEMENT OF INCOME                                          
Interest income   $ 59,517     $ 56,200     $ 54,691     $ 52,050     $ 49,961    
Interest expense     7,465       7,091       6,773       6,159       5,782    
Net interest income     52,052       49,109       47,918       45,891       44,179    
Provision for loan losses     4,986       4,075       3,464       3,800       2,059    
Net interest income after provision for loan losses     47,066       45,034       44,454       42,091       42,120    
Non-interest income     4,546       6,039       4,791       3,847       3,435    
Non-interest expense     21,267       22,037       20,162       19,504       19,290    
Income before income tax     30,345       29,036       29,083       26,434       26,265    
Provision for income tax     7,826       7,298       8,174       7,558       6,309    
Net income     22,519       21,738       20,909       18,876       19,956    
Preferred stock dividends     -       24       -       23       -    
Net income available to common stockholders   $ 22,519     $ 21,714     $ 20,909     $ 18,853     $ 19,956    
Earnings per share - basic (1)   $ 0.43     $ 0.41     $ 0.40     $ 0.36     $ 0.38    
Earnings per share - diluted (1)   $ 0.42     $ 0.40     $ 0.39     $ 0.36     $ 0.38    
Average diluted shares outstanding (1)     54,133,722       53,961,160       53,879,328       53,452,526       53,133,620    
                                           
CONSOLIDATED BALANCE SHEET DATA                                          
Total assets   $ 6,336,165     $ 6,370,448     $ 6,002,621     $ 5,646,055     $ 5,378,599    
Loans     5,151,984       4,911,770       4,631,822       4,536,338       4,340,900    
Debt securities     526,023       447,427       377,270       347,706       362,106    
Non-interest-bearing demand deposits     1,292,440       1,281,605       1,269,726       1,185,668       1,070,275    
Total deposits     5,361,532       5,420,311       5,081,128       4,664,795       4,339,747    
Borrowings     55,169       55,262       55,356       55,450       55,543    
Stockholders' equity   $ 545,148     $ 522,889     $ 507,866     $ 489,097     $ 470,940    
                                           
Shares outstanding (1)     52,812,396       52,636,896       52,610,896       52,503,896       52,365,396    
Book value per share (1)   $ 10.32     $ 9.93     $ 9.65     $ 9.32     $ 8.99    
Tangible book value per share (1) (2)   $ 10.04     $ 9.65     $ 9.37     $ 9.03     $ 8.70    
                                           
SELECTED FINANCIAL RATIOS                                          
Net interest margin     3.53 %     3.30 %     3.35 %     3.51 %     3.57 %  
Return on average assets     1.45 %     1.39 %     1.39 %     1.37 %     1.53 %  
Return on average common stockholders' equity     17.09 %     16.71 %     16.66 %     15.79 %     17.39 %  
Efficiency ratio     37.58 %     39.96 %     38.25 %     39.21 %     40.51 %  
Non-interest expense to average earning assets     1.43 %     1.46 %     1.39 %     1.50 %     1.56 %  
                                           
CAPITAL RATIOS (3)                                          
Common equity tier 1 capital to risk-weighted assets     9.67 %     9.78 %     9.91 %     9.83 %     9.90 %  
Tier 1 capital to risk-weighted assets     9.68 %     9.78 %     9.92 %     9.84 %     9.91 %  
Total capital to risk-weighted assets     11.66 %     11.84 %     12.03 %     11.98 %     12.12 %  
Tier 1 capital to average assets     8.46 %     8.22 %     8.20 %     8.52 %     8.65 %  
Tangible common equity to total tangible assets (2)     8.39 %     7.99 %     8.23 %     8.42 %     8.50 %  
                                           
(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)                    
        March 31, 2017   March 31, 2016   % Change  
ASSETS                    
Cash and due from banks   $ 54,993     $ 56,714     (3 ) %  
Interest-bearing balances due from depository institutions     283,181       440,513     (36 ) %  
Federal funds sold     127,390       28,410     348   %  
  Cash and cash equivalents     465,564       525,637     (11 ) %  
Available for sale debt securities, at fair value     453,956       334,567     36   %  
Held to maturity debt securities (fair value of $73,180 and $28,409 at                    
  March 31, 2017 and 2016, respectively)     72,057       27,539     162   %  
Restricted equity securities     1,034       5,667     (82 ) %  
Mortgage loans held for sale     6,599       5,090     30   %  
Loans     5,151,984       4,340,900     19   %  
Less allowance for loan losses     (53,892 )     (45,145 )   19   %  
  Loans, net     5,098,092       4,295,755     19   %  
Premises and equipment, net     46,407       20,989     121   %  
Goodwill and other identifiable intangible assets     14,924       15,239     (2 ) %  
Other assets     177,532       148,116     20   %  
  Total assets   $ 6,336,165     $ 5,378,599     18   %  
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Liabilities:                    
Deposits:                    
  Non-interest-bearing   $ 1,292,440     $ 1,070,275     21   %  
  Interest-bearing     4,069,092       3,269,472     24   %  
    Total deposits     5,361,532       4,339,747     24   %  
Federal funds purchased     358,241       497,885     (28 ) %  
Other borrowings     55,169       55,543     (1 ) %  
Other liabilities     16,075       14,484     11   %  
  Total liabilities     5,791,017       4,907,659     18   %  
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 March 31, 2017 and 2016     -       -     -   %  
  Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at                    
    March 31, 2017, and 1,000,000 authorized and 960,000 undesignated at March 31, 2016     -       -     -   %  
  Common stock, par value $0.001 per share; 100,000,000 shares authorized; 52,8712,396 shares                    
    issued and outstanding at March 31, 2017, and 52,365,396 shares issued and outstanding at                    
    March 31, 2016 (1)     53       53     -   %  
  Additional paid-in capital     217,195       215,932     1   %  
  Retained earnings     327,029       307,151     6   %  
  Accumulated other comprehensive income     369       (624 )   (159 ) %  
  Noncontrolling interest     502       377     33   %  
    Total stockholders' equity     545,148       522,889     4   %  
  Total liabilities and stockholders' equity   $ 6,336,165     $ 6,370,448     (1 ) %  
                         
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.  

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
(In thousands except per share data)  
        Three Months Ended March 31,  
        2017   2016  
Interest income:              
  Interest and fees on loans   $ 55,556   $ 47,247  
  Taxable securities     2,087     1,269  
  Nontaxable securities     765     858  
  Federal funds sold     519     73  
  Other interest and dividends     590     514  
  Total interest income     59,517     49,961  
Interest expense:              
  Deposits     5,982     4,361  
  Borrowed funds     1,483     1,421  
  Total interest expense     7,465     5,782  
  Net interest income     52,052     44,179  
Provision for loan losses     4,986     2,059  
  Net interest income after provision for loan losses     47,066     42,120  
Non-interest income:              
  Service charges on deposit accounts     1,354     1,307  
  Mortgage banking     899     668  
  Increase in cash surrender value life insurance     724     624  
  Other operating income     1,569     836  
  Total non-interest income     4,546     3,435  
Non-interest expense:              
  Salaries and employee benefits     11,713     11,067  
  Equipment and occupancy expense     2,250     1,985  
  Professional services     771     738  
  FDIC and other regulatory assessments     997     750  
  Other real estate owned expense     76     449  
  Other operating expense     5,460     4,301  
  Total non-interest expense     21,267     19,290  
  Income before income tax     30,345     26,265  
Provision for income tax     7,826     6,309  
  Net income     22,519     19,956  
  Dividends on preferred stock     -     -  
  Net income available to common stockholders   $ 22,519   $ 19,956  
Basic earnings per common share (1)   $ 0.43   $ 0.38  
Diluted earnings per common share (1)   $ 0.42   $ 0.38  
                   
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.

 

LOANS BY TYPE (UNAUDITED)                              
(In thousands)                              
                                 
      1st Quarter 2017   4th Quarter 2016   3rd Quarter 2016   2nd Quarter 2016   1st Quarter 2016
Commercial, financial and agricultural   $ 2,061,503   $ 1,982,267   $ 1,885,315   $ 1,892,870   $ 1,799,132
Real estate - construction     345,777     335,085     292,721     251,144     254,254
Real estate - mortgage:                              
  Owner-occupied commercial     1,262,578     1,171,719     1,138,308     1,117,514     1,055,852
  1-4 family mortgage     554,261     536,805     520,394     494,733     458,032
  Other mortgage     872,955     830,683     740,127     725,336     723,542
Subtotal: Real estate - mortgage     2,689,794     2,539,207     2,398,829     2,337,583     2,237,426
Consumer     54,910     55,211     54,957     54,741     50,088
Total loans   $ 5,151,984   $ 4,911,770   $ 4,631,822   $ 4,536,338   $ 4,340,900
                               

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)  
(Dollars in thousands)  
          1st Quarter 2017   4th Quarter 2016   3rd Quarter 2016   2nd Quarter 2016   1st Quarter 2016  
Allowance for loan losses:                                          
Beginning balance   $ 51,893       $ 48,933     $ 46,998       $ 45,145       $ 43,419      
Loans charged off:                                          
  Commercial financial and agricultural     2,855         1,059       1,270         1,412         50      
  Real estate - construction     -         -       79         355         381      
  Real estate - mortgage     266         45       144         191         -      
  Consumer     75         82       81         31         18      
    Total charge offs     3,196         1,186       1,574         1,989         449      
Recoveries:                                          
  Commercial financial and agricultural     190         10       35         1         3      
  Real estate - construction     16         12       9         39         16      
  Real estate - mortgage     2         46       1         2         97      
  Consumer     1         3       -         -         -      
    Total recoveries     209         71       45         42         116      
  Net charge-offs     2,987         1,115       1,529         1,947         333      
  Provision for loan losses     4,986         4,075       3,464         3,800         2,059      
  Ending balance   $ 53,892       $ 51,893     $ 48,933       $ 46,998       $ 45,145      
                                                 
  Allowance for loan losses to total loans     1.05   %     1.06 %     1.05   %     1.04   %     1.04   %  
  Allowance for loan losses to total average                                          
    loans     1.08   %     1.10 %     1.07   %     1.06   %     1.06   %  
  Net charge-offs to total average loans     0.24   %     0.09 %     0.13   %     0.18   %     0.03   %  
  Provision for loan losses to total average                                          
    loans     0.40   %     0.34 %     0.30   %     0.34   %     0.20   %  
  Nonperforming assets:                                          
    Nonaccrual loans   $ 12,084       $ 10,624     $ 6,647       $ 4,730       $ 6,133      
    Loans 90+ days past due and accruing     16         6,263       43         423         417      
    Other real estate owned and                                          
    repossessed assets     5,102         4,988       3,035         4,260         4,044      
  Total   $ 17,202       $ 21,875     $ 9,725       $ 9,413       $ 10,594      
                                                 
  Nonperforming loans to total loans     0.23   %     0.34 %     0.14   %     0.11   %     0.15   %  
  Nonperforming assets to total assets     0.27   %     0.34 %     0.16   %     0.17   %     0.20   %  
  Nonperforming assets to earning assets     0.28   %     0.35 %     0.16   %     0.17   %     0.20   %  
  Reserve for loan losses to nonaccrual loans     445.98   %     488.45 %     736.17   %     993.62   %     736.10   %  
                                                 
  Restructured accruing loans   $ 536       $ 558     $ 6,738       $ 6,753       $ 6,763      
                                                 
  Restructured accruing loans to total loans     0.01   %     0.01 %     0.14   %     0.15   %     0.16   %  
                                                 
  TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)  
  (In thousands)                                  
          1st Quarter 2017   4th Quarter 2016   3rd Quarter 2016   2nd Quarter 2016   1st Quarter 2016  
  Beginning balance:   $ 7,292       $ 6,738     $ 6,753       $ 6,763       $ 7,736      
    Net (paydowns) / advances     (23 )       554       (15 )       (10 )       (19 )    
    Transfers to other real estate owned     -         -       -         -         (954 )    
          $ 7,269       $ 7,292     $ 6,738       $ 6,753       $ 6,763      

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
(In thousands except per share data)  
        1st Quarter 
2017
  4th Quarter 
2016
  3rd Quarter 
2016
  2nd Quarter 
2016
  1st Quarter 
2016
 
Interest income:                                
  Interest and fees on loans   $ 55,556   $ 52,533   $ 51,598   $ 49,210     $ 47,247  
  Taxable securities     2,087     1,604     1,107     1,238       1,269  
  Nontaxable securities     765     785     823     834       858  
  Federal funds sold     519     377     347     210       73  
  Other interest and dividends     590     901     816     558       514  
  Total interest income     59,517     56,200     54,691     52,050       49,961  
Interest expense:                                
  Deposits     5,982     5,817     5,358     4,611       4,361  
  Borrowed funds     1,483     1,274     1,415     1,548       1,421  
  Total interest expense     7,465     7,091     6,773     6,159       5,782  
  Net interest income     52,052     49,109     47,918     45,891       44,179  
Provision for loan losses     4,986     4,075     3,464     3,800       2,059  
  Net interest income after provision for loan losses     47,066     45,034     44,454     42,091       42,120  
Non-interest income:                                
  Service charges on deposit accounts     1,354     1,375     1,367     1,306       1,307  
  Mortgage banking     899     1,044     1,112     901       668  
  Securities gains     -     -     -     (3 )     -  
  Increase in cash surrender value life insurance     724     745     770     655       624  
  Other operating income     1,569     2,875     1,542     988       836  
  Total non-interest income     4,546     6,039     4,791     3,847       3,435  
Non-interest expense:                                
  Salaries and employee benefits     11,713     11,197     10,958     10,733       11,067  
  Equipment and occupancy expense     2,250     1,877     2,100     2,023       1,985  
  Professional services     771     1,058     1,182     999       738  
  FDIC and other regulatory assessments     997     1,072     775     803       750  
  Other real estate owned expense     76     91     178     41       449  
  Other operating expense     5,460     6,742     4,969     4,905       4,301  
  Total non-interest expense     21,267     22,037     20,162     19,504       19,290  
  Income before income tax     30,345     29,036     29,083     26,434       26,265  
Provision for income tax     7,826     7,298     8,174     7,558       6,309  
  Net income     22,519     21,738     20,909     18,876       19,956  
  Dividends on preferred stock     -     24     -     23       -  
  Net income available to common stockholders   $ 22,519   $ 21,714   $ 20,909   $ 18,853     $ 19,956  
Basic earnings per common share (1)   $ 0.43   $ 0.41   $ 0.40   $ 0.36     $ 0.38  
Diluted earnings per common share (1)   $ 0.42   $ 0.40   $ 0.39   $ 0.36     $ 0.38  
                                     
(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)  
   
            1st Quarter 2017   4th Quarter 2016   3rd Quarter 2016   2nd Quarter 2016   1st Quarter 2016  
            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   $ 4,976,933     4.50 %   $ 4,676,565   4.45 %   $ 4,554,900   4.47 %   $ 4,406,107   4.47 %   $ 4,230,057   4.48 %  
    Tax-exempt (2)     27,322     4.72       26,344   4.74       21,939   4.37       16,315   4.54       10,281   5.59    
      Total loans, net of                                                              
        unearned income     5,004,255     4.51       4,702,909   4.45       4,576,839   4.47       4,422,422   4.47       4,240,338   4.48    
  Mortgage loans held for sale     5,637     4.10       6,271   3.36       6,724   3.79       7,323   3.62       6,084   4.63    
  Debt securities:                                                              
    Taxable     368,349     2.27       295,608   2.17       224,825   2.19       208,113   2.38       221,722   2.29    
    Tax-exempt (2)     132,578     3.45       134,748   3.54       135,272   3.73       135,954   3.73       137,763   3.79    
      Total securities (3)     500,927     2.58       430,356   2.60       360,097   2.77       344,067   2.91       359,485   2.86    
  Federal funds sold     234,460     0.90       242,211   0.62       217,158   0.64       144,206   0.59       48,390   0.61    
  Restricted equity securities     1,030     1.57       3,042   8.24       5,658   4.01       5,659   3.62       4,962   3.81    
  Interest-bearing balances with banks     295,648     0.80       601,143   0.55       590,675   0.51       393,782   0.52       373,339   0.51    
  Total interest-earning assets     6,041,957     4.03 %     5,985,932   3.77 %     5,757,151   3.81 %     5,317,459   3.97 %     5,032,598   4.03 %  
Non-interest-earning assets:                                                              
  Cash and due from banks     59,697             55,593           58,809           65,318           61,578        
  Net premises and equipment     44,739             30,421           25,000           23,241           21,023        
  Allowance for loan losses, accrued                                                              
    interest and other assets     138,289             140,721           145,804           127,640           126,491        
      Total assets   $ 6,284,682           $ 6,212,667         $ 5,986,764         $ 5,533,658         $ 5,241,690        
                                                                       
Interest-bearing liabilities:                                                              
  Interest-bearing deposits:                                                              
  Checking   $ 789,273     0.38 %   $ 735,115   0.37 %   $ 696,100   0.37 %   $ 691,776   0.36 %   $ 665,039   0.35 %  
  Savings     50,461     0.33       51,845   0.32       43,569   0.30       41,546   0.30       41,055   0.29    
  Money market     2,694,225     0.58       2,669,513   0.56       2,471,829   0.55       2,105,420   0.52       1,979,727   0.51    
  Time deposits     530,000     1.02       527,100   1.00       519,653   0.99       498,151   1.01       507,605   1.00    
    Total interest-bearing deposits     4,063,959     0.60       3,983,573   0.58       3,731,151   0.57       3,336,893   0.56       3,193,426   0.55    
  Federal funds purchased     359,747     0.86       353,029   0.63       436,415   0.64       505,076   0.64       441,309   0.64    
  Other borrowings     55,239     5.26       55,315   5.16       55,410   5.15       55,521   5.20       55,630   5.19    
  Total interest-bearing liabilities     4,478,945     0.68 %     4,391,917   0.64 %     4,222,976   0.64 %     3,897,490   0.64 %     3,690,365   0.63 %  
Non-interest-bearing liabilities:                                                              
  Non-interest-bearing                                                              
    demand deposits     1,254,496             1,289,448           1,250,139           1,142,541           1,077,613        
  Other liabilities     16,809             14,399           14,376           13,301           12,194        
  Stockholders' equity     535,232             514,245           494,248           475,917           457,218        
  Unrealized gains on securities and                                                              
    derivatives     (800 )           2,658           5,025           4,409           4,300        
      Total liabilities and                                                              
        stockholders' equity   $ 6,284,682           $ 6,212,667         $ 5,986,764         $ 5,533,658         $ 5,241,690        
Net interest spread         3.35 %         3.13 %         3.18 %         3.34 %         3.40 %  
Net interest margin         3.53 %         3.30 %         3.35 %         3.51 %         3.57 %  
                                                                       
(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.  

 

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

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