ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2022

BIRMINGHAM, Ala.--()--ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2022.

Second Quarter 2022 Highlights:

  • Diluted earnings per share were $1.14 for the second quarter of 2022, a 24% increase over the second quarter of 2021 and an 8% increase on a linked-quarter basis
  • Total loans grew $718.4 million during the second quarter of 2022, or 29% annualized
  • Entered the Tallahassee, Florida market
  • Book value per share increased 13% year-over-year and 3% on a linked-quarter basis
  • Return on equity was 21% for the quarter
  • Deposits grew $814.1 million, or 7%, year-over-year

Tom Broughton, Chairman, President and CEO, said, “We are pleased with the strong profitability due to growth in our core relationships. Our bankers are winning in the marketplace.”

Bud Foshee, CFO, said, “Our efficiency ratio is among the lowest in the industry despite adding the most new bankers in the first half of the year.”

FINANCIAL SUMMARY (UNAUDITED)

 

 

 

 

 

(in Thousands except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Period Ending
June 30, 2022

Period Ending
March 31, 2022

% Change From
Period Ending
March 31, 2022
to Period Ending
June 30, 2022

Period Ending
June 30, 2021

% Change From
Period Ending
June 30, 2021
to Period Ending
June 30, 2022

QUARTERLY OPERATING RESULTS

 

 

 

 

 

Net Income

$

62,136

 

$

57,613

 

8

%

$

50,027

 

24

%

Net Income Available to Common Stockholders

$

62,105

 

$

57,613

 

8

%

$

49,996

 

24

%

Diluted Earnings Per Share

$

1.14

 

$

1.06

 

8

%

$

0.92

 

24

%

Return on Average Assets

 

1.67

%

 

1.53

%

 

 

1.56

%

 

Return on Average Common Stockholders' Equity

 

20.93

%

 

20.09

%

 

 

18.98

%

 

Average Diluted Shares Outstanding

 

54,532,385

 

 

54,522,042

 

 

 

54,460,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YEAR-TO-DATE OPERATING RESULTS

 

 

 

 

 

Net Income

$

119,749

 

 

 

$

101,482

 

18

%

Net Income Available to Common Stockholders

$

119,718

 

 

 

$

101,451

 

18

%

Diluted Earnings Per Share

$

2.20

 

 

 

$

1.86

 

18

%

Return on Average Assets

 

1.60

%

 

 

 

1.63

%

 

Return on Average Common Stockholders' Equity

 

20.52

%

 

 

 

19.73

%

 

Average Diluted Shares Outstanding

 

54,527,242

 

 

 

 

54,421,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

Total Assets

$

14,494,317

 

$

15,339,419

 

(6

)%

$

13,207,319

 

10

%

Loans

 

10,617,320

 

 

9,898,957

 

7

%

 

8,649,694

 

23

%

Non-interest-bearing Demand Deposits

 

4,686,511

 

 

4,889,495

 

(4

)%

 

3,296,429

 

42

%

Total Deposits

 

11,772,337

 

 

12,408,755

 

(5

)%

 

10,958,236

 

7

%

Stockholders' Equity

 

1,211,918

 

 

1,172,975

 

3

%

 

1,073,284

 

13

%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $62.1 million for the quarter ended June 30, 2022, compared to net income and net income available to common stockholders of $57.6 million for the first quarter of 2022 and $50.0 million for the second quarter of 2021. Basic and diluted earnings per common share were both $1.14 for the second quarter of 2022, compared to $1.06 for both in the first quarter of 2022 and $0.92 for both in the second quarter of 2021.

Annualized return on average assets was 1.67% and annualized return on average common stockholders’ equity was 20.93% for the second quarter of 2022, compared to 1.56% and 18.98%, respectively, for the second quarter of 2021.

Net interest income was $116.4 million for the second quarter of 2022, compared to $105.7 million for the first quarter of 2022 and $94.7 million for the second quarter of 2021. The net interest margin in the second quarter of 2022 was 3.26% compared to 2.89% in the first quarter of 2022 and 3.06% in the second quarter of 2021. Loan yields were 4.38% during the second quarter of 2022 compared to 4.29% during the first quarter of 2022 and 4.43% during the second quarter of 2021. Accretion of net fees on Paycheck Protection Program ("PPP") loans of $3.3 million during the second quarter of 2022 contributed 11 basis points of the loan yield, compared to $4.5 million of PPP loan fee accretion during the first quarter of 2022, or 19 basis points of the loan yield, and $8.0 million during the second quarter of 2021, or 37 basis points of the loan yield. Investment yields were 2.37% during the second quarter of 2022 compared to 2.17% during the first quarter of 2022 and 2.69% during the second quarter of 2021. Amortization of mortgage-backed securities decreased by $465,000 from the first quarter to the second quarter of 2022.

Average loans for the second quarter of 2022 were $10.19 billion, an increase of $542.4 million, or 22.6% annualized, over average loans of $9.65 billion for the first quarter of 2022, and an increase of $1.54 billion, or 17.9%, over average loans of $8.64 billion for the second quarter of 2021. Forgiveness of PPP loans during the second quarter of 2022 totaled $84.6 million. PPP loans outstanding as of June 30, 2022 were $23.0 million.

Average total deposits for the second quarter of 2022 were $12.04 billion, a decrease of $337.2 million, or 10.9%, annualized, over average total deposits of $12.38 billion for the first quarter of 2022, and an increase of $1.31 billion, or 12.2%, over average total deposits of $10.73 billion for the second quarter of 2021.

Non-performing assets to total assets were 0.12% for the second quarter of 2022, a decrease of 2 basis points compared to 0.14% for the first quarter of 2022 and a decrease of 3 basis points compared to 0.15% for the second quarter of 2021. Annualized net charge-offs to average loans were 0.02% for the second quarter of 2022, compared to 0.11% and -0.01% for the first quarter of 2022 and second quarter of 2021, respectively. The allowance for credit losses as a percentage of total loans at June 30, 2022, March 31, 2022 and June 30, 2021 was 1.21% at each date. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at June 30, 2022, March 31, 2022 and June 30, 2021 was 1.21%, 1.22%, and 1.30%, respectively. We recorded a $9.5 million provision for credit losses in the second quarter of 2022 compared to $5.4 million in the first quarter of 2022 and $9.7 million in the second quarter of 2021. The second quarter 2022 and 2021 provision for credit losses were higher due to increased loan growth, adjusted for forgiveness of PPP loans.

Non-interest income decreased $92,000, or 1.0%, to $9.5 million for the second quarter of 2022 from $9.6 million in the second quarter of 2021. Service charges on deposit accounts increased $226,000, or 11.9%, to $2.1 million from the second quarter of 2021 to the second quarter of 2022. Mortgage banking revenue decreased $2.1 million, or 77.3%, to $614,000 from the second quarter of 2021 to the second quarter of 2022. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of June 30, 2022, we had retained a total of 405 1-4 family mortgages for an aggregate balance of $151.1 million. Net credit card revenue increased $760,000, or 39.7%, to $2.7 million during the second quarter of 2022, compared to $1.9 million during the second quarter of 2021. The number of credit card accounts increased approximately 20.2% and the aggregate amount of spend on all credit card accounts increased 33.4% during the second quarter of 2022 compared to the second quarter of 2021. Cash surrender value life insurance decreased $50,000, or 3.0%, to $1.6 million during the second quarter of 2022, compared to $1.7 million during the second quarter of 2021. Other operating income for the second quarter of 2022 increased $4.5 million, or 580.4%, to $5.3 million from $777,000 in the second quarter of 2021. We wrote up the value of our interest rate cap by $1.9 million during the second quarter of 2022 compared to a write down of $2,000 during the second quarter of 2021. Merchant service revenue increased from $289,000 during the second quarter of 2021 to $471,000, or 63%, during the second quarter of 2022. We recognized a $2.1 million death benefit related to a former employee in our bank-owned life insurance (“BOLI”) program during the second quarter of 2022. We recognized a $2.8 million loss on the sale of seven available for sale debt securities that were yielding less than 1.00% during the second quarter of 2022.

Non-interest expense for the second quarter of 2022 increased $8.5 million, or 27.2%, to $39.8 million from $31.3 million in the second quarter of 2021, and increased $2.6 million, or 7.0%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2022 increased $3.8 million, or 22.8%, to $20.7 million from $16.9 million in the second quarter of 2021, and increased $2.4 million, or 13.3%, on a linked quarter basis. The number of FTE employees increased by 13 to 540 at June 30, 2022 compared to 527 at June 30, 2021, and increased by 29 from the end of the first quarter of 2022. We accrued an additional $1.8 million in our annual incentive program during the second quarter of 2022 based on loan growth and entry into new markets. Equipment and occupancy expense increased $139,000, or 4.9%, to $3.0 million in the second quarter of 2022, from $2.8 million in the second quarter of 2021, and increased $50,000, or 1.7% on a linked-quarter basis. Third party processing and other services expense increased $2.4 million, or 60.8%, to $6.3 million in the second quarter of 2022, from $3.9 million in the second quarter of 2021, and increased $740,000, or 13.2%, on a linked-quarter basis. We incurred additional processing expenses of $243,000 during the second quarter of 2022 and $503,000 year-to-date related to our conversion to a new core processor in the first quarter of 2023. This increase in third party processing also includes Federal Reserve Bank charges related to correspondent bank settlement activities. These charges increased by $1.7 million year-over-year to $2.3 million during the second quarter of 2022. Professional services expense increased $220,000, or 19.9%, to $1.3 million in the second quarter of 2022, from $1.1 million in the second quarter of 2021. FDIC and other regulatory assessments decreased $278,000 to $1.1 million in the second quarter of 2022, from $1.4 million in the second quarter of 2021, and increased $15,000, or 1.3%, on a linked quarter basis. Other operating expenses for the second quarter of 2022 increased $2.7 million, or 59.1%, to $7.3 million from $4.6 million in the second quarter of 2021, and decreased $999,000 on a linked-quarter basis. We accrued $250,000 for potential uninsured check fraud losses during the second quarter of 2022 and $750,000 year-to-date. We recognized core system deconversion expenses of $3.0 million during the fourth quarter of 2021 and $873,000 during the first quarter of 2022 through other operating expenses. The efficiency ratio was 31.64% during the second quarter of 2022 compared to 30.03% during the second quarter of 2021 and compared to 32.74% during the first quarter of 2022.

Income tax expense increased $1.1 million, or 8.5%, to $14.4 million in the second quarter of 2022, compared to $13.3 million in the second quarter of 2021. Our effective tax rate was 18.83% for the second quarter of 2022 compared to 20.97% for the second quarter of 2021. We recognized an aggregate of $3.1 million in credits during the second quarter of 2022 related to investments in new market tax credits. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the second quarters of 2022 and 2021 of $352,000 and $724,000, 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 June 30,
2022

At March 31,
2022

At December 31,
2021

At September 30,
2021

At June 30,
2021

Book value per share - GAAP

$

22.32

 

$

21.61

 

$

21.24

 

$

20.56

 

$

19.80

 

Total common stockholders' equity - GAAP

 

1,211,949

 

 

1,172,975

 

 

1,152,015

 

 

1,114,293

 

 

1,073,284

 

Adjustments:

 

 

 

 

 

Adjusted for goodwill and core deposit intangible asset

 

(13,615

)

 

(13,615

)

 

(13,638

)

 

(13,705

)

 

(13,773

)

Tangible common stockholders' equity - non-GAAP

$

1,198,334

 

$

1,159,360

 

$

1,138,377

 

$

1,100,588

 

$

1,059,511

 

Tangible book value per share - non-GAAP

$

22.07

 

$

21.36

 

$

20.99

 

$

20.30

 

$

19.55

 

 

 

 

 

 

 

Stockholders' equity to total assets - GAAP

 

8.36

%

 

7.65

%

 

7.46

%

 

7.63

%

 

8.13

%

Total assets - GAAP

$

14,494,348

 

$

15,339,419

 

$

15,448,806

 

$

14,602,228

 

$

13,207,319

 

Adjustments:

 

 

 

 

 

Adjusted for goodwill and core deposit intangible asset

 

(13,615

)

 

(13,615

)

 

(13,638

)

 

(13,705

)

 

(13,773

)

Total tangible assets - non-GAAP

$

14,480,733

 

$

15,325,804

 

$

15,435,168

 

$

14,588,523

 

$

13,193,546

 

Tangible common equity to total tangible assets - non-GAAP

 

8.28

%

 

7.56

%

 

7.38

%

 

7.54

%

 

8.03

%

 

 

 

 

 

 

Total loans - GAAP

$

10,617,320

 

$

9,898,957

 

$

9,532,934

 

$

8,812,811

 

$

8,649,694

 

Adjustments:

 

 

 

 

 

Adjusted to exclude PPP loans

 

(22,973

)

 

(107,565

)

 

(230,184

)

 

(387,725

)

 

(595,017

)

Loans, excluding PPP loans - non-GAAP

$

10,594,347

 

$

9,791,392

 

$

9,302,750

 

$

8,425,086

 

$

8,054,677

 

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, Mobile, Montgomery and Dothan, Alabama, Northwest Florida, West Central Florida, Nashville, Tennessee, Atlanta, Georgia, Charleston, South Carolina, and Charlotte, North Carolina.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.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,” “could,” “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, but not limited to: the global health and economic crisis precipitated by the COVID-19 outbreak; 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 as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; 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, in our Quarterly Reports on Form 10-Q for fiscal year 2022, 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 www.servisfirstbancshares.com or by calling (205) 949-0302.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

 

 

 

 

(In thousands except share and per share data)

 

 

 

 

 

 

2nd Quarter 2022

1st Quarter 2022

4th Quarter 2021

3rd Quarter 2021

2nd Quarter 2021

CONSOLIDATED STATEMENT OF INCOME

 

 

 

 

 

Interest income

$

126,555

 

$

113,188

 

$

108,954

 

$

104,236

 

$

102,719

 

Interest expense

 

10,187

 

 

7,466

 

 

7,804

 

 

7,916

 

 

8,051

 

Net interest income

 

116,368

 

 

105,722

 

 

101,150

 

 

96,320

 

 

94,668

 

Provision for credit losses

 

9,507

 

 

5,362

 

 

8,451

 

 

5,963

 

 

9,652

 

Net interest income after provision for credit losses

 

106,861

 

 

100,360

 

 

92,699

 

 

90,357

 

 

85,016

 

Non-interest income

 

9,506

 

 

7,948

 

 

7,365

 

 

8,026

 

 

9,598

 

Non-interest expense

 

39,821

 

 

37,218

 

 

38,489

 

 

34,377

 

 

31,309

 

Income before income tax

 

76,546

 

 

71,090

 

 

61,575

 

 

64,006

 

 

63,305

 

Provision for income tax

 

14,410

 

 

13,477

 

 

7,822

 

 

11,507

 

 

13,278

 

Net income

 

62,136

 

 

57,613

 

 

53,753

 

 

52,499

 

 

50,027

 

Preferred stock dividends

 

31

 

 

-

 

 

31

 

 

-

 

 

31

 

Net income available to common stockholders

$

62,105

 

$

57,613

 

$

53,722

 

$

52,499

 

$

49,996

 

Earnings per share - basic

$

1.14

 

$

1.06

 

$

0.99

 

$

0.97

 

$

0.92

 

Earnings per share - diluted

$

1.14

 

$

1.06

 

$

0.99

 

$

0.96

 

$

0.92

 

Average diluted shares outstanding

 

54,532,385

 

 

54,522,042

 

 

54,493,959

 

 

54,477,740

 

 

54,460,230

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEET DATA

 

 

 

 

 

Total assets

$

14,494,317

 

$

15,339,419

 

$

15,448,806

 

$

14,602,228

 

$

13,207,319

 

Loans

 

10,617,320

 

 

9,898,957

 

 

9,532,934

 

 

8,812,811

 

 

8,649,694

 

Debt securities

 

1,790,218

 

 

1,617,977

 

 

1,305,527

 

 

984,600

 

 

1,013,783

 

Non-interest-bearing demand deposits

 

4,686,511

 

 

4,889,495

 

 

4,799,767

 

 

4,366,654

 

 

3,296,429

 

Total deposits

 

11,772,337

 

 

12,408,755

 

 

12,452,836

 

 

12,078,670

 

 

10,958,236

 

Borrowings

 

64,716

 

 

64,711

 

 

64,706

 

 

64,701

 

 

64,696

 

Stockholders' equity

 

1,211,918

 

 

1,172,975

 

 

1,152,015

 

 

1,114,293

 

 

1,073,284

 

 

 

 

 

 

 

Shares outstanding

 

54,282,132

 

 

54,282,132

 

 

54,227,060

 

 

54,207,147

 

 

54,201,204

 

Book value per share

$

22.32

 

$

21.61

 

$

21.24

 

$

20.56

 

$

19.80

 

Tangible book value per share (1)

$

22.07

 

$

21.36

 

$

20.99

 

$

20.30

 

$

19.55

 

 

 

 

 

 

 

SELECTED FINANCIAL RATIOS (Annualized)

 

 

 

 

 

Net interest margin

 

3.26

%

 

2.89

%

 

2.71

%

 

2.85

%

 

3.06

%

Return on average assets

 

1.67

%

 

1.53

%

 

1.40

%

 

1.50

%

 

1.56

%

Return on average common stockholders' equity

 

20.93

%

 

20.09

%

 

18.75

%

 

18.93

%

 

18.98

%

Efficiency ratio

 

31.64

%

 

32.74

%

 

35.47

%

 

32.95

%

 

30.03

%

Non-interest expense to average earning assets

 

1.11

%

 

1.02

%

 

1.03

%

 

1.01

%

 

1.01

%

 

 

 

 

 

 

CAPITAL RATIOS (2)

 

 

 

 

 

Common equity tier 1 capital to risk-weighted assets

 

9.59

%

 

9.86

%

 

9.95

%

 

10.46

%

 

10.60

%

Tier 1 capital to risk-weighted assets

 

9.59

%

 

9.87

%

 

9.96

%

 

10.47

%

 

10.60

%

Total capital to risk-weighted assets

 

11.12

%

 

11.43

%

 

11.58

%

 

12.18

%

 

12.36

%

Tier 1 capital to average assets

 

8.19

%

 

7.67

%

 

7.39

%

 

7.80

%

 

8.10

%

Tangible common equity to total tangible assets (1)

 

8.28

%

 

7.56

%

 

7.38

%

 

7.54

%

 

8.03

%

 

 

 

 

 

 

(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.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

(Dollars in thousands)

 

 

 

 

June 30, 2022

June 30, 2021

% Change

ASSETS

 

 

 

Cash and due from banks

$

252,638

 

$

72,599

 

248

%

Interest-bearing balances due from depository institutions

 

1,334,511

 

 

3,100,677

 

(57

)%

Federal funds sold

 

101,447

 

 

7,500

 

1,253

%

Cash and cash equivalents

 

1,688,596

 

 

3,180,776

 

(47

)%

Available for sale debt securities, at fair value

 

724,463

 

 

1,013,533

 

(29

)%

Held to maturity debt securities (fair value of $1,003,840 at June 30, 2022 and $250 at June 30, 2021)

 

1,065,755

 

 

250

 

NM

 

Restricted equity securities

 

7,734

 

 

-

 

NM

 

Mortgage loans held for sale

 

3,451

 

 

6,147

 

(44

)%

Loans

 

10,617,320

 

 

8,649,694

 

23

%

Less allowance for credit losses

 

(128,387

)

 

(104,670

)

23

%

Loans, net

 

10,488,933

 

 

8,545,024

 

23

%

Premises and equipment, net

 

59,482

 

 

67,738

 

(12

)%

Goodwill and other identifiable intangible assets

 

13,615

 

 

13,773

 

(1

)%

Other assets

 

442,288

 

 

380,078

 

16

%

Total assets

$

14,494,317

 

$

13,207,319

 

10

%

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Liabilities:

 

 

 

Deposits:

 

 

 

Non-interest-bearing

$

4,686,511

 

$

3,296,429

 

42

%

Interest-bearing

 

7,085,826

 

 

7,661,807

 

(8

)%

Total deposits

 

11,772,337

 

 

10,958,236

 

7

%

Federal funds purchased

 

1,389,167

 

 

1,059,474

 

31

%

Other borrowings

 

64,716

 

 

64,696

 

-

%

Other liabilities

 

56,179

 

 

51,629

 

9

%

Total liabilities

 

13,282,399

 

 

12,134,035

 

9

%

Stockholders' equity:

 

 

 

Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at June 30, 2022 and June 30, 2021

 

-

 

 

-

 

-

%

Common stock, par value $0.001 per share; 200,000,000 shares authorized and 54,306,875 shares issued and outstanding at June 30, 2022, and 100,000,000 shares authorized; 54,201,204 shares issued and outstanding at June 30, 2021

 

54

 

 

54

 

-

%

Additional paid-in capital

 

227,906

 

 

225,127

 

1

%

Retained earnings

 

1,005,815

 

 

828,048

 

21

%

Accumulated other comprehensive (loss) income

 

(22,357

)

 

19,555

 

NM

 

Total stockholders' equity attributable to ServisFirst Bancshares, Inc.

 

1,211,418

 

 

1,072,784

 

13

%

Noncontrolling interest

 

500

 

 

500

 

-

%

Total stockholders' equity

 

1,211,918

 

 

1,073,284

 

13

%

Total liabilities and stockholders' equity

$

14,494,317

 

$

13,207,319

 

10

%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

 

 

(In thousands except per share data)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

Interest and fees on loans

$

111,287

 

$

95,451

$

214,392

 

$

189,254

Taxable securities

 

10,515

 

 

6,315

 

 

18,738

 

 

12,122

 

Nontaxable securities

 

37

 

 

86

 

 

80

 

 

193

 

Federal funds sold

 

93

 

 

4

 

 

106

 

 

7

 

Other interest and dividends

 

4,623

 

 

863

 

 

6,427

 

 

1,539

 

Total interest income

 

126,555

 

 

102,719

 

 

239,743

 

 

203,115

 

Interest expense:

 

 

 

 

Deposits

 

6,427

 

 

6,836

 

 

12,270

 

 

13,717

 

Borrowed funds

 

3,760

 

 

1,215

 

 

5,383

 

 

2,365

 

Total interest expense

 

10,187

 

 

8,051

 

 

17,653

 

 

16,082

 

Net interest income

 

116,368

 

 

94,668

 

 

222,090

 

 

187,033

 

Provision for credit losses

 

9,507

 

 

9,652

 

 

14,869

 

 

17,103

 

Net interest income after provision for credit losses

 

106,861

 

 

85,016

 

 

207,221

 

 

169,930

 

Non-interest income:

 

 

 

 

Service charges on deposit accounts

 

2,133

 

 

1,907

 

 

4,275

 

 

3,815

 

Mortgage banking

 

614

 

 

2,699

 

 

1,140

 

 

5,446

 

Credit card income

 

2,672

 

 

1,912

 

 

5,044

 

 

3,104

 

Securities (losses) gains

 

(2,833

)

 

620

 

 

(6,168

)

 

620

 

Increase in cash surrender value life insurance

 

1,633

 

 

1,683

 

 

3,241

 

 

3,341

 

Other operating income

 

5,287

 

 

777

 

 

9,922

 

 

1,735

 

Total non-interest income

 

9,506

 

 

9,598

 

 

17,454

 

 

18,061

 

Non-interest expense:

 

 

 

 

Salaries and employee benefits

 

20,734

 

 

16,887

 

 

39,035

 

 

32,430

 

Equipment and occupancy expense

 

2,983

 

 

2,844

 

 

5,916

 

 

5,498

 

Third party processing and other services

 

6,345

 

 

3,946

 

 

11,950

 

 

7,362

 

Professional services

 

1,327

 

 

1,107

 

 

2,319

 

 

2,030

 

FDIC and other regulatory assessments

 

1,147

 

 

1,425

 

 

2,279

 

 

3,007

 

Other real estate owned expense

 

32

 

 

540

 

 

35

 

 

697

 

Other operating expense

 

7,253

 

 

4,560

 

 

15,505

 

 

9,199

 

Total non-interest expense

 

39,821

 

 

31,309

 

 

77,039

 

 

60,223

 

Income before income tax

 

76,546

 

 

63,305

 

 

147,636

 

 

127,768

 

Provision for income tax

 

14,410

 

 

13,278

 

 

27,887

 

 

26,286

 

Net income

 

62,136

 

 

50,027

 

 

119,749

 

 

101,482

 

Dividends on preferred stock

 

31

 

 

31

 

 

31

 

 

31

 

Net income available to common stockholders

$

62,105

 

$

49,996

 

$

119,718

 

$

101,451

 

Basic earnings per common share

$

1.14

 

$

0.92

 

$

2.21

 

$

1.87

 

Diluted earnings per common share

$

1.14

 

$

0.92

 

$

2.20

 

$

1.86

 

LOANS BY TYPE (UNAUDITED)

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

2nd Quarter 2022

1st Quarter 2022

4th Quarter 2021

3rd Quarter 2021

2nd Quarter 2021

Commercial, financial and agricultural

$

2,966,040

$

2,955,927

$

2,984,053

$

2,927,845

$

3,105,243

Real estate - construction

 

1,383,155

 

 

1,164,690

 

 

1,103,076

 

 

887,938

 

 

782,305

 

Real estate - mortgage:

 

 

 

 

 

Owner-occupied commercial

 

2,026,807

 

 

1,919,811

 

 

1,874,103

 

 

1,809,840

 

 

1,726,888

 

1-4 family mortgage

 

1,015,698

 

 

926,697

 

 

826,765

 

 

765,102

 

 

707,546

 

Other mortgage

 

3,160,510

 

 

2,869,158

 

 

2,678,084

 

 

2,357,812

 

 

2,262,231

 

Subtotal: Real estate - mortgage

 

6,203,015

 

 

5,715,666

 

 

5,378,952

 

 

4,932,754

 

 

4,696,665

 

Consumer

 

65,110

 

 

62,674

 

 

66,853

 

 

64,274

 

 

65,481

 

Total loans

$

10,617,320

 

$

9,898,957

 

$

9,532,934

 

$

8,812,811

 

$

8,649,694

 

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

2nd Quarter 2022

 

1st Quarter 2022

 

4th Quarter 2021

 

3rd Quarter 2021

 

2nd Quarter 2021

Allowance for credit losses:

 

 

 

 

 

Beginning balance

$

119,463

 

$

116,660

 

$

108,950

 

$

104,670

 

$

94,906

 

Loans charged off:

 

 

 

 

 

Commercial financial and agricultural

 

1,667

 

 

2,574

 

 

1,285

 

 

1,541

 

 

150

 

Real estate - construction

 

-

 

 

-

 

 

14

 

 

-

 

 

-

 

Real estate - mortgage

 

23

 

 

27

 

 

-

 

 

208

 

 

59

 

Consumer

 

123

 

 

75

 

 

141

 

 

86

 

 

54

 

Total charge offs

 

1,813

 

 

2,676

 

 

1,440

 

 

1,835

 

 

263

 

Recoveries:

 

 

 

 

 

Commercial financial and agricultural

 

1,217

 

 

105

 

 

671

 

 

140

 

 

298

 

Real estate - construction

 

-

 

 

-

 

 

-

 

 

-

 

 

2

 

Real estate - mortgage

 

-

 

 

-

 

 

18

 

 

4

 

 

62

 

Consumer

 

13

 

 

12

 

 

10

 

 

8

 

 

13

 

Total recoveries

 

1,230

 

 

117

 

 

699

 

 

152

 

 

375

 

Net charge-offs (recoveries)

 

583

 

 

2,559

 

 

741

 

 

1,683

 

 

(112

)

Provision for credit losses

 

9,507

 

 

5,362

 

 

8,451

 

 

5,963

 

 

9,652

 

Ending balance

$

128,387

 

$

119,463

 

$

116,660

 

$

108,950

 

$

104,670

 

 

 

 

 

 

 

Allowance for credit losses to total loans

 

1.21

%

 

1.21

%

 

1.22

%

 

1.24

%

 

1.21

%

Allowance for credit losses to total average loans

 

1.26

%

 

1.24

%

 

1.29

%

 

1.26

%

 

1.21

%

Net charge-offs (recoveries) to total average loans

 

0.02

%

 

0.11

%

 

0.03

%

 

0.08

%

 

(0.01

)%

Provision for credit losses to total average loans

 

0.37

%

 

0.23

%

 

0.37

%

 

0.27

%

 

0.45

%

Nonperforming assets:

 

 

 

 

 

Nonaccrual loans

$

10,540

 

$

14,738

 

$

6,762

 

$

9,145

 

$

12,301

 

Loans 90+ days past due and accruing

 

4,991

 

 

4,686

 

 

5,335

 

 

5,326

 

 

4,888

 

Other real estate owned and repossessed assets

 

1,207

 

 

1,989

 

 

1,208

 

 

2,068

 

 

2,039

 

Total

$

16,738

 

$

21,413

 

$

13,305

 

$

16,539

 

$

19,228

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

0.15

%

 

0.20

%

 

0.13

%

 

0.16

%

 

0.20

%

Nonperforming assets to total assets

 

0.12

%

 

0.14

%

 

0.09

%

 

0.11

%

 

0.15

%

Nonperforming assets to earning assets

 

0.12

%

 

0.14

%

 

0.09

%

 

0.11

%

 

0.15

%

Allowance for credit losses to nonaccrual loans

 

1,218.05

%

 

826.19

%

 

1,725.23

%

 

1,191.36

%

 

850.91

%

 

 

 

 

 

 

Restructured accruing loans

$

421

 

$

426

 

$

431

 

$

437

 

$

441

 

 

 

 

 

 

 

Restructured accruing loans to total loans

 

-

%

 

-

%

 

-

%

 

-

%

 

0.01

%

 

 

 

 

 

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

 

 

 

(In thousands)

 

 

 

 

 

 

2nd Quarter 2022

 

1st Quarter 2022

 

4th Quarter 2021

 

3rd Quarter 2021

 

2nd Quarter 2021

Beginning balance:

$

2,482

 

$

2,576

 

$

2,893

 

$

2,918

 

$

3,542

 

Additions

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Net (paydowns) / advances

 

(79

)

 

(94

)

 

(303

)

 

(25

)

 

(624

)

Charge-offs

 

-

 

 

-

 

 

(14

)

 

-

 

 

-

 

Ending balance

$

2,403

 

$

2,482

 

$

2,576

 

$

2,893

 

$

2,918

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

 

 

(In thousands except per share data)

 

 

 

 

2nd Quarter 2022

1st Quarter 2022

4th Quarter 2021

3rd Quarter 2021

2nd Quarter 2021

Interest income:

 

 

 

 

 

Interest and fees on loans

$

111,287

 

$

103,105

 

$

100,348

$

96,119

$

95,451

Taxable securities

 

10,515

 

 

8,223

 

 

6,747

 

 

6,544

 

 

6,315

 

Nontaxable securities

 

37

 

 

43

 

 

47

 

 

62

 

 

86

 

Federal funds sold

 

93

 

 

13

 

 

18

 

 

4

 

 

4

 

Other interest and dividends

 

4,623

 

 

1,804

 

 

1,794

 

 

1,507

 

 

863

 

Total interest income

 

126,555

 

 

113,188

 

 

108,954

 

 

104,236

 

 

102,719

 

Interest expense:

 

 

 

 

 

Deposits

 

6,427

 

 

5,843

 

 

6,271

 

 

6,581

 

 

6,836

 

Borrowed funds

 

3,760

 

 

1,623

 

 

1,533

 

 

1,335

 

 

1,215

 

Total interest expense

 

10,187

 

 

7,466

 

 

7,804

 

 

7,916

 

 

8,051

 

Net interest income

 

116,368

 

 

105,722

 

 

101,150

 

 

96,320

 

 

94,668

 

Provision for credit losses

 

9,507

 

 

5,362

 

 

8,451

 

 

5,963

 

 

9,652

 

Net interest income after provision for credit losses

 

106,861

 

 

100,360

 

 

92,699

 

 

90,357

 

 

85,016

 

Non-interest income:

 

 

 

 

 

Service charges on deposit accounts

 

2,133

 

 

2,142

 

 

1,297

 

 

1,727

 

 

1,907

 

Mortgage banking

 

614

 

 

526

 

 

471

 

 

1,423

 

 

2,699

 

Credit card income

 

2,672

 

 

2,372

 

 

2,200

 

 

2,043

 

 

1,912

 

Securities (losses) gains

 

(2,833

)

 

(3,335

)

 

-

 

 

-

 

 

620

 

Increase in cash surrender value life insurance

 

1,633

 

 

1,608

 

 

1,630

 

 

1,671

 

 

1,683

 

Other operating income

 

5,287

 

 

4,635

 

 

1,767

 

 

1,162

 

 

777

 

Total non-interest income

 

9,506

 

 

7,948

 

 

7,365

 

 

8,026

 

 

9,598

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

20,734

 

 

18,301

 

 

17,303

 

 

17,995

 

 

16,887

 

Equipment and occupancy expense

 

2,983

 

 

2,933

 

 

2,910

 

 

2,996

 

 

2,844

 

Third party processing and other services

 

6,345

 

 

5,605

 

 

4,856

 

 

4,144

 

 

3,946

 

Professional services

 

1,327

 

 

992

 

 

913

 

 

948

 

 

1,107

 

FDIC and other regulatory assessments

 

1,147

 

 

1,132

 

 

1,042

 

 

1,630

 

 

1,425

 

Other real estate owned expense

 

32

 

 

3

 

 

48

 

 

123

 

 

540

 

Other operating expense

 

7,253

 

 

8,252

 

 

11,417

 

 

6,541

 

 

4,560

 

Total non-interest expense

 

39,821

 

 

37,218

 

 

38,489

 

 

34,377

 

 

31,309

 

Income before income tax

 

76,546

 

 

71,090

 

 

61,575

 

 

64,006

 

 

63,305

 

Provision for income tax

 

14,410

 

 

13,477

 

 

7,822

 

 

11,507

 

 

13,278

 

Net income

 

62,136

 

 

57,613

 

 

53,753

 

 

52,499

 

 

50,027

 

Dividends on preferred stock

 

31

 

 

-

 

 

31

 

 

-

 

 

31

 

Net income available to common stockholders

$

62,105

 

$

57,613

 

$

53,722

 

$

52,499

 

$

49,996

 

Basic earnings per common share

$

1.14

 

$

1.06

 

$

0.99

 

$

0.97

 

$

0.92

 

Diluted earnings per common share

$

1.14

 

$

1.06

 

$

0.99

 

$

0.96

 

$

0.92

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2nd Quarter 2022

1st Quarter 2022

4th Quarter 2021

3rd Quarter 2021

2nd Quarter 2021

 

 

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

$

10,165,470

4.38

%

$

9,621,484

4.29

%

$

9,032,914

4.40

%

$

8,653,632

4.40

%

$

8,618,139

4.43

%

 

Tax-exempt (2)

 

23,616

 

4.09

 

 

25,195

 

4.08

 

 

26,148

 

4.07

 

 

26,542

 

4.05

 

 

26,854

 

4.05

 

 

Total loans, net of unearned income

 

10,189,086

 

4.38

 

 

9,646,679

 

4.29

 

 

9,059,062

 

4.40

 

 

8,680,174

 

4.39

 

 

8,644,993

 

4.43

 

 

Mortgage loans held for sale

 

471

 

3.41

 

 

927

 

1.73

 

 

998

 

1.99

 

 

7,050

 

1.69

 

 

11,470

 

1.92

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

1,775,425

 

2.37

 

 

1,518,572

 

2.17

 

 

1,134,378

 

2.38

 

 

969,715

 

2.70

 

 

936,863

 

2.70

 

 

Tax-exempt (2)

 

7,148

 

2.35

 

 

8,812

 

2.36

 

 

9,823

 

2.36

 

 

12,382

 

2.39

 

 

16,872

 

2.47

 

 

Total securities (3)

 

1,782,573

 

2.37

 

 

1,527,384

 

2.17

 

 

1,144,201

 

2.38

 

 

982,097

 

2.70

 

 

953,735

 

2.69

 

 

Federal funds sold

 

30,721

 

1.21

 

 

16,639

 

0.31

 

 

39,445

 

0.18

 

 

8,551

 

0.19

 

 

8,224

 

0.20

 

 

Restricted equity securities

 

7,724

 

3.74

 

 

7,371

 

3.70

 

 

873

 

3.18

 

 

-

 

-

 

 

-

 

-

 

 

Interest-bearing balances with banks

 

2,332,412

 

0.80

 

 

3,637,882

 

0.20

 

 

4,561,662

 

0.16

 

 

3,761,652

 

0.16

 

 

2,790,524

 

0.12

 

 

Total interest-earning assets

$

14,342,987

 

3.54

 

$

14,836,882

 

3.06

 

$

14,806,241

 

2.92

 

$

13,439,524

 

3.08

 

$

12,408,946

 

3.32

 

Non-interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

204,994

 

 

 

74,534

 

 

 

79,293

 

 

 

90,034

 

 

 

85,478

 

 

 

Net premises and equipment

 

60,673

 

 

 

61,209

 

 

 

61,837

 

 

 

62,845

 

 

 

61,240

 

 

 

Allowance for credit losses, accrued interest and other assets

 

297,893

 

 

 

313,560

 

 

 

303,300

 

 

 

315,178

 

 

 

320,729

 

 

 

Total assets

$

14,906,547

 

 

$

15,286,185

 

 

$

15,250,671

 

 

$

13,907,581

 

 

$

12,876,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

Checking

$

1,699,602

 

0.21

%

$

1,594,645

 

0.20

%

$

1,499,918

 

0.19

%

$

1,431,420

 

0.19

%

$

1,350,098

 

0.19

%

 

Savings

 

134,469

 

0.18

 

 

135,545

 

0.17

 

 

123,179

 

0.18

 

 

122,579

 

0.17

 

 

104,283

 

0.18

 

 

Money market

 

4,617,021

 

0.33

 

 

4,985,224

 

0.26

 

 

5,100,192

 

0.26

 

 

5,328,291

 

0.26

 

 

5,321,338

 

0.26

 

 

Time deposits

 

766,225

 

0.86

 

 

792,930

 

0.91

 

 

807,342

 

1.05

 

 

806,108

 

1.15

 

 

801,928

 

1.33

 

 

Total interest-bearing deposits

 

7,217,317

 

0.36

 

 

7,508,344

 

0.31

 

 

7,530,631

 

0.33

 

 

7,688,398

 

0.34

 

 

7,577,647

 

0.36

 

 

Federal funds purchased

 

1,550,805

 

0.79

 

 

1,620,012

 

0.23

 

 

1,608,349

 

0.21

 

 

1,205,327

 

0.21

 

 

970,708

 

0.22

 

 

Other borrowings

 

64,713

 

4.28

 

 

64,708

 

4.28

 

 

64,704

 

4.23

 

 

64,694

 

4.23

 

 

64,694

 

4.28

 

 

Total interest-bearing liabilities

$

8,832,835

 

0.46

%

$

9,193,064

 

0.33

%

$

9,203,684

 

0.34

%

$

8,958,419

 

0.35

%

$

8,613,049

 

0.37

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

4,824,521

 

 

 

4,870,701

 

 

 

4,856,243

 

 

 

3,800,972

 

 

 

3,154,605

 

 

 

Other liabilities

 

58,784

 

 

 

59,619

 

 

 

54,134

 

 

 

48,060

 

 

 

52,027

 

 

 

Stockholders' equity

 

1,205,551

 

 

 

1,156,186

 

 

 

1,121,578

 

 

 

1,078,987

 

 

 

1,038,012

 

 

 

Accumulated other comprehensive (loss) income

 

(15,144

)

 

 

6,615

 

 

 

15,032

 

 

 

21,143

 

 

 

18,700

 

 

 

Total liabilities and stockholders' equity

$

14,906,547

 

 

$

15,286,185

 

 

$

15,250,671

 

 

$

13,907,581

 

 

$

12,876,393

 

 

Net interest spread

 

3.08

%

 

2.77

%

 

2.58

%

 

2.73

%

 

2.95

%

Net interest margin

 

3.26

%

 

2.89

%

 

2.71

%

 

2.85

%

 

3.06

%

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Average loans include nonaccrual loans in all periods. Loan fees of $6,823, $7,686, $7,203, $9,915 and $10,400 are included in interest income in the second quarter of 2022, first quarter of 2022, the fourth quarter of 2021, the third quarter of 2021, and the second quarter of 2021, respectively.

(2)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.

(3)

Unrealized gains on debt securities of $8,245, $18,974, $26,709, $24,547 and $22,027 for the second quarter of 2022, first quarter of 2022, fourth quarter of 2021, third quarter of 2021, and second quarter of 2021, respectively, are excluded from the yield calculation.

 

Contacts

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

Contacts

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