Investor Relations

Press Release

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2017

Company Release - 7/17/2017 4:01 PM ET

BIRMINGHAM, Ala., July 17, 2017 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2017.

SECOND QUARTER 2017 HIGHLIGHTS:

  • Net income of $24.2 million and diluted EPS of $0.45 for the second quarter of 2017, an increase of 28% and 25%, respectively, year over year
  • Diluted EPS of $0.86 for the six months ended June 30, 2017, an 18% increase year over year
  • Loans and deposits increased 18% and 16%, respectively, year over year
  • Loans increased 16% for the quarter on an annualized basis

Tom Broughton, President and CEO, said, “We are pleased that customer retention and new customer activity is very strong year to date, driving continued EPS growth.”  Bud Foshee, CFO, stated, “Higher interest rates have led to margin improvement in the second quarter, as well as a lower efficiency ratio.  Based on the June rate increase, we should see further margin improvement in the third quarter.”

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 shares and per share information for prior periods in this release  
has been adjusted to give effect to this stock split. 
  
    Period Ending
June 30, 2017
 Period Ending
March 31, 2017
 % Change
From Period
Ending March
31, 2017 to
Period Ending
June 30, 2017
 Period Ending
June 30, 2016
 % Change
From Period
Ending June
30, 2016 to
Period Ending
June 30, 2017
 
QUARTERLY OPERATING RESULTS                   
Net Income $24,164  $22,519  7% $18,876  28% 
Net Income Available to Common Stockholders $24,133  $22,519  7% $18,853  28% 
Diluted Earnings Per Share $0.45  $0.42  7% $0.36  25% 
Return on Average Assets  1.55%  1.45%     1.37%    
Return on Average Common Stockholders' Equity  17.36%  17.09%     15.79%    
Average Diluted Shares Outstanding  54,100,604   54,133,722      53,452,526     
                      
YEAR-TO-DATE OPERATING RESULTS                   
Net Income $46,683         $38,832  20% 
Net Income Available to Common Stockholders $46,652         $38,809  20% 
Diluted Earnings Per Share $0.86         $0.73  18% 
Return on Average Assets  1.50%         1.45%    
Return on Average Common Stockholders' Equity  17.23%         16.57%    
Average Diluted Shares Outstanding  54,117,072          53,293,074     
                      
BALANCE SHEET                   
Total Assets $6,329,599  $6,336,165  -% $5,646,055  12% 
Loans  5,343,688   5,151,984  4%  4,536,338  18% 
Non-interest-bearing Demand Deposits  1,373,353   1,292,440  6%  1,185,668  16% 
Total Deposits  5,394,810   5,361,532  1%  4,667,795  16% 
Stockholders' Equity  567,086   545,148  4%  489,097  16% 
                    

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $24.2 million and net income available to common stockholders of $24.1 million for the quarter ended June 30, 2017, compared to net income and net income available to common stockholders of $18.9 million for the same quarter in 2016.  Basic and diluted earnings per common share were $0.46 and $0.45, respectively, for the second quarter of 2017, compared to $0.36 and $0.36, respectively, for the second quarter of 2016.

Return on average assets was 1.55% and return on average equity was 17.36% for the second quarter of 2017, compared to 1.37% and 15.79%, respectively, for the second quarter of 2016.

Net interest income was $55.6  million for the second quarter of 2017, compared to $52.1 million for the first quarter of 2017 and $45.9 million for the second quarter of 2016.  The net interest margin in the second quarter of 2017 was 3.77%, a 24 basis point increase from the first quarter of 2017 and a 26 basis point increase from the second quarter of 2016.  The increase in net interest income on a linked quarter basis is attributable to a $229.7 million increase in average loans outstanding, a $84.0 million increase in non-interest-bearing deposits and a $321.6 million decrease in average federal funds sold and interest-bearing balances with banks, all resulting in a positive mix change in our balance sheet.  The average yield on loans increased nine basis points to 4.60% on a linked quarter basis.

Average loans for the second quarter of 2017 were $5.23 billion, an increase of $229.7 million, or 5%, over average loans of $5.00 billion for the first quarter of 2017, and an increase of $811.5 million, or 18%, over average loans of $4.42 billion for the second quarter of 2016.

Average total deposits for the second quarter of 2017 were $5.27 billion, a decrease of $46.8 million, or 1%, over average total deposits of $5.32 billion for the first quarter of 2017, and an increase of $792.2 million, or 18%, over average total deposits of $4.48 billion for the second quarter of 2016.

Non-performing assets to total assets were 0.23% for the second quarter of 2017, a decrease of four basis points compared to 0.27% for the first quarter of 2017 and an increase of six basis points compared to 0.17% for the second quarter of 2016.  Net credit charge-offs to average loans were 0.25%, a one basis point increase compared to 0.24% for the first quarter of 2017 and a seven basis point increase compared to 0.18% for the second quarter of 2016.  We recorded a $4.4 million provision for loan losses in the second quarter of 2017 compared to $5.0 million in the first quarter of 2017 and $3.8 million in the second quarter of 2016.  The allowance for loan loss as a percentage of total loans was 1.03% at June 30, 2017 compared to 1.05% at March 31, 2017 and 1.04% at June 30, 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 by $958,000 during the second quarter of 2017, or 25%, compared to the second quarter of 2016.  Mortgage banking revenue increased by $163,000 in the second quarter of 2017, or 18%, compared to the second quarter of 2016.  Cash surrender value of life insurance increased to $785,000 during the second quarter of 2017, compared to $655,000 during the second quarter of 2016.  Credit card revenue increased $617,000, or 108%, to $1.2 million during the second quarter of 2017, compared to $572,000 during the second quarter of 2016.

Non-interest expense for the second quarter of 2017 increased $2.4 million, or 12%, to $21.9 million from $19.5 million in the second quarter of 2016, and increased $608,000, or 3%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2017 increased $1.3 million, or 12%, to $12.0 million from $10.7 million in the second quarter of 2016, and increased $318,000, or 3%, on a linked quarter basis.  Equipment and Occupancy expense increased $242,000, or 12%, to $2.3 million in the second quarter of 2017, from $2.0 million in the second 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.  Other operating expense for the second quarter of 2017 increased $729,000, or 15%, to $5.6 million from $4.9 million in the second quarter of 2016.  This was primarily the result of higher credit card processing expenses and higher Federal Reserve Bank service charges related to increased correspondent banking activities.

Income tax expense increased $2.4 million, or 32%, to $10.0 million in the second quarter of 2017, compared to $7.6 million in the second 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 $1.4 million in the second quarter of 2017, compared to $1.2 million in the second quarter of 2016.  Our effective tax rate for the second quarter of 2017 and 2016 was 29.2% and 28.6%, 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, 2017 At March 31,
2017
 At December
31, 2016
 At September
30, 2016
 At June 30, 2016 
Book value per share - GAAP $10.72  $10.32  $9.93  $9.65  $9.32  
Total common stockholders' equity - GAAP  567,086   545,148   522,889   507,886   489,097  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,855   14,924   14,996   15,073   15,154  
Tangible common stockholders' equity - non-GAAP $552,231  $530,224  $507,893  $492,813  $473,943  
Tangible book value per share - non-GAAP $10.44  $10.04  $9.65  $9.37  $9.03  
                       
Stockholders' equity to total assets - GAAP  8.96%  8.60%  8.21%  8.46%  8.66% 
Total assets - GAAP $6,329,599  $6,336,165  $6,370,448  $6,002,621  $5,646,055  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,855   14,924   14,996   15,073   15,154  
Total tangible assets - non-GAAP $6,314,744  $6,321,241  $6,355,452  $5,987,548  $5,630,901  
Tangible common equity to total tangible assets - non-GAAP  8.75%  8.39%  7.99%  8.23%  8.42% 
                      

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://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,” “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://www.servisfirstbancshares.com/ or by calling (205) 949-0302.

                       
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) 
(In thousands except share and per share data) 
  2nd Quarter
2017
 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016  
CONSOLIDATED STATEMENT OF INCOME                     
Interest income $63,538  $59,517  $56,200  $54,691  $52,050  
Interest expense  7,971   7,465   7,091   6,773   6,159  
Net interest income  55,567   52,052   49,109   47,918   45,891  
Provision for loan losses  4,381   4,986   4,075   3,464   3,800  
Net interest income after provision for loan losses  51,186   47,066   45,034   44,454   42,091  
Non-interest income  4,805   4,546   6,039   4,791   3,847  
Non-interest expense  21,875   21,267   22,037   20,162   19,504  
Income before income tax  34,116   30,345   29,036   29,083   26,434  
Provision for income tax  9,952   7,826   7,298   8,174   7,558  
Net income  24,164   22,519   21,738   20,909   18,876  
Preferred stock dividends  31   -   24   -   23  
Net income available to common stockholders $24,133  $22,519  $21,714  $20,909  $18,853  
Earnings per share - basic $0.46  $0.43  $0.41  $0.40  $0.36  
Earnings per share - diluted $0.45  $0.42  $0.40  $0.39  $0.36  
Average diluted shares outstanding  54,100,604   54,133,722   53,961,160   53,879,328   53,452,526  
                      
CONSOLIDATED BALANCE SHEET DATA                     
Total assets $6,329,599  $6,336,165  $6,370,448  $6,002,621  $5,646,055  
Loans  5,343,688   5,151,984   4,911,770   4,631,822   4,536,338  
Debt securities  518,065   526,023   447,427   377,270   347,706  
Non-interest-bearing demand deposits  1,373,353   1,292,440   1,281,605   1,269,726   1,185,668  
Total deposits  5,394,810   5,361,532   5,420,311   5,081,128   4,664,795  
Borrowings  55,075   55,169   55,262   55,356   55,450  
Stockholders' equity $567,086  $545,148  $522,889  $507,866  $489,097  
                      
Shares outstanding  52,909,362   52,812,396   52,636,896   52,610,896   52,503,896  
Book value per share $10.72  $10.32  $9.93  $9.65  $9.32  
Tangible book value per share (1) $10.44  $10.04  $9.65  $9.37  $9.03  
                      
SELECTED FINANCIAL RATIOS                     
Net interest margin  3.77%  3.53%  3.30%  3.35%  3.51% 
Return on average assets  1.55%  1.45%  1.39%  1.39%  1.37% 
Return on average common stockholders' equity  17.36%  17.09%  16.71%  16.66%  15.79% 
Efficiency ratio  36.23%  37.58%  39.96%  38.25%  39.21% 
Non-interest expense to average earning assets  1.47%  1.43%  1.46%  1.39%  1.50% 
                      
CAPITAL RATIOS (2)                     
Common equity tier 1 capital to risk-weighted assets  9.72%  9.67%  9.78%  9.91%  9.83% 
Tier 1 capital to risk-weighted assets  9.73%  9.68%  9.78%  9.92%  9.84% 
Total capital to risk-weighted assets  11.67%  11.66%  11.84%  12.03%  11.98% 
Tier 1 capital to average assets  8.88%  8.46%  8.22%  8.20%  8.52% 
Tangible common equity to total tangible assets (1)  8.75%  8.39%  7.99%  8.23%  8.42% 
                      
(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, 2017 June 30, 2016 % Change 
ASSETS          
Cash and due from banks $71,181  $54,985  29 % 
Interest-bearing balances due from depository institutions  134,694   417,703  (68)% 
Federal funds sold  49,443   116,038  (57)% 
 Cash and cash equivalents  255,318   588,726  (57)% 
Available for sale debt securities, at fair value  438,808   321,044  37 % 
Held to maturity debt securities (fair value of $80,532 and $30,717 at          
 June 30, 2017 and 2016, respectively)  79,257   29,662  167 % 
Restricted equity securities  1,037   5,671  (82)% 
Mortgage loans held for sale  5,673   7,933  (28)% 
Loans  5,343,688   4,536,338  18 % 
Less allowance for loan losses  (55,059)  (46,998) 17 % 
 Loans, net  5,288,629   4,489,340  18 % 
Premises and equipment, net  51,797   23,221  123 % 
Goodwill and other identifiable intangible assets  14,855   15,154  (2)% 
Other assets  194,225   165,304  17 % 
 Total assets $6,329,599  $5,646,055  12 % 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Liabilities:          
Deposits:          
 Non-interest-bearing $1,373,353  $1,185,668  16 % 
 Interest-bearing  4,021,457   3,482,127  15 % 
  Total deposits  5,394,810   4,667,795  16 % 
Federal funds purchased  300,226   420,430  (29)% 
Other borrowings  55,075   55,450  (1)% 
Other liabilities  12,402   13,283  (7)% 
 Total liabilities  5,762,513   5,156,958  12 % 
Stockholders' equity:          
 Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001          
  (liquidation preference $1,000), net of discount; no shares authorized,          
  no shares issued or outstanding at June 30, 2017 and 2016  -   -  - % 
 Preferred stock, par value $0.001 per share; 1,000,000 shares authorized and          
  undesignated at June 30, 2017 and 2016  -   -  - % 
 Common stock, par value $0.001 per share; 100,000,000 shares authorized;          
  52,909,362 shares issued and outstanding at June 30, 2017 and 52,503,896          
  shares issued and outstanding at June 30, 2016  53   52  2 % 
 Additional paid-in capital  217,271   214,525  1 % 
 Retained earnings  348,517   268,739  30 % 
 Accumulated other comprehensive income  743   5,404  (86)% 
 Noncontrolling interest  502   377  33 % 
  Total stockholders' equity  567,086   489,097  16 % 
 Total liabilities and stockholders' equity $6,329,599  $5,646,055  12 % 


           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 
(In thousands except per share data)  
    Three Months Ended June 30, Six Months Ended June 30, 
    2017 2016  2017 2016  
Interest income:             
 Interest and fees on loans $59,912 $49,210  $115,468 $96,457  
 Taxable securities  2,274  1,238   4,361  2,507  
 Nontaxable securities  752  834   1,517  1,692  
 Federal funds sold  287  210   806  283  
 Other interest and dividends  313  558   903  1,072  
   Total interest income  63,538  52,050   123,055  102,011  
Interest expense:             
 Deposits  6,321  4,633   12,303  8,994  
 Borrowed funds  1,650  1,526   3,133  2,947  
   Total interest expense  7,971  6,159   15,436  11,941  
   Net interest income  55,567  45,891   107,619  90,070  
Provision for loan losses  4,381  3,800   9,367  5,859  
   Net interest income after provision for loan losses  51,186  42,091   98,252  84,211  
Non-interest income:             
 Service charges on deposit accounts  1,382  1,306   2,736  2,613  
 Mortgage banking  1,064  901   1,963  1,569  
 Credit card income   1,189  572   2,368  1,041  
 Securities gains    -  (3)    -  (3) 
 Increase in cash surrender value life insurance  785  655   1,509  1,279  
 Other operating income  385  416   775  783  
   Total non-interest income  4,805  3,847   9,351  7,282  
Non-interest expense:             
 Salaries and employee benefits  12,031  10,733   23,744  21,800  
 Equipment and occupancy expense  2,265  2,023   4,505  4,008  
 Professional services  808  999   1,579  1,737  
 FDIC and other regulatory assessments  1,081  803   2,078  1,553  
 Other real estate owned expense  56  41   132  490  
 Other operating expense  5,634  4,905   11,104  9,206  
   Total non-interest expense  21,875  19,504   43,142  38,794  
   Income before income tax  34,116  26,434   64,461  52,699  
Provision for income tax  9,952  7,558   17,778  13,867  
   Net income  24,164  18,876   46,683  38,832  
 Dividends on preferred stock  31  23   31  23  
   Net income available to common stockholders $24,133 $18,853  $46,652 $38,809  
Basic earnings per common share $0.46 $0.36  $0.88 $0.74  
Diluted earnings per common share $0.45 $0.36  $0.86 $0.73  


                
LOANS BY TYPE (UNAUDITED) 
(In thousands) 
                 
   2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016
Commercial, financial and agricultural $2,123,498 $2,061,503 $1,982,267 $1,885,315 $1,892,870
Real estate - construction  395,398  345,777  335,085  292,721  251,144
Real estate - mortgage:               
 Owner-occupied commercial  1,272,659  1,262,578  1,171,719  1,138,308  1,117,514
 1-4 family mortgage  565,121  554,261  536,805  520,394  494,733
 Other mortgage  931,788  872,955  830,683  740,127  725,336
Subtotal: Real estate - mortgage  2,769,568  2,689,794  2,539,207  2,398,829  2,337,583
Consumer  55,224  54,910  55,211  54,957  54,741
Total loans $5,343,688 $5,151,984 $4,911,770 $4,631,822 $4,536,338


                   
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED) 
(Dollars in thousands) 
     2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 
Allowance for loan losses:                     
Beginning balance $53,892   $51,893    $48,933   $46,998    $45,145   
Loans charged off:                     
 Commercial, financial and agricultural  3,067    2,855    1,059   1,270    1,412   
 Real estate - construction  40    -    -   79    355   
 Real estate - mortgage  106    266    45   144    191   
 Consumer  33    75    82   81    31   
  Total charge offs  3,246    3,196    1,186   1,574    1,989   
Recoveries:                     
 Commercial, financial and agricultural  16    190    10   35    1   
 Real estate - construction  14    16    12   9    39   
 Real estate - mortgage  2    2    46   1    2   
 Consumer  -    1    3   -    -   
  Total recoveries  32    209    71   45    42   
 Net charge-offs  3,214    2,987    1,115   1,529    1,947   
 Provision for loan losses  4,381    4,986    4,075   3,464    3,800   
 Ending balance $55,059   $53,892   $51,893  $48,933   $46,998   
                         
 Allowance for loan losses to total loans  1.03 %  1.05  %  1.06 %  1.05  %  1.04 % 
 Allowance for loan losses to total average                     
  loans  1.05 %  1.08  %  1.10 %  1.07  %  1.06 % 
 Net charge-offs to total average loans  0.25 %  0.24  %  0.09 %  0.13  %  0.18 % 
 Provision for loan losses to total average                     
  loans  0.34 %  0.40  %  0.34 %  0.30  %  0.34 % 
 Nonperforming assets:                     
  Nonaccrual loans $9,963   $12,084    $10,624   $6,647    $4,730   
  Loans 90+ days past due and accruing  1,016    16    6,263   43    423   
  Other real estate owned and                     
    repossessed assets  3,891    5,102    4,988   3,035    4,260   
 Total $14,870   $17,202   $21,875  $9,725   $9,413   
                         
 Nonperforming loans to total loans  0.21 %  0.23  %  0.34 %  0.14  %  0.11 % 
 Nonperforming assets to total assets  0.23 %  0.27  %  0.34 %  0.16  %  0.17 % 
 Nonperforming assets to earning assets  0.24 %  0.28  %  0.35 %  0.16  %  0.17 % 
 Reserve for loan losses to nonaccrual loans  552.63 %  445.98  %  488.45 %  736.17  %  993.62 % 
                         
 Restructured accruing loans $12,716   $536    $558   $6,738    $6,753   
                         
 Restructured accruing loans to total loans  0.24 %  0.01  %  0.01 %  0.14  %  0.15 % 
                         
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)              
 (In thousands)                 
     2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 
 Beginning balance: $7,269   $7,292   $6,738  $6,753   $6,763   
  Additions  12,716    -    -   -    -   
  Removal from TDR  (535)   -    -   -    -   
  Net (paydowns) / advances  (1,380)   (23)   554   (15)   (10)  
  Charge-offs  (1,700)   -    -   -    -   
     $16,370   $7,269   $7,292  $6,738   $6,753   


           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
    2nd Quarter
2017
 1st Quarter
2017
 4th Quarter
2016
 3rd Quarter
2016
 2nd Quarter
2016
 
Interest income:                
 Interest and fees on loans $59,912 $55,556 $52,533 $51,598 $49,210  
 Taxable securities  2,274  2,087  1,604  1,107  1,238  
 Nontaxable securities  752  765  785  823  834  
 Federal funds sold  287  519  377  347  210  
 Other interest and dividends  313  590  901  816  558  
   Total interest income  63,538  59,517  56,200  54,691  52,050  
Interest expense:                
 Deposits  6,321  5,982  5,817  5,358  4,611  
 Borrowed funds  1,650  1,483  1,274  1,415  1,548  
   Total interest expense  7,971  7,465  7,091  6,773  6,159  
   Net interest income  55,567  52,052  49,109  47,918  45,891  
Provision for loan losses  4,381  4,986  4,075  3,464  3,800  
   Net interest income after provision for loan losses  51,186  47,066  45,034  44,454  42,091  
Non-interest income:                
 Service charges on deposit accounts  1,382  1,354  1,375  1,367  1,306  
 Mortgage banking  1,064  899  1,044  1,112  901  
 Credit card income   1,189  1,179  1,052  1,114  572  
 Securities gains  -  -  -  -  (3) 
 Increase in cash surrender value life insurance  785  724  745  770  655  
 Other operating income  385  390  1,823  428  416  
   Total non-interest income  4,805  4,546  6,039  4,791  3,847  
Non-interest expense:                
 Salaries and employee benefits  12,031  11,713  11,197  10,958  10,733  
 Equipment and occupancy expense  2,265  2,250  1,877  2,100  2,023  
 Professional services  808  771  1,058  1,182  999  
 FDIC and other regulatory assessments  1,081  997  1,072  775  803  
 Other real estate owned expense  56  76  91  178  41  
 Other operating expense  5,634  5,460  6,742  4,969  4,905  
   Total non-interest expense  21,875  21,267  22,037  20,162  19,504  
   Income before income tax  34,116  30,345  29,036  29,083  26,434  
Provision for income tax  9,952  7,826  7,298  8,174  7,558  
   Net income  24,164  22,519  21,738  20,909  18,876  
 Dividends on preferred stock  31  -  24  -  23  
   Net income available to common stockholders $24,133 $22,519 $21,714 $20,909 $18,853  
Basic earnings per common share $0.46 $0.43 $0.41 $0.40 $0.36  
Diluted earnings per common share $0.45 $0.42 $0.40 $0.39 $0.36  


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) 
ON A FULLY TAXABLE-EQUIVALENT BASIS 
(Dollars in thousands) 
  
                                    
      2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd 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 $5,192,812 4.60% $4,976,933  4.50% $4,676,565 4.45% $4,554,900 4.47% $4,406,107 4.47% 
  Tax-exempt (2)  41,143 4.92   27,322  4.72   26,344 4.74   21,939 4.37   16,315 4.54  
   Total loans, net of                               
    unearned income  5,233,955 4.60   5,004,255  4.51   4,702,909 4.45   4,576,839 4.47   4,422,422 4.47  
 Mortgage loans held for sale  5,958 3.90   5,637  4.10   6,271 3.36   6,724 3.79   7,323 3.62  
 Debt securities:                               
  Taxable  389,505 2.34   368,349  2.27   295,608 2.17   224,825 2.19   208,113 2.38  
  Tax-exempt (2)  133,590 3.38   132,578  3.45   134,748 3.54   135,272 3.73   135,954 3.73  
   Total securities (3)  523,095 2.60   500,927  2.58   430,356 2.60   360,097 2.77   344,067 2.91  
 Federal funds sold  98,598 1.17   234,460  0.90   242,211 0.62   217,158 0.64   144,206 0.59  
 Restricted equity securities  1,030 10.51   1,030  1.57   3,042 8.24   5,658 4.01   5,659 3.62  
 Interest-bearing balances with banks  109,909 1.04   295,648  0.80   601,143 0.55   590,675 0.51   393,782 0.52  
 Total interest-earning assets $5,972,545 4.30% $6,041,957  4.03% $5,985,932 3.77% $5,757,151 3.81% $5,317,459 3.97% 
Non-interest-earning assets:                               
 Cash and due from banks  68,894     59,697      55,593     58,809     65,318    
 Net premises and equipment  49,813     44,739      30,421     25,000     23,241    
 Allowance for loan losses, accrued                               
  interest and other assets  143,286     138,289      140,721     145,804     127,640    
   Total assets $6,234,538    $6,284,682     $6,212,667    $5,986,764    $5,533,658    
                                    
Interest-bearing liabilities:                               
 Interest-bearing deposits:                               
 Checking $779,916 0.39% $789,273  0.38% $735,115 0.37% $696,100 0.37% $691,776 0.36% 
 Savings  48,150 0.30   50,461  0.33   51,845 0.32   43,569 0.30   41,546 0.30  
 Money market  2,567,817 0.64   2,694,225  0.58   2,669,513 0.56   2,471,829 0.55   2,105,420 0.52  
 Time deposits  537,220 1.06   530,000  1.02   527,100 1.00   519,653 0.99   498,151 1.01  
  Total interest-bearing deposits  3,933,103 0.64   4,063,959  0.60   3,983,573 0.58   3,731,151 0.57   3,336,893 0.56  
 Federal funds purchased  336,344 1.11   359,747  0.86   353,029 0.63   436,415 0.64   505,076 0.64  
 Other borrowings  55,130 5.22   55,239  5.26   55,315 5.16   55,410 5.15   55,521 5.20  
 Total interest-bearing liabilities $4,324,577 0.74% $4,478,945  0.68% $4,391,917 0.64% $4,222,976 0.64% $3,897,490 0.64% 
Non-interest-bearing liabilities:                               
 Non-interest-bearing                               
  demand  1,338,514     1,254,496      1,289,448     1,250,139     1,142,541    
 Other liabilities  13,739     16,809      14,399     14,376     13,301    
 Stockholders' equity  556,521     535,232      514,245     494,248     475,917    
 Unrealized gains on securities and                               
  derivatives  1,187     (800)     2,658     5,025     4,409    
   Total liabilities and                               
    stockholders' equity $6,234,538    $6,284,682     $6,212,667    $5,986,764    $5,533,658    
Net interest spread    3.56%    3.35%    3.13%    3.17%    3.33% 
Net interest margin    3.77%    3.53%    3.30%    3.35%    3.51% 
                                    

 

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

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Source: ServisFirst Bancshares, Inc.