Investor Relations

Press Release

ServisFirst Bancshares, Inc. Announces Results for Fourth Quarter of 2018

Company Release - 1/22/2019 4:01 PM ET

BIRMINGHAM, Ala., Jan. 22, 2019 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2018.

Fourth Quarter 2018 Highlights:

  • Assets exceed $8 billion at year end 2018
  • Diluted EPS increased 47% from $1.72 to $2.53 year over year
  • Deposits increased 25% on an annualized basis for the quarter and 14% year over year
  • Increased dividend to $0.15 per share, a 36% increase
  • Loans increased 12% year over year

Tom Broughton, President and CEO, said, “Our strong organic growth continues for the 13th year, with assets now exceeding $8 billion.”  Bud Foshee, CFO, added, “Our strong organic growth continued in the fourth quarter as a result of our bank’s focus on developing new and existing relationships.”

FINANCIAL SUMMARY (UNAUDITED) 
(in Thousands except share and per share amounts) 
   Period Ending
December 31, 2018
 Period Ending
September 30, 2018
 % Change
From Period
Ending
September 30,
2018 to Period
Ending
December 31,
2018
 Period Ending
December 31, 2017
 % Change
From Period
Ending
December 31,
2017 to Period
Ending
December 31,
2018
QUARTERLY OPERATING RESULTS                  
Net Income $36,237  $34,560  5% $21,150  71%
Net Income Available to Common Stockholders $36,205  $34,560  5% $21,119  71%
Diluted Earnings Per Share $0.67  $0.64  5% $0.39  72%
Return on Average Assets  1.85%  1.87%     1.20%   
Return on Average Common Stockholders' Equity  21.13%  20.42%     13.97%   
Average Diluted Shares Outstanding  54,109,450   54,191,222      54,161,788    
                    
Net Income - adjusted for non-routine expenses * $36,237         $24,424  48%
Net Income Available to Common Stockholders - adjusted for                  
 non-routine expenses* $36,205         $24,393  48%
Diluted Earnings Per Share - adjusted for non-routine expenses * $0.67         $0.45  49%
Return on Average Assets - adjusted for non-routine expenses *  1.85%         1.39%   
Return on Average Common Stockholders' Equity - adjusted for                  
 non-routine expenses*  21.13%         16.13%   
                    
YEAR-TO-DATE OPERATING RESULTS                  
Net Income $136,940         $93,092  47%
Net Income Available to Common Stockholders $136,877         $93,030  47%
Diluted Earnings Per Share $2.53         $1.72  47%
Return on Average Assets  1.88%         1.43%   
Return on Average Common Stockholders' Equity  20.95%         16.37%   
Average Diluted Shares Outstanding  54,169,879          54,123,957    
                    
Net Income - adjusted for non-routine expenses * $136,940         $96,366  42%
Net Income Available to Common Stockholders - adjusted for                  
 non-routine expenses* $136,877         $96,304  42%
Diluted Earnings Per Share - adjusted for non-routine expenses * $2.53         $1.78  42%
Return on Average Assets - adjusted for non-routine expenses *  1.88%         1.48%   
Return on Average Common Stockholders' Equity - adjusted for                  
 non-routine expenses*  20.95%         16.95%   
                    
BALANCE SHEET                  
Total Assets $8,007,382  $7,517,833  7% $7,082,384  13%
Loans  6,533,499   6,363,531  3%  5,851,261  12%
Non-interest-bearing Demand Deposits  1,557,341   1,504,447  4%  1,440,326  8%
Total Deposits  6,915,708   6,505,351  6%  6,091,674  14%
Stockholders' Equity  715,203   681,510  5%  607,604  18%
                    
* Non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.
 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $36.2 million for the quarter ended December 31, 2018, compared to net income of $21.2 million and net income available to common stockholders of $21.1 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.68 and $0.67, respectively, for the fourth quarter of 2018, compared to $0.40 and $0.39, respectively, for the fourth quarter of 2017.

Return on average assets was 1.85% and return on average common stockholders’ equity was 21.13 for the fourth quarter of 2018, compared to 1.20% and 13.97%, respectively, for the fourth quarter of 2017.

Net interest income was $68.9 million for the fourth quarter of 2018, compared to $66.9 million for the third quarter of 2018 and $61.4 million for the fourth quarter of 2017.  The net interest margin in the fourth quarter of 2018 was 3.63% compared to 3.77% in the third quarter of 2018 and 3.66% in the fourth quarter of 2017.  Loans of $16.7 million were added to nonaccrual status during the fourth quarter of 2018 resulting in the reversal of $390,000 in interest income.  Linked quarter increases in average rates paid on deposits in excess of increased average yields on loans drove unfavorable mix change, while increases in average balances in loans, non-interest bearing deposits and equity drove favorable volume change and overall change.

Average loans for the fourth quarter of 2018 were $6.43 billion, an increase of $199.4 million, or 3%, over average loans of $6.23 billion for the third quarter of 2018, and an increase of $715.6 million, or 13%, over average loans of $5.72 billion for the fourth quarter of 2017.

Average total deposits for the fourth quarter of 2018 were $6.74 billion, an increase of $403.5 million, or 6%, over average total deposits of $6.33 billion for the third quarter of 2018, and an increase of $702.4 million, or 12%, over average total deposits of $6.03 billion for the fourth quarter of 2017.

Non-performing assets to total assets were 0.41% for the fourth quarter of 2018, an increase of 14 basis points compared to 0.27% for the third quarter of 2018 and an increase of 16 basis points compared to 0.25% for the fourth quarter of 2017.  $10.4 million of the previously mentioned $16.7 million of loans added to nonaccrual status were classified as accruing TDRs at September 30, 2018.  Net credit charge-offs to average loans were 0.30%, a five basis point increase compared to 0.25% for the third quarter of 2018 and a decrease of 26 basis points compared to 0.56% for the fourth quarter of 2017.  Year-to-date net credit charge-offs to average loans were 0.20%, a nine basis point decrease compared to 0.29% for the same period in 2017.  We recorded a $6.5 million provision for loan losses in the fourth quarter of 2018 compared to $6.6 million in the third quarter of 2018 and $9.1 million in the fourth quarter of 2017.  The allowance for loan loss as a percentage of total loans was 1.05% at December 31, 2018 compared to 1.05% at September 30, 2018 and 1.02% at December 31, 2017.  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 $712,000 during the fourth quarter of 2018, or 15%, compared to the fourth quarter of 2017.  Deposit service charges increased $215,000 in the fourth quarter of 2018, or 14%, compared to the fourth quarter of 2017.  The number of transaction deposit accounts increased approximately 8% from December 31, 2017 to December 31, 2018, and the amount of overdraft fees increased $175,000, or 24%, from the fourth quarter of 2017 to the fourth quarter of 2018.  Mortgage banking revenue decreased $206,000, or 23%, from the fourth quarter of 2017 to the fourth quarter of 2018.  Increases in market rates have slowed originations and refinancing activity during 2018.  Credit card revenue increased $695,000, or 54%, to $2.0 million during the fourth quarter of 2018, compared to $1.3 million during the fourth quarter of 2017, driven by increased numbers of accounts and increased purchases per account.

Non-interest expense for the fourth quarter of 2018 increased $2.0 million, or 9%, to $23.3 million from $21.3 million in the fourth quarter of 2017, and increased $149,000, or 1%, on a linked quarter basis.  Salary and benefit expense for the fourth quarter of 2018 increased $953,000, or 8%, to $12.4 million from $11.4 million in the fourth quarter of 2017, and decreased $685,000, or 5%, on a linked quarter basis.  The linked-quarter decrease resulted from a $815,000 reversal of incentive bonuses in December 2018 that were accrued during the first eleven months of 2018.  The number of FTE employees increased from 428 at December 31, 2017 to 468 at December 31, 2018, or 9%.  Equipment and occupancy expense increased $597,000, or 38%, to $2.2 million in the fourth quarter of 2018, from $1.6 million in the fourth quarter of 2017, and decreased $30,000 on a linked-quarter basis.  Other operating expense for the fourth quarter of 2018 increased $526,000, or 8%, to $6.8 million from $6.2 million in the fourth quarter of 2017, and increased $690,000, or 11%, on a linked-quarter basis.  During the fourth quarter of 2018 we recognized a $250,000 charge related to a wire fraud.  The efficiency ratio improved to 31.28% during the fourth quarter of 2018 from 32.05% during the fourth quarter of 2017 and from 31.95% on a linked quarter basis.

Income tax expense decreased $6.4 million, or 43%, to $8.4 million in the fourth quarter of 2018, compared to $14.9 million in the fourth quarter of 2017.  We recognized $3.1 million of additional tax expense during the fourth quarter of 2017 as a result of revaluing our net deferred tax assets as of December 31, 2017 in connection with the Tax Cuts and Jobs Act passed into law in December 2017.  Lower corporate income tax rates resulting from the passage of this law have resulted in lower effective tax rates starting in 2018.  We also 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 fourth quarters of 2018 and 2017 of $1.5 million and $351,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We recorded $3.1 million of additional tax expense as a result of revaluing our net deferred tax assets at December 31, 2017 due to lower corporate income tax rates provided by the Tax Cuts and Jobs Act passed into law in December 2017. During the fourth quarter of 2017 we also recorded expenses of $347,000 related to terminating the lease agreement on our previous headquarters building in Birmingham, Alabama and expenses of moving into our new headquarters building.  Financial measures included in this press release that are presented adjusted for these non-routine expenses are net income, net income available to common stockholders, diluted earnings per share, return on average assets and return on average common stockholders’ equity.  Each of these five financial measures excludes the impact of the non-routine expenses attributable to our net deferred tax asset revaluation, lease termination and moving expenses, and are all considered non-GAAP financial measures.  In addition to these financial measures adjusted for non-routine expenses, 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.

               Three Months ended
December 31, 2017
 Year ended
December 31, 2017
Return on average assets - GAAP              1.20 %  1.43 %
Net income - GAAP             $21,150  $93,092 
 Adjustments:                  
 Revaluation of net deferred tax assets              3,059   3,059 
 Lease termination and moving expenses              347   347 
   Tax (benefit) of adjustments              (132)  (132)
Net income adjusted for non-routine expenses, net of tax                  
 benefit - non-GAAP             $24,424  $96,366 
Average assets             $6,988,731  $6,495,067 
Return on average assets adjusted for non-routine                  
 expenses - non-GAAP              1.39 %  1.48 %
                    
Return on average common stockholders' equity - GAAP              13.97 %  16.37 %
Net income available to common stockholders - GAAP             $21,119  $93,030 
 Adjustments:                  
 Revaluation of net deferred tax assets              3,059   3,059 
 Lease termination and moving expenses              347   347 
   Tax (benefit) of adjustments              (132)  (132)
Net income available to common stockholders - adjusted for                  
 non-routine expenses - non-GAAP             $24,393  $96,304 
Average common stockholders' equity             $599,947  $568,228 
Return on average common stockholders' equity - adjusted                  
 for non-routine expenses - non-GAAP              16.13 %  16.95 %
Diluted earnings per share             $0.39  $1.72 
Weighted average shares outstanding, diluted - GAAP              54,161,788   54,123,957 
Diluted earnings per share - adjusted for non-routine                  
 expenses - non-GAAP             $0.45  $1.78 
                    
   At December 31,
2018
 At September 30,
2018
 At June 30,
2018
 At March 31,
2018
 At December 31,
2017
Book value per share - GAAP $13.40  $12.81  $12.33  $11.84  $11.47 
Total common stockholders' equity - GAAP  715,203   681,510   655,114   629,297   607,604 
 Adjustments:                  
 Adjusted for goodwill and core deposit intangible asset  14,449   14,517   14,584   14,652   14,719 
Tangible common stockholders' equity - non-GAAP $700,754  $666,993  $640,530  $614,645  $592,885 
Tangible book value per share - non-GAAP $13.13  $12.54  $12.05  $11.56  $11.19 
                    
Stockholders' equity to total assets - GAAP  8.93%  9.07%  9.25%  8.98 %  8.58 %
Total assets - GAAP $8,007,382  $7,517,833  $7,084,562  $7,011,735  $7,082,384 
 Adjustments:                  
 Adjusted for goodwill and core deposit intangible asset  14,449   14,517   14,584   14,652   14,719 
Total tangible assets - non-GAAP $7,992,933  $7,503,316  $7,069,978  $6,997,083  $7,067,665 
Tangible common equity to total tangible assets - non-GAAP  8.77%  8.89%  9.06%  8.78 %  8.39 %
                     

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 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 www.servisfirstbancshares.com  or by calling (205) 949-0302.

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

                  
 SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)                 
(In thousands except share and per share data)                    
  4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017
CONSOLIDATED STATEMENT OF INCOME                    
Interest income $90,164  $84,058  $78,396  $74,009  $72,060 
Interest expense  21,306   17,195   13,874   11,573   10,652 
Net interest income  68,858   66,863   64,522   62,436   61,408 
Provision for loan losses  6,518   6,624   4,121   4,139   9,055 
Net interest income after provision for loan losses  62,340   60,239   60,401   58,297   52,353 
Non-interest income  5,617   5,591   5,459   4,869   4,905 
Non-interest expense  23,299   23,150   24,010   23,512   21,255 
Income before income tax  44,658   42,680   41,850   39,654   36,003 
Provision for income tax  8,421   8,120   8,310   7,051   14,853 
Net income  36,237   34,560   33,540   32,603   21,150 
Preferred stock dividends  32   -   31   -   31 
Net income available to common stockholders $36,205  $34,560  $33,509  $32,603  $21,119 
Earnings per share - basic $0.68  $0.65  $0.63  $0.61  $0.40 
Earnings per share - diluted $0.67  $0.64  $0.62  $0.60  $0.39 
Average diluted shares outstanding  54,109,450   54,191,222   54,196,023   54,183,400   54,161,788 
                     
CONSOLIDATED BALANCE SHEET DATA                    
Total assets $8,007,382  $7,517,833  $7,084,562  $7,011,735  $7,082,384 
Loans  6,533,499   6,363,531   6,129,649   5,928,327   5,851,261 
Debt securities  590,184   578,271   583,799   560,885   538,330 
Non-interest-bearing demand deposits  1,557,341   1,504,447   1,481,447   1,407,592   1,440,326 
Total deposits  6,915,708   6,505,351   6,085,682   5,977,387   6,091,674 
Borrowings  64,666   64,657   64,648   64,739   64,832 
Stockholders' equity $715,203  $681,510  $655,114  $629,297  $607,604 
                     
Shares outstanding  53,375,195   53,197,807   53,150,733   53,147,169   52,992,586 
Book value per share $13.40  $12.81  $12.33  $11.84  $11.47 
Tangible book value per share (1) $13.13  $12.54  $12.05  $11.56  $11.19 
                     
SELECTED FINANCIAL RATIOS                    
Net interest margin  3.63%  3.77%  3.82%  3.81%  3.66%
Return on average assets  1.85%  1.87%  1.91%  1.91%  1.20%
Return on average common stockholders' equity  21.13%  20.42%  20.89%  21.40%  13.97%
Efficiency ratio  31.28%  31.95%  34.31%  34.93%  32.05%
Non-interest expense to average earning assets  1.23%  1.30%  1.42%  1.43%  1.26%
                     
CAPITAL RATIOS (2)                    
Common equity tier 1 capital to risk-weighted assets  10.12%  10.08%  10.08%  9.88%  9.51%
Tier 1 capital to risk-weighted assets  10.13%  10.09%  10.08%  9.88%  9.52%
Total capital to risk-weighted assets  12.05%  12.05%  12.10%  11.91%  11.52%
Tier 1 capital to average assets  9.07%  9.28%  9.21%  8.95%  8.51%
Tangible common equity to total tangible assets (1)  8.77%  8.89%  9.06%  8.78%  8.39%
                     
(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)        
   December 31, 2018 December 31, 2017   
       % Change
ASSETS        
Cash and due from banks$206,434  $86,213  139 %
Interest-bearing balances due from depository institutions 251,616   151,849  66 %
Federal funds sold 223,845   239,524  (7)%
 Cash and cash equivalents 681,895   477,586  43 %
Available for sale debt securities, at fair value 590,184   538,080  10 %
Held to maturity debt securities (fair value of $250 at December 31, 2017) -   250  NM  
Restricted equity securities 894   1,034  (14)%
Mortgage loans held for sale 120   4,459  (97)%
Loans 6,533,499   5,851,261  12 %
Less allowance for loan losses (68,600)  (59,406) 15 %
 Loans, net 6,464,899   5,791,855  12 %
Premises and equipment, net 57,822   58,900  (2)%
Goodwill and other identifiable intangible assets 14,449   14,719  (2)%
Other assets 197,119   195,501  1 %
 Total assets$8,007,382  $7,082,384  13 %
LIABILITIES AND STOCKHOLDERS' EQUITY        
Liabilities:        
Deposits:        
 Non-interest-bearing$1,557,341  $1,440,326  8 %
 Interest-bearing 5,358,367   4,651,348  15 %
  Total deposits 6,915,708   6,091,674  14 %
Federal funds purchased 288,725   301,797  (4)%
Other borrowings 64,666   64,832  - %
Other liabilities 23,080   16,477  40 %
 Total liabilities 7,292,179   6,474,780  13 %
Stockholders' equity:        
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at        
  December 31, 2018 and December 31, 2017 -   -  - %
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,375,195 shares        
  issued and outstanding at December 31, 2018, and 52,992,586 shares issued and outstanding        
  at December 31, 2017 53   53  - %
 Additional paid-in capital 218,521   217,693  - %
 Retained earnings 500,868   389,554  29 %
 Accumulated other comprehensive loss (4,741)  (198) N/M  
  Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 714,701   607,102  18 %
 Noncontrolling interest 502   502  - %
  Total stockholders' equity 715,203   607,604  18 %
 Total liabilities and stockholders' equity$8,007,382  $7,082,384  13 %
           


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)             
   Three Months Ended December 31, Year Ended December 31, 
   2018 2017 2018 2017 
Interest income:             
 Interest and fees on loans $83,085 $67,357 $305,370 $246,682 
 Taxable securities  3,506  2,468  12,654  9,117 
 Nontaxable securities  544  702  2,406  2,948 
 Federal funds sold  966  508  3,103  1,693 
 Other interest and dividends  2,063  1,025  3,094  2,316 
   Total interest income  90,164  72,060  326,627  262,756 
Interest expense:             
 Deposits  18,957  8,954  55,502  28,831 
 Borrowed funds  2,349  1,698  8,446  6,502 
   Total interest expense  21,306  10,652  63,948  35,333 
   Net interest income  68,858  61,408  262,679  227,423 
Provision for loan losses  6,518  9,055  21,402  23,225 
   Net interest income after provision for loan losses  62,340  52,353  241,277  204,198 
Non-interest income:             
 Service charges on deposit accounts  1,714  1,499  6,547  5,702 
 Mortgage banking  688  894  2,784  3,835 
 Credit card income  1,993  1,298  7,165  4,815 
 Securities gains  -  -  190  - 
 Increase in cash surrender value life insurance  780  797  3,130  3,131 
 Other operating income  442  417  1,720  1,563 
   Total non-interest income  5,617  4,905  21,536  19,046 
Non-interest expense:             
 Salaries and employee benefits  12,385  11,432  51,849  47,604 
 Equipment and occupancy expense  2,163  1,566  8,423  8,018 
 Professional services  1,064  833  3,646  3,217 
 FDIC and other regulatory assessments  902  1,030  3,869  3,918 
 Other real estate owned expense  25  160  790  323 
 Other operating expense  6,760  6,234  25,394  22,814 
   Total non-interest expense  23,299  21,255  93,971  85,894 
   Income before income tax  44,658  36,003  168,842  137,350 
Provision for income tax  8,421  14,853  31,902  44,258 
    Net income  36,237  21,150  136,940  93,092 
 Dividends on preferred stock  32  31  63  62 
   Net income available to common stockholders $36,205 $21,119 $136,877 $93,030 
Basic earnings per common share $0.68 $0.40 $2.57 $1.76 
Diluted earnings per common share $0.67 $0.39 $2.53 $1.72 


LOANS BY TYPE (UNAUDITED)               
(In thousands)               
                 
   4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017
Commercial, financial and agricultural $2,513,225 $2,478,788 $2,345,879 $2,329,904 $2,279,366
Real estate - construction  533,192  543,611  522,788  506,050  580,874
Real estate - mortgage:               
 Owner-occupied commercial  1,463,887  1,430,111  1,383,882  1,349,679  1,328,666
 1-4 family mortgage  621,634  610,460  584,133  581,498  603,063
 Other mortgage  1,337,068  1,236,954  1,225,906  1,099,482  997,079
Subtotal: Real estate - mortgage  3,422,589  3,277,525  3,193,921  3,030,659  2,928,808
Consumer  64,493  63,607  67,061  61,714  62,213
Total loans $6,533,499 $6,363,531 $6,129,649 $5,928,327 $5,851,261


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                 
(Dollars in thousands)                 
   4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017
Allowance for loan losses:                   
Beginning balance$66,879   $64,239    $62,050    $59,406    $58,459  
Loans charged off:                   
 Commercial, financial and agricultural 4,685    3,923    1,732    1,088    7,064  
 Real estate - construction -    -    -    -    -  
 Real estate - mortgage 173    48    440    381    1,134  
 Consumer 72    76    47    88    137  
  Total charge offs 4,930    4,047    2,219    1,557    8,335  
Recoveries:                   
 Commercial, financial and agricultural 120    52    173    4    64  
 Real estate - construction 4    4    97    7    126  
 Real estate - mortgage 1    1    2    42    26  
 Consumer 8    6    15    9    11  
  Total recoveries 133    63    287    62    227  
 Net charge-offs 4,797    3,984    1,932    1,495    8,108  
 Provision for loan losses 6,518    6,624    4,121    4,139    9,055  
 Ending balance$68,600   $66,879   $64,239   $62,050   $59,406  
                      
 Allowance for loan losses to total loans 1.05 %  1.05  %  1.05  %  1.05  %  1.02 %
 Allowance for loan losses to total average                   
  loans 1.07 %  1.07  %  1.07  %  1.05  %  1.04 %
 Net charge-offs to total average loans 0.30 %  0.25  %  0.13  %  0.10  %  0.56 %
 Provision for loan losses to total average                   
  loans 0.40 %  0.42  %  0.28  %  0.29  %  0.63 %
 Nonperforming assets:                   
  Nonaccrual loans$21,926   $9,153    $8,022    $9,271    $10,765  
  Loans 90+ days past due and accruing 5,844    5,714    6,081    678    60  
  Other real estate owned and                   
    repossessed assets 5,169    5,714    5,937    5,748    6,701  
 Total$32,939   $20,581   $20,040   $15,697   $17,526  
                      
 Nonperforming loans to total loans 0.43 %  0.23  %  0.23  %  0.17  %  0.19 %
 Nonperforming assets to total assets 0.41 %  0.27  %  0.28  %  0.22  %  0.25 %
 Nonperforming assets to earning assets 0.43 %  0.28  %  0.29  %  0.23  %  0.25 %
 Reserve for loan losses to nonaccrual loans 312.87 %  730.68  %  800.79  %  669.29  %  551.84 %
                      
 Restructured accruing loans$3,073   $15,495    $15,572    $15,838    $16,919  
                      
 Restructured accruing loans to total loans 0.04 %  0.24  %  0.25  %  0.27  %  0.29 %
                      
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)             
 (In thousands)                
   4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017
 Beginning balance:$16,584   $17,257   $18,792   $20,572   $16,354  
  Additions -    100    -    -    4,233  
  Net (paydowns) / advances (11)   (177)   (267)   (1,080)   (15) 
  Charge-offs (2,018)   (596)   (1,268)   (700)   -  
   $14,555   $16,584   $17,257   $18,792   $20,572  


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
    4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 
Interest income:                
 Interest and fees on loans $83,085 $78,991 $73,620 $69,674 $67,357 
 Taxable securities  3,506  3,276  3,127  2,745  2,468 
 Nontaxable securities  544  583  623  656  702 
 Federal funds sold  966  892  694  551  508 
 Other interest and dividends  2,063  316  332  383  1,025 
   Total interest income  90,164  84,058  78,396  74,009  72,060 
Interest expense:                
 Deposits  18,957  15,210  11,714  9,621  8,954 
 Borrowed funds  2,349  1,985  2,160  1,952  1,698 
   Total interest expense  21,306  17,195  13,874  11,573  10,652 
   Net interest income  68,858  66,863  64,522  62,436  61,408 
Provision for loan losses  6,518  6,624  4,121  4,139  9,055 
   Net interest income after provision for loan losses  62,340  60,239  60,401  58,297  52,353 
Non-interest income:                
 Service charges on deposit accounts  1,714  1,595  1,653  1,585  1,499 
 Mortgage banking  688  789  789  518  894 
 Credit card income  1,993  1,838  1,756  1,578  1,298 
 Securities gains  -  186  -  4  - 
 Increase in cash surrender value life insurance  780  787  786  777  797 
 Other operating income  442  396  475  407  417 
   Total non-interest income  5,617  5,591  5,459  4,869  4,905 
Non-interest expense:                
 Salaries and employee benefits  12,385  13,070  13,098  13,296  11,432 
 Equipment and occupancy expense  2,163  2,193  2,113  1,954  1,566 
 Professional services  1,064  853  924  805  833 
 FDIC and other regulatory assessments  902  675  1,159  1,133  1,030 
 Other real estate owned expense  25  289  160  316  160 
 Other operating expense  6,760  6,070  6,556  6,008  6,234 
   Total non-interest expense  23,299  23,150  24,010  23,512  21,255 
   Income before income tax  44,658  42,680  41,850  39,654  36,003 
Provision for income tax  8,421  8,120  8,310  7,051  14,853 
   Net income  36,237  34,560  33,540  32,603  21,150 
 Dividends on preferred stock  32  -  31  -  31 
   Net income available to common stockholders $36,205 $34,560 $33,509 $32,603 $21,119 
Basic earnings per common share $0.68 $0.65 $0.63 $0.61 $0.40 
Diluted earnings per common share $0.67 $0.64 $0.62 $0.60 $0.39 


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
                                   
      4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017
      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 $6,403,139  5.13% $6,203,372  5.03% $5,958,377  4.94% $5,847,443  4.81% $5,680,227 4.68%
  Tax-exempt (2)  29,656  3.26   30,005  3.94   30,246  3.94   36,357  4.06   36,992 4.95 
   Total loans, net of                              
    unearned income  6,432,795  5.12   6,233,377  5.03   5,988,623  4.93   5,883,800  4.80   5,717,219 4.68 
 Mortgage loans held for sale  3,364  3.30   3,538  4.15   3,770  4.26   3,698  4.50   6,199 3.52 
 Debt securities:                              
  Taxable  498,138  2.82   482,571  2.72   475,777  2.63   435,747  2.52   406,488 2.43 
  Tax-exempt (2)  98,027  2.34   105,592  2.45   112,145  2.60   120,270  2.56   128,201 3.27 
   Total securities (3)  596,165  2.74   588,163  2.67   587,922  2.62   556,017  2.53   534,689 2.63 
 Federal funds sold  156,884  2.44   163,453  2.17   141,915  1.96   131,472  1.70   143,905 1.40 
 Restricted equity securities  879  1.35   993  2.80   1,022  1.18   1,030  1.57   1,030 1.93 
 Interest-bearing balances with banks  334,065  2.45   61,867  1.98   73,714  1.79   96,012  1.60   310,289 1.31 
 Total interest-earning assets $7,524,152  4.76% $7,051,391  4.74% $6,796,966  4.64% $6,672,029  4.51% $6,713,331 4.29%
Non-interest-earning assets:                              
 Cash and due from banks  74,272      76,800      68,190      68,309      68,444   
 Net premises and equipment  58,521      58,873