Investor Relations

Press Release

ServisFirst Bancshares, Inc. Announces Results for First Quarter of 2019

Company Release - 4/15/2019 4:01 PM ET

BIRMINGHAM, Ala., April 15, 2019 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter ended March 31, 2019.

FIRST QUARTER 2019 HIGHLIGHTS:

  • Assets exceeded $8.3 billion, with organic growth exceeding $8.1 billion since the Bank opened in 2005
  • Loans and deposits grew 12.3% and 18.5%, respectively, year over year
  • Diluted earnings per share increased 8.3% from $0.60 to $0.65 year over year
  • Credit quality remains strong as evidenced by improving metrics
  • Efficiency ratio for the first quarter of 2019 of 34.35%
                    
FINANCIAL SUMMARY (UNAUDITED) 
(in Thousands except share and per share amounts)  
  Period Ending
March 31, 2019
 Period Ending
December 31, 2018
 % Change
From Period
Ending
December 31, 2018
to Period Ending
March 31, 2019
 Period Ending
March 31, 2018
 % Change
From Period Ending
March 31, 2018
to Period Ending
March 31, 2019
QUARTERLY OPERATING RESULTS                   
Net Income $35,010  $36,237  (3)% $32,603  7%
Net Income Available to Common Stockholders $35,010  $36,205  (3)% $32,603  7%
Diluted Earnings Per Share $0.65  $0.67  (3)% $0.60  8%
Return on Average Assets  1.75%  1.85%      1.91%   
Return on Average Common Stockholders' Equity  19.42%  21.13%      21.40%   
Average Diluted Shares Outstanding  54,076,538   54,109,450       54,183,400    
                    
BALANCE SHEET                   
Total Assets $8,310,836  $8,007,382  4 % $7,011,735  19%
Loans  6,659,908   6,533,499  2 %  5,928,327  12%
Non-interest-bearing Demand Deposits  1,572,703   1,557,341  1 %  1,407,592  12%
Total Deposits  7,083,666   6,915,708  2 %  5,977,387  19%
Stockholders' Equity  745,586   715,203  4 %  629,297  18%
                    

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $35.0 million for the quarter ended March 31, 2019, compared to net income and net income available to common stockholders of $32.6 million for the same quarter in 2018.  Basic and diluted earnings per common share were $0.65 for the first quarter of 2019, compared to $0.61 and $0.60, respectively, for the first quarter of 2018.

Return on average assets was 1.75% and return on average common stockholders’ equity was 19.42% for the first quarter of 2019, compared to 1.91% and 21.40%, respectively, for the first quarter of 2018.

Net interest income was $68.8 million for the first quarter of 2019, compared to $68.9 million for the fourth quarter of 2018 and $62.4 million for the first quarter of 2018.  The net interest margin in the first quarter of 2019 was 3.56% compared to 3.63% in the fourth quarter of 2018 and 3.81% in the first quarter of 2018.  Loans of $4.1 million were added to nonaccrual status during the first quarter of 2019 resulting in the reversal of $73,000 in interest income compared to loans of $16.7 million 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 an unfavorable mix change, while increases in average balances in loans and equity drove favorable volume change.

Average loans for the first quarter of 2019 were $6.60 billion, an increase of $168.7 million, or 3%, over average loans of $6.43 billion for the fourth quarter of 2018, and an increase of $717.7 million, or 12%, over average loans of $5.88 billion for the first quarter of 2018.

Average total deposits for the first quarter of 2019 were $6.98 billion, an increase of $241.3 million, or 4%, over average total deposits of $6.74 billion for the fourth quarter of 2018, and an increase of $1.03 billion, or 17%, over average total deposits of $5.95 billion for the first quarter of 2018.

Non-performing assets to total assets were 0.39% for the first quarter of 2019, a decrease of two basis points compared to 0.41% for the fourth quarter of 2018 and an increase of 17 basis points compared to 0.22% for the first quarter of 2018.  Net credit charge-offs to average loans was 0.20%, a 10 basis point decrease compared to 0.30% for the fourth quarter of 2018 and an increase of 10 basis points compared to 0.10% for the first quarter of 2018.  We recorded a $4.9 million provision for loan losses in the first quarter of 2019 compared to $6.5 million in the fourth quarter of 2018 and $4.1 million in the first quarter of 2018.  The allowance for loan loss as a percentage of total loans was 1.05% at March 31, 2019, December 31, 2018 and March 31, 2018, respectively.  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 $527,000 during the first quarter of 2019, or 12%, compared to the first quarter of 2018.  Deposit service charges increased $117,000 in the first quarter of 2019, or 7%, compared to the first quarter of 2018.  The number of transaction deposit accounts increased approximately 12% from March 31, 2018 to March 31, 2019.  Mortgage banking revenue increased $57,000, or 11%, from the first quarter of 2018 to the first quarter of 2019.  Mortgage loan originations were up about 3% year over year.  Credit card revenue increased $321,000, or 26%, to $1.6 million during the first quarter of 2019, compared to $1.3 million during the first quarter of 2018.  The number of cards increased 31% and the aggregate amount of sales on all accounts increased 21% year over year.

Non-interest expense for the first quarter of 2019 increased $2.3 million, or 10%, to $25.3 million from $23.1 million in the first quarter of 2018, and increased $2.6 million, or 10%, on a linked quarter basis.  Salary and benefit expense for the first quarter of 2019 increased $969,000, or 7%, to $14.3 million from $13.3 million in the first quarter of 2018, and increased $1.9 million, or 15%, on a linked quarter basis.  We reversed $815,000 of incentive bonus accrual in December 2018.  The number of FTE employees increased from 437 at March 31, 2018 to 485 at March 31, 2019, or 11%.  Equipment and occupancy expense increased $305,000, or 16%, to $2.3 million in the first quarter of 2019, from $2.0 million in the first quarter of 2018, and increased $96,000 on a linked-quarter basis.  Professional services expense increased $189,000, or 24%, to $1.0 million in the first quarter of 2019, from $805,000 in the first quarter of 2018, but decreased $70,000, or 7%, from $1.1 on a linked-quarter basis.  FDIC and other regulatory assessments decreased $114,000, or 10%, to $1.0 million in the first quarter of 2019, from $1.1 million in the first quarter of 2018.  Lower assessment rates result from the FDIC’s Bank Insurance Fund reaching its desired level of 1.35%.  Other operating expense for the first quarter of 2019 increased $1.2 million, or 22%, to $6.8 million from $5.6 million in the first quarter of 2018, and increased $605,000, or 10%, on a linked-quarter basis.  The year-over-year increase is attributable to increases in Federal Reserve charges resulting from increased activity from our correspondent clearing and increased loan and credit expenses resulting from loan growth.  The efficiency ratio improved to 34.35% during the first quarter of 2019 from 34.49% during the first quarter of 2018 but increased compared to 30.73% during the fourth quarter of 2018.

Income tax expense increased $1.4 million, or 20%, to $8.5 million in the first quarter of 2019, compared to $7.1 million in the first quarter of 2018.  Our effective tax rate was 19.53% for the first quarter of 2019 compared to 17.78% for the first quarter of 2018.  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 first quarters of 2019 and 2018 of $772,000 and $1.5 million, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.  We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use.  The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release.  Dollars are in thousands, except share and per share data.

             
   At
March 31,
2019
 At
December 31,
2018
 At
September 30,
2018
 At
June 30,
2018
 At
March 31,
2018
 
Book value per share - GAAP $13.94  $13.40  $12.81  $12.33  $11.84  
Total common stockholders' equity - GAAP  745,586   715,203   681,510   655,114   629,297  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,381   14,449   14,517   14,584   14,652  
Tangible common stockholders' equity - non-GAAP $731,205  $700,754  $666,993  $640,530  $614,645  
Tangible book value per share - non-GAAP $13.67  $13.13  $12.54  $12.05  $11.56  
                       
Stockholders' equity to total assets - GAAP  8.97%  8.93%  9.07%  9.25%  8.98% 
Total assets - GAAP $8,310,836  $8,007,382  $7,517,833  $7,084,562  $7,011,735  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,381   14,449   14,517   14,584   14,652  
Total tangible assets - non-GAAP $8,296,455  $7,992,933  $7,503,316  $7,069,978  $6,997,083  
Tangible common equity to total tangible assets - non-GAAP  8.81%  8.77%  8.89%  9.06%  8.78% 
                      

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)                      
  1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 1st Quarter
2018
  
CONSOLIDATED STATEMENT OF INCOME                      
Interest income $93,699  $90,164  $84,058  $78,396  $74,009   
Interest expense  24,921   21,306   17,195   13,874   11,573   
Net interest income  68,778   68,858   66,863   64,522   62,436   
Provision for loan losses  4,885   6,518   6,624   4,121   4,139   
Net interest income after provision for loan losses  63,893   62,340   60,239   60,401   58,297   
Non-interest income  4,942   5,019   5,065   4,941   4,415   
Non-interest expense  25,326   22,701   22,624   23,492   23,058   
Income before income tax  43,509   44,658   42,680   41,850   39,654   
Provision for income tax  8,499   8,421   8,120   8,310   7,051   
Net income  35,010   36,237   34,560   33,540   32,603   
Preferred stock dividends  -   32   -   31   -   
Net income available to common stockholders $35,010  $36,205  $34,560  $33,509  $32,603   
Earnings per share - basic $0.65  $0.68  $0.65  $0.63  $0.61   
Earnings per share - diluted $0.65  $0.67  $0.64  $0.62  $0.60   
Average diluted shares outstanding  54,076,538   54,109,450   54,191,222   54,196,023   54,183,400   
                       
CONSOLIDATED BALANCE SHEET DATA                      
Total assets $8,310,836  $8,007,382  $7,517,833  $7,084,562  $7,011,735   
Loans  6,659,908   6,533,499   6,363,531   6,129,649   5,928,327   
Debt securities  631,946   590,184   578,271   583,799   560,885   
Non-interest-bearing demand deposits  1,572,703   1,557,341   1,504,447   1,481,447   1,407,592   
Total deposits  7,083,666   6,915,708   6,505,351   6,085,682   5,977,387   
Borrowings  64,675   64,666   64,657   64,648   64,739   
Stockholders' equity $745,586  $715,203  $681,510  $655,114  $629,297   
                       
Shares outstanding  53,495,208   53,375,195   53,197,807   53,150,733   53,147,169   
Book value per share $13.94  $13.40  $12.81  $12.33  $11.84   
Tangible book value per share (1) $13.67  $13.13  $12.54  $12.05  $11.56   
                       
SELECTED FINANCIAL RATIOS                      
Net interest margin  3.56%  3.63%  3.77%  3.82%  3.81%  
Return on average assets  1.75%  1.85%  1.87%  1.91%  1.91%  
Return on average common stockholders' equity  19.42%  21.13%  20.42%  20.89%  21.40%  
Efficiency ratio  34.35%  30.73%  31.45%  33.82%  34.49%  
Non-interest expense to average earning assets  1.31%  1.20%  1.27%  1.39%  1.40%  
                       
CAPITAL RATIOS (2)                      
Common equity tier 1 capital to risk-weighted assets  10.30%  10.12%  10.08%  10.08%  9.88%  
Tier 1 capital to risk-weighted assets  10.30%  10.13%  10.09%  10.08%  9.88%  
Total capital to risk-weighted assets  12.21%  12.05%  12.05%  12.10%  11.91%  
Tier 1 capital to average assets  9.03%  9.07%  9.28%  9.21%  8.95%  
Tangible common equity to total tangible assets (1)  8.81%  8.77%  8.89%  9.06%  8.78%  
                       
(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)          
    March 31, 2019 March 31, 2018 % Change 
ASSETS          
Cash and due from banks $71,058  $64,912  9 % 
Interest-bearing balances due from depository institutions  547,036   53,311  926 % 
Federal funds sold  181,435   197,882  (8)% 
 Cash and cash equivalents  799,529   316,105  153 % 
Available for sale debt securities, at fair value  631,696   560,635  13 % 
Held to maturity debt securities (fair value of $250 at March 31, 2019 and March 31, 2018)  250   250  - % 
Mortgage loans held for sale  1,223   4,522  (73)% 
Loans  6,659,908   5,928,327  12 % 
Less allowance for loan losses  (70,207)  (62,050) 13 % 
 Loans, net  6,589,701   5,866,277  12 % 
Premises and equipment, net  57,664   58,624  (2)% 
Goodwill and other identifiable intangible assets  14,381   14,652  (2)% 
Other assets  216,392   190,670  13 % 
 Total assets $8,310,836  $7,011,735  19 % 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Liabilities:          
Deposits:          
 Non-interest-bearing $1,572,703  $1,407,592  12 % 
 Interest-bearing  5,510,963   4,569,795  21 % 
  Total deposits  7,083,666   5,977,387  19 % 
Federal funds purchased  373,378   326,399  14 % 
Other borrowings  64,675   64,739  - % 
Other liabilities  43,531   13,913  213 % 
 Total liabilities  7,565,250   6,382,438  19 % 
Stockholders' equity:          
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at          
  March 31, 2019 and March 31, 2018          
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,495,208 shares  -   -  - % 
  issued and outstanding at March 31, 2019, and 53,147,169 shares issued and outstanding          
  at March 31, 2018          
 Additional paid-in capital  218,147   217,536  - % 
 Retained earnings  527,853   416,311  27 % 
 Accumulated other comprehensive loss  (969)  (5,105) NM   
  Total stockholders' equity attributable to ServisFirst Bancshares, Inc.  745,084   628,795  18 % 
 Noncontrolling interest  502   502  - % 
  Total stockholders' equity  745,586   629,297  18 % 
 Total liabilities and stockholders' equity $8,310,836  $7,011,735  19 % 
             


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)   
(In thousands except per share data)      
   Three Months Ended March 31,
   2019 2018
Interest income:      
 Interest and fees on loans $85,524 $69,674
 Taxable securities  3,746  2,745
 Nontaxable securities  446  656
 Federal funds sold  1,219  551
 Other interest and dividends  2,764  383
   Total interest income  93,699  74,009
Interest expense:      
 Deposits  22,145  9,621
 Borrowed funds  2,776  1,952
   Total interest expense  24,921  11,573
   Net interest income  68,778  62,436
Provision for loan losses  4,885  4,139
    Net interest income after provision for loan losses  63,893  58,297
Non-interest income:      
 Service charges on deposit accounts  1,702  1,585
 Mortgage banking  575  518
 Credit card income  1,576  1,255
 Securities gains  -  4
 Increase in cash surrender value life insurance  762  777
 Other operating income  327  276
   Total non-interest income  4,942  4,415
Non-interest expense:      
 Salaries and employee benefits  14,265  13,296
 Equipment and occupancy expense  2,259  1,954
 Professional services  994  805
 FDIC and other regulatory assessments  1,019  1,133
 Other real estate owned expense  22  316
 Other operating expense  6,767  5,554
   Total non-interest expense  25,326  23,058
   Income before income tax  43,509  39,654
Provision for income tax  8,499  7,051
    Net income  35,010  32,603
 Dividends on preferred stock  -  -
   Net income available to common stockholders $35,010 $32,603
Basic earnings per common share $0.65 $0.61
Diluted earnings per common share $0.65 $0.60
       


LOANS BY TYPE (UNAUDITED)               
(In thousands)               
                 
   1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 1st Quarter
2018
Commercial, financial and agricultural $2,522,136 $2,513,225 $2,478,788 $2,345,879 $2,329,904
Real estate - construction  556,219  533,192  543,611  522,788  506,050
Real estate - mortgage:               
 Owner-occupied commercial  1,500,595  1,463,887  1,430,111  1,383,882  1,349,679
 1-4 family mortgage  629,285  621,634  610,460  584,133  581,498
 Other mortgage  1,394,611  1,337,068  1,236,954  1,225,906  1,099,482
Subtotal: Real estate - mortgage  3,524,491  3,422,589  3,277,525  3,193,921  3,030,659
Consumer  57,062  64,493  63,607  67,061  61,714
Total loans $6,659,908 $6,533,499 $6,363,531 $6,129,649 $5,928,327


                   
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                  
(Dollars in thousands)                  
     1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 1st Quarter
2018
 
Allowance for loan losses:                     
Beginning balance $68,600   $66,879    $64,239    $62,050    $59,406   
Loans charged off:                     
 Commercial, financial and agricultural  3,037    4,685    3,923    1,732    1,088   
 Real estate - construction  -    -    -    -    -   
 Real estate - mortgage  50    173    48    440    381   
 Consumer  218    72    76    47    88   
  Total charge offs  3,305    4,930    4,047    2,219    1,557   
Recoveries:                     
 Commercial, financial and agricultural  12    120    52    173    4   
 Real estate - construction  1    4    4    97    7   
 Real estate - mortgage  7    1    1    2    42   
 Consumer  7    8    6    15    9   
  Total recoveries  27    133    63    287    62   
 Net charge-offs  3,278    4,797    3,984    1,932    1,495   
 Provision for loan losses  4,885    6,518    6,624    4,121    4,139   
 Ending balance $70,207   $68,600   $66,879   $64,239   $62,050   
                         
 Allowance for loan losses to total loans  1.05 %  1.05  %  1.05  %  1.05  %  1.05 % 
 Allowance for loan losses to total average                     
  loans  1.06 %  1.07  %  1.07  %  1.07  %  1.05 % 
 Net charge-offs to total average loans  0.20 %  0.30  %  0.25  %  0.13  %  0.10 % 
 Provision for loan losses to total average                     
  loans  0.30 %  0.40  %  0.42  %  0.28  %  0.29 % 
 Nonperforming assets:                     
  Nonaccrual loans $22,154   $21,926    $9,153    $8,022    $9,271   
  Loans 90+ days past due and accruing  5,021    5,844    5,714    6,081    678   
  Other real estate owned and                     
    repossessed assets  5,480    5,169    5,714    5,937    5,748   
 Total $32,655   $32,939   $20,581   $20,040   $15,697   
                         
 Nonperforming loans to total loans  0.41 %  0.43  %  0.23  %  0.23  %  0.17 % 
 Nonperforming assets to total assets  0.39 %  0.41  %  0.27  %  0.28  %  0.22 % 
 Nonperforming assets to earning assets  0.40 %  0.43  %  0.28  %  0.29  %  0.23 % 
 Reserve for loan losses to nonaccrual loans  316.90 %  312.87  %  730.68  %  800.79  %  669.29 % 
                         
 Restructured accruing loans $2,742   $3,073    $15,495    $15,572    $15,838   
                         
 Restructured accruing loans to total loans  0.04 %  0.04  %  0.24  %  0.25  %  0.27 % 
                         
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)              
 (In thousands)                 
     1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 1st Quarter
2018
 
 Beginning balance: $14,555   $16,584   $17,257   $18,792   $20,572   
  Additions  -    -    100    -    -   
  Net (paydowns) / advances  (766)   (11)   (177)   (267)   (1,080)  
  Charge-offs  (1,500)   (2,018)   (596)   (1,268)   (700)  
     $12,289   $14,555   $16,584   $17,257   $18,792   


           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
    1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 1st Quarter
2018
 
Interest income:                
 Interest and fees on loans $85,524 $83,085 $78,991 $73,620 $69,674 
 Taxable securities  3,746  3,506  3,276  3,127  2,745 
 Nontaxable securities  446  544  583  623  656 
 Federal funds sold  1,219  966  892  694  551 
 Other interest and dividends  2,764  2,063  316  332  383 
   Total interest income  93,699  90,164  84,058  78,396  74,009 
Interest expense:                
 Deposits  22,145  18,957  15,210  11,714  9,621 
 Borrowed funds  2,776  2,349  1,985  2,160  1,952 
   Total interest expense  24,921  21,306  17,195  13,874  11,573 
   Net interest income  68,778  68,858  66,863  64,522  62,436 
Provision for loan losses  4,885  6,518  6,624  4,121  4,139 
   Net interest income after provision for loan losses  63,893  62,340  60,239  60,401  58,297 
Non-interest income:                
 Service charges on deposit accounts  1,702  1,714  1,595  1,653  1,585 
 Mortgage banking  575  688  789  789  518 
 Credit card income  1,576  1,521  1,414  1,361  1,255 
 Securities gains  -  -  186  -  4 
 Increase in cash surrender value life insurance  762  780  787  786  777 
 Other operating income  327  316  294  352  276 
   Total non-interest income  4,942  5,019  5,065  4,941  4,415 
Non-interest expense:                
 Salaries and employee benefits  14,265  12,385  13,070  13,098  13,296 
 Equipment and occupancy expense  2,259  2,163  2,193  2,113  1,954 
 Professional services  994  1,064  853  924  805 
 FDIC and other regulatory assessments  1,019  902  675  1,159  1,133 
 Other real estate owned expense  22  25  289  160  316 
 Other operating expense  6,767  6,162  5,544  6,038  5,554 
   Total non-interest expense  25,326  22,701  22,624  23,492  23,058 
   Income before income tax  43,509  44,658  42,680  41,850  39,654 
Provision for income tax  8,499  8,421  8,120  8,310  7,051 
   Net income  35,010  36,237  34,560  33,540  32,603 
 Dividends on preferred stock  -  32  -  31  - 
   Net income available to common stockholders $35,010 $36,205 $34,560 $33,509 $32,603 
Basic earnings per common share $0.65 $0.68 $0.65 $0.63 $0.61 
Diluted earnings per common share $0.65 $0.67 $0.64 $0.62 $0.60 


 
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
                                   
      1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018
      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 $6,570,920  5.26% $6,403,139  5.13% $6,203,372  5.03% $5,958,377  4.94% $5,847,443  4.81%
  Tax-exempt (2)  30,577  3.81   29,656  3.26   30,005  3.94   30,246  3.94   36,357  4.06 
   Total loans, net of                              
    unearned income  6,601,497  5.25   6,432,795  5.12   6,233,377  5.03   5,988,623  4.93   5,883,800  4.80 
 Mortgage loans held for sale  1,614  6.53   3,364  3.30   3,538  4.15   3,770  4.26   3,698  4.50 
 Debt securities:                              
  Taxable  518,955  2.89   498,138  2.82   482,571  2.72   475,777  2.63   435,747  2.52 
  Tax-exempt (2)  87,537  2.12   98,027  2.34   105,592  2.45   112,145  2.60   120,270  2.56 
   Total securities (3)  606,492  2.78   596,165  2.74   588,163  2.67   587,922  2.62   556,017  2.53 
 Federal funds sold  192,690  2.57   156,884  2.44   163,453  2.17   141,915  1.96   131,472  1.70 
 Interest-bearing balances with banks  438,099  2.56   334,065  2.45   61,867  2.03   73,714  1.81   96,012  1.62 
 Total interest-earning assets  7,840,392  4.85   7,524,152  4.76   7,051,391  4.74   6,796,966  4.64   6,672,029  4.51 
Non-interest-earning assets:                              
 Cash and due from banks  74,430      74,272      76,800      68,190      68,309    
 Net premises and equipment  58,852      58,521      58,873      59,262      59,709    
 Allowance for loan losses, accrued                              
  interest and other assets  149,941      128,933      128,843      130,607      141,588    
   Total assets $8,123,615     $7,784,999     $7,314,914     $7,054,003     $6,940,605    
                                   
Interest-bearing liabilities:                              
 Interest-bearing deposits:                              
 Checking $942,686  0.86% $908,416  0.74% $819,807  0.67% $827,540  0.56% $899,311  0.52%
 Savings  54,086  0.55   52,443  0.54   53,835  0.52   54,842  0.34   53,269  0.31 
 Money market  3,758,162  1.78   3,537,522  1.56   3,305,293  1.33   3,089,595  1.10   3,027,176  0.90 
 Time deposits  698,976  2.06   687,361  1.92   643,260  1.65   596,450  1.36   576,857  1.21 
  Total interest-bearing deposits  5,453,910  1.65   5,185,742  1.45   4,822,195  1.25   4,568,427  1.03   4,556,613  0.86 
 Federal funds purchased  312,989  2.59   263,125  2.36   229,016  2.09   295,309  1.87   297,051  1.60 
 Other borrowings  64,671  4.90   64,665  4.79   64,652  4.79   64,699  4.85   64,805  4.89 
 Total interest-bearing liabilities $5,831,570  1.73  $5,513,532  1.53  $5,115,863  1.33  $4,928,435  1.13  $4,918,469  0.95 
Non-interest-bearing liabilities:                              
 Non-interest-bearing                              
  demand  1,524,502      1,551,366      1,511,410      1,469,194      1,389,217    
 Other liabilities  36,362      40,185      16,333      13,079      15,007    
 Stockholders' equity  735,611      689,525      678,839      650,641      621,004    
 Accumulated other comprehensive                              
  (loss) income  (4,430)     (9,609)     (7,531)     (7,346)     (3,092)   
   Total liabilities and                              
    stockholders' equity $8,123,615     $7,784,999     $7,314,914     $7,054,003     $6,940,605    
Net interest spread    3.12%    3.23%    3.41%    3.51%    3.56%
Net interest margin    3.56%    3.63%    3.77%    3.82%    3.81%
                                   
(1)Average loans include loans on which the accrual of interest has been discontinued.  
(2)Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.  
(3)Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.  

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Source: ServisFirst Bancshares, Inc.