ServisFirst Bancshares, Inc. Announces Results For Second Quarter of 2014
BIRMINGHAM, Ala., July 22, 2014 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2014.
SECOND QUARTER 2014 HIGHLIGHTS:
- Net income for the second quarter increased 20% year over year
- Second quarter annualized loan and deposit growth of 16% and 17%, respectively, on a linked quarter basis
- Core diluted earnings per share of $0.51 for the second quarter of 2014, a 16% increase year over year*
- Diluted earnings per share of $0.46 for the second quarter, a 5% increase year over year
- Completed initial public offering in the second quarter with net proceeds of $52.1 million
- 30% growth in non-interest-bearing demand deposits year over year
Tom Broughton, President and CEO, said, "We are pleased to report a great quarter following our initial public offering in May." Bud Foshee, CFO, stated, "Strong loan and deposit growth combined with excellent credit quality continue to drive our strong earnings performance."
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FINANCIAL SUMMARY |
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(in Thousands except share and per share amounts) |
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On June 16, 2014, the Company declared a three-for-one split of its common stock in the form of a stock dividend. All share and per share information in this release has been adjusted to give effect to this stock split. |
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Period Ending |
Period Ending |
% Change |
Period Ending June 30, 2013 |
% Change |
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|
QUARTERLY OPERATING RESULTS |
|||||||||||||||||||||
|
Net Income |
$ |
11,585 |
$ |
11,758 |
(1) |
% |
$ |
9,686 |
20 |
% |
|||||||||||
|
Net Income Available to Common Stockholders |
$ |
11,469 |
$ |
11,656 |
(2) |
% |
$ |
9,586 |
20 |
% |
|||||||||||
|
Diluted Earnings Per Share |
$ |
0.46 |
$ |
0.51 |
(10) |
% |
$ |
0.44 |
5 |
% |
|||||||||||
|
Return on Average Assets |
1.28 |
% |
1.36 |
% |
1.31 |
% |
|||||||||||||||
|
Return on Average Common Stockholders' Equity |
15.03 |
% |
17.83 |
% |
17.28 |
% |
|||||||||||||||
|
Average Diluted Shares Outstanding |
24,823,590 |
22,985,670 |
21,655,326 |
||||||||||||||||||
|
Core Net Income* |
$ |
12,740 |
$ |
12,215 |
4 |
% |
$ |
9,686 |
32 |
% |
|||||||||||
|
Core Net Income Available to Common Stockholders* |
$ |
12,624 |
$ |
12,113 |
4 |
% |
$ |
9,586 |
32 |
% |
|||||||||||
|
Core Diluted Earnings Per Share* |
$ |
0.51 |
$ |
0.53 |
(4) |
% |
$ |
0.44 |
16 |
% |
|||||||||||
|
Core Return on Average Assets* |
1.41 |
% |
1.42 |
% |
1.31 |
% |
|||||||||||||||
|
Core Return on Average Common Stockholders' Equity* |
16.54 |
% |
18.53 |
% |
17.28 |
% |
|||||||||||||||
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YEAR-TO-DATE OPERATING RESULTS |
|||||||||||||||||||||
|
Net Income |
$ |
23,343 |
$ |
18,937 |
23 |
% |
|||||||||||||||
|
Net Income Available to Common Stockholders |
$ |
23,127 |
$ |
18,737 |
23 |
% |
|||||||||||||||
|
Diluted Earnings Per Share |
$ |
0.97 |
$ |
0.88 |
10 |
% |
|||||||||||||||
|
Return on Average Assets |
1.32 |
% |
1.31 |
% |
|||||||||||||||||
|
Return on Average Common Stockholders' Equity |
15.61 |
% |
17.96 |
% |
|||||||||||||||||
|
Average Diluted Shares Outstanding |
23,909,707 |
21,443,595 |
|||||||||||||||||||
|
Core Net Income* |
$ |
24,955 |
$ |
18,937 |
32 |
% |
|||||||||||||||
|
Core Net Income Available to Common Stockholders* |
$ |
24,739 |
$ |
18,737 |
32 |
% |
|||||||||||||||
|
Core Diluted Earnings Per Share* |
$ |
1.03 |
$ |
0.88 |
18 |
% |
|||||||||||||||
|
Core Return on Average Assets* |
1.41 |
% |
1.31 |
% |
|||||||||||||||||
|
Core Return on Average Common Stockholders' Equity* |
16.70 |
% |
17.96 |
% |
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|
BALANCE SHEET |
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|
Total Assets |
$ |
3,762,684 |
$ |
3,572,914 |
5 |
% |
$ |
3,140,626 |
20 |
% |
|||||||||||
|
Loans |
3,053,989 |
2,937,797 |
4 |
% |
2,590,192 |
18 |
% |
||||||||||||||
|
Non-interest-bearing Demand Deposits |
729,163 |
662,834 |
10 |
% |
562,196 |
30 |
% |
||||||||||||||
|
Total Deposits |
3,157,642 |
3,031,041 |
4 |
% |
2,674,977 |
18 |
% |
||||||||||||||
|
Stockholders' Equity |
380,074 |
312,283 |
22 |
% |
265,189 |
43 |
% |
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* Core measures exclude non-routine expenses in the first and second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets. For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below. |
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DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income of $11.6 million and net income available to common stockholders of $11.5 million for the quarter ended June 30, 2014, compared to net income of $9.7 million and net income available to common stockholders of $9.6 million for the same quarter in 2013. Basic and diluted earnings per common share were $0.49 and $0.46, respectively, for the second quarter of 2014, compared to $0.46 and $0.44, respectively, for the second quarter of 2013.
Return on average assets was 1.29% and return on average equity was 15.03% for the second quarter of 2014, compared to 1.29% and 17.28%, respectively, for the second quarter of 2013.
Net interest income was $32.0 million for the second quarter of 2014, compared to $30.8 million for the first quarter of 2014 and $27.5 million for the second quarter of 2013. The net interest margin in the second quarter of 2014 was 3.74%, a 6 basis point decrease from the first quarter of 2014 and 19 basis point decrease from the second quarter of 2013. The increase in net interest income on a linked quarter basis is attributable to a $87.5 million increase in average loans outstanding, a $33.6 million increase in non-interest-bearing deposits and a $40.9 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.
Average loans for the second quarter of 2014 were $2.99 billion, an increase of $87.5 million, or 3%, over average loans of $2.91 billion for the first quarter of 2014, and an increase of $472.1 million, or 19%, over average loans of $2.52 billion for the second quarter of 2013.
Average total deposits for the second quarter of 2014 were $3.06 billion, an increase of $83.1 million, or 3%, over average total deposits of $2.97 billion for the first quarter of 2014, and an increase of $554.3 million, or 22%, over average total deposits of $2.50 billion for the second quarter of 2013.
Non-performing assets to total assets were unchanged for the second quarter of 2014 compared to the first quarter of 2014 at 0.53%. Net credit charge-offs decreased slightly in the second quarter of 2014 compared to the first quarter of 2014 and remain well below levels we experienced in the first two quarters of 2013. We recorded a $2.4 million provision for loan losses in the second quarter of 2014 compared to $2.3 million in the first quarter of 2014 and $3.3 million in the second quarter of 2013. Growth in loans and improving credit quality has resulted in a relatively stable loan loss reserve as a percent of loans ratio, remaining unchanged at 1.08% for June 30, 2014 and March 31, 2014 and increasing one basis point as compared to 1.07% at December 31, 2013. In management's opinion, the reserve is adequate and was determined by consistent application of ServisFirst Bank's methodology for calculating its reserve for loan losses.
Non-interest income increased $365,000 during the second quarter of 2014, or 14%, compared to the second quarter of 2013. Deposit service charges increased by $251,000, or 31%, resulting from higher balances and an increase in the number of accounts and transactions. Increases in the cash surrender value of our life insurance contracts resulted from added investments in contracts during the third quarter of 2013.
Non-interest expense for the second quarter of 2014 increased $3.0 million, or 24%, to $15.4 million from $12.4 million in the second quarter of 2013, and increased $1.7 million, or 12%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2014 increased $2.0 million, or 28%, to $9.1 million from $7.1 million in the second quarter of 2013, and increased $1.4 million, or 18%, on a linked quarter basis. Included in salary and benefit expense for the first and second quarters of 2014 are non-routine expenses of $703,000 and $1.8 million, respectively, resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets. This expense impacted our diluted earnings per share for the first and second quarters of 2014 by $0.02 and $0.05, respectively. We historically accounted for these options under the provisions of FASB ASC 718-10, Compensation – Stock Compensation, and now have determined to recognize as an expense the fair value of these vested options in accordance with the provisions of the FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees. The change in accounting treatment is a non-cash item and does not impact the Company's operating activities or cash from operations. Other operating expense for the second quarter of 2014 increased $800,000, or 29%, to $3.6 million from $2.8 million in the second of 2013. This was primarily the result of write downs of investments in tax credit partnerships of $377,000 for the second quarter of 2014 compared to $53,000 in the same quarter in 2013. We recognized tax credits of $550,000 during the second quarter of 2014 from these investments.
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
As discussed in more detail in the section titled "Detailed Financials," we recorded a non-routine expense of $703,000 for the first quarter of 2014 resulting from the correction of our accounting for vested stock options previously granted to members of our advisory boards in our Dothan, Huntsville and Montgomery, Alabama markets, and we recorded a non-routine expense of $1.8 million for the second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our Mobile, Alabama and Pensacola, Florida markets. This change in accounting treatment is a non-cash item and does not impact our operating activities or cash from operations. The non-GAAP financial measures included in this press release of our results for the first and second quarters of 2014 and the first six months of 2014 are "core net income," "core net income available to common stockholders," "core diluted earnings per share," "core return on average assets" and "core return on average common stockholders' equity." Each of these five core financial measures excludes the impact of the non-routine expenses attributable to the correction of our accounting for vested stock options. None of the other periods included in this press release are affected by this correction.
"Core net income" is defined as net income, adjusted by the net effect of the non-routine expense.
"Core net income available to common stockholders" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.
"Core diluted earnings per share" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.
"Core return on average assets" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.
"Core return of average common stockholders' equity" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders' equity.
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 for the six months ended June 30, 2014 and the three month periods ended June 30, 2014 and March 31, 2014. Dollars are in thousands, except share and per share data.
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For the Six Months Ended June 30, 2014 |
For the Three Months Ended June 30, 2014 |
For the Three Months Ended March 31, 2014 |
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|
Provision for income taxes - GAAP |
$ |
10,705 |
$ |
5,476 |
$ |
5,229 |
||||||||
|
Adjustments: |
||||||||||||||
|
Adjustment for non-routine expense |
865 |
619 |
246 |
|||||||||||
|
Core provision for income taxes |
$ |
11,570 |
$ |
6,095 |
$ |
5,475 |
||||||||
|
Return on average assets - GAAP |
1.32 |
% |
1.28 |
% |
1.36 |
% |
||||||||
|
Net income - GAAP |
$ |
23,343 |
$ |
11,585 |
$ |
11,758 |
||||||||
|
Adjustments: |
||||||||||||||
|
Adjustment for non-routine expense |
1,612 |
1,155 |
457 |
|||||||||||
|
Core net income |
$ |
24,955 |
$ |
12,740 |
$ |
12,215 |
||||||||
|
Average assets |
$ |
3,568,159 |
$ |
3,635,506 |
$ |
3,500,257 |
||||||||
|
Core return on average assets |
1.41 |
% |
1.41 |
% |
1.42 |
% |
||||||||
|
Return on average common stockholders' equity |
15.61 |
% |
15.67 |
% |
17.83 |
% |
||||||||
|
Net income available to common stockholders - GAAP |
$ |
23,127 |
$ |
11,469 |
$ |
11,658 |
||||||||
|
Adjustments: |
||||||||||||||
|
Adjustment for non-routine expense |
1,612 |
1,155 |
457 |
|||||||||||
|
Core net income available to common stockholders |
$ |
24,739 |
$ |
12,624 |
$ |
12,115 |
||||||||
|
Average common stockholders' equity |
$ |
298,713 |
$ |
306,050 |
$ |
265,188 |
||||||||
|
Core return on average common stockholders' equity |
16.70 |
% |
16.54 |
% |
18.53 |
% |
||||||||
|
Earnings per share - diluted - GAAP |
$ |
0.97 |
$ |
0.46 |
$ |
0.51 |
||||||||
|
Weighted average shares outstanding, diluted |
23,909,707 |
24,823,590 |
22,985,670 |
|||||||||||
|
Core diluted earnings per share |
$ |
1.03 |
$ |
0.51 |
$ |
0.53 |
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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, Florida and Nashville, Tennessee.
ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC's website at www.sec.gov or at http://servisfirstbancshares.investorroom.com/.
Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "believe," "expect," "anticipate," "project," "plan," "intend," "will," "would," "might" and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.'s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-looking Statements" and "Risk Factors" in our most recent Annual Report on Form 10-K and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.
More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at http://servisfirstbancshares.investorroom.com/ or by calling (205) 949-0302.
Contact: ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com
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SELECTED FINANCIAL HIGHLIGHTS |
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(In thousands except share and per share data) |
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|
2nd Quarter 2014 |
1st Quarter 2014 |
4th Quarter 2013 |
3rd Quarter 2013 |
2nd Quarter 2013 |
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CONSOLIDATED STATEMENT OF INCOME |
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|
Interest income |
$ |
35,424 |
$ |
34,281 |
$ |
33,725 |
$ |
32,499 |
$ |
30,692 |
|||||||||||
|
Interest expense |
3,446 |
3,432 |
3,610 |
3,534 |
3,211 |
||||||||||||||||
|
Net interest income |
31,978 |
30,849 |
30,115 |
28,965 |
27,481 |
||||||||||||||||
|
Provision for loan losses |
2,438 |
2,314 |
2,356 |
3,034 |
3,334 |
||||||||||||||||
|
Net interest income after provision for loan losses |
29,540 |
28,535 |
27,759 |
25,931 |
24,147 |
||||||||||||||||
|
Non-interest income |
2,938 |
2,175 |
2,371 |
2,269 |
2,573 |
||||||||||||||||
|
Non-interest expense |
15,417 |
13,723 |
12,298 |
12,067 |
12,372 |
||||||||||||||||
|
Income before income tax |
17,061 |
16,987 |
17,832 |
16,133 |
14,348 |
||||||||||||||||
|
Provision for income tax |
5,476 |
5,229 |
5,964 |
5,321 |
4,662 |
||||||||||||||||
|
Net income |
11,585 |
11,758 |
11,868 |
10,812 |
9,686 |
||||||||||||||||
|
Preferred stock dividends |
116 |
100 |
116 |
100 |
100 |
||||||||||||||||
|
Net income available to common stockholders |
$ |
11,469 |
$ |
11,658 |
$ |
11,752 |
$ |
10,712 |
$ |
9,586 |
|||||||||||
|
Earnings per share - basic |
$ |
0.49 |
$ |
0.53 |
$ |
0.55 |
$ |
0.51 |
$ |
0.46 |
|||||||||||
|
Earnings per share - diluted |
$ |
0.46 |
$ |
0.51 |
$ |
0.53 |
$ |
0.49 |
$ |
0.44 |
|||||||||||
|
Average diluted shares outstanding |
24,823,590 |
22,985,670 |
22,359,351 |
21,965,733 |
21,655,326 |
||||||||||||||||
|
CONSOLIDATED BALANCE SHEET DATA |
|||||||||||||||||||||
|
Total assets |
$ |
3,762,684 |
$ |
3,572,914 |
$ |
3,520,699 |
$ |
3,396,153 |
$ |
3,140,626 |
|||||||||||
|
Loans |
3,053,989 |
2,937,797 |
2,858,868 |
2,731,973 |
2,590,192 |
||||||||||||||||
|
Debt securities |
325,432 |
309,475 |
298,494 |
289,515 |
261,578 |
||||||||||||||||
|
Non-interest-bearing demand deposits |
729,163 |
662,834 |
650,456 |
635,153 |
562,196 |
||||||||||||||||
|
Total deposits |
3,157,642 |
3,031,041 |
3,019,642 |
2,919,217 |
2,674,977 |
||||||||||||||||
|
Borrowings |
19,957 |
19,949 |
19,940 |
19,932 |
19,924 |
||||||||||||||||
|
Stockholders' equity |
$ |
380,074 |
$ |
312,283 |
$ |
297,192 |
$ |
276,300 |
$ |
265,189 |
|||||||||||
|
Shares outstanding |
24,749,436 |
22,574,436 |
22,050,036 |
21,229,041 |
20,922,936 |
||||||||||||||||
|
Book value per share |
$ |
13.74 |
$ |
12.06 |
$ |
11.67 |
$ |
11.13 |
$ |
10.76 |
|||||||||||
|
Tangible book value per share (1) |
$ |
13.74 |
$ |
12.06 |
$ |
11.67 |
$ |
11.13 |
$ |
10.76 |
|||||||||||
|
SELECTED FINANCIAL RATIOS |
|||||||||||||||||||||
|
Net interest margin |
3.74 |
% |
3.80 |
% |
3.67 |
% |
3.69 |
% |
3.93 |
% |
|||||||||||
|
Return on average assets |
1.28 |
% |
1.36 |
% |
1.36 |
% |
1.31 |
% |
1.31 |
% |
|||||||||||
|
Return on average common stockholders' equity |
15.03 |
% |
17.83 |
% |
18.86 |
% |
18.47 |
% |
17.28 |
% |
|||||||||||
|
Efficiency ratio |
44.15 |
% |
41.55 |
% |
37.86 |
% |
38.63 |
% |
41.17 |
% |
|||||||||||
|
Non-interest expense to average earning assets |
1.78 |
% |
1.66 |
% |
1.48 |
% |
1.52 |
% |
1.74 |
% |
|||||||||||
|
Tangible common equity to total tangible assets (1) |
9.04 |
% |
7.62 |
% |
7.31 |
% |
6.96 |
% |
7.17 |
% |
|||||||||||
|
(1) Non-GAAP financial measures. "Tangible book value per share" and "tangible common equity to total tangible assets" are not measures of financial performance recognized by generally accepted accounting principles in the United States, or GAAP; However, because the Company has no intangible assets, there is no reconciliation of these non-GAAP financial measures. |
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|
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||||||
|
(Dollars in thousands) |
||||||||||||
|
June 30, 2014 |
June 30, 2013 |
% Change |
||||||||||
|
ASSETS |
||||||||||||
|
Cash and due from banks |
$ |
76,893 |
$ |
60,251 |
28 |
% |
||||||
|
Interest-bearing balances due from depository institutions |
199,990 |
129,767 |
54 |
% |
||||||||
|
Federal funds sold |
3,044 |
2,590 |
18 |
% |
||||||||
|
Cash and cash equivalents |
279,927 |
192,608 |
45 |
% |
||||||||
|
Available for sale debt securities, at fair value |
294,254 |
227,770 |
29 |
% |
||||||||
|
Held to maturity debt securities (fair value of $33,663 and $33,292 at |
||||||||||||
|
June 30, 2014 and 2013, respectively) |
31,178 |
33,808 |
(8) |
% |
||||||||
|
Restricted equity securities |
3,418 |
3,738 |
(9) |
% |
||||||||
|
Mortgage loans held for sale |
11,675 |
16,374 |
(29) |
% |
||||||||
|
Loans |
3,053,989 |
2,590,192 |
18 |
% |
||||||||
|
Less allowance for loan losses |
(32,984) |
(28,757) |
15 |
% |
||||||||
|
Loans, net |
3,021,005 |
2,561,435 |
18 |
% |
||||||||
|
Premises and equipment, net |
7,745 |
8,756 |
(12) |
% |
||||||||
|
Accrued interest and dividends receivable |
9,686 |
9,101 |
6 |
% |
||||||||
|
Deferred tax asset, net |
12,817 |
10,383 |
23 |
% |
||||||||
|
Other real estate owned and repossessed assets |
6,739 |
9,071 |
(26) |
% |
||||||||
|
Bank owned life insurance contracts |
70,090 |
57,969 |
21 |
% |
||||||||
|
Other assets |
14,150 |
9,613 |
47 |
% |
||||||||
|
Total assets |
$ |
3,762,684 |
$ |
3,140,626 |
20 |
% |
||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||||
|
Liabilities: |
||||||||||||
|
Deposits: |
||||||||||||
|
Non-interest-bearing |
$ |
729,163 |
$ |
562,196 |
30 |
% |
||||||
|
Interest-bearing |
2,428,479 |
2,112,781 |
15 |
% |
||||||||
|
Total deposits |
3,157,642 |
2,674,977 |
18 |
% |
||||||||
|
Federal funds purchased |
181,070 |
175,475 |
3 |
% |
||||||||
|
Other borrowings |
19,957 |
19,924 |
0 |
% |
||||||||
|
Accrued interest payable |
1,946 |
905 |
115 |
% |
||||||||
|
Other liabilities |
21,995 |
4,156 |
429 |
% |
||||||||
|
Total liabilities |
3,382,610 |
2,875,437 |
18 |
% |
||||||||
|
Stockholders' equity: |
||||||||||||
|
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001 |
||||||||||||
|
(liquidation preference $1,000), net of discount; 40,000 shares authorized, |
||||||||||||
|
40,000 shares issued and outstanding at June 30, 2014 and 2013 |
39,958 |
39,958 |
- |
% |
||||||||
|
Preferred stock, par value $0.001 per share; 1,000,000 authorized and |
||||||||||||
|
Common stock, par value $0.0003 per share; 50,000,000 shares authorized; |
||||||||||||
|
24,749,436 shares issued and outstanding at June 30, 2014 and |
||||||||||||
|
20,922,936 shares issued and outstanding at June 30, 2013 |
8 |
7 |
14 |
% |
||||||||
|
Additional paid-in capital |
183,782 |
109,874 |
67 |
% |
||||||||
|
Retained earnings |
150,769 |
111,217 |
36 |
% |
||||||||
|
Accumulated other comprehensive income |
5,305 |
4,133 |
28 |
% |
||||||||
|
Noncontrolling interest |
252 |
- |
100 |
% |
||||||||
|
Total stockholders' equity |
380,074 |
265,189 |
43 |
% |
||||||||
|
Total liabilities and stockholders' equity |
$ |
3,762,684 |
$ |
3,140,626 |
20 |
% |
||||||
|
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
|||||||||||||
|
(In thousands except per share data) |
|||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||
|
2014 |
2013 |
2014 |
2013 |
||||||||||
|
Interest income: |
|||||||||||||
|
Interest and fees on loans |
$ |
33,250 |
$ |
28,874 |
$ |
65,502 |
$ |
56,192 |
|||||
|
Taxable securities |
1,126 |
908 |
2,223 |
1,856 |
|||||||||
|
Nontaxable securities |
870 |
847 |
1,741 |
1,679 |
|||||||||
|
Federal funds sold |
43 |
17 |
85 |
33 |
|||||||||
|
Other interest and dividends |
135 |
46 |
154 |
97 |
|||||||||
|
Total interest income |
35,424 |
30,692 |
69,705 |
59,857 |
|||||||||
|
Interest expense: |
|||||||||||||
|
Deposits |
3,027 |
2,784 |
6,041 |
5,497 |
|||||||||
|
Borrowed funds |
419 |
427 |
837 |
978 |
|||||||||
|
Total interest expense |
3,446 |
3,211 |
6,878 |
6,475 |
|||||||||
|
Net interest income |
31,978 |
27,481 |
62,827 |
53,382 |
|||||||||
|
Provision for loan losses |
2,438 |
3,334 |
4,752 |
7,618 |
|||||||||
|
Net interest income after provision for loan losses |
29,540 |
24,147 |
58,075 |
45,764 |
|||||||||
|
Non-interest income: |
|||||||||||||
|
Service charges on deposit accounts |
1,057 |
806 |
1,925 |
1,568 |
|||||||||
|
Mortgage banking |
674 |
787 |
958 |
1,752 |
|||||||||
|
Securities gains |
- |
8 |
- |
131 |
|||||||||
|
Increase in cash surrender value life insurance |
546 |
485 |
1,082 |
955 |
|||||||||
|
Other operating income |
661 |
487 |
1,148 |
964 |
|||||||||
|
Total non-interest income |
2,938 |
2,573 |
5,113 |
5,370 |
|||||||||
|
Non-interest expense: |
|||||||||||||
|
Salaries and employee benefits |
9,098 |
7,056 |
16,795 |
12,735 |
|||||||||
|
Equipment and occupancy expense |
1,409 |
1,469 |
2,775 |
2,580 |
|||||||||
|
Professional services |
532 |
425 |
1,048 |
886 |
|||||||||
|
FDIC and other regulatory assessments |
528 |
426 |
1,045 |
858 |
|||||||||
|
Other real estate owned expense |
298 |
204 |
785 |
594 |
|||||||||
|
Other operating expense |
3,552 |
2,792 |
6,692 |
5,471 |
|||||||||
|
Total non-interest expense |
15,417 |
12,372 |
29,140 |
23,124 |
|||||||||
|
Income before income tax |
17,061 |
14,348 |
34,048 |
28,010 |
|||||||||
|
Provision for income tax |
5,476 |
4,662 |
10,705 |
9,073 |
|||||||||
|
Net income |
11,585 |
9,686 |
23,343 |
18,937 |
|||||||||
|
Dividends on preferred stock |
116 |
100 |
216 |
200 |
|||||||||
|
Net income available to common stockholders |
$ |
11,469 |
$ |
9,586 |
$ |
23,127 |
$ |
18,737 |
|||||
|
Basic earnings per common share |
$ |
0.49 |
$ |
0.46 |
$ |
1.01 |
$ |
0.94 |
|||||
|
Diluted earnings per common share |
$ |
0.46 |
$ |
0.44 |
$ |
0.97 |
$ |
0.88 |
|||||
|
SUMMARY OF LOAN LOSS EXPERIENCE |
||||||||||||||||||||||||
|
(Dollars in thousands) |
||||||||||||||||||||||||
|
2nd Quarter 2014 |
1st Quarter 2014 |
4th Quarter 2013 |
3rd Quarter 2013 |
2nd Quarter 2013 |
||||||||||||||||||||
|
Reserve for loan losses: |
||||||||||||||||||||||||
|
Beginning balance |
$ |
31,728 |
$ |
30,663 |
$ |
28,927 |
$ |
28,757 |
$ |
27,679 |
||||||||||||||
|
Loans charged off: |
||||||||||||||||||||||||
|
Commercial financial and agricultural |
142 |
1,222 |
95 |
849 |
101 |
|||||||||||||||||||
|
Real estate - construction |
325 |
23 |
557 |
394 |
1,888 |
|||||||||||||||||||
|
Real estate - mortgage: |
890 |
4 |
25 |
1,746 |
270 |
|||||||||||||||||||
|
Consumer |
18 |
58 |
38 |
42 |
129 |
|||||||||||||||||||
|
Total charge off |
1,375 |
1,307 |
715 |
3,031 |
2,388 |
|||||||||||||||||||
|
Recoveries: |
||||||||||||||||||||||||
|
Commercial financial and agricultural |
1 |
45 |
16 |
13 |
31 |
|||||||||||||||||||
|
Real estate - construction |
180 |
8 |
70 |
124 |
95 |
|||||||||||||||||||
|
Real estate - mortgage: |
10 |
4 |
9 |
24 |
3 |
|||||||||||||||||||
|
Consumer |
2 |
1 |
- |
6 |
3 |
|||||||||||||||||||
|
Total recoveries |
193 |
58 |
95 |
167 |
132 |
|||||||||||||||||||
|
Net charge-off |
1,182 |
1,249 |
620 |
2,864 |
2,256 |
|||||||||||||||||||
|
Provision for loan losses |
2,438 |
2,314 |
2,356 |
3,034 |
3,334 |
|||||||||||||||||||
|
Ending balance |
$ |
32,984 |
$ |
31,728 |
$ |
30,663 |
$ |
28,927 |
$ |
28,757 |
||||||||||||||
|
Reserve for loan losses to total loans |
1.08 |
% |
1.08 |
% |
1.07 |
% |
1.06 |
% |
1.11 |
% |
||||||||||||||
|
Reserve for loan losses to total average |
||||||||||||||||||||||||
|
loans |
1.10 |
% |
1.09 |
% |
1.11 |
% |
1.09 |
% |
1.14 |
% |
||||||||||||||
|
Net charge-offs to total average loans |
0.16 |
% |
0.17 |
% |
0.09 |
% |
0.43 |
% |
0.36 |
% |
||||||||||||||
|
Provision for loan losses to total average |
||||||||||||||||||||||||
|
loans |
0.33 |
% |
0.32 |
% |
0.34 |
% |
0.46 |
% |
0.53 |
% |
||||||||||||||
|
Nonperforming assets: |
||||||||||||||||||||||||
|
Nonaccrual loans |
$ |
13,193 |
$ |
9,084 |
$ |
9,621 |
$ |
9,396 |
$ |
14,765 |
||||||||||||||
|
Loans 90+ days past due and accruing |
- |
110 |
115 |
- |
259 |
|||||||||||||||||||
|
Other real estate owned and |
||||||||||||||||||||||||
|
repossessed assets |
6,739 |
9,752 |
12,861 |
14,258 |
9,232 |
|||||||||||||||||||
|
Total |
$ |
19,932 |
$ |
18,946 |
$ |
22,597 |
$ |
23,654 |
$ |
24,256 |
||||||||||||||
|
Nonperforming loans to total loans |
0.43 |
% |
0.31 |
% |
0.35 |
% |
0.34 |
% |
0.58 |
% |
||||||||||||||
|
Nonperforming assets to total assets |
0.53 |
% |
0.53 |
% |
0.64 |
% |
0.70 |
% |
0.77 |
% |
||||||||||||||
|
Nonperforming assets to earning assets |
0.54 |
% |
0.55 |
% |
0.66 |
% |
0.72 |
% |
0.79 |
% |
||||||||||||||
|
Reserve for loan losses to nonaccrual loans |
250.01 |
% |
349.27 |
% |
318.71 |
% |
307.87 |
% |
194.76 |
% |
||||||||||||||
|
Restructured accruing loans |
$ |
7,030 |
$ |
9,411 |
$ |
9,689 |
$ |
6,233 |
$ |
9,406 |
||||||||||||||
|
Restructured accruing loans to total loans |
0.23 |
% |
0.32 |
% |
0.35 |
% |
0.23 |
% |
0.36 |
% |
||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
||||||||||||||||||
|
(In thousands except per share data) |
||||||||||||||||||
|
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
||||||||||||||
|
Interest income: |
||||||||||||||||||
|
Interest and fees on loans |
$ |
33,250 |
$ |
32,252 |
$ |
31,618 |
$ |
30,475 |
$ |
28,874 |
||||||||
|
Taxable securities |
1,126 |
1,097 |
1,052 |
980 |
908 |
|||||||||||||
|
Nontaxable securities |
870 |
871 |
870 |
858 |
847 |
|||||||||||||
|
Federal funds sold |
43 |
42 |
51 |
44 |
17 |
|||||||||||||
|
Other interest and dividends |
135 |
19 |
134 |
142 |
46 |
|||||||||||||
|
Total interest income |
35,424 |
34,281 |
33,725 |
32,499 |
30,692 |
|||||||||||||
|
Deposits |
3,027 |
3,014 |
3,202 |
3,131 |
2,784 |
|||||||||||||
|
Borrowed funds |
419 |
418 |
408 |
403 |
427 |
|||||||||||||
|
Total interest expense |
3,446 |
3,432 |
3,610 |
3,534 |
3,211 |
|||||||||||||
|
Net interest income |
31,978 |
30,849 |
30,115 |
28,965 |
27,481 |
|||||||||||||
|
Provision for loan losses |
2,438 |
2,314 |
2,356 |
3,034 |
3,334 |
|||||||||||||
|
Net interest income after provision for loan losses |
29,540 |
28,535 |
27,759 |
25,931 |
24,147 |
|||||||||||||
|
Non-interest income: |
||||||||||||||||||
|
Service charges on deposit accounts |
1,057 |
868 |
837 |
823 |
806 |
|||||||||||||
|
Mortgage banking |
674 |
284 |
344 |
402 |
787 |
|||||||||||||
|
Securities gains |
- |
- |
- |
- |
8 |
|||||||||||||
|
Increase in cash surrender value life insurance |
546 |
536 |
548 |
491 |
485 |
|||||||||||||
|
Other operating income |
661 |
487 |
642 |
553 |
487 |
|||||||||||||
|
Total non-interest income |
2,938 |
2,175 |
2,371 |
2,269 |
2,573 |
|||||||||||||
|
Salaries and employee benefits |
9,098 |
7,697 |
6,541 |
7,048 |
7,056 |
|||||||||||||
|
Equipment and occupancy expense |
1,409 |
1,366 |
1,350 |
1,272 |
1,469 |
|||||||||||||
|
Professional services |
532 |
516 |
480 |
443 |
425 |
|||||||||||||
|
FDIC and other regulatory assessments |
528 |
517 |
536 |
405 |
426 |
|||||||||||||
|
Other real estate owned expense |
298 |
487 |
475 |
357 |
204 |
|||||||||||||
|
Other operating expense |
3,552 |
3,140 |
2,916 |
2,542 |
2,792 |
|||||||||||||
|
Total non-interest expense |
15,417 |
13,723 |
12,298 |
12,067 |
12,372 |
|||||||||||||
|
Income before income tax |
17,061 |
16,987 |
17,832 |
16,133 |
14,348 |
|||||||||||||
|
Provision for income tax |
5,476 |
5,229 |
5,964 |
5,321 |
4,662 |
|||||||||||||
|
Net income |
11,585 |
11,758 |
11,868 |
10,812 |
9,686 |
|||||||||||||
|
Dividends on preferred stock |
116 |
100 |
116 |
100 |
100 |
|||||||||||||
|
Net income available to common stockholders |
$ |
11,469 |
$ |
11,658 |
$ |
11,752 |
$ |
10,712 |
$ |
9,586 |
||||||||
|
Basic earnings per common share |
$ |
0.49 |
$ |
0.53 |
$ |
0.55 |
$ |
0.51 |
$ |
0.46 |
||||||||
|
Diluted earnings per common share |
$ |
0.46 |
$ |
0.51 |
$ |
0.53 |
$ |
0.49 |
$ |
0.44 |
||||||||
|
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS - UNAUDITED |
|||||||||||||||||||||||||||||||||||
|
ON A FULLY TAXABLE-EQUIVALENT BASIS |
|||||||||||||||||||||||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||||||||||||||||||||||
|
2nd Quarter 2014 |
1st Quarter 2014 |
4th Quarter 2013 |
3rd Quarter 2013 |
2nd Quarter 2013 |
|||||||||||||||||||||||||||||||
|
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 |
$ |
2,978,631 |
4.46 |
% |
$ |
2,892,433 |
4.52 |
% |
$ |
2,754,955 |
4.54 |
% |
$ |
2,640,444 |
4.56 |
% |
$ |
2,519,869 |
4.58 |
% |
|||||||||||||||
|
Tax-exempt (2) |
15,803 |
3.25 |
14,550 |
3.34 |
5,669 |
4.34 |
2,483 |
5.91 |
2,453 |
5.72 |
|||||||||||||||||||||||||
|
Mortgage loans held for sale |
8,048 |
3.24 |
4,496 |
2.80 |
5,956 |
3.66 |
12,531 |
2.66 |
14,157 |
2.10 |
|||||||||||||||||||||||||
|
Debt securities: |
|||||||||||||||||||||||||||||||||||
|
Taxable |
188,148 |
2.40 |
174,842 |
2.54 |
166,027 |
2.49 |
152,135 |
2.56 |
139,189 |
2.65 |
|||||||||||||||||||||||||
|
Tax-exempt (2) |
123,897 |
4.11 |
122,686 |
4.13 |
120,161 |
4.11 |
118,001 |
4.13 |
115,428 |
4.22 |
|||||||||||||||||||||||||
|
Total securities (3) |
312,045 |
3.08 |
297,528 |
3.20 |
286,188 |
3.17 |
270,136 |
3.24 |
254,617 |
3.36 |
|||||||||||||||||||||||||
|
Federal funds sold |
41,388 |
0.37 |
54,895 |
0.31 |
68,710 |
0.25 |
62,192 |
0.28 |
21,303 |
0.26 |
|||||||||||||||||||||||||
|
Restricted equity securities |
3,446 |
7.57 |
3,738 |
- |
3,738 |
2.55 |
3,738 |
2.65 |
3,738 |
2.25 |
|||||||||||||||||||||||||
|
Interest-bearing balances with banks |
121,532 |
0.25 |
82,279 |
0.09 |
173,521 |
0.29 |
161,169 |
0.29 |
30,083 |
0.24 |
|||||||||||||||||||||||||
|
Total interest-earning assets |
3,480,893 |
4.13 |
% |
3,349,919 |
4.21 |
% |
3,298,737 |
4.11 |
% |
3,152,693 |
4.14 |
% |
2,846,220 |
4.38 |
% |
||||||||||||||||||||
|
Non-interest-earning assets: |
|||||||||||||||||||||||||||||||||||
|
Cash and due from banks |
57,387 |
56,082 |
53,062 |
45,314 |
42,175 |
||||||||||||||||||||||||||||||
|
Net premises and equipment |
8,377 |
8,724 |
8,944 |
9,052 |
9,359 |
||||||||||||||||||||||||||||||
|
Allowance for loan losses, |
|||||||||||||||||||||||||||||||||||
|
accrued interest and |
|||||||||||||||||||||||||||||||||||
|
other assets |
88,849 |
85,532 |
98,586 |
76,477 |
75,239 |
||||||||||||||||||||||||||||||
|
Total assets |
$ |
3,635,506 |
$ |
3,500,257 |
$ |
3,459,329 |
$ |
3,283,536 |
$ |
2,972,993 |
|||||||||||||||||||||||||
|
Interest-bearing liabilities: |
|||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits: |
|||||||||||||||||||||||||||||||||||
|
Checking |
$ |
482,115 |
0.27 |
% |
$ |
478,678 |
0.27 |
% |
$ |
472,751 |
0.27 |
% |
$ |
432,453 |
0.28 |
% |
$ |
415,955 |
0.28 |
% |
|||||||||||||||
|
Savings |
25,406 |
0.28 |
25,081 |
0.27 |
21,755 |
0.27 |
21,602 |
0.29 |
21,733 |
0.28 |
|||||||||||||||||||||||||
|
Money market |
1,472,346 |
0.44 |
1,416,645 |
0.45 |
1,420,771 |
0.47 |
1,356,197 |
0.47 |
1,123,605 |
0.46 |
|||||||||||||||||||||||||
|
Time deposits |
402,613 |
1.08 |
412,622 |
1.10 |
412,254 |
1.13 |
408,600 |
1.16 |
402,733 |
1.19 |
|||||||||||||||||||||||||
|
Federal funds purchased |
195,809 |
0.28 |
195,967 |
0.28 |
176,967 |
0.28 |
168,121 |
0.28 |
185,533 |
0.29 |
|||||||||||||||||||||||||
|
Other borrowings |
19,953 |
5.69 |
19,945 |
5.75 |
19,936 |
5.63 |
19,928 |
5.63 |
19,920 |
5.92 |
|||||||||||||||||||||||||
|
Total interest-bearing liabilities |
2,598,242 |
0.53 |
% |
2,548,938 |
0.55 |
% |
2,524,434 |
0.57 |
% |
2,406,901 |
0.58 |
% |
2,169,479 |
0.59 |
% |
||||||||||||||||||||
|
Non-interest-bearing liabilities: |
|||||||||||||||||||||||||||||||||||
|
Non-interest-bearing |
|||||||||||||||||||||||||||||||||||
|
demand |
675,098 |
641,450 |
640,476 |
599,379 |
539,228 |
||||||||||||||||||||||||||||||
|
Other liabilities |
16,158 |
4,724 |
7,226 |
7,250 |
1,799 |
||||||||||||||||||||||||||||||
|
Stockholders' equity |
341,120 |
300,512 |
282,549 |
266,427 |
255,837 |
||||||||||||||||||||||||||||||
|
Unrealized gains on securities and |
|||||||||||||||||||||||||||||||||||
|
derivatives |
4,888 |
4,634 |
4,644 |
3,580 |
6,650 |
||||||||||||||||||||||||||||||
|
Total liabilities and |
|||||||||||||||||||||||||||||||||||
|
stockholders' equity |
$ |
3,635,506 |
$ |
3,500,257 |
$ |
3,459,329 |
$ |
3,283,536 |
$ |
2,972,993 |
|||||||||||||||||||||||||
|
Net interest spread |
3.60 |
% |
3.67 |
% |
3.54 |
% |
3.56 |
% |
3.79 |
% |
|||||||||||||||||||||||||
|
Net interest margin |
3.74 |
% |
3.80 |
% |
3.67 |
% |
3.69 |
% |
3.93 |
% |
|||||||||||||||||||||||||
|
(1) |
Average loans include loans on which the accrual of interest has been discontinued. |
||||||||||||||||||||||||||||||||||
|
(2) |
Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 35%. |
||||||||||||||||||||||||||||||||||
|
(3) |
Unrealized gains on available-for-sale debt securities are excluded from the yield calculation. |
||||||||||||||||||||||||||||||||||
SOURCE ServisFirst Bancshares, Inc.
Released July 22, 2014