Press Releases

ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2021

BIRMINGHAM, Ala., Jan. 24, 2022 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2021.

Fourth Quarter 2021 Highlights:

  • Diluted earnings per share were $0.99 for the fourth quarter of 2021, a 5% increase over the fourth quarter of 2020. Excluding the impact of core system conversion expenses recognized during the fourth quarter of 2021, diluted earnings per share were $1.03, an increase of 10% over the fourth quarter of 2020
  • Diluted earnings per share were $3.82 for 2021, a 22% increase over 2020. Excluding the impact of core system conversion expenses, diluted earnings per share were $3.86 for 2021, a 23% increase over 2020
  • Total loans grew from $8.5 billion to $9.5 billion, or by 13%, during 2021, and grew $720.1 million, or 32%, annualized, on a linked-quarter basis. Total loans, excluding the impact of Paycheck Protection Program (“PPP”) loan forgiveness, grew $877.7 million, or 41% annualized, during the quarter
  • Deposits grew from $9.98 billion to $12.45 billion year-over-year, or 25%, and grew $374 million on a linked-quarter basis, or 12%, annualized
  • Book value per share increased to $21.24, a 15% increase year-over-year
  • Cash dividend increased from $0.20 to $0.23 per quarter, a 15% increase

Tom Broughton, Chairman, President and CEO, said, “Our strong business development initiatives continue to result in record loan growth and a strong loan pipeline.”

Bud Foshee, CFO, said, “Excellent credit quality and low levels of loan losses are evidence that we will be able to leverage our excess liquidity in a profitable manner. Operating efficiency will continue to be a focus in 2022.”

FINANCIAL SUMMARY (UNAUDITED)                                      
(in Thousands except share and per share amounts)                                
                                           
        Period Ending
December 31, 2021
  Period Ending
September 30, 2021
  % Change From
Period Ending
September 30, 2021
to Period Ending
December 31, 2021
  Period Ending
December 31, 2020
  % Change From
Period Ending
December 31, 2020
to Period Ending December 31, 2021
 
QUARTERLY OPERATING RESULTS                                      
Net Income   $ 53,753     $ 52,499     2 %   $ 50,981     5 %  
Net Income Available to Common Stockholders   $ 53,722     $ 52,499     2 %   $ 50,949     5 %  
Diluted Earnings Per Share   $ 0.99     $ 0.96     3 %   $ 0.94     5 %  
Return on Average Assets     1.40 %     1.50 %           1.74 %        
Return on Average Common Stockholders' Equity     18.75 %     18.93 %           20.78 %        
Average Diluted Shares Outstanding     54,493,959       54,477,740             54,273,944          
                                           
Net income - adjusted for core system conversion                                      
  expenses, net of tax*   $ 56,004     $ 52,499     7 %   $ 50,981     10 %  
Net Income Available to Common Stockholders -                                      
  adjusted for core system conversion expenses,                                      
  net of tax*   $ 55,973     $ 52,499     7 %   $ 50,949     10 %  
Diluted Earnings Per Share - adjusted for core                                      
  system conversion expenses, net of tax*   $ 1.03     $ 0.96     7 %   $ 0.94     10 %  
Return on Average Assets - adjusted for core                                      
  system conversion expenses, net of tax*     1.46 %     1.50 %           1.74 %        
Return on Average Common Stockholders' Equity -                                      
  adjusted for core system conversion expenses,                                      
  net of tax*     19.54 %     18.93 %           20.78 %        
                                           
YEAR-TO-DATE OPERATING RESULTS                                      
Net Income   $ 207,734                   $ 169,569     23 %  
Net Income Available to Common Stockholders   $ 207,672                   $ 169,506     23 %  
Diluted Earnings Per Share   $ 3.82                   $ 3.13     22 %  
Return on Average Assets     1.53 %                   1.59 %        
Return on Average Common Stockholders' Equity     19.26 %                   18.55 %        
Average Diluted Shares Outstanding     54,434,573                     54,219,037          
                                           
Net income - adjusted for core system conversion                                      
  expenses, net of tax*   $ 209,985                   $ 169,569     24 %  
Net Income Available to Common Stockholders -                                      
  adjusted for core system conversion expenses,                                      
  net of tax*   $ 209,923                   $ 169,506     24 %  
Diluted Earnings Per Share - adjusted for core system                                      
  conversion expenses, net of tax*   $ 3.86                   $ 3.13     23 %  
Return on Average Assets - adjusted for core                                      
  system conversion expenses, net of tax*     1.55 %                   1.59 %        
Return on Average Common Stockholders' Equity -                                      
  adjusted for core system conversion expenses,                                      
  net of tax*     19.47 %                   18.55 %        
                                           
BALANCE SHEET                                      
Total Assets   $ 15,448,806     $ 14,602,228     6 %   $ 11,932,654     29 %  
Loans     9,532,934       8,812,811     8 %     8,465,688     13 %  
Non-interest-bearing Demand Deposits     4,799,767       4,366,654     10 %     2,788,772     72 %  
Total Deposits     12,452,836       12,078,670     3 %     9,975,724     25 %  
Stockholders' Equity     1,152,015       1,114,293     3 %     992,852     16 %  
                                           
* The adjustment for the core system conversion expenses included in the comparative periods presented in this press release are more fully described in "Detailed Financials" and in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.  

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $53.8 million and net income available to common stockholders of $53.7 million for the quarter ended December 31, 2021, compared to net income and net income available to common stockholders of $51.0 million and $50.9 million, respectively, for the same quarter in 2020. Basic and diluted earnings per common share were $0.99 for the fourth quarter of 2021, compared to $0.94 for the fourth quarter of 2020.

Annualized return on average assets was 1.40% and annualized return on average common stockholders’ equity was 18.75% for the fourth quarter of 2021, compared to 1.74% and 20.78%, respectively, for the fourth quarter of 2020.

Net interest income was $101.2 million for the fourth quarter of 2021, compared to $96.3 million for the third quarter of 2021 and $92.1 million for the fourth quarter of 2020. The net interest margin in the fourth quarter of 2021 was 2.71% compared to 2.85% in the third quarter of 2021 and 3.27% in the fourth quarter of 2020. Accretion of net fees on PPP loans of $5.1 million during the fourth quarter of 2021 contributed 22 basis points of the loan yield, compared to $5.2 million of PPP loan fee accretion during the third quarter of 2021, or 24 basis points of the loan yield and $7.5 million during the fourth quarter of 2020, or 35 basis points of the loan yield.

Average loans for the fourth quarter of 2021 were $9.06 billion, an increase of $378.9 million, or 17.3% annualized, over average loans of $8.68 billion for the third quarter of 2021, and an increase of $594.4 million, or 7.0%, over average loans of $8.46 billion for the fourth quarter of 2020. Forgiveness of PPP loans during the fourth quarter of 2021 totaled $157.8 million. PPP loans outstanding as of December 31, 2021 were $230.2 million.

Average total deposits for the fourth quarter of 2021 were $12.39 billion, an increase of $897.5 million, or 31.0%, annualized, over average total deposits of $11.49 billion for the third quarter of 2021, and an increase of $2.55 billion, or 25.9%, over average total deposits of $9.84 billion for the fourth quarter of 2020.

Non-performing assets to total assets were 0.09% for the fourth quarter of 2021, a decrease of two basis points compared to 0.11% for the third quarter of 2021 and a decrease of 12 basis points compared to 0.21% for the fourth quarter of 2020. Annualized net charge-offs to average loans were 0.03% for the fourth quarter of 2021, compared to 0.08% and 0.41% for the third quarter of 2021 and fourth quarter of 2020, respectively. The allowance for credit losses for each quarter-end period presented was calculated under the CECL methodology. The allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 30, 2020 was 1.22%, 1.24% and 1.04%, respectively. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 31, 2020 was 1.25%, 1.29%, and 1.16%, respectively. We recorded an $8.5 million provision for credit losses in the fourth quarter of 2021 compared to $6.0 million in the third quarter of 2021 and $6.3 million in the fourth quarter of 2020.

Non-interest income decreased $872,000, or 10.6%, to $7.4 million for the fourth quarter of 2021 from $8.2 million in the fourth quarter of 2020. Service charges on deposit accounts decreased $674,000, or 34.2%, to $1.3 million from the fourth quarter of 2020 to the fourth quarter of 2021. Mortgage banking revenue decreased $2.6 million, or 84.6%, to $471,000 from the fourth quarter of 2020 to the fourth quarter of 2021. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of December 31, 2021, we had retained a total of 202 1-4 family mortgages for an aggregate balance of $76.9 million. Net credit card revenue increased $1.3 million, or 141.0%, to $2.2 million during the fourth quarter of 2021, compared to $913,000 during the fourth quarter of 2020. The number of credit card accounts increased approximately 6.4% and the aggregate amount of spend on all credit card accounts increased 36% during the fourth quarter of 2021 compared to the fourth quarter of 2020. Other operating income for the fourth quarter of 2021 increased $1.1 million, or 174.8%, to $1.8 million from $643,000 in the fourth quarter of 2020. We wrote up the value of our interest rate cap by $839,000 during the fourth quarter of 2021 through other income compared to a write down of $61,000 during the fourth quarter of 2020. Increased probabilities of Fed rate increases contributed to the recovery in the fair value of our interest rate cap during the fourth quarter of 2021. Merchant service revenue increased from $168,000 during the fourth quarter of 2020 to $376,000, or 124.1%, during the fourth quarter of 2021.

Non-interest expense for the fourth quarter of 2021 increased $10.3 million, or 36.5%, to $38.5 million from $28.2 million in the fourth quarter of 2020, and increased $4.1 million, or 12.0%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2021 increased $2.3 million, or 15.6%, to $17.3 million from $15.0 million in the fourth quarter of 2020, and decreased $692,000, or 3.8%, on a linked quarter basis. Salary expense alone increased 6.2% year over year. We increased our annual incentive accrual based on the increased loan production in 2021 and on final anticipated payouts for 2021 PPP loan originations. Total incentive accruals increased $2.4 million to $4.4 million for the fourth quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 9 to 502 at December 31, 2021 compared to 493 at December 31, 2020, and decreased by 16 from the end of the third quarter of 2021. Equipment and occupancy expense increased $230,000, or 8.6%, to $2.9 million in the fourth quarter of 2021, from $2.7 million in the fourth quarter of 2020, and decreased $86,000, or 2.9% on a linked-quarter basis. We moved our office in Nashville, Tennessee in early 2021 to expand our space and improve visibility and we opened our new office in Orlando, Florida in the third quarter of 2021. The linked-quarter decrease is primarily attributable to adjustments of accrued property taxes. Third party processing and other services expense increased $1.4 million, or 42.1%, to $4.9 million in the fourth quarter of 2021, from $3.4 million in the fourth quarter of 2020 and increased $712,000, or 17.2%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. Professional services expense decreased $335,000, or 26.8%, to $913,000 in the fourth quarter of 2021, from $1.2 million in the fourth quarter of 2020, primarily due to adjustments in accrued professional services fees during the fourth quarter of 2021. FDIC and other regulatory assessments decreased $324,000 to $1.0 million in the fourth quarter of 2021, from $1.4 million in the fourth quarter of 2020, and decreased $588,000, or 36.1%, on a linked quarter basis. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Other operating expenses for the fourth quarter of 2021 increased $7 million, or 160.7%, to $11.4 million from $4.4 million in the fourth quarter of 2020, and increased $4.9 million on a linked-quarter basis. This increase in other operating expenses includes a $3.0 million charge for expenses associated with the conversion to a new core operating system scheduled to take place in the third quarter of 2022. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. We invested $24.5 million in a new market tax credit during the fourth quarter of 2021. We wrote down the investment by $3.1 million during the fourth quarter of 2021 as we recognize the tax credits. We decreased our reserve for credit losses on unfunded loan commitments by $1.7 million in the fourth quarter of 2021. The efficiency ratio was 35.47% during the fourth quarter of 2021 compared to 28.11% during the fourth quarter of 2020 and compared to 32.95% during the third quarter of 2021. The efficiency ratio was 32.70% when adjusted for the core system conversion costs discussed above.

Income tax expense decreased $7.0 million, or 47.3%, to $7.8 million in the fourth quarter of 2021, compared to $14.9 million in the fourth quarter of 2020. Our effective tax rate was 12.70% for the fourth quarter of 2021 compared to 22.56% for the fourth quarter of 2020. We recognized an aggregate of $7.4 million in credits during the fourth quarter of 2021 related to investments in new market tax credits. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the fourth quarters of 2021 and 2020 of $363,000 and $170,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

During the fourth quarter of 2021, we recorded $3.0 million of expenses associated with our core operating system conversion scheduled to be completed during the third quarter of 2022. The expenses relate to negotiated liquidated damages of our existing system contracts and the procurement of our data from those providers. Financial measures included in this press release that are presented adjusted for these expenses are net income, net income available to common stockholders, diluted earnings per share, return on average assets, return on average common stockholders’ equity and efficiency ratio. Each of these six financial measures excludes the impact of this item, net of tax, and are all considered non-GAAP financial measures. This press release also 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 also include total loans adjusted for the impact of PPP loan activities. 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, 2021   Year Ended
December 31, 2021
                         
Net income - GAAP   $ 53,753       $ 207,734                              
  Adjustments:                                          
  Core system conversion expenses     3,007         3,007                              
    Tax on adjustment     (756 )       (756 )                            
Adjusted net income - non-GAAP   $ 56,004       $ 209,985                              
                                               
Net income available to common stockholders - GAAP   $ 53,722       $ 207,672                              
  Adjustments:                                          
  Core system conversion expenses     3,007         3,007                              
    Tax on adjustment     (756 )       (756 )                            
Adjusted net income available to common stockholders -                                          
  non-GAAP   $ 55,973       $ 209,923                              
                                               
Diluted earnings per share - GAAP   $ 0.99         3.82                              
  Adjustments:                                          
  Core system conversion expenses     0.05         0.05                              
    Tax on adjustment     (0.01 )       (0.01 )                            
Adjusted diluted earnings per share - non-GAAP   $ 1.03       $ 3.86                              
                                             
Return on average assets - GAAP     1.40   %     1.53   %                          
Net income - GAAP   $ 53,753       $ 207,734                              
  Adjustments:                                          
  Core system conversion expenses     3,007         3,007                              
    Tax on adjustment     (756 )       (756 )                            
Adjusted net income - non-GAAP   $ 56,004       $ 209,985                              
Average assets - GAAP   $ 15,250,671       $ 13,555,221                              
Adjusted return on average assets - non-GAAP     1.46   %     1.55   %                          
                                               
Return on average common stockholders' equity - GAAP     18.75   %     19.26   %                          
Net income available to common stockholders - GAAP   $ 53,722       $ 207,672                              
  Adjustments:                                          
  Core system conversion expenses     3,007         3,007                              
    Tax on adjustment     (756 )       (756 )                            
Adjusted net income available to common stockholders -                                          
  non-GAAP   $ 55,973       $ 209,923                              
Average common stockholders' equity - GAAP   $ 1,136,610       $ 1,078,075                              
Adjusted return on average common stockholders' equity -     19.54   %     19.47   %                          
  non-GAAP                                          
                                               
Efficiency ratio     35.47   %                                  
Non-interest expense - GAAP   $ 38,489                                      
  Adjustments:                                          
  Core system conversion expenses     3,007                                      
Adjusted non-interest expense     35,482                                      
Net interest income plus non-interest income - GAAP   $ 108,515                                      
Adjusted efficiency ratio - non-GAAP     32.70   %                                  
                                               
        At December 31,
2021
  At September 30,
2021
  At June 30,
2021
  At March 31,
2021
  At December 31,
2020
 
Book value per share - GAAP   $ 21.24       $ 20.56       $ 19.80       $ 19.03       $ 18.41      
Total common stockholders' equity - GAAP     1,152,015         1,114,293         1,073,284         1,030,485         992,852      
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     (13,638 )       (13,705 )       (13,773 )       (13,841 )       (13,908 )    
Tangible common stockholders' equity - non-GAAP   $ 1,138,377       $ 1,100,588       $ 1,059,511       $ 1,016,644       $ 978,944      
Tangible book value per share - non-GAAP   $ 20.99       $ 20.30       $ 19.55       $ 18.78       $ 18.15      
                                               
Stockholders' equity to total assets - GAAP     7.46   %     7.63   %     8.13   %     8.15   %     8.32   %  
Total assets - GAAP   $ 15,448,806       $ 14,602,228       $ 13,207,319       $ 12,647,374       $ 11,932,654      
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     (13,638 )       (13,705 )       (13,773 )       (13,841 )       (13,908 )    
Total tangible assets - non-GAAP   $ 15,435,168       $ 14,588,523       $ 13,193,546       $ 12,633,533       $ 11,918,746      
Tangible common equity to total tangible assets - non-GAAP     7.38   %     7.54   %     8.03   %     8.05   %     8.21   %  
                                               
Total loans - GAAP   $ 9,532,934       $ 8,812,811       $ 8,649,694       $ 8,504,980       $ 8,465,688      
  Adjustments:                                          
  Adjusted to exclude PPP loans     (230,184 )       (387,725 )       (595,017 )       (967,641 )       (900,493 )    
Loans, excluding PPP loans - non-GAAP   $ 9,302,750       $ 8,425,086       $ 8,054,677       $ 7,537,339       $ 7,565,195      

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Mobile, Montgomery and Dothan, Alabama, Northwest Florida, West Central Florida, Nashville, Tennessee, Atlanta, Georgia, and Charleston, South Carolina.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "believe," "expect," "anticipate," "project," “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including, but not limited to: the global health and economic crisis precipitated by the COVID-19 outbreak; general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2021, 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 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020  
CONSOLIDATED STATEMENT OF INCOME                                          
Interest income   $ 108,954     $ 104,236     $ 102,719     $ 100,396     $ 101,065    
Interest expense     7,804       7,916       8,051       8,031       8,984    
Net interest income     101,150       96,320       94,668       92,365       92,081    
Provision for credit losses     8,451       5,963       9,652       7,451       6,283    
Net interest income after provision for credit losses     92,699       90,357       85,016       84,914       85,798    
Non-interest income     7,365       8,026       9,598       8,463       8,237    
Non-interest expense     38,489       34,377       31,309       28,914       28,202    
Income before income tax     61,575       64,006       63,305       64,463       65,833    
Provision for income tax     7,822       11,507       13,278       13,008       14,852    
Net income     53,753       52,499       50,027       51,455       50,981    
Preferred stock dividends     31       -       31       -       32    
Net income available to common stockholders   $ 53,722     $ 52,499     $ 49,996     $ 51,455     $ 50,949    
Earnings per share - basic   $ 0.99     $ 0.97     $ 0.92     $ 0.95     $ 0.94    
Earnings per share - diluted   $ 0.99     $ 0.96     $ 0.92     $ 0.95     $ 0.94    
Average diluted shares outstanding     54,493,959       54,477,740       54,460,230       54,381,991       54,273,944    
                                           
CONSOLIDATED BALANCE SHEET DATA                                          
Total assets   $ 15,448,806     $ 14,602,228     $ 13,207,319     $ 12,647,374     $ 11,932,654    
Loans     9,532,934       8,812,811       8,649,694       8,504,980       8,465,688    
Debt securities     1,305,527       984,600       1,013,783       962,129       886,938    
Non-interest-bearing demand deposits     4,799,767       4,366,654       3,296,429       3,044,611       2,788,772    
Total deposits     12,452,836       12,078,670       10,958,236       10,577,610       9,975,724    
Borrowings     64,706       64,701       64,696       64,691       64,748    
Stockholders' equity     1,152,015       1,114,293       1,073,284       1,030,485       992,852    
                                           
Shares outstanding     54,227,060       54,207,147       54,201,204       54,137,650       53,943,751    
Book value per share   $ 21.24     $ 20.56     $ 19.80     $ 19.03     $ 18.41    
Tangible book value per share (1)   $ 20.99     $ 20.30     $ 19.55     $ 18.78     $ 18.15    
                                           
SELECTED FINANCIAL RATIOS (Annualized)                                          
Net interest margin     2.71 %     2.85 %     3.06 %     3.20 %     3.27 %  
Return on average assets     1.40 %     1.50 %     1.56 %     1.72 %     1.74 %  
Return on average common stockholders' equity     18.75 %     18.93 %     18.98 %     19.83 %     20.78 %  
Efficiency ratio     35.47 %     32.95 %     30.03 %     28.68 %     28.11 %  
Non-interest expense to average earning assets     1.03 %     1.01 %     1.01 %     1.00 %     1.00 %  
                                           
CAPITAL RATIOS (2)                                          
Common equity tier 1 capital to risk-weighted assets     9.95 %     10.46 %     10.60 %     10.73 %     10.50 %  
Tier 1 capital to risk-weighted assets     9.96 %     10.47 %     10.60 %     10.73 %     10.50 %  
Total capital to risk-weighted assets     11.58 %     12.18 %     12.36 %     12.48 %     12.20 %  
Tier 1 capital to average assets     7.39 %     7.80 %     8.10 %     8.25 %     8.23 %  
Tangible common equity to total tangible assets (1)     7.38 %     7.54 %     8.03 %     8.05 %     8.22 %  
                                           
(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, 2021   December 31, 2020   % Change  
ASSETS                    
Cash and due from banks   $ 56,934     $ 93,655     (39 ) %  
Interest-bearing balances due from depository institutions     4,106,790       2,115,985     94   %  
Federal funds sold     58,372       1,771     3,196   %  
  Cash and cash equivalents     4,222,096       2,211,411     91   %  
Available for sale debt securities, at fair value     842,570       886,688     (5 ) %  
Held to maturity debt securities (fair value of $466,286 at December 31, 2021 and $250 at December 31, 2020)     462,957       250     NM    
Restricted equity securities     7,311       -          
Mortgage loans held for sale     1,114       14,425     (92 ) %  
Loans     9,532,934       8,465,688     13   %  
Less allowance for credit losses     (116,660 )     (87,942 )   33   %  
  Loans, net     9,416,274       8,377,746     12   %  
Premises and equipment, net     60,300       54,969     10   %  
Goodwill and other identifiable intangible assets     13,638       13,908     (2 ) %  
Other assets     429,859       373,256     15   %  
  Total assets   $ 15,448,806     $ 11,932,654     29   %  
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Liabilities:                    
Deposits:                    
  Non-interest-bearing   $ 4,799,767     $ 2,788,772     72   %  
  Interest-bearing     7,653,069       7,186,952     6   %  
    Total deposits     12,452,836       9,975,724     25   %  
Federal funds purchased     1,711,777       851,545     101   %  
Other borrowings     64,706       64,748     -   %  
Other liabilities     67,472       47,785     41   %  
  Total liabilities     14,296,791       10,939,802     31   %  
Stockholders' equity:                    
  Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at                    
    December 31, 2021 and December 31, 2020     -       -          
  Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,227,060 shares                    
    issued and outstanding at December 31, 2021, and 53,943,751 shares issued and outstanding                    
    at December 31, 2020     54       54     -   %  
  Additional paid-in capital     226,397       223,856     1   %  
  Retained earnings     911,008       748,224     22   %  
  Accumulated other comprehensive income     14,056       20,218     (30 ) %  
    Total stockholders' equity attributable to ServisFirst Bancshares, Inc.     1,151,515       992,352     16   %  
  Noncontrolling interest     500       500     -   %  
    Total stockholders' equity     1,152,015       992,852     16   %  
  Total liabilities and stockholders' equity   $ 15,448,806     $ 11,932,654     29   %  

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                    
(In thousands except per share data)                          
        Three Months Ended December 31,   Year Ended December 31,  
        2021   2020   2021   2020  
Interest income:                          
  Interest and fees on loans   $ 100,348   $ 94,332   $ 385,721   $ 362,664  
  Taxable securities     6,747     6,018     25,413     22,122  
  Nontaxable securities     47     129     302     739  
  Federal funds sold     18     5     29     332  
  Other interest and dividends     1,794     581     4,840     3,165  
  Total interest income     108,954     101,065     416,305     389,022  
Interest expense:                          
  Deposits     6,271     7,853     26,569     45,230  
  Borrowed funds     1,533     1,131     5,233     5,755  
  Total interest expense     7,804     8,984     31,802     50,985  
  Net interest income     101,150     92,081     384,503     338,037  
Provision for credit losses     8,451     6,283     31,517     42,434  
  Net interest income after provision for credit losses     92,699     85,798     352,986     295,603  
Non-interest income:                          
  Service charges on deposit accounts     1,297     1,971     6,839     7,528  
  Mortgage banking     471     3,050     7,340     8,747  
  Credit card income     2,200     913     7,347     5,916  
  Securities gains     -     -     620     -  
  Increase in cash surrender value life insurance     1,630     1,660     6,642     6,310  
  Other operating income     1,767     643     4,664     1,615  
  Total non-interest income     7,365     8,237     33,452     30,116  
Non-interest expense:                          
  Salaries and employee benefits     17,303     14,970     67,728     61,414  
  Equipment and occupancy expense     2,910     2,680     11,404     10,070  
  Third party processing and other services     4,856     3,418     16,362     13,778  
  Professional services     913     1,248     3,891     4,242  
  FDIC and other regulatory assessments     1,042     1,366     5,679     4,354  
  Other real estate owned expense     48     140     868     2,163  
  Other operating expense     11,417     4,380     27,157     15,490  
  Total non-interest expense     38,489     28,202     133,089     111,511  
  Income before income tax     61,575     65,833     253,349     214,208  
Provision for income tax     7,822     14,852     45,615     44,639  
  Net income     53,753     50,981     207,734     169,569  
  Dividends on preferred stock     31     32     62     63  
  Net income available to common stockholders   $ 53,722   $ 50,949   $ 207,672   $ 169,506  
Basic earnings per common share   $ 0.99   $ 0.94   $ 3.83   $ 3.15  
Diluted earnings per common share   $ 0.99   $ 0.94   $ 3.82   $ 3.13  

LOANS BY TYPE (UNAUDITED)                              
(In thousands)                              
                                 
      4th Quarter 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020
Commercial, financial and agricultural   $ 2,984,053   $ 2,927,845   $ 3,105,243   $ 3,323,093   $ 3,295,900
Real estate - construction     1,103,076     887,938     782,305     666,592     593,614
Real estate - mortgage:                              
  Owner-occupied commercial     1,874,103     1,809,840     1,726,888     1,698,695     1,693,428
  1-4 family mortgage     826,765     765,102     707,546     685,840     711,692
  Other mortgage     2,678,084     2,357,812     2,262,231     2,068,560     2,106,184
Subtotal: Real estate - mortgage     5,378,952     4,932,754     4,696,665     4,453,095     4,511,304
Consumer     66,853     64,274     65,481     62,200     64,870
Total loans   $ 9,532,934   $ 8,812,811   $ 8,649,694   $ 8,504,980   $ 8,465,688

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)                                
(Dollars in thousands)                                  
          4th Quarter 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020
Allowance for credit losses:                                        
Beginning balance   $ 108,950       $ 104,670       $ 94,906       $ 87,942       $ 92,440    
  Impact of Adoption of ASC 326     -         -         -         -         (2,000 )  
Loans charged off:                                        
  Commercial financial and agricultural     1,285         1,541         150         477         8,792    
  Real estate - construction     14         -         -         -         202    
  Real estate - mortgage     -         208         59         12         -    
  Consumer     141         86         54         87         38    
    Total charge offs     1,440         1,835         263         576         9,032    
Recoveries:                                        
  Commercial financial and agricultural     671         140         298         26         94    
  Real estate - construction     -         -         2         50         30    
  Real estate - mortgage     18         4         62         2         114    
  Consumer     10         8         13         11         13    
    Total recoveries     699         152         375         89         251    
  Net charge-offs     741         1,683         (112 )       487         8,781    
  Provision for credit losses     8,451         5,963         9,652         7,451         6,283    
  Ending balance   $ 116,660       $ 108,950       $ 104,670       $ 94,906       $ 87,942    
                                               
  Allowance for credit losses to total loans     1.22   %     1.24   %     1.21   %     1.12   %     1.04   %
  Allowance for credit losses to total average                                        
    loans     1.29   %     1.26   %     1.21   %     1.11   %     1.04   %
  Net charge-offs (recoveries) to total average loans 0.03   %     0.08   %     (0.01 ) %     0.02   %     0.41   %
  Provision for credit losses to total average                                        
    loans     0.37   %     0.27   %     0.45   %     0.35   %     0.30   %
  Nonperforming assets:                                        
    Nonaccrual loans   $ 6,762       $ 9,145       $ 12,301       $ 13,088       $ 13,973    
    Loans 90+ days past due and accruing     5,335         5,326         4,888         4,804         4,981    
    Other real estate owned and                                        
     repossessed assets     1,208         2,068         2,039         2,067         6,497    
  Total   $ 13,305       $ 16,539       $ 19,228       $ 19,959       $ 25,451    
                                           
  Nonperforming loans to total loans     0.13   %     0.16   %     0.20   %     0.21   %     0.22   %
  Nonperforming assets to total assets     0.09   %     0.11   %     0.15   %     0.16   %     0.21   %
  Nonperforming assets to earning assets     0.09   %     0.11   %     0.15   %     0.16   %     0.22   %
  Allowance for credit losses to nonaccrual loans 1,725.23   %     1,191.36   %     850.91   %     725.14   %     629.37   %
                                               
  Restructured accruing loans   $ 431       $ 437       $ 441       $ 794       $ 818    
                                           
  Restructured accruing loans to total loans     -   %     -   %     0.01   %     0.01   %     0.01   %
                                       
  TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)                          
  (In thousands)                                        
      4th Quarter 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020
  Beginning balance:   $ 2,893       $ 2,918       $ 3,542       $ 1,433       $ 2,738    
    Additions     -         -         -         2,146         -    
    Net (paydowns) / advances     (303 )       (25 )       (624 )       (37 )       (619 )  
    Charge-offs     (14 )       -         -         -         (535 )  
    Transfer to OREO     -         -         -         -         (151 )  
  Ending balance   $ 2,576       $ 2,893       $ 2,918       $ 3,542       $ 1,433    

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                    
(In thousands except per share data)                    
        4th Quarter 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020  
Interest income:                                
  Interest and fees on loans   $ 100,348   $ 96,119   $ 95,451   $ 93,803   $ 94,332  
  Taxable securities     6,747     6,544     6,315     5,807     6,018  
  Nontaxable securities     47     62     86     107     129  
  Federal funds sold     18     4     4     3     5  
  Other interest and dividends     1,794     1,507     863     676     581  
  Total interest income     108,954     104,236     102,719     100,396     101,065  
Interest expense:                                
  Deposits     6,271     6,581     6,836     6,881     7,853  
  Borrowed funds     1,533     1,335     1,215     1,150     1,131  
  Total interest expense     7,804     7,916     8,051     8,031     8,984  
  Net interest income     101,150     96,320     94,668     92,365     92,081  
Provision for credit losses     8,451     5,963     9,652     7,451     6,283  
  Net interest income after provision for credit losses     92,699     90,357     85,016     84,914     85,798  
Non-interest income:                                
  Service charges on deposit accounts     1,297     1,727     1,907     1,908     1,971  
  Mortgage banking     471     1,423     2,699     2,747     3,050  
  Credit card income     2,200     2,043     1,912     1,192     913  
  Securities gains     -     -     620     -     -  
  Increase in cash surrender value life insurance     1,630     1,671     1,683     1,658     1,660  
  Other operating income     1,767     1,162     777     958     643  
  Total non-interest income     7,365     8,026     9,598     8,463     8,237  
Non-interest expense:                                
  Salaries and employee benefits     17,303     17,995     16,887     15,543     14,970  
  Equipment and occupancy expense     2,910     2,996     2,844     2,654     2,680  
  Third party processing and other services     4,856     4,144     3,946     3,416     3,418  
  Professional services     913     948     1,107     923     1,248  
  FDIC and other regulatory assessments     1,042     1,630     1,425     1,582     1,366  
  Other real estate owned expense     48     123     540     157     140  
  Other operating expense     11,417     6,541     4,560     4,639     4,380  
  Total non-interest expense     38,489     34,377     31,309     28,914     28,202  
  Income before income tax     61,575     64,006     63,305     64,463     65,833  
Provision for income tax     7,822     11,507     13,278     13,008     14,852  
  Net income     53,753     52,499     50,027     51,455     50,981  
  Dividends on preferred stock     31     -     31     -     32  
  Net income available to common stockholders   $ 53,722   $ 52,499   $ 49,996   $ 51,455   $ 50,949  
Basic earnings per common share   $ 0.99   $ 0.97   $ 0.92   $ 0.95   $ 0.94  
Diluted earnings per common share   $ 0.99   $ 0.96   $ 0.92   $ 0.95   $ 0.94  

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)  
ON A FULLY TAXABLE-EQUIVALENT BASIS  
(Dollars in thousands)  
                                                                       
            4th Quarter 2021   3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020  
            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   $ 9,032,914   4.40 %   $ 8,653,632   4.40 %   $ 8,618,139   4.43 %   $ 8,484,914   4.47 %   $ 8,435,237   4.43 %  
    Tax-exempt (2)     26,148   4.07       26,542   4.05       26,854   4.05       27,592   4.17       29,393   4.16    
      Total loans, net of                                                              
        unearned income     9,059,062   4.40       8,680,174   4.39       8,644,993   4.43       8,512,506   4.47       8,464,630   4.43    
  Mortgage loans held for sale     998   1.99       7,050   1.69       11,470   1.92       13,601   1.94       19,459   1.37    
  Debt securities:                                                              
    Taxable     1,134,378   2.38       969,715   2.70       936,863   2.70       878,118   2.65       862,333   2.79    
    Tax-exempt (2)     9,823   2.36       12,382   2.39       16,872   2.47       21,084   2.43       25,542   2.52    
      Total securities (3)     1,144,201   2.38       982,097   2.70       953,735   2.69       899,202   2.64       887,875   2.78    
  Federal funds sold     39,445   0.18       8,551   0.19       8,224   0.20       11,935   0.10       16,306   0.12    
  Restricted equity securities     873   3.18       -   -       -   -       -   -       -   -    
  Interest-bearing balances with banks     4,561,662   0.16       3,761,652   0.16       2,790,524   0.12       2,262,233   0.12       1,837,249   0.13    
  Total interest-earning assets   $ 14,806,241   2.92     $ 13,439,524   3.08     $ 12,408,946   3.32     $ 11,699,477   3.48     $ 11,225,519   3.58    
Non-interest-earning assets:                                                              
  Cash and due from banks     79,293           90,034           85,478           71,166           91,258        
  Net premises and equipment     61,837           62,845           61,240           57,198           56,315        
  Allowance for credit losses, accrued                                                              
    interest and other assets     303,300           315,178           320,729           320,407           308,746        
      Total assets   $ 15,250,671         $ 13,907,581         $ 12,876,393         $ 12,148,248         $ 11,681,838        
                                                                       
Interest-bearing liabilities:                                                              
  Interest-bearing deposits:                                                              
  Checking   $ 1,499,918   0.19 %   $ 1,431,420   0.19 %   $ 1,350,098   0.19 %   $ 1,294,614   0.19 %   $ 1,197,908   0.23 %  
  Savings     123,179   0.18       122,579   0.17       104,283   0.18       93,375   0.18       86,259   0.18    
  Money market     5,100,192   0.26       5,328,291   0.26       5,321,338   0.26       5,057,828   0.27       4,933,285   0.31    
  Time deposits     807,342   1.05       806,108   1.15       801,928   1.33       808,561   1.44       810,675   1.59    
    Total interest-bearing deposits     7,530,631   0.33       7,688,398   0.34       7,577,647   0.36       7,254,378   0.38       7,028,127   0.44    
  Federal funds purchased     1,608,349   0.21       1,205,327   0.21       970,708   0.22       849,772   0.22       752,765   0.22    
  Other borrowings     64,704   4.23       64,694   4.23       64,694   4.28       64,689   4.33       64,701   4.41    
  Total interest-bearing liabilities   $ 9,203,684   0.34 %   $ 8,958,419   0.35 %   $ 8,613,049   0.37 %   $ 8,168,839   0.40 %   $ 7,845,593   0.46 %  
Non-interest-bearing liabilities:                                                              
  Non-interest-bearing                                                              
    demand deposits     4,856,243           3,800,972           3,154,605           2,923,041           2,812,254        
  Other liabilities     54,134           48,060           52,027           39,442           48,642        
  Stockholders' equity     1,121,578           1,078,987           1,038,012           996,741           956,847        
  Accumulated other comprehensive                                                              
    income     15,032           21,143           18,700           20,185           18,502        
      Total liabilities and                                                              
        stockholders' equity   $ 15,250,671         $ 13,907,581         $ 12,876,393         $ 12,148,248         $ 11,681,838        
Net interest spread         2.58 %         2.73 %         2.95 %         3.08 %         3.12 %  
Net interest margin         2.71 %         2.85 %         3.06 %         3.20 %         3.27 %  
                                                                       
(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 on available-for-sale debt securities are excluded from the yield calculation.  

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Source: ServisFirst Bancshares, Inc.