Press Releases

ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2023

BIRMINGHAM, Ala.--(BUSINESS WIRE)-- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended December 31, 2023.

Fourth Quarter 2023 Highlights:

  • Entering the Memphis, Tennessee market with the hiring of Joel Smith as President.
  • Deposits grew 15% year-over-year and new deposit accounts opened increased 12% year-over-year.
  • Diluted earnings per share of $0.77 for the quarter.
  • Adjusted* diluted earnings per share of $0.91 for the quarter.
  • $2.1 billion in cash on hand with no FHLB advances or brokered deposits.
  • Book value per share of $26.45, up 10.7% from the fourth quarter of 2022 and 10.8% annualized, from the third quarter of 2023.
  • Cash dividend increased from $0.28 per share to $0.30 per share, a 7% increase.
  • Credit quality continues to be strong with non-performing assets to total assets of 0.14%.
  • Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.95% to 10.91% year-over-year.

Tom Broughton, Chairman, President, and CEO, said, “We are pleased to announce our entrance into the Memphis, Tennessee market with the addition of Joel Smith, who is an outstanding banker with a commercial and industrial banking background.”

Bud Foshee, CFO, said, “We are well-positioned for growth in 2024, with strong liquidity in what we believe to be the best footprint in the United States.”

* This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”

FINANCIAL SUMMARY (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in Thousands except share and per share amounts)

 

Period Ending December 31, 2023

 

Period Ending September 30, 2023

 

% Change From Period Ending September 30, 2023 to Period Ending December 31, 2023

 

Period Ending December 31, 2022

 

% Change From Period Ending December 31, 2022 to Period Ending December 31, 2023

 

QUARTERLY OPERATING RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

42,074

 

 

$

53,340

 

 

(21.1

)%

 

$

67,724

 

 

(37.9

)%

 

Net Income Available to Common Stockholders

 

$

42,043

 

 

$

53,340

 

 

(21.2

)%

 

$

67,693

 

 

(37.9

)%

 

Diluted Earnings Per Share

 

$

0.77

 

 

$

0.98

 

 

(21.3

)%

 

$

1.24

 

 

(38.0

)%

 

Return on Average Assets

 

 

1.04

%

 

 

1.37

%

 

 

 

 

1.89

%

 

 

 

Return on Average Common Stockholders' Equity

 

 

11.78

%

 

 

15.34

%

 

 

 

 

21.27

%

 

 

 

Average Diluted Shares Outstanding

 

 

54,548,719

 

 

 

54,530,635

 

 

 

 

 

54,537,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income, net of tax*

 

$

49,891

 

 

$

53,340

 

 

(6.5

)%

 

$

67,724

 

 

(26.3

)%

 

Adjusted Net Income Available to Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders, net of tax*

 

$

49,860

 

 

$

53,340

 

 

(6.5

)%

 

$

67,693

 

 

(26.3

)%

 

Adjusted Diluted Earnings Per Share, net of tax*

 

$

0.91

 

 

$

0.98

 

 

(6.6

)%

 

$

1.24

 

 

(26.4

)%

 

Adjusted Return on Average Assets, net of tax*

 

 

1.23

%

 

 

1.37

%

 

 

 

 

1.89

%

 

 

 

Adjusted Return on Average Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity, net of tax*

 

 

13.98

%

 

 

15.34

%

 

 

 

 

21.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YEAR-TO-DATE OPERATING RESULTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

206,853

 

 

 

 

 

 

 

 

$

251,504

 

 

(17.8

)%

 

Net Income Available to Common Stockholders

 

$

206,791

 

 

 

 

 

 

 

 

$

251,442

 

 

(17.8

)%

 

Diluted Earnings Per Share

 

$

3.79

 

 

 

 

 

 

 

 

$

4.61

 

 

(17.8

)%

 

Return on Average Assets

 

 

1.37

%

 

 

 

 

 

 

 

 

1.71

%

 

 

 

Return on Average Common Stockholders' Equity

 

 

15.13

%

 

 

 

 

 

 

 

 

20.73

%

 

 

 

Average Diluted Shares Outstanding

 

 

54,535,315

 

 

 

 

 

 

 

 

 

54,534,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income, net of tax*

 

$

214,670

 

 

 

 

 

 

 

 

$

251,504

 

 

(14.6

)%

 

Adjusted Net Income Available to Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders, net of tax*

 

$

214,608

 

 

 

 

 

 

 

 

$

251,442

 

 

(14.6

)%

 

Adjusted Diluted Earnings Per Share, net of tax*

 

$

3.94

 

 

 

 

 

 

 

 

$

4.61

 

 

 

 

Adjusted Return on Average Assets, net of tax*

 

 

1.42

%

 

 

 

 

 

 

 

 

1.71

%

 

 

 

Adjusted Return on Average Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity, net of tax*

 

 

15.71

%

 

 

 

 

 

 

 

 

20.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

16,129,668

 

 

$

16,044,332

 

 

0.5

%

 

$

14,595,753

 

 

10.5

%

 

Loans

 

 

11,658,829

 

 

 

11,641,130

 

 

0.2

%

 

 

11,687,968

 

 

(0.2

)%

 

Non-interest-bearing Demand Deposits

 

 

2,643,101

 

 

 

2,621,072

 

 

0.8

%

 

 

3,321,347

 

 

(20.4

)%

 

Total Deposits

 

 

13,273,511

 

 

 

13,142,376

 

 

1.0

%

 

 

11,546,805

 

 

15.0

%

 

Stockholders' Equity

 

 

1,440,405

 

 

 

1,401,384

 

 

2.8

%

 

 

1,297,896

 

 

11.0

%

 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $42.1 million and net income available to common stockholders of $42.0 million for the quarter ended December 31, 2023, compared to net income and net income available to common stockholders of $53.3 million for the third quarter of 2023 and net income and net income available to common stockholders of $67.7 million for the fourth quarter of 2022. Basic and diluted earnings per common share were both $0.77 in the fourth quarter of 2023, compared to $0.98 for both in the third quarter of 2023 and $1.25 and $1.24, respectively, in the fourth quarter of 2022.

Annualized return on average assets was 1.04% and annualized return on average common stockholders’ equity was 11.78% for the fourth quarter of 2023, compared to 1.89% and 21.27%, respectively, for the fourth quarter of 2022.

Net interest income was $101.7 million for the fourth quarter of 2023, compared to $99.7 million for the third quarter of 2023 and $122.4 million for the fourth quarter of 2022. The net interest margin in the fourth quarter of 2023 was 2.57% compared to 2.64% in the third quarter of 2023 and 3.52% in the fourth quarter of 2022. The Company significantly increased deposits and liquidity in the form of interest-bearing balances with banks after the stress in the banking system in March. Average interest-bearing balances with banks increased by $1.5 billion, or 333%, from the fourth quarter of 2022 to the fourth quarter of 2023. While the increased liquidity had a benign impact on net interest income, it has had an impact on our net interest margin. Loan yields were 6.32% during the fourth quarter of 2023 compared to 6.13% during the third quarter of 2023 and 5.32% during the fourth quarter of 2022. Investment yields were 3.08% during the fourth quarter of 2023 compared to 3.07% during the third quarter of 2023 and 2.49% during the fourth quarter of 2022. Average interest-bearing deposit rates were 4.06% during the fourth quarter of 2023, compared to 3.84% during the third quarter of 2023 and 1.70% during the fourth quarter of 2022. Average federal funds purchased rates were 5.49% during the fourth quarter of 2023, compared to 5.43% during the third quarter of 2023 and 3.75% during the fourth quarter of 2022.

Average loans for the fourth quarter of 2023 were $11.60 billion, an increase of $35.5 million, or 1.2% annualized, from average loans of $11.56 billion for the third quarter of 2023, and an increase of $113.4 million, or 1.0%, from average loans of $11.49 billion for the fourth quarter of 2022.

Average total deposits for the fourth quarter of 2023 were $13.23 billion, an increase of $549.1 million, or 17.2% annualized, over average total deposits of $12.68 billion for the third quarter of 2023, and an increase of $1.84 billion, or 16.2%, from average total deposits of $11.39 billion for the fourth quarter of 2022.

Non-performing assets to total assets were 0.14% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.12% for the fourth quarter of 2022. Annualized net charge-offs to average loans were 0.09% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.06% fourth quarter of 2022. The allowance for credit losses as a percentage of total loans at December 31, 2023, September 30, 2023, and December 31, 2022, was 1.32%, 1.31%, and 1.25%, respectively. We recorded a $3.6 million provision for credit losses in the fourth quarter of 2023 compared to $4.3 million in the third quarter of 2023, and $7.1 million in the fourth quarter of 2022.

Non-interest income increased $413,000, or 5.9%, to $7.4 million for the fourth quarter of 2023 from $7.0 million in the fourth quarter of 2022, and decreased $756,000, or 9.3%, on a linked quarter basis. Service charges on deposit accounts increased $315,000, or 16.9%, to $2.2 million from the fourth quarter of 2022 to the fourth quarter of 2023, and increased $18,000, or 0.8%, on a linked quarter basis. Mortgage banking revenue increased $278,000, or 54.1%, to $792,000 from the fourth quarter of 2022 to the fourth quarter of 2023, and decreased $33,000, or 4.0%, on a linked quarter basis. Net credit card revenue decreased $257,000, or 11.4%, to $2.0 million during the fourth quarter of 2023, compared to $2.3 million during the fourth quarter of 2022, and decreased $528,000, or 20.9%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income increased $39,000, or 2.4%, to $1.6 million during the fourth quarter of 2023, compared to $1.6 million during the fourth quarter of 2022, and decreased $179,000, or 9.8%, on a linked quarter basis. Other operating income for the fourth quarter of 2023 increased $38,000, or 5.2%, to $763,000 from $725,000 in the fourth quarter of 2022, and decreased $34,000, or 4.3%, on a linked quarter basis. We recognized $162,000 of income on an interest rate cap during the fourth quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $95,000, or 19.5%, to $585,000 for the fourth quarter of 2023 from $490,000 in the fourth quarter of 2022.

Non-interest expense for the fourth quarter of 2023 increased $20.2 million, or 52.9%, to $58.3 million from $38.1 million in the fourth quarter of 2022, and increased $16.6 million, or 39.8%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2023 increased $3.8 million, or 19.7%, to $23.0 million from $19.2 million in the fourth quarter of 2022, and increased $2.9 million, or 14.7%, on a linked quarter basis. The number of FTE employees increased by 20 to 591 at December 31, 2023 compared to 571 at December 31, 2022, and increased by 23 from the end of the third quarter of 2023. Equipment and occupancy expense increased $597,000, or 18.3%, to $3.9 million in the fourth quarter of 2023, from $3.3 million in the fourth quarter of 2022, and increased $281,000, or 7.9% on a linked-quarter basis. The year-over-year increase was primarily attributed to new leases that began after the fourth quarter of 2022. Third party processing and other services expense decreased $329,000, or 4.0%, to $7.8 million in the fourth quarter of 2023, from $8.2 million in the fourth quarter of 2022, and increased $1.3 million, or 19.7%, on a linked-quarter basis. Professional services expense increased $495,000, or 53.7%, to $1.4 million in the fourth quarter of 2023, from $922,000 in the fourth quarter of 2022, and increased $152,000, or 12.0%, on a linked quarter basis. FDIC and other regulatory assessments increased $8.2 million to $9.5 million in the fourth quarter of 2023, from $1.3 million in the fourth quarter of 2022, and increased $7.2 million, or 305.3%, on a linked quarter basis. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023. Other operating expenses for the fourth quarter of 2023 increased $7.6 million, or 154.0%, to $12.6 million from $5.0 million in the fourth quarter of 2022, and increased $4.8 million, or 60.9%, on a linked-quarter basis. During the fourth quarter of 2023, an incremental expense related to tax credit investments of $3.3 million, associated with the tax benefit discussed below, contributed to the increase in other operating expenses. In addition, the following items, which management views as unusual, infrequent, and not reflective of future normal operating expenses, contributed to the increase in non-interest expense: the FDIC implemented a special assessment to recapitalize the Deposit Insurance Fund resulting in an expense of $7.2 million, an EDP contract termination and related capitalized cost write-offs of $1.1 million to other operating expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense to other operating expenses. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expense for 2023. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. The efficiency ratio was 55.23% during the fourth quarter of 2023 compared to 29.45% during the fourth quarter of 2022 and 38.64% during the third quarter of 2023. The adjusted efficiency ratio was 42.22%.

Income tax expense decreased $11.2 million, or 68.6%, to $5.2 million in the fourth quarter of 2023, compared to $16.4 million in the fourth quarter of 2022. Our effective tax rate was 10.91% for the fourth quarter of 2023 compared to 19.49% for the fourth quarter of 2022. We recognized an aggregate of $6.7 million in credits during the fourth quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the fourth quarter of 2022. During the fourth quarter of 2023, $4.1 million of the recognized credits were related to the incremental expense for tax credit investments discussed above. We recognize 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 2023 and 2022 of $252,000 and $10,000, respectively.

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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida. Through the bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.

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: 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; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; 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 2023, 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.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Quarter 2023

 

3rd Quarter 2023

 

2nd Quarter 2023

 

1st Quarter 2023

 

4th Quarter 2022

 

CONSOLIDATED STATEMENT OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

229,062

 

 

$

213,206

 

 

$

189,656

 

 

$

181,322

 

 

$

170,273

 

 

Interest expense

 

 

127,375

 

 

 

113,508

 

 

 

88,405

 

 

 

73,021

 

 

 

47,889

 

 

Net interest income

 

 

101,687

 

 

 

99,698

 

 

 

101,251

 

 

 

108,301

 

 

 

122,384

 

 

Provision for credit losses

 

 

3,582

 

 

 

4,282

 

 

 

6,654

 

 

 

4,197

 

 

 

7,135

 

 

Net interest income after provision for credit losses

 

 

98,105

 

 

 

95,416

 

 

 

94,597

 

 

 

104,104

 

 

 

115,249

 

 

Non-interest income

 

 

7,379

 

 

 

8,135

 

 

 

8,582

 

 

 

6,321

 

 

 

6,966

 

 

Non-interest expense

 

 

58,258

 

 

 

41,663

 

 

 

38,466

 

 

 

39,664

 

 

 

38,092

 

 

Income before income tax

 

 

47,226

 

 

 

61,888

 

 

 

64,713

 

 

 

70,761

 

 

 

84,123

 

 

Provision for income tax

 

 

5,152

 

 

 

8,548

 

 

 

11,245

 

 

 

12,790

 

 

 

16,399

 

 

Net income

 

 

42,074

 

 

 

53,340

 

 

 

53,468

 

 

 

57,971

 

 

 

67,724

 

 

Preferred stock dividends

 

 

31

 

 

 

-

 

 

 

31

 

 

 

-

 

 

 

31

 

 

Net income available to common stockholders

 

$

42,043

 

 

$

53,340

 

 

$

53,437

 

 

$

57,971

 

 

$

67,693

 

 

Earnings per share - basic

 

$

0.77

 

 

$

0.98

 

 

$

0.98

 

 

$

1.07

 

 

$

1.25

 

 

Earnings per share - diluted

 

$

0.77

 

 

$

0.98

 

 

$

0.98

 

 

$

1.06

 

 

$

1.24

 

 

Average diluted shares outstanding

 

 

54,548,719

 

 

 

54,530,635

 

 

 

54,527,317

 

 

 

54,534,482

 

 

 

54,537,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

16,129,668

 

 

$

16,044,332

 

 

$

15,072,808

 

 

$

14,566,559

 

 

$

14,595,753

 

 

Loans

 

 

11,658,829

 

 

 

11,641,130

 

 

 

11,604,894

 

 

 

11,629,802

 

 

 

11,687,968

 

 

Debt securities

 

 

1,882,847

 

 

 

1,878,701

 

 

 

2,048,227

 

 

 

1,646,937

 

 

 

1,678,936

 

 

Non-interest-bearing demand deposits

 

 

2,643,101

 

 

 

2,621,072

 

 

 

2,855,102

 

 

 

2,898,736

 

 

 

3,321,347

 

 

Total deposits

 

 

13,273,511

 

 

 

13,142,376

 

 

 

12,288,219

 

 

 

11,615,317

 

 

 

11,546,805

 

 

Borrowings

 

 

64,735

 

 

 

64,751

 

 

 

64,737

 

 

 

65,417

 

 

 

64,726

 

 

Stockholders' equity

 

 

1,440,405

 

 

 

1,401,384

 

 

 

1,363,471

 

 

 

1,339,817

 

 

 

1,297,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

54,461,580

 

 

 

54,425,447

 

 

 

54,425,033

 

 

 

54,398,025

 

 

 

54,326,527

 

 

Book value per share

 

$

26.45

 

 

$

25.75

 

 

$

25.05

 

 

$

24.63

 

 

$

23.89

 

 

Tangible book value per share (1)

 

$

26.20

 

 

$

25.50

 

 

$

24.80

 

 

$

24.38

 

 

$

23.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SELECTED FINANCIAL RATIOS (Annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

2.57

%

 

 

2.64

%

 

 

2.93

%

 

 

3.15

%

 

 

3.52

%

 

Return on average assets

 

 

1.04

%

 

 

1.37

%

 

 

1.50

%

 

 

1.63

%

 

 

1.89

%

 

Return on average common stockholders' equity

 

 

11.78

%

 

 

15.34

%

 

 

15.85

%

 

 

17.83

%

 

 

21.27

%

 

Efficiency ratio

 

 

55.23

%

 

 

38.64

%

 

 

35.02

%

 

 

34.60

%

 

 

29.45

%

 

Non-interest expense to average earning assets

 

 

1.47

%

 

 

1.10

%

 

 

1.11

%

 

 

1.15

%

 

 

1.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital to risk-weighted assets

 

 

10.91

%

 

 

10.69

%

 

 

10.37

%

 

 

10.01

%

 

 

9.55

%

 

Tier 1 capital to risk-weighted assets

 

 

10.92

%

 

 

10.69

%

 

 

10.38

%

 

 

10.02

%

 

 

9.55

%

 

Total capital to risk-weighted assets

 

 

12.45

%

 

 

12.25

%

 

 

11.94

%

 

 

11.54

%

 

 

11.03

%

 

Tier 1 capital to average assets

 

 

9.12

%

 

 

9.35

%

 

 

9.83

%

 

 

9.49

%

 

 

9.29

%

 

Tangible common equity to total tangible assets (1)

 

 

8.85

%

 

 

8.66

%

 

 

8.96

%

 

 

9.11

%

 

 

8.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) This press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”

 

(2) Regulatory capital ratios for the most recent period are preliminary.

 

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. Additionally, we experienced expenses for the termination of an EDP contract and related capitalized cost write-offs resulting in $1.1 million in expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expenses for 2023. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures.

This press release also contains the non-GAAP financial measures of 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 associated with our acquisition of Metro Bancshares, Inc. in January 2015.

We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations, and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

 

 

 

 

Three Months Ended December 31, 2023

 

Year Ended December 31, 2023

Net income - GAAP

 

$

42,074

 

 

$

206,853

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

7,152

 

 

 

7,152

 

 

Privilege tax expense

 

 

2,150

 

 

 

2,150

 

 

EDP contract termination expense

 

 

1,134

 

 

 

1,134

 

 

 

Tax on adjustments

 

 

(2,619

)

 

 

(2,619

)

Adjusted net income - non-GAAP

 

$

49,891

 

 

$

214,670

 

 

 

 

 

 

 

 

 

Net income available to common stockholders - GAAP

 

$

42,043

 

 

$

206,791

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

7,152

 

 

 

7,152

 

 

Privilege tax expense

 

 

2,150

 

 

 

2,150

 

 

EDP contract termination expense

 

 

1,134

 

 

 

1,134

 

 

 

Tax on adjustments

 

 

(2,619

)

 

 

(2,619

)

Adjusted net income available to common stockholders -non-GAAP

 

$

49,860

 

 

$

214,608

 

 

 

 

 

 

 

 

 

Diluted earnings per share - GAAP

 

$

0.77

 

 

$

3.79

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

0.13

 

 

 

0.13

 

 

Privilege tax expense

 

 

0.04

 

 

 

0.04

 

 

EDP contract termination expense

 

 

0.02

 

 

 

0.02

 

 

 

Tax on adjustments

 

 

(0.05

)

 

 

(0.05

)

Adjusted diluted earnings per share - non-GAAP

 

$

0.91

 

 

$

3.94

 

 

 

 

 

 

 

 

 

 

Return on average assets - GAAP

 

 

1.04

%

 

 

1.37

%

Net income - GAAP

 

$

42,074

 

 

$

206,853

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

7,152

 

 

 

7,152

 

 

Privilege tax expense

 

 

2,150

 

 

 

2,150

 

 

EDP contract termination expense

 

 

1,134

 

 

 

1,134

 

 

 

Tax on adjustments

 

 

(2,619

)

 

 

(2,619

)

Adjusted net income available to common stockholders -non-GAAP

 

$

49,891

 

 

$

214,670

 

Average assets - GAAP

 

$

16,122,146

 

 

$

15,066,716

 

Adjusted return on average assets - non-GAAP

 

 

1.23

%

 

 

1.42

%

 

 

 

 

 

 

 

 

 

Return on average common stockholders' equity - GAAP

 

 

11.78

%

 

 

15.13

%

Net income available to common stockholders - GAAP

 

$

42,074

 

 

$

206,853

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

7,152

 

 

 

7,152

 

 

Privilege tax expense

 

 

2,150

 

 

 

2,150

 

 

EDP contract termination expense

 

 

1,134

 

 

 

1,134

 

 

 

Tax on adjustments

 

 

(2,619

)

 

 

(2,619

)

Adjusted diluted earnings per share - non-GAAP

 

$

49,891

 

 

$

214,670

 

Average common stockholders' equity - GAAP

 

$

1,415,866

 

 

$

1,366,708

 

Adjusted return on average common stockholders' equity non-GAAP

 

 

13.98

%

 

 

15.71

%

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

55.23

%

 

 

40.67

%

Non-interest expense - GAAP

 

$

56,480

 

 

$

176,273

 

 

Adjustments:

 

 

 

 

 

 

 

FDIC special assessment

 

 

7,152

 

 

 

7,152

 

 

Privilege tax expense

 

 

2,150

 

 

 

2,150

 

 

EDP contract termination expense

 

 

1,134

 

 

 

1,134

 

Adjusted non-interest expense

 

$

46,044

 

 

$

165,837

 

Net interest income plus non-interest income - GAAP

 

$

109,066

 

 

$

441,354

 

Adjusted efficiency ratio - non-GAAP

 

 

42.22

%

 

 

37.57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2023

 

At September 30, 2023

 

At June 30, 2023

 

At March 31, 2023

 

At December 31, 2022

 

Book value per share - GAAP

 

$

26.45

 

 

$

25.75

 

 

$

25.05

 

 

$

24.63

 

 

$

23.89

 

 

Total common stockholders' equity - GAAP

 

 

1,440,405

 

 

 

1,401,384

 

 

 

1,363,471

 

 

 

1,339,817

 

 

 

1,297,896

 

 

 

Adjustment for Goodwill

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

Tangible common stockholders' equity - non-GAAP

 

$

1,426,790

 

 

$

1,387,769

 

 

$

1,349,856

 

 

$

1,326,202

 

 

$

1,284,281

 

 

Tangible book value per share - non-GAAP

 

$

26.22

 

 

$

25.50

 

 

$

24.80

 

 

$

24.38

 

 

$

23.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity to total assets - GAAP

 

 

8.93

%

 

 

8.73

%

 

 

9.05

%

 

 

9.20

%

 

 

8.89

%

 

Total assets - GAAP

 

$

16,129,668

 

 

$

16,044,332

 

 

$

15,072,808

 

 

$

14,566,559

 

 

$

14,595,753

 

 

 

Adjustment for Goodwill

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

 

(13,615

)

 

Total tangible assets - non-GAAP

 

$

16,116,053

 

 

$

16,030,717

 

 

$

15,059,193

 

 

$

14,552,944

 

 

$

14,582,138

 

 

Tangible common equity to total tangible assets - non-GAAP

 

 

8.85

%

 

 

8.66

%

 

 

8.96

%

 

 

9.11

%

 

 

8.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

December 31, 2022

 

% Change

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

123,430

 

 

$

106,317

 

 

16

%

 

Interest-bearing balances due from depository institutions

 

 

1,907,083

 

 

 

708,221

 

 

169

%

 

Federal funds sold

 

 

100,575

 

 

 

1,515

 

 

6,539

%

 

 

Cash and cash equivalents

 

 

2,131,088

 

 

 

816,053

 

 

161

%

 

Available for sale debt securities, at fair value

 

 

900,183

 

 

 

644,815

 

 

40

%

 

Held to maturity debt securities (fair value of $907,191 and $935,953, respectively)

 

 

982,664

 

 

 

1,034,121

 

 

(5

)%

 

Restricted equity securities

 

 

10,226

 

 

 

7,734

 

 

32

%

 

Mortgage loans held for sale

 

 

5,074

 

 

 

1,607

 

 

216

%

 

Loans

 

 

11,658,829

 

 

 

11,687,968

 

 

-

%

 

Less allowance for credit losses

 

 

(153,317

)

 

 

(146,297

)

 

5

%

 

 

Loans, net

 

 

11,505,512

 

 

 

11,541,671

 

 

-

%

 

Premises and equipment, net

 

 

59,324

 

 

 

59,850

 

 

(1

)%

 

Goodwill

 

 

13,615

 

 

 

13,615

 

 

-

%

 

Other assets

 

 

521,982

 

 

 

476,287

 

 

10

%

 

 

Total assets

 

$

16,129,668

 

 

$

14,595,753

 

 

11

%

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing

 

$

2,643,101

 

 

$

3,321,347

 

 

(20

)%

 

 

Interest-bearing

 

 

10,630,410

 

 

 

8,225,458

 

 

29

%

 

 

 

Total deposits

 

 

13,273,511

 

 

 

11,546,805

 

 

15

%

 

Federal funds purchased

 

 

1,256,724

 

 

 

1,618,798

 

 

(22

)%

 

Other borrowings

 

 

64,735

 

 

 

64,726

 

 

-

%

 

Other liabilities

 

 

94,293

 

 

 

67,528

 

 

40

%

 

 

Total liabilities

 

 

14,689,263

 

 

 

13,297,857

 

 

10

%

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023 and December 31, 2022

 

 

-

 

 

 

-

 

 

-

%

 

 

Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,461,580 shares

 

 

 

 

 

 

 

 

 

 

 

issued and outstanding at December 31, 2023, and 54,326,527

 

 

 

 

 

 

 

 

 

 

 

shares issued and outstanding at December 31, 2022

 

 

54

 

 

 

54

 

 

-

%

 

 

Additional paid-in capital

 

 

232,605

 

 

 

229,693

 

 

1

%

 

 

Retained earnings

 

 

1,254,841

 

 

 

1,109,902

 

 

13

%

 

 

Accumulated other comprehensive loss

 

 

(47,595

)

 

 

(42,253

)

 

13

%

 

 

 

Total stockholders' equity attributable to ServisFirst Bancshares, Inc.

 

 

1,439,905

 

 

 

1,297,396

 

 

11

%

 

 

Noncontrolling interest

 

 

500

 

 

 

500

 

 

-

%

 

 

 

Total stockholders' equity

 

 

1,440,405

 

 

 

1,297,896

 

 

11

%

 

 

Total liabilities and stockholders' equity

 

$

16,129,668

 

 

$

14,595,753

 

 

11

%

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

 

 

2023

 

2022

 

2023

 

2022

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

184,897

 

$

153,924

 

$

699,101

 

$

499,691

 

 

 

Taxable securities

 

 

15,512

 

 

10,895

 

 

53,499

 

 

40,722

 

 

 

Nontaxable securities

 

 

12

 

 

27

 

 

65

 

 

137

 

 

 

Federal funds sold

 

 

1,018

 

 

818

 

 

2,844

 

 

1,556

 

 

 

Other interest and dividends

 

 

27,623

 

 

4,609

 

 

57,737

 

 

17,209

 

 

 

Total interest income

 

 

229,062

 

 

170,273

 

 

813,246

 

 

559,315

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

108,155

 

 

33,471

 

 

331,740

 

 

59,396

 

 

 

Borrowed funds

 

 

19,220

 

 

14,418

 

 

70,569

 

 

29,027

 

 

 

Total interest expense

 

 

127,375

 

 

47,889

 

 

402,309

 

 

88,423

 

 

 

Net interest income

 

 

101,687

 

 

122,384

 

 

410,937

 

 

470,892

 

 

Provision for credit losses

 

 

3,582

 

 

7,135

 

 

18,715

 

 

37,607

 

 

 

Net interest income after provision for credit losses

 

 

98,105

 

 

115,249

 

 

392,222

 

 

433,285

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

2,181

 

 

1,866

 

 

8,420

 

 

8,033

 

 

 

Mortgage banking

 

 

792

 

 

514

 

 

2,755

 

 

2,438

 

 

 

Credit card income

 

 

2,004

 

 

2,261

 

 

8,631

 

 

9,917

 

 

 

Securities losses

 

 

-

 

 

-

 

 

-

 

 

(6,168

)

 

 

Bank-owned life insurance income

 

 

1,639

 

 

1,600

 

 

7,574

 

 

6,478

 

 

 

Other operating income

 

 

763

 

 

725

 

 

3,037

 

 

12,661

 

 

 

Total non-interest income

 

 

7,379

 

 

6,966

 

 

30,417

 

 

33,359

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

23,024

 

 

19,230

 

 

80,965

 

 

77,952

 

 

 

Equipment and occupancy expense

 

 

3,860

 

 

3,263

 

 

14,295

 

 

12,319

 

 

 

Third party processing and other services

 

 

7,841

 

 

8,170

 

 

27,872

 

 

27,333

 

 

 

Professional services

 

 

1,417

 

 

922

 

 

5,916

 

 

4,277

 

 

 

FDIC and other regulatory assessments

 

 

9,509

 

 

1,311

 

 

15,614

 

 

4,565

 

 

 

Other real estate owned expense

 

 

17

 

 

239

 

 

47

 

 

295

 

 

 

Other operating expense

 

 

12,590

 

 

4,957

 

 

33,342

 

 

31,075

 

 

 

Total non-interest expense

 

 

58,258

 

 

38,092

 

 

178,051

 

 

157,816

 

 

 

Income before income tax

 

 

47,226

 

 

84,123

 

 

244,588

 

 

308,828

 

 

Provision for income tax

 

 

5,152

 

 

16,399

 

 

37,735

 

 

57,324

 

 

 

Net income

 

 

42,074

 

 

67,724

 

 

206,853

 

 

251,504

 

 

 

Dividends on preferred stock

 

 

31

 

 

-

 

 

62

 

 

62

 

 

 

Net income available to common stockholders

 

$

42,043

 

$

67,693

 

$

206,791

 

$

251,442

 

 

Basic earnings per common share

 

$

0.77

 

$

1.25

 

$

3.80

 

$

4.63

 

 

Diluted earnings per common share

 

$

0.77

 

$

1.24

 

$

3.79

 

$

4.61

 

 

LOANS BY TYPE (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Quarter 2023

 

3rd Quarter 2023

 

2nd Quarter 2023

 

1st Quarter 2023

 

4th Quarter 2022

Commercial, financial, and agricultural

 

$

2,823,986

 

$

2,890,535

 

$

2,986,453

 

$

3,081,926

 

$

3,145,317

Real estate - construction

 

 

1,519,619

 

 

1,509,937

 

 

1,397,732

 

 

1,469,670

 

 

1,532,388

Real estate - mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner-occupied commercial

 

 

2,257,163

 

 

2,237,684

 

 

2,294,002

 

 

2,243,436

 

 

2,199,280

 

1-4 family mortgage

 

 

1,249,938

 

 

1,170,099

 

 

1,167,238

 

 

1,138,645

 

 

1,146,831

 

Other mortgage

 

 

3,744,346

 

 

3,766,124

 

 

3,686,434

 

 

3,624,071

 

 

3,597,750

Subtotal: Real estate - mortgage

 

 

7,251,447

 

 

7,173,907

 

 

7,147,674

 

 

7,006,152

 

 

6,943,861

Consumer

 

 

63,777

 

 

66,751

 

 

73,035

 

 

72,054

 

 

66,402

Total loans

 

$

11,658,829

 

$

11,641,130

 

$

11,604,894

 

$

11,629,802

 

$

11,687,968

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Quarter 2023

 

3rd Quarter 2023

 

2nd Quarter 2023

 

1st Quarter 2023

 

4th Quarter 2022

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

152,247

 

 

$

152,272

 

 

$

148,965

 

 

$

146,297

 

 

$

140,967

 

Loans charged off:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial financial and agricultural

 

 

2,831

 

 

 

4,783

 

 

 

4,358

 

 

 

1,257

 

 

 

2,116

 

 

Real estate - construction

 

 

89

 

 

 

19

 

 

 

-

 

 

 

-

 

 

 

-

 

 

Real estate - mortgage

 

 

14

 

 

 

-

 

 

 

131

 

 

 

26

 

 

 

-

 

 

Consumer

 

 

231

 

 

 

341

 

 

 

111

 

 

 

390

 

 

 

200

 

 

 

Total charge offs

 

 

3,165

 

 

 

5,143

 

 

 

4,600

 

 

 

1,673

 

 

 

2,316

 

Recoveries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial financial and agricultural

 

 

614

 

 

 

825

 

 

 

1,233

 

 

 

128

 

 

 

393

 

 

Real estate - construction

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

 

 

-

 

 

Real estate - mortgage

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1

 

 

 

-

 

 

Consumer

 

 

39

 

 

 

11

 

 

 

21

 

 

 

11

 

 

 

118

 

 

 

Total recoveries

 

 

653

 

 

 

836

 

 

 

1,254

 

 

 

143

 

 

 

511

 

 

Net charge-offs

 

 

2,512

 

 

 

4,307

 

 

 

3,346

 

 

 

1,530

 

 

 

1,805

 

 

Provision for credit losses

 

 

3,582

 

 

 

4,282

 

 

 

6,654

 

 

 

4,197

 

 

 

7,135

 

 

Ending balance

 

$

153,317

 

 

$

152,247

 

 

$

152,272

 

 

$

148,965

 

 

$

146,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses to total loans

 

 

1.32

%

 

 

1.31

%

 

 

1.31

%

 

 

1.28

%

 

 

1.25

%

 

Allowance for credit losses to total average loans

 

 

1.32

%

 

 

1.31

%

 

 

1.31

%

 

 

1.28

%

 

 

1.27

%

 

Net charge-offs to total average loans

0.09

%

 

 

0.15

%

 

 

0.11

%

 

 

0.05

%

 

 

0.06

%

 

Provision for credit losses to total average loans

 

 

0.12

%

 

 

0.15

%

 

 

0.23

%

 

 

0.14

%

 

 

0.25

%

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

19,349

 

 

$

20,912

 

 

$

16,897

 

 

$

13,157

 

 

$

12,450

 

 

 

Loans 90+ days past due and accruing

 

 

2,184

 

 

 

1,692

 

 

 

5,947

 

 

 

4,683

 

 

 

5,391

 

 

 

Other real estate owned and repossessed assets

 

 

995

 

 

 

690

 

 

 

832

 

 

 

248

 

 

 

248

 

 

Total

 

$

22,528

 

 

$

23,294

 

 

$

23,676

 

 

$

18,088

 

 

$

18,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

 

0.18

%

 

 

0.19

%

 

 

0.20

%

 

 

0.15

%

 

 

0.15

%

 

Nonperforming assets to total assets

 

 

0.14

%

 

 

0.15

%

 

 

0.16

%

 

 

0.12

%

 

 

0.12

%

 

Nonperforming assets to earning assets

 

 

0.14

%

 

 

0.16

%

 

 

0.16

%

 

 

0.13

%

 

 

0.13

%

 

Allowance for credit losses to nonaccrual loans

795.17

%

 

 

731.74

%

 

 

901.18

%

 

 

1,132.24

%

 

 

1,175.08

%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

 

 

 

 

 

 

 

 

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

4th Quarter 2023

 

3rd Quarter 2023

 

2nd Quarter 2023

 

1st Quarter 2023

 

4th Quarter 2022

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

184,897

 

$

178,754

 

$

171,718

 

$

163,732

 

$

153,924

 

Taxable securities

 

15,512

 

 

15,522

 

 

11,570

 

 

10,895

 

 

10,895

 

Nontaxable securities

 

12

 

 

15

 

 

17

 

 

21

 

 

27

 

Federal funds sold

 

1,018

 

 

985

 

 

227

 

 

614

 

 

818

 

Other interest and dividends

 

27,623

 

 

17,930

 

 

6,124

 

 

6,060

 

 

4,609

 

Total interest income

 

229,062

 

 

213,206

 

 

189,656

 

 

181,322

 

 

170,273

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

108,155

 

 

95,901

 

 

71,971

 

 

55,713

 

 

33,471

 

Borrowed funds

 

19,220

 

 

17,607

 

 

16,434

 

 

17,308

 

 

14,418

 

Total interest expense

 

127,375

 

 

113,508

 

 

88,405

 

 

73,021

 

 

47,889

 

Net interest income

 

101,687

 

 

99,698

 

 

101,251

 

 

108,301

 

 

122,384

Provision for credit losses

 

3,582

 

 

4,282

 

 

6,654

 

 

4,197

 

 

7,135

 

Net interest income after provision for credit losses

 

98,105

 

 

95,416

 

 

94,597

 

 

104,104

 

 

115,249

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

2,181

 

 

2,163

 

 

2,142

 

 

1,934

 

 

1,866

 

Mortgage banking

 

792

 

 

825

 

 

696

 

 

442

 

 

514

 

Credit card income

 

2,004

 

 

2,532

 

 

2,406

 

 

1,689

 

 

2,261

 

Bank-owned life insurance income

 

1,639

 

 

1,818

 

 

2,496

 

 

1,621

 

 

1,600

 

Other operating income

 

763

 

 

797

 

 

842

 

 

635

 

 

725

 

Total non-interest income

 

7,379

 

 

8,135

 

 

8,582

 

 

6,321

 

 

6,966

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

23,024

 

 

20,080

 

 

18,795

 

 

19,066

 

 

19,230

 

Equipment and occupancy expense

 

3,860

 

 

3,579

 

 

3,421

 

 

3,435

 

 

3,263

 

Third party processing and other services

 

7,841

 

 

6,549

 

 

6,198

 

 

7,284

 

 

8,170

 

Professional services

 

1,417

 

 

1,265

 

 

1,580

 

 

1,654

 

 

922

 

FDIC and other regulatory assessments

 

9,509

 

 

2,346

 

 

2,242

 

 

1,517

 

 

1,311

 

Other real estate owned expense

 

17

 

 

18

 

 

6

 

 

6

 

 

239

 

Other operating expense

 

12,590

 

 

7,826

 

 

6,224

 

 

6,702

 

 

4,957

 

Total non-interest expense

 

58,258

 

 

41,663

 

 

38,466

 

 

39,664

 

 

38,092

 

Income before income tax

 

47,226

 

 

61,888

 

 

64,713

 

 

70,761

 

 

84,123

Provision for income tax

 

5,152

 

 

8,548

 

 

11,245

 

 

12,790

 

 

16,399

 

Net income

 

42,074

 

 

53,340

 

 

53,468

 

 

57,971

 

 

67,724

 

Dividends on preferred stock

 

31

 

 

-

 

 

31

 

 

-

 

 

31

 

Net income available to common stockholders

$

42,043

 

$

53,340

 

$

53,437

 

$

57,971

 

$

67,693

Basic earnings per common share

$

0.77

 

$

0.98

 

$

0.98

 

$

1.07

 

$

1.25

Diluted earnings per common share

$

0.77

 

$

0.98

 

$

0.98

 

$

1.06

 

$

1.24

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

 

ON A FULLY TAXABLE-EQUIVALENT BASIS

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Quarter 2023

 

3rd Quarter 2023

 

2nd Quarter 2023

 

1st Quarter 2023

 

4th Quarter 2022

 

 

 

 

 

 

 

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

 

$

11,580,716

 

 

6.33

%

 

$

11,545,003

 

 

6.13

%

 

$

11,581,008

 

 

5.94

%

 

$

11,632,439

 

 

5.70

%

 

$

11,465,538

 

 

5.32

%

 

 

 

Tax-exempt (2)

 

 

17,787

 

 

4.71

 

 

 

18,023

 

 

4.71

 

 

 

18,312

 

 

4.82

 

 

 

18,978

 

 

3.36

 

 

 

19,526

 

 

6.60

 

 

 

 

 

Total loans, net of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

unearned income

 

 

11,598,503

 

 

6.32

 

 

 

11,563,026

 

 

6.13

 

 

 

11,599,320

 

 

5.94

 

 

 

11,651,417

 

 

5.70

 

 

 

11,485,064

 

 

5.32

 

 

 

Mortgage loans held for sale

 

 

5,105

 

 

6.22

 

 

 

5,476

 

 

6.67

 

 

 

5,014

 

 

5.12

 

 

 

1,522

 

 

6.40

 

 

 

1,515

 

 

3.67

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

2,007,636

 

 

3.08

 

 

 

2,029,995

 

 

3.07

 

 

 

1,757,397

 

 

2.64

 

 

 

1,724,523

 

 

2.54

 

 

 

1,755,764

 

 

2.49

 

 

 

 

Tax-exempt (2)

 

 

1,739

 

 

2.30

 

 

 

2,408

 

 

2.49

 

 

 

2,960

 

 

2.43

 

 

 

3,781

 

 

2.43

 

 

 

4,863

 

 

2.39

 

 

 

 

 

Total securities (3)

 

 

2,009,375

 

 

3.08

 

 

 

2,032,403

 

 

3.07

 

 

 

1,760,357

 

 

2.64

 

 

 

1,728,304

 

 

2.54

 

 

 

1,760,627

 

 

2.49

 

 

 

Federal funds sold

 

 

72,178

 

 

5.60

 

 

 

74,424

 

 

5.25

 

 

 

15,908

 

 

5.72

 

 

 

50,526

 

 

4.93

 

 

 

82,656

 

 

3.93

 

 

 

Restricted equity securities

 

 

10,216

 

 

8.74

 

 

 

8,471

 

 

5.90

 

 

 

8,834

 

 

6.08

 

 

 

9,919

 

 

7.69

 

 

 

7,724

 

 

7.35

 

 

 

Interest-bearing balances with banks

 

 

1,981,411

 

 

5.49

 

 

 

1,293,243

 

 

5.45

 

 

 

460,893

 

 

5.21

 

 

 

510,021

 

 

4.67

 

 

 

458,115

 

 

3.83

 

 

 

Total interest-earning assets

 

$

15,676,788

 

 

5.80

 

 

$

14,977,043

 

 

5.65

 

 

$

13,850,326

 

 

5.49

 

 

$

13,951,709

 

 

5.27

 

 

$

13,795,701

 

 

4.90

 

 

Non-interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

101,741

 

 

 

 

 

 

111,566

 

 

 

 

 

 

101,188

 

 

 

 

 

 

106,448

 

 

 

 

 

 

113,823

 

 

 

 

 

 

Net premises and equipment

 

 

60,110

 

 

 

 

 

 

60,121

 

 

 

 

 

 

60,499

 

 

 

 

 

 

60,617

 

 

 

 

 

 

60,323

 

 

 

 

 

 

Allowance for credit losses, accrued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interest and other assets

 

 

283,435

 

 

 

 

 

 

283,357

 

 

 

 

 

 

279,860

 

 

 

 

 

 

279,775

 

 

 

 

 

 

273,964

 

 

 

 

 

 

 

 

Total assets

 

$

16,122,074

 

 

 

 

 

$

15,432,087

 

 

 

 

 

$

14,291,873

 

 

 

 

 

$

14,398,549

 

 

 

 

 

$

14,243,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

2,245,431

 

 

2.91

%

 

$

2,153,973

 

 

2.72

%

 

$

1,628,936

 

 

1.69

%

 

$

1,675,355

 

 

1.25

%

 

$

1,763,622

 

 

0.73

%

 

 

Savings

 

 

107,035

 

 

1.72

 

 

 

112,814

 

 

1.61

 

 

 

122,050

 

 

1.38

 

 

 

134,671

 

 

0.94

 

 

 

141,163

 

 

0.64

 

 

 

Money market

 

 

7,106,190

 

 

4.44

 

 

 

6,538,426

 

 

4.24

 

 

 

5,971,639

 

 

3.78

 

 

 

5,756,642

 

 

3.17

 

 

 

5,047,133

 

 

2.07

 

 

 

Time deposits

 

 

1,111,350

 

 

4.18

 

 

 

1,093,388

 

 

3.89

 

 

 

983,582

 

 

3.44

 

 

 

850,639

 

 

2.51

 

 

 

860,336

 

 

1.69

 

 

 

 

Total interest-bearing deposits

 

 

10,570,006

 

 

4.06

 

 

 

9,898,601

 

 

3.84

 

 

 

8,706,207

 

 

3.32

 

 

 

8,417,307

 

 

2.68

 

 

 

7,812,254

 

 

1.70

 

 

 

Federal funds purchased

 

 

1,338,110

 

 

5.49

 

 

 

1,237,721

 

 

5.43

 

 

 

1,191,582

 

 

5.14

 

 

 

1,389,217

 

 

4.67

 

 

 

1,453,445

 

 

3.75

 

 

 

Other borrowings

 

 

64,734

 

 

4.23

 

 

 

64,734

 

 

4.23

 

 

 

100,998

 

 

4.62

 

 

 

114,726

 

 

4.61

 

 

 

64,726

 

 

4.23

 

 

 

Total interest-bearing liabilities

 

$

11,972,850

 

 

4.22

%

 

$

11,201,056

 

 

4.02

%

 

$

9,998,787

 

 

3.55

%

 

$

9,921,250

 

 

2.98

%

 

$

9,330,425

 

 

2.04

%

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

demand deposits

 

 

2,656,504

 

 

 

 

 

 

2,778,858

 

 

 

 

 

 

2,876,225

 

 

 

 

 

 

3,086,774

 

 

 

 

 

 

3,572,956

 

 

 

 

 

 

Other liabilities

 

 

76,651

 

 

 

 

 

 

72,924

 

 

 

 

 

 

64,917

 

 

 

 

 

 

72,121

 

 

 

 

 

 

77,544

 

 

 

 

 

 

Stockholders' equity

 

 

1,475,366

 

 

 

 

 

 

1,437,766

 

 

 

 

 

 

1,399,578

 

 

 

 

 

 

1,358,587

 

 

 

 

 

 

1,307,553

 

 

 

 

 

 

Accumulated other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

loss

 

 

(59,297

)

 

 

 

 

 

(58,517

)

 

 

 

 

 

(47,634

)

 

 

 

 

 

(40,183

)

 

 

 

 

 

(44,667

)

 

 

 

 

 

 

 

Total liabilities and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

stockholders' equity

 

$

16,122,074

 

 

 

 

 

$

15,432,087

 

 

 

 

 

$

14,291,873

 

 

 

 

 

$

14,398,549

 

 

 

 

 

$

14,243,811

 

 

 

 

 

Net interest spread

 

 

 

 

1.58

%

 

 

 

 

1.63

%

 

 

 

 

1.94

%

 

 

 

 

2.29

%

 

 

 

 

2.86

%

 

Net interest margin

 

 

 

 

2.57

%

 

 

 

 

2.64

%

 

 

 

 

2.93

%

 

 

 

 

3.15

%

 

 

 

 

3.52

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Average loans include nonaccrual loans in all periods. Loan fees of $4,175, $2,996, $3,318 $3,263, and $3,630 are included in interest income in the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively.

 

(2)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.

 

(3)

Unrealized losses on debt securities of $(84,647), $(83,815), $(69,498), $(59,738), and $(62,568) for the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively, are excluded from the yield calculation.

 

 

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

Source: ServisFirst Bancshares, Inc.