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

BIRMINGHAM, Ala., July 19, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2021.

Second Quarter 2021 Highlights:

Total loans grew $144.7 million during the quarter, while loans, excluding the impact of Paycheck Protection Program (“PPP”) loan activity, grew $517.3 million, or 28% annualized, during the quarter
Diluted earnings per share were $0.92 for the second quarter, an increase of 23% over the second quarter of 2020
Deposits grew from $9.34 billion to $10.96 billion year-over-year, or 17%, and grew $381 million, or 14% annualized, on a linked-quarter basis
Book value per share increased to $19.80, a 17% increase year-over-year
Liquidity reached new record levels, with approximately $3.0 billion on deposit at the Federal Reserve Bank
We transferred the listing of our common stock to the New York Stock Exchange (NYSE) during the quarter

Tom Broughton, Chairman, President and CEO, said, “Strong loan growth and a continued robust loan pipeline are evidence that we are well positioned to meet the financial needs of our customers and prospects as they return to a more normal operating environment.”

Bud Foshee, CFO, said, “Our credit quality and low expense structure has weathered the pandemic and we remain optimistic about the future.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)

	Period Ending June 30, 2021			Period Ending March 31, 2021			% Change From Period Ending March 31, 2021 to Period Ending June 30, 2021		Period Ending June 30, 2020			% Change From Period Ending June 30, 2020 to Period Ending June 30, 2021
QUARTERLY OPERATING RESULTS
Net Income	$	50,027		$	51,455		(3)	%	$	40,448		24	%
Net Income Available to Common Stockholders	$	49,996		$	51,455		(3)	%	$	40,417		24	%
Diluted Earnings Per Share	$	0.92		$	0.95		(3)	%	$	0.75		23	%
Return on Average Assets		1.56	%		1.72	%				1.55	%
Return on Average Common Stockholders' Equity		18.98	%		19.83	%				18.40	%
Average Diluted Shares Outstanding		54,460,230			54,381,991					54,194,506

YEAR-TO-DATE OPERATING RESULTS
Net Income	$	101,482							$	75,226		35	%
Net Income Available to Common Stockholders	$	101,451							$	75,195		35	%
Diluted Earnings Per Share	$	1.86							$	1.39		34	%
Return on Average Assets		1.63	%							1.54	%
Return on Average Common Stockholders' Equity		19.73	%							17.31	%
Average Diluted Shares Outstanding		54,421,327								54,180,960


BALANCE SHEET
Total Assets	$	13,207,319		$	12,647,374		4	%	$	11,012,195		20	%
Loans		8,649,694			8,504,980		2	%		8,315,375		4	%
Non-interest-bearing Demand Deposits		3,296,429			3,044,611		8	%		2,678,893		23	%
Total Deposits		10,958,236			10,577,610		4	%		9,342,918		17	%
Stockholders' Equity		1,073,284			1,030,485		4	%		914,588		17	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $50.0 million for the quarter ended June 30, 2021, compared to net income and net income available to common stockholders of $40.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.92 for the second quarter of 2021, compared to $0.75, for the second quarter of 2020.

Annualized return on average assets was 1.56% and annualized return on average common stockholders’ equity was 18.98% for the second quarter of 2021, compared to 1.55% and 18.40%, respectively, for the second quarter of 2020.

Net interest income was $94.7 million for the second quarter of 2021, compared to $92.4 million for the first quarter of 2021 and $83.2 million for the second quarter of 2020. The net interest margin in the second quarter of 2021 was 3.06% compared to 3.20% in the first quarter of 2021 and 3.32% in the second quarter of 2020. Accretion of net fees on PPP loans of $8.0 million during the second quarter of 2021 contributed 37 basis points of the loan yield, compared to $9.1 million of PPP loan fee accretion during the first quarter of 2021, or 43 basis points of the loan yield.

Average loans for the second quarter of 2021 were $8.64 billion, an increase of $132.4 million, or 6% annualized, with average loans of $8.51 billion for the first quarter of 2021, and an increase of $311.3 million, or 4%, with average loans of $8.33 billion for the second quarter of 2020. Origination of round-two PPP loans during the second quarter of 2021 totaled $28.0 million while forgiveness of round-one PPP loans during the second quarter of 2021 totaled $400.6 million.

Average total deposits for the second quarter of 2021 were $10.73 billion, an increase of $554.8 million, or 22% annualized, with average total deposits of $10.18 billion for the first quarter of 2021, and an increase of $1.86 billion, or 21%, with average total deposits of $8.87 billion for the second quarter of 2020.

Non-performing assets to total assets were 0.15% for the second quarter of 2021, a decrease of one basis point compared to 0.16% for the first quarter of 2021 and a decrease of 11 basis points compared to 0.26% for the second quarter of 2020. Annualized net recoveries to average loans were 0.01% for the second quarter of 2021, compared to annualized net charge-offs of 0.02% and 0.20% for the first quarter of 2021 and second quarter of 2020, respectively. The allowance for credit losses for the quarters ending June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.21%, 1.12% and 1.04%, respectively. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 1.10% at June 30, 2020. Excluding PPP loans, for all periods discussed, the allowance for credit losses as a percentage of total loans under the CECL methodology at June 30, 2021 and March 31, 2021 was 1.30% and 1.26%, respectively, compared to 1.26% at June 30, 2020, under the incurred loss model. We recorded a $9.7 million provision for credit losses in the second quarter of 2021 compared to $7.5 million in the first quarter of 2021 and $10.3 million in the second quarter of 2020. The $2.2 million linked-quarter increase in provision for credit losses is primarily due to loan growth and qualitative factors reflecting economic uncertainty related to the termination of the PPP.

Non-interest income for the second quarter of 2021 increased $2.6 million, or 37%, to $9.6 million from $7.0 million in the second quarter of 2020. Mortgage banking revenue increased $592,000, or 28%, to $2.7 million from the second quarter of 2020 to the second quarter of 2021. Margin pricing on mortgage loans was increased in the third quarter of 2020, increasing the per-loan revenue by approximately 18%. Net credit card revenue increased $514,000, or 37%, to $1.9 million during the second quarter of 2021, compared to $1.4 million during the second quarter of 2020. The number of credit card accounts increased approximately 36% and the aggregate amount of spend on all credit card accounts increased 47% during the second quarter of 2021 compared to the second quarter of 2020. Cash surrender value of life insurance increased $219,000, or 15%, to $1.7 million during the second quarter of 2021, compared to $1.5 million during the second quarter of 2020. Other income for the second quarter of 2021 increased $536,000, or 222%, to $777,000 from $241,000 in the second quarter of 2020. We wrote down the value of our interest rate cap by $252,000 during the second quarter of 2020 through other income. Merchant service revenue increased from $134,000 during the second quarter of 2020 to $289,000, or 15%, during the second quarter of 2021.

Non-interest expense for the second quarter of 2021 increased $2.5 million, or 9%, to $31.3 million from $28.8 million in the second quarter of 2020, and increased $2.4 million, or 8%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2021 increased $1.1 million, or 7%, to $16.9 million from $15.8 million in the second quarter of 2020, and increased $1.3 million, or 9%, on a linked quarter basis. Salary expense alone only increased by $326,000 during the second quarter of 2021 compared to the second quarter of 2020. Higher loan origination cost deferrals during the second quarter of 2020 related to origination of round-one PPP loans decreased salary and benefits expenses below what they would have otherwise been during that quarter. The number of FTE employees increased by 35 to 527 at June 30, 2021 compared to 492 at June 30, 2020, and increased by 36 from the end of the first quarter of 2021. Equipment and occupancy expense increased $410,000, or 17%, to $2.8 million in the second quarter of 2021, from $2.4 million in the second quarter of 2020, and increased $190,000 on a linked-quarter basis. Third party processing and other services expense increased $324,000, or 9%, to $3.9 million in the second quarter of 2021, from $3.6 million in the second quarter of 2020 and increased $530,000 on a linked-quarter basis. FDIC and other regulatory assessments increased $830,000 to $1.4 million in the second quarter of 2021, from $595,000 in the second quarter of 2020, and decreased $157,000, or 10%, on a linked quarter basis. Lower asset growth during the second quarter of 2020 resulted in us adjusting our accrual for assessments in that quarter. Expenses associated with other real estate owned decreased $763,000 to $540,000 in the second quarter of 2021, from $1.3 million in the second quarter of 2020, and increased $383,000 on a linked quarter basis. The second quarter 2020 amount included write-downs in value of two foreclosed properties in our Birmingham region. The linked-quarter increase was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the second quarter of 2021 increased $581,000, or 15%, to $4.6 million from $4.0 million in the second quarter of 2020, and decreased $79,000 on a linked-quarter basis. We increased our reserve for credit losses on unfunded loan commitments by $500,000 in the second quarter of 2021 with a charge to other operating expenses. The efficiency ratio was 30.03% during the second quarter of 2021 compared to 31.92% during the second quarter of 2020 and compared to 28.68% during the first quarter of 2021.

Income tax expense increased $2.6 million, or 24%, to $13.3 million in the second quarter of 2021, compared to $10.7 million in the second quarter of 2020. Our effective tax rate was 20.97% for the second quarter of 2021 compared to 20.95% for the second quarter of 2020. 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 second quarters of 2021 and 2020 of $724,000 and $136,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

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

		At June 30, 2021				At March 31, 2021		At December 31, 2020			At September 30, 2020			At June 30, 2020



Book value per share - GAAP		$	19.80		$	19.03		$	18.41		$	17.61		$	16.98
Total common stockholders' equity - GAAP			1,073,284			1,030,485			992,852			949,589			914,588
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		13,773			13,841			13,908			13,976			14,043
Tangible common stockholders' equity - non-GAAP		$	1,059,511		$	1,016,644		$	978,944		$	935,613		$	900,545
Tangible book value per share - non-GAAP		$	19.55		$	18.78		$	18.15		$	17.35		$	16.72

Stockholders' equity to total assets - GAAP			8.13	%		8.15	%		8.32	%		8.33	%		8.31	%
Total assets - GAAP		$	13,207,319		$	12,647,374		$	11,932,654		$	11,394,874		$	11,012,195
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		13,773			13,841			13,908			13,976			14,043
Total tangible assets - non-GAAP		$	13,193,546		$	12,633,533		$	11,918,746		$	11,380,898		$	10,998,152
Tangible common equity to total tangible assets - non-GAAP			8.03	%		8.05	%		8.21	%		8.22	%		8.19	%

Total loans - GAAP		$	8,649,694		$	8,504,980
	Adjustments:
	Adjusted to exclude PPP loans		595,017			967,641
Loans, excluding PPP loans - non-GAAP		$	8,054,677		$	7,537,339

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 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; 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)
	2nd Quarter 2021			1st Quarter 2021			4th Quarter 2020			3rd Quarter 2020			2nd Quarter 2020
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	102,719		$	100,396		$	101,065		$	96,110		$	95,080
Interest expense		8,051			8,031			8,984			11,028			11,846
Net interest income		94,668			92,365			92,081			85,082			83,234
Provision for credit losses		9,652			7,451			6,283			12,284			10,283
Net interest income after provision for credit losses		85,016			84,914			85,798			72,798			72,951
Non-interest income		9,598			8,463			8,237			8,172			7,033
Non-interest expense		31,309			28,914			28,202			26,573			28,816
Income before income tax		63,305			64,463			65,833			54,397			51,168
Provision for income tax		13,278			13,008			14,852			11,035			10,720
Net income		50,027			51,455			50,981			43,362			40,448
Preferred stock dividends		31			-			32			-			31
Net income available to common stockholders	$	49,996		$	51,455		$	50,949		$	43,362		$	40,417
Earnings per share - basic	$	0.92		$	0.95		$	0.94		$	0.80		$	0.75
Earnings per share - diluted	$	0.92		$	0.95		$	0.94		$	0.80		$	0.75
Average diluted shares outstanding		54,460,230			54,381,991			54,273,944			54,232,965			54,194,506

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	13,207,319		$	12,647,374		$	11,932,654		$	11,394,874		$	11,012,195
Loans		8,649,694			8,504,980			8,465,688			8,508,544			8,315,375
Debt securities		1,013,783			962,129			886,938			913,299			856,378
Non-interest-bearing demand deposits		3,296,429			3,044,611			2,788,772			2,762,814			2,678,893
Total deposits		10,958,236			10,577,610			9,975,724			9,673,783			9,342,918
Borrowings		64,696			64,691			64,748			64,719			64,715
Stockholders' equity	$	1,073,284		$	1,030,485		$	992,852		$	949,589		$	914,588

Shares outstanding		54,201,204			54,137,650			53,943,751			53,915,245			53,874,276
Book value per share	$	19.80		$	19.03		$	18.41		$	17.61		$	16.98
Tangible book value per share (1)	$	19.55		$	18.78		$	18.15		$	17.35		$	16.72

SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin		3.06	%		3.20	%		3.27	%		3.14	%		3.32	%
Return on average assets		1.56	%		1.72	%		1.74	%		1.54	%		1.55	%
Return on average common stockholders' equity		18.98	%		19.83	%		20.78	%		18.43	%		18.40	%
Efficiency ratio		30.03	%		28.68	%		28.11	%		28.50	%		31.92	%
Non-interest expense to average earning assets		1.01	%		1.00	%		1.00	%		0.98	%		1.15	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		10.60	%		10.73	%		10.50	%		11.24	%		11.26	%
Tier 1 capital to risk-weighted assets		10.60	%		10.73	%		10.50	%		11.25	%		11.27	%
Total capital to risk-weighted assets		12.36	%		12.48	%		12.20	%		13.10	%		13.27	%
Tier 1 capital to average assets		8.10	%		8.25	%		8.23	%		8.22	%		8.46	%
Tangible common equity to total tangible assets (1)		8.03	%		8.05	%		8.22	%		8.22	%		8.19	%

(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)
			June 30, 2021			June 30, 2020			% Change
ASSETS
Cash and due from banks			$	72,599		$	102,282		(29	)	%
Interest-bearing balances due from depository institutions				3,100,677			1,444,293		115		%
Federal funds sold				7,500			2,352		219		%
	Cash and cash equivalents			3,180,776			1,548,927		105		%
Available for sale debt securities, at fair value				1,013,533			856,128		18		%
Held to maturity debt securities (fair value of $250 at June 30, 2021 and 2020)				250			250		-
Mortgage loans held for sale				6,147			14,491		(58	)	%
Loans				8,649,694			8,315,375		4		%
Less allowance for credit losses				(104,670	)		(91,507	)	14		%
	Loans, net			8,545,024			8,223,868		4		%
Premises and equipment, net				67,738			55,588		22		%
Goodwill and other identifiable intangible assets				13,773			14,043		(2	)	%
Other assets				380,078			298,900		27		%
	Total assets		$	13,207,319		$	11,012,195		20		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing		$	3,296,429		$	2,678,893		23		%
	Interest-bearing			7,661,807			6,664,025		15		%
		Total deposits		10,958,236			9,342,918		17		%
Federal funds purchased				1,059,474			635,606		67		%
Other borrowings				64,696			64,715		-		%
Other liabilities				51,629			54,368		(5	)	%
	Total liabilities			12,134,035			10,097,607		20		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		June 30, 2021 and June 30, 2020		-			-
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,201,204 shares
		issued and outstanding at June 30, 2021, and 53,874,276 shares issued and outstanding
		at June 30, 2020		54			54		-		%
	Additional paid-in capital			225,127			222,437		1		%
	Retained earnings			828,048			672,984		23		%
	Accumulated other comprehensive income			19,555			18,611		5		%
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		1,072,784			914,086		17		%
	Noncontrolling interest			500			502		-		%
		Total stockholders' equity		1,073,284			914,588		17		%
	Total liabilities and stockholders' equity		$	13,207,319		$	11,012,195		20		%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended June, 30				Six Months Ended June, 30
		2021		2020		2021		2020
Interest income:
	Interest and fees on loans	$	95,451	$	89,383	$	189,254	$	178,768
	Taxable securities		6,315		5,092		12,122		10,246
	Nontaxable securities		86		211		193		444
	Federal funds sold		4		34		7		311
	Other interest and dividends		863		360		1,539		2,078
	Total interest income		102,719		95,080		203,115		191,847
Interest expense:
	Deposits		6,836		10,756		13,717		27,501
	Borrowed funds		1,215		1,090		2,365		3,472
	Total interest expense		8,051		11,846		16,082		30,973
	Net interest income		94,668		83,234		187,033		160,874
Provision for credit losses			9,652		10,283		17,103		23,867
	Net interest income after provision for credit losses		85,016		72,951		169,930		137,007
Non-interest income:
	Service charges on deposit accounts		1,907		1,823		3,815		3,739
	Mortgage banking		2,699		2,107		5,446		3,178
	Credit card income		1,912		1,398		3,104		3,163
	Securities gains		620		-		620		-
	Increase in cash surrender value life insurance		1,683		1,464		3,341		2,917
	Other operating income		777		241		1,735		710
	Total non-interest income		9,598		7,033		18,061		13,707
Non-interest expense:
	Salaries and employee benefits		16,887		15,792		32,430		31,450
	Equipment and occupancy expense		2,844		2,434		5,498		4,834
	Third party processing and other services		3,946		3,622		7,362		7,079
	Professional services		1,107		1,091		2,030		2,039
	FDIC and other regulatory assessments		1,425		595		3,007		1,927
	Other real estate owned expense		540		1,303		697		1,904
	Other operating expense		4,560		3,979		9,199		7,503
	Total non-interest expense		31,309		28,816		60,223		56,736
	Income before income tax		63,305		51,168		127,768		93,978
Provision for income tax			13,278		10,720		26,286		18,752
	Net income		50,027		40,448		101,482		75,226
	Dividends on preferred stock		31		31	$	31	$	31
	Net income available to common stockholders	$	49,996	$	40,417	$	101,451	$	75,195
Basic earnings per common share		$	0.92	$	0.75	$	1.87	$	1.40
Diluted earnings per common share		$	0.92	$	0.75	$	1.86	$	1.39

LOANS BY TYPE (UNAUDITED)
(In thousands)

		2nd Quarter 2021		1st Quarter 2021		4th Quarter 2020		3rd Quarter 2020		2nd Quarter 2020
Commercial, financial and agricultural		$	3,105,243	$	3,323,093	$	3,295,900	$	3,466,189	$	3,498,627
Real estate - construction			782,305		666,592		593,614		530,919		544,586
Real estate - mortgage:
	Owner-occupied commercial		1,726,888		1,698,695		1,693,428		1,725,222		1,634,495
	1-4 family mortgage		707,546		685,840		711,692		671,841		665,883
	Other mortgage		2,262,231		2,068,560		2,106,184		2,056,549		1,911,384
Subtotal: Real estate - mortgage			4,696,665		4,453,095		4,511,304		4,453,612		4,211,762
Consumer			65,481		62,200		64,870		57,834		60,400
Total loans		$	8,649,694	$	8,504,980	$	8,465,688	$	8,508,554	$	8,315,375

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
			2nd Quarter 2021					1st Quarter 2021				4th Quarter 2020					3rd Quarter 2020				2nd Quarter 2020
Allowance for credit losses:
Beginning balance			$	94,906				$	87,942			$	92,440				$	91,507			$	85,414
	Impact of Adoption of ASC 326			-					-				(2,000	)				-				-
Loans charged off:
	Commercial financial and agricultural			150					477				8,792					11,146				1,358
	Real estate - construction			-					-				202					-				376
	Real estate - mortgage			59					12				-					200				2,520
	Consumer			54					87				38					44				62
		Total charge offs		263					576				9,032					11,390				4,316
Recoveries:
	Commercial financial and agricultural			298					26				94					12				84
	Real estate - construction			2					50				30					-				1
	Real estate - mortgage			62					2				114					12				13
	Consumer			13					11				13					15				28
		Total recoveries		375					89				251					39				126
	Net charge-offs			(112	)				487				8,781					11,351				4,190
	Provision for credit losses			9,652					7,451				6,283					12,284				10,283
	Ending balance		$	104,670				$	94,906			$	87,942				$	92,440			$	91,507

	Allowance for credit losses to total loans			1.21		%			1.12	%			1.04		%			-				-
	Allowance for credit losses to total average
		loans		1.21		%			1.11	%			1.04		%			-				-
	Allowance for loan losses to total loans			-					-				-					1.09	%			1.10	%
	Allowance for loan losses to total average
		loans		-					-				-					1.11	%			1.10	%
	Net (recoveries) charge-offs to total average loans			(0.01	)	%			0.02	%			0.41		%			0.54	%			0.20	%
	Provision for credit losses to total average
		loans		0.45		%			0.35	%			0.30		%			-				-
	Provision for loan losses to total average
		loans		-					-				-					0.58	%			0.50	%
	Nonperforming assets:
		Nonaccrual loans	$	12,301				$	13,088			$	13,973				$	21,675			$	16,881
		Loans 90+ days past due and accruing		4,888					4,804				4,981					4,898				5,133
		Other real estate owned and
		repossessed assets		2,039					2,067				6,497					6,976				6,537
	Total		$	19,228				$	19,959			$	25,451				$	33,549			$	28,551

	Nonperforming loans to total loans			0.20		%			0.21	%			0.22		%			0.31	%			0.26	%
	Nonperforming assets to total assets			0.15		%			0.16	%			0.21		%			0.29	%			0.26	%
	Nonperforming assets to earning assets			0.15		%			0.16	%			0.22		%			0.30	%			0.26	%
	Allowance for credit losses to nonaccrual loans			850.91		%			725.14	%			629.37		%			-				-
	Allowance for loan losses to nonaccrual loans			-					-				-					426.48	%			542.07	%

	Restructured accruing loans		$	441				$	794			$	818				$	1,800			$	975

	Restructured accruing loans to total loans			0.01		%			0.01	%			0.01		%			0.02	%			0.01	%

	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
			2nd Quarter 2021					1st Quarter 2021				4th Quarter 2020					3rd Quarter 2020				2nd Quarter 2020
	Beginning balance:		$	3,542				$	1,433			$	2,738				$	1,568			$	2,367
		Additions		-					2,146				-					1,182				-
		Net (paydowns) / advances		(624			)		(37		)		(619			)		(12		)		(12		)
		Charge-offs		-					-				(535			)		-				(412		)
		Transfer to OREO		-					-				(151			)		-				(375		)
	Ending balance		$	2,918				$	3,542			$	1,433				$	2,738			$	1,568

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		2nd Quarter 2021		1st Quarter 2021		4th Quarter 2020		3rd Quarter 2020		2nd Quarter 2020
Interest income:
	Interest and fees on loans	$	95,451	$	93,803	$	94,332	$	89,564	$	89,383
	Taxable securities		6,315		5,807		6,018		5,858		5,092
	Nontaxable securities		86		107		129		166		211
	Federal funds sold		4		3		5		16		34
	Other interest and dividends		863		676		581		506		360
	Total interest income		102,719		100,396		101,065		96,110		95,080
Interest expense:
	Deposits		6,836		6,881		7,853		9,876		10,756
	Borrowed funds		1,215		1,150		1,131		1,152		1,090
	Total interest expense		8,051		8,031		8,984		11,028		11,846
	Net interest income		94,668		92,365		92,081		85,082		83,234
Provision for credit losses			9,652		7,451		6,283		12,284		10,283
	Net interest income after provision for credit losses		85,016		84,914		85,798		72,798		72,951
Non-interest income:
	Service charges on deposit accounts		1,907		1,908		1,971		1,818		1,823
	Mortgage banking		2,699		2,747		3,050		2,519		2,107
	Credit card income		1,912		1,192		913		1,840		1,398
	Securities gains		620		-		-		-		-
	Increase in cash surrender value life insurance		1,683		1,658		1,660		1,733		1,464
	Other operating income		777		958		643		262		241
	Total non-interest income		9,598		8,463		8,237		8,172		7,033
Non-interest expense:
	Salaries and employee benefits		16,887		15,543		14,970		14,994		15,792
	Equipment and occupancy expense		2,844		2,654		2,680		2,556		2,434
	Third party processing and other services		3,946		3,416		3,418		3,281		3,622
	Professional services		1,107		923		1,248		955		1,091
	FDIC and other regulatory assessments		1,425		1,582		1,366		1,061		595
	Other real estate owned expense		540		157		140		119		1,303
	Other operating expense		4,560		4,639		4,380		3,607		3,979
	Total non-interest expense		31,309		28,914		28,202		26,573		28,816
	Income before income tax		63,305		64,463		65,833		54,397		51,168
Provision for income tax			13,278		13,008		14,852		11,035		10,720
	Net income		50,027		51,455		50,981		43,362		40,448
	Dividends on preferred stock		31		-		32		-		31
	Net income available to common stockholders	$	49,996	$	51,455	$	50,949	$	43,362	$	40,417
Basic earnings per common share		$	0.92	$	0.95	$	0.94	$	0.80	$	0.75
Diluted earnings per common share		$	0.92	$	0.95	$	0.94	$	0.80	$	0.75

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)

						2nd Quarter 2021				1st Quarter 2021				4th Quarter 2020				3rd Quarter 2020				2nd 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			$	8,618,139	4.43	%	$	8,484,914	4.47	%	$	8,435,237	4.43	%	$	8,335,087	4.26	%	$	8,301,775	4.31	%
			Tax-exempt (2)				26,854	4.05			27,592	4.17			29,393	4.16			30,068	4.14			31,929	4.12
				Total loans, net of
					unearned income		8,644,993	4.43			8,512,506	4.47			8,464,630	4.43			8,365,155	4.26			8,333,704	4.31
		Mortgage loans held for sale					11,470	1.92			13,601	1.94			19,459	1.37			20,053	1.41			13,278	2.09
		Debt securities:
			Taxable				936,863	2.70			878,118	2.65			862,333	2.79			820,526	2.86			761,575	2.67
			Tax-exempt (2)				16,872	2.47			21,084	2.43			25,542	2.52			31,880	2.51			38,201	2.62
				Total securities (3)			953,735	2.69			899,202	2.64			887,875	2.78			852,406	2.84			799,776	2.67
		Federal funds sold					8,224	0.20			11,935	0.10			16,306	0.12			41,884	0.15			83,274	0.16
		Interest-bearing balances with banks					2,790,524	0.12			2,262,233	0.12			1,837,249	0.13			1,500,563	0.13			849,549	0.17
		Total interest-earning assets				$	12,408,946	3.32	%	$	11,699,477	3.48	%	$	11,225,519	3.58	%	$	10,780,061	3.55	%	$	10,079,581	3.80	%
Non-interest-earning assets:
		Cash and due from banks					85,478				71,166				91,258				75,065				76,212
		Net premises and equipment					61,240				57,198				56,315				56,799				57,446
		Allowance for credit losses, accrued
			interest and other assets				320,729				320,407				308,746				281,196				248,702
				Total assets		$	12,876,393			$	12,148,248			$	11,681,838			$	11,193,121			$	10,461,941

Interest-bearing liabilities:
		Interest-bearing deposits:
		Checking				$	1,350,098	0.19	%	$	1,294,614	0.19	%	$	1,197,908	0.23	%	$	1,077,595	0.31	%	$	992,848	0.35	%
		Savings					104,283	0.18			93,375	0.18			86,259	0.18			82,671	0.36			72,139	0.42
		Money market					5,321,338	0.26			5,057,828	0.27			4,933,285	0.31			4,739,566	0.44			4,285,907	0.52
		Time deposits					801,928	1.33			808,561	1.44			810,675	1.59			841,378	1.78			877,448	1.95
			Total interest-bearing deposits				7,577,647	0.36			7,254,378	0.38			7,028,127	0.44			6,741,210	0.58			6,228,342	0.69
		Federal funds purchased					970,708	0.22			849,772	0.22			752,765	0.22			682,971	0.22			572,990	0.22
		Other borrowings					64,694	4.28			64,689	4.33			64,701	4.41			64,717	4.78			64,711	4.85
		Total interest-bearing liabilities				$	8,613,049	0.37	%	$	8,168,839	0.40	%	$	7,845,593	0.46	%	$	7,488,898	0.59	%	$	6,866,043	0.69	%
Non-interest-bearing liabilities:
		Non-interest-bearing
			demand deposits				3,154,605				2,923,041				2,812,254				2,728,513				2,646,030
		Other liabilities					52,027				39,442				48,642				39,537				69,061
		Stockholders' equity					1,038,012				996,741				956,847				917,626				862,500
		Accumulated other comprehensive
			income				18,700				20,185				18,502				18,547				18,307
				Total liabilities and
					stockholders' equity	$	12,876,393			$	12,148,248			$	11,681,838			$	11,193,121			$	10,461,941
Net interest spread								2.95	%			3.08	%			3.12	%			2.96	%			3.11	%
Net interest margin								3.06	%			3.20	%			3.27	%			3.14	%			3.32	%

(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.

Source: ServisFirst Bancshares, Inc.

Released July 19, 2021

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

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