sfbs20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to_______

Commission file number 001-36452

SERVISFIRST BANCSHARES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	26-0734029
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

2500 Woodcrest Place, Birmingham, Alabama	35209
(Address of Principal Executive Offices)	(Zip Code)

(205) 949-0302

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $.001 per share	SFBS	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of July 29, 2024
Common stock, $.001 par value	54,529,826

SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

	June 30, 2024			December 31, 2023
	(Unaudited)				(1)
ASSETS
Cash and due from banks	$	135,711		$	123,430
Interest-bearing balances due from depository institutions		1,129,922			1,907,083
Federal funds sold		11,132			100,575
Cash and cash equivalents		1,276,765			2,131,088
Available-for-sale debt securities, at fair value		1,174,386			900,183
Held-to-maturity debt securities (fair value of $684,234 and $907,191, respectively)		767,255			982,664
Restricted equity securities		11,300			10,226
Mortgage loans held for sale		11,174			5,074
Loans		12,332,780			11,658,829
Less allowance for credit losses		(158,092	)		(153,317	)
Loans, net		12,174,688			11,505,512
Premises and equipment, net		59,200			59,324
Accrued interest and dividends receivable		62,936			59,181
Deferred tax asset, net		62,321			62,918
Other real estate owned and repossessed assets		1,458			995
Bank owned life insurance contracts		296,042			292,759
Goodwill		13,615			13,615
Other assets		138,672			106,129
Total assets	$	16,049,812		$	16,129,668
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing demand	$	2,475,415		$	2,643,101
Interest-bearing		10,783,977			10,630,410
Total deposits		13,259,392			13,273,511
Federal funds purchased		1,097,154			1,256,724
Other borrowings		64,739			64,735
Accrued interest and dividends payable		25,293			27,545
Other liabilities		92,658			66,748
Total liabilities		14,539,236			14,689,263
Stockholders' equity:
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at June 30, 2024 and December 31, 2023
Common stock, par value $0.001 per share; 200,000,000 shares authorized: 54,521,479 shares issued and outstanding at June 30, 2024; and 54,461,580 shares issued and outstanding at December 31, 2023		54			54
Additional paid-in capital		234,495			232,605
Retained earnings		1,322,048			1,254,841
Accumulated other comprehensive loss		(46,521	)		(47,595	)
Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		1,510,076			1,439,905
Noncontrolling interest		500			500
Total stockholders' equity		1,510,576			1,440,405
Total liabilities and stockholders' equity	$	16,049,812		$	16,129,668

SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest income:
Interest and fees on loans	$	194,300	$	171,718	$	381,278	$	335,450
Taxable securities		16,158		11,570		32,137		22,465
Nontaxable securities		9		17		18		38
Federal funds sold		538		227		1,079		841
Other interest and dividends		16,535		6,124		39,738		12,184
Total interest income		227,540		189,656		454,250		370,978
Interest expense:
Deposits		104,671		71,971		208,737		127,684
Borrowed funds		16,994		16,434		37,143		33,742
Total interest expense		121,665		88,405		245,880		161,426
Net interest income		105,875		101,251		208,370		209,552
Provision for credit losses		5,353		6,654		9,721		10,851
Net interest income after provision for credit losses		100,522		94,597		198,649		198,701
Noninterest income:
Service charges on deposit accounts		2,293		2,142		4,443		4,076
Mortgage banking		1,379		696		2,057		1,138
Credit card income		2,333		2,406		4,488		4,095
Bank-owned life insurance income		2,058		2,496		5,289		4,117
Other operating income		828		842		1,427		1,477
Total noninterest income		8,891		8,582		17,704		14,903
Noninterest expenses:
Salaries and employee benefits		24,213		18,795		47,199		37,861
Equipment and occupancy expense		3,567		3,421		7,124		6,856
Third party processing and other services		7,465		6,198		14,631		13,482
Professional services		1,741		1,580		3,205		3,234
FDIC and other regulatory assessments		2,202		2,242		6,107		3,759
Other real estate owned expense		7		6		37		12
Other operating expenses		3,623		6,224		10,818		12,926
Total noninterest expenses		42,818		38,466		89,121		78,130
Income before income taxes		66,595		64,713		127,232		135,474
Provision for income taxes		14,459		11,245		25,070		24,035
Net income		52,136		53,468		102,162		111,439
Dividends on preferred stock		31		31		31		31
Net income available to common stockholders	$	52,105		53,437		102,131		111,408
Basic earnings per common share	$	0.96	$	0.98	$	1.87	$	2.05
Diluted earnings per common share	$	0.95	$	0.98	$	1.87	$	2.04

SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net income	$	52,136		$	53,468		$	102,162		$	111,439
Other comprehensive income (loss), net of tax
Unrealized net holding gains (losses) arising during period from securities available for sale, net of tax of $65 and $(5,182) for the three ended June 30, 2024 and 2023, respectively, and $2,437 and $(5,403) for the six months ended June 30, 2024 and 2023, respectively		205			(15,455	)		1,344			(16,122	)
Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax of $(45) and $(51) for the three ended June 30, 2024 and 2023, respectively, and $(82) and $(96) for the six months ended June 30, 2024 and 2023, respectively		(134	)		(158	)		(270	)		(287	)
Other comprehensive income (loss), net of tax		71			(15,613	)		1,074			(16,409	)
Comprehensive income	$	52,207		$	37,855		$	103,236		$	95,030

SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts) (Unaudited)

	Three Months Ended June 30,
	Common Shares		Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling interest		Total Stockholders' Equity
Balance, April 1, 2023		54,398,025	$	-	$	54	$	229,631		$	1,152,681		$	(43,049	)	$	500	$	1,339,817
Common dividends declared, $0.28 per share		-		-		-		-			(15,239	)		-			-		(15,239	)
Preferred dividends paid		-		-		-		-			(31	)		-			-		(31	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			41			-			-		41
Issue restricted shares pursuant to stock incentives, net of forfeitures		16,555		-		-		-			-			-			-		-
Issue shares of common stock upon exercise of stock options		10,453		-		-		168			-			-			-		168
2,247 shares of common stock withheld in net settlement upon exercise of stock options		-		-		-		(122	)		-			-			-		(122	)
Stock-based compensation expense		-		-		-		982			-			-			-		982
Other comprehensive loss, net of tax		-		-		-		-			-			(15,613	)		-		(15,613	)
Net income		-		-		-		-			53,468			-			-		53,468
Balance, June 30, 2023		54,425,033	$	-	$	54	$	230,659		$	1,190,920		$	(58,662	)	$	500	$	1,363,471



Balance, April 1, 2024		54,507,778	$	-	$	54	$	233,560		$	1,286,245		$	(46,592	)	$	500	$	1,473,767
Common dividends declared, $0.30 per share		-		-		-		-			(16,356	)		-			-		(16,356	)
Preferred dividends paid		-		-		-		-			(31	)		-			-		(31	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			54			-			-		54
Issue restricted shares pursuant to stock incentives, net of forfeitures		2,113		-		-		-			-			-			-		-
Issue shares of common stock upon exercise of stock options		11,588		-		-		238			-			-			-		238
3,162 shares of common stock withheld in net settlement upon exercise of stock options		-		-		-		(182	)		-			-			-		(182	)
Stock-based compensation expense		-		-		-		879			-			-			-		879
Other comprehensive income, net of tax		-		-		-		-			-			71			-		71
Net income		-		-		-		-			52,136			-			-		52,136
Balance, June 30, 2024		54,521,479	$	-	$	54	$	234,495		$	1,322,048		$	(46,521	)	$	500	$	1,510,576

	Six Months Ended June 30,
	Common Shares		Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling interest		Total Stockholders' Equity
Balance, January 1, 2023		54,326,527	$	-	$	54	$	229,693		$	1,109,902		$	(42,253	)	$	500	$	1,297,896
Common dividends paid, $0.28 per share		-		-		-		-			(15,233	)		-			-		(15,233	)
Common dividends declared, $0.28 per share		-		-		-		-			(15,239	)		-			-		(15,239	)
Preferred dividends paid		-		-		-		-			(31	)		-			-		(31	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			82			-			-		82
Issue restricted shares pursuant to stock incentives, net of forfeitures		37,268		-		-		-			-			-			-		-
Issue shares of common stock upon exercise of stock options		61,238		-		-		1,014			-			-			-		1,014
26,462 shares of common stock withheld in net settlement upon exercise of stock options		-		-		-		(1,838	)		-			-			-		(1,838	)
Stock-based compensation expense		-		-		-		1,790			-			-			-		1,790
Other comprehensive loss, net of tax		-		-		-		-			-			(16,409	)		-		(16,409	)
Net income		-		-		-		-			111,439			-			-		111,439
Balance, June 30, 2023		54,425,033	$	-	$	54	$	230,659		$	1,190,920		$	(58,662	)	$	500	$	1,363,471


Balance, January 1, 2024		54,461,580	$	-	$	54	$	232,605		$	1,254,841		$	(47,595	)	$	500	$	1,440,405
Impact of adoption ASU 2023-02, net of tax		-		-		-		-			(2,269	)		-			-		(2,269	)
Adjusted balance, January 1, 2024		54,461,580		-

PART I. FINANCIAL INFORMATION		3
Item 1.	Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43

PART II. OTHER INFORMATION		43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44

EX-31.01 SECTION 302 CERTIFICATION OF THE CEO
EX-31.02 SECTION 302 CERTIFICATION OF THE CFO
EX-32.01 SECTION 906 CERTIFICATION OF THE CEO
EX-32.02 SECTION 906 CERTIFICATION OF THE CFO