sfbs20240930

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 SEPTEMBER 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 October 30, 2024
Common stock, $.001 par value	54,552,393

1

	September 30, 2024			December 31, 2023
	(Unaudited)				(1	)
ASSETS
Cash and due from banks	$	142,372		$	123,430
Interest-bearing balances due from depository institutions		1,614,317			1,907,083
Federal funds sold		3,542			100,575
Cash and cash equivalents		1,760,231			2,131,088
Available-for-sale debt securities, at fair value		1,139,007			900,183
Held-to-maturity debt securities (fair value of $673,023 and $907,191, respectively)		728,580			982,664
Restricted equity securities		11,300			10,226
Mortgage loans held for sale		8,453			5,074
Loans		12,338,226			11,658,829
Less allowance for credit losses		(160,755	)		(153,317	)
Loans, net		12,177,471			11,505,512
Premises and equipment, net		61,328			59,324
Accrued interest and dividends receivable		61,578			59,181
Deferred tax asset, net		57,290			62,918
Other real estate owned and repossessed assets		2,723			995
Bank owned life insurance contracts		297,656			292,759
Goodwill		13,615			13,615
Other assets		129,946			106,129
Total assets	$	16,449,178		$	16,129,668
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing demand	$	2,576,329		$	2,643,101
Interest-bearing		10,570,200			10,630,410
Total deposits		13,146,529			13,273,511
Federal funds purchased		1,542,623			1,256,724
Other borrowings		64,741			64,735
Accrued interest and dividends payable		26,581			27,545
Other liabilities		98,435			66,748
Total liabilities		14,878,909			14,689,263
Stockholders' equity:
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at September 30, 2024 and December 31, 2023		-			-
Common stock, par value $0.001 per share; 200,000,000 shares authorized: 54,551,543 shares issued and outstanding at September 30, 2024; and 54,461,580 shares issued and outstanding at December 31, 2023		54			54
Additional paid-in capital		235,649			232,605
Retained earnings		1,365,701			1,254,841
Accumulated other comprehensive loss		(31,635	)		(47,595	)
Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		1,569,769			1,439,905
Noncontrolling interest		500			500
Total stockholders' equity		1,570,269			1,440,405
Total liabilities and stockholders' equity	$	16,449,178		$	16,129,668

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Interest income:
Interest and fees on loans	$	205,952	$	178,754	$	587,230	$	514,204
Taxable securities		17,493		15,522		49,630		37,987
Nontaxable securities		7		15		25		53
Federal funds sold		31		985		1,110		1,826
Other interest and dividends		24,496		17,930		64,234		30,114
Total interest income		247,979		213,206		702,229		584,184
Interest expense:
Deposits		113,211		95,901		321,948		223,585
Borrowed funds		19,647		17,607		56,790		51,349
Total interest expense		132,858		113,508		378,738		274,934
Net interest income		115,121		99,698		323,491		309,250
Provision for credit losses		5,659		4,282		15,883		15,133
Net interest income after provision for credit losses		109,462		95,416		307,608		294,117
Noninterest income:
Service charges on deposit accounts		2,341		2,163		6,784		6,239
Mortgage banking		1,352		825		3,409		1,963
Credit card income		1,925		2,532		6,413		6,627
Bank-owned life insurance income		2,113		1,818		7,402		5,935
Other operating income		818		797		2,245		2,274
Total noninterest income		8,549		8,135		26,253		23,038
Noninterest expenses:
Salaries and employee benefits		25,057		20,080		72,256		57,941
Equipment and occupancy expense		3,795		3,579		10,919		10,435
Third party processing and other services		8,035		6,549		22,666		20,031
Professional services		1,715		1,265		4,920		4,499
FDIC and other regulatory assessments		2,355		2,346		8,462		6,105
Other real estate owned expense		103		18		141		30
Other operating expenses		4,572		7,826		14,886		20,752
Total noninterest expenses		45,632		41,663		134,250		119,793
Income before income taxes		72,379		61,888		199,611		197,362
Provision for income taxes		12,472		8,548		37,542		32,583
Net income		59,907		53,340		162,069		164,779
Dividends on preferred stock		-		-		31		31
Net income available to common stockholders	$	59,907	$	53,340	$	162,038	$	164,748
Basic earnings per common share	$	1.10	$	0.98	$	2.97	$	3.03
Diluted earnings per common share	$	1.10	$	0.98	$	2.97	$	3.02

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Net income	$	59,907		$	53,340		$	162,069		$	164,779
Other comprehensive income (loss), net of tax
Unrealized net holding gains (losses) arising during period from securities available for sale, net of tax of $5,025 and $(340) for the three months ended September 30, 2024 and 2023, respectively, and $7,463 and $(5,743) for the nine months ended September 30, 2024 and 2023, respectively		14,997			(1,016	)		16,341			(17,138	)
Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax of $(38) and $(54) for the three months ended September 30, 2024 and 2023, respectively, and $(120) and $(150) for the nine months ended September 30, 2024 and 2023, respectively		(111	)		(160	)		(381	)		(447	)
Other comprehensive income (loss), net of tax		14,886			(1,176	)		15,960			(17,585	)
Comprehensive income	$	74,793		$	52,164		$	178,029		$	147,194

	Three Months Ended September 30,
	Common Shares		Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling interest		Total Stockholders' Equity
Balance, July 1, 2023		54,425,033	$	-	$	54	$	230,659		$	1,190,920		$	(58,662	)	$	500	$	1,363,471
Common dividends declared, $0.28 per share		-		-		-		-			(15,239	)		-			-		(15,239	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			59			-			-		59
Issue restricted shares pursuant to stock incentives, net of forfeitures		414		-		-		-			-			-			-		-
Issue shares of common stock upon
Stock-based compensation expense		-		-		-		929			-			-			-		929
Other comprehensive loss, net of tax		-		-		-		-			-			(1,176	)		-		(1,176	)
Net income		-		-		-		-			53,340			-			-		53,340
Balance, September 30, 2023		54,425,447	$	-	$	54	$	231,588		$	1,229,080		$	(59,838	)	$	500	$	1,401,384


Balance, July 1, 2024		54,521,479	$	-	$	54	$	234,495		$	1,322,048		$	(46,521	)	$	500	$	1,510,576
Common dividends declared, $0.30 per share		-		-		-		-			(16,365	)		-			-		(16,365	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			111			-			-		111
Issue restricted shares pursuant to stock incentives, net of forfeitures		21,256		-		-		-			-			-			-		-
Issue shares of common stock upon exercise of stock options		-		-		-		236			-			-			-		236
1,492 shares of common stock withheld in net settlement upon exercise of stock options		8,808		-		-		(95	)		-			-			-		(95	)
Stock-based compensation expense		-		-		-		1,013			-			-			-		1,013
Other comprehensive income, net of tax		-		-		-		-			-			14,886			-		14,886
Net income		-		-		-		-			59,907			-			-		59,907
Balance, September 30, 2024		54,551,543	$	-	$	54	$	235,649		$	1,365,701		$	(31,635	)	$	500	$	1,570,269

	Nine Months Ended September 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, $0.56 per share		-		-		-		-			(30,472	)		-			-		(30,472	)
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		-		-		-		-			141			-			-		141
Issue restricted shares pursuant to stock incentives, net of forfeitures		37,682		-		-		-			-			-			-		-
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		-		-		-		2,719			-			-			-		2,719
Other comprehensive loss, net of tax		-		-		-		-			-			(17,585	)		-		(17,585	)
Net income		-		-		-		-			164,779			-			-		164,779
Balance, September 30, 2023		54,425,447	$	-	$	54	$	231,588		$	1,229,080		$	(59,838	)	$	500	$	1,401,384


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		-		54		232,605			1,252,572			(47,595	)		500		1,438,136
Common dividends paid, $0.60 per share		-		-		-		-			(32,709	)		-			-		(32,709	)
Common dividends declared, $0.30 per share		-		-		-		-			(16,365	)		-			-		(16,365	)
Preferred dividends paid		-		-		-		-			(31	)		-			-		(31	)
Dividends on nonvested restricted stock recognized as compensation expense		-		-		-		-			165			-			-		165
Issue restricted shares pursuant to stock incentives, net of forfeitures		63,281		-		-		-			-			-			-		-
Issue shares of common stock upon exercise of stock options		26,682		-		-		605			-			-			-		605
6,668 shares of common stock withheld in net settlement upon exercise of stock options		-		-		-

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	27
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

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

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