BIRMINGHAM, Ala.--(BUSINESS WIRE)--ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended September 30, 2023.
Third Quarter 2023 Highlights:
- Reached milestone of $16.0 billion in total assets, a 9.9% increase year-to-date.
- $13.1 billion in total deposits, a 7% increase from second quarter 2023 and a 13.8% increase year-to-date.
- $2.0 billion in cash on hand with no FHLB advances or brokered deposits.
- Diluted net income per share of $0.98 for the quarter.
- Book value per share of $25.75, up 7.6% year-to-date and 12.6% from the third quarter of 2022.
- Loans grew $362.5 million, or 3%, from the third quarter of 2022. Our loan pipeline is improving.
- An increase of 19% in new deposit accounts opened year-over-year.
- Credit quality continues to be strong with non-performing assets to total assets of 0.15%.
- Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.42% to 10.69% year-over-year.
Tom Broughton, Chairman, President and CEO, said, "We are proud to reach the $16 billion in assets milestone in the quarter, with current cash exceeding $2 billion and no FHLB advances or brokered deposits. We believe this gives our bank a significant competitive advantage."
Bud Foshee, CFO, said, "We continue to see strong asset quality with record low past dues, while loan pipelines and activity are beginning to rebuild, which should improve profitability in coming quarters."
FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||||
(in Thousands except share and per share amounts) | Period Ending
| Period Ending
| % Change From
| Period Ending
| % Change From
| ||||||||||||||||
QUARTERLY OPERATING RESULTS | |||||||||||||||||||||
Net Income | $ | 53,340 | $ | 53,468 | - | % | $ | 64,031 | (17 | ) | % | ||||||||||
Net Income Available to Common Stockholders | $ | 53,340 | $ | 53,437 | - | % | $ | 64,031 | (17 | ) | % | ||||||||||
Diluted Earnings Per Share | $ | 0.98 | $ | 0.98 | - | % | $ | 1.17 | (17 | ) | % | ||||||||||
Return on Average Assets | 1.37 | % | 1.50 | % | 1.77 | % | |||||||||||||||
Return on Average Common Stockholders' Equity | 15.12 | % | 15.85 | % | 20.49 | % | |||||||||||||||
Average Diluted Shares Outstanding | 54,530,635 | 54,527,317 | 54,546,682 | ||||||||||||||||||
YEAR-TO-DATE OPERATING RESULTS | |||||||||||||||||||||
Net Income | $ | 164,779 | $ | 183,780 | (10 | ) | % | ||||||||||||||
Net Income Available to Common Stockholders | $ | 164,748 | $ | 183,749 | (10 | ) | % | ||||||||||||||
Diluted Earnings Per Share | $ | 3.02 | $ | 3.37 | (10 | ) | % | ||||||||||||||
Return on Average Assets | 1.50 | % | 1.64 | % | |||||||||||||||||
Return on Average Common Stockholders' Equity | 16.23 | % | 20.43 | % | |||||||||||||||||
Average Diluted Shares Outstanding | 54,530,797 | 54,533,793 | |||||||||||||||||||
BALANCE SHEET | |||||||||||||||||||||
Total Assets | $ | 16,044,332 | $ | 15,072,808 | 6 | % | $ | 13,890,030 | 16 | % | |||||||||||
Loans | 11,641,130 | 11,604,894 | - | % | 11,278,614 | 3 | % | ||||||||||||||
Non-interest-bearing Demand Deposits | 2,621,072 | 2,855,102 | (8 | ) | % | 3,661,936 | (28 | ) | % | ||||||||||||
Total Deposits | 13,142,376 | 12,288,219 | 7 | % | 11,051,915 | 19 | % | ||||||||||||||
Stockholders' Equity | 1,401,384 | 1,363,471 | 3 | % | 1,242,589 | 13 | % | ||||||||||||||
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $53.3 million for the quarter ended September 30, 2023, compared to net income of $53.5 million and net income available to common stockholders of $53.4 million for the second quarter of 2023 and net income and net income available to common stockholders of $64.0 million for the third quarter of 2022. Basic and diluted earnings per common share were both $0.98 in the third quarter of 2023, compared to $0.98 for both in the second quarter of 2023 and $1.18 and $1.17, respectively, in the third quarter of 2022.
Annualized return on average assets was 1.37% and annualized return on average common stockholders' equity was 15.12% for the third quarter of 2023, compared to 1.77% and 20.49%, respectively, for the third quarter of 2022.
Net interest income was $99.7 million for the third quarter of 2023, compared to $101.3 million for the second quarter of 2023 and $126.4 million for the third quarter of 2022. Net interest income was negatively impacted by the continued narrowing in net interest spread due to Federal Reserve increases in interest rates over the last year. The net interest margin in the third quarter of 2023 was 2.64% compared to 2.93% in the second quarter of 2023 and 3.64% in the third quarter of 2022. Loan yields were 6.13% during the third quarter of 2023 compared to 5.94% during the second quarter of 2023 and 4.77% during the third quarter of 2022. Investment yields were 3.07% during the third quarter of 2023 compared to 2.64% during the second quarter of 2023 and 2.47% during the third quarter of 2022. Average interest-bearing deposit rates were 3.84% during the third quarter of 2023, compared to 3.32% during the second quarter of 2023 and 0.76% during the third quarter of 2022. Average federal funds purchased rates were 5.43% during third quarter of 2023, compared to 5.14% during the second quarter of 2023 and 2.27% during the third quarter of 2022.
Average loans for the third quarter of 2023 were $11.56 billion, a decrease of $36.3 million, or 1.2% annualized, from average loans of $11.60 billion for the second quarter of 2023, and an increase of $643.1 million, or 5.9%, from average loans of $10.92 billion for the third quarter of 2022.
Average total deposits for the third quarter of 2023 were $12.68 billion, an increase of $1.10 billion, or 37.5% annualized, over average total deposits of $11.58 billion for the second quarter of 2023, and an increase of $1.15 billion, or 9.9%, from average total deposits of $11.53 billion for the third quarter of 2022.
Non-performing assets to total assets were 0.15% for the third quarter of 2023, compared to 0.16% for the second quarter of 2023 and 0.13% for the third quarter of 2022. Annualized net charge-offs to average loans were 0.15% for the third quarter of 2023, compared to 0.11% for both the second quarter of 2023 and third quarter of 2022. The allowance for credit losses as a percentage of total loans at September 30, 2023, June 30, 2023, and September 30, 2022, was 1.31%, 1.31%, and 1.25%, respectively. We recorded a $4.3 million provision for credit losses in the third quarter of 2023 compared to $6.7 million in the second quarter of 2023, and $15.6 million in the third quarter of 2022.
Non-interest income decreased $804,000, or 9.0%, to $8.1 million for the third quarter of 2023 from $8.9 million in the third quarter of 2022, and decreased $447,000, or 5.2%, on a linked quarter basis. Service charges on deposit accounts increased $271,000, or 14.3%, to $2.2 million from the third quarter of 2022 to the third quarter of 2023, and increased $21,000, or 1.0%, on a linked quarter basis. Mortgage banking revenue increased $41,000, or 5.2%, to $825,000 from the third quarter of 2022 to the third quarter of 2023, and increased $129,000, or 18.5%, on a linked quarter basis. Net credit card revenue decreased $80,000, or 3.1%, to $2.5 million during the third quarter of 2023, compared to $2.6 million during the third quarter of 2022, and increased $126,000, or 5.2%, on a linked quarter basis. The aggregate amount of spend on all credit card accounts decreased 2.0% during the third quarter of 2023 compared to the third quarter of 2022. Bank-owned life insurance ("BOLI") income increased $181,000, or 11.1%, to $1.8 million during the third quarter of 2023, compared to $1.6 million during the third quarter of 2022, and decreased $678,000, or 27.2%, on a linked quarter basis. During the second quarter of 2023, we recognized $890,000 of income primarily attributed to a death benefit related to a former employee in our BOLI program. Other operating income for the third quarter of 2023 decreased $1.2 million, or 60.4%, to $797,000 from $2.0 million in the third quarter of 2022, and decreased $45,000, or 5.3%, on a linked quarter basis. We recognized $1.3 million of income on an interest rate cap during the third quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $125,000, or 26.7%, to $594,000 for the third quarter of 2023 from $468,000 in the third quarter of 2022.
Non-interest expense for the third quarter of 2023 decreased $1.0 million, or 2.4%, to $41.7 million from $42.7 million in the third quarter of 2022, and increased $3.2 million, or 8.3%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2023 increased $393,000, or 2.0%, to $20.1 million from $19.7 million in the third quarter of 2022, and increased $1.3 million, or 6.8%, on a linked quarter basis. The increase in the linked quarter is primarily attributed to higher incentive accruals. The number of FTE employees increased by 10 to 568 at September 30, 2023 compared to 558 at September 30, 2022, and decreased by 9 from the end of the second quarter of 2023. Equipment and occupancy expense increased $439,000, or 14.0%, to $3.6 million in the third quarter of 2023, from $3.1 million in the third quarter of 2022, and increased $158,000, or 4.6% on a linked-quarter basis. The year-over-year increase is primarily attributed to new leases that began after the third quarter of 2022. Third party processing and other services expense decreased $664,000, or 9.2%, to $6.5 million in the third quarter of 2023, from $7.2 million in the third quarter of 2022, and increased $351,000, or 5.7%, on a linked-quarter basis. Professional services expense increased $229,000, or 22.1%, to $1.3 million in the third quarter of 2023, from $1.0 million in the third quarter of 2022. FDIC and other regulatory assessments increased $1.4 million to $2.3 million in the third quarter of 2023, from $975,000 in the third quarter of 2022, and increased $104,000, or 4.6%, 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 third quarter of 2023 decreased $2.8 million, or 26.3%, to $7.8 million from $10.6 million in the third quarter of 2022, and increased $1.6 million, or 25.7%, on a linked-quarter basis. During the third quarter of 2022 we reached a preliminary settlement on a lawsuit and wrote down the value of a private investment resulting in charges of $3.1 million, or $2.4 million net of income tax. The efficiency ratio was 38.64% during the third quarter of 2023 compared to 31.54% during the third quarter of 2022 and 35.02% during the second quarter of 2023.
Income tax expense decreased $4.5 million, or 34.4%, to $8.5 million in the third quarter of 2023, compared to $13.0 million in the third quarter of 2022, mostly due to lower pretax net income. Our effective tax rate was 13.81% for the third quarter of 2023 compared to 16.92% for the third quarter of 2022. We recognized an aggregate of $3.7 million in credits during the third quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the third quarter of 2022. We did not 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 third quarter of 2023, compared to $370,000 during the third quarter of 2022.
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 and North Carolina. 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; 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) | ||||||||||||||||||||
3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME | ||||||||||||||||||||
Interest income | $ | 213,206 | $ | 189,656 | $ | 181,322 | $ | 170,273 | $ | 149,299 | ||||||||||
Interest expense | 113,508 | 88,405 | 73,021 | 47,889 | 22,881 | |||||||||||||||
Net interest income | 99,698 | 101,251 | 108,301 | 122,384 | 126,418 | |||||||||||||||
Provision for credit losses | 4,282 | 6,654 | 4,197 | 7,135 | 15,603 | |||||||||||||||
Net interest income after provision for credit losses | 95,416 | 94,597 | 104,104 | 115,249 | 110,815 | |||||||||||||||
Non-interest income | 8,135 | 8,582 | 6,321 | 6,966 | 8,939 | |||||||||||||||
Non-interest expense | 41,663 | 38,466 | 39,664 | 38,092 | 42,685 | |||||||||||||||
Income before income tax | 61,888 | 64,713 | 70,761 | 84,123 | 77,069 | |||||||||||||||
Provision for income tax | 8,548 | 11,245 | 12,790 | 16,399 | 13,038 | |||||||||||||||
Net income | 53,340 | 53,468 | 57,971 | 67,724 | 64,031 | |||||||||||||||
Preferred stock dividends | - | 31 | - | 31 | - | |||||||||||||||
Net income available to common stockholders | $ | 53,340 | $ | 53,437 | $ | 57,971 | $ | 67,693 | $ | 64,031 | ||||||||||
Earnings per share - basic | $ | 0.98 | $ | 0.98 | $ | 1.07 | $ | 1.25 | $ | 1.18 | ||||||||||
Earnings per share - diluted | $ | 0.98 | $ | 0.98 | $ | 1.06 | $ | 1.24 | $ | 1.17 | ||||||||||
Average diluted shares outstanding | 54,530,635 | 54,527,317 | 54,534,482 | 54,537,716 | 54,546,682 | |||||||||||||||
CONSOLIDATED BALANCE SHEET DATA | ||||||||||||||||||||
Total assets | $ | 16,044,332 | $ | 15,072,808 | $ | 14,566,559 | $ | 14,595,753 | $ | 13,890,030 | ||||||||||
Loans | 11,641,130 | 11,604,894 | 11,629,802 | 11,687,968 | 11,278,614 | |||||||||||||||
Debt securities | 1,878,701 | 2,048,227 | 1,646,937 | 1,678,936 | 1,714,603 | |||||||||||||||
Non-interest-bearing demand deposits | 2,621,072 | 2,855,102 | 2,898,736 | 3,321,347 | 3,661,936 | |||||||||||||||
Total deposits | 13,142,376 | 12,288,219 | 11,615,317 | 11,546,805 | 11,051,915 | |||||||||||||||
Borrowings | 64,751 | 64,737 | 65,417 | 64,726 | 64,721 | |||||||||||||||
Stockholders' equity | 1,401,384 | 1,363,471 | 1,339,817 | 1,297,896 | 1,242,589 | |||||||||||||||
Shares outstanding | 54,425,447 | 54,425,033 | 54,398,025 | 54,326,527 | 54,324,007 | |||||||||||||||
Book value per share | $ | 25.75 | $ | 25.05 | $ | 24.63 | $ | 23.89 | $ | 22.87 | ||||||||||
Tangible book value per share (1) | $ | 25.50 | $ | 24.80 | $ | 24.38 | $ | 23.64 | $ | 22.62 | ||||||||||
SELECTED FINANCIAL RATIOS (Annualized) | ||||||||||||||||||||
Net interest margin | 2.64 | % | 2.93 | % | 3.15 | % | 3.52 | % | 3.64 | % | ||||||||||
Return on average assets | 1.37 | % | 1.50 | % | 1.63 | % | 1.89 | % | 1.77 | % | ||||||||||
Return on average common stockholders' equity | 15.12 | % | 15.85 | % | 17.83 | % | 21.27 | % | 20.49 | % | ||||||||||
Efficiency ratio | 38.64 | % | 35.02 | % | 34.60 | % | 29.45 | % | 31.54 | % | ||||||||||
Non-interest expense to average earning assets | 1.10 | % | 1.11 | % | 1.15 | % | 1.10 | % | 1.23 | % | ||||||||||
CAPITAL RATIOS (2) | ||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets | 10.69 | % | 10.37 | % | 10.01 | % | 9.55 | % | 9.42 | % | ||||||||||
Tier 1 capital to risk-weighted assets | 10.69 | % | 10.38 | % | 10.02 | % | 9.55 | % | 9.43 | % | ||||||||||
Total capital to risk-weighted assets | 12.25 | % | 11.94 | % | 11.54 | % | 11.03 | % | 10.96 | % | ||||||||||
Tier 1 capital to average assets | 9.35 | % | 9.83 | % | 9.49 | % | 9.29 | % | 8.84 | % | ||||||||||
Tangible common equity to total tangible assets (1) | 8.66 | % | 8.96 | % | 9.11 | % | 8.81 | % | 8.86 | % | ||||||||||
(1) This press release also contains certain non-GAAP financial measures, including tangible common stockholders' equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill associated with our acquisition of Metro Bancshares, Inc. in January 2015. | ||||||||||||||||||||
(2) Regulatory capital ratios for 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 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.
At September 30,
| At June 30,
| At March 31,
| At December 31,
| At September 30,
| |||||||||||||||||||||
Book value per share - GAAP | $ | 25.75 | $ | 25.05 | $ | 24.63 | $ | 23.89 | $ | 22.87 | |||||||||||||||
Total common stockholders' equity - GAAP | 1,401,384 | 1,363,471 | 1,339,817 | 1,297,896 | 1,242,589 | ||||||||||||||||||||
Adjustment for Goodwill | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | |||||||||||||||
Tangible common stockholders' equity - non-GAAP | $ | 1,387,769 | $ | 1,349,856 | $ | 1,326,202 | $ | 1,284,281 | $ | 1,228,974 | |||||||||||||||
Tangible book value per share - non-GAAP | $ | 25.50 | $ | 24.80 | $ | 24.38 | $ | 23.64 | $ | 22.62 | |||||||||||||||
Stockholders' equity to total assets - GAAP | 8.73 | % | 9.05 | % | 9.20 | % | 8.89 | % | 8.95 | % | |||||||||||||||
Total assets - GAAP | $ | 16,044,332 | $ | 15,072,808 | $ | 14,566,559 | $ | 14,595,753 | $ | 13,890,030 | |||||||||||||||
Adjustment for Goodwill | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | |||||||||||||||
Total tangible assets - non-GAAP | $ | 16,030,717 | $ | 15,059,193 | $ | 14,552,944 | $ | 14,582,138 | $ | 13,876,415 | |||||||||||||||
Tangible common equity to total tangible assets - non-GAAP | 8.66 | % | 8.96 | % | 9.11 | % | 8.81 | % | 8.86 | % | |||||||||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||
(Dollars in thousands) | ||||||||||||
September 30,
| September 30,
| % Change | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 112,150 | $ | 249,051 | (55 | ) | % | |||||
Interest-bearing balances due from depository institutions | 1,861,924 | 156,959 | 1,086 | % | ||||||||
Federal funds sold | 91,035 | 82,316 | 11 | % | ||||||||
Cash and cash equivalents | 2,065,109 | 488,326 | 323 | % | ||||||||
Available for sale debt securities, at fair value | 834,802 | 665,763 | 25 | % | ||||||||
Held to maturity debt securities (fair value of $933,006 and $942,282, respectively) | 1,043,899 | 1,048,840 | - | % | ||||||||
Restricted equity securities | 10,226 | 7,734 | 32 | % | ||||||||
Mortgage loans held for sale | 6,333 | 2,003 | 216 | % | ||||||||
Loans | 11,641,130 | 11,278,614 | 3 | % | ||||||||
Less allowance for credit losses | (152,247 | ) | (140,967 | ) | 8 | % | ||||||
Loans, net | 11,488,883 | 11,137,647 | 3 | % | ||||||||
Premises and equipment, net | 59,516 | 59,080 | 1 | % | ||||||||
Goodwill and other identifiable intangible assets | 13,615 | 13,615 | - | % | ||||||||
Other assets | 521,949 | 467,022 | 12 | % | ||||||||
Total assets | $ | 16,044,332 |
| $ | 13,890,030 | 16 | % | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Liabilities: | ||||||||||||
Deposits: | ||||||||||||
Non-interest-bearing | $ | 2,621,072 | $ | 3,661,936 | (28 | ) | % | |||||
Interest-bearing | 10,521,304 | 7,389,979 | 42 | % | ||||||||
Total deposits | 13,142,376 | 11,051,915 | 19 | % | ||||||||
Federal funds purchased | 1,370,289 | 1,466,322 | (7 | ) | % | |||||||
Other borrowings | 64,751 | 64,721 | - | % | ||||||||
Other liabilities | 65,532 | 64,483 | 2 | % | ||||||||
Total liabilities | 14,642,948 | 12,647,441 | 16 | % | ||||||||
Stockholders' equity: | ||||||||||||
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at | ||||||||||||
September 30, 2023 and September 30, 2022 | - | - | - | % | ||||||||
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,425,447 shares | ||||||||||||
issued and outstanding at September 30, 2023, and 54,324,007 | ||||||||||||
shares issued and outstanding at September 30, 2022 | 54 | 54 | - | % | ||||||||
Additional paid-in capital | 231,588 | 228,738 | 1 | % | ||||||||
Retained earnings | 1,229,080 | 1,057,387 | 16 | % | ||||||||
Accumulated other comprehensive loss | (59,838 | ) | (44,090 | ) | 36 | % | ||||||
Total stockholders' equity attributable to ServisFirst Bancshares, Inc. | 1,400,884 | 1,242,089 | 13 | % | ||||||||
Noncontrolling interest | 500 | 500 | - | % | ||||||||
Total stockholders' equity | 1,401,384 | 1,242,589 | 13 | % | ||||||||
Total liabilities and stockholders' equity | $ | 16,044,332 | $ | 13,890,030 | 16 | % | ||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||
(In thousands except per share data) | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Interest income: | |||||||||||||
Interest and fees on loans | $ | 178,754 | $ | 131,375 | $ | 514,204 | $ | 345,767 | |||||
Taxable securities | 15,522 | 11,089 | 37,987 | 29,827 | |||||||||
Nontaxable securities | 15 | 30 | 53 | 110 | |||||||||
Federal funds sold | 985 | 632 | 1,826 | 738 | |||||||||
Other interest and dividends | 17,930 | 6,173 | 30,114 | 12,600 | |||||||||
Total interest income | 213,206 | 149,299 | 584,184 | 389,042 | |||||||||
Interest expense: | |||||||||||||
Deposits | 95,901 | 13,655 | 223,585 | 25,925 | |||||||||
Borrowed funds | 17,607 | 9,226 | 51,349 | 14,609 | |||||||||
Total interest expense | 113,508 | 22,881 | 274,934 | 40,534 | |||||||||
Net interest income | 99,698 | 126,418 | 309,250 | 348,508 | |||||||||
Provision for credit losses | 4,282 | 15,603 | 15,133 | 30,472 | |||||||||
Net interest income after provision for credit losses | 95,416 | 110,815 | 294,117 | 318,036 | |||||||||
Non-interest income: | |||||||||||||
Service charges on deposit accounts | 2,163 | 1,892 | 6,239 | 6,167 | |||||||||
Mortgage banking | 825 | 784 | 1,963 | 1,924 | |||||||||
Credit card income | 2,532 | 2,612 | 6,627 | 7,656 | |||||||||
Securities losses | - | - | - | (6,168 | ) | ||||||||
Bank-owned life insurance income | 1,818 | 1,637 | 5,935 | 6,978 | |||||||||
Other operating income | 797 | 2,014 | 2,274 | 9,836 | |||||||||
Total non-interest income | 8,135 | 8,939 | 23,038 | 26,393 | |||||||||
Non-interest expense: | |||||||||||||
Salaries and employee benefits | 20,080 | 19,687 | 57,941 | 58,722 | |||||||||
Equipment and occupancy expense | 3,579 | 3,140 | 10,435 | 9,056 | |||||||||
Third party processing and other services | 6,549 | 7,213 | 20,031 | 19,163 | |||||||||
Professional services | 1,265 | 1,036 | 4,499 | 3,355 | |||||||||
FDIC and other regulatory assessments | 2,346 | 975 | 6,105 | 3,254 | |||||||||
Other real estate owned expense | 18 | 21 | 30 | 56 | |||||||||
Other operating expense | 7,826 | 10,613 | 20,752 | 26,118 | |||||||||
Total non-interest expense | 41,663 | 42,685 | 119,793 | 119,724 | |||||||||
Income before income tax | 61,888 | 77,069 | 197,362 | 224,705 | |||||||||
Provision for income tax | 8,548 | 13,038 | 32,583 | 40,925 | |||||||||
Net income | 53,340 | 64,031 | 164,779 | 183,780 | |||||||||
Dividends on preferred stock | - | - | 31 | 31 | |||||||||
Net income available to common stockholders | $ | 53,340 | $ | 64,031 | $ | 164,748 | $ | 183,749 | |||||
Basic earnings per common share | $ | 0.98 | $ | 1.18 | $ | 3.03 | $ | 3.38 | |||||
Diluted earnings per common share | $ | 0.98 | $ | 1.17 | $ | 3.02 | $ | 3.37 | |||||
LOANS BY TYPE (UNAUDITED) | |||||||||||||||
(In thousands) | |||||||||||||||
3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | |||||||||||
Commercial, financial and agricultural | $ | 2,890,535 | $ | 2,986,453 | $ | 3,081,926 | $ | 3,145,317 | $ | 3,104,155 | |||||
Real estate - construction | 1,509,937 | 1,397,732 | 1,469,670 | 1,532,388 | 1,433,698 | ||||||||||
Real estate - mortgage: | |||||||||||||||
Owner-occupied commercial | 2,237,684 | 2,294,002 | 2,243,436 | 2,199,280 | 2,145,621 | ||||||||||
1-4 family mortgage | 1,170,099 | 1,167,238 | 1,138,645 | 1,146,831 | 1,089,826 | ||||||||||
Other mortgage | 3,766,124 | 3,686,434 | 3,624,071 | 3,597,750 | 3,438,762 | ||||||||||
Subtotal: Real estate - mortgage | 7,173,907 | 7,147,674 | 7,006,152 | 6,943,861 | 6,674,209 | ||||||||||
Consumer | 66,751 | 73,035 | 72,054 | 66,402 | 66,552 | ||||||||||
Total loans | $ | 11,641,130 | $ | 11,604,894 | $ | 11,629,802 | $ | 11,687,968 | $ | 11,278,614 | |||||
SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | ||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||
Beginning balance | $ | 152,272 | $ | 148,965 | $ | 146,297 | $ | 140,967 | $ | 128,387 | ||||||||||
Loans charged off: | ||||||||||||||||||||
Commercial financial and agricultural | 4,784 | 4,358 | 1,257 | 2,116 | 2,902 | |||||||||||||||
Real estate - construction | 19 | - | - | - | - | |||||||||||||||
Real estate - mortgage | - | 131 | 26 | - | 170 | |||||||||||||||
Consumer | 341 | 111 | 390 | 200 | 261 | |||||||||||||||
Total charge offs | 5,144 | 4,600 | 1,673 | 2,316 | 3,333 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial financial and agricultural | 825 | 1,233 | 128 | 393 | 297 | |||||||||||||||
Real estate - construction | - | - | 3 | - | - | |||||||||||||||
Real estate - mortgage | - | - | 1 | - | - | |||||||||||||||
Consumer | 11 | 21 | 11 | 118 | 12 | |||||||||||||||
Total recoveries | 836 | 1,254 | 143 | 511 | 309 | |||||||||||||||
Net charge-offs | 4,308 | 3,346 | 1,530 | 1,805 | 3,024 | |||||||||||||||
Provision for credit losses | 4,282 | 6,654 | 4,197 | 7,135 | 15,604 | |||||||||||||||
Ending balance | $ | 152,247 | $ | 152,272 | $ | 148,965 | $ | 146,297 | $ | 140,967 | ||||||||||
Allowance for credit losses to total loans | 1.31 | % | 1.31 | % | 1.28 | % | 1.25 | % | 1.25 | % | ||||||||||
Allowance for credit losses to total average | ||||||||||||||||||||
loans | 1.31 | % | 1.31 | % | 1.28 | % | 1.27 | % | 1.29 | % | ||||||||||
Net charge-offs to total average loans | 0.15 | % | 0.11 | % | 0.05 | % | 0.06 | % | 0.11 | % | ||||||||||
Provision for credit losses to total average | ||||||||||||||||||||
loans | 0.15 | % | 0.23 | % | 0.14 | % | 0.25 | % | 0.57 | % | ||||||||||
Nonperforming assets: | ||||||||||||||||||||
Nonaccrual loans | $ | 20,911 | $ | 16,897 | $ | 13,157 | $ | 12,450 | $ | 11,655 | ||||||||||
Loans 90+ days past due and accruing | 1,692 | 5,947 | 4,683 | 5,391 | 4,803 | |||||||||||||||
Other real estate owned and | ||||||||||||||||||||
repossessed assets | 690 | 832 | 248 | 248 | 1,245 | |||||||||||||||
Total | $ | 23,293 | $ | 23,676 | $ | 18,088 | $ | 18,089 | $ | 17,703 | ||||||||||
Nonperforming loans to total loans | 0.19 | % | 0.20 | % | 0.15 | % | 0.15 | % | 0.15 | % | ||||||||||
Nonperforming assets to total assets | 0.15 | % | 0.16 | % | 0.12 | % | 0.12 | % | 0.13 | % | ||||||||||
Nonperforming assets to earning assets | 0.16 | % | 0.16 | % | 0.13 | % | 0.13 | % | 0.13 | % | ||||||||||
Allowance for credit losses to nonaccrual loans | 731.74 | % | 901.18 | % | 1,132.24 | % | 1,175.08 | % | 1,209.50 | % | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||
(In thousands except per share data) | |||||||||||||||
3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | |||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 178,754 | $ | 171,718 | $ | 163,732 | $ | 153,924 | $ | 131,375 | |||||
Taxable securities | 15,522 | 11,570 | 10,895 | 10,895 | 11,089 | ||||||||||
Nontaxable securities | 15 | 17 | 21 | 27 | 30 | ||||||||||
Federal funds sold | 985 | 227 | 614 | 818 | 632 | ||||||||||
Other interest and dividends | 17,930 | 6,124 | 6,060 | 4,609 | 6,173 | ||||||||||
Total interest income | 213,206 | 189,656 | 181,322 | 170,273 | 149,299 | ||||||||||
Interest expense: | |||||||||||||||
Deposits | 95,901 | 71,971 | 55,713 | 33,471 | 13,655 | ||||||||||
Borrowed funds | 17,607 | 16,434 | 17,308 | 14,418 | 9,226 | ||||||||||
Total interest expense | 113,508 | 88,405 | 73,021 | 47,889 | 22,881 | ||||||||||
Net interest income | 99,698 | 101,251 | 108,301 | 122,384 | 126,418 | ||||||||||
Provision for credit losses | 4,282 | 6,654 | 4,197 | 7,135 | 15,603 | ||||||||||
Net interest income after provision for credit losses | 95,416 | 94,597 | 104,104 | 115,249 | 110,815 | ||||||||||
Non-interest income: | |||||||||||||||
Service charges on deposit accounts | 2,163 | 2,142 | 1,934 | 1,866 | 1,892 | ||||||||||
Mortgage banking | 825 | 696 | 442 | 514 | 784 | ||||||||||
Credit card income | 2,532 | 2,406 | 1,689 | 2,261 | 2,612 | ||||||||||
Bank-owned life insurance income | 1,818 | 2,496 | 1,621 | 1,600 | 1,637 | ||||||||||
Other operating income | 797 | 842 | 635 | 725 | 2,014 | ||||||||||
Total non-interest income | 8,135 | 8,582 | 6,321 | 6,966 | 8,939 | ||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 20,080 | 18,795 | 19,066 | 19,230 | 19,687 | ||||||||||
Equipment and occupancy expense | 3,579 | 3,421 | 3,435 | 3,263 | 3,140 | ||||||||||
Third party processing and other services | 6,549 | 6,198 | 7,284 | 8,170 | 7,213 | ||||||||||
Professional services | 1,265 | 1,580 | 1,654 | 922 | 1,036 | ||||||||||
FDIC and other regulatory assessments | 2,346 | 2,242 | 1,517 | 1,311 | 975 | ||||||||||
Other real estate owned expense | 18 | 6 | 6 | 239 | 21 | ||||||||||
Other operating expense | 7,826 | 6,224 | 6,702 | 4,957 | 10,613 | ||||||||||
Total non-interest expense | 41,663 | 38,466 | 39,664 | 38,092 | 42,685 | ||||||||||
Income before income tax | 61,888 | 64,713 | 70,761 | 84,123 | 77,069 | ||||||||||
Provision for income tax | 8,548 | 11,245 | 12,790 | 16,399 | 13,038 | ||||||||||
Net income | 53,340 | 53,468 | 57,971 | 67,724 | 64,031 | ||||||||||
Dividends on preferred stock | - | 31 | - | 31 | - | ||||||||||
Net income available to common stockholders | $ | 53,340 | $ | 53,437 | $ | 57,971 | $ | 67,693 | $ | 64,031 | |||||
Basic earnings per common share | $ | 0.98 | $ | 0.98 | $ | 1.07 | $ | 1.25 | $ | 1.18 | |||||
Diluted earnings per common share | $ | 0.98 | $ | 0.98 | $ | 1.06 | $ | 1.24 | $ | 1.17 | |||||
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||||||||||||
ON A FULLY TAXABLE-EQUIVALENT BASIS | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
3rd Quarter 2023 | 2nd Quarter 2023 | 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | |||||||||||||||||||||||||||||||
Average
| Yield /
| Average
| Yield /
| Average
| Yield /
| Average
| Yield /
| Average
| Yield /
| ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Loans, net of unearned income (1) | |||||||||||||||||||||||||||||||||||
Taxable | $ | 11,545,003 | 6.13 | % | $ | 11,581,008 | 5.94 | % | $ | 11,632,439 | 5.70 | % | $ | 11,465,538 | 5.32 | % | $ | 10,900,105 | 4.77 | % | |||||||||||||||
Tax-exempt (2) | 18,023 | 4.71 | 18,312 | 4.82 | 18,978 | 3.36 | 19,526 | 6.60 | 19,852 | 4.14 | |||||||||||||||||||||||||
Total loans, net of | |||||||||||||||||||||||||||||||||||
unearned income | 11,563,026 | 6.13 | 11,599,320 | 5.94 | 11,651,417 | 5.70 | 11,485,064 | 5.32 | 10,919,957 | 4.77 | |||||||||||||||||||||||||
Mortgage loans held for sale | 5,476 | 6.67 | 5,014 | 5.12 | 1,522 | 6.40 | 1,515 | 3.67 | 2,906 | 2.73 | |||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||||||||
Taxable | 2,029,995 | 3.07 | 1,757,397 | 2.64 | 1,724,523 | 2.54 | 1,755,764 | 2.49 | 1,797,560 | 2.47 | |||||||||||||||||||||||||
Tax-exempt (2) | 2,408 | 2.49 | 2,960 | 2.43 | 3,781 | 2.43 | 4,863 | 2.39 | 5,863 | 2.39 | |||||||||||||||||||||||||
Total securities (3) | 2,032,403 | 3.07 | 1,760,357 | 2.64 |
| 1,728,304 | 2.54 | 1,760,627 | 2.49 | 1,803,423 | 2.47 | ||||||||||||||||||||||||
Federal funds sold | 74,424 | 5.25 | 15,908 | 5.72 | 50,526 | 4.93 | 82,656 | 3.93 | 102,028 | 2.46 | |||||||||||||||||||||||||
Restricted equity securities | 8,471 | 5.90 | 8,834 | 6.08 | 9,919 | 7.69 | 7,724 | 7.35 | 7,724 | 3.65 | |||||||||||||||||||||||||
Interest-bearing balances with banks | 1,293,243 | 5.45 | 460,893 | 5.21 | 510,021 | 4.67 | 458,115 | 3.83 | 945,142 | 2.56 | |||||||||||||||||||||||||
Total interest-earning assets | $ | 14,977,043 | 5.65 | $ | 13,850,326 | 5.49 | $ | 13,951,709 | 5.27 | $ | 13,795,701 | 4.90 | $ | 13,781,180 | 4.30 | ||||||||||||||||||||
Non-interest-earning assets: | |||||||||||||||||||||||||||||||||||
Cash and due from banks | 111,566 | 101,188 | 106,448 | 113,823 | 256,607 | ||||||||||||||||||||||||||||||
Net premises and equipment | 60,121 | 60,499 | 60,617 | 60,323 | 60,155 | ||||||||||||||||||||||||||||||
Allowance for credit losses, accrued | |||||||||||||||||||||||||||||||||||
interest and other assets | 283,357 | 279,860 | 279,775 | 273,964 | 294,006 | ||||||||||||||||||||||||||||||
Total assets | $ | 15,432,087 | $ | 14,291,873 | $ | 14,398,549 | $ | 14,243,811 | $ | 14,391,948 | |||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
Checking | $ | 2,153,973 | 2.72 | % | $ | 1,628,936 | 1.69 | % | $ | 1,675,355 | 1.25 | % | $ | 1,763,622 | 0.73 | % | $ | 1,722,926 | 0.28 | % | |||||||||||||||
Savings | 112,814 | 1.61 | 122,050 | 1.38 | 134,671 | 0.94 | 141,163 | 0.64 | 144,368 | 0.21 | |||||||||||||||||||||||||
Money market | 6,538,426 | 4.24 | 5,971,639 | 3.78 | 5,756,642 | 3.17 | 5,047,133 | 2.07 | 4,444,583 | 0.89 | |||||||||||||||||||||||||
Time deposits | 1,093,388 | 3.89 | 983,582 | 3.44 | 850,639 | 2.51 | 860,336 | 1.69 | 809,057 | 1.16 | |||||||||||||||||||||||||
Total interest-bearing deposits | 9,898,601 | 3.84 | 8,706,207 | 3.32 | 8,417,307 | 2.68 | 7,812,254 | 1.70 | 7,120,934 | 0.76 | |||||||||||||||||||||||||
Federal funds purchased | 1,237,721 | 5.43 | 1,191,582 | 5.14 | 1,389,217 | 4.67 | 1,453,445 | 3.75 | 1,493,444 | 2.27 | |||||||||||||||||||||||||
Other borrowings | 64,734 | 4.23 | 100,998 | 4.62 | 114,726 | 4.61 | 64,726 | 4.23 | 65,406 | 4.19 | |||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 11,201,056 | 4.02 | % | $ | 9,998,787 | 3.55 | % | $ | 9,921,250 | 2.98 | % | $ | 9,330,425 | 2.04 | % | $ | 8,679,784 | 1.05 | % | |||||||||||||||
Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Non-interest-bearing | |||||||||||||||||||||||||||||||||||
demand deposits | 2,778,858 | 2,876,225 | 3,086,774 | 3,572,956 | 4,410,318 | ||||||||||||||||||||||||||||||
Other liabilities | 52,797 | 64,917 | 72,121 | 77,544 | 62,093 | ||||||||||||||||||||||||||||||
Stockholders' equity | 1,457,893 | 1,399,578 | 1,358,587 | 1,307,553 | 1,263,870 | ||||||||||||||||||||||||||||||
Accumulated other comprehensive | |||||||||||||||||||||||||||||||||||
loss | (58,517 | ) | (47,634 | ) | (40,183 | ) | (44,667 | ) | (24,117 | ) | |||||||||||||||||||||||||
Total liabilities and | |||||||||||||||||||||||||||||||||||
stockholders' equity | $ | 15,432,087 | $ | 14,291,873 | $ | 14,398,549 | $ | 14,243,811 | $ | 14,391,948 | |||||||||||||||||||||||||
Net interest spread | 1.63 | % | 1.94 | % | 2.29 | % | 2.86 | % | 3.25 | % | |||||||||||||||||||||||||
Net interest margin | 2.64 | % | 2.93 | % | 3.15 | % | 3.52 | % | 3.64 | % | |||||||||||||||||||||||||
(1) | Average loans include nonaccrual loans in all periods. Loan fees of $2,996, $3,318 $3,263, $3,630, and $3,849 are included in interest income in the third quarter of 2023, second quarter of 2023, first quarter of 2023, fourth quarter of 2022, and third 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 $(83,815), $(69,498), $(59,738), $(62,567),and $(34,688) for the third quarter of 2023, second quarter of 2023, first quarter of 2023, fourth quarter of 2022, and third quarter of 2022, respectively, are excluded from the yield calculation. |
Contacts
ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com
