8-K
ServisFirst Bancshares, Inc. (SFBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | July 18, 2022 | |
|---|---|---|
| ServisFirst Bancshares, Inc. | ||
| --- | ||
| (Exact name of registrant as specified in its charter) | ||
| Delaware | 001-36452 | 26-0734029 |
| --- | --- | --- |
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>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) | ||
| Not Applicable | ||
| --- | ||
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered |
|---|---|---|
| Common | SFBS | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. ☐
Item 2.02 – Results of Operations and Financial Condition.
On July 18, 2022, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.1.
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 7.01 – Regulation FD Disclosure
On July 18, 2022, ServisFirst hosted a call to review 2022 second quarter earnings. The supplemental financial data is attached as Exhibit 99.2 and is incorporated by reference into this Item 7.01.
The information in this report is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Items 7.01 and 9.01 of this report will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Statements in this presentation 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,” “would,” “might” “could” 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: 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; 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 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.
Item 9.01 – Financial Statements and Exhibits
| (a) | Not applicable |
|---|---|
| (b) | Not applicable |
| --- | --- |
| (c) | Not applicable |
| --- | --- |
| (d) | Exhibits. The following exhibits are included with this Current Report on Form 8-K: |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release dated July 18, 2022 |
| 99.2 | Supplemental Financial Data dated July<br> 18, 2022 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SERVISFIRST BANCSHARES, INC. | ||
|---|---|---|
| Dated: July 18, 2022 | By: | /s/ Thomas A. Broughton, III |
| Thomas A. Broughton, III | ||
| Chairman, President and Chief Executive Officer |
Exhibit 99.1
ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2022
BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 18, 2022--ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2022.
Second Quarter 2022 Highlights:
- Diluted earnings per share were $1.14 for the second quarter of 2022, a 24% increase over the second quarter of 2021 and an 8% increase on a linked-quarter basis
- Total loans grew $718.4 million during the second quarter of 2022, or 29% annualized
- Entered the Tallahassee, Florida market
- Book value per share increased 13% year-over-year and 3% on a linked-quarter basis
- Return on equity was 21% for the quarter
- Deposits grew $814.1 million, or 7%, year-over-year
Tom Broughton, Chairman, President and CEO, said, “We are pleased with the strong profitability due to growth in our core relationships. Our bankers are winning in the marketplace.”
Bud Foshee, CFO, said, “Our efficiency ratio is among the lowest in the industry despite adding the most new bankers in the first half of the year.”
| FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in Thousands except share and per share amounts) | |||||||||||||
| Period Ending <br><br> June 30, 2022 | Period Ending <br><br> March 31, 2022 | % Change From <br><br> Period Ending <br><br> March 31, 2022 <br><br> to Period Ending <br><br> June 30, 2022 | Period Ending <br><br> June 30, 2021 | % Change From <br><br> Period Ending <br><br> June 30, 2021 <br><br> to Period Ending <br><br> June 30, 2022 | |||||||||
| QUARTERLY OPERATING RESULTS | |||||||||||||
| Net Income | $ | 62,136 | $ | 57,613 | 8 | % | $ | 50,027 | 24 | % | |||
| Net Income Available to Common Stockholders | $ | 62,105 | $ | 57,613 | 8 | % | $ | 49,996 | 24 | % | |||
| Diluted Earnings Per Share | $ | 1.14 | $ | 1.06 | 8 | % | $ | 0.92 | 24 | % | |||
| Return on Average Assets | 1.67 | % | 1.53 | % | 1.56 | % | |||||||
| Return on Average Common Stockholders' Equity | 20.93 | % | 20.09 | % | 18.98 | % | |||||||
| Average Diluted Shares Outstanding | 54,532,385 | 54,522,042 | 54,460,230 | ||||||||||
| YEAR-TO-DATE OPERATING RESULTS | |||||||||||||
| Net Income | $ | 119,749 | $ | 101,482 | 18 | % | |||||||
| Net Income Available to Common Stockholders | $ | 119,718 | $ | 101,451 | 18 | % | |||||||
| Diluted Earnings Per Share | $ | 2.20 | $ | 1.86 | 18 | % | |||||||
| Return on Average Assets | 1.60 | % | 1.63 | % | |||||||||
| Return on Average Common Stockholders' Equity | 20.52 | % | 19.73 | % | |||||||||
| Average Diluted Shares Outstanding | 54,527,242 | 54,421,327 | |||||||||||
| BALANCE SHEET | |||||||||||||
| Total Assets | $ | 14,494,317 | $ | 15,339,419 | (6 | )% | $ | 13,207,319 | 10 | % | |||
| Loans | 10,617,320 | 9,898,957 | 7 | % | 8,649,694 | 23 | % | ||||||
| Non-interest-bearing Demand Deposits | 4,686,511 | 4,889,495 | (4 | )% | 3,296,429 | 42 | % | ||||||
| Total Deposits | 11,772,337 | 12,408,755 | (5 | )% | 10,958,236 | 7 | % | ||||||
| Stockholders' Equity | 1,211,918 | 1,172,975 | 3 | % | 1,073,284 | 13 | % |
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $62.1 million for the quarter ended June 30, 2022, compared to net income and net income available to common stockholders of $57.6 million for the first quarter of 2022 and $50.0 million for the second quarter of 2021. Basic and diluted earnings per common share were both $1.14 for the second quarter of 2022, compared to $1.06 for both in the first quarter of 2022 and $0.92 for both in the second quarter of 2021.
Annualized return on average assets was 1.67% and annualized return on average common stockholders’ equity was 20.93% for the second quarter of 2022, compared to 1.56% and 18.98%, respectively, for the second quarter of 2021.
Net interest income was $116.4 million for the second quarter of 2022, compared to $105.7 million for the first quarter of 2022 and $94.7 million for the second quarter of 2021. The net interest margin in the second quarter of 2022 was 3.26% compared to 2.89% in the first quarter of 2022 and 3.06% in the second quarter of 2021. Loan yields were 4.38% during the second quarter of 2022 compared to 4.29% during the first quarter of 2022 and 4.43% during the second quarter of 2021. Accretion of net fees on Paycheck Protection Program ("PPP") loans of $3.3 million during the second quarter of 2022 contributed 11 basis points of the loan yield, compared to $4.5 million of PPP loan fee accretion during the first quarter of 2022, or 19 basis points of the loan yield, and $8.0 million during the second quarter of 2021, or 37 basis points of the loan yield. Investment yields were 2.37% during the second quarter of 2022 compared to 2.17% during the first quarter of 2022 and 2.69% during the second quarter of 2021. Amortization of mortgage-backed securities decreased by $465,000 from the first quarter to the second quarter of 2022.
Average loans for the second quarter of 2022 were $10.19 billion, an increase of $542.4 million, or 22.6% annualized, over average loans of $9.65 billion for the first quarter of 2022, and an increase of $1.54 billion, or 17.9%, over average loans of $8.64 billion for the second quarter of 2021. Forgiveness of PPP loans during the second quarter of 2022 totaled $84.6 million. PPP loans outstanding as of June 30, 2022 were $23.0 million.
Average total deposits for the second quarter of 2022 were $12.04 billion, a decrease of $337.2 million, or 10.9%, annualized, over average total deposits of $12.38 billion for the first quarter of 2022, and an increase of $1.31 billion, or 12.2%, over average total deposits of $10.73 billion for the second quarter of 2021.
Non-performing assets to total assets were 0.12% for the second quarter of 2022, a decrease of 2 basis points compared to 0.14% for the first quarter of 2022 and a decrease of 3 basis points compared to 0.15% for the second quarter of 2021. Annualized net charge-offs to average loans were 0.02% for the second quarter of 2022, compared to 0.11% and -0.01% for the first quarter of 2022 and second quarter of 2021, respectively. The allowance for credit losses as a percentage of total loans at June 30, 2022, March 31, 2022 and June 30, 2021 was 1.21% at each date. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at June 30, 2022, March 31, 2022 and June 30, 2021 was 1.21%, 1.22%, and 1.30%, respectively. We recorded a $9.5 million provision for credit losses in the second quarter of 2022 compared to $5.4 million in the first quarter of 2022 and $9.7 million in the second quarter of 2021. The second quarter 2022 and 2021 provision for credit losses were higher due to increased loan growth, adjusted for forgiveness of PPP loans.
Non-interest income decreased $92,000, or 1.0%, to $9.5 million for the second quarter of 2022 from $9.6 million in the second quarter of 2021. Service charges on deposit accounts increased $226,000, or 11.9%, to $2.1 million from the second quarter of 2021 to the second quarter of 2022. Mortgage banking revenue decreased $2.1 million, or 77.3%, to $614,000 from the second quarter of 2021 to the second quarter of 2022. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of June 30, 2022, we had retained a total of 405 1-4 family mortgages for an aggregate balance of $151.1 million. Net credit card revenue increased $760,000, or 39.7%, to $2.7 million during the second quarter of 2022, compared to $1.9 million during the second quarter of 2021. The number of credit card accounts increased approximately 20.2% and the aggregate amount of spend on all credit card accounts increased 33.4% during the second quarter of 2022 compared to the second quarter of 2021. Cash surrender value life insurance decreased $50,000, or 3.0%, to $1.6 million during the second quarter of 2022, compared to $1.7 million during the second quarter of 2021. Other operating income for the second quarter of 2022 increased $4.5 million, or 580.4%, to $5.3 million from $777,000 in the second quarter of 2021. We wrote up the value of our interest rate cap by $1.9 million during the second quarter of 2022 compared to a write down of $2,000 during the second quarter of 2021. Merchant service revenue increased from $289,000 during the second quarter of 2021 to $471,000, or 63%, during the second quarter of 2022. We recognized a $2.1 million death benefit related to a former employee in our bank-owned life insurance (“BOLI”) program during the second quarter of 2022. We recognized a $2.8 million loss on the sale of seven available for sale debt securities that were yielding less than 1.00% during the second quarter of 2022.
Non-interest expense for the second quarter of 2022 increased $8.5 million, or 27.2%, to $39.8 million from $31.3 million in the second quarter of 2021, and increased $2.6 million, or 7.0%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2022 increased $3.8 million, or 22.8%, to $20.7 million from $16.9 million in the second quarter of 2021, and increased $2.4 million, or 13.3%, on a linked quarter basis. The number of FTE employees increased by 13 to 540 at June 30, 2022 compared to 527 at June 30, 2021, and increased by 29 from the end of the first quarter of 2022. We accrued an additional $1.8 million in our annual incentive program during the second quarter of 2022 based on loan growth and entry into new markets. Equipment and occupancy expense increased $139,000, or 4.9%, to $3.0 million in the second quarter of 2022, from $2.8 million in the second quarter of 2021, and increased $50,000, or 1.7% on a linked-quarter basis. Third party processing and other services expense increased $2.4 million, or 60.8%, to $6.3 million in the second quarter of 2022, from $3.9 million in the second quarter of 2021, and increased $740,000, or 13.2%, on a linked-quarter basis. We incurred additional processing expenses of $243,000 during the second quarter of 2022 and $503,000 year-to-date related to our conversion to a new core processor in the first quarter of 2023. This increase in third party processing also includes Federal Reserve Bank charges related to correspondent bank settlement activities. These charges increased by $1.7 million year-over-year to $2.3 million during the second quarter of 2022. Professional services expense increased $220,000, or 19.9%, to $1.3 million in the second quarter of 2022, from $1.1 million in the second quarter of 2021. FDIC and other regulatory assessments decreased $278,000 to $1.1 million in the second quarter of 2022, from $1.4 million in the second quarter of 2021, and increased $15,000, or 1.3%, on a linked quarter basis. Other operating expenses for the second quarter of 2022 increased $2.7 million, or 59.1%, to $7.3 million from $4.6 million in the second quarter of 2021, and decreased $999,000 on a linked-quarter basis. We accrued $250,000 for potential uninsured check fraud losses during the second quarter of 2022 and $750,000 year-to-date. We recognized core system deconversion expenses of $3.0 million during the fourth quarter of 2021 and $873,000 during the first quarter of 2022 through other operating expenses. The efficiency ratio was 31.64% during the second quarter of 2022 compared to 30.03% during the second quarter of 2021 and compared to 32.74% during the first quarter of 2022.
Income tax expense increased $1.1 million, or 8.5%, to $14.4 million in the second quarter of 2022, compared to $13.3 million in the second quarter of 2021. Our effective tax rate was 18.83% for the second quarter of 2022 compared to 20.97% for the second quarter of 2021. We recognized an aggregate of $3.1 million in credits during the second quarter of 2022 related to investments in new market tax credits. 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 2022 and 2021 of $352,000 and $724,000, 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 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, <br><br> 2022 | At March 31, <br><br> 2022 | At December 31, <br><br> 2021 | At September 30, <br><br> 2021 | At June 30, <br><br> 2021 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Book value per share - GAAP | $ | 22.32 | $ | 21.61 | $ | 21.24 | $ | 20.56 | $ | 19.80 | |||||
| Total common stockholders' equity - GAAP | 1,211,949 | 1,172,975 | 1,152,015 | 1,114,293 | 1,073,284 | ||||||||||
| Adjustments: | |||||||||||||||
| Adjusted for goodwill and core deposit intangible asset | (13,615 | ) | (13,615 | ) | (13,638 | ) | (13,705 | ) | (13,773 | ) | |||||
| Tangible common stockholders' equity - non-GAAP | $ | 1,198,334 | $ | 1,159,360 | $ | 1,138,377 | $ | 1,100,588 | $ | 1,059,511 | |||||
| Tangible book value per share - non-GAAP | $ | 22.07 | $ | 21.36 | $ | 20.99 | $ | 20.30 | $ | 19.55 | |||||
| Stockholders' equity to total assets - GAAP | 8.36 | % | 7.65 | % | 7.46 | % | 7.63 | % | 8.13 | % | |||||
| Total assets - GAAP | $ | 14,494,348 | $ | 15,339,419 | $ | 15,448,806 | $ | 14,602,228 | $ | 13,207,319 | |||||
| Adjustments: | |||||||||||||||
| Adjusted for goodwill and core deposit intangible asset | (13,615 | ) | (13,615 | ) | (13,638 | ) | (13,705 | ) | (13,773 | ) | |||||
| Total tangible assets - non-GAAP | $ | 14,480,733 | $ | 15,325,804 | $ | 15,435,168 | $ | 14,588,523 | $ | 13,193,546 | |||||
| Tangible common equity to total tangible assets - non-GAAP | 8.28 | % | 7.56 | % | 7.38 | % | 7.54 | % | 8.03 | % | |||||
| Total loans - GAAP | $ | 10,617,320 | $ | 9,898,957 | $ | 9,532,934 | $ | 8,812,811 | $ | 8,649,694 | |||||
| Adjustments: | |||||||||||||||
| Adjusted to exclude PPP loans | (22,973 | ) | (107,565 | ) | (230,184 | ) | (387,725 | ) | (595,017 | ) | |||||
| Loans, excluding PPP loans - non-GAAP | $ | 10,594,347 | $ | 9,791,392 | $ | 9,302,750 | $ | 8,425,086 | $ | 8,054,677 |
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, Charleston, South Carolina, and Charlotte, North 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 as a result of our reclassification as a large financial institution by the FDIC; 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 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 2022, 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) | |||||||||||||||
| 2nd Quarter 2022 | 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | |||||||||||
| CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||
| Interest income | $ | 126,555 | $ | 113,188 | $ | 108,954 | $ | 104,236 | $ | 102,719 | |||||
| Interest expense | 10,187 | 7,466 | 7,804 | 7,916 | 8,051 | ||||||||||
| Net interest income | 116,368 | 105,722 | 101,150 | 96,320 | 94,668 | ||||||||||
| Provision for credit losses | 9,507 | 5,362 | 8,451 | 5,963 | 9,652 | ||||||||||
| Net interest income after provision for credit losses | 106,861 | 100,360 | 92,699 | 90,357 | 85,016 | ||||||||||
| Non-interest income | 9,506 | 7,948 | 7,365 | 8,026 | 9,598 | ||||||||||
| Non-interest expense | 39,821 | 37,218 | 38,489 | 34,377 | 31,309 | ||||||||||
| Income before income tax | 76,546 | 71,090 | 61,575 | 64,006 | 63,305 | ||||||||||
| Provision for income tax | 14,410 | 13,477 | 7,822 | 11,507 | 13,278 | ||||||||||
| Net income | 62,136 | 57,613 | 53,753 | 52,499 | 50,027 | ||||||||||
| Preferred stock dividends | 31 | - | 31 | - | 31 | ||||||||||
| Net income available to common stockholders | $ | 62,105 | $ | 57,613 | $ | 53,722 | $ | 52,499 | $ | 49,996 | |||||
| Earnings per share - basic | $ | 1.14 | $ | 1.06 | $ | 0.99 | $ | 0.97 | $ | 0.92 | |||||
| Earnings per share - diluted | $ | 1.14 | $ | 1.06 | $ | 0.99 | $ | 0.96 | $ | 0.92 | |||||
| Average diluted shares outstanding | 54,532,385 | 54,522,042 | 54,493,959 | 54,477,740 | 54,460,230 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 14,494,317 | $ | 15,339,419 | $ | 15,448,806 | $ | 14,602,228 | $ | 13,207,319 | |||||
| Loans | 10,617,320 | 9,898,957 | 9,532,934 | 8,812,811 | 8,649,694 | ||||||||||
| Debt securities | 1,790,218 | 1,617,977 | 1,305,527 | 984,600 | 1,013,783 | ||||||||||
| Non-interest-bearing demand deposits | 4,686,511 | 4,889,495 | 4,799,767 | 4,366,654 | 3,296,429 | ||||||||||
| Total deposits | 11,772,337 | 12,408,755 | 12,452,836 | 12,078,670 | 10,958,236 | ||||||||||
| Borrowings | 64,716 | 64,711 | 64,706 | 64,701 | 64,696 | ||||||||||
| Stockholders' equity | 1,211,918 | 1,172,975 | 1,152,015 | 1,114,293 | 1,073,284 | ||||||||||
| Shares outstanding | 54,282,132 | 54,282,132 | 54,227,060 | 54,207,147 | 54,201,204 | ||||||||||
| Book value per share | $ | 22.32 | $ | 21.61 | $ | 21.24 | $ | 20.56 | $ | 19.80 | |||||
| Tangible book value per share (1) | $ | 22.07 | $ | 21.36 | $ | 20.99 | $ | 20.30 | $ | 19.55 | |||||
| SELECTED FINANCIAL RATIOS (Annualized) | |||||||||||||||
| Net interest margin | 3.26 | % | 2.89 | % | 2.71 | % | 2.85 | % | 3.06 | % | |||||
| Return on average assets | 1.67 | % | 1.53 | % | 1.40 | % | 1.50 | % | 1.56 | % | |||||
| Return on average common stockholders' equity | 20.93 | % | 20.09 | % | 18.75 | % | 18.93 | % | 18.98 | % | |||||
| Efficiency ratio | 31.64 | % | 32.74 | % | 35.47 | % | 32.95 | % | 30.03 | % | |||||
| Non-interest expense to average earning assets | 1.11 | % | 1.02 | % | 1.03 | % | 1.01 | % | 1.01 | % | |||||
| CAPITAL RATIOS (2) | |||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 9.59 | % | 9.86 | % | 9.95 | % | 10.46 | % | 10.60 | % | |||||
| Tier 1 capital to risk-weighted assets | 9.59 | % | 9.87 | % | 9.96 | % | 10.47 | % | 10.60 | % | |||||
| Total capital to risk-weighted assets | 11.12 | % | 11.43 | % | 11.58 | % | 12.18 | % | 12.36 | % | |||||
| Tier 1 capital to average assets | 8.19 | % | 7.67 | % | 7.39 | % | 7.80 | % | 8.10 | % | |||||
| Tangible common equity to total tangible assets (1) | 8.28 | % | 7.56 | % | 7.38 | % | 7.54 | % | 8.03 | % | |||||
| (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 | % Change | ||||||
| ASSETS | |||||||
| Cash and due from banks | 252,638 | $ | 72,599 | 248 | % | ||
| Interest-bearing balances due from depository institutions | 1,334,511 | 3,100,677 | (57 | )% | |||
| Federal funds sold | 101,447 | 7,500 | 1,253 | % | |||
| Cash and cash equivalents | 1,688,596 | 3,180,776 | (47 | )% | |||
| Available for sale debt securities, at fair value | 724,463 | 1,013,533 | (29 | )% | |||
| Held to maturity debt securities (fair value of 1,003,840 at June 30, 2022 and 250 at June 30, 2021) | 1,065,755 | 250 | NM | ||||
| Restricted equity securities | 7,734 | - | NM | ||||
| Mortgage loans held for sale | 3,451 | 6,147 | (44 | )% | |||
| Loans | 10,617,320 | 8,649,694 | 23 | % | |||
| Less allowance for credit losses | (128,387 | ) | (104,670 | ) | 23 | % | |
| Loans, net | 10,488,933 | 8,545,024 | 23 | % | |||
| Premises and equipment, net | 59,482 | 67,738 | (12 | )% | |||
| Goodwill and other identifiable intangible assets | 13,615 | 13,773 | (1 | )% | |||
| Other assets | 442,288 | 380,078 | 16 | % | |||
| Total assets | 14,494,317 | $ | 13,207,319 | 10 | % | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Liabilities: | |||||||
| Deposits: | |||||||
| Non-interest-bearing | 4,686,511 | $ | 3,296,429 | 42 | % | ||
| Interest-bearing | 7,085,826 | 7,661,807 | (8 | )% | |||
| Total deposits | 11,772,337 | 10,958,236 | 7 | % | |||
| Federal funds purchased | 1,389,167 | 1,059,474 | 31 | % | |||
| Other borrowings | 64,716 | 64,696 | - | % | |||
| Other liabilities | 56,179 | 51,629 | 9 | % | |||
| Total liabilities | 13,282,399 | 12,134,035 | 9 | % | |||
| Stockholders' equity: | |||||||
| Preferred stock, par value 0.001 per share; 1,000,000 authorized and undesignated at June 30, 2022 and June 30, 2021 | - | - | - | % | |||
| Common stock, par value 0.001 per share; 200,000,000 shares authorized and 54,306,875 shares issued and outstanding at June 30, 2022, and 100,000,000 shares authorized; 54,201,204 shares<br> issued and outstanding at June 30, 2021 | 54 | 54 | - | % | |||
| Additional paid-in capital | 227,906 | 225,127 | 1 | % | |||
| Retained earnings | 1,005,815 | 828,048 | 21 | % | |||
| Accumulated other comprehensive (loss) income | (22,357 | ) | 19,555 | NM | |||
| Total stockholders' equity attributable to ServisFirst Bancshares, Inc. | 1,211,418 | 1,072,784 | 13 | % | |||
| Noncontrolling interest | 500 | 500 | - | % | |||
| Total stockholders' equity | 1,211,918 | 1,073,284 | 13 | % | |||
| Total liabilities and stockholders' equity | 14,494,317 | $ | 13,207,319 | 10 | % |
All values are in US Dollars.
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | ||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Interest income: | ||||||||||
| Interest and fees on loans | $ | 111,287 | $ | 95,451 | $ | 214,392 | $ | 189,254 | ||
| Taxable securities | 10,515 | 6,315 | 18,738 | 12,122 | ||||||
| Nontaxable securities | 37 | 86 | 80 | 193 | ||||||
| Federal funds sold | 93 | 4 | 106 | 7 | ||||||
| Other interest and dividends | 4,623 | 863 | 6,427 | 1,539 | ||||||
| Total interest income | 126,555 | 102,719 | 239,743 | 203,115 | ||||||
| Interest expense: | ||||||||||
| Deposits | 6,427 | 6,836 | 12,270 | 13,717 | ||||||
| Borrowed funds | 3,760 | 1,215 | 5,383 | 2,365 | ||||||
| Total interest expense | 10,187 | 8,051 | 17,653 | 16,082 | ||||||
| Net interest income | 116,368 | 94,668 | 222,090 | 187,033 | ||||||
| Provision for credit losses | 9,507 | 9,652 | 14,869 | 17,103 | ||||||
| Net interest income after provision for credit losses | 106,861 | 85,016 | 207,221 | 169,930 | ||||||
| Non-interest income: | ||||||||||
| Service charges on deposit accounts | 2,133 | 1,907 | 4,275 | 3,815 | ||||||
| Mortgage banking | 614 | 2,699 | 1,140 | 5,446 | ||||||
| Credit card income | 2,672 | 1,912 | 5,044 | 3,104 | ||||||
| Securities (losses) gains | (2,833 | ) | 620 | (6,168 | ) | 620 | ||||
| Increase in cash surrender value life insurance | 1,633 | 1,683 | 3,241 | 3,341 | ||||||
| Other operating income | 5,287 | 777 | 9,922 | 1,735 | ||||||
| Total non-interest income | 9,506 | 9,598 | 17,454 | 18,061 | ||||||
| Non-interest expense: | ||||||||||
| Salaries and employee benefits | 20,734 | 16,887 | 39,035 | 32,430 | ||||||
| Equipment and occupancy expense | 2,983 | 2,844 | 5,916 | 5,498 | ||||||
| Third party processing and other services | 6,345 | 3,946 | 11,950 | 7,362 | ||||||
| Professional services | 1,327 | 1,107 | 2,319 | 2,030 | ||||||
| FDIC and other regulatory assessments | 1,147 | 1,425 | 2,279 | 3,007 | ||||||
| Other real estate owned expense | 32 | 540 | 35 | 697 | ||||||
| Other operating expense | 7,253 | 4,560 | 15,505 | 9,199 | ||||||
| Total non-interest expense | 39,821 | 31,309 | 77,039 | 60,223 | ||||||
| Income before income tax | 76,546 | 63,305 | 147,636 | 127,768 | ||||||
| Provision for income tax | 14,410 | 13,278 | 27,887 | 26,286 | ||||||
| Net income | 62,136 | 50,027 | 119,749 | 101,482 | ||||||
| Dividends on preferred stock | 31 | 31 | 31 | 31 | ||||||
| Net income available to common stockholders | $ | 62,105 | $ | 49,996 | $ | 119,718 | $ | 101,451 | ||
| Basic earnings per common share | $ | 1.14 | $ | 0.92 | $ | 2.21 | $ | 1.87 | ||
| Diluted earnings per common share | $ | 1.14 | $ | 0.92 | $ | 2.20 | $ | 1.86 | ||
| LOANS BY TYPE (UNAUDITED) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (In thousands) | ||||||||||
| 2nd Quarter 2022 | 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | ||||||
| Commercial, financial and agricultural | $ | 2,966,040 | $ | 2,955,927 | $ | 2,984,053 | $ | 2,927,845 | $ | 3,105,243 |
| Real estate - construction | 1,383,155 | 1,164,690 | 1,103,076 | 887,938 | 782,305 | |||||
| Real estate - mortgage: | ||||||||||
| Owner-occupied commercial | 2,026,807 | 1,919,811 | 1,874,103 | 1,809,840 | 1,726,888 | |||||
| 1-4 family mortgage | 1,015,698 | 926,697 | 826,765 | 765,102 | 707,546 | |||||
| Other mortgage | 3,160,510 | 2,869,158 | 2,678,084 | 2,357,812 | 2,262,231 | |||||
| Subtotal: Real estate - mortgage | 6,203,015 | 5,715,666 | 5,378,952 | 4,932,754 | 4,696,665 | |||||
| Consumer | 65,110 | 62,674 | 66,853 | 64,274 | 65,481 | |||||
| Total loans | $ | 10,617,320 | $ | 9,898,957 | $ | 9,532,934 | $ | 8,812,811 | $ | 8,649,694 |
| SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||||||||
| 2nd Quarter 2022 | 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | |||||||||||
| Allowance for credit losses: | |||||||||||||||
| Beginning balance | $ | 119,463 | $ | 116,660 | $ | 108,950 | $ | 104,670 | $ | 94,906 | |||||
| Loans charged off: | |||||||||||||||
| Commercial financial and agricultural | 1,667 | 2,574 | 1,285 | 1,541 | 150 | ||||||||||
| Real estate - construction | - | - | 14 | - | - | ||||||||||
| Real estate - mortgage | 23 | 27 | - | 208 | 59 | ||||||||||
| Consumer | 123 | 75 | 141 | 86 | 54 | ||||||||||
| Total charge offs | 1,813 | 2,676 | 1,440 | 1,835 | 263 | ||||||||||
| Recoveries: | |||||||||||||||
| Commercial financial and agricultural | 1,217 | 105 | 671 | 140 | 298 | ||||||||||
| Real estate - construction | - | - | - | - | 2 | ||||||||||
| Real estate - mortgage | - | - | 18 | 4 | 62 | ||||||||||
| Consumer | 13 | 12 | 10 | 8 | 13 | ||||||||||
| Total recoveries | 1,230 | 117 | 699 | 152 | 375 | ||||||||||
| Net charge-offs (recoveries) | 583 | 2,559 | 741 | 1,683 | (112 | ) | |||||||||
| Provision for credit losses | 9,507 | 5,362 | 8,451 | 5,963 | 9,652 | ||||||||||
| Ending balance | $ | 128,387 | $ | 119,463 | $ | 116,660 | $ | 108,950 | $ | 104,670 | |||||
| Allowance for credit losses to total loans | 1.21 | % | 1.21 | % | 1.22 | % | 1.24 | % | 1.21 | % | |||||
| Allowance for credit losses to total average loans | 1.26 | % | 1.24 | % | 1.29 | % | 1.26 | % | 1.21 | % | |||||
| Net charge-offs (recoveries) to total average loans | 0.02 | % | 0.11 | % | 0.03 | % | 0.08 | % | (0.01 | )% | |||||
| Provision for credit losses to total average loans | 0.37 | % | 0.23 | % | 0.37 | % | 0.27 | % | 0.45 | % | |||||
| Nonperforming assets: | |||||||||||||||
| Nonaccrual loans | $ | 10,540 | $ | 14,738 | $ | 6,762 | $ | 9,145 | $ | 12,301 | |||||
| Loans 90+ days past due and accruing | 4,991 | 4,686 | 5,335 | 5,326 | 4,888 | ||||||||||
| Other real estate owned and repossessed assets | 1,207 | 1,989 | 1,208 | 2,068 | 2,039 | ||||||||||
| Total | $ | 16,738 | $ | 21,413 | $ | 13,305 | $ | 16,539 | $ | 19,228 | |||||
| Nonperforming loans to total loans | 0.15 | % | 0.20 | % | 0.13 | % | 0.16 | % | 0.20 | % | |||||
| Nonperforming assets to total assets | 0.12 | % | 0.14 | % | 0.09 | % | 0.11 | % | 0.15 | % | |||||
| Nonperforming assets to earning assets | 0.12 | % | 0.14 | % | 0.09 | % | 0.11 | % | 0.15 | % | |||||
| Allowance for credit losses to nonaccrual loans | 1,218.05 | % | 826.19 | % | 1,725.23 | % | 1,191.36 | % | 850.91 | % | |||||
| Restructured accruing loans | $ | 421 | $ | 426 | $ | 431 | $ | 437 | $ | 441 | |||||
| Restructured accruing loans to total loans | - | % | - | % | - | % | - | % | 0.01 | % | |||||
| TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) | |||||||||||||||
| (In thousands) | |||||||||||||||
| 2nd Quarter 2022 | 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | |||||||||||
| Beginning balance: | $ | 2,482 | $ | 2,576 | $ | 2,893 | $ | 2,918 | $ | 3,542 | |||||
| Additions | - | - | - | - | - | ||||||||||
| Net (paydowns) / advances | (79 | ) | (94 | ) | (303 | ) | (25 | ) | (624 | ) | |||||
| Charge-offs | - | - | (14 | ) | - | - | |||||||||
| Ending balance | $ | 2,403 | $ | 2,482 | $ | 2,576 | $ | 2,893 | $ | 2,918 |
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | ||||||||||||
| 2nd Quarter 2022 | 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | ||||||||
| Interest income: | ||||||||||||
| Interest and fees on loans | $ | 111,287 | $ | 103,105 | $ | 100,348 | $ | 96,119 | $ | 95,451 | ||
| Taxable securities | 10,515 | 8,223 | 6,747 | 6,544 | 6,315 | |||||||
| Nontaxable securities | 37 | 43 | 47 | 62 | 86 | |||||||
| Federal funds sold | 93 | 13 | 18 | 4 | 4 | |||||||
| Other interest and dividends | 4,623 | 1,804 | 1,794 | 1,507 | 863 | |||||||
| Total interest income | 126,555 | 113,188 | 108,954 | 104,236 | 102,719 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 6,427 | 5,843 | 6,271 | 6,581 | 6,836 | |||||||
| Borrowed funds | 3,760 | 1,623 | 1,533 | 1,335 | 1,215 | |||||||
| Total interest expense | 10,187 | 7,466 | 7,804 | 7,916 | 8,051 | |||||||
| Net interest income | 116,368 | 105,722 | 101,150 | 96,320 | 94,668 | |||||||
| Provision for credit losses | 9,507 | 5,362 | 8,451 | 5,963 | 9,652 | |||||||
| Net interest income after provision for credit losses | 106,861 | 100,360 | 92,699 | 90,357 | 85,016 | |||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 2,133 | 2,142 | 1,297 | 1,727 | 1,907 | |||||||
| Mortgage banking | 614 | 526 | 471 | 1,423 | 2,699 | |||||||
| Credit card income | 2,672 | 2,372 | 2,200 | 2,043 | 1,912 | |||||||
| Securities (losses) gains | (2,833 | ) | (3,335 | ) | - | - | 620 | |||||
| Increase in cash surrender value life insurance | 1,633 | 1,608 | 1,630 | 1,671 | 1,683 | |||||||
| Other operating income | 5,287 | 4,635 | 1,767 | 1,162 | 777 | |||||||
| Total non-interest income | 9,506 | 7,948 | 7,365 | 8,026 | 9,598 | |||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 20,734 | 18,301 | 17,303 | 17,995 | 16,887 | |||||||
| Equipment and occupancy expense | 2,983 | 2,933 | 2,910 | 2,996 | 2,844 | |||||||
| Third party processing and other services | 6,345 | 5,605 | 4,856 | 4,144 | 3,946 | |||||||
| Professional services | 1,327 | 992 | 913 | 948 | 1,107 | |||||||
| FDIC and other regulatory assessments | 1,147 | 1,132 | 1,042 | 1,630 | 1,425 | |||||||
| Other real estate owned expense | 32 | 3 | 48 | 123 | 540 | |||||||
| Other operating expense | 7,253 | 8,252 | 11,417 | 6,541 | 4,560 | |||||||
| Total non-interest expense | 39,821 | 37,218 | 38,489 | 34,377 | 31,309 | |||||||
| Income before income tax | 76,546 | 71,090 | 61,575 | 64,006 | 63,305 | |||||||
| Provision for income tax | 14,410 | 13,477 | 7,822 | 11,507 | 13,278 | |||||||
| Net income | 62,136 | 57,613 | 53,753 | 52,499 | 50,027 | |||||||
| Dividends on preferred stock | 31 | - | 31 | - | 31 | |||||||
| Net income available to common stockholders | $ | 62,105 | $ | 57,613 | $ | 53,722 | $ | 52,499 | $ | 49,996 | ||
| Basic earnings per common share | $ | 1.14 | $ | 1.06 | $ | 0.99 | $ | 0.97 | $ | 0.92 | ||
| Diluted earnings per common share | $ | 1.14 | $ | 1.06 | $ | 0.99 | $ | 0.96 | $ | 0.92 |
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ON A FULLY TAXABLE-EQUIVALENT BASIS | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| 1st Quarter 2022 | 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | ||||||||||||||||||
| Yield / <br><br> Rate | Average <br><br> Balance | Yield / <br><br> Rate | Average <br><br> Balance | Yield / <br><br> Rate | Average <br><br> Balance | Yield / <br><br> Rate | Average <br><br> Balance | Yield / <br><br> Rate | |||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Loans, net of unearned income (1) | |||||||||||||||||||||
| Taxable | 10,165,470 | 4.38 | % | $ | 9,621,484 | 4.29 | % | $ | 9,032,914 | 4.40 | % | $ | 8,653,632 | 4.40 | % | $ | 8,618,139 | 4.43 | % | ||
| Tax-exempt (2) | 23,616 | 4.09 | 25,195 | 4.08 | 26,148 | 4.07 | 26,542 | 4.05 | 26,854 | 4.05 | |||||||||||
| Total loans, net of unearned income | 10,189,086 | 4.38 | 9,646,679 | 4.29 | 9,059,062 | 4.40 | 8,680,174 | 4.39 | 8,644,993 | 4.43 | |||||||||||
| Mortgage loans held for sale | 471 | 3.41 | 927 | 1.73 | 998 | 1.99 | 7,050 | 1.69 | 11,470 | 1.92 | |||||||||||
| Debt securities: | |||||||||||||||||||||
| Taxable | 1,775,425 | 2.37 | 1,518,572 | 2.17 | 1,134,378 | 2.38 | 969,715 | 2.70 | 936,863 | 2.70 | |||||||||||
| Tax-exempt (2) | 7,148 | 2.35 | 8,812 | 2.36 | 9,823 | 2.36 | 12,382 | 2.39 | 16,872 | 2.47 | |||||||||||
| Total securities (3) | 1,782,573 | 2.37 | 1,527,384 | 2.17 | 1,144,201 | 2.38 | 982,097 | 2.70 | 953,735 | 2.69 | |||||||||||
| Federal funds sold | 30,721 | 1.21 | 16,639 | 0.31 | 39,445 | 0.18 | 8,551 | 0.19 | 8,224 | 0.20 | |||||||||||
| Restricted equity securities | 7,724 | 3.74 | 7,371 | 3.70 | 873 | 3.18 | - | - | - | - | |||||||||||
| Interest-bearing balances with banks | 2,332,412 | 0.80 | 3,637,882 | 0.20 | 4,561,662 | 0.16 | 3,761,652 | 0.16 | 2,790,524 | 0.12 | |||||||||||
| Total interest-earning assets | 14,342,987 | 3.54 | $ | 14,836,882 | 3.06 | $ | 14,806,241 | 2.92 | $ | 13,439,524 | 3.08 | $ | 12,408,946 | 3.32 | |||||||
| Non-interest-earning assets: | |||||||||||||||||||||
| Cash and due from banks | 204,994 | 74,534 | 79,293 | 90,034 | 85,478 | ||||||||||||||||
| Net premises and equipment | 60,673 | 61,209 | 61,837 | 62,845 | 61,240 | ||||||||||||||||
| Allowance for credit losses, accrued interest and other assets | 297,893 | 313,560 | 303,300 | 315,178 | 320,729 | ||||||||||||||||
| Total assets | 14,906,547 | $ | 15,286,185 | $ | 15,250,671 | $ | 13,907,581 | $ | 12,876,393 | ||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||
| Checking | 1,699,602 | 0.21 | % | $ | 1,594,645 | 0.20 | % | $ | 1,499,918 | 0.19 | % | $ | 1,431,420 | 0.19 | % | $ | 1,350,098 | 0.19 | % | ||
| Savings | 134,469 | 0.18 | 135,545 | 0.17 | 123,179 | 0.18 | 122,579 | 0.17 | 104,283 | 0.18 | |||||||||||
| Money market | 4,617,021 | 0.33 | 4,985,224 | 0.26 | 5,100,192 | 0.26 | 5,328,291 | 0.26 | 5,321,338 | 0.26 | |||||||||||
| Time deposits | 766,225 | 0.86 | 792,930 | 0.91 | 807,342 | 1.05 | 806,108 | 1.15 | 801,928 | 1.33 | |||||||||||
| Total interest-bearing deposits | 7,217,317 | 0.36 | 7,508,344 | 0.31 | 7,530,631 | 0.33 | 7,688,398 | 0.34 | 7,577,647 | 0.36 | |||||||||||
| Federal funds purchased | 1,550,805 | 0.79 | 1,620,012 | 0.23 | 1,608,349 | 0.21 | 1,205,327 | 0.21 | 970,708 | 0.22 | |||||||||||
| Other borrowings | 64,713 | 4.28 | 64,708 | 4.28 | 64,704 | 4.23 | 64,694 | 4.23 | 64,694 | 4.28 | |||||||||||
| Total interest-bearing liabilities | 8,832,835 | 0.46 | % | $ | 9,193,064 | 0.33 | % | $ | 9,203,684 | 0.34 | % | $ | 8,958,419 | 0.35 | % | $ | 8,613,049 | 0.37 | % | ||
| Non-interest-bearing liabilities: | |||||||||||||||||||||
| Non-interest-bearing demand deposits | 4,824,521 | 4,870,701 | 4,856,243 | 3,800,972 | 3,154,605 | ||||||||||||||||
| Other liabilities | 58,784 | 59,619 | 54,134 | 48,060 | 52,027 | ||||||||||||||||
| Stockholders' equity | 1,205,551 | 1,156,186 | 1,121,578 | 1,078,987 | 1,038,012 | ||||||||||||||||
| Accumulated other comprehensive (loss) income | (15,144 | ) | 6,615 | 15,032 | 21,143 | 18,700 | |||||||||||||||
| Total liabilities and stockholders' equity | 14,906,547 | $ | 15,286,185 | $ | 15,250,671 | $ | 13,907,581 | $ | 12,876,393 | ||||||||||||
| Net interest spread | 3.08 | % | 2.77 | % | 2.58 | % | 2.73 | % | 2.95 | % | |||||||||||
| Net interest margin | 3.26 | % | 2.89 | % | 2.71 | % | 2.85 | % | 3.06 | % | |||||||||||
| (1) | Average loans include nonaccrual loans in all periods. Loan fees of 6,823, 7,686, 7,203, 9,915 and 10,400 are included in interest income in the second quarter of 2022, first quarter<br> of 2022, the fourth quarter of 2021, the third quarter of 2021, and the second quarter of 2021, respectively. | ||||||||||||||||||||
| (2) | Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. | ||||||||||||||||||||
| (3) | Unrealized gains on debt securities of 8,245, 18,974, 26,709, 24,547 and 22,027 for the second quarter of 2022, first quarter of 2022, fourth quarter of 2021, third quarter of 2021,<br> and second quarter of 2021, respectively, are excluded from the yield calculation. |
All values are in US Dollars.
Contacts
ServisFirst Bank
Davis Mange, \(205\) 949-3420
dmange@servisfirstbank.com
Exhibit 99.2
| Selected Financial Data (in thousands except number of employees) | 6/30/2022 | 3/31/2022 | 6/30/2021 | Commentary | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net interest margin | 3.26 | % | 2.89 | % | 3.06 | % | ||||
| Adjusted net interest margin (excluding PPP loan balances and PPP interest income/fees) | 3.19 | % | 2.79 | % | 2.96 | % | ||||
| PPP average loan balances | $ | 58,162 | $ | 166,399 | $ | 859,949 | ||||
| PPP interest income/fees | $ | 2,919 | $ | 4,868 | $ | 10,186 | ||||
| Scheduled CD maturities for subsequent quarter | $ | 196,280 | $ | 196,528 | $ | 163,476 | ||||
| Average rate scheduled CD maturities for subsequent quarter | 0.62 | % | 0.65 | % | 1.11 | % | ||||
| Cost of total deposits, Qtr-End | 0.22 | % | 0.19 | % | 0.24 | % | ||||
| Cost of interest-bearing DDAs, Qtr-End | 0.31 | % | 0.24 | % | 0.24 | % | ||||
| Cost of interest-bearing deposits, Qtr-End | 0.37 | % | 0.32 | % | 0.34 | % | ||||
| Noninterest bearing DDA balances, Qtr-End | $ | 4,686,511 | $ | 4,889,495 | $ | 3,296,429 | ||||
| PPP outstanding loan balance, Qtr-End | $ | 22,973 | $ | 107,565 | $ | 595,017 | ||||
| PPP loan fees earned QTD | $ | 2,773 | $ | 4,453 | $ | 8,042 | ||||
| PPP unaccreted loan fees | $ | 513 | $ | 3,086 | $ | 16,821 | ||||
| PPP loan forgiveness QTD | $ | 84,592 | $ | 122,619 | $ | 406,980 | ||||
| Reserve for unfunded commitments, Qtr-End | $ | 1,600 | $ | 1,600 | $ | 3,300 | ||||
| Credit card spend QTD | $ | 263,888 | $ | 226,227 | $ | 197,420 | ||||
| Credit card net income QTD | $ | 2,672 | $ | 2,372 | $ | 1,911 | ||||
| Merchant services fees QTD | $ | 471 | $ | 336 | $ | 289 | ||||
| Mortgage banking income QTD | $ | 614 | $ | 526 | $ | 2,699 | ||||
| FDIC insurance QTD | $ | 960 | $ | 945 | $ | 1,200 | ||||
| Write down tax credit investment QTD | $ | 2,499 | $ | 2,499 | $ | 86 | Write down of tax credit investment increased non-interest expenses by $2.5 million during the 2nd quarter 2022 but was offset by an income tax reduction of $3.1<br> million | |||
| Salaries & employee benefits QTD | $ | 20,734 | $ | 18,301 | $ | 16,887 | We accrued an additional $1.8 million in our annual incentive program during the 2nd Qtr of 2022 based on loan growth and entry into new regions | |||
| Third party processing and other services QTD | $ | 6,345 | $ | 5,605 | $ | 3,946 | Recorded additional processing expenses of $243,000 during 2nd Qtr of 2022 and $503,000 YTD related to our conversion to a new core processor | |||
| Equipment and occupancy expense QTD | $ | 2,983 | $ | 2,933 | $ | 2,844 | ||||
| Business meals QTD | $ | 293 | $ | 429 | $ | 170 | ||||
| Earnings retention YTD | 79 | % | 78 | % | 79 | % | ||||
| Number of employees | 550 | 519 | 534 | |||||||
| QTD tax rate | 18.83 | % | 18.96 | % | 21.0 | % | ||||
| YTD tax rate | 18.89 | % | 18.96 | % | 20.6 | % |
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
This supplemental financial data contains a measure of adjusted net interest margin, which is a non-GAAP measure. We provide net interest margin adjusted to exclude PPP balances, PPP interest income, and PPP fees over the quarter. We believe this non-GAAP financial measure provides 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 this non-GAAP financial measure has a number of limitations. As such, you should not view this disclosure as a substitute for results determined in accordance with GAAP, and it is 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 measure as of and for the comparative periods presented in conjunction with this press release. Dollars are in thousands.
| At June 30, 2022 | At March 31, 2022 | At June 30, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Net Interest Margin - GAAP | 3.26 | % | 2.89 | % | 3.06 | % | |||
| Net Interest Income - GAAP | $ | 116,368 | $ | 105,722 | $ | 94,668 | |||
| Adjustments: | |||||||||
| PPP Interest Income & Fee Accretion | (2,919 | ) | (4,868 | ) | (10,186 | ) | |||
| Adjusted Net Interest Income - non-GAAP | 113,449 | 100,854 | 84,482 | ||||||
| Average interest-earning assets | 14,342,987 | 14,836,882 | 12,408,946 | ||||||
| Adjustments: | |||||||||
| Average PPP loan balances | (58,162 | ) | (166,399 | ) | (859,949 | ) | |||
| Adjusted average interest-earning assets | $ | 14,284,825 | $ | 14,670,483 | $ | 11,548,997 | |||
| Adjusted Net Interest Margin - non-GAAP | 3.19 | % | 2.79 | % | 2.96 | % |