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) | April 17, 2023 | |
|---|---|---|
| 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 April 17, 2023, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended March 31, 2023. 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 April 17, 2023, ServisFirst hosted a call to review 2023 first quarter earnings. The supplemental presentation and data table are attached as Exhibit 99.2 and Exhibit 99.3 respectively and are 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<br> Release dated April 17, 2023 |
| 99.2 | Supplemental presentation April 17, 2023 |
| 99.3 | Supplemental data table April 17, 2023 |
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. | ||
|---|---|---|
| By: | /s/ Thomas A. Broughton, III | |
| Dated: April 17, 2023 | Thomas A. Broughton, III | |
| Chairman, President and Chief Executive Officer |
Exhibit 99.1
ServisFirst Bancshares, Inc. Announces Results For First Quarter of 2023
BIRMINGHAM, Ala.--(BUSINESS WIRE)--April 17, 2023--ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended March 31, 2023.
First Quarter 2023 Highlights:
- Diluted earnings per share were $1.06 for the first quarter of 2023, unchanged from the first quarter of 2022. When adjusting for income on Paycheck Protection Program (“PPP”) loans in 2022, diluted earnings per share increased 7% over the first quarter of 2022. ^(1)^
- An increase of 23% in new accounts opened year-over-year.
- Deposit balances grew $69 million during the first quarter of 2023 while the deposit pipeline increased by $244 million, or 51%.
- Available liquidity sources totaled $8.4 billion as of March 31, 2023.
- Return on assets increased from 1.53% to 1.63% year-over-year.
- Book value per share grew from $21.61 to $24.63, or 14%, year-over-year.
- No brokered deposits or FHLB borrowings as of March 31, 2023.
- Bank level Tier 1 capital to average assets increased from 8.08% to 9.91% year-over-year.
- Industry-leading credit quality measures.
Tom Broughton, Chairman, President and CEO, said, “Our business model has proven itself over the past 18 years and we continue to attract new customers with a 23% increase in new accounts opened year-over-year due to our financial stability, our commitment to customer service, and our team of responsive bankers.”
Bud Foshee, CFO, said, “We are pleased with a very good first quarter of growth in profitability, liquidity, and capital while maintaining pristine credit quality.”
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures
| FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except share and per share amounts) | |||||||||||||
| Period Ending March 31, 2023 | Period Ending December 31, 2022 | % Change From Period Ending December 31, 2022 to Period Ending March 31, 2023 | Period Ending March 31, 2022 | % Change From Period Ending March 31, 2022 to Period Ending March 31, 2023 | |||||||||
| QUARTERLY OPERATING RESULTS | |||||||||||||
| Net Income | $ | 57,971 | $ | 67,724 | (14) | % | $ | 57,613 | 1 | % | |||
| Net Income Available to Common Stockholders | $ | 57,971 | $ | 67,693 | (14) | % | $ | 57,613 | 1 | % | |||
| Diluted Earnings Per Share | $ | 1.06 | $ | 1.24 | (15) | % | $ | 1.06 | - | % | |||
| Return on Average Assets | 1.63 | % | 1.89 | % | 1.53 | % | |||||||
| Return on Average Common Stockholders' Equity | 17.83 | % | 21.27 | % | 20.09 | % | |||||||
| Average Diluted Shares Outstanding | 54,534,482 | 54,537,685 | 54,522,042 | ||||||||||
| BALANCE SHEET | |||||||||||||
| Total Assets | $ | 14,566,559 | $ | 14,595,753 | - | % | $ | 15,339,419 | (5) | % | |||
| Loans | 11,629,802 | 11,687,968 | - | % | 9,898,957 | 17 | % | ||||||
| Non-interest-bearing Demand Deposits | 2,898,736 | 3,321,347 | (13) | % | 4,889,495 | (41) | % | ||||||
| Total Deposits | 11,615,317 | 11,546,805 | 1 | % | 12,408,755 | (6) | % | ||||||
| Stockholders' Equity | 1,339,817 | 1,297,896 | 3 | % | 1,172,975 | 14 | % |
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $58.0 million for the quarter ended March 31, 2023, compared to net income and net income available to common stockholders of $57.6 million for the same quarter in 2022. Basic and diluted earnings per common share were $1.07 and $1.06, respectively, for the first quarter of 2023, compared to $1.06 for both in the first quarter of 2022.
Annualized return on average assets was 1.63% and annualized return on average common stockholders’ equity was 17.83% for the first quarter of 2023, compared to 1.53% and 20.09%, respectively, for the first quarter of 2022.
Net interest income was $108.3 million for the first quarter of 2023, compared to $122.4 million for the fourth quarter of 2022 and $105.7 million for the first quarter of 2022. The net interest margin in the first quarter of 2023 was 3.15% compared to 3.52% in the fourth quarter of 2022 and 2.89% in the first quarter of 2022. Loan yields were 5.70% during the first quarter of 2023 compared to 5.32% during the fourth quarter of 2022 and 4.29% during the first quarter of 2022. Investment yields were 2.54% during the first quarter of 2023, compared to 2.49% during the fourth quarter of 2022 and 2.17% during the first quarter of 2022. Average interest-bearing deposit rates were 2.68% during the first quarter of 2023, compared to 1.70% during the fourth quarter of 2022 and 0.31% during the first quarter of 2022. Average federal funds purchased rates were 4.67% during the first quarter of 2023, compared to 3.75% during the fourth quarter of 2022 and 0.23% during the first quarter of 2022.
Average loans for the first quarter of 2023 were $11.65 billion, an increase of $166.4 million, or 5.9% annualized, over average loans of $11.49 billion for the fourth quarter of 2022, and an increase of $2.00 billion, or 20.8%, over average loans of $9.65 billion for the first quarter of 2022.
Average total deposits for the first quarter of 2023 were $11.50 billion, an increase of $118.9 million, or 4.2%, annualized, over average total deposits of $11.39 billion for the fourth quarter of 2022, and a decrease of $875.0 million, or 7.1%, over average total deposits of $12.38 billion for the first quarter of 2022.
Non-performing assets to total assets were 0.12% for the first quarter of 2023, unchanged compared to 0.12% for the fourth quarter of 2022, and a decrease of two basis points compared to 0.14% for the first quarter of 2022. Annualized net charge-offs to average loans were 0.05% for the first quarter of 2023, compared to 0.06% and 0.11% for the fourth quarter of 2022 and first quarter of 2022, respectively. The allowance for credit losses as a percentage of total loans at March 31, 2023, December 31, 2022 and March 31, 2022, was 1.28%, 1.25%, and 1.21%, respectively. We recorded a $4.2 million provision for credit losses in the first quarter of 2023 compared to $7.1 million in the fourth quarter of 2022, and $5.4 million in the first quarter of 2022.
Non-interest income decreased $1.6 million, or 20.5%, to $6.3 million for the first quarter of 2023 from $7.9 million in the first quarter of 2022, and decreased $645,000, or 9.3%, on a linked quarter basis. Service charges on deposit accounts decreased $208,000, or 9.7%, to $1.9 million from the first quarter of 2022 to the first quarter of 2023, and increased $68,000, or 3.6%, on a linked quarter basis. Mortgage banking revenue decreased $84,000, or 16.0%, to $442,000 from the first quarter of 2022 to the first quarter of 2023, and decreased $72,000, or 14.0%, on a linked quarter basis. Net credit card revenue decreased $683,000, or 28.8%, to $1.7 million during the first quarter of 2023, compared to $2.4 million during the first quarter of 2022, and decreased $572,000, or 25.3%, on a linked quarter basis. The number of credit card accounts increased approximately 8.2% and the aggregate amount of spend on all credit card accounts increased 14.7% during the first quarter of 2023 compared to the first quarter of 2022. Cash surrender value life insurance increased $13,000, or 0.8%, to $1.6 million during the first quarter of 2023, compared to $1.6 million during the first quarter of 2022, and increased $21,000, or 1.3%, on a linked quarter basis. Other operating income for the first quarter of 2023 decreased $4.0 million, or 86.3%, to $635,000 from $4.6 million in the first quarter of 2022, and decreased $90,000, or 12.4%, on a linked quarter basis. Other income in the first quarter of 2022 included $3.4 million of income on our interest rate cap. We did not recognize any income on the cap during the first quarter of 2023 and $162,000 during the fourth quarter of 2022. Merchant service revenue increased by $118,000, or 35.2%, to $455,000, during the first quarter of 2023, from $336,000 during the first quarter of 2022, and decreased $35,000, or 7.2%, on a linked quarter basis.
Non-interest expense for the first quarter of 2023 increased $2.4 million, or 6.6%, to $39.7 million from $37.2 million in the first quarter of 2022, and increased $1.6 million, or 4.1%, on a linked quarter basis. Salary and benefit expense for the first quarter of 2023 increased $765,000, or 4.2%, to $19.1 million from $18.3 million in the first quarter of 2022, and decreased $164,000, or 0.9%, on a linked quarter basis. The number of FTE employees increased by 62 to 573 at March 31, 2023 compared to 511 at March 31, 2022, and increased by 2 from the end of the fourth quarter of 2022. Equipment and occupancy expense increased $502,000, or 17.1%, to $3.4 million in the first quarter of 2023, from $2.9 million in the first quarter of 2022, and increased $172,000, or 5.3% on a linked-quarter basis. Third party processing and other services expense increased $1.7 million, or 30.0%, to $7.3 million in the first quarter of 2023, from $5.6 million in the first quarter of 2022, and decreased $886,000, or 10.8%, on a linked-quarter basis. The increase year-over-year in third party processing also includes Federal Reserve Bank charges related to correspondent bank settlement activities. Professional services expense increased $662,000, or 66.7%, to $1.7 million in the first quarter of 2023, from $992,000 in the first quarter of 2022, and increased $732,000, or 79.4%, on a linked quarter basis. FDIC and other regulatory assessments increased $385,000, or 34.0%, to $1.5 million in the first quarter of 2023, from $1.1 million in the first quarter of 2022, and increased $206,000, or 15.7%, on a linked quarter basis. Other operating expenses for the first quarter of 2023 decreased $1.6 million, or 18.8%, to $6.7 million from $8.3 million in the first quarter of 2022, and increased $1.7 million on a linked-quarter basis. The efficiency ratio was 34.60% during the first quarter of 2023 compared to 32.74% during the first quarter of 2022 and compared to 29.45% during the fourth quarter of 2022.
Income tax expense decreased $687,000, or 5.1%, to $12.8 million in the first quarter of 2023, compared to $13.5 million in the first quarter of 2022. Our effective tax rate was 18.07% for the first quarter of 2023 compared to 18.96% for the first quarter of 2022. We recognized an aggregate of $3.9 million in credits during the first quarter of 2023 related to investments in tax credit partnerships, compared to an aggregate of $3.3 million in credits during the first quarter of 2022. 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 first quarter of 2023 and 2022 of $1.1 million and $572,000, respectively.
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
We originated over 7,400 PPP loans with an aggregate balance of approximately $1.5 billion during the COVID-19 pandemic. At March 31, 2022, we had outstanding PPP loans of $107.6 million. Financial measures in this press release that are presented adjusted for our PPP activities are net income available to common stockholders and diluted earnings per share. These financial measures exclude the impact of PPP loans, net of tax, and are considered non-GAAP financial measures. 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.
| Three Months Ended <br><br> March 31, 2022 | |||||
|---|---|---|---|---|---|
| Net income - GAAP | $ | 57,613 | |||
| Adjustments: | |||||
| PPP loan income | (4,869 | ) | |||
| Tax on adjustment | 1,222 | ||||
| Adjusted net income - non-GAAP | $ | 53,966 | |||
| Diluted earnings per share - GAAP | $ | 1.06 | |||
| Adjustments: | |||||
| PPP loan income | (0.09 | ) | |||
| Tax on adjustment | 0.02 | ||||
| Adjusted diluted earnings per share - non-GAAP | $ | 0.99 |
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 and Asheville, 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, interest rate spread relationships and inflation; 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; 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 credit worthiness 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; the effect of data breaches, cyberattacks or other data security issues; 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.
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) | |||||||||||||||
| 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | |||||||||||
| CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||
| Interest income | $ | 181,322 | $ | 170,273 | $ | 149,299 | $ | 126,555 | $ | 113,188 | |||||
| Interest expense | 73,021 | 47,889 | 22,881 | 10,187 | 7,466 | ||||||||||
| Net interest income | 108,301 | 122,384 | 126,418 | 116,368 | 105,722 | ||||||||||
| Provision for credit losses | 4,197 | 7,135 | 15,603 | 9,507 | 5,362 | ||||||||||
| Net interest income after provision for credit losses | 104,104 | 115,249 | 110,815 | 106,861 | 100,360 | ||||||||||
| Non-interest income | 6,321 | 6,966 | 8,939 | 9,506 | 7,948 | ||||||||||
| Non-interest expense | 39,664 | 38,092 | 42,685 | 39,821 | 37,218 | ||||||||||
| Income before income tax | 70,761 | 84,123 | 77,069 | 76,546 | 71,090 | ||||||||||
| Provision for income tax | 12,790 | 16,399 | 13,038 | 14,410 | 13,477 | ||||||||||
| Net income | 57,971 | 67,724 | 64,031 | 62,136 | 57,613 | ||||||||||
| Preferred stock dividends | - | 31 | - | 31 | - | ||||||||||
| Net income available to common stockholders | $ | 57,971 | $ | 67,693 | $ | 64,031 | $ | 62,105 | $ | 57,613 | |||||
| Earnings per share - basic | $ | 1.07 | $ | 1.25 | $ | 1.18 | $ | 1.14 | $ | 1.06 | |||||
| Earnings per share - diluted | $ | 1.06 | $ | 1.24 | $ | 1.17 | $ | 1.14 | $ | 1.06 | |||||
| Average diluted shares outstanding | 54,534,482 | 54,537,716 | 54,528,554 | 54,532,385 | 54,522,042 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 14,566,559 | $ | 14,595,753 | $ | 13,890,030 | $ | 14,494,317 | $ | 15,339,419 | |||||
| Loans | 11,629,802 | 11,687,968 | 11,278,614 | 10,617,320 | 9,898,957 | ||||||||||
| Debt securities | 1,646,937 | 1,678,936 | 1,714,603 | 1,790,218 | 1,617,977 | ||||||||||
| Non-interest-bearing demand deposits | 2,898,736 | 3,321,347 | 3,661,936 | 4,686,511 | 4,889,495 | ||||||||||
| Total deposits | 11,615,317 | 11,546,805 | 11,051,915 | 11,772,337 | 12,408,755 | ||||||||||
| Borrowings | 65,417 | 64,726 | 64,721 | 64,716 | 64,711 | ||||||||||
| Stockholders' equity | 1,339,817 | 1,297,896 | 1,242,589 | 1,211,918 | 1,172,975 | ||||||||||
| Shares outstanding | 54,398,025 | 54,326,527 | 54,324,007 | 54,306,875 | 54,282,132 | ||||||||||
| Book value per share | $ | 24.63 | $ | 23.89 | $ | 22.87 | $ | 22.32 | $ | 21.61 | |||||
| Tangible book value per share (1) | $ | 24.38 | $ | 23.64 | $ | 22.62 | $ | 22.07 | $ | 21.36 | |||||
| SELECTED FINANCIAL RATIOS (Annualized) | |||||||||||||||
| Net interest margin | 3.15 | % | 3.52 | % | 3.64 | % | 3.26 | % | 2.89 | % | |||||
| Return on average assets | 1.63 | % | 1.89 | % | 1.77 | % | 1.67 | % | 1.53 | % | |||||
| Return on average common stockholders' equity | 17.83 | % | 21.27 | % | 20.49 | % | 20.93 | % | 20.09 | % | |||||
| Efficiency ratio | 34.60 | % | 29.45 | % | 31.54 | % | 31.64 | % | 32.74 | % | |||||
| Non-interest expense to average earning assets | 1.15 | % | 1.10 | % | 1.23 | % | 1.11 | % | 1.02 | % | |||||
| CAPITAL RATIOS (2) | |||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 10.01 | % | 9.54 | % | 9.37 | % | 9.59 | % | 9.86 | % | |||||
| Tier 1 capital to risk-weighted assets | 10.02 | % | 9.54 | % | 9.37 | % | 9.59 | % | 9.87 | % | |||||
| Total capital to risk-weighted assets | 11.54 | % | 11.06 | % | 10.91 | % | 11.12 | % | 11.43 | % | |||||
| Tier 1 capital to average assets | 9.49 | % | 9.29 | % | 8.84 | % | 8.19 | % | 7.67 | % | |||||
| Tangible common equity to total tangible assets (1) | 9.11 | % | 8.81 | % | 8.86 | % | 8.28 | % | 7.56 | % | |||||
| (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. |
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||
| March 31, 2023 | March 31, 2022 | % Change | |||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 139,175 | $ | 103,439 | 35 | % | |||
| Interest-bearing balances due from depository institutions | 725,318 | 3,315,312 | (78 | ) | % | ||||
| Federal funds sold | 6,478 | 24,638 | (74 | ) | % | ||||
| 870,971 | 3,443,389 | (75 | ) | % | |||||
| Available for sale debt securities, at fair value | 624,948 | 784,673 | (20 | ) | % | ||||
| Held to maturity debt securities (fair value of 937,960 at March 31, 2023 and 799,347 at March 31, 2022) | 1,021,989 | 833,304 | 23 | % | |||||
| Restricted equity securities | 7,307 | 7,734 | (6 | ) | % | ||||
| Mortgage loans held for sale | 1,651 | 403 | 310 | % | |||||
| Loans | 11,629,802 | 9,898,957 | 17 | % | |||||
| Less allowance for credit losses | (148,965 | ) | (119,463 | ) | 25 | % | |||
| 11,480,837 | 9,779,494 | 17 | % | ||||||
| Premises and equipment, net | 60,093 | 59,908 | - | % | |||||
| Goodwill and other identifiable intangible assets | 13,615 | 13,615 | - | % | |||||
| Other assets | 485,148 | 416,899 | 16 | % | |||||
| $ | 14,566,559 | $ | 15,339,419 | (5 | ) | % | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities: | |||||||||
| Deposits: | |||||||||
| $ | 2,898,736 | $ | 4,889,495 | (41 | ) | % | |||
| 8,716,581 | 7,519,260 | 16 | % | ||||||
| 11,615,317 | 12,408,755 | (6 | ) | % | |||||
| Federal funds purchased | 1,480,160 | 1,639,238 | (10 | ) | % | ||||
| Other borrowings | 65,417 | 64,711 | 1 | % | |||||
| Other liabilities | 65,848 | 53,740 | 23 | % | |||||
| 13,226,742 | 14,166,444 | (7 | ) | % | |||||
| Stockholders' equity: | |||||||||
| - | - | ||||||||
| 54 | 54 | - | % | ||||||
| 229,631 | 227,127 | 1 | % | ||||||
| 1,152,681 | 956,169 | 21 | % | ||||||
| (43,049 | ) | (10,875 | ) | 296 | % | ||||
| 1,339,317 | 1,172,475 | 14 | % | ||||||
| 500 | 500 | - | % | ||||||
| 1,339,817 | 1,172,975 | 14 | % | ||||||
| $ | 14,566,559 | $ | 15,339,419 | (5 | ) | % |
All values are in US Dollars.
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Interest income: | |||||||||||
| Interest and fees on loans | $ | 163,732 | $ | 103,105 | |||||||
| Taxable securities | 10,895 | 8,223 | |||||||||
| Nontaxable securities | 21 | 43 | |||||||||
| Federal funds sold | 614 | 13 | |||||||||
| Other interest and dividends | 6,060 | 1,804 | |||||||||
| Total interest income | 181,322 | 113,188 | |||||||||
| Interest expense: | |||||||||||
| Deposits | 55,713 | 5,843 | |||||||||
| Borrowed funds | 17,308 | 1,623 | |||||||||
| Total interest expense | 73,021 | 7,466 | |||||||||
| Net interest income | 108,301 | 105,722 | |||||||||
| Provision for credit losses | 4,197 | 5,362 | |||||||||
| Net interest income after provision for credit losses | 104,104 | 100,360 | |||||||||
| Non-interest income: | |||||||||||
| Service charges on deposit accounts | 1,934 | 2,142 | |||||||||
| Mortgage banking | 442 | 526 | |||||||||
| Credit card income | 1,689 | 2,372 | |||||||||
| Securities losses | - | (3,335 | ) | ||||||||
| Increase in cash surrender value life insurance | 1,621 | 1,608 | |||||||||
| Other operating income | 635 | 4,635 | |||||||||
| Total non-interest income | 6,321 | 7,948 | |||||||||
| Non-interest expense: | |||||||||||
| Salaries and employee benefits | 19,066 | 18,301 | |||||||||
| Equipment and occupancy expense | 3,435 | 2,933 | |||||||||
| Third party processing and other services | 7,284 | 5,605 | |||||||||
| Professional services | 1,654 | 992 | |||||||||
| FDIC and other regulatory assessments | 1,517 | 1,132 | |||||||||
| Other real estate owned expense | 6 | 3 | |||||||||
| Other operating expense | 6,702 | 8,252 | |||||||||
| Total non-interest expense | 39,664 | 37,218 | |||||||||
| Income before income tax | 70,761 | 71,090 | |||||||||
| Provision for income tax | 12,790 | 13,477 | |||||||||
| Net income | 57,971 | 57,613 | |||||||||
| Net income available to common stockholders | $ | 57,971 | $ | 57,613 | |||||||
| Basic earnings per common share | $ | 1.07 | $ | 1.06 | |||||||
| Diluted earnings per common share | $ | 1.06 | $ | 1.06 | |||||||
| LOANS BY TYPE (UNAUDITED) | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (In thousands) | |||||||||||
| 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | |||||||
| Commercial, financial and agricultural | $ | 3,081,926 | $ | 3,145,317 | $ | 3,104,155 | $ | 2,966,040 | $ | 2,955,927 | |
| Real estate - construction | 1,469,670 | 1,532,388 | 1,433,698 | 1,383,155 | 1,164,690 | ||||||
| Real estate - mortgage: | |||||||||||
| Owner-occupied commercial | 2,243,436 | 2,199,280 | 2,145,621 | 2,026,807 | 1,919,811 | ||||||
| 1-4 family mortgage | 1,138,645 | 1,146,831 | 1,089,826 | 1,015,698 | 926,697 | ||||||
| Other mortgage | 3,624,071 | 3,597,750 | 3,438,762 | 3,160,510 | 2,869,158 | ||||||
| Subtotal: Real estate - mortgage | 7,006,152 | 6,943,861 | 6,674,209 | 6,203,015 | 5,715,666 | ||||||
| Consumer | 72,054 | 66,402 | 66,552 | 65,110 | 62,674 | ||||||
| Total loans | $ | 11,629,802 | $ | 11,687,968 | $ | 11,278,614 | $ | 10,617,320 | $ | 9,898,957 |
| SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||||||||||
| 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | |||||||||||||
| Allowance for credit losses: | |||||||||||||||||
| Beginning balance | $ | 146,297 | $ | 140,967 | $ | 128,387 | $ | 119,463 | $ | 116,660 | |||||||
| Loans charged off: | |||||||||||||||||
| Commercial financial and agricultural | 1,257 | 2,116 | 2,902 | 1,667 | 2,574 | ||||||||||||
| Real estate - construction | - | - | - | - | - | ||||||||||||
| Real estate - mortgage | 26 | - | 170 | 23 | 27 | ||||||||||||
| Consumer | 390 | 200 | 261 | 123 | 75 | ||||||||||||
| Total charge offs | 1,673 | 2,316 | 3,333 | 1,813 | 2,676 | ||||||||||||
| Recoveries: | |||||||||||||||||
| Commercial financial and agricultural | 128 | 393 | 297 | 1,217 | 105 | ||||||||||||
| Real estate - construction | 3 | - | - | - | - | ||||||||||||
| Real estate - mortgage | 1 | - | - | - | - | ||||||||||||
| Consumer | 11 | 118 | 12 | 13 | 12 | ||||||||||||
| Total recoveries | 143 | 511 | 309 | 1,230 | 117 | ||||||||||||
| Net charge-offs | 1,530 | 1,805 | 3,024 | 583 | 2,559 | ||||||||||||
| Provision for credit losses | 4,197 | 7,135 | 15,604 | 9,507 | 5,362 | ||||||||||||
| Ending balance | $ | 148,965 | $ | 146,297 | $ | 140,967 | $ | 128,387 | $ | 119,463 | |||||||
| Allowance for credit losses to total loans | 1.28 | % | 1.25 | % | 1.25 | % | 1.21 | % | 1.21 | % | |||||||
| Allowance for credit losses to total average | |||||||||||||||||
| loans | 1.30 | % | 1.27 | % | 1.29 | % | 1.26 | % | 1.24 | % | |||||||
| Net charge-offs to total average loans | 0.05 | % | 0.06 | % | 0.11 | % | 0.02 | % | 0.11 | % | |||||||
| Provision for credit losses to total average loans | 0.14 | % | 0.25 | % | 0.57 | % | 0.37 | % | 0.23 | % | |||||||
| Nonperforming assets: | |||||||||||||||||
| Nonaccrual loans | $ | 13,157 | $ | 12,450 | $ | 11,655 | $ | 10,540 | $ | 14,738 | |||||||
| Loans 90+ days past due and accruing | 4,683 | 5,391 | 4,803 | 4,991 | 4,686 | ||||||||||||
| Other real estate owned and repossessed assets | 248 | 248 | 1,245 | 1,207 | 1,989 | ||||||||||||
| Total | $ | 18,088 | $ | 18,089 | $ | 17,703 | $ | 16,738 | $ | 21,413 | |||||||
| Nonperforming loans to total loans | 0.15 | % | 0.15 | % | 0.15 | % | 0.15 | % | 0.20 | % | |||||||
| Nonperforming assets to total assets | 0.12 | % | 0.12 | % | 0.13 | % | 0.12 | % | 0.14 | % | |||||||
| Nonperforming assets to earning assets | 0.13 | % | 0.13 | % | 0.13 | % | 0.12 | % | 0.14 | % | |||||||
| Allowance for credit losses to nonaccrual loans | 1,132.24 | % | 1,175.08 | % | 1,209.50 | % | 1,218.05 | % | 826.19 | % | |||||||
| Restructured accruing loans | $ | 2,480 | $ | 236 | $ | 421 | $ | 426 | |||||||||
| Restructured accruing loans to total loans | 0.02 | % | - | % | - | % | - | % | |||||||||
| TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | ||||||||||||||
| Beginning balance: | $ | 2,041 | $ | 2,403 | $ | 2,482 | $ | 2,576 | |||||||||
| Additions | 444 | - | - | - | |||||||||||||
| Net (paydowns) / advances | (5) | (362) | (79) | (94) | |||||||||||||
| Charge-offs | - | - | - | - | |||||||||||||
| Transfer to OREO | - | - | - | - | |||||||||||||
| Ending balance | $ | 2,480 | $ | 2,041 | $ | 2,403 | $ | 2,482 |
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | ||||||||||||
| 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | ||||||||
| Interest income: | ||||||||||||
| Interest and fees on loans | $ | 163,732 | $ | 153,924 | $ | 131,375 | $ | 111,287 | $ | 103,105 | ||
| Taxable securities | 10,895 | 10,895 | 11,089 | 10,515 | 8,223 | |||||||
| Nontaxable securities | 21 | 27 | 30 | 37 | 43 | |||||||
| Federal funds sold | 614 | 818 | 632 | 93 | 13 | |||||||
| Other interest and dividends | 6,060 | 4,609 | 6,173 | 4,623 | 1,804 | |||||||
| Total interest income | 181,322 | 170,273 | 149,299 | 126,555 | 113,188 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 55,713 | 33,471 | 13,655 | 6,427 | 5,843 | |||||||
| Borrowed funds | 17,308 | 14,418 | 9,226 | 3,760 | 1,623 | |||||||
| Total interest expense | 73,021 | 47,889 | 22,881 | 10,187 | 7,466 | |||||||
| Net interest income | 108,301 | 122,384 | 126,418 | 116,368 | 105,722 | |||||||
| Provision for credit losses | 4,197 | 7,135 | 15,603 | 9,507 | 5,362 | |||||||
| Net interest income after provision for credit losses | 104,104 | 115,249 | 110,815 | 106,861 | 100,360 | |||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 1,934 | 1,866 | 1,892 | 2,133 | 2,142 | |||||||
| Mortgage banking | 442 | 514 | 784 | 614 | 526 | |||||||
| Credit card income | 1,689 | 2,261 | 2,612 | 2,672 | 2,372 | |||||||
| Securities losses | - | - | - | (2,833 | ) | (3,335 | ) | |||||
| Increase in cash surrender value life insurance | 1,621 | 1,600 | 1,637 | 1,633 | 1,608 | |||||||
| Other operating income | 635 | 725 | 2,014 | 5,287 | 4,635 | |||||||
| Total non-interest income | 6,321 | 6,966 | 8,939 | 9,506 | 7,948 | |||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 19,066 | 19,230 | 19,687 | 20,734 | 18,301 | |||||||
| Equipment and occupancy expense | 3,435 | 3,263 | 3,140 | 2,983 | 2,933 | |||||||
| Third party processing and other services | 7,284 | 8,170 | 7,213 | 6,345 | 5,605 | |||||||
| Professional services | 1,654 | 922 | 1,036 | 1,327 | 992 | |||||||
| FDIC and other regulatory assessments | 1,517 | 1,311 | 975 | 1,147 | 1,132 | |||||||
| Other real estate owned expense | 6 | 239 | 21 | 32 | 3 | |||||||
| Other operating expense | 6,702 | 4,957 | 10,613 | 7,253 | 8,252 | |||||||
| Total non-interest expense | 39,664 | 38,092 | 42,685 | 39,821 | 37,218 | |||||||
| Income before income tax | 70,761 | 84,123 | 77,069 | 76,546 | 71,090 | |||||||
| Provision for income tax | 12,790 | 16,399 | 13,038 | 14,410 | 13,477 | |||||||
| Net income | 57,971 | 67,724 | 64,031 | 62,136 | 57,613 | |||||||
| Dividends on preferred stock | - | 31 | - | 31 | - | |||||||
| Net income available to common stockholders | $ | 57,971 | $ | 67,693 | $ | 64,031 | $ | 62,105 | $ | 57,613 | ||
| Basic earnings per common share | $ | 1.07 | $ | 1.25 | $ | 1.18 | $ | 1.14 | $ | 1.06 | ||
| Diluted earnings per common share | $ | 1.06 | $ | 1.24 | $ | 1.17 | $ | 1.14 | $ | 1.06 |
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ON A FULLY TAXABLE-EQUIVALENT BASIS | ||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||
| 1st Quarter 2023 | 4th Quarter 2022 | 3rd Quarter 2022 | 2nd Quarter 2022 | 1st Quarter 2022 | ||||||||||||||||||
| Average Balance | Yield / Rate | Average Balance | Yield / Rate | Average Balance | Yield / Rate | Average Balance | Yield / Rate | Average Balance | Yield / Rate | |||||||||||||
| Assets: | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Loans, net of unearned income (1) | ||||||||||||||||||||||
| $ | 11,632,439 | 5.70 | % | $ | 11,465,538 | 5.32 | % | $ | 10,900,105 | 4.77 | % | $ | 10,165,470 | 4.38 | % | $ | 9,621,484 | 4.29 | % | |||
| 18,978 | 3.36 | 19,526 | 6.60 | 19,852 | 4.14 | 23,616 | 4.09 | 25,195 | 4.08 | |||||||||||||
| Total loans, net of unearned income | 11,651,417 | 5.70 | 11,485,064 | 5.32 | 10,919,957 | 4.77 | 10,189,086 | 4.38 | 9,646,679 | 4.29 | ||||||||||||
| Mortgage loans held for sale | 1,522 | 6.40 | 1,515 | 3.67 | 2,906 | 2.73 | 471 | 3.41 | 927 | 1.73 | ||||||||||||
| Debt securities: | ||||||||||||||||||||||
| 1,724,523 | 2.54 | 1,755,764 | 2.49 | 1,797,560 | 2.47 | 1,775,425 | 2.37 | 1,518,572 | 2.17 | |||||||||||||
| 3,781 | 2.43 | 4,863 | 2.39 | 5,863 | 2.39 | 7,148 | 2.35 | 8,812 | 2.36 | |||||||||||||
| Total securities (3) | 1,728,304 | 2.54 | 1,760,627 | 2.49 | 1,803,423 | 2.47 | 1,782,573 | 2.37 | 1,527,384 | 2.17 | ||||||||||||
| Federal funds sold | 50,526 | 4.93 | 82,656 | 3.93 | 102,028 | 2.46 | 30,721 | 1.21 | 16,639 | 0.31 | ||||||||||||
| Restricted equity securities | 9,919 | 7.69 | 7,724 | 7.35 | 7,724 | 3.65 | 7,724 | 3.74 | 7,371 | 3.70 | ||||||||||||
| Interest-bearing balances with banks | 510,021 | 4.67 | 458,115 | 3.83 | 945,142 | 2.56 | 2,332,412 | 0.80 | 3,637,882 | 0.20 | ||||||||||||
| Total interest-earning assets | $ | 13,951,709 | 5.27 | $ | 13,795,701 | 4.90 | $ | 13,781,180 | 4.30 | $ | 14,342,987 | 3.54 | $ | 14,836,882 | 3.06 | |||||||
| Non-interest-earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 106,448 | 113,823 | 256,607 | 204,994 | 74,534 | |||||||||||||||||
| Net premises and equipment | 60,617 | 60,323 | 60,155 | 60,673 | 61,209 | |||||||||||||||||
| Allowance for credit losses, accrued interest and other assets | 279,775 | 273,964 | 294,006 | 297,893 | 313,560 | |||||||||||||||||
| Total assets | $ | 14,398,549 | $ | 14,243,811 | $ | 14,391,948 | $ | 14,906,547 | $ | 15,286,185 | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||
| Checking | $ | 1,675,355 | 1.25 | % | $ | 1,763,622 | 0.73 | % | $ | 1,722,926 | 0.28 | % | $ | 1,699,602 | 0.21 | % | $ | 1,594,645 | 0.20 | % | ||
| Savings | 134,671 | 0.94 | 141,163 | 0.64 | 144,368 | 0.21 | 134,469 | 0.18 | 135,545 | 0.17 | ||||||||||||
| Money market | 5,756,642 | 3.17 | 5,047,133 | 2.07 | 4,444,583 | 0.89 | 4,617,021 | 0.33 | 4,985,224 | 0.26 | ||||||||||||
| Time deposits | 850,639 | 2.51 | 860,336 | 1.69 | 809,057 | 1.16 | 766,225 | 0.86 | 792,930 | 0.91 | ||||||||||||
| 8,417,307 | 2.68 | 7,812,254 | 1.70 | 7,120,934 | 0.76 | 7,217,317 | 0.36 | 7,508,344 | 0.31 | |||||||||||||
| Federal funds purchased | 1,389,217 | 4.67 | 1,453,445 | 3.75 | 1,493,444 | 2.27 | 1,550,805 | 0.79 | 1,620,012 | 0.23 | ||||||||||||
| Other borrowings | 114,726 | 4.61 | 64,726 | 4.23 | 65,406 | 4.19 | 64,713 | 4.28 | 64,708 | 4.28 | ||||||||||||
| Total interest-bearing liabilities | $ | 9,921,250 | 2.98 | % | $ | 9,330,425 | 2.04 | % | $ | 8,679,784 | 1.05 | % | $ | 8,832,835 | 0.46 | % | $ | 9,193,064 | 0.33 | % | ||
| Non-interest-bearing liabilities: | ||||||||||||||||||||||
| Non-interest-bearing demand deposits | 3,086,774 | 3,572,956 | 4,410,318 | 4,824,521 | 4,870,701 | |||||||||||||||||
| Other liabilities | 72,121 | 77,544 | 62,093 | 58,784 | 59,619 | |||||||||||||||||
| Stockholders' equity | 1,358,587 | 1,307,553 | 1,263,870 | 1,205,551 | 1,156,186 | |||||||||||||||||
| Accumulated other comprehensive (loss) income | (40,183) | (44,667) | (24,117) | (15,144) | 6,615 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 14,398,549 | $ | 14,243,811 | $ | 14,391,948 | $ | 14,906,547 | $ | 15,286,185 | ||||||||||||
| Net interest spread | 2.29 | % | 2.86 | % | 3.25 | % | 3.08 | % | 2.77 | % | ||||||||||||
| Net interest margin | 3.15 | % | 3.52 | % | 3.64 | % | 3.26 | % | 2.89 | % | ||||||||||||
| (1) | Average loans include nonaccrual loans in all periods. Loan fees of 3,263, 3,630, 3,849, 5,303, and 6,823 are included in interest income in the first quarter of 2023, fourth<br> quarter of 2022, third quarter of 2022, second quarter of 2022, and first 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) gains on debt securities of (59,738), (62,568), (34,688), (25,703), and 8,245 for the first quarter of 2023, fourth quarter of 2022, third quarter of 2022,<br> second quarter of 2022, and first quarter of 2022, 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
ServisFirst Bancshares, Inc. NYSE: SFBS April 2023
Forward-Looking Statements 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, including in light of the continuing high rate of domestic inflation; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic measures intended to curb rising inflation; 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. 2
Deposits overview 3 Business Segment New Accounts opened in 2023 Commercial 1724 Consumer 1097 Diversified deposit base Top Commercial Sectors by NAICS Industry Sectors: % of Total Deposits Commercial Banking 4.72% Offices of Lawyers 3.19% Commercial and Institutional Building Construction 2.25% Colleges, Universities, and Professional Schools 2.17% Wholesale Trade Agents and Brokers 2.11% Other Activities Related to Real Estate 2.03% Other General Government Support 1.84% Courts 1.77% Lessors of Residential Buildings and Dwellings 1.67% Trusts, Estates, and Agency Accounts 1.59% Executive Offices 1.40% Lessors of Nonresidential Buildings 1.32% New Car Dealers 1.27% Nonresidential Property Managers 1.27% Engineering Services 1.22% Trust, Fiduciary, and Custody Activities 1.14% New Single-Family Housing Construction 1.00% Religious Organizations 0.96% Private Households 0.90% Residential Property Managers 0.87% Administrative & General Management Consulting Services 0.84% Elementary and Secondary Schools 0.81% Offices of Other Holding Companies 0.79% Truck Trailer Manufacturing 0.79% Offices of Physicians (except Mental Health Specialists) 0.77% Nursing Care Facilities (Skilled Nursing Facilities) 0.70% Insurance Agencies and Brokerages 0.69% Plumbing, Heating, and Air-Conditioning Contractors 0.59% Iron and Steel Mills and Ferroalloy Manufacturing 0.59% Time frame Deposit Balance % of Deposits Accounts opened prior to 2020 $8,809,667 78% Business Segment % of Total Deposits Commercial 81% Consumer 19%
Deposits Overview Continued 4 Deposit Flows by Month Net deposit inflows (outflows) January February March Total Total deposits (162,851) 207,435 23,926 68,512 Correspondent Relationships DDA % Term MM % Total % Non-settlement 52,986 25% 263,362 35% 833,373 37% Settlement 159,657 75% 497,300 65% 1,406,236 63% Total 212,643 760,662 2,239,609 Select Financial Ratios – ServisFirst Bank and Peer Banks Source: S&P Global Market Intelligence ServisFirst Bank 2022Y Actual Avg Banks $10-50B 2022Y Actual Efficiency Ratio 30.50 53.39 Net Interest Margin 3.41 3.23 Return on Avg Assets 1.73 1.10 Return on Avg Equity 20.00 11.12 YOY Earnings Growth 21.07 3.00 We have opened 2,821 new accounts during the 1st quarter of 2023, a 23% increase over 1st quarter 2022 Stable fundings from Correspondent banking relationships anchored by substantial settlement accounts Total correspondent bank funding is 63% Settlement vs 37% Non-Settlement Deposit pipeline has increased by $244 million since year-end, or 51% Our business accounts are primarily from owner managed businesses .
Liquidity 5 ($ in 000's) Balance at 12/31/22 Balance at 3/31/23 AFS (unrealized losses Pre-tax) 62,567 63,461 HTM (unrealized loss pre-tax) 98,175 84,028 Total securities unrealized loss pre-tax 160,742 147,489 Net Unrealized loss on AFS after tax 45,348 46,015 Net unrealized loss on HTM after tax 73,533 62,937 Net unrealized loss on securities after tax 118,881 108,952 Capital Analysis CET1 Capital 1,326,035 1,428,872 net unrealized loss on securities after tax 118,881 108,952 CET1 Adjusted for U/R Gain/Loss 1,207,154 1,319,920 Liquidity Table Bond Portfolio Unrealized Gain/Loss Liquidity 12/31/2022 3/31/2023 ($ in 000's) Capacity Capacity Cash 700,528 870,971 AFS Securities, net of pledged 642,428 608,491 Total on balance sheet liquidity 1,342,956 1,479,462 FHLB fundings availability 3,100,000 3,100,000 Correspondent lines of credit availability 265,000 265,000 Brokered deposit availability 3,600,000 3,600,000 Total Available Liquidity 8,307,956 8,444,462
Capital, Investments, & Liquidity 6 Well-Capitalized ServisFirst has always been well-capitalized per regulatory standards. Our bank level Tier 1 leverage ratio increased year over year from 8.08% at 3/31/22 to 9.91% at 3/31/23, or 23%, while total capital increased $167 million. As of March 31, 2023, our bank level Tier 1 Capital Leverage Ratio was 9.91% and when adjusted for AFS unrealized losses, net of tax, it would be 9.59%. When adjusted for both AFS and HTM unrealized losses, net of tax, the Tier 1 Capital Leverage Ratio would be 9.15%. Credit ratings were affirmed on 3/31/2023 after annual review with Kroll Bond Rating Agency. Conservative & Stable Investment Portfolio Management Our investment portfolio is prudently managed, with a focus on short-term, high-quality, liquid securities. Our portfolio is approximately 11% of our assets, it serves as collateral for public deposits and provides liquidity for our bank. At March 31, 2023, our AFS securities totaled $625 million with a duration of 2.3 years and HTM securities totaled $938 million with a duration of 5.8 years. Available Sources of Liquidity Historically, our bank experiences minimal deposit growth during the first quarter. Year to date we have continued to fund our bank with core deposits and relationship banking. We have no borrowings with the FHLB. We have loans pledged to the FHLB providing approximately $1.4 billion in available funding. We have additional unpledged CRE loans that would provide approximately $1.7 billion in additional funding through the FHLB for a total of $3.1 billion. The bank also has $402.5 million in unpledged securities that can be pledged for liquidity. We have no brokered deposits but our policy allows for brokered deposits of up to 25% of total assets.
Credit Since the bank’s founding we have focused our calling efforts on owner operated C&I companies in the Southeast. Almost half of our loan portfolio is comprised of C&I and Owner Occupied Real Estate loans, which is among the highest in our industry. The average remaining maturity of our commercial loan portfolio is 3.5 years. Pristine Credit Quality Charge-offs for the first quarter were only $1.5MM or 5 basis points (bps) annualized. Non Performing Loans to Total Loans were 15bps which is near our historical lows. Past Dues to total loans were 17bps for the quarter. Loan loss reserve was 1.28% of total loans at quarter-end, up from 1.25% at year end. Commercial Real Estate Office Exposure represents less than $388 million, or 3.3% of total loans with an average loan size of $1.5MM and typically in suburban settings. Our largest office exposure credit is a $21 million suburban medical office building with a strong sponsor. Loans secured by multifamily properties total $1.36 billion or 11.7% of total loans. These projects are focused in the Sun Belt and the bank generally has 30% - 35% equity upfront. Single family residential development represents $258 million in exposure, or 2.2% of total loans. Lot and Land exposure represents $267 million in exposure, or 2.3% of total loans. AD&C loans as a percent of capital decreased to 93% at 3/31 down from 100% at year-end. 7
Exhibit 99.3
| Selected Financial Data (in thousands except<br><br> <br>number of employees) | 3/31/2023 | 12/31/2022 | 3/31/20222 |
|---|---|---|---|
| Scheduled CD maturities for subsequent quarter | $ 156,886 | $ <br> 311,315 | 196,528 |
| Average rate scheduled CD maturities for subsequent quarter | 2.38% | 1.70% | 0.65% |
| Loan rate (excludes fees), Qtr-End | 5.66% | 5.41% | 4.34% |
| Cost of total deposits, Qtr-End | 2.31% | 1.66% | 0.19% |
| Cost of interest-bearing DDAs, Qtr-End | 3.12% | 2.39% | 0.24% |
| Cost of interest-bearing deposits, Qtr-End | 3.08% | 2.32% | 0.32% |
| Noninterest bearing DDA balances, Qtr-End | $ <br> 2,898,736 | $ <br> 3,321,347 | 4,889,495 |
| Reserve for unfunded commitments, Qtr-End | $ <br> 575 | $ <br> 575 | 1,600 |
| Credit card spend QTD | $ <br> 259,592 | $ <br> 262,684 | 226,227 |
| Credit card net income QTD | $ <br> 1,689 | $ <br> 2,261 | 2,372 |
| Merchant services fees QTD | $ <br> 455 | $ <br> 490 | 336 |
| Mortgage banking income QTD | $ <br> 442 | $ <br> 514 | 526 |
| FDIC insurance QTD | $ <br> 1,275 | $ <br> 1,075 | 945 |
| Write down tax credit investment QTD | $ <br> 2,716 | $ <br> 2,499 | 2,499 |
| Salaries & employee benefits QTD | $ <br> 19,066 | $ <br> 19,230 | 18,301 |
| Other operating expense | $ <br> 6,702 | $ <br> 4,957 | 8,252 |
| Third party processing and other services QTD | $ <br> 7,284 | $ <br> 8,170 | 5,605 |
| Equipment and occupancy expense QTD | $ <br> 3,435 | $ <br> 3,263 | 2,933 |
| Business meals QTD | $ <br> 532 | $ <br> 461 | 429 |
| Earnings retention YTD | 74% | 79% | 78% |
| Number of employees | 581 | 580 | 519 |
| QTD tax rate | 18.07% | 19.49% | 18.96% |
| YTD tax rate | 18.07% | 18.56% | 18.96% |
All values are in US Dollars.