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): January 24, 2022
_______________________________
ServisFirst Bancshares, Inc.
(Exact name of registrant as specified in its charter)
_______________________________
| Delaware | 001-36452 | 26-0734029 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2500 Woodcrest Place
Homewood, 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(s) | Name of each 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 January 24, 2022, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended December 31, 2021. 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 January 24, 2022, ServisFirst hosted a call to review 2021 fourth 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 January 24, 2022 |
| 99.2 | Supplemental Financial Data dated January 24, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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. | ||
|---|---|---|
| Date: January 24, 2022 | By: | /s/ Thomas A. Broughton, III |
| Thomas A. Broughton, III | ||
| Chairman, President and Chief Executive Officer |
EdgarFiling EXHIBIT 99.1
ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2021
BIRMINGHAM, Ala., Jan. 24, 2022 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2021.
Fourth Quarter 2021 Highlights:
- Diluted earnings per share were $0.99 for the fourth quarter of 2021, a 5% increase over the fourth quarter of 2020. Excluding the impact of core system conversion expenses recognized during the fourth quarter of 2021, diluted earnings per share were $1.03, an increase of 10% over the fourth quarter of 2020
- Diluted earnings per share were $3.82 for 2021, a 22% increase over 2020. Excluding the impact of core system conversion expenses, diluted earnings per share were $3.86 for 2021, a 23% increase over 2020
- Total loans grew from $8.5 billion to $9.5 billion, or by 13%, during 2021, and grew $720.1 million, or 32%, annualized, on a linked-quarter basis. Total loans, excluding the impact of Paycheck Protection Program (“PPP”) loan forgiveness, grew $877.7 million, or 41% annualized, during the quarter
- Deposits grew from $9.98 billion to $12.45 billion year-over-year, or 25%, and grew $374 million on a linked-quarter basis, or 12%, annualized
- Book value per share increased to $21.24, a 15% increase year-over-year
- Cash dividend increased from $0.20 to $0.23 per quarter, a 15% increase
Tom Broughton, Chairman, President and CEO, said, “Our strong business development initiatives continue to result in record loan growth and a strong loan pipeline.”
Bud Foshee, CFO, said, “Excellent credit quality and low levels of loan losses are evidence that we will be able to leverage our excess liquidity in a profitable manner. Operating efficiency will continue to be a focus in 2022.”
| FINANCIAL SUMMARY (UNAUDITED) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in Thousands except share and per share amounts) | ||||||||||||||
| Period Ending <br>December 31, 2021 | Period Ending <br>September 30, 2021 | % Change From <br>Period Ending <br>September 30, 2021 <br>to Period Ending <br>December 31, 2021 | Period Ending <br>December 31, 2020 | % Change From<br> Period Ending <br>December 31, 2020 <br>to Period Ending December 31, 2021 | ||||||||||
| QUARTERLY OPERATING RESULTS | ||||||||||||||
| Net Income | $ | 53,753 | $ | 52,499 | 2 | % | $ | 50,981 | 5 | % | ||||
| Net Income Available to Common Stockholders | $ | 53,722 | $ | 52,499 | 2 | % | $ | 50,949 | 5 | % | ||||
| Diluted Earnings Per Share | $ | 0.99 | $ | 0.96 | 3 | % | $ | 0.94 | 5 | % | ||||
| Return on Average Assets | 1.40 | % | 1.50 | % | 1.74 | % | ||||||||
| Return on Average Common Stockholders' Equity | 18.75 | % | 18.93 | % | 20.78 | % | ||||||||
| Average Diluted Shares Outstanding | 54,493,959 | 54,477,740 | 54,273,944 | |||||||||||
| Net income - adjusted for core system conversion | ||||||||||||||
| expenses, net of tax* | $ | 56,004 | $ | 52,499 | 7 | % | $ | 50,981 | 10 | % | ||||
| Net Income Available to Common Stockholders - | ||||||||||||||
| adjusted for core system conversion expenses, | ||||||||||||||
| net of tax* | $ | 55,973 | $ | 52,499 | 7 | % | $ | 50,949 | 10 | % | ||||
| Diluted Earnings Per Share - adjusted for core | ||||||||||||||
| system conversion expenses, net of tax* | $ | 1.03 | $ | 0.96 | 7 | % | $ | 0.94 | 10 | % | ||||
| Return on Average Assets - adjusted for core | ||||||||||||||
| system conversion expenses, net of tax* | 1.46 | % | 1.50 | % | 1.74 | % | ||||||||
| Return on Average Common Stockholders' Equity - | ||||||||||||||
| adjusted for core system conversion expenses, | ||||||||||||||
| net of tax* | 19.54 | % | 18.93 | % | 20.78 | % | ||||||||
| YEAR-TO-DATE OPERATING RESULTS | ||||||||||||||
| Net Income | $ | 207,734 | $ | 169,569 | 23 | % | ||||||||
| Net Income Available to Common Stockholders | $ | 207,672 | $ | 169,506 | 23 | % | ||||||||
| Diluted Earnings Per Share | $ | 3.82 | $ | 3.13 | 22 | % | ||||||||
| Return on Average Assets | 1.53 | % | 1.59 | % | ||||||||||
| Return on Average Common Stockholders' Equity | 19.26 | % | 18.55 | % | ||||||||||
| Average Diluted Shares Outstanding | 54,434,573 | 54,219,037 | ||||||||||||
| Net income - adjusted for core system conversion | ||||||||||||||
| expenses, net of tax* | $ | 209,985 | $ | 169,569 | 24 | % | ||||||||
| Net Income Available to Common Stockholders - | ||||||||||||||
| adjusted for core system conversion expenses, | ||||||||||||||
| net of tax* | $ | 209,923 | $ | 169,506 | 24 | % | ||||||||
| Diluted Earnings Per Share - adjusted for core system | ||||||||||||||
| conversion expenses, net of tax* | $ | 3.86 | $ | 3.13 | 23 | % | ||||||||
| Return on Average Assets - adjusted for core | ||||||||||||||
| system conversion expenses, net of tax* | 1.55 | % | 1.59 | % | ||||||||||
| Return on Average Common Stockholders' Equity - | ||||||||||||||
| adjusted for core system conversion expenses, | ||||||||||||||
| net of tax* | 19.47 | % | 18.55 | % | ||||||||||
| BALANCE SHEET | ||||||||||||||
| Total Assets | $ | 15,448,806 | $ | 14,602,228 | 6 | % | $ | 11,932,654 | 29 | % | ||||
| Loans | 9,532,934 | 8,812,811 | 8 | % | 8,465,688 | 13 | % | |||||||
| Non-interest-bearing Demand Deposits | 4,799,767 | 4,366,654 | 10 | % | 2,788,772 | 72 | % | |||||||
| Total Deposits | 12,452,836 | 12,078,670 | 3 | % | 9,975,724 | 25 | % | |||||||
| Stockholders' Equity | 1,152,015 | 1,114,293 | 3 | % | 992,852 | 16 | % | |||||||
| * The adjustment for the core system conversion expenses included in the comparative periods presented in this press release are more fully described in "Detailed Financials" and in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below. |
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income of $53.8 million and net income available to common stockholders of $53.7 million for the quarter ended December 31, 2021, compared to net income and net income available to common stockholders of $51.0 million and $50.9 million, respectively, for the same quarter in 2020. Basic and diluted earnings per common share were $0.99 for the fourth quarter of 2021, compared to $0.94 for the fourth quarter of 2020.
Annualized return on average assets was 1.40% and annualized return on average common stockholders’ equity was 18.75% for the fourth quarter of 2021, compared to 1.74% and 20.78%, respectively, for the fourth quarter of 2020.
Net interest income was $101.2 million for the fourth quarter of 2021, compared to $96.3 million for the third quarter of 2021 and $92.1 million for the fourth quarter of 2020. The net interest margin in the fourth quarter of 2021 was 2.71% compared to 2.85% in the third quarter of 2021 and 3.27% in the fourth quarter of 2020. Accretion of net fees on PPP loans of $5.1 million during the fourth quarter of 2021 contributed 22 basis points of the loan yield, compared to $5.2 million of PPP loan fee accretion during the third quarter of 2021, or 24 basis points of the loan yield and $7.5 million during the fourth quarter of 2020, or 35 basis points of the loan yield.
Average loans for the fourth quarter of 2021 were $9.06 billion, an increase of $378.9 million, or 17.3% annualized, over average loans of $8.68 billion for the third quarter of 2021, and an increase of $594.4 million, or 7.0%, over average loans of $8.46 billion for the fourth quarter of 2020. Forgiveness of PPP loans during the fourth quarter of 2021 totaled $157.8 million. PPP loans outstanding as of December 31, 2021 were $230.2 million.
Average total deposits for the fourth quarter of 2021 were $12.39 billion, an increase of $897.5 million, or 31.0%, annualized, over average total deposits of $11.49 billion for the third quarter of 2021, and an increase of $2.55 billion, or 25.9%, over average total deposits of $9.84 billion for the fourth quarter of 2020.
Non-performing assets to total assets were 0.09% for the fourth quarter of 2021, a decrease of two basis points compared to 0.11% for the third quarter of 2021 and a decrease of 12 basis points compared to 0.21% for the fourth quarter of 2020. Annualized net charge-offs to average loans were 0.03% for the fourth quarter of 2021, compared to 0.08% and 0.41% for the third quarter of 2021 and fourth quarter of 2020, respectively. The allowance for credit losses for each quarter-end period presented was calculated under the CECL methodology. The allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 30, 2020 was 1.22%, 1.24% and 1.04%, respectively. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 31, 2020 was 1.25%, 1.29%, and 1.16%, respectively. We recorded an $8.5 million provision for credit losses in the fourth quarter of 2021 compared to $6.0 million in the third quarter of 2021 and $6.3 million in the fourth quarter of 2020.
Non-interest income decreased $872,000, or 10.6%, to $7.4 million for the fourth quarter of 2021 from $8.2 million in the fourth quarter of 2020. Service charges on deposit accounts decreased $674,000, or 34.2%, to $1.3 million from the fourth quarter of 2020 to the fourth quarter of 2021. Mortgage banking revenue decreased $2.6 million, or 84.6%, to $471,000 from the fourth quarter of 2020 to the fourth quarter of 2021. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of December 31, 2021, we had retained a total of 202 1-4 family mortgages for an aggregate balance of $76.9 million. Net credit card revenue increased $1.3 million, or 141.0%, to $2.2 million during the fourth quarter of 2021, compared to $913,000 during the fourth quarter of 2020. The number of credit card accounts increased approximately 6.4% and the aggregate amount of spend on all credit card accounts increased 36% during the fourth quarter of 2021 compared to the fourth quarter of 2020. Other operating income for the fourth quarter of 2021 increased $1.1 million, or 174.8%, to $1.8 million from $643,000 in the fourth quarter of 2020. We wrote up the value of our interest rate cap by $839,000 during the fourth quarter of 2021 through other income compared to a write down of $61,000 during the fourth quarter of 2020. Increased probabilities of Fed rate increases contributed to the recovery in the fair value of our interest rate cap during the fourth quarter of 2021. Merchant service revenue increased from $168,000 during the fourth quarter of 2020 to $376,000, or 124.1%, during the fourth quarter of 2021.
Non-interest expense for the fourth quarter of 2021 increased $10.3 million, or 36.5%, to $38.5 million from $28.2 million in the fourth quarter of 2020, and increased $4.1 million, or 12.0%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2021 increased $2.3 million, or 15.6%, to $17.3 million from $15.0 million in the fourth quarter of 2020, and decreased $692,000, or 3.8%, on a linked quarter basis. Salary expense alone increased 6.2% year over year. We increased our annual incentive accrual based on the increased loan production in 2021 and on final anticipated payouts for 2021 PPP loan originations. Total incentive accruals increased $2.4 million to $4.4 million for the fourth quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 9 to 502 at December 31, 2021 compared to 493 at December 31, 2020, and decreased by 16 from the end of the third quarter of 2021. Equipment and occupancy expense increased $230,000, or 8.6%, to $2.9 million in the fourth quarter of 2021, from $2.7 million in the fourth quarter of 2020, and decreased $86,000, or 2.9% on a linked-quarter basis. We moved our office in Nashville, Tennessee in early 2021 to expand our space and improve visibility and we opened our new office in Orlando, Florida in the third quarter of 2021. The linked-quarter decrease is primarily attributable to adjustments of accrued property taxes. Third party processing and other services expense increased $1.4 million, or 42.1%, to $4.9 million in the fourth quarter of 2021, from $3.4 million in the fourth quarter of 2020 and increased $712,000, or 17.2%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. Professional services expense decreased $335,000, or 26.8%, to $913,000 in the fourth quarter of 2021, from $1.2 million in the fourth quarter of 2020, primarily due to adjustments in accrued professional services fees during the fourth quarter of 2021. FDIC and other regulatory assessments decreased $324,000 to $1.0 million in the fourth quarter of 2021, from $1.4 million in the fourth quarter of 2020, and decreased $588,000, or 36.1%, on a linked quarter basis. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Other operating expenses for the fourth quarter of 2021 increased $7 million, or 160.7%, to $11.4 million from $4.4 million in the fourth quarter of 2020, and increased $4.9 million on a linked-quarter basis. This increase in other operating expenses includes a $3.0 million charge for expenses associated with the conversion to a new core operating system scheduled to take place in the third quarter of 2022. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. We invested $24.5 million in a new market tax credit during the fourth quarter of 2021. We wrote down the investment by $3.1 million during the fourth quarter of 2021 as we recognize the tax credits. We decreased our reserve for credit losses on unfunded loan commitments by $1.7 million in the fourth quarter of 2021. The efficiency ratio was 35.47% during the fourth quarter of 2021 compared to 28.11% during the fourth quarter of 2020 and compared to 32.95% during the third quarter of 2021. The efficiency ratio was 32.70% when adjusted for the core system conversion costs discussed above.
Income tax expense decreased $7.0 million, or 47.3%, to $7.8 million in the fourth quarter of 2021, compared to $14.9 million in the fourth quarter of 2020. Our effective tax rate was 12.70% for the fourth quarter of 2021 compared to 22.56% for the fourth quarter of 2020. We recognized an aggregate of $7.4 million in credits during the fourth quarter of 2021 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 fourth quarters of 2021 and 2020 of $363,000 and $170,000, respectively.
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
During the fourth quarter of 2021, we recorded $3.0 million of expenses associated with our core operating system conversion scheduled to be completed during the third quarter of 2022. The expenses relate to negotiated liquidated damages of our existing system contracts and the procurement of our data from those providers. Financial measures included in this press release that are presented adjusted for these expenses are net income, net income available to common stockholders, diluted earnings per share, return on average assets, return on average common stockholders’ equity and efficiency ratio. Each of these six financial measures excludes the impact of this item, net of tax, and are all considered non-GAAP financial measures. 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 and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015. We also include total loans adjusted for the impact of PPP loan activities. 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 December 31, 2021 | Year Ended <br>December 31, 2021 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income - GAAP | $ | 53,753 | $ | 207,734 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 3,007 | 3,007 | ||||||||||||||||||||
| Tax on adjustment | (756 | ) | (756 | ) | ||||||||||||||||||
| Adjusted net income - non-GAAP | $ | 56,004 | $ | 209,985 | ||||||||||||||||||
| Net income available to common stockholders - GAAP | $ | 53,722 | $ | 207,672 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 3,007 | 3,007 | ||||||||||||||||||||
| Tax on adjustment | (756 | ) | (756 | ) | ||||||||||||||||||
| Adjusted net income available to common stockholders - | ||||||||||||||||||||||
| non-GAAP | $ | 55,973 | $ | 209,923 | ||||||||||||||||||
| Diluted earnings per share - GAAP | $ | 0.99 | 3.82 | |||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 0.05 | 0.05 | ||||||||||||||||||||
| Tax on adjustment | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
| Adjusted diluted earnings per share - non-GAAP | $ | 1.03 | $ | 3.86 | ||||||||||||||||||
| Return on average assets - GAAP | 1.40 | % | 1.53 | % | ||||||||||||||||||
| Net income - GAAP | $ | 53,753 | $ | 207,734 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 3,007 | 3,007 | ||||||||||||||||||||
| Tax on adjustment | (756 | ) | (756 | ) | ||||||||||||||||||
| Adjusted net income - non-GAAP | $ | 56,004 | $ | 209,985 | ||||||||||||||||||
| Average assets - GAAP | $ | 15,250,671 | $ | 13,555,221 | ||||||||||||||||||
| Adjusted return on average assets - non-GAAP | 1.46 | % | 1.55 | % | ||||||||||||||||||
| Return on average common stockholders' equity - GAAP | 18.75 | % | 19.26 | % | ||||||||||||||||||
| Net income available to common stockholders - GAAP | $ | 53,722 | $ | 207,672 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 3,007 | 3,007 | ||||||||||||||||||||
| Tax on adjustment | (756 | ) | (756 | ) | ||||||||||||||||||
| Adjusted net income available to common stockholders - | ||||||||||||||||||||||
| non-GAAP | $ | 55,973 | $ | 209,923 | ||||||||||||||||||
| Average common stockholders' equity - GAAP | $ | 1,136,610 | $ | 1,078,075 | ||||||||||||||||||
| Adjusted return on average common stockholders' equity - | 19.54 | % | 19.47 | % | ||||||||||||||||||
| non-GAAP | ||||||||||||||||||||||
| Efficiency ratio | 35.47 | % | ||||||||||||||||||||
| Non-interest expense - GAAP | $ | 38,489 | ||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Core system conversion expenses | 3,007 | |||||||||||||||||||||
| Adjusted non-interest expense | 35,482 | |||||||||||||||||||||
| Net interest income plus non-interest income - GAAP | $ | 108,515 | ||||||||||||||||||||
| Adjusted efficiency ratio - non-GAAP | 32.70 | % | ||||||||||||||||||||
| At December 31, <br>2021 | At September 30,<br> 2021 | At June 30, <br>2021 | At March 31, <br>2021 | At December 31, <br>2020 | ||||||||||||||||||
| Book value per share - GAAP | $ | 21.24 | $ | 20.56 | $ | 19.80 | $ | 19.03 | $ | 18.41 | ||||||||||||
| Total common stockholders' equity - GAAP | 1,152,015 | 1,114,293 | 1,073,284 | 1,030,485 | 992,852 | |||||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Adjusted for goodwill and core deposit intangible asset | (13,638 | ) | (13,705 | ) | (13,773 | ) | (13,841 | ) | (13,908 | ) | ||||||||||||
| Tangible common stockholders' equity - non-GAAP | $ | 1,138,377 | $ | 1,100,588 | $ | 1,059,511 | $ | 1,016,644 | $ | 978,944 | ||||||||||||
| Tangible book value per share - non-GAAP | $ | 20.99 | $ | 20.30 | $ | 19.55 | $ | 18.78 | $ | 18.15 | ||||||||||||
| Stockholders' equity to total assets - GAAP | 7.46 | % | 7.63 | % | 8.13 | % | 8.15 | % | 8.32 | % | ||||||||||||
| Total assets - GAAP | $ | 15,448,806 | $ | 14,602,228 | $ | 13,207,319 | $ | 12,647,374 | $ | 11,932,654 | ||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Adjusted for goodwill and core deposit intangible asset | (13,638 | ) | (13,705 | ) | (13,773 | ) | (13,841 | ) | (13,908 | ) | ||||||||||||
| Total tangible assets - non-GAAP | $ | 15,435,168 | $ | 14,588,523 | $ | 13,193,546 | $ | 12,633,533 | $ | 11,918,746 | ||||||||||||
| Tangible common equity to total tangible assets - non-GAAP | 7.38 | % | 7.54 | % | 8.03 | % | 8.05 | % | 8.21 | % | ||||||||||||
| Total loans - GAAP | $ | 9,532,934 | $ | 8,812,811 | $ | 8,649,694 | $ | 8,504,980 | $ | 8,465,688 | ||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Adjusted to exclude PPP loans | (230,184 | ) | (387,725 | ) | (595,017 | ) | (967,641 | ) | (900,493 | ) | ||||||||||||
| Loans, excluding PPP loans - non-GAAP | $ | 9,302,750 | $ | 8,425,086 | $ | 8,054,677 | $ | 7,537,339 | $ | 7,565,195 |
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, and Charleston, South 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 2021, 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.
Contact: ServisFirst Bank Davis Mange (205) 949-3420 dmange@servisfirstbank.com
| SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except share and per share data) | |||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||
| CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||
| Interest income | $ | 108,954 | $ | 104,236 | $ | 102,719 | $ | 100,396 | $ | 101,065 | |||||
| Interest expense | 7,804 | 7,916 | 8,051 | 8,031 | 8,984 | ||||||||||
| Net interest income | 101,150 | 96,320 | 94,668 | 92,365 | 92,081 | ||||||||||
| Provision for credit losses | 8,451 | 5,963 | 9,652 | 7,451 | 6,283 | ||||||||||
| Net interest income after provision for credit losses | 92,699 | 90,357 | 85,016 | 84,914 | 85,798 | ||||||||||
| Non-interest income | 7,365 | 8,026 | 9,598 | 8,463 | 8,237 | ||||||||||
| Non-interest expense | 38,489 | 34,377 | 31,309 | 28,914 | 28,202 | ||||||||||
| Income before income tax | 61,575 | 64,006 | 63,305 | 64,463 | 65,833 | ||||||||||
| Provision for income tax | 7,822 | 11,507 | 13,278 | 13,008 | 14,852 | ||||||||||
| Net income | 53,753 | 52,499 | 50,027 | 51,455 | 50,981 | ||||||||||
| Preferred stock dividends | 31 | - | 31 | - | 32 | ||||||||||
| Net income available to common stockholders | $ | 53,722 | $ | 52,499 | $ | 49,996 | $ | 51,455 | $ | 50,949 | |||||
| Earnings per share - basic | $ | 0.99 | $ | 0.97 | $ | 0.92 | $ | 0.95 | $ | 0.94 | |||||
| Earnings per share - diluted | $ | 0.99 | $ | 0.96 | $ | 0.92 | $ | 0.95 | $ | 0.94 | |||||
| Average diluted shares outstanding | 54,493,959 | 54,477,740 | 54,460,230 | 54,381,991 | 54,273,944 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 15,448,806 | $ | 14,602,228 | $ | 13,207,319 | $ | 12,647,374 | $ | 11,932,654 | |||||
| Loans | 9,532,934 | 8,812,811 | 8,649,694 | 8,504,980 | 8,465,688 | ||||||||||
| Debt securities | 1,305,527 | 984,600 | 1,013,783 | 962,129 | 886,938 | ||||||||||
| Non-interest-bearing demand deposits | 4,799,767 | 4,366,654 | 3,296,429 | 3,044,611 | 2,788,772 | ||||||||||
| Total deposits | 12,452,836 | 12,078,670 | 10,958,236 | 10,577,610 | 9,975,724 | ||||||||||
| Borrowings | 64,706 | 64,701 | 64,696 | 64,691 | 64,748 | ||||||||||
| Stockholders' equity | 1,152,015 | 1,114,293 | 1,073,284 | 1,030,485 | 992,852 | ||||||||||
| Shares outstanding | 54,227,060 | 54,207,147 | 54,201,204 | 54,137,650 | 53,943,751 | ||||||||||
| Book value per share | $ | 21.24 | $ | 20.56 | $ | 19.80 | $ | 19.03 | $ | 18.41 | |||||
| Tangible book value per share (1) | $ | 20.99 | $ | 20.30 | $ | 19.55 | $ | 18.78 | $ | 18.15 | |||||
| SELECTED FINANCIAL RATIOS (Annualized) | |||||||||||||||
| Net interest margin | 2.71 | % | 2.85 | % | 3.06 | % | 3.20 | % | 3.27 | % | |||||
| Return on average assets | 1.40 | % | 1.50 | % | 1.56 | % | 1.72 | % | 1.74 | % | |||||
| Return on average common stockholders' equity | 18.75 | % | 18.93 | % | 18.98 | % | 19.83 | % | 20.78 | % | |||||
| Efficiency ratio | 35.47 | % | 32.95 | % | 30.03 | % | 28.68 | % | 28.11 | % | |||||
| Non-interest expense to average earning assets | 1.03 | % | 1.01 | % | 1.01 | % | 1.00 | % | 1.00 | % | |||||
| CAPITAL RATIOS (2) | |||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 9.95 | % | 10.46 | % | 10.60 | % | 10.73 | % | 10.50 | % | |||||
| Tier 1 capital to risk-weighted assets | 9.96 | % | 10.47 | % | 10.60 | % | 10.73 | % | 10.50 | % | |||||
| Total capital to risk-weighted assets | 11.58 | % | 12.18 | % | 12.36 | % | 12.48 | % | 12.20 | % | |||||
| Tier 1 capital to average assets | 7.39 | % | 7.80 | % | 8.10 | % | 8.25 | % | 8.23 | % | |||||
| Tangible common equity to total tangible assets (1) | 7.38 | % | 7.54 | % | 8.03 | % | 8.05 | % | 8.22 | % | |||||
| (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) | |||||||||||||||
| December 31, 2021 | December 31, 2020 | % Change | |||||||||||||
| ASSETS | |||||||||||||||
| Cash and due from banks | $ | 56,934 | $ | 93,655 | (39 | ) | % | ||||||||
| Interest-bearing balances due from depository institutions | 4,106,790 | 2,115,985 | 94 | % | |||||||||||
| Federal funds sold | 58,372 | 1,771 | 3,196 | % | |||||||||||
| 4,222,096 | 2,211,411 | 91 | % | ||||||||||||
| Available for sale debt securities, at fair value | 842,570 | 886,688 | (5 | ) | % | ||||||||||
| Held to maturity debt securities (fair value of 466,286 at December 31, 2021 and 250 at December 31, 2020) | 462,957 | 250 | NM | ||||||||||||
| Restricted equity securities | 7,311 | - | |||||||||||||
| Mortgage loans held for sale | 1,114 | 14,425 | (92 | ) | % | ||||||||||
| Loans | 9,532,934 | 8,465,688 | 13 | % | |||||||||||
| Less allowance for credit losses | (116,660 | ) | (87,942 | ) | 33 | % | |||||||||
| 9,416,274 | 8,377,746 | 12 | % | ||||||||||||
| Premises and equipment, net | 60,300 | 54,969 | 10 | % | |||||||||||
| Goodwill and other identifiable intangible assets | 13,638 | 13,908 | (2 | ) | % | ||||||||||
| Other assets | 429,859 | 373,256 | 15 | % | |||||||||||
| $ | 15,448,806 | $ | 11,932,654 | 29 | % | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| $ | 4,799,767 | $ | 2,788,772 | 72 | % | ||||||||||
| 7,653,069 | 7,186,952 | 6 | % | ||||||||||||
| 12,452,836 | 9,975,724 | 25 | % | ||||||||||||
| Federal funds purchased | 1,711,777 | 851,545 | 101 | % | |||||||||||
| Other borrowings | 64,706 | 64,748 | - | % | |||||||||||
| Other liabilities | 67,472 | 47,785 | 41 | % | |||||||||||
| 14,296,791 | 10,939,802 | 31 | % | ||||||||||||
| Stockholders' equity: | |||||||||||||||
| - | - | ||||||||||||||
| 54 | 54 | - | % | ||||||||||||
| 226,397 | 223,856 | 1 | % | ||||||||||||
| 911,008 | 748,224 | 22 | % | ||||||||||||
| 14,056 | 20,218 | (30 | ) | % | |||||||||||
| 1,151,515 | 992,352 | 16 | % | ||||||||||||
| 500 | 500 | - | % | ||||||||||||
| 1,152,015 | 992,852 | 16 | % | ||||||||||||
| $ | 15,448,806 | $ | 11,932,654 | 29 | % |
All values are in US Dollars.
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | |||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||
| Interest and fees on loans | $ | 100,348 | $ | 94,332 | $ | 385,721 | $ | 362,664 | |||||||||||||||||
| Taxable securities | 6,747 | 6,018 | 25,413 | 22,122 | |||||||||||||||||||||
| Nontaxable securities | 47 | 129 | 302 | 739 | |||||||||||||||||||||
| Federal funds sold | 18 | 5 | 29 | 332 | |||||||||||||||||||||
| Other interest and dividends | 1,794 | 581 | 4,840 | 3,165 | |||||||||||||||||||||
| Total interest income | 108,954 | 101,065 | 416,305 | 389,022 | |||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||
| Deposits | 6,271 | 7,853 | 26,569 | 45,230 | |||||||||||||||||||||
| Borrowed funds | 1,533 | 1,131 | 5,233 | 5,755 | |||||||||||||||||||||
| Total interest expense | 7,804 | 8,984 | 31,802 | 50,985 | |||||||||||||||||||||
| Net interest income | 101,150 | 92,081 | 384,503 | 338,037 | |||||||||||||||||||||
| Provision for credit losses | 8,451 | 6,283 | 31,517 | 42,434 | |||||||||||||||||||||
| Net interest income after provision for credit losses | 92,699 | 85,798 | 352,986 | 295,603 | |||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||
| Service charges on deposit accounts | 1,297 | 1,971 | 6,839 | 7,528 | |||||||||||||||||||||
| Mortgage banking | 471 | 3,050 | 7,340 | 8,747 | |||||||||||||||||||||
| Credit card income | 2,200 | 913 | 7,347 | 5,916 | |||||||||||||||||||||
| Securities gains | - | - | 620 | - | |||||||||||||||||||||
| Increase in cash surrender value life insurance | 1,630 | 1,660 | 6,642 | 6,310 | |||||||||||||||||||||
| Other operating income | 1,767 | 643 | 4,664 | 1,615 | |||||||||||||||||||||
| Total non-interest income | 7,365 | 8,237 | 33,452 | 30,116 | |||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||
| Salaries and employee benefits | 17,303 | 14,970 | 67,728 | 61,414 | |||||||||||||||||||||
| Equipment and occupancy expense | 2,910 | 2,680 | 11,404 | 10,070 | |||||||||||||||||||||
| Third party processing and other services | 4,856 | 3,418 | 16,362 | 13,778 | |||||||||||||||||||||
| Professional services | 913 | 1,248 | 3,891 | 4,242 | |||||||||||||||||||||
| FDIC and other regulatory assessments | 1,042 | 1,366 | 5,679 | 4,354 | |||||||||||||||||||||
| Other real estate owned expense | 48 | 140 | 868 | 2,163 | |||||||||||||||||||||
| Other operating expense | 11,417 | 4,380 | 27,157 | 15,490 | |||||||||||||||||||||
| Total non-interest expense | 38,489 | 28,202 | 133,089 | 111,511 | |||||||||||||||||||||
| Income before income tax | 61,575 | 65,833 | 253,349 | 214,208 | |||||||||||||||||||||
| Provision for income tax | 7,822 | 14,852 | 45,615 | 44,639 | |||||||||||||||||||||
| Net income | 53,753 | 50,981 | 207,734 | 169,569 | |||||||||||||||||||||
| Dividends on preferred stock | 31 | 32 | 62 | 63 | |||||||||||||||||||||
| Net income available to common stockholders | $ | 53,722 | $ | 50,949 | $ | 207,672 | $ | 169,506 | |||||||||||||||||
| Basic earnings per common share | $ | 0.99 | $ | 0.94 | $ | 3.83 | $ | 3.15 | |||||||||||||||||
| Diluted earnings per common share | $ | 0.99 | $ | 0.94 | $ | 3.82 | $ | 3.13 | |||||||||||||||||
| LOANS BY TYPE (UNAUDITED) | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| (In thousands) | |||||||||||||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||||||||||||
| Commercial, financial and agricultural | $ | 2,984,053 | $ | 2,927,845 | $ | 3,105,243 | $ | 3,323,093 | $ | 3,295,900 | |||||||||||||||
| Real estate - construction | 1,103,076 | 887,938 | 782,305 | 666,592 | 593,614 | ||||||||||||||||||||
| Real estate - mortgage: | |||||||||||||||||||||||||
| Owner-occupied commercial | 1,874,103 | 1,809,840 | 1,726,888 | 1,698,695 | 1,693,428 | ||||||||||||||||||||
| 1-4 family mortgage | 826,765 | 765,102 | 707,546 | 685,840 | 711,692 | ||||||||||||||||||||
| Other mortgage | 2,678,084 | 2,357,812 | 2,262,231 | 2,068,560 | 2,106,184 | ||||||||||||||||||||
| Subtotal: Real estate - mortgage | 5,378,952 | 4,932,754 | 4,696,665 | 4,453,095 | 4,511,304 | ||||||||||||||||||||
| Consumer | 66,853 | 64,274 | 65,481 | 62,200 | 64,870 | ||||||||||||||||||||
| Total loans | $ | 9,532,934 | $ | 8,812,811 | $ | 8,649,694 | $ | 8,504,980 | $ | 8,465,688 | |||||||||||||||
| SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| (Dollars in thousands) | |||||||||||||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||||||||||||
| Allowance for credit losses: | |||||||||||||||||||||||||
| Beginning balance | $ | 108,950 | $ | 104,670 | $ | 94,906 | $ | 87,942 | $ | 92,440 | |||||||||||||||
| Impact of Adoption of ASC 326 | - | - | - | - | (2,000 | ) | |||||||||||||||||||
| Loans charged off: | |||||||||||||||||||||||||
| Commercial financial and agricultural | 1,285 | 1,541 | 150 | 477 | 8,792 | ||||||||||||||||||||
| Real estate - construction | 14 | - | - | - | 202 | ||||||||||||||||||||
| Real estate - mortgage | - | 208 | 59 | 12 | - | ||||||||||||||||||||
| Consumer | 141 | 86 | 54 | 87 | 38 | ||||||||||||||||||||
| Total charge offs | 1,440 | 1,835 | 263 | 576 | 9,032 | ||||||||||||||||||||
| Recoveries: | |||||||||||||||||||||||||
| Commercial financial and agricultural | 671 | 140 | 298 | 26 | 94 | ||||||||||||||||||||
| Real estate - construction | - | - | 2 | 50 | 30 | ||||||||||||||||||||
| Real estate - mortgage | 18 | 4 | 62 | 2 | 114 | ||||||||||||||||||||
| Consumer | 10 | 8 | 13 | 11 | 13 | ||||||||||||||||||||
| Total recoveries | 699 | 152 | 375 | 89 | 251 | ||||||||||||||||||||
| Net charge-offs | 741 | 1,683 | (112 | ) | 487 | 8,781 | |||||||||||||||||||
| Provision for credit losses | 8,451 | 5,963 | 9,652 | 7,451 | 6,283 | ||||||||||||||||||||
| Ending balance | $ | 116,660 | $ | 108,950 | $ | 104,670 | $ | 94,906 | $ | 87,942 | |||||||||||||||
| Allowance for credit losses to total loans | 1.22 | % | 1.24 | % | 1.21 | % | 1.12 | % | 1.04 | % | |||||||||||||||
| Allowance for credit losses to total average | |||||||||||||||||||||||||
| loans | 1.29 | % | 1.26 | % | 1.21 | % | 1.11 | % | 1.04 | % | |||||||||||||||
| Net charge-offs (recoveries) to total average loans | 0.03 | % | 0.08 | % | (0.01 | ) | % | 0.02 | % | 0.41 | % | ||||||||||||||
| Provision for credit losses to total average | |||||||||||||||||||||||||
| loans | 0.37 | % | 0.27 | % | 0.45 | % | 0.35 | % | 0.30 | % | |||||||||||||||
| Nonperforming assets: | |||||||||||||||||||||||||
| Nonaccrual loans | $ | 6,762 | $ | 9,145 | $ | 12,301 | $ | 13,088 | $ | 13,973 | |||||||||||||||
| Loans 90+ days past due and accruing | 5,335 | 5,326 | 4,888 | 4,804 | 4,981 | ||||||||||||||||||||
| Other real estate owned and | |||||||||||||||||||||||||
| repossessed assets | 1,208 | 2,068 | 2,039 | 2,067 | 6,497 | ||||||||||||||||||||
| Total | $ | 13,305 | $ | 16,539 | $ | 19,228 | $ | 19,959 | $ | 25,451 | |||||||||||||||
| Nonperforming loans to total loans | 0.13 | % | 0.16 | % | 0.20 | % | 0.21 | % | 0.22 | % | |||||||||||||||
| Nonperforming assets to total assets | 0.09 | % | 0.11 | % | 0.15 | % | 0.16 | % | 0.21 | % | |||||||||||||||
| Nonperforming assets to earning assets | 0.09 | % | 0.11 | % | 0.15 | % | 0.16 | % | 0.22 | % | |||||||||||||||
| Allowance for credit losses to nonaccrual loans | 1,725.23 | % | 1,191.36 | % | 850.91 | % | 725.14 | % | 629.37 | % | |||||||||||||||
| Restructured accruing loans | $ | 431 | $ | 437 | $ | 441 | $ | 794 | $ | 818 | |||||||||||||||
| Restructured accruing loans to total loans | - | % | - | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||||
| TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) | |||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||||||||||||
| Beginning balance: | $ | 2,893 | $ | 2,918 | $ | 3,542 | $ | 1,433 | $ | 2,738 | |||||||||||||||
| Additions | - | - | - | 2,146 | - | ||||||||||||||||||||
| Net (paydowns) / advances | (303 | ) | (25 | ) | (624 | ) | (37 | ) | (619 | ) | |||||||||||||||
| Charge-offs | (14 | ) | - | - | - | (535 | ) | ||||||||||||||||||
| Transfer to OREO | - | - | - | - | (151 | ) | |||||||||||||||||||
| Ending balance | $ | 2,576 | $ | 2,893 | $ | 2,918 | $ | 3,542 | $ | 1,433 | |||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| (In thousands except per share data) | |||||||||||||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||
| Interest and fees on loans | $ | 100,348 | $ | 96,119 | $ | 95,451 | $ | 93,803 | $ | 94,332 | |||||||||||||||
| Taxable securities | 6,747 | 6,544 | 6,315 | 5,807 | 6,018 | ||||||||||||||||||||
| Nontaxable securities | 47 | 62 | 86 | 107 | 129 | ||||||||||||||||||||
| Federal funds sold | 18 | 4 | 4 | 3 | 5 | ||||||||||||||||||||
| Other interest and dividends | 1,794 | 1,507 | 863 | 676 | 581 | ||||||||||||||||||||
| Total interest income | 108,954 | 104,236 | 102,719 | 100,396 | 101,065 | ||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||
| Deposits | 6,271 | 6,581 | 6,836 | 6,881 | 7,853 | ||||||||||||||||||||
| Borrowed funds | 1,533 | 1,335 | 1,215 | 1,150 | 1,131 | ||||||||||||||||||||
| Total interest expense | 7,804 | 7,916 | 8,051 | 8,031 | 8,984 | ||||||||||||||||||||
| Net interest income | 101,150 | 96,320 | 94,668 | 92,365 | 92,081 | ||||||||||||||||||||
| Provision for credit losses | 8,451 | 5,963 | 9,652 | 7,451 | 6,283 | ||||||||||||||||||||
| Net interest income after provision for credit losses | 92,699 | 90,357 | 85,016 | 84,914 | 85,798 | ||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||
| Service charges on deposit accounts | 1,297 | 1,727 | 1,907 | 1,908 | 1,971 | ||||||||||||||||||||
| Mortgage banking | 471 | 1,423 | 2,699 | 2,747 | 3,050 | ||||||||||||||||||||
| Credit card income | 2,200 | 2,043 | 1,912 | 1,192 | 913 | ||||||||||||||||||||
| Securities gains | - | - | 620 | - | - | ||||||||||||||||||||
| Increase in cash surrender value life insurance | 1,630 | 1,671 | 1,683 | 1,658 | 1,660 | ||||||||||||||||||||
| Other operating income | 1,767 | 1,162 | 777 | 958 | 643 | ||||||||||||||||||||
| Total non-interest income | 7,365 | 8,026 | 9,598 | 8,463 | 8,237 | ||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||
| Salaries and employee benefits | 17,303 | 17,995 | 16,887 | 15,543 | 14,970 | ||||||||||||||||||||
| Equipment and occupancy expense | 2,910 | 2,996 | 2,844 | 2,654 | 2,680 | ||||||||||||||||||||
| Third party processing and other services | 4,856 | 4,144 | 3,946 | 3,416 | 3,418 | ||||||||||||||||||||
| Professional services | 913 | 948 | 1,107 | 923 | 1,248 | ||||||||||||||||||||
| FDIC and other regulatory assessments | 1,042 | 1,630 | 1,425 | 1,582 | 1,366 | ||||||||||||||||||||
| Other real estate owned expense | 48 | 123 | 540 | 157 | 140 | ||||||||||||||||||||
| Other operating expense | 11,417 | 6,541 | 4,560 | 4,639 | 4,380 | ||||||||||||||||||||
| Total non-interest expense | 38,489 | 34,377 | 31,309 | 28,914 | 28,202 | ||||||||||||||||||||
| Income before income tax | 61,575 | 64,006 | 63,305 | 64,463 | 65,833 | ||||||||||||||||||||
| Provision for income tax | 7,822 | 11,507 | 13,278 | 13,008 | 14,852 | ||||||||||||||||||||
| Net income | 53,753 | 52,499 | 50,027 | 51,455 | 50,981 | ||||||||||||||||||||
| Dividends on preferred stock | 31 | - | 31 | - | 32 | ||||||||||||||||||||
| Net income available to common stockholders | $ | 53,722 | $ | 52,499 | $ | 49,996 | $ | 51,455 | $ | 50,949 | |||||||||||||||
| Basic earnings per common share | $ | 0.99 | $ | 0.97 | $ | 0.92 | $ | 0.95 | $ | 0.94 | |||||||||||||||
| Diluted earnings per common share | $ | 0.99 | $ | 0.96 | $ | 0.92 | $ | 0.95 | $ | 0.94 | |||||||||||||||
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ON A FULLY TAXABLE-EQUIVALENT BASIS | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||
| 4th Quarter 2021 | 3rd Quarter 2021 | 2nd Quarter 2021 | 1st Quarter 2021 | 4th Quarter 2020 | |||||||||||||||||||||
| Average<br> Balance | Yield /<br> Rate | Average <br>Balance | Yield / <br>Rate | Average <br>Balance | Yield / <br>Rate | Average <br>Balance | Yield / <br>Rate | Average <br>Balance | Yield / <br>Rate | ||||||||||||||||
| Assets: | |||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||
| Loans, net of unearned income (1) | |||||||||||||||||||||||||
| Taxable | $ | 9,032,914 | 4.40 | % | $ | 8,653,632 | 4.40 | % | $ | 8,618,139 | 4.43 | % | $ | 8,484,914 | 4.47 | % | $ | 8,435,237 | 4.43 | % | |||||
| Tax-exempt (2) | 26,148 | 4.07 | 26,542 | 4.05 | 26,854 | 4.05 | 27,592 | 4.17 | 29,393 | 4.16 | |||||||||||||||
| Total loans, net of | |||||||||||||||||||||||||
| unearned income | 9,059,062 | 4.40 | 8,680,174 | 4.39 | 8,644,993 | 4.43 | 8,512,506 | 4.47 | 8,464,630 | 4.43 | |||||||||||||||
| Mortgage loans held for sale | 998 | 1.99 | 7,050 | 1.69 | 11,470 | 1.92 | 13,601 | 1.94 | 19,459 | 1.37 | |||||||||||||||
| Debt securities: | |||||||||||||||||||||||||
| Taxable | 1,134,378 | 2.38 | 969,715 | 2.70 | 936,863 | 2.70 | 878,118 | 2.65 | 862,333 | 2.79 | |||||||||||||||
| Tax-exempt (2) | 9,823 | 2.36 | 12,382 | 2.39 | 16,872 | 2.47 | 21,084 | 2.43 | 25,542 | 2.52 | |||||||||||||||
| Total securities (3) | 1,144,201 | 2.38 | 982,097 | 2.70 | 953,735 | 2.69 | 899,202 | 2.64 | 887,875 | 2.78 | |||||||||||||||
| Federal funds sold | 39,445 | 0.18 | 8,551 | 0.19 | 8,224 | 0.20 | 11,935 | 0.10 | 16,306 | 0.12 | |||||||||||||||
| Restricted equity securities | 873 | 3.18 | - | - | - | - | - | - | - | - | |||||||||||||||
| Interest-bearing balances with banks | 4,561,662 | 0.16 | 3,761,652 | 0.16 | 2,790,524 | 0.12 | 2,262,233 | 0.12 | 1,837,249 | 0.13 | |||||||||||||||
| Total interest-earning assets | $ | 14,806,241 | 2.92 | $ | 13,439,524 | 3.08 | $ | 12,408,946 | 3.32 | $ | 11,699,477 | 3.48 | $ | 11,225,519 | 3.58 | ||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||||||
| Cash and due from banks | 79,293 | 90,034 | 85,478 | 71,166 | 91,258 | ||||||||||||||||||||
| Net premises and equipment | 61,837 | 62,845 | 61,240 | 57,198 | 56,315 | ||||||||||||||||||||
| Allowance for credit losses, accrued | |||||||||||||||||||||||||
| interest and other assets | 303,300 | 315,178 | 320,729 | 320,407 | 308,746 | ||||||||||||||||||||
| Total assets | $ | 15,250,671 | $ | 13,907,581 | $ | 12,876,393 | $ | 12,148,248 | $ | 11,681,838 | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||
| Checking | $ | 1,499,918 | 0.19 | % | $ | 1,431,420 | 0.19 | % | $ | 1,350,098 | 0.19 | % | $ | 1,294,614 | 0.19 | % | $ | 1,197,908 | 0.23 | % | |||||
| Savings | 123,179 | 0.18 | 122,579 | 0.17 | 104,283 | 0.18 | 93,375 | 0.18 | 86,259 | 0.18 | |||||||||||||||
| Money market | 5,100,192 | 0.26 | 5,328,291 | 0.26 | 5,321,338 | 0.26 | 5,057,828 | 0.27 | 4,933,285 | 0.31 | |||||||||||||||
| Time deposits | 807,342 | 1.05 | 806,108 | 1.15 | 801,928 | 1.33 | 808,561 | 1.44 | 810,675 | 1.59 | |||||||||||||||
| Total interest-bearing deposits | 7,530,631 | 0.33 | 7,688,398 | 0.34 | 7,577,647 | 0.36 | 7,254,378 | 0.38 | 7,028,127 | 0.44 | |||||||||||||||
| Federal funds purchased | 1,608,349 | 0.21 | 1,205,327 | 0.21 | 970,708 | 0.22 | 849,772 | 0.22 | 752,765 | 0.22 | |||||||||||||||
| Other borrowings | 64,704 | 4.23 | 64,694 | 4.23 | 64,694 | 4.28 | 64,689 | 4.33 | 64,701 | 4.41 | |||||||||||||||
| Total interest-bearing liabilities | $ | 9,203,684 | 0.34 | % | $ | 8,958,419 | 0.35 | % | $ | 8,613,049 | 0.37 | % | $ | 8,168,839 | 0.40 | % | $ | 7,845,593 | 0.46 | % | |||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||
| Non-interest-bearing | |||||||||||||||||||||||||
| demand deposits | 4,856,243 | 3,800,972 | 3,154,605 | 2,923,041 | 2,812,254 | ||||||||||||||||||||
| Other liabilities | 54,134 | 48,060 | 52,027 | 39,442 | 48,642 | ||||||||||||||||||||
| Stockholders' equity | 1,121,578 | 1,078,987 | 1,038,012 | 996,741 | 956,847 | ||||||||||||||||||||
| Accumulated other comprehensive | |||||||||||||||||||||||||
| income | 15,032 | 21,143 | 18,700 | 20,185 | 18,502 | ||||||||||||||||||||
| Total liabilities and | |||||||||||||||||||||||||
| stockholders' equity | $ | 15,250,671 | $ | 13,907,581 | $ | 12,876,393 | $ | 12,148,248 | $ | 11,681,838 | |||||||||||||||
| Net interest spread | 2.58 | % | 2.73 | % | 2.95 | % | 3.08 | % | 3.12 | % | |||||||||||||||
| Net interest margin | 2.71 | % | 2.85 | % | 3.06 | % | 3.20 | % | 3.27 | % | |||||||||||||||
| (1 | ) | Average loans include loans on which the accrual of interest has been discontinued. | |||||||||||||||||||||||
| (2 | ) | Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. | |||||||||||||||||||||||
| (3 | ) | Unrealized losses on available-for-sale debt securities are excluded from the yield calculation. |
EdgarFiling
Exhibit 99.2
Selected Financial Data (in thousands except number of employees) 12/31/2021 9/30/2021 12/31/2020 Commentary Net interest margin 2.71% 2.85% 3.27% Adjusted net interest margin (excluding PPP loan balances and PPP interest income/fees) 2.62% 2.76% 3.23% PPP average loan balances $ 309,474 $ 472,605 $ 1,010,000 PPP interest income/fees $ 5,842 $ 6,363 $ 10,100 Adjusted net interest margin (excluding Qtr/Qtr increase in excess funds) 2.86% 3.05% 3.36% Excess funds were $600 million in April 2020, prior to funding PPP loans. Excess funds were $4.3 billion at 12/31/2021 Qtr/Qtr increase in excess funds (due from banks and fed funds sold) $ 830,904 $ 971,455 $ 311,108 Scheduled CD maturities for subsequent quarter $ 204,797 $ 208,862 $ 137,000 Average rate scheduled CD maturities for subsequent quarter 0.85% 0.80% 1.33% Cost of total deposits, Qtr - End 0.20% 0.20% 0.28% Cost of interest - bearing DDAs, Qtr - End 0.24% 0.24% 0.25% Cost of interest - bearing deposits, Qtr - End 0.32% 0.32% 0.39% Noninterest bearing DDA balances, Qtr - End $ 4,799,767 $ 4,366,654 $ 2,788,772 PPP outstanding loan balance (Round 1 & Round 2), Qtr - End $ 230,184 $ 387,725 $ 900,493 Round 1 (R1) PPP loan balance, Qtr - End $ 16,135 $ 46,802 $ 900,493 R1 PPP loan fees earned QTD $ 279 $ 1,777 $ 7,539 R1 PPP loan fees earned YTD $ 17,638 $ 17,389 $ 14,150 R1 PPP unaccreted loan fees $ 166 $ 444 $ 17,804 R1 PPP loan forgiveness QTD $ 27,759 $ 137,555 $ 134,096 Round 2 (R2) PPP loan balance, Qtr - End $ 214,049 $ 340,923 NA R2 PPP loan fees earned QTD $ 4,783 $ 3,395 NA R2 PPP loan fees earned YTD $ 9,692 $ 4,879 NA R2 PPP unaccreted loan fees $ 7,029 $ 12,400 NA R2 PPP loan forgiveness QTD $ 129,782 $ 70,284 NA Credit card spend QTD $ 229,108 $ 215,755 $ 168,400 Credit card net income QTD $ 2,200 $ 2,043 $ 913 Merchant services fees QTD $ 376 $ 375 $ 168 Mortgage banking income QTD $ 471 $ 1,423 $ 3,100 Reserve for unfunded commitments, Qtr - End $ 1,300 $ 3,000 $ 2,200 FDIC insurance QTD $ 800 $ 1,400 $ 1,260 Write down tax credit investment QTD $ 6,049 $ 2,931 $ 140 Write down of tax credit investment increased non - interest expenses by $3.1 million during the fourth quarter but was offset by and income tax reduction of $4.1 million Salaries & employee benefits QTD $ 17,303 $ 17,995 $ 14,970 Total incentive accruals increased $2.4 million to $4.4 million for the fourth quarter of 2021 compared to same quarter of 2020 due to record loan production; Salaries increased 6.2% Yr/Yr primarily due to new hires in West Central Florida Region, Fort Walton, & Columbus Third party processing and other services QTD $ 4,856 $ 4,144 $3,418 Data processing increased $1,438 Yr/Yr due to rate increase from current provider; in process of conversion to new provider Equipment and occupancy expense QTD $ 2,910 $ 2,996 $ 2,680 Business meals QTD $ 276 $ 316 $ 158 Earnings retention YTD 79% 79% 78% Number of employees 509 525 499 QTD tax rate 12.7% 18.0% 22.6% YTD tax rate 18.0% 19.7% 20.8%
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
This supplemental financial data contains two measures of adjusted net interest margin. Both are non-GAAP measures. We provide net interest margin adjusted to exclude PPP balances, PPP interest income, and PPP fees, and we provide net interest margin adjusted to exclude increases in excess funds over the past quarter. 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.
| At December 31, 2021 | At September 30, 2021 | At December 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Net Interest Margin - GAAP | 2.71 | % | 2.85 | % | 3.27 | % | |||
| Net Interest Income - GAAP | $ | 101,150 | $ | 96,320 | $ | 92,081 | |||
| Adjustments: | |||||||||
| PPP Interest Income | (780 | ) | (1,191 | ) | (2,539 | ) | |||
| PPP Fee Accretion | (5,062 | ) | (5,172 | ) | (7,539 | ) | |||
| Adjusted Net Interest Income - non-GAAP | 95,308 | 89,957 | 82,003 | ||||||
| Average interest-earning assets | 14,806,241 | 13,439,524 | 11,225,519 | ||||||
| Adjustments: | |||||||||
| Average PPP loan balances | (309,474 | ) | (472,605 | ) | (1,006,131 | ) | |||
| Adjusted average interest-earning assets | $ | 14,496,767 | $ | 12,966,919 | $ | 10,219,388 | |||
| Adjusted Net Interest Margin - non-GAAP | 2.62 | % | 2.76 | % | 3.23 | % | |||
| Net Interest Margin - GAAP | 2.71 | % | 2.85 | % | 3.27 | % | |||
| Net Interest Income - GAAP | $ | 101,150 | $ | 96,320 | $ | 92,081 | |||
| Adjustments: | |||||||||
| Interest earned on excess funds | (1,485 | ) | (1,121 | ) | (488 | ) | |||
| Adjusted Net Interest Income - non-GAAP | 99,665 | 95,199 | 91,593 | ||||||
| Average interest-earning assets | 14,806,241 | 13,439,524 | 11,225,519 | ||||||
| Adjustments: | |||||||||
| Increase in quarterly average excess funds | (830,904 | ) | (971,455 | ) | (311,108 | ) | |||
| Adjusted average interest-earning assets | $ | 13,975,337 | $ | 12,468,069 | $ | 10,914,411 | |||
| Adjusted Net Interest Margin - non-GAAP | 2.86 | % | 3.05 | % | 3.36 | % |