8-K
ServisFirst Bancshares, Inc. (SFBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | July<br>15, 2024 | |
|---|---|---|
| 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) | (IRS Employer Identification No.) |
| 2500 Woodcrest Place, Homewood,<br>Alabama | 35209 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| (205) 949-0302 | ||
| --- | ||
| (Registrant’s telephone number,<br>including area code) | ||
| Not Applicable | ||
| --- | ||
| (Former name or former address, if<br>changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered |
|---|---|---|
| Common | SFBS | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 – Results of Operations and Financial Condition.
On July 15, 2024, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended June 30, 2024. A copy of the press release is attached as Exhibit 99.1.
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item 7.01 – Regulation FD Disclosure
****On July 15, 2024, ServisFirst hosted a call to review 2024 second quarter earnings. The supplemental data table 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 Actof 1933. The words "believe," "expect," "anticipate," "project," “plan,” “intend,”“will,” “would,” “might” “could” and similar expressions often signify forward-lookingstatements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-lookingstatements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarilyestimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertaintiesthat could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statementsshould, 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 ininterest 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 regulationsand governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effectsof legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairmentof the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographicmarkets; 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 NoteRegarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K and our otherSEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actualresults, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statementscontained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the datemade. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time totime.
Item 9.01 – Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits. The following exhibits are included with this Current Report on Form 8-K:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated July 15, 2024 |
| 99.2 | Supplemental data table July 15, 2024 |
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. | ||
|---|---|---|
| /s/ Thomas A. Broughton, III | ||
| Dated: July 15, 2024 | By: | Thomas A. Broughton, III |
| Chairman, President and Chief Executive Officer |
Exhibit99.1
SERVISFIRSTBANCSHARES, INC.
AnnouncesResults For Second Quarter of 2024
Birmingham, Ala. – (BUSINESS WIRE) – July 15, 2024 – ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2024.
SecondQuarter 2024 Highlights:
| · | Diluted EPS grew from $0.92 in the first quarter of 2024 to $0.95 in the second quarter of 2024. |
|---|---|
| · | Net interest margin increased 13 basis points from the first quarter of 2024. |
| --- | --- |
| · | Deposits grew by 16% annualized from the first quarter of 2024 and 8% year-over-year. |
| --- | --- |
| · | Loans grew by 15% annualized from the first quarter of 2024 and 6% year-over-year. |
| --- | --- |
| · | Credit quality continues to be strong with non-performing assets to total assets of 0.23%. |
| --- | --- |
| · | Liquidity remains strong with over $1.3 billion in cash and no FHLB advances or brokered deposits. |
| --- | --- |
| · | Book value per share of $27.71, up 11% year-over-year. |
| --- | --- |
| · | Entered the Auburn-Opelika, Alabama market. |
| --- | --- |
Tom Broughton, Chairman, President, and CEO, said, “We were pleased to add a strong banking team and enter the Auburn-Opelika, Alabama market during the quarter, and believe it should become one of our top community banking markets. Loan and deposit growth were strong throughout our footprint with the addition of new bankers and serving new and expanded customer relationships.”
Kirk Pressley, CFO, said, “We are happy with the margin progression and momentum. Our dollar margin increased by $3.4 million from the first quarter, a 13% annualized linked quarter increase. The net interest margin percentage increased an impressive 13 basis points to 2.79%.”
| FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in Thousands except share and per share<br> amounts) | Period<br> Ending June 30, 2024 | Period<br> Ending March 31, 2024 | %<br> Change From Period Ending March 31, 2024 to Period Ending June 30, 2024 | Period<br> Ending June 30, 2023 | %<br> Change From Period Ending June 30, 2023 to Period Ending June 30, 2024 | ||||||||
| QUARTERLY<br> OPERATING RESULTS | |||||||||||||
| Net Income | $ | 52,136 | $ | 50,026 | 4.2 | % | $ | 53,468 | (2.5 | )% | |||
| Net Income Available to Common<br> Stockholders | $ | 52,105 | $ | 50,026 | 4.2 | % | $ | 53,437 | (2.5 | )% | |||
| Diluted Earnings Per Share | $ | 0.95 | $ | 0.92 | 3.7 | % | $ | 0.98 | (3.1 | )% | |||
| Return on Average Assets | 1.34 | % | 1.26 | % | 1.50 | % | |||||||
| Return on Average Common Stockholders'<br> Equity | 14.08 | % | 13.82 | % | 15.85 | % | |||||||
| Average Diluted Shares Outstanding | 54,638,118 | 54,595,384 | 54,527,317 | ||||||||||
| Adjusted Net Income, net of tax* | $ | 52,136 | $ | 51,373 | 1.5 | % | $ | 53,468 | (2.5 | )% | |||
| Adjusted<br> Net Income Available to Common<br><br> <br>Stockholders,<br> net of tax* | $ | 52,105 | $ | 51,373 | 1.4 | % | $ | 53,437 | (2.5 | )% | |||
| Adjusted Diluted Earnings Per<br> Share, net of tax* | $ | 0.95 | $ | 0.94 | 1.1 | % | $ | 0.98 | (3.1 | )% | |||
| Adjusted Return on Average Assets,<br> net of tax* | 1.34 | % | 1.29 | % | 1.50 | % | |||||||
| Adjusted<br> Return on Average Common<br><br> <br>Stockholders'<br> Equity, net of tax* | 14.08 | % | 14.19 | % | 15.85 | % | |||||||
| YEAR-TO-DATE<br> OPERATING RESULTS | |||||||||||||
| Net Income | $ | 102,162 | $ | 111,439 | (8.3 | )% | |||||||
| Net Income Available to Common<br> Stockholders | $ | 102,131 | $ | 111,408 | (8.3 | )% | |||||||
| Diluted Earnings Per Share | $ | 1.87 | $ | 2.04 | (8.5 | )% | |||||||
| Return on Average Assets | 1.30 | % | 1.57 | % | |||||||||
| Return on Average Common Stockholders'<br> Equity | 13.96 | % | 16.83 | % | |||||||||
| Average Diluted Shares Outstanding | 54,616,751 | 54,520,025 | |||||||||||
| Adjusted Net Income, net of tax* | $ | 103,509 | $ | 111,439 | (7.1 | )% | |||||||
| Adjusted<br> Net Income Available to Common<br><br> <br>Stockholders,<br> net of tax* | $ | 103,478 | $ | 111,408 | (7.1 | )% | |||||||
| Adjusted Diluted Earnings Per<br> Share, net of tax* | $ | 1.89 | $ | 2.04 | |||||||||
| Adjusted Return on Average Assets,<br> net of tax* | 1.31 | % | 1.57 | % | |||||||||
| Adjusted<br> Return on Average Common<br><br> <br>Stockholders'<br> Equity, net of tax* | 14.15 | % | 16.83 | % | |||||||||
| BALANCE<br> SHEET | |||||||||||||
| Total Assets | $ | 16,049,814 | $ | 15,721,630 | 2.1 | % | $ | 15,072,808 | 6.5 | % | |||
| Loans | 12,332,780 | 11,880,696 | 3.8 | % | 11,604,894 | 6.3 | % | ||||||
| Non-interest-bearing Demand Deposits | 2,475,415 | 2,627,639 | (5.8 | )% | 2,855,102 | (13.3 | )% | ||||||
| Total Deposits | 13,259,392 | 12,751,448 | 4.0 | % | 12,288,219 | 7.9 | % | ||||||
| Stockholders' Equity | 1,510,578 | 1,476,036 | 2.3 | % | 1,363,471 | 10.8 | % |
* This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $52.1 million for the quarter ended June 30, 2024, compared to net income and net income available to common stockholders of $50.0 million for the first quarter of 2024 and net income of $53.5 million and net income available to common stockholders of $53.4 million for the second quarter of 2023. Basic and diluted earnings per common share were $0.96 and $0.95, respectively, in the second quarter of 2024, compared to $0.92 for both in the first quarter of 2024 and $0.98 for both in the second quarter of 2023.
Annualized return on average assets was 1.34% and annualized return on average common stockholders’ equity was 14.08% for the second quarter of 2024, compared to 1.50% and 15.85%, respectively, for the second quarter of 2023.
Net interest income was $105.9 million for the second quarter of 2024, compared to $102.5 million for the first quarter of 2024 and $101.3 million for the second quarter of 2023. The net interest margin in the second quarter of 2024 was 2.79% compared to 2.66% in the first quarter of 2024 and 2.93% in the second quarter of 2023. Loan yields were 6.48% during the second quarter of 2024 compared to 6.40% during the first quarter of 2024 and 5.94% during the second quarter of 2023. Investment yields were 3.32% during the second quarter of 2024 compared to 3.16% during the first quarter of 2024 and 2.64% during the second quarter of 2023. Average interest-bearing deposit rates were 4.08% during the second quarter of 2024, compared to 4.04% during the first quarter of 2024 and 3.32% during the second quarter of 2023. Average federal funds purchased rates were 5.50% during second quarter of 2024, compared to 5.50% during the first quarter of 2024 and 5.14% during the second quarter of 2023.
Average loans for the second quarter of 2024 were $12.06 billion, an increase of $322.0 million, or 11.0% annualized, from average loans of $11.74 billion for the first quarter of 2024, and an increase of $463.7 million, or 4.0%, from average loans of $11.60 billion for the second quarter of 2023. Ending total loans for the second quarter of 2024 were $12.33 billion, an increase of $452.1 million, or 15.3% annualized, from $11.88 billion for the first quarter of 2024, and an increase of $727.9 million, or 6.3%, from $11.60 billion for the second quarter of 2023.
Average total deposits for the second quarter of 2024 were $12.86 billion, a decrease of $61.0 million, or 1.9% annualized, from average total deposits of $12.92 billion for the first quarter of 2024, and an increase of $1.28 billion, or 11.0%, from average total deposits of $11.58 billion for the second quarter of 2023. Ending total deposits for the second quarter of 2024 were $13.26 billion, an increase of $507.9 million, or 16.0% annualized, from $12.75 billion for the first quarter of 2024, and an increase of $971.2 million, or 7.9%, from $12.29 billion for the second quarter of 2023.
Non-performing assets to total assets were 0.23% for the second quarter of 2024, compared to 0.22% for the first quarter of 2024 and 0.16% for the second quarter of 2023. The increase in non-performing assets to total assets can be attributed to a single relationship that moved to non-accrual status during the first quarter of 2024. This loan has been closely monitored and is well-collateralized. Annualized net charge-offs to average loans were 0.10% for the second quarter of 2024, compared to 0.06% for the first quarter of 2024 and 0.11% for the second quarter of 2023. The allowance for credit losses as a percentage of total loans at June 30, 2024, March 31, 2024, and June 30, 2023, was 1.28%, 1.31%, and 1.31%, respectively. We recorded a $5.4 million provision for credit losses in the second quarter of 2024 compared to $4.4 million in the first quarter of 2024, and $6.7 million in the second quarter of 2023.
Non-interest income increased $309,000, or 3.6%, to $8.9 million for the second quarter of 2024 from $8.6 million in the second quarter of 2023, and increased $78,000, or .9%, on a linked quarter basis. Service charges on deposit accounts increased $151,000, or 7.0%, to $2.3 million for the second quarter of 2024 from $2.1 million in the second quarter of 2023, and increased $143,000, or 6.7%, on a linked quarter basis. Mortgage banking revenue increased $683,000, or 98.1%, to $1.4 million for the second quarter of 2024 from $696,000 in the second quarter of 2023, and increased $701,000, or 103.4%, on a linked quarter basis. The increase in mortgage banking revenue was primarily attributed to a combination of favorable market conditions and increased staffing levels. Net credit card revenue decreased $73,000, or 3.0%, to $2.3 million for the second quarter of 2024 from $2.4 million in the second quarter of 2023, and increased $178,000, or 8.3%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income decreased $438,000, or 17.5%, to $2.1 million for the second quarter of 2024 from $2.5 million in the second quarter of 2023, and decreased $1.2 million, or 36.3%, on a linked quarter basis. We recognized $1.2 million of income attributed to a death benefit related to a former employee in our BOLI program during the first quarter of 2024, and $890,000 during the second quarter of 2023. Other operating income decreased $14,000, or 1.7%, to $828,000 for the second quarter of 2024 from $842,000 in the second quarter of 2023, and increased $229,000, or 38.2%, on a linked quarter basis.
Non-interest expense increased $4.4 million, or 11.3%, to $42.8 million for the second quarter of 2024 from $38.5 million in the second quarter of 2023, and decreased $3.5 million, or 7.5%, on a linked quarter basis. During the second quarter of 2024, the Company recorded the impact from election of the proportional amortization method to account for historical and new market tax credit investments made primarily for the purpose of receiving income tax credits due to our adoption of Accounting Standards Update 2023-02. The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense. Previously the amortization of the investment was included in other non-interest expenses. Salary and benefit expense increased $5.4 million, or 28.8%, to $24.2 million for the second quarter of 2024 from $18.8 million in the second quarter of 2023, and increased $1.2 million, or 5.3%, on a linked quarter basis. The number of FTE employees increased by 48, or 8.3%, to 625 at June 30, 2024 compared to 577 at June 30, 2023, and increased by 20, or 3.3%, from the end of the first quarter of 2024. The increase in salary and benefit expense year-over-year continues to be largely due to the normalization of incentives and increased salary expenses due to an increase in FTE employees. Incentives increased approximately $2.7 million, and salaries increased approximately $1.5 million from the second quarter of 2023. Equipment and occupancy expense increased $146,000, or 4.3%, to $3.6 million for the second quarter of 2024 from $3.4 million in the second quarter of 2023, and increased $10,000, or .3%, on a linked quarter basis. Third party processing and other services expense increased $1.3 million, or 20.4%, to $7.5 million for the second quarter of 2024 from $6.2 million in the second quarter of 2023, and increased $299,000, or 4.2%, on a linked quarter basis. Professional services expense increased $161,000, or 10.2%, to $1.7 million for the second quarter of 2024 from $1.6 million in the second quarter of 2023, and increased $277,000, or 18.9%, on a linked quarter basis. FDIC and other regulatory assessments decreased $40,000, or 1.8%, to $2.2 million for the second quarter of 2024 from $2.2 million in the second quarter of 2023, and decreased $1.7 million, or 43.6%, on a linked quarter basis. In the first quarter of 2024, the FDIC implemented a special assessment adjustment to recapitalize the Deposit Insurance Fund resulting in an expense of $1.8 million. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures”. Other operating expenses decreased $2.6 million, or 41.8%, to $3.6 million for the second quarter of 2024 from $6.2 million in the second quarter of 2023, and decreased $3.6 million, or 49.6%, on a linked quarter basis. The decrease in other operating expenses were largely due to the application of the proportional amortization method to account for historical and new market tax credit investments, discussed above. The efficiency ratio was 37.31% during the second quarter of 2024 compared to 35.02% during the second quarter of 2023 and 43.30% during the first quarter of 2024.
Income tax expense increased $3.2 million, or 28.6%, to $14.5 million in the second quarter of 2024, compared to $11.2 million in the second quarter of 2023. Our effective tax rate was 21.71% for the second quarter of 2024 compared to 17.38% for the second quarter of 2023. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the second quarters of 2024 and 2023 of $396,000 and $138,000, respectively.
About ServisFirstBancshares, Inc.
ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida and Tennessee. Through the ServisFirst Bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.
ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.
Statementsin this press release that are not historical facts, including, but not limited to, statements concerning future operations, resultsor performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section21E 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 statementsattributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’ssenior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggestedby the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors thatcould affect the accuracy of such forward-looking statements, including, but not limited to: general economic conditions, especiallyin the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interestrate 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 depositbase; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the FederalReserve policies in connection with continued or re-emerging inflationary pressures and the ability of the U.S. Congress to increasethe U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietaryinformation; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal andadministrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment ofthe collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographicmarkets; and increased competition from both banks and non-bank financial institutions. For discussion of these and other risks thatmay 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 2024,and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, thenour actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking informationand statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak onlyas of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are madefrom 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<br> share data) | |||||||||||||||
| 2nd<br> quarter 2024 | 1st<br> quarter 2024 | 4th<br> quarter 2023 | 3rd<br> quarter 2023 | 2nd<br> quarter 2023 | |||||||||||
| CONSOLIDATED STATEMENT OF INCOME | |||||||||||||||
| Interest income | $ | 227,540 | $ | 226,710 | $ | 229,062 | $ | 213,206 | $ | 189,656 | |||||
| Interest<br> expense | 121,665 | 124,215 | 127,375 | 113,508 | 88,405 | ||||||||||
| Net interest income | 105,875 | 102,495 | 101,687 | 99,698 | 101,251 | ||||||||||
| Provision<br> for credit losses | 5,353 | 4,368 | 3,582 | 4,282 | 6,654 | ||||||||||
| Net interest income after provision<br> for credit losses | 100,522 | 98,127 | 98,105 | 95,416 | 94,597 | ||||||||||
| Non-interest income | 8,891 | 8,813 | 7,379 | 8,135 | 8,582 | ||||||||||
| Non-interest<br> expense | 42,818 | 46,303 | 58,258 | 41,663 | 38,466 | ||||||||||
| Income before income tax | 66,595 | 60,637 | 47,226 | 61,888 | 64,713 | ||||||||||
| Provision<br> for income tax | 14,459 | 10,611 | 5,152 | 8,548 | 11,245 | ||||||||||
| Net income | 52,136 | 50,026 | 42,074 | 53,340 | 53,468 | ||||||||||
| Preferred<br> stock dividends | 31 | — | 31 | — | 31 | ||||||||||
| Net income<br> available to common stockholders | $ | 52,105 | $ | 50,026 | $ | 42,043 | $ | 53,340 | $ | 53,437 | |||||
| Earnings per share - basic | $ | 0.96 | $ | 0.92 | $ | 0.77 | $ | 0.98 | $ | 0.98 | |||||
| Earnings per share - diluted | $ | 0.95 | $ | 0.92 | $ | 0.77 | $ | 0.98 | $ | 0.98 | |||||
| Average diluted shares outstanding | 54,638,118 | 54,595,384 | 54,548,719 | 54,530,635 | 54,527,317 | ||||||||||
| CONSOLIDATED BALANCE SHEET DATA | |||||||||||||||
| Total assets | $ | 16,049,814 | $ | 15,721,630 | $ | 16,129,668 | $ | 16,044,332 | $ | 15,072,808 | |||||
| Loans | 12,332,780 | 11,880,696 | 11,658,829 | 11,641,130 | 11,604,894 | ||||||||||
| Debt securities | 1,941,647 | 1,941,625 | 1,882,847 | 1,878,701 | 2,048,227 | ||||||||||
| Non-interest-bearing demand<br> deposits | 2,475,415 | 2,627,639 | 2,643,101 | 2,621,072 | 2,855,102 | ||||||||||
| Total deposits | 13,259,392 | 12,751,448 | 13,273,511 | 13,142,376 | 12,288,219 | ||||||||||
| Borrowings | 64,739 | 64,737 | 64,735 | 64,751 | 64,737 | ||||||||||
| Stockholders' equity | 1,510,578 | 1,476,036 | 1,440,405 | 1,401,384 | 1,363,471 | ||||||||||
| Shares outstanding | 54,522,802 | 54,507,778 | 54,461,580 | 54,425,447 | 54,425,033 | ||||||||||
| Book value per share | $ | 27.71 | $ | 27.08 | $ | 26.45 | $ | 25.75 | $ | 25.05 | |||||
| Tangible book value per share (1) | $ | 27.46 | $ | 26.83 | $ | 26.20 | $ | 25.50 | $ | 24.80 | |||||
| SELECTED FINANCIAL RATIOS (Annualized) | |||||||||||||||
| Net interest margin | 2.79 | % | 2.66 | % | 2.57 | % | 2.64 | % | 2.93 | % | |||||
| Return on average assets | 1.34 | % | 1.26 | % | 1.04 | % | 1.37 | % | 1.50 | % | |||||
| Return on average common stockholders'<br> equity | 14.08 | % | 13.82 | % | 11.78 | % | 15.34 | % | 15.85 | % | |||||
| Efficiency ratio | 37.31 | % | 43.30 | % | 55.23 | % | 38.64 | % | 35.02 | % | |||||
| Non-interest expense to average<br> earning assets | 1.13 | % | 1.20 | % | 1.47 | % | 1.10 | % | 1.11 | % | |||||
| CAPITAL RATIOS (2) | |||||||||||||||
| Common equity tier 1 capital<br> to risk-weighted assets | 10.93 | % | 11.07 | % | 10.91 | % | 10.69 | % | 10.37 | % | |||||
| Tier 1 capital to risk-weighted<br> assets | 10.93 | % | 11.08 | % | 10.92 | % | 10.69 | % | 10.38 | % | |||||
| Total capital to risk-weighted<br> assets | 12.43 | % | 12.61 | % | 12.45 | % | 12.25 | % | 11.94 | % | |||||
| Tier 1 capital to average assets | 9.81 | % | 9.44 | % | 9.12 | % | 9.35 | % | 9.83 | % | |||||
| Tangible common equity to total<br> tangible assets (1) | 9.33 | % | 9.31 | % | 8.85 | % | 8.66 | % | 8.96 | % | |||||
| (1) This<br> press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP<br> Financial Measures.” | |||||||||||||||
| (2) Regulatory<br> capital ratios for most recent period are preliminary. |
GAAP Reconciliationand Management Explanation of Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. This assessment was updated in the first quarter of 2024 resulting in additional expense of $1.8 million. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill associated with our acquisition of Metro Bancshares, Inc. in January 2015.
We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.
| At<br> June 30, 2024 | At<br> March 31, 2024 | At<br> December 31, 2023 | At<br> September 30, 2023 | At<br> June 30, 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Book value per share<br> - GAAP | $ | 27.71 | $ | 27.08 | $ | 26.45 | $ | 25.75 | $ | 25.05 | |||||
| Total common<br> stockholders' equity - GAAP | 1,510,578 | 1,476,036 | 1,440,405 | 1,401,384 | 1,363,471 | ||||||||||
| Adjustment<br> for Goodwill | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | |||||
| Tangible common<br> stockholders' equity - non-GAAP | $ | 1,496,963 | $ | 1,462,421 | $ | 1,426,790 | $ | 1,387,769 | $ | 1,349,856 | |||||
| Tangible book value per share<br> - non-GAAP | $ | 27.46 | $ | 26.83 | $ | 26.22 | $ | 25.50 | $ | 24.80 | |||||
| Stockholders'<br> equity to total assets - GAAP | 9.41 | % | 9.39 | % | 8.93 | % | 8.73 | % | 9.05 | % | |||||
| Total assets<br> - GAAP | $ | 16,049,814 | $ | 16,048,819 | $ | 16,129,668 | $ | 16,044,332 | $ | 15,072,808 | |||||
| Adjustment<br> for Goodwill | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | (13,615 | ) | |||||
| Total tangible<br> assets - non-GAAP | $ | 16,036,199 | $ | 16,035,204 | $ | 16,116,053 | $ | 16,030,717 | $ | 15,059,193 | |||||
| Tangible common<br> equity to total tangible assets - non-GAAP | 9.33 | % | 9.33 | % | 8.85 | % | 8.66 | % | 8.96 | % | |||||
| Three<br> Months Ended June 30, 2024 | Three<br> Months Ended March 31, 2024 | Three<br> Months Ended June 30, 2023 | Six<br> Months Ended June 30, 2024 | Six<br> Months Ended June 30, 2023 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net<br> income - GAAP | $ | 52,136 | $ | 50,026 | $ | 53,468 | $ | 102,162 | $ | 111,439 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 1,799 | — | 1,799 | — | ||||||||||
| Tax<br> on adjustments | — | (452 | ) | — | (452 | ) | — | ||||||||
| Adjusted<br> net income - non-GAAP | $ | 52,136 | $ | 51,373 | $ | 53,468 | $ | 103,509 | $ | 111,439 | |||||
| Net income<br> available to common stockholders - GAAP | $ | 52,105 | $ | 50,026 | $ | 53,437 | $ | 102,131 | $ | 111,408 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 1,799 | — | 1,799 | — | ||||||||||
| Tax<br> on adjustments | — | (452 | ) | — | (452 | ) | — | ||||||||
| Adjusted<br> net income available to common stockholders -non-GAAP | $ | 52,105 | $ | 51,373 | $ | 53,437 | $ | 103,478 | $ | 111,408 | |||||
| Diluted earnings per share<br> - GAAP | $ | 0.95 | $ | 0.92 | $ | 0.98 | $ | 1.87 | $ | 2.04 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 0.03 | — | 0.03 | — | ||||||||||
| Tax<br> on adjustments | — | (0.01 | ) | — | (0.01 | ) | — | ||||||||
| Adjusted<br> diluted earnings per share - non-GAAP | $ | 0.95 | $ | 0.94 | $ | 0.98 | $ | 1.89 | $ | 2.04 | |||||
| Return<br> on average assets - GAAP | 1.34 | % | 1.26 | % | 1.50 | % | 1.30 | % | 1.57 | % | |||||
| Net income<br> available to common stockholders - GAAP | $ | 52,105 | $ | 50,026 | $ | 53,437 | $ | 102,131 | $ | 111,408 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 1,799 | — | 1,799 | — | ||||||||||
| Tax<br> on adjustments | — | (452 | ) | — | (452 | ) | — | ||||||||
| Adjusted<br> net income available to common stockholders -non-GAAP | $ | 52,105 | $ | 51,373 | $ | 53,437 | $ | 103,478 | $ | 111,408 | |||||
| Average<br> assets - GAAP | $ | 15,697,538 | $ | 15,957,579 | $ | 14,291,873 | $ | 15,827,894 | $ | 14,344,749 | |||||
| Adjusted<br> return on average assets - non-GAAP | 1.34 | % | 1.29 | % | 1.50 | % | 1.31 | % | 1.57 | % | |||||
| Return<br> on average common stockholders' equity - GAAP | 14.08 | % | 13.82 | % | 15.85 | % | 13.96 | % | 16.83 | % | |||||
| Net income<br> available to common stockholders - GAAP | $ | 52,105 | $ | 50,026 | $ | 53,437 | $ | 102,131 | $ | 111,408 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 1,799 | — | 1,799 | — | ||||||||||
| Tax<br> on adjustments | — | (452 | ) | — | (452 | ) | — | ||||||||
| Adjusted<br> diluted earnings per share - non-GAAP | $ | 52,105 | $ | 51,373 | $ | 53,437 | $ | 103,478 | $ | 111,408 | |||||
| Average<br> common stockholders' equity - GAAP | $ | 1,488,429 | $ | 1,455,938 | $ | 1,351,944 | $ | 1,471,048 | $ | 1,335,267 | |||||
| Adjusted<br> return on average common stockholders' equity non-GAAP | 14.08 | % | 14.19 | % | 15.85 | % | 14.15 | % | 16.83 | % | |||||
| Efficiency<br> ratio | 37.31 | % | 55.23 | % | 35.02 | % | 39.42 | % | 34.81 | % | |||||
| Non-interest<br> expense - GAAP | $ | 42,818 | $ | 46,303 | $ | 38,466 | $ | 89,121 | $ | 78,130 | |||||
| Adjustments: | |||||||||||||||
| FDIC<br> special assessment | — | 1,799 | — | 1,799 | — | ||||||||||
| Adjusted<br> non-interest expense | $ | 42,818 | $ | 44,504 | $ | 38,466 | $ | 87,322 | $ | 78,130 | |||||
| Net interest<br> income plus non-interest income - GAAP | $ | 114,766 | $ | 111,308 | $ | 109,833 | $ | 226,074 | $ | 224,455 | |||||
| Adjusted<br> efficiency ratio - non-GAAP | 37.31 | % | 39.98 | % | 35.02 | % | 38.63 | % | 34.81 | % | |||||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| (Dollars in thousands) | |||||||||||||||
| June<br> 30, 2023 | %<br> Change | ||||||||||||||
| ASSETS | |||||||||||||||
| Cash and due from<br> banks | 135,711 | $ | 107,251 | 27 | % | ||||||||||
| Interest-bearing balances due<br> from depository institutions | 1,129,922 | 852,483 | 33 | % | |||||||||||
| Federal<br> funds sold | 11,132 | 17,958 | (38 | )% | |||||||||||
| Cash and<br> cash equivalents | 1,276,765 | 977,692 | 31 | % | |||||||||||
| Available for sale debt securities,<br> at fair value | 1,174,389 | 990,921 | 19 | % | |||||||||||
| Held to maturity debt securities<br> (fair value of 684,235 and 963,843, respectively) | 767,258 | 1,057,306 | (27 | )% | |||||||||||
| Restricted equity securities | 11,300 | 7,307 | 55 | % | |||||||||||
| Mortgage loans held for sale | 11,174 | 3,981 | 181 | % | |||||||||||
| Loans | 12,332,780 | 11,604,894 | 6 | % | |||||||||||
| Less allowance<br> for credit losses | (158,092 | ) | (152,272 | ) | 4 | % | |||||||||
| Loans, net | 12,174,688 | 11,452,622 | 6 | % | |||||||||||
| Premises and equipment, net | 59,200 | 59,655 | (1 | )% | |||||||||||
| Goodwill | 13,615 | 13,615 | - | % | |||||||||||
| Other assets | 561,425 | 509,709 | 10 | % | |||||||||||
| Total assets | 16,049,814 | $ | 15,072,808 | 6 | % | ||||||||||
| LIABILITIES AND STOCKHOLDERS'<br> EQUITY | |||||||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Non-interest-bearing<br> demand | 2,475,415 | $ | 2,855,102 | (13 | )% | ||||||||||
| Interest-bearing | 10,783,977 | 9,433,117 | 14 | % | |||||||||||
| Total deposits | 13,259,392 | 12,288,219 | 8 | % | |||||||||||
| Federal funds purchased | 1,097,154 | 1,298,066 | (15 | )% | |||||||||||
| Other borrowings | 64,739 | 64,737 | - | % | |||||||||||
| Other liabilities | 117,951 | 58,315 | 102 | % | |||||||||||
| Total liabilities | 14,539,236 | 13,709,337 | 6 | % | |||||||||||
| Stockholders' equity: | |||||||||||||||
| Preferred<br> stock, par value 0.001 per share; 1,000,000 authorized and undesignated at June 30, 2024 and June 30, 2023 | - | - | - | % | |||||||||||
| Common<br> stock, par value 0.001 per share; 200,000,000 shares authorized; 54,522,802 shares issued and outstanding at June 30, 2024, and<br> 54,398,025 shares issued and outstanding at June 30, 2023 | 54 | 54 | - | % | |||||||||||
| Additional<br> paid-in capital | 234,495 | 230,659 | 2 | % | |||||||||||
| Retained<br> earnings | 1,322,049 | 1,190,920 | 11 | % | |||||||||||
| Accumulated<br> other comprehensive loss | (46,520 | ) | (58,662 | ) | (21 | )% | |||||||||
| Total stockholders'<br> equity attributable to ServisFirst Bancshares, Inc. | 1,510,078 | 1,362,971 | 11 | % | |||||||||||
| Noncontrolling<br> interest | 500 | 500 | - | % | |||||||||||
| Total<br> stockholders' equity | 1,510,578 | 1,363,471 | 11 | % | |||||||||||
| Total<br> liabilities and stockholders' equity | 16,049,814 | $ | 15,072,808 | 6 | % |
All values are in US Dollars.
| CONSOLIDATED STATEMENTS OF INCOME<br> (UNAUDITED) | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands except per share data) | ||||||||||||||||||||||||||||||
| Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | |||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||||||||
| Interest<br> and fees on loans | $ | 194,300 | $ | 171,718 | $ | 381,278 | $ | 335,450 | ||||||||||||||||||||||
| Taxable<br> securities | 16,158 | 11,570 | 32,137 | 22,465 | ||||||||||||||||||||||||||
| Nontaxable<br> securities | 9 | 17 | 18 | 38 | ||||||||||||||||||||||||||
| Federal<br> funds sold | 538 | 227 | 1,079 | 841 | ||||||||||||||||||||||||||
| Other<br> interest and dividends | 16,535 | 6,124 | 39,738 | 12,184 | ||||||||||||||||||||||||||
| Total<br> interest income | 227,540 | 189,656 | 454,250 | 370,978 | ||||||||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||||||
| Deposits | 104,671 | 71,971 | 208,737 | 127,684 | ||||||||||||||||||||||||||
| Borrowed<br> funds | 16,994 | 16,434 | 37,143 | 33,742 | ||||||||||||||||||||||||||
| Total<br> interest expense | 121,665 | 88,405 | 245,880 | 161,426 | ||||||||||||||||||||||||||
| Net interest<br> income | 105,875 | 101,251 | 208,370 | 209,552 | ||||||||||||||||||||||||||
| Provision<br> for credit losses | 5,353 | 6,654 | 9,721 | 10,851 | ||||||||||||||||||||||||||
| Net<br> interest income after provision for credit losses | 100,522 | 94,597 | 198,649 | 198,701 | ||||||||||||||||||||||||||
| Non-interest income: | ||||||||||||||||||||||||||||||
| Service<br> charges on deposit accounts | 2,293 | 2,142 | 4,443 | 4,076 | ||||||||||||||||||||||||||
| Mortgage<br> banking | 1,379 | 696 | 2,057 | 1,138 | ||||||||||||||||||||||||||
| Credit card<br> income | 2,333 | 2,406 | 4,488 | 4,095 | ||||||||||||||||||||||||||
| Bank-owned<br> life insurance income | 2,058 | 2,496 | 5,289 | 4,117 | ||||||||||||||||||||||||||
| Other<br> operating income | 828 | 842 | 1,427 | 1,477 | ||||||||||||||||||||||||||
| Total<br> non-interest income | 8,891 | 8,582 | 17,704 | 14,903 | ||||||||||||||||||||||||||
| Non-interest expense: | ||||||||||||||||||||||||||||||
| Salaries<br> and employee benefits | 24,213 | 18,795 | 47,199 | 37,861 | ||||||||||||||||||||||||||
| Equipment<br> and occupancy expense | 3,567 | 3,421 | 7,124 | 6,856 | ||||||||||||||||||||||||||
| Third party<br> processing and other services | 7,465 | 6,198 | 14,631 | 13,482 | ||||||||||||||||||||||||||
| Professional<br> services | 1,741 | 1,580 | 3,205 | 3,234 | ||||||||||||||||||||||||||
| FDIC and<br> other regulatory assessments | 2,202 | 2,242 | 6,107 | 3,759 | ||||||||||||||||||||||||||
| Other real<br> estate owned expense | 7 | 6 | 37 | 12 | ||||||||||||||||||||||||||
| Other<br> operating expense | 3,623 | 6,224 | 10,818 | 12,926 | ||||||||||||||||||||||||||
| Total<br> non-interest expense | 42,818 | 38,466 | 89,121 | 78,130 | ||||||||||||||||||||||||||
| Income before<br> income tax | 66,595 | 64,713 | 127,232 | 135,474 | ||||||||||||||||||||||||||
| Provision<br> for income tax | 14,459 | 11,245 | 25,070 | 24,035 | ||||||||||||||||||||||||||
| Net income | 52,136 | 53,468 | 102,162 | 111,439 | ||||||||||||||||||||||||||
| Dividends<br> on preferred stock | 31 | - | 31 | 31 | ||||||||||||||||||||||||||
| Net<br> income available to common stockholders | $ | 52,105 | $ | 53,437 | $ | 102,131 | $ | 111,408 | ||||||||||||||||||||||
| Basic earnings per common share | $ | 0.96 | $ | 0.98 | $ | 1.87 | $ | 2.05 | ||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.95 | $ | 0.98 | $ | 1.87 | $ | 2.04 | ||||||||||||||||||||||
| LOANS BY TYPE (UNAUDITED) | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||
| 2nd<br> Quarter 2024 | 1st<br> Quarter 2024 | 4th<br> Quarter 2023 | 3rd<br> Quarter 2023 | 2nd<br> Quarter 2023 | ||||||||||||||||||||||||||
| Commercial, financial<br> and agricultural | $ | 2,935,577 | $ | 2,834,102 | $ | 2,823,986 | $ | 2,890,535 | $ | 2,986,453 | ||||||||||||||||||||
| Real estate - construction | 1,510,677 | 1,546,716 | 1,519,619 | 1,509,937 | 1,397,732 | |||||||||||||||||||||||||
| Real estate - mortgage: | ||||||||||||||||||||||||||||||
| Owner-occupied<br> commercial | 2,399,644 | 2,377,042 | 2,257,163 | 2,237,684 | 2,294,002 | |||||||||||||||||||||||||
| 1-4 family<br> mortgage | 1,350,428 | 1,284,888 | 1,249,938 | 1,170,099 | 1,167,238 | |||||||||||||||||||||||||
| Other mortgage | 4,072,007 | 3,777,758 | 3,744,346 | 3,766,124 | 3,686,434 | |||||||||||||||||||||||||
| Subtotal: Real estate - mortgage | 7,822,079 | 7,439,688 | 7,251,447 | 7,173,907 | 7,147,674 | |||||||||||||||||||||||||
| Consumer | 64,447 | 60,190 | 63,777 | 66,751 | 73,035 | |||||||||||||||||||||||||
| Total<br> loans | $ | 12,332,780 | $ | 11,880,696 | $ | 11,658,829 | $ | 11,641,130 | $ | 11,604,894 | ||||||||||||||||||||
| SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| 2nd<br> Quarter 2024 | 1st<br> Quarter 2024 | 4th<br> Quarter 2023 | 3rd<br> Quarter 2023 | 2nd<br> Quarter 2023 | ||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||
| Beginning balance | $ | 155,892 | $ | 153,317 | $ | 152,247 | $ | 152,272 | $ | 148,965 | ||||||||||||||||||||
| Loans charged off: | ||||||||||||||||||||||||||||||
| Commercial<br> financial and agricultural | 3,355 | 1,842 | 2,831 | 4,783 | 4,358 | |||||||||||||||||||||||||
| Real estate<br> - construction | - | - | 89 | 19 | - | |||||||||||||||||||||||||
| Real estate<br> - mortgage | 119 | 67 | 14 | - | 131 | |||||||||||||||||||||||||
| Consumer | 108 | 98 | 231 | 341 | 111 | |||||||||||||||||||||||||
| Total charge<br> offs | 3,582 | 2,007 | 3,165 | 5,143 | 4,600 | |||||||||||||||||||||||||
| Recoveries: | ||||||||||||||||||||||||||||||
| Commercial<br> financial and agricultural | 406 | 199 | 614 | 825 | 1,233 | |||||||||||||||||||||||||
| Real estate<br> - construction | 8 | - | - | - | - | |||||||||||||||||||||||||
| Real estate<br> - mortgage | - | 6 | - | - | - | |||||||||||||||||||||||||
| Consumer | 15 | 9 | 39 | 11 | 21 | |||||||||||||||||||||||||
| Total<br> recoveries | 429 | 214 | 653 | 836 | 1,254 | |||||||||||||||||||||||||
| Net charge-offs | 3,153 | 1,793 | 2,512 | 4,307 | 3,346 | |||||||||||||||||||||||||
| Provision<br> for credit losses | 5,353 | 4,368 | 3,582 | 4,282 | 6,654 | |||||||||||||||||||||||||
| Ending<br> balance | $ | 158,092 | $ | 155,892 | $ | 153,317 | $ | 152,247 | $ | 152,272 | ||||||||||||||||||||
| Allowance<br> for credit losses to total loans | 1.28 | % | 1.31 | % | 1.32 | % | 1.31 | % | 1.31 | % | ||||||||||||||||||||
| Allowance<br> for credit losses to total average loans | 1.31 | % | 1.33 | % | 1.32 | % | 1.31 | % | 1.31 | % | ||||||||||||||||||||
| Net charge-offs<br> to total average loans | 0.10 | % | 0.06 | % | 0.09 | % | 0.15 | % | 0.11 | % | ||||||||||||||||||||
| Provision<br> for credit losses to total average loans | 0.18 | % | 0.15 | % | 0.12 | % | 0.15 | % | 0.23 | % | ||||||||||||||||||||
| Nonperforming<br> assets: | ||||||||||||||||||||||||||||||
| Nonaccrual<br> loans | $ | 33,454 | $ | 34,457 | $ | 19,349 | $ | 20,912 | $ | 16,897 | ||||||||||||||||||||
| Loans 90+<br> days past due and accruing | 1,482 | 380 | 2,184 | 1,692 | 5,947 | |||||||||||||||||||||||||
| Other real<br> estate owned and repossessed assets | 1,458 | 490 | 995 | 690 | 832 | |||||||||||||||||||||||||
| Total | $ | 36,394 | $ | 35,327 | $ | 22,528 | $ | 23,294 | $ | 23,676 | ||||||||||||||||||||
| Nonperforming<br> loans to total loans | 0.28 | % | 0.29 | % | 0.18 | % | 0.19 | % | 0.20 | % | ||||||||||||||||||||
| Nonperforming<br> assets to total assets | 0.23 | % | 0.22 | % | 0.14 | % | 0.15 | % | 0.16 | % | ||||||||||||||||||||
| Nonperforming<br> assets to earning assets | 0.23 | % | 0.23 | % | 0.14 | % | 0.16 | % | 0.16 | % | ||||||||||||||||||||
| Allowance<br> for credit losses to nonaccrual loans | 472.57 | % | 452.42 | % | 795.17 | % | 731.74 | % | 901.18 | % | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME<br> (UNAUDITED) | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||
| (In thousands except per share data) | ||||||||||||||||||||||||||||||
| 2nd<br> quarter 2024 | 1st<br> quarter 2024 | 4th<br> quarter 2023 | 3rd<br> quarter 2023 | 2nd<br> quarter 2023 | ||||||||||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||||||||
| Interest<br> and fees on loans | $ | 194,300 | $ | 186,978 | $ | 184,897 | $ | 178,754 | $ | 171,718 | ||||||||||||||||||||
| Taxable<br> securities | 16,158 | 15,979 | 15,512 | 15,522 | 11,570 | |||||||||||||||||||||||||
| Nontaxable<br> securities | 9 | 9 | 12 | 15 | 17 | |||||||||||||||||||||||||
| Federal<br> funds sold | 538 | 541 | 1,018 | 985 | 227 | |||||||||||||||||||||||||
| Other<br> interest and dividends | 16,535 | 23,203 | 27,623 | 17,930 | 6,124 | |||||||||||||||||||||||||
| Total<br> interest income | 227,540 | 226,710 | 229,062 | 213,206 | 189,656 | |||||||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||||||
| Deposits | 104,671 | 104,066 | 108,155 | 95,901 | 71,971 | |||||||||||||||||||||||||
| Borrowed<br> funds | 16,994 | 20,149 | 19,220 | 17,607 | 16,434 | |||||||||||||||||||||||||
| Total<br> interest expense | 121,665 | 124,215 | 127,375 | 113,508 | 88,405 | |||||||||||||||||||||||||
| Net interest<br> income | 105,875 | 102,495 | 101,687 | 99,698 | 101,251 | |||||||||||||||||||||||||
| Provision<br> for credit losses | 5,353 | 4,368 | 3,582 | 4,282 | 6,654 | |||||||||||||||||||||||||
| Net<br> interest income after provision for credit losses | 100,522 | 98,127 | 98,105 | 95,416 | 94,597 | |||||||||||||||||||||||||
| Non-interest income: | ||||||||||||||||||||||||||||||
| Service<br> charges on deposit accounts | 2,293 | 2,150 | 2,181 | 2,163 | 2,142 | |||||||||||||||||||||||||
| Mortgage<br> banking | 1,379 | 678 | 792 | 825 | 696 | |||||||||||||||||||||||||
| Credit card<br> income | 2,333 | 2,155 | 2,004 | 2,532 | 2,406 | |||||||||||||||||||||||||
| Bank-owned<br> life insurance income | 2,058 | 3,231 | 1,639 | 1,818 | 2,496 | |||||||||||||||||||||||||
| Other<br> operating income | 828 | 599 | 763 | 797 | 842 | |||||||||||||||||||||||||
| Total<br> non-interest income | 8,891 | 8,813 | 7,379 | 8,135 | 8,582 | |||||||||||||||||||||||||
| Non-interest expense: | ||||||||||||||||||||||||||||||
| Salaries<br> and employee benefits | 24,213 | 22,986 | 23,024 | 20,080 | 18,795 | |||||||||||||||||||||||||
| Equipment<br> and occupancy expense | 3,567 | 3,557 | 3,860 | 3,579 | 3,421 | |||||||||||||||||||||||||
| Third party<br> processing and other services | 7,465 | 7,166 | 7,841 | 6,549 | 6,198 | |||||||||||||||||||||||||
| Professional<br> services | 1,741 | 1,464 | 1,417 | 1,265 | 1,580 | |||||||||||||||||||||||||
| FDIC and<br> other regulatory assessments | 2,202 | 3,905 | 9,509 | 2,346 | 2,242 | |||||||||||||||||||||||||
| Other real<br> estate owned expense | 7 | 30 | 17 | 18 | 6 | |||||||||||||||||||||||||
| Other<br> operating expense | 3,623 | 7,195 | 12,590 | 7,826 | 6,224 | |||||||||||||||||||||||||
| Total<br> non-interest expense | 42,818 | 46,303 | 58,258 | 41,663 | 38,466 | |||||||||||||||||||||||||
| Income before<br> income tax | 66,595 | 60,637 | 47,226 | 61,888 | 64,713 | |||||||||||||||||||||||||
| Provision<br> for income tax | 14,459 | 10,611 | 5,152 | 8,548 | 11,245 | |||||||||||||||||||||||||
| Net income | 52,136 | 50,026 | 42,074 | 53,340 | 53,468 | |||||||||||||||||||||||||
| Dividends<br> on preferred stock | 31 | - | 31 | - | 31 | |||||||||||||||||||||||||
| Net<br> income available to common stockholders | $ | 52,105 | $ | 50,026 | $ | 42,043 | $ | 53,340 | $ | 53,437 | ||||||||||||||||||||
| Basic earnings per common share | $ | 0.96 | $ | 0.92 | $ | 0.77 | $ | 0.98 | $ | 0.98 | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.95 | $ | 0.92 | $ | 0.77 | $ | 0.98 | $ | 0.98 | ||||||||||||||||||||
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ON A FULLY TAXABLE-EQUIVALENT BASIS | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| 2nd quarter 2024 | 1st quarter 2024 | 4th quarter 2023 | 3rd quarter 2023 | 2nd quarter 2023 | ||||||||||||||||||||||||||
| 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) | ||||||||||||||||||||||||||||||
| Taxable | $ | 12,045,743 | 6.48 | % | $ | 11,723,391 | 6.41 | % | $ | 11,580,716 | 6.33 | % | $ | 11,545,003 | 6.13 | % | $ | 11,581,008 | 5.94 | % | ||||||||||
| Tax-exempt (2) | 17,230 | 2.08 | 17,605 | 5.00 | 17,787 | 4.71 | 18,023 | 4.71 | 18,312 | 4.82 | ||||||||||||||||||||
| Total loans, net of unearned income | 12,062,973 | 6.48 | 11,740,996 | 6.40 | 11,598,503 | 6.32 | 11,563,026 | 6.13 | 11,599,320 | 5.94 | ||||||||||||||||||||
| Mortgage loans held for sale | 6,761 | 6.13 | 4,770 | 5.57 | 5,105 | 6.22 | 5,476 | 6.67 | 5,014 | 5.12 | ||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||||||
| Taxable | 1,936,818 | 3.33 | 2,013,295 | 3.16 | 2,007,636 | 3.08 | 2,029,995 | 3.07 | 1,757,397 | 2.64 | ||||||||||||||||||||
| Tax-exempt (2) | 1,209 | 1.99 | 1,296 | 3.40 | 1,739 | 2.30 | 2,408 | 2.49 | 2,960 | 2.43 | ||||||||||||||||||||
| Total securities (3) | 1,938,027 | 3.32 | 2,014,591 | 3.16 | 2,009,375 | 3.08 | 2,032,403 | 3.07 | 1,760,357 | 2.64 | ||||||||||||||||||||
| Federal funds sold | 38,475 | 5.62 | 37,298 | 5.83 | 72,178 | 5.60 | 74,424 | 5.25 | 15,908 | 5.72 | ||||||||||||||||||||
| Restricted equity securities | 11,290 | 7.16 | 10,417 | 7.57 | 10,216 | 8.74 | 8,471 | 5.90 | 8,834 | 6.08 | ||||||||||||||||||||
| Interest-bearing balances with banks | 1,183,482 | 5.57 | 1,687,977 | 5.48 | 1,981,411 | 5.49 | 1,293,243 | 5.45 | 460,893 | 5.21 | ||||||||||||||||||||
| Total interest-earning assets | $ | 15,241,008 | 6.01 | $ | 15,496,049 | 5.88 | $ | 15,676,788 | 5.80 | $ | 14,977,043 | 5.65 | $ | 13,850,326 | 5.49 | |||||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||||||||||||
| Cash and due from banks | 96,646 | 98,813 | 101,741 | 111,566 | 101,188 | |||||||||||||||||||||||||
| Net premises and equipment | 59,653 | 60,126 | 60,110 | 60,121 | 60,499 | |||||||||||||||||||||||||
| Allowance for credit losses, accrued interest and other assets | 300,231 | 302,592 | 283,435 | 283,357 | 279,860 | |||||||||||||||||||||||||
| Total assets | $ | 15,697,538 | $ | 15,957,580 | $ | 16,122,074 | $ | 15,432,087 | $ | 14,291,873 | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||
| Checking | $ | 2,232,460 | 2.84 | % | $ | 2,339,548 | 2.69 | % | $ | 2,245,431 | 2.91 | % | $ | 2,153,973 | 2.72 | % | $ | 1,628,936 | 1.69 | % | ||||||||||
| Savings | 105,955 | 1.71 | 106,924 | 1.76 | 107,035 | 1.72 | 112,814 | 1.61 | 122,050 | 1.38 | ||||||||||||||||||||
| Money market | 6,810,799 | 4.46 | 6,761,495 | 4.48 | 7,106,190 | 4.44 | 6,538,426 | 4.24 | 5,971,639 | 3.78 | ||||||||||||||||||||
| Time deposits | 1,157,528 | 4.47 | 1,164,204 | 4.37 | 1,111,350 | 4.18 | 1,093,388 | 3.89 | 983,582 | 3.44 | ||||||||||||||||||||
| Total interest-bearing deposits | 10,306,742 | 4.08 | 10,372,171 | 4.04 | 10,570,006 | 4.06 | 9,898,601 | 3.84 | 8,706,207 | 3.32 | ||||||||||||||||||||
| Federal funds purchased | 1,193,190 | 5.50 | 1,422,828 | 5.50 | 1,338,110 | 5.49 | 1,237,721 | 5.43 | 1,191,582 | 5.14 | ||||||||||||||||||||
| Other borrowings | 64,736 | 4.26 | 64,736 | 4.26 | 64,734 | 4.23 | 64,734 | 4.23 | 100,998 | 4.62 | ||||||||||||||||||||
| Total interest-bearing liabilities | $ | 11,564,668 | 4.23 | % | $ | 11,859,735 | 4.21 | % | $ | 11,972,850 | 4.22 | % | $ | 11,201,056 | 4.02 | % | $ | 9,998,787 | 3.55 | % | ||||||||||
| Non-interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Non-interest-bearing checking | 2,555,312 | 2,550,841 | 2,656,504 | 2,778,858 | 2,876,225 | |||||||||||||||||||||||||
| Other liabilities | 89,130 | 91,066 | 76,651 | 72,924 | 64,917 | |||||||||||||||||||||||||
| Stockholders' equity | 1,536,013 | 1,503,240 | 1,475,366 | 1,437,766 | 1,399,578 | |||||||||||||||||||||||||
| Accumulated other comprehensive loss | (47,584 | ) | (47,302 | ) | (59,297 | ) | (58,517 | ) | (47,634 | ) | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 15,697,538 | $ | 15,957,580 | $ | 16,122,074 | $ | 15,432,087 | $ | 14,291,873 | ||||||||||||||||||||
| Net interest spread | 1.78 | % | 1.67 | % | 1.58 | % | 1.63 | % | 1.94 | % | ||||||||||||||||||||
| Net interest margin | 2.79 | % | 2.66 | % | 2.57 | % | 2.64 | % | 2.93 | % |
(1) Average loans include nonaccrual loans in all periods. Loan fees of $3,317, $3,655, $4,175, $2,996, and $3,318 are included in interest income in the second quarter of 2024, first quarter of 2024, fourth quarter of 2023, third quarter of 2023, and second quarter of 2023, respectively.
(2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.
(3) Unrealized losses on debt securities of $(67,823), $(68,162), $(84,647), $(83,815), and $(69,498) for the second quarter of 2024, first quarter of 2024, fourth quarter of 2023, third quarter of 2023, and second quarter of 2023, respectively, are excluded from the yield calculation.
Exhibit 99.2
| Selected Financial Data (in thousands except number of employees) | 6/30/2024 | 3/31/2024 | 6/30/2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Scheduled CD maturities for subsequent quarter | $ | 399,395 | $ | 358,069 | $ | 152,562 | |||
| Average rate scheduled CD maturities for subsequent quarter | 4.72 | % | 4.53 | % | 3.00 | % | |||
| Average loan rate - loan originations/renewals QTD (excludes fees) | 8.05 | % | 8.05 | % | 7.99 | % | |||
| Cost of total deposits, Qtr-End | 3.34 | % | 3.20 | % | 2.76 | % | |||
| Cost of interest-bearing DDAs, Qtr-End | 4.07 | % | 3.96 | % | 3.62 | % | |||
| Cost of interest-bearing deposits, Qtr-End | 4.12 | % | 4.01 | % | 3.60 | % | |||
| Noninterest bearing DDA balances, Qtr-End | $ | 2,475,415 | $ | 2,627,639 | $ | 2,855,102 | |||
| Reserve for unfunded commitments, Qtr-End | $ | 1,078 | $ | 742 | $ | 575 | |||
| Credit card spend QTD | $ | 261,486 | $ | 255,839 | $ | 277,822 | |||
| Credit card net income QTD | $ | 2,333 | $ | 2,155 | $ | 2,406 | |||
| Merchant services fees QTD | $ | 595 | $ | 508 | $ | 581 | |||
| Mortgage banking income QTD | $ | 1,379 | $ | 678 | $ | 696 | |||
| FDIC insurance QTD | $ | 1,950 | $ | 3,650 | $ | 2,000 | |||
| Write down tax credit investment QTD | $ | (1,628 | ) | $ | 2,197 | $ | 2,384 | ||
| Salaries & employee benefits QTD | $ | 24,213 | $ | 22,986 | $ | 18,795 | |||
| Other operating expense | $ | 3,623 | $ | 7,195 | $ | 6,224 | |||
| Third party processing and other services QTD | $ | 7,465 | $ | 7,166 | $ | 6,198 | |||
| Equipment and occupancy expense QTD | $ | 3,567 | $ | 3,557 | $ | 3,421 | |||
| Earnings retention YTD | 68 | % | 67 | % | 73 | % | |||
| Number of employees | 625 | 611 | 583 | ||||||
| QTD tax rate | 21.71 | % | 17.50 | % | 17.38 | % | |||
| YTD tax rate | 19.70 | % | 17.50 | % | 17.74 | % |
| Available Liquidity | 6/30/2024 | |
|---|---|---|
| Cash and cash equivalents | $ | 1,276,765 |
| Investment Securities (mkt value), net of pledged | $ | 346,922 |
| Total on balance sheet liquidity | $ | 1,623,687 |
| FHLB fundings availability | $ | 2,883,095 |
| Correspondent lines of credit availability | $ | 225,000 |
| Brokered deposit availability (25% of assets per policy) | $ | 4,012,454 |
| Federal Reserve Bank fundings availability | $ | 2,154,226 |
| Total Available Liquidity | $ | 10,898,462 |