ServisFirst Bancshares, Inc. Announces Results For Second Quarter of 2021

ServisFirst Bancshares, Inc.
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BIRMINGHAM, Ala., July 19, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2021.

Second Quarter 2021 Highlights:

  • Total loans grew $144.7 million during the quarter, while loans, excluding the impact of Paycheck Protection Program (“PPP”) loan activity, grew $517.3 million, or 28% annualized, during the quarter

  • Diluted earnings per share were $0.92 for the second quarter, an increase of 23% over the second quarter of 2020

  • Deposits grew from $9.34 billion to $10.96 billion year-over-year, or 17%, and grew $381 million, or 14% annualized, on a linked-quarter basis

  • Book value per share increased to $19.80, a 17% increase year-over-year

  • Liquidity reached new record levels, with approximately $3.0 billion on deposit at the Federal Reserve Bank

  • We transferred the listing of our common stock to the New York Stock Exchange (NYSE) during the quarter

Tom Broughton, Chairman, President and CEO, said, “Strong loan growth and a continued robust loan pipeline are evidence that we are well positioned to meet the financial needs of our customers and prospects as they return to a more normal operating environment.”

Bud Foshee, CFO, said, “Our credit quality and low expense structure has weathered the pandemic and we remain optimistic about the future.”

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

Period Ending June 30, 2021

Period Ending March 31, 2021

% Change From Period Ending March 31, 2021 to Period Ending June 30, 2021

Period Ending June 30, 2020

% Change From Period Ending June 30, 2020 to Period Ending June 30, 2021

QUARTERLY OPERATING RESULTS

Net Income

$

50,027

$

51,455

(3)

%

$

40,448

24

%

Net Income Available to Common Stockholders

$

49,996

$

51,455

(3)

%

$

40,417

24

%

Diluted Earnings Per Share

$

0.92

$

0.95

(3)

%

$

0.75

23

%

Return on Average Assets

1.56

%

1.72

%

1.55

%

Return on Average Common Stockholders' Equity

18.98

%

19.83

%

18.40

%

Average Diluted Shares Outstanding

54,460,230

54,381,991

54,194,506

YEAR-TO-DATE OPERATING RESULTS

Net Income

$

101,482

$

75,226

35

%

Net Income Available to Common Stockholders

$

101,451

$

75,195

35

%

Diluted Earnings Per Share

$

1.86

$

1.39

34

%

Return on Average Assets

1.63

%

1.54

%

Return on Average Common Stockholders' Equity

19.73

%

17.31

%

Average Diluted Shares Outstanding

54,421,327

54,180,960

BALANCE SHEET

Total Assets

$

13,207,319

$

12,647,374

4

%

$

11,012,195

20

%

Loans

8,649,694

8,504,980

2

%

8,315,375

4

%

Non-interest-bearing Demand Deposits

3,296,429

3,044,611

8

%

2,678,893

23

%

Total Deposits

10,958,236

10,577,610

4

%

9,342,918

17

%

Stockholders' Equity

1,073,284

1,030,485

4

%

914,588

17

%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $50.0 million for the quarter ended June 30, 2021, compared to net income and net income available to common stockholders of $40.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.92 for the second quarter of 2021, compared to $0.75, for the second quarter of 2020.

Annualized return on average assets was 1.56% and annualized return on average common stockholders’ equity was 18.98% for the second quarter of 2021, compared to 1.55% and 18.40%, respectively, for the second quarter of 2020.

Net interest income was $94.7 million for the second quarter of 2021, compared to $92.4 million for the first quarter of 2021 and $83.2 million for the second quarter of 2020. The net interest margin in the second quarter of 2021 was 3.06% compared to 3.20% in the first quarter of 2021 and 3.32% in the second quarter of 2020. Accretion of net fees on PPP loans of $8.0 million during the second quarter of 2021 contributed 37 basis points of the loan yield, compared to $9.1 million of PPP loan fee accretion during the first quarter of 2021, or 43 basis points of the loan yield.

Average loans for the second quarter of 2021 were $8.64 billion, an increase of $132.4 million, or 6% annualized, with average loans of $8.51 billion for the first quarter of 2021, and an increase of $311.3 million, or 4%, with average loans of $8.33 billion for the second quarter of 2020. Origination of round-two PPP loans during the second quarter of 2021 totaled $28.0 million while forgiveness of round-one PPP loans during the second quarter of 2021 totaled $400.6 million.

Average total deposits for the second quarter of 2021 were $10.73 billion, an increase of $554.8 million, or 22% annualized, with average total deposits of $10.18 billion for the first quarter of 2021, and an increase of $1.86 billion, or 21%, with average total deposits of $8.87 billion for the second quarter of 2020.

Non-performing assets to total assets were 0.15% for the second quarter of 2021, a decrease of one basis point compared to 0.16% for the first quarter of 2021 and a decrease of 11 basis points compared to 0.26% for the second quarter of 2020. Annualized net recoveries to average loans were 0.01% for the second quarter of 2021, compared to annualized net charge-offs of 0.02% and 0.20% for the first quarter of 2021 and second quarter of 2020, respectively. The allowance for credit losses for the quarters ending June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.21%, 1.12% and 1.04%, respectively. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 1.10% at June 30, 2020. Excluding PPP loans, for all periods discussed, the allowance for credit losses as a percentage of total loans under the CECL methodology at June 30, 2021 and March 31, 2021 was 1.30% and 1.26%, respectively, compared to 1.26% at June 30, 2020, under the incurred loss model. We recorded a $9.7 million provision for credit losses in the second quarter of 2021 compared to $7.5 million in the first quarter of 2021 and $10.3 million in the second quarter of 2020. The $2.2 million linked-quarter increase in provision for credit losses is primarily due to loan growth and qualitative factors reflecting economic uncertainty related to the termination of the PPP.

Non-interest income for the second quarter of 2021 increased $2.6 million, or 37%, to $9.6 million from $7.0 million in the second quarter of 2020. Mortgage banking revenue increased $592,000, or 28%, to $2.7 million from the second quarter of 2020 to the second quarter of 2021. Margin pricing on mortgage loans was increased in the third quarter of 2020, increasing the per-loan revenue by approximately 18%. Net credit card revenue increased $514,000, or 37%, to $1.9 million during the second quarter of 2021, compared to $1.4 million during the second quarter of 2020. The number of credit card accounts increased approximately 36% and the aggregate amount of spend on all credit card accounts increased 47% during the second quarter of 2021 compared to the second quarter of 2020. Cash surrender value of life insurance increased $219,000, or 15%, to $1.7 million during the second quarter of 2021, compared to $1.5 million during the second quarter of 2020. Other income for the second quarter of 2021 increased $536,000, or 222%, to $777,000 from $241,000 in the second quarter of 2020. We wrote down the value of our interest rate cap by $252,000 during the second quarter of 2020 through other income. Merchant service revenue increased from $134,000 during the second quarter of 2020 to $289,000, or 15%, during the second quarter of 2021.

Non-interest expense for the second quarter of 2021 increased $2.5 million, or 9%, to $31.3 million from $28.8 million in the second quarter of 2020, and increased $2.4 million, or 8%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2021 increased $1.1 million, or 7%, to $16.9 million from $15.8 million in the second quarter of 2020, and increased $1.3 million, or 9%, on a linked quarter basis. Salary expense alone only increased by $326,000 during the second quarter of 2021 compared to the second quarter of 2020. Higher loan origination cost deferrals during the second quarter of 2020 related to origination of round-one PPP loans decreased salary and benefits expenses below what they would have otherwise been during that quarter. The number of FTE employees increased by 35 to 527 at June 30, 2021 compared to 492 at June 30, 2020, and increased by 36 from the end of the first quarter of 2021. Equipment and occupancy expense increased $410,000, or 17%, to $2.8 million in the second quarter of 2021, from $2.4 million in the second quarter of 2020, and increased $190,000 on a linked-quarter basis. Third party processing and other services expense increased $324,000, or 9%, to $3.9 million in the second quarter of 2021, from $3.6 million in the second quarter of 2020 and increased $530,000 on a linked-quarter basis. FDIC and other regulatory assessments increased $830,000 to $1.4 million in the second quarter of 2021, from $595,000 in the second quarter of 2020, and decreased $157,000, or 10%, on a linked quarter basis. Lower asset growth during the second quarter of 2020 resulted in us adjusting our accrual for assessments in that quarter. Expenses associated with other real estate owned decreased $763,000 to $540,000 in the second quarter of 2021, from $1.3 million in the second quarter of 2020, and increased $383,000 on a linked quarter basis. The second quarter 2020 amount included write-downs in value of two foreclosed properties in our Birmingham region. The linked-quarter increase was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the second quarter of 2021 increased $581,000, or 15%, to $4.6 million from $4.0 million in the second quarter of 2020, and decreased $79,000 on a linked-quarter basis. We increased our reserve for credit losses on unfunded loan commitments by $500,000 in the second quarter of 2021 with a charge to other operating expenses. The efficiency ratio was 30.03% during the second quarter of 2021 compared to 31.92% during the second quarter of 2020 and compared to 28.68% during the first quarter of 2021.

Income tax expense increased $2.6 million, or 24%, to $13.3 million in the second quarter of 2021, compared to $10.7 million in the second quarter of 2020. Our effective tax rate was 20.97% for the second quarter of 2021 compared to 20.95% for the second quarter of 2020. 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 2021 and 2020 of $724,000 and $136,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015. We also include total loans excluding PPP loans. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

At June 30, 2021

At March 31, 2021

At December 31, 2020

At September 30, 2020

At June 30, 2020

Book value per share - GAAP

$

19.80

$

19.03

$

18.41

$

17.61

$

16.98

Total common stockholders' equity - GAAP

1,073,284

1,030,485

992,852

949,589

914,588

Adjustments:

Adjusted for goodwill and core deposit intangible asset

13,773

13,841

13,908

13,976

14,043

Tangible common stockholders' equity - non-GAAP

$

1,059,511

$

1,016,644

$

978,944

$

935,613

$

900,545

Tangible book value per share - non-GAAP

$

19.55

$

18.78

$

18.15

$

17.35

$

16.72

Stockholders' equity to total assets - GAAP

8.13

%

8.15

%

8.32

%

8.33

%

8.31

%

Total assets - GAAP

$

13,207,319

$

12,647,374

$

11,932,654

$

11,394,874

$

11,012,195

Adjustments:

Adjusted for goodwill and core deposit intangible asset

13,773

13,841

13,908

13,976

14,043

Total tangible assets - non-GAAP

$

13,193,546

$

12,633,533

$

11,918,746

$

11,380,898

$

10,998,152

Tangible common equity to total tangible assets - non-GAAP

8.03

%

8.05

%

8.21

%

8.22

%

8.19

%

Total loans - GAAP

$

8,649,694

$

8,504,980

Adjustments:

Adjusted to exclude PPP loans

595,017

967,641

Loans, excluding PPP loans - non-GAAP

$

8,054,677

$

7,537,339

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 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; 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)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

CONSOLIDATED STATEMENT OF INCOME

Interest income

$

102,719

$

100,396

$

101,065

$

96,110

$

95,080

Interest expense

8,051

8,031

8,984

11,028

11,846

Net interest income

94,668

92,365

92,081

85,082

83,234

Provision for credit losses

9,652

7,451

6,283

12,284

10,283

Net interest income after provision for credit losses

85,016

84,914

85,798

72,798

72,951

Non-interest income

9,598

8,463

8,237

8,172

7,033

Non-interest expense

31,309

28,914

28,202

26,573

28,816

Income before income tax

63,305

64,463

65,833

54,397

51,168

Provision for income tax

13,278

13,008

14,852

11,035

10,720

Net income

50,027

51,455

50,981

43,362

40,448

Preferred stock dividends

31

-

32

-

31

Net income available to common stockholders

$

49,996

$

51,455

$

50,949

$

43,362

$

40,417

Earnings per share - basic

$

0.92

$

0.95

$

0.94

$

0.80

$

0.75

Earnings per share - diluted

$

0.92

$

0.95

$

0.94

$

0.80

$

0.75

Average diluted shares outstanding

54,460,230

54,381,991

54,273,944

54,232,965

54,194,506

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

13,207,319

$

12,647,374

$

11,932,654

$

11,394,874

$

11,012,195

Loans

8,649,694

8,504,980

8,465,688

8,508,544

8,315,375

Debt securities

1,013,783

962,129

886,938

913,299

856,378

Non-interest-bearing demand deposits

3,296,429

3,044,611

2,788,772

2,762,814

2,678,893

Total deposits

10,958,236

10,577,610

9,975,724

9,673,783

9,342,918

Borrowings

64,696

64,691

64,748

64,719

64,715

Stockholders' equity

$

1,073,284

$

1,030,485

$

992,852

$

949,589

$

914,588

Shares outstanding

54,201,204

54,137,650

53,943,751

53,915,245

53,874,276

Book value per share

$

19.80

$

19.03

$

18.41

$

17.61

$

16.98

Tangible book value per share (1)

$

19.55

$

18.78

$

18.15

$

17.35

$

16.72

SELECTED FINANCIAL RATIOS (Annualized)

Net interest margin

3.06

%

3.20

%

3.27

%

3.14

%

3.32

%

Return on average assets

1.56

%

1.72

%

1.74

%

1.54

%

1.55

%

Return on average common stockholders' equity

18.98

%

19.83

%

20.78

%

18.43

%

18.40

%

Efficiency ratio

30.03

%

28.68

%

28.11

%

28.50

%

31.92

%

Non-interest expense to average earning assets

1.01

%

1.00

%

1.00

%

0.98

%

1.15

%

CAPITAL RATIOS (2)

Common equity tier 1 capital to risk-weighted assets

10.60

%

10.73

%

10.50

%

11.24

%

11.26

%

Tier 1 capital to risk-weighted assets

10.60

%

10.73

%

10.50

%

11.25

%

11.27

%

Total capital to risk-weighted assets

12.36

%

12.48

%

12.20

%

13.10

%

13.27

%

Tier 1 capital to average assets

8.10

%

8.25

%

8.23

%

8.22

%

8.46

%

Tangible common equity to total tangible assets (1)

8.03

%

8.05

%

8.22

%

8.22

%

8.19

%

(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.

(2) Regulatory capital ratios for most recent period are preliminary.


CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

June 30, 2021

June 30, 2020

% Change

ASSETS

Cash and due from banks

$

72,599

$

102,282

(29

)

%

Interest-bearing balances due from depository institutions

3,100,677

1,444,293

115

%

Federal funds sold

7,500

2,352

219

%

Cash and cash equivalents

3,180,776

1,548,927

105

%

Available for sale debt securities, at fair value

1,013,533

856,128

18

%

Held to maturity debt securities (fair value of $250 at June 30, 2021 and 2020)

250

250

-

Mortgage loans held for sale

6,147

14,491

(58

)

%

Loans

8,649,694

8,315,375

4

%

Less allowance for credit losses

(104,670

)

(91,507

)

14

%

Loans, net

8,545,024

8,223,868

4

%

Premises and equipment, net

67,738

55,588

22

%

Goodwill and other identifiable intangible assets

13,773

14,043

(2

)

%

Other assets

380,078

298,900

27

%

Total assets

$

13,207,319

$

11,012,195

20

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing

$

3,296,429

$

2,678,893

23

%

Interest-bearing

7,661,807

6,664,025

15

%

Total deposits

10,958,236

9,342,918

17

%

Federal funds purchased

1,059,474

635,606

67

%

Other borrowings

64,696

64,715

-

%

Other liabilities

51,629

54,368

(5

)

%

Total liabilities

12,134,035

10,097,607

20

%

Stockholders' equity:

Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at

June 30, 2021 and June 30, 2020

-

-

Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,201,204 shares

issued and outstanding at June 30, 2021, and 53,874,276 shares issued and outstanding

at June 30, 2020

54

54

-

%

Additional paid-in capital

225,127

222,437

1

%

Retained earnings

828,048

672,984

23

%

Accumulated other comprehensive income

19,555

18,611

5

%

Total stockholders' equity attributable to ServisFirst Bancshares, Inc.

1,072,784

914,086

17

%

Noncontrolling interest

500

502

-

%

Total stockholders' equity

1,073,284

914,588

17

%

Total liabilities and stockholders' equity

$

13,207,319

$

11,012,195

20

%


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

Three Months Ended June, 30

Six Months Ended June, 30

2021

2020

2021

2020

Interest income:

Interest and fees on loans

$

95,451

$

89,383

$

189,254

$

178,768

Taxable securities

6,315

5,092

12,122

10,246

Nontaxable securities

86

211

193

444

Federal funds sold

4

34

7

311

Other interest and dividends

863

360

1,539

2,078

Total interest income

102,719

95,080

203,115

191,847

Interest expense:

Deposits

6,836

10,756

13,717

27,501

Borrowed funds

1,215

1,090

2,365

3,472

Total interest expense

8,051

11,846

16,082

30,973

Net interest income

94,668

83,234

187,033

160,874

Provision for credit losses

9,652

10,283

17,103

23,867

Net interest income after provision for credit losses

85,016

72,951

169,930

137,007

Non-interest income:

Service charges on deposit accounts

1,907

1,823

3,815

3,739

Mortgage banking

2,699

2,107

5,446

3,178

Credit card income

1,912

1,398

3,104

3,163

Securities gains

620

-

620

-

Increase in cash surrender value life insurance

1,683

1,464

3,341

2,917

Other operating income

777

241

1,735

710

Total non-interest income

9,598

7,033

18,061

13,707

Non-interest expense:

Salaries and employee benefits

16,887

15,792

32,430

31,450

Equipment and occupancy expense

2,844

2,434

5,498

4,834

Third party processing and other services

3,946

3,622

7,362

7,079

Professional services

1,107

1,091

2,030

2,039

FDIC and other regulatory assessments

1,425

595

3,007

1,927

Other real estate owned expense

540

1,303

697

1,904

Other operating expense

4,560

3,979

9,199

7,503

Total non-interest expense

31,309

28,816

60,223

56,736

Income before income tax

63,305

51,168

127,768

93,978

Provision for income tax

13,278

10,720

26,286

18,752

Net income

50,027

40,448

101,482

75,226

Dividends on preferred stock

31

31

$

31

$

31

Net income available to common stockholders

$

49,996

$

40,417

$

101,451

$

75,195

Basic earnings per common share

$

0.92

$

0.75

$

1.87

$

1.40

Diluted earnings per common share

$

0.92

$

0.75

$

1.86

$

1.39


LOANS BY TYPE (UNAUDITED)

(In thousands)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

Commercial, financial and agricultural

$

3,105,243

$

3,323,093

$

3,295,900

$

3,466,189

$

3,498,627

Real estate - construction

782,305

666,592

593,614

530,919

544,586

Real estate - mortgage:

Owner-occupied commercial

1,726,888

1,698,695

1,693,428

1,725,222

1,634,495

1-4 family mortgage

707,546

685,840

711,692

671,841

665,883

Other mortgage

2,262,231

2,068,560

2,106,184

2,056,549

1,911,384

Subtotal: Real estate - mortgage

4,696,665

4,453,095

4,511,304

4,453,612

4,211,762

Consumer

65,481

62,200

64,870

57,834

60,400

Total loans

$

8,649,694

$

$

8,465,688

$

8,508,554

$

8,315,375


SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

Allowance for credit losses:

Beginning balance

$

94,906

$

87,942

$

92,440

$

91,507

$

85,414

Impact of Adoption of ASC 326

-

-

(2,000

)

-

-

Loans charged off:

Commercial financial and agricultural

150

477

8,792

11,146

1,358

Real estate - construction

-

-

202

-

376

Real estate - mortgage

59

12

-

200

2,520

Consumer

54

87

38

44

62

Total charge offs

263

576

9,032

11,390

4,316

Recoveries:

Commercial financial and agricultural

298

26

94

12

84

Real estate - construction

2

50

30

-

1

Real estate - mortgage

62

2

114

12

13

Consumer

13

11

13

15

28

Total recoveries

375

89

251

39

126

Net charge-offs

(112

)

487

8,781

11,351

4,190

Provision for credit losses

9,652

7,451

6,283

12,284

10,283

Ending balance

$

104,670

$

94,906

$

87,942

$

92,440

$

91,507

Allowance for credit losses to total loans

1.21

%

1.12

%

1.04

%

-

-

Allowance for credit losses to total average

loans

1.21

%

1.11

%

1.04

%

-

-

Allowance for loan losses to total loans

-

-

-

1.09

%

1.10

%

Allowance for loan losses to total average

loans

-

-

-

1.11

%

1.10

%

Net (recoveries) charge-offs to total average loans

(0.01

)

%

0.02

%

0.41

%

0.54

%

0.20

%

Provision for credit losses to total average

loans

0.45

%

0.35

%

0.30

%

-

-

Provision for loan losses to total average

loans

-

-

-

0.58

%

0.50

%

Nonperforming assets:

Nonaccrual loans

$

12,301

$

13,088

$

13,973

$

21,675

$

16,881

Loans 90+ days past due and accruing

4,888

4,804

4,981

4,898

5,133

Other real estate owned and

repossessed assets

2,039

2,067

6,497

6,976

6,537

Total

$

19,228

$

19,959

$

25,451

$

33,549

$

28,551

Nonperforming loans to total loans

0.20

%

0.21

%

0.22

%

0.31

%

0.26

%

Nonperforming assets to total assets

0.15

%

0.16

%

0.21

%

0.29

%

0.26

%

Nonperforming assets to earning assets

0.15

%

0.16

%

0.22

%

0.30

%

0.26

%

Allowance for credit losses to nonaccrual loans

850.91

%

725.14

%

629.37

%

-

-

Allowance for loan losses to nonaccrual loans

-

-

-

426.48

%

542.07

%

Restructured accruing loans

$

441

$

794

$

818

$

1,800

$

975

Restructured accruing loans to total loans

0.01

%

0.01

%

0.01

%

0.02

%

0.01

%

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

Beginning balance:

$

3,542

$

1,433

$

2,738

$

1,568

$

2,367

Additions

-

2,146

-

1,182

-

Net (paydowns) / advances

(624

)

(37

)

(619

)

(12

)

(12

)

Charge-offs

-

-

(535

)

-

(412

)

Transfer to OREO

-

-

(151

)

-

(375

)

Ending balance

$

2,918

$

3,542

$

1,433

$

2,738

$

1,568


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

Interest income:

Interest and fees on loans

$

95,451

$

93,803

$

94,332

$

89,564

$

89,383

Taxable securities

6,315

5,807

6,018

5,858

5,092

Nontaxable securities

86

107

129

166

211

Federal funds sold

4

3

5

16

34

Other interest and dividends

863

676

581

506

360

Total interest income

102,719

100,396

101,065

96,110

95,080

Interest expense:

Deposits

6,836

6,881

7,853

9,876

10,756

Borrowed funds

1,215

1,150

1,131

1,152

1,090

Total interest expense

8,051

8,031

8,984

11,028

11,846

Net interest income

94,668

92,365

92,081

85,082

83,234

Provision for credit losses

9,652

7,451

6,283

12,284

10,283

Net interest income after provision for credit losses

85,016

84,914

85,798

72,798

72,951

Non-interest income:

Service charges on deposit accounts

1,907

1,908

1,971

1,818

1,823

Mortgage banking

2,699

2,747

3,050

2,519

2,107

Credit card income

1,912

1,192

913

1,840

1,398

Securities gains

620

-

-

-

-

Increase in cash surrender value life insurance

1,683

1,658

1,660

1,733

1,464

Other operating income

777

958

643

262

241

Total non-interest income

9,598

8,463

8,237

8,172

7,033

Non-interest expense:

Salaries and employee benefits

16,887

15,543

14,970

14,994

15,792

Equipment and occupancy expense

2,844

2,654

2,680

2,556

2,434

Third party processing and other services

3,946

3,416

3,418

3,281

3,622

Professional services

1,107

923

1,248

955

1,091

FDIC and other regulatory assessments

1,425

1,582

1,366

1,061

595

Other real estate owned expense

540

157

140

119

1,303

Other operating expense

4,560

4,639

4,380

3,607

3,979

Total non-interest expense

31,309

28,914

28,202

26,573

28,816

Income before income tax

63,305

64,463

65,833

54,397

51,168

Provision for income tax

13,278

13,008

14,852

11,035

10,720

Net income

50,027

51,455

50,981

43,362

40,448

Dividends on preferred stock

31

-

32

-

31

Net income available to common stockholders

$

49,996

$

51,455

$

50,949

$

43,362

$

40,417

Basic earnings per common share

$

0.92

$

0.95

$

0.94

$

0.80

$

0.75

Diluted earnings per common share

$

0.92

$

0.95

$

0.94

$

0.80

$

0.75


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

2nd Quarter 2021

1st Quarter 2021

4th Quarter 2020

3rd Quarter 2020

2nd Quarter 2020

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

$

8,618,139

4.43

%

$

8,484,914

4.47

%

$

8,435,237

4.43

%

$

8,335,087

4.26

%

$

8,301,775

4.31

%

Tax-exempt (2)

26,854

4.05

27,592

4.17

29,393

4.16

30,068

4.14

31,929

4.12

Total loans, net of

unearned income

8,644,993

4.43

8,512,506

4.47

8,464,630

4.43

8,365,155

4.26

8,333,704

4.31

Mortgage loans held for sale

11,470

1.92

13,601

1.94

19,459

1.37

20,053

1.41

13,278

2.09

Debt securities:

Taxable

936,863

2.70

878,118

2.65

862,333

2.79

820,526

2.86

761,575

2.67

Tax-exempt (2)

16,872

2.47

21,084

2.43

25,542

2.52

31,880

2.51

38,201

2.62

Total securities (3)

953,735

2.69

899,202

2.64

887,875

2.78

852,406

2.84

799,776

2.67

Federal funds sold

8,224

0.20

11,935

0.10

16,306

0.12

41,884

0.15

83,274

0.16

Interest-bearing balances with banks

2,790,524

0.12

2,262,233

0.12

1,837,249

0.13

1,500,563

0.13

849,549

0.17

Total interest-earning assets

$

12,408,946

3.32

%

$

11,699,477

3.48

%

$

11,225,519

3.58

%

$

10,780,061

3.55

%

$

10,079,581

3.80

%

Non-interest-earning assets:

Cash and due from banks

85,478

71,166

91,258

75,065

76,212

Net premises and equipment

61,240

57,198

56,315

56,799

57,446

Allowance for credit losses, accrued

interest and other assets

320,729

320,407

308,746

281,196

248,702

Total assets

$

12,876,393

$

12,148,248

$

11,681,838

$

11,193,121

$

10,461,941

Interest-bearing liabilities:

Interest-bearing deposits:

Checking

$

1,350,098

0.19

%

$

1,294,614

0.19

%

$

1,197,908

0.23

%

$

1,077,595

0.31

%

$

992,848

0.35

%

Savings

104,283

0.18

93,375

0.18

86,259

0.18

82,671

0.36

72,139

0.42

Money market

5,321,338

0.26

5,057,828

0.27

4,933,285

0.31

4,739,566

0.44

4,285,907

0.52

Time deposits

801,928

1.33

808,561

1.44

810,675

1.59

841,378

1.78

877,448

1.95

Total interest-bearing deposits

7,577,647

0.36

7,254,378

0.38

7,028,127

0.44

6,741,210

0.58

6,228,342

0.69

Federal funds purchased

970,708

0.22

849,772

0.22

752,765

0.22

682,971

0.22

572,990

0.22

Other borrowings

64,694

4.28

64,689

4.33

64,701

4.41

64,717

4.78

64,711

4.85

Total interest-bearing liabilities

$

8,613,049

0.37

%

$

8,168,839

0.40

%

$

7,845,593

0.46

%

$

7,488,898

0.59

%

$

6,866,043

0.69

%

Non-interest-bearing liabilities:

Non-interest-bearing

demand deposits

3,154,605

2,923,041

2,812,254

2,728,513

2,646,030

Other liabilities

52,027

39,442

48,642

39,537

69,061

Stockholders' equity

1,038,012

996,741

956,847

917,626

862,500

Accumulated other comprehensive

income

18,700

20,185

18,502

18,547

18,307

Total liabilities and

stockholders' equity

$

12,876,393

$

12,148,248

$

11,681,838

$

11,193,121

$

10,461,941

Net interest spread

2.95

%

3.08

%

3.12

%

2.96

%

3.11

%

Net interest margin

3.06

%

3.20

%

3.27

%

3.14

%

3.32

%

(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.


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