ServisFirst Bancshares, Inc. Announces Results For Third Quarter of 2023

Business Wire
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BIRMINGHAM, Ala., October 16, 2023--(BUSINESS WIRE)--ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended September 30, 2023.

Third Quarter 2023 Highlights:

  • Reached milestone of $16.0 billion in total assets, a 9.9% increase year-to-date.

  • $13.1 billion in total deposits, a 7% increase from second quarter 2023 and a 13.8% increase year-to-date.

  • $2.0 billion in cash on hand with no FHLB advances or brokered deposits.

  • Diluted net income per share of $0.98 for the quarter.

  • Book value per share of $25.75, up 7.6% year-to-date and 12.6% from the third quarter of 2022.

  • Loans grew $362.5 million, or 3%, from the third quarter of 2022. Our loan pipeline is improving.

  • An increase of 19% in new deposit accounts opened year-over-year.

  • Credit quality continues to be strong with non-performing assets to total assets of 0.15%.

  • Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.42% to 10.69% year-over-year.

Tom Broughton, Chairman, President and CEO, said, "We are proud to reach the $16 billion in assets milestone in the quarter, with current cash exceeding $2 billion and no FHLB advances or brokered deposits. We believe this gives our bank a significant competitive advantage."

Bud Foshee, CFO, said, "We continue to see strong asset quality with record low past dues, while loan pipelines and activity are beginning to rebuild, which should improve profitability in coming quarters."

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

Period Ending
September 30,
2023

Period Ending
June 30, 2023

% Change From
Period Ending
June 30, 2023 to
Period Ending
September 30,
2023

Period Ending
September 30,
2022

% Change From
Period Ending
September 30,
2022 to Period
Ending
September 30,
2023

QUARTERLY OPERATING RESULTS

Net Income

$

53,340

$

53,468

-

%

$

64,031

(17

)

%

Net Income Available to Common Stockholders

$

53,340

$

53,437

-

%

$

64,031

(17

)

%

Diluted Earnings Per Share

$

0.98

$

0.98

-

%

$

1.17

(17

)

%

Return on Average Assets

1.37

%

1.50

%

1.77

%

Return on Average Common Stockholders' Equity

15.12

%

15.85

%

20.49

%

Average Diluted Shares Outstanding

54,530,635

54,527,317

54,546,682

YEAR-TO-DATE OPERATING RESULTS

Net Income

$

164,779

$

183,780

(10

)

%

Net Income Available to Common Stockholders

$

164,748

$

183,749

(10

)

%

Diluted Earnings Per Share

$

3.02

$

3.37

(10

)

%

Return on Average Assets

1.50

%

1.64

%

Return on Average Common Stockholders' Equity

16.23

%

20.43

%

Average Diluted Shares Outstanding

54,530,797

54,533,793

BALANCE SHEET

Total Assets

$

16,044,332

$

15,072,808

6

%

$

13,890,030

16

%

Loans

11,641,130

11,604,894

-

%

11,278,614

3

%

Non-interest-bearing Demand Deposits

2,621,072

2,855,102

(8

)

%

3,661,936

(28

)

%

Total Deposits

13,142,376

12,288,219

7

%

11,051,915

19

%

Stockholders' Equity

1,401,384

1,363,471

3

%

1,242,589

13

%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $53.3 million for the quarter ended September 30, 2023, compared to net income of $53.5 million and net income available to common stockholders of $53.4 million for the second quarter of 2023 and net income and net income available to common stockholders of $64.0 million for the third quarter of 2022. Basic and diluted earnings per common share were both $0.98 in the third quarter of 2023, compared to $0.98 for both in the second quarter of 2023 and $1.18 and $1.17, respectively, in the third quarter of 2022.

Annualized return on average assets was 1.37% and annualized return on average common stockholders’ equity was 15.12% for the third quarter of 2023, compared to 1.77% and 20.49%, respectively, for the third quarter of 2022.

Net interest income was $99.7 million for the third quarter of 2023, compared to $101.3 million for the second quarter of 2023 and $126.4 million for the third quarter of 2022. Net interest income was negatively impacted by the continued narrowing in net interest spread due to Federal Reserve increases in interest rates over the last year. The net interest margin in the third quarter of 2023 was 2.64% compared to 2.93% in the second quarter of 2023 and 3.64% in the third quarter of 2022. Loan yields were 6.13% during the third quarter of 2023 compared to 5.94% during the second quarter of 2023 and 4.77% during the third quarter of 2022. Investment yields were 3.07% during the third quarter of 2023 compared to 2.64% during the second quarter of 2023 and 2.47% during the third quarter of 2022. Average interest-bearing deposit rates were 3.84% during the third quarter of 2023, compared to 3.32% during the second quarter of 2023 and 0.76% during the third quarter of 2022. Average federal funds purchased rates were 5.43% during third quarter of 2023, compared to 5.14% during the second quarter of 2023 and 2.27% during the third quarter of 2022.

Average loans for the third quarter of 2023 were $11.56 billion, a decrease of $36.3 million, or 1.2% annualized, from average loans of $11.60 billion for the second quarter of 2023, and an increase of $643.1 million, or 5.9%, from average loans of $10.92 billion for the third quarter of 2022.

Average total deposits for the third quarter of 2023 were $12.68 billion, an increase of $1.10 billion, or 37.5% annualized, over average total deposits of $11.58 billion for the second quarter of 2023, and an increase of $1.15 billion, or 9.9%, from average total deposits of $11.53 billion for the third quarter of 2022.

Non-performing assets to total assets were 0.15% for the third quarter of 2023, compared to 0.16% for the second quarter of 2023 and 0.13% for the third quarter of 2022. Annualized net charge-offs to average loans were 0.15% for the third quarter of 2023, compared to 0.11% for both the second quarter of 2023 and third quarter of 2022. The allowance for credit losses as a percentage of total loans at September 30, 2023, June 30, 2023, and September 30, 2022, was 1.31%, 1.31%, and 1.25%, respectively. We recorded a $4.3 million provision for credit losses in the third quarter of 2023 compared to $6.7 million in the second quarter of 2023, and $15.6 million in the third quarter of 2022.

Non-interest income decreased $804,000, or 9.0%, to $8.1 million for the third quarter of 2023 from $8.9 million in the third quarter of 2022, and decreased $447,000, or 5.2%, on a linked quarter basis. Service charges on deposit accounts increased $271,000, or 14.3%, to $2.2 million from the third quarter of 2022 to the third quarter of 2023, and increased $21,000, or 1.0%, on a linked quarter basis. Mortgage banking revenue increased $41,000, or 5.2%, to $825,000 from the third quarter of 2022 to the third quarter of 2023, and increased $129,000, or 18.5%, on a linked quarter basis. Net credit card revenue decreased $80,000, or 3.1%, to $2.5 million during the third quarter of 2023, compared to $2.6 million during the third quarter of 2022, and increased $126,000, or 5.2%, on a linked quarter basis. The aggregate amount of spend on all credit card accounts decreased 2.0% during the third quarter of 2023 compared to the third quarter of 2022. Bank-owned life insurance ("BOLI") income increased $181,000, or 11.1%, to $1.8 million during the third quarter of 2023, compared to $1.6 million during the third quarter of 2022, and decreased $678,000, or 27.2%, on a linked quarter basis. During the second quarter of 2023, we recognized $890,000 of income primarily attributed to a death benefit related to a former employee in our BOLI program. Other operating income for the third quarter of 2023 decreased $1.2 million, or 60.4%, to $797,000 from $2.0 million in the third quarter of 2022, and decreased $45,000, or 5.3%, on a linked quarter basis. We recognized $1.3 million of income on an interest rate cap during the third quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $125,000, or 26.7%, to $594,000 for the third quarter of 2023 from $468,000 in the third quarter of 2022.

Non-interest expense for the third quarter of 2023 decreased $1.0 million, or 2.4%, to $41.7 million from $42.7 million in the third quarter of 2022, and increased $3.2 million, or 8.3%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2023 increased $393,000, or 2.0%, to $20.1 million from $19.7 million in the third quarter of 2022, and increased $1.3 million, or 6.8%, on a linked quarter basis. The increase in the linked quarter is primarily attributed to higher incentive accruals. The number of FTE employees increased by 10 to 568 at September 30, 2023 compared to 558 at September 30, 2022, and decreased by 9 from the end of the second quarter of 2023. Equipment and occupancy expense increased $439,000, or 14.0%, to $3.6 million in the third quarter of 2023, from $3.1 million in the third quarter of 2022, and increased $158,000, or 4.6% on a linked-quarter basis. The year-over-year increase is primarily attributed to new leases that began after the third quarter of 2022. Third party processing and other services expense decreased $664,000, or 9.2%, to $6.5 million in the third quarter of 2023, from $7.2 million in the third quarter of 2022, and increased $351,000, or 5.7%, on a linked-quarter basis. Professional services expense increased $229,000, or 22.1%, to $1.3 million in the third quarter of 2023, from $1.0 million in the third quarter of 2022. FDIC and other regulatory assessments increased $1.4 million to $2.3 million in the third quarter of 2023, from $975,000 in the third quarter of 2022, and increased $104,000, or 4.6%, on a linked quarter basis. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023. Other operating expenses for the third quarter of 2023 decreased $2.8 million, or 26.3%, to $7.8 million from $10.6 million in the third quarter of 2022, and increased $1.6 million, or 25.7%, on a linked-quarter basis. During the third quarter of 2022 we reached a preliminary settlement on a lawsuit and wrote down the value of a private investment resulting in charges of $3.1 million, or $2.4 million net of income tax. The efficiency ratio was 38.64% during the third quarter of 2023 compared to 31.54% during the third quarter of 2022 and 35.02% during the second quarter of 2023.

Income tax expense decreased $4.5 million, or 34.4%, to $8.5 million in the third quarter of 2023, compared to $13.0 million in the third quarter of 2022, mostly due to lower pretax net income. Our effective tax rate was 13.81% for the third quarter of 2023 compared to 16.92% for the third quarter of 2022. We recognized an aggregate of $3.7 million in credits during the third quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the third quarter of 2022. We did not recognize 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 third quarter of 2023, compared to $370,000 during the third quarter of 2022.

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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida and North Carolina. Through the 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.

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: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-looking Statements" and "Risk Factors" in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2023, and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com or by calling (205) 949-0302.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(In thousands except share and per share data)

3rd Quarter 2023

2nd Quarter 2023

1st Quarter 2023

4th Quarter 2022

3rd Quarter 2022

CONSOLIDATED STATEMENT OF INCOME

Interest income

$

213,206

$

189,656

$

181,322

$

170,273

$

149,299

Interest expense

113,508

88,405

73,021

47,889

22,881

Net interest income

99,698

101,251

108,301

122,384

126,418

Provision for credit losses

4,282

6,654

4,197

7,135

15,603

Net interest income after provision for credit losses

95,416

94,597

104,104

115,249

110,815

Non-interest income

8,135

8,582

6,321

6,966

8,939

Non-interest expense

41,663

38,466

39,664

38,092

42,685

Income before income tax

61,888

64,713

70,761

84,123

77,069

Provision for income tax

8,548

11,245

12,790

16,399

13,038

Net income

53,340

53,468

57,971

67,724

64,031

Preferred stock dividends

-

31

-

31

-

Net income available to common stockholders

$

53,340

$

53,437

$

57,971

$

67,693

$

64,031

Earnings per share - basic

$

0.98

$

0.98

$

1.07

$

1.25

$

1.18

Earnings per share - diluted

$

0.98

$

0.98

$

1.06

$

1.24

$

1.17

Average diluted shares outstanding

54,530,635

54,527,317

54,534,482

54,537,716

54,546,682

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

16,044,332

$

15,072,808

$

14,566,559

$

14,595,753

$

13,890,030

Loans

11,641,130

11,604,894

11,629,802

11,687,968

11,278,614

Debt securities

1,878,701

2,048,227

1,646,937

1,678,936

1,714,603

Non-interest-bearing demand deposits

2,621,072

2,855,102

2,898,736

3,321,347

3,661,936

Total deposits

13,142,376

12,288,219

11,615,317

11,546,805

11,051,915

Borrowings

64,751

64,737

65,417

64,726

64,721

Stockholders' equity

1,401,384

1,363,471

1,339,817

1,297,896

1,242,589

Shares outstanding

54,425,447

54,425,033

54,398,025

54,326,527

54,324,007

Book value per share

$

25.75

$

25.05

$

24.63

$

23.89

$

22.87

Tangible book value per share (1)

$

25.50

$

24.80

$

24.38

$

23.64

$

22.62

SELECTED FINANCIAL RATIOS (Annualized)

Net interest margin

2.64

%

2.93

%

3.15

%

3.52

%

3.64

%

Return on average assets

1.37

%

1.50

%

1.63

%

1.89

%

1.77

%

Return on average common stockholders' equity

15.12

%

15.85

%

17.83

%

21.27

%

20.49

%

Efficiency ratio

38.64

%

35.02

%

34.60

%

29.45

%

31.54

%

Non-interest expense to average earning assets

1.10

%

1.11

%

1.15

%

1.10

%

1.23

%

CAPITAL RATIOS (2)

Common equity tier 1 capital to risk-weighted assets

10.69

%

10.37

%

10.01

%

9.55

%

9.42

%

Tier 1 capital to risk-weighted assets

10.69

%

10.38

%

10.02

%

9.55

%

9.43

%

Total capital to risk-weighted assets

12.25

%

11.94

%

11.54

%

11.03

%

10.96

%

Tier 1 capital to average assets

9.35

%

9.83

%

9.49

%

9.29

%

8.84

%

Tangible common equity to total tangible assets (1)

8.66

%

8.96

%

9.11

%

8.81

%

8.86

%

(1) This press release also contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill associated with our acquisition of Metro Bancshares, Inc. in January 2015.

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

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 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 September 30,
2023

At June 30,
2023

At March 31,
2023

At December 31,
2022

At September 30,
2022

Book value per share - GAAP

$

25.75

$

25.05

$

24.63

$

23.89

$

22.87

Total common stockholders' equity - GAAP

1,401,384

1,363,471

1,339,817

1,297,896

1,242,589

Adjustment for Goodwill

(13,615

)

(13,615

)

(13,615

)

(13,615

)

(13,615

)

Tangible common stockholders' equity - non-GAAP

$

1,387,769

$

1,349,856

$

1,326,202

$

1,284,281

$

1,228,974

Tangible book value per share - non-GAAP

$

25.50

$

24.80

$

24.38

$

23.64

$

22.62

Stockholders' equity to total assets - GAAP

8.73

%

9.05

%

9.20

%

8.89

%

8.95

%

Total assets - GAAP

$

16,044,332

$

15,072,808

$

14,566,559

$

14,595,753

$

13,890,030

Adjustment for Goodwill

(13,615

)

(13,615

)

(13,615

)

(13,615

)

(13,615

)

Total tangible assets - non-GAAP

$

16,030,717

$

15,059,193

$

14,552,944

$

14,582,138

$

13,876,415

Tangible common equity to total tangible assets - non-GAAP

8.66

%

8.96

%

9.11

%

8.81

%

8.86

%

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

September 30,
2023

September 30,
2022

% Change

ASSETS

Cash and due from banks

$

112,150

$

249,051

(55

)

%

Interest-bearing balances due from depository institutions

1,861,924

156,959

1,086

%

Federal funds sold

91,035

82,316

11

%

Cash and cash equivalents

2,065,109

488,326

323

%

Available for sale debt securities, at fair value

834,802

665,763

25

%

Held to maturity debt securities (fair value of $933,006 and $942,282, respectively)

1,043,899

1,048,840

-

%

Restricted equity securities

10,226

7,734

32

%

Mortgage loans held for sale

6,333

2,003

216

%

Loans

11,641,130

11,278,614

3

%

Less allowance for credit losses

(152,247

)

(140,967

)

8

%

Loans, net

11,488,883

11,137,647

3

%

Premises and equipment, net

59,516

59,080

1

%

Goodwill and other identifiable intangible assets

13,615

13,615

-

%

Other assets

521,949

467,022

12

%

Total assets

$

16,044,332

$

13,890,030

16

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing

$

2,621,072

$

3,661,936

(28

)

%

Interest-bearing

10,521,304

7,389,979

42

%

Total deposits

13,142,376

11,051,915

19

%

Federal funds purchased

1,370,289

1,466,322

(7

)

%

Other borrowings

64,751

64,721

-

%

Other liabilities

65,532

64,483

2

%

Total liabilities

14,642,948

12,647,441

16

%

Stockholders' equity:

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

September 30, 2023 and September 30, 2022

-

-

-

%

Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,425,447 shares

issued and outstanding at September 30, 2023, and 54,324,007

shares issued and outstanding at September 30, 2022

54

54

-

%

Additional paid-in capital

231,588

228,738

1

%

Retained earnings

1,229,080

1,057,387

16

%

Accumulated other comprehensive loss

(59,838

)

(44,090

)

36

%

Total stockholders' equity attributable to ServisFirst Bancshares, Inc.

1,400,884

1,242,089

13

%

Noncontrolling interest

500

500

-

%

Total stockholders' equity

1,401,384

1,242,589

13

%

Total liabilities and stockholders' equity

$

16,044,332

$

13,890,030

16

%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2022

2023

2022

Interest income:

Interest and fees on loans

$

178,754

$

131,375

$

514,204

$

345,767

Taxable securities

15,522

11,089

37,987

29,827

Nontaxable securities

15

30

53

110

Federal funds sold

985

632

1,826

738

Other interest and dividends

17,930

6,173

30,114

12,600

Total interest income

213,206

149,299

584,184

389,042

Interest expense:

Deposits

95,901

13,655

223,585

25,925

Borrowed funds

17,607

9,226

51,349

14,609

Total interest expense

113,508

22,881

274,934

40,534

Net interest income

99,698

126,418

309,250

348,508

Provision for credit losses

4,282

15,603

15,133

30,472

Net interest income after provision for credit losses

95,416

110,815

294,117

318,036

Non-interest income:

Service charges on deposit accounts

2,163

1,892

6,239

6,167

Mortgage banking

825

784

1,963

1,924

Credit card income

2,532

2,612

6,627

7,656

Securities losses

-

-

-

(6,168

)

Bank-owned life insurance income

1,818

1,637

5,935

6,978

Other operating income

797

2,014

2,274

9,836

Total non-interest income

8,135

8,939

23,038

26,393

Non-interest expense:

Salaries and employee benefits

20,080

19,687

57,941

58,722

Equipment and occupancy expense

3,579

3,140

10,435

9,056

Third party processing and other services

6,549

7,213

20,031

19,163

Professional services

1,265

1,036

4,499

3,355

FDIC and other regulatory assessments

2,346

975

6,105

3,254

Other real estate owned expense

18

21

30

56

Other operating expense

7,826

10,613

20,752

26,118

Total non-interest expense

41,663

42,685

119,793

119,724

Income before income tax

61,888

77,069

197,362

224,705

Provision for income tax

8,548

13,038

32,583

40,925

Net income

53,340

64,031

164,779

183,780

Dividends on preferred stock

-

-

31

31

Net income available to common stockholders

$

53,340

$

64,031

$

164,748

$

183,749

Basic earnings per common share

$

0.98

$

1.18

$

3.03

$

3.38

Diluted earnings per common share

$

0.98

$

1.17

$

3.02

$

3.37

LOANS BY TYPE (UNAUDITED)

(In thousands)

3rd Quarter 2023

2nd Quarter 2023

1st Quarter 2023

4th Quarter 2022

3rd Quarter 2022

Commercial, financial and agricultural

$

2,890,535

$

2,986,453

$

3,081,926

$

3,145,317

$

3,104,155

Real estate - construction

1,509,937

1,397,732

1,469,670

1,532,388

1,433,698

Real estate - mortgage:

Owner-occupied commercial

2,237,684

2,294,002

2,243,436

2,199,280

2,145,621

1-4 family mortgage

1,170,099

1,167,238

1,138,645

1,146,831

1,089,826

Other mortgage

3,766,124

3,686,434

3,624,071

3,597,750

3,438,762

Subtotal: Real estate - mortgage

7,173,907

7,147,674

7,006,152

6,943,861

6,674,209

Consumer

66,751

73,035

72,054

66,402

66,552

Total loans

$

11,641,130

$

11,604,894

$

11,629,802

$

11,687,968

$

11,278,614

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

3rd Quarter 2023

2nd Quarter 2023

1st Quarter 2023

4th Quarter 2022

3rd Quarter 2022

Allowance for credit losses:

Beginning balance

$

152,272

$

148,965

$

146,297

$

140,967

$

128,387

Loans charged off:

Commercial financial and agricultural

4,784

4,358

1,257

2,116

2,902

Real estate - construction

19

-

-

-

-

Real estate - mortgage

-

131

26

-

170

Consumer

341

111

390

200

261

Total charge offs

5,144

4,600

1,673

2,316

3,333

Recoveries:

Commercial financial and agricultural

825

1,233

128

393

297

Real estate - construction

-

-

3

-

-

Real estate - mortgage

-

-

1

-

-

Consumer

11

21

11

118

12

Total recoveries

836

1,254

143

511

309

Net charge-offs

4,308

3,346

1,530

1,805

3,024

Provision for credit losses

4,282

6,654

4,197

7,135

15,604

Ending balance

$

152,247

$

152,272

$

148,965

$

146,297

$

140,967

Allowance for credit losses to total loans

1.31

%

1.31

%

1.28

%

1.25

%

1.25

%

Allowance for credit losses to total average

loans

1.31

%

1.31

%

1.28

%

1.27

%

1.29

%

Net charge-offs to total average loans

0.15

%

0.11

%

0.05

%

0.06

%

0.11

%

Provision for credit losses to total average

loans

0.15

%

0.23

%

0.14

%

0.25

%

0.57

%

Nonperforming assets:

Nonaccrual loans

$

20,911

$

16,897

$

13,157

$

12,450

$

11,655

Loans 90+ days past due and accruing

1,692

5,947

4,683

5,391

4,803

Other real estate owned and

repossessed assets

690

832

248

248

1,245

Total

$

23,293

$

23,676

$

18,088

$

18,089

$

17,703

Nonperforming loans to total loans

0.19

%

0.20

%

0.15

%

0.15

%

0.15

%

Nonperforming assets to total assets

0.15

%

0.16

%

0.12

%

0.12

%

0.13

%

Nonperforming assets to earning assets

0.16

%

0.16

%

0.13

%

0.13

%

0.13

%

Allowance for credit losses to nonaccrual loans

731.74

%

901.18

%

1,132.24

%

1,175.08

%

1,209.50

%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

3rd Quarter 2023

2nd Quarter 2023

1st Quarter 2023

4th Quarter 2022

3rd Quarter 2022

Interest income:

Interest and fees on loans

$

178,754

$

171,718

$

163,732

$

153,924

$

131,375

Taxable securities

15,522

11,570

10,895

10,895

11,089

Nontaxable securities

15

17

21

27

30

Federal funds sold

985

227

614

818

632

Other interest and dividends

17,930

6,124

6,060

4,609

6,173

Total interest income

213,206

189,656

181,322

170,273

149,299

Interest expense:

Deposits

95,901

71,971

55,713

33,471

13,655

Borrowed funds

17,607

16,434

17,308

14,418

9,226

Total interest expense

113,508

88,405

73,021

47,889

22,881

Net interest income

99,698

101,251

108,301

122,384

126,418

Provision for credit losses

4,282

6,654

4,197

7,135

15,603

Net interest income after provision for credit losses

95,416

94,597

104,104

115,249

110,815

Non-interest income:

Service charges on deposit accounts

2,163

2,142

1,934

1,866

1,892

Mortgage banking

825

696

442

514

784

Credit card income

2,532

2,406

1,689

2,261

2,612

Bank-owned life insurance income

1,818

2,496

1,621

1,600

1,637

Other operating income

797

842

635

725

2,014

Total non-interest income

8,135

8,582

6,321

6,966

8,939

Non-interest expense:

Salaries and employee benefits

20,080

18,795

19,066

19,230

19,687

Equipment and occupancy expense

3,579

3,421

3,435

3,263

3,140

Third party processing and other services

6,549

6,198

7,284

8,170

7,213

Professional services

1,265

1,580

1,654

922

1,036

FDIC and other regulatory assessments

2,346

2,242

1,517

1,311

975

Other real estate owned expense

18

6

6

239

21

Other operating expense

7,826

6,224

6,702

4,957

10,613

Total non-interest expense

41,663

38,466

39,664

38,092

42,685

Income before income tax

61,888

64,713

70,761

84,123

77,069

Provision for income tax

8,548

11,245

12,790

16,399

13,038

Net income

53,340

53,468

57,971

67,724

64,031

Dividends on preferred stock

-

31

-

31

-

Net income available to common stockholders

$

53,340

$

53,437

$

57,971

$

67,693

$

64,031

Basic earnings per common share

$

0.98

$

0.98

$

1.07

$

1.25

$

1.18

Diluted earnings per common share

$

0.98

$

0.98

$

1.06

$

1.24

$

1.17

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

3rd Quarter 2023

2nd Quarter 2023

1st Quarter 2023

4th Quarter 2022

3rd Quarter 2022

Average
Balance

Yield /
Rate

Average
Balance

Yield /
Rate

Average
Balance

Yield /
Rate

Average
Balance

Yield /
Rate

Average
Balance

Yield /
Rate

Assets:

Interest-earning assets:

Loans, net of unearned income (1)

Taxable

$

11,545,003

6.13

%

$

11,581,008

5.94

%

$

11,632,439

5.70

%

$

11,465,538

5.32

%

$

10,900,105

4.77

%

Tax-exempt (2)

18,023

4.71

18,312

4.82

18,978

3.36

19,526

6.60

19,852

4.14

Total loans, net of

unearned income

11,563,026

6.13

11,599,320

5.94

11,651,417

5.70

11,485,064

5.32

10,919,957

4.77

Mortgage loans held for sale

5,476

6.67

5,014

5.12

1,522

6.40

1,515

3.67

2,906

2.73

Debt securities:

Taxable

2,029,995

3.07

1,757,397

2.64

1,724,523

2.54

1,755,764

2.49

1,797,560

2.47

Tax-exempt (2)

2,408

2.49

2,960

2.43

3,781

2.43

4,863

2.39

5,863

2.39

Total securities (3)

2,032,403

3.07

1,760,357

2.64

1,728,304

2.54

1,760,627

2.49

1,803,423

2.47

Federal funds sold

74,424

5.25

15,908

5.72

50,526

4.93

82,656

3.93

102,028

2.46

Restricted equity securities

8,471

5.90

8,834

6.08

9,919

7.69

7,724

7.35

7,724

3.65

Interest-bearing balances with banks

1,293,243

5.45

460,893

5.21

510,021

4.67

458,115

3.83

945,142

2.56

Total interest-earning assets

$

14,977,043

5.65

$

13,850,326

5.49

$

13,951,709

5.27

$

13,795,701

4.90

$

13,781,180

4.30

Non-interest-earning assets:

Cash and due from banks

111,566

101,188

106,448

113,823

256,607

Net premises and equipment

60,121

60,499

60,617

60,323

60,155

Allowance for credit losses, accrued

interest and other assets

283,357

279,860

279,775

273,964

294,006

Total assets

$

15,432,087

$

14,291,873

$

14,398,549

$

14,243,811

$

14,391,948

Interest-bearing liabilities:

Interest-bearing deposits:

Checking

$

2,153,973

2.72

%

$

1,628,936

1.69

%

$

1,675,355

1.25

%

$

1,763,622

0.73

%

$

1,722,926

0.28

%

Savings

112,814

1.61

122,050

1.38

134,671

0.94

141,163

0.64

144,368

0.21

Money market

6,538,426

4.24

5,971,639

3.78

5,756,642

3.17

5,047,133

2.07

4,444,583

0.89

Time deposits

1,093,388

3.89

983,582

3.44

850,639

2.51

860,336

1.69

809,057

1.16

Total interest-bearing deposits

9,898,601

3.84

8,706,207

3.32

8,417,307

2.68

7,812,254

1.70

7,120,934

0.76

Federal funds purchased

1,237,721

5.43

1,191,582

5.14

1,389,217

4.67

1,453,445

3.75

1,493,444

2.27

Other borrowings

64,734

4.23

100,998

4.62

114,726

4.61

64,726

4.23

65,406

4.19

Total interest-bearing liabilities

$

11,201,056

4.02

%

$

9,998,787

3.55

%

$

9,921,250

2.98

%

$

9,330,425

2.04

%

$

8,679,784

1.05

%

Non-interest-bearing liabilities:

Non-interest-bearing

demand deposits

2,778,858

2,876,225

3,086,774

3,572,956

4,410,318

Other liabilities

52,797

64,917

72,121

77,544

62,093

Stockholders' equity

1,457,893

1,399,578

1,358,587

1,307,553

1,263,870

Accumulated other comprehensive

loss

(58,517

)

(47,634

)

(40,183

)

(44,667

)

(24,117

)

Total liabilities and

stockholders' equity

$

15,432,087

$

14,291,873

$

14,398,549

$

14,243,811

$

14,391,948

Net interest spread

1.63

%

1.94

%

2.29

%

2.86

%

3.25

%

Net interest margin

2.64

%

2.93

%

3.15

%

3.52

%

3.64

%

(1)

Average loans include nonaccrual loans in all periods. Loan fees of $2,996, $3,318 $3,263, $3,630, and $3,849 are included in interest income in the third quarter of 2023, second quarter of 2023, first quarter of 2023, fourth quarter of 2022, and third quarter of 2022, respectively.

(2)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.

(3)

Unrealized losses on debt securities of $(83,815), $(69,498), $(59,738), $(62,567),and $(34,688) for the third quarter of 2023, second quarter of 2023, first quarter of 2023, fourth quarter of 2022, and third quarter of 2022, respectively, are excluded from the yield calculation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231016586913/en/

Contacts

ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com

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