ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2021

BIRMINGHAM, Ala., Oct. 18, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights:

Total loans grew $163.1 million, or 8% annualized, during the quarter, while loans, excluding the impact of Paycheck Protection Program (“PPP”) loan forgiveness, grew $370.4 million, or 18% annualized, during the quarter
Diluted earnings per share were $0.96 for the third quarter, an increase of 20% over the third quarter of 2020
Deposits grew from $9.67 billion to $12.08 billion year-over-year, or 25%, and grew $1.12 billion, or 41% annualized, on a linked-quarter basis
Book value per share increased to $20.56, a 17% increase year-over-year
Liquidity reached new record levels, with approximately $4.2 billion on deposit at the Federal Reserve Bank

Tom Broughton, Chairman, President and CEO, said, “The economic recovery in the Southeast United States is resulting in very strong loan growth for our bank. Our bankers are winning in the marketplace.”

Bud Foshee, CFO, said, “Credit losses continue at historically low levels and credit quality remains very good. Operating efficiency is also very good.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)

	Period Ending September 30, 2021			Period Ending June 30, 2021			% Change From Period Ending June 30, 2021 to Period Ending September 30, 2021		Period Ending September 30, 2020			% Change From Period Ending September 30, 2020 to Period Ending September 30, 2021
QUARTERLY OPERATING RESULTS
Net Income	$	52,499		$	50,027		5	%	$	43,362		21	%
Net Income Available to Common Stockholders	$	52,499		$	49,996		5	%	$	43,362		21	%
Diluted Earnings Per Share	$	0.96		$	0.92		4	%	$	0.80		20	%
Return on Average Assets		1.50	%		1.56	%				1.54	%
Return on Average Common Stockholders' Equity		18.93	%		18.98	%				18.43	%
Average Diluted Shares Outstanding		54,477,740			54,460,230					54,232,965

YEAR-TO-DATE OPERATING RESULTS
Net Income	$	153,981							$	118,588		30	%
Net Income Available to Common Stockholders	$	153,950							$	118,557		30	%
Diluted Earnings Per Share	$	2.83							$	2.19		29	%
Return on Average Assets		1.63	%							1.54	%
Return on Average Common Stockholders' Equity		19.73	%							17.73	%
Average Diluted Shares Outstanding		54,440,004								54,198,422


BALANCE SHEET
Total Assets	$	14,602,228		$	13,207,319		11	%	$	11,394,874		28	%
Loans		8,812,811			8,649,694		2	%		8,508,554		4	%
Non-interest-bearing Demand Deposits		4,366,654			3,296,429		32	%		2,762,814		58	%
Total Deposits		12,078,670			10,958,236		10	%		9,673,783		25	%
Stockholders' Equity		1,114,293			1,073,284		4	%		949,589		17	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $52.5 million for the quarter ended September 30, 2021, compared to net income and net income available to common stockholders of $43.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.97 and $0.96, respectively, for the third quarter of 2021, compared to $0.80 for the third quarter of 2020.

Annualized return on average assets was 1.50% and annualized return on average common stockholders’ equity was 18.93% for the third quarter of 2021, compared to 1.54% and 18.43%, respectively, for the third quarter of 2020.

Net interest income was $96.3 million for the third quarter of 2021, compared to $94.7 million for the second quarter of 2021 and $85.1 million for the third quarter of 2020. The net interest margin in the third quarter of 2021 was 2.85% compared to 3.06% in the second quarter of 2021 and 3.14% in the third quarter of 2020. Accretion of net fees on PPP loans of $5.2 million during the third quarter of 2021 contributed 24 basis points of the loan yield, compared to $8.0 million of PPP loan fee accretion during the second quarter of 2021, or 37 basis points of the loan yield and $4.0 million during the third quarter of 2020, or 19 basis points of the loan yield.

Average loans for the third quarter of 2021 were $8.68 billion, an increase of $35.2 million, or 1.6% annualized, over average loans of $8.64 billion for the second quarter of 2021, and an increase of $315.0 million, or 3.8%, over average loans of $8.37 billion for the third quarter of 2020. Forgiveness of PPP loans during the third quarter of 2021 totaled $207.4 million. PPP loans outstanding as of September 30, 2021 were $387.7 million.

Average total deposits for the third quarter of 2021 were $11.49 billion, an increase of $757.1 million, or 28.0%, annualized, over average total deposits of $10.73 billion for the second quarter of 2021, and an increase of $2.02 billion, or 21.3%, over average total deposits of $9.47 billion for the third quarter of 2020.

Non-performing assets to total assets were 0.11% for the third quarter of 2021, a decrease of 4 basis points compared to 0.15% for the second quarter of 2021 and a decrease of 18 basis points compared to 0.29% for the third quarter of 2020. Annualized net charge-offs to average loans were 0.08% for the third quarter of 2021, compared to -0.01% and 0.54% for the second quarter of 2021 and third quarter of 2020, respectively. The allowance for credit losses for the quarters ending September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.24%, 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 1.09% at September 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 September 30, 2021 and June 30, 2021 was 1.29% and 1.30%, respectively, compared to 1.24% at September 30, 2020, under the incurred loss model. We recorded a $6.0 million provision for credit losses in the third quarter of 2021 compared to $9.7 million in the second quarter of 2021 and $12.3 million in the third quarter of 2020.

Non-interest income for the third quarter of 2021 decreased $146,000, or 1.8%, to $8.0 million from $8.2 million in the third quarter of 2020. Mortgage banking revenue decreased $1.1 million, or 43.5%, to $1.4 million from the third quarter of 2020 to the third quarter of 2021. The number of mortgage loans originated during the third quarter of 2021 fell to 208, from 325 during the same quarter in 2020. Net credit card revenue increased $203,000, or 11.0%, to $2.0 million during the third quarter of 2021, compared to $1.8 million during the third quarter of 2020. The number of credit card accounts increased approximately 31% and the aggregate amount of spend on all credit card accounts increased 43% during the third quarter of 2021 compared to the third quarter of 2020. Increase in cash surrender value of life insurance decreased $62,000, or 3.6%, during the third quarter of 2021 compared the third quarter of 2020, due to decreases in crediting rates on policies. Other income for the third quarter of 2021 increased $900,000, or 343.5%, to $1.2 million from $262,000 in the third quarter of 2020. We wrote down the value of our interest rate cap by $98,000 during the third quarter of 2021 through other income compared to a write down of $343,000 during the third quarter of 2020. Merchant service revenue increased from $163,000 during the third quarter of 2020 to $375,000, or 30.1%, during the third quarter of 2021.

Non-interest expense for the third quarter of 2021 increased $7.8 million, or 29.4%, to $34.4 million from $26.6 million in the third quarter of 2020, and increased $3.1 million, or 9.8%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2021 increased $3.0 million, or 20.0%, to $18.0 million from $15.0 million in the third quarter of 2020, and increased $1.1 million, or 6.6%, on a linked quarter basis. Salary expense alone increased 7.6% year over year. We increased our annual incentive accrual based on the increased loan production in 2021 and on final anticipated payouts for 2021 PPP loan originations. Total incentive accruals increased $2.2 million to $4.9 million for the third quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 24 to 518 at September 30, 2021 compared to 494 at September 30, 2020, and decreased by 9 from the end of the second quarter of 2021. Equipment and occupancy expense increased $440,000, or 17.2%, to $3.0 million in the third quarter of 2021, from $2.6 million in the third quarter of 2020, and increased $152,000, or 5.3% on a linked-quarter basis. We moved our office in Nashville, Tennessee in early 2021 to expand our space and improve visibility and we opened our new office in Orlando, Florida in the third quarter of 2021. Third party processing and other services expense increased $863,000, or 26.3%, to $4.1 million in the third quarter of 2021, from $3.3 million in the third quarter of 2020 and increased $198,000, or 5.0%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. FDIC and other regulatory assessments increased $569,000 to $1.6 million in the third quarter of 2021, from $1.1 million in the third quarter of 2020, and increased $205,000, or 14.4%, on a linked quarter basis. Growth in total assets has increased our assessments. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Expenses associated with other real estate owned increased $4,000, to $123,000 in the third quarter of 2021, from $119,000 in the third quarter of 2020, and decreased $417,000 on a linked quarter basis. The third quarter of 2021 included a write-down in value of a property in our Atlanta region. The linked-quarter decrease was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the third quarter of 2021 increased $2.9 million, or 81.3%, to $6.5 million from $3.6 million in the third quarter of 2020, and increased $2.0 million on a linked-quarter basis. We invested in new market tax credits in July 2021 and wrote down the investments by $2.8 million during the third quarter of 2021 with a charge to other operating expenses. We decreased our reserve for credit losses on unfunded loan commitments by $300,000 in the third quarter of 2021. The efficiency ratio was 32.95% during the third quarter of 2021 compared to 28.50% during the third quarter of 2020 and compared to 30.03% during the second quarter of 2021.

Income tax expense increased $472,000, or 4.3%, to $11.5 million in the third quarter of 2021, compared to $11.0 million in the third quarter of 2020. Our effective tax rate was 17.98% for the third quarter of 2021 compared to 20.29% for the third quarter of 2020. We recognized $3.2 million in credits during the third quarter of 2021 related to the investment in new market tax credits in July 2021. 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 third quarters of 2021 and 2020 of $78,000 and $180,000, 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 adjusted for the impact of PPP loan activities. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

	At September 30, 2021			At June 30, 2021			At March 31, 2021			At December 31, 2020			At September 30, 2020
Book value per share - GAAP	$	20.56		$	19.80		$	19.03		$	18.41		$	17.61
Total common stockholders' equity - GAAP		1,114,293			1,073,284			1,030,485			992,852			949,589
Adjustments:
Adjusted for goodwill and core deposit intangible asset		13,705			13,773			13,841			13,908			13,976
Tangible common stockholders' equity - non-GAAP	$	1,100,588		$	1,059,511		$	1,016,644		$	978,944		$	935,613
Tangible book value per share - non-GAAP	$	20.30		$	19.55		$	18.78		$	18.15		$	17.35

Stockholders' equity to total assets - GAAP		7.63	%		8.13	%		8.15	%		8.32	%		8.33	%
Total assets - GAAP	$	14,602,228		$	13,207,319		$	12,647,374		$	11,932,654		$	11,394,874
Adjustments:
Adjusted for goodwill and core deposit intangible asset		13,705			13,773			13,841			13,908			13,976
Total tangible assets - non-GAAP	$	14,588,523		$	13,193,546		$	12,633,533		$	11,918,746		$	11,380,898
Tangible common equity to total tangible assets - non-GAAP		7.54	%		8.03	%		8.05	%		8.21	%		8.22	%

Total loans - GAAP	$	8,812,811		$	8,649,694		$	8,504,980
Adjustments:
Adjusted to exclude PPP loans		387,725			595,017			967,641
Loans, excluding PPP loans - non-GAAP	$	8,425,086		$	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 as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2021, and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

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

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


SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
	3rd Quarter 2021			2nd Quarter 2021			1st Quarter 2021			4th Quarter 2020			3rd Quarter 2020
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	104,236		$	102,719		$	100,396		$	101,065		$	96,110
Interest expense		7,916			8,051			8,031			8,984			11,028
Net interest income		96,320			94,668			92,365			92,081			85,082
Provision for credit losses		5,963			9,652			7,451			6,283			12,284
Net interest income after provision for credit losses		90,357			85,016			84,914			85,798			72,798
Non-interest income		8,026			9,598			8,463			8,237			8,172
Non-interest expense		34,377			31,309			28,914			28,202			26,573
Income before income tax		64,006			63,305			64,463			65,833			54,397
Provision for income tax		11,507			13,278			13,008			14,852			11,035
Net income		52,499			50,027			51,455			50,981			43,362
Preferred stock dividends		-			31			-			32			-
Net income available to common stockholders	$	52,499		$	49,996		$	51,455		$	50,949		$	43,362
Earnings per share - basic	$	0.97		$	0.92		$	0.95		$	0.94		$	0.80
Earnings per share - diluted	$	0.96		$	0.92		$	0.95		$	0.94		$	0.80
Average diluted shares outstanding		54,477,740			54,381,991			54,273,944			54,232,965			54,194,506

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	14,602,228		$	13,207,319		$	12,647,374		$	11,932,654		$	11,394,874
Loans		8,812,811			8,649,694			8,504,980			8,465,688			8,508,544
Debt securities		984,600			1,013,783			962,129			886,938			913,299
Non-interest-bearing demand deposits		4,366,654			3,296,429			3,044,611			2,788,772			2,762,814
Total deposits		12,078,670			10,958,236			10,577,610			9,975,724			9,673,783
Borrowings		64,701			64,696			64,691			64,748			64,719
Stockholders' equity	$	1,114,293		$	1,073,284		$	1,030,485		$	992,852		$	949,589

Shares outstanding		54,207,147			54,201,204			54,137,650			53,943,751			53,915,245
Book value per share	$	20.56		$	19.80		$	19.03		$	18.41		$	17.61
Tangible book value per share (1)	$	20.30		$	19.55		$	18.78		$	18.15		$	17.35

SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin		2.85	%		3.06	%		3.20	%		3.27	%		3.14	%
Return on average assets		1.50	%		1.56	%		1.72	%		1.74	%		1.54	%
Return on average common stockholders' equity		18.93	%		18.98	%		19.83	%		20.78	%		18.43	%
Efficiency ratio		32.95	%		30.03	%		28.68	%		28.11	%		28.50	%
Non-interest expense to average earning assets		1.01	%		1.01	%		1.00	%		1.00	%		0.98	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		10.46	%		10.60	%		10.73	%		10.50	%		11.24	%
Tier 1 capital to risk-weighted assets		10.47	%		10.60	%		10.73	%		10.50	%		11.25	%
Total capital to risk-weighted assets		12.18	%		12.36	%		12.48	%		12.20	%		13.10	%
Tier 1 capital to average assets		7.80	%		8.10	%		8.25	%		8.23	%		8.22	%
Tangible common equity to total tangible assets (1)		7.54	%		8.03	%		8.05	%		8.22	%		8.22	%

(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(2) Regulatory capital ratios for most recent period are preliminary.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
	September 30, 2021			September 30, 2020			% Change
ASSETS
Cash and due from banks	$	102,313		$	70,472		45	%
Interest-bearing balances due from depository institutions		4,297,473			1,551,597		177	%
Federal funds sold		44,700			1,302		3,333	%
Cash and cash equivalents		4,444,486			1,623,371		174	%
Available for sale debt securities, at fair value		723,324			913,049		(21	)%
Held to maturity debt securities (fair value of $261,276 at September 30, 2021 and $250 at September 30, 2020)		261,276			250		104,410	%
Mortgage loans held for sale		578			21,472		(97	)%
Loans		8,812,811			8,508,554		4	%
Less allowance for credit losses		(108,950	)		(92,440	)	18	%
Loans, net		8,703,861			8,416,114		3	%
Premises and equipment, net		60,953			55,273		10	%
Goodwill and other identifiable intangible assets		13,705			13,976		(2	)%
Other assets		394,045			351,369		12	%
Total assets	$	14,602,228		$	11,394,874		28	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing	$	4,366,654		$	2,762,814		58	%
Interest-bearing		7,712,016			6,910,969		12	%
Total deposits		12,078,670			9,673,783		25	%
Federal funds purchased		1,286,756			669,350		92	%
Other borrowings		64,701			64,719		-	%
Other liabilities		57,808			37,433		54	%
Total liabilities		13,487,935			10,445,285		29	%
Stockholders' equity:
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
September 30, 2021 and September 30, 2020		-			-
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,207,147 shares
issued and outstanding at September 30, 2021, and 53,915,245 shares issued and outstanding
at September 30, 2020		54			54		-	%
Additional paid-in capital		225,648			223,280		1	%
Retained earnings		869,731			706,924		23	%
Accumulated other comprehensive income		18,360			18,831		(3	)%
Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		1,113,793			949,089		17	%
Noncontrolling interest		500			500		-	%
Total stockholders' equity		1,114,293			949,589		17	%
Total liabilities and stockholders' equity	$	14,602,228		$	11,394,874		28	%


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest income:
Interest and fees on loans	$	96,119	$	89,564	$	285,373	$	268,332
Taxable securities		6,544		5,858		18,666		16,104
Nontaxable securities		62		166		255		610
Federal funds sold		4		16		11		327
Other interest and dividends		1,507		506		3,046		2,584
Total interest income		104,236		96,110		307,351		287,957
Interest expense:
Deposits		6,581		9,876		20,298		37,377
Borrowed funds		1,335		1,152		3,700		4,624
Total interest expense		7,916		11,028		23,998		42,001
Net interest income		96,320		85,082		283,353		245,956
Provision for credit losses		5,963		12,284		23,066		36,151
Net interest income after provision for credit losses		90,357		72,798		260,287		209,805
Non-interest income:
Service charges on deposit accounts		1,727		1,818		5,542		5,557
Mortgage banking		1,423		2,519		6,869		5,697
Credit card income		2,043		1,840		5,147		5,003
Securities gains		-		-		620		-
Increase in cash surrender value life insurance		1,671		1,733		5,012		4,650
Other operating income		1,162		262		2,897		972
Total non-interest income		8,026		8,172		26,087		21,879
Non-interest expense:
Salaries and employee benefits		17,995		14,994		50,425		46,444
Equipment and occupancy expense		2,996		2,556		8,494		7,390
Third party processing and other services		4,144		3,281		11,506		10,360
Professional services		948		955		2,978		2,994
FDIC and other regulatory assessments		1,630		1,061		4,637		2,988
Other real estate owned expense		123		119		820		2,023
Other operating expense		6,541		3,607		15,740		11,110
Total non-interest expense		34,377		26,573		94,600		83,309
Income before income tax		64,006		54,397		191,774		148,375
Provision for income tax		11,507		11,035		37,793		29,787
Net income		52,499		43,362		153,981		118,588
Dividends on preferred stock		-		-		31		31
Net income available to common stockholders	$	52,499	$	43,362	$	153,950	$	118,557
Basic earnings per common share	$	0.97	$	0.80	$	2.84	$	2.20
Diluted earnings per common share	$	0.96	$	0.80	$	2.83	$	2.19

LOANS BY TYPE (UNAUDITED)
(In thousands)

	3rd Quarter 2021		2nd Quarter 2021		1st Quarter 2021		4th Quarter 2020		3rd Quarter 2020
Commercial, financial and agricultural	$	2,927,845	$	3,105,243	$	3,323,093	$	3,295,900	$	3,466,189
Real estate - construction		887,938		782,305		666,592		593,614		530,919
Real estate - mortgage:
Owner-occupied commercial		1,809,840		1,726,888		1,698,695		1,693,428		1,725,222
1-4 family mortgage		765,102		707,546		685,840		711,692		671,841
Other mortgage		2,357,812		2,262,231		2,068,560		2,106,184		2,056,549
Subtotal: Real estate - mortgage		4,932,754		4,696,665		4,453,095		4,511,304		4,453,612
Consumer		64,274		65,481		62,200		64,870		57,834
Total loans	$	8,812,811	$	8,649,694	$	8,504,980	$	8,465,688	$	8,508,554


SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
	3rd Quarter 2021			2nd Quarter 2021			1st Quarter 2021			4th Quarter 2020			3rd Quarter 2020
Allowance for credit losses:
Beginning balance	$	104,670		$	94,906		$	87,942		$	92,440		$	91,507
Impact of Adoption of ASC 326		-			-			-			(2,000	)		-
Loans charged off:
Commercial financial and agricultural		1,541			150			477			8,792			11,146
Real estate - construction		-			-			-			202			-
Real estate - mortgage		208			59			12			-			200
Consumer		86			54			87			38			44
Total charge offs		1,835			263			576			9,032			11,390
Recoveries:
Commercial financial and agricultural		140			298			26			94			12
Real estate - construction		-			2			50			30			-
Real estate - mortgage		4			62			2			114			12
Consumer		8			13			11			13			15
Total recoveries		152			375			89			251			39
Net charge-offs		1,683			(112	)		487			8,781			11,351
Provision for credit losses		5,963			9,652			7,451			6,283			12,284
Ending balance	$	108,950		$	104,670		$	94,906		$	87,942		$	92,440

Allowance for credit losses to total loans		1.24	%		1.21	%		1.12	%		1.04	%		-
Allowance for credit losses to total average loans		1.26	%		1.21	%		1.11	%		1.04	%		-
Allowance for loan losses to total loans		-			-			-			-			1.09	%
Allowance for loan losses to total average loans		-			-			-			-			1.11	%
Net charge-offs (recoveries) to total average loans		0.08	%		(0.01	)%		0.02	%		0.41	%		0.54	%
Provision for credit losses to total average loans		0.27	%		0.45	%		0.35	%		0.30	%		-
Provision for loan losses to total average loans		-			-			-			-			0.58	%
Nonperforming assets:
Nonaccrual loans	$	9,145		$	12,301		$	13,088		$	13,973		$	21,675
Loans 90+ days past due and accruing		5,326			4,888			4,804			4,981			4,898
Other real estate owned and repossessed assets		2,068			2,039			2,067			6,497			6,976
Total	$	16,539		$	19,228		$	19,959		$	25,451		$	33,549

Nonperforming loans to total loans		0.16	%		0.20	%		0.21	%		0.22	%		0.31	%
Nonperforming assets to total assets		0.11	%		0.15	%		0.16	%		0.21	%		0.29	%
Nonperforming assets to earning assets		0.11	%		0.15	%		0.16	%		0.22	%		0.30	%
Allowance for credit losses to nonaccrual loans		1,191.36	%		850.91	%		725.14	%		629.37	%		-
Allowance for loan losses to nonaccrual loans		-			-			-			-			426.48	%

Restructured accruing loans	$	437		$	441		$	794		$	818		$	1,800

Restructured accruing loans to total loans		-	%		0.01	%		0.01	%		0.01	%		0.02	%

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
(In thousands)
	3rd Quarter 2021			2nd Quarter 2021			1st Quarter 2021			4th Quarter 2020			3rd Quarter 2020
Beginning balance:	$	2,918		$	3,542		$	1,433		$	2,738		$	1,568
Additions		-			-			2,146			-			1,182
Net (paydowns) / advances		(25	)		(624	)		(37	)		(619	)		(12	)
Charge-offs		-			-			-			(535	)		-
Transfer to OREO		-			-			-			(151	)		-
Ending balance	$	2,893		$	2,918		$	3,542		$	1,433		$	2,738


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
	3rd Quarter 2021		2nd Quarter 2021		1st Quarter 2021		4th Quarter 2020		3rd Quarter 2020
Interest income:
Interest and fees on loans	$	96,119	$	95,451	$	93,803	$	94,332	$	89,564
Taxable securities		6,544		6,315		5,807		6,018		5,858
Nontaxable securities		62		86		107		129		166
Federal funds sold		4		4		3		5		16
Other interest and dividends		1,507		863		676		581		506
Total interest income		104,236		102,719		100,396		101,065		96,110
Interest expense:
Deposits		6,581		6,836		6,881		7,853		9,876
Borrowed funds		1,335		1,215		1,150		1,131		1,152
Total interest expense		7,916		8,051		8,031		8,984		11,028
Net interest income		96,320		94,668		92,365		92,081		85,082
Provision for credit losses		5,963		9,652		7,451		6,283		12,284
Net interest income after provision for credit losses		90,357		85,016		84,914		85,798		72,798
Non-interest income:
Service charges on deposit accounts		1,727		1,907		1,908		1,971		1,818
Mortgage banking		1,423		2,699		2,747		3,050		2,519
Credit card income		2,043		1,912		1,192		913		1,840
Securities gains		-		620		-		-		-
Increase in cash surrender value life insurance		1,671		1,683		1,658		1,660		1,733
Other operating income		1,162		777		958		643		262
Total non-interest income		8,026		9,598		8,463		8,237		8,172
Non-interest expense:
Salaries and employee benefits		17,995		16,887		15,543		14,970		14,994
Equipment and occupancy expense		2,996		2,844		2,654		2,680		2,556
Third party processing and other services		4,144		3,946		3,416		3,418		3,281
Professional services		948		1,107		923		1,248		955
FDIC and other regulatory assessments		1,630		1,425		1,582		1,366		1,061
Other real estate owned expense		123		540		157		140		119
Other operating expense		6,541		4,560		4,639		4,380		3,607
Total non-interest expense		34,377		31,309		28,914		28,202		26,573
Income before income tax		64,006		63,305		64,463		65,833		54,397
Provision for income tax		11,507		13,278		13,008		14,852		11,035
Net income		52,499		50,027		51,455		50,981		43,362
Dividends on preferred stock		-		31		-		32		-
Net income available to common stockholders	$	52,499	$	49,996	$	51,455	$	50,949	$	43,362
Basic earnings per common share	$	0.97	$	0.92	$	0.95	$	0.94	$	0.80
Diluted earnings per common share	$	0.96	$	0.92	$	0.95	$	0.94	$	0.80


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)

					3rd Quarter 2021				2nd Quarter 2021				1st Quarter 2021				4th Quarter 2020				3rd 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			$	8,653,632	4.40	%	$	8,618,139	4.43	%	$	8,484,914	4.47	%	$	8,435,237	4.43	%	$	8,335,087	4.26	%
		Tax-exempt (2)				26,542	4.05			26,854	4.05			27,592	4.17			29,393	4.16			30,068	4.14
			Total loans, net of
				unearned income		8,680,174	4.39			8,644,993	4.43			8,512,506	4.47			8,464,630	4.43			8,365,155	4.26
	Mortgage loans held for sale					7,050	1.69			11,470	1.92			13,601	1.94			19,459	1.37			20,053	1.41
	Debt securities:
		Taxable				969,715	2.70			936,863	2.70			878,118	2.65			862,333	2.79			820,526	2.86
		Tax-exempt (2)				12,382	2.39			16,872	2.47			21,084	2.43			25,542	2.52			31,880	2.51
			Total securities (3)			982,097	2.70			953,735	2.69			899,202	2.64			887,875	2.78			852,406	2.84
	Federal funds sold					8,551	0.19			8,224	0.20			11,935	0.10			16,306	0.12			41,884	0.15
	Interest-bearing balances with banks					3,761,652	0.16			2,790,524	0.12			2,262,233	0.12			1,837,249	0.13			1,500,563	0.13
	Total interest-earning assets				$	13,439,524	3.08	%	$	12,408,946	3.32	%	$	11,699,477	3.48	%	$	11,225,519	3.58	%	$	10,780,061	3.55	%
Non-interest-earning assets:
	Cash and due from banks					90,034				85,478				71,166				91,258				75,065
	Net premises and equipment					62,845				61,240				57,198				56,315				56,799
	Allowance for credit losses, accrued
		interest and other assets				315,178				320,729				320,407				308,746				281,196
			Total assets		$	13,907,581			$	12,876,393			$	12,148,248			$	11,681,838			$	11,193,121

Interest-bearing liabilities:
	Interest-bearing deposits:
	Checking				$	1,431,420	0.19	%	$	1,350,098	0.19	%	$	1,294,614	0.19	%	$	1,197,908	0.23	%	$	1,077,595	0.31	%
	Savings					122,579	0.17			104,283	0.18			93,375	0.18			86,259	0.18			82,671	0.36
	Money market					5,328,291	0.26			5,321,338	0.26			5,057,828	0.27			4,933,285	0.31			4,739,566	0.44
	Time deposits					806,108	1.15			801,928	1.33			808,561	1.44			810,675	1.59			841,378	1.78
		Total interest-bearing deposits				7,688,398	0.34			7,577,647	0.36			7,254,378	0.38			7,028,127	0.44			6,741,210	0.58
	Federal funds purchased					1,205,327	0.21			970,708	0.22			849,772	0.22			752,765	0.22			682,971	0.22
	Other borrowings					64,694	4.23			64,694	4.28			64,689	4.33			64,701	4.41			64,717	4.78
	Total interest-bearing liabilities				$	8,958,419	0.35	%	$	8,613,049	0.37	%	$	8,168,839	0.40	%	$	7,845,593	0.46	%	$	7,488,898	0.59	%
Non-interest-bearing liabilities:
	Non-interest-bearing
		demand deposits				3,800,972				3,154,605				2,923,041				2,812,254				2,728,513
	Other liabilities					26,891				52,027				39,442				48,642				39,537
	Stockholders' equity					1,100,156				1,038,012				996,741				956,847				917,626
	Accumulated other comprehensive
		income				21,143				18,700				20,185				18,502				18,547
			Total liabilities and
				stockholders' equity	$	13,907,581			$	12,876,393			$	12,148,248			$	11,681,838			$	11,193,121
Net interest spread							2.73	%			2.95	%			3.08	%			3.12	%			2.96	%
Net interest margin							2.85	%			3.06	%			3.20	%			3.27	%			3.14	%

(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.

Source: ServisFirst Bancshares, Inc.

Released October 18, 2021

ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2021

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