ServisFirst Bancshares, Inc. Announces Results for First Quarter of 2022

BIRMINGHAM, Ala., April 18, 2022 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE:SFBS), today announced earnings and operating results for the quarter ended March 31, 2022.

First Quarter 2022 Highlights:

Diluted earnings per share were $1.06 for the first quarter, an increase of 12% over the first quarter of 2021. Excluding income on Paycheck Protection Program (“PPP”) loans, diluted earnings per share were $0.99 for the first quarter of 2022 compared to $0.79 for the first quarter of 2021, a 25% increase
Entered the Piedmont region of North Carolina and hired veteran banker Rick Manley as Regional CEO
Total loans grew $366.0 million during the first quarter of 2022. Total loans, excluding the impact of PPP loan forgiveness, grew $488.6 million, or 21% annualized, during the quarter
Deposits were $12.4 billion at March 31, 2022, a 17% increase year over year
Excess funds were $3.34 billion at March 31, 2022
Tangible book value per share increased 13.7% year over year
Return on equity exceeded 20% for the quarter

Tom Broughton, Chairman, President and CEO, said, “We continue to see strong economic activity in our southeastern footprint and saw the first improvement in commercial and industrial line utilization in the quarter since the beginning of the pandemic.”

Bud Foshee, CFO, said, “Liquidity continues to exceed $3.3 billion despite strong loan growth and continued securities purchases.”

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

	Period Ending March 31, 2022			Period Ending December 31, 2021			% Change From Period Ending December 31, 2021 to Period Ending March 31, 2022			Period Ending March 31, 2021			% Change From Period Ending March 31, 2021 to Period Ending March 31, 2022
QUARTERLY OPERATING RESULTS
Net Income	$	57,613		$	53,753		7		%	$	51,455		12	%
Net Income Available to Common Stockholders	$	57,613		$	53,722		7		%	$	51,455		12	%
Diluted Earnings Per Share	$	1.06		$	0.99		7		%	$	0.95		12	%
Return on Average Assets		1.53	%		1.40	%					1.72	%
Return on Average Common Stockholders' Equity		20.09	%		18.75	%					19.83	%
Average Diluted Shares Outstanding		54,522,042			54,493,959						54,381,991

BALANCE SHEET
Total Assets	$	15,339,419		$	15,448,806		(1	)	%	$	12,647,374		21	%
Loans		9,898,957			9,532,934		4		%		8,504,980		16	%
Non-interest-bearing Demand Deposits		4,889,495			4,799,767		2		%		3,044,611		61	%
Total Deposits		12,408,755			12,452,836		-		%		10,577,610		17	%
Stockholders' Equity		1,172,975			1,152,015		2		%		1,030,485		14	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $57.6 million for the quarter ended March 31, 2022, compared to net income and net income available to common stockholders of $51.5 million for the same quarter in 2021. Basic and diluted earnings per common share were $1.06 for the first quarter of 2022, compared to $0.95 for the first quarter of 2021. Excluding the impact of PPP, net income and net income available to common stockholders was $54.0 million for the quarter ended March 31, 2022, compared to net income and net income available to common stockholders of $42.9 million for the same quarter in 2021. Excluding the impact of PPP, basic and diluted earnings per common share were $0.99 for the first quarter of 2022, compared to $0.79 for the first quarter of 2021 (see GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures section).

Annualized return on average assets was 1.53% and annualized return on average common stockholders’ equity was 20.09% for the first quarter of 2022, compared to 1.72% and 19.83%, respectively, for the first quarter of 2021.

Net interest income was $105.7 million for the first quarter of 2022, compared to $101.2 million for the fourth quarter of 2021 and $92.4 million for the first quarter of 2021. The net interest margin improved to 2.89% in the first quarter of 2022 compared to 2.71% in the fourth quarter of 2021. The net interest margin was 3.20% in the first quarter of 2021. Accretion of net fees on PPP loans of $4.5 million during the first quarter of 2022 contributed 19 basis points of the loan yield, compared to $5.1 million during the fourth quarter of 2021, or 22 basis points and $9.1 million during the first quarter of 2021, or 43 basis points.

Average loans for the first quarter of 2022 were $9.65 billion, an increase of $587.6 million, or 25.7% annualized, with average loans of $9.06 billion for the fourth quarter of 2021, and an increase of $1.13 billion, or 13.3%, with average loans of $8.51 billion for the first quarter of 2021. Excluding PPP loans, average loans grew $730.7 million, or by 33.9% annualized, during the first quarter of 2022 and grew $1.92 billion, or by 25.5%, year-over-year.

Average total deposits for the first quarter of 2022 were $12.38 billion, a decrease of $7.8 million compared to average deposits for the fourth quarter of 2021, and an increase of $2.20 billion, or 21.6%, with average total deposits of $10.18 billion for the first quarter of 2021.

Non-performing assets to total assets were 0.14% for the first quarter of 2022, an increase of five basis points compared to 0.09% for the fourth quarter of 2021 and a decrease of two basis points compared to 0.16% for the first quarter of 2021. Annualized net charge-offs to average loans were 0.11%, an eight basis point increase compared to 0.03% for the fourth quarter of 2021 and an increase of nine basis points compared to 0.02% for the first quarter of 2021. The allowance for credit losses as a percentage of total loans was 1.21% at March 31, 2022, a decrease of one basis point compared to 1.22% at December 31, 2021, and an increase of nine basis points compared to 1.12% at March 31, 2021. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at March 31, 2022, December 31, 2021, and March 31, 2021, was 1.22%, 1.25% and 1.26%, respectively. We recorded a $5.4 million provision for credit losses in the first quarter of 2022 compared to $8.5 million in the fourth quarter of 2021 and $7.5 million in the first quarter of 2021.

Non-interest income for the first quarter of 2022 decreased $515,000, or 6.1%, to $7.9 million from $8.5 million in the first quarter of 2021, and increased $583,000, or 7.93%, on a linked quarter basis. Service charges on deposit accounts increased $234,000, or 12.3%, to $2.1 million from the first quarter of 2021 to the first quarter of 2022. Mortgage banking revenue decreased $2.2 million to $526,000 from the first quarter of 2021 to the first quarter of 2022, and increased $55,000 or 11.7%, on a linked quarter basis. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of March 31, 2022, we had retained a total of 313 1-4 family mortgages with an aggregate balance of $117.9 million. Net credit card revenue increased $1.2 million, or 99.0%, to $2.4 million during the first quarter of 2022, compared to $1.2 million during the first quarter of 2021, and increased $172,000, or 7.8%, on a linked quarter basis. The number of credit card accounts increased approximately 29% and the aggregate amount of spend on all credit card accounts increased 32% during the first quarter of 2022 compared to the first quarter of 2021. We recognized a $3.3 million loss on the sale of available for sale debt securities during the first quarter of 2022. We sold eight debt securities that were yielding less than 1.00%. Other income for the first quarter of 2022 increased $3.6 million when compared to the first quarter of 2021. The interest rate cap we bought in May of 2020 increased in value during the first quarter of 2022, contributing $3.4 million to the increase in other income. Merchant service revenue increased from $191,000 during the first quarter of 2021 to $336,000 during the first quarter of 2022.

Non-interest expense for the first quarter of 2022 increased $8.3 million, or 28.7%, to $37.2 million from $28.9 million in the first quarter of 2021, and decreased $1.3 million, or 3.3%, on a linked quarter basis. The efficiency ratio was 32.74% during the first quarter of 2022 compared to 28.68% during the first quarter of 2021 and compared to 35.47% during the fourth quarter of 2021. Salary and benefit expense for the first quarter of 2022 increased $2.8 million, or 17.7%, to $18.3 million from $15.6 million in the first quarter of 2021, and increased $998,000, or 5.8%, on a linked quarter basis. The number of FTE employees increased by 20 to 511 at March 31, 2022 compared to 491 at March 31, 2021 and increased by 9 from the end of the fourth quarter of 2021. Equipment and occupancy expense increased $279,000, or 10.5%, to $2.9 million in the first quarter of 2022, from $2.7 million in the first quarter of 2021 and increased $23,000 on a linked-quarter basis. Third party processing and other services expense increased $2.2 million, or 64.1%, to $5.6 million in the first quarter of 2022, from $3.4 million in the first quarter of 2021 and increased $749,000, on a linked-quarter basis. Professional services expense increased $69,000, or 7.5%, to $992,000 in the first quarter of 2022, from $923,000 in the first quarter of 2021 and increased $79,000 on a linked-quarter basis. FDIC and other regulatory assessments decreased $450,000 to $1.1 million in the first quarter of 2022, from $1.6 million in the first quarter of 2021, and increased $90,000, or 8.6%, on a linked quarter basis. Our assessment rate decreased when we started reporting as a large financial institution in the third quarter of 2021. Other operating expenses for the first quarter of 2022 increased $3.6 million, or 77.9%, to $8.3 million from $4.6 million in the first quarter of 2021, and decreased $3.2 million, on a linked-quarter basis. We recognized $874,000 of expenses during the first quarter of 2022 and $3.0 million of expenses during the fourth quarter of 2021 associated with the conversion to a new core operating system scheduled to take place in the fourth quarter of 2022. We wrote down investments in new market tax credit entities by $2.5 million during the first quarter of 2022 and by $6.0 million during the fourth quarter of 2021. We increased our reserve for unfunded loan commitments by $300,000 during the first quarter of 2022 compared to $600,000 during the first quarter of 2021 and decreased the reserve by $1.7 million during the fourth quarter of 2021.

Income tax expense increased $469,000, or 3.6%, to $13.5 million in the first quarter of 2022, compared to $13.0 million in the first quarter of 2021. Our effective tax rate was 18.96% for the first quarter of 2022 compared to 20.18% for the first quarter of 2021. We recognized an aggregate of $3.1 million in credits during the first quarter of 2022 related to investments in new market tax credits. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the first quarters of 2022 and 2021 of $571,000 and $1.6 million, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We originated over 7,400 Paycheck Protection Program (“PPP”) loans with an aggregate balance of approximately $1.5 billion during the COVID-19 pandemic. As of March 31, 2022, we had outstanding PPP loans of $107.6 million, compared to $967.7 million as of March 31, 2021. Financial measures in this press release that are presented adjusted for our PPP activities are net income available to common stockholders, basic and diluted earnings per share and total loans. These financial measures exclude the impact of PPP loans, net of tax, and are considered non-GAAP financial measures. This press release also contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

			Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
Net income available to common stockholders - GAAP			$	57,613			$	51,455
	Adjustments:
	PPP loan income			(4,869	)			(11,411	)
		Tax on adjustment		1,222				2,864
Adjusted net income available to common stockholders -
	non-GAAP		$	53,966			$	42,908

Diluted earnings per share - GAAP			$	1.06				0.95
	Adjustments:
	PPP loan income			(0.09	)			(0.21	)
		Tax on adjustment		0.02				0.05
Adjusted diluted earnings per share - non-GAAP			$	0.99			$	0.79

			At March 31, 2022				At December 31, 2021				At September 30, 2021				At June 30, 2021				At March 31, 2021
Book value per share - GAAP			$	21.61			$	21.24			$	20.56			$	19.80			$	19.03
Total common stockholders' equity - GAAP				1,172,975				1,152,015				1,114,293				1,073,284				1,030,485
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			(13,615	)			(13,638	)			(13,705	)			(13,773	)			(13,841	)
Tangible common stockholders' equity - non-GAAP			$	1,159,360			$	1,138,377			$	1,100,588			$	1,059,511			$	1,016,644
Tangible book value per share - non-GAAP			$	21.36			$	20.99			$	20.30			$	19.55			$	18.78

Stockholders' equity to total assets - GAAP				7.65		%		7.46		%		7.63		%		8.13		%		8.15		%
Total assets - GAAP			$	15,339,419			$	15,448,806			$	14,602,228			$	13,207,319			$	12,647,374
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			(13,615	)			(13,638	)			(13,705	)			(13,773	)			(13,841	)
Total tangible assets - non-GAAP			$	15,325,804			$	15,435,168			$	14,588,523			$	13,193,546			$	12,633,533
Tangible common equity to total tangible assets - non-GAAP				7.56		%		7.38		%		7.54		%		8.03		%		8.05		%

Total loans - GAAP			$	9,898,957			$	9,532,934			$	8,812,811			$	8,649,694			$	8,504,980
	Adjustments:
	Adjusted to exclude PPP loans			(107,565	)			(230,184	)			(387,725	)			(595,017	)			(967,641	)
Loans, excluding PPP loans - non-GAAP			$	9,791,392			$	9,302,750			$	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, Montgomery, Mobile and Dothan, Alabama, Pensacola, Sarasota and Tampa Bay, Florida, Atlanta and Columbus, Georgia, Charleston, South Carolina and Nashville, Tennessee.

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, including in light of the continuing high rate of domestic inflation; 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; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic measures intended to curb rising inflation; 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)
	1st Quarter 2022			4th Quarter 2021			3rd Quarter 2021			2nd Quarter 2021			1st Quarter 2021
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	113,188		$	108,954		$	104,236		$	102,719		$	100,396
Interest expense		7,466			7,804			7,916			8,051			8,031
Net interest income		105,722			101,150			96,320			94,668			92,365
Provision for credit losses		5,362			8,451			5,963			9,652			7,451
Net interest income after provision for credit losses		100,360			92,699			90,357			85,016			84,914
Non-interest income		7,948			7,365			8,026			9,598			8,463
Non-interest expense		37,218			38,489			34,377			31,309			28,914
Income before income tax		71,090			61,575			64,006			63,305			64,463
Provision for income tax		13,477			7,822			11,507			13,278			13,008
Net income		57,613			53,753			52,499			50,027			51,455
Preferred stock dividends		-			31			-			31			-
Net income available to common stockholders	$	57,613		$	53,722		$	52,499		$	49,996		$	51,455
Earnings per share - basic	$	1.06		$	0.99		$	0.97		$	0.92		$	0.95
Earnings per share - diluted	$	1.06		$	0.99		$	0.96		$	0.92		$	0.95
Average diluted shares outstanding		54,522,042			54,493,959			54,477,740			54,460,230			54,381,991

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	15,339,419		$	15,448,806		$	14,602,228		$	13,207,319		$	12,647,374
Loans		9,898,957			9,532,934			8,812,811			8,649,694			8,504,980
Debt securities		1,617,977			1,305,527			984,600			1,013,783			962,129
Non-interest-bearing demand deposits		4,889,495			4,799,767			4,366,654			3,296,429			3,044,611
Total deposits		12,408,755			12,452,836			12,078,670			10,958,236			10,577,610
Borrowings		64,711			64,706			64,701			64,696			64,691
Stockholders' equity	$	1,172,975		$	1,152,015		$	1,114,293		$	1,073,284		$	1,030,485

Shares outstanding		54,282,132			54,227,060			54,207,147			54,201,204			54,137,650
Book value per share	$	21.61		$	21.24		$	20.56		$	19.80		$	19.03
Tangible book value per share (1)	$	21.36		$	20.99		$	20.30		$	19.55		$	18.78

SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin		2.89	%		2.71	%		2.85	%		3.06	%		3.20	%
Return on average assets		1.53	%		1.40	%		1.50	%		1.56	%		1.72	%
Return on average common stockholders' equity		20.09	%		18.75	%		18.93	%		18.98	%		19.83	%
Efficiency ratio		32.74	%		35.47	%		32.95	%		30.03	%		28.68	%
Non-interest expense to average earning assets		1.02	%		1.03	%		1.01	%		1.01	%		1.00	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		9.86	%		9.95	%		10.46	%		10.60	%		10.73	%
Tier 1 capital to risk-weighted assets		9.87	%		9.96	%		10.47	%		10.60	%		10.73	%
Total capital to risk-weighted assets		11.43	%		11.58	%		12.18	%		12.36	%		12.48	%
Tier 1 capital to average assets		7.67	%		7.39	%		7.80	%		8.10	%		8.25	%
Tangible common equity to total tangible assets (1)		7.56	%		7.38	%		7.54	%		8.03	%		8.05	%

(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)
			March 31, 2022			March 31, 2021			% Change
ASSETS
Cash and due from banks			$	103,439		$	70,107		48		%
Interest-bearing balances due from depository institutions				3,315,312			2,738,046		21		%
Federal funds sold				24,638			1,577		1,462		%
	Cash and cash equivalents			3,443,389			2,809,730		23		%
Available for sale debt securities, at fair value				784,673			961,879		(18	)	%
Held to maturity debt securities (fair value of $799,347 at March 31, 2022 and $250 at March 31, 2021)				833,304			250		N/M
Restricted equity securities				7,734			-		N/M
Mortgage loans held for sale				403			15,834		(97	)	%
Loans				9,898,957			8,504,980		16		%
Less allowance for credit losses				(119,463	)		(94,906	)	26		%
	Loans, net			9,779,494			8,410,074		16		%
Premises and equipment, net				59,908			56,472		6		%
Goodwill and other identifiable intangible assets				13,615			13,841		(2	)	%
Other assets				416,898			379,294		10		%
	Total assets		$	15,339,419		$	12,647,374		21		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing		$	4,889,495		$	3,044,611		61		%
	Interest-bearing			7,519,260			7,532,999		-		%
		Total deposits		12,408,755			10,577,610		17		%
Federal funds purchased				1,639,238			911,558		80		%
Other borrowings				64,711			64,691		-		%
Other liabilities				53,740			63,030		(15	)	%
	Total liabilities			14,166,444			11,616,889		22		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		March 31, 2022 and March 31, 2021		-			-		-		%
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,282,132 shares
		issued and outstanding at March 31, 2022, and 54,137,650 shares issued and outstanding
		at March 31, 2021		54			54		-		%
	Additional paid-in capital			227,127			224,302		1		%
	Retained earnings			956,169			788,875		21		%
	Accumulated other comprehensive (loss) income			(10,875	)		16,754		N/M
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		1,172,475			1,029,985		14		%
	Noncontrolling interest			500			500		-		%
		Total stockholders' equity		1,172,975			1,030,485		14		%
	Total liabilities and stockholders' equity		$	15,339,419		$	12,647,374		21		%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended March 31,
		2022			2021
Interest income:
	Interest and fees on loans	$	103,105		$	93,803
	Taxable securities		8,223			5,807
	Nontaxable securities		43			107
	Federal funds sold		13			3
	Other interest and dividends		1,804			676
	Total interest income		113,188			100,396
Interest expense:
	Deposits		5,843			6,881
	Borrowed funds		1,623			1,150
	Total interest expense		7,466			8,031
	Net interest income		105,722			92,365
Provision for credit losses			5,362			7,451
	Net interest income after provision for credit losses		100,360			84,914
Non-interest income:
	Service charges on deposit accounts		2,142			1,908
	Mortgage banking		526			2,747
	Credit card income		2,372			1,192
	(Loss) on sale of debt securities		(3,335	)		-
	Increase in cash surrender value life insurance		1,608			1,658
	Other operating income		4,635			958
	Total non-interest income		7,948			8,463
Non-interest expense:
	Salaries and employee benefits		18,301			15,543
	Equipment and occupancy expense		2,933			2,654
	Third party processing and other services		5,605			3,416
	Professional services		992			923
	FDIC and other regulatory assessments		1,132			1,582
	Other real estate owned expense		3			157
	Other operating expense		8,252			4,639
	Total non-interest expense		37,218			28,914
	Income before income tax		71,090			64,463
Provision for income tax			13,477			13,008
	Net income		57,613			51,455
	Dividends on preferred stock		-			-
	Net income available to common stockholders	$	57,613		$	51,455
Basic earnings per common share		$	1.06		$	0.95
Diluted earnings per common share		$	1.06		$	0.95

LOANS BY TYPE (UNAUDITED)
(In thousands)

		1st Quarter 2022		4th Quarter 2021		3rd Quarter 2021		2nd Quarter 2021		1st Quarter 2021
Commercial, financial and agricultural		$	2,955,927	$	2,984,053	$	2,927,845	$	3,105,243	$	3,323,093
Real estate - construction			1,164,690		1,103,076		887,938		782,305		666,592
Real estate - mortgage:
	Owner-occupied commercial		1,919,811		1,874,103		1,809,840		1,726,888		1,698,695
	1-4 family mortgage		926,697		826,765		765,102		707,546		685,840
	Other mortgage		2,869,158		2,678,084		2,357,812		2,262,231		2,068,560
Subtotal: Real estate - mortgage			5,715,666		5,378,952		4,932,754		4,696,665		4,453,095
Consumer			62,674		66,853		64,274		65,481		62,200
Total loans		$	9,898,957	$	9,532,934	$	8,812,811	$	8,649,694	$	8,504,980

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
			1st Quarter 2022				4th Quarter 2021				3rd Quarter 2021				2nd Quarter 2021					1st Quarter 2021
Allowance for credit losses:
Beginning balance			$	116,660			$	108,950			$	104,670			$	94,906				$	87,942
Loans charged off:
	Commercial financial and agricultural			2,574				1,285				1,541				150					477
	Real estate - construction			-				14				-				-					-
	Real estate - mortgage			27				-				208				59					12
	Consumer			75				141				86				54					87
		Total charge offs		2,676				1,440				1,835				263					576
Recoveries:
	Commercial financial and agricultural			105				671				140				298					26
	Real estate - construction			-				-				-				2					50
	Real estate - mortgage			-				18				4				62					2
	Consumer			12				10				8				13					11
		Total recoveries		117				699				152				375					89
	Net charge-offs (recoveries)			2,559				741				1,683				(112	)				487
	Provision for credit losses			5,362				8,451				5,963				9,652					7,451
Ending balance			$	119,463			$	116,660			$	108,950			$	104,670				$	94,906

Allowance for credit losses to total loans				1.21	%			1.22	%			1.24	%			1.21		%			1.12	%
Allowance for credit losses to total average
	loans			1.24	%			1.29	%			1.26	%			1.21		%			1.11	%
Net charge-offs (recoveries) to total average loans				0.11	%			0.03	%			0.08	%			(0.01	)	%			0.02	%
Provision for credit losses to total average
	loans			0.23	%			0.37	%			0.27	%			0.45		%			0.35	%
Nonperforming assets:
	Nonaccrual loans		$	14,738			$	6,762			$	9,145			$	12,301				$	13,088
	Loans 90+ days past due and accruing			4,686				5,335				5,326				4,888					4,804
	Other real estate owned and
	repossessed assets			1,989				1,208				2,068				2,039					2,067
Total			$	21,413			$	13,305			$	16,539			$	19,228				$	19,959

Nonperforming loans to total loans				0.20	%			0.13	%			0.16	%			0.20		%			0.21	%
Nonperforming assets to total assets				0.14	%			0.09	%			0.11	%			0.15		%			0.16	%
Nonperforming assets to earning assets				0.14	%			0.09	%			0.11	%			0.15		%			0.16	%
Allowance for credit losses to nonaccrual loans				810.58	%			1,725.23	%			1,191.36	%			850.91		%			725.14	%

Restructured accruing loans			$	426			$	431			$	437			$	441				$	794

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

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
(In thousands)
			1st Quarter 2022				4th Quarter 2021				3rd Quarter 2021				2nd Quarter 2021					1st Quarter 2021
Beginning balance:			$	2,576			$	2,893			$	2,918			$	3,542				$	1,433
	Additions			-				-				-				-					2,146
	Net (paydowns) / advances			(94		)		(303		)		(25		)		(624			)		(37		)
	Charge-offs			-				(14		)		-				-					-
Ending balance			$	2,482			$	2,576			$	2,893			$	2,918				$	3,542

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		1st Quarter 2022			4th Quarter 2021		3rd Quarter 2021		2nd Quarter 2021		1st Quarter 2021
Interest income:
	Interest and fees on loans	$	103,105		$	100,348	$	96,119	$	95,451	$	93,803
	Taxable securities		8,223			6,747		6,544		6,315		5,807
	Nontaxable securities		43			47		62		86		107
	Federal funds sold		13			18		4		4		3
	Other interest and dividends		1,804			1,794		1,507		863		676
	Total interest income		113,188			108,954		104,236		102,719		100,396
Interest expense:
	Deposits		5,843			6,271		6,581		6,836		6,881
	Borrowed funds		1,623			1,533		1,335		1,215		1,150
	Total interest expense		7,466			7,804		7,916		8,051		8,031
	Net interest income		105,722			101,150		96,320		94,668		92,365
Provision for credit losses			5,362			8,451		5,963		9,652		7,451
			100,360			92,699		90,357		85,016		84,914
Non-interest income:
	Service charges on deposit accounts		2,142			1,297		1,727		1,907		1,908
	Mortgage banking		526			471		1,423		2,699		2,747
	Credit card income		2,372			2,200		2,043		1,912		1,192
	(Loss) gains on sale of debt securities		(3,335	)		-		-		620		-
	Increase in cash surrender value life insurance		1,608			1,630		1,671		1,683		1,658
	Other operating income		4,635			1,767		1,162		777		958
	Total non-interest income		7,948			7,365		8,026		9,598		8,463
Non-interest expense:
	Salaries and employee benefits		18,301			17,303		17,995		16,887		15,543
	Equipment and occupancy expense		2,933			2,910		2,996		2,844		2,654
	Third party processing and other services		5,605			4,856		4,144		3,946		3,416
	Professional services		992			913		948		1,107		923
	FDIC and other regulatory assessments		1,132			1,042		1,630		1,425		1,582
	Other real estate owned expense		3			48		123		540		157
	Other operating expense		8,252			11,417		6,541		4,560		4,639
	Total non-interest expense		37,218			38,489		34,377		31,309		28,914
	Income before income tax		71,090			61,575		64,006		63,305		64,463
Provision for income tax			13,477			7,822		11,507		13,278		13,008
	Net income		57,613			53,753		52,499		50,027		51,455
	Dividends on preferred stock		-			31		-		31		-
	Net income available to common stockholders	$	57,613		$	53,722	$	52,499	$	49,996	$	51,455
Basic earnings per common share		$	1.06		$	0.99	$	0.97	$	0.92	$	0.95
Diluted earnings per common share		$	1.06		$	0.99	$	0.96	$	0.92	$	0.95

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

						1st Quarter 2022				4th Quarter 2021				3rd Quarter 2021				2nd Quarter 2021				1st Quarter 2021
						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			$	9,621,484	4.34	%	$	9,032,914	4.40	%	$	8,653,632	4.40	%	$	8,618,139	4.43	%	$	8,484,914	4.47	%
			Tax-exempt (2)				25,195	4.09			26,148	4.07			26,542	4.05			26,854	4.05			27,592	4.17
				Total loans, net of
					unearned income		9,646,679	4.34			9,059,062	4.40			8,680,174	4.39			8,644,993	4.43			8,512,506	4.47
		Mortgage loans held for sale					927	1.75			998	1.99			7,050	1.69			11,470	1.92			13,601	1.94
		Debt securities:
			Taxable				1,518,572	2.17			1,134,378	2.38			969,715	2.70			936,863	2.70			878,118	2.65
			Tax-exempt (2)				8,812	2.32			9,823	2.36			12,382	2.39			16,872	2.47			21,084	2.43
				Total securities (3)			1,527,384	2.17			1,144,201	2.38			982,097	2.70			953,735	2.69			899,202	2.64
		Federal funds sold					16,639	0.32			39,445	0.18			8,551	0.19			8,224	0.20			11,935	0.10
		Restricted equity securities					7,371	3.74			873	3.18			-	-			-	-			-	-
		Interest-bearing balances with banks					3,637,882	0.20			4,561,662	0.16			3,761,652	0.16			2,790,524	0.12			2,262,233	0.12
		Total interest-earning assets				$	14,836,882	3.10	%	$	14,806,241	2.92	%	$	13,439,524	3.08	%	$	12,408,946	3.32	%	$	11,699,477	3.48	%
Non-interest-earning assets:
		Cash and due from banks					74,534				79,293				90,034				85,478				71,166
		Net premises and equipment					61,209				61,837				62,845				61,240				57,198
		Allowance for credit losses, accrued
			interest and other assets				313,560				303,300				315,178				320,729				320,407
				Total assets		$	15,286,185			$	15,250,671			$	13,907,581			$	12,876,393			$	12,148,248

Interest-bearing liabilities:
		Interest-bearing deposits:
		Interest-bearing demand deposits				$	1,594,645	0.20	%	$	1,499,918	0.19	%	$	1,431,420	0.19	%	$	1,350,098	0.19	%	$	1,294,614	0.19	%
		Savings					135,545	0.18			123,179	0.18			122,579	0.17			104,283	0.18			93,375	0.18
		Money market					4,985,224	0.26			5,100,192	0.26			5,328,291	0.26			5,321,338	0.26			5,057,828	0.27
		Time deposits					792,930	0.92			807,342	1.05			806,108	1.15			801,928	1.33			808,561	1.44
			Total interest-bearing deposits				7,508,344	0.32			7,530,631	0.33			7,688,398	0.34			7,577,647	0.36			7,254,378	0.38
		Federal funds purchased					1,620,012	0.23			1,608,349	0.21			1,205,327	0.21			970,708	0.22			849,772	0.22
		Other borrowings					64,708	4.32			64,704	4.23			64,694	4.23			64,694	4.28			64,689	4.33
		Total interest-bearing liabilities				$	9,193,064	0.33	%	$	9,203,684	0.34	%	$	8,958,419	0.35	%	$	8,613,049	0.37	%	$	8,168,839	0.40	%
Non-interest-bearing liabilities:
		Non-interest-bearing
			demand deposits				4,870,701				4,856,243				3,800,972				3,154,605				2,923,041
		Other liabilities					59,619				54,134				48,060				52,027				39,442
		Stockholders' equity					1,156,186				1,121,578				1,078,987				1,038,012				996,741
		Accumulated other comprehensive
			income				6,615				15,032				21,143				18,700				20,185
				Total liabilities and
					stockholders' equity	$	15,286,185			$	15,250,671			$	13,907,581			$	12,876,393			$	12,148,248
Net interest spread								2.77	%			2.58	%			2.73	%			2.95	%			3.08	%
Net interest margin								2.89	%			2.71	%			2.85	%			3.06	%			3.20	%

(1	)	Average loans include nonaccrual loans in all periods. Loan fees of $6,823, $7,686, $7,203, $9,915 and $10,400 are included in interest income in the first quarter of 2022, the fourth quarter of 2021, the third quarter of 2021, the second quarter of 2021 and the first quarter of 2021, respectively.
(2	)	Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.
(3	)	Unrealized gains on debt securities of $8,245, $18,974, $26,709, $24,547 and $22,027 for the first quarter of 2022, fourth quarter of 2021, third quarter of 2021, second quarter of 2021 and first quarter of 2021, respectively, are excluded from the yield calculation.

Source: ServisFirst Bancshares, Inc.

Released April 18, 2022

ServisFirst Bancshares, Inc. Announces Results for First Quarter of 2022

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