ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2019

BIRMINGHAM, Ala., July 15, 2019 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three and six months ended June 30, 2019.

SECOND QUARTER 2019 HIGHLIGHTS:

Loans increased 19%, annualized, on a linked quarter basis and 14% year-over-year, respectively
Deposits increased 18%, annualized, on a linked quarter basis and 22% year-over-year, respectively
Diluted EPS was $0.66 for the second quarter of 2019 compared to $0.62 for the second quarter of 2018
Efficiency ratio improved to 34.3% compared to previous quarter

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

	Period Ending June 30, 2019			Period Ending March 31, 2019			% Change From Period Ending March 31, 2019 to Period Ending June 30, 2019		Period Ending June 30, 2018			% Change From Period Ending June 30, 2018 to Period Ending June 30, 2019
QUARTERLY OPERATING RESULTS
Net Income	$	35,633		$	35,010		2	%	$	33,540		6	%
Net Income Available to Common Stockholders	$	35,602		$	35,010		2	%	$	33,509		6	%
Diluted Earnings Per Share	$	0.66		$	0.65		2	%	$	0.62		6	%
Return on Average Assets		1.69	%		1.75	%				1.91	%
Return on Average Common Stockholders' Equity		18.72	%		19.42	%				20.89	%
Average Diluted Shares Outstanding		54,089,107			54,076,538					54,196,023

YEAR-TO-DATE OPERATING RESULTS
Net Income	$	70,643							$	66,143		7	%
Net Income Available to Common Stockholders	$	70,612							$	66,112		7	%
Diluted Earnings Per Share	$	1.31							$	1.22		7	%
Return on Average Assets		1.72	%							1.91	%
Return on Average Common Stockholders' Equity		19.06	%							21.13	%
Average Diluted Shares Outstanding		54,082,857								54,189,746

BALANCE SHEET
Total Assets	$	8,740,237		$	8,310,836		5	%	$	7,084,562		23	%
Loans		6,967,886			6,659,908		5	%		6,129,649		14	%
Non-interest-bearing Demand Deposits		1,576,959			1,572,703		-	%		1,481,447		6	%
Total Deposits		7,404,794			7,083,666		5	%		6,085,682		22	%
Stockholders' Equity		778,957			745,586		4	%		655,114		19	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $35.6 million for the quarter ended June 30, 2019, compared to net income and net income available to common stockholders of $33.5 million for the same quarter in 2018. Basic and diluted earnings per common share were $0.67 and $0.66, respectively, for the second quarter of 2019, compared to $0.63 and $0.62, respectively, for the second quarter of 2018.

Annualized return on average assets was 1.69% and annualized return on average common stockholders’ equity was 18.72% for the second quarter of 2019, compared to 1.91% and 20.89%, respectively, for the second quarter of 2018.

Net interest income was $70.1 million for the second quarter of 2019, compared to $68.8 million for the first quarter of 2019 and $64.5 million for the second quarter of 2018. The net interest margin in the second quarter of 2019 was 3.44% compared to 3.56% in the first quarter of 2019 and 3.82% in the second quarter of 2018. Linked quarter increases in average rates paid on deposits drove an unfavorable rate change while increases in average balances in loans and equity drove favorable volume change.

Average loans for the second quarter of 2019 were $6.79 billion, an increase of $187.6 million, or 11% annualized, over average loans of $6.60 billion for the first quarter of 2019, and an increase of $800.4 million, or 13%, over average loans of $5.99 billion for the second quarter of 2018.

Average total deposits for the second quarter of 2019 were $7.18 billion, an increase of $203.0 million, or 12% annualized, over average total deposits of $6.98 billion for the first quarter of 2019, and an increase of $1.14 billion, or 19%, over average total deposits of $6.04 billion for the second quarter of 2018.

Non-performing assets to total assets were 0.46% for the second quarter of 2019, an increase of five basis points compared to 0.41% for the first quarter of 2019 and an increase of 23 basis points compared to 0.23% for the second quarter of 2018. Net charge-offs to average loans was 0.22%, a two basis point increase compared to 0.20% for the first quarter of 2019 and an increase of nine basis points compared to 0.13% for the second quarter of 2018. We recorded a $4.9 million provision for loan losses in the second quarter of 2019 compared to $4.9 million in the first quarter of 2019 and $4.1 million in the second quarter of 2018. The allowance for loan loss as a percentage of total loans was 1.02% at June 30, 2019, a decrease of 3 basis points compared to 1.05% at March 31, 2019 and June 30, 2018, respectively. In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income for the second quarter of 2019 increased $837,000, or 17%, to $5.8 million from $4.9 million in the second quarter of 2018. Deposit service charges increased $133,000 in the second quarter of 2019, or 8%, compared to the second quarter of 2018. The number of transaction deposit accounts increased approximately 8% from June 30, 2018 to June 30, 2019. Mortgage banking revenue increased $298,000, or 38%, from the second quarter of 2018 to the second quarter of 2019. Mortgage loan originations increased approximately 28% during the second quarter of 2019 when compared to the same quarter in 2018. Credit card revenue increased $380,000, or 28%, to $1.7 million during the second quarter of 2019, compared to $1.3 million during the second quarter of 2018. The number of accounts increased approximately 35% and the aggregate amount of sales on all accounts increased 28% during the second quarter of 2019. Other income for the second quarter of 2019 increased $40,000, or 11%, to $392,000 from $352,000 in the second quarter of 2018.

Non-interest expense for the second quarter of 2019 increased $2.5 million, or 11%, to $26.0 million from $23.5 million in the second quarter of 2018, and increased $696,000, or 3%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2019 increased $1.2 million, or 10%, to $14.3 million from $13.1 million in the second quarter of 2018, and increased $74,000, or 1%, on a linked quarter basis. The number of FTE employees increased from 447 at June 30, 2018 to 495 at June 30, 2019, or 11%. Equipment and occupancy expense increased $174,000, or 8%, to $2.3 million in the second quarter of 2019, from $2.1 million in the second quarter of 2018, and increased $28,000 on a linked-quarter basis. Professional services expense increased $267,000, or 29%, to $1.2 million in the second quarter of 2019, from $924,000 in the second quarter of 2018, and increased $197,000, or 20%, from $994,000 on a linked-quarter basis. FDIC and other regulatory assessments decreased $78,000, or 7%, to $1.1 million in the second quarter of 2019, from $1.1 million in the second quarter of 2018. Lower assessment rates result from the FDIC’s Bank Insurance Fund reaching their targeted level of 1.35%. Expenses associated with other real estate owned increased $52,000, or 33%, to $212,000 in the second quarter of 2019, from $160,000 in the second quarter of 2018. Updated appraisals resulted in some write-downs in values of properties. Other operating expenses for the second quarter of 2019 increased $874,000, or 15%, to $6.9 million from $6.0 million in the second quarter of 2018, and increased $145,000, or 2%, on a linked-quarter basis. Increases in business development and Federal Reserve Bank service charges contributed to this increase in other operating expenses. The efficiency ratio was 34.30% during the second quarter of 2019 compared to 33.82% during the second quarter of 2018 and compared to 34.35% during the first of 2019.

Income tax expense increased $1.0 million, or 12%, to $9.3 million in the second quarter of 2019, compared to $8.3 million in the second quarter of 2018. Our effective tax rate was 20.74% for the second quarter of 2019 compared to 19.86% for the second quarter of 2018. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the second quarters of 2019 and 2018 of $186,000 and $457,000, 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 believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.


		At June 30, 2019			At March 31, 2019			At December 31, 2018			At September 30, 2018			At June 30, 2018
Book value per share - GAAP		$	14.55		$	13.94		$	13.40		$	12.81		$	12.33
Total common stockholders' equity - GAAP			778,957			745,586			715,203			681,510			655,114
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,314			14,381			14,449			14,517			14,584
Tangible common stockholders' equity - non-GAAP		$	764,643		$	731,205		$	700,754		$	666,993		$	640,530
Tangible book value per share - non-GAAP		$	14.29		$	13.67		$	13.13		$	12.54		$	12.05

Stockholders' equity to total assets - GAAP			8.91	%		8.97	%		8.93	%		9.07	%		9.25	%
Total assets - GAAP		$	8,740,237		$	8,310,836		$	8,007,382		$	7,517,833		$	7,084,562
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,314			14,381			14,449			14,517			14,584
Total tangible assets - non-GAAP		$	8,725,923		$	8,296,455		$	7,992,933		$	7,503,316		$	7,069,978
Tangible common equity to total tangible assets - non-GAAP			8.76	%		8.81	%		8.77	%		8.89	%		9.06	%

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

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

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


SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands except share and per share data)
	2nd Quarter 2019			1st Quarter 2019			4th Quarter 2018			3rd Quarter 2018			2nd Quarter 2018
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	97,787		$	93,699		$	90,164		$	84,058		$	78,396
Interest expense		27,702			24,921			21,306			17,195			13,874
Net interest income		70,085			68,778			68,858			66,863			64,522
Provision for loan losses		4,884			4,885			6,518			6,624			4,121
Net interest income after provision for loan losses		65,201			63,893			62,340			60,239			60,401
Non-interest income		5,778			4,942			5,019			5,065			4,941
Non-interest expense		26,022			25,326			22,701			22,624			23,492
Income before income tax		44,957			43,509			44,658			42,680			41,850
Provision for income tax		9,324			8,499			8,421			8,120			8,310
Net income		35,633			35,010			36,237			34,560			33,540
Preferred stock dividends		31			-			32			-			31
Net income available to common stockholders	$	35,602		$	35,010		$	36,205		$	34,560		$	33,509
Earnings per share - basic	$	0.67		$	0.65		$	0.68		$	0.65		$	0.63
Earnings per share - diluted	$	0.66		$	0.65		$	0.67		$	0.64		$	0.62
Average diluted shares outstanding		54,089,107			54,076,538			54,109,450			54,191,222			54,196,023

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	8,740,237		$	8,310,836		$	8,007,382		$	7,517,833		$	7,084,562
Loans		6,967,886			6,659,908			6,533,499			6,363,531			6,129,649
Debt securities		658,221			631,946			590,184			578,271			583,799
Non-interest-bearing demand deposits		1,576,959			1,572,703			1,557,341			1,504,447			1,481,447
Total deposits		7,404,794			7,083,666			6,915,708			6,505,351			6,085,682
Borrowings		64,684			64,675			64,666			64,657			64,648
Stockholders' equity	$	778,957		$	745,586		$	715,203		$	681,510		$	655,114

Shares outstanding		53,526,882			53,495,208			53,375,195			53,197,807			53,150,733
Book value per share	$	14.55		$	13.94		$	13.40		$	12.81		$	12.33
Tangible book value per share (1)	$	14.29		$	13.67		$	13.13		$	12.54		$	12.05

SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin		3.44	%		3.56	%		3.63	%		3.77	%		3.82	%
Return on average assets		1.69	%		1.75	%		1.85	%		1.87	%		1.91	%
Return on average common stockholders' equity		18.72	%		19.42	%		21.13	%		20.42	%		20.89	%
Efficiency ratio		34.30	%		34.35	%		30.73	%		31.45	%		33.82	%
Non-interest expense to average earning assets		1.28	%		1.31	%		1.20	%		1.27	%		1.39	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		10.18	%		10.30	%		10.12	%		10.08	%		10.08	%
Tier 1 capital to risk-weighted assets		10.19	%		10.30	%		10.13	%		10.09	%		10.08	%
Total capital to risk-weighted assets		12.02	%		12.21	%		12.05	%		12.05	%		12.10	%
Tier 1 capital to average assets		9.00	%		9.03	%		9.07	%		9.28	%		9.21	%
Tangible common equity to total tangible assets (1)		8.76	%		8.81	%		8.77	%		8.89	%		9.06	%

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


CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
			June 30, 2019			June 30, 2018			% Change
ASSETS
Cash and due from banks			$	68,841		$	68,344		1		%
Interest-bearing balances due from depository institutions				409,052			81,742		400		%
Federal funds sold				408,289			15,585		2,520		%
	Cash and cash equivalents			886,182			165,671		435		%
Available for sale debt securities, at fair value				657,971			583,549		13		%
Held to maturity debt securities (fair value of $250 at June 30, 2019 and June 30, 2018)				250			250		-		%
Mortgage loans held for sale				9,446			4,605		105		%
Loans				6,967,886			6,129,649		14		%
Less allowance for loan losses				(71,386	)		(64,239	)	11		%
	Loans, net			6,896,500			6,065,410		14		%
Premises and equipment, net				57,195			58,299		(2	)	%
Goodwill and other identifiable intangible assets				14,314			14,584		(2	)	%
Other assets				218,379			192,194		14		%
	Total assets		$	8,740,237		$	7,084,562		23		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing		$	1,576,959		$	1,481,447		6		%
	Interest-bearing			5,827,835			4,604,235		27		%
		Total deposits		7,404,794			6,085,682		22		%
Federal funds purchased				459,449			262,659		75		%
Other borrowings				64,684			64,648		-		%
Other liabilities				32,353			16,459		97		%
	Total liabilities			7,961,280			6,429,448		24		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		June 30, 2019 and June 30, 2018		-			-
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,526,882 shares
		issued and outstanding at June 30, 2019, and 53,150,733 shares issued and outstanding
		at June 30, 2018		54			53		2		%
	Additional paid-in capital			218,658			217,765		-		%
	Retained earnings			555,425			443,972		25		%
	Accumulated other comprehensive income (loss)			4,318			(7,178	)	NM
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.		778,455			654,612		19		%
	Noncontrolling interest			502			502		-		%
		Total stockholders' equity		778,957			655,114		19		%
	Total liabilities and stockholders' equity		$	8,740,237		$	7,084,562		23		%


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended June 30,					Six Months Ended June 30,
		2019			2018		2019			2018
Interest income:
	Interest and fees on loans	$	88,610		$	73,620	$	174,134		$	143,294
	Taxable securities		4,193			3,127		7,939			5,872
	Nontaxable securities		393			623		839			1,279
	Federal funds sold		1,998			694		3,217			1,245
	Other interest and dividends		2,593			332		5,357			715
	Total interest income		97,787			78,396		191,486			152,405
Interest expense:
	Deposits		24,240			11,714		46,385			21,335
	Borrowed funds		3,462			2,160		6,238			4,112
	Total interest expense		27,702			13,874		52,623			25,447
	Net interest income		70,085			64,522		138,863			126,958
Provision for loan losses			4,884			4,121		9,769			8,260
	Net interest income after provision for loan losses		65,201			60,401		129,094			118,698
Non-interest income:
	Service charges on deposit accounts		1,786			1,653		3,488			3,238
	Mortgage banking		1,087			789		1,662			1,307
	Credit card income		1,741			1,361		3,317			2,616
	Securities (losses) gains		(6	)		-		(6	)		4
	Increase in cash surrender value life insurance		778			786		1,540			1,563
	Other operating income		392			352		719			629
	Total non-interest income		5,778			4,941		10,720			9,357
Non-interest expense:
	Salaries and employee benefits		14,339			13,098		28,604			26,394
	Equipment and occupancy expense		2,287			2,113		4,546			4,067
	Professional services		1,191			924		2,185			1,729
	FDIC and other regulatory assessments		1,081			1,159		2,100			2,292
	Other real estate owned expense		212			160		234			476
	Other operating expense		6,912			6,038		13,679			11,593
	Total non-interest expense		26,022			23,492		51,348			46,551
	Income before income tax		44,957			41,850		88,466			81,504
Provision for income tax			9,324			8,310		17,823			15,361
	Net income		35,633			33,540		70,643			66,143
	Dividends on preferred stock		31			31		31			31
	Net income available to common stockholders	$	35,602		$	33,509	$	70,612		$	66,112
Basic earnings per common share		$	0.67		$	0.63	$	1.32		$	1.24
Diluted earnings per common share		$	0.66		$	0.62	$	1.31		$	1.22


LOANS BY TYPE (UNAUDITED)
(In thousands)

		2nd Quarter 2019		1st Quarter 2019		4th Quarter 2018		3rd Quarter 2018		2nd Quarter 2018
Commercial, financial and agricultural		$	2,633,529	$	2,522,136	$	2,513,225	$	2,478,788	$	2,345,879
Real estate - construction			603,779		556,219		533,192		543,611		522,788
Real estate - mortgage:
	Owner-occupied commercial		1,538,279		1,500,595		1,463,887		1,430,111		1,383,882
	1-4 family mortgage		630,963		629,285		621,634		610,460		584,133
	Other mortgage		1,496,512		1,394,611		1,337,068		1,236,954		1,225,906
Subtotal: Real estate - mortgage			3,665,754		3,524,491		3,422,589		3,277,525		3,193,921
Consumer			64,824		57,062		64,493		63,607		67,061
Total loans		$	6,967,886	$	6,659,908	$	6,533,499	$	6,363,531	$	6,129,649


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
			2nd Quarter 2019				1st Quarter 2019				4th Quarter 2018				3rd Quarter 2018				2nd Quarter 2018
Allowance for loan losses:
Beginning balance			$	70,207			$	68,600			$	66,879			$	64,239			$	62,050
Loans charged off:
	Commercial, financial and agricultural			3,610				3,037				4,685				3,923				1,732
	Real estate - mortgage			169				50				173				48				440
	Consumer			63				218				72				76				47
		Total charge offs		3,842				3,305				4,930				4,047				2,219
Recoveries:
	Commercial, financial and agricultural			117				12				120				52				173
	Real estate - construction			-				1				4				4				97
	Real estate - mortgage			4				7				1				1				2
	Consumer			16				7				8				6				15
		Total recoveries		137				27				133				63				287
	Net charge-offs			3,705				3,278				4,797				3,984				1,932
	Provision for loan losses			4,884				4,885				6,518				6,624				4,121
	Ending balance		$	71,386			$	70,207			$	68,600			$	66,879			$	64,239

	Allowance for loan losses to total loans			1.02		%		1.05		%		1.05		%		1.05		%		1.05		%
	Allowance for loan losses to total average
		loans		1.05		%		1.06		%		1.07		%		1.07		%		1.07		%
	Net charge-offs to total average loans			0.22		%		0.20		%		0.30		%		0.25		%		0.13		%
	Provision for loan losses to total average
		loans		0.29		%		0.30		%		0.40		%		0.42		%		0.28		%
	Nonperforming assets:
		Nonaccrual loans	$	21,840			$	22,154			$	21,926			$	9,153			$	8,022
		Loans 90+ days past due and accruing		10,299				5,021				5,844				5,714				6,081
		Other real estate owned and
		repossessed assets		5,649				5,480				5,169				5,714				5,937
	Total		$	37,788			$	32,655			$	32,939			$	20,581			$	20,040

	Nonperforming loans to total loans			0.46		%		0.41		%		0.43		%		0.23		%		0.23		%
	Nonperforming assets to total assets			0.43		%		0.39		%		0.41		%		0.27		%		0.28		%
	Nonperforming assets to earning assets			0.44		%		0.40		%		0.43		%		0.28		%		0.29		%
	Reserve for loan losses to nonaccrual loans			326.86		%		316.90		%		312.87		%		730.68		%		800.79		%

	Restructured accruing loans		$	2,742			$	2,742			$	3,073			$	15,495			$	15,572

	Restructured accruing loans to total loans			0.04		%		0.04		%		0.04		%		0.24		%		0.25		%

	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
			2nd Quarter 2019				1st Quarter 2019				4th Quarter 2018				3rd Quarter 2018				2nd Quarter 2018
	Beginning balance:		$	12,289			$	14,555			$	16,584			$	17,257			$	18,792
		Additions		-				-				-				100				-
		Net (paydowns) / advances		(12	)			(766	)			(11	)			(177	)			(267	)
		Charge-offs		(993	)			(1,500	)			(2,018	)			(596	)			(1,268	)
			$	11,284			$	12,289			$	14,555			$	16,584			$	17,257


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		2nd Quarter 2019			1st Quarter 2019		4th Quarter 2018		3rd Quarter 2018		2nd Quarter 2018
Interest income:
	Interest and fees on loans	$	88,610		$	85,524	$	83,085	$	78,991	$	73,620
	Taxable securities		4,193			3,746		3,506		3,276		3,127
	Nontaxable securities		393			446		544		583		623
	Federal funds sold		1,998			1,219		966		892		694
	Other interest and dividends		2,593			2,764		2,063		316		332
	Total interest income		97,787			93,699		90,164		84,058		78,396
Interest expense:
	Deposits		24,240			22,145		18,957		15,210		11,714
	Borrowed funds		3,462			2,776		2,349		1,985		2,160
	Total interest expense		27,702			24,921		21,306		17,195		13,874
	Net interest income		70,085			68,778		68,858		66,863		64,522
Provision for loan losses			4,884			4,885		6,518		6,624		4,121
	Net interest income after provision for loan losses		65,201			63,893		62,340		60,239		60,401
Non-interest income:
	Service charges on deposit accounts		1,786			1,702		1,714		1,595		1,653
	Mortgage banking		1,087			575		688		789		789
	Credit card income		1,741			1,576		1,521		1,414		1,361
	Securities gains		(6	)		-		-		186		-
	Increase in cash surrender value life insurance		778			762		780		787		786
	Other operating income		392			327		316		294		352
	Total non-interest income		5,778			4,942		5,019		5,065		4,941
Non-interest expense:
	Salaries and employee benefits		14,339			14,265		12,385		13,070		13,098
	Equipment and occupancy expense		2,287			2,259		2,163		2,193		2,113
	Professional services		1,191			994		1,064		853		924
	FDIC and other regulatory assessments		1,081			1,019		902		675		1,159
	Other real estate owned expense		212			22		25		289		160
	Other operating expense		6,912			6,767		6,162		5,544		6,038
	Total non-interest expense		26,022			25,326		22,701		22,624		23,492
	Income before income tax		44,957			43,509		44,658		42,680		41,850
Provision for income tax			9,324			8,499		8,421		8,120		8,310
	Net income		35,633			35,010		36,237		34,560		33,540
	Dividends on preferred stock		31			-		32		-		31
	Net income available to common stockholders	$	35,602		$	35,010	$	36,205	$	34,560	$	33,509
Basic earnings per common share		$	0.67		$	0.65	$	0.68	$	0.65	$	0.63
Diluted earnings per common share		$	0.66		$	0.65	$	0.67	$	0.64	$	0.62


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

						2nd Quarter 2019					1st Quarter 2019					4th Quarter 2018					3rd Quarter 2018					2nd Quarter 2018
						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			$	6,756,927		5.24	%	$	6,570,920		5.26	%	$	6,403,139		5.13	%	$	6,203,372		5.03	%	$	5,958,377		4.94	%
			Tax-exempt (2)				32,124		3.83			30,577		3.81			29,656		3.26			30,005		3.94			30,246		3.94
				Total loans, net of
					unearned income		6,789,051		5.23			6,601,497		5.25			6,432,795		5.12			6,233,377		5.03			5,988,623		4.93
		Mortgage loans held for sale					5,208		3.85			1,614		6.53			3,364		3.30			3,538		4.15			3,770		4.26
		Debt securities:
			Taxable				565,491		2.97			518,955		2.89			498,138		2.82			482,571		2.72			475,777		2.63
			Tax-exempt (2)				77,364		2.10			87,537		2.12			98,027		2.34			105,592		2.45			112,145		2.60
				Total securities (3)			642,855		2.86			606,492		2.78			596,165		2.74			588,163		2.67			587,922		2.62
		Federal funds sold					323,714		2.48			192,690		2.57			156,884		2.44			163,453		2.17			141,915		1.96
		Interest-bearing balances with banks					411,481		2.53			438,099		2.56			334,065		2.45			61,867		2.03			73,714		1.81
		Total interest-earning assets				$	8,172,309		4.80	%	$	7,840,392		4.85	%	$	7,524,152		4.76	%	$	7,051,391		4.74	%	$	6,796,966		4.64	%
Non-interest-earning assets:
		Cash and due from banks					76,988					74,430					74,272					76,800					68,190
		Net premises and equipment					58,607					58,852					58,521					58,873					59,262
		Allowance for loan losses, accrued
			interest and other assets				156,264					149,941					128,933					128,843					130,607
				Total assets		$	8,464,168				$	8,123,615				$	7,784,999				$	7,314,914				$	7,054,003

Interest-bearing liabilities:
		Interest-bearing deposits:
		Checking				$	909,847		0.88	%	$	942,686		0.86	%	$	908,416		0.74	%	$	819,807		0.67	%	$	827,540		0.56	%
		Savings					54,391		0.57			54,086		0.55			52,443		0.54			53,835		0.52			54,842		0.34
		Money market					3,932,459		1.88			3,758,162		1.78			3,537,522		1.56			3,305,293		1.33			3,089,595		1.10
		Time deposits					694,414		2.16			698,976		2.06			687,361		1.92			643,260		1.65			596,450		1.36
			Total interest-bearing deposits				5,591,111		1.74			5,453,910		1.65			5,185,742		1.45			4,822,195		1.25			4,568,427		1.03
		Federal funds purchased					418,486		2.57			312,989		2.59			263,125		2.36			229,016		2.09			295,309		1.87
		Other borrowings					64,680		4.84			64,671		4.90			64,665		4.79			64,652		4.79			64,699		4.85
		Total interest-bearing liabilities				$	6,074,277		1.83	%	$	5,831,570		1.73	%	$	5,513,532		1.53	%	$	5,115,863		1.33	%	$	4,928,435		1.13	%
Non-interest-bearing liabilities:
		Non-interest-bearing
			checking				1,591,722					1,524,502					1,551,366					1,511,410					1,469,194
		Other liabilities					35,161					36,362					40,185					16,333					13,079
		Stockholders' equity					763,742					735,611					689,525					678,839					650,641
		Accumulated other comprehensive
			loss				(734	)				(4,430	)				(9,609	)				(7,531	)				(7,346	)
				Total liabilities and
					stockholders' equity	$	8,464,168				$	8,123,615				$	7,784,999				$	7,314,914				$	7,054,003
Net interest spread									2.97	%				3.12	%				3.23	%				3.41	%				3.51	%
Net interest margin									3.44	%				3.56	%				3.63	%				3.77	%				3.82	%

(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 July 15, 2019

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2019

Related Documents