ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2018

BIRMINGHAM, Ala., Oct. 17, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and nine months ended September 30, 2018.

Third Quarter 2018 Highlights:

Deposits grew 27% during the quarter on an annualized basis
Loans grew 15% during the quarter on an annualized basis
Net income of $34.6 million for the third quarter of 2018 compared to $25.3 million in the third quarter of 2017, a 37% increase
Diluted EPS of $0.64 for the third quarter of 2018 compared to $0.47 for the third quarter of 2017, a 36% increase
Net income topped $100 million through the first nine months of 2018, and is up 40% over the same period in 2017

Tom Broughton, President and CEO, said, “We are very pleased with the strong growth in loans, deposits and new accounts in the third quarter and on a year-to-date basis.” Bud Foshee, CFO, added, “Our strong financial condition continued to improve in the quarter with the improved efficiency ratio and strong asset quality.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
	Period Ending September 30, 2018			Period Ending June 30, 2018			% Change From Period Ending June 30, 2018 to Period Ending September 30, 2018		Period Ending September 30, 2017			% Change From Period Ending September 30, 2017 to Period Ending September 30, 2018
QUARTERLY OPERATING RESULTS
Net Income	$	34,560		$	33,540		3	%	$	25,259		37	%
Net Income Available to Common Stockholders	$	34,560		$	33,509		3	%	$	25,259		37	%
Diluted Earnings Per Share	$	0.64		$	0.62		3	%	$	0.47		36	%
Return on Average Assets		1.87	%		1.91	%				1.55	%
Return on Average Common Stockholders' Equity		20.42	%		20.89	%				17.28	%
Average Diluted Shares Outstanding		54,191,222			54,196,023					54,099,672

YEAR-TO-DATE OPERATING RESULTS
Net Income	$	100,703							$	71,942		40	%
Net Income Available to Common Stockholders	$	100,672							$	71,911		40	%
Diluted Earnings Per Share	$	1.86							$	1.33		40	%
Return on Average Assets		1.90	%							1.52	%
Return on Average Common Stockholders' Equity		20.88	%							17.24	%
Average Diluted Shares Outstanding		54,190,244								54,111,208

BALANCE SHEET
Total Assets	$	7,517,833		$	7,084,562		6	%	$	6,712,103		12	%
Loans		6,363,531			6,129,649		4	%		5,628,765		13	%
Non-interest-bearing Demand Deposits		1,504,447			1,481,447		2	%		1,405,965		7	%
Total Deposits		6,505,351			6,085,682		7	%		5,796,901		12	%
Stockholders' Equity		681,510			655,114		4	%		590,213		15	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $34.6 million for the quarter ended September 30, 2018, compared to net income and net income available to common stockholders of $25.3 million for the same quarter in 2017. Basic and diluted earnings per common share were $0.65 and $0.64, respectively, for the third quarter of 2018, compared to $0.48 and $0.47, respectively, for the third quarter of 2017.

Return on average assets was 1.87% and return on average common stockholders’ equity was 20.42% for the third quarter of 2018, compared to 1.55% and 17.28%, respectively, for the third quarter of 2017.

Net interest income was $66.9 million for the third quarter of 2018, compared to $64.5 million for the second quarter of 2018 and $58.4 million for the third quarter of 2017. The net interest margin in the third quarter of 2018 was 3.77% compared to 3.82% in the second quarter of 2018 and 3.77% in the third quarter of 2017. Linked quarter increases in average rates paid on deposits in excess of increased average yields on loans drove unfavorable mix change, while increases in average balances in loans, non-interest bearing deposits and equity drove favorable volume change and overall change.

Average loans for the third quarter of 2018 were $6.23 billion, an increase of $244.8 million, or 4%, over average loans of $5.99 billion for the second quarter of 2018, and an increase of $792.9 million, or 15%, over average loans of $5.44 billion for the third quarter of 2017.

Average total deposits for the third quarter of 2018 were $6.33 billion, an increase of $296.0 million, or 5%, over average total deposits of $6.04 billion for the second quarter of 2018, and an increase of $801.6 million, or 15%, over average total deposits of $5.53 billion for the third quarter of 2017.

Non-performing assets to total assets were 0.27% for the third quarter of 2018, a decrease of one basis point compared to 0.28% for both the second quarter of 2018 and third quarter of 2017, respectively. Net credit charge-offs to average loans were 0.25%, a 12 basis point increase compared to 0.13% for the second quarter of 2018 and a 15 basis point increase compared to 0.10% for the third quarter of 2017. The increase in net credit charge-offs for the third quarter was primarily attributable to a $3.0 million charge-off on one commercial relationship. Year-to-date net credit charge-offs to average loans were 0.16%, a three basis point decrease compared to 0.19% for the same period in 2017. We recorded a $6.6 million provision for loan losses in the third quarter of 2018 compared to $4.1 million in the second quarter of 2018 and $4.8 million in the third quarter of 2017. The allowance for loan loss as a percentage of total loans was 1.05% at September 30, 2018 compared to 1.05% at June 30, 2018 and 1.04% at September 30, 2017. 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 increased $801,000 during the third quarter of 2018, or 17%, compared to the third quarter of 2017. Deposit service charges increased $128,000 in the third quarter of 2018, or 9%, compared to the third quarter of 2017. The number of transaction deposit accounts increased approximately 9% from September 30, 2017 to September 30, 2018, and the amount of overdraft fees increased $74,000, or 18%, from the third quarter of 2017 to the third quarter of 2018. Credit card revenue increased $689,000, or 60%, to $1.8 million during the third quarter of 2018, compared to $1.1 million during the third quarter of 2017, driven by increased numbers of accounts and increased purchases per account.

Non-interest expense for the third quarter of 2018 increased $1.7 million, or 8%, to $23.2 million from $21.5 million in the third quarter of 2017, and decreased $860,000, or 4%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2018 increased $642,000, or 5%, to $13.1 million from $12.4 million in the third quarter of 2017, and was unchanged on a linked quarter basis. The number of FTE employees increased from 438 at September 30, 2017 to 456 at September 30, 2018, or 4%. Equipment and occupancy expense increased $246,000, or 13%, to $2.2 million in the third quarter of 2018, from $1.9 million in the third quarter of 2017. Other operating expense for the third quarter of 2018 increased $594,000, or 11%, to $6.1 million from $5.5 million in the third quarter of 2017. The efficiency ratio improved to 31.95% during the third quarter of 2018 from 34.02% during the third quarter of 2017 and from 34.31% on a linked quarter basis.

Income tax expense decreased $3.5 million, or 30%, to $8.1 million in the third quarter of 2018, compared to $11.6 million in the third quarter of 2017. Lower corporate income tax rates resulting from the passage of the Tax Cuts and Jobs Act in December 2017 has resulted in lower effective tax rates. We also 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 quarter of 2018 and 2017 of $543,000 and $757,000, respectively. Our effective tax rate for the third quarter of 2018 and 2017 was 19.0% and 31.5%, 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 September 30, 2018			At June 30, 2018			At March 31, 2018			At December 31, 2017			At September 30, 2017
Book value per share - GAAP		$	12.81		$	12.33		$	11.84		$	11.47		$	11.14
Total common stockholders' equity - GAAP			681,510			655,114			629,297			607,604			590,213
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,517			14,584			14,652			14,719			14,787
Tangible common stockholders' equity - non-GAAP		$	666,993		$	640,530		$	614,645		$	592,885		$	575,426
Tangible book value per share - non-GAAP		$	12.54		$	12.05		$	11.56		$	11.19		$	10.86

Stockholders' equity to total assets - GAAP			9.07	%		9.25	%		8.98	%		8.58	%		8.79	%
Total assets - GAAP		$	7,517,833		$	7,084,562		$	7,011,735		$	7,082,384		$	6,712,103
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,517			14,584			14,652			14,719			14,787
Total tangible assets - non-GAAP		$	7,503,316		$	7,069,978		$	6,997,083		$	7,067,665		$	6,697,316
Tangible common equity to total tangible assets - non-GAAP			8.89	%		9.06	%		8.78	%		8.39	%		8.59	%

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 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)
	3rd Quarter 2018			2nd Quarter 2018			1st Quarter 2018			4th Quarter 2017			3rd Quarter 2017
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	84,058		$	78,396		$	74,009		$	72,060		$	67,641
Interest expense		17,195			13,874			11,573			10,652			9,245
Net interest income		66,863			64,522			62,436			61,408			58,396
Provision for loan losses		6,624			4,121			4,139			9,055			4,803
Net interest income after provision for loan losses		60,239			60,401			58,297			52,353			53,593
Non-interest income		5,591			5,459			4,869			4,905			4,790
Non-interest expense		23,150			24,010			23,512			21,255			21,497
Income before income tax		42,680			41,850			39,654			36,003			36,886
Provision for income tax		8,120			8,310			7,051			14,853			11,627
Net income		34,560			33,540			32,603			21,150			25,259
Preferred stock dividends		-			31			-			31			-
Net income available to common stockholders	$	34,560		$	33,509		$	32,603		$	21,119		$	25,259
Earnings per share - basic	$	0.65		$	0.63		$	0.61		$	0.40		$	0.48
Earnings per share - diluted	$	0.64		$	0.62		$	0.60		$	0.39		$	0.47
Average diluted shares outstanding		54,191,222			54,196,023			54,183,400			54,161,788			54,099,672

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	7,517,833		$	7,084,562		$	7,011,735		$	7,082,384		$	6,712,103
Loans		6,363,531			6,129,649			5,928,327			5,851,261			5,628,765
Debt securities		578,271			583,799			560,885			538,330			522,724
Non-interest-bearing demand deposits		1,504,447			1,481,447			1,407,592			1,440,326			1,405,965
Total deposits		6,505,351			6,085,682			5,977,387			6,091,674			5,796,901
Borrowings		64,657			64,648			64,739			64,832			54,975
Stockholders' equity	$	681,510		$	655,114		$	629,297		$	607,604		$	590,213

Shares outstanding		53,197,807			53,150,733			53,147,169			52,992,586			52,970,310
Book value per share	$	12.81		$	12.33		$	11.84		$	11.47		$	11.14
Tangible book value per share (1)	$	12.54		$	12.05		$	11.56		$	11.19		$	10.86

SELECTED FINANCIAL RATIOS
Net interest margin		3.77	%		3.82	%		3.81	%		3.66	%		3.77	%
Return on average assets		1.87	%		1.91	%		1.91	%		1.20	%		1.55	%
Return on average common stockholders' equity		20.42	%		20.89	%		21.40	%		13.97	%		17.28	%
Efficiency ratio		31.95	%		34.31	%		34.93	%		32.05	%		34.02	%
Non-interest expense to average earning assets		1.30	%		1.42	%		1.43	%		1.26	%		1.38	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		10.08	%		10.08	%		9.88	%		9.51	%		9.60	%
Tier 1 capital to risk-weighted assets		10.09	%		10.08	%		9.88	%		9.52	%		9.61	%
Total capital to risk-weighted assets		12.05	%		12.10	%		11.91	%		11.52	%		11.51	%
Tier 1 capital to average assets		9.28	%		9.21	%		8.95	%		8.51	%		8.91	%
Tangible common equity to total tangible assets (1)		8.89	%		9.06	%		8.78	%		8.39	%		8.59	%

(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, 2018			September 30, 2017			% Change
ASSETS
Cash and due from banks			$	77,692		$	79,431		(2	)	%
Interest-bearing balances due from depository institutions				59,096			86,719		(32	)	%
Federal funds sold				229,033			182,841		25		%
	Cash and cash equivalents			365,821			348,991		5		%
Available for sale debt securities, at fair value				578,021			435,325		33		%
Held to maturity debt securities (fair value of $250 and $89,329 at
	September 30, 2018 and 2017, respectively)			250			87,399		(100	)	%
Restricted equity securities				889			1,038		(14	)	%
Mortgage loans held for sale				5,277			4,971		6		%
Loans				6,363,531			5,628,765		13		%
Less allowance for loan losses				(66,879	)		(58,459	)	14		%
	Loans, net			6,296,652			5,570,306		13		%
Premises and equipment, net				57,882			55,104		5		%
Goodwill and other identifiable intangible assets				14,517			14,787		(2	)	%
Other assets				198,523			194,182		2		%
	Total assets		$	7,517,833		$	6,712,103		12		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing		$	1,504,447		$	1,405,965		7		%
	Interest-bearing			5,000,904			4,390,936		14		%
		Total deposits		6,505,351			5,796,901		12		%
Federal funds purchased				246,094			254,880		(3	)	%
Other borrowings				64,657			54,975		18		%
Other liabilities				20,221			15,134		34		%
	Total liabilities			6,836,323			6,121,890		12		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		September 30, 2018 and September 30, 2017		-			-		-		%
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,197,807 shares
		issued and outstanding at September 30, 2018, and 52,970,310 shares issued and outstanding
		at September 30, 2017		53			53		-		%
	Additional paid-in capital			218,062			217,483		-		%
	Retained earnings			472,681			371,127		27		%
	Accumulated other comprehensive (loss) income			(9,788	)		1,048		N/M
	Noncontrolling interest			502			502		-		%
		Total stockholders' equity		681,510			590,213		15		%
	Total liabilities and stockholders' equity		$	7,517,833		$	6,712,103		12		%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended September 30,				Nine Months Ended September 30,
		2018		2017		2018		2017
Interest income:
	Interest and fees on loans	$	78,991	$	63,857	$	222,285	$	179,325
	Taxable securities		3,276		2,288		9,148		6,649
	Nontaxable securities		583		729		1,862		2,246
	Federal funds sold		892		379		2,137		1,185
	Other interest and dividends		316		388		1,031		1,291
	Total interest income		84,058		67,641		236,463		190,696
Interest expense:
	Deposits		15,210		7,574		36,545		19,877
	Borrowed funds		1,985		1,671		6,097		4,804
	Total interest expense		17,195		9,245		42,642		24,681
	Net interest income		66,863		58,396		193,821		166,015
Provision for loan losses			6,624		4,803		14,884		14,170
	Net interest income after provision for loan losses		60,239		53,593		178,937		151,845
Non-interest income:
	Service charges on deposit accounts		1,595		1,467		4,833		4,203
	Mortgage banking		789		978		2,096		2,941
	Credit card income		1,838		1,149		5,172		3,517
	Securities gains		186		-		190		-
	Increase in cash surrender value life insurance		787		825		2,350		2,334
	Other operating income		396		371		1,278		1,146
	Total non-interest income		5,591		4,790		15,919		14,141
Non-interest expense:
	Salaries and employee benefits		13,070		12,428		39,464		36,172
	Equipment and occupancy expense		2,193		1,947		6,260		6,452
	Professional services		853		805		2,582		2,384
	FDIC and other regulatory assessments		675		810		2,967		2,888
	Other real estate owned expense		289		31		765		163
	Other operating expense		6,070		5,476		18,634		16,580
	Total non-interest expense		23,150		21,497		70,672		64,639
	Income before income tax		42,680		36,886		124,184		101,347
Provision for income tax			8,120		11,627		23,481		29,405
	Net income		34,560		25,259		100,703		71,942
	Dividends on preferred stock		-		-		31		31
	Net income available to common stockholders	$	34,560	$	25,259	$	100,672	$	71,911
Basic earnings per common share		$	0.65	$	0.48	$	1.89	$	1.36
Diluted earnings per common share		$	0.64	$	0.47	$	1.86	$	1.33

LOANS BY TYPE (UNAUDITED)
(In thousands)

		3rd Quarter 2018		2nd Quarter 2018		1st Quarter 2018		4th Quarter 2017		3rd Quarter 2017
Commercial, financial and agricultural		$	2,478,788	$	2,345,879	$	2,329,904	$	2,279,366	$	2,223,910
Real estate - construction			543,611		522,788		506,050		580,874		467,838
Real estate - mortgage:
	Owner-occupied commercial		1,430,111		1,383,882		1,349,679		1,328,666		1,323,383
	1-4 family mortgage		610,460		584,133		581,498		603,063		593,180
	Other mortgage		1,236,954		1,225,906		1,099,482		997,079		962,690
Subtotal: Real estate - mortgage			3,277,525		3,193,921		3,030,659		2,928,808		2,879,253
Consumer			63,607		67,061		61,714		62,213		57,764
Total loans		$	6,363,531	$	6,129,649	$	5,928,327	$	5,851,261	$	5,628,765

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
			3rd Quarter 2018				2nd Quarter 2018				1st Quarter 2018				4th Quarter 2017				3rd Quarter 2017
Allowance for loan losses:
Beginning balance			$	64,239			$	62,050			$	59,406			$	58,459			$	55,059
Loans charged off:
	Commercial, financial and agricultural			3,923				1,732				1,088				7,064				924
	Real estate - construction			-				-				-				-				16
	Real estate - mortgage			48				440				381				1,134				550
	Consumer			76				47				88				137				65
		Total charge offs		4,047				2,219				1,557				8,335				1,555
Recoveries:
	Commercial, financial and agricultural			52				173				4				64				67
	Real estate - construction			4				97				7				126				12
	Real estate - mortgage			1				2				42				26				59
	Consumer			6				15				9				11				14
		Total recoveries		63				287				62				227				152
	Net charge-offs			3,984				1,932				1,495				8,108				1,403
	Provision for loan losses			6,624				4,121				4,139				9,055				4,803
	Ending balance		$	66,879			$	64,239			$	62,050			$	59,406			$	58,459

	Allowance for loan losses to total loans			1.05		%		1.05		%		1.05		%		1.02		%		1.04		%
	Allowance for loan losses to total average
		loans		1.07		%		1.07		%		1.05		%		1.04		%		1.07		%
	Net charge-offs to total average loans			0.25		%		0.13		%		0.10		%		0.56		%		0.10		%
	Provision for loan losses to total average
		loans		0.42		%		0.28		%		0.29		%		0.63		%		0.35		%
	Nonperforming assets:
		Nonaccrual loans	$	9,153			$	8,022			$	9,271			$	10,765			$	12,356
		Loans 90+ days past due and accruing		5,714				6,081				678				60				2,506
		Other real estate owned and
		repossessed assets		5,714				5,937				5,748				6,701				3,888
	Total		$	20,581			$	20,040			$	15,697			$	17,526			$	18,750

	Nonperforming loans to total loans			0.23		%		0.23		%		0.17		%		0.19		%		0.26		%
	Nonperforming assets to total assets			0.27		%		0.28		%		0.22		%		0.25		%		0.28		%
	Nonperforming assets to earning assets			0.28		%		0.29		%		0.23		%		0.25		%		0.29		%
	Reserve for loan losses to nonaccrual loans			730.68		%		800.79		%		669.29		%		551.84		%		473.12		%

	Restructured accruing loans		$	15,495			$	15,572			$	15,838			$	16,919			$	12,700

	Restructured accruing loans to total loans			0.24		%		0.25		%		0.27		%		0.29		%		0.23		%

	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
			3rd Quarter 2018				2nd Quarter 2018				1st Quarter 2018				4th Quarter 2017				3rd Quarter 2017
	Beginning balance:		$	17,257			$	18,792			$	20,572			$	16,354			$	16,370
		Additions		100				-				-				4,233				-
		Net (paydowns) / advances		(177	)			(267	)			(1,080	)			(15	)			(16	)
		Charge-offs		(596	)			(1,268	)			(700	)			-				-
			$	16,584			$	17,257			$	18,792			$	20,572			$	16,354

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		3rd Quarter 2018		2nd Quarter 2018		1st Quarter 2018		4th Quarter 2017		3rd Quarter 2017
Interest income:
	Interest and fees on loans	$	78,991	$	73,620	$	69,674	$	67,357	$	63,857
	Taxable securities		3,276		3,127		2,745		2,468		2,288
	Nontaxable securities		583		623		656		702		729
	Federal funds sold		892		694		551		508		379
	Other interest and dividends		316		332		383		1,025		388
	Total interest income		84,058		78,396		74,009		72,060		67,641
	Deposits		15,210		11,714		9,621		8,954		7,574
	Borrowed funds		1,985		2,160		1,952		1,698		1,671
	Total interest expense		17,195		13,874		11,573		10,652		9,245
	Net interest income		66,863		64,522		62,436		61,408		58,396
Provision for loan losses			6,624		4,121		4,139		9,055		4,803
	Net interest income after provision for loan losses		60,239		60,401		58,297		52,353		53,593
	Service charges on deposit accounts		1,595		1,653		1,585		1,499		1,467
	Mortgage banking		789		789		518		894		978
	Credit card income		1,838		1,756		1,578		1,298		1,149
	Securities gains		186		-		4		-		-
	Increase in cash surrender value life insurance		787		786		777		797		825
	Other operating income		396		475		407		417		371
	Total non-interest income		5,591		5,459		4,869		4,905		4,790
	Salaries and employee benefits		13,070		13,098		13,296		11,432		12,428
	Equipment and occupancy expense		2,193		2,113		1,954		1,566		1,947
	Professional services		853		924		805		833		805
	FDIC and other regulatory assessments		675		1,159		1,133		1,030		810
	Other real estate owned expense		289		160		316		160		31
	Other operating expense		6,070		6,556		6,008		6,234		5,476
	Total non-interest expense		23,150		24,010		23,512		21,255		21,497
	Income before income tax		42,680		41,850		39,654		36,003		36,886
Provision for income tax			8,120		8,310		7,051		14,853		11,627
	Net income		34,560		33,540		32,603		21,150		25,259
	Dividends on preferred stock		-		31		-		31		-
	Net income available to common stockholders	$	34,560	$	33,509	$	32,603	$	21,119	$	25,259
Basic earnings per common share		$	0.65	$	0.63	$	0.61	$	0.40	$	0.48
Diluted earnings per common share		$	0.64	$	0.62	$	0.60	$	0.39	$	0.47

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


					3rd Quarter 2018					2nd Quarter 2018					1st Quarter 2018					4th Quarter 2017				3rd Quarter 2017
					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			$	6,203,372		5.03	%	$	5,958,377		4.94	%	$	5,847,443		4.81	%	$	5,680,227	4.68	%	$	5,407,109	4.66	%
		Tax-exempt (2)				30,005		3.94			30,246		3.94			36,357		4.06			36,992	4.95			33,357	5.17
			Total loans, net of
				unearned income		6,233,377		5.03			5,988,623		4.93			5,883,800		4.80			5,717,219	4.68			5,440,466	4.66
	Mortgage loans held for sale					3,538		4.15			3,770		4.26			3,698		4.50			6,199	3.52			4,862	3.51
	Debt securities:
		Taxable				482,571		2.72			475,777		2.63			435,747		2.52			406,488	2.43			385,431	2.37
		Tax-exempt (2)				105,592		2.45			112,145		2.60			120,270		2.56			128,201	3.27			131,478	3.34
			Total securities (3)			588,163		2.67			587,922		2.62			556,017		2.53			534,689	2.63			516,909	2.62
	Federal funds sold					163,453		2.17			141,915		1.96			131,472		1.70			143,905	1.40			111,175	1.35
	Restricted equity securities					993		2.80			1,022		1.18			1,030		1.57			1,030	1.93			1,030	3.47
	Interest-bearing balances with banks					61,867		1.98			73,714		1.79			96,012		1.60			310,289	1.31			118,510	1.27
	Total interest-earning assets				$	7,051,391		4.74	%	$	6,796,966		4.64	%	$	6,672,029		4.51	%	$	6,713,331	4.29	%	$	6,192,952	4.37	%
Non-interest-earning assets:
	Cash and due from banks					76,800					68,190					68,309					68,444				65,457
	Net premises and equipment					58,873					59,262					59,709					57,320				54,727
	Allowance for loan losses, accrued
		interest and other assets				127,850					129,585					140,558					149,636				151,786
			Total assets		$	7,314,914				$	7,054,003				$	6,940,605				$	6,988,731			$	6,464,922

Interest-bearing liabilities:
	Interest-bearing deposits:
	Checking				$	819,807		0.67	%	$	827,540		0.56	%	$	899,311		0.52	%	$	899,334	0.46	%	$	800,437	0.42	%
	Savings					53,835		0.52			54,842		0.34			53,269		0.31			49,697	0.31			48,313	0.30
	Money market					3,305,293		1.33			3,089,595		1.10			3,027,176		0.90			3,065,298	0.80			2,774,061	0.74
	Time deposits					643,260		1.65			596,450		1.36			576,857		1.21			576,010	1.16			546,020	1.10
		Total interest-bearing deposits				4,822,195		1.25			4,568,427		1.03			4,556,613		0.86			4,590,339	0.77			4,168,831	0.72
	Federal funds purchased					229,016		2.09			295,309		1.87			297,051		1.60			271,248	1.37			282,806	1.34
	Other borrowings					64,652		4.79			64,699		4.85			64,805		4.89			60,829	4.98			55,034	5.17
	Total interest-bearing liabilities				$	5,115,863		1.33	%	$	4,928,435		1.13	%	$	4,918,469		0.95	%	$	4,922,416	0.86	%	$	4,506,671	0.81	%
Non-interest-bearing liabilities:
	Non-interest-bearing
		demand				1,511,410					1,469,194					1,389,217					1,444,338				1,363,207
	Other liabilities					16,333					13,079					15,007					22,029				15,070
	Stockholders' equity					678,839					650,641					621,004					599,754				578,626
	Accumulated other comprehensive
		(loss) income				(7,531	)				(7,346	)				(3,092	)				194				1,348
			Total liabilities and
				stockholders' equity	$	7,314,914				$	7,054,003				$	6,940,605				$	6,988,731			$	6,464,922
Net interest spread								3.41	%				3.51	%				3.56	%			3.43	%			3.56	%
Net interest margin								3.77	%				3.82	%				3.81	%			3.66	%			3.77	%

(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% for the quarters in 2018 and 35% for the quarters in 2017.
(3)	Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.

Source: ServisFirst Bancshares, Inc.

Released October 17, 2018

ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2018

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