ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2017

BIRMINGHAM, Ala., July 17, 2017 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2017.

SECOND QUARTER 2017 HIGHLIGHTS:

Net income of $24.2 million and diluted EPS of $0.45 for the second quarter of 2017, an increase of 28% and 25%, respectively, year over year
Diluted EPS of $0.86 for the six months ended June 30, 2017, an 18% increase year over year
Loans and deposits increased 18% and 16%, respectively, year over year
Loans increased 16% for the quarter on an annualized basis

Tom Broughton, President and CEO, said, “We are pleased that customer retention and new customer activity is very strong year to date, driving continued EPS growth.” Bud Foshee, CFO, stated, “Higher interest rates have led to margin improvement in the second quarter, as well as a lower efficiency ratio. Based on the June rate increase, we should see further margin improvement in the third quarter.”

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

On December 20, 2016, the Company effected a two-for-one split of its common stock in the form of a stock dividend. All shares and per share information for prior periods in this release
has been adjusted to give effect to this stock split.

	Period Ending June 30, 2017			Period Ending March 31, 2017			% Change From Period Ending March 31, 2017 to Period Ending June 30, 2017		Period Ending June 30, 2016			% Change From Period Ending June 30, 2016 to Period Ending June 30, 2017
QUARTERLY OPERATING RESULTS
Net Income	$	24,164		$	22,519		7	%	$	18,876		28	%
Net Income Available to Common Stockholders	$	24,133		$	22,519		7	%	$	18,853		28	%
Diluted Earnings Per Share	$	0.45		$	0.42		7	%	$	0.36		25	%
Return on Average Assets		1.55	%		1.45	%				1.37	%
Return on Average Common Stockholders' Equity		17.36	%		17.09	%				15.79	%
Average Diluted Shares Outstanding		54,100,604			54,133,722					53,452,526

YEAR-TO-DATE OPERATING RESULTS
Net Income	$	46,683							$	38,832		20	%
Net Income Available to Common Stockholders	$	46,652							$	38,809		20	%
Diluted Earnings Per Share	$	0.86							$	0.73		18	%
Return on Average Assets		1.50	%							1.45	%
Return on Average Common Stockholders' Equity		17.23	%							16.57	%
Average Diluted Shares Outstanding		54,117,072								53,293,074

BALANCE SHEET
Total Assets	$	6,329,599		$	6,336,165		-	%	$	5,646,055		12	%
Loans		5,343,688			5,151,984		4	%		4,536,338		18	%
Non-interest-bearing Demand Deposits		1,373,353			1,292,440		6	%		1,185,668		16	%
Total Deposits		5,394,810			5,361,532		1	%		4,667,795		16	%
Stockholders' Equity		567,086			545,148		4	%		489,097		16	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $24.2 million and net income available to common stockholders of $24.1 million for the quarter ended June 30, 2017, compared to net income and net income available to common stockholders of $18.9 million for the same quarter in 2016. Basic and diluted earnings per common share were $0.46 and $0.45, respectively, for the second quarter of 2017, compared to $0.36 and $0.36, respectively, for the second quarter of 2016.

Return on average assets was 1.55% and return on average equity was 17.36% for the second quarter of 2017, compared to 1.37% and 15.79%, respectively, for the second quarter of 2016.

Net interest income was $55.6 million for the second quarter of 2017, compared to $52.1 million for the first quarter of 2017 and $45.9 million for the second quarter of 2016. The net interest margin in the second quarter of 2017 was 3.77%, a 24 basis point increase from the first quarter of 2017 and a 26 basis point increase from the second quarter of 2016. The increase in net interest income on a linked quarter basis is attributable to a $229.7 million increase in average loans outstanding, a $84.0 million increase in non-interest-bearing deposits and a $321.6 million decrease in average federal funds sold and interest-bearing balances with banks, all resulting in a positive mix change in our balance sheet. The average yield on loans increased nine basis points to 4.60% on a linked quarter basis.

Average loans for the second quarter of 2017 were $5.23 billion, an increase of $229.7 million, or 5%, over average loans of $5.00 billion for the first quarter of 2017, and an increase of $811.5 million, or 18%, over average loans of $4.42 billion for the second quarter of 2016.

Average total deposits for the second quarter of 2017 were $5.27 billion, a decrease of $46.8 million, or 1%, over average total deposits of $5.32 billion for the first quarter of 2017, and an increase of $792.2 million, or 18%, over average total deposits of $4.48 billion for the second quarter of 2016.

Non-performing assets to total assets were 0.23% for the second quarter of 2017, a decrease of four basis points compared to 0.27% for the first quarter of 2017 and an increase of six basis points compared to 0.17% for the second quarter of 2016. Net credit charge-offs to average loans were 0.25%, a one basis point increase compared to 0.24% for the first quarter of 2017 and a seven basis point increase compared to 0.18% for the second quarter of 2016. We recorded a $4.4 million provision for loan losses in the second quarter of 2017 compared to $5.0 million in the first quarter of 2017 and $3.8 million in the second quarter of 2016. The allowance for loan loss as a percentage of total loans was 1.03% at June 30, 2017 compared to 1.05% at March 31, 2017 and 1.04% at June 30, 2016. 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 by $958,000 during the second quarter of 2017, or 25%, compared to the second quarter of 2016. Mortgage banking revenue increased by $163,000 in the second quarter of 2017, or 18%, compared to the second quarter of 2016. Cash surrender value of life insurance increased to $785,000 during the second quarter of 2017, compared to $655,000 during the second quarter of 2016. Credit card revenue increased $617,000, or 108%, to $1.2 million during the second quarter of 2017, compared to $572,000 during the second quarter of 2016.

Non-interest expense for the second quarter of 2017 increased $2.4 million, or 12%, to $21.9 million from $19.5 million in the second quarter of 2016, and increased $608,000, or 3%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2017 increased $1.3 million, or 12%, to $12.0 million from $10.7 million in the second quarter of 2016, and increased $318,000, or 3%, on a linked quarter basis. Equipment and Occupancy expense increased $242,000, or 12%, to $2.3 million in the second quarter of 2017, from $2.0 million in the second quarter of 2016. This increase in equipment and occupancy expense was attributable to new offices in our Tampa Bay, Florida and Charleston, South Carolina regions, which were relocations from temporary facilities we previously occupied. Other operating expense for the second quarter of 2017 increased $729,000, or 15%, to $5.6 million from $4.9 million in the second quarter of 2016. This was primarily the result of higher credit card processing expenses and higher Federal Reserve Bank service charges related to increased correspondent banking activities.

Income tax expense increased $2.4 million, or 32%, to $10.0 million in the second quarter of 2017, compared to $7.6 million in the second quarter of 2016. In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09 using the modified retrospective method. Accordingly, we recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $1.4 million in the second quarter of 2017, compared to $1.2 million in the second quarter of 2016. Our effective tax rate for the second quarter of 2017 and 2016 was 29.2% and 28.6%, 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, 2017			At March 31, 2017			At December 31, 2016			At September 30, 2016			At June 30, 2016
Book value per share - GAAP		$	10.72		$	10.32		$	9.93		$	9.65		$	9.32
Total common stockholders' equity - GAAP			567,086			545,148			522,889			507,886			489,097
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,855			14,924			14,996			15,073			15,154
Tangible common stockholders' equity - non-GAAP		$	552,231		$	530,224		$	507,893		$	492,813		$	473,943
Tangible book value per share - non-GAAP		$	10.44		$	10.04		$	9.65		$	9.37		$	9.03

Stockholders' equity to total assets - GAAP			8.96	%		8.60	%		8.21	%		8.46	%		8.66	%
Total assets - GAAP		$	6,329,599		$	6,336,165		$	6,370,448		$	6,002,621		$	5,646,055
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset		14,855			14,924			14,996			15,073			15,154
Total tangible assets - non-GAAP		$	6,314,744		$	6,321,241		$	6,355,452		$	5,987,548		$	5,630,901
Tangible common equity to total tangible assets - non-GAAP			8.75	%		8.39	%		7.99	%		8.23	%		8.42	%

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 http://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 http://www.servisfirstbancshares.com/ or by calling (205) 949-0302.


SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
	2nd Quarter 2017			1st Quarter 2017				4th Quarter 2016				3rd Quarter 2016				2nd Quarter 2016
CONSOLIDATED STATEMENT OF INCOME
Interest income	$	63,538			$	59,517			$	56,200			$	54,691			$	52,050
Interest expense		7,971				7,465				7,091				6,773				6,159
Net interest income		55,567				52,052				49,109				47,918				45,891
Provision for loan losses		4,381				4,986				4,075				3,464				3,800
Net interest income after provision for loan losses		51,186				47,066				45,034				44,454				42,091
Non-interest income		4,805				4,546				6,039				4,791				3,847
Non-interest expense		21,875				21,267				22,037				20,162				19,504
Income before income tax		34,116				30,345				29,036				29,083				26,434
Provision for income tax		9,952				7,826				7,298				8,174				7,558
Net income		24,164				22,519				21,738				20,909				18,876
Preferred stock dividends		31				-				24				-				23
Net income available to common stockholders	$	24,133			$	22,519			$	21,714			$	20,909			$	18,853
Earnings per share - basic	$	0.46			$	0.43			$	0.41			$	0.40			$	0.36
Earnings per share - diluted	$	0.45			$	0.42			$	0.40			$	0.39			$	0.36
Average diluted shares outstanding		54,100,604				54,133,722				53,961,160				53,879,328				53,452,526

CONSOLIDATED BALANCE SHEET DATA
Total assets	$	6,329,599			$	6,336,165			$	6,370,448			$	6,002,621			$	5,646,055
Loans		5,343,688				5,151,984				4,911,770				4,631,822				4,536,338
Debt securities		518,065				526,023				447,427				377,270				347,706
Non-interest-bearing demand deposits		1,373,353				1,292,440				1,281,605				1,269,726				1,185,668
Total deposits		5,394,810				5,361,532				5,420,311				5,081,128				4,664,795
Borrowings		55,075				55,169				55,262				55,356				55,450
Stockholders' equity	$	567,086			$	545,148			$	522,889			$	507,866			$	489,097

Shares outstanding		52,909,362				52,812,396				52,636,896				52,610,896				52,503,896
Book value per share	$	10.72			$	10.32			$	9.93			$	9.65			$	9.32
Tangible book value per share (1)	$	10.44			$	10.04			$	9.65			$	9.37			$	9.03

SELECTED FINANCIAL RATIOS
Net interest margin		3.77	%			3.53	%			3.30	%			3.35	%			3.51	%
Return on average assets		1.55	%			1.45	%			1.39	%			1.39	%			1.37	%
Return on average common stockholders' equity		17.36	%			17.09	%			16.71	%			16.66	%			15.79	%
Efficiency ratio		36.23	%			37.58	%			39.96	%			38.25	%			39.21	%
Non-interest expense to average earning assets		1.47	%			1.43	%			1.46	%			1.39	%			1.50	%

CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets		9.72	%			9.67	%			9.78	%			9.91	%			9.83	%
Tier 1 capital to risk-weighted assets		9.73	%			9.68	%			9.78	%			9.92	%			9.84	%
Total capital to risk-weighted assets		11.67	%			11.66	%			11.84	%			12.03	%			11.98	%
Tier 1 capital to average assets		8.88	%			8.46	%			8.22	%			8.20	%			8.52	%
Tangible common equity to total tangible assets (1)		8.75	%			8.39	%			7.99	%			8.23	%			8.42	%

(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, 2017			June 30, 2016			% Change
ASSETS
Cash and due from banks			$	71,181		$	54,985		29		%
Interest-bearing balances due from depository institutions				134,694			417,703		(68	)	%
Federal funds sold				49,443			116,038		(57	)	%
	Cash and cash equivalents			255,318			588,726		(57	)	%
Available for sale debt securities, at fair value				438,808			321,044		37		%
Held to maturity debt securities (fair value of $80,532 and $30,717 at
	June 30, 2017 and 2016, respectively)			79,257			29,662		167		%
Restricted equity securities				1,037			5,671		(82	)	%
Mortgage loans held for sale				5,673			7,933		(28	)	%
Loans				5,343,688			4,536,338		18		%
Less allowance for loan losses				(55,059	)		(46,998	)	17		%
	Loans, net			5,288,629			4,489,340		18		%
Premises and equipment, net				51,797			23,221		123		%
Goodwill and other identifiable intangible assets				14,855			15,154		(2	)	%
Other assets				194,225			165,304		17		%
	Total assets		$	6,329,599		$	5,646,055		12		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing		$	1,373,353		$	1,185,668		16		%
	Interest-bearing			4,021,457			3,482,127		15		%
		Total deposits		5,394,810			4,667,795		16		%
Federal funds purchased				300,226			420,430		(29	)	%
Other borrowings				55,075			55,450		(1	)	%
Other liabilities				12,402			13,283		(7	)	%
	Total liabilities			5,762,513			5,156,958		12		%
Stockholders' equity:
	Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
		(liquidation preference $1,000), net of discount; no shares authorized,
		no shares issued or outstanding at June 30, 2017 and 2016		-			-		-		%
	Preferred stock, par value $0.001 per share; 1,000,000 shares authorized and
		undesignated at June 30, 2017 and 2016		-			-		-		%
	Common stock, par value $0.001 per share; 100,000,000 shares authorized;
		52,909,362 shares issued and outstanding at June 30, 2017 and 52,503,896
		shares issued and outstanding at June 30, 2016		53			52		2		%
	Additional paid-in capital			217,271			214,525		1		%
	Retained earnings			348,517			268,739		30		%
	Accumulated other comprehensive income			743			5,404		(86	)	%
	Noncontrolling interest			502			377		33		%
		Total stockholders' equity		567,086			489,097		16		%
	Total liabilities and stockholders' equity		$	6,329,599		$	5,646,055		12		%


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended June 30,					Six Months Ended June 30,
		2017		2016			2017		2016
Interest income:
	Interest and fees on loans	$	59,912	$	49,210		$	115,468	$	96,457
	Taxable securities		2,274		1,238			4,361		2,507
	Nontaxable securities		752		834			1,517		1,692
	Federal funds sold		287		210			806		283
	Other interest and dividends		313		558			903		1,072
	Total interest income		63,538		52,050			123,055		102,011
Interest expense:
	Deposits		6,321		4,633			12,303		8,994
	Borrowed funds		1,650		1,526			3,133		2,947
	Total interest expense		7,971		6,159			15,436		11,941
	Net interest income		55,567		45,891			107,619		90,070
Provision for loan losses			4,381		3,800			9,367		5,859
	Net interest income after provision for loan losses		51,186		42,091			98,252		84,211
Non-interest income:
	Service charges on deposit accounts		1,382		1,306			2,736		2,613
	Mortgage banking		1,064		901			1,963		1,569
	Credit card income		1,189		572			2,368		1,041
	Securities gains		-		(3	)		-		(3	)
	Increase in cash surrender value life insurance		785		655			1,509		1,279
	Other operating income		385		416			775		783
	Total non-interest income		4,805		3,847			9,351		7,282
Non-interest expense:
	Salaries and employee benefits		12,031		10,733			23,744		21,800
	Equipment and occupancy expense		2,265		2,023			4,505		4,008
	Professional services		808		999			1,579		1,737
	FDIC and other regulatory assessments		1,081		803			2,078		1,553
	Other real estate owned expense		56		41			132		490
	Other operating expense		5,634		4,905			11,104		9,206
	Total non-interest expense		21,875		19,504			43,142		38,794
	Income before income tax		34,116		26,434			64,461		52,699
Provision for income tax			9,952		7,558			17,778		13,867
	Net income		24,164		18,876			46,683		38,832
	Dividends on preferred stock		31		23			31		23
	Net income available to common stockholders	$	24,133	$	18,853		$	46,652	$	38,809
Basic earnings per common share		$	0.46	$	0.36		$	0.88	$	0.74
Diluted earnings per common share		$	0.45	$	0.36		$	0.86	$	0.73


LOANS BY TYPE (UNAUDITED)
(In thousands)

		2nd Quarter 2017		1st Quarter 2017		4th Quarter 2016		3rd Quarter 2016		2nd Quarter 2016
Commercial, financial and agricultural		$	2,123,498	$	2,061,503	$	1,982,267	$	1,885,315	$	1,892,870
Real estate - construction			395,398		345,777		335,085		292,721		251,144
Real estate - mortgage:
	Owner-occupied commercial		1,272,659		1,262,578		1,171,719		1,138,308		1,117,514
	1-4 family mortgage		565,121		554,261		536,805		520,394		494,733
	Other mortgage		931,788		872,955		830,683		740,127		725,336
Subtotal: Real estate - mortgage			2,769,568		2,689,794		2,539,207		2,398,829		2,337,583
Consumer			55,224		54,910		55,211		54,957		54,741
Total loans		$	5,343,688	$	5,151,984	$	4,911,770	$	4,631,822	$	4,536,338


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
			2nd Quarter 2017				1st Quarter 2017				4th Quarter 2016			3rd Quarter 2016				2nd Quarter 2016
Allowance for loan losses:
Beginning balance			$	53,892			$	51,893			$	48,933		$	46,998			$	45,145
Loans charged off:
	Commercial, financial and agricultural			3,067				2,855				1,059			1,270				1,412
	Real estate - construction			40				-				-			79				355
	Real estate - mortgage			106				266				45			144				191
	Consumer			33				75				82			81				31
		Total charge offs		3,246				3,196				1,186			1,574				1,989
Recoveries:
	Commercial, financial and agricultural			16				190				10			35				1
	Real estate - construction			14				16				12			9				39
	Real estate - mortgage			2				2				46			1				2
	Consumer			-				1				3			-				-
		Total recoveries		32				209				71			45				42
	Net charge-offs			3,214				2,987				1,115			1,529				1,947
	Provision for loan losses			4,381				4,986				4,075			3,464				3,800
	Ending balance		$	55,059			$	53,892			$	51,893		$	48,933			$	46,998

	Allowance for loan losses to total loans			1.03		%		1.05		%		1.06	%		1.05		%		1.04		%
	Allowance for loan losses to total average
		loans		1.05		%		1.08		%		1.10	%		1.07		%		1.06		%
	Net charge-offs to total average loans			0.25		%		0.24		%		0.09	%		0.13		%		0.18		%
	Provision for loan losses to total average
		loans		0.34		%		0.40		%		0.34	%		0.30		%		0.34		%
	Nonperforming assets:
		Nonaccrual loans	$	9,963			$	12,084			$	10,624		$	6,647			$	4,730
		Loans 90+ days past due and accruing		1,016				16				6,263			43				423
		Other real estate owned and
		repossessed assets		3,891				5,102				4,988			3,035				4,260
	Total		$	14,870			$	17,202			$	21,875		$	9,725			$	9,413

	Nonperforming loans to total loans			0.21		%		0.23		%		0.34	%		0.14		%		0.11		%
	Nonperforming assets to total assets			0.23		%		0.27		%		0.34	%		0.16		%		0.17		%
	Nonperforming assets to earning assets			0.24		%		0.28		%		0.35	%		0.16		%		0.17		%
	Reserve for loan losses to nonaccrual loans			552.63		%		445.98		%		488.45	%		736.17		%		993.62		%

	Restructured accruing loans		$	12,716			$	536			$	558		$	6,738			$	6,753

	Restructured accruing loans to total loans			0.24		%		0.01		%		0.01	%		0.14		%		0.15		%

	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
			2nd Quarter 2017				1st Quarter 2017				4th Quarter 2016			3rd Quarter 2016				2nd Quarter 2016
	Beginning balance:		$	7,269			$	7,292			$	6,738		$	6,753			$	6,763
		Additions		12,716				-				-			-				-
		Removal from TDR		(535	)			-				-			-				-
		Net (paydowns) / advances		(1,380	)			(23	)			554			(15	)			(10	)
		Charge-offs		(1,700	)			-				-			-				-
			$	16,370			$	7,269			$	7,292		$	6,738			$	6,753


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		2nd Quarter 2017		1st Quarter 2017		4th Quarter 2016		3rd Quarter 2016		2nd Quarter 2016
Interest income:
	Interest and fees on loans	$	59,912	$	55,556	$	52,533	$	51,598	$	49,210
	Taxable securities		2,274		2,087		1,604		1,107		1,238
	Nontaxable securities		752		765		785		823		834
	Federal funds sold		287		519		377		347		210
	Other interest and dividends		313		590		901		816		558
	Total interest income		63,538		59,517		56,200		54,691		52,050
Interest expense:
	Deposits		6,321		5,982		5,817		5,358		4,611
	Borrowed funds		1,650		1,483		1,274		1,415		1,548
	Total interest expense		7,971		7,465		7,091		6,773		6,159
	Net interest income		55,567		52,052		49,109		47,918		45,891
Provision for loan losses			4,381		4,986		4,075		3,464		3,800
	Net interest income after provision for loan losses		51,186		47,066		45,034		44,454		42,091
Non-interest income:
	Service charges on deposit accounts		1,382		1,354		1,375		1,367		1,306
	Mortgage banking		1,064		899		1,044		1,112		901
	Credit card income		1,189		1,179		1,052		1,114		572
	Securities gains		-		-		-		-		(3	)
	Increase in cash surrender value life insurance		785		724		745		770		655
	Other operating income		385		390		1,823		428		416
	Total non-interest income		4,805		4,546		6,039		4,791		3,847
Non-interest expense:
	Salaries and employee benefits		12,031		11,713		11,197		10,958		10,733
	Equipment and occupancy expense		2,265		2,250		1,877		2,100		2,023
	Professional services		808		771		1,058		1,182		999
	FDIC and other regulatory assessments		1,081		997		1,072		775		803
	Other real estate owned expense		56		76		91		178		41
	Other operating expense		5,634		5,460		6,742		4,969		4,905
	Total non-interest expense		21,875		21,267		22,037		20,162		19,504
	Income before income tax		34,116		30,345		29,036		29,083		26,434
Provision for income tax			9,952		7,826		7,298		8,174		7,558
	Net income		24,164		22,519		21,738		20,909		18,876
	Dividends on preferred stock		31		-		24		-		23
	Net income available to common stockholders	$	24,133	$	22,519	$	21,714	$	20,909	$	18,853
Basic earnings per common share		$	0.46	$	0.43	$	0.41	$	0.40	$	0.36
Diluted earnings per common share		$	0.45	$	0.42	$	0.40	$	0.39	$	0.36

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


					2nd Quarter 2017				1st Quarter 2017					4th Quarter 2016				3rd Quarter 2016				2nd Quarter 2016
					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			$	5,192,812	4.60	%	$	4,976,933		4.50	%	$	4,676,565	4.45	%	$	4,554,900	4.47	%	$	4,406,107	4.47	%
		Tax-exempt (2)				41,143	4.92			27,322		4.72			26,344	4.74			21,939	4.37			16,315	4.54
			Total loans, net of
				unearned income		5,233,955	4.60			5,004,255		4.51			4,702,909	4.45			4,576,839	4.47			4,422,422	4.47
	Mortgage loans held for sale					5,958	3.90			5,637		4.10			6,271	3.36			6,724	3.79			7,323	3.62
	Debt securities:
		Taxable				389,505	2.34			368,349		2.27			295,608	2.17			224,825	2.19			208,113	2.38
		Tax-exempt (2)				133,590	3.38			132,578		3.45			134,748	3.54			135,272	3.73			135,954	3.73
			Total securities (3)			523,095	2.60			500,927		2.58			430,356	2.60			360,097	2.77			344,067	2.91
	Federal funds sold					98,598	1.17			234,460		0.90			242,211	0.62			217,158	0.64			144,206	0.59
	Restricted equity securities					1,030	10.51			1,030		1.57			3,042	8.24			5,658	4.01			5,659	3.62
	Interest-bearing balances with banks					109,909	1.04			295,648		0.80			601,143	0.55			590,675	0.51			393,782	0.52
	Total interest-earning assets				$	5,972,545	4.30	%	$	6,041,957		4.03	%	$	5,985,932	3.77	%	$	5,757,151	3.81	%	$	5,317,459	3.97	%
Non-interest-earning assets:
	Cash and due from banks					68,894				59,697					55,593				58,809				65,318
	Net premises and equipment					49,813				44,739					30,421				25,000				23,241
	Allowance for loan losses, accrued
		interest and other assets				143,286				138,289					140,721				145,804				127,640
			Total assets		$	6,234,538			$	6,284,682				$	6,212,667			$	5,986,764			$	5,533,658

Interest-bearing liabilities:
	Interest-bearing deposits:
	Checking				$	779,916	0.39	%	$	789,273		0.38	%	$	735,115	0.37	%	$	696,100	0.37	%	$	691,776	0.36	%
	Savings					48,150	0.30			50,461		0.33			51,845	0.32			43,569	0.30			41,546	0.30
	Money market					2,567,817	0.64			2,694,225		0.58			2,669,513	0.56			2,471,829	0.55			2,105,420	0.52
	Time deposits					537,220	1.06			530,000		1.02			527,100	1.00			519,653	0.99			498,151	1.01
		Total interest-bearing deposits				3,933,103	0.64			4,063,959		0.60			3,983,573	0.58			3,731,151	0.57			3,336,893	0.56
	Federal funds purchased					336,344	1.11			359,747		0.86			353,029	0.63			436,415	0.64			505,076	0.64
	Other borrowings					55,130	5.22			55,239		5.26			55,315	5.16			55,410	5.15			55,521	5.20
	Total interest-bearing liabilities				$	4,324,577	0.74	%	$	4,478,945		0.68	%	$	4,391,917	0.64	%	$	4,222,976	0.64	%	$	3,897,490	0.64	%
Non-interest-bearing liabilities:
	Non-interest-bearing
		demand				1,338,514				1,254,496					1,289,448				1,250,139				1,142,541
	Other liabilities					13,739				16,809					14,399				14,376				13,301
	Stockholders' equity					556,521				535,232					514,245				494,248				475,917
	Unrealized gains on securities and
		derivatives				1,187				(800	)				2,658				5,025				4,409
			Total liabilities and
				stockholders' equity	$	6,234,538			$	6,284,682				$	6,212,667			$	5,986,764			$	5,533,658
Net interest spread							3.56	%				3.35	%			3.13	%			3.17	%			3.33	%
Net interest margin							3.77	%				3.53	%			3.30	%			3.35	%			3.51	%

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

Source: ServisFirst Bancshares, Inc.

Released July 17, 2017

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2017

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