Exhibit 99.1

 

 

SERVISFIRST BANCSHARES, INC.

Announces Results For Second Quarter of 2015

 

Birmingham, Ala. – (PR Newswire) – July 20, 2015 – ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2015.

 

SECOND Quarter 2015 Highlights:

 

§Net income for the second quarter increased 25% year over year
§Second quarter annualized loan growth of 28% on a linked quarter basis
§Diluted earnings per share of $0.54 for the second quarter, a 17% increase year over year
§Continued strong asset quality with non-performing assets to total assets of 0.38% at quarter-end and annualized net charge-offs of 0.15%
§Added more producers during first six months of 2015 than in any equivalent period in our ten year history

 

Tom Broughton, President and CEO, said, “We are pleased to welcome seven new producers to our company in the second quarter, for a total of 19 new producers year to date, excluding officers added through the Metro Bank (Atlanta) acquisition.” Bud Foshee, CFO, stated, “The improvement in net interest margin in the quarter, combined with strong loan growth, gives us strong fundamentals from which to build for the balance of 2015.”

 

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

 

   Period Ending
June 30, 2015
   Period Ending
March 31, 2015
   % Change
From Period
Ending March
31, 2015 to
Period Ending
June 30, 2015
   Period Ending
June 30, 2014
   % Change
From Period
Ending June
30, 2014 to
Period Ending
June 30, 2015
 
QUARTERLY OPERATING RESULTS                         
Net Income  $14,469   $13,055    11%  $11,585    25%
Net Income Available to Common Stockholders  $14,346   $12,955    11%  $11,469    25%
Diluted Earnings Per Share  $0.54   $0.49    10%  $0.46    17%
Return on Average Assets   1.31%   1.26%        1.28%     
Return on Average Common Stockholders' Equity   14.06%   13.55%        15.03%     
Average Diluted Shares Outstanding   26,426,036    26,237,980         24,823,590      
                          
Core Net Income*  $14,469   $14,822    (2)%  $12,740    14%
Core Net Income Available to Common Stockholders*  $14,346   $14,722    (3)%  $12,624    14%
Core Diluted Earnings Per Share*  $0.54   $0.56    (4)%  $0.51    6%
Core Return on Average Assets*   1.31%   1.43%        1.41%     
Core Return on Average Common Stockholders' Equity*   14.06%   15.39%        16.54%     
                          
YEAR-TO-DATE OPERATING RESULTS                         
Net Income  $27,524             $23,343    18%
Net Income Available to Common Stockholders  $27,301             $23,127    18%
Diluted Earnings Per Share  $1.04             $0.97    7%
Return on Average Assets   1.29%             1.32%     
Return on Average Common Stockholders' Equity   13.81%             15.61%     
Average Diluted Shares Outstanding   26,332,527              23,909,707      
                          
Core Net Income*  $29,291             $24,955    17%
Core Net Income Available to Common Stockholders*  $29,068             $24,739    17%
Core Diluted Earnings Per Share*  $1.10             $1.03    7%
Core Return on Average Assets*   1.37%             1.41%     
Core Return on Average Common Stockholders' Equity*   14.70%             16.70%     
                          
BALANCE SHEET                         
Total Assets  $4,492,539   $4,393,342    2%  $3,762,684    19%
Loans   3,863,734    3,607,852    7%   3,053,989    27%
Non-interest-bearing Demand Deposits   926,577    866,743    7%   729,163    27%
Total Deposits   3,729,132    3,638,763    2%   3,157,642    18%
Stockholders' Equity   454,487    441,458    3%   380,074    20%

 

 
 

  

* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.

 

DETAILED FINANCIALS

 

ServisFirst Bancshares, Inc. reported net income of $14.5 million and net income available to common stockholders of $14.3 million for the quarter ended June 30, 2015, compared to net income of $11.6 million and net income available to common stockholders of $11.5 million for the same quarter in 2014. Basic and diluted earnings per common share were $0.56 and $0.54, respectively, for the second quarter of 2015, compared to $0.49 and $0.46, respectively, for the second quarter of 2014.

 

Return on average assets was 1.31% and return on average equity was 14.06% for the second quarter of 2015, compared to 1.28% and 15.03%, respectively, for the second quarter of 2014.

 

Net interest income was $40.2 million for the second quarter of 2015, compared to $37.0 million for the first quarter of 2015 and $32.0 million for the second quarter of 2014. The net interest margin in the second quarter of 2015 was 3.88%, an 8 basis point increase from the first quarter of 2015 and 14 basis point increase from the second quarter of 2014. The increase in net interest income on a linked quarter basis is attributable to a $239.2 million increase in average loans outstanding, a $94.7 million increase in non-interest-bearing deposits and a $21.4 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet. The average yield on loans increased 4 basis points to 4.51% on a linked quarter basis.

 

Average loans for the second quarter of 2015 were $3.74 billion, an increase of $239.2 million, or 7%, over average loans of $3.50 billion for the first quarter of 2015, and an increase of $747.3 million, or 25%, over average loans of $2.99 billion for the second quarter of 2014.

 

Average total deposits for the second quarter of 2015 were $3.66 billion, an increase of $191.4 million, or 6%, over average total deposits of $3.47 billion for the first quarter of 2015, and an increase of $601.6 million, or 20%, over average total deposits of $3.06 billion for the second quarter of 2014.

 

Non-performing assets to total assets were 0.38% for the second quarter of 2015, a decrease of two basis points compared to 0.40% for the first quarter of 2015 and a decrease of fifteen basis points compared to 0.53% for the second quarter of 2014. Net credit charge-offs to average loans were 0.15%, a seven basis point increase compared to 0.08% for the first quarter of 2015 and a one basis point decrease compared to 0.16% for the second quarter of 2014. We recorded a $4.1 million provision for loan losses in the second quarter of 2015 compared to $2.4 million in the first quarter of 2015 and $2.4 million in the second quarter of 2014. The $1.7 million increase in loan loss provision in the second quarter is primarily attributable to loan growth combined with new impairment and charge-off of two large commercial loans. The allowance for loan loss as a percentage of total loans remained unchanged at 1.04% for June 30, 2015 and March 31, 2015 and decreased four basis points compared to 1.08% at June 30, 2014. 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 $567,000 during the second quarter of 2015, or 19%, compared to the second quarter of 2014. Deposit service charges increased by $219,000, or 21%, resulting from higher balances and an increase in the number of accounts and transactions. Increases in the cash surrender value of our life insurance contracts resulted from added investments in contracts during the third quarter of 2014.

 

 
 

  

Non-interest expense for the second quarter of 2015 increased $2.8 million, or 18%, to $18.2 million from $15.4 million in the second quarter of 2014, and decreased $0.5 million, or 3%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2015 increased $1.3 million, or 15%, to $10.4 million from $9.1 million in the second quarter of 2014, and increased $1.4 million, or 16%, on a linked quarter basis. Salary and benefit expenses for the second quarter of 2014 included non-routine expense of $1.8 million resulting from the accelerated vesting of stock options previously granted to members of our advisory boards in our markets. Excluding this non-routine expense, salary and benefit expenses increased $3.1 million, or 42%. This increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets. Merger expenses during the first quarter of 2015 related to our acquisition of Metro Bancshares were $2.1 million. Other operating expense for the second quarter of 2015 increased $1.0 million, or 29%, to $4.6 million from $3.6 million in the second of 2014. This was primarily the result of increased loan origination expenses, increased federal reserve bank charges from our correspondent bank clearing activities, and amortization of the core deposit intangible asset resulting from the Metro Bancshares acquisition.

 

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

 

We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the merger of Metro Bank with and into the Bank, and recorded an expense of $500,000 resulting from the initial funding of reserves for unfunded loan commitments for the first quarter of 2015, consistent with guidance provided in the Federal Reserve Bank’s Inter-agency Policy Statement SR 06-17. We recorded non-routine expenses of $2.5 million during the first half of 2014 resulting from a correction of our accounting for vested stock options and acceleration of vesting for unvested stock options previously granted to members of our advisory boards in our markets. This change in accounting treatment is a non-cash item and did not impact our operating activities or cash from operations. Core financial measures included in this press release are “core net income,” “core net income available to common stockholders,” “core diluted earnings per share,” “core return on average assets” and “core return on average common stockholders’ equity.” Each of these five core financial measures excludes the impact of the non-routine expenses attributable to merger expenses, the initial funding of reserves for unfunded loan commitments, the correction of our accounting for vested stock options and the acceleration of vesting of unvested stock options, and are all considered non-GAAP financial measures. Other non-GAAP financial measures included in this press release are “tangible common stockholders’ equity,” “total tangible assets,” “tangible book value per share,” and “tangible common equity to total tangible assets.” All non-GAAP financial measures are more fully explained below.

 

“Core net income” is defined as net income, adjusted by the net effect of the non-routine expense.

 

“Core net income available to common stockholders” is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.

 

“Core diluted earnings per share” is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.

 

“Core return on average assets” is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.

 

“Core return of average common stockholders’ equity” is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders’ equity.

 

“Tangible common stockholders’ equity” is defined as common stockholders’ equity, adjusted by the total of goodwill and other identifiable intangible assets.

 

“Total tangible assets” is defined as total assets, adjusted by the total of goodwill and other identifiable intangible assets.

 

“Tangible book value per share” is defined as tangible common stockholders’ equity divided by the number of common shares outstanding.

 

“Tangible common equity to total tangible assets” is defined as tangible common equity divided by total tangible assets.

 

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 for the three months ended March 31, 2015 and six month comparative periods ended June 30, 2015 and 2014 included in this press release. Dollars are in thousands, except share and per share data.

 

 
 

 

   For the Three Months
Ended March 31, 2015
   For the Six Months
Ended June 30, 2015
   For the Six Months
Ended June 30, 2014
 
Provision for income taxes - GAAP  $5,903   $12,875   $10,705 
Adjustments:               
Adjustment for non-routine expense   829    830    865 
Core provision for income taxes  $6,732   $13,705   $11,570 
                
Return on average assets - GAAP   1.26%   1.29%   1.32%
Net income - GAAP  $13,055   $27,524   $23,343 
Adjustments:               
Adjustment for non-routine expense   1,767    1,767    1,612 
Core net income  $14,822   $29,291   $24,955 
Average assets  $4,193,413   $4,307,778   $3,568,159 
Core return on average assets   1.43%   1.37%   1.41%
                
Return on average common stockholders' equity   13.55%   13.81%   15.61%
Net income available to common stockholders - GAAP  $12,955   $27,301   $23,127 
Adjustments:               
Adjustment for non-routine expense   1,767    1,767    1,612 
Core net income available to common stockholders  $14,722   $29,068   $24,739 
Average common stockholders' equity  $387,870   $398,678   $298,713 
Core return on average common stockholders' equity   15.39%   14.70%   16.70%
                
Earnings per share - diluted - GAAP  $0.49   $1.04   $0.97 
Weighted average shares outstanding, diluted   26,237,980    26,332,527    23,909,707 
Core diluted earnings per share  $0.56   $1.10   $1.03 
                
Book value per share  $15.65   $16.05   $13.74 
Total common stockholders' equity - GAAP   401,500    414,529    340,116 
Adjustments:               
Adjusted for goodwill and other identifiable intangible assets   18,069    18,060    - 
Tangible common stockholders' equity  $383,431   $396,469   $340,116 
Tangible book value per share  $14.95   $15.35   $13.74 
                
Stockholders' equity to total assets   10.05%   10.13%   10.10%
Total assets - GAAP  $4,393,342   $4,485,091   $3,762,684 
Adjustments:               
Adjusted for goodwill and other identifiable intangible assets   18,069    18,060    - 
Total tangible assets   4,375,273    4,467,031    3,762,684 
Tangible common equity to total tangible assets   8.76%   8.88%   10.10%

 

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, 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://servisfirstbancshares.investorroom.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://servisfirstbancshares.investorroom.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 2015   1st Quarter 2015   4th Quarter 2014   3rd Quarter 2014   2nd Quarter 2014 
CONSOLIDATED STATEMENT OF INCOME                         
Interest income  $44,209   $40,783   $38,163   $36,857   $35,424 
Interest expense   3,998    3,746    3,703    3,538    3,446 
Net interest income   40,211    37,037    34,460    33,319    31,978 
Provision for loan losses   4,062    2,405    2,759    2,748    2,438 
Net interest income after provision for loan losses   36,149    34,632    31,701    30,571    29,540 
Non-interest income   3,505    3,077    3,110    3,006    2,938 
Non-interest expense   18,213    18,751    13,143    15,315    15,417 
Income before income tax   21,441    18,958    21,668    18,262    17,061 
Provision for income tax   6,972    5,903    6,636    4,260    5,476 
Net income   14,469    13,055    15,032    14,002    11,585 
Preferred stock dividends   123    100    115    100    116 
Net income available to common stockholders  $14,346   $12,955   $14,917   $13,902   $11,469 
Earnings per share - basic  $0.56   $0.51   $0.60   $0.56   $0.49 
Earnings per share - diluted  $0.54   $0.49   $0.58   $0.54   $0.46 
Average diluted shares outstanding   26,426,036    26,237,980    25,697,531    25,726,313    24,823,590 
                          
CONSOLIDATED BALANCE SHEET DATA                         
Total assets  $4,492,539   $4,393,342   $4,098,679   $3,952,799   $3,762,684 
Loans   3,863,734    3,607,852    3,359,858    3,159,772    3,053,989 
Debt securities   335,008    336,505    327,665    332,351    325,432 
Non-interest-bearing demand deposits   926,577    866,743    810,460    794,553    729,163 
Total deposits   3,729,132    3,638,763    3,398,160    3,352,766    3,157,642 
Borrowings   21,016    21,278    19,973    19,965    19,957 
Stockholders' equity  $454,487   $441,458   $407,213   $393,136   $380,074 
                          
Shares outstanding   25,826,198    26,653,610    24,801,518    24,791,436    24,749,436 
Book value per share  $16.05   $15.65   $14.81   $14.25   $13.74 
Tangible book value per share (1)  $15.35   $14.95   $14.81   $14.25   $13.74 
                          
SELECTED FINANCIAL RATIOS                         
Net interest margin   3.88%   3.80%   3.56%   3.65%   3.74%
Return on average assets   1.31%   1.26%   1.47%   1.45%   1.28%
Return on average common stockholders' equity   14.06%   13.55%   16.39%   15.89%   15.03%
Efficiency ratio   41.66%   46.74%   34.98%   42.16%   44.15%
Non-interest expense to average earning assets   1.73%   1.90%   1.34%   1.66%   1.78%
                          
CAPITAL RATIOS (2)                         
Common equity tier 1 capital to risk-weighted assets (3)   9.60%   9.93%   N/A    N/A    N/A 
Tier 1 capital to risk-weighted assets   10.58%   10.98%   11.75%   12.02%   12.04%
Total capital to risk-weighted assets   12.04%   12.49%   13.38%   13.70%   13.74%
Tier 1 capital to average assets   9.88%   10.07%   9.91%   10.18%   10.32%
Tangible common equity to total tangible assets (1)   8.86%   8.76%   8.96%   8.93%   9.04 

 

(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.

(3) Basel III final capital rules, including the new Common Equity Tier 1 Capital to Risk-Weighted Assets ratio, became effective for the Company on January 1, 2015.

 

 
 

  

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

 

   June 30, 2015   June 30, 2014   % Change 
ASSETS               
Cash and due from banks  $49,731   $76,893    (35)%
Interest-bearing balances due from depository institutions   69,104    199,990    (65)%
Federal funds sold   17,622    3,044    479%
Cash and cash equivalents   136,457    279,927    (51)%
Available for sale debt securities, at fair value   305,985    294,254    4%
Held to maturity debt securities (fair value of $29,348 and $31,446 at June 30, 2015 and 2014, respectively)   29,023    31,178    (7)%
Restricted equity securities   4,954    3,418    45%
Mortgage loans held for sale   11,722    11,675    0%
Loans   3,863,734    3,053,989    27%
Less allowance for loan losses   (40,020)   (32,984)   21%
Loans, net   3,823,714    3,021,005    27%
Premises and equipment, net   15,563    7,745    101%
Goodwill and other identifiable intangible assets   18,060    -      
Other assets   147,061    113,482    30%
Total assets  $4,492,539   $3,762,684    19%
LIABILITIES AND STOCKHOLDERS' EQUITY               
Liabilities:               
Deposits:               
Non-interest-bearing  $926,577   $729,163    27%
Interest-bearing   2,802,555    2,428,479    15%
Total deposits   3,729,132    3,157,642    18%
Federal funds purchased   273,095    181,070    51%
Other borrowings   21,016    19,957    5%
Other liabilities   14,809    23,941    (38)%
Total liabilities   4,038,052    3,382,610    19%
Stockholders' equity:               
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001 (liquidation preference $1,000), net of discount; 40,000 shares authorized, 40,000 shares issued and outstanding at June 30, 2015 and 2014   39,958    39,958    -%
Preferred stock, par value $0.001 per share; 1,000,000 authorized and 960,000 currently undesignated   -    -    -%
Common stock, par value $0.0003 per share; 50,000,000 shares authorized; 25,833,698 shares issued and 25,826,198 outstanding at June 30, 2015 and 24,749,436 shares issued and outstanding at June 30, 2014   26    25    4%
Additional paid-in capital   209,074    183,765    14%
Retained earnings   201,303    150,769    34%
Accumulated other comprehensive income   3,749    5,305    (29)%
Noncontrolling interest   377    252    50%
Total stockholders' equity   454,487    380,074    20%
Total liabilities and stockholders' equity  $4,492,539   $3,762,684    19%

 

 
 

  

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2015   2014   2015   2014 
Interest income:                    
Interest and fees on loans  $42,105   $33,250   $80,751   $65,502 
Taxable securities   1,104    1,126    2,232    2,223 
Nontaxable securities   874    870    1,734    1,741 
Federal funds sold   24    43    101    85 
Other interest and dividends   102    135    174    154 
Total interest income   44,209    35,424    84,992    69,705 
Interest expense:                    
Deposits   3,512    3,027    6,782    6,041 
Borrowed funds   486    419    962    837 
Total interest expense   3,998    3,446    7,744    6,878 
Net interest income   40,211    31,978    77,248    62,827 
Provision for loan losses   4,062    2,438    6,467    4,752 
Net interest income after provision for loan losses   36,149    29,540    70,781    58,075 
Non-interest income:                    
Service charges on deposit accounts   1,276    1,057    2,483    1,925 
Mortgage banking   735    674    1,189    958 
Securities gains   -    -    29    - 
Increase in cash surrender value life insurance   660    546    1,308    1,082 
Other operating income   834    661    1,573    1,148 
Total non-interest income   3,505    2,938    6,582    5,113 
Non-interest expense:                    
Salaries and employee benefits   10,426    9,098    19,434    16,795 
Equipment and occupancy expense   1,634    1,409    3,295    2,775 
Professional services   665    532    1,233    1,048 
FDIC and other regulatory assessments   626    528    1,246    1,045 
Other real estate owned expense   289    298    503    785 
Merger expense   4    -    2,100    - 
Other operating expense   4,569    3,552    9,153    6,692 
Total non-interest expense   18,213    15,417    36,964    29,140 
Income before income tax   21,441    17,061    40,399    34,048 
Provision for income tax   6,972    5,476    12,875    10,705 
Net income   14,469    11,585    27,524    23,343 
Dividends on preferred stock   123    116    223    216 
Net income available to common stockholders  $14,346   $11,469   $27,301   $23,127 
Basic earnings per common share  $0.56   $0.49   $1.07   $1.01 
Diluted earnings per common share  $0.54   $0.46   $1.04   $0.97 

 

LOANS BY TYPE (UNAUDITED)

(In thousands)

 

   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014   3rd Quarter 2014   2nd Quarter 2014 
Commercial, financial and agricultural  $1,630,134   $1,543,531   $1,495,092   $1,382,607   $1,362,757 
Real estate - construction   219,607    219,005    208,769    194,506    178,033 
Real estate - mortgage:                         
Owner-occupied commercial   930,719    869,724    793,917    773,432    708,294 
1-4 family mortgage   392,245    375,770    333,455    314,778    296,220 
Other mortgage   627,099    545,668    471,363    443,245    457,845 
Subtotal: Real estate - mortgage   1,950,063    1,791,162    1,598,735    1,531,455    1,462,359 
Consumer   63,930    54,154    57,262    51,204    50,840 
Total loans  $3,863,734   $3,607,852   $3,359,858   $3,159,772   $3,053,989 

 

 
 

  

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

 

   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014   3rd Quarter 2014   2nd Quarter 2014 
Allowance for loan losses:                         
Beginning balance  $37,356   $35,629   $34,442   $32,984   $31,728 
Loans charged off:                         
Commercial financial and agricultural   1,151    77    416    531    142 
Real estate - construction   93    382    309    610    325 
Real estate - mortgage   208    433    922    149    890 
Consumer   19    5    21    131    18 
Total charge offs   1,471    897    1,668    1,421    1,375 
Recoveries:                         
Commercial financial and agricultural   6    19    2    -    1 
Real estate - construction   65    99    37    97    180 
Real estate - mortgage   2    101    46    14    10 
Consumer   -    -    11    20    2 
Total recoveries   73    219    96    131    193 
Net charge-offs   1,398    678    1,572    1,290    1,182 
Provision for loan losses   4,062    2,405    2,759    2,748    2,438 
Ending balance  $40,020   $37,356   $35,629   $34,442   $32,984 
                          
Allowance for loan losses to total loans   1.04%   1.04%   1.06%   1.09%   1.08%
Allowance for loan losses to total average loans   1.07%   1.07%   1.10%   1.11%   1.10%
Net charge-offs to total average loans   0.15%   0.08%   0.19%   0.17%   0.16%
Provision for loan losses to total average loans   0.44%   0.28%   0.34%   0.35%   0.33%
Nonperforming assets:                         
Nonaccrual loans  $8,194   $8,361   $9,125   $16,078   $13,193 
Loans 90+ days past due and accruing   470    553    925    1,190    - 
Other real estate owned and repossessed assets   8,235    8,638    6,840    6,940    6,739 
Total  $16,899   $17,552   $16,890   $24,208   $19,932 
                          
Nonperforming loans to total loans   0.22%   0.25%   0.30%   0.55%   0.43%
Nonperforming assets to total assets   0.38%   0.40%   0.41%   0.61%   0.53%
Nonperforming assets to earning assets   0.38%   0.41%   0.42%   0.62%   0.54%
Reserve for loan losses to nonaccrual loans   488.41%   446.79%   390.45%   214.22%   250.01%
                          
Restructured accruing loans  $8,279   $8,280   $8,295   $2,067   $7,030 
                          
Restructured accruing loans to total loans   0.21%   0.23%   0.25%   0.07%   0.23%

 

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

 

   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014   3rd Quarter 2014   2nd Quarter 2014 
Beginning balance:  $8,280   $8,992   $7,932   $9,217   $13,478 
Additions   -    -    6,250    -    1,409 
Net (paydowns) / advances   (1)   (381)   (4,492)   (802)   (5,080)
Charge-offs   -    (331)   (698)   (483)   (590)
   $8,279   $8,280   $8,992   $7,932   $9,217 

 

 
 

  

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

   2nd Quarter
2015
   1st Quarter
2015
   4th Quarter
2014
   3rd Quarter
2014
   2nd Quarter
2014
 
Interest income:                         
Interest and fees on loans  $42,105   $38,646   $35,902   $34,662   $33,250 
Taxable securities   1,104    1,128    1,143    1,131    1,126 
Nontaxable securities   874    860    871    877    870 
Federal funds sold   24    77    41    38    43 
Other interest and dividends   102    72    206    149    135 
Total interest income   44,209    40,783    38,163    36,857    35,424 
Interest expense:                         
Deposits   3,512    3,270    3,256    3,123    3,027 
Borrowed funds   486    476    447    415    419 
Total interest expense   3,998    3,746    3,703    3,538    3,446 
Net interest income   40,211    37,037    34,460    33,319    31,978 
Provision for loan losses   4,062    2,405    2,759    2,748    2,438 
Net interest income after provision for loan losses   36,149    34,632    31,701    30,571    29,540 
Non-interest income:                         
Service charges on deposit accounts   1,276    1,207    1,168    1,172    1,057 
Mortgage banking   735    454    507    582    674 
Securities gains   -    29    -    3    - 
Increase in cash surrender value life insurance   660    648    649    549    546 
Other operating income   834    739    786    700    661 
Total non-interest income   3,505    3,077    3,110    3,006    2,938 
Non-interest expense:                         
Salaries and employee benefits   10,426    9,008    6,332    7,890    9,098 
Equipment and occupancy expense   1,634    1,661    1,335    1,437    1,409 
Professional services   665    568    558    829    532 
FDIC and other regulatory assessments   626    620    516    533    528 
Other real estate owned expense   289    214    528    220    298 
Merger expense   4    2,096    -    -    - 
Other operating expense   4,569    4,584    3,874    4,406    3,552 
Total non-interest expense   18,213    18,751    13,142    15,315    15,417 
Income before income tax   21,441    18,958    21,668    18,262    17,061 
Provision for income tax   6,972    5,903    6,636    4,260    5,476 
Net income   14,469    13,055    15,032    14,002    11,585 
Dividends on preferred stock   123    100    115    100    116 
  Net income available to common stockholders  $14,346   $12,955   $14,917   $13,902   $11,469 
Basic earnings per common share  $0.56   $0.51   $0.60   $0.56   $0.49 
Diluted earnings per common share  $0.54   $0.49   $0.58   $0.54   $0.46 

 

 
 

  

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

 

   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014   3rd Quarter 2014   2nd Quarter 2014 
   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  $3,731,699    4.51%  $3,492,363    4.47%  $3,215,400    4.41%  $3,081,435    4.44%  $2,978,631    4.46%
Tax-exempt(2)   10,005    5.01    10,180    5.10    10,367    4.94    12,043    4.25    15,803    3.25 
Mortgage loans held for sale   12,718    2.21    6,884    2.12    3,410    6.05    6,861    3.64    8,048    3.24 
Debt securities:                                                  
Taxable   193,848    2.28    198,104    2.28    195,533    2.32    195,220    2.31    188,148    2.40 
Tax-exempt(2)   136,104    3.93    129,525    4.02    127,909    4.19    126,512    4.08    123,897    4.10 
Total securities (3)   329,952    2.96    327,629    2.97    323,442    3.06    321,732    3.01    312,045    3.07 
Federal funds sold   26,638    0.36    39,438    0.27    68,640    0.24    57,625    0.27    41,388    0.37 
Restricted equity securities   4,953    3.16    4,354    3.63    3,418    3.95    3,418    3.83    3,446    7.57 
Interest-bearing balances with banks   97,482    0.26    119,195    0.28    273,496    0.26    185,716    0.25    121,532    0.25 
Total interest-earning assets   4,213,447    4.26%   4,000,043    4.18%   3,898,173    3.94%   3,668,830    4.03%   3,480,893    4.13%
Non-interest-earning assets:                                                  
Cash and due from banks   58,347         61,911         58,973         58,340         57,387      
Net premises and equipment   16,323         13,847         8,315         8,310         8,377      
Allowance for loan losses, accrued interest and other assets   129,233         117,612         101,831         86,901         88,849      
Total assets  $4,417,350        $4,193,413        $4,067,292        $3,822,381        $3,635,506      
                                                   
Interest-bearing liabilities:                                                  
Interest-bearing deposits:                                                  
Checking  $579,650    0.27%  $553,569    0.26%  $511,451    0.26%  $484,291    0.26%  $482,115    0.27%
Savings   37,697    0.28    36,128    0.28    28,806    0.29    26,584    0.28    25,406    0.28 
Money market   1,653,708    0.45    1,618,715    0.44    1,645,533    0.45    1,555,091    0.44    1,472,346    0.44 
Time deposits   480,140    1.05    446,084    1.05    395,598    1.03    394,158    1.05    402,613    1.08 
Federal funds purchased   275,888    0.29    270,549    0.28    231,135    0.28    187,629    0.28    195,809    0.28 
Other borrowings   21,238    5.40    20,455    5.65    19,969    5.62    19,961    5.62    19,953    5.69 
Total interest-bearing liabilities   3,048,321    0.53%   2,925,500    0.52%   2,832,492    0.52%   2,667,714    0.53%   2,598,242    0.53%
Non-interest-bearing liabilities:                                                  
Non-interest-bearing demand   908,020         813,340         823,738         751,831         675,098      
Other liabilities   11,793         6,745         9,969         15,838         16,158      
Stockholders' equity   444,302         422,847         395,981         382,025         341,120      
Unrealized gains on securities and derivatives   4,914         4,981         5,112         4,973         4,888      
Total liabilities and stockholders' equity  $4,417,350        $4,193,413        $4,067,292        $3,822,381        $3,635,506      
Net interest spread        3.73%        3.66%        3.42%        3.50%        3.60%
Net interest margin        3.88%        3.80%        3.56%        3.65%        3.74%

 

(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 35%.
(3)Unrealized gains on available-for-sale debt securities are excluded from the yield calculation.