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. |