Exhibit 99.1

 

 

SERVISFIRST BANCSHARES, INC.

Announces Results For Fourth Quarter of 2015

 

Birmingham, Ala. – (PR Newswire) – January 25, 2016 – ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2015.

 

Fourth Quarter 2015 Highlights:

 

§Diluted earnings per share increased 28% from $0.58 to $0.74 year over year
§Diluted earnings per share increased 21% from $0.61 to $0.74 on a linked quarter basis
§Net income for the quarter increased 31% year over year
§Organic loan and deposit growth for the year of 20% and 18%, respectively
§Fourth quarter annualized loan and deposit growth of 17% and 18%, respectively, on a linked quarter basis
§Entry into the Tampa Bay, Florida area with hire of a new regional CEO

 

Tom Broughton, President and CEO, said, “We are pleased to welcome our new banking team in the Tampa Bay area led by Greg Bryant, a highly experienced and well known banker in the area.” Bud Foshee, CFO, stated, “2015 was a strong year in financial performance and growth.”

 

ServisFirst announces the hiring of Greg Bryant as Executive Vice President and Regional CEO. A temporary loan production office will be opened in Pasco County, for up to a year before a permanent office is established in Tampa Bay, Florida. Greg was formerly the President & CEO of Bay Cities Bank prior to the sale of the bank.

 

 

 

 

 

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

 

   Period Ending
December 31,
2015
   Period Ending
September 30,
2015
   % Change
From Period
Ending
September 30,
2015 to Period
Ending
December 31,
2015
   Period Ending
December 31,
2014
   % Change
From Period
Ending
December 31,
2014 to Period
Ending
December 31,
2015
 
QUARTERLY OPERATING RESULTS                    
Net Income  $19,750   $16,266    21%  $15,032    31%
Net Income Available to Common Stockholders  $19,726   $16,233    22%  $14,917    32%
Diluted Earnings Per Share  $0.74   $0.61    21%  $0.58    28%
Return on Average Assets   1.55%   1.38%        1.47%     
Return on Average Common Stockholders' Equity   17.75%   15.52%        16.39%     
Average Diluted Shares Outstanding   26,595,239    26,506,334         25,697,531      
                          
YEAR-TO-DATE OPERATING RESULTS                         
Net Income  $63,540             $52,377    21%
Net Income Available to Common Stockholders  $63,260             $51,946    22%
Diluted Earnings Per Share  $2.39             $2.09    14%
Return on Average Assets   1.38%             1.39%     
Return on Average Common Stockholders' Equity   15.30%             16.23%     
Average Diluted Shares Outstanding   26,442,554              24,818,221      
                          
Core Net Income*  $65,307             $53,989    21%
Core Net Income Available to Common Stockholders*  $65,027             $53,558    21%
Core Diluted Earnings Per Share*  $2.46             $2.16    14%
Core Return on Average Assets*   1.42%             1.44%     
Core Return on Average Common Stockholders' Equity*   15.73%             16.74%     
                          
BALANCE SHEET                         
Total Assets  $5,095,509   $4,772,601    7%  $4,098,679    24%
Loans   4,216,375    4,044,242    4%   3,359,858    25%
Non-interest-bearing Demand Deposits   1,053,467    1,029,354    2%   810,460    30%
Total Deposits   4,223,888    4,044,634    4%   3,398,160    24%
Stockholders' Equity   449,147    431,194    4%   407,213    10%

 

* 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 $19.8 million and net income available to common stockholders of $19.7 million for the quarter ended December 31 2015, compared to net income of $15.0 million and net income available to common stockholders of $14.9 million for the same quarter in 2014. Basic and diluted earnings per common share were $0.76 and $0.74, respectively, for the fourth quarter of 2015, compared to $0.60 and $0.58, respectively, for the fourth quarter of 2014.

 

Return on average assets was 1.55% and return on average common stockholders’ equity was 17.75% for the fourth quarter of 2015, compared to 1.47% and 16.39%, respectively, for the fourth quarter of 2014.

 

Net interest income was $43.2 million for the fourth quarter of 2015, compared to $41.9 million for the third quarter of 2015 and $34.5 million for the fourth quarter of 2014. The increase in net interest income on a linked quarter basis is attributable to a $197.1 million increase in average loans outstanding and a $74.0 million increase in non-interest-bearing deposits, both resulting in a positive mix change in our balance sheet. The Company completed a private placement of $34.75 million of its 5% Subordinated Notes due July 15, 2025 during the third quarter of 2015, which partially offset the positive mix change attributable to the increase in average loans and non-interest-bearing deposits. The net interest margin in the fourth quarter of 2015 was 3.56%, a 21 basis point decrease from the third quarter of 2015 and unchanged from the fourth quarter of 2014. Excess liquidity during the fourth quarters of 2015 and 2014 drives an unfavorable volume component change when compared to their respective comparable linked quarters. The average yield on loans decreased 9 basis points to 4.44% on a linked quarter basis. Three basis points of this decrease are attributable to a $318,000 decrease in the accretion on acquired loans. Excluding accretion on acquired loans, the net interest margin decreased 22 basis points from the third quarter to the fourth quarter of 2015. Average rates paid on interest-bearing liabilities increased from 0.58% in the third quarter to 0.60% in the fourth quarter of 2015. The higher rates paid on federal funds purchased from our correspondent banks was the result of the 0.25% increase in the Federal Reserve’s targeted rate in early December 2015.

 

Average loans for the fourth quarter of 2015 were $4.12 billion, an increase of $197.1 million, or 5%, over average loans of $3.93 billion for the third quarter of 2015, and an increase of $896.9 million, or 28%, over average loans of $3.23 billion for the fourth quarter of 2014.

 

Average total deposits for the fourth quarter of 2015 were $4.21 billion, an increase of $288.1 million, or 7%, over average total deposits of $3.92 billion for the third quarter of 2015, and an increase of $805.7 million, or 24%, over average total deposits of $3.41 billion for the fourth quarter of 2014.

 

Non-performing assets to total assets were 0.26% for the fourth quarter of 2015, a decrease of 8 basis points compared to 0.34% for the third quarter of 2015 and a decrease of 15 basis points compared to 0.41% for the fourth quarter of 2014. Net credit charge-offs to average loans were 0.24%, a 19 basis point increase compared to 0.05% for the third quarter of 2015 and a 5 basis point increase compared to 0.19% for the fourth quarter of 2014. We recorded a $3.3 million provision for loan losses in the fourth quarter of 2015 compared to $3.1 million in the third quarter of 2015 and $2.8 million in the fourth quarter of 2014. The allowance for loan loss as a percentage of total loans was 1.03% at December 31, 2015, a decrease of 2 basis points compared to 1.05% at September 30, 2015 and a decrease of 3 basis points compared to 1.06% at December 31, 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 loss.

 

Non-interest income increased $449,000 during the fourth quarter of 2015, or 14%, compared to the fourth quarter of 2014. Service charges on deposit accounts increased $158,000, or 14%, compared to the fourth quarter of 2014, resulting from an increase in the number of accounts and transactions. Mortgage banking revenue increased $113,000, or 22%, compared to the fourth quarter of 2014. Interchange income on credit card transactions, included in other operating income, increased $140,000, or 25%, compared to the fourth quarter of 2014, resulting from an increase in the number of credit card accounts.

 

Non-interest expense for the fourth quarter of 2015 increased $5.9 million, or 45%, to $19.1 million from $13.1 million in the fourth quarter of 2014, and increased $754,000, or 4%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2015 increased $2.6 million, or 41%, to $8.9 million from $6.3 million in the fourth quarter of 2014, and decreased $1.7 million, or 16%, on a linked quarter basis. We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015 and reversed $1.0 million of accrued incentive pay during the fourth quarter of 2014. Excluding these reversals, salary and benefit expenses increased $3.6 million year over year and increased $0.3 million on a linked quarter basis. The year-over-year increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets and Birmingham. Other operating expense for the fourth quarter of 2015 increased $3.0 million, or 79%, to $6.9 million from $3.9 million in the fourth quarter of 2014, and increased $2.5 million, or 57%, on a linked quarter basis. Included in these increases were $2.4 million of write-downs in equity investments in tax credit partnerships during the fourth quarter of 2015.

 

Tax expense for the fourth quarter of 2015 decreased $2.1 million compared to the fourth quarter of 2014, and decreased $3.4 million on a linked quarter basis. Effective tax rates for the fourth quarter of 2015, third quarter of 2015 and fourth quarter of 2014 were 18.81%, 33.00% and 30.63%, respectively. The lower rate in the fourth quarter of 2015 was primarily the result of recognition of federal historic tax credits.

 

 

 

 

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 on 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 years ended December 31, 2015 and December 31, 2014 included in this press release. Dollars are in thousands, except share and per share data.

 

 

 

 

   2015   2014 
Provision for income taxes - GAAP  $25,465   $21,601 
Adjustments:          
Adjustment for non-routine expense   829    865 
Core provision for income taxes  $26,294   $22,466 
           
Return on average assets - GAAP   1.38%   1.39%
Net income - GAAP  $63,540   $52,377 
Adjustments:          
Adjustment for non-routine expense   1,767    1,612 
Core net income  $65,307   $53,989 
Average assets  $4,591,860   $3,757,932 
Core return on average assets   1.42%   1.44%
           
Return on average common stockholders' equity   15.30%   16.23%
Net income available to common stockholders - GAAP  $63,260   $51,946 
Adjustments:          
Adjustment for non-routine expense   1,767    1,612 
Core net income available to common stockholders  $65,027   $53,558 
Average common stockholders' equity  $413,445   $320,005 
Core return on average common stockholders' equity   15.73%   16.74%
           
Earnings per share - diluted - GAAP  $2.39   $2.09 
Weighted average shares outstanding, diluted   26,442,554    24,818,221 
Core diluted earnings per share  $2.46   $2.16 
           
Book value per share  $17.29   $14.81 
Total common stockholders' equity - GAAP   449,147    367,255 
Adjustments:          
Adjusted for goodwill and other identifiable intangible assets   15,330    - 
Tangible common stockholders' equity  $433,817   $367,255 
Tangible book value per share  $16.70   $14.81 
           
Common stockholders' equity to total assets   8.81%   8.96%
Total assets - GAAP  $5,095,509   $4,098,679 
Adjustments:          
Adjusted for goodwill and other identifiable intangible assets   15,330    - 
Total tangible assets   5,080,179    4,098,679 
Tangible common equity to total tangible assets   8.54%   8.96%

 

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 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. 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)

 

   4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014 
CONSOLIDATED STATEMENT OF INCOME                         
Interest income  $48,451   $46,532   $44,209   $40,783   $38,163 
Interest expense   5,290    4,670    3,998    3,746    3,703 
Net interest income   43,161    41,862    40,211    37,037    34,460 
Provision for loan losses   3,308    3,072    4,062    2,405    2,759 
Net interest income after provision for loan losses   39,853    38,790    36,149    34,632    31,701 
Non-interest income   3,559    3,822    3,505    3,077    3,110 
Non-interest expense   19,086    18,332    18,213    18,751    13,143 
Income before income tax   24,326    24,280    21,441    18,958    21,668 
Provision for income tax   4,576    8,014    6,972    5,903    6,636 
Net income   19,750    16,266    14,469    13,055    15,032 
Preferred stock dividends   24    33    123    100    115 
Net income available to common stockholders  $19,726   $16,233   $14,346   $12,955   $14,917 
Earnings per share - basic  $0.76   $0.63   $0.56   $0.51   $0.60 
Earnings per share - diluted  $0.74   $0.61   $0.54   $0.49   $0.58 
Average diluted shares outstanding   26,595,239    26,506,334    26,426,036    26,237,980    25,697,531 
                          
CONSOLIDATED BALANCE SHEET DATA                         
Total assets  $5,095,509   $4,772,601   $4,492,539   $4,393,342   $4,098,679 
Loans   4,216,375    4,044,242    3,863,734    3,607,852    3,359,858 
Debt securities   370,364    334,635    335,008    336,505    327,665 
Non-interest-bearing demand deposits   1,053,467    1,029,354    926,577    866,743    810,460 
Total deposits   4,223,888    4,044,634    3,729,132    3,638,763    3,398,160 
Borrowings   55,748    55,728    21,016    21,278    19,973 
Stockholders' equity  $449,147   $431,194   $454,487   $441,458   $407,213 
                          
Shares outstanding   25,972,698    25,903,698    25,826,198    25,653,610    24,801,518 
Book value per share  $17.29   $16.65   $16.05   $15.65   $14.81 
Tangible book value per share (1)  $16.70   $15.96   $15.35   $14.95   $14.81 
                          
SELECTED FINANCIAL RATIOS                         
Net interest margin   3.56%   3.77%   3.88%   3.80%   3.56%
Return on average assets   1.55%   1.38%   1.31%   1.26%   1.47%
Return on average common stockholders' equity   17.75%   15.52%   14.06%   13.55%   16.39%
Efficiency ratio   40.85%   40.13%   41.66%   46.74%   34.98%
Non-interest expense to average earning assets   1.56%   1.63%   1.73%   1.90%   1.34%
                          
CAPITAL RATIOS (2)                         
Common equity tier 1 capital to risk-weighted assets (3)   9.72%   9.59%   9.60%   9.93%   N/A 
Tier 1 capital to risk-weighted assets   9.73%   9.60%   10.58%   10.98%   11.75%
Total capital to risk-weighted assets   11.95%   11.89%   12.05%   12.49%   13.38%
Tier 1 capital to average assets   8.55%   8.83%   9.88%   10.07%   9.91%
Tangible common equity to total tangible assets (1)   8.54%   8.70%   8.86%   8.76%   8.96%

 

(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)

 

   December 31, 2015   December 31, 2014   % Change 
ASSETS               
Cash and due from banks  $46,614   $48,519    (4)%
Interest-bearing balances due from depository institutions   270,836    248,054    9%
Federal funds sold   34,785    891    3,804%
Cash and cash equivalents   352,235    297,464    18%
Available for sale debt securities, at fair value   342,938    298,310    15%
Held to maturity debt securities (fair value of $27,910 and $29,974 at               
December 31, 2015 and 2014, respectively)   27,426    29,355    (7)%
Restricted equity securities   4,954    3,921    26%
Mortgage loans held for sale   8,249    5,984    38%
Loans   4,216,375    3,359,858    25%
Less allowance for loan losses   (43,419)   (35,629)   22%
Loans, net   4,172,956    3,324,229    26%
Premises and equipment, net   19,434    7,815    149%
Goodwill and other identifiable intangible assets   15,330    -      
Other assets   151,987    131,601    15%
Total assets  $5,095,509   $4,098,679    24%
LIABILITIES AND STOCKHOLDERS' EQUITY               
Liabilities:               
Deposits:               
Non-interest-bearing  $1,053,467   $810,460    30%
Interest-bearing   3,170,421    2,587,700    23%
Total deposits   4,223,888    3,398,160    24%
Federal funds purchased   352,360    264,315    33%
Other borrowings   55,748    19,973    179%
Other liabilities   14,366    9,018    59%
Total liabilities   4,646,362    3,691,466    26%
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,               
no shares issued and outstanding at December 31, 2015, and               
40,000 shares issued and outstanding at December 31, 2014   -    39,958    (100)%
Preferred stock, par value $0.001 per share; 1,000,000 authorized and               
960,000 currently undesignated   -    -    -%
Common stock, par value $0.001 per share; 50,000,000 shares authorized;               
25,972,698 shares issued and outstanding at December 31, 2015 and               
24,801,518 shares issued and outstanding at December 31, 2014   26    25    4%
Additional paid-in capital   211,546    185,397    14%
Retained earnings   234,150    177,091    32%
Accumulated other comprehensive income   3,048    4,490    (32)%
Noncontrolling interest   377    252    50%
Total stockholders' equity   449,147    407,213    10%
Total liabilities and stockholders' equity  $5,095,509   $4,098,679    24%

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

   Three Months Ended December 31,   Year Ended December 31, 
   2015   2014   2015   2014 
Interest income:                    
Interest and fees on loans  $46,150   $35,902   $171,302   $136,066 
Taxable securities   1,058    1,143    4,331    4,497 
Nontaxable securities   875    871    3,499    3,489 
Federal funds sold   46    41    127    159 
Other interest and dividends   322    206    716    514 
   Total interest income   48,451    38,163    179,975    144,725 
Interest expense:                    
Deposits   4,294    3,256    14,894    12,420 
Borrowed funds   996    447    2,810    1,699 
   Total interest expense   5,290    3,703    17,704    14,119 
   Net interest income   43,161    34,460    162,271    130,606 
Provision for loan losses   3,308    2,759    12,847    10,259 
   Net interest income after provision for loan losses   39,853    31,701    149,424    120,347 
Non-interest income:                    
Service charges on deposit accounts   1,326    1,168    5,088    4,265 
Mortgage banking   620    507    2,682    2,047 
Securities gains   -    -    29    3 
Increase in cash surrender value life insurance   630    649    2,621    2,280 
Other operating income   983    786    3,543    2,634 
   Total non-interest income   3,559    3,110    13,963    11,229 
Non-interest expense:                    
Salaries and employee benefits   8,884    6,332    38,913    31,017 
Equipment and occupancy expense   1,519    1,335    6,389    5,547 
Professional services   706    558    2,607    2,435 
FDIC and other regulatory assessments   733    516    2,660    2,094 
Other real estate owned expense   324    528    1,227    1,533 
Merger expense   -    -    2,100    - 
Other operating expense   6,920    3,874    20,486    14,972 
   Total non-interest expense   19,086    13,143    74,382    57,598 
   Income before income tax   24,326    21,668    89,005    73,978 
Provision for income tax   4,576    6,636    25,465    21,601 
         Net income   19,750    15,032    63,540    52,377 
Dividends on preferred stock   24    115    280    431 
         Net income available to common stockholders  $19,726   $14,917   $63,260   $51,946 
Basic earnings per common share  $0.76   $0.60   $2.46   $2.18 
Diluted earnings per common share  $0.74   $0.58   $2.39   $2.09 

 

LOANS BY TYPE (UNAUDITED)

(In thousands)

 

   4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014 
Commercial, financial and agricultural  $1,760,479   $1,683,819   $1,642,182   $1,554,020   $1,504,652 
Real estate - construction   243,267    232,895    219,607    219,005    208,769 
Real estate - mortgage:                         
Owner-occupied commercial   1,014,669    978,721    930,719    869,724    793,917 
1-4 family mortgage   444,134    417,012    392,245    375,770    333,455 
Other mortgage   698,779    677,822    627,099    545,668    471,363 
Subtotal: Real estate - mortgage   2,157,582    2,073,555    1,950,063    1,791,162    1,598,735 
Consumer   55,047    53,973    51,882    43,665    47,702 
Total loans  $4,216,375   $4,044,242   $3,863,734   $3,607,852   $3,359,858 

 

 

 

 

 

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

 

   4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014 
Allowance for loan losses:                         
Beginning balance  $42,574   $40,020   $37,356   $35,629   $34,442 
Loans charged off:                         
Commercial financial and agricultural   2,186    388    1,151    77    416 
Real estate - construction   161    31    93    382    309 
Real estate - mortgage   463    -    208    433    922 
Consumer   21    126    19    5    21 
Total charge offs   2,831    545    1,471    897    1,668 
Recoveries:                         
Commercial financial and agricultural   241    13    6    19    2 
Real estate - construction   61    13    65    99    37 
Real estate - mortgage   65    1    2    101    46 
Consumer   1    -    -    -    11 
Total recoveries   368    27    73    219    96 
Net charge-offs   2,463    518    1,398    678    1,572 
Provision for loan losses   3,308    3,072    4,062    2,405    2,759 
Ending balance  $43,419   $42,574   $40,020   $37,356   $35,629 
                          
Allowance for loan losses to total loans   1.03%   1.05%   1.04%   1.04%   1.06%
Allowance for loan losses to total average                         
loans   1.05%   1.08%   1.07%   1.07%   1.10%
Net charge-offs to total average loans   0.24%   0.05%   0.15%   0.08%   0.19%
Provision for loan losses to total average                         
loans   0.32%   0.31%   0.44%   0.28%   0.34%
Nonperforming assets:                         
Nonaccrual loans  $7,767   $9,850   $8,194   $8,361   $9,125 
Loans 90+ days past due and accruing   1    524    470    553    925 
Other real estate owned and                         
   repossessed assets   5,392    6,068    8,235    8,638    6,840 
Total  $13,160   $16,442   $16,899   $17,552   $16,890 
                          
Nonperforming loans to total loans   0.18%   0.26%   0.22%   0.25%   0.30%
Nonperforming assets to total assets   0.26%   0.34%   0.38%   0.40%   0.41%
Nonperforming assets to earning assets   0.26%   0.35%   0.38%   0.41%   0.42%
Reserve for loan losses to nonaccrual loans   559.02%   432.22%   488.41%   446.79%   390.45%
                          
Restructured accruing loans  $6,782   $8,266   $8,279   $8,280   $8,292 
                          
Restructured accruing loans to total loans   0.16%   0.20%   0.21%   0.23%   0.25%

 

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

 

   4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014 
Beginning balance:  $8,266   $8,279   $8,280   $8,992   $7,932 
Additions   -    -    -    -    6,250 
Net (paydowns) / advances   (83)   (13)   (1)   (381)   (4,492)
Charge-offs   (447)   -    -    (331)   (698)
   $7,736   $8,266   $8,279   $8,280   $8,992 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

   4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015   4th Quarter 2014 
Interest income:                         
Interest and fees on loans  $46,150   $44,401   $42,105   $38,646   $35,902 
Taxable securities   1,058    1,041    1,104    1,128    1,143 
Nontaxable securities   875    890    874    860    871 
Federal funds sold   46    32    24    77    41 
Other interest and dividends   322    168    102    72    206 
   Total interest income   48,451    46,532    44,209    40,783    38,163 
Interest expense:                         
Deposits   4,294    3,818    3,512    3,270    3,256 
Borrowed funds   996    852    486    476    447 
   Total interest expense   5,290    4,670    3,998    3,746    3,703 
   Net interest income   43,161    41,862    40,211    37,037    34,460 
Provision for loan losses   3,308    3,072    4,062    2,405    2,759 
   Net interest income after provision for loan losses   39,853    38,790    36,149    34,632    31,701 
Non-interest income:                         
Service charges on deposit accounts   1,326    1,279    1,276    1,207    1,168 
Mortgage banking   620    873    735    454    507 
Securities gains   -    -    -    29    - 
Increase in cash surrender value life insurance   630    683    660    648    649 
Other operating income   983    987    834    739    786 
   Total non-interest income   3,559    3,822    3,505    3,077    3,110 
Non-interest expense:                         
Salaries and employee benefits   8,884    10,595    10,426    9,008    6,332 
Equipment and occupancy expense   1,519    1,575    1,634    1,661    1,335 
Professional services   706    668    665    568    558 
FDIC and other regulatory assessments   733    681    626    620    516 
Other real estate owned expense   324    400    289    214    528 
Merger expense   -    -    -    2,096    - 
Other operating expense   6,920    4,413    4,573    4,584    3,874 
   Total non-interest expense   19,086    18,332    18,213    18,751    13,142 
   Income before income tax   24,326    24,280    21,441    18,958    21,668 
Provision for income tax   4,576    8,014    6,972    5,903    6,636 
       Net income   19,750    16,266    14,469    13,055    15,032 
Dividends on preferred stock   24    33    123    100    115 
         Net income available to common stockholders  $19,726   $16,233   $14,346   $12,955   $14,917 
Basic earnings per common share  $0.76   $0.63   $0.56   $0.51   $0.60 
Diluted earnings per common share  $0.74   $0.61   $0.54   $0.49   $0.58 

 

 

 

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

  4th Quarter 2015   3rd Quarter 2015   2nd Quarter 2015   1st Quarter 2015  

4th 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 $4,113,044    4.44%  $3,915,778    4.48%  $3,731,699    4.51%  $3,492,363    4.47%  $3,215,400    4.41%
Tax-exempt (2)  9,639    4.98    9,802    4.98    10,005    5.00    10,180    5.03    10,367    4.98 
Mortgage loans held for sale  4,362    4.27    7,714    4.32    12,718    2.21    6,884    2.12    3,410    6.05 
Debt securities:                                                 
Taxable  193,982    2.18    189,941    2.19    193,848    2.28    198,104    2.28    195,533    2.32 
Tax-exempt (2)  139,435    3.88    139,543    3.95    136,104    3.93    129,525    4.02    127,909    4.19 
Total securities (3)  333,417    2.89    329,484    2.94    329,952    2.96    327,629    2.97    323,442    3.06 
Federal funds sold  33,255    0.55    24,860    0.51    26,638    0.36    39,438    0.27    68,640    0.24 
Restricted equity securities  4,954    4.24    4,954    4.16    4,953    3.16    4,354    3.63    3,418    3.95 
Interest-bearing balances with banks  366,771    0.29    168,548    0.27    97,482    0.26    119,195    0.28    273,496    0.26 
Total interest-earning assets  4,865,442    3.99%   4,461,140    4.18%   4,213,447    4.26%   4,000,043    4.18%   3,898,173    3.94%
Non-interest-earning assets:                                                 
Cash and due from banks  62,037         63,259         58,347         61,911         58,973      
Net premises and equipment  19,609         18,961         16,323         13,847         8,315      
Allowance for loan losses,                                                 
accrued interest and                                                 
other assets  124,241         127,778         129,233         117,612         101,831      
Total assets $5,071,329        $4,671,136        $4,417,350        $4,193,413        $4,067,292      
                                                  
Interest-bearing liabilities:                                                 
Interest-bearing deposits:                                                 
Checking $611,521    0.30%  $593,550    0.28%  $579,650    0.27%  $553,569    0.26%  $511,451    0.26%
Savings  39,590    0.29    37,281    0.30    37,697    0.28    36,128    0.28    28,806    0.29 
Money market  2,048,453    0.49    1,817,997    0.47    1,653,708    0.45    1,618,715    0.44    1,645,533    0.45 
Time deposits  503,217    1.00    485,137    0.99    480,140    1.05    446,084    1.05    395,598    1.03 
Federal funds purchased  295,530    0.37    246,168    0.31    275,888    0.29    270,549    0.28    231,135    0.28 
Other borrowings  55,805    5.11    50,509    5.18    21,238    5.40    20,455    5.65    19,969    5.62 
Total interest-bearing liabilities  3,554,116    0.59%   3,230,642    0.57%   3,048,321    0.53%   2,925,500    0.52%   2,832,492    0.52%
Non-interest-bearing liabilities:                                                 
Non-interest-bearing                                                 
demand  1,062,795         988,756         908,020         813,340         823,738      
Other liabilities  13,469         23,738         11,793         6,745         9,969      
Stockholders' equity  436,928         424,113         444,302         422,847         395,981      
Unrealized gains on securities and                                                 
derivatives  4,021         3,911         4,914         4,981         5,112      
Total liabilities and                                                 
stockholders' equity $5,071,329        $4,671,136        $4,417,350        $4,193,413        $4,067,292      
Net interest spread       3.40%        3.61%        3.73%        3.66%        3.42%
Net interest margin       3.56%        3.77%        3.88%        3.80%        3.56%

 

(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.