ServisFirst Bancshares, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Securities

Note 4 - Securities

6 Months Ended

Jun. 30, 2021

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 4 - SECURITIES

The amortized cost and fair value of available-for-sale and held-to-maturity securities at June 30, 2021 and December 31, 2020 are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Market
	Cost		Gain		Loss			Value
June 30, 2021	(In Thousands)
Securities Available for Sale
U.S. Treasury securities	$	13,998	$	237	$	-		$	14,235
Government agencies		12,026		113		-			12,139
Mortgage-backed securities		587,372		12,840		(1,120	)		599,092
State and municipal securities		26,045		293		(57	)		26,281
Corporate debt		349,394		13,656		(1,264	)		361,786
Total	$	988,835	$	27,139	$	(2,441	)	$	1,013,533
Securities Held to Maturity
State and municipal securities		250		-		-			250
Total	$	250	$	-	$	-		$	250

December 31, 2020
Securities Available for Sale
U.S. Treasury securities	$	13,993	$	364	$	-		$	14,357
Government agencies		15,228		230		-			15,458
Mortgage-backed securities		477,407		17,720		(18	)		495,109
State and municipal securities		37,671		444		-			38,115
Corporate debt		316,857		7,296		(504	)		323,649
Total	$	861,156	$	26,054	$	(522	)	$	886,688
Securities Held to Maturity
State and municipal securities		250		-		-			250
Total	$	250	$	-	$	-		$	250

The amortized cost and fair value of debt securities as of June 30, 2021 and December 31, 2020 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage-backed securities since the mortgages underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories along with the other categories of debt securities.

	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Debt securities available for sale
Due within one year	$	34,066	$	34,409	$	30,797	$	31,060
Due from one to five years		42,224		43,525		59,828		61,481
Due from five to ten years		321,035		332,152		288,002		293,886
Due after ten years		4,138		4,355		5,122		5,152
Mortgage-backed securities		587,372		599,092		477,407		495,109
	$	988,835	$	1,013,533	$	861,156	$	886,688

Debt securities held to maturity
Due from one to five years	$	250	$	250	$	250	$	250
	$	250	$	250	$	250	$	250

All mortgage-backed securities are with government-sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

The carrying value of debt securities pledged to secure public funds on deposit and for other purposes as required by law as of June 30, 2021 and December 31, 2020 was $463.1 million and $477.6 million, respectively.

The following table identifies, as of June 30, 2021 and December 31, 2020, the Company’s investment securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months.

	Less Than Twelve Months					Twelve Months or More				Total
	Gross					Gross				Gross
	Unrealized					Unrealized				Unrealized
	Losses			Fair Value		Losses		Fair Value		Losses			Fair Value
	(In Thousands)
June 30, 2021
Mortgage-backed securities	$	(1,120	)	$	178,518	$	-	$	-	$	(1,120	)	$	178,518
State and municipal securities		(57	)		4,439		-		-		(57	)		4,439
Corporate debt		(1,264	)		19,736		-		-		(1,264	)		19,736
Total	$	(2,441	)	$	202,693	$	-	$	-	$	(2,441	)	$	202,693

December 31, 2020
Mortgage-backed securities	$	(18	)	$	3,667	$	-	$	-	$	(18	)	$	3,667
Corporate debt		(504	)		59,576		-		-		(504	)		59,576
Total	$	(522	)	$	63,243	$	-	$	-	$	(522	)	$	63,243

The following table summarizes information about sales and calls of debt securities for sale.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In Thousands)
Sales and calls proceeds	$	6,272	$	-	$	6,272	$	-
Gross realized gains	$	620	$	-	$	620	$	-
Gross realized losses		-		-		-		-
Net realized gain (loss)	$	620	$	-	$	620	$	-

At June 30, 2021, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, the Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased.