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ServisFirst Bancshares, Inc. Announces Results for First Quarter 2017

BIRMINGHAM, Ala., April 17, 2017 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter ended March 31, 2017.

FIRST QUARTER HIGHLIGHTS:

  • Loans increased 20% for the first quarter on an annualized basis
  • Loans and deposits increased 19% and 24%, respectively, year over year
  • Diluted EPS increased 11% from $0.38 to $0.42 year over year
  • Quarterly dividend increased 25% as previously announced
  • Tampa Bay Main office opened in March 2017, replacing the Pascoe County loan production office

Tom Broughton, President and CEO, said, “We are pleased with our loan growth in the first quarter which is typically the slowest growth quarter of the year. Business activity around our Southeastern footprint has greatly improved in 2017 to date.” Bud Foshee, CFO, stated, “Our efficiency ratio has improved from 40.5% to 37.6% year over year.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
On December 20, 2016, the Company effected a two-for-one split of its common stock in the form of a stock dividend. All share and per share
information for prior periods in this release has been adjusted to give effect to this stock split.
Period Ending
March 31, 2017
Period Ending
December 31, 2016
% Change
From Period
Ending
December 31,
2016 to
Period Ending
March 31,
2017
Period Ending
March 31, 2016
% Change
From Period
Ending March
31, 2016 to
Period Ending
March 31,
2017
QUARTERLY OPERATING RESULTS
Net Income $22,519 $21,738 4 % $19,956 13%
Net Income Available to Common Stockholders $22,519 $21,714 4 % $19,956 13%
Diluted Earnings Per Share $0.42 $0.40 5 % $0.38 11%
Return on Average Assets 1.45% 1.39% 1.53%
Return on Average Common Stockholders' Equity 17.09% 16.71% 17.39%
Average Diluted Shares Outstanding 54,133,722 53,961,160 53,133,620
BALANCE SHEET
Total Assets $6,336,165 $6,370,448 (1)% $5,378,599 18%
Loans 5,151,984 4,911,770 5 % 4,340,900 19%
Non-interest-bearing Demand Deposits 1,292,440 1,281,605 1 % 1,070,275 21%
Total Deposits 5,361,532 5,420,311 (1)% 4,339,747 24%
Stockholders' Equity 545,148 522,889 4 % 470,940 16%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $22.5 million for the quarter ended March 31, 2017, compared to net income and net income available to common stockholders of $20.0 million for the same quarter in 2016. Basic and diluted earnings per common share were $0.43 and $0.42, respectively, for the first quarter of 2017, compared to $0.38 for both basic and diluted earnings per share for the first quarter of 2016.

Return on average assets was 1.45% and return on average equity was 17.09% for the first quarter of 2017, compared to 1.53% and 17.39%, respectively, for the first quarter of 2016.

Net interest income was $52.1 million for the first quarter of 2017, compared to $49.1 million for the fourth quarter of 2016 and $44.2 million for the first quarter of 2016. The net interest margin in the first quarter of 2017 was 3.53%, an increase of 23 basis points from the fourth quarter of 2016 and a decrease of four basis points from the first quarter of 2016. The increase in net interest income on a linked quarter basis is attributable to a $301.3 million increase in average loans outstanding and a $17.5 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet. A $35.0 million decrease in average non-interest-bearing deposits offset the positive mix change caused by increases in loans and stockholders’ equity, while a $313.2 million decrease in federal funds sold and interest-bearing balances with banks added to the positive mix change. The average yield on loans increased by six basis points to 4.51% on a linked quarter basis. This was primarily the result of repricing of loans following the Federal Reserve Bank’s increase of interest rates in December 2016 and again in March 2017.

Average loans for the first quarter of 2017 were $5.00 billion, an increase of $301.3 million, or 6.4%, over average loans of $4.70 billion for the fourth quarter of 2016, and an increase of $763.9 million, or 18.0%, over average loans of $4.24 billion for the first quarter of 2016.

Average total deposits for the first quarter of 2017 were $5.32 billion, an increase of $45.4 million, or 0.9%, over average total deposits of $5.27 billion for the fourth quarter of 2016, and an increase of $1.05 billion, or 24.6%, over average total deposits of $4.27 billion for the first quarter of 2016.

Non-performing assets to total assets were 0.27% for the first quarter of 2017, a decrease of seven basis points compared to 0.34% for the fourth quarter of 2016 and an increase of seven basis points compared to 0.20% for the first quarter of 2016. Net credit charge-offs to average loans were 0.24%, a 15 basis point increase compared to 0.09% for the fourth quarter of 2016 and a 21 basis point increase compared to 0.03% for the first quarter of 2016. We recorded a $5.0 million provision for loan losses in the first quarter of 2017 compared to $4.1 million in the fourth quarter of 2016 and $2.1 million in the first quarter of 2016. The allowance for loan loss as a percentage of total loans was 1.05% at March 31, 2017 compared to 1.06% at December 31, 2016 and 1.04% at March 31, 2016. In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income increased $1.1 million during the first quarter of 2017, or 32%, compared to the first quarter of 2016. Mortgage revenue increased $231,000, or 35%, to $899,000 during the first quarter of 2017, compared to $668,000 during the first quarter of 2016. Credit card revenue increased $710,000, or 151%, to $1.2 million during the first quarter of 2017, compared to $469,000 during the first quarter of 2016.

Non-interest expense for the first quarter of 2017 increased $2.0 million, or 10%, to $21.3 million from $19.3 million in the first quarter of 2016, and decreased $770,000, or 3%, on a linked quarter basis. Salary and benefit expense for the first quarter of 2017 increased $646,000, or 6%, to $11.7 million from $11.1 million in the first quarter of 2016, and increased $516,000, or 5%, on a linked quarter basis. We added seven production officers and had two terminations during the first quarter of 2017. Equipment and occupancy expense increased $265,000, or 13%, to $2.3 million in the first quarter of 2017, from $2.0 million in the first quarter of 2016. This increase in equipment and occupancy expense was attributable to new offices in our Tampa Bay, Florida and Charleston, South Carolina regions, which were relocations from temporary facilities we previously occupied. Our efficiency ratio for the first quarter of 2017, fourth quarter of 2016 and first quarter of 2016 was 37.58%, 39.96% and 40.51%, respectively.

Income tax expense increased $1.5 million, or 24%, to $7.8 million in the first quarter of 2017, compared to $6.3 million in the first quarter of 2016. In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09 using the modified retrospective method. Accordingly, we recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $2.1 million in the first quarter of 2017, compared to $2.3 million in the first quarter of 2016. Our effective tax rate for the first quarter of 2017 and 2016 was 25.8% and 24.0%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

At March 31,
2017
At December 31,
2016
At September 30,
2016
At June 30,
2016
At March 31,
2016
Book value per share - GAAP $10.32 $9.93 $9.65 $9.32 $8.99
Total common stockholders' equity - GAAP 545,148 522,889 507,886 489,097 470,940
Adjustments:
Adjusted for goodwill and core deposit intangible asset 14,924 14,996 15,073 15,154 15,239
Tangible common stockholders' equity - non-GAAP $530,224 $507,893 $492,813 $473,943 $455,701
Tangible book value per share - non-GAAP $10.04 $9.65 $9.37 $9.03 $8.70
Stockholders' equity to total assets - GAAP 8.60% 8.21% 8.46% 8.66% 8.76%
Total assets - GAAP $6,336,165 $6,370,448 $6,002,621 $5,646,055 $5,378,596
Adjustments:
Adjusted for goodwill and core deposit intangible asset 14,924 14,996 15,073 15,154 15,239
Total tangible assets - non-GAAP $6,321,241 $6,355,452 $5,987,548 $5,630,901 $5,363,357
Tangible common equity to total tangible assets - non-GAAP 8.39% 7.99% 8.23% 8.42% 8.50%

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Montgomery, Mobile and Dothan, Alabama, Pensacola and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at http://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.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016
CONSOLIDATED STATEMENT OF INCOME
Interest income $59,517 $56,200 $54,691 $52,050 $49,961
Interest expense 7,465 7,091 6,773 6,159 5,782
Net interest income 52,052 49,109 47,918 45,891 44,179
Provision for loan losses 4,986 4,075 3,464 3,800 2,059
Net interest income after provision for loan losses 47,066 45,034 44,454 42,091 42,120
Non-interest income 4,546 6,039 4,791 3,847 3,435
Non-interest expense 21,267 22,037 20,162 19,504 19,290
Income before income tax 30,345 29,036 29,083 26,434 26,265
Provision for income tax 7,826 7,298 8,174 7,558 6,309
Net income 22,519 21,738 20,909 18,876 19,956
Preferred stock dividends - 24 - 23 -
Net income available to common stockholders $22,519 $21,714 $20,909 $18,853 $19,956
Earnings per share - basic (1) $0.43 $0.41 $0.40 $0.36 $0.38
Earnings per share - diluted (1) $0.42 $0.40 $0.39 $0.36 $0.38
Average diluted shares outstanding (1) 54,133,722 53,961,160 53,879,328 53,452,526 53,133,620
CONSOLIDATED BALANCE SHEET DATA
Total assets $6,336,165 $6,370,448 $6,002,621 $5,646,055 $5,378,599
Loans 5,151,984 4,911,770 4,631,822 4,536,338 4,340,900
Debt securities 526,023 447,427 377,270 347,706 362,106
Non-interest-bearing demand deposits 1,292,440 1,281,605 1,269,726 1,185,668 1,070,275
Total deposits 5,361,532 5,420,311 5,081,128 4,664,795 4,339,747
Borrowings 55,169 55,262 55,356 55,450 55,543
Stockholders' equity $545,148 $522,889 $507,866 $489,097 $470,940
Shares outstanding (1) 52,812,396 52,636,896 52,610,896 52,503,896 52,365,396
Book value per share (1) $10.32 $9.93 $9.65 $9.32 $8.99
Tangible book value per share (1) (2) $10.04 $9.65 $9.37 $9.03 $8.70
SELECTED FINANCIAL RATIOS
Net interest margin 3.53% 3.30% 3.35% 3.51% 3.57%
Return on average assets 1.45% 1.39% 1.39% 1.37% 1.53%
Return on average common stockholders' equity 17.09% 16.71% 16.66% 15.79% 17.39%
Efficiency ratio 37.58% 39.96% 38.25% 39.21% 40.51%
Non-interest expense to average earning assets 1.43% 1.46% 1.39% 1.50% 1.56%
CAPITAL RATIOS (3)
Common equity tier 1 capital to risk-weighted assets 9.67% 9.78% 9.91% 9.83% 9.90%
Tier 1 capital to risk-weighted assets 9.68% 9.78% 9.92% 9.84% 9.91%
Total capital to risk-weighted assets 11.66% 11.84% 12.03% 11.98% 12.12%
Tier 1 capital to average assets 8.46% 8.22% 8.20% 8.52% 8.65%
Tangible common equity to total tangible assets (2) 8.39% 7.99% 8.23% 8.42% 8.50%
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.
(2) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(3) Regulatory capital ratios for most recent period are preliminary.


CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
March 31, 2017 March 31, 2016 % Change
ASSETS
Cash and due from banks $54,993 $56,714 (3)%
Interest-bearing balances due from depository institutions 283,181 440,513 (36)%
Federal funds sold 127,390 28,410 348 %
Cash and cash equivalents 465,564 525,637 (11)%
Available for sale debt securities, at fair value 453,956 334,567 36 %
Held to maturity debt securities (fair value of $73,180 and $28,409 at
March 31, 2017 and 2016, respectively) 72,057 27,539 162 %
Restricted equity securities 1,034 5,667 (82)%
Mortgage loans held for sale 6,599 5,090 30 %
Loans 5,151,984 4,340,900 19 %
Less allowance for loan losses (53,892) (45,145) 19 %
Loans, net 5,098,092 4,295,755 19 %
Premises and equipment, net 46,407 20,989 121 %
Goodwill and other identifiable intangible assets 14,924 15,239 (2)%
Other assets 177,532 148,116 20 %
Total assets $6,336,165 $5,378,599 18 %
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing $1,292,440 $1,070,275 21 %
Interest-bearing 4,069,092 3,269,472 24 %
Total deposits 5,361,532 4,339,747 24 %
Federal funds purchased 358,241 497,885 (28)%
Other borrowings 55,169 55,543 (1)%
Other liabilities 16,075 14,484 11 %
Total liabilities 5,791,017 4,907,659 18 %
Stockholders' equity:
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
(liquidation preference $1,000), net of discount; no shares authorized or outstanding
at March 31, 2017 and 2016 - - - %
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
March 31, 2017, and 1,000,000 authorized and 960,000 undesignated at March 31, 2016 - - - %
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 52,8712,396 shares
issued and outstanding at March 31, 2017, and 52,365,396 shares issued and outstanding at
March 31, 2016 (1) 53 53 - %
Additional paid-in capital 217,195 215,932 1 %
Retained earnings 327,029 307,151 6 %
Accumulated other comprehensive income 369 (624) (159)%
Noncontrolling interest 502 377 33 %
Total stockholders' equity 545,148 522,889 4 %
Total liabilities and stockholders' equity $6,336,165 $6,370,448 (1)%
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
Three Months Ended March 31,
2017 2016
Interest income:
Interest and fees on loans $55,556 $47,247
Taxable securities 2,087 1,269
Nontaxable securities 765 858
Federal funds sold 519 73
Other interest and dividends 590 514
Total interest income 59,517 49,961
Interest expense:
Deposits 5,982 4,361
Borrowed funds 1,483 1,421
Total interest expense 7,465 5,782
Net interest income 52,052 44,179
Provision for loan losses 4,986 2,059
Net interest income after provision for loan losses 47,066 42,120
Non-interest income:
Service charges on deposit accounts 1,354 1,307
Mortgage banking 899 668
Increase in cash surrender value life insurance 724 624
Other operating income 1,569 836
Total non-interest income 4,546 3,435
Non-interest expense:
Salaries and employee benefits 11,713 11,067
Equipment and occupancy expense 2,250 1,985
Professional services 771 738
FDIC and other regulatory assessments 997 750
Other real estate owned expense 76 449
Other operating expense 5,460 4,301
Total non-interest expense 21,267 19,290
Income before income tax 30,345 26,265
Provision for income tax 7,826 6,309
Net income 22,519 19,956
Dividends on preferred stock - -
Net income available to common stockholders $22,519 $19,956
Basic earnings per common share (1) $0.43 $0.38
Diluted earnings per common share (1) $0.42 $0.38
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.


LOANS BY TYPE (UNAUDITED)
(In thousands)
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016
Commercial, financial and agricultural $2,061,503 $1,982,267 $1,885,315 $1,892,870 $1,799,132
Real estate - construction 345,777 335,085 292,721 251,144 254,254
Real estate - mortgage:
Owner-occupied commercial 1,262,578 1,171,719 1,138,308 1,117,514 1,055,852
1-4 family mortgage 554,261 536,805 520,394 494,733 458,032
Other mortgage 872,955 830,683 740,127 725,336 723,542
Subtotal: Real estate - mortgage 2,689,794 2,539,207 2,398,829 2,337,583 2,237,426
Consumer 54,910 55,211 54,957 54,741 50,088
Total loans $5,151,984 $4,911,770 $4,631,822 $4,536,338 $4,340,900


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016
Allowance for loan losses:
Beginning balance $51,893 $48,933 $46,998 $45,145 $43,419
Loans charged off:
Commercial financial and agricultural 2,855 1,059 1,270 1,412 50
Real estate - construction - - 79 355 381
Real estate - mortgage 266 45 144 191 -
Consumer 75 82 81 31 18
Total charge offs 3,196 1,186 1,574 1,989 449
Recoveries:
Commercial financial and agricultural 190 10 35 1 3
Real estate - construction 16 12 9 39 16
Real estate - mortgage 2 46 1 2 97
Consumer 1 3 - - -
Total recoveries 209 71 45 42 116
Net charge-offs 2,987 1,115 1,529 1,947 333
Provision for loan losses 4,986 4,075 3,464 3,800 2,059
Ending balance $53,892 $51,893 $48,933 $46,998 $45,145
Allowance for loan losses to total loans 1.05 % 1.06% 1.05 % 1.04 % 1.04 %
Allowance for loan losses to total average
loans 1.08 % 1.10% 1.07 % 1.06 % 1.06 %
Net charge-offs to total average loans 0.24 % 0.09% 0.13 % 0.18 % 0.03 %
Provision for loan losses to total average
loans 0.40 % 0.34% 0.30 % 0.34 % 0.20 %
Nonperforming assets:
Nonaccrual loans $12,084 $10,624 $6,647 $4,730 $6,133
Loans 90+ days past due and accruing 16 6,263 43 423 417
Other real estate owned and
repossessed assets 5,102 4,988 3,035 4,260 4,044
Total $17,202 $21,875 $9,725 $9,413 $10,594
Nonperforming loans to total loans 0.23 % 0.34% 0.14 % 0.11 % 0.15 %
Nonperforming assets to total assets 0.27 % 0.34% 0.16 % 0.17 % 0.20 %
Nonperforming assets to earning assets 0.28 % 0.35% 0.16 % 0.17 % 0.20 %
Reserve for loan losses to nonaccrual loans 445.98 % 488.45% 736.17 % 993.62 % 736.10 %
Restructured accruing loans $536 $558 $6,738 $6,753 $6,763
Restructured accruing loans to total loans 0.01 % 0.01% 0.14 % 0.15 % 0.16 %
TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
(In thousands)
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016
Beginning balance: $7,292 $6,738 $6,753 $6,763 $7,736
Net (paydowns) / advances (23) 554 (15) (10) (19)
Transfers to other real estate owned - - - - (954)
$7,269 $7,292 $6,738 $6,753 $6,763


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
1st Quarter
2017
4th Quarter
2016
3rd Quarter
2016
2nd Quarter
2016
1st Quarter
2016
Interest income:
Interest and fees on loans $55,556 $52,533 $51,598 $49,210 $47,247
Taxable securities 2,087 1,604 1,107 1,238 1,269
Nontaxable securities 765 785 823 834 858
Federal funds sold 519 377 347 210 73
Other interest and dividends 590 901 816 558 514
Total interest income 59,517 56,200 54,691 52,050 49,961
Interest expense:
Deposits 5,982 5,817 5,358 4,611 4,361
Borrowed funds 1,483 1,274 1,415 1,548 1,421
Total interest expense 7,465 7,091 6,773 6,159 5,782
Net interest income 52,052 49,109 47,918 45,891 44,179
Provision for loan losses 4,986 4,075 3,464 3,800 2,059
Net interest income after provision for loan losses 47,066 45,034 44,454 42,091 42,120
Non-interest income:
Service charges on deposit accounts 1,354 1,375 1,367 1,306 1,307
Mortgage banking 899 1,044 1,112 901 668
Securities gains - - - (3) -
Increase in cash surrender value life insurance 724 745 770 655 624
Other operating income 1,569 2,875 1,542 988 836
Total non-interest income 4,546 6,039 4,791 3,847 3,435
Non-interest expense:
Salaries and employee benefits 11,713 11,197 10,958 10,733 11,067
Equipment and occupancy expense 2,250 1,877 2,100 2,023 1,985
Professional services 771 1,058 1,182 999 738
FDIC and other regulatory assessments 997 1,072 775 803 750
Other real estate owned expense 76 91 178 41 449
Other operating expense 5,460 6,742 4,969 4,905 4,301
Total non-interest expense 21,267 22,037 20,162 19,504 19,290
Income before income tax 30,345 29,036 29,083 26,434 26,265
Provision for income tax 7,826 7,298 8,174 7,558 6,309
Net income 22,519 21,738 20,909 18,876 19,956
Dividends on preferred stock - 24 - 23 -
Net income available to common stockholders $22,519 $21,714 $20,909 $18,853 $19,956
Basic earnings per common share (1) $0.43 $0.41 $0.40 $0.36 $0.38
Diluted earnings per common share (1) $0.42 $0.40 $0.39 $0.36 $0.38
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016
Average
Balance
Yield /
Rate
Average
Balance
Yield /
Rate
Average
Balance
Yield /
Rate
Average
Balance
Yield /
Rate
Average
Balance
Yield /
Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)
Taxable $4,976,933 4.50% $4,676,565 4.45% $4,554,900 4.47% $4,406,107 4.47% $4,230,057 4.48%
Tax-exempt (2) 27,322 4.72 26,344 4.74 21,939 4.37 16,315 4.54 10,281 5.59
Total loans, net of
unearned income 5,004,255 4.51 4,702,909 4.45 4,576,839 4.47 4,422,422 4.47 4,240,338 4.48
Mortgage loans held for sale 5,637 4.10 6,271 3.36 6,724 3.79 7,323 3.62 6,084 4.63
Debt securities:
Taxable 368,349 2.27 295,608 2.17 224,825 2.19 208,113 2.38 221,722 2.29
Tax-exempt (2) 132,578 3.45 134,748 3.54 135,272 3.73 135,954 3.73 137,763 3.79
Total securities (3) 500,927 2.58 430,356 2.60 360,097 2.77 344,067 2.91 359,485 2.86
Federal funds sold 234,460 0.90 242,211 0.62 217,158 0.64 144,206 0.59 48,390 0.61
Restricted equity securities 1,030 1.57 3,042 8.24 5,658 4.01 5,659 3.62 4,962 3.81
Interest-bearing balances with banks 295,648 0.80 601,143 0.55 590,675 0.51 393,782 0.52 373,339 0.51
Total interest-earning assets 6,041,957 4.03% 5,985,932 3.77% 5,757,151 3.81% 5,317,459 3.97% 5,032,598 4.03%
Non-interest-earning assets:
Cash and due from banks 59,697 55,593 58,809 65,318 61,578
Net premises and equipment 44,739 30,421 25,000 23,241 21,023
Allowance for loan losses, accrued
interest and other assets 138,289 140,721 145,804 127,640 126,491
Total assets $6,284,682 $6,212,667 $5,986,764 $5,533,658 $5,241,690
Interest-bearing liabilities:
Interest-bearing deposits:
Checking $789,273 0.38% $735,115 0.37% $696,100 0.37% $691,776 0.36% $665,039 0.35%
Savings 50,461 0.33 51,845 0.32 43,569 0.30 41,546 0.30 41,055 0.29
Money market 2,694,225 0.58 2,669,513 0.56 2,471,829 0.55 2,105,420 0.52 1,979,727 0.51
Time deposits 530,000 1.02 527,100 1.00 519,653 0.99 498,151 1.01 507,605 1.00
Total interest-bearing deposits 4,063,959 0.60 3,983,573 0.58 3,731,151 0.57 3,336,893 0.56 3,193,426 0.55
Federal funds purchased 359,747 0.86 353,029 0.63 436,415 0.64 505,076 0.64 441,309 0.64
Other borrowings 55,239 5.26 55,315 5.16 55,410 5.15 55,521 5.20 55,630 5.19
Total interest-bearing liabilities 4,478,945 0.68% 4,391,917 0.64% 4,222,976 0.64% 3,897,490 0.64% 3,690,365 0.63%
Non-interest-bearing liabilities:
Non-interest-bearing
demand deposits 1,254,496 1,289,448 1,250,139 1,142,541 1,077,613
Other liabilities 16,809 14,399 14,376 13,301 12,194
Stockholders' equity 535,232 514,245 494,248 475,917 457,218
Unrealized gains on securities and
derivatives (800) 2,658 5,025 4,409 4,300
Total liabilities and
stockholders' equity $6,284,682 $6,212,667 $5,986,764 $5,533,658 $5,241,690
Net interest spread 3.35% 3.13% 3.18% 3.34% 3.40%
Net interest margin 3.53% 3.30% 3.35% 3.51% 3.57%
(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.


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

Source:ServisFirst Bancshares, Inc.