×

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2017

BIRMINGHAM, Ala., July 17, 2017 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2017.

SECOND QUARTER 2017 HIGHLIGHTS:

  • Net income of $24.2 million and diluted EPS of $0.45 for the second quarter of 2017, an increase of 28% and 25%, respectively, year over year
  • Diluted EPS of $0.86 for the six months ended June 30, 2017, an 18% increase year over year
  • Loans and deposits increased 18% and 16%, respectively, year over year
  • Loans increased 16% for the quarter on an annualized basis

Tom Broughton, President and CEO, said, “We are pleased that customer retention and new customer activity is very strong year to date, driving continued EPS growth.” Bud Foshee, CFO, stated, “Higher interest rates have led to margin improvement in the second quarter, as well as a lower efficiency ratio. Based on the June rate increase, we should see further margin improvement in the third quarter.”

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 shares and per share information for prior periods in this release
has been adjusted to give effect to this stock split.
Period Ending
June 30, 2017
Period Ending
March 31, 2017
% Change
From Period
Ending March
31, 2017 to
Period Ending
June 30, 2017
Period Ending
June 30, 2016
% Change
From Period
Ending June
30, 2016 to
Period Ending
June 30, 2017
QUARTERLY OPERATING RESULTS
Net Income $24,164 $22,519 7% $18,876 28%
Net Income Available to Common Stockholders $24,133 $22,519 7% $18,853 28%
Diluted Earnings Per Share $0.45 $0.42 7% $0.36 25%
Return on Average Assets 1.55% 1.45% 1.37%
Return on Average Common Stockholders' Equity 17.36% 17.09% 15.79%
Average Diluted Shares Outstanding 54,100,604 54,133,722 53,452,526
YEAR-TO-DATE OPERATING RESULTS
Net Income $46,683 $38,832 20%
Net Income Available to Common Stockholders $46,652 $38,809 20%
Diluted Earnings Per Share $0.86 $0.73 18%
Return on Average Assets 1.50% 1.45%
Return on Average Common Stockholders' Equity 17.23% 16.57%
Average Diluted Shares Outstanding 54,117,072 53,293,074
BALANCE SHEET
Total Assets $6,329,599 $6,336,165 -% $5,646,055 12%
Loans 5,343,688 5,151,984 4% 4,536,338 18%
Non-interest-bearing Demand Deposits 1,373,353 1,292,440 6% 1,185,668 16%
Total Deposits 5,394,810 5,361,532 1% 4,667,795 16%
Stockholders' Equity 567,086 545,148 4% 489,097 16%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $24.2 million and net income available to common stockholders of $24.1 million for the quarter ended June 30, 2017, compared to net income and net income available to common stockholders of $18.9 million for the same quarter in 2016. Basic and diluted earnings per common share were $0.46 and $0.45, respectively, for the second quarter of 2017, compared to $0.36 and $0.36, respectively, for the second quarter of 2016.

Return on average assets was 1.55% and return on average equity was 17.36% for the second quarter of 2017, compared to 1.37% and 15.79%, respectively, for the second quarter of 2016.

Net interest income was $55.6 million for the second quarter of 2017, compared to $52.1 million for the first quarter of 2017 and $45.9 million for the second quarter of 2016. The net interest margin in the second quarter of 2017 was 3.77%, a 24 basis point increase from the first quarter of 2017 and a 26 basis point increase from the second quarter of 2016. The increase in net interest income on a linked quarter basis is attributable to a $229.7 million increase in average loans outstanding, a $84.0 million increase in non-interest-bearing deposits and a $321.6 million decrease in average federal funds sold and interest-bearing balances with banks, all resulting in a positive mix change in our balance sheet. The average yield on loans increased nine basis points to 4.60% on a linked quarter basis.

Average loans for the second quarter of 2017 were $5.23 billion, an increase of $229.7 million, or 5%, over average loans of $5.00 billion for the first quarter of 2017, and an increase of $811.5 million, or 18%, over average loans of $4.42 billion for the second quarter of 2016.

Average total deposits for the second quarter of 2017 were $5.27 billion, a decrease of $46.8 million, or 1%, over average total deposits of $5.32 billion for the first quarter of 2017, and an increase of $792.2 million, or 18%, over average total deposits of $4.48 billion for the second quarter of 2016.

Non-performing assets to total assets were 0.23% for the second quarter of 2017, a decrease of four basis points compared to 0.27% for the first quarter of 2017 and an increase of six basis points compared to 0.17% for the second quarter of 2016. Net credit charge-offs to average loans were 0.25%, a one basis point increase compared to 0.24% for the first quarter of 2017 and a seven basis point increase compared to 0.18% for the second quarter of 2016. We recorded a $4.4 million provision for loan losses in the second quarter of 2017 compared to $5.0 million in the first quarter of 2017 and $3.8 million in the second quarter of 2016. The allowance for loan loss as a percentage of total loans was 1.03% at June 30, 2017 compared to 1.05% at March 31, 2017 and 1.04% at June 30, 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 by $958,000 during the second quarter of 2017, or 25%, compared to the second quarter of 2016. Mortgage banking revenue increased by $163,000 in the second quarter of 2017, or 18%, compared to the second quarter of 2016. Cash surrender value of life insurance increased to $785,000 during the second quarter of 2017, compared to $655,000 during the second quarter of 2016. Credit card revenue increased $617,000, or 108%, to $1.2 million during the second quarter of 2017, compared to $572,000 during the second quarter of 2016.

Non-interest expense for the second quarter of 2017 increased $2.4 million, or 12%, to $21.9 million from $19.5 million in the second quarter of 2016, and increased $608,000, or 3%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2017 increased $1.3 million, or 12%, to $12.0 million from $10.7 million in the second quarter of 2016, and increased $318,000, or 3%, on a linked quarter basis. Equipment and Occupancy expense increased $242,000, or 12%, to $2.3 million in the second quarter of 2017, from $2.0 million in the second 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. Other operating expense for the second quarter of 2017 increased $729,000, or 15%, to $5.6 million from $4.9 million in the second quarter of 2016. This was primarily the result of higher credit card processing expenses and higher Federal Reserve Bank service charges related to increased correspondent banking activities.

Income tax expense increased $2.4 million, or 32%, to $10.0 million in the second quarter of 2017, compared to $7.6 million in the second 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 $1.4 million in the second quarter of 2017, compared to $1.2 million in the second quarter of 2016. Our effective tax rate for the second quarter of 2017 and 2016 was 29.2% and 28.6%, 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 June 30, 2017 At March 31,
2017
At December
31, 2016
At September
30, 2016
At June 30, 2016
Book value per share - GAAP $10.72 $10.32 $9.93 $9.65 $9.32
Total common stockholders' equity - GAAP 567,086 545,148 522,889 507,886 489,097
Adjustments:
Adjusted for goodwill and core deposit intangible asset 14,855 14,924 14,996 15,073 15,154
Tangible common stockholders' equity - non-GAAP $552,231 $530,224 $507,893 $492,813 $473,943
Tangible book value per share - non-GAAP $10.44 $10.04 $9.65 $9.37 $9.03
Stockholders' equity to total assets - GAAP 8.96% 8.60% 8.21% 8.46% 8.66%
Total assets - GAAP $6,329,599 $6,336,165 $6,370,448 $6,002,621 $5,646,055
Adjustments:
Adjusted for goodwill and core deposit intangible asset 14,855 14,924 14,996 15,073 15,154
Total tangible assets - non-GAAP $6,314,744 $6,321,241 $6,355,452 $5,987,548 $5,630,901
Tangible common equity to total tangible assets - non-GAAP 8.75% 8.39% 7.99% 8.23% 8.42%

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://www.servisfirstbancshares.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://www.servisfirstbancshares.com/ or by calling (205) 949-0302.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
2nd Quarter
2017
1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016
CONSOLIDATED STATEMENT OF INCOME
Interest income $63,538 $59,517 $56,200 $54,691 $52,050
Interest expense 7,971 7,465 7,091 6,773 6,159
Net interest income 55,567 52,052 49,109 47,918 45,891
Provision for loan losses 4,381 4,986 4,075 3,464 3,800
Net interest income after provision for loan losses 51,186 47,066 45,034 44,454 42,091
Non-interest income 4,805 4,546 6,039 4,791 3,847
Non-interest expense 21,875 21,267 22,037 20,162 19,504
Income before income tax 34,116 30,345 29,036 29,083 26,434
Provision for income tax 9,952 7,826 7,298 8,174 7,558
Net income 24,164 22,519 21,738 20,909 18,876
Preferred stock dividends 31 - 24 - 23
Net income available to common stockholders $24,133 $22,519 $21,714 $20,909 $18,853
Earnings per share - basic $0.46 $0.43 $0.41 $0.40 $0.36
Earnings per share - diluted $0.45 $0.42 $0.40 $0.39 $0.36
Average diluted shares outstanding 54,100,604 54,133,722 53,961,160 53,879,328 53,452,526
CONSOLIDATED BALANCE SHEET DATA
Total assets $6,329,599 $6,336,165 $6,370,448 $6,002,621 $5,646,055
Loans 5,343,688 5,151,984 4,911,770 4,631,822 4,536,338
Debt securities 518,065 526,023 447,427 377,270 347,706
Non-interest-bearing demand deposits 1,373,353 1,292,440 1,281,605 1,269,726 1,185,668
Total deposits 5,394,810 5,361,532 5,420,311 5,081,128 4,664,795
Borrowings 55,075 55,169 55,262 55,356 55,450
Stockholders' equity $567,086 $545,148 $522,889 $507,866 $489,097
Shares outstanding 52,909,362 52,812,396 52,636,896 52,610,896 52,503,896
Book value per share $10.72 $10.32 $9.93 $9.65 $9.32
Tangible book value per share (1) $10.44 $10.04 $9.65 $9.37 $9.03
SELECTED FINANCIAL RATIOS
Net interest margin 3.77% 3.53% 3.30% 3.35% 3.51%
Return on average assets 1.55% 1.45% 1.39% 1.39% 1.37%
Return on average common stockholders' equity 17.36% 17.09% 16.71% 16.66% 15.79%
Efficiency ratio 36.23% 37.58% 39.96% 38.25% 39.21%
Non-interest expense to average earning assets 1.47% 1.43% 1.46% 1.39% 1.50%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets 9.72% 9.67% 9.78% 9.91% 9.83%
Tier 1 capital to risk-weighted assets 9.73% 9.68% 9.78% 9.92% 9.84%
Total capital to risk-weighted assets 11.67% 11.66% 11.84% 12.03% 11.98%
Tier 1 capital to average assets 8.88% 8.46% 8.22% 8.20% 8.52%
Tangible common equity to total tangible assets (1) 8.75% 8.39% 7.99% 8.23% 8.42%
(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.


CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
June 30, 2017 June 30, 2016 % Change
ASSETS
Cash and due from banks $71,181 $54,985 29 %
Interest-bearing balances due from depository institutions 134,694 417,703 (68)%
Federal funds sold 49,443 116,038 (57)%
Cash and cash equivalents 255,318 588,726 (57)%
Available for sale debt securities, at fair value 438,808 321,044 37 %
Held to maturity debt securities (fair value of $80,532 and $30,717 at
June 30, 2017 and 2016, respectively) 79,257 29,662 167 %
Restricted equity securities 1,037 5,671 (82)%
Mortgage loans held for sale 5,673 7,933 (28)%
Loans 5,343,688 4,536,338 18 %
Less allowance for loan losses (55,059) (46,998) 17 %
Loans, net 5,288,629 4,489,340 18 %
Premises and equipment, net 51,797 23,221 123 %
Goodwill and other identifiable intangible assets 14,855 15,154 (2)%
Other assets 194,225 165,304 17 %
Total assets $6,329,599 $5,646,055 12 %
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing $1,373,353 $1,185,668 16 %
Interest-bearing 4,021,457 3,482,127 15 %
Total deposits 5,394,810 4,667,795 16 %
Federal funds purchased 300,226 420,430 (29)%
Other borrowings 55,075 55,450 (1)%
Other liabilities 12,402 13,283 (7)%
Total liabilities 5,762,513 5,156,958 12 %
Stockholders' equity:
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
(liquidation preference $1,000), net of discount; no shares authorized,
no shares issued or outstanding at June 30, 2017 and 2016 - - - %
Preferred stock, par value $0.001 per share; 1,000,000 shares authorized and
undesignated at June 30, 2017 and 2016 - - - %
Common stock, par value $0.001 per share; 100,000,000 shares authorized;
52,909,362 shares issued and outstanding at June 30, 2017 and 52,503,896
shares issued and outstanding at June 30, 2016 53 52 2 %
Additional paid-in capital 217,271 214,525 1 %
Retained earnings 348,517 268,739 30 %
Accumulated other comprehensive income 743 5,404 (86)%
Noncontrolling interest 502 377 33 %
Total stockholders' equity 567,086 489,097 16 %
Total liabilities and stockholders' equity $6,329,599 $5,646,055 12 %


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
Interest income:
Interest and fees on loans $59,912 $49,210 $115,468 $96,457
Taxable securities 2,274 1,238 4,361 2,507
Nontaxable securities 752 834 1,517 1,692
Federal funds sold 287 210 806 283
Other interest and dividends 313 558 903 1,072
Total interest income 63,538 52,050 123,055 102,011
Interest expense:
Deposits 6,321 4,633 12,303 8,994
Borrowed funds 1,650 1,526 3,133 2,947
Total interest expense 7,971 6,159 15,436 11,941
Net interest income 55,567 45,891 107,619 90,070
Provision for loan losses 4,381 3,800 9,367 5,859
Net interest income after provision for loan losses 51,186 42,091 98,252 84,211
Non-interest income:
Service charges on deposit accounts 1,382 1,306 2,736 2,613
Mortgage banking 1,064 901 1,963 1,569
Credit card income 1,189 572 2,368 1,041
Securities gains - (3) - (3)
Increase in cash surrender value life insurance 785 655 1,509 1,279
Other operating income 385 416 775 783
Total non-interest income 4,805 3,847 9,351 7,282
Non-interest expense:
Salaries and employee benefits 12,031 10,733 23,744 21,800
Equipment and occupancy expense 2,265 2,023 4,505 4,008
Professional services 808 999 1,579 1,737
FDIC and other regulatory assessments 1,081 803 2,078 1,553
Other real estate owned expense 56 41 132 490
Other operating expense 5,634 4,905 11,104 9,206
Total non-interest expense 21,875 19,504 43,142 38,794
Income before income tax 34,116 26,434 64,461 52,699
Provision for income tax 9,952 7,558 17,778 13,867
Net income 24,164 18,876 46,683 38,832
Dividends on preferred stock 31 23 31 23
Net income available to common stockholders $24,133 $18,853 $46,652 $38,809
Basic earnings per common share $0.46 $0.36 $0.88 $0.74
Diluted earnings per common share $0.45 $0.36 $0.86 $0.73


LOANS BY TYPE (UNAUDITED)
(In thousands)
2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016
Commercial, financial and agricultural $2,123,498 $2,061,503 $1,982,267 $1,885,315 $1,892,870
Real estate - construction 395,398 345,777 335,085 292,721 251,144
Real estate - mortgage:
Owner-occupied commercial 1,272,659 1,262,578 1,171,719 1,138,308 1,117,514
1-4 family mortgage 565,121 554,261 536,805 520,394 494,733
Other mortgage 931,788 872,955 830,683 740,127 725,336
Subtotal: Real estate - mortgage 2,769,568 2,689,794 2,539,207 2,398,829 2,337,583
Consumer 55,224 54,910 55,211 54,957 54,741
Total loans $5,343,688 $5,151,984 $4,911,770 $4,631,822 $4,536,338


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016
Allowance for loan losses:
Beginning balance $53,892 $51,893 $48,933 $46,998 $45,145
Loans charged off:
Commercial, financial and agricultural 3,067 2,855 1,059 1,270 1,412
Real estate - construction 40 - - 79 355
Real estate - mortgage 106 266 45 144 191
Consumer 33 75 82 81 31
Total charge offs 3,246 3,196 1,186 1,574 1,989
Recoveries:
Commercial, financial and agricultural 16 190 10 35 1
Real estate - construction 14 16 12 9 39
Real estate - mortgage 2 2 46 1 2
Consumer - 1 3 - -
Total recoveries 32 209 71 45 42
Net charge-offs 3,214 2,987 1,115 1,529 1,947
Provision for loan losses 4,381 4,986 4,075 3,464 3,800
Ending balance $55,059 $53,892 $51,893 $48,933 $46,998
Allowance for loan losses to total loans 1.03 % 1.05 % 1.06 % 1.05 % 1.04 %
Allowance for loan losses to total average
loans 1.05 % 1.08 % 1.10 % 1.07 % 1.06 %
Net charge-offs to total average loans 0.25 % 0.24 % 0.09 % 0.13 % 0.18 %
Provision for loan losses to total average
loans 0.34 % 0.40 % 0.34 % 0.30 % 0.34 %
Nonperforming assets:
Nonaccrual loans $9,963 $12,084 $10,624 $6,647 $4,730
Loans 90+ days past due and accruing 1,016 16 6,263 43 423
Other real estate owned and
repossessed assets 3,891 5,102 4,988 3,035 4,260
Total $14,870 $17,202 $21,875 $9,725 $9,413
Nonperforming loans to total loans 0.21 % 0.23 % 0.34 % 0.14 % 0.11 %
Nonperforming assets to total assets 0.23 % 0.27 % 0.34 % 0.16 % 0.17 %
Nonperforming assets to earning assets 0.24 % 0.28 % 0.35 % 0.16 % 0.17 %
Reserve for loan losses to nonaccrual loans 552.63 % 445.98 % 488.45 % 736.17 % 993.62 %
Restructured accruing loans $12,716 $536 $558 $6,738 $6,753
Restructured accruing loans to total loans 0.24 % 0.01 % 0.01 % 0.14 % 0.15 %
TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
(In thousands)
2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016
Beginning balance: $7,269 $7,292 $6,738 $6,753 $6,763
Additions 12,716 - - - -
Removal from TDR (535) - - - -
Net (paydowns) / advances (1,380) (23) 554 (15) (10)
Charge-offs (1,700) - - - -
$16,370 $7,269 $7,292 $6,738 $6,753


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
2nd Quarter
2017
1st Quarter
2017
4th Quarter
2016
3rd Quarter
2016
2nd Quarter
2016
Interest income:
Interest and fees on loans $59,912 $55,556 $52,533 $51,598 $49,210
Taxable securities 2,274 2,087 1,604 1,107 1,238
Nontaxable securities 752 765 785 823 834
Federal funds sold 287 519 377 347 210
Other interest and dividends 313 590 901 816 558
Total interest income 63,538 59,517 56,200 54,691 52,050
Interest expense:
Deposits 6,321 5,982 5,817 5,358 4,611
Borrowed funds 1,650 1,483 1,274 1,415 1,548
Total interest expense 7,971 7,465 7,091 6,773 6,159
Net interest income 55,567 52,052 49,109 47,918 45,891
Provision for loan losses 4,381 4,986 4,075 3,464 3,800
Net interest income after provision for loan losses 51,186 47,066 45,034 44,454 42,091
Non-interest income:
Service charges on deposit accounts 1,382 1,354 1,375 1,367 1,306
Mortgage banking 1,064 899 1,044 1,112 901
Credit card income 1,189 1,179 1,052 1,114 572
Securities gains - - - - (3)
Increase in cash surrender value life insurance 785 724 745 770 655
Other operating income 385 390 1,823 428 416
Total non-interest income 4,805 4,546 6,039 4,791 3,847
Non-interest expense:
Salaries and employee benefits 12,031 11,713 11,197 10,958 10,733
Equipment and occupancy expense 2,265 2,250 1,877 2,100 2,023
Professional services 808 771 1,058 1,182 999
FDIC and other regulatory assessments 1,081 997 1,072 775 803
Other real estate owned expense 56 76 91 178 41
Other operating expense 5,634 5,460 6,742 4,969 4,905
Total non-interest expense 21,875 21,267 22,037 20,162 19,504
Income before income tax 34,116 30,345 29,036 29,083 26,434
Provision for income tax 9,952 7,826 7,298 8,174 7,558
Net income 24,164 22,519 21,738 20,909 18,876
Dividends on preferred stock 31 - 24 - 23
Net income available to common stockholders $24,133 $22,519 $21,714 $20,909 $18,853
Basic earnings per common share $0.46 $0.43 $0.41 $0.40 $0.36
Diluted earnings per common share $0.45 $0.42 $0.40 $0.39 $0.36


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
2nd Quarter 2017 1st Quarter 2017 4th Quarter 2016 3rd Quarter 2016 2nd 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 $5,192,812 4.60% $4,976,933 4.50% $4,676,565 4.45% $4,554,900 4.47% $4,406,107 4.47%
Tax-exempt (2) 41,143 4.92 27,322 4.72 26,344 4.74 21,939 4.37 16,315 4.54
Total loans, net of
unearned income 5,233,955 4.60 5,004,255 4.51 4,702,909 4.45 4,576,839 4.47 4,422,422 4.47
Mortgage loans held for sale 5,958 3.90 5,637 4.10 6,271 3.36 6,724 3.79 7,323 3.62
Debt securities:
Taxable 389,505 2.34 368,349 2.27 295,608 2.17 224,825 2.19 208,113 2.38
Tax-exempt (2) 133,590 3.38 132,578 3.45 134,748 3.54 135,272 3.73 135,954 3.73
Total securities (3) 523,095 2.60 500,927 2.58 430,356 2.60 360,097 2.77 344,067 2.91
Federal funds sold 98,598 1.17 234,460 0.90 242,211 0.62 217,158 0.64 144,206 0.59
Restricted equity securities 1,030 10.51 1,030 1.57 3,042 8.24 5,658 4.01 5,659 3.62
Interest-bearing balances with banks 109,909 1.04 295,648 0.80 601,143 0.55 590,675 0.51 393,782 0.52
Total interest-earning assets $5,972,545 4.30% $6,041,957 4.03% $5,985,932 3.77% $5,757,151 3.81% $5,317,459 3.97%
Non-interest-earning assets:
Cash and due from banks 68,894 59,697 55,593 58,809 65,318
Net premises and equipment 49,813 44,739 30,421 25,000 23,241
Allowance for loan losses, accrued
interest and other assets 143,286 138,289 140,721 145,804 127,640
Total assets $6,234,538 $6,284,682 $6,212,667 $5,986,764 $5,533,658
Interest-bearing liabilities:
Interest-bearing deposits:
Checking $779,916 0.39% $789,273 0.38% $735,115 0.37% $696,100 0.37% $691,776 0.36%
Savings 48,150 0.30 50,461 0.33 51,845 0.32 43,569 0.30 41,546 0.30
Money market 2,567,817 0.64 2,694,225 0.58 2,669,513 0.56 2,471,829 0.55 2,105,420 0.52
Time deposits 537,220 1.06 530,000 1.02 527,100 1.00 519,653 0.99 498,151 1.01
Total interest-bearing deposits 3,933,103 0.64 4,063,959 0.60 3,983,573 0.58 3,731,151 0.57 3,336,893 0.56
Federal funds purchased 336,344 1.11 359,747 0.86 353,029 0.63 436,415 0.64 505,076 0.64
Other borrowings 55,130 5.22 55,239 5.26 55,315 5.16 55,410 5.15 55,521 5.20
Total interest-bearing liabilities $4,324,577 0.74% $4,478,945 0.68% $4,391,917 0.64% $4,222,976 0.64% $3,897,490 0.64%
Non-interest-bearing liabilities:
Non-interest-bearing
demand 1,338,514 1,254,496 1,289,448 1,250,139 1,142,541
Other liabilities 13,739 16,809 14,399 14,376 13,301
Stockholders' equity 556,521 535,232 514,245 494,248 475,917
Unrealized gains on securities and
derivatives 1,187 (800) 2,658 5,025 4,409
Total liabilities and
stockholders' equity $6,234,538 $6,284,682 $6,212,667 $5,986,764 $5,533,658
Net interest spread 3.56% 3.35% 3.13% 3.17% 3.33%
Net interest margin 3.77% 3.53% 3.30% 3.35% 3.51%


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

Source:ServisFirst Bancshares, Inc.