ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced
earnings and operating results for the quarter ended September 30,
2023.
Third Quarter 2023 Highlights:
- Reached milestone of $16.0 billion in total assets, a 9.9%
increase year-to-date.
- $13.1 billion in total deposits, a 7% increase from second
quarter 2023 and a 13.8% increase year-to-date.
- $2.0 billion in cash on hand with no FHLB advances or
brokered deposits.
- Diluted net income per share of $0.98 for the
quarter.
- Book value per share of $25.75, up 7.6% year-to-date and
12.6% from the third quarter of 2022.
- Loans grew $362.5 million, or 3%, from the third quarter of
2022. Our loan pipeline is improving.
- An increase of 19% in new deposit accounts opened
year-over-year.
- Credit quality continues to be strong with non-performing
assets to total assets of 0.15%.
- Consolidated Common Equity Tier 1 capital to risk-weighted
assets increased from 9.42% to 10.69% year-over-year.
Tom Broughton, Chairman, President and CEO, said, “We are proud
to reach the $16 billion in assets milestone in the quarter, with
current cash exceeding $2 billion and no FHLB advances or brokered
deposits. We believe this gives our bank a significant competitive
advantage.”
Bud Foshee, CFO, said, “We continue to see strong asset quality
with record low past dues, while loan pipelines and activity are
beginning to rebuild, which should improve profitability in coming
quarters.”
FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share
amounts)
Period Ending September 30,
2023
Period Ending June 30, 2023
% Change From Period Ending June
30, 2023 to Period Ending September 30, 2023
Period Ending September 30,
2022
% Change From Period Ending
September 30, 2022 to Period Ending September 30, 2023
QUARTERLY OPERATING RESULTS
Net Income
$
53,340
$
53,468
-
%
$
64,031
(17
)
%
Net Income Available to Common
Stockholders
$
53,340
$
53,437
-
%
$
64,031
(17
)
%
Diluted Earnings Per Share
$
0.98
$
0.98
-
%
$
1.17
(17
)
%
Return on Average Assets
1.37
%
1.50
%
1.77
%
Return on Average Common Stockholders'
Equity
15.12
%
15.85
%
20.49
%
Average Diluted Shares Outstanding
54,530,635
54,527,317
54,546,682
YEAR-TO-DATE OPERATING RESULTS
Net Income
$
164,779
$
183,780
(10
)
%
Net Income Available to Common
Stockholders
$
164,748
$
183,749
(10
)
%
Diluted Earnings Per Share
$
3.02
$
3.37
(10
)
%
Return on Average Assets
1.50
%
1.64
%
Return on Average Common Stockholders'
Equity
16.23
%
20.43
%
Average Diluted Shares Outstanding
54,530,797
54,533,793
BALANCE SHEET
Total Assets
$
16,044,332
$
15,072,808
6
%
$
13,890,030
16
%
Loans
11,641,130
11,604,894
-
%
11,278,614
3
%
Non-interest-bearing Demand Deposits
2,621,072
2,855,102
(8
)
%
3,661,936
(28
)
%
Total Deposits
13,142,376
12,288,219
7
%
11,051,915
19
%
Stockholders' Equity
1,401,384
1,363,471
3
%
1,242,589
13
%
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income
available to common stockholders of $53.3 million for the quarter
ended September 30, 2023, compared to net income of $53.5 million
and net income available to common stockholders of $53.4 million
for the second quarter of 2023 and net income and net income
available to common stockholders of $64.0 million for the third
quarter of 2022. Basic and diluted earnings per common share were
both $0.98 in the third quarter of 2023, compared to $0.98 for both
in the second quarter of 2023 and $1.18 and $1.17, respectively, in
the third quarter of 2022.
Annualized return on average assets was 1.37% and annualized
return on average common stockholders’ equity was 15.12% for the
third quarter of 2023, compared to 1.77% and 20.49%, respectively,
for the third quarter of 2022.
Net interest income was $99.7 million for the third quarter of
2023, compared to $101.3 million for the second quarter of 2023 and
$126.4 million for the third quarter of 2022. Net interest income
was negatively impacted by the continued narrowing in net interest
spread due to Federal Reserve increases in interest rates over the
last year. The net interest margin in the third quarter of 2023 was
2.64% compared to 2.93% in the second quarter of 2023 and 3.64% in
the third quarter of 2022. Loan yields were 6.13% during the third
quarter of 2023 compared to 5.94% during the second quarter of 2023
and 4.77% during the third quarter of 2022. Investment yields were
3.07% during the third quarter of 2023 compared to 2.64% during the
second quarter of 2023 and 2.47% during the third quarter of 2022.
Average interest-bearing deposit rates were 3.84% during the third
quarter of 2023, compared to 3.32% during the second quarter of
2023 and 0.76% during the third quarter of 2022. Average federal
funds purchased rates were 5.43% during third quarter of 2023,
compared to 5.14% during the second quarter of 2023 and 2.27%
during the third quarter of 2022.
Average loans for the third quarter of 2023 were $11.56 billion,
a decrease of $36.3 million, or 1.2% annualized, from average loans
of $11.60 billion for the second quarter of 2023, and an increase
of $643.1 million, or 5.9%, from average loans of $10.92 billion
for the third quarter of 2022.
Average total deposits for the third quarter of 2023 were $12.68
billion, an increase of $1.10 billion, or 37.5% annualized, over
average total deposits of $11.58 billion for the second quarter of
2023, and an increase of $1.15 billion, or 9.9%, from average total
deposits of $11.53 billion for the third quarter of 2022.
Non-performing assets to total assets were 0.15% for the third
quarter of 2023, compared to 0.16% for the second quarter of 2023
and 0.13% for the third quarter of 2022. Annualized net charge-offs
to average loans were 0.15% for the third quarter of 2023, compared
to 0.11% for both the second quarter of 2023 and third quarter of
2022. The allowance for credit losses as a percentage of total
loans at September 30, 2023, June 30, 2023, and September 30, 2022,
was 1.31%, 1.31%, and 1.25%, respectively. We recorded a $4.3
million provision for credit losses in the third quarter of 2023
compared to $6.7 million in the second quarter of 2023, and $15.6
million in the third quarter of 2022.
Non-interest income decreased $804,000, or 9.0%, to $8.1 million
for the third quarter of 2023 from $8.9 million in the third
quarter of 2022, and decreased $447,000, or 5.2%, on a linked
quarter basis. Service charges on deposit accounts increased
$271,000, or 14.3%, to $2.2 million from the third quarter of 2022
to the third quarter of 2023, and increased $21,000, or 1.0%, on a
linked quarter basis. Mortgage banking revenue increased $41,000,
or 5.2%, to $825,000 from the third quarter of 2022 to the third
quarter of 2023, and increased $129,000, or 18.5%, on a linked
quarter basis. Net credit card revenue decreased $80,000, or 3.1%,
to $2.5 million during the third quarter of 2023, compared to $2.6
million during the third quarter of 2022, and increased $126,000,
or 5.2%, on a linked quarter basis. The aggregate amount of spend
on all credit card accounts decreased 2.0% during the third quarter
of 2023 compared to the third quarter of 2022. Bank-owned life
insurance (“BOLI”) income increased $181,000, or 11.1%, to $1.8
million during the third quarter of 2023, compared to $1.6 million
during the third quarter of 2022, and decreased $678,000, or 27.2%,
on a linked quarter basis. During the second quarter of 2023, we
recognized $890,000 of income primarily attributed to a death
benefit related to a former employee in our BOLI program. Other
operating income for the third quarter of 2023 decreased $1.2
million, or 60.4%, to $797,000 from $2.0 million in the third
quarter of 2022, and decreased $45,000, or 5.3%, on a linked
quarter basis. We recognized $1.3 million of income on an interest
rate cap during the third quarter of 2022. The interest rate cap
matured during the second quarter of 2023. Merchant service revenue
increased $125,000, or 26.7%, to $594,000 for the third quarter of
2023 from $468,000 in the third quarter of 2022.
Non-interest expense for the third quarter of 2023 decreased
$1.0 million, or 2.4%, to $41.7 million from $42.7 million in the
third quarter of 2022, and increased $3.2 million, or 8.3%, on a
linked quarter basis. Salary and benefit expense for the third
quarter of 2023 increased $393,000, or 2.0%, to $20.1 million from
$19.7 million in the third quarter of 2022, and increased $1.3
million, or 6.8%, on a linked quarter basis. The increase in the
linked quarter is primarily attributed to higher incentive
accruals. The number of FTE employees increased by 10 to 568 at
September 30, 2023 compared to 558 at September 30, 2022, and
decreased by 9 from the end of the second quarter of 2023.
Equipment and occupancy expense increased $439,000, or 14.0%, to
$3.6 million in the third quarter of 2023, from $3.1 million in the
third quarter of 2022, and increased $158,000, or 4.6% on a
linked-quarter basis. The year-over-year increase is primarily
attributed to new leases that began after the third quarter of
2022. Third party processing and other services expense decreased
$664,000, or 9.2%, to $6.5 million in the third quarter of 2023,
from $7.2 million in the third quarter of 2022, and increased
$351,000, or 5.7%, on a linked-quarter basis. Professional services
expense increased $229,000, or 22.1%, to $1.3 million in the third
quarter of 2023, from $1.0 million in the third quarter of 2022.
FDIC and other regulatory assessments increased $1.4 million to
$2.3 million in the third quarter of 2023, from $975,000 in the
third quarter of 2022, and increased $104,000, or 4.6%, on a linked
quarter basis. The FDIC increased the assessment rate by two basis
points beginning in the first quarter of 2023. Other operating
expenses for the third quarter of 2023 decreased $2.8 million, or
26.3%, to $7.8 million from $10.6 million in the third quarter of
2022, and increased $1.6 million, or 25.7%, on a linked-quarter
basis. During the third quarter of 2022 we reached a preliminary
settlement on a lawsuit and wrote down the value of a private
investment resulting in charges of $3.1 million, or $2.4 million
net of income tax. The efficiency ratio was 38.64% during the third
quarter of 2023 compared to 31.54% during the third quarter of 2022
and 35.02% during the second quarter of 2023.
Income tax expense decreased $4.5 million, or 34.4%, to $8.5
million in the third quarter of 2023, compared to $13.0 million in
the third quarter of 2022, mostly due to lower pretax net income.
Our effective tax rate was 13.81% for the third quarter of 2023
compared to 16.92% for the third quarter of 2022. We recognized an
aggregate of $3.7 million in credits during the third quarter of
2023 related to investments in tax credit partnerships, compared to
$3.1 million during the third quarter of 2022. We did not recognize
a reduction in provision for income taxes resulting from excess tax
benefits from the exercise and vesting of stock options and
restricted stock during the third quarter of 2023, compared to
$370,000 during the third quarter of 2022.
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 Alabama, Florida, Georgia,
North and South Carolina, Tennessee, and Virginia. We also operate
loan production offices in Florida and North Carolina. Through the
bank, we originate commercial, consumer and other loans and accept
deposits, provide electronic banking services, such as online and
mobile banking, including remote deposit capture, deliver treasury
and cash management services and provide correspondent banking
services to other financial institutions.
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 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,”
“could,” “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, but not
limited to: 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 as a result of our reclassification as a
large financial institution by the FDIC; changes in our loan
portfolio and the deposit base; credit issues associated with the
efficacy of return to office policies; possible changes in laws and
regulations and governmental monetary and fiscal policies,
including, but not limited to, the Federal Reserve policies in
connection with continued inflationary pressures and the ability of
the U.S. Congress to increase the U.S. statutory debt limit as
needed; 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, in our
Quarterly Reports on Form 10-Q for fiscal year 2023, 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 www.servisfirstbancshares.com or by
calling (205) 949-0302.
SELECTED FINANCIAL HIGHLIGHTS
(UNAUDITED)
(In thousands except share and per share
data)
3rd Quarter 2023
2nd Quarter 2023
1st Quarter 2023
4th Quarter 2022
3rd Quarter 2022
CONSOLIDATED STATEMENT OF INCOME
Interest income
$
213,206
$
189,656
$
181,322
$
170,273
$
149,299
Interest expense
113,508
88,405
73,021
47,889
22,881
Net interest income
99,698
101,251
108,301
122,384
126,418
Provision for credit losses
4,282
6,654
4,197
7,135
15,603
Net interest income after provision for
credit losses
95,416
94,597
104,104
115,249
110,815
Non-interest income
8,135
8,582
6,321
6,966
8,939
Non-interest expense
41,663
38,466
39,664
38,092
42,685
Income before income tax
61,888
64,713
70,761
84,123
77,069
Provision for income tax
8,548
11,245
12,790
16,399
13,038
Net income
53,340
53,468
57,971
67,724
64,031
Preferred stock dividends
-
31
-
31
-
Net income available to common
stockholders
$
53,340
$
53,437
$
57,971
$
67,693
$
64,031
Earnings per share - basic
$
0.98
$
0.98
$
1.07
$
1.25
$
1.18
Earnings per share - diluted
$
0.98
$
0.98
$
1.06
$
1.24
$
1.17
Average diluted shares outstanding
54,530,635
54,527,317
54,534,482
54,537,716
54,546,682
CONSOLIDATED BALANCE SHEET DATA
Total assets
$
16,044,332
$
15,072,808
$
14,566,559
$
14,595,753
$
13,890,030
Loans
11,641,130
11,604,894
11,629,802
11,687,968
11,278,614
Debt securities
1,878,701
2,048,227
1,646,937
1,678,936
1,714,603
Non-interest-bearing demand deposits
2,621,072
2,855,102
2,898,736
3,321,347
3,661,936
Total deposits
13,142,376
12,288,219
11,615,317
11,546,805
11,051,915
Borrowings
64,751
64,737
65,417
64,726
64,721
Stockholders' equity
1,401,384
1,363,471
1,339,817
1,297,896
1,242,589
Shares outstanding
54,425,447
54,425,033
54,398,025
54,326,527
54,324,007
Book value per share
$
25.75
$
25.05
$
24.63
$
23.89
$
22.87
Tangible book value per share (1)
$
25.50
$
24.80
$
24.38
$
23.64
$
22.62
SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin
2.64
%
2.93
%
3.15
%
3.52
%
3.64
%
Return on average assets
1.37
%
1.50
%
1.63
%
1.89
%
1.77
%
Return on average common stockholders'
equity
15.12
%
15.85
%
17.83
%
21.27
%
20.49
%
Efficiency ratio
38.64
%
35.02
%
34.60
%
29.45
%
31.54
%
Non-interest expense to average earning
assets
1.10
%
1.11
%
1.15
%
1.10
%
1.23
%
CAPITAL RATIOS (2)
Common equity tier 1 capital to
risk-weighted assets
10.69
%
10.37
%
10.01
%
9.55
%
9.42
%
Tier 1 capital to risk-weighted assets
10.69
%
10.38
%
10.02
%
9.55
%
9.43
%
Total capital to risk-weighted assets
12.25
%
11.94
%
11.54
%
11.03
%
10.96
%
Tier 1 capital to average assets
9.35
%
9.83
%
9.49
%
9.29
%
8.84
%
Tangible common equity to total tangible
assets (1)
8.66
%
8.96
%
9.11
%
8.81
%
8.86
%
(1) This press release also 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 associated with our acquisition of Metro
Bancshares, Inc. in January 2015.
(2) Regulatory capital ratios for most
recent period are preliminary.
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 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 September 30, 2023
At June 30, 2023
At March 31, 2023
At December 31, 2022
At September 30, 2022
Book value per share - GAAP
$
25.75
$
25.05
$
24.63
$
23.89
$
22.87
Total common stockholders' equity -
GAAP
1,401,384
1,363,471
1,339,817
1,297,896
1,242,589
Adjustment for Goodwill
(13,615
)
(13,615
)
(13,615
)
(13,615
)
(13,615
)
Tangible common stockholders' equity -
non-GAAP
$
1,387,769
$
1,349,856
$
1,326,202
$
1,284,281
$
1,228,974
Tangible book value per share -
non-GAAP
$
25.50
$
24.80
$
24.38
$
23.64
$
22.62
Stockholders' equity to total assets -
GAAP
8.73
%
9.05
%
9.20
%
8.89
%
8.95
%
Total assets - GAAP
$
16,044,332
$
15,072,808
$
14,566,559
$
14,595,753
$
13,890,030
Adjustment for Goodwill
(13,615
)
(13,615
)
(13,615
)
(13,615
)
(13,615
)
Total tangible assets - non-GAAP
$
16,030,717
$
15,059,193
$
14,552,944
$
14,582,138
$
13,876,415
Tangible common equity to total tangible
assets - non-GAAP
8.66
%
8.96
%
9.11
%
8.81
%
8.86
%
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands)
September 30, 2023
September 30, 2022
% Change
ASSETS
Cash and due from banks
$
112,150
$
249,051
(55
)
%
Interest-bearing balances due from
depository institutions
1,861,924
156,959
1,086
%
Federal funds sold
91,035
82,316
11
%
Cash and cash equivalents
2,065,109
488,326
323
%
Available for sale debt securities, at
fair value
834,802
665,763
25
%
Held to maturity debt securities (fair
value of $933,006 and $942,282, respectively)
1,043,899
1,048,840
-
%
Restricted equity securities
10,226
7,734
32
%
Mortgage loans held for sale
6,333
2,003
216
%
Loans
11,641,130
11,278,614
3
%
Less allowance for credit losses
(152,247
)
(140,967
)
8
%
Loans, net
11,488,883
11,137,647
3
%
Premises and equipment, net
59,516
59,080
1
%
Goodwill and other identifiable intangible
assets
13,615
13,615
-
%
Other assets
521,949
467,022
12
%
Total assets
$
16,044,332
$
13,890,030
16
%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing
$
2,621,072
$
3,661,936
(28
)
%
Interest-bearing
10,521,304
7,389,979
42
%
Total deposits
13,142,376
11,051,915
19
%
Federal funds purchased
1,370,289
1,466,322
(7
)
%
Other borrowings
64,751
64,721
-
%
Other liabilities
65,532
64,483
2
%
Total liabilities
14,642,948
12,647,441
16
%
Stockholders' equity:
Preferred stock, par value $0.001 per
share; 1,000,000 authorized and undesignated at
September 30, 2023 and September 30,
2022
-
-
-
%
Common stock, par value $0.001 per share;
200,000,000 shares authorized; 54,425,447 shares
issued and outstanding at September 30,
2023, and 54,324,007
shares issued and outstanding at September
30, 2022
54
54
-
%
Additional paid-in capital
231,588
228,738
1
%
Retained earnings
1,229,080
1,057,387
16
%
Accumulated other comprehensive loss
(59,838
)
(44,090
)
36
%
Total stockholders' equity attributable to
ServisFirst Bancshares, Inc.
1,400,884
1,242,089
13
%
Noncontrolling interest
500
500
-
%
Total stockholders' equity
1,401,384
1,242,589
13
%
Total liabilities and stockholders'
equity
$
16,044,332
$
13,890,030
16
%
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Interest income:
Interest and fees on loans
$
178,754
$
131,375
$
514,204
$
345,767
Taxable securities
15,522
11,089
37,987
29,827
Nontaxable securities
15
30
53
110
Federal funds sold
985
632
1,826
738
Other interest and dividends
17,930
6,173
30,114
12,600
Total interest income
213,206
149,299
584,184
389,042
Interest expense:
Deposits
95,901
13,655
223,585
25,925
Borrowed funds
17,607
9,226
51,349
14,609
Total interest expense
113,508
22,881
274,934
40,534
Net interest income
99,698
126,418
309,250
348,508
Provision for credit losses
4,282
15,603
15,133
30,472
Net interest income after provision for
credit losses
95,416
110,815
294,117
318,036
Non-interest income:
Service charges on deposit accounts
2,163
1,892
6,239
6,167
Mortgage banking
825
784
1,963
1,924
Credit card income
2,532
2,612
6,627
7,656
Securities losses
-
-
-
(6,168
)
Bank-owned life insurance income
1,818
1,637
5,935
6,978
Other operating income
797
2,014
2,274
9,836
Total non-interest income
8,135
8,939
23,038
26,393
Non-interest expense:
Salaries and employee benefits
20,080
19,687
57,941
58,722
Equipment and occupancy expense
3,579
3,140
10,435
9,056
Third party processing and other
services
6,549
7,213
20,031
19,163
Professional services
1,265
1,036
4,499
3,355
FDIC and other regulatory assessments
2,346
975
6,105
3,254
Other real estate owned expense
18
21
30
56
Other operating expense
7,826
10,613
20,752
26,118
Total non-interest expense
41,663
42,685
119,793
119,724
Income before income tax
61,888
77,069
197,362
224,705
Provision for income tax
8,548
13,038
32,583
40,925
Net income
53,340
64,031
164,779
183,780
Dividends on preferred stock
-
-
31
31
Net income available to common
stockholders
$
53,340
$
64,031
$
164,748
$
183,749
Basic earnings per common share
$
0.98
$
1.18
$
3.03
$
3.38
Diluted earnings per common share
$
0.98
$
1.17
$
3.02
$
3.37
LOANS BY TYPE (UNAUDITED)
(In thousands)
3rd Quarter 2023
2nd Quarter 2023
1st Quarter 2023
4th Quarter 2022
3rd Quarter 2022
Commercial, financial and agricultural
$
2,890,535
$
2,986,453
$
3,081,926
$
3,145,317
$
3,104,155
Real estate - construction
1,509,937
1,397,732
1,469,670
1,532,388
1,433,698
Real estate - mortgage:
Owner-occupied commercial
2,237,684
2,294,002
2,243,436
2,199,280
2,145,621
1-4 family mortgage
1,170,099
1,167,238
1,138,645
1,146,831
1,089,826
Other mortgage
3,766,124
3,686,434
3,624,071
3,597,750
3,438,762
Subtotal: Real estate - mortgage
7,173,907
7,147,674
7,006,152
6,943,861
6,674,209
Consumer
66,751
73,035
72,054
66,402
66,552
Total loans
$
11,641,130
$
11,604,894
$
11,629,802
$
11,687,968
$
11,278,614
SUMMARY OF CREDIT LOSS EXPERIENCE
(UNAUDITED)
(Dollars in thousands)
3rd Quarter 2023
2nd Quarter 2023
1st Quarter 2023
4th Quarter 2022
3rd Quarter 2022
Allowance for credit losses:
Beginning balance
$
152,272
$
148,965
$
146,297
$
140,967
$
128,387
Loans charged off:
Commercial financial and agricultural
4,784
4,358
1,257
2,116
2,902
Real estate - construction
19
-
-
-
-
Real estate - mortgage
-
131
26
-
170
Consumer
341
111
390
200
261
Total charge offs
5,144
4,600
1,673
2,316
3,333
Recoveries:
Commercial financial and agricultural
825
1,233
128
393
297
Real estate - construction
-
-
3
-
-
Real estate - mortgage
-
-
1
-
-
Consumer
11
21
11
118
12
Total recoveries
836
1,254
143
511
309
Net charge-offs
4,308
3,346
1,530
1,805
3,024
Provision for credit losses
4,282
6,654
4,197
7,135
15,604
Ending balance
$
152,247
$
152,272
$
148,965
$
146,297
$
140,967
Allowance for credit losses to total
loans
1.31
%
1.31
%
1.28
%
1.25
%
1.25
%
Allowance for credit losses to total
average
loans
1.31
%
1.31
%
1.28
%
1.27
%
1.29
%
Net charge-offs to total average loans
0.15
%
0.11
%
0.05
%
0.06
%
0.11
%
Provision for credit losses to total
average
loans
0.15
%
0.23
%
0.14
%
0.25
%
0.57
%
Nonperforming assets:
Nonaccrual loans
$
20,911
$
16,897
$
13,157
$
12,450
$
11,655
Loans 90+ days past due and accruing
1,692
5,947
4,683
5,391
4,803
Other real estate owned and
repossessed assets
690
832
248
248
1,245
Total
$
23,293
$
23,676
$
18,088
$
18,089
$
17,703
Nonperforming loans to total loans
0.19
%
0.20
%
0.15
%
0.15
%
0.15
%
Nonperforming assets to total assets
0.15
%
0.16
%
0.12
%
0.12
%
0.13
%
Nonperforming assets to earning assets
0.16
%
0.16
%
0.13
%
0.13
%
0.13
%
Allowance for credit losses to nonaccrual
loans
731.74
%
901.18
%
1,132.24
%
1,175.08
%
1,209.50
%
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands except per share data)
3rd Quarter 2023
2nd Quarter 2023
1st Quarter 2023
4th Quarter 2022
3rd Quarter 2022
Interest income:
Interest and fees on loans
$
178,754
$
171,718
$
163,732
$
153,924
$
131,375
Taxable securities
15,522
11,570
10,895
10,895
11,089
Nontaxable securities
15
17
21
27
30
Federal funds sold
985
227
614
818
632
Other interest and dividends
17,930
6,124
6,060
4,609
6,173
Total interest income
213,206
189,656
181,322
170,273
149,299
Interest expense:
Deposits
95,901
71,971
55,713
33,471
13,655
Borrowed funds
17,607
16,434
17,308
14,418
9,226
Total interest expense
113,508
88,405
73,021
47,889
22,881
Net interest income
99,698
101,251
108,301
122,384
126,418
Provision for credit losses
4,282
6,654
4,197
7,135
15,603
Net interest income after provision for
credit losses
95,416
94,597
104,104
115,249
110,815
Non-interest income:
Service charges on deposit accounts
2,163
2,142
1,934
1,866
1,892
Mortgage banking
825
696
442
514
784
Credit card income
2,532
2,406
1,689
2,261
2,612
Bank-owned life insurance income
1,818
2,496
1,621
1,600
1,637
Other operating income
797
842
635
725
2,014
Total non-interest income
8,135
8,582
6,321
6,966
8,939
Non-interest expense:
Salaries and employee benefits
20,080
18,795
19,066
19,230
19,687
Equipment and occupancy expense
3,579
3,421
3,435
3,263
3,140
Third party processing and other
services
6,549
6,198
7,284
8,170
7,213
Professional services
1,265
1,580
1,654
922
1,036
FDIC and other regulatory assessments
2,346
2,242
1,517
1,311
975
Other real estate owned expense
18
6
6
239
21
Other operating expense
7,826
6,224
6,702
4,957
10,613
Total non-interest expense
41,663
38,466
39,664
38,092
42,685
Income before income tax
61,888
64,713
70,761
84,123
77,069
Provision for income tax
8,548
11,245
12,790
16,399
13,038
Net income
53,340
53,468
57,971
67,724
64,031
Dividends on preferred stock
-
31
-
31
-
Net income available to common
stockholders
$
53,340
$
53,437
$
57,971
$
67,693
$
64,031
Basic earnings per common share
$
0.98
$
0.98
$
1.07
$
1.25
$
1.18
Diluted earnings per common share
$
0.98
$
0.98
$
1.06
$
1.24
$
1.17
AVERAGE BALANCE SHEETS AND NET INTEREST
ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
3rd Quarter 2023
2nd Quarter 2023
1st Quarter 2023
4th Quarter 2022
3rd Quarter 2022
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
$
11,545,003
6.13
%
$
11,581,008
5.94
%
$
11,632,439
5.70
%
$
11,465,538
5.32
%
$
10,900,105
4.77
%
Tax-exempt (2)
18,023
4.71
18,312
4.82
18,978
3.36
19,526
6.60
19,852
4.14
Total loans, net of
unearned income
11,563,026
6.13
11,599,320
5.94
11,651,417
5.70
11,485,064
5.32
10,919,957
4.77
Mortgage loans held for sale
5,476
6.67
5,014
5.12
1,522
6.40
1,515
3.67
2,906
2.73
Debt securities:
Taxable
2,029,995
3.07
1,757,397
2.64
1,724,523
2.54
1,755,764
2.49
1,797,560
2.47
Tax-exempt (2)
2,408
2.49
2,960
2.43
3,781
2.43
4,863
2.39
5,863
2.39
Total securities (3)
2,032,403
3.07
1,760,357
2.64
1,728,304
2.54
1,760,627
2.49
1,803,423
2.47
Federal funds sold
74,424
5.25
15,908
5.72
50,526
4.93
82,656
3.93
102,028
2.46
Restricted equity securities
8,471
5.90
8,834
6.08
9,919
7.69
7,724
7.35
7,724
3.65
Interest-bearing balances with banks
1,293,243
5.45
460,893
5.21
510,021
4.67
458,115
3.83
945,142
2.56
Total interest-earning assets
$
14,977,043
5.65
$
13,850,326
5.49
$
13,951,709
5.27
$
13,795,701
4.90
$
13,781,180
4.30
Non-interest-earning assets:
Cash and due from banks
111,566
101,188
106,448
113,823
256,607
Net premises and equipment
60,121
60,499
60,617
60,323
60,155
Allowance for credit losses, accrued
interest and other assets
283,357
279,860
279,775
273,964
294,006
Total assets
$
15,432,087
$
14,291,873
$
14,398,549
$
14,243,811
$
14,391,948
Interest-bearing liabilities:
Interest-bearing deposits:
Checking
$
2,153,973
2.72
%
$
1,628,936
1.69
%
$
1,675,355
1.25
%
$
1,763,622
0.73
%
$
1,722,926
0.28
%
Savings
112,814
1.61
122,050
1.38
134,671
0.94
141,163
0.64
144,368
0.21
Money market
6,538,426
4.24
5,971,639
3.78
5,756,642
3.17
5,047,133
2.07
4,444,583
0.89
Time deposits
1,093,388
3.89
983,582
3.44
850,639
2.51
860,336
1.69
809,057
1.16
Total interest-bearing deposits
9,898,601
3.84
8,706,207
3.32
8,417,307
2.68
7,812,254
1.70
7,120,934
0.76
Federal funds purchased
1,237,721
5.43
1,191,582
5.14
1,389,217
4.67
1,453,445
3.75
1,493,444
2.27
Other borrowings
64,734
4.23
100,998
4.62
114,726
4.61
64,726
4.23
65,406
4.19
Total interest-bearing liabilities
$
11,201,056
4.02
%
$
9,998,787
3.55
%
$
9,921,250
2.98
%
$
9,330,425
2.04
%
$
8,679,784
1.05
%
Non-interest-bearing liabilities:
Non-interest-bearing
demand deposits
2,778,858
2,876,225
3,086,774
3,572,956
4,410,318
Other liabilities
52,797
64,917
72,121
77,544
62,093
Stockholders' equity
1,457,893
1,399,578
1,358,587
1,307,553
1,263,870
Accumulated other comprehensive
loss
(58,517
)
(47,634
)
(40,183
)
(44,667
)
(24,117
)
Total liabilities and
stockholders' equity
$
15,432,087
$
14,291,873
$
14,398,549
$
14,243,811
$
14,391,948
Net interest spread
1.63
%
1.94
%
2.29
%
2.86
%
3.25
%
Net interest margin
2.64
%
2.93
%
3.15
%
3.52
%
3.64
%
(1)
Average loans include nonaccrual loans in
all periods. Loan fees of $2,996, $3,318 $3,263, $3,630, and $3,849
are included in interest income in the third quarter of 2023,
second quarter of 2023, first quarter of 2023, fourth quarter of
2022, and third quarter of 2022, respectively.
(2)
Interest income and yields are presented
on a fully taxable equivalent basis using a tax rate of 21%.
(3)
Unrealized losses on debt securities of
$(83,815), $(69,498), $(59,738), $(62,567),and $(34,688) for the
third quarter of 2023, second quarter of 2023, first quarter of
2023, fourth quarter of 2022, and third quarter of 2022,
respectively, are excluded from the yield calculation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231016586913/en/
ServisFirst Bank Davis Mange (205) 949-3420
dmange@servisfirstbank.com
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