ServisFirst Bancshares, Inc. Announces Results For Third Quarter of 2023

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 [phone].

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.

 

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The ServisFirst Bancshares Stock at the time of publication of the news with a raise of 0,00 % to 51,29USD on NYSE stock exchange (14. Oktober 2023, 02:04 Uhr).