ServisFirst Bancshares, Inc. Announces Results For First Quarter of 2024

ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended March 31, 2024.

First Quarter 2024 Highlights:

• Loans grew by 8% annualized for the first quarter of 2024.
• Net interest margin increased to 2.66% for the first quarter of 2024 from 2.57% for the fourth quarter of 2023.
• Credit quality continues to be strong with non-performing assets to total assets of 0.22%.
• Deposits grew 10% year-over-year.
• Book value per share of $27.08, up 10% from the first quarter of 2023.

Tom Broughton, Chairman, President, and CEO, said, “We hired nine new bankers during the first quarter after seven in the fourth quarter and we continue to attract the best talent in the industry in the Southeast.”

Kirk Pressley, CFO, said, “We are pleased to have stabilized our funding costs, which will continue to improve our net interest margin. Our expenses remain tightly controlled, as evidenced by our efficiency ratio, which we believe continues to be among the lowest of all commercial banks.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
		Period Ending March 31, 2024				Period Ending December 31, 2023				% Change From Period Ending December 31, 2023 to Period Ending March 31, 2024			Period Ending March 31, 2023				% Change From Period Ending March 31, 2023 to Period Ending March 31, 2024
QUARTERLY OPERATING RESULTS
Net Income		$	50,026			$	42,074			18.9	%		$	57,971			(13.7	)%
Net Income Available to Common Stockholders		$	50,026			$	42,043			19.0	%		$	57,971			(13.7	)%
Diluted Earnings Per Share		$	0.92			$	0.77			19.4	%		$	1.06			(13.4	)%
Return on Average Assets			1.26	%			1.04	%						1.63	%
Return on Average Common Stockholders' Equity			13.82	%			11.78	%						17.83	%
Average Diluted Shares Outstanding			54,595,384				54,548,719							54,534,482
Adjusted Net Income, net of tax*		$	51,373			$	49,891			3.0	%		$	57,971			(11.4	)%
Adjusted Net Income Available to Common
Stockholders, net of tax*		$	51,373			$	49,860			3.0	%		$	57,971			(11.4	)%
Adjusted Diluted Earnings Per Share, net of tax*		$	0.94			$	0.91			2.7	%		$	1.06			(11.7	)%
Adjusted Return on Average Assets, net of tax*			1.29	%			1.23	%						1.63	%
Adjusted Return on Average Common
Stockholders' Equity, net of tax*			14.19	%			13.98	%						17.83	%
BALANCE SHEET
Total Assets		$	15,721,630			$	16,129,668			(2.5	)%		$	14,566,559			7.9	%
Loans			11,880,696				11,658,829			1.9	%			11,629,802			2.2	%
Non-interest-bearing Demand Deposits			2,627,639				2,643,101			(0.6	)%			2,898,736			(9.4	)%
Total Deposits			12,751,448				13,273,511			(3.9	)%			11,615,317			9.8	%
Stockholders' Equity			1,476,036				1,440,405			2.5	%			1,339,817			10.2	%
* This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $50.0 million for the quarter ended March 31, 2024, compared to net income of $42.1 million and net income available to common stockholders of $42.0 million for the fourth quarter of 2023 and net income and net income available to common stockholders of $58.0 million for the first quarter of 2023. Basic and diluted earnings per common share were both $0.92 in the first quarter of 2024, compared to $0.77 for both in the fourth quarter of 2023 and $1.07 and $1.06, respectively, in the first quarter of 2023.

Annualized return on average assets was 1.26% and annualized return on average common stockholders’ equity was 13.82% for the first quarter of 2024, compared to 1.63% and 17.83%, respectively, for the first quarter of 2023.

Net interest income was $102.5 million for the first quarter of 2024, compared to $101.7 million for the fourth quarter of 2023 and $108.3 million for the first quarter of 2023. The net interest margin in the first quarter of 2024 was 2.66% compared to 2.57% in the fourth quarter of 2023 and 3.15% in the first quarter of 2023. Loan yields were 6.40% during the first quarter of 2024 compared to 6.32% during the fourth quarter of 2023 and 5.70% during the first quarter of 2023. Investment yields were 3.16% during the first quarter of 2024 compared to 3.08% during the fourth quarter of 2023 and 2.54% during the first quarter of 2023. Average interest-bearing deposit rates were 4.04% during the first quarter of 2024, compared to 4.06% during the fourth quarter of 2023 and 2.68% during the first quarter of 2023. Average federal funds purchased rates were 5.50% during first quarter of 2024, compared to 5.49% during the fourth quarter of 2023 and 4.67% during the first quarter of 2023.

Average loans for the first quarter of 2024 were $11.74 billion, an increase of $142.5 million, or 4.9% annualized, from average loans of $11.60 billion for the fourth quarter of 2023, and an increase of $89.6 million, or 0.8%, from average loans of $11.65 billion for the first quarter of 2023. Ending total loans for the first quarter of 2024 were $11.88 billion, an increase of $221.9 million, or 1.9%, from $11.66 billion for the fourth quarter of 2023, and an increase of $250.9 million, or 2.2%, from $11.63 billion for the first quarter of 2023.

Average total deposits for the first quarter of 2024 were $12.92 billion, a decrease of $0.30 billion, or 9.2% annualized, over average total deposits of $13.23 billion for the fourth quarter of 2023, and an increase of $1.42 billion, or 12.3%, from average total deposits of $11.50 billion for the first quarter of 2023. Ending total deposits for the first quarter of 2024 were $12.75 billion, a decrease of $522.1 million, or 3.9%, from $13.27 billion for the fourth quarter of 2023, and an increase of $1.1 billion, or 9.8%, from $11.62 billion for the first quarter of 2023. The decline in our deposits over the last quarter can be partly attributed to our strategic decision to move away from high-cost and non-core deposits.

Non-performing assets to total assets were 0.22% for the first quarter of 2024, compared to 0.14% for the fourth quarter of 2023 and 0.12% for the first quarter of 2023. The increase in non-performing assets to total assets can be attributed to a single relationship that moved to non-accrual status during the first quarter of 2024. This loan has been closely monitored and is well-collateralized. Annualized net charge-offs to average loans were 0.06% for the first quarter of 2024, compared to 0.09% for the fourth quarter of 2023 and 0.05% first quarter of 2023. The allowance for credit losses as a percentage of total loans at March 31, 2024, December 31, 2023, and March 31, 2023, was 1.31%, 1.32%, and 1.28%, respectively. We recorded a $4.4 million provision for credit losses in the first quarter of 2024 compared to $3.6 million in the fourth quarter of 2023, and $4.2 million in the first quarter of 2023.

Non-interest income increased $2.5 million, or 39.4%, to $8.8 million for the first quarter of 2024 from $6.3 million in the first quarter of 2023, and increased $1.4 million, or 19.4%, on a linked quarter basis. Service charges on deposit accounts increased $216,000, or 11.2%, to $2.2 million for the first quarter of 2024 from $1.9 million in the first quarter of 2023, and decreased $31,000, or 1.4%, on a linked quarter basis. Mortgage banking revenue increased $236,000, or 53.4%, to $678,000 for the first quarter of 2024 from $442,000 in the first quarter of 2023, and decreased $114,000, or 14.4%, on a linked quarter basis. Net credit card revenue increased $466,000, or 27.6%, to $2.2 million for the first quarter of 2024 from $1.7 million in the first quarter of 2023, and increased $151,000, or 7.5%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income increased $1.6 million, or 99.3%, to $3.2 million for the first quarter of 2024 from $1.6 million in the first quarter of 2023, and increased $1.6 million, or 97.1%, on a linked quarter basis. During the first quarter of 2024, we recognized $1.2 million of income attributed to a death benefit related to a former employee in our BOLI program. Other operating income decreased $36,000, or 5.7%, to $599,000 for the first quarter of 2024 from $635,000 in the first quarter of 2023, and decreased $164,000, or 21.5%, on a linked quarter basis. Merchant service revenue increased $53,000, or 11.7%, to $508,000 for the first quarter of 2024 from $455,000 in the first quarter of 2023.

Non-interest expense increased $6.6 million, or 16.7%, to $46.3 million for the first quarter of 2024 from $39.7 million in the first quarter of 2023, and decreased $12.0 million, or 20.5%, on a linked quarter basis. Salary and benefit expense increased $3.9 million, or 20.6%, to $23.0 million for the first quarter of 2024 from $19.1 million in the first quarter of 2023, and decreased $38,000, or 0.2%, on a linked quarter basis.. The number of FTE employees increased by 32, or 5.6%, to 605 at March 31, 2024 compared to 573 at March 31, 2023, and increased by 14, or 2.4%, from the end of the fourth quarter of 2023. The increase in salary and benefit expense from the first quarter of 2023 is largely due to the normalization of incentives and increased salary expenses due to an increase in FTE employees. Incentives increased approximately $2.8 million, and salaries increased approximately $1.0 million from the first quarter of 2023. Equipment and occupancy expense increased $122,000, or 3.6%, to $3.6 million for the first quarter of 2024 from $3.4 million in the first quarter of 2023, and decreased $303,000, or 7.8%, on a linked quarter basis. Third party processing and other services expense decreased $118,000, or 1.6%, to $7.2 million for the first quarter of 2024 from $7.3 million in the first quarter of 2023, and decreased $675,000, or 8.6%, on a linked quarter basis. Professional services expense decreased $190,000, or 11.5%, to $1.5 million for the first quarter of 2024 from $1.7 million in the first quarter of 2023, and increased $47,000, or 3.3%, on a linked quarter basis. FDIC and other regulatory assessments increased $2.4 million, or 157.4%, to $3.9 million for the first quarter of 2024 from $1.5 million in the first quarter of 2023, and decreased $5.6 million, or 58.9%, on a linked quarter basis. In the fourth quarter of 2023, the FDIC implemented a special assessment to recapitalize the Deposit Insurance Fund resulting in an expense of $7.2 million during the fourth quarter of 2023. The FDIC recapitalization estimate will be periodically adjusted as the FDIC sells assets, satisfies liabilities, and incurs expenses, which resulted in an additional expense of $1.8 million during the first quarter of 2024. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. Other operating expenses increased $493,000, or 7.4%, to $7.2 million for the first quarter of 2024 from $6.7 million in the first quarter of 2023, and decreased $5.4 million, or 42.9%, on a linked quarter basis. During the fourth quarter of 2023, an incremental expense related to tax credit investments of $3.3 million, associated with the tax benefit discussed below, contributed to the increase in other operating expenses. In addition, the following items, which management viewed as unusual, infrequent, or not reflective of future normal operating expenses within the control of management, contributed to the increase in non-interest expense during the fourth quarter of 2023: the FDIC special assessment expense of $7.2 million, an EDP contract termination and related capitalized cost write-offs of $1.1 million to other operating expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense to other operating expenses. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. The efficiency ratio was 43.30% during the first quarter of 2024 compared to 34.60% during the first quarter of 2023 and 55.23% during the fourth quarter of 2023. The adjusted efficiency ratio was 39.31%.

Income tax expense decreased $2.2 million, or 17.0%, to $10.6 million in the first quarter of 2024, compared to $12.8 million in the first quarter of 2023. Our effective tax rate was 17.5% for the first quarter of 2024 compared to 18.1% for the first quarter of 2023. We recognized an aggregate of $2.2 million in credits during the first quarter of 2024 related to investments in tax credit partnerships, compared to $2.7 million during the first quarter of 2023, and $6.7 million during the fourth quarter of 2023. During the fourth quarter of 2023, $4.1 million of the recognized credits were related to the incremental expense for tax credit investments discussed above. We recognized 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 first quarters of 2024 and 2023 of $204,000 and $1.1 million, respectively.

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 Tennessee. Through the ServisFirst 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; 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; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; 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 2024, 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)
		1st Quarter 2024				4th Quarter 2023				3rd Quarter 2023				2nd Quarter 2023				1st Quarter 2023
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	226,710			$	229,062			$	213,206			$	189,656			$	181,322
Interest expense			124,215				127,375				113,508				88,405				73,021
Net interest income			102,495				101,687				99,698				101,251				108,301
Provision for credit losses			4,368				3,582				4,282				6,654				4,197
Net interest income after provision for credit losses			98,127				98,105				95,416				94,597				104,104
Non-interest income			8,813				7,379				8,135				8,582				6,321
Non-interest expense			46,303				58,258				41,663				38,466				39,664
Income before income tax			60,637				47,226				61,888				64,713				70,761
Provision for income tax			10,611				5,152				8,548				11,245				12,790
Net income			50,026				42,074				53,340				53,468				57,971
Preferred stock dividends			-				31				-				31				-
Net income available to common stockholders		$	50,026			$	42,043			$	53,340			$	53,437			$	57,971
Earnings per share - basic		$	0.92			$	0.77			$	0.98			$	0.98			$	1.07
Earnings per share - diluted		$	0.92			$	0.77			$	0.98			$	0.98			$	1.06
Average diluted shares outstanding			54,595,384				54,548,719				54,530,635				54,527,317				54,534,482
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	15,721,630			$	16,129,668			$	16,044,332			$	15,072,808			$	14,566,559
Loans			11,880,696				11,658,829				11,641,130				11,604,894				11,629,802
Debt securities			1,941,625				1,882,847				1,878,701				2,048,227				1,646,937
Non-interest-bearing demand deposits			2,627,639				2,643,101				2,621,072				2,855,102				2,898,736
Total deposits			12,751,448				13,273,511				13,142,376				12,288,219				11,615,317
Borrowings			64,737				64,735				64,751				64,737				65,417
Stockholders' equity			1,476,036				1,440,405				1,401,384				1,363,471				1,339,817
Shares outstanding			54,507,778				54,461,580				54,425,447				54,425,033				54,398,025
Book value per share		$	27.08			$	26.45			$	25.75			$	25.05			$	24.63
Tangible book value per share (1)		$	26.83			$	26.20			$	25.50			$	24.80			$	24.38
SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin			2.66	%			2.57	%			2.64	%			2.93	%			3.15	%
Return on average assets			1.26	%			1.04	%			1.37	%			1.50	%			1.63	%
Return on average common stockholders' equity			13.82	%			11.78	%			15.34	%			15.85	%			17.83	%
Efficiency ratio			43.30	%			55.23	%			38.64	%			35.02	%			34.60	%
Non-interest expense to average earning assets			1.20	%			1.47	%			1.10	%			1.11	%			1.15	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets			11.07	%			10.91	%			10.69	%			10.37	%			10.01	%
Tier 1 capital to risk-weighted assets			11.08	%			10.92	%			10.69	%			10.38	%			10.02	%
Total capital to risk-weighted assets			12.61	%			12.45	%			12.25	%			11.94	%			11.54	%
Tier 1 capital to average assets			9.44	%			9.12	%			9.35	%			9.83	%			9.49	%
Tangible common equity to total tangible assets (1)			9.31	%			8.85	%			8.66	%			8.96	%			9.11	%
(1) This press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”
(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 adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. This assessment was updated in the first quarter of 2024 resulting in additional expense of $1.8 million. Additionally, we experienced expenses for the termination of an EDP contract and related capitalized cost write-offs resulting in $1.1 million in expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expenses for 2023. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of 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.

		Three Months Ended March 31, 2024				Three Months Ended December 31, 2023				Three Months Ended March 31, 2023
Net income - GAAP		$	50,026			$	42,074			$	57,971
Adjustments:
FDIC special assessment			1,799				7,152				-
Privilege tax expense			-				2,150				-
EDP contract termination expense			-				1,134				-
Tax on adjustments			(452	)			(2,619	)			-
Adjusted net income - non-GAAP		$	51,373			$	49,891			$	57,971
Net income available to common stockholders - GAAP		$	50,026			$	42,043			$	57,971
Adjustments:
FDIC special assessment			1,799				7,152				-
Privilege tax expense			-				2,150				-
EDP contract termination expense			-				1,134				-
Tax on adjustments			(452	)			(2,619	)			-
Adjusted net income available to common stockholders -non-GAAP		$	51,373			$	49,860			$	49,860
Diluted earnings per share - GAAP		$	0.92			$	0.77			$	1.06
Adjustments:
FDIC special assessment			0.03				0.13				-
Privilege tax expense			-				0.04				-
EDP contract termination expense			-				0.02				-
Tax on adjustments			(0.01	)			(0.05	)			-
Adjusted diluted earnings per share - non-GAAP		$	0.94			$	0.91			$	1.06
Return on average assets - GAAP			1.26	%			1.04	%			1.63	%
Net income - GAAP		$	50,026			$	42,074			$	57,971
Adjustments:
FDIC special assessment			1,799				7,152				-
Privilege tax expense			-				2,150				-
EDP contract termination expense			-				1,134				-
Tax on adjustments			(452	)			(2,619	)			-
Adjusted net income available to common stockholders -non-GAAP		$	51,373			$	49,891			$	57,971
Average assets - GAAP		$	15,957,579			$	16,122,146			$	14,398,549
Adjusted return on average assets - non-GAAP			1.29	%			1.23	%			1.63	%
Return on average common stockholders' equity - GAAP			13.82	%			11.78	%			17.83	%
Net income available to common stockholders - GAAP		$	50,026			$	42,074			$	57,971
Adjustments:
FDIC special assessment			1,799				7,152				-
Privilege tax expense			-				2,150				-
EDP contract termination expense			-				1,134				-
Tax on adjustments			(452	)			(2,619	)			-
Adjusted diluted earnings per share - non-GAAP		$	51,373			$	49,891			$	57,971
Average common stockholders' equity - GAAP		$	1,455,938			$	1,415,866			$	1,318,459
Adjusted return on average common stockholders' equity non-GAAP			14.19	%			13.98	%			17.83	%
Efficiency ratio			43.30	%			55.23	%			55.23	%
Non-interest expense - GAAP		$	45,550			$	56,480			$	57,971
Adjustments:
FDIC special assessment			1,799				7,152				-
Privilege tax expense			-				2,150				-
EDP contract termination expense			-				1,134				-
Adjusted non-interest expense		$	43,751			$	46,044			$	39,664
Net interest income plus non-interest income - GAAP		$	111,308			$	109,066			$	114,622
Adjusted efficiency ratio - non-GAAP			39.31	%			42.22	%			34.60	%

	At March 31, 2024				At December 31, 2023				At September 30, 2023				At June 30, 2023				At March 31, 2023
Book value per share - GAAP	$	27.08			$	26.45			$	25.75			$	25.05			$	24.63
Total common stockholders' equity - GAAP		1,476,036				1,440,405				1,401,384				1,363,471				1,339,817
Adjustment for Goodwill		(13,615	)			(13,615	)			(13,615	)			(13,615	)			(13,615	)
Tangible common stockholders' equity - non-GAAP	$	1,462,421			$	1,426,790			$	1,387,769			$	1,349,856			$	1,326,202
Tangible book value per share - non-GAAP	$	26.83			$	26.22			$	25.50			$	24.80			$	24.38
Stockholders' equity to total assets - GAAP		9.39	%			8.93	%			8.73	%			9.05	%			9.20	%
Total assets - GAAP	$	15,721,630			$	16,129,668			$	16,044,332			$	15,072,808			$	14,566,559
Adjustment for Goodwill		(13,615	)			(13,615	)			(13,615	)			(13,615	)			(13,615	)
Total tangible assets - non-GAAP	$	15,708,015			$	16,116,053			$	16,030,717			$	15,059,193			$	14,552,944
Tangible common equity to total tangible assets - non-GAAP		9.31	%			8.85	%			8.66	%			8.96	%			9.11	%

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
		March 31, 2024				March 31, 2023				% Change
ASSETS
Cash and due from banks		$	78,708			$	139,175			(43	)%
Interest-bearing balances due from depository institutions			1,201,566				725,318			66	%
Federal funds sold			170,625				6,478			2,534	%
Cash and cash equivalents			1,450,899				870,971			67	%
Available for sale debt securities, at fair value			1,073,929				624,948			72	%
Held to maturity debt securities (fair value of $785,270 and $937,961, respectively)			867,696				1,021,989			(15	)%
Restricted equity securities			11,300				7,307			55	%
Mortgage loans held for sale			7,592				1,651			360	%
Loans			11,880,696				11,629,802			2	%
Less allowance for credit losses			(155,892	)			(148,965	)		5	%
Loans, net			11,724,804				11,480,837			2	%
Premises and equipment, net			59,302				60,093			(1	)%
Goodwill			13,615				13,615			-	%
Other assets			512,493				485,148			6	%
Total assets		$	15,721,630			$	14,566,559			8	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing demand		$	2,627,639			$	2,898,736			(9	)%
Interest-bearing			10,123,809				8,716,581			16	%
Total deposits			12,751,448				11,615,317			10	%
Federal funds purchased			1,345,328				1,480,160			(9	)%
Other borrowings			64,737				65,417			(1	)%
Other liabilities			84,081				65,848			28	%
Total liabilities			14,245,594				13,226,742			8	%
Stockholders' equity:
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
March 31, 2024 and March 31, 2023			-				-			-	%
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,507,778 shares
issued and outstanding at March 31, 2024, and 54,398,025
shares issued and outstanding at March 31, 2023			54				54			-	%
Additional paid-in capital			233,560				229,631			2	%
Retained earnings			1,288,514				1,152,681			12	%
Accumulated other comprehensive loss			(46,592	)			(43,049	)		8	%
Total stockholders' equity attributable to ServisFirst Bancshares, Inc.			1,475,536				1,339,317			10	%
Noncontrolling interest			500				500			-	%
Total stockholders' equity			1,476,036				1,339,817			10	%
Total liabilities and stockholders' equity		$	15,721,630			$	14,566,559			8	%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended March 31,
		2024			2023
Interest income:
Interest and fees on loans		$	186,978		$	163,732
Taxable securities			15,979			10,895
Nontaxable securities			9			21
Federal funds sold			541			614
Other interest and dividends			23,203			6,060
Total interest income			226,710			181,322
Interest expense:
Deposits			104,066			55,713
Borrowed funds			20,149			17,308
Total interest expense			124,215			73,021
Net interest income			102,495			108,301
Provision for credit losses			4,368			4,197
Net interest income after provision for credit losses			98,127			104,104
Non-interest income:
Service charges on deposit accounts			2,150			1,934
Mortgage banking			678			442
Credit card income			2,155			1,689
Bank-owned life insurance income			3,231			1,621
Other operating income			599			635
Total non-interest income			8,813			6,321
Non-interest expense:
Salaries and employee benefits			22,986			19,066
Equipment and occupancy expense			3,557			3,435
Third party processing and other services			7,166			7,284
Professional services			1,464			1,654
FDIC and other regulatory assessments			3,905			1,517
Other real estate owned expense			30			6
Other operating expense			7,195			6,702
Total non-interest expense			46,303			39,664
Income before income tax			60,637			70,761
Provision for income tax			10,611			12,790
Net income			50,026			57,971
Dividends on preferred stock			-			-
Net income available to common stockholders		$	50,026		$	57,971
Basic earnings per common share		$	0.92		$	1.07
Diluted earnings per common share		$	0.92		$	1.06

LOANS BY TYPE (UNAUDITED)
(In thousands)
		1st Quarter 2024			4th Quarter 2023			3rd Quarter 2023			2nd Quarter 2023			1st Quarter 2023
Commercial, financial and agricultural		$	2,834,102		$	2,823,986		$	2,890,535		$	2,986,453		$	3,081,926
Real estate - construction			1,546,716			1,519,619			1,509,937			1,397,732			1,469,670
Real estate - mortgage:
Owner-occupied commercial			2,377,042			2,257,163			2,237,684			2,294,002			2,243,436
1-4 family mortgage			1,284,888			1,249,938			1,170,099			1,167,238			1,138,645
Other mortgage			3,777,758			3,744,346			3,766,124			3,686,434			3,624,071
Subtotal: Real estate - mortgage			7,439,688			7,251,447			7,173,907			7,147,674			7,006,152
Consumer			60,190			63,777			66,751			73,035			72,054
Total loans		$	11,880,696		$	11,658,829		$	11,641,130		$	11,604,894		$	11,629,802

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
	1st Quarter 2024				4th Quarter 2023				3rd Quarter 2023				2nd Quarter 2023				1st Quarter 2023
Allowance for credit losses:
Beginning balance	$	153,317			$	152,247			$	152,272			$	148,965			$	146,297
Loans charged off:
Commercial financial and agricultural		1,842				2,831				4,783				4,358				1,257
Real estate - construction		-				89				19				-				-
Real estate - mortgage		67				14				-				131				26
Consumer		98				231				341				111				390
Total charge offs		2,007				3,165				5,143				4,600				1,673
Recoveries:
Commercial financial and agricultural		199				614				825				1,233				128
Real estate - construction		-				-				-				-				3
Real estate - mortgage		6				-				-				-				1
Consumer		9				39				11				21				11
Total recoveries		214				653				836				1,254				143
Net charge-offs		1,793				2,512				4,307				3,346				1,530
Provision for credit losses		4,368				3,582				4,282				6,654				4,197
Ending balance	$	155,892			$	153,317			$	152,247			$	152,272			$	148,965
Allowance for credit losses to total loans		1.31	%			1.32	%			1.31	%			1.31	%			1.28	%
Allowance for credit losses to total average
loans		1.33	%			1.32	%			1.31	%			1.31	%			1.28	%
Net charge-offs to total average loans		0.06	%			0.09	%			0.15	%			0.11	%			0.05	%
Provision for credit losses to total average
loans		0.15	%			0.12	%			0.15	%			0.23	%			0.14	%
Nonperforming assets:
Nonaccrual loans	$	34,457			$	19,349			$	20,912			$	16,897			$	13,157
Loans 90+ days past due and accruing		380				2,184				1,692				5,947				4,683
Other real estate owned and
repossessed assets		490				995				690				832				248
Total	$	35,327			$	22,528			$	23,294			$	23,676			$	18,088
Nonperforming loans to total loans		0.29	%			0.18	%			0.19	%			0.20	%			0.15	%
Nonperforming assets to total assets		0.22	%			0.14	%			0.15	%			0.16	%			0.12	%
Nonperforming assets to earning assets		0.23	%			0.14	%			0.16	%			0.16	%			0.13	%
Allowance for credit losses to nonaccrual loans		452.42	%			795.17	%			731.74	%			901.18	%			1,132.24	%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		1st Quarter 2024			4th Quarter 2023			3rd Quarter 2023			2nd Quarter 2023			1st Quarter 2023
Interest income:
Interest and fees on loans		$	186,978		$	184,897		$	178,754		$	171,718		$	163,732
Taxable securities			15,979			15,512			15,522			11,570			10,895
Nontaxable securities			9			12			15			17			21
Federal funds sold			541			1,018			985			227			614
Other interest and dividends			23,203			27,623			17,930			6,124			6,060
Total interest income			226,710			229,062			213,206			189,656			181,322
Interest expense:
Deposits			104,066			108,155			95,901			71,971			55,713
Borrowed funds			20,149			19,220			17,607			16,434			17,308
Total interest expense			124,215			127,375			113,508			88,405			73,021
Net interest income			102,495			101,687			99,698			101,251			108,301
Provision for credit losses			4,368			3,582			4,282			6,654			4,197
Net interest income after provision for credit losses			98,127			98,105			95,416			94,597			104,104
Non-interest income:
Service charges on deposit accounts			2,150			2,181			2,163			2,142			1,934
Mortgage banking			678			792			825			696			442
Credit card income			2,155			2,004			2,532			2,406			1,689
Bank-owned life insurance income			3,231			1,639			1,818			2,496			1,621
Other operating income			599			763			797			842			635
Total non-interest income			8,813			7,379			8,135			8,582			6,321
Non-interest expense:
Salaries and employee benefits			22,986			23,024			20,080			18,795			19,066
Equipment and occupancy expense			3,557			3,860			3,579			3,421			3,435
Third party processing and other services			7,166			7,841			6,549			6,198			7,284
Professional services			1,464			1,417			1,265			1,580			1,654
FDIC and other regulatory assessments			3,905			9,509			2,346			2,242			1,517
Other real estate owned expense			30			17			18			6			6
Other operating expense			7,195			12,590			7,826			6,224			6,702
Total non-interest expense			46,303			58,258			41,663			38,466			39,664
Income before income tax			60,637			47,226			61,888			64,713			70,761
Provision for income tax			10,611			5,152			8,548			11,245			12,790
Net income			50,026			42,074			53,340			53,468			57,971
Dividends on preferred stock			-			31			-			31			-
Net income available to common stockholders		$	50,026		$	42,043		$	53,340		$	53,437		$	57,971
Basic earnings per common share		$	0.92		$	0.77		$	0.98		$	0.98		$	1.07
Diluted earnings per common share		$	0.92		$	0.77		$	0.98		$	0.98		$	1.06

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
		1st Quarter 2024							4th Quarter 2023							3rd Quarter 2023							2nd Quarter 2023							1st Quarter 2023
		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		$	11,723,391			6.41	%		$	11,580,716			6.33	%		$	11,545,003			6.13	%		$	11,581,008			5.94	%		$	11,632,439			5.70	%
Tax-exempt (2)			17,605			5.00				17,787			4.71				18,023			4.71				18,312			4.82				18,978			3.36
Total loans, net of unearned
income			11,740,996			6.40				11,598,503			6.32				11,563,026			6.13				11,599,320			5.94				11,651,417			5.70
Mortgage loans held for sale			4,770			5.57				5,105			6.22				5,476			6.67				5,014			5.12				1,522			6.40
Debt securities:
Taxable			2,013,295			3.16				2,007,636			3.08				2,029,995			3.07				1,757,397			2.64				1,724,523			2.54
Tax-exempt (2)			1,296			3.40				1,739			2.30				2,408			2.49				2,960			2.43				3,781			2.43
Total securities (3)			2,014,591			3.16				2,009,375			3.08				2,032,403			3.07				1,760,357			2.64				1,728,304			2.54
Federal funds sold			37,298			5.83				72,178			5.60				74,424			5.25				15,908			5.72				50,526			4.93
Restricted equity securities			10,417			7.57				10,216			8.74				8,471			5.90				8,834			6.08				9,919			7.69
Interest-bearing balances with banks			1,687,977			5.48				1,981,411			5.49				1,293,243			5.45				460,893			5.21				510,021			4.67
Total interest-earning assets		$	15,496,049			5.88			$	15,676,788			5.80			$	14,977,043			5.65			$	13,850,326			5.49			$	13,951,709			5.27
Non-interest-earning assets:
Cash and due from banks			98,813							101,741							111,566							101,188							106,448
Net premises and equipment			60,126							60,110							60,121							60,499							60,617
Allowance for credit losses, accrued
interest and other assets			302,591							283,435							283,357							279,860							279,775
Total assets		$	15,957,579						$	16,122,074						$	15,432,087						$	14,291,873						$	14,398,549
Interest-bearing liabilities:
Interest-bearing deposits:
Checking		$	2,339,548			2.69	%		$	2,245,431			2.91	%		$	2,153,973			2.72	%		$	1,628,936			1.69	%		$	1,675,355			1.25	%
Savings			106,924			1.76				107,035			1.72				112,814			1.61				122,050			1.38				134,671			0.94
Money market			6,761,495			4.48				7,106,190			4.44				6,538,426			4.24				5,971,639			3.78				5,756,642			3.17
Time deposits			1,164,204			4.37				1,111,350			4.18				1,093,388			3.89				983,582			3.44				850,639			2.51
Total interest-bearing deposits			10,372,171			4.04				10,570,006			4.06				9,898,601			3.84				8,706,207			3.32				8,417,307			2.68
Federal funds purchased			1,422,828			5.50				1,338,110			5.49				1,237,721			5.43				1,191,582			5.14				1,389,217			4.67
Other borrowings			64,736			4.26				64,734			4.23				64,734			4.23				100,998			4.62				114,726			4.61
Total interest-bearing liabilities		$	11,859,735			4.21	%		$	11,972,850			4.22	%		$	11,201,056			4.02	%		$	9,998,787			3.55	%		$	9,921,250			2.98	%
Non-interest-bearing liabilities:
Non-interest-bearing
checking			2,550,841							2,656,504							2,778,858							2,876,225							3,086,774
Other liabilities			91,064							76,651							72,924							64,917							72,121
Stockholders' equity			1,503,240							1,475,366							1,437,766							1,399,578							1,358,587
Accumulated other comprehensive
loss			(47,302	)						(59,297	)						(58,517	)						(47,634	)						(40,183	)
Total liabilities and
stockholders' equity		$	15,957,579						$	16,122,074						$	15,432,087						$	14,291,873						$	14,398,549
Net interest spread						1.67	%						1.58	%						1.63	%						1.94	%						2.29	%
Net interest margin						2.66	%						2.57	%						2.64	%						2.93	%						3.15	%
(1) Average loans include nonaccrual loans in all periods. Loan fees of $3,655, $4,175, $2,996, $3,318, and $3,263 are included in interest income in the first quarter of 2024, fourth quarter of 2023, third quarter of 2023, second quarter of 2023, and first quarter of 2023, 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 $(68,162), $(84,647), $(83,815), $(69,498), and $(59,738) for the first quarter of 2024, fourth quarter of 2023, third quarter of 2023, second quarter of 2023, and first quarter of 2023, 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 +1,96 % to 61,40USD on NYSE stock exchange (22. April 2024, 21:50 Uhr).