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Section 1: 8-K (FORM 8-K)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): October 17, 2018  

ServisFirst Bancshares, Inc.
(Exact Name of Registrant as Specified in Charter)

Delaware001-3645226-0734029
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

2500 Woodcrest Place, Birmingham, Alabama 35209
(Address of Principal Executive Offices) (Zip Code)

(205) 949-0302
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On October 17, 2018, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended September 30, 2018.  A copy of the press release is attached as Exhibit 99.1.

The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

     (a)     Not applicable
     (b)     
Not applicable
     (c)     Not applicable
     (d)     Exhibits. The following exhibits are included with this Current Report on Form 8-K:

Exhibit No. Description
   
99.1 Press Release dated October 17, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 ServisFirst Bancshares, Inc.
   
  
Date: October 17, 2018By: /s/ Thomas A. Broughton, III        
  Thomas A. Broughton, III
  President and Chief Executive Officer
  

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Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2018

BIRMINGHAM, Ala., Oct. 17, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and nine months ended September 30, 2018.

Third Quarter 2018 Highlights:

Tom Broughton, President and CEO, said, “We are very pleased with the strong growth in loans, deposits and new accounts in the third quarter and on a year-to-date basis.”  Bud Foshee, CFO, added, “Our strong financial condition continued to improve in the quarter with the improved efficiency ratio and strong asset quality.”

FINANCIAL SUMMARY (UNAUDITED)                   
(in Thousands except share and per share amounts)                   
    Period Ending
September 30,
2018
 Period Ending
June 30, 2018
 % Change
From Period
Ending June
30, 2018 to
Period Ending
September 30,
2018
 Period Ending
September 30,
2017
 % Change From
Period Ending
September 30,
2017 to Period
Ending
September 30,
2018
 
QUARTERLY OPERATING RESULTS                   
Net Income $34,560  $33,540  3% $25,259  37% 
Net Income Available to Common Stockholders $34,560  $33,509  3% $25,259  37% 
Diluted Earnings Per Share $0.64  $0.62  3% $0.47  36% 
Return on Average Assets  1.87%  1.91%     1.55%    
Return on Average Common Stockholders' Equity  20.42%  20.89%     17.28%    
Average Diluted Shares Outstanding  54,191,222   54,196,023      54,099,672     
                      
YEAR-TO-DATE OPERATING RESULTS                   
Net Income $100,703         $71,942  40% 
Net Income Available to Common Stockholders $100,672         $71,911  40% 
Diluted Earnings Per Share $1.86         $1.33  40% 
Return on Average Assets  1.90%         1.52%    
Return on Average Common Stockholders' Equity  20.88%         17.24%    
Average Diluted Shares Outstanding  54,190,244          54,111,208     
                      
BALANCE SHEET                   
Total Assets $7,517,833  $7,084,562  6% $6,712,103  12% 
Loans  6,363,531   6,129,649  4%  5,628,765  13% 
Non-interest-bearing Demand Deposits  1,504,447   1,481,447  2%  1,405,965  7% 
Total Deposits  6,505,351   6,085,682  7%  5,796,901  12% 
Stockholders' Equity  681,510   655,114  4%  590,213  15% 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $34.6 million for the quarter ended September 30, 2018, compared to net income and net income available to common stockholders of $25.3 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.65 and $0.64, respectively, for the third quarter of 2018, compared to $0.48 and $0.47, respectively, for the third quarter of 2017.

Return on average assets was 1.87% and return on average common stockholders’ equity was 20.42% for the third quarter of 2018, compared to 1.55% and 17.28%, respectively, for the third quarter of 2017.

Net interest income was $66.9 million for the third quarter of 2018, compared to $64.5 million for the second quarter of 2018 and $58.4 million for the third quarter of 2017.  The net interest margin in the third quarter of 2018 was 3.77% compared to 3.82% in the second quarter of 2018 and 3.77% in the third quarter of 2017.  Linked quarter increases in average rates paid on deposits in excess of increased average yields on loans drove unfavorable mix change, while increases in average balances in loans, non-interest bearing deposits and equity drove favorable volume change and overall change.

Average loans for the third quarter of 2018 were $6.23 billion, an increase of $244.8 million, or 4%, over average loans of $5.99 billion for the second quarter of 2018, and an increase of $792.9 million, or 15%, over average loans of $5.44 billion for the third quarter of 2017.

Average total deposits for the third quarter of 2018 were $6.33 billion, an increase of $296.0 million, or 5%, over average total deposits of $6.04 billion for the second quarter of 2018, and an increase of $801.6 million, or 15%, over average total deposits of $5.53 billion for the third quarter of 2017.

Non-performing assets to total assets were 0.27% for the third quarter of 2018, a decrease of one basis point compared to 0.28% for both the second quarter of 2018 and third quarter of 2017, respectively.  Net credit charge-offs to average loans were 0.25%, a 12 basis point increase compared to 0.13% for the second quarter of 2018 and a 15 basis point increase compared to 0.10% for the third quarter of 2017.  The increase in net credit charge-offs for the third quarter was primarily attributable to a $3.0 million charge-off on one commercial relationship.  Year-to-date net credit charge-offs to average loans were 0.16%, a three basis point decrease compared to 0.19% for the same period in 2017.  We recorded a $6.6 million provision for loan losses in the third quarter of 2018 compared to $4.1 million in the second quarter of 2018 and $4.8 million in the third quarter of 2017.  The allowance for loan loss as a percentage of total loans was 1.05% at September 30, 2018 compared to 1.05% at June 30, 2018 and 1.04% at September 30, 2017.  In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income increased $801,000 during the third quarter of 2018, or 17%, compared to the third quarter of 2017.  Deposit service charges increased $128,000 in the third quarter of 2018, or 9%, compared to the third quarter of 2017.  The number of transaction deposit accounts increased approximately 9% from September 30, 2017 to September 30, 2018, and the amount of overdraft fees increased $74,000, or 18%, from the third quarter of 2017 to the third quarter of 2018.  Credit card revenue increased $689,000, or 60%, to $1.8 million during the third quarter of 2018, compared to $1.1 million during the third quarter of 2017, driven by increased numbers of accounts and increased purchases per account.

Non-interest expense for the third quarter of 2018 increased $1.7 million, or 8%, to $23.2 million from $21.5 million in the third quarter of 2017, and decreased $860,000, or 4%, on a linked quarter basis.  Salary and benefit expense for the third quarter of 2018 increased $642,000, or 5%, to $13.1 million from $12.4 million in the third quarter of 2017, and was unchanged on a linked quarter basis.  The number of FTE employees increased from 438 at September 30, 2017 to 456 at September 30, 2018, or 4%.  Equipment and occupancy expense increased $246,000, or 13%, to $2.2 million in the third quarter of 2018, from $1.9 million in the third quarter of 2017.  Other operating expense for the third quarter of 2018 increased $594,000, or 11%, to $6.1 million from $5.5 million in the third quarter of 2017.  The efficiency ratio improved to 31.95% during the third quarter of 2018 from 34.02% during the third quarter of 2017 and from 34.31% on a linked quarter basis.

Income tax expense decreased $3.5 million, or 30%, to $8.1 million in the third quarter of 2018, compared to $11.6 million in the third quarter of 2017.  Lower corporate income tax rates resulting from the passage of the Tax Cuts and Jobs Act in December 2017 has resulted in lower effective tax rates.  We also 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 third quarter of 2018 and 2017 of $543,000 and $757,000, respectively.  Our effective tax rate for the third quarter of 2018 and 2017 was 19.0% and 31.5%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

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

   At September 30,
2018
 At June 30, 2018

 At March 31,
2018
 At December
31, 2017
 At September
30, 2017
 
Book value per share - GAAP $12.81  $12.33  $11.84  $11.47  $11.14  
Total common stockholders' equity - GAAP  681,510   655,114   629,297   607,604   590,213  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,517   14,584   14,652   14,719   14,787  
Tangible common stockholders' equity - non-GAAP $666,993  $640,530  $614,645  $592,885  $575,426  
Tangible book value per share - non-GAAP $12.54  $12.05  $11.56  $11.19  $10.86  
                       
Stockholders' equity to total assets - GAAP  9.07%  9.25%  8.98%  8.58%  8.79% 
Total assets - GAAP $7,517,833  $7,084,562  $7,011,735  $7,082,384  $6,712,103  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,517   14,584   14,652   14,719   14,787  
Total tangible assets - non-GAAP $7,503,316  $7,069,978  $6,997,083  $7,067,665  $6,697,316  
Tangible common equity to total tangible assets - non-GAAP  8.89%  9.06%  8.78%  8.39%  8.59% 

About ServisFirst Bancshares, Inc.

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

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

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  The words "believe," "expect," "anticipate," "project," “plan,” “intend,” “will,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.  Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions.  The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made.  ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com  or by calling (205) 949-0302.

Contact: ServisFirst Bank
Davis Mange (205) 949-3420
[email protected]

                       
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)                      
(In thousands except share and per share data)                      
  3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017  
CONSOLIDATED STATEMENT OF INCOME                      
Interest income $84,058  $78,396  $74,009  $72,060  $67,641   
Interest expense  17,195   13,874   11,573   10,652   9,245   
Net interest income  66,863   64,522   62,436   61,408   58,396   
Provision for loan losses  6,624   4,121   4,139   9,055   4,803   
Net interest income after provision for loan losses  60,239   60,401   58,297   52,353   53,593   
Non-interest income  5,591   5,459   4,869   4,905   4,790   
Non-interest expense  23,150   24,010   23,512   21,255   21,497   
Income before income tax  42,680   41,850   39,654   36,003   36,886   
Provision for income tax  8,120   8,310   7,051   14,853   11,627   
Net income  34,560   33,540   32,603   21,150   25,259   
Preferred stock dividends  -   31   -   31   -   
Net income available to common stockholders $34,560  $33,509  $32,603  $21,119  $25,259   
Earnings per share - basic $0.65  $0.63  $0.61  $0.40  $0.48   
Earnings per share - diluted $0.64  $0.62  $0.60  $0.39  $0.47   
Average diluted shares outstanding  54,191,222   54,196,023   54,183,400   54,161,788   54,099,672   
                       
CONSOLIDATED BALANCE SHEET DATA                      
Total assets $7,517,833  $7,084,562  $7,011,735  $7,082,384  $6,712,103   
Loans  6,363,531   6,129,649   5,928,327   5,851,261   5,628,765   
Debt securities  578,271   583,799   560,885   538,330   522,724   
Non-interest-bearing demand deposits  1,504,447   1,481,447   1,407,592   1,440,326   1,405,965   
Total deposits  6,505,351   6,085,682   5,977,387   6,091,674   5,796,901   
Borrowings  64,657   64,648   64,739   64,832   54,975   
Stockholders' equity $681,510  $655,114  $629,297  $607,604  $590,213   
                       
Shares outstanding  53,197,807   53,150,733   53,147,169   52,992,586   52,970,310   
Book value per share $12.81  $12.33  $11.84  $11.47  $11.14   
Tangible book value per share (1) $12.54  $12.05  $11.56  $11.19  $10.86   
                       
SELECTED FINANCIAL RATIOS                      
Net interest margin  3.77%  3.82%  3.81%  3.66%  3.77%  
Return on average assets  1.87%  1.91%  1.91%  1.20%  1.55%  
Return on average common stockholders' equity  20.42%  20.89%  21.40%  13.97%  17.28%  
Efficiency ratio  31.95%  34.31%  34.93%  32.05%  34.02%  
Non-interest expense to average earning assets  1.30%  1.42%  1.43%  1.26%  1.38%  
                       
CAPITAL RATIOS (2)                      
Common equity tier 1 capital to risk-weighted assets  10.08%  10.08%  9.88%  9.51%  9.60%  
Tier 1 capital to risk-weighted assets  10.09%  10.08%  9.88%  9.52%  9.61%  
Total capital to risk-weighted assets  12.05%  12.10%  11.91%  11.52%  11.51%  
Tier 1 capital to average assets  9.28%  9.21%  8.95%  8.51%  8.91%  
Tangible common equity to total tangible assets (1)  8.89%  9.06%  8.78%  8.39%  8.59%  
                       
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures. 
(2) Regulatory capital ratios for most recent period are preliminary. 


CONSOLIDATED BALANCE SHEETS (UNAUDITED)          
(Dollars in thousands)          
    September 30,
2018
 September 30,
2017
 % Change 
ASSETS          
Cash and due from banks $77,692  $79,431  (2)% 
Interest-bearing balances due from depository institutions  59,096   86,719  (32)% 
Federal funds sold  229,033   182,841  25 % 
 Cash and cash equivalents  365,821   348,991  5 % 
Available for sale debt securities, at fair value  578,021   435,325  33 % 
Held to maturity debt securities (fair value of $250 and $89,329 at          
 September 30, 2018 and 2017, respectively)  250   87,399  (100)% 
Restricted equity securities  889   1,038  (14)% 
Mortgage loans held for sale  5,277   4,971  6 % 
Loans  6,363,531   5,628,765  13 % 
Less allowance for loan losses  (66,879)  (58,459) 14 % 
 Loans, net  6,296,652   5,570,306  13 % 
Premises and equipment, net  57,882   55,104  5 % 
Goodwill and other identifiable intangible assets  14,517   14,787  (2)% 
Other assets  198,523   194,182  2 % 
 Total assets $7,517,833  $6,712,103  12 % 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Liabilities:          
Deposits:          
 Non-interest-bearing $1,504,447  $1,405,965  7 % 
 Interest-bearing  5,000,904   4,390,936  14 % 
  Total deposits  6,505,351   5,796,901  12 % 
Federal funds purchased  246,094   254,880  (3)% 
Other borrowings  64,657   54,975  18 % 
Other liabilities  20,221   15,134  34 % 
 Total liabilities  6,836,323   6,121,890  12 % 
Stockholders' equity:          
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at          
  September 30, 2018 and September 30, 2017  -   -  - % 
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,197,807 shares          
  issued and outstanding at September 30, 2018, and 52,970,310 shares issued and outstanding          
  at September 30, 2017  53   53  - % 
 Additional paid-in capital  218,062   217,483  - % 
 Retained earnings  472,681   371,127  27 % 
 Accumulated other comprehensive (loss) income  (9,788)  1,048  N/M   
 Noncontrolling interest  502   502  - % 
  Total stockholders' equity  681,510   590,213  15 % 
 Total liabilities and stockholders' equity $7,517,833  $6,712,103  12 % 
               


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)             
    Three Months Ended September 30, Nine Months Ended September 30, 
    2018 2017 2018 2017 
Interest income:             
 Interest and fees on loans $78,991 $63,857 $222,285 $179,325 
 Taxable securities  3,276  2,288  9,148  6,649 
 Nontaxable securities  583  729  1,862  2,246 
 Federal funds sold  892  379  2,137  1,185 
 Other interest and dividends  316  388  1,031  1,291 
 Total interest income  84,058  67,641  236,463  190,696 
Interest expense:             
 Deposits  15,210  7,574  36,545  19,877 
 Borrowed funds  1,985  1,671  6,097  4,804 
 Total interest expense  17,195  9,245  42,642  24,681 
 Net interest income  66,863  58,396  193,821  166,015 
Provision for loan losses  6,624  4,803  14,884  14,170 
 Net interest income after provision for loan losses  60,239  53,593  178,937  151,845 
Non-interest income:             
 Service charges on deposit accounts  1,595  1,467  4,833  4,203 
 Mortgage banking  789  978  2,096  2,941 
 Credit card income  1,838  1,149  5,172  3,517 
 Securities gains  186  -  190  - 
 Increase in cash surrender value life insurance  787  825  2,350  2,334 
 Other operating income  396  371  1,278  1,146 
 Total non-interest income  5,591  4,790  15,919  14,141 
Non-interest expense:             
 Salaries and employee benefits  13,070  12,428  39,464  36,172 
 Equipment and occupancy expense  2,193  1,947  6,260  6,452 
 Professional services  853  805  2,582  2,384 
 FDIC and other regulatory assessments  675  810  2,967  2,888 
 Other real estate owned expense  289  31  765  163 
 Other operating expense  6,070  5,476  18,634  16,580 
 Total non-interest expense  23,150  21,497  70,672  64,639 
 Income before income tax  42,680  36,886  124,184  101,347 
Provision for income tax  8,120  11,627  23,481  29,405 
 Net income  34,560  25,259  100,703  71,942 
 Dividends on preferred stock  -  -  31  31 
 Net income available to common stockholders $34,560 $25,259 $100,672 $71,911 
Basic earnings per common share $0.65 $0.48 $1.89 $1.36 
Diluted earnings per common share $0.64 $0.47 $1.86 $1.33 


LOANS BY TYPE (UNAUDITED)               
(In thousands)               
                 
   3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017
Commercial, financial and agricultural $2,478,788 $2,345,879 $2,329,904 $2,279,366 $2,223,910
Real estate - construction  543,611  522,788  506,050  580,874  467,838
Real estate - mortgage:               
 Owner-occupied commercial  1,430,111  1,383,882  1,349,679  1,328,666  1,323,383
 1-4 family mortgage  610,460  584,133  581,498  603,063  593,180
 Other mortgage  1,236,954  1,225,906  1,099,482  997,079  962,690
Subtotal: Real estate - mortgage  3,277,525  3,193,921  3,030,659  2,928,808  2,879,253
Consumer  63,607  67,061  61,714  62,213  57,764
Total loans $6,363,531 $6,129,649 $5,928,327 $5,851,261 $5,628,765
                


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                  
(Dollars in thousands)                  
     3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 
Allowance for loan losses:                     
Beginning balance $64,239   $62,050   $59,406   $58,459   $55,059   
Loans charged off:                     
 Commercial, financial and agricultural  3,923    1,732    1,088    7,064    924   
 Real estate - construction  -    -    -    -    16   
 Real estate - mortgage  48    440    381    1,134    550   
 Consumer  76    47    88    137    65   
  Total charge offs  4,047    2,219    1,557    8,335    1,555   
Recoveries:                     
 Commercial, financial and agricultural  52    173    4    64    67   
 Real estate - construction  4    97    7    126    12   
 Real estate - mortgage  1    2    42    26    59   
 Consumer  6    15    9    11    14   
  Total recoveries  63    287    62    227    152   
 Net charge-offs  3,984    1,932    1,495    8,108    1,403   
 Provision for loan losses  6,624    4,121    4,139    9,055    4,803   
 Ending balance $66,879   $64,239   $62,050   $59,406   $58,459   
                         
 Allowance for loan losses to total loans  1.05 %  1.05  %  1.05  %  1.02  %  1.04 % 
 Allowance for loan losses to total average                     
  loans  1.07 %  1.07  %  1.05  %  1.04  %  1.07 % 
 Net charge-offs to total average loans  0.25 %  0.13  %  0.10  %  0.56  %  0.10 % 
 Provision for loan losses to total average                     
  loans  0.42 %  0.28  %  0.29  %  0.63  %  0.35 % 
 Nonperforming assets:                     
  Nonaccrual loans $9,153   $8,022   $9,271   $10,765   $12,356   
  Loans 90+ days past due and accruing  5,714    6,081    678    60    2,506   
  Other real estate owned and                     
    repossessed assets  5,714    5,937    5,748    6,701    3,888   
 Total $20,581   $20,040   $15,697   $17,526   $18,750   
                         
 Nonperforming loans to total loans  0.23 %  0.23  %  0.17  %  0.19  %  0.26 % 
 Nonperforming assets to total assets  0.27 %  0.28  %  0.22  %  0.25  %  0.28 % 
 Nonperforming assets to earning assets  0.28 %  0.29  %  0.23  %  0.25  %  0.29 % 
 Reserve for loan losses to nonaccrual loans  730.68 %  800.79  %  669.29  %  551.84  %  473.12 % 
                         
 Restructured accruing loans $15,495   $15,572   $15,838   $16,919   $12,700   
                         
 Restructured accruing loans to total loans  0.24 %  0.25  %  0.27  %  0.29  %  0.23 % 
                         
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)              
 (In thousands)                 
     3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 
 Beginning balance: $17,257   $18,792   $20,572   $16,354   $16,370   
  Additions  100    -    -    4,233    -   
  Net (paydowns) / advances  (177)   (267)   (1,080)   (15)   (16)  
  Charge-offs  (596)   (1,268)   (700)   -    -   
     $16,584   $17,257   $18,792   $20,572   $16,354   
                              


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
    3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 
Interest income:                
 Interest and fees on loans $78,991 $73,620 $69,674 $67,357 $63,857 
 Taxable securities  3,276  3,127  2,745  2,468  2,288 
 Nontaxable securities  583  623  656  702  729 
 Federal funds sold  892  694  551  508  379 
 Other interest and dividends  316  332  383  1,025  388 
 Total interest income  84,058  78,396  74,009  72,060  67,641 
 Deposits  15,210  11,714  9,621  8,954  7,574 
 Borrowed funds  1,985  2,160  1,952  1,698  1,671 
 Total interest expense  17,195  13,874  11,573  10,652  9,245 
 Net interest income  66,863  64,522  62,436  61,408  58,396 
Provision for loan losses  6,624  4,121  4,139  9,055  4,803 
 Net interest income after provision for loan losses  60,239  60,401  58,297  52,353  53,593 
 Service charges on deposit accounts  1,595  1,653  1,585  1,499  1,467 
 Mortgage banking  789  789  518  894  978 
 Credit card income  1,838  1,756  1,578  1,298  1,149 
 Securities gains  186  -  4  -  - 
 Increase in cash surrender value life insurance  787  786  777  797  825 
 Other operating income  396  475  407  417  371 
 Total non-interest income  5,591  5,459  4,869  4,905  4,790 
 Salaries and employee benefits  13,070  13,098  13,296  11,432  12,428 
 Equipment and occupancy expense  2,193  2,113  1,954  1,566  1,947 
 Professional services  853  924  805  833  805 
 FDIC and other regulatory assessments  675  1,159  1,133  1,030  810 
 Other real estate owned expense  289  160  316  160  31 
 Other operating expense  6,070  6,556  6,008  6,234  5,476 
 Total non-interest expense  23,150  24,010  23,512  21,255  21,497 
 Income before income tax  42,680  41,850  39,654  36,003  36,886 
Provision for income tax  8,120  8,310  7,051  14,853  11,627 
 Net income  34,560  33,540  32,603  21,150  25,259 
 Dividends on preferred stock  -  31  -  31  - 
 Net income available to common stockholders $34,560 $33,509 $32,603 $21,119 $25,259 
Basic earnings per common share $0.65 $0.63 $0.61 $0.40 $0.48 
Diluted earnings per common share $0.64 $0.62 $0.60 $0.39 $0.47 


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) 
ON A FULLY TAXABLE-EQUIVALENT BASIS 
(Dollars in thousands) 
  
                                    
      3rd Quarter 2018 2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 
      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 $6,203,372  5.03% $5,958,377  4.94% $5,847,443  4.81% $5,680,227 4.68% $5,407,109 4.66% 
  Tax-exempt (2)  30,005  3.94   30,246  3.94   36,357  4.06   36,992 4.95   33,357 5.17  
   Total loans, net of                               
    unearned income  6,233,377  5.03   5,988,623  4.93   5,883,800  4.80   5,717,219 4.68   5,440,466 4.66  
 Mortgage loans held for sale  3,538  4.15   3,770  4.26   3,698  4.50   6,199 3.52   4,862 3.51  
 Debt securities:                               
  Taxable  482,571  2.72   475,777  2.63   435,747  2.52   406,488 2.43   385,431 2.37  
  Tax-exempt (2)  105,592  2.45   112,145  2.60   120,270  2.56   128,201 3.27   131,478 3.34  
   Total securities (3)  588,163  2.67   587,922  2.62   556,017  2.53   534,689 2.63   516,909 2.62  
 Federal funds sold  163,453  2.17   141,915  1.96   131,472  1.70   143,905 1.40   111,175 1.35  
 Restricted equity securities  993  2.80   1,022  1.18   1,030  1.57   1,030 1.93   1,030 3.47  
 Interest-bearing balances with banks  61,867  1.98   73,714  1.79   96,012  1.60   310,289 1.31   118,510 1.27  
 Total interest-earning assets $7,051,391  4.74% $6,796,966  4.64% $6,672,029  4.51% $6,713,331 4.29% $6,192,952 4.37% 
Non-interest-earning assets:                               
 Cash and due from banks  76,800      68,190      68,309      68,444     65,457    
 Net premises and equipment  58,873      59,262      59,709      57,320     54,727    
 Allowance for loan losses, accrued                               
  interest and other assets  127,850      129,585      140,558      149,636     151,786    
   Total assets $7,314,914     $7,054,003     $6,940,605     $6,988,731    $6,464,922    
                                    
Interest-bearing liabilities:                               
 Interest-bearing deposits:                               
 Checking $819,807  0.67% $827,540  0.56% $899,311  0.52% $899,334 0.46% $800,437 0.42% 
 Savings  53,835  0.52   54,842  0.34   53,269  0.31   49,697 0.31   48,313 0.30  
 Money market  3,305,293  1.33   3,089,595  1.10   3,027,176  0.90   3,065,298 0.80   2,774,061 0.74  
 Time deposits  643,260  1.65   596,450  1.36   576,857  1.21   576,010 1.16   546,020 1.10  
  Total interest-bearing deposits  4,822,195  1.25   4,568,427  1.03   4,556,613  0.86   4,590,339 0.77   4,168,831 0.72  
 Federal funds purchased  229,016  2.09   295,309  1.87   297,051  1.60   271,248 1.37   282,806 1.34  
 Other borrowings  64,652  4.79   64,699  4.85   64,805  4.89   60,829 4.98   55,034 5.17  
 Total interest-bearing liabilities $5,115,863  1.33% $4,928,435  1.13% $4,918,469  0.95% $4,922,416 0.86% $4,506,671 0.81% 
Non-interest-bearing liabilities:                               
 Non-interest-bearing                               
  demand  1,511,410      1,469,194      1,389,217      1,444,338     1,363,207    
 Other liabilities  16,333      13,079      15,007      22,029     15,070    
 Stockholders' equity  678,839      650,641      621,004      599,754     578,626    
 Accumulated other comprehensive                               
  (loss) income  (7,531)     (7,346)     (3,092)     194     1,348    
   Total liabilities and                               
    stockholders' equity $7,314,914     $7,054,003     $6,940,605     $6,988,731    $6,464,922    
Net interest spread    3.41%    3.51%    3.56%    3.43%    3.56% 
Net interest margin    3.77%    3.82%    3.81%    3.66%    3.77% 
                                    
(1) Average loans include loans on which the accrual of interest has been discontinued. 
(2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21% for the quarters in 2018 and 35% for the quarters in 2017. 
(3) Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation. 

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