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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): July 15, 2019  

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, Homewood, 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))

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading SymbolName of exchange on which registered
CommonSFBSNASDAQ

 

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 July 15, 2019, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended June 30, 2019. 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 July 15, 2019


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: July 15, 2019By: /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 Second Quarter of 2019

BIRMINGHAM, Ala., July 15, 2019 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three and six months ended June 30, 2019.

SECOND QUARTER 2019 HIGHLIGHTS:

FINANCIAL SUMMARY (UNAUDITED)  
(in Thousands except share and per share amounts)  
     
  Period Ending
June 30, 2019
 Period Ending
March 31, 2019
 % Change
From Period
Ending March
31, 2019 to
Period Ending
June 30, 2019
 Period Ending
June 30, 2018
 % Change
From Period
Ending June
30, 2018 to
Period Ending
June 30, 2019
QUARTERLY OPERATING RESULTS                  
Net Income $35,633  $35,010  2% $33,540  6%
Net Income Available to Common Stockholders $35,602  $35,010  2% $33,509  6%
Diluted Earnings Per Share $0.66  $0.65  2% $0.62  6%
Return on Average Assets  1.69%  1.75%     1.91%   
Return on Average Common Stockholders' Equity  18.72%  19.42%     20.89%   
Average Diluted Shares Outstanding  54,089,107   54,076,538      54,196,023    
                   
YEAR-TO-DATE OPERATING RESULTS                  
Net Income $70,643         $66,143  7%
Net Income Available to Common Stockholders $70,612         $66,112  7%
Diluted Earnings Per Share $1.31         $1.22  7%
Return on Average Assets  1.72%         1.91%   
Return on Average Common Stockholders' Equity  19.06%         21.13%   
Average Diluted Shares Outstanding  54,082,857          54,189,746    
                   
BALANCE SHEET                  
Total Assets $8,740,237  $8,310,836  5% $7,084,562  23%
Loans  6,967,886   6,659,908  5%  6,129,649  14%
Non-interest-bearing Demand Deposits  1,576,959   1,572,703  -%  1,481,447  6%
Total Deposits  7,404,794   7,083,666  5%  6,085,682  22%
Stockholders' Equity  778,957   745,586  4%  655,114  19%
                   

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $35.6 million for the quarter ended June 30, 2019, compared to net income and net income available to common stockholders of $33.5 million for the same quarter in 2018.  Basic and diluted earnings per common share were $0.67 and $0.66, respectively, for the second quarter of 2019, compared to $0.63 and $0.62, respectively, for the second quarter of 2018.

Annualized return on average assets was 1.69% and annualized return on average common stockholders’ equity was 18.72% for the second quarter of 2019, compared to 1.91% and 20.89%, respectively, for the second quarter of 2018.

Net interest income was $70.1 million for the second quarter of 2019, compared to $68.8 million for the first quarter of 2019 and $64.5 million for the second quarter of 2018.  The net interest margin in the second quarter of 2019 was 3.44% compared to 3.56% in the first quarter of 2019 and 3.82% in the second quarter of 2018.  Linked quarter increases in average rates paid on deposits drove an unfavorable rate change while increases in average balances in loans and equity drove favorable volume change.

Average loans for the second quarter of 2019 were $6.79 billion, an increase of $187.6 million, or 11% annualized, over average loans of $6.60 billion for the first quarter of 2019, and an increase of $800.4 million, or 13%, over average loans of $5.99 billion for the second quarter of 2018.

Average total deposits for the second quarter of 2019 were $7.18 billion, an increase of $203.0 million, or 12% annualized, over average total deposits of $6.98 billion for the first quarter of 2019, and an increase of $1.14 billion, or 19%, over average total deposits of $6.04 billion for the second quarter of 2018.

Non-performing assets to total assets were 0.46% for the second quarter of 2019, an increase of five basis points compared to 0.41% for the first quarter of 2019 and an increase of 23 basis points compared to 0.23% for the second quarter of 2018.  Net charge-offs to average loans was 0.22%, a two basis point increase compared to 0.20% for the first quarter of 2019 and an increase of nine basis points compared to 0.13% for the second quarter of 2018.  We recorded a $4.9 million provision for loan losses in the second quarter of 2019 compared to $4.9 million in the first quarter of 2019 and $4.1 million in the second quarter of 2018.  The allowance for loan loss as a percentage of total loans was 1.02% at June 30, 2019, a decrease of 3 basis points compared to 1.05% at March 31, 2019 and June 30, 2018, respectively.  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 for the second quarter of 2019 increased $837,000, or 17%, to $5.8 million from $4.9 million in the second quarter of 2018.  Deposit service charges increased $133,000 in the second quarter of 2019, or 8%, compared to the second quarter of 2018.  The number of transaction deposit accounts increased approximately 8% from June 30, 2018 to June 30, 2019.  Mortgage banking revenue increased $298,000, or 38%, from the second quarter of 2018 to the second quarter of 2019.  Mortgage loan originations increased approximately 28% during the second quarter of 2019 when compared to the same quarter in 2018.  Credit card revenue increased $380,000, or 28%, to $1.7 million during the second quarter of 2019, compared to $1.3 million during the second quarter of 2018.  The number of accounts increased approximately 35% and the aggregate amount of sales on all accounts increased 28% during the second quarter of 2019.  Other income for the second quarter of 2019 increased $40,000, or 11%, to $392,000 from $352,000 in the second quarter of 2018.

Non-interest expense for the second quarter of 2019 increased $2.5 million, or 11%, to $26.0 million from $23.5 million in the second quarter of 2018, and increased $696,000, or 3%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2019 increased $1.2 million, or 10%, to $14.3 million from $13.1 million in the second quarter of 2018, and increased $74,000, or 1%, on a linked quarter basis. The number of FTE employees increased from 447 at June 30, 2018 to 495 at June 30, 2019, or 11%.  Equipment and occupancy expense increased $174,000, or 8%, to $2.3 million in the second quarter of 2019, from $2.1 million in the second quarter of 2018, and increased $28,000 on a linked-quarter basis.  Professional services expense increased $267,000, or 29%, to $1.2 million in the second quarter of 2019, from $924,000 in the second quarter of 2018, and increased $197,000, or 20%, from $994,000 on a linked-quarter basis.  FDIC and other regulatory assessments decreased $78,000, or 7%, to $1.1 million in the second quarter of 2019, from $1.1 million in the second quarter of 2018.  Lower assessment rates result from the FDIC’s Bank Insurance Fund reaching their targeted level of 1.35%.  Expenses associated with other real estate owned increased $52,000, or 33%, to $212,000 in the second quarter of 2019, from $160,000 in the second quarter of 2018.  Updated appraisals resulted in some write-downs in values of properties.  Other operating expenses for the second quarter of 2019 increased $874,000, or 15%, to $6.9 million from $6.0 million in the second quarter of 2018, and increased $145,000, or 2%, on a linked-quarter basis.  Increases in business development and Federal Reserve Bank service charges contributed to this increase in other operating expenses.  The efficiency ratio was 34.30% during the second quarter of 2019 compared to 33.82% during the second quarter of 2018 and compared to 34.35% during the first of 2019.

Income tax expense increased $1.0 million, or 12%, to $9.3 million in the second quarter of 2019, compared to $8.3 million in the second quarter of 2018.  Our effective tax rate was 20.74% for the second quarter of 2019 compared to 19.86% for the second quarter of 2018.  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 second quarters of 2019 and 2018 of $186,000 and $457,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

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

           
  At June 30, 2019 At March 31, 2019 At December 31, 2018 At September 30, 2018 At June 30, 2018
Book value per share - GAAP$14.55  $13.94  $13.40  $12.81  $12.33 
Total common stockholders' equity - GAAP 778,957   745,586   715,203   681,510   655,114 
 Adjustments:                   
 Adjusted for goodwill and core deposit intangible asset 14,314   14,381   14,449   14,517   14,584 
Tangible common stockholders' equity - non-GAAP$764,643  $731,205  $700,754  $666,993  $640,530 
Tangible book value per share - non-GAAP$14.29  $13.67  $13.13  $12.54  $12.05 
                     
Stockholders' equity to total assets - GAAP 8.91%  8.97%  8.93%  9.07%  9.25%
Total assets - GAAP$8,740,237  $8,310,836  $8,007,382  $7,517,833  $7,084,562 
 Adjustments:                   
 Adjusted for goodwill and core deposit intangible asset 14,314   14,381   14,449   14,517   14,584 
Total tangible assets - non-GAAP$8,725,923  $8,296,455  $7,992,933  $7,503,316  $7,069,978 
Tangible common equity to total tangible assets - non-GAAP 8.76%  8.81%  8.77%  8.89%  9.06%
                    

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, Sarasota 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)                   
 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018
CONSOLIDATED STATEMENT OF INCOME                   
Interest income$97,787  $93,699  $90,164  $84,058  $78,396 
Interest expense 27,702   24,921   21,306   17,195   13,874 
Net interest income 70,085   68,778   68,858   66,863   64,522 
Provision for loan losses 4,884   4,885   6,518   6,624   4,121 
Net interest income after provision for loan losses 65,201   63,893   62,340   60,239   60,401 
Non-interest income 5,778   4,942   5,019   5,065   4,941 
Non-interest expense 26,022   25,326   22,701   22,624   23,492 
Income before income tax 44,957   43,509   44,658   42,680   41,850 
Provision for income tax 9,324   8,499   8,421   8,120   8,310 
Net income 35,633   35,010   36,237   34,560   33,540 
Preferred stock dividends 31   -   32   -   31 
Net income available to common stockholders$35,602  $35,010  $36,205  $34,560  $33,509 
Earnings per share - basic$0.67  $0.65  $0.68  $0.65  $0.63 
Earnings per share - diluted$0.66  $0.65  $0.67  $0.64  $0.62 
Average diluted shares outstanding 54,089,107   54,076,538   54,109,450   54,191,222   54,196,023 
                    
CONSOLIDATED BALANCE SHEET DATA                   
Total assets$8,740,237  $8,310,836  $8,007,382  $7,517,833  $7,084,562 
Loans 6,967,886   6,659,908   6,533,499   6,363,531   6,129,649 
Debt securities 658,221   631,946   590,184   578,271   583,799 
Non-interest-bearing demand deposits 1,576,959   1,572,703   1,557,341   1,504,447   1,481,447 
Total deposits 7,404,794   7,083,666   6,915,708   6,505,351   6,085,682 
Borrowings 64,684   64,675   64,666   64,657   64,648 
Stockholders' equity$778,957  $745,586  $715,203  $681,510  $655,114 
                    
Shares outstanding 53,526,882   53,495,208   53,375,195   53,197,807   53,150,733 
Book value per share$14.55  $13.94  $13.40  $12.81  $12.33 
Tangible book value per share (1)$14.29  $13.67  $13.13  $12.54  $12.05 
                    
SELECTED FINANCIAL RATIOS (Annualized)                   
Net interest margin 3.44%  3.56%  3.63%  3.77%  3.82%
Return on average assets 1.69%  1.75%  1.85%  1.87%  1.91%
Return on average common stockholders' equity 18.72%  19.42%  21.13%  20.42%  20.89%
Efficiency ratio 34.30%  34.35%  30.73%  31.45%  33.82%
Non-interest expense to average earning assets 1.28%  1.31%  1.20%  1.27%  1.39%
                    
CAPITAL RATIOS (2)                   
Common equity tier 1 capital to risk-weighted assets 10.18%  10.30%  10.12%  10.08%  10.08%
Tier 1 capital to risk-weighted assets 10.19%  10.30%  10.13%  10.09%  10.08%
Total capital to risk-weighted assets 12.02%  12.21%  12.05%  12.05%  12.10%
Tier 1 capital to average assets 9.00%  9.03%  9.07%  9.28%  9.21%
Tangible common equity to total tangible assets (1) 8.76%  8.81%  8.77%  8.89%  9.06%
                    
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(2) Regulatory capital ratios for most recent period are preliminary.


         
CONSOLIDATED BALANCE SHEETS (UNAUDITED)        
(Dollars in thousands)        
   June 30, 2019 June 30, 2018 % Change
ASSETS        
Cash and due from banks$68,841  $68,344  1 %
Interest-bearing balances due from depository institutions 409,052   81,742  400 %
Federal funds sold 408,289   15,585  2,520 %
 Cash and cash equivalents 886,182   165,671  435 %
Available for sale debt securities, at fair value 657,971   583,549  13 %
Held to maturity debt securities (fair value of $250 at June 30, 2019 and June 30, 2018) 250   250  - %
Mortgage loans held for sale 9,446   4,605  105 %
Loans 6,967,886   6,129,649  14 %
Less allowance for loan losses (71,386)  (64,239) 11 %
 Loans, net 6,896,500   6,065,410  14 %
Premises and equipment, net 57,195   58,299  (2)%
Goodwill and other identifiable intangible assets 14,314   14,584  (2)%
Other assets 218,379   192,194  14 %
 Total assets$8,740,237  $7,084,562  23 %
LIABILITIES AND STOCKHOLDERS' EQUITY        
Liabilities:        
Deposits:        
 Non-interest-bearing$1,576,959  $1,481,447  6 %
 Interest-bearing 5,827,835   4,604,235  27 %
  Total deposits 7,404,794   6,085,682  22 %
Federal funds purchased 459,449   262,659  75 %
Other borrowings 64,684   64,648  - %
Other liabilities 32,353   16,459  97 %
 Total liabilities 7,961,280   6,429,448  24 %
Stockholders' equity:        
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at        
  June 30, 2019 and June 30, 2018 -   -    
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,526,882 shares        
  issued and outstanding at June 30, 2019, and 53,150,733 shares issued and outstanding        
  at June 30, 2018 54   53  2 %
 Additional paid-in capital 218,658   217,765  - %
 Retained earnings 555,425   443,972  25 %
 Accumulated other comprehensive income (loss) 4,318   (7,178) NM  
  Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 778,455   654,612  19 %
 Noncontrolling interest 502   502  - %
  Total stockholders' equity 778,957   655,114  19 %
 Total liabilities and stockholders' equity$8,740,237  $7,084,562  23 %


           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)            
  Three Months Ended June 30, Six Months Ended June 30, 
  2019  2018 2019  2018 
Interest income:            
 Interest and fees on loans$88,610  $73,620 $174,134  $143,294 
 Taxable securities 4,193   3,127  7,939   5,872 
 Nontaxable securities 393   623  839   1,279 
 Federal funds sold 1,998   694  3,217   1,245 
 Other interest and dividends 2,593   332  5,357   715 
   Total interest income 97,787   78,396  191,486   152,405 
Interest expense:            
 Deposits 24,240   11,714  46,385   21,335 
 Borrowed funds 3,462   2,160  6,238   4,112 
   Total interest expense 27,702   13,874  52,623   25,447 
   Net interest income 70,085   64,522  138,863   126,958 
Provision for loan losses 4,884   4,121  9,769   8,260 
   Net interest income after provision for loan losses 65,201   60,401  129,094   118,698 
Non-interest income:            
 Service charges on deposit accounts 1,786   1,653  3,488   3,238 
 Mortgage banking 1,087   789  1,662   1,307 
 Credit card income 1,741   1,361  3,317   2,616 
 Securities (losses) gains (6)  -  (6)  4 
 Increase in cash surrender value life insurance 778   786  1,540   1,563 
 Other operating income 392   352  719   629 
   Total non-interest income 5,778   4,941  10,720   9,357 
Non-interest expense:            
 Salaries and employee benefits 14,339   13,098  28,604   26,394 
 Equipment and occupancy expense 2,287   2,113  4,546   4,067 
 Professional services 1,191   924  2,185   1,729 
 FDIC and other regulatory assessments 1,081   1,159  2,100   2,292 
 Other real estate owned expense 212   160  234   476 
 Other operating expense 6,912   6,038  13,679   11,593 
   Total non-interest expense 26,022   23,492  51,348   46,551 
   Income before income tax 44,957   41,850  88,466   81,504 
Provision for income tax 9,324   8,310  17,823   15,361 
      Net income 35,633   33,540  70,643   66,143 
 Dividends on preferred stock 31   31  31   31 
      Net income available to common stockholders$35,602  $33,509 $70,612  $66,112 
Basic earnings per common share$0.67  $0.63 $1.32  $1.24 
Diluted earnings per common share$0.66  $0.62 $1.31  $1.22 


               
LOANS BY TYPE (UNAUDITED)              
(In thousands)              
                
  2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018
Commercial, financial and agricultural$2,633,529 $2,522,136 $2,513,225 $2,478,788 $2,345,879
Real estate - construction 603,779  556,219  533,192  543,611  522,788
Real estate - mortgage:              
 Owner-occupied commercial 1,538,279  1,500,595  1,463,887  1,430,111  1,383,882
 1-4 family mortgage 630,963  629,285  621,634  610,460  584,133
 Other mortgage 1,496,512  1,394,611  1,337,068  1,236,954  1,225,906
Subtotal: Real estate - mortgage 3,665,754  3,524,491  3,422,589  3,277,525  3,193,921
Consumer 64,824  57,062  64,493  63,607  67,061
Total loans$6,967,886 $6,659,908 $6,533,499 $6,363,531 $6,129,649


                  
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                 
(Dollars in thousands)                 
   2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018
Allowance for loan losses:                   
Beginning balance$70,207   $68,600    $66,879    $64,239    $62,050  
Loans charged off:                   
 Commercial, financial and agricultural 3,610    3,037    4,685    3,923    1,732  
 Real estate - mortgage 169    50    173    48    440  
 Consumer 63    218    72    76    47  
  Total charge offs 3,842    3,305    4,930    4,047    2,219  
Recoveries:                   
 Commercial, financial and agricultural 117    12    120    52    173  
 Real estate - construction -    1    4    4    97  
 Real estate - mortgage 4    7    1    1    2  
 Consumer 16    7    8    6    15  
  Total recoveries 137    27    133    63    287  
 Net charge-offs 3,705    3,278    4,797    3,984    1,932  
 Provision for loan losses 4,884    4,885    6,518    6,624    4,121  
 Ending balance$71,386   $70,207   $68,600   $66,879   $64,239  
                      
 Allowance for loan losses to total loans 1.02 %  1.05  %  1.05  %  1.05  %  1.05 %
 Allowance for loan losses to total average                   
  loans 1.05 %  1.06  %  1.07  %  1.07  %  1.07 %
 Net charge-offs to total average loans 0.22 %  0.20  %  0.30  %  0.25  %  0.13 %
 Provision for loan losses to total average                   
  loans 0.29 %  0.30  %  0.40  %  0.42  %  0.28 %
 Nonperforming assets:                   
  Nonaccrual loans$21,840   $22,154    $21,926    $9,153    $8,022  
  Loans 90+ days past due and accruing 10,299    5,021    5,844    5,714    6,081  
  Other real estate owned and                   
    repossessed assets 5,649    5,480    5,169    5,714    5,937  
 Total$37,788   $32,655   $32,939   $20,581   $20,040  
                      
 Nonperforming loans to total loans 0.46 %  0.41  %  0.43  %  0.23  %  0.23 %
 Nonperforming assets to total assets 0.43 %  0.39  %  0.41  %  0.27  %  0.28 %
 Nonperforming assets to earning assets 0.44 %  0.40  %  0.43  %  0.28  %  0.29 %
 Reserve for loan losses to nonaccrual loans 326.86 %  316.90  %  312.87  %  730.68  %  800.79 %
                      
 Restructured accruing loans$2,742   $2,742    $3,073    $15,495    $15,572  
                      
 Restructured accruing loans to total loans 0.04 %  0.04  %  0.04  %  0.24  %  0.25 %
                      
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)             
 (In thousands)                
   2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018
 Beginning balance:$12,289   $14,555   $16,584   $17,257   $18,792  
  Additions -    -    -    100    -  
  Net (paydowns) / advances (12)   (766)   (11)   (177)   (267) 
  Charge-offs (993)   (1,500)   (2,018)   (596)   (1,268) 
   $11,284   $12,289   $14,555   $16,584   $17,257  


           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
  2nd Quarter
2019
 1st Quarter
2019
 4th Quarter
2018
 3rd Quarter
2018
 2nd Quarter
2018
 
Interest income:               
 Interest and fees on loans$88,610  $85,524 $83,085 $78,991 $73,620 
 Taxable securities 4,193   3,746  3,506  3,276  3,127 
 Nontaxable securities 393   446  544  583  623 
 Federal funds sold 1,998   1,219  966  892  694 
 Other interest and dividends 2,593   2,764  2,063  316  332 
   Total interest income 97,787   93,699  90,164  84,058  78,396 
Interest expense:               
 Deposits 24,240   22,145  18,957  15,210  11,714 
 Borrowed funds 3,462   2,776  2,349  1,985  2,160 
   Total interest expense 27,702   24,921  21,306  17,195  13,874 
   Net interest income 70,085   68,778  68,858  66,863  64,522 
Provision for loan losses 4,884   4,885  6,518  6,624  4,121 
   Net interest income after provision for loan losses 65,201   63,893  62,340  60,239  60,401 
Non-interest income:               
 Service charges on deposit accounts 1,786   1,702  1,714  1,595  1,653 
 Mortgage banking 1,087   575  688  789  789 
 Credit card income 1,741   1,576  1,521  1,414  1,361 
 Securities gains (6)  -  -  186  - 
 Increase in cash surrender value life insurance 778   762  780  787  786 
 Other operating income 392   327  316  294  352 
   Total non-interest income 5,778   4,942  5,019  5,065  4,941 
Non-interest expense:               
 Salaries and employee benefits 14,339   14,265  12,385  13,070  13,098 
 Equipment and occupancy expense 2,287   2,259  2,163  2,193  2,113 
 Professional services 1,191   994  1,064  853  924 
 FDIC and other regulatory assessments 1,081   1,019  902  675  1,159 
 Other real estate owned expense 212   22  25  289  160 
 Other operating expense 6,912   6,767  6,162  5,544  6,038 
   Total non-interest expense 26,022   25,326  22,701  22,624  23,492 
   Income before income tax 44,957   43,509  44,658  42,680  41,850 
Provision for income tax 9,324   8,499  8,421  8,120  8,310 
      Net income 35,633   35,010  36,237  34,560  33,540 
 Dividends on preferred stock 31   -  32  -  31 
      Net income available to common stockholders$35,602  $35,010 $36,205 $34,560 $33,509 
Basic earnings per common share$0.67  $0.65 $0.68 $0.65 $0.63 
Diluted earnings per common share$0.66  $0.65 $0.67 $0.64 $0.62 


 
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
                                  
     2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 3rd Quarter 2018 2nd Quarter 2018
     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$6,756,927  5.24% $6,570,920  5.26% $6,403,139  5.13% $6,203,372  5.03% $5,958,377  4.94%
  Tax-exempt (2) 32,124  3.83   30,577  3.81   29,656  3.26   30,005  3.94   30,246  3.94 
   Total loans, net of                             
    unearned income 6,789,051  5.23   6,601,497  5.25   6,432,795  5.12   6,233,377  5.03   5,988,623  4.93 
 Mortgage loans held for sale 5,208  3.85   1,614  6.53   3,364  3.30   3,538  4.15   3,770  4.26 
 Debt securities:                             
  Taxable 565,491  2.97   518,955  2.89   498,138  2.82   482,571  2.72   475,777  2.63 
  Tax-exempt (2) 77,364  2.10   87,537  2.12   98,027  2.34   105,592  2.45   112,145  2.60 
   Total securities (3) 642,855  2.86   606,492  2.78   596,165  2.74   588,163  2.67   587,922  2.62 
 Federal funds sold 323,714  2.48   192,690  2.57   156,884  2.44   163,453  2.17   141,915  1.96 
 Interest-bearing balances with   banks 411,481  2.53   438,099  2.56   334,065  2.45   61,867  2.03   73,714  1.81 
 Total interest-earning assets$8,172,309  4.80% $7,840,392  4.85% $7,524,152  4.76% $7,051,391  4.74% $6,796,966  4.64%
Non-interest-earning assets:                             
 Cash and due from banks 76,988      74,430      74,272      76,800      68,190    
 Net premises and equipment 58,607      58,852      58,521      58,873      59,262    
 Allowance for loan losses, accrued                             
  interest and other assets 156,264      149,941      128,933      128,843      130,607    
   Total assets$8,464,168     $8,123,615     $7,784,999     $7,314,914     $7,054,003    
                                  
Interest-bearing liabilities:                             
 Interest-bearing deposits:                             
 Checking$909,847  0.88% $942,686  0.86% $908,416  0.74% $819,807  0.67% $827,540  0.56%
 Savings 54,391  0.57   54,086  0.55   52,443  0.54   53,835  0.52   54,842  0.34 
 Money market 3,932,459  1.88   3,758,162  1.78   3,537,522  1.56   3,305,293  1.33   3,089,595  1.10 
 Time deposits 694,414  2.16   698,976  2.06   687,361  1.92   643,260  1.65   596,450  1.36 
  Total interest-bearing deposits 5,591,111  1.74   5,453,910  1.65   5,185,742  1.45   4,822,195  1.25   4,568,427  1.03 
 Federal funds purchased 418,486  2.57   312,989  2.59   263,125  2.36   229,016  2.09   295,309  1.87 
 Other borrowings 64,680  4.84   64,671  4.90   64,665  4.79   64,652  4.79   64,699  4.85 
 Total interest-bearing liabilities$6,074,277  1.83% $5,831,570  1.73% $5,513,532  1.53% $5,115,863  1.33% $4,928,435  1.13%
Non-interest-bearing liabilities:                             
 Non-interest-bearing                             
  checking 1,591,722      1,524,502      1,551,366      1,511,410      1,469,194    
 Other liabilities 35,161      36,362      40,185      16,333      13,079    
 Stockholders' equity 763,742      735,611      689,525      678,839      650,641    
 Accumulated other comprehensive                             
  loss (734)     (4,430)     (9,609)     (7,531)     (7,346)   
   Total liabilities and                             
    stockholders' equity$8,464,168     $8,123,615     $7,784,999     $7,314,914     $7,054,003    
Net interest spread   2.97%    3.12%    3.23%    3.41%    3.51%
Net interest margin   3.44%    3.56%    3.63%    3.77%    3.82%
                                  
(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%.
(3)Unrealized losses on available-for-sale debt securities are excluded from the yield calculation.

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