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

Form 8-K
0001430723 False 0001430723 2020-01-21 2020-01-21 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

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):  January 21, 2020

_______________________________

ServisFirst Bancshares, Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware001-3645226-0734029
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

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))

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

Title of each classTrading Symbol(s)Name of each 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 January 21, 2020, ServisFirst Bancshares, Inc., a Delaware corporation (“ServisFirst”), issued a press release announcing its operating results for the quarter ended December 31, 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) Exhibit. The following exhibits are included with this Current Report on Form 8-K: 

Exhibit No. Description
   
99.1 Press Release dated January 21, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

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: January 21, 2020By: /s/ Thomas A. Broughton, III        
  Thomas A. Broughton, III
  Chairman, President and Chief Executive Officer
  

 

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Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

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ServisFirst Bancshares, Inc. Announces Results for Fourth Quarter of 2019

BIRMINGHAM, Ala., Jan. 21, 2020 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three months and year ended December 31, 2019.

Fourth Quarter 2019 Highlights:

FINANCIAL SUMMARY (UNAUDITED)                    
(in Thousands except share and per share amounts)                    
                       
    Period Ending
December 31,
2019
 Period Ending
September 30,
2019
 % Change
From Period
Ending
September 30,
2019 to Period
Ending
December 31,
2019
 Period Ending
December 31,
2018
 % Change
From Period
Ending
December 31,
2018 to Period
Ending
December 31,
2019
 
QUARTERLY OPERATING RESULTS                    
Net Income $41,037  $37,563  9 % $36,237  13% 
Net Income Available to Common Stockholders $41,005  $37,563  9 % $36,205  13% 
Diluted Earnings Per Share $0.76  $0.69  10 % $0.67  13% 
Return on Average Assets  1.80%  1.67%      1.85%    
Return on Average Common Stockholders' Equity  19.75%  18.69%      21.13%    
Average Diluted Shares Outstanding  54,149,554   54,096,368       54,109,450     
                       
YEAR-TO-DATE OPERATING RESULTS                    
Net Income $149,243          $136,940  9% 
Net Income Available to Common Stockholders $149,180          $136,877  9% 
Diluted Earnings Per Share $2.76          $2.53  9% 
Return on Average Assets  1.73%          1.88%    
Return on Average Common Stockholders' Equity  19.15%          20.95%    
Average Diluted Shares Outstanding  54,103,074           54,169,879     
                       
Net income - adjusted for FDIC assessment credit* $147,995          $136,940  8% 
Net Income Available to Common Stockholders - adjusted for FDIC assessment credit* $147,932          $136,877  8% 
Diluted Earnings Per Share - adjusted for FDIC assessment credit* $2.74          $2.53  8% 
Return on Average Assets - adjusted for FDIC assessment credit*  1.71%          1.88%    
Return on Average Common Stockholders' Equity - adjusted for FDIC assessment credit*  18.99%          20.95%    
                       
BALANCE SHEET                    
Total Assets $8,947,653  $9,005,112  (1)% $8,007,382  12% 
Loans  7,261,451   7,022,069  3 %  6,533,499  11% 
Non-interest-bearing Demand Deposits  1,749,879   1,678,672  4 %  1,557,341  12% 
Total Deposits  7,530,433   7,724,158  (3)%  6,915,708  9% 
Stockholders' Equity  842,682   810,537  4 %  715,203  18% 
                       
* The adjustment for the FDIC assessment credit included in the comparative periods presented in this press release are more fully described in "Detailed Financials" and in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below. 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $41.0 million for the quarter ended December 31, 2019, compared to net income and net income available to common stockholders of $36.2 million for the same quarter in 2018.  Basic and diluted earnings per common share were $0.77 and $0.76, respectively, for the fourth quarter of 2019, compared to $0.68 and $0.67, respectively, for the fourth quarter of 2018.

Annualized return on average assets was 1.80% and annualized return on average common stockholders’ equity was 19.75% for the fourth quarter of 2019, compared to 1.85% and 21.13%, respectively, for the fourth quarter of 2018.

Net interest income was $75.8 million for the fourth quarter of 2019, compared to $73.0 million for the third quarter of 2019 and $68.9 million for the fourth quarter of 2018.  The net interest margin in the fourth quarter of 2019 was 3.47% compared to 3.36% in the third quarter of 2019 and 3.63% in the fourth quarter of 2018.  Linked quarter decreases in average rates paid on deposits in excess of decreases in loan yields drove a favorable rate change and increases in average balances in loans, non-interest-bearing demand deposits and equity drove favorable volume change.

Average loans for the fourth quarter of 2019 were $7.10 billion, an increase of $140.9 million, or 8% annualized, over average loans of $6.96 billion for the third quarter of 2019, and an increase of $669.3 million, or 10%, over average loans of $6.43 billion for the fourth quarter of 2018.

Average total deposits for the fourth quarter of 2019 were $7.68 billion, an increase of $102.9 million, or 5% annualized, over average total deposits of $7.58 billion for the third quarter of 2019, and an increase of $947.6 million, or 14%, over average total deposits of $6.74 billion for the fourth quarter of 2018.

Non-performing assets to total assets were 0.50% for the fourth quarter of 2019, a decrease of two basis points compared to 0.52% for the third quarter of 2019 and an increase of nine basis points compared to 0.41% for the fourth quarter of 2018. Annualized net charge-offs to average loans were 0.36%, a 13 basis point decrease compared to 0.49% for the third quarter of 2019 and an increase of six basis points compared to 0.30% for the fourth quarter of 2018.  We recorded a $5.9 million provision for loan losses in the fourth quarter of 2019 compared to $7.0 million in the third quarter of 2019 and $6.5 million in the fourth quarter of 2018.  The allowance for loan loss as a percentage of total loans was 1.05% at December 31, 2019, a decrease of five basis points compared to 1.10% at September 30, 2019 and unchanged compared to 1.05% as of December 31, 2018.  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 fourth quarter of 2019 increased $2.1 million, or 42%, to $7.1 million from $5.0 million in the fourth quarter of 2018.  Deposit service charges increased $92,000 in the fourth quarter of 2019, or 5%, compared to the fourth quarter of 2018.  Mortgage banking revenue almost doubled to $1.4 million from the fourth quarter of 2018 to the fourth quarter of 2019.  Mortgage loan sales increased approximately 111% during the fourth quarter of 2019 when compared to the same quarter in 2018.  Credit card revenue increased $370,000, or 25%, to $1.9 million during the fourth quarter of 2019, compared to $1.5 million during the fourth quarter of 2018.  The number of credit card accounts increased approximately 36% and the aggregate amount of sales on all credit card accounts increased 20% during the fourth quarter of 2019.  Cash surrender value of life insurance increased $638,000, or 82%, to $1.4 million during the fourth quarter of 2019, compared to $780,000 during the fourth quarter of 2018.  We purchased $75.0 million of additional life insurance contracts during the third quarter of 2019.  Other income for the fourth quarter of 2019 increased $256,000, or 81%, to $572,000 from $316,000 in the fourth quarter of 2018.  Gain or loss on the sale of other real estate owned, included in other income, was a gain of $116,000 during the fourth quarter of 2019, compared to a loss $18,000 during the fourth quarter of 2018.

Non-interest expense for the fourth quarter of 2019 increased $2.9 million, or 13%, to $25.6 million from $22.7 million in the fourth quarter of 2018, and increased $458,000, or 2%, on a linked quarter basis.  During the third quarter of 2019 we recognized a credit in the amount of $1.7 million to our FDIC and other regulatory assessments expense as a result of the Federal Deposit Insurance Corporation’s (“FDIC”) Small Bank Assessment Credit.  This credit is discussed further below in “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.”  Salary and benefit expense for the fourth quarter of 2019 increased $1.3 million, or 10%, to $13.7 million from $12.4 million in the fourth quarter of 2018, and decreased $1.8 million, or 12%, on a linked quarter basis.  We adjusted accrued incentives downward by $1.0 million in December based on actual year-end production in 2019.  The number of FTE employees increased from 468 at December 31, 2018 to 500 at December 31, 2019, or 7%, and decreased by six from the end of the third quarter of 2019.  Equipment and occupancy expense increased $176,000, or 8%, to $2.3 million in the fourth quarter of 2019, from $2.2 million in the fourth quarter of 2018, and decreased $48,000 on a linked-quarter basis.  Professional services expense increased $99,000, or 9%, to $1.2 million in the fourth quarter of 2019, from $1.1 million in the fourth quarter of 2018, and increased $276,000, or 31%, from $887,000 on a linked-quarter basis.  FDIC and other regulatory assessments increased $269,000 to $1.2 million in the fourth quarter of 2019, from $902,000 in the fourth quarter of 2018.  As mentioned above, we recognized an assessment credit during the third quarter of 2019.  Expenses associated with other real estate owned increased $78,000 to $103,000 in the fourth quarter of 2019, from $25,000 in the fourth quarter of 2018.  Property taxes on a recently foreclosed property were attributable to the increase during the fourth quarter of 2019.  Other operating expenses for the fourth quarter of 2019 increased $1.0 million, or 16%, to $7.2 million from $6.2 million in the fourth quarter of 2018, and increased $557,000, or 8%, on a linked-quarter basis.  Increases in data processing expense, Federal Reserve Bank service charges, telecommunication expense and insurance expense contributed to this increase in other operating expenses for the year-over-year comparison.  The efficiency ratio was 30.93% during the fourth quarter of 2019 compared to 30.73% during the fourth quarter of 2018 and compared to 31.76% during the third quarter of 2019.

Income tax expense increased $1.9 million, or 23%, to $10.3 million in the fourth quarter of 2019, compared to $8.4 million in the fourth quarter of 2018.  Our effective tax rate was 20.05% for the fourth quarter of 2019 compared to 18.86% for the fourth 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 fourth quarters of 2019 and 2018 of $297,000 and $1.5 million, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

During the third quarter of 2019, we recorded a $1.7 million credit to our FDIC and other regulatory assessments expense as a result of the FDIC’s Small Bank Assessment Credit.  Financial measures included in this press release that are presented adjusted for this credit are net income, net income available to common stockholders, diluted earnings per share, return on average assets and return on average common stockholders’ equity. Each of these five financial measures excludes the impact of this item, net of tax, attributable to the FDIC Small Bank Assessment Credit and are all considered non-GAAP financial measures. This press release also contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill 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 tables provide 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.

   Year Ended
December 31,
2019
           
Net income - GAAP $149,243                   
 Adjustments:                     
 FDIC Small Bank Assessment Credit  1,669                   
 Tax on adjustment  421                   
Adjusted net income - non-GAAP $147,995                   
                       
Net income available to common stockholders - GAAP $149,180                   
 Adjustments:                     
 FDIC Small Bank Assessment Credit  1,669                   
 Tax on adjustment  421                   
Adjusted net income available to common stockholders - non-GAAP $147,932                   
                       
Diluted earnings per share - GAAP $2.76                   
 Adjustments:                     
 FDIC Small Bank Assessment Credit  (0.03)                  
 Tax on adjustment  0.01                   
Adjusted diluted earnings per share - non-GAAP $2.74                   
                       
Return on average assets - GAAP  1.73 %                 
Net income - GAAP $149,243                   
 Adjustments:                     
 FDIC Small Bank Assessment Credit  1,669                   
 Tax on adjustment  421                   
Adjusted net income - non-GAAP $147,995                   
Average assets - GAAP $8,638,604                   
Adjusted return on average assets - non-GAAP  1.71 %                 
                       
Return on average common stockholders' equity - GAAP  19.15 %                 
Net income - GAAP $149,243                   
 Adjustments:                     
 FDIC Small Bank Assessment Credit  1,669                   
 Tax on adjustment  421                   
Adjusted net income - non-GAAP $147,995                   
Average common stockholders' equity - GAAP $779,071                   
Adjusted return on average common stockholders' equity - non-GAAP  18.99 %                 
                       
   At December
31, 2019
 At September
30, 2019
 At June 30,
2019
 At March 31,
2019
 At December
31, 2018
 
Book value per share - GAAP $15.71   $15.13  $14.55  $13.94  $13.40  
Total common stockholders' equity - GAAP  842,682    810,537   778,957   745,586   715,203  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,179    14,246   14,314   14,381   14,449  
Tangible common stockholders' equity - non-GAAP $828,503   $796,291  $764,643  $731,205  $700,754  
Tangible book value per share - non-GAAP $15.45   $14.86  $14.29  $13.67  $13.13  
                       
Stockholders' equity to total assets - GAAP  9.42 %  9.00%  8.91%  8.97%  8.93% 
Total assets - GAAP $8,947,653   $9,005,112  $8,740,237  $8,310,836  $8,007,382  
 Adjustments:                     
 Adjusted for goodwill and core deposit intangible asset  14,179    14,246   14,314   14,381   14,449  
Total tangible assets - non-GAAP $8,933,474   $8,990,866  $8,725,923  $8,296,455  $7,992,933  
Tangible common equity to total tangible assets - non-GAAP  9.27 %  8.86%  8.76%  8.81%  8.77% 

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)                     
  4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018 
CONSOLIDATED STATEMENT OF INCOME                     
Interest income $98,187  $101,130  $97,787  $93,699  $90,164  
Interest expense  22,410   28,125   27,702   24,921   21,306  
Net interest income  75,777   73,005   70,085   68,778   68,858  
Provision for loan losses  5,884   6,985   4,884   4,885   6,518  
Net interest income after provision for loan losses  69,893   66,020   65,201   63,893   62,340  
Non-interest income  7,052   6,210   5,778   4,942   5,019  
Non-interest expense  25,619   25,161   26,022   25,326   22,701  
Income before income tax  51,326   47,069   44,957   43,509   44,658  
Provision for income tax  10,289   9,506   9,324   8,499   8,421  
Net income  41,037   37,563   35,633   35,010   36,237  
Preferred stock dividends  32   -   31   -   32  
Net income available to common stockholders $41,005  $37,563  $35,602  $35,010  $36,205  
Earnings per share - basic $0.77  $0.70  $0.66  $0.65  $0.68  
Earnings per share - diluted $0.76  $0.69  $0.66  $0.65  $0.67  
Average diluted shares outstanding  54,149,554   54,096,368   54,089,107   54,076,538   54,109,450  
                      
CONSOLIDATED BALANCE SHEET DATA                     
Total assets $8,947,653  $9,005,112  $8,740,237  $8,310,836  $8,007,382  
Loans  7,261,451   7,022,069   6,967,886   6,659,908   6,533,499  
Debt securities  759,649   688,271   658,221   631,946   590,184  
Non-interest-bearing demand deposits  1,749,879   1,678,672   1,576,959   1,572,703   1,557,341  
Total deposits  7,530,433   7,724,158   7,404,794   7,083,666   6,915,708  
Borrowings  64,703   64,693   64,684   64,675   64,666  
Stockholders' equity $842,682  $810,537  $778,957  $745,586  $715,203  
                      
Shares outstanding  53,623,740   53,579,013   53,526,882   53,495,208   53,375,195  
Book value per share $15.71  $15.13  $14.55  $13.94  $13.40  
Tangible book value per share (1) $15.45  $14.86  $14.29  $13.67  $13.13  
                      
SELECTED FINANCIAL RATIOS (Annualized)                     
Net interest margin  3.47%  3.36%  3.44%  3.56%  3.63% 
Return on average assets  1.80%  1.67%  1.69%  1.75%  1.85% 
Return on average common stockholders' equity  19.75%  18.69%  18.72%  19.42%  21.13% 
Efficiency ratio  30.93%  31.76%  34.30%  34.35%  30.73% 
Non-interest expense to average earning assets  1.17%  1.16%  1.28%  1.31%  1.20% 
                      
CAPITAL RATIOS (2)                     
Common equity tier 1 capital to risk-weighted assets  10.50%  10.39%  10.18%  10.30%  10.12% 
Tier 1 capital to risk-weighted assets  10.50%  10.39%  10.19%  10.30%  10.13% 
Total capital to risk-weighted assets  12.31%  12.27%  12.02%  12.21%  12.05% 
Tier 1 capital to average assets  9.13%  8.88%  9.00%  9.03%  9.07% 
Tangible common equity to total tangible assets (1)  9.27%  8.86%  8.76%  8.81%  8.77% 
                      
(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)          
    December 31,
2019
 December 31,
2018
 % Change 
ASSETS          
Cash and due from banks $78,618  $97,516  (19)% 
Interest-bearing balances due from depository institutions  451,509   360,534  25 % 
Federal funds sold  100,473   223,845  (55)% 
 Cash and cash equivalents  630,600   681,895  (8)% 
Available for sale debt securities, at fair value  759,399   590,184  29 % 
Held to maturity debt securities (fair value of $250 at December 31, 2019)  250   -  NM   
Mortgage loans held for sale  6,312   120  5,160 % 
Loans  7,261,451   6,533,499  11 % 
Less allowance for loan losses  (76,584)  (68,600) 12 % 
 Loans, net  7,184,867   6,464,899  11 % 
Premises and equipment, net  56,496   57,822  (2)% 
Goodwill and other identifiable intangible assets  14,179   14,449  (2)% 
Other assets  295,552   198,013  49 % 
 Total assets $8,947,653  $8,007,382  12 % 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Liabilities:          
Deposits:          
 Non-interest-bearing $1,749,879  $1,557,341  12 % 
 Interest-bearing  5,780,554   5,358,367  8 % 
  Total deposits  7,530,433   6,915,708  9 % 
Federal funds purchased  470,749   288,725  63 % 
Other borrowings  64,703   64,666  - % 
Other liabilities  39,086   23,080  69 % 
 Total liabilities  8,104,971   7,292,179  11 % 
Stockholders' equity:          
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at          
  December 31, 2019 and December 31, 2018  -   -     
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,623,740 shares          
  issued and outstanding at December 31, 2019, and 53,375,195 shares issued and outstanding          
  at December 31, 2018  54   53  2 % 
 Additional paid-in capital  219,766   218,521  1 % 
 Retained earnings  616,611   500,868  23 % 
 Accumulated other comprehensive income (loss)  5,749   (4,741) NM   
  Total stockholders' equity attributable to ServisFirst Bancshares, Inc.  842,180   714,701  18 % 
 Noncontrolling interest  502   502  - % 
  Total stockholders' equity  842,682   715,203  18 % 
 Total liabilities and stockholders' equity $8,947,653  $8,007,382  12 % 
               


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)             
    Three Months Ended December 31, Year Ended December 31, 
    2019  2018 2019 2018 
Interest income:             
 Interest and fees on loans $89,407  $83,085 $354,308 $305,370 
 Taxable securities  4,702   3,506  17,008  12,654 
 Nontaxable securities  274   544  1,429  2,406 
 Federal funds sold  1,053   966  6,038  3,103 
 Other interest and dividends  2,751   2,063  12,020  3,094 
 Total interest income  98,187   90,164  390,803  326,627 
Interest expense:             
 Deposits  19,786   18,957  90,958  55,502 
 Borrowed funds  2,624   2,349  12,200  8,446 
 Total interest expense  22,410   21,306  103,158  63,948 
 Net interest income  75,777   68,858  287,645  262,679 
Provision for loan losses  5,884   6,518  22,638  21,402 
 Net interest income after provision for loan losses  69,893   62,340  265,007  241,277 
Non-interest income:             
 Service charges on deposit accounts  1,806   1,714  7,029  6,547 
 Mortgage banking  1,366   688  4,361  2,784 
 Credit card income  1,891   1,521  7,076  5,550 
 Securities (losses) gains  (1)  -  27  190 
 Increase in cash surrender value life insurance  1,418   780  3,745  3,130 
 Other operating income  572   316  1,744  1,239 
 Total non-interest income  7,052   5,019  23,982  19,440 
Non-interest expense:             
 Salaries and employee benefits  13,680   12,385  57,783  51,849 
 Equipment and occupancy expense  2,339   2,163  9,272  8,423 
 Professional services  1,163   1,064  4,235  3,646 
 FDIC and other regulatory assessments  1,171   902  2,975  3,869 
 Other real estate owned expense  103   25  415  790 
 Other operating expense  7,163   6,162  27,448  23,298 
 Total non-interest expense  25,619   22,701  102,128  91,875 
 Income before income tax  51,326   44,658  186,861  168,842 
Provision for income tax  10,289   8,421  37,618  31,902 
 Net income  41,037   36,237  149,243  136,940 
 Dividends on preferred stock  32   32  63  63 
 Net income available to common stockholders $41,005  $36,205 $149,180 $136,877 
Basic earnings per common share $0.77  $0.68 $2.79 $2.57 
Diluted earnings per common share $0.76  $0.67 $2.76 $2.53 


LOANS BY TYPE (UNAUDITED)               
(In thousands)               
                 
   4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018
Commercial, financial and agricultural $2,696,210 $2,653,934 $2,633,529 $2,522,136 $2,513,225
Real estate - construction  521,392  550,871  603,779  556,219  533,192
Real estate - mortgage:               
 Owner-occupied commercial  1,587,478  1,526,911  1,538,279  1,500,595  1,463,887
 1-4 family mortgage  644,188  632,346  630,963  629,285  621,634
 Other mortgage  1,747,394  1,592,072  1,496,512  1,394,611  1,337,068
Subtotal: Real estate - mortgage  3,979,060  3,751,329  3,665,754  3,524,491  3,422,589
Consumer  64,789  65,935  64,824  57,062  64,493
Total loans $7,261,451 $7,022,069 $6,967,886 $6,659,908 $6,533,499
                


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                 
(Dollars in thousands)                 
     4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018
Allowance for loan losses:                    
Beginning balance $77,192   $71,386   $70,207   $68,600   $66,879  
Loans charged off:                    
 Commercial financial and agricultural  4,742    3,626    3,610    3,037    4,685  
 Real estate - mortgage  1,689    4,974    169    50    173  
 Consumer  139    172    63    218    72  
  Total charge offs  6,570    8,772    3,842    3,305    4,930  
Recoveries:                    
 Commercial financial and agricultural  51    126    117    12    120  
 Real estate - construction  1    1    -    1    4  
 Real estate - mortgage  2    -    4    7    1  
 Consumer  24    60    16    7    8  
  Total recoveries  78    187    137    27    133  
 Net charge-offs  6,492    8,585    3,705    3,278    4,797  
 Allocation from Loan Guarantee Program  -    7,406    -    -    -  
 Provision for loan losses  5,884    6,985    4,884    4,885    6,518  
 Ending balance $76,584   $77,192   $71,386   $70,207   $68,600  
                        
 Allowance for loan losses to total loans  1.05 %  1.10 %  1.02 %  1.05 %  1.05 %
 Allowance for loan losses to total average loans  1.08 %  1.11 %  1.05 %  1.06 %  1.07 %
 Net charge-offs to total average loans  0.36 %  0.49 %  0.22 %  0.20 %  0.30 %
 Provision for loan losses to total average loans  0.33 %  0.40 %  0.29 %  0.30 %  0.40 %
 Nonperforming assets:                    
  Nonaccrual loans $30,091   $35,732   $21,840   $22,154   $21,926  
  Loans 90+ days past due and accruing  6,021    5,317    10,299    5,021    5,844  
  Other real estate owned and repossessed assets  8,178    5,337    5,649    5,480    5,169  
 Total $44,290   $46,386   $37,788   $32,655   $32,939  
                        
 Nonperforming loans to total loans  0.50 %  0.58 %  0.46 %  0.41 %  0.43 %
 Nonperforming assets to total assets  0.50 %  0.52 %  0.43 %  0.39 %  0.41 %
 Nonperforming assets to earning assets  0.50 %  0.53 %  0.44 %  0.40 %  0.43 %
 Reserve for loan losses to nonaccrual loans  254.51 %  216.03 %  326.86 %  316.90 %  312.87 %
                        
 Restructured accruing loans $375   $3,468   $2,742   $2,742   $3,043  
                        
 Restructured accruing loans to total loans  0.01 %  0.05 %  0.04 %  0.04 %  0.04 %
                        
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)             
 (In thousands)                
     4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th Quarter 2018
 Beginning balance: $11,248   $11,284   $12,289   $14,555   $16,584  
  Net (paydowns) / advances  (3,481)   714    (12)   (766)   (11) 
  Charge-offs  (1,333)   (750)   (993)   (1,500)   (2,018) 
  Transfer to OREO  (3,354)   -    -    -    -  
     $3,080   $11,248   $11,284   $12,289   $14,555  
                             


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)          
(In thousands except per share data)          
    4th Quarter
2019
 3rd Quarter
2019
 2nd Quarter
2019
 1st Quarter
2019
 4th Quarter
2018
 
Interest income:                
 Interest and fees on loans $89,407  $90,767  $88,610  $85,524 $83,085 
 Taxable securities  4,702   4,367   4,193   3,746  3,506 
 Nontaxable securities  274   316   393   446  544 
 Federal funds sold  1,053   1,768   1,998   1,219  966 
 Other interest and dividends  2,751   3,912   2,593   2,764  2,063 
 Total interest income  98,187   101,130   97,787   93,699  90,164 
Interest expense:                
 Deposits  19,786   24,787   24,240   22,145  18,957 
 Borrowed funds  2,624   3,338   3,462   2,776  2,349 
 Total interest expense  22,410   28,125   27,702   24,921  21,306 
 Net interest income  75,777   73,005   70,085   68,778  68,858 
Provision for loan losses  5,884   6,985   4,884   4,885  6,518 
 Net interest income after provision for loan losses  69,893   66,020   65,201   63,893  62,340 
Non-interest income:                
 Service charges on deposit accounts  1,806   1,735   1,786   1,702  1,714 
 Mortgage banking  1,366   1,333   1,087   575  688 
 Credit card income  1,891   1,868   1,741   1,576  1,521 
 Securities (losses) gains  (1)  34   (6)  -  - 
 Increase in cash surrender value life insurance  1,418   787   778   762  780 
 Other operating income  572   453   392   327  316 
 Total non-interest income  7,052   6,210   5,778   4,942  5,019 
Non-interest expense:                
 Salaries and employee benefits  13,680   15,499   14,339   14,265  12,385 
 Equipment and occupancy expense  2,339   2,387   2,287   2,259  2,163 
 Professional services  1,163   887   1,191   994  1,064 
 FDIC and other regulatory assessments (credits)  1,171   (296)  1,081   1,019  902 
 Other real estate owned expense  103   78   212   22  25 
 Other operating expense  7,163   6,606   6,912   6,767  6,162 
 Total non-interest expense  25,619   25,161   26,022   25,326  22,701 
 Income before income tax  51,326   47,069   44,957   43,509  44,658 
Provision for income tax  10,289   9,506   9,324   8,499  8,421 
 Net income  41,037   37,563   35,633   35,010  36,237 
 Dividends on preferred stock  32   -   31   -  32 
 Net income available to common stockholders $41,005  $37,563  $35,602  $35,010 $36,205 
Basic earnings per common share $0.77  $0.70  $0.67  $0.65 $0.68 
Diluted earnings per common share $0.76  $0.69  $0.66  $0.65 $0.67 


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
                                   
      4th Quarter 2019 3rd Quarter 2019 2nd Quarter 2019 1st Quarter 2019 4th 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 $7,066,576 5.00% $6,927,075 5.18% $6,756,927  5.24% $6,570,920  5.26% $6,403,139  5.13%
  Tax-exempt (2)  35,563 4.06   34,195 3.98   32,124  3.83   30,577  3.81   29,656  3.26 
   Total loans, net of                              
    unearned income  7,102,139 5.00   6,961,270 5.17   6,789,051  5.23   6,601,497  5.25   6,432,795  5.12 
 Mortgage loans held for sale  6,505 2.44   6,482 2.45   5,208  3.85   1,614  6.53   3,364  3.30 
 Debt securities:                              
  Taxable  670,732 2.81   595,405 2.93   565,491  2.97   518,955  2.89   498,138  2.82 
  Tax-exempt (2)  50,825 2.20   59,992 2.21   77,364  2.10   87,537  2.12   98,027  2.34 
   Total securities (3)  721,557 2.76   655,397 2.87   642,855  2.86   606,492  2.78   596,165  2.74 
 Federal funds sold  238,927 1.75   312,968 2.24   323,714  2.48   192,690  2.57   156,884  2.44 
 Interest-bearing balances with banks  602,755 1.81   690,973 2.25   411,481  2.53   438,099  2.56   334,065  2.45 
 Total interest-earning assets $8,671,883 4.49% $8,627,090 4.65% $8,172,309  4.80% $7,840,392  4.85% $7,524,152  4.76%
Non-interest-earning assets:                              
 Cash and due from banks  70,381     71,418     76,988      74,430      74,272    
 Net premises and equipment  57,986     58,243     58,607      58,852      58,521    
 Allowance for loan losses, accrued interest and other assets  233,885     162,654     156,264      149,941      128,933    
   Total assets $9,034,135    $8,919,405    $8,464,168     $8,123,615     $7,784,999    
                                   
Interest-bearing liabilities:                              
 Interest-bearing deposits:                              
 Checking $961,258 0.69% $900,754 0.84% $909,847  0.88% $942,686  0.86% $908,416  0.74%
 Savings  62,311 0.53   57,431 0.60   54,391  0.57   54,086  0.55   52,443  0.54 
 Money market  4,189,283 1.34   4,265,435 1.76   3,932,459  1.88   3,758,162  1.78   3,537,522  1.56 
 Time deposits  712,155 2.15   703,278 2.20   694,414  2.16   698,976  2.06   687,361  1.92 
  Total interest-bearing deposits  5,925,007 1.32   5,926,898 1.66   5,591,111  1.74   5,453,910  1.65   5,185,742  1.45 
 Federal funds purchased  420,066 1.74   441,526 2.30   418,486  2.57   312,989  2.59   263,125  2.36 
 Other borrowings  64,698 4.79   64,689 4.79   64,680  4.84   64,671  4.90   64,665  4.79 
 Total interest-bearing liabilities $6,409,771 1.39% $6,433,113 1.73% $6,074,277  1.83% $5,831,570  1.73% $5,513,532  1.53%
Non-interest-bearing liabilities:                              
 Non-interest-bearing demand deposits  1,759,671     1,654,928     1,591,722      1,524,502      1,551,366    
 Other liabilities  41,112     34,070     35,161      36,362      40,185    
 Stockholders' equity  818,320     792,284     763,742      735,611      689,525    
 Accumulated other comprehensive income (loss)  5,261     5,010     (734)     (4,430)     (9,609)   
  Total liabilities and stockholders' equity $9,034,135    $8,919,405    $8,464,168     $8,123,615     $7,784,999    
Net interest spread    3.10%    2.92%    2.97%    3.12%    3.23%
Net interest margin    3.47%    3.36%    3.44%    3.56%    3.63%
                                   
(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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