ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter Of 2015

Jan 25, 2016, 16:01 ET from ServisFirst Bancshares, Inc.

BIRMINGHAM, Ala., Jan. 25, 2016 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2015.

Fourth Quarter 2015 Highlights:

  • Diluted earnings per share increased 28% from $0.58 to $0.74 year over year
  • Diluted earnings per share increased 21% from $0.61 to $0.74 on a linked quarter basis
  • Net income for the quarter increased 31% year over year
  • Organic loan and deposit growth for the year of 20% and 18%, respectively
  • Fourth quarter annualized loan and deposit growth of 17% and 18%, respectively, on a linked quarter basis
  • Entry into the Tampa Bay, Florida area with hire of a new regional CEO

Tom Broughton, President and CEO, said, "We are pleased to welcome our new banking team in the Tampa Bay area led by Greg Bryant, a highly experienced and well known banker in the area."  Bud Foshee, CFO, stated, "2015 was a strong year in financial performance and growth." 

ServisFirst announces the hiring of Greg Bryant as Executive Vice President and Regional CEO.  A temporary loan production office will be opened in Pasco County, for up to a year before a permanent office is established in Tampa Bay, Florida.  Greg was formerly the President & CEO of Bay Cities Bank prior to the sale of the bank.

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

Period Ending December 31, 2015

Period Ending September 30, 2015

% Change From Period Ending September 30,

2015 to Period Ending December 31, 2015

Period Ending December 31, 2014

% Change From Period Ending December 31, 2014 to Period Ending December 31, 2015

QUARTERLY OPERATING RESULTS

Net Income

$

19,750

$

16,266

21

%

$

15,032

31

%

Net Income Available to Common Stockholders

$

19,726

$

16,233

22

%

$

14,917

32

%

Diluted Earnings Per Share

$

0.74

$

0.61

21

%

$

0.58

28

%

Return on Average Assets

1.55

%

1.38

%

1.47

%

Return on Average Common Stockholders' Equity

17.75

%

15.52

%

16.39

%

Average Diluted Shares Outstanding

26,595,239

26,506,334

25,697,531

YEAR-TO-DATE OPERATING RESULTS

Net Income

$

63,540

$

52,377

21

%

Net Income Available to Common Stockholders

$

63,260

$

51,946

22

%

Diluted Earnings Per Share

$

2.39

$

2.09

14

%

Return on Average Assets

1.38

%

1.39

%

Return on Average Common Stockholders' Equity

15.30

%

16.23

%

Average Diluted Shares Outstanding

26,442,554

24,818,221

Core Net Income*

$

65,307

$

53,989

21

%

Core Net Income Available to Common Stockholders*

$

65,027

$

53,558

21

%

Core Diluted Earnings Per Share*

$

2.46

$

2.16

14

%

Core Return on Average Assets*

1.42

%

1.44

%

Core Return on Average Common Stockholders' Equity*

15.73

%

16.74

%

BALANCE SHEET

Total Assets

$

5,095,509

$

4,772,601

7

%

$

4,098,679

24

%

Loans

4,216,375

4,044,242

4

%

3,359,858

25

%

Non-interest-bearing Demand Deposits

1,053,467

1,029,354

2

%

810,460

30

%

Total Deposits

4,223,888

4,044,634

4

%

3,398,160

24

%

Stockholders' Equity

449,147

431,194

4

%

407,213

10

%

* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.

 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $19.8 million and net income available to common stockholders of $19.7 million for the quarter ended December 31 2015, compared to net income of $15.0 million and net income available to common stockholders of $14.9 million for the same quarter in 2014.  Basic and diluted earnings per common share were $0.76 and $0.74, respectively, for the fourth quarter of 2015, compared to $0.60 and $0.58, respectively, for the fourth quarter of 2014.

Return on average assets was 1.55% and return on average common stockholders' equity was 17.75% for the fourth quarter of 2015, compared to 1.47% and 16.39%, respectively, for the fourth quarter of 2014.

Net interest income was $43.2 million for the fourth quarter of 2015, compared to $41.9 million for the third quarter of 2015 and $34.5 million for the fourth quarter of 2014.  The increase in net interest income on a linked quarter basis is attributable to a $197.1 million increase in average loans outstanding and a $74.0 million increase in non-interest-bearing deposits, both resulting in a positive mix change in our balance sheet.  The Company completed a private placement of $34.75 million of its 5% Subordinated Notes due July 15, 2025 during the third quarter of 2015, which partially offset the positive mix change attributable to the increase in average loans and non-interest-bearing deposits.  The net interest margin in the fourth quarter of 2015 was 3.56%, a 21 basis point decrease from the third quarter of 2015 and unchanged from the fourth quarter of 2014.  Excess liquidity during the fourth quarters of 2015 and 2014 drives an unfavorable volume component change when compared to their respective comparable linked quarters.  The average yield on loans decreased 9 basis points to 4.44% on a linked quarter basis.  Three basis points of this decrease are attributable to a $318,000 decrease in the accretion on acquired loans.  Excluding accretion on acquired loans, the net interest margin decreased 22 basis points from the third quarter to the fourth quarter of 2015.  Average rates paid on interest-bearing liabilities increased from 0.58% in the third quarter to 0.60% in the fourth quarter of 2015.  The higher rates paid on federal funds purchased from our correspondent banks was the result of the 0.25% increase in the Federal Reserve's targeted rate in early December 2015. 

Average loans for the fourth quarter of 2015 were $4.12 billion, an increase of $197.1 million, or 5%, over average loans of $3.93 billion for the third quarter of 2015, and an increase of $896.9 million, or 28%, over average loans of $3.23 billion for the fourth quarter of 2014.

Average total deposits for the fourth quarter of 2015 were $4.21 billion, an increase of $288.1 million, or 7%, over average total deposits of $3.92 billion for the third quarter of 2015, and an increase of $805.7 million, or 24%, over average total deposits of $3.41 billion for the fourth quarter of 2014.

Non-performing assets to total assets were 0.26% for the fourth quarter of 2015, a decrease of 8 basis points compared to 0.34% for the third quarter of 2015 and a decrease of 15 basis points compared to 0.41% for the fourth quarter of 2014.  Net credit charge-offs to average loans were 0.24%, a 19 basis point increase compared to 0.05% for the third quarter of 2015 and a 5 basis point increase compared to 0.19% for the fourth quarter of 2014.  We recorded a $3.3 million provision for loan losses in the fourth quarter of 2015 compared to $3.1 million in the third quarter of 2015 and $2.8 million in the fourth quarter of 2014.  The allowance for loan loss as a percentage of total loans was 1.03% at December 31, 2015, a decrease of 2 basis points compared to 1.05% at September 30, 2015 and a decrease of 3 basis points compared to 1.06% at December 31, 2014.  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 loss.

Non-interest income increased $449,000 during the fourth quarter of 2015, or 14%, compared to the fourth quarter of 2014.  Service charges on deposit accounts increased $158,000, or 14%, compared to the fourth quarter of 2014, resulting from an increase in the number of accounts and transactions.  Mortgage banking revenue increased $113,000, or 22%, compared to the fourth quarter of 2014.  Interchange income on credit card transactions, included in other operating income, increased $140,000, or 25%, compared to the fourth quarter of 2014, resulting from an increase in the number of credit card accounts.

Non-interest expense for the fourth quarter of 2015 increased $5.9 million, or 45%, to $19.1 million from $13.1 million in the fourth quarter of 2014, and increased $754,000, or 4%, on a linked quarter basis.  Salary and benefit expense for the fourth quarter of 2015 increased $2.6 million, or 41%, to $8.9 million from $6.3 million in the fourth quarter of 2014, and decreased $1.7 million, or 16%, on a linked quarter basis.  We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015 and reversed $1.0 million of accrued incentive pay during the fourth quarter of 2014.  Excluding these reversals, salary and benefit expenses increased $3.6 million year over year and increased $0.3 million on a linked quarter basis.  The year-over-year increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets and Birmingham.  Other operating expense for the fourth quarter of 2015 increased $3.0 million, or 79%, to $6.9 million from $3.9 million in the fourth quarter of 2014, and increased $2.5 million, or 57%, on a linked quarter basis.  Included in these increases were $2.4 million of write-downs in equity investments in tax credit partnerships during the fourth quarter of 2015.

Tax expense for the fourth quarter of 2015 decreased $2.1 million compared to the fourth quarter of 2014, and decreased $3.4 million on a linked quarter basis.  Effective tax rates for the fourth quarter of 2015, third quarter of 2015 and fourth quarter of 2014 were 18.81%, 33.00% and 30.63%, respectively.  The lower rate in the fourth quarter of 2015 was primarily the result of recognition of federal historic tax credits.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the merger of Metro Bank with and into the Bank, and recorded an expense of $500,000 resulting from the initial funding of reserves for unfunded loan commitments for the first quarter of 2015, consistent with guidance provided in the Federal Reserve Bank's Inter-agency Policy Statement SR 06-17.  We recorded non-routine expenses of $2.5 million during the first half of 2014 resulting from a correction of our accounting for vested stock options and acceleration of vesting for unvested stock options previously granted to members of our advisory boards in our markets.  This change in accounting treatment is a non-cash item and did not impact our operating activities or cash from operations.  Core financial measures included in this press release are "core net income," "core net income available to common stockholders," "core diluted earnings per share," "core return on average assets" and "core return on average common stockholders' equity."  Each of these five core financial measures excludes the impact of the non-routine expenses attributable to merger expenses, the initial funding of reserves for unfunded loan commitments, the correction of our accounting for vested stock options and the acceleration of vesting of unvested stock options, and are all considered non-GAAP financial measures.  Other non-GAAP financial measures included in this press release are "tangible common stockholders' equity," "total tangible assets," "tangible book value per share," and "tangible common equity to total tangible assets."  All non-GAAP financial measures are more fully explained below.

"Core net income" is defined as net income, adjusted by the net effect of the non-routine expense.

"Core net income available to common stockholders" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.

"Core diluted earnings per share" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.

"Core return on average assets" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.

"Core return on average common stockholders' equity" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders' equity.

"Tangible common stockholders' equity" is defined as common stockholders' equity, adjusted by the total of goodwill and other identifiable intangible assets.

"Total tangible assets" is defined as total assets, adjusted by the total of goodwill and other identifiable intangible assets.

"Tangible book value per share" is defined as tangible common stockholders' equity divided by the number of common shares outstanding.

"Tangible common equity to total tangible assets" is defined as tangible common equity divided by total tangible assets.

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 for the years ended December 31, 2015 and December 31, 2014 included in this press release.  Dollars are in thousands, except share and per share data.

 

2015

2014

Provision for income taxes - GAAP

$

25,465

$

21,601

Adjustments:

Adjustment for non-routine expense

829

865

Core provision for income taxes

$

26,294

$

22,466

Return on average assets - GAAP

1.38

%

1.39

%

Net income - GAAP

$

63,540

$

52,377

Adjustments:

Adjustment for non-routine expense

1,767

1,612

Core net income

$

65,307

$

53,989

Average assets

$

4,591,860

$

3,757,932

Core return on average assets

1.42

%

1.44

%

Return on average common stockholders' equity

15.30

%

16.23

%

Net income available to common stockholders - GAAP

$

63,260

$

51,946

Adjustments:

Adjustment for non-routine expense

1,767

1,612

Core net income available to common stockholders

$

65,027

$

53,558

Average common stockholders' equity

$

413,445

$

320,005

Core return on average common stockholders' equity

15.73

%

16.74

%

Earnings per share - diluted - GAAP

$

2.39

$

2.09

Weighted average shares outstanding, diluted

26,442,554

24,818,221

Core diluted earnings per share

$

2.46

$

2.16

Book value per share

$

17.29

$

14.81

Total common stockholders' equity - GAAP

449,147

367,255

Adjustments:

Adjusted for goodwill and other identifiable intangible assets

15,330

-

Tangible common stockholders' equity

$

433,817

$

367,255

Tangible book value per share

$

16.70

$

14.81

Common stockholders' equity to total assets

8.81

%

8.96

%

Total assets - GAAP

$

5,095,509

$

4,098,679

Adjustments:

Adjusted for goodwill and other identifiable intangible assets

15,330

-

Total tangible assets

5,080,179

4,098,679

Tangible common equity to total tangible assets

8.54

%

8.96

%

 

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, 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 http://servisfirstbancshares.investorroom.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 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. 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 http://servisfirstbancshares.investorroom.com/  or by calling (205) 949-0302.

Contact: ServisFirst Bank Davis Mange (205) 949-3420 dmange@servisfirstbank.com

 

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

(In thousands except share and per share data)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

CONSOLIDATED STATEMENT OF INCOME

Interest income

$

48,451

$

46,532

$

44,209

$

40,783

$

38,163

Interest expense

5,290

4,670

3,998

3,746

3,703

Net interest income

43,161

41,862

40,211

37,037

34,460

Provision for loan losses

3,308

3,072

4,062

2,405

2,759

Net interest income after provision for loan losses

39,853

38,790

36,149

34,632

31,701

Non-interest income

3,559

3,822

3,505

3,077

3,110

Non-interest expense

19,086

18,332

18,213

18,751

13,143

Income before income tax

24,326

24,280

21,441

18,958

21,668

Provision for income tax

4,576

8,014

6,972

5,903

6,636

Net income

19,750

16,266

14,469

13,055

15,032

Preferred stock dividends

24

33

123

100

115

Net income available to common stockholders

$

19,726

$

16,233

$

14,346

$

12,955

$

14,917

Earnings per share - basic

$

0.76

$

0.63

$

0.56

$

0.51

$

0.60

Earnings per share - diluted

$

0.74

$

0.61

$

0.54

$

0.49

$

0.58

Average diluted shares outstanding

26,595,239

26,506,334

26,426,036

26,237,980

25,697,531

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

5,095,509

$

4,772,601

$

4,492,539

$

4,393,342

$

4,098,679

Loans

4,216,375

4,044,242

3,863,734

3,607,852

3,359,858

Debt securities

370,364

334,635

335,008

336,505

327,665

Non-interest-bearing demand deposits

1,053,467

1,029,354

926,577

866,743

810,460

Total deposits

4,223,888

4,044,634

3,729,132

3,638,763

3,398,160

Borrowings

55,748

55,728

21,016

21,278

19,973

Stockholders' equity

$

449,147

$

431,194

$

454,487

$

441,458

$

407,213

Shares outstanding

25,972,698

25,903,698

25,826,198

25,653,610

24,801,518

Book value per share

$

17.29

$

16.65

$

16.05

$

15.65

$

14.81

Tangible book value per share (1)

$

16.70

$

15.96

$

15.35

$

14.95

$

14.81

SELECTED FINANCIAL RATIOS

Net interest margin

3.56

%

3.77

%

3.88

%

3.80

%

3.56

%

Return on average assets

1.55

%

1.38

%

1.31

%

1.26

%

1.47

%

Return on average common stockholders' equity

17.75

%

15.52

%

14.06

%

13.55

%

16.39

%

Efficiency ratio

40.85

%

40.13

%

41.66

%

46.74

%

34.98

%

Non-interest expense to average earning assets

1.56

%

1.63

%

1.73

%

1.90

%

1.34

%

CAPITAL RATIOS (2)

Common equity tier 1 capital to risk-weighted assets (3)

9.72

%

9.59

%

9.60

%

9.93

%

N/A

Tier 1 capital to risk-weighted assets

9.73

%

9.60

%

10.58

%

10.98

%

11.75

%

Total capital to risk-weighted assets

11.95

%

11.89

%

12.05

%

12.49

%

13.38

%

Tier 1 capital to average assets

8.55

%

8.83

%

9.88

%

10.07

%

9.91

%

Tangible common equity to total tangible assets (1)

8.54

%

8.70

%

8.86

%

8.76

%

8.96

%

(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.

(3) Basel III final capital rules, including the new Common Equity Tier 1 Capital to Risk-Weighted Assets ratio, became effective for the Company on January 1, 2015.

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

December 31, 2015

December 31, 2014

% Change

ASSETS

Cash and due from banks

$

46,614

$

48,519

(4)

%

Interest-bearing balances due from depository institutions

270,836

248,054

9

%

Federal funds sold

34,785

891

3,804

%

Cash and cash equivalents

352,235

297,464

18

%

Available for sale debt securities, at fair value

342,938

298,310

15

%

Held to maturity debt securities (fair value of $27,910 and $29,974 at

December 31, 2015 and 2014, respectively)

27,426

29,355

(7)

%

Restricted equity securities

4,954

3,921

26

%

Mortgage loans held for sale

8,249

5,984

38

%

Loans

4,216,375

3,359,858

25

%

Less allowance for loan losses

(43,419)

(35,629)

22

%

Loans, net

4,172,956

3,324,229

26

%

Premises and equipment, net

19,434

7,815

149

%

Goodwill and other identifiable intangible assets

15,330

-

Other assets

151,987

131,601

15

%

Total assets

$

5,095,509

$

4,098,679

24

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing

$

1,053,467

$

810,460

30

%

Interest-bearing

3,170,421

2,587,700

23

%

Total deposits

4,223,888

3,398,160

24

%

Federal funds purchased

352,360

264,315

33

%

Other borrowings

55,748

19,973

179

%

Other liabilities

14,366

9,018

59

%

Total liabilities

4,646,362

3,691,466

26

%

Stockholders' equity:

Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001

(liquidation preference $1,000), net of discount; 40,000 shares authorized,

no shares issued and outstanding at December 31, 2015, and

40,000 shares issued and outstanding at December 31, 2014

-

39,958

(100)

%

Preferred stock, par value $0.001 per share; 1,000,000 authorized and

960,000 currently undesignated

-

-

-

%

Common stock, par value $0.001 per share; 50,000,000 shares authorized;

25,972,698 shares issued and outstanding at December 31, 2015 and

24,801,518 shares issued and outstanding at December 31, 2014

26

25

4

%

Additional paid-in capital

211,546

185,397

14

%

Retained earnings

234,150

177,091

32

%

Accumulated other comprehensive income

3,048

4,490

(32)

%

Noncontrolling interest

377

252

50

%

Total stockholders' equity

449,147

407,213

10

%

Total liabilities and stockholders' equity

$

5,095,509

$

4,098,679

24

%

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

Three Months Ended December 31,

Year Ended December 31,

2015

2014

2015

2014

Interest income:

Interest and fees on loans

$

46,150

$

35,902

$

171,302

$

136,066

Taxable securities

1,058

1,143

4,331

4,497

Nontaxable securities

875

871

3,499

3,489

Federal funds sold

46

41

127

159

Other interest and dividends

322

206

716

514

   Total interest income

48,451

38,163

179,975

144,725

Interest expense:

Deposits

4,294

3,256

14,894

12,420

Borrowed funds

996

447

2,810

1,699

   Total interest expense

5,290

3,703

17,704

14,119

   Net interest income

43,161

34,460

162,271

130,606

Provision for loan losses

3,308

2,759

12,847

10,259

   Net interest income after provision for loan losses

39,853

31,701

149,424

120,347

Non-interest income:

Service charges on deposit accounts

1,326

1,168

5,088

4,265

Mortgage banking

620

507

2,682

2,047

Securities gains

-

-

29

3

Increase in cash surrender value life insurance

630

649

2,621

2,280

Other operating income

983

786

3,543

2,634

   Total non-interest income

3,559

3,110

13,963

11,229

Non-interest expense:

Salaries and employee benefits

8,884

6,332

38,913

31,017

Equipment and occupancy expense

1,519

1,335

6,389

5,547

Professional services

706

558

2,607

2,435

FDIC and other regulatory assessments

733

516

2,660

2,094

Other real estate owned expense

324

528

1,227

1,533

Merger expense

-

-

2,100

-

Other operating expense

6,920

3,874

20,486

14,972

   Total non-interest expense

19,086

13,143

74,382

57,598

   Income before income tax

24,326

21,668

89,005

73,978

Provision for income tax

4,576

6,636

25,465

21,601

         Net income

19,750

15,032

63,540

52,377

Dividends on preferred stock

24

115

280

431

         Net income available to common stockholders

$

19,726

$

14,917

$

63,260

$

51,946

Basic earnings per common share

$

0.76

$

0.60

$

2.46

$

2.18

Diluted earnings per common share

$

0.74

$

0.58

$

2.39

$

2.09

 

LOANS BY TYPE (UNAUDITED)

(In thousands)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

Commercial, financial and agricultural

$

1,760,479

$

1,683,819

$

1,642,182

$

1,554,020

$

1,504,652

Real estate - construction

243,267

232,895

219,607

219,005

208,769

Real estate - mortgage:

Owner-occupied commercial

1,014,669

978,721

930,719

869,724

793,917

1-4 family mortgage

444,134

417,012

392,245

375,770

333,455

Other mortgage

698,779

677,822

627,099

545,668

471,363

Subtotal: Real estate - mortgage

2,157,582

2,073,555

1,950,063

1,791,162

1,598,735

Consumer

55,047

53,973

51,882

43,665

47,702

Total loans

$

4,216,375

$

4,044,242

$

3,863,734

$

3,607,852

$

3,359,858

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

Allowance for loan losses:

Beginning balance

$

42,574

$

40,020

$

37,356

$

35,629

$

34,442

Loans charged off:

Commercial financial and agricultural

2,186

388

1,151

77

416

Real estate - construction

161

31

93

382

309

Real estate - mortgage

463

-

208

433

922

Consumer

21

126

19

5

21

Total charge offs

2,831

545

1,471

897

1,668

Recoveries:

Commercial financial and agricultural

241

13

6

19

2

Real estate - construction

61

13

65

99

37

Real estate - mortgage

65

1

2

101

46

Consumer

1

-

-

-

11

Total recoveries

368

27

73

219

96

Net charge-offs

2,463

518

1,398

678

1,572

Provision for loan losses

3,308

3,072

4,062

2,405

2,759

Ending balance

$

43,419

$

42,574

$

40,020

$

37,356

$

35,629

Allowance for loan losses to total loans

1.03

%

1.05

%

1.04

%

1.04

%

1.06

%

Allowance for loan losses to total average

loans

1.05

%

1.08

%

1.07

%

1.07

%

1.10

%

Net charge-offs to total average loans

0.24

%

0.05

%

0.15

%

0.08

%

0.19

%

Provision for loan losses to total average

loans

0.32

%

0.31

%

0.44

%

0.28

%

0.34

%

Nonperforming assets:

Nonaccrual loans

$

7,767

$

9,850

$

8,194

$

8,361

$

9,125

Loans 90+ days past due and accruing

1

524

470

553

925

Other real estate owned and

   repossessed assets

5,392

6,068

8,235

8,638

6,840

Total

$

13,160

$

16,442

$

16,899

$

17,552

$

16,890

Nonperforming loans to total loans

0.18

%

0.26

%

0.22

%

0.25

%

0.30

%

Nonperforming assets to total assets

0.26

%

0.34

%

0.38

%

0.40

%

0.41

%

Nonperforming assets to earning assets

0.26

%

0.35

%

0.38

%

0.41

%

0.42

%

Reserve for loan losses to nonaccrual loans

559.02

%

432.22

%

488.41

%

446.79

%

390.45

%

Restructured accruing loans

$

6,782

$

8,266

$

8,279

$

8,280

$

8,292

Restructured accruing loans to total loans

0.16

%

0.20

%

0.21

%

0.23

%

0.25

%

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

Beginning balance:

$

8,266

$

8,279

$

8,280

$

8,992

$

7,932

Additions

-

-

-

-

6,250

Net (paydowns) / advances

(83)

(13)

(1)

(381)

(4,492)

Charge-offs

(447)

-

-

(331)

(698)

$

7,736

$

8,266

$

8,279

$

8,280

$

8,992

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

Interest income:

Interest and fees on loans

$

46,150

$

44,401

$

42,105

$

38,646

$

35,902

Taxable securities

1,058

1,041

1,104

1,128

1,143

Nontaxable securities

875

890

874

860

871

Federal funds sold

46

32

24

77

41

Other interest and dividends

322

168

102

72

206

   Total interest income

48,451

46,532

44,209

40,783

38,163

Interest expense:

Deposits

4,294

3,818

3,512

3,270

3,256

Borrowed funds

996

852

486

476

447

   Total interest expense

5,290

4,670

3,998

3,746

3,703

   Net interest income

43,161

41,862

40,211

37,037

34,460

Provision for loan losses

3,308

3,072

4,062

2,405

2,759

   Net interest income after provision for loan losses

39,853

38,790

36,149

34,632

31,701

Non-interest income:

Service charges on deposit accounts

1,326

1,279

1,276

1,207

1,168

Mortgage banking

620

873

735

454

507

Securities gains

-

-

-

29

-

Increase in cash surrender value life insurance

630

683

660

648

649

Other operating income

983

987

834

739

786

   Total non-interest income

3,559

3,822

3,505

3,077

3,110

Non-interest expense:

Salaries and employee benefits

8,884

10,595

10,426

9,008

6,332

Equipment and occupancy expense

1,519

1,575

1,634

1,661

1,335

Professional services

706

668

665

568

558

FDIC and other regulatory assessments

733

681

626

620

516

Other real estate owned expense

324

400

289

214

528

Merger expense

-

-

-

2,096

-

Other operating expense

6,920

4,413

4,573

4,584

3,874

   Total non-interest expense

19,086

18,332

18,213

18,751

13,142

   Income before income tax

24,326

24,280

21,441

18,958

21,668

Provision for income tax

4,576

8,014

6,972

5,903

6,636

       Net income

19,750

16,266

14,469

13,055

15,032

Dividends on preferred stock

24

33

123

100

115

         Net income available to common stockholders

$

19,726

$

16,233

$

14,346

$

12,955

$

14,917

Basic earnings per common share

$

0.76

$

0.63

$

0.56

$

0.51

$

0.60

Diluted earnings per common share

$

0.74

$

0.61

$

0.54

$

0.49

$

0.58

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

4th Quarter 2015

3rd Quarter 2015

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

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

$

4,113,044

4.44

%

$

3,915,778

4.48

%

$

3,731,699

4.51

%

$

3,492,363

4.47

%

$

3,215,400

4.41

%

Tax-exempt (2)

9,639

4.98

9,802

4.98

10,005

5.00

10,180

5.03

10,367

4.98

Mortgage loans held for sale

4,362

4.27

7,714

4.32

12,718

2.21

6,884

2.12

3,410

6.05

Debt securities:

Taxable

193,982

2.18

189,941

2.19

193,848

2.28

198,104

2.28

195,533

2.32

Tax-exempt (2)

139,435

3.88

139,543

3.95

136,104

3.93

129,525

4.02

127,909

4.19

Total securities (3)

333,417

2.89

329,484

2.94

329,952

2.96

327,629

2.97

323,442

3.06

Federal funds sold

33,255

0.55

24,860

0.51

26,638

0.36

39,438

0.27

68,640

0.24

Restricted equity securities

4,954

4.24

4,954

4.16

4,953

3.16

4,354

3.63

3,418

3.95

Interest-bearing balances with banks

366,771

0.29

168,548

0.27

97,482

0.26

119,195

0.28

273,496

0.26

Total interest-earning assets

4,865,442

3.99

%

4,461,140

4.18

%

4,213,447

4.26

%

4,000,043

4.18

%

3,898,173

3.94

%

Non-interest-earning assets:

Cash and due from banks

62,037

63,259

58,347

61,911

58,973

Net premises and equipment

19,609

18,961

16,323

13,847

8,315

Allowance for loan losses,

accrued interest and

other assets

124,241

127,778

129,233

117,612

101,831

Total assets

$

5,071,329

$

4,671,136

$

4,417,350

$

4,193,413

$

4,067,292

Interest-bearing liabilities:

Interest-bearing deposits:

Checking

$

611,521

0.30

%

$

593,550

0.28

%

$

579,650

0.27

%

$

553,569

0.26

%

$

511,451

0.26

%

Savings

39,590

0.29

37,281

0.30

37,697

0.28

36,128

0.28

28,806

0.29

Money market

2,048,453

0.49

1,817,997

0.47

1,653,708

0.45

1,618,715

0.44

1,645,533

0.45

Time deposits

503,217

1.00

485,137

0.99

480,140

1.05

446,084

1.05

395,598

1.03

Federal funds purchased

295,530

0.37

246,168

0.31

275,888

0.29

270,549

0.28

231,135

0.28

Other borrowings

55,805

5.11

50,509

5.18

21,238

5.40

20,455

5.65

19,969

5.62

Total interest-bearing liabilities

3,554,116

0.59

%

3,230,642

0.57

%

3,048,321

0.53

%

2,925,500

0.52

%

2,832,492

0.52

%

Non-interest-bearing liabilities:

Non-interest-bearing

demand

1,062,795

988,756

908,020

813,340

823,738

Other liabilities

13,469

23,738

11,793

6,745

9,969

Stockholders' equity

436,928

424,113

444,302

422,847

395,981

Unrealized gains on securities and

derivatives

4,021

3,911

4,914

4,981

5,112

Total liabilities and

stockholders' equity

$

5,071,329

$

4,671,136

$

4,417,350

$

4,193,413

$

4,067,292

Net interest spread

3.40

%

3.61

%

3.73

%

3.66

%

3.42

%

Net interest margin

3.56

%

3.77

%

3.88

%

3.80

%

3.56

%

(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 35%.

(3)

Unrealized gains on available-for-sale debt securities are excluded from the yield calculation.

 

 

SOURCE ServisFirst Bancshares, Inc.



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