ServisFirst Bancshares, Inc. Announces Results For Second Quarter of 2014

22 Jul, 2014, 08:00 ET from ServisFirst Bancshares, Inc.

BIRMINGHAM, Ala., July 22, 2014 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2014.

SECOND QUARTER 2014 HIGHLIGHTS:

  • Net income for the second quarter increased 20% year over year
  • Second quarter annualized loan and deposit growth of 16% and 17%, respectively, on a linked quarter basis
  • Core diluted earnings per share of $0.51 for the second quarter of 2014, a 16% increase year over year*
  • Diluted earnings per share of $0.46 for the second quarter, a 5% increase year over year
  • Completed initial public offering in the second quarter with net proceeds of $52.1 million
  • 30% growth in non-interest-bearing demand deposits year over year

Tom Broughton, President and CEO, said, "We are pleased to report a great quarter following our initial public offering in May."  Bud Foshee, CFO, stated, "Strong loan and deposit growth combined with excellent credit quality continue to drive our strong earnings performance."

 

FINANCIAL SUMMARY

(in Thousands except share and per share amounts)

On June 16, 2014, the Company declared a three-for-one split of its common stock in the form of a stock dividend.  All share and per share information in this release has been adjusted to give effect to this stock split.

Period Ending June 30, 2014

Period Ending March 31, 2014

% Change From Period Ending March 31, 2014 to Period Ending June 30, 2014

Period Ending June 30, 2013

% Change From Period Ending June 30, 2013 to Period Ending June 30, 2014

QUARTERLY OPERATING RESULTS

Net Income

$

11,585

$

11,758

(1)

%

$

9,686

20

%

Net Income Available to Common Stockholders

$

11,469

$

11,656

(2)

%

$

9,586

20

%

Diluted Earnings Per Share

$

0.46

$

0.51

(10)

%

$

0.44

5

%

Return on Average Assets

1.28

%

1.36

%

1.31

%

Return on Average Common Stockholders' Equity

15.03

%

17.83

%

17.28

%

Average Diluted Shares Outstanding

24,823,590

22,985,670

21,655,326

Core Net Income*

$

12,740

$

12,215

4

%

$

9,686

32

%

Core Net Income Available to Common Stockholders*

$

12,624

$

12,113

4

%

$

9,586

32

%

Core Diluted Earnings Per Share*

$

0.51

$

0.53

(4)

%

$

0.44

16

%

Core Return on Average Assets*

1.41

%

1.42

%

1.31

%

Core Return on Average Common Stockholders' Equity*

16.54

%

18.53

%

17.28

%

YEAR-TO-DATE OPERATING RESULTS

Net Income

$

23,343

$

18,937

23

%

Net Income Available to Common Stockholders

$

23,127

$

18,737

23

%

Diluted Earnings Per Share

$

0.97

$

0.88

10

%

Return on Average Assets

1.32

%

1.31

%

Return on Average Common Stockholders' Equity

15.61

%

17.96

%

Average Diluted Shares Outstanding

23,909,707

21,443,595

Core Net Income*

$

24,955

$

18,937

32

%

Core Net Income Available to Common Stockholders*

$

24,739

$

18,737

32

%

Core Diluted Earnings Per Share*

$

1.03

$

0.88

18

%

Core Return on Average Assets*

1.41

%

1.31

%

Core Return on Average Common Stockholders' Equity*

16.70

%

17.96

%

BALANCE SHEET

Total Assets

$

3,762,684

$

3,572,914

5

%

$

3,140,626

20

%

Loans

3,053,989

2,937,797

4

%

2,590,192

18

%

Non-interest-bearing Demand Deposits

729,163

662,834

10

%

562,196

30

%

Total Deposits

3,157,642

3,031,041

4

%

2,674,977

18

%

Stockholders' Equity

380,074

312,283

22

%

265,189

43

%

* Core measures exclude non-routine expenses in the first and second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets.  For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.

 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $11.6 million and net income available to common stockholders of $11.5 million for the quarter ended June 30, 2014, compared to net income of $9.7 million and net income available to common stockholders of $9.6 million for the same quarter in 2013.  Basic and diluted earnings per common share were $0.49 and $0.46, respectively, for the second quarter of 2014, compared to $0.46 and $0.44, respectively, for the second quarter of 2013.

Return on average assets was 1.29% and return on average equity was 15.03% for the second quarter of 2014, compared to 1.29% and 17.28%, respectively, for the second quarter of 2013.

Net interest income was $32.0 million for the second quarter of 2014, compared to $30.8 million for the first quarter of 2014 and $27.5 million for the second quarter of 2013.  The net interest margin in the second quarter of 2014 was 3.74%, a 6 basis point decrease from the first quarter of 2014 and 19 basis point decrease from the second quarter of 2013.  The increase in net interest income on a linked quarter basis is attributable to a $87.5 million increase in average loans outstanding, a $33.6 million increase in non-interest-bearing deposits and a $40.9 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.

Average loans for the second quarter of 2014 were $2.99 billion, an increase of $87.5 million, or 3%, over average loans of $2.91 billion for the first quarter of 2014, and an increase of $472.1 million, or 19%, over average loans of $2.52 billion for the second quarter of 2013.

Average total deposits for the second quarter of 2014 were $3.06 billion, an increase of $83.1 million, or 3%, over average total deposits of $2.97 billion for the first quarter of 2014, and an increase of $554.3 million, or 22%, over average total deposits of $2.50 billion for the second quarter of 2013.

Non-performing assets to total assets were unchanged for the second quarter of 2014 compared to the first quarter of 2014 at 0.53%.  Net credit charge-offs decreased slightly in the second quarter of 2014 compared to the first quarter of 2014 and remain well below levels we experienced in the first two quarters of 2013.  We recorded a $2.4 million provision for loan losses in the second quarter of 2014 compared to $2.3 million in the first quarter of 2014 and $3.3 million in the second quarter of 2013.  Growth in loans and improving credit quality has resulted in a relatively stable loan loss reserve as a percent of loans ratio, remaining unchanged at 1.08% for June 30, 2014 and March 31, 2014 and increasing one basis point as compared to 1.07% at December 31, 2013.  In management's opinion, the reserve is adequate and was determined by consistent application of ServisFirst Bank's methodology for calculating its reserve for loan losses.

Non-interest income increased $365,000 during the second quarter of 2014, or 14%, compared to the second quarter of 2013.  Deposit service charges increased by $251,000, or 31%, resulting from higher balances and an increase in the number of accounts and transactions.  Increases in the cash surrender value of our life insurance contracts resulted from added investments in contracts during the third quarter of 2013.

Non-interest expense for the second quarter of 2014 increased $3.0 million, or 24%, to $15.4 million from $12.4 million in the second quarter of 2013, and increased $1.7 million, or 12%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2014 increased $2.0 million, or 28%, to $9.1 million from $7.1 million in the second quarter of 2013, and increased $1.4 million, or 18%, on a linked quarter basis.  Included in salary and benefit expense for the first and second quarters of 2014 are non-routine expenses of $703,000 and $1.8 million, respectively, resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our markets.  This expense impacted our diluted earnings per share for the first and second quarters of 2014 by $0.02 and $0.05, respectively.  We historically accounted for these options under the provisions of FASB ASC 718-10, Compensation – Stock Compensation, and now have determined to recognize as an expense the fair value of these vested options in accordance with the provisions of the FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees.  The change in accounting treatment is a non-cash item and does not impact the Company's operating activities or cash from operations.  Other operating expense for the second quarter of 2014 increased $800,000, or 29%, to $3.6 million from $2.8 million in the second of 2013.  This was primarily the result of write downs of investments in tax credit partnerships of $377,000 for the second quarter of 2014 compared to $53,000 in the same quarter in 2013.  We recognized tax credits of $550,000 during the second quarter of 2014 from these investments.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

As discussed in more detail in the section titled "Detailed Financials," we recorded a non-routine expense of $703,000 for the first quarter of 2014 resulting from the correction  of our accounting for vested stock options previously granted to members of our advisory boards in our Dothan, Huntsville and Montgomery, Alabama markets, and we recorded a non-routine expense of $1.8 million for the second quarter of 2014 resulting from a correction of our accounting for vested stock options previously granted to members of our advisory boards in our Mobile, Alabama and Pensacola, Florida markets.  This change in accounting treatment is a non-cash item and does not impact our operating activities or cash from operations.  The non-GAAP financial measures included in this press release of our results for the first and second quarters of 2014 and the first six months of 2014 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 the correction of our accounting for vested stock options.  None of the other periods included in this press release are affected by this correction.

"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 of 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.

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 six months ended June 30, 2014 and the three month periods ended June 30, 2014 and March 31, 2014.  Dollars are in thousands, except share and per share data.

 

For the Six Months

Ended June 30, 2014

For the Three

Months Ended June

30, 2014

For the Three

Months Ended

March 31, 2014

Provision for income taxes - GAAP

$

10,705

$

5,476

$

5,229

Adjustments:

Adjustment for non-routine expense

865

619

246

Core provision for income taxes

$

11,570

$

6,095

$

5,475

Return on average assets - GAAP

1.32

%

1.28

%

1.36

%

Net income - GAAP

$

23,343

$

11,585

$

11,758

Adjustments:

Adjustment for non-routine expense

1,612

1,155

457

Core net income

$

24,955

$

12,740

$

12,215

Average assets

$

3,568,159

$

3,635,506

$

3,500,257

Core return on average assets

1.41

%

1.41

%

1.42

%

Return on average common stockholders' equity

15.61

%

15.67

%

17.83

%

Net income available to common stockholders - GAAP

$

23,127

$

11,469

$

11,658

Adjustments:

Adjustment for non-routine expense

1,612

1,155

457

Core net income available to common stockholders

$

24,739

$

12,624

$

12,115

Average common stockholders' equity

$

298,713

$

306,050

$

265,188

Core return on average common stockholders' equity

16.70

%

16.54

%

18.53

%

Earnings per share - diluted - GAAP

$

0.97

$

0.46

$

0.51

Weighted average shares outstanding, diluted

23,909,707

24,823,590

22,985,670

Core diluted earnings per share

$

1.03

$

0.51

$

0.53

 

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 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 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 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)

2nd Quarter 2014

1st Quarter 2014

4th Quarter 2013

3rd Quarter 2013

2nd Quarter 2013

CONSOLIDATED STATEMENT OF INCOME

Interest income

$

35,424

$

34,281

$

33,725

$

32,499

$

30,692

Interest expense

3,446

3,432

3,610

3,534

3,211

Net interest income

31,978

30,849

30,115

28,965

27,481

Provision for loan losses

2,438

2,314

2,356

3,034

3,334

Net interest income after provision for loan losses

29,540

28,535

27,759

25,931

24,147

Non-interest income

2,938

2,175

2,371

2,269

2,573

Non-interest expense

15,417

13,723

12,298

12,067

12,372

Income before income tax

17,061

16,987

17,832

16,133

14,348

Provision for income tax

5,476

5,229

5,964

5,321

4,662

Net income

11,585

11,758

11,868

10,812

9,686

Preferred stock dividends

116

100

116

100

100

Net income available to common stockholders

$

11,469

$

11,658

$

11,752

$

10,712

$

9,586

Earnings per share - basic

$

0.49

$

0.53

$

0.55

$

0.51

$

0.46

Earnings per share - diluted

$

0.46

$

0.51

$

0.53

$

0.49

$

0.44

Average diluted shares outstanding

24,823,590

22,985,670

22,359,351

21,965,733

21,655,326

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

3,762,684

$

3,572,914

$

3,520,699

$

3,396,153

$

3,140,626

Loans

3,053,989

2,937,797

2,858,868

2,731,973

2,590,192

Debt securities

325,432

309,475

298,494

289,515

261,578

Non-interest-bearing demand deposits

729,163

662,834

650,456

635,153

562,196

Total deposits

3,157,642

3,031,041

3,019,642

2,919,217

2,674,977

Borrowings

19,957

19,949

19,940

19,932

19,924

Stockholders' equity

$

380,074

$

312,283

$

297,192

$

276,300

$

265,189

Shares outstanding

24,749,436

22,574,436

22,050,036

21,229,041

20,922,936

Book value per share

$

13.74

$

12.06

$

11.67

$

11.13

$

10.76

Tangible book value per share (1)

$

13.74

$

12.06

$

11.67

$

11.13

$

10.76

SELECTED FINANCIAL RATIOS

Net interest margin

3.74

%

3.80

%

3.67

%

3.69

%

3.93

%

Return on average assets

1.28

%

1.36

%

1.36

%

1.31

%

1.31

%

Return on average common stockholders' equity

15.03

%

17.83

%

18.86

%

18.47

%

17.28

%

Efficiency ratio

44.15

%

41.55

%

37.86

%

38.63

%

41.17

%

Non-interest expense to average earning assets

1.78

%

1.66

%

1.48

%

1.52

%

1.74

%

Tangible common equity to total tangible assets (1)

9.04

%

7.62

%

7.31

%

6.96

%

7.17

%

(1) Non-GAAP financial measures.  "Tangible book value per share" and "tangible common equity to total tangible assets" are not measures of financial performance recognized by generally accepted accounting principles in the United States, or GAAP;   However, because the Company has no intangible assets, there is no reconciliation of these non-GAAP financial measures.

 

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

June 30, 2014

June 30, 2013

% Change

ASSETS

Cash and due from banks

$

76,893

$

60,251

28

%

Interest-bearing balances due from depository institutions

199,990

129,767

54

%

Federal funds sold

3,044

2,590

18

%

Cash and cash equivalents

279,927

192,608

45

%

Available for sale debt securities, at fair value

294,254

227,770

29

%

Held to maturity debt securities (fair value of $33,663 and $33,292 at

June 30, 2014 and 2013, respectively)

31,178

33,808

(8)

%

Restricted equity securities

3,418

3,738

(9)

%

Mortgage loans held for sale

11,675

16,374

(29)

%

Loans

3,053,989

2,590,192

18

%

Less allowance for loan losses

(32,984)

(28,757)

15

%

Loans, net

3,021,005

2,561,435

18

%

Premises and equipment, net

7,745

8,756

(12)

%

Accrued interest and dividends receivable

9,686

9,101

6

%

Deferred tax asset, net

12,817

10,383

23

%

Other real estate owned and repossessed assets

6,739

9,071

(26)

%

Bank owned life insurance contracts

70,090

57,969

21

%

Other assets

14,150

9,613

47

%

Total assets

$

3,762,684

$

3,140,626

20

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing

$

729,163

$

562,196

30

%

Interest-bearing

2,428,479

2,112,781

15

%

Total deposits

3,157,642

2,674,977

18

%

Federal funds purchased

181,070

175,475

3

%

Other borrowings

19,957

19,924

0

%

Accrued interest payable

1,946

905

115

%

Other liabilities

21,995

4,156

429

%

Total liabilities

3,382,610

2,875,437

18

%

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,

40,000 shares issued and outstanding at June 30, 2014 and 2013

39,958

39,958

-

%

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

Common stock, par value $0.0003 per share; 50,000,000 shares authorized;

24,749,436 shares issued and outstanding at June 30, 2014 and

20,922,936 shares issued and outstanding at June 30, 2013

8

7

14

%

Additional paid-in capital

183,782

109,874

67

%

Retained earnings

150,769

111,217

36

%

Accumulated other comprehensive income

5,305

4,133

28

%

Noncontrolling interest

252

-

100

%

Total stockholders' equity

380,074

265,189

43

%

Total liabilities and stockholders' equity

$

3,762,684

$

3,140,626

20

%

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Interest income:

Interest and fees on loans

$

33,250

$

28,874

$

65,502

$

56,192

Taxable securities

1,126

908

2,223

1,856

Nontaxable securities

870

847

1,741

1,679

Federal funds sold

43

17

85

33

Other interest and dividends

135

46

154

97

   Total interest income

35,424

30,692

69,705

59,857

Interest expense:

Deposits

3,027

2,784

6,041

5,497

Borrowed funds

419

427

837

978

   Total interest expense

3,446

3,211

6,878

6,475

   Net interest income

31,978

27,481

62,827

53,382

Provision for loan losses

2,438

3,334

4,752

7,618

   Net interest income after provision for loan losses

29,540

24,147

58,075

45,764

Non-interest income:

Service charges on deposit accounts

1,057

806

1,925

1,568

Mortgage banking

674

787

958

1,752

Securities gains

-

8

-

131

Increase in cash surrender value life insurance

546

485

1,082

955

Other operating income

661

487

1,148

964

   Total non-interest income

2,938

2,573

5,113

5,370

Non-interest expense:

Salaries and employee benefits

9,098

7,056

16,795

12,735

Equipment and occupancy expense

1,409

1,469

2,775

2,580

Professional services

532

425

1,048

886

FDIC and other regulatory assessments

528

426

1,045

858

Other real estate owned expense

298

204

785

594

Other operating expense

3,552

2,792

6,692

5,471

   Total non-interest expense

15,417

12,372

29,140

23,124

   Income before income tax

17,061

14,348

34,048

28,010

Provision for income tax

5,476

4,662

10,705

9,073

         Net income

11,585

9,686

23,343

18,937

Dividends on preferred stock

116

100

216

200

         Net income available to common stockholders

$

11,469

$

9,586

$

23,127

$

18,737

Basic earnings per common share

$

0.49

$

0.46

$

1.01

$

0.94

Diluted earnings per common share

$

0.46

$

0.44

$

0.97

$

0.88

 

 

SUMMARY OF LOAN LOSS EXPERIENCE

(Dollars in thousands)

2nd Quarter 2014

1st Quarter 2014

4th Quarter 2013

3rd Quarter 2013

2nd Quarter 2013

Reserve for loan losses:

Beginning balance

$

31,728

$

30,663

$

28,927

$

28,757

$

27,679

Loans charged off:

Commercial financial and agricultural

142

1,222

95

849

101

Real estate - construction

325

23

557

394

1,888

Real estate - mortgage:

890

4

25

1,746

270

Consumer

18

58

38

42

129

Total charge off

1,375

1,307

715

3,031

2,388

Recoveries:

Commercial financial and agricultural

1

45

16

13

31

Real estate - construction

180

8

70

124

95

Real estate - mortgage:

10

4

9

24

3

Consumer

2

1

-

6

3

Total recoveries

193

58

95

167

132

Net charge-off

1,182

1,249

620

2,864

2,256

Provision for loan losses

2,438

2,314

2,356

3,034

3,334

Ending balance

$

32,984

$

31,728

$

30,663

$

28,927

$

28,757

Reserve for loan losses to total loans

1.08

%

1.08

%

1.07

%

1.06

%

1.11

%

Reserve for loan losses to total average

loans

1.10

%

1.09

%

1.11

%

1.09

%

1.14

%

Net charge-offs to total average loans

0.16

%

0.17

%

0.09

%

0.43

%

0.36

%

Provision for loan losses to total average

loans

0.33

%

0.32

%

0.34

%

0.46

%

0.53

%

Nonperforming assets:

Nonaccrual loans

$

13,193

$

9,084

$

9,621

$

9,396

$

14,765

Loans 90+ days past due and accruing

-

110

115

-

259

Other real estate owned and

   repossessed assets

6,739

9,752

12,861

14,258

9,232

Total

$

19,932

$

18,946

$

22,597

$

23,654

$

24,256

Nonperforming loans to total loans

0.43

%

0.31

%

0.35

%

0.34

%

0.58

%

Nonperforming assets to total assets

0.53

%

0.53

%

0.64

%

0.70

%

0.77

%

Nonperforming assets to earning assets

0.54

%

0.55

%

0.66

%

0.72

%

0.79

%

Reserve for loan losses to nonaccrual loans

250.01

%

349.27

%

318.71

%

307.87

%

194.76

%

Restructured accruing loans

$

7,030

$

9,411

$

9,689

$

6,233

$

9,406

Restructured accruing loans to total loans

0.23

%

0.32

%

0.35

%

0.23

%

0.36

%

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

2nd Quarter 2014

1st Quarter 2014

4th Quarter 2013

3rd Quarter 2013

2nd Quarter 2013

Interest income:

Interest and fees on loans

$

33,250

$

32,252

$

31,618

$

30,475

$

28,874

Taxable securities

1,126

1,097

1,052

980

908

Nontaxable securities

870

871

870

858

847

Federal funds sold

43

42

51

44

17

Other interest and dividends

135

19

134

142

46

   Total interest income

35,424

34,281

33,725

32,499

30,692

Deposits

3,027

3,014

3,202

3,131

2,784

Borrowed funds

419

418

408

403

427

   Total interest expense

3,446

3,432

3,610

3,534

3,211

   Net interest income

31,978

30,849

30,115

28,965

27,481

Provision for loan losses

2,438

2,314

2,356

3,034

3,334

   Net interest income after provision for loan losses

29,540

28,535

27,759

25,931

24,147

Non-interest income:

Service charges on deposit accounts

1,057

868

837

823

806

Mortgage banking

674

284

344

402

787

Securities gains

-

-

-

-

8

Increase in cash surrender value life insurance

546

536

548

491

485

Other operating income

661

487

642

553

487

   Total non-interest income

2,938

2,175

2,371

2,269

2,573

Salaries and employee benefits

9,098

7,697

6,541

7,048

7,056

Equipment and occupancy expense

1,409

1,366

1,350

1,272

1,469

Professional services

532

516

480

443

425

FDIC and other regulatory assessments

528

517

536

405

426

Other real estate owned expense

298

487

475

357

204

Other operating expense

3,552

3,140

2,916

2,542

2,792

   Total non-interest expense

15,417

13,723

12,298

12,067

12,372

   Income before income tax

17,061

16,987

17,832

16,133

14,348

Provision for income tax

5,476

5,229

5,964

5,321

4,662

       Net income

11,585

11,758

11,868

10,812

9,686

Dividends on preferred stock

116

100

116

100

100

         Net income available to common stockholders

$

11,469

$

11,658

$

11,752

$

10,712

$

9,586

Basic earnings per common share

$

0.49

$

0.53

$

0.55

$

0.51

$

0.46

Diluted earnings per common share

$

0.46

$

0.51

$

0.53

$

0.49

$

0.44

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS - UNAUDITED

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

2nd Quarter 2014

1st Quarter 2014

4th Quarter 2013

3rd Quarter 2013

2nd Quarter 2013

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

$

2,978,631

4.46

%

$

2,892,433

4.52

%

$

2,754,955

4.54

%

$

2,640,444

4.56

%

$

2,519,869

4.58

%

Tax-exempt (2)

15,803

3.25

14,550

3.34

5,669

4.34

2,483

5.91

2,453

5.72

Mortgage loans held for sale

8,048

3.24

4,496

2.80

5,956

3.66

12,531

2.66

14,157

2.10

Debt securities:

Taxable

188,148

2.40

174,842

2.54

166,027

2.49

152,135

2.56

139,189

2.65

Tax-exempt (2)

123,897

4.11

122,686

4.13

120,161

4.11

118,001

4.13

115,428

4.22

Total securities (3)

312,045

3.08

297,528

3.20

286,188

3.17

270,136

3.24

254,617

3.36

Federal funds sold

41,388

0.37

54,895

0.31

68,710

0.25

62,192

0.28

21,303

0.26

Restricted equity securities

3,446

7.57

3,738

-

3,738

2.55

3,738

2.65

3,738

2.25

Interest-bearing balances with banks

121,532

0.25

82,279

0.09

173,521

0.29

161,169

0.29

30,083

0.24

Total interest-earning assets

3,480,893

4.13

%

3,349,919

4.21

%

3,298,737

4.11

%

3,152,693

4.14

%

2,846,220

4.38

%

Non-interest-earning assets:

Cash and due from banks

57,387

56,082

53,062

45,314

42,175

Net premises and equipment

8,377

8,724

8,944

9,052

9,359

Allowance for loan losses,

accrued interest and

other assets

88,849

85,532

98,586

76,477

75,239

Total assets

$

3,635,506

$

3,500,257

$

3,459,329

$

3,283,536

$

2,972,993

Interest-bearing liabilities:

Interest-bearing deposits:

Checking

$

482,115

0.27

%

$

478,678

0.27

%

$

472,751

0.27

%

$

432,453

0.28

%

$

415,955

0.28

%

Savings

25,406

0.28

25,081

0.27

21,755

0.27

21,602

0.29

21,733

0.28

Money market

1,472,346

0.44

1,416,645

0.45

1,420,771

0.47

1,356,197

0.47

1,123,605

0.46

Time deposits

402,613

1.08

412,622

1.10

412,254

1.13

408,600

1.16

402,733

1.19

Federal funds purchased

195,809

0.28

195,967

0.28

176,967

0.28

168,121

0.28

185,533

0.29

Other borrowings

19,953

5.69

19,945

5.75

19,936

5.63

19,928

5.63

19,920

5.92

Total interest-bearing liabilities

2,598,242

0.53

%

2,548,938

0.55

%

2,524,434

0.57

%

2,406,901

0.58

%

2,169,479

0.59

%

Non-interest-bearing liabilities:

Non-interest-bearing

demand

675,098

641,450

640,476

599,379

539,228

Other liabilities

16,158

4,724

7,226

7,250

1,799

Stockholders' equity

341,120

300,512

282,549

266,427

255,837

Unrealized gains on securities and

derivatives

4,888

4,634

4,644

3,580

6,650

Total liabilities and

stockholders' equity

$

3,635,506

$

3,500,257

$

3,459,329

$

3,283,536

$

2,972,993

Net interest spread

3.60

%

3.67

%

3.54

%

3.56

%

3.79

%

Net interest margin

3.74

%

3.80

%

3.67

%

3.69

%

3.93

%

(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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