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

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.



RELATED LINKS
http://servisfirstbancshares.investorroom.com/

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