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

Jul 20, 2015, 16:01 ET from ServisFirst Bancshares, Inc.

BIRMINGHAM, Ala., July 20, 2015 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2015.

SECOND QUARTER 2015 HIGHLIGHTS:

  • Net income for the second quarter increased 25% year over year
  • Second quarter annualized loan growth of 28% on a linked quarter basis
  • Diluted earnings per share of $0.54 for the second quarter, a 17% increase year over year
  • Continued strong asset quality with non-performing assets to total assets of 0.38% at quarter-end and annualized net charge-offs of 0.15%
  • Added more producers during first six months of 2015 than in any equivalent period in our ten year history

Tom Broughton, President and CEO, said, "We are pleased to welcome seven new producers to our company in the second quarter, for a total of 19 new producers year to date, excluding officers added through the Metro Bank (Atlanta) acquisition."  Bud Foshee, CFO, stated, "The improvement in net interest margin in the quarter, combined with strong loan growth, gives us strong fundamentals from which to build for the balance of 2015."

 

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

Period Ending June 30, 2015

Period Ending March 31, 2015

% Change From Period Ending March 31, 2015 to Period Ending June 30, 2015

Period Ending June 30, 2014

% Change From Period Ending June 30, 2014 to Period Ending June 30, 2015

QUARTERLY OPERATING RESULTS

Net Income

$

14,469

$

13,055

11

%

$

11,585

25

%

Net Income Available to Common Stockholders

$

14,346

$

12,955

11

%

$

11,469

25

%

Diluted Earnings Per Share

$

0.54

$

0.49

10

%

$

0.46

17

%

Return on Average Assets

1.31

%

1.26

%

1.28

%

Return on Average Common Stockholders' Equity

14.06

%

13.55

%

15.03

%

Average Diluted Shares Outstanding

26,426,036

26,237,980

24,823,590

Core Net Income*

$

14,469

$

14,822

(2)

%

$

12,740

14

%

Core Net Income Available to Common Stockholders*

$

14,346

$

14,722

(3)

%

$

12,624

14

%

Core Diluted Earnings Per Share*

$

0.54

$

0.56

(4)

%

$

0.51

6

%

Core Return on Average Assets*

1.31

%

1.43

%

1.41

%

Core Return on Average Common Stockholders' Equity*

14.06

%

15.39

%

16.54

%

YEAR-TO-DATE OPERATING RESULTS

Net Income

$

27,524

$

23,343

18

%

Net Income Available to Common Stockholders

$

27,301

$

23,127

18

%

Diluted Earnings Per Share

$

1.04

$

0.97

7

%

Return on Average Assets

1.29

%

1.32

%

Return on Average Common Stockholders' Equity

13.81

%

15.61

%

Average Diluted Shares Outstanding

26,332,527

23,909,707

Core Net Income*

$

29,291

$

24,955

17

%

Core Net Income Available to Common Stockholders*

$

29,068

$

24,739

17

%

Core Diluted Earnings Per Share*

$

1.10

$

1.03

7

%

Core Return on Average Assets*

1.37

%

1.41

%

Core Return on Average Common Stockholders' Equity*

14.70

%

16.70

%

BALANCE SHEET

Total Assets

$

4,492,539

$

4,393,342

2

%

$

3,762,684

19

%

Loans

3,863,734

3,607,852

7

%

3,053,989

27

%

Non-interest-bearing Demand Deposits

926,577

866,743

7

%

729,163

27

%

Total Deposits

3,729,132

3,638,763

2

%

3,157,642

18

%

Stockholders' Equity

454,487

441,458

3

%

380,074

20

%

* 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 $14.5 million and net income available to common stockholders of $14.3 million for the quarter ended June 30, 2015, compared to net income of $11.6 million and net income available to common stockholders of $11.5 million for the same quarter in 2014.  Basic and diluted earnings per common share were $0.56 and $0.54, respectively, for the second quarter of 2015, compared to $0.49 and $0.46, respectively, for the second quarter of 2014.

Return on average assets was 1.31% and return on average equity was 14.06% for the second quarter of 2015, compared to 1.28% and 15.03%, respectively, for the second quarter of 2014.

Net interest income was $40.2 million for the second quarter of 2015, compared to $37.0 million for the first quarter of 2015 and $32.0 million for the second quarter of 2014.  The net interest margin in the second quarter of 2015 was 3.88%, an 8 basis point increase from the first quarter of 2015 and 14 basis point increase from the second quarter of 2014.  The increase in net interest income on a linked quarter basis is attributable to a $239.2 million increase in average loans outstanding, a $94.7 million increase in non-interest-bearing deposits and a $21.4 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans increased 4 basis points to 4.51% on a linked quarter basis.

Average loans for the second quarter of 2015 were $3.74 billion, an increase of $239.2 million, or 7%, over average loans of $3.50 billion for the first quarter of 2015, and an increase of $747.3 million, or 25%, over average loans of $2.99 billion for the second quarter of 2014.

Average total deposits for the second quarter of 2015 were $3.66 billion, an increase of $191.4 million, or 6%, over average total deposits of $3.47 billion for the first quarter of 2015, and an increase of $601.6 million, or 20%, over average total deposits of $3.06 billion for the second quarter of 2014.

Non-performing assets to total assets were 0.38% for the second quarter of 2015, a decrease of two basis points compared to 0.40% for the first quarter of 2015 and a decrease of fifteen basis points compared to 0.53% for the second quarter of 2014.  Net credit charge-offs to average loans  were 0.15%, a seven basis point increase compared to 0.08% for the first quarter of 2015 and a one basis point decrease compared to 0.16% for the second quarter of 2014.  We recorded a $4.1 million provision for loan losses in the second quarter of 2015 compared to $2.4 million in the first quarter of 2015 and $2.4 million in the second quarter of 2014.  The $1.7 million increase in loan loss provision in the second quarter is primarily attributable to loan growth combined with new impairment and charge-off of two large commercial loans.  The allowance for loan loss as a percentage of total loans remained unchanged at 1.04% for June 30, 2015 and March 31, 2015 and decreased four basis points compared to 1.08% at June 30, 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 losses.

Non-interest income increased $567,000 during the second quarter of 2015, or 19%, compared to the second quarter of 2014.  Deposit service charges increased by $219,000, or 21%, 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 2014.

Non-interest expense for the second quarter of 2015 increased $2.8 million, or 18%, to $18.2 million from $15.4 million in the second quarter of 2014, and decreased $0.5 million, or 3%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2015 increased $1.3 million, or 15%, to $10.4 million from $9.1 million in the second quarter of 2014, and increased $1.4 million, or 16%, on a linked quarter basis.  Salary and benefit expenses for the second quarter of 2014 included non-routine expense of $1.8 million resulting from the accelerated vesting of stock options previously granted to members of our advisory boards in our markets.  Excluding this non-routine expense, salary and benefit expenses increased $3.1 million, or 42%.  This increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets.  Merger expenses during the first quarter of 2015 related to our acquisition of Metro Bancshares were $2.1 million.  Other operating expense for the second quarter of 2015 increased $1.0 million, or 29%, to $4.6 million from $3.6 million in the second of 2014.  This was primarily the result of increased loan origination expenses, increased federal reserve bank charges from our correspondent bank clearing activities, and amortization of the core deposit intangible asset resulting from the Metro Bancshares acquisition.

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 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.

"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 three months ended March 31, 2015 and six month comparative periods ended June 30, 2015 and 2014 included in this press release.  Dollars are in thousands, except share and per share data.

 

For the Three Months Ended March 31, 2015

For the Six Months Ended June 30, 2015

For the Six Months Ended June 30, 2014

Provision for income taxes - GAAP

$

5,903

$

12,875

$

10,705

Adjustments:

Adjustment for non-routine expense

829

830

865

Core provision for income taxes

$

6,732

$

13,705

$

11,570

Return on average assets - GAAP

1.26

%

1.29

%

1.32

%

Net income - GAAP

$

13,055

$

27,524

$

23,343

Adjustments:

Adjustment for non-routine expense

1,767

1,767

1,612

Core net income

$

14,822

$

29,291

$

24,955

Average assets

$

4,193,413

$

4,307,778

$

3,568,159

Core return on average assets

1.43

%

1.37

%

1.41

%

Return on average common stockholders' equity

13.55

%

13.81

%

15.61

%

Net income available to common stockholders - GAAP

$

12,955

$

27,301

$

23,127

Adjustments:

Adjustment for non-routine expense

1,767

1,767

1,612

Core net income available to common stockholders

$

14,722

$

29,068

$

24,739

Average common stockholders' equity

$

387,870

$

398,678

$

298,713

Core return on average common stockholders' equity

15.39

%

14.70

%

16.70

%

Earnings per share - diluted - GAAP

$

0.49

$

1.04

$

0.97

Weighted average shares outstanding, diluted

26,237,980

26,332,527

23,909,707

Core diluted earnings per share

$

0.56

$

1.10

$

1.03

Book value per share

$

15.65

$

16.05

$

13.74

Total common stockholders' equity - GAAP

401,500

414,529

340,116

Adjustments:

Adjusted for goodwill and other identifiable intangible assets

18,069

18,060

-

Tangible common stockholders' equity

$

383,431

$

396,469

$

340,116

Tangible book value per share

$

14.95

$

15.35

$

13.74

Stockholders' equity to total assets

10.05

%

10.13

%

10.10

%

Total assets - GAAP

$

4,393,342

$

4,485,091

$

3,762,684

Adjustments:

Adjusted for goodwill and other identifiable intangible assets

18,069

18,060

-

Total tangible assets

4,375,273

4,467,031

3,762,684

Tangible common equity to total tangible assets

8.76

%

8.88

%

10.10

%

 

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 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 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd Quarter 2014

CONSOLIDATED STATEMENT OF INCOME

Interest income

$

44,209

$

40,783

$

38,163

$

36,857

$

35,424

Interest expense

3,998

3,746

3,703

3,538

3,446

Net interest income

40,211

37,037

34,460

33,319

31,978

Provision for loan losses

4,062

2,405

2,759

2,748

2,438

Net interest income after provision for loan losses

36,149

34,632

31,701

30,571

29,540

Non-interest income

3,505

3,077

3,110

3,006

2,938

Non-interest expense

18,213

18,751

13,143

15,315

15,417

Income before income tax

21,441

18,958

21,668

18,262

17,061

Provision for income tax

6,972

5,903

6,636

4,260

5,476

Net income

14,469

13,055

15,032

14,002

11,585

Preferred stock dividends

123

100

115

100

116

Net income available to common stockholders

$

14,346

$

12,955

$

14,917

$

13,902

$

11,469

Earnings per share - basic

$

0.56

$

0.51

$

0.60

$

0.56

$

0.49

Earnings per share - diluted

$

0.54

$

0.49

$

0.58

$

0.54

$

0.46

Average diluted shares outstanding

26,426,036

26,237,980

25,697,531

25,726,313

24,823,590

CONSOLIDATED BALANCE SHEET DATA

Total assets

$

4,492,539

$

4,393,342

$

4,098,679

$

3,952,799

$

3,762,684

Loans

3,863,734

3,607,852

3,359,858

3,159,772

3,053,989

Debt securities

335,008

336,505

327,665

332,351

325,432

Non-interest-bearing demand deposits

926,577

866,743

810,460

794,553

729,163

Total deposits

3,729,132

3,638,763

3,398,160

3,352,766

3,157,642

Borrowings

21,016

21,278

19,973

19,965

19,957

Stockholders' equity

$

454,487

$

441,458

$

407,213

$

393,136

$

380,074

Shares outstanding

25,826,198

26,653,610

24,801,518

24,791,436

24,749,436

Book value per share

$

16.05

$

15.65

$

14.81

$

14.25

$

13.74

Tangible book value per share (1)

$

15.35

$

14.95

$

14.81

$

14.25

$

13.74

SELECTED FINANCIAL RATIOS

Net interest margin

3.88

%

3.80

%

3.56

%

3.65

%

3.74

%

Return on average assets

1.31

%

1.26

%

1.47

%

1.45

%

1.28

%

Return on average common stockholders' equity

14.06

%

13.55

%

16.39

%

15.89

%

15.03

%

Efficiency ratio

41.66

%

46.74

%

34.98

%

42.16

%

44.15

%

Non-interest expense to average earning assets

1.73

%

1.90

%

1.34

%

1.66

%

1.78

%

CAPITAL RATIOS (2)

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

9.60

%

9.93

%

N/A

N/A

N/A

Tier 1 capital to risk-weighted assets

10.58

%

10.98

%

11.75

%

12.02

%

12.04

%

Total capital to risk-weighted assets

12.04

%

12.49

%

13.38

%

13.70

%

13.74

%

Tier 1 capital to average assets

9.88

%

10.07

%

9.91

%

10.18

%

10.32

%

Tangible common equity to total tangible assets (1)

8.86

%

8.76

%

8.96

%

8.93

%

9.04

(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)

June 30, 2015

June 30, 2014

% Change

ASSETS

Cash and due from banks

$

49,731

$

76,893

(35)

%

Interest-bearing balances due from depository institutions

69,104

199,990

(65)

%

Federal funds sold

17,622

3,044

479

%

Cash and cash equivalents

136,457

279,927

(51)

%

Available for sale debt securities, at fair value

305,985

294,254

4

%

Held to maturity debt securities (fair value of $29,348 and $31,446 at

June 30, 2015 and 2014, respectively)

29,023

31,178

(7)

%

Restricted equity securities

4,954

3,418

45

%

Mortgage loans held for sale

11,722

11,675

0

%

Loans

3,863,734

3,053,989

27

%

Less allowance for loan losses

(40,020)

(32,984)

21

%

Loans, net

3,823,714

3,021,005

27

%

Premises and equipment, net

15,563

7,745

101

%

Goodwill and other identifiable intangible assets

18,060

-

Other assets

147,061

113,482

30

%

Total assets

$

4,492,539

$

3,762,684

19

%

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest-bearing

$

926,577

$

729,163

27

%

Interest-bearing

2,802,555

2,428,479

15

%

Total deposits

3,729,132

3,157,642

18

%

Federal funds purchased

273,095

181,070

51

%

Other borrowings

21,016

19,957

5

%

Other liabilities

14,809

23,941

(38)

%

Total liabilities

4,038,052

3,382,610

19

%

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, 2015 and 2014

39,958

39,958

-

%

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

960,000 currently undesignated

-

-

-

%

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

25,833,698 shares issued and 25,826,198 outstanding at June 30, 2015 and

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

26

25

4

%

Additional paid-in capital

209,074

183,765

14

%

Retained earnings

201,303

150,769

34

%

Accumulated other comprehensive income

3,749

5,305

(29)

%

Noncontrolling interest

377

252

50

%

Total stockholders' equity

454,487

380,074

20

%

Total liabilities and stockholders' equity

$

4,492,539

$

3,762,684

19

%

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Interest income:

Interest and fees on loans

$

42,105

$

33,250

$

80,751

$

65,502

Taxable securities

1,104

1,126

2,232

2,223

Nontaxable securities

874

870

1,734

1,741

Federal funds sold

24

43

101

85

Other interest and dividends

102

135

174

154

   Total interest income

44,209

35,424

84,992

69,705

Interest expense:

Deposits

3,512

3,027

6,782

6,041

Borrowed funds

486

419

962

837

   Total interest expense

3,998

3,446

7,744

6,878

   Net interest income

40,211

31,978

77,248

62,827

Provision for loan losses

4,062

2,438

6,467

4,752

   Net interest income after provision for loan losses

36,149

29,540

70,781

58,075

Non-interest income:

Service charges on deposit accounts

1,276

1,057

2,483

1,925

Mortgage banking

735

674

1,189

958

Securities gains

-

-

29

-

Increase in cash surrender value life insurance

660

546

1,308

1,082

Other operating income

834

661

1,573

1,148

   Total non-interest income

3,505

2,938

6,582

5,113

Non-interest expense:

Salaries and employee benefits

10,426

9,098

19,434

16,795

Equipment and occupancy expense

1,634

1,409

3,295

2,775

Professional services

665

532

1,233

1,048

FDIC and other regulatory assessments

626

528

1,246

1,045

Other real estate owned expense

289

298

503

785

Merger expense

4

-

2,100

-

Other operating expense

4,569

3,552

9,153

6,692

   Total non-interest expense

18,213

15,417

36,964

29,140

   Income before income tax

21,441

17,061

40,399

34,048

Provision for income tax

6,972

5,476

12,875

10,705

         Net income

14,469

11,585

27,524

23,343

Dividends on preferred stock

123

116

223

216

         Net income available to common stockholders

$

14,346

$

11,469

$

27,301

$

23,127

Basic earnings per common share

$

0.56

$

0.49

$

1.07

$

1.01

Diluted earnings per common share

$

0.54

$

0.46

$

1.04

$

0.97

 

LOANS BY TYPE (UNAUDITED)

(In thousands)

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd Quarter 2014

Commercial, financial and agricultural

$

1,630,134

$

1,543,531

$

1,495,092

$

1,382,607

$

1,362,757

Real estate - construction

219,607

219,005

208,769

194,506

178,033

Real estate - mortgage:

Owner-occupied commercial

930,719

869,724

793,917

773,432

708,294

1-4 family mortgage

392,245

375,770

333,455

314,778

296,220

Other mortgage

627,099

545,668

471,363

443,245

457,845

Subtotal: Real estate - mortgage

1,950,063

1,791,162

1,598,735

1,531,455

1,462,359

Consumer

63,930

54,154

57,262

51,204

50,840

Total loans

$

3,863,734

$

3,607,852

$

3,359,858

$

3,159,772

$

3,053,989

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd Quarter 2014

Allowance for loan losses:

Beginning balance

$

37,356

$

35,629

$

34,442

$

32,984

$

31,728

Loans charged off:

Commercial financial and agricultural

1,151

77

416

531

142

Real estate - construction

93

382

309

610

325

Real estate - mortgage

208

433

922

149

890

Consumer

19

5

21

131

18

Total charge offs

1,471

897

1,668

1,421

1,375

Recoveries:

Commercial financial and agricultural

6

19

2

-

1

Real estate - construction

65

99

37

97

180

Real estate - mortgage

2

101

46

14

10

Consumer

-

-

11

20

2

Total recoveries

73

219

96

131

193

Net charge-offs

1,398

678

1,572

1,290

1,182

Provision for loan losses

4,062

2,405

2,759

2,748

2,438

Ending balance

$

40,020

$

37,356

$

35,629

$

34,442

$

32,984

Allowance for loan losses to total loans

1.04

%

1.04

%

1.06

%

1.09

%

1.08

%

Allowance for loan losses to total average

loans

1.07

%

1.07

%

1.10

%

1.11

%

1.10

%

Net charge-offs to total average loans

0.15

%

0.08

%

0.19

%

0.17

%

0.16

%

Provision for loan losses to total average

loans

0.44

%

0.28

%

0.34

%

0.35

%

0.33

%

Nonperforming assets:

Nonaccrual loans

$

8,194

$

8,361

$

9,125

$

16,078

$

13,193

Loans 90+ days past due and accruing

470

553

925

1,190

-

Other real estate owned and

  repossessed assets

8,235

8,638

6,840

6,940

6,739

Total

$

16,899

$

17,552

$

16,890

$

24,208

$

19,932

Nonperforming loans to total loans

0.22

%

0.25

%

0.30

%

0.55

%

0.43

%

Nonperforming assets to total assets

0.38

%

0.40

%

0.41

%

0.61

%

0.53

%

Nonperforming assets to earning assets

0.38

%

0.41

%

0.42

%

0.62

%

0.54

%

Reserve for loan losses to nonaccrual loans

488.41

%

446.79

%

390.45

%

214.22

%

250.01

%

Restructured accruing loans

$

8,279

$

8,280

$

8,295

$

2,067

$

7,030

Restructured accruing loans to total loans

0.21

%

0.23

%

0.25

%

0.07

%

0.23

%

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd Quarter 2014

Beginning balance:

$

8,280

$

8,992

$

7,932

$

9,217

$

13,478

Additions

-

-

6,250

-

1,409

Net (paydowns) / advances

(1)

(381)

(4,492)

(802)

(5,080)

Charge-offs

-

(331)

(698)

(483)

(590)

$

8,279

$

8,280

$

8,992

$

7,932

$

9,217

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd Quarter 2014

Interest income:

Interest and fees on loans

$

42,105

$

38,646

$

35,902

$

34,662

$

33,250

Taxable securities

1,104

1,128

1,143

1,131

1,126

Nontaxable securities

874

860

871

877

870

Federal funds sold

24

77

41

38

43

Other interest and dividends

102

72

206

149

135

   Total interest income

44,209

40,783

38,163

36,857

35,424

Interest expense:

Deposits

3,512

3,270

3,256

3,123

3,027

Borrowed funds

486

476

447

415

419

   Total interest expense

3,998

3,746

3,703

3,538

3,446

   Net interest income

40,211

37,037

34,460

33,319

31,978

Provision for loan losses

4,062

2,405

2,759

2,748

2,438

   Net interest income after provision for loan losses

36,149

34,632

31,701

30,571

29,540

Non-interest income:

Service charges on deposit accounts

1,276

1,207

1,168

1,172

1,057

Mortgage banking

735

454

507

582

674

Securities gains

-

29

-

3

-

Increase in cash surrender value life insurance

660

648

649

549

546

Other operating income

834

739

786

700

661

   Total non-interest income

3,505

3,077

3,110

3,006

2,938

Non-interest expense:

Salaries and employee benefits

10,426

9,008

6,332

7,890

9,098

Equipment and occupancy expense

1,634

1,661

1,335

1,437

1,409

Professional services

665

568

558

829

532

FDIC and other regulatory assessments

626

620

516

533

528

Other real estate owned expense

289

214

528

220

298

Merger expense

4

2,096

-

-

-

Other operating expense

4,569

4,584

3,874

4,406

3,552

   Total non-interest expense

18,213

18,751

13,142

15,315

15,417

   Income before income tax

21,441

18,958

21,668

18,262

17,061

Provision for income tax

6,972

5,903

6,636

4,260

5,476

       Net income

14,469

13,055

15,032

14,002

11,585

Dividends on preferred stock

123

100

115

100

116

         Net income available to common stockholders

$

14,346

$

12,955

$

14,917

$

13,902

$

11,469

Basic earnings per common share

$

0.56

$

0.51

$

0.60

$

0.56

$

0.49

Diluted earnings per common share

$

0.54

$

0.49

$

0.58

$

0.54

$

0.46

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

2nd Quarter 2015

1st Quarter 2015

4th Quarter 2014

3rd Quarter 2014

2nd 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

$

3,731,699

4.51

%

$

3,492,363

4.47

%

$

3,215,400

4.41

%

$

3,081,435

4.44

%

$

2,978,631

4.46

%

Tax-exempt (2)

10,005

5.01

10,180

5.10

10,367

4.94

12,043

4.25

15,803

3.25

Mortgage loans held for sale

12,718

2.21

6,884

2.12

3,410

6.05

6,861

3.64

8,048

3.24

Debt securities:

Taxable

193,848

2.28

198,104

2.28

195,533

2.32

195,220

2.31

188,148

2.40

Tax-exempt (2)

136,104

3.93

129,525

4.02

127,909

4.19

126,512

4.08

123,897

4.10

Total securities (3)

329,952

2.96

327,629

2.97

323,442

3.06

321,732

3.01

312,045

3.07

Federal funds sold

26,638

0.36

39,438

0.27

68,640

0.24

57,625

0.27

41,388

0.37

Restricted equity securities

4,953

3.16

4,354

3.63

3,418

3.95

3,418

3.83

3,446

7.57

Interest-bearing balances with banks

97,482

0.26

119,195

0.28

273,496

0.26

185,716

0.25

121,532

0.25

Total interest-earning assets

4,213,447

4.26

%

4,000,043

4.18

%

3,898,173

3.94

%

3,668,830

4.03

%

3,480,893

4.13

%

Non-interest-earning assets:

Cash and due from banks

58,347

61,911

58,973

58,340

57,387

Net premises and equipment

16,323

13,847

8,315

8,310

8,377

Allowance for loan losses,

accrued interest and

other assets

129,233

117,612

101,831

86,901

88,849

Total assets

$

4,417,350

$

4,193,413

$

4,067,292

$

3,822,381

$

3,635,506

Interest-bearing liabilities:

Interest-bearing deposits:

Checking

$

579,650

0.27

%

$

553,569

0.26

%

$

511,451

0.26

%

$

484,291

0.26

%

$

482,115

0.27

%

Savings

37,697

0.28

36,128

0.28

28,806

0.29

26,584

0.28

25,406

0.28

Money market

1,653,708

0.45

1,618,715

0.44

1,645,533

0.45

1,555,091

0.44

1,472,346

0.44

Time deposits

480,140

1.05

446,084

1.05

395,598

1.03

394,158

1.05

402,613

1.08

Federal funds purchased

275,888

0.29

270,549

0.28

231,135

0.28

187,629

0.28

195,809

0.28

Other borrowings

21,238

5.40

20,455

5.65

19,969

5.62

19,961

5.62

19,953

5.69

Total interest-bearing liabilities

3,048,321

0.53

%

2,925,500

0.52

%

2,832,492

0.52

%

2,667,714

0.53

%

2,598,242

0.53

%

Non-interest-bearing liabilities:

Non-interest-bearing

demand

908,020

813,340

823,738

751,831

675,098

Other liabilities

11,793

6,745

9,969

15,838

16,158

Stockholders' equity

444,302

422,847

395,981

382,025

341,120

Unrealized gains on securities and

derivatives

4,914

4,981

5,112

4,973

4,888

Total liabilities and

stockholders' equity

$

4,417,350

$

4,193,413

$

4,067,292

$

3,822,381

$

3,635,506

Net interest spread

3.73

%

3.66

%

3.42

%

3.50

%

3.60

%

Net interest margin

3.88

%

3.80

%

3.56

%

3.65

%

3.74

%

(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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