ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2022

Rhea-AI Summary

ServisFirst Bancshares, Inc. (NYSE: SFBS) reported robust earnings for Q4 2022, with diluted earnings per share at $1.24, a 25% increase year-over-year. For the entire year, EPS reached $4.61, up 21%. Total deposits increased by $494.9 million (18%) to $11.6 billion, while total loans surged by 23% to $11.7 billion in 2022. The efficiency ratio improved to 29.45%, down from 35.47% a year prior. The quarterly cash dividend rose by 22% to $0.28. The company’s Chairman highlighted growth in footprint and profitability, with strong credit quality metrics maintained. Key financial ratios also showed improvement, including a return on average assets of 1.89%. The effective tax rate increased significantly in Q4 2022.

Positive

• Diluted EPS increased by 25% to $1.24 in Q4 2022 and by 21% to $4.61 for 2022.
• Total deposits rose by $494.9 million (18%) to $11.6 billion.
• Total loans increased by 23% to $11.7 billion in 2022.
• Efficiency ratio improved to 29.45%, down from 35.47% year-over-year.
• Quarterly cash dividend increased by 22% to $0.28.

Negative

• Net interest income decreased to $122.4 million in Q4 2022, down from $126.4 million in Q3 2022.
• Average total deposits for Q4 2022 decreased by $146.0 million (5.0%) compared to Q3 2022.
• Non-interest income decreased by $399,000 (5.4%) year-over-year.

BIRMINGHAM, Ala.--(BUSINESS WIRE)-- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2022.

Fourth Quarter 2022 Highlights:

• Diluted earnings per share were $1.24 for the fourth quarter of 2022, a 25% increase over the fourth quarter of 2021.
• Diluted earnings per share were $4.61 for 2022, a 21% increase from 2021.
• Deposits increased $494.9 million, or by 18%, annualized to $11.6 billion on a linked-quarter basis.
• Total loans grew from $9.5 billion to $11.7 billion, or by 23%, during 2022, and grew $409.4 million, or 14% annualized, on a linked-quarter basis.
• Efficiency ratio improved to 29.45% during the fourth quarter of 2022, down from 31.54% in the prior quarter and 35.47% in the year-ago quarter.
• Cash dividend increased from $0.23 to $0.28 per quarter, a 22% increase.
• Book value per share increased to $23.89, a 12% increase year-over-year.

Tom Broughton, Chairman, President and CEO, said, “2022 was a year of growth in both our footprint and profitability while maintaining credit quality. Our company has expanded to Panama City and Tallahassee, Florida, and the Piedmont region of North Carolina, with offices in Charlotte and Asheville. Diluted EPS increased 21% year-over-year, due in part to our best-in-class bankers, who continue to deliver superior growth.”

Bud Foshee, CFO, said, “We continue to see strong credit quality metrics, evidenced by our below-industry-average charge-offs and non-performing assets over the past three years. Our commitment to operational efficiency will continue in 2023.”

FINANCIAL SUMMARY (UNAUDITED)
(In thousands except share and per share amounts)
		Period Ending December 31, 2022				Period Ending September 30, 2022				% Change From Period Ending September 30, 2022 to Period Ending December 31, 2022			Period Ending December 31, 2021				% Change From Period Ending December 31, 2021 to Period Ending December 31, 2022
QUARTERLY OPERATING RESULTS
Net Income		$	67,724			$	64,031			6	%		$	53,753			26	%
Net Income Available to Common Stockholders		$	67,693			$	64,031			6	%		$	53,722			26	%
Diluted Earnings Per Share		$	1.24			$	1.17			6	%		$	0.99			25	%
Return on Average Assets			1.89	%			1.77	%						1.40	%
Return on Average Common Stockholders' Equity			21.27	%			20.49	%						18.75	%
Average Diluted Shares Outstanding			54,537,685				54,546,682							54,493,959
YEAR-TO-DATE OPERATING RESULTS
Net Income		$	251,504										$	207,734			21	%
Net Income Available to Common Stockholders		$	251,442										$	207,672			21	%
Diluted Earnings Per Share		$	4.61										$	3.82			21	%
Return on Average Assets			1.71	%										1.53	%
Return on Average Common Stockholders' Equity			23.32	%										19.26	%
Average Diluted Shares Outstanding			54,534,774											54,434,573
BALANCE SHEET
Total Assets		$	14,595,753			$	13,890,030			5	%		$	15,448,806			(6)	%
Loans			11,687,968				11,278,614			4	%			9,532,934			23	%
Non-interest-bearing Demand Deposits			3,321,347				3,661,936			(9)	%			4,799,767			(31)	%
Total Deposits			11,546,805				11,051,915			4	%			12,452,836			(7)	%
Stockholders' Equity			1,297,896				1,242,589			4	%			1,152,015			13	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $67.7 million for the quarter ended December 31, 2022, compared to net income and net income available to common stockholders of $53.8 million and $53.7 million, respectively, for the same quarter in 2021. Basic and diluted earnings per common share were $1.25 and $1.24, respectively, for the fourth quarter of 2022, compared to $0.99 for both in the fourth quarter of 2021.

Annualized return on average assets was 1.89% and annualized return on average common stockholders’ equity was 21.27% for the fourth quarter of 2022, compared to 1.40% and 18.75%, respectively, for the fourth quarter of 2021.

Net interest income was $122.4 million for the fourth quarter of 2022, compared to $126.4 million for the third quarter of 2022 and $101.2 million for the fourth quarter of 2021. The net interest margin in the fourth quarter of 2022 was 3.52% compared to 3.64% in the third quarter of 2022 and 2.71% in the fourth quarter of 2021. Loan yields were 5.32% during the fourth quarter of 2022 compared to 4.77% during the third quarter of 2022, and 4.40% during the fourth quarter of 2021. Accretion of net fees of $103,000 on PPP loans during the fourth quarter of 2022 had a negligible impact on the loan yield, compared to $400,000 of PPP loan fee accretion during the third quarter of 2022, or one basis points of the loan yield and $5.1 million during the fourth quarter of 2021, or 22 basis points of the loan yield. Investment yields were 2.48% during the fourth quarter of 2022, compared to 2.47% during the third quarter of 2022, and 2.38% during the fourth quarter of 2021. Average interest-bearing deposit rates increased to 1.70% during the fourth quarter of 2022, compared to 0.76% during the third quarter of 2022 and 0.33% during the fourth quarter of 2021. Average borrowing rates increased to 3.75% during the fourth quarter of 2022, compared to 2.27% during the third quarter of 2022 and 0.21% during the fourth quarter of 2021.

Average loans for the fourth quarter of 2022 were $11.49 billion, an increase of $565.1 million, or 20.5% annualized, over average loans of $10.92 billion for the third quarter of 2022, and an increase of $2.43 billion, or 26.8%, over average loans of $9.06 billion for the fourth quarter of 2021.

Average total deposits for the fourth quarter of 2022 were $11.39 billion, a decrease of $146.0 million, or 5.0%, annualized, over average total deposits of $11.53 billion for the third quarter of 2022, and a decrease of $1.00 billion, or 8.1%, over average total deposits of $12.39 billion for the fourth quarter of 2021.

Non-performing assets to total assets were 0.12% for the fourth quarter of 2022, a decrease of one basis point compared to 0.13% for the third quarter of 2022 and an increase of three basis points compared to 0.09% for the fourth quarter of 2021. Annualized net charge-offs to average loans were 0.06% for the fourth quarter of 2022, compared to 0.11% and 0.03% for the third quarter of 2022 and fourth quarter of 2021, respectively. The allowance for credit losses as a percentage of total loans at December 31, 2022, September 30, 2022 and December 31, 2021 was 1.25%, 1.25%, and 1.22%, respectively. We recorded a $7.1 million provision for credit losses in the fourth quarter of 2022 compared to $15.6 million in the third quarter of 2022 and $8.5 million in the fourth quarter of 2021.

Non-interest income decreased $399,000, or 5.4%, to $7.0 million for the fourth quarter of 2022 from $7.4 million in the fourth quarter of 2021, and decreased $2.0 million, or 22.1%, on a linked quarter basis. Service charges on deposit accounts increased $569,000, or 43.9%, to $1.9 million from the fourth quarter of 2021 to the fourth quarter of 2022, and decreased $26,000, or 1.4%, on a linked quarter basis. Mortgage banking revenue increased $43,000, or 9.1%, to $514,000 from the fourth quarter of 2021 to the fourth quarter of 2022, and decreased $270,000, or 34.4%, on a linked quarter basis. Net credit card revenue increased $61,000, or 2.8%, to $2.3 million during the fourth quarter of 2022, compared to $2.2 million during the fourth quarter of 2021, and decreased $351,000, or 13.4%, on a linked quarter basis. The number of credit card accounts increased approximately 12.6% and the aggregate amount of spend on all credit card accounts increased 17.8% during the fourth quarter of 2022 compared to the fourth quarter of 2021. Cash surrender value life insurance decreased $30,000, or 1.8%, to $1.6 million during the fourth quarter of 2022, compared to $1.6 million during the fourth quarter of 2021, and decreased $37,000, or 2.3%, on a linked quarter basis. Other operating income for the fourth quarter of 2022 decreased $1.0 million, or 59.0%, to $725,000 from $1.8 million in the fourth quarter of 2021, and decreased $1.3 million, or 64.0%, on a linked quarter basis. We recognized $162,000 of income related to our interest rate cap during the fourth quarter 2022 compared to $839,000 during the fourth quarter of 2021. Merchant service revenue increased by $114,000, or 30.4%, to $490,000, during the fourth quarter of 2022, from $376,000 during the fourth quarter of 2021.

Non-interest expense for the fourth quarter of 2022 decreased $397,000, or 1.0%, to $38.1 million from $38.5 million in the fourth quarter of 2021, and decreased $4.6 million, or 10.8%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2022 increased $1.9 million, or 11.1%, to $19.2 million from $17.3 million in the fourth quarter of 2021, and decreased $457,000, or 2.3%, on a linked quarter basis. The number of FTE employees increased by 69 to 571 at December 31, 2022 compared to 502 at December 31, 2021, and increased by 13 from the end of the third quarter of 2022. Equipment and occupancy expense increased $353,000, or 12.1%, to $3.3 million in the fourth quarter of 2022, from $2.9 million in the fourth quarter of 2021, and increased $123,000, or 3.9% on a linked-quarter basis. Third party processing and other services expense increased $3.3 million, or 68.2%, to $8.2 million in the fourth quarter of 2022, from $4.9 million in the fourth quarter of 2021, and increased $957,000, or 13.3%, on a linked-quarter basis. This increase in third party processing also includes Federal Reserve Bank charges related to correspondent bank settlement activities, which increased by $3.1 million year-over-year to $4.3 million during the fourth quarter of 2022. Professional services expense increased $9,000, or 1.0%, to $922,000 in the fourth quarter of 2022, from $913,000 in the fourth quarter of 2021. FDIC and other regulatory assessments increased $269,000 to $1.3 million in the fourth quarter of 2022, from $1.0 million in the fourth quarter of 2021, and increased $336,000, or 34.5%, on a linked quarter basis. Other operating expenses for the fourth quarter of 2022 decreased $6.5 million, or 56.6%, to $5.0 million from $11.4 million in the fourth quarter of 2021, and decreased $5.7 million on a linked-quarter basis. During the third quarter of 2022 we reached a preliminary settlement on a lawsuit and wrote down the value of a private investment resulting in combined charges of $3.1 million, or $2.4 million net of income tax. Our reserve for credit losses on unfunded loan commitments decreased by $1.4 million in the fourth quarter of 2022. The efficiency ratio was 29.45% during the fourth quarter of 2022 compared to 35.47% during the fourth quarter of 2021 and compared to 31.54% during the third quarter of 2022.

Income tax expense increased $8.6 million, or 109.7%, to $16.4 million in the fourth quarter of 2022, compared to $7.8 million in the fourth quarter of 2021. Our effective tax rate was 19.49% for the fourth quarter of 2022 compared to 12.70% for the fourth quarter of 2021. We recognized an aggregate of $3.4 million in credits during the fourth quarter of 2022 related to investments in tax credit partnerships, compared to an aggregate of $7.4 million in credits during the fourth quarter of 2021 related to investments in new market tax credits. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the fourth quarters of 2022 and 2021 of $10,000 and $363,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

Financial measures included in this press release that are presented adjusted for these expenses are net income, net income available to common stockholders, diluted earnings per share, return on average assets, return on average common stockholders’ equity and efficiency ratio. Each of these six financial measures excludes the impact of this item, net of tax, and are all considered non-GAAP financial measures. This press release also contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release. Dollars are in thousands, except share and per share data.

			At December 31, 2022				At September 30, 2022				At June 30, 2022				At March 31, 2022				At December 31, 2021
Book value per share - GAAP			$	23.89			$	22.87			$	22.32			$	21.61			$	21.24
Total common stockholders' equity - GAAP				1,297,896				1,242,589				1,211,918				1,172,975				1,152,015
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			(13,615	)			(13,615	)			(13,615	)			(13,615	)			(13,638	)
Tangible common stockholders' equity - non-GAAP			$	1,284,281			$	1,228,974			$	1,198,334			$	1,159,360			$	1,138,377
Tangible book value per share - non-GAAP			$	23.64			$	22.62			$	22.07			$	21.36			$	20.99
Stockholders' equity to total assets - GAAP				8.89	%			8.95	%			8.36	%			7.65	%			7.46	%
Total assets - GAAP			$	14,595,753			$	13,890,030			$	14,494,317			$	15,339,419			$	15,448,806
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			(13,615	)			(13,615	)			(13,615	)			(13,615	)			(13,638	)
Total tangible assets - non-GAAP			$	14,582,138			$	13,876,415			$	14,480,733			$	15,325,804			$	15,435,168
Tangible common equity to total tangible assets - non-GAAP				8.81	%			8.86	%			8.28	%			7.56	%			7.38	%

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, Mobile, Montgomery and Dothan, Alabama, Northwest Florida, West Central Florida, Nashville, Tennessee, Atlanta, Georgia, and Charleston, South Carolina, and Charlotte and Asheville, North Carolina.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "believe," "expect," "anticipate," "project," “plan,” “intend,” “will,” “could,” “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, but not limited to: the global health and economic crisis precipitated by the COVID-19 outbreak; general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves, interest rate spread relationships and inflation; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the credit worthiness 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; the effect of data breaches, cyberattacks or other data security issues; 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, in our Quarterly Reports on Form 10-Q for fiscal year 2022, and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com or by calling (205) 949-0302.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
		4th Quarter 2022				3rd Quarter 2022				2nd Quarter 2022				1st Quarter 2022				4th Quarter 2021
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	170,273			$	149,299			$	126,555			$	113,188			$	108,954
Interest expense			47,889				22,881				10,187				7,466				7,804
Net interest income			122,384				126,418				116,368				105,722				101,150
Provision for credit losses			7,135				15,603				9,507				5,362				8,451
Net interest income after provision for credit losses			115,249				110,815				106,861				100,360				92,699
Non-interest income			6,966				8,939				9,506				7,948				7,365
Non-interest expense			38,092				42,685				39,821				37,218				38,489
Income before income tax			84,123				77,069				76,546				71,090				61,575
Provision for income tax			16,399				13,038				14,410				13,477				7,822
Net income			67,724				64,031				62,136				57,613				53,753
Preferred stock dividends			31				-				31				-				31
Net income available to common stockholders		$	67,693			$	64,031			$	62,105			$	57,613			$	53,722
Earnings per share - basic		$	1.25			$	1.18			$	1.14			$	1.06			$	0.99
Earnings per share - diluted		$	1.24			$	1.17			$	1.14			$	1.06			$	0.99
Average diluted shares outstanding			54,537,685				54,528,554				54,532,385				54,522,042				54,493,959
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	14,595,753			$	13,890,030			$	14,494,317			$	15,339,419			$	15,448,806
Loans			11,687,968				11,278,614				10,617,320				9,898,957				9,532,934
Debt securities			1,678,936				1,714,603				1,790,218				1,617,977				1,305,527
Non-interest-bearing demand deposits			3,321,347				3,661,936				4,686,511				4,889,495				4,799,767
Total deposits			11,546,805				11,051,915				11,772,337				12,408,755				12,452,836
Borrowings			64,726				64,721				64,716				64,711				64,706
Stockholders' equity			1,297,896				1,242,589				1,211,918				1,172,975				1,152,015
Shares outstanding			54,326,527				54,324,007				54,306,875				54,282,132				54,227,060
Book value per share		$	23.89			$	22.87			$	22.32			$	21.61			$	21.24
Tangible book value per share (1)		$	23.64			$	22.62			$	22.07			$	21.36			$	20.99
SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin			3.52	%			3.64	%			3.26	%			2.89	%			2.71	%
Return on average assets			1.89	%			1.77	%			1.67	%			1.53	%			1.40	%
Return on average common stockholders' equity			21.27	%			20.49	%			20.93	%			20.09	%			18.75	%
Efficiency ratio			29.45	%			31.54	%			31.64	%			32.74	%			35.47	%
Non-interest expense to average earning assets			1.10	%			1.23	%			1.11	%			1.02	%			1.03	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets			9.54	%			9.37	%			9.59	%			9.86	%			9.95	%
Tier 1 capital to risk-weighted assets			9.54	%			9.37	%			9.59	%			9.87	%			9.96	%
Total capital to risk-weighted assets			11.06	%			10.91	%			11.12	%			11.43	%			11.58	%
Tier 1 capital to average assets			9.29	%			8.84	%			8.19	%			7.67	%			7.39	%
Tangible common equity to total tangible assets (1)			8.81	%			8.86	%			8.28	%			7.56	%			7.38	%
(1) This press release also contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.
(2) Regulatory capital ratios for most recent period are preliminary.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
				December 31, 2022				December 31, 2021				% Change
ASSETS
Cash and due from banks				$	106,317			$	56,934			87	%
Interest-bearing balances due from depository institutions					708,221				4,106,790			(83	)%
Federal funds sold					1,515				58,372			(97	)%
	Cash and cash equivalents				816,053				4,222,096			(81	)%
Available for sale debt securities, at fair value					644,815				842,570			(23	)%
Held to maturity debt securities (fair value of $935,953 at 2022 and $466,286 at 2021)					1,034,121				462,957			123	%
Restricted equity securities					7,734				7,311			6	%
Mortgage loans held for sale					1,607				1,114			44	%
Loans					11,687,968				9,532,934			23	%
Less allowance for credit losses					(146,297	)			(116,660	)		25	%
	Loans, net				11,541,671				9,416,274			23	%
Premises and equipment, net					59,850				60,300			(1	)%
Goodwill and other identifiable intangible assets					13,615				13,638			-	%
Other assets					476,287				422,546			13	%
	Total assets			$	14,595,753			$	15,448,806			(6	)%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing			$	3,321,347			$	4,799,767			(31	)%
	Interest-bearing				8,225,458				7,653,069			7	%
		Total deposits			11,546,805				12,452,836			(7	)%
Federal funds purchased					1,618,798				1,711,777			(5	)%
Other borrowings					64,726				64,706			-	%
Other liabilities					67,528				67,472			-	%
	Total liabilities				13,297,857				14,296,791			(7	)%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at December 31, 2022 and December 31, 2021				-				-
	Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,329,527 shares issued and outstanding at December 31, 2022, and 100,000,000 shares authorized; 54,227,060 shares issued and outstanding at December 31, 2021				54				54			-	%
	Additional paid-in capital				229,693				226,397			1	%
	Retained earnings				1,109,902				911,008			22	%
	Accumulated other comprehensive (loss) income				(42,253	)			14,056			(401	)%
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.			1,297,396				1,151,515			13	%
	Noncontrolling interest				500				500			-	%
		Total stockholders' equity			1,297,896				1,152,015			13	%
	Total liabilities and stockholders' equity			$	14,595,753			$	15,448,806			(6	)%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
		Three Months Ended December 31,						Year Ended December 31,
		2022			2021			2022				2021
Interest income:
Interest and fees on loans		$	153,924		$	100,348		$	499,691			$	385,721
Taxable securities			10,895			6,747			40,722				25,413
Nontaxable securities			27			47			137				302
Federal funds sold			818			18			1,556				29
Other interest and dividends			4,609			1,794			17,209				4,840
Total interest income			170,273			108,954			559,315				416,305
Interest expense:
Deposits			33,471			6,271			59,396				26,569
Borrowed funds			14,418			1,533			29,027				5,233
Total interest expense			47,889			7,804			88,423				31,802
Net interest income			122,384			101,150			470,892				384,503
Provision for credit losses			7,135			8,451			37,607				31,517
Net interest income after provision for credit losses			115,249			92,699			433,285				352,986
Non-interest income:
Service charges on deposit accounts			1,866			1,297			8,033				6,839
Mortgage banking			514			471			2,438				7,340
Credit card income			2,261			2,200			9,917				7,347
Securities (losses) gains			-			-			(6,168	)			620
Increase in cash surrender value life insurance			1,600			1,630			6,478				6,642
Other operating income			725			1,767			12,661				4,664
Total non-interest income			6,966			7,365			33,359				33,452
Non-interest expense:
Salaries and employee benefits			19,230			17,303			77,952				67,728
Equipment and occupancy expense			3,263			2,910			12,319				11,404
Third party processing and other services			8,170			4,856			27,333				16,362
Professional services			922			913			4,277				3,891
FDIC and other regulatory assessments			1,311			1,042			4,565				5,679
Other real estate owned expense			239			48			295				868
Other operating expense			4,957			11,417			31,075				27,157
Total non-interest expense			38,092			38,489			157,816				133,089
Income before income tax			84,123			61,575			308,828				253,349
Provision for income tax			16,399			7,822			57,324				45,615
Net income			67,724			53,753			251,504				207,734
Dividends on preferred stock			31			31			62				62
Net income available to common stockholders		$	67,693		$	53,722		$	251,442			$	207,672
Basic earnings per common share		$	1.25		$	0.99		$	4.63			$	3.83
Diluted earnings per common share		$	1.24		$	0.99		$	4.61			$	3.82

LOANS BY TYPE (UNAUDITED)
(In thousands)
			4th Quarter 2022			3rd Quarter 2022			2nd Quarter 2022			1st Quarter 2022			4th Quarter 2021
Commercial, financial and agricultural			$	3,145,317		$	3,104,155		$	2,966,040		$	2,955,927		$	2,984,053
Real estate - construction				1,532,388			1,433,698			1,383,155			1,164,690			1,103,076
Real estate - mortgage:
	Owner-occupied commercial			2,199,280			2,145,621			2,026,807			1,919,811			1,874,103
	1-4 family mortgage			1,146,831			1,089,826			1,015,698			926,697			826,765
	Other mortgage			3,597,750			3,438,762			3,160,510			2,869,158			2,678,084
Subtotal: Real estate - mortgage				6,943,861			6,674,209			6,203,015			5,715,666			5,378,952
Consumer				66,402			66,552			65,110			62,674			66,853
Total loans			$	11,687,968		$	11,278,614		$	10,617,320		$	9,898,957		$	9,532,934

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
					4th Quarter 2022				3rd Quarter 2022				2nd Quarter 2022				1st Quarter 2022				4th Quarter 2021
Allowance for credit losses:
Beginning balance					$	140,967			$	128,387			$	119,463			$	116,660			$	108,950
Loans charged off:
	Commercial financial and agricultural					2,116				2,902				1,667				2,574				1,285
	Real estate - construction					-				-				-				-				14
	Real estate - mortgage					-				170				23				27				-
	Consumer					200				261				123				75				141
		Total charge offs				2,316				3,333				1,813				2,676				1,440
Recoveries:
	Commercial financial and agricultural					393				297				1,217				105				671
	Real estate - construction					-				-				-				-				-
	Real estate - mortgage					-				-				-				-				18
	Consumer					118				12				13				12				10
		Total recoveries				511				309				1,230				117				699
	Net charge-offs					1,805				3,024				583				2,559				741
	Provision for credit losses					7,135				15,604				9,507				5,362				8,451
	Ending balance				$	146,297			$	140,967			$	128,387			$	119,463			$	116,660
	Allowance for credit losses to total loans					1.25	%			1.25	%			1.21	%			1.21	%			1.22	%
	Allowance for credit losses to total average loans					1.27	%			1.29	%			1.26	%			1.24	%			1.29	%
	Net charge-offs to total average loans					0.06	%			0.11	%			0.02	%			0.11	%			0.03	%
	Provision for credit losses to total average loans					0.25	%			0.57	%			0.37	%			0.23	%			0.37	%
	Nonperforming assets:
		Nonaccrual loans			$	12,450			$	11,655			$	10,540			$	14,738			$	6,762
		Loans 90+ days past due and accruing				5,391				4,803				4,991				4,686				5,335
		Other real estate owned and repossessed assets				248				1,245				1,207				1,989				1,208
	Total				$	18,089			$	17,703			$	16,738			$	21,413			$	13,305
	Nonperforming loans to total loans					0.15	%			0.15	%			0.15	%			0.20	%			0.13	%
	Nonperforming assets to total assets					0.12	%			0.13	%			0.12	%			0.14	%			0.09	%
	Nonperforming assets to earning assets					0.13	%			0.13	%			0.12	%			0.14	%			0.09	%
	Allowance for credit losses to nonaccrual loans					1,175.08	%			1,209.50	%			1,218.05	%			826.19	%			1,725.23	%
	Restructured accruing loans				$	2,480			$	236			$	421			$	426			$	431
	Restructured accruing loans to total loans					-	%			-	%			-	%			-	%			-	%
	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
					4th Quarter 2022				3rd Quarter 2022				2nd Quarter 2022				1st Quarter 2022				4th Quarter 2021
	Beginning balance:				$	2,041			$	2,403			$	2,482			$	2,576			$	2,893
		Additions				444				-				-				-				-
		Net (paydowns) / advances				(5)				(362)				(79)				(94)				(303)
		Charge-offs				-				-				-				-				(14)
		Transfer to OREO				-				-				-				-				-
	Ending balance				$	2,480			$	2,041			$	2,403			$	2,482			$	2,576

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
				4th Quarter 2022			3rd Quarter 2022			2nd Quarter 2022			1st Quarter 2022			4th Quarter 2021
Interest income:
	Interest and fees on loans			$	153,924		$	131,375		$	111,287		$	103,105		$	100,348
	Taxable securities				10,895			11,089			10,515			8,223			6,747
	Nontaxable securities				27			30			37			43			47
	Federal funds sold				818			632			93			13			18
	Other interest and dividends				4,609			6,173			4,623			1,804			1,794
	Total interest income				170,273			149,299			126,555			113,188			108,954
Interest expense:
	Deposits				33,471			13,655			6,427			5,843			6,271
	Borrowed funds				14,418			9,226			3,760			1,623			1,533
	Total interest expense				47,889			22,881			10,187			7,466			7,804
	Net interest income				122,384			126,418			116,368			105,722			101,150
Provision for credit losses					7,135			15,603			9,507			5,362			8,451
	Net interest income after provision for credit losses				115,249			110,815			106,861			100,360			92,699
Non-interest income:
	Service charges on deposit accounts				1,866			1,892			2,133			2,142			1,297
	Mortgage banking				514			784			614			526			471
	Credit card income				2,261			2,612			2,672			2,372			2,200
	Securities losses				-			-			(2,833)			(3,335)			-
	Increase in cash surrender value life insurance				1,600			1,637			1,633			1,608			1,630
	Other operating income				725			2,014			5,287			4,635			1,767
	Total non-interest income				6,966			8,939			9,506			7,948			7,365
Non-interest expense:
	Salaries and employee benefits				19,230			19,687			20,734			18,301			17,303
	Equipment and occupancy expense				3,263			3,140			2,983			2,933			2,910
	Third party processing and other services				8,170			7,213			6,345			5,605			4,856
	Professional services				922			1,036			1,327			992			913
	FDIC and other regulatory assessments				1,311			975			1,147			1,132			1,042
	Other real estate owned expense				239			21			32			3			48
	Other operating expense				4,957			10,613			7,253			8,252			11,417
	Total non-interest expense				38,092			42,685			39,821			37,218			38,489
	Income before income tax				84,123			77,069			76,546			71,090			61,575
Provision for income tax					16,399			13,038			14,410			13,477			7,822
	Net income				67,724			64,031			62,136			57,613			53,753
	Dividends on preferred stock				31			-			31			-			31
	Net income available to common stockholders			$	67,693		$	64,031		$	62,105		$	57,613		$	53,722
Basic earnings per common share				$	1.25		$	1.18		$	1.14		$	1.06		$	0.99
Diluted earnings per common share				$	1.24		$	1.17		$	1.14		$	1.06		$	0.99

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
		4th Quarter 2022							3rd Quarter 2022							2nd Quarter 2022							1st Quarter 2022						4th Quarter 2021
		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	$	11,465,538			5.32	%		$	10,900,105			4.77	%		$	10,165,470			4.38	%		$	9,621,484		4.29	%		$	9,032,914		4.40	%
	Tax-exempt (2)		19,526			6.75				19,852			4.14				23,616			4.09				25,195		4.08				26,148		4.07
	Total loans, net of unearned income		11,485,064			5.32				10,919,957			4.77				10,189,086			4.38				9,646,679		4.29				9,059,062		4.40
	Mortgage loans held for sale		1,515			3.67				2,906			2.73				471			3.41				927		1.73				998		1.99
	Debt securities:
	Taxable		1,755,764			2.49				1,797,560			2.47				1,775,425			2.37				1,518,572		2.17				1,134,378		2.38
	Tax-exempt (2)		4,863			2.47				5,863			2.39				7,148			2.35				8,812		2.36				9,823		2.36
	Total securities (3)		1,760,627			2.49				1,803,423			2.47				1,782,573			2.37				1,527,384		2.17				1,144,201		2.38
	Federal funds sold		82,656			3.93				102,028			2.46				30,721			1.21				16,639		0.31				39,445		0.18
	Restricted equity securities		7,724			7.35				7,724			3.65				7,724			3.74				7,371		3.70				873		3.18
	Interest-bearing balances with banks		458,115			3.83				945,142			2.56				2,332,412			0.80				3,637,882		0.20				4,561,662		0.16
	Total interest-earning assets	$	13,795,701			4.90			$	13,781,180			4.30			$	14,342,987			3.54			$	14,836,882		3.06			$	14,806,241		2.92
Non-interest-earning assets:
	Cash and due from banks		113,823							256,607							204,994							74,534						79,293
	Net premises and equipment		60,323							60,155							60,673							61,209						61,837
	Allowance for credit losses, accrued
	interest and other assets		273,964							294,006							297,893							313,560						303,300
	Total assets	$	14,243,811						$	14,391,948						$	14,906,547						$	15,286,185					$	15,250,671
Interest-bearing liabilities:
	Interest-bearing deposits:
	Checking	$	1,763,622			0.73	%		$	1,722,926			0.28	%		$	1,699,602			0.21	%		$	1,594,645		0.20	%		$	1,499,918		0.19	%
	Savings		141,163			0.64				144,368			0.21				134,469			0.18				135,545		0.17				123,179		0.18
	Money market		5,047,133			2.07				4,444,583			0.89				4,617,021			0.33				4,985,224		0.26				5,100,192		0.26
	Time deposits		860,336			1.69				809,057			1.16				766,225			0.86				792,930		0.91				807,342		1.05
	Total interest-bearing deposits		7,812,254			1.70				7,120,934			0.76				7,217,317			0.36				7,508,344		0.31				7,530,631		0.33
	Federal funds purchased		1,453,445			3.75				1,493,444			2.27				1,550,805			0.79				1,620,012		0.23				1,608,349		0.21
	Other borrowings		64,726			4.23				65,406			4.19				64,713			4.28				64,708		4.28				64,704		4.23
	Total interest-bearing liabilities	$	9,330,425			2.04	%		$	8,679,784			1.05	%		$	8,832,835			0.46	%		$	9,193,064		0.33	%		$	9,203,684		0.34	%
Non-interest-bearing liabilities:
	Non-interest-bearing demand deposits		3,572,956							4,410,318							4,824,521							4,870,701						4,856,243
	Other liabilities		77,544							62,093							58,784							59,619						54,134
	Stockholders' equity		1,307,553							1,263,870							1,205,551							1,156,186						1,121,578
	Accumulated other comprehensive (loss) income		(44,667	)						(24,117	)						(15,144	)						6,615						15,032
	Total liabilities and stockholders' equity	$	14,243,811						$	14,391,948						$	14,906,547						$	15,286,185					$	15,250,671
Net interest spread						2.86	%						3.25	%						3.08	%					2.77	%					2.58	%
Net interest margin						3.52	%						3.64	%						3.26	%					2.89	%					2.71	%
(1)	Average loans include nonaccrual loans in all periods. Loan fees of $3,630, $3,849, $5,303, $6,823, and $7,686 are included in interest income in the fourth quarter of 2022, third quarter of 2022, second quarter of 2022, first quarter of 2022, and the fourth quarter of 2021, respectively.
(2)	Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.
(3)	Unrealized (losses) gains on debt securities of $(62,568), $(34,688), $(25,703), $8,245, and $18,974 for the fourth quarter of 2022, third quarter of 2022, second quarter of 2022, first quarter of 2022, and the fourth quarter of 2021, respectively, are excluded from the yield calculation.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230123005653/en/

ServisFirst Bank

Davis Mange (205) 949-3420

dmange@servisfirstbank.com

Source: ServisFirst Bancshares, Inc.

FAQ

What were the earnings per share for ServisFirst Bancshares (SFBS) in Q4 2022?

Diluted earnings per share for Q4 2022 were $1.24, a 25% increase from the previous year.

How much did total deposits increase for SFBS in 2022?

Total deposits increased by $494.9 million, or 18%, to $11.6 billion in 2022.

What was the efficiency ratio for ServisFirst Bancshares in Q4 2022?

The efficiency ratio improved to 29.45% in Q4 2022.

Did SFBS increase its cash dividend in 2022?

Yes, the cash dividend increased by 22% to $0.28 per quarter.

What was the total loan growth for SFBS in 2022?

Total loans grew by 23% to $11.7 billion in 2022.