ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2020

Rhea-AI Summary

ServisFirst Bancshares (NASDAQ: SFBS) reported significant financial growth for 2020, with diluted earnings per share rising 13% to $3.13. The fourth quarter saw a 24% increase in earnings per share to $0.94, while net income surged to $51 million, an 18% quarter-over-quarter increase. Deposits grew by 32% year-over-year, reaching nearly $10 billion. The book value per share rose to $18.41, marking a 17% increase. The cash dividend per share increased by 14% to $0.20. Despite the pandemic's challenges, the company maintained strong operational performance and client support.

Positive

• Diluted earnings per share increased by 13% to $3.13 in 2020.
• Deposits grew 32% year-over-year to $9.98 billion.
• Book value per share rose 17% to $18.41.
• Cash dividend increased 14% to $0.20 per quarter.
• Net income for Q4 2020 was $51 million, up 24% year-over-year.

Negative

• Return on average assets decreased from 1.80% in Q4 2019 to 1.74% in Q4 2020.
• Annualized net charge-offs to average loans rose to 0.41%, compared to 0.36% in Q4 2019.

BIRMINGHAM, Ala., Jan. 25, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three months and year ended December 31, 2020.

Highlights:

• Diluted earnings per share were $3.13 for 2020, a 13% increase over 2019
• Diluted earnings per share for the quarter were $0.94, a 24% increase over the fourth quarter of 2019
• Deposits grew from $7.53 billion to $9.98 billion year-over-year, or 32%
• Book value per share increased to $18.41, a 17% increase year-over-year
• Cash dividend increased from $0.175 to $0.20 cents per quarter, a 14% increase
• Opened new Venice, Florida office in January 2021

Tom Broughton, Chairman, President and CEO, said, “We are thankful to have had the opportunity to assist so many of our clients during this pandemic and have worked to support them through a year of difficult circumstances. We are pleased that we were able to build new customer relationships during the pandemic; customers who came to ServisFirst Bank needing a responsive and dedicated banking partner. I am proud of our team’s performance and dedication to our mission.”

Bud Foshee, CFO, said, “We are pleased to report record earnings in 2020. Given the uneven economic conditions and the unanticipated challenges that the pandemic presented, we maintained a strong commitment to hard work and to provide excellent service to our customers.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
		Period Ending December 31, 2020				Period Ending September 30, 2020				% Change From Period Ending September 30, 2020 to Period Ending December 31, 2020				Period Ending December 31, 2019				% Change From Period Ending December 31, 2019 to Period Ending December 31, 2020
QUARTERLY OPERATING RESULTS
Net Income		$	50,981			$	43,362			18		%		$	41,037			24	%
Net Income Available to Common Stockholders		$	50,949			$	43,362			17		%		$	41,005			24	%
Diluted Earnings Per Share		$	0.94			$	0.80			18		%		$	0.76			24	%
Return on Average Assets			1.74	%			1.54	%							1.80	%
Return on Average Common Stockholders' Equity			20.78	%			18.43	%							19.75	%
Average Diluted Shares Outstanding			54,273,944				54,232,965								54,149,554
YEAR-TO-DATE OPERATING RESULTS
Net Income		$	169,569											$	149,243			14	%
Net Income Available to Common Stockholders		$	169,506											$	149,180			14	%
Diluted Earnings Per Share		$	3.13											$	2.76			13	%
Return on Average Assets			1.59	%											1.73	%
Return on Average Common Stockholders' Equity			18.55	%											19.15	%
Average Diluted Shares Outstanding			54,219,037												54,103,074
BALANCE SHEET
Total Assets		$	11,932,654			$	11,394,874			5		%		$	8,947,653			33	%
Loans			8,465,688				8,508,554			(1	)	%			7,261,451			17	%
Non-interest-bearing Demand Deposits			2,788,772				2,762,814			1		%			1,749,879			59	%
Total Deposits			9,975,724				9,673,783			3		%			7,530,433			32	%
Stockholders' Equity			992,852				949,589			5		%			842,682			18	%

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $51.0 million and $50.9 million, respectively, for the quarter ended December 31, 2020, compared to net income and net income available to common stockholders of $41.0 million for the same quarter in 2019. Basic and diluted earnings per common share were $0.94 for the fourth quarter of 2020, compared to $0.77 and $0.76, respectively, for the fourth quarter of 2019.

Annualized return on average assets was 1.74% and annualized return on average common stockholders’ equity was 20.78% for the fourth quarter of 2020, compared to 1.80% and 19.75%, respectively, for the fourth quarter of 2019.

Net interest income was $92.1 million for the fourth quarter of 2020, compared to $85.1 million for the third quarter of 2020 and $75.8 million for the fourth quarter of 2019. The net interest margin in the fourth quarter of 2020 was 3.27% compared to 3.14% in the third quarter of 2020 and 3.47% in the fourth quarter of 2019. Accretion of net fees on PPP loans of $7.5 million during the fourth quarter of 2020 contributed to 35 basis points of loan yield increase, compared to $4.0 million of PPP loan fee accretion during the third quarter, or 19 basis points.

Average loans for the fourth quarter of 2020 were $8.46 billion, an increase of $99.5 million, or 5% annualized, over average loans of $8.37 billion for the third quarter of 2020, and an increase of $1.36 billion, or 19%, over average loans of $7.10 billion for the fourth quarter of 2019. We originated over 4,900 PPP loans during 2020 for a total of $1.05 billion. Excluding PPP loans, average loans for the fourth quarter of 2020 were $7.46 billion, an increase of $146.6 million compared to the third quarter of 2020, and an increase of $356.4 million, or 5%, over average loans for the fourth quarter of 2019.

Average total deposits for the fourth quarter of 2020 were $9.84 billion, an increase of $371.5 million, or 16% annualized, over average total deposits of $9.47 billion for the third quarter of 2020, and an increase of $2.16 billion, or 28%, over average total deposits of $7.68 billion for the fourth quarter of 2019.

Nonperforming assets to total assets were 0.21% for the fourth quarter of 2020, a decrease of eight basis points compared to 0.29% for the third quarter of 2020 and a decrease of 29 basis points compared to 0.50% for the fourth quarter of 2019. Annualized net charge-offs to average loans were 0.41%, a 13 basis-point decrease compared to 0.54% for the third quarter of 2020 and an increase of five basis points compared to 0.36% for the fourth quarter of 2019. The CARES Act, passed into law on March 27, 2020 as a result of the COVID-19 outbreak, allowed companies to delay their adoption of Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), including the current expected credit loss methodology for estimating allowances for credit losses. We elected to delay adoption of ASU 2016-13 until the date on which the national emergency concerning the COVID-19 outbreak terminates or December 31, 2020, with an effective retrospective implementation date of January 1, 2020. Based on prevailing economic conditions and forecasts as of the January 1, 2020 adoption date, we recorded a net $2 million decrease in our allowance for credit losses for CECL adoption effective at January 1, 2020. This decrease is the result of implementing a more quantitative methodology along with the loan portfolio consisting primarily of commercial loans with generally short contractual maturities. The allowance for credit losses for the quarter ending December 31, 2020 was calculated under the CECL methodology and as a percentage of total loans was 1.04%. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 1.09% at September 30, 2020 and 1.05% at December 31, 2019. Excluding PPP loans, for all periods discussed, the allowance for credit losses as a percentage of total loans under the CECL methodology was 1.16% at December 31, 2020, compared to 1.24% and 1.05% at September 30, 2020 and December 31, 2019, respectively, under the incurred loss model. We recorded a $6.3 million provision for credit losses in the fourth quarter of 2020 compared to $12.3 million in the third quarter of 2020 and $5.9 million in the fourth quarter of 2019.

Noninterest income for the fourth quarter of 2020 increased $1.3 million, or 19%, to $8.2 million from $6.9 million in the fourth quarter of 2019. Deposit service charges increased $165,000, or 9%, to $2.0 million for the fourth quarter of 2020. Mortgage banking revenue increased $1.7 million, or 123%, from the fourth quarter of 2019 to the fourth quarter of 2020. Mortgage loan origination volumes increased approximately 94% during the fourth quarter of 2020 when compared to the same quarter in 2019. Credit card revenue, net of awards, decreased $978,000, or 52%, to $913,000 during the fourth quarter of 2020, compared to the fourth quarter of 2019. Credit card awards accruals were increased by $1.7 million during the fourth quarter of 2020 when compared to the fourth quarter of 2019. A majority of these accruals will be paid out to customers in January 2021. The amount of spend on purchase cards increased $29.1 million while the amount of spend on business credit cards increased $3.0 million during the fourth quarter of 2020 when compared to the fourth quarter of 2019. Purchase card spend carries lower profit margins than credit cards due to their higher rebates. Income on life insurance policies increased $241,000, or 17%, to $1.7 million during the fourth quarter of 2020, compared to $1.4 million during the fourth quarter of 2019. We purchased $40.0 million in BOLI contracts in July of 2020 and another $20.5 million in November of 2020. The November 2020 BOLI contracts include endorsement split dollar agreements entered into with certain of our executives, as well as policies with respect to certain of our other employees. Other income for the fourth quarter of 2020 increased $188,000, or 41%, to $643,000 from $455,000 in the fourth quarter of 2019. On May 4, 2020 we bought an interest rate cap with a term of three years and a notional amount of $300 million. The cap is tied to one-month LIBOR with a strike rate of 0.50%. We wrote down the value of the cap by $61,000 during the fourth quarter of 2020 and by $781,000 year-to-date through other income and are amortizing the fee paid to our counterparty over the life of the cap.

Noninterest expense for the fourth quarter of 2020 increased $2.7 million, or 10%, to $28.2 million from $25.5 million in the fourth quarter of 2019, and increased $1.6 million, or 6%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2020 increased $1.3 million, or 9%, to $15.0 million from $13.7 million in the fourth quarter of 2019, and was flat on a linked quarter basis. The number of FTE employees was 493 as of December 31, 2020 compared to 486 as of September 30, 2020 and 500 as of December 31, 2019. Equipment and occupancy expense increased $341,000, or 15%, to $2.7 million in the fourth quarter of 2020, from $2.4 million in the fourth quarter of 2019. Third party processing expenses increased $242,000, or 8%, to $3.4 million in the fourth quarter of 2020, from $3.2 million in the fourth quarter of 2019. Professional services expense increased $85,000, or 7%, to $1.2 million in the fourth quarter of 2020. FDIC and other regulatory assessments increased $195,000, or 17%, to $1.4 million in the fourth quarter of 2020 compared to $1.2 million in the fourth quarter of 2019. Expenses associated with other real estate owned increased $37,000 to $140,000 in the fourth quarter of 2020, from $103,000 in the fourth quarter of 2019. Other operating expenses for the fourth quarter of 2020 increased $509,000, or 13%, to $4.4 million from $3.9 million in the fourth quarter of 2019, and increased $773,000, or 21%, on a linked-quarter basis. The efficiency ratio was 28.11% during the fourth quarter of 2020 compared to 30.83% during the fourth quarter of 2019 and compared to 28.50% during the third quarter of 2020.

Income tax expense increased $4.6 million, or 44%, to $14.9 million in the fourth quarter of 2020, compared to $10.3 million in the fourth quarter of 2019. Our effective tax rate was 22.56% for the fourth quarter of 2020 compared to 20.05% for the fourth quarter of 2019. State of Alabama tax credit investments matured at the end of 2019, causing our state credit amounts to decrease from $1.0 million during the fourth quarter of 2019 to $132,000 during the fourth quarter of 2020. 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 2020 and 2019 of $170,000 and $297,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release 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.

			December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019
Book value per share - GAAP			$	18.41			$	17.61			$	16.98			$	16.38			$	15.71
Total common stockholders' equity - GAAP				992,852				949,589				914,588				881,885				842,682
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			13,908				13,976				14,043				14,111				14,179
Tangible common stockholders' equity - non-GAAP			$	978,944			$	935,613			$	900,545			$	867,775			$	828,503
Tangible book value per share - non-GAAP			$	18.15			$	17.35			$	16.72			$	16.12			$	15.45
Stockholders' equity to total assets - GAAP				8.32	%			8.33	%			8.31	%			9.42	%			9.42	%
Total assets - GAAP			$	11,927,955			$	11,394,874			$	11,012,195			$	9,364,882			$	8,947,653
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			13,908				13,976				14,043				14,111				14,179
Total tangible assets - non-GAAP			$	11,914,047			$	11,380,898			$	10,998,152			$	9,350,771			$	8,933,474
Tangible common equity to total tangible assets - non-GAAP				8.22	%			8.22	%			8.19	%			9.28	%			9.27	%

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, Sarasota and Tampa Bay, 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 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 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; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; 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, in our Quarterly Reports on Form 10-Q for fiscal year 2020, 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.

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

SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands except share and per share data)
		4th Quarter 2020				3rd Quarter 2020				2nd Quarter 2020				1st Quarter 2020				4th Quarter 2019
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	101,065			$	96,110			$	95,080			$	96,767			$	98,187
Interest expense			8,984				11,028				11,846				19,127				22,410
Net interest income			92,081				85,082				83,234				77,640				75,777
Provision for loan losses			6,283				12,284				10,283				13,584				5,884
Net interest income after provision for loan losses			85,798				72,798				72,951				64,056				69,893
Non-interest income			8,237				8,172				7,033				6,674				6,936
Non-interest expense			28,202				26,573				28,816				27,920				25,503
Income before income tax			65,833				54,397				51,168				42,810				51,326
Provision for income tax			14,852				11,035				10,720				8,032				10,289
Net income			50,981				43,362				40,448				34,778				41,037
Preferred stock dividends			32				-				31				-				32
Net income available to common stockholders		$	50,949			$	43,362			$	40,417			$	34,778			$	41,005
Earnings per share - basic		$	0.94			$	0.80			$	0.75			$	0.65			$	0.77
Earnings per share - diluted		$	0.94			$	0.80			$	0.75			$	0.64			$	0.76
Average diluted shares outstanding			54,273,944				54,232,965				54,194,506				54,167,414				54,149,554
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	11,932,654			$	11,394,874			$	11,012,195			$	9,364,882			$	8,947,653
Loans			8,465,688				8,508,544				8,315,375				7,568,836				7,261,451
Debt securities			886,938				913,299				856,378				827,032				759,649
Non-interest-bearing demand deposits			2,788,772				2,762,814				2,678,893				1,925,626				1,749,879
Total deposits			9,975,724				9,673,783				9,342,918				7,832,655				7,530,433
Borrowings			64,748				64,719				64,715				64,707				64,703
Stockholders' equity		$	992,852			$	949,589			$	914,588			$	881,885			$	842,682
Shares outstanding			53,943,751				53,915,245				53,874,276				53,844,009				53,623,740
Book value per share		$	18.41			$	17.61			$	16.98			$	16.38			$	15.71
Tangible book value per share (1)		$	18.15			$	17.35			$	16.72			$	16.12			$	15.45
SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin			3.27	%			3.14	%			3.32	%			3.58	%			3.47	%
Return on average assets			1.74	%			1.54	%			1.55	%			1.54	%			1.80	%
Return on average common stockholders' equity			20.78	%			18.43	%			18.40	%			16.23	%			19.75	%
Efficiency ratio			28.11	%			28.50	%			31.92	%			33.11	%			30.83	%
Non-interest expense to average earning assets			1.00	%			0.98	%			1.15	%			1.29	%			1.17	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets			10.52	%			11.24	%			11.26	%			10.68	%			10.50	%
Tier 1 capital to risk-weighted assets			10.52	%			11.25	%			11.27	%			10.68	%			10.50	%
Total capital to risk-weighted assets			12.22	%			13.10	%			13.27	%			12.54	%			12.31	%
Tier 1 capital to average assets			8.23	%			8.22	%			8.46	%			9.56	%			9.13	%
Tangible common equity to total tangible assets (1)			8.22	%			8.22	%			8.19	%			9.28	%			9.27	%
(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.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
				December 31, 2020				December 31, 2019				% Change
ASSETS
Cash and due from banks				$	93,655			$	78,618			19		%
Interest-bearing balances due from depository institutions					2,115,985				451,509			369		%
Federal funds sold					1,771				100,473			(98	)	%
	Cash and cash equivalents				2,211,411				630,600			251		%
Available for sale debt securities, at fair value					886,688				759,399			17		%
Held to maturity debt securities (fair value of $250 at December 31, 2020 and 2019)					250				250			-		%
Mortgage loans held for sale					14,425				6,312			129		%
Loans					8,465,688				7,261,451			17		%
Less allowance for loan losses					(87,942	)			(76,584	)		15		%
	Loans, net				8,377,746				7,184,867			17		%
Premises and equipment, net					54,969				56,496			(3	)	%
Goodwill and other identifiable intangible assets					13,908				14,179			(2	)	%
Other assets					373,256				295,550			26		%
	Total assets			$	11,932,654			$	8,947,653			33		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing			$	2,788,772			$	1,749,879			59		%
	Interest-bearing				7,186,952				5,780,554			24		%
		Total deposits			9,975,724				7,530,433			32		%
Federal funds purchased					851,545				470,749			81		%
Other borrowings					64,748				64,703			-		%
Other liabilities					47,785				39,086			22		%
	Total liabilities				10,939,802				8,104,971			35		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		December 31, 2020 and December 31, 2019			-				-
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,943,751 shares
		issued and outstanding at December 31, 2020, and 53,623,740 shares issued and outstanding
		at December 31, 2019			54				54			-		%
	Additional paid-in capital				223,856				219,766			2		%
	Retained earnings				748,224				616,611			21		%
	Accumulated other comprehensive income				20,218				5,749			252		%
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.			992,352				842,180			18		%
	Noncontrolling interest				500				502			-		%
		Total stockholders' equity			992,852				842,682			18		%
	Total liabilities and stockholders' equity			$	11,932,654			$	8,947,653			33		%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
			Three Months Ended December 31,								Year Ended December 31,
			2020				2019				2020				2019
Interest income:
	Interest and fees on loans		$	94,332			$	89,407			$	362,664			$	354,308
	Taxable securities			6,018				4,702				22,122				17,008
	Nontaxable securities			129				274				739				1,429
	Federal funds sold			5				1,053				332				6,038
	Other interest and dividends			581				2,751				3,165				12,020
	Total interest income			101,065				98,187				389,022				390,803
Interest expense:
	Deposits			7,853				19,786				45,230				90,958
	Borrowed funds			1,131				2,624				5,755				12,200
	Total interest expense			8,984				22,410				50,985				103,158
	Net interest income			92,081				75,777				338,037				287,645
Provision for loan losses				6,283				5,884				42,434				22,638
	Net interest income after provision for loan losses			85,798				69,893				295,603				265,007
Non-interest income:
	Service charges on deposit accounts			1,971				1,806				7,528				7,029
	Mortgage banking			3,050				1,366				8,747				4,361
	Credit card income			913				1,891				5,916				7,076
	Securities (losses) gains			-				(1	)			-				27
	Increase in cash surrender value life insurance			1,660				1,419				6,310				3,745
	Other operating income			643				455				1,615				1,744
	Total non-interest income			8,237				6,936				30,116				23,982
Non-interest expense:
	Salaries and employee benefits			14,970				13,680				61,414				57,783
	Equipment and occupancy expense			2,680				2,339				10,070				9,272
	Third party processing and other services			3,418				3,176				13,778				11,234
	Professional services			1,248				1,163				4,242				4,235
	FDIC and other regulatory assessments			1,366				1,171				4,354				2,975
	Other real estate owned expense			140				103				2,163				415
	Other operating expense			4,380				3,871				15,490				16,214
	Total non-interest expense			28,202				25,503				111,511				102,128
	Income before income tax			65,833				51,326				214,208				186,861
Provision for income tax				14,852				10,289				44,639				37,618
	Net income			50,981				41,037				169,569				149,243
	Dividends on preferred stock			32				32				63				63
	Net income available to common stockholders		$	50,949			$	41,005			$	169,506			$	149,180
Basic earnings per common share			$	0.94			$	0.77			$	3.15			$	2.79
Diluted earnings per common share			$	0.94			$	0.76			$	3.13			$	2.76

LOANS BY TYPE (UNAUDITED)
(In thousands)
			4th Quarter 2020				3rd Quarter 2020				2nd Quarter 2020				1st Quarter 2020				4th Quarter 2019
Commercial, financial and agricultural			$	3,295,900			$	3,466,189			$	3,498,627			$	2,771,307			$	2,696,210
Real estate - construction				593,614				530,919				544,586				548,578				521,392
Real estate - mortgage:
	Owner-occupied commercial			1,693,428				1,725,222				1,634,495				1,678,532				1,587,478
	1-4 family mortgage			711,692				671,841				665,883				675,870				644,188
	Other mortgage			2,106,184				2,056,549				1,911,384				1,834,137				1,747,394
Subtotal: Real estate - mortgage				4,511,304				4,453,612				4,211,762				4,188,539				3,979,060
Consumer				64,870				57,834				60,400				60,412				64,789
Total loans			$	8,465,688			$	8,508,554			$	8,315,375			$	7,568,836			$	7,261,451

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
				4th Quarter 2020					3rd Quarter 2020					2nd Quarter 2020					1st Quarter 2020					4th Quarter 2019
Allowance for loan losses:
Beginning balance				$	92,440				$	91,507				$	85,414				$	76,584				$	77,192
	Impact of Adoption of ASC 326				(2,000	)				-					-					-					-
Loans charged off:
	Commercial financial and agricultural				8,792					11,146					1,358					2,640					4,742
	Real estate - construction				202					-					376					454					-
	Real estate - mortgage				-					200					2,520					1,678					1,689
	Consumer				38					44					62					58					139
		Total charge offs			9,032					11,390					4,316					4,830					6,570
Recoveries:
	Commercial financial and agricultural				94					12					84					62					51
	Real estate - construction				30					-					1					1					1
	Real estate - mortgage				114					12					13					1					2
	Consumer				13					15					28					12					24
		Total recoveries			251					39					126					76					78
	Net charge-offs				8,781					11,351					4,190					4,754					6,492
	Provision for loan losses				6,283					12,284					10,283					13,584					5,884
	Ending balance			$	87,942				$	92,440				$	91,507				$	85,414				$	76,584
	Allowance for credit losses to total loans				1.04		%			-					-					-					-
	Allowance for credit losses to total average
		loans			1.04		%			-					-					-					-
	Allowance for loan losses to total loans				-					1.09		%			1.10		%			1.13		%			1.05		%
	Allowance for loan losses to total average
		loans			-					1.11		%			1.10		%			1.16		%			1.08		%
	Net charge-offs to total average loans				0.41		%			0.54		%			0.20		%			0.26		%			0.36		%
	Provision for credit losses to total average
		loans			0.30		%			-					-					-					-
	Provision for loan losses to total average
		loans			-					0.58		%			0.50		%			0.74		%			0.33		%
	Nonperforming assets:
		Nonaccrual loans		$	13,973				$	21,675				$	16,881				$	28,914				$	30,091
		Loans 90+ days past due and accruing			4,981					4,898					5,133					4,954					6,021
		Other real estate owned and
		repossessed assets			6,497					6,976					6,537					7,448					8,178
	Total			$	25,451				$	33,549				$	28,551				$	41,316				$	44,290
	Nonperforming loans to total loans				0.22		%			0.31		%			0.26		%			0.45		%			0.50		%
	Nonperforming assets to total assets				0.21		%			0.29		%			0.26		%			0.44		%			0.50		%
	Nonperforming assets to earning assets				0.22		%			0.30		%			0.26		%			0.45		%			0.50		%
	Allowance for credit losses to nonaccrual loans				629.37		%			-					-					-					-
	Allowance for loan losses to nonaccrual loans				-					426.48		%			542.07		%			295.41		%			254.51		%
	Restructured accruing loans			$	818				$	1,800				$	975				$	975				$	625
	Restructured accruing loans to total loans				0.01		%			0.02		%			0.01		%			0.01		%			0.01		%
	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
				4th Quarter 2020					3rd Quarter 2020					2nd Quarter 2020					1st Quarter 2020					4th Quarter 2019
	Beginning balance:			$	2,738				$	1,568				$	2,367				$	3,330				$	11,248
		Additions			-					1,182					-					350					250
		Net (paydowns) / advances			(619	)				(12	)				(12	)				(232	)				(3,481	)
		Charge-offs			(535	)				-					(412	)				(1,081	)				(1,333	)
		Transfer to OREO			(151	)				-					(375	)				-					(3,354	)
	Ending balance			$	1,433				$	2,738				$	1,568				$	2,367				$	3,330

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
			4th Quarter 2020				3rd Quarter 2020				2nd Quarter 2020				1st Quarter 2020				4th Quarter 2019
Interest income:
	Interest and fees on loans		$	94,332			$	89,564			$	89,383			$	89,385			$	89,407
	Taxable securities			6,018				5,858				5,092				5,154				4,702
	Nontaxable securities			129				166				211				233				274
	Federal funds sold			5				16				34				277				1,053
	Other interest and dividends			581				506				360				1,718				2,751
	Total interest income			101,065				96,110				95,080				96,767				98,187
Interest expense:
	Deposits			7,853				9,876				10,756				16,745				19,786
	Borrowed funds			1,131				1,152				1,090				2,382				2,624
	Total interest expense			8,984				11,028				11,846				19,127				22,410
	Net interest income			92,081				85,082				83,234				77,640				75,777
Provision for loan losses				6,283				12,284				10,283				13,584				5,884
	Net interest income after provision for loan losses			85,798				72,798				72,951				64,056				69,893
Non-interest income:
	Service charges on deposit accounts			1,971				1,818				1,823				1,916				1,806
	Mortgage banking			3,050				2,519				2,107				1,071				1,366
	Credit card income			913				1,840				1,398				1,765				1,891
	Securities losses			-				-				-				-				(1	)
	Increase in cash surrender value life insurance			1,660				1,733				1,464				1,453				1,419
	Other operating income			643				262				241				469				455
	Total non-interest income			8,237				8,172				7,033				6,674				6,936
Non-interest expense:
	Salaries and employee benefits			14,970				14,994				15,792				15,658				13,680
	Equipment and occupancy expense			2,680				2,556				2,434				2,400				2,339
	Third party processing and other services			3,418				3,281				3,622				3,457				3,176
	Professional services			1,248				955				1,091				948				1,163
	FDIC and other regulatory assessments (credits)			1,366				1,061				595				1,332				1,171
	Other real estate owned expense			140				119				1,303				601				103
	Other operating expense			4,380				3,607				3,979				3,524				3,871
	Total non-interest expense			28,202				26,573				28,816				27,920				25,503
	Income before income tax			65,833				54,397				51,168				42,810				51,326
Provision for income tax				14,852				11,035				10,720				8,032				10,289
	Net income			50,981				43,362				40,448				34,778				41,037
	Dividends on preferred stock			32				-				31				-				32
	Net income available to common stockholders		$	50,949			$	43,362			$	40,417			$	34,778			$	41,005
Basic earnings per common share			$	0.94			$	0.80			$	0.75			$	0.65			$	0.77
Diluted earnings per common share			$	0.94			$	0.80			$	0.75			$	0.64			$	0.76

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
						4th Quarter 2020						3rd Quarter 2020						2nd Quarter 2020						1st Quarter 2020						4th Quarter 2019
						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				$	8,435,237		4.43	%		$	8,335,087		4.26	%		$	8,301,775		4.31	%		$	7,328,594		4.89	%		$	7,066,576		5.00	%
		Tax-exempt (2)					29,393		4.11				30,068		4.14				31,929		4.12				32,555		4.04				35,563		4.00
			Total loans, net of
				unearned income			8,464,630		4.43				8,365,155		4.26				8,333,704		4.31				7,361,149		4.88				7,102,139		4.99
	Mortgage loans held for sale						19,459		1.37				20,053		1.41				13,278		2.09				4,282		2.16				6,505		2.44
	Debt securities:
		Taxable					862,333		2.79				820,526		2.86				761,575		2.67				750,413		2.75				670,732		2.81
		Tax-exempt (2)					25,542		2.43				31,880		2.51				38,201		2.62				44,029		2.33				50,825		2.17
			Total securities (3)				887,875		2.78				852,406		2.84				799,776		2.67				794,442		2.72				721,557		2.76
	Federal funds sold						16,306		0.12				41,884		0.15				83,274		0.16				105,423		1.06				238,927		1.75
	Interest-bearing balances with banks						1,837,249		0.13				1,500,563		0.13				849,549		0.17				469,199		1.47				602,755		1.81
	Total interest-earning assets					$	11,225,519		3.58	%		$	10,780,061		3.55	%		$	10,079,581		3.80	%		$	8,734,495		4.46	%		$	8,671,883		4.49	%
Non-interest-earning assets:
	Cash and due from banks						91,258						75,065						76,212						66,140						70,381
	Net premises and equipment						56,315						56,799						57,446						58,066						57,986
	Allowance for loan losses, accrued
		interest and other assets					308,251						281,196						248,702						241,479						233,885
			Total assets			$	11,681,343					$	11,193,121					$	10,461,941					$	9,100,180					$	9,034,135
Interest-bearing liabilities:
	Interest-bearing deposits:
	Checking					$	1,197,908		0.23	%		$	1,077,595		0.31	%		$	992,848		0.35	%		$	956,803		0.57	%		$	961,258		0.69	%
	Savings						86,259		0.18				82,671		0.36				72,139		0.42				67,380		0.50				62,311		0.53
	Money market						4,933,285		0.31				4,739,566		0.44				4,285,907		0.52				4,061,286		1.10				4,189,283		1.34
	Time deposits						810,675		1.59				841,378		1.78				877,448		1.95				805,924		2.09				712,155		2.15
		Total interest-bearing deposits					7,028,127		0.44				6,741,210		0.58				6,228,342		0.69				5,891,393		1.14				5,925,007		1.32
	Federal funds purchased						752,765		0.22				682,971		0.22				572,990		0.22				492,638		1.31				420,066		1.74
	Other borrowings						64,717		4.41				64,717		4.78				64,711		4.85				64,707		4.85				64,698		4.79
	Total interest-bearing liabilities					$	7,845,609		0.46	%		$	7,488,898		0.59	%		$	6,866,043		0.69	%		$	6,448,738		1.19	%		$	6,409,771		1.39	%
Non-interest-bearing liabilities:
	Non-interest-bearing
		checking					2,813,095						2,728,513						2,646,030						1,749,671						1,759,671
	Other liabilities						47,290						39,537						69,061						39,801						41,112
	Stockholders' equity						956,847						917,626						862,500						853,800						818,320
	Accumulated other comprehensive
		income					18,502						18,547						18,307						8,170						5,261
			Total liabilities and
				stockholders' equity		$	11,681,343					$	11,193,121					$	10,461,941					$	9,100,180					$	9,034,135
Net interest spread									3.12	%					2.96	%					3.11	%					3.27	%					3.10	%
Net interest margin									3.27	%					3.14	%					3.32	%					3.58	%					3.47	%
(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 21%.
(3)	Unrealized losses on available-for-sale debt securities are excluded from the yield calculation.

FAQ

What were the earnings per share for ServisFirst Bancshares (SFBS) in 2020?

ServisFirst Bancshares reported diluted earnings per share of $3.13 for the year ended December 31, 2020, a 13% increase over 2019.

How much did deposits increase for SFBS in 2020?

Deposits for ServisFirst Bancshares grew by 32% year-over-year, reaching approximately $9.98 billion.

What was the net income for SFBS in the fourth quarter of 2020?

The net income for ServisFirst Bancshares in the fourth quarter of 2020 was $51 million, an 18% increase from the third quarter.

What is the cash dividend declared by SFBS for 2020?

ServisFirst Bancshares increased its cash dividend from $0.175 to $0.20 per quarter, which is a 14% increase.

What is the book value per share for SFBS as of December 31, 2020?

The book value per share for ServisFirst Bancshares increased to $18.41 as of December 31, 2020, a 17% increase year-over-year.