Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2022 By: ServisFirst Bancshares, Inc. via Business Wire January 23, 2023 at 16:02 PM EST 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/Contacts ServisFirst Bank Davis Mange (205) 949-3420 dmange@servisfirstbank.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter of 2022 By: ServisFirst Bancshares, Inc. via Business Wire January 23, 2023 at 16:02 PM EST 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/Contacts ServisFirst Bank Davis Mange (205) 949-3420 dmange@servisfirstbank.com
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/