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 2023 By: ServisFirst Bancshares, Inc. via Business Wire January 29, 2024 at 16:05 PM EST ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended December 31, 2023. Fourth Quarter 2023 Highlights: Entering the Memphis, Tennessee market with the hiring of Joel Smith as President. Deposits grew 15% year-over-year and new deposit accounts opened increased 12% year-over-year. Diluted earnings per share of $0.77 for the quarter. Adjusted* diluted earnings per share of $0.91 for the quarter. $2.1 billion in cash on hand with no FHLB advances or brokered deposits. Book value per share of $26.45, up 10.7% from the fourth quarter of 2022 and 10.8% annualized, from the third quarter of 2023. Cash dividend increased from $0.28 per share to $0.30 per share, a 7% increase. Credit quality continues to be strong with non-performing assets to total assets of 0.14%. Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.95% to 10.91% year-over-year. Tom Broughton, Chairman, President, and CEO, said, “We are pleased to announce our entrance into the Memphis, Tennessee market with the addition of Joel Smith, who is an outstanding banker with a commercial and industrial banking background.” Bud Foshee, CFO, said, “We are well-positioned for growth in 2024, with strong liquidity in what we believe to be the best footprint in the United States.” * This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” FINANCIAL SUMMARY (UNAUDITED) (in Thousands except share and per share amounts) Period Ending December 31, 2023 Period Ending September 30, 2023 % Change From Period Ending September 30, 2023 to Period Ending December 31, 2023 Period Ending December 31, 2022 % Change From Period Ending December 31, 2022 to Period Ending December 31, 2023 QUARTERLY OPERATING RESULTS Net Income $ 42,074 $ 53,340 (21.1 )% $ 67,724 (37.9 )% Net Income Available to Common Stockholders $ 42,043 $ 53,340 (21.2 )% $ 67,693 (37.9 )% Diluted Earnings Per Share $ 0.77 $ 0.98 (21.3 )% $ 1.24 (38.0 )% Return on Average Assets 1.04 % 1.37 % 1.89 % Return on Average Common Stockholders' Equity 11.78 % 15.34 % 21.27 % Average Diluted Shares Outstanding 54,548,719 54,530,635 54,537,685 Adjusted Net Income, net of tax* $ 49,891 $ 53,340 (6.5 )% $ 67,724 (26.3 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 49,860 $ 53,340 (6.5 )% $ 67,693 (26.3 )% Adjusted Diluted Earnings Per Share, net of tax* $ 0.91 $ 0.98 (6.6 )% $ 1.24 (26.4 )% Adjusted Return on Average Assets, net of tax* 1.23 % 1.37 % 1.89 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 13.98 % 15.34 % 21.27 % YEAR-TO-DATE OPERATING RESULTS Net Income $ 206,853 $ 251,504 (17.8 )% Net Income Available to Common Stockholders $ 206,791 $ 251,442 (17.8 )% Diluted Earnings Per Share $ 3.79 $ 4.61 (17.8 )% Return on Average Assets 1.37 % 1.71 % Return on Average Common Stockholders' Equity 15.13 % 20.73 % Average Diluted Shares Outstanding 54,535,315 54,534,774 Adjusted Net Income, net of tax* $ 214,670 $ 251,504 (14.6 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 214,608 $ 251,442 (14.6 )% Adjusted Diluted Earnings Per Share, net of tax* $ 3.94 $ 4.61 Adjusted Return on Average Assets, net of tax* 1.42 % 1.71 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 15.71 % 20.73 % BALANCE SHEET Total Assets $ 16,129,668 $ 16,044,332 0.5 % $ 14,595,753 10.5 % Loans 11,658,829 11,641,130 0.2 % 11,687,968 (0.2 )% Non-interest-bearing Demand Deposits 2,643,101 2,621,072 0.8 % 3,321,347 (20.4 )% Total Deposits 13,273,511 13,142,376 1.0 % 11,546,805 15.0 % Stockholders' Equity 1,440,405 1,401,384 2.8 % 1,297,896 11.0 % DETAILED FINANCIALS ServisFirst Bancshares, Inc. reported net income of $42.1 million and net income available to common stockholders of $42.0 million for the quarter ended December 31, 2023, compared to net income and net income available to common stockholders of $53.3 million for the third quarter of 2023 and net income and net income available to common stockholders of $67.7 million for the fourth quarter of 2022. Basic and diluted earnings per common share were both $0.77 in the fourth quarter of 2023, compared to $0.98 for both in the third quarter of 2023 and $1.25 and $1.24, respectively, in the fourth quarter of 2022. Annualized return on average assets was 1.04% and annualized return on average common stockholders’ equity was 11.78% for the fourth quarter of 2023, compared to 1.89% and 21.27%, respectively, for the fourth quarter of 2022. Net interest income was $101.7 million for the fourth quarter of 2023, compared to $99.7 million for the third quarter of 2023 and $122.4 million for the fourth quarter of 2022. The net interest margin in the fourth quarter of 2023 was 2.57% compared to 2.64% in the third quarter of 2023 and 3.52% in the fourth quarter of 2022. The Company significantly increased deposits and liquidity in the form of interest-bearing balances with banks after the stress in the banking system in March. Average interest-bearing balances with banks increased by $1.5 billion, or 333%, from the fourth quarter of 2022 to the fourth quarter of 2023. While the increased liquidity had a benign impact on net interest income, it has had an impact on our net interest margin. Loan yields were 6.32% during the fourth quarter of 2023 compared to 6.13% during the third quarter of 2023 and 5.32% during the fourth quarter of 2022. Investment yields were 3.08% during the fourth quarter of 2023 compared to 3.07% during the third quarter of 2023 and 2.49% during the fourth quarter of 2022. Average interest-bearing deposit rates were 4.06% during the fourth quarter of 2023, compared to 3.84% during the third quarter of 2023 and 1.70% during the fourth quarter of 2022. Average federal funds purchased rates were 5.49% during the fourth quarter of 2023, compared to 5.43% during the third quarter of 2023 and 3.75% during the fourth quarter of 2022. Average loans for the fourth quarter of 2023 were $11.60 billion, an increase of $35.5 million, or 1.2% annualized, from average loans of $11.56 billion for the third quarter of 2023, and an increase of $113.4 million, or 1.0%, from average loans of $11.49 billion for the fourth quarter of 2022. Average total deposits for the fourth quarter of 2023 were $13.23 billion, an increase of $549.1 million, or 17.2% annualized, over average total deposits of $12.68 billion for the third quarter of 2023, and an increase of $1.84 billion, or 16.2%, from average total deposits of $11.39 billion for the fourth quarter of 2022. Non-performing assets to total assets were 0.14% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.12% for the fourth quarter of 2022. Annualized net charge-offs to average loans were 0.09% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.06% fourth quarter of 2022. The allowance for credit losses as a percentage of total loans at December 31, 2023, September 30, 2023, and December 31, 2022, was 1.32%, 1.31%, and 1.25%, respectively. We recorded a $3.6 million provision for credit losses in the fourth quarter of 2023 compared to $4.3 million in the third quarter of 2023, and $7.1 million in the fourth quarter of 2022. Non-interest income increased $413,000, or 5.9%, to $7.4 million for the fourth quarter of 2023 from $7.0 million in the fourth quarter of 2022, and decreased $756,000, or 9.3%, on a linked quarter basis. Service charges on deposit accounts increased $315,000, or 16.9%, to $2.2 million from the fourth quarter of 2022 to the fourth quarter of 2023, and increased $18,000, or 0.8%, on a linked quarter basis. Mortgage banking revenue increased $278,000, or 54.1%, to $792,000 from the fourth quarter of 2022 to the fourth quarter of 2023, and decreased $33,000, or 4.0%, on a linked quarter basis. Net credit card revenue decreased $257,000, or 11.4%, to $2.0 million during the fourth quarter of 2023, compared to $2.3 million during the fourth quarter of 2022, and decreased $528,000, or 20.9%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income increased $39,000, or 2.4%, to $1.6 million during the fourth quarter of 2023, compared to $1.6 million during the fourth quarter of 2022, and decreased $179,000, or 9.8%, on a linked quarter basis. Other operating income for the fourth quarter of 2023 increased $38,000, or 5.2%, to $763,000 from $725,000 in the fourth quarter of 2022, and decreased $34,000, or 4.3%, on a linked quarter basis. We recognized $162,000 of income on an interest rate cap during the fourth quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $95,000, or 19.5%, to $585,000 for the fourth quarter of 2023 from $490,000 in the fourth quarter of 2022. Non-interest expense for the fourth quarter of 2023 increased $20.2 million, or 52.9%, to $58.3 million from $38.1 million in the fourth quarter of 2022, and increased $16.6 million, or 39.8%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2023 increased $3.8 million, or 19.7%, to $23.0 million from $19.2 million in the fourth quarter of 2022, and increased $2.9 million, or 14.7%, on a linked quarter basis. The number of FTE employees increased by 20 to 591 at December 31, 2023 compared to 571 at December 31, 2022, and increased by 23 from the end of the third quarter of 2023. Equipment and occupancy expense increased $597,000, or 18.3%, to $3.9 million in the fourth quarter of 2023, from $3.3 million in the fourth quarter of 2022, and increased $281,000, or 7.9% on a linked-quarter basis. The year-over-year increase was primarily attributed to new leases that began after the fourth quarter of 2022. Third party processing and other services expense decreased $329,000, or 4.0%, to $7.8 million in the fourth quarter of 2023, from $8.2 million in the fourth quarter of 2022, and increased $1.3 million, or 19.7%, on a linked-quarter basis. Professional services expense increased $495,000, or 53.7%, to $1.4 million in the fourth quarter of 2023, from $922,000 in the fourth quarter of 2022, and increased $152,000, or 12.0%, on a linked quarter basis. FDIC and other regulatory assessments increased $8.2 million to $9.5 million in the fourth quarter of 2023, from $1.3 million in the fourth quarter of 2022, and increased $7.2 million, or 305.3%, on a linked quarter basis. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023. Other operating expenses for the fourth quarter of 2023 increased $7.6 million, or 154.0%, to $12.6 million from $5.0 million in the fourth quarter of 2022, and increased $4.8 million, or 60.9%, on a linked-quarter basis. During the fourth quarter of 2023, an incremental expense related to tax credit investments of $3.3 million, associated with the tax benefit discussed below, contributed to the increase in other operating expenses. In addition, the following items, which management views as unusual, infrequent, and not reflective of future normal operating expenses, contributed to the increase in non-interest expense: the FDIC implemented a special assessment to recapitalize the Deposit Insurance Fund resulting in an expense of $7.2 million, an EDP contract termination and related capitalized cost write-offs of $1.1 million to other operating expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense to other operating expenses. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expense for 2023. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. The efficiency ratio was 55.23% during the fourth quarter of 2023 compared to 29.45% during the fourth quarter of 2022 and 38.64% during the third quarter of 2023. The adjusted efficiency ratio was 42.22%. Income tax expense decreased $11.2 million, or 68.6%, to $5.2 million in the fourth quarter of 2023, compared to $16.4 million in the fourth quarter of 2022. Our effective tax rate was 10.91% for the fourth quarter of 2023 compared to 19.49% for the fourth quarter of 2022. We recognized an aggregate of $6.7 million in credits during the fourth quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the fourth quarter of 2022. During the fourth quarter of 2023, $4.1 million of the recognized credits were related to the incremental expense for tax credit investments discussed above. We recognize 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 2023 and 2022 of $252,000 and $10,000, respectively. 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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida. Through the bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions. 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: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2023, 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 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 CONSOLIDATED STATEMENT OF INCOME Interest income $ 229,062 $ 213,206 $ 189,656 $ 181,322 $ 170,273 Interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Preferred stock dividends 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Earnings per share - basic $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Earnings per share - diluted $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 Average diluted shares outstanding 54,548,719 54,530,635 54,527,317 54,534,482 54,537,685 CONSOLIDATED BALANCE SHEET DATA Total assets $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Loans 11,658,829 11,641,130 11,604,894 11,629,802 11,687,968 Debt securities 1,882,847 1,878,701 2,048,227 1,646,937 1,678,936 Non-interest-bearing demand deposits 2,643,101 2,621,072 2,855,102 2,898,736 3,321,347 Total deposits 13,273,511 13,142,376 12,288,219 11,615,317 11,546,805 Borrowings 64,735 64,751 64,737 65,417 64,726 Stockholders' equity 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Shares outstanding 54,461,580 54,425,447 54,425,033 54,398,025 54,326,527 Book value per share $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Tangible book value per share (1) $ 26.20 $ 25.50 $ 24.80 $ 24.38 $ 23.64 SELECTED FINANCIAL RATIOS (Annualized) Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % Return on average assets 1.04 % 1.37 % 1.50 % 1.63 % 1.89 % Return on average common stockholders' equity 11.78 % 15.34 % 15.85 % 17.83 % 21.27 % Efficiency ratio 55.23 % 38.64 % 35.02 % 34.60 % 29.45 % Non-interest expense to average earning assets 1.47 % 1.10 % 1.11 % 1.15 % 1.10 % CAPITAL RATIOS (2) Common equity tier 1 capital to risk-weighted assets 10.91 % 10.69 % 10.37 % 10.01 % 9.55 % Tier 1 capital to risk-weighted assets 10.92 % 10.69 % 10.38 % 10.02 % 9.55 % Total capital to risk-weighted assets 12.45 % 12.25 % 11.94 % 11.54 % 11.03 % Tier 1 capital to average assets 9.12 % 9.35 % 9.83 % 9.49 % 9.29 % Tangible common equity to total tangible assets (1) 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % (1) This press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” (2) Regulatory capital ratios for the most recent period are preliminary. GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. Additionally, we experienced expenses for the termination of an EDP contract and related capitalized cost write-offs resulting in $1.1 million in expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expenses for 2023. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of 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 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. Three Months Ended December 31, 2023 Year Ended December 31, 2023 Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income - non-GAAP $ 49,891 $ 214,670 Net income available to common stockholders - GAAP $ 42,043 $ 206,791 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,860 $ 214,608 Diluted earnings per share - GAAP $ 0.77 $ 3.79 Adjustments: FDIC special assessment 0.13 0.13 Privilege tax expense 0.04 0.04 EDP contract termination expense 0.02 0.02 Tax on adjustments (0.05 ) (0.05 ) Adjusted diluted earnings per share - non-GAAP $ 0.91 $ 3.94 Return on average assets - GAAP 1.04 % 1.37 % Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,891 $ 214,670 Average assets - GAAP $ 16,122,146 $ 15,066,716 Adjusted return on average assets - non-GAAP 1.23 % 1.42 % Return on average common stockholders' equity - GAAP 11.78 % 15.13 % Net income available to common stockholders - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted diluted earnings per share - non-GAAP $ 49,891 $ 214,670 Average common stockholders' equity - GAAP $ 1,415,866 $ 1,366,708 Adjusted return on average common stockholders' equity non-GAAP 13.98 % 15.71 % Efficiency ratio 55.23 % 40.67 % Non-interest expense - GAAP $ 56,480 $ 176,273 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Adjusted non-interest expense $ 46,044 $ 165,837 Net interest income plus non-interest income - GAAP $ 109,066 $ 441,354 Adjusted efficiency ratio - non-GAAP 42.22 % 37.57 % At December 31, 2023 At September 30, 2023 At June 30, 2023 At March 31, 2023 At December 31, 2022 Book value per share - GAAP $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Total common stockholders' equity - GAAP 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Tangible common stockholders' equity - non-GAAP $ 1,426,790 $ 1,387,769 $ 1,349,856 $ 1,326,202 $ 1,284,281 Tangible book value per share - non-GAAP $ 26.22 $ 25.50 $ 24.80 $ 24.38 $ 23.64 Stockholders' equity to total assets - GAAP 8.93 % 8.73 % 9.05 % 9.20 % 8.89 % Total assets - GAAP $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Total tangible assets - non-GAAP $ 16,116,053 $ 16,030,717 $ 15,059,193 $ 14,552,944 $ 14,582,138 Tangible common equity to total tangible assets - non-GAAP 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 % Change ASSETS Cash and due from banks $ 123,430 $ 106,317 16 % Interest-bearing balances due from depository institutions 1,907,083 708,221 169 % Federal funds sold 100,575 1,515 6,539 % Cash and cash equivalents 2,131,088 816,053 161 % Available for sale debt securities, at fair value 900,183 644,815 40 % Held to maturity debt securities (fair value of $907,191 and $935,953, respectively) 982,664 1,034,121 (5 )% Restricted equity securities 10,226 7,734 32 % Mortgage loans held for sale 5,074 1,607 216 % Loans 11,658,829 11,687,968 - % Less allowance for credit losses (153,317 ) (146,297 ) 5 % Loans, net 11,505,512 11,541,671 - % Premises and equipment, net 59,324 59,850 (1 )% Goodwill 13,615 13,615 - % Other assets 521,982 476,287 10 % Total assets $ 16,129,668 $ 14,595,753 11 % LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Non-interest-bearing $ 2,643,101 $ 3,321,347 (20 )% Interest-bearing 10,630,410 8,225,458 29 % Total deposits 13,273,511 11,546,805 15 % Federal funds purchased 1,256,724 1,618,798 (22 )% Other borrowings 64,735 64,726 - % Other liabilities 94,293 67,528 40 % Total liabilities 14,689,263 13,297,857 10 % Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at December 31, 2023 and December 31, 2022 - - - % Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,461,580 shares issued and outstanding at December 31, 2023, and 54,326,527 shares issued and outstanding at December 31, 2022 54 54 - % Additional paid-in capital 232,605 229,693 1 % Retained earnings 1,254,841 1,109,902 13 % Accumulated other comprehensive loss (47,595 ) (42,253 ) 13 % Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 1,439,905 1,297,396 11 % Noncontrolling interest 500 500 - % Total stockholders' equity 1,440,405 1,297,896 11 % Total liabilities and stockholders' equity $ 16,129,668 $ 14,595,753 11 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 184,897 $ 153,924 $ 699,101 $ 499,691 Taxable securities 15,512 10,895 53,499 40,722 Nontaxable securities 12 27 65 137 Federal funds sold 1,018 818 2,844 1,556 Other interest and dividends 27,623 4,609 57,737 17,209 Total interest income 229,062 170,273 813,246 559,315 Interest expense: Deposits 108,155 33,471 331,740 59,396 Borrowed funds 19,220 14,418 70,569 29,027 Total interest expense 127,375 47,889 402,309 88,423 Net interest income 101,687 122,384 410,937 470,892 Provision for credit losses 3,582 7,135 18,715 37,607 Net interest income after provision for credit losses 98,105 115,249 392,222 433,285 Non-interest income: Service charges on deposit accounts 2,181 1,866 8,420 8,033 Mortgage banking 792 514 2,755 2,438 Credit card income 2,004 2,261 8,631 9,917 Securities losses - - - (6,168 ) Bank-owned life insurance income 1,639 1,600 7,574 6,478 Other operating income 763 725 3,037 12,661 Total non-interest income 7,379 6,966 30,417 33,359 Non-interest expense: Salaries and employee benefits 23,024 19,230 80,965 77,952 Equipment and occupancy expense 3,860 3,263 14,295 12,319 Third party processing and other services 7,841 8,170 27,872 27,333 Professional services 1,417 922 5,916 4,277 FDIC and other regulatory assessments 9,509 1,311 15,614 4,565 Other real estate owned expense 17 239 47 295 Other operating expense 12,590 4,957 33,342 31,075 Total non-interest expense 58,258 38,092 178,051 157,816 Income before income tax 47,226 84,123 244,588 308,828 Provision for income tax 5,152 16,399 37,735 57,324 Net income 42,074 67,724 206,853 251,504 Dividends on preferred stock 31 - 62 62 Net income available to common stockholders $ 42,043 $ 67,693 $ 206,791 $ 251,442 Basic earnings per common share $ 0.77 $ 1.25 $ 3.80 $ 4.63 Diluted earnings per common share $ 0.77 $ 1.24 $ 3.79 $ 4.61 LOANS BY TYPE (UNAUDITED) (In thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Commercial, financial, and agricultural $ 2,823,986 $ 2,890,535 $ 2,986,453 $ 3,081,926 $ 3,145,317 Real estate - construction 1,519,619 1,509,937 1,397,732 1,469,670 1,532,388 Real estate - mortgage: Owner-occupied commercial 2,257,163 2,237,684 2,294,002 2,243,436 2,199,280 1-4 family mortgage 1,249,938 1,170,099 1,167,238 1,138,645 1,146,831 Other mortgage 3,744,346 3,766,124 3,686,434 3,624,071 3,597,750 Subtotal: Real estate - mortgage 7,251,447 7,173,907 7,147,674 7,006,152 6,943,861 Consumer 63,777 66,751 73,035 72,054 66,402 Total loans $ 11,658,829 $ 11,641,130 $ 11,604,894 $ 11,629,802 $ 11,687,968 SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Allowance for credit losses: Beginning balance $ 152,247 $ 152,272 $ 148,965 $ 146,297 $ 140,967 Loans charged off: Commercial financial and agricultural 2,831 4,783 4,358 1,257 2,116 Real estate - construction 89 19 - - - Real estate - mortgage 14 - 131 26 - Consumer 231 341 111 390 200 Total charge offs 3,165 5,143 4,600 1,673 2,316 Recoveries: Commercial financial and agricultural 614 825 1,233 128 393 Real estate - construction - - - 3 - Real estate - mortgage - - - 1 - Consumer 39 11 21 11 118 Total recoveries 653 836 1,254 143 511 Net charge-offs 2,512 4,307 3,346 1,530 1,805 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Ending balance $ 153,317 $ 152,247 $ 152,272 $ 148,965 $ 146,297 Allowance for credit losses to total loans 1.32 % 1.31 % 1.31 % 1.28 % 1.25 % Allowance for credit losses to total average loans 1.32 % 1.31 % 1.31 % 1.28 % 1.27 % Net charge-offs to total average loans 0.09 % 0.15 % 0.11 % 0.05 % 0.06 % Provision for credit losses to total average loans 0.12 % 0.15 % 0.23 % 0.14 % 0.25 % Nonperforming assets: Nonaccrual loans $ 19,349 $ 20,912 $ 16,897 $ 13,157 $ 12,450 Loans 90+ days past due and accruing 2,184 1,692 5,947 4,683 5,391 Other real estate owned and repossessed assets 995 690 832 248 248 Total $ 22,528 $ 23,294 $ 23,676 $ 18,088 $ 18,089 Nonperforming loans to total loans 0.18 % 0.19 % 0.20 % 0.15 % 0.15 % Nonperforming assets to total assets 0.14 % 0.15 % 0.16 % 0.12 % 0.12 % Nonperforming assets to earning assets 0.14 % 0.16 % 0.16 % 0.13 % 0.13 % Allowance for credit losses to nonaccrual loans 795.17 % 731.74 % 901.18 % 1,132.24 % 1,175.08 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Interest income: Interest and fees on loans $ 184,897 $ 178,754 $ 171,718 $ 163,732 $ 153,924 Taxable securities 15,512 15,522 11,570 10,895 10,895 Nontaxable securities 12 15 17 21 27 Federal funds sold 1,018 985 227 614 818 Other interest and dividends 27,623 17,930 6,124 6,060 4,609 Total interest income 229,062 213,206 189,656 181,322 170,273 Interest expense: Deposits 108,155 95,901 71,971 55,713 33,471 Borrowed funds 19,220 17,607 16,434 17,308 14,418 Total interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income: Service charges on deposit accounts 2,181 2,163 2,142 1,934 1,866 Mortgage banking 792 825 696 442 514 Credit card income 2,004 2,532 2,406 1,689 2,261 Bank-owned life insurance income 1,639 1,818 2,496 1,621 1,600 Other operating income 763 797 842 635 725 Total non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense: Salaries and employee benefits 23,024 20,080 18,795 19,066 19,230 Equipment and occupancy expense 3,860 3,579 3,421 3,435 3,263 Third party processing and other services 7,841 6,549 6,198 7,284 8,170 Professional services 1,417 1,265 1,580 1,654 922 FDIC and other regulatory assessments 9,509 2,346 2,242 1,517 1,311 Other real estate owned expense 17 18 6 6 239 Other operating expense 12,590 7,826 6,224 6,702 4,957 Total non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Dividends on preferred stock 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Basic earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Diluted earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 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 $ 11,580,716 6.33 % $ 11,545,003 6.13 % $ 11,581,008 5.94 % $ 11,632,439 5.70 % $ 11,465,538 5.32 % Tax-exempt (2) 17,787 4.71 18,023 4.71 18,312 4.82 18,978 3.36 19,526 6.60 Total loans, net of unearned income 11,598,503 6.32 11,563,026 6.13 11,599,320 5.94 11,651,417 5.70 11,485,064 5.32 Mortgage loans held for sale 5,105 6.22 5,476 6.67 5,014 5.12 1,522 6.40 1,515 3.67 Debt securities: Taxable 2,007,636 3.08 2,029,995 3.07 1,757,397 2.64 1,724,523 2.54 1,755,764 2.49 Tax-exempt (2) 1,739 2.30 2,408 2.49 2,960 2.43 3,781 2.43 4,863 2.39 Total securities (3) 2,009,375 3.08 2,032,403 3.07 1,760,357 2.64 1,728,304 2.54 1,760,627 2.49 Federal funds sold 72,178 5.60 74,424 5.25 15,908 5.72 50,526 4.93 82,656 3.93 Restricted equity securities 10,216 8.74 8,471 5.90 8,834 6.08 9,919 7.69 7,724 7.35 Interest-bearing balances with banks 1,981,411 5.49 1,293,243 5.45 460,893 5.21 510,021 4.67 458,115 3.83 Total interest-earning assets $ 15,676,788 5.80 $ 14,977,043 5.65 $ 13,850,326 5.49 $ 13,951,709 5.27 $ 13,795,701 4.90 Non-interest-earning assets: Cash and due from banks 101,741 111,566 101,188 106,448 113,823 Net premises and equipment 60,110 60,121 60,499 60,617 60,323 Allowance for credit losses, accrued interest and other assets 283,435 283,357 279,860 279,775 273,964 Total assets $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 2,245,431 2.91 % $ 2,153,973 2.72 % $ 1,628,936 1.69 % $ 1,675,355 1.25 % $ 1,763,622 0.73 % Savings 107,035 1.72 112,814 1.61 122,050 1.38 134,671 0.94 141,163 0.64 Money market 7,106,190 4.44 6,538,426 4.24 5,971,639 3.78 5,756,642 3.17 5,047,133 2.07 Time deposits 1,111,350 4.18 1,093,388 3.89 983,582 3.44 850,639 2.51 860,336 1.69 Total interest-bearing deposits 10,570,006 4.06 9,898,601 3.84 8,706,207 3.32 8,417,307 2.68 7,812,254 1.70 Federal funds purchased 1,338,110 5.49 1,237,721 5.43 1,191,582 5.14 1,389,217 4.67 1,453,445 3.75 Other borrowings 64,734 4.23 64,734 4.23 100,998 4.62 114,726 4.61 64,726 4.23 Total interest-bearing liabilities $ 11,972,850 4.22 % $ 11,201,056 4.02 % $ 9,998,787 3.55 % $ 9,921,250 2.98 % $ 9,330,425 2.04 % Non-interest-bearing liabilities: Non-interest-bearing demand deposits 2,656,504 2,778,858 2,876,225 3,086,774 3,572,956 Other liabilities 76,651 72,924 64,917 72,121 77,544 Stockholders' equity 1,475,366 1,437,766 1,399,578 1,358,587 1,307,553 Accumulated other comprehensive loss (59,297 ) (58,517 ) (47,634 ) (40,183 ) (44,667 ) Total liabilities and stockholders' equity $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Net interest spread 1.58 % 1.63 % 1.94 % 2.29 % 2.86 % Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % (1) Average loans include nonaccrual loans in all periods. Loan fees of $4,175, $2,996, $3,318 $3,263, and $3,630 are included in interest income in the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively. (2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. (3) Unrealized losses on debt securities of $(84,647), $(83,815), $(69,498), $(59,738), and $(62,568) for the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively, are excluded from the yield calculation. View source version on businesswire.com: https://www.businesswire.com/news/home/20240129131808/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 2023 By: ServisFirst Bancshares, Inc. via Business Wire January 29, 2024 at 16:05 PM EST ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended December 31, 2023. Fourth Quarter 2023 Highlights: Entering the Memphis, Tennessee market with the hiring of Joel Smith as President. Deposits grew 15% year-over-year and new deposit accounts opened increased 12% year-over-year. Diluted earnings per share of $0.77 for the quarter. Adjusted* diluted earnings per share of $0.91 for the quarter. $2.1 billion in cash on hand with no FHLB advances or brokered deposits. Book value per share of $26.45, up 10.7% from the fourth quarter of 2022 and 10.8% annualized, from the third quarter of 2023. Cash dividend increased from $0.28 per share to $0.30 per share, a 7% increase. Credit quality continues to be strong with non-performing assets to total assets of 0.14%. Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.95% to 10.91% year-over-year. Tom Broughton, Chairman, President, and CEO, said, “We are pleased to announce our entrance into the Memphis, Tennessee market with the addition of Joel Smith, who is an outstanding banker with a commercial and industrial banking background.” Bud Foshee, CFO, said, “We are well-positioned for growth in 2024, with strong liquidity in what we believe to be the best footprint in the United States.” * This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” FINANCIAL SUMMARY (UNAUDITED) (in Thousands except share and per share amounts) Period Ending December 31, 2023 Period Ending September 30, 2023 % Change From Period Ending September 30, 2023 to Period Ending December 31, 2023 Period Ending December 31, 2022 % Change From Period Ending December 31, 2022 to Period Ending December 31, 2023 QUARTERLY OPERATING RESULTS Net Income $ 42,074 $ 53,340 (21.1 )% $ 67,724 (37.9 )% Net Income Available to Common Stockholders $ 42,043 $ 53,340 (21.2 )% $ 67,693 (37.9 )% Diluted Earnings Per Share $ 0.77 $ 0.98 (21.3 )% $ 1.24 (38.0 )% Return on Average Assets 1.04 % 1.37 % 1.89 % Return on Average Common Stockholders' Equity 11.78 % 15.34 % 21.27 % Average Diluted Shares Outstanding 54,548,719 54,530,635 54,537,685 Adjusted Net Income, net of tax* $ 49,891 $ 53,340 (6.5 )% $ 67,724 (26.3 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 49,860 $ 53,340 (6.5 )% $ 67,693 (26.3 )% Adjusted Diluted Earnings Per Share, net of tax* $ 0.91 $ 0.98 (6.6 )% $ 1.24 (26.4 )% Adjusted Return on Average Assets, net of tax* 1.23 % 1.37 % 1.89 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 13.98 % 15.34 % 21.27 % YEAR-TO-DATE OPERATING RESULTS Net Income $ 206,853 $ 251,504 (17.8 )% Net Income Available to Common Stockholders $ 206,791 $ 251,442 (17.8 )% Diluted Earnings Per Share $ 3.79 $ 4.61 (17.8 )% Return on Average Assets 1.37 % 1.71 % Return on Average Common Stockholders' Equity 15.13 % 20.73 % Average Diluted Shares Outstanding 54,535,315 54,534,774 Adjusted Net Income, net of tax* $ 214,670 $ 251,504 (14.6 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 214,608 $ 251,442 (14.6 )% Adjusted Diluted Earnings Per Share, net of tax* $ 3.94 $ 4.61 Adjusted Return on Average Assets, net of tax* 1.42 % 1.71 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 15.71 % 20.73 % BALANCE SHEET Total Assets $ 16,129,668 $ 16,044,332 0.5 % $ 14,595,753 10.5 % Loans 11,658,829 11,641,130 0.2 % 11,687,968 (0.2 )% Non-interest-bearing Demand Deposits 2,643,101 2,621,072 0.8 % 3,321,347 (20.4 )% Total Deposits 13,273,511 13,142,376 1.0 % 11,546,805 15.0 % Stockholders' Equity 1,440,405 1,401,384 2.8 % 1,297,896 11.0 % DETAILED FINANCIALS ServisFirst Bancshares, Inc. reported net income of $42.1 million and net income available to common stockholders of $42.0 million for the quarter ended December 31, 2023, compared to net income and net income available to common stockholders of $53.3 million for the third quarter of 2023 and net income and net income available to common stockholders of $67.7 million for the fourth quarter of 2022. Basic and diluted earnings per common share were both $0.77 in the fourth quarter of 2023, compared to $0.98 for both in the third quarter of 2023 and $1.25 and $1.24, respectively, in the fourth quarter of 2022. Annualized return on average assets was 1.04% and annualized return on average common stockholders’ equity was 11.78% for the fourth quarter of 2023, compared to 1.89% and 21.27%, respectively, for the fourth quarter of 2022. Net interest income was $101.7 million for the fourth quarter of 2023, compared to $99.7 million for the third quarter of 2023 and $122.4 million for the fourth quarter of 2022. The net interest margin in the fourth quarter of 2023 was 2.57% compared to 2.64% in the third quarter of 2023 and 3.52% in the fourth quarter of 2022. The Company significantly increased deposits and liquidity in the form of interest-bearing balances with banks after the stress in the banking system in March. Average interest-bearing balances with banks increased by $1.5 billion, or 333%, from the fourth quarter of 2022 to the fourth quarter of 2023. While the increased liquidity had a benign impact on net interest income, it has had an impact on our net interest margin. Loan yields were 6.32% during the fourth quarter of 2023 compared to 6.13% during the third quarter of 2023 and 5.32% during the fourth quarter of 2022. Investment yields were 3.08% during the fourth quarter of 2023 compared to 3.07% during the third quarter of 2023 and 2.49% during the fourth quarter of 2022. Average interest-bearing deposit rates were 4.06% during the fourth quarter of 2023, compared to 3.84% during the third quarter of 2023 and 1.70% during the fourth quarter of 2022. Average federal funds purchased rates were 5.49% during the fourth quarter of 2023, compared to 5.43% during the third quarter of 2023 and 3.75% during the fourth quarter of 2022. Average loans for the fourth quarter of 2023 were $11.60 billion, an increase of $35.5 million, or 1.2% annualized, from average loans of $11.56 billion for the third quarter of 2023, and an increase of $113.4 million, or 1.0%, from average loans of $11.49 billion for the fourth quarter of 2022. Average total deposits for the fourth quarter of 2023 were $13.23 billion, an increase of $549.1 million, or 17.2% annualized, over average total deposits of $12.68 billion for the third quarter of 2023, and an increase of $1.84 billion, or 16.2%, from average total deposits of $11.39 billion for the fourth quarter of 2022. Non-performing assets to total assets were 0.14% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.12% for the fourth quarter of 2022. Annualized net charge-offs to average loans were 0.09% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.06% fourth quarter of 2022. The allowance for credit losses as a percentage of total loans at December 31, 2023, September 30, 2023, and December 31, 2022, was 1.32%, 1.31%, and 1.25%, respectively. We recorded a $3.6 million provision for credit losses in the fourth quarter of 2023 compared to $4.3 million in the third quarter of 2023, and $7.1 million in the fourth quarter of 2022. Non-interest income increased $413,000, or 5.9%, to $7.4 million for the fourth quarter of 2023 from $7.0 million in the fourth quarter of 2022, and decreased $756,000, or 9.3%, on a linked quarter basis. Service charges on deposit accounts increased $315,000, or 16.9%, to $2.2 million from the fourth quarter of 2022 to the fourth quarter of 2023, and increased $18,000, or 0.8%, on a linked quarter basis. Mortgage banking revenue increased $278,000, or 54.1%, to $792,000 from the fourth quarter of 2022 to the fourth quarter of 2023, and decreased $33,000, or 4.0%, on a linked quarter basis. Net credit card revenue decreased $257,000, or 11.4%, to $2.0 million during the fourth quarter of 2023, compared to $2.3 million during the fourth quarter of 2022, and decreased $528,000, or 20.9%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income increased $39,000, or 2.4%, to $1.6 million during the fourth quarter of 2023, compared to $1.6 million during the fourth quarter of 2022, and decreased $179,000, or 9.8%, on a linked quarter basis. Other operating income for the fourth quarter of 2023 increased $38,000, or 5.2%, to $763,000 from $725,000 in the fourth quarter of 2022, and decreased $34,000, or 4.3%, on a linked quarter basis. We recognized $162,000 of income on an interest rate cap during the fourth quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $95,000, or 19.5%, to $585,000 for the fourth quarter of 2023 from $490,000 in the fourth quarter of 2022. Non-interest expense for the fourth quarter of 2023 increased $20.2 million, or 52.9%, to $58.3 million from $38.1 million in the fourth quarter of 2022, and increased $16.6 million, or 39.8%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2023 increased $3.8 million, or 19.7%, to $23.0 million from $19.2 million in the fourth quarter of 2022, and increased $2.9 million, or 14.7%, on a linked quarter basis. The number of FTE employees increased by 20 to 591 at December 31, 2023 compared to 571 at December 31, 2022, and increased by 23 from the end of the third quarter of 2023. Equipment and occupancy expense increased $597,000, or 18.3%, to $3.9 million in the fourth quarter of 2023, from $3.3 million in the fourth quarter of 2022, and increased $281,000, or 7.9% on a linked-quarter basis. The year-over-year increase was primarily attributed to new leases that began after the fourth quarter of 2022. Third party processing and other services expense decreased $329,000, or 4.0%, to $7.8 million in the fourth quarter of 2023, from $8.2 million in the fourth quarter of 2022, and increased $1.3 million, or 19.7%, on a linked-quarter basis. Professional services expense increased $495,000, or 53.7%, to $1.4 million in the fourth quarter of 2023, from $922,000 in the fourth quarter of 2022, and increased $152,000, or 12.0%, on a linked quarter basis. FDIC and other regulatory assessments increased $8.2 million to $9.5 million in the fourth quarter of 2023, from $1.3 million in the fourth quarter of 2022, and increased $7.2 million, or 305.3%, on a linked quarter basis. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023. Other operating expenses for the fourth quarter of 2023 increased $7.6 million, or 154.0%, to $12.6 million from $5.0 million in the fourth quarter of 2022, and increased $4.8 million, or 60.9%, on a linked-quarter basis. During the fourth quarter of 2023, an incremental expense related to tax credit investments of $3.3 million, associated with the tax benefit discussed below, contributed to the increase in other operating expenses. In addition, the following items, which management views as unusual, infrequent, and not reflective of future normal operating expenses, contributed to the increase in non-interest expense: the FDIC implemented a special assessment to recapitalize the Deposit Insurance Fund resulting in an expense of $7.2 million, an EDP contract termination and related capitalized cost write-offs of $1.1 million to other operating expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense to other operating expenses. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expense for 2023. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. The efficiency ratio was 55.23% during the fourth quarter of 2023 compared to 29.45% during the fourth quarter of 2022 and 38.64% during the third quarter of 2023. The adjusted efficiency ratio was 42.22%. Income tax expense decreased $11.2 million, or 68.6%, to $5.2 million in the fourth quarter of 2023, compared to $16.4 million in the fourth quarter of 2022. Our effective tax rate was 10.91% for the fourth quarter of 2023 compared to 19.49% for the fourth quarter of 2022. We recognized an aggregate of $6.7 million in credits during the fourth quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the fourth quarter of 2022. During the fourth quarter of 2023, $4.1 million of the recognized credits were related to the incremental expense for tax credit investments discussed above. We recognize 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 2023 and 2022 of $252,000 and $10,000, respectively. 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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida. Through the bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions. 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: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2023, 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 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 CONSOLIDATED STATEMENT OF INCOME Interest income $ 229,062 $ 213,206 $ 189,656 $ 181,322 $ 170,273 Interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Preferred stock dividends 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Earnings per share - basic $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Earnings per share - diluted $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 Average diluted shares outstanding 54,548,719 54,530,635 54,527,317 54,534,482 54,537,685 CONSOLIDATED BALANCE SHEET DATA Total assets $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Loans 11,658,829 11,641,130 11,604,894 11,629,802 11,687,968 Debt securities 1,882,847 1,878,701 2,048,227 1,646,937 1,678,936 Non-interest-bearing demand deposits 2,643,101 2,621,072 2,855,102 2,898,736 3,321,347 Total deposits 13,273,511 13,142,376 12,288,219 11,615,317 11,546,805 Borrowings 64,735 64,751 64,737 65,417 64,726 Stockholders' equity 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Shares outstanding 54,461,580 54,425,447 54,425,033 54,398,025 54,326,527 Book value per share $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Tangible book value per share (1) $ 26.20 $ 25.50 $ 24.80 $ 24.38 $ 23.64 SELECTED FINANCIAL RATIOS (Annualized) Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % Return on average assets 1.04 % 1.37 % 1.50 % 1.63 % 1.89 % Return on average common stockholders' equity 11.78 % 15.34 % 15.85 % 17.83 % 21.27 % Efficiency ratio 55.23 % 38.64 % 35.02 % 34.60 % 29.45 % Non-interest expense to average earning assets 1.47 % 1.10 % 1.11 % 1.15 % 1.10 % CAPITAL RATIOS (2) Common equity tier 1 capital to risk-weighted assets 10.91 % 10.69 % 10.37 % 10.01 % 9.55 % Tier 1 capital to risk-weighted assets 10.92 % 10.69 % 10.38 % 10.02 % 9.55 % Total capital to risk-weighted assets 12.45 % 12.25 % 11.94 % 11.54 % 11.03 % Tier 1 capital to average assets 9.12 % 9.35 % 9.83 % 9.49 % 9.29 % Tangible common equity to total tangible assets (1) 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % (1) This press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” (2) Regulatory capital ratios for the most recent period are preliminary. GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. Additionally, we experienced expenses for the termination of an EDP contract and related capitalized cost write-offs resulting in $1.1 million in expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expenses for 2023. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of 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 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. Three Months Ended December 31, 2023 Year Ended December 31, 2023 Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income - non-GAAP $ 49,891 $ 214,670 Net income available to common stockholders - GAAP $ 42,043 $ 206,791 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,860 $ 214,608 Diluted earnings per share - GAAP $ 0.77 $ 3.79 Adjustments: FDIC special assessment 0.13 0.13 Privilege tax expense 0.04 0.04 EDP contract termination expense 0.02 0.02 Tax on adjustments (0.05 ) (0.05 ) Adjusted diluted earnings per share - non-GAAP $ 0.91 $ 3.94 Return on average assets - GAAP 1.04 % 1.37 % Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,891 $ 214,670 Average assets - GAAP $ 16,122,146 $ 15,066,716 Adjusted return on average assets - non-GAAP 1.23 % 1.42 % Return on average common stockholders' equity - GAAP 11.78 % 15.13 % Net income available to common stockholders - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted diluted earnings per share - non-GAAP $ 49,891 $ 214,670 Average common stockholders' equity - GAAP $ 1,415,866 $ 1,366,708 Adjusted return on average common stockholders' equity non-GAAP 13.98 % 15.71 % Efficiency ratio 55.23 % 40.67 % Non-interest expense - GAAP $ 56,480 $ 176,273 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Adjusted non-interest expense $ 46,044 $ 165,837 Net interest income plus non-interest income - GAAP $ 109,066 $ 441,354 Adjusted efficiency ratio - non-GAAP 42.22 % 37.57 % At December 31, 2023 At September 30, 2023 At June 30, 2023 At March 31, 2023 At December 31, 2022 Book value per share - GAAP $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Total common stockholders' equity - GAAP 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Tangible common stockholders' equity - non-GAAP $ 1,426,790 $ 1,387,769 $ 1,349,856 $ 1,326,202 $ 1,284,281 Tangible book value per share - non-GAAP $ 26.22 $ 25.50 $ 24.80 $ 24.38 $ 23.64 Stockholders' equity to total assets - GAAP 8.93 % 8.73 % 9.05 % 9.20 % 8.89 % Total assets - GAAP $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Total tangible assets - non-GAAP $ 16,116,053 $ 16,030,717 $ 15,059,193 $ 14,552,944 $ 14,582,138 Tangible common equity to total tangible assets - non-GAAP 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 % Change ASSETS Cash and due from banks $ 123,430 $ 106,317 16 % Interest-bearing balances due from depository institutions 1,907,083 708,221 169 % Federal funds sold 100,575 1,515 6,539 % Cash and cash equivalents 2,131,088 816,053 161 % Available for sale debt securities, at fair value 900,183 644,815 40 % Held to maturity debt securities (fair value of $907,191 and $935,953, respectively) 982,664 1,034,121 (5 )% Restricted equity securities 10,226 7,734 32 % Mortgage loans held for sale 5,074 1,607 216 % Loans 11,658,829 11,687,968 - % Less allowance for credit losses (153,317 ) (146,297 ) 5 % Loans, net 11,505,512 11,541,671 - % Premises and equipment, net 59,324 59,850 (1 )% Goodwill 13,615 13,615 - % Other assets 521,982 476,287 10 % Total assets $ 16,129,668 $ 14,595,753 11 % LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Non-interest-bearing $ 2,643,101 $ 3,321,347 (20 )% Interest-bearing 10,630,410 8,225,458 29 % Total deposits 13,273,511 11,546,805 15 % Federal funds purchased 1,256,724 1,618,798 (22 )% Other borrowings 64,735 64,726 - % Other liabilities 94,293 67,528 40 % Total liabilities 14,689,263 13,297,857 10 % Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at December 31, 2023 and December 31, 2022 - - - % Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,461,580 shares issued and outstanding at December 31, 2023, and 54,326,527 shares issued and outstanding at December 31, 2022 54 54 - % Additional paid-in capital 232,605 229,693 1 % Retained earnings 1,254,841 1,109,902 13 % Accumulated other comprehensive loss (47,595 ) (42,253 ) 13 % Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 1,439,905 1,297,396 11 % Noncontrolling interest 500 500 - % Total stockholders' equity 1,440,405 1,297,896 11 % Total liabilities and stockholders' equity $ 16,129,668 $ 14,595,753 11 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 184,897 $ 153,924 $ 699,101 $ 499,691 Taxable securities 15,512 10,895 53,499 40,722 Nontaxable securities 12 27 65 137 Federal funds sold 1,018 818 2,844 1,556 Other interest and dividends 27,623 4,609 57,737 17,209 Total interest income 229,062 170,273 813,246 559,315 Interest expense: Deposits 108,155 33,471 331,740 59,396 Borrowed funds 19,220 14,418 70,569 29,027 Total interest expense 127,375 47,889 402,309 88,423 Net interest income 101,687 122,384 410,937 470,892 Provision for credit losses 3,582 7,135 18,715 37,607 Net interest income after provision for credit losses 98,105 115,249 392,222 433,285 Non-interest income: Service charges on deposit accounts 2,181 1,866 8,420 8,033 Mortgage banking 792 514 2,755 2,438 Credit card income 2,004 2,261 8,631 9,917 Securities losses - - - (6,168 ) Bank-owned life insurance income 1,639 1,600 7,574 6,478 Other operating income 763 725 3,037 12,661 Total non-interest income 7,379 6,966 30,417 33,359 Non-interest expense: Salaries and employee benefits 23,024 19,230 80,965 77,952 Equipment and occupancy expense 3,860 3,263 14,295 12,319 Third party processing and other services 7,841 8,170 27,872 27,333 Professional services 1,417 922 5,916 4,277 FDIC and other regulatory assessments 9,509 1,311 15,614 4,565 Other real estate owned expense 17 239 47 295 Other operating expense 12,590 4,957 33,342 31,075 Total non-interest expense 58,258 38,092 178,051 157,816 Income before income tax 47,226 84,123 244,588 308,828 Provision for income tax 5,152 16,399 37,735 57,324 Net income 42,074 67,724 206,853 251,504 Dividends on preferred stock 31 - 62 62 Net income available to common stockholders $ 42,043 $ 67,693 $ 206,791 $ 251,442 Basic earnings per common share $ 0.77 $ 1.25 $ 3.80 $ 4.63 Diluted earnings per common share $ 0.77 $ 1.24 $ 3.79 $ 4.61 LOANS BY TYPE (UNAUDITED) (In thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Commercial, financial, and agricultural $ 2,823,986 $ 2,890,535 $ 2,986,453 $ 3,081,926 $ 3,145,317 Real estate - construction 1,519,619 1,509,937 1,397,732 1,469,670 1,532,388 Real estate - mortgage: Owner-occupied commercial 2,257,163 2,237,684 2,294,002 2,243,436 2,199,280 1-4 family mortgage 1,249,938 1,170,099 1,167,238 1,138,645 1,146,831 Other mortgage 3,744,346 3,766,124 3,686,434 3,624,071 3,597,750 Subtotal: Real estate - mortgage 7,251,447 7,173,907 7,147,674 7,006,152 6,943,861 Consumer 63,777 66,751 73,035 72,054 66,402 Total loans $ 11,658,829 $ 11,641,130 $ 11,604,894 $ 11,629,802 $ 11,687,968 SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Allowance for credit losses: Beginning balance $ 152,247 $ 152,272 $ 148,965 $ 146,297 $ 140,967 Loans charged off: Commercial financial and agricultural 2,831 4,783 4,358 1,257 2,116 Real estate - construction 89 19 - - - Real estate - mortgage 14 - 131 26 - Consumer 231 341 111 390 200 Total charge offs 3,165 5,143 4,600 1,673 2,316 Recoveries: Commercial financial and agricultural 614 825 1,233 128 393 Real estate - construction - - - 3 - Real estate - mortgage - - - 1 - Consumer 39 11 21 11 118 Total recoveries 653 836 1,254 143 511 Net charge-offs 2,512 4,307 3,346 1,530 1,805 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Ending balance $ 153,317 $ 152,247 $ 152,272 $ 148,965 $ 146,297 Allowance for credit losses to total loans 1.32 % 1.31 % 1.31 % 1.28 % 1.25 % Allowance for credit losses to total average loans 1.32 % 1.31 % 1.31 % 1.28 % 1.27 % Net charge-offs to total average loans 0.09 % 0.15 % 0.11 % 0.05 % 0.06 % Provision for credit losses to total average loans 0.12 % 0.15 % 0.23 % 0.14 % 0.25 % Nonperforming assets: Nonaccrual loans $ 19,349 $ 20,912 $ 16,897 $ 13,157 $ 12,450 Loans 90+ days past due and accruing 2,184 1,692 5,947 4,683 5,391 Other real estate owned and repossessed assets 995 690 832 248 248 Total $ 22,528 $ 23,294 $ 23,676 $ 18,088 $ 18,089 Nonperforming loans to total loans 0.18 % 0.19 % 0.20 % 0.15 % 0.15 % Nonperforming assets to total assets 0.14 % 0.15 % 0.16 % 0.12 % 0.12 % Nonperforming assets to earning assets 0.14 % 0.16 % 0.16 % 0.13 % 0.13 % Allowance for credit losses to nonaccrual loans 795.17 % 731.74 % 901.18 % 1,132.24 % 1,175.08 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Interest income: Interest and fees on loans $ 184,897 $ 178,754 $ 171,718 $ 163,732 $ 153,924 Taxable securities 15,512 15,522 11,570 10,895 10,895 Nontaxable securities 12 15 17 21 27 Federal funds sold 1,018 985 227 614 818 Other interest and dividends 27,623 17,930 6,124 6,060 4,609 Total interest income 229,062 213,206 189,656 181,322 170,273 Interest expense: Deposits 108,155 95,901 71,971 55,713 33,471 Borrowed funds 19,220 17,607 16,434 17,308 14,418 Total interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income: Service charges on deposit accounts 2,181 2,163 2,142 1,934 1,866 Mortgage banking 792 825 696 442 514 Credit card income 2,004 2,532 2,406 1,689 2,261 Bank-owned life insurance income 1,639 1,818 2,496 1,621 1,600 Other operating income 763 797 842 635 725 Total non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense: Salaries and employee benefits 23,024 20,080 18,795 19,066 19,230 Equipment and occupancy expense 3,860 3,579 3,421 3,435 3,263 Third party processing and other services 7,841 6,549 6,198 7,284 8,170 Professional services 1,417 1,265 1,580 1,654 922 FDIC and other regulatory assessments 9,509 2,346 2,242 1,517 1,311 Other real estate owned expense 17 18 6 6 239 Other operating expense 12,590 7,826 6,224 6,702 4,957 Total non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Dividends on preferred stock 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Basic earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Diluted earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 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 $ 11,580,716 6.33 % $ 11,545,003 6.13 % $ 11,581,008 5.94 % $ 11,632,439 5.70 % $ 11,465,538 5.32 % Tax-exempt (2) 17,787 4.71 18,023 4.71 18,312 4.82 18,978 3.36 19,526 6.60 Total loans, net of unearned income 11,598,503 6.32 11,563,026 6.13 11,599,320 5.94 11,651,417 5.70 11,485,064 5.32 Mortgage loans held for sale 5,105 6.22 5,476 6.67 5,014 5.12 1,522 6.40 1,515 3.67 Debt securities: Taxable 2,007,636 3.08 2,029,995 3.07 1,757,397 2.64 1,724,523 2.54 1,755,764 2.49 Tax-exempt (2) 1,739 2.30 2,408 2.49 2,960 2.43 3,781 2.43 4,863 2.39 Total securities (3) 2,009,375 3.08 2,032,403 3.07 1,760,357 2.64 1,728,304 2.54 1,760,627 2.49 Federal funds sold 72,178 5.60 74,424 5.25 15,908 5.72 50,526 4.93 82,656 3.93 Restricted equity securities 10,216 8.74 8,471 5.90 8,834 6.08 9,919 7.69 7,724 7.35 Interest-bearing balances with banks 1,981,411 5.49 1,293,243 5.45 460,893 5.21 510,021 4.67 458,115 3.83 Total interest-earning assets $ 15,676,788 5.80 $ 14,977,043 5.65 $ 13,850,326 5.49 $ 13,951,709 5.27 $ 13,795,701 4.90 Non-interest-earning assets: Cash and due from banks 101,741 111,566 101,188 106,448 113,823 Net premises and equipment 60,110 60,121 60,499 60,617 60,323 Allowance for credit losses, accrued interest and other assets 283,435 283,357 279,860 279,775 273,964 Total assets $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 2,245,431 2.91 % $ 2,153,973 2.72 % $ 1,628,936 1.69 % $ 1,675,355 1.25 % $ 1,763,622 0.73 % Savings 107,035 1.72 112,814 1.61 122,050 1.38 134,671 0.94 141,163 0.64 Money market 7,106,190 4.44 6,538,426 4.24 5,971,639 3.78 5,756,642 3.17 5,047,133 2.07 Time deposits 1,111,350 4.18 1,093,388 3.89 983,582 3.44 850,639 2.51 860,336 1.69 Total interest-bearing deposits 10,570,006 4.06 9,898,601 3.84 8,706,207 3.32 8,417,307 2.68 7,812,254 1.70 Federal funds purchased 1,338,110 5.49 1,237,721 5.43 1,191,582 5.14 1,389,217 4.67 1,453,445 3.75 Other borrowings 64,734 4.23 64,734 4.23 100,998 4.62 114,726 4.61 64,726 4.23 Total interest-bearing liabilities $ 11,972,850 4.22 % $ 11,201,056 4.02 % $ 9,998,787 3.55 % $ 9,921,250 2.98 % $ 9,330,425 2.04 % Non-interest-bearing liabilities: Non-interest-bearing demand deposits 2,656,504 2,778,858 2,876,225 3,086,774 3,572,956 Other liabilities 76,651 72,924 64,917 72,121 77,544 Stockholders' equity 1,475,366 1,437,766 1,399,578 1,358,587 1,307,553 Accumulated other comprehensive loss (59,297 ) (58,517 ) (47,634 ) (40,183 ) (44,667 ) Total liabilities and stockholders' equity $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Net interest spread 1.58 % 1.63 % 1.94 % 2.29 % 2.86 % Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % (1) Average loans include nonaccrual loans in all periods. Loan fees of $4,175, $2,996, $3,318 $3,263, and $3,630 are included in interest income in the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively. (2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. (3) Unrealized losses on debt securities of $(84,647), $(83,815), $(69,498), $(59,738), and $(62,568) for the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively, are excluded from the yield calculation. View source version on businesswire.com: https://www.businesswire.com/news/home/20240129131808/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 ended December 31, 2023. Fourth Quarter 2023 Highlights: Entering the Memphis, Tennessee market with the hiring of Joel Smith as President. Deposits grew 15% year-over-year and new deposit accounts opened increased 12% year-over-year. Diluted earnings per share of $0.77 for the quarter. Adjusted* diluted earnings per share of $0.91 for the quarter. $2.1 billion in cash on hand with no FHLB advances or brokered deposits. Book value per share of $26.45, up 10.7% from the fourth quarter of 2022 and 10.8% annualized, from the third quarter of 2023. Cash dividend increased from $0.28 per share to $0.30 per share, a 7% increase. Credit quality continues to be strong with non-performing assets to total assets of 0.14%. Consolidated Common Equity Tier 1 capital to risk-weighted assets increased from 9.95% to 10.91% year-over-year. Tom Broughton, Chairman, President, and CEO, said, “We are pleased to announce our entrance into the Memphis, Tennessee market with the addition of Joel Smith, who is an outstanding banker with a commercial and industrial banking background.” Bud Foshee, CFO, said, “We are well-positioned for growth in 2024, with strong liquidity in what we believe to be the best footprint in the United States.” * This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” FINANCIAL SUMMARY (UNAUDITED) (in Thousands except share and per share amounts) Period Ending December 31, 2023 Period Ending September 30, 2023 % Change From Period Ending September 30, 2023 to Period Ending December 31, 2023 Period Ending December 31, 2022 % Change From Period Ending December 31, 2022 to Period Ending December 31, 2023 QUARTERLY OPERATING RESULTS Net Income $ 42,074 $ 53,340 (21.1 )% $ 67,724 (37.9 )% Net Income Available to Common Stockholders $ 42,043 $ 53,340 (21.2 )% $ 67,693 (37.9 )% Diluted Earnings Per Share $ 0.77 $ 0.98 (21.3 )% $ 1.24 (38.0 )% Return on Average Assets 1.04 % 1.37 % 1.89 % Return on Average Common Stockholders' Equity 11.78 % 15.34 % 21.27 % Average Diluted Shares Outstanding 54,548,719 54,530,635 54,537,685 Adjusted Net Income, net of tax* $ 49,891 $ 53,340 (6.5 )% $ 67,724 (26.3 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 49,860 $ 53,340 (6.5 )% $ 67,693 (26.3 )% Adjusted Diluted Earnings Per Share, net of tax* $ 0.91 $ 0.98 (6.6 )% $ 1.24 (26.4 )% Adjusted Return on Average Assets, net of tax* 1.23 % 1.37 % 1.89 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 13.98 % 15.34 % 21.27 % YEAR-TO-DATE OPERATING RESULTS Net Income $ 206,853 $ 251,504 (17.8 )% Net Income Available to Common Stockholders $ 206,791 $ 251,442 (17.8 )% Diluted Earnings Per Share $ 3.79 $ 4.61 (17.8 )% Return on Average Assets 1.37 % 1.71 % Return on Average Common Stockholders' Equity 15.13 % 20.73 % Average Diluted Shares Outstanding 54,535,315 54,534,774 Adjusted Net Income, net of tax* $ 214,670 $ 251,504 (14.6 )% Adjusted Net Income Available to Common Stockholders, net of tax* $ 214,608 $ 251,442 (14.6 )% Adjusted Diluted Earnings Per Share, net of tax* $ 3.94 $ 4.61 Adjusted Return on Average Assets, net of tax* 1.42 % 1.71 % Adjusted Return on Average Common Stockholders' Equity, net of tax* 15.71 % 20.73 % BALANCE SHEET Total Assets $ 16,129,668 $ 16,044,332 0.5 % $ 14,595,753 10.5 % Loans 11,658,829 11,641,130 0.2 % 11,687,968 (0.2 )% Non-interest-bearing Demand Deposits 2,643,101 2,621,072 0.8 % 3,321,347 (20.4 )% Total Deposits 13,273,511 13,142,376 1.0 % 11,546,805 15.0 % Stockholders' Equity 1,440,405 1,401,384 2.8 % 1,297,896 11.0 % DETAILED FINANCIALS ServisFirst Bancshares, Inc. reported net income of $42.1 million and net income available to common stockholders of $42.0 million for the quarter ended December 31, 2023, compared to net income and net income available to common stockholders of $53.3 million for the third quarter of 2023 and net income and net income available to common stockholders of $67.7 million for the fourth quarter of 2022. Basic and diluted earnings per common share were both $0.77 in the fourth quarter of 2023, compared to $0.98 for both in the third quarter of 2023 and $1.25 and $1.24, respectively, in the fourth quarter of 2022. Annualized return on average assets was 1.04% and annualized return on average common stockholders’ equity was 11.78% for the fourth quarter of 2023, compared to 1.89% and 21.27%, respectively, for the fourth quarter of 2022. Net interest income was $101.7 million for the fourth quarter of 2023, compared to $99.7 million for the third quarter of 2023 and $122.4 million for the fourth quarter of 2022. The net interest margin in the fourth quarter of 2023 was 2.57% compared to 2.64% in the third quarter of 2023 and 3.52% in the fourth quarter of 2022. The Company significantly increased deposits and liquidity in the form of interest-bearing balances with banks after the stress in the banking system in March. Average interest-bearing balances with banks increased by $1.5 billion, or 333%, from the fourth quarter of 2022 to the fourth quarter of 2023. While the increased liquidity had a benign impact on net interest income, it has had an impact on our net interest margin. Loan yields were 6.32% during the fourth quarter of 2023 compared to 6.13% during the third quarter of 2023 and 5.32% during the fourth quarter of 2022. Investment yields were 3.08% during the fourth quarter of 2023 compared to 3.07% during the third quarter of 2023 and 2.49% during the fourth quarter of 2022. Average interest-bearing deposit rates were 4.06% during the fourth quarter of 2023, compared to 3.84% during the third quarter of 2023 and 1.70% during the fourth quarter of 2022. Average federal funds purchased rates were 5.49% during the fourth quarter of 2023, compared to 5.43% during the third quarter of 2023 and 3.75% during the fourth quarter of 2022. Average loans for the fourth quarter of 2023 were $11.60 billion, an increase of $35.5 million, or 1.2% annualized, from average loans of $11.56 billion for the third quarter of 2023, and an increase of $113.4 million, or 1.0%, from average loans of $11.49 billion for the fourth quarter of 2022. Average total deposits for the fourth quarter of 2023 were $13.23 billion, an increase of $549.1 million, or 17.2% annualized, over average total deposits of $12.68 billion for the third quarter of 2023, and an increase of $1.84 billion, or 16.2%, from average total deposits of $11.39 billion for the fourth quarter of 2022. Non-performing assets to total assets were 0.14% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.12% for the fourth quarter of 2022. Annualized net charge-offs to average loans were 0.09% for the fourth quarter of 2023, compared to 0.15% for the third quarter of 2023 and 0.06% fourth quarter of 2022. The allowance for credit losses as a percentage of total loans at December 31, 2023, September 30, 2023, and December 31, 2022, was 1.32%, 1.31%, and 1.25%, respectively. We recorded a $3.6 million provision for credit losses in the fourth quarter of 2023 compared to $4.3 million in the third quarter of 2023, and $7.1 million in the fourth quarter of 2022. Non-interest income increased $413,000, or 5.9%, to $7.4 million for the fourth quarter of 2023 from $7.0 million in the fourth quarter of 2022, and decreased $756,000, or 9.3%, on a linked quarter basis. Service charges on deposit accounts increased $315,000, or 16.9%, to $2.2 million from the fourth quarter of 2022 to the fourth quarter of 2023, and increased $18,000, or 0.8%, on a linked quarter basis. Mortgage banking revenue increased $278,000, or 54.1%, to $792,000 from the fourth quarter of 2022 to the fourth quarter of 2023, and decreased $33,000, or 4.0%, on a linked quarter basis. Net credit card revenue decreased $257,000, or 11.4%, to $2.0 million during the fourth quarter of 2023, compared to $2.3 million during the fourth quarter of 2022, and decreased $528,000, or 20.9%, on a linked quarter basis. Bank-owned life insurance (“BOLI”) income increased $39,000, or 2.4%, to $1.6 million during the fourth quarter of 2023, compared to $1.6 million during the fourth quarter of 2022, and decreased $179,000, or 9.8%, on a linked quarter basis. Other operating income for the fourth quarter of 2023 increased $38,000, or 5.2%, to $763,000 from $725,000 in the fourth quarter of 2022, and decreased $34,000, or 4.3%, on a linked quarter basis. We recognized $162,000 of income on an interest rate cap during the fourth quarter of 2022. The interest rate cap matured during the second quarter of 2023. Merchant service revenue increased $95,000, or 19.5%, to $585,000 for the fourth quarter of 2023 from $490,000 in the fourth quarter of 2022. Non-interest expense for the fourth quarter of 2023 increased $20.2 million, or 52.9%, to $58.3 million from $38.1 million in the fourth quarter of 2022, and increased $16.6 million, or 39.8%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2023 increased $3.8 million, or 19.7%, to $23.0 million from $19.2 million in the fourth quarter of 2022, and increased $2.9 million, or 14.7%, on a linked quarter basis. The number of FTE employees increased by 20 to 591 at December 31, 2023 compared to 571 at December 31, 2022, and increased by 23 from the end of the third quarter of 2023. Equipment and occupancy expense increased $597,000, or 18.3%, to $3.9 million in the fourth quarter of 2023, from $3.3 million in the fourth quarter of 2022, and increased $281,000, or 7.9% on a linked-quarter basis. The year-over-year increase was primarily attributed to new leases that began after the fourth quarter of 2022. Third party processing and other services expense decreased $329,000, or 4.0%, to $7.8 million in the fourth quarter of 2023, from $8.2 million in the fourth quarter of 2022, and increased $1.3 million, or 19.7%, on a linked-quarter basis. Professional services expense increased $495,000, or 53.7%, to $1.4 million in the fourth quarter of 2023, from $922,000 in the fourth quarter of 2022, and increased $152,000, or 12.0%, on a linked quarter basis. FDIC and other regulatory assessments increased $8.2 million to $9.5 million in the fourth quarter of 2023, from $1.3 million in the fourth quarter of 2022, and increased $7.2 million, or 305.3%, on a linked quarter basis. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023. Other operating expenses for the fourth quarter of 2023 increased $7.6 million, or 154.0%, to $12.6 million from $5.0 million in the fourth quarter of 2022, and increased $4.8 million, or 60.9%, on a linked-quarter basis. During the fourth quarter of 2023, an incremental expense related to tax credit investments of $3.3 million, associated with the tax benefit discussed below, contributed to the increase in other operating expenses. In addition, the following items, which management views as unusual, infrequent, and not reflective of future normal operating expenses, contributed to the increase in non-interest expense: the FDIC implemented a special assessment to recapitalize the Deposit Insurance Fund resulting in an expense of $7.2 million, an EDP contract termination and related capitalized cost write-offs of $1.1 million to other operating expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense to other operating expenses. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expense for 2023. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for more discussion of these expenses. The efficiency ratio was 55.23% during the fourth quarter of 2023 compared to 29.45% during the fourth quarter of 2022 and 38.64% during the third quarter of 2023. The adjusted efficiency ratio was 42.22%. Income tax expense decreased $11.2 million, or 68.6%, to $5.2 million in the fourth quarter of 2023, compared to $16.4 million in the fourth quarter of 2022. Our effective tax rate was 10.91% for the fourth quarter of 2023 compared to 19.49% for the fourth quarter of 2022. We recognized an aggregate of $6.7 million in credits during the fourth quarter of 2023 related to investments in tax credit partnerships, compared to $3.1 million during the fourth quarter of 2022. During the fourth quarter of 2023, $4.1 million of the recognized credits were related to the incremental expense for tax credit investments discussed above. We recognize 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 2023 and 2022 of $252,000 and $10,000, respectively. 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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida. Through the bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions. 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: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2023, 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 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 CONSOLIDATED STATEMENT OF INCOME Interest income $ 229,062 $ 213,206 $ 189,656 $ 181,322 $ 170,273 Interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Preferred stock dividends 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Earnings per share - basic $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Earnings per share - diluted $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 Average diluted shares outstanding 54,548,719 54,530,635 54,527,317 54,534,482 54,537,685 CONSOLIDATED BALANCE SHEET DATA Total assets $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Loans 11,658,829 11,641,130 11,604,894 11,629,802 11,687,968 Debt securities 1,882,847 1,878,701 2,048,227 1,646,937 1,678,936 Non-interest-bearing demand deposits 2,643,101 2,621,072 2,855,102 2,898,736 3,321,347 Total deposits 13,273,511 13,142,376 12,288,219 11,615,317 11,546,805 Borrowings 64,735 64,751 64,737 65,417 64,726 Stockholders' equity 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Shares outstanding 54,461,580 54,425,447 54,425,033 54,398,025 54,326,527 Book value per share $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Tangible book value per share (1) $ 26.20 $ 25.50 $ 24.80 $ 24.38 $ 23.64 SELECTED FINANCIAL RATIOS (Annualized) Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % Return on average assets 1.04 % 1.37 % 1.50 % 1.63 % 1.89 % Return on average common stockholders' equity 11.78 % 15.34 % 15.85 % 17.83 % 21.27 % Efficiency ratio 55.23 % 38.64 % 35.02 % 34.60 % 29.45 % Non-interest expense to average earning assets 1.47 % 1.10 % 1.11 % 1.15 % 1.10 % CAPITAL RATIOS (2) Common equity tier 1 capital to risk-weighted assets 10.91 % 10.69 % 10.37 % 10.01 % 9.55 % Tier 1 capital to risk-weighted assets 10.92 % 10.69 % 10.38 % 10.02 % 9.55 % Total capital to risk-weighted assets 12.45 % 12.25 % 11.94 % 11.54 % 11.03 % Tier 1 capital to average assets 9.12 % 9.35 % 9.83 % 9.49 % 9.29 % Tangible common equity to total tangible assets (1) 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % (1) This press release contains certain non-GAAP financial measures. Please see “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures.” (2) Regulatory capital ratios for the most recent period are preliminary. GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio. During the fourth quarter of 2023, we recorded a one-time expense of $7.2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. Additionally, we experienced expenses for the termination of an EDP contract and related capitalized cost write-offs resulting in $1.1 million in expenses, and an adjustment to a privilege tax accrual resulting in a $2.2 million expense. The EDP contract termination costs were related to a planned systems conversion that was canceled. We determined the benefits to our clients were less than expected and the disruption outweighed the benefits. We can continue to provide best-in-class products with our current service provider. The adjustment to the privilege tax accrual was due to an under-accrual in previous years, and the correction resulted in duplicate expenses for 2023. These expenses are unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders’ equity, and adjusted efficiency ratio excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of 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 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. Three Months Ended December 31, 2023 Year Ended December 31, 2023 Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income - non-GAAP $ 49,891 $ 214,670 Net income available to common stockholders - GAAP $ 42,043 $ 206,791 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,860 $ 214,608 Diluted earnings per share - GAAP $ 0.77 $ 3.79 Adjustments: FDIC special assessment 0.13 0.13 Privilege tax expense 0.04 0.04 EDP contract termination expense 0.02 0.02 Tax on adjustments (0.05 ) (0.05 ) Adjusted diluted earnings per share - non-GAAP $ 0.91 $ 3.94 Return on average assets - GAAP 1.04 % 1.37 % Net income - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted net income available to common stockholders -non-GAAP $ 49,891 $ 214,670 Average assets - GAAP $ 16,122,146 $ 15,066,716 Adjusted return on average assets - non-GAAP 1.23 % 1.42 % Return on average common stockholders' equity - GAAP 11.78 % 15.13 % Net income available to common stockholders - GAAP $ 42,074 $ 206,853 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Tax on adjustments (2,619 ) (2,619 ) Adjusted diluted earnings per share - non-GAAP $ 49,891 $ 214,670 Average common stockholders' equity - GAAP $ 1,415,866 $ 1,366,708 Adjusted return on average common stockholders' equity non-GAAP 13.98 % 15.71 % Efficiency ratio 55.23 % 40.67 % Non-interest expense - GAAP $ 56,480 $ 176,273 Adjustments: FDIC special assessment 7,152 7,152 Privilege tax expense 2,150 2,150 EDP contract termination expense 1,134 1,134 Adjusted non-interest expense $ 46,044 $ 165,837 Net interest income plus non-interest income - GAAP $ 109,066 $ 441,354 Adjusted efficiency ratio - non-GAAP 42.22 % 37.57 % At December 31, 2023 At September 30, 2023 At June 30, 2023 At March 31, 2023 At December 31, 2022 Book value per share - GAAP $ 26.45 $ 25.75 $ 25.05 $ 24.63 $ 23.89 Total common stockholders' equity - GAAP 1,440,405 1,401,384 1,363,471 1,339,817 1,297,896 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Tangible common stockholders' equity - non-GAAP $ 1,426,790 $ 1,387,769 $ 1,349,856 $ 1,326,202 $ 1,284,281 Tangible book value per share - non-GAAP $ 26.22 $ 25.50 $ 24.80 $ 24.38 $ 23.64 Stockholders' equity to total assets - GAAP 8.93 % 8.73 % 9.05 % 9.20 % 8.89 % Total assets - GAAP $ 16,129,668 $ 16,044,332 $ 15,072,808 $ 14,566,559 $ 14,595,753 Adjustment for Goodwill (13,615 ) (13,615 ) (13,615 ) (13,615 ) (13,615 ) Total tangible assets - non-GAAP $ 16,116,053 $ 16,030,717 $ 15,059,193 $ 14,552,944 $ 14,582,138 Tangible common equity to total tangible assets - non-GAAP 8.85 % 8.66 % 8.96 % 9.11 % 8.81 % CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 31, 2023 December 31, 2022 % Change ASSETS Cash and due from banks $ 123,430 $ 106,317 16 % Interest-bearing balances due from depository institutions 1,907,083 708,221 169 % Federal funds sold 100,575 1,515 6,539 % Cash and cash equivalents 2,131,088 816,053 161 % Available for sale debt securities, at fair value 900,183 644,815 40 % Held to maturity debt securities (fair value of $907,191 and $935,953, respectively) 982,664 1,034,121 (5 )% Restricted equity securities 10,226 7,734 32 % Mortgage loans held for sale 5,074 1,607 216 % Loans 11,658,829 11,687,968 - % Less allowance for credit losses (153,317 ) (146,297 ) 5 % Loans, net 11,505,512 11,541,671 - % Premises and equipment, net 59,324 59,850 (1 )% Goodwill 13,615 13,615 - % Other assets 521,982 476,287 10 % Total assets $ 16,129,668 $ 14,595,753 11 % LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Non-interest-bearing $ 2,643,101 $ 3,321,347 (20 )% Interest-bearing 10,630,410 8,225,458 29 % Total deposits 13,273,511 11,546,805 15 % Federal funds purchased 1,256,724 1,618,798 (22 )% Other borrowings 64,735 64,726 - % Other liabilities 94,293 67,528 40 % Total liabilities 14,689,263 13,297,857 10 % Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at December 31, 2023 and December 31, 2022 - - - % Common stock, par value $0.001 per share; 200,000,000 shares authorized; 54,461,580 shares issued and outstanding at December 31, 2023, and 54,326,527 shares issued and outstanding at December 31, 2022 54 54 - % Additional paid-in capital 232,605 229,693 1 % Retained earnings 1,254,841 1,109,902 13 % Accumulated other comprehensive loss (47,595 ) (42,253 ) 13 % Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 1,439,905 1,297,396 11 % Noncontrolling interest 500 500 - % Total stockholders' equity 1,440,405 1,297,896 11 % Total liabilities and stockholders' equity $ 16,129,668 $ 14,595,753 11 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 184,897 $ 153,924 $ 699,101 $ 499,691 Taxable securities 15,512 10,895 53,499 40,722 Nontaxable securities 12 27 65 137 Federal funds sold 1,018 818 2,844 1,556 Other interest and dividends 27,623 4,609 57,737 17,209 Total interest income 229,062 170,273 813,246 559,315 Interest expense: Deposits 108,155 33,471 331,740 59,396 Borrowed funds 19,220 14,418 70,569 29,027 Total interest expense 127,375 47,889 402,309 88,423 Net interest income 101,687 122,384 410,937 470,892 Provision for credit losses 3,582 7,135 18,715 37,607 Net interest income after provision for credit losses 98,105 115,249 392,222 433,285 Non-interest income: Service charges on deposit accounts 2,181 1,866 8,420 8,033 Mortgage banking 792 514 2,755 2,438 Credit card income 2,004 2,261 8,631 9,917 Securities losses - - - (6,168 ) Bank-owned life insurance income 1,639 1,600 7,574 6,478 Other operating income 763 725 3,037 12,661 Total non-interest income 7,379 6,966 30,417 33,359 Non-interest expense: Salaries and employee benefits 23,024 19,230 80,965 77,952 Equipment and occupancy expense 3,860 3,263 14,295 12,319 Third party processing and other services 7,841 8,170 27,872 27,333 Professional services 1,417 922 5,916 4,277 FDIC and other regulatory assessments 9,509 1,311 15,614 4,565 Other real estate owned expense 17 239 47 295 Other operating expense 12,590 4,957 33,342 31,075 Total non-interest expense 58,258 38,092 178,051 157,816 Income before income tax 47,226 84,123 244,588 308,828 Provision for income tax 5,152 16,399 37,735 57,324 Net income 42,074 67,724 206,853 251,504 Dividends on preferred stock 31 - 62 62 Net income available to common stockholders $ 42,043 $ 67,693 $ 206,791 $ 251,442 Basic earnings per common share $ 0.77 $ 1.25 $ 3.80 $ 4.63 Diluted earnings per common share $ 0.77 $ 1.24 $ 3.79 $ 4.61 LOANS BY TYPE (UNAUDITED) (In thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Commercial, financial, and agricultural $ 2,823,986 $ 2,890,535 $ 2,986,453 $ 3,081,926 $ 3,145,317 Real estate - construction 1,519,619 1,509,937 1,397,732 1,469,670 1,532,388 Real estate - mortgage: Owner-occupied commercial 2,257,163 2,237,684 2,294,002 2,243,436 2,199,280 1-4 family mortgage 1,249,938 1,170,099 1,167,238 1,138,645 1,146,831 Other mortgage 3,744,346 3,766,124 3,686,434 3,624,071 3,597,750 Subtotal: Real estate - mortgage 7,251,447 7,173,907 7,147,674 7,006,152 6,943,861 Consumer 63,777 66,751 73,035 72,054 66,402 Total loans $ 11,658,829 $ 11,641,130 $ 11,604,894 $ 11,629,802 $ 11,687,968 SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED) (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Allowance for credit losses: Beginning balance $ 152,247 $ 152,272 $ 148,965 $ 146,297 $ 140,967 Loans charged off: Commercial financial and agricultural 2,831 4,783 4,358 1,257 2,116 Real estate - construction 89 19 - - - Real estate - mortgage 14 - 131 26 - Consumer 231 341 111 390 200 Total charge offs 3,165 5,143 4,600 1,673 2,316 Recoveries: Commercial financial and agricultural 614 825 1,233 128 393 Real estate - construction - - - 3 - Real estate - mortgage - - - 1 - Consumer 39 11 21 11 118 Total recoveries 653 836 1,254 143 511 Net charge-offs 2,512 4,307 3,346 1,530 1,805 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Ending balance $ 153,317 $ 152,247 $ 152,272 $ 148,965 $ 146,297 Allowance for credit losses to total loans 1.32 % 1.31 % 1.31 % 1.28 % 1.25 % Allowance for credit losses to total average loans 1.32 % 1.31 % 1.31 % 1.28 % 1.27 % Net charge-offs to total average loans 0.09 % 0.15 % 0.11 % 0.05 % 0.06 % Provision for credit losses to total average loans 0.12 % 0.15 % 0.23 % 0.14 % 0.25 % Nonperforming assets: Nonaccrual loans $ 19,349 $ 20,912 $ 16,897 $ 13,157 $ 12,450 Loans 90+ days past due and accruing 2,184 1,692 5,947 4,683 5,391 Other real estate owned and repossessed assets 995 690 832 248 248 Total $ 22,528 $ 23,294 $ 23,676 $ 18,088 $ 18,089 Nonperforming loans to total loans 0.18 % 0.19 % 0.20 % 0.15 % 0.15 % Nonperforming assets to total assets 0.14 % 0.15 % 0.16 % 0.12 % 0.12 % Nonperforming assets to earning assets 0.14 % 0.16 % 0.16 % 0.13 % 0.13 % Allowance for credit losses to nonaccrual loans 795.17 % 731.74 % 901.18 % 1,132.24 % 1,175.08 % CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 Interest income: Interest and fees on loans $ 184,897 $ 178,754 $ 171,718 $ 163,732 $ 153,924 Taxable securities 15,512 15,522 11,570 10,895 10,895 Nontaxable securities 12 15 17 21 27 Federal funds sold 1,018 985 227 614 818 Other interest and dividends 27,623 17,930 6,124 6,060 4,609 Total interest income 229,062 213,206 189,656 181,322 170,273 Interest expense: Deposits 108,155 95,901 71,971 55,713 33,471 Borrowed funds 19,220 17,607 16,434 17,308 14,418 Total interest expense 127,375 113,508 88,405 73,021 47,889 Net interest income 101,687 99,698 101,251 108,301 122,384 Provision for credit losses 3,582 4,282 6,654 4,197 7,135 Net interest income after provision for credit losses 98,105 95,416 94,597 104,104 115,249 Non-interest income: Service charges on deposit accounts 2,181 2,163 2,142 1,934 1,866 Mortgage banking 792 825 696 442 514 Credit card income 2,004 2,532 2,406 1,689 2,261 Bank-owned life insurance income 1,639 1,818 2,496 1,621 1,600 Other operating income 763 797 842 635 725 Total non-interest income 7,379 8,135 8,582 6,321 6,966 Non-interest expense: Salaries and employee benefits 23,024 20,080 18,795 19,066 19,230 Equipment and occupancy expense 3,860 3,579 3,421 3,435 3,263 Third party processing and other services 7,841 6,549 6,198 7,284 8,170 Professional services 1,417 1,265 1,580 1,654 922 FDIC and other regulatory assessments 9,509 2,346 2,242 1,517 1,311 Other real estate owned expense 17 18 6 6 239 Other operating expense 12,590 7,826 6,224 6,702 4,957 Total non-interest expense 58,258 41,663 38,466 39,664 38,092 Income before income tax 47,226 61,888 64,713 70,761 84,123 Provision for income tax 5,152 8,548 11,245 12,790 16,399 Net income 42,074 53,340 53,468 57,971 67,724 Dividends on preferred stock 31 - 31 - 31 Net income available to common stockholders $ 42,043 $ 53,340 $ 53,437 $ 57,971 $ 67,693 Basic earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.07 $ 1.25 Diluted earnings per common share $ 0.77 $ 0.98 $ 0.98 $ 1.06 $ 1.24 AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 4th Quarter 2023 3rd Quarter 2023 2nd Quarter 2023 1st Quarter 2023 4th Quarter 2022 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 $ 11,580,716 6.33 % $ 11,545,003 6.13 % $ 11,581,008 5.94 % $ 11,632,439 5.70 % $ 11,465,538 5.32 % Tax-exempt (2) 17,787 4.71 18,023 4.71 18,312 4.82 18,978 3.36 19,526 6.60 Total loans, net of unearned income 11,598,503 6.32 11,563,026 6.13 11,599,320 5.94 11,651,417 5.70 11,485,064 5.32 Mortgage loans held for sale 5,105 6.22 5,476 6.67 5,014 5.12 1,522 6.40 1,515 3.67 Debt securities: Taxable 2,007,636 3.08 2,029,995 3.07 1,757,397 2.64 1,724,523 2.54 1,755,764 2.49 Tax-exempt (2) 1,739 2.30 2,408 2.49 2,960 2.43 3,781 2.43 4,863 2.39 Total securities (3) 2,009,375 3.08 2,032,403 3.07 1,760,357 2.64 1,728,304 2.54 1,760,627 2.49 Federal funds sold 72,178 5.60 74,424 5.25 15,908 5.72 50,526 4.93 82,656 3.93 Restricted equity securities 10,216 8.74 8,471 5.90 8,834 6.08 9,919 7.69 7,724 7.35 Interest-bearing balances with banks 1,981,411 5.49 1,293,243 5.45 460,893 5.21 510,021 4.67 458,115 3.83 Total interest-earning assets $ 15,676,788 5.80 $ 14,977,043 5.65 $ 13,850,326 5.49 $ 13,951,709 5.27 $ 13,795,701 4.90 Non-interest-earning assets: Cash and due from banks 101,741 111,566 101,188 106,448 113,823 Net premises and equipment 60,110 60,121 60,499 60,617 60,323 Allowance for credit losses, accrued interest and other assets 283,435 283,357 279,860 279,775 273,964 Total assets $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 2,245,431 2.91 % $ 2,153,973 2.72 % $ 1,628,936 1.69 % $ 1,675,355 1.25 % $ 1,763,622 0.73 % Savings 107,035 1.72 112,814 1.61 122,050 1.38 134,671 0.94 141,163 0.64 Money market 7,106,190 4.44 6,538,426 4.24 5,971,639 3.78 5,756,642 3.17 5,047,133 2.07 Time deposits 1,111,350 4.18 1,093,388 3.89 983,582 3.44 850,639 2.51 860,336 1.69 Total interest-bearing deposits 10,570,006 4.06 9,898,601 3.84 8,706,207 3.32 8,417,307 2.68 7,812,254 1.70 Federal funds purchased 1,338,110 5.49 1,237,721 5.43 1,191,582 5.14 1,389,217 4.67 1,453,445 3.75 Other borrowings 64,734 4.23 64,734 4.23 100,998 4.62 114,726 4.61 64,726 4.23 Total interest-bearing liabilities $ 11,972,850 4.22 % $ 11,201,056 4.02 % $ 9,998,787 3.55 % $ 9,921,250 2.98 % $ 9,330,425 2.04 % Non-interest-bearing liabilities: Non-interest-bearing demand deposits 2,656,504 2,778,858 2,876,225 3,086,774 3,572,956 Other liabilities 76,651 72,924 64,917 72,121 77,544 Stockholders' equity 1,475,366 1,437,766 1,399,578 1,358,587 1,307,553 Accumulated other comprehensive loss (59,297 ) (58,517 ) (47,634 ) (40,183 ) (44,667 ) Total liabilities and stockholders' equity $ 16,122,074 $ 15,432,087 $ 14,291,873 $ 14,398,549 $ 14,243,811 Net interest spread 1.58 % 1.63 % 1.94 % 2.29 % 2.86 % Net interest margin 2.57 % 2.64 % 2.93 % 3.15 % 3.52 % (1) Average loans include nonaccrual loans in all periods. Loan fees of $4,175, $2,996, $3,318 $3,263, and $3,630 are included in interest income in the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively. (2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. (3) Unrealized losses on debt securities of $(84,647), $(83,815), $(69,498), $(59,738), and $(62,568) for the fourth quarter of 2023, third quarter of 2023, second quarter of 2023, first quarter of 2023, and fourth quarter of 2022, respectively, are excluded from the yield calculation. View source version on businesswire.com: https://www.businesswire.com/news/home/20240129131808/en/