SERVISFIRST BANCSHARES, INC. BIRMINGHAM, Ala., Jan. 30, 2017 /PRNewswire/ -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2016.
FOURTH QUARTER AND YEAR ENDED 2016 HIGHLIGHTS:
-- 2-for-1 stock split in December 2016
-- Diluted EPS increased 27% from $1.20 to $1.52 year over year
-- Diluted EPS increased 3% from $0.39 to $0.40 on a linked quarter basis
-- Loans and deposits increased 24% and 27%, respectively, for the fourth
quarter on an annualized basis
-- Loans and deposits increased 16% and 28%, respectively, year over year
Tom Broughton, President and CEO, said, "We are pleased to report a year of record growth in net income, loans and deposits while maintaining pristine credit quality." Bud Foshee, CFO, stated, "Our new regions of Nashville, Tennessee, Atlanta, Georgia, Charleston, South Carolina and Tampa Bay, Florida all made solid progress in 2016."
FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
On December 20, 2016, the Company effected a two-for-one split of its common stock in the form of a stock dividend. All share and per share information in this release has been adjusted to give effect to this stock split.
Period Ending Period Ending % Change Period Ending % Change
December 31, September 30, From Period December 31, From Period
2016 2016 Ending 2015 Ending
September December 31,
30, 2016 to 2015 to Period
Period Ending Ending
December 31, December 31,
2016 2016
---- ----
QUARTERLY OPERATING RESULTS
---------------------------
Net Income $21,738 $20,909 4% $19,750 10%
Net Income Available to Common Stockholders $21,714 $20,909 4% $19,726 10%
Diluted Earnings Per Share $0.40 $0.39 3% $0.37 8%
Return on Average Assets 1.39% 1.39% 1.55%
Return on Average Common Stockholders' Equity 16.71% 16.66% 17.75%
Average Diluted Shares Outstanding 53,961,160 53,879,328 53,190,478
YEAR-TO-DATE OPERATING RESULTS
------------------------------
Net Income $81,479 $63,540 28%
Net Income Available to Common Stockholders $81,432 $63,260 29%
Diluted Earnings Per Share $1.52 $1.20 27%
Return on Average Assets 1.42% 1.38%
Return on Average Common Stockholders' Equity 16.63% 15.30%
Average Diluted Shares Outstanding 53,608,372 52,885,108
Core Net Income* $81,479 $65,307 25%
Core Net Income Available to Common Stockholders* $81,432 $65,027 25%
Core Diluted Earnings Per Share* $1.52 $1.23 24%
Core Return on Average Assets* 1.42% 1.42%
Core Return on Average Common Stockholders' Equity* 16.63% 15.73%
BALANCE SHEET
-------------
Total Assets $6,370,448 $6,002,621 6% $5,095,509 25%
Loans 4,911,770 4,631,821 6% 4,216,375 16%
Non-interest-bearing Demand Deposits 1,281,605 1,269,726 1% 1,053,467 22%
Total Deposits 5,420,311 5,081,128 7% 4,223,888 28%
Stockholders' Equity 522,889 507,866 3% 449,147 16%
* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.
DETAILED FINANCIALS
ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $21.7 million for the quarter ended December 31, 2016, compared to net income of $19.8 million and net income available to common stockholders of $19.7 million for the same quarter in 2015. Basic and diluted earnings per common share were $0.41 and $0.40 respectively, for the fourth quarter of 2016, compared to $0.38 and $0.37, respectively, for the fourth quarter of 2015.
Return on average assets was 1.39% and return on average equity was 16.71% for the fourth quarter of 2016, compared to 1.55% and 17.75%, respectively, for the fourth quarter of 2015.
Net interest income was $49.1 million for the fourth quarter of 2016, compared to $47.9 million for the third quarter of 2016 and $43.2 million for the fourth quarter of 2015. The net interest margin in the fourth quarter of 2016 was 3.30%, a five basis point decrease from the third quarter of 2016 and 26 basis point decrease from the fourth quarter of 2015. The increase in net interest income on a linked quarter basis is attributable to a $126.1 million increase in average loans outstanding, a $39.3 million increase in average non-interest-bearing deposits and a $17.6 million increase in average stockholders' equity, all resulting in a positive mix change in our balance sheet. The average yield on loans decreased by two basis points to 4.45% on a linked quarter basis.
Average loans for the fourth quarter of 2016 were $4.70 billion, an increase of $126.1 million, or 3%, over average loans of $4.58 billion for the third quarter of 2016, and an increase of $580.2 million, or 14%, over average loans of $4.12 billion for the fourth quarter of 2015.
Average total deposits for the fourth quarter of 2016 were $5.27 billion, an increase of $291.7 million, or 6%, over average total deposits of $4.98 billion for the third quarter of 2016, and an increase of $1.01 billion, or 24%, over average total deposits of $4.27 billion for the fourth quarter of 2015.
Non-performing assets to total assets were 0.34% for the fourth quarter of 2016, an increase of 18 basis points compared to 0.16% for the third quarter of 2016 and an increase of eight basis points compared to 0.26% for the fourth quarter of 2015. One loan with a balance of approximately $6.2 million, which was greater than 90 days past due and accruing as of December 31, 2016, has paid current as of the date of this earnings release. This loan represented 10 basis points of the non-performing assets ratio as of December 31, 2016. Net credit charge-offs to average loans were 0.09%, a four basis point decrease compared to 0.13% for the third quarter of 2016 and a 15 basis point decrease compared to 0.24% for the fourth quarter of 2015. We recorded a $4.1 million provision for loan losses in the fourth quarter of 2016 compared to $3.5 million in the third quarter of 2016 and $3.3 million in the fourth quarter of 2015. The allowance for loan loss as a percentage of total loans was 1.06% for December 31, 2016 compared to 1.05% at September 30, 2016 and 1.03% at December 31, 2015. In management's opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank's methodology for calculating its allowance for loan losses.
Non-interest income increased $2.5 million during the fourth quarter of 2016, or 71%, compared to the fourth quarter of 2015. Mortgage banking revenue increased by $424,000 in the fourth quarter of 2016, or 68%, compared to the fourth quarter of 2015, resulting from a 38% increase in the number of loans originated and improved operations, translating to increased net gains on sales. Credit card income increased $411,000 in the fourth quarter of 2016, or 64%, compared to the fourth quarter of 2015, resulting from an 89% increase in the volume of spending on ServisFirst Bank cards and a 29% increase in spending on our agent banks' cards. We recognized a $1.3 million gain on the sale of fixed assets during the fourth quarter of 2016.
Non-interest expense for the fourth quarter of 2016 increased $3.0 million, or 16%, to $22.0 million from $19.0 million in the fourth quarter of 2015, and increased $1.8 million, or 9%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2016 increased $2.3 million, or 26%, to $11.2 million from $8.9 million in the fourth quarter of 2015, and increased $200,000, or 2%, on a linked quarter basis. We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015. Excluding this reversal, salary and benefit expenses increased $300,000, or 3%, from the fourth quarter of 2015 to the fourth quarter of 2016. Equipment and Occupancy expense increased $358,000, or 24% to $1.9 million in the fourth quarter of 2016, from $1.5 million in the fourth quarter of 2015. This increase in equipment and occupancy expense was attributable to new offices in our Charleston, South Carolina and Nashville, Tennessee regions, each of which were relocations from temporary facilities we previously occupied. We also accelerated depreciation of leasehold improvements in our Birmingham, Alabama headquarters building to coincide with our anticipated move date to our new headquarters building, which we anticipate will be in the second half of 2017. Professional services expense increased $352,000, or 50%, to $1.1 million in the fourth quarter of 2016, from $706,000 in the fourth quarter of 2015, primarily the result of legal fees accrued for pending litigation. FDIC assessments increased $339,000, or 46%, to $1.1 million in the fourth quarter of 2016, from $733,000 in the fourth quarter of 2015. This increase was the result of higher assessment rates under the new assessment calculation rule adopted by the FDIC effective at the beginning of the second quarter 2016, and growth in assets.
Income tax expense increased $2.7 million, or 59%, to $7.3 million in the fourth quarter of 2016, compared to $4.6 million in the fourth quarter of 2015, and increased $3.8 million, or 15%, to $29.3 million in the year ended December 31, 2016, compared to $25.5 million in the year ended December 31, 2015. In the second quarter of 2016 we adopted the amendments in Accounting Standards Update 2016-09 using the modified retrospective method. We have recognized excess tax benefits from the exercise and vesting of stock options and restricted stock of $54,000 in the fourth quarter of 2016 and $4.8 million for the year ended December 31, 2016. Previously under generally accepted accounting principles, such credits were reflected within additional paid-in capital.
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the merger of Metro Bank with and into the Bank, and recorded an expense of $500,000 resulting from the initial funding of reserves for unfunded loan commitments for the first quarter of 2015, consistent with guidance provided in the Federal Reserve Bank's Inter-agency Policy Statement SR 06-17. Core financial measures included in this press release are "core net income," "core net income available to common stockholders," "core diluted earnings per share," "core return on average assets" and "core return on average common stockholders' equity." Each of these five core financial measures excludes the impact of the non-routine expenses attributable to merger expenses and the initial funding of reserves for unfunded loan commitments, and are all considered non-GAAP financial measures. Other non-GAAP financial measures included in this press release are "tangible common stockholders' equity," "total tangible assets," "tangible book value per share," and "tangible common equity to total tangible assets." All non-GAAP financial measures are more fully explained below.
"Core net income" is defined as net income, adjusted by the net effect of the non-routine expense.
"Core net income available to common stockholders" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.
"Core diluted earnings per share" is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.
"Core return on average assets" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.
"Core return of average common stockholders' equity" is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders' equity.
"Tangible common stockholders' equity" is defined as common stockholders' equity, adjusted by the total of goodwill and other identifiable intangible assets.
"Total tangible assets" is defined as total assets, adjusted by the total of goodwill and other identifiable intangible assets.
"Tangible book value per share" is defined as tangible common stockholders' equity divided by the number of common shares outstanding.
"Tangible common equity to total tangible assets" is defined as tangible common equity divided by total tangible assets.
We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the annual comparative periods ended December 31, 2016 and 2015 included in this press release. Dollars are in thousands, except share and per share data.
As of December 31,
2016 As Of and For the
Year Ended
December 31, 2015
-----------------
Return on average assets - GAAP 1.38%
Net income - GAAP $63,540
Adjustments:
Merger expenses - Metro Bancshares, Inc. 2,096
Initial reserve for unfunded loan commitments 500
Tax (benefit) of adjustments (829)
----
Core net income - non-GAAP* $65,307
Average assets $4,591,860
Core return on average assets - non-GAAP* 1.42%
Return on average common stockholders' equity - GAAP 15.30%
Net income available to common stockholders - GAAP $63,260
Adjustments:
Merger expenses - Metro Bancshares, Inc. 2,096
Initial reserve for unfunded loan commitments 500
Tax (benefit) of adjustments (829)
----
Core net income available to common stockholders - non-GAAP* $65,027
Average common stockholders' equity $413,445
Core return on average common stockholders' equity - non-GAAP* 15.73%
Earnings per share - diluted - GAAP $1.20
Weighted average shares outstanding, diluted - GAAP 52,885,108
Core diluted earnings per share - non-GAAP* $1.23
Book value per share - GAAP $9.93 $8.65
Total common stockholders' equity - GAAP 522,889 449,147
Adjustments:
Adjusted for goodwill and other identifiable
intangible assets 14,996 15,330
Tangible common stockholders' equity - non-GAAP $507,893 $433,817
Tangible book value per share - non-GAAP $9.65 $8.35
Stockholders' equity to total assets - GAAP 8.21% 8.81%
Total assets - GAAP $6,370,448 $5,095,509
Adjustments:
Adjusted for goodwill and other identifiable
intangible assets 14,996 15,330
Total tangible assets - non-GAAP $6,355,452 $5,080,179
Tangible common equity to total tangible assets - non-GAAP 7.99% 8.54%
* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation on Non-GAAP Financial Measures" above.
About ServisFirst Bancshares, Inc.
ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Montgomery, Mobile and Dothan, Alabama, Pensacola and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.
ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC's website at www.sec.gov or at http://servisfirstbancshares.investorroom.com/.
Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "believe," "expect," "anticipate," "project," "plan," "intend," "will," "would," "might" and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.'s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-looking Statements" and "Risk Factors" in our most recent Annual Report on Form 10-K and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.
More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at http://servisfirstbancshares.investorroom.com/ or by calling (205) 949-0302.
Contact: ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015
---------------- ---------------- ---------------- ---------------- ----------------
CONSOLIDATED STATEMENT OF INCOME
Interest income $56,200 $54,691 $52,050 $49,961 $48,451
Interest expense 7,091 6,773 6,159 5,782 5,290
----- ----- ----- ----- -----
Net interest income 49,109 47,918 45,891 44,179 43,161
Provision for loan losses 4,075 3,464 3,800 2,059 3,308
----- ----- ----- ----- -----
Net interest income after provision for loan losses 45,034 44,454 42,091 42,120 39,853
Non-interest income 6,039 4,791 3,847 3,435 3,475
Non-interest expense 22,037 20,162 19,504 19,290 19,002
------ ------ ------ ------ ------
Income before income tax 29,036 29,083 26,434 26,265 24,326
Provision for income tax 7,298 8,174 7,558 6,309 4,576
----- ----- ----- ----- -----
Net income 21,738 20,909 18,876 19,956 19,750
Preferred stock dividends 24 - 23 - 24
--- --- --- --- ---
Net income available to common stockholders $21,714 $20,909 $18,853 $19,956 $19,726
======= ======= ======= ======= =======
Earnings per share - basic (1) $0.41 $0.40 $0.36 $0.38 $0.38
Earnings per share - diluted (1) $0.40 $0.39 $0.36 $0.38 $0.37
Average diluted shares outstanding 53,961,160 53,879,328 53,452,568 53,133,620 53,190,478
CONSOLIDATED BALANCE SHEET DATA
Total assets $6,370,448 $6,002,621 $5,646,055 $5,378,599 $5,095,509
Loans 4,949,282 4,657,284 4,539,338 4,340,900 4,216,375
Debt securities 447,427 377,270 347,706 362,106 370,364
Non-interest-bearing demand deposits 1,281,605 1,269,726 1,185,668 1,070,275 1,053,467
Total deposits 5,420,311 5,081,128 4,664,795 4,339,747 4,223,888
Borrowings 55,262 55,356 55,450 55,543 55,637
Stockholders' equity $522,889 $507,866 $489,097 $470,940 $449,147
Shares outstanding 52,636,896 52,610,896 52,503,896 52,365,396 51,945,396
Book value per share $9.93 $9.65 $9.32 $8.99 $8.65
Tangible book value per share (2) $9.65 $9.37 $9.03 $8.70 $8.35
SELECTED FINANCIAL RATIOS
Net interest margin 3.30% 3.35% 3.51% 3.57% 3.56%
Return on average assets 1.39% 1.39% 1.37% 1.53% 1.55%
Return on average common stockholders' equity 16.71% 16.66% 15.79% 17.39% 17.75%
Efficiency ratio 39.96% 38.25% 39.21% 40.51% 40.75%
Non-interest expense to average earning assets 1.46% 1.39% 1.50% 1.56% 1.56%
CAPITAL RATIOS (3)
Common equity tier 1 capital to risk-weighted assets 9.78% 9.91% 9.83% 9.90% 9.72%
Tier 1 capital to risk-weighted assets 9.78% 9.92% 9.84% 9.91% 9.73%
Total capital to risk-weighted assets 11.84% 12.03% 11.98% 12.12% 11.95%
Tier 1 capital to average assets 8.22% 8.20% 8.52% 8.65% 8.55%
Tangible common equity to total tangible assets (2) 7.99% 8.23% 8.42% 8.50% 8.54%
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.
(2) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(3) Regulatory capital ratios for most recent period are preliminary.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
December 31, 2016 December 31, 2015 % Change
----------------- ----------------- --------
ASSETS
Cash and due from banks $56,855 $46,614 22%
Interest-bearing balances due from depository institutions 566,707 270,836 109%
Federal funds sold 160,435 34,785 361%
------- ------
Cash and cash equivalents 783,997 352,235 123%
Available for sale debt securities, at fair value 422,375 342,938 23%
Held to maturity debt securities (fair value of $63,302 and $27,910 at
December 31, 2016 and 2015, respectively) 62,564 27,426 128%
Restricted equity securities 1,024 4,954 (79)%
Mortgage loans held for sale 4,675 8,249 (43)%
Loans 4,911,770 4,216,375 16%
Less allowance for loan losses (51,893) (43,419) 20%
------- -------
Loans, net 4,859,877 4,172,956 16%
Premises and equipment, net 40,314 19,434 107%
Goodwill and other identifiable intangible assets 14,996 15,330 (2)%
Other assets 180,626 151,987 19%
------- -------
Total assets $6,370,448 $5,095,509 25%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing $1,281,605 $1,053,467 22%
Interest-bearing 4,138,706 3,170,421 31%
Total deposits 5,420,311 4,223,888 28%
Federal funds purchased 355,944 352,360 1%
Other borrowings 55,262 55,637 (1)%
Other liabilities 16,042 14,477 11%
------ ------
Total liabilities 5,847,559 4,646,362 26%
Stockholders' equity:
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
(liquidation preference $1,000), net of discount; no shares authorized or outstanding
at December 31, 2016, and 40,000 shares authorized, no shares issued and outstanding
at December 31, 2015 - - - %
Preferred stock, par value $0.001 per share; 1,000,000 authorized and
undesignated
at December 31, 2016, and 1,000,000 authorized and 960,000 shares undesignated at
December 31, 2015 - - - %
Common stock, par value $0.001 per share; 100,000,000 shares authorized;
52,636,896 shares issued and outstanding at December 31, 2016, and
51,945,396 shares issued and outstanding at December 31, 2015 53 26 104%
Additional paid-in capital 215,932 211,546 2%
Retained earnings 307,151 234,150 31%
Accumulated other comprehensive (loss) income (624) 3,048 (120)%
Noncontrolling interest 377 377 - %
Total stockholders' equity 522,889 449,147 16%
------- -------
Total liabilities and stockholders' equity $6,370,448 $5,095,509 25%
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
---- ---- ---- ----
Interest income:
Interest and fees on loans $52,533 $46,150 $200,463 $171,302
Taxable securities 1,604 1,058 5,343 4,331
Nontaxable securities 785 875 3,300 3,499
Federal funds sold 377 46 1,007 127
Other interest and dividends 901 322 2,789 716
Total interest income 56,200 48,451 212,902 179,975
Interest expense:
Deposits 5,817 4,294 20,169 14,894
Borrowed funds 1,274 996 5,636 2,810
Total interest expense 7,091 5,290 25,805 17,704
Net interest income 49,109 43,161 187,097 162,271
Provision for loan losses 4,075 3,308 13,398 12,847
----- ----- ------ ------
Net interest income after provision for loan
losses 45,034 39,853 173,699 149,424
Non-interest income:
Service charges on deposit accounts 1,375 1,326 5,355 5,088
Mortgage banking 1,044 620 3,725 2,682
Securities gains - - (3) 29
Increase in cash surrender value life
insurance 745 630 2,794 2,621
Other operating income 2,875 899 6,241 3,157
Total non-interest income 6,039 3,475 18,112 13,577
Non-interest expense:
Salaries and employee benefits 11,197 8,884 43,955 38,913
Equipment and occupancy expense 1,877 1,519 7,985 6,389
Professional services 1,058 706 3,977 2,607
FDIC and other regulatory assessments 1,072 733 3,400 2,660
Other real estate owned expense 91 324 759 1,227
Merger expense - - - 2,100
Other operating expense 6,742 6,836 20,917 20,100
Total non-interest expense 22,037 19,002 80,993 73,996
Income before income tax 29,036 24,326 110,818 89,005
Provision for income tax 7,298 4,576 29,339 25,465
----- ----- ------ ------
Net income 21,738 19,750 81,479 63,540
Dividends on preferred stock 24 24 47 280
Net income available to common stockholders $21,714 $19,726 $81,432 $63,260
Basic earnings per common share (1) $0.41 $0.38 $1.55 $1.23
Diluted earnings per common share (1) $0.40 $0.37 $1.52 $1.20
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.
LOANS BY TYPE (UNAUDITED)
(In thousands)
4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015
---------------- ---------------- ---------------- ---------------- ----------------
Commercial, financial and agricultural $1,982,267 $1,885,315 $1,892,870 $1,799,132 $1,760,479
Real estate - construction 335,085 292,721 251,144 254,254 243,267
Real estate - mortgage:
Owner-occupied commercial 1,171,719 1,138,308 1,117,514 1,055,852 1,014,669
1-4 family mortgage 536,805 520,394 494,733 458,032 444,134
Other mortgage 830,683 740,127 725,336 723,542 698,779
Subtotal: Real estate - mortgage 2,539,207 2,398,829 2,337,583 2,237,426 2,157,582
Consumer 55,211 54,957 54,741 50,088 55,047
------ ------ ------ ------ ------
Total loans $4,911,770 $4,631,822 $4,536,338 $4,340,900 $4,216,375
========== ========== ========== ========== ==========
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015
---------------- ---------------- ---------------- ---------------- ----------------
Allowance for loan losses:
Beginning balance $48,933 $46,998 $45,145 $43,419 $42,574
Loans charged off:
Commercial financial and agricultural 1,059 1,270 1,412 50 2,186
Real estate - construction - 79 355 381 161
Real estate - mortgage 45 144 191 - 463
Consumer 82 81 31 18 21
Total charge offs 1,186 1,574 1,989 449 2,831
Recoveries:
Commercial financial and agricultural 10 35 1 3 241
Real estate - construction 12 9 39 16 61
Real estate - mortgage 46 1 2 97 65
Consumer 3 - - - 1
Total recoveries 71 45 42 116 368
Net charge-offs 1,115 1,529 1,947 333 2,463
Provision for loan losses 4,075 3,464 3,800 2,059 3,308
Ending balance $51,893 $48,933 $46,998 $45,145 $43,419
Allowance for loan losses to total loans 1.06% 1.05% 1.04% 1.04% 1.03%
Allowance for loan losses to total average
loans 1.10% 1.07% 1.06% 1.06% 1.05%
Net charge-offs to total average loans 0.09% 0.13% 0.18% 0.03% 0.24%
Provision for loan losses to total average
loans 0.34% 0.30% 0.34% 0.20% 0.32%
Nonperforming assets:
Nonaccrual loans $10,624 $6,647 $4,730 $6,133 $7,767
Loans 90+ days past due and
accruing 6,263 43 423 417 1
Other real estate owned and
repossessed assets 4,988 3,035 4,260 4,044 5,392
----- ----- ----- ----- -----
Total $21,875 $9,725 $9,413 $10,594 $13,160
Nonperforming loans to total loans 0.34% 0.14% 0.11% 0.15% 0.18%
Nonperforming assets to total assets 0.34% 0.16% 0.17% 0.20% 0.26%
Nonperforming assets to earning assets 0.35% 0.16% 0.17% 0.20% 0.26%
Reserve for loan losses to nonaccrual loans 488.45% 736.17% 993.62% 736.10% 559.02%
Restructured accruing loans $558 $6,738 $6,753 $6,763 $6,782
Restructured accruing loans to total loans 0.01% 0.14% 0.15% 0.16% 0.16%
TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
(In thousands)
4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015
---------------- ---------------- ---------------- ---------------- ----------------
Beginning balance: $6,738 $6,753 $6,763 $7,736 $8,266
Net (paydowns) / advances 554 (15) (10) (19) (83)
Transfers to other real estate
owned - - - (954) -
Charge-offs - - - - (447)
--- --- --- --- ----
$7,292 $6,738 $6,753 $6,763 $7,736
====== ====== ====== ====== ======
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Interest income:
Interest and fees on loans $52,533 $51,598 $49,210 $47,247 $46,150
Taxable securities 1,604 1,107 1,238 1,269 1,058
Nontaxable securities 785 823 834 858 875
Federal funds sold 377 347 210 73 46
Other interest and dividends 901 816 558 514 322
Total interest income 56,200 54,691 52,050 49,961 48,451
Interest expense:
Deposits 5,817 5,358 4,611 4,361 4,294
Borrowed funds 1,274 1,415 1,548 1,421 996
Total interest expense 7,091 6,773 6,159 5,782 5,290
Net interest income 49,109 47,918 45,891 44,179 43,161
Provision for loan losses 4,075 3,464 3,800 2,059 3,308
----- ----- ----- ----- -----
Net interest income after provision for loan
losses 45,034 44,454 42,091 42,120 39,853
Non-interest income:
Service charges on deposit accounts 1,375 1,367 1,306 1,307 1,326
Mortgage banking 1,044 1,112 901 668 620
Securities gains - - (3) - -
Increase in cash surrender value life
insurance 745 770 655 624 630
Other operating income 2,875 1,542 988 836 899
Total non-interest income 6,039 4,791 3,847 3,435 3,475
Non-interest expense:
Salaries and employee benefits 11,197 10,958 10,733 11,067 8,884
Equipment and occupancy expense 1,877 2,100 2,023 1,985 1,519
Professional services 1,058 1,182 999 738 706
FDIC and other regulatory assessments 1,072 775 803 750 733
Other real estate owned expense 91 178 41 449 324
Other operating expense 6,742 4,969 4,905 4,301 6,836
Total non-interest expense 22,037 20,162 19,504 19,290 19,002
Income before income tax 29,036 29,083 26,434 26,265 24,326
Provision for income tax 7,298 8,174 7,558 6,309 4,576
----- ----- ----- ----- -----
Net income 21,738 20,909 18,876 19,956 19,750
Dividends on preferred stock 24 - 23 - 24
Net income available to common stockholders $21,714 $20,909 $18,853 $19,956 $19,726
Basic earnings per common share (1) $0.41 $0.40 $0.36 $0.38 $0.38
Diluted earnings per common share (1) $0.40 $0.39 $0.36 $0.38 $0.37
(1) Adjusted to reflect two-for-one stock split that occurred on December 20, 2016.
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
4th Quarter 2016 3rd Quarter 2016 2nd Quarter 2016 1st Quarter 2016 4th Quarter 2015
---------------- ---------------- ---------------- ---------------- ----------------
Average Balance Yield / Average Balance Yield / Average Balance Yield / Average Balance Yield / Average Balance Yield /
Rate Rate Rate Rate Rate
--------------- -------- --------------- -------- --------------- -------- --------------- -------- --------------- --------
Assets:
Interest-earning assets:
Loans, net of unearned income (1)
Taxable $4,676,565 4.45% $4,554,900 4.47% $4,406,107 4.47% $4,230,057 4.48% $4,113,044 4.44%
Tax-exempt (2) 26,344 4.74 21,939 4.37 16,315 4.54 10,281 5.59 9,639 4.94
------ ---- ------ ---- ------ ---- ------ ---- ----- ----
Total loans, net of
unearned income 4,702,909 4.45 4,576,839 4.47 4,422,422 4.47 4,240,338 4.48 4,122,683 4.44
Mortgage loans held for sale 6,271 3.36 6,724 3.79 7,323 3.62 6,084 4.63 4,362 4.27
Debt securities:
Taxable 295,608 2.17 224,825 2.19 208,113 2.38 221,722 2.29 193,982 2.18
Tax-exempt (2) 134,748 3.54 135,272 3.73 135,954 3.73 137,763 3.79 139,435 3.88
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
Total securities (3) 430,356 2.60 360,097 2.77 344,067 2.91 359,485 2.86 333,417 2.89
Federal funds sold 242,211 0.62 217,158 0.64 144,206 0.59 48,390 0.61 33,255 0.55
Restricted equity securities 3,042 8.24 5,658 4.01 5,659 3.62 4,962 3.81 4,954 4.24
Interest-bearing balances with
banks 601,143 0.55 590,675 0.51 393,782 0.52 373,339 0.51 366,771 0.29
Total interest-earning assets 5,985,932 3.77% 5,757,151 3.81% 5,317,459 3.97% 5,032,598 4.03% 4,865,442 3.99%
Non-interest-earning assets:
Cash and due from banks 55,593 58,809 65,318 61,578 62,037
Net premises and equipment 30,421 25,000 23,241 21,023 19,609
Allowance for loan losses,
accrued
interest and other assets 140,721 145,804 127,640 126,491 124,241
------- ------- ------- ------- -------
Total assets $6,212,667 $5,986,764 $5,533,658 $5,241,690 $5,071,329
========== ========== ========== ========== ==========
Interest-bearing liabilities:
Interest-bearing deposits:
Checking $735,115 0.37% $696,100 0.37% $691,776 0.36% $665,039 0.35% $611,521 0.30%
Savings 51,845 0.32 43,569 0.30 41,546 0.30 41,055 0.29 39,590 0.29
Money market 2,669,513 0.56 2,471,829 0.55 2,105,420 0.52 1,979,727 0.51 2,048,453 0.49
Time deposits 527,100 1.00 519,653 0.99 498,151 1.01 507,605 1.00 503,217 1.00
Total interest-bearing
deposits 3,983,573 0.58 3,731,151 0.57 3,336,893 0.56 3,193,426 0.55 3,202,781 0.53
Federal funds purchased 353,029 0.63 436,415 0.64 505,076 0.64 441,309 0.64 295,530 0.37
Other borrowings 55,315 5.16 55,410 5.15 55,521 5.20 55,630 5.19 55,805 5.11
Total interest-bearing
liabilities 4,391,917 0.64% 4,222,976 0.64% 3,897,490 0.64% 3,690,365 0.63% 3,554,116 0.59%
Non-interest-bearing liabilities:
Non-interest-bearing
demand deposits 1,289,448 1,250,139 1,142,541 1,077,613 1,062,795
Other liabilities 14,399 14,376 13,301 12,194 13,469
Stockholders' equity 514,245 494,248 475,917 457,218 436,928
Unrealized gains on securities
and
derivatives 2,658 5,025 4,409 4,300 4,021
Total liabilities and
stockholders' equity $6,212,667 $5,986,764 $5,533,658 $5,241,690 $5,071,329
========== ========== ========== ========== ==========
Net interest spread 3.13% 3.18% 3.34% 3.40% 3.40%
Net interest margin 3.30% 3.35% 3.51% 3.57% 3.56%
(1) Average loans include loans on which the accrual of interest has been discontinued.
(2) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 35%.
(3) Unrealized gains on available-for-sale debt securities are excluded from the yield calculation.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/servisfirst-bancshares-inc-announces-results-for-fourth-quarter-and-year-ended-2016-300398732.html
SOURCE ServisFirst Bancshares, Inc.
