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 ServisFirst Bancshares, Inc. Announces Results For Fourth Quarter Of 2015
   Monday, January 25, 2016 4:01:00 PM ET

ServisFirst Bancshares, Inc. (SFBS ), today announced earnings and operating results for the quarter and year ended December 31, 2015.

Fourth Quarter 2015 Highlights:

-- Diluted earnings per share increased 28% from $0.58 to $0.74 year over year

-- Diluted earnings per share increased 21% from $0.61 to $0.74 on a linked quarter basis

-- Net income for the quarter increased 31% year over year

-- Organic loan and deposit growth for the year of 20% and 18%, respectively

-- Fourth quarter annualized loan and deposit growth of 17% and 18%, respectively, on a linked quarter basis

-- Entry into the Tampa Bay, Florida area with hire of a new regional CEO

Tom Broughton, President and CEO, said, "We are pleased to welcome our new banking team in the Tampa Bay area led by Greg Bryant, a highly experienced and well known banker in the area." Bud Foshee, CFO, stated, "2015 was a strong year in financial performance and growth."

ServisFirst announces the hiring of Greg Bryant as Executive Vice President and Regional CEO. A temporary loan production office will be opened in Pasco County, for up to a year before a permanent office is established in Tampa Bay, Florida. Greg was formerly the President & CEO of Bay Cities Bank prior to the sale of the bank.

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
                                                     Period Ending December 31,  Period Ending September 30,  % Change        Period Ending December 31,  % Change
                                                     2015                        2015                         From Period     2014                        From Period
                                                                                                              Ending                                      Ending
                                                                                                              September 30,                               December 31,
                                                                                                              2015 to Period                              2014 to Period
                                                                                                              Ending                                      Ending
                                                                                                              December 31,                                December 31,
                                                                                                              2015                                        2015
QUARTERLY OPERATING RESULTS
Net Income                                           $          19,750           $          16,266            21         %    $          15,032           31         %
Net Income Available to Common Stockholders          $          19,726           $          16,233            22         %    $          14,917           32         %
Diluted Earnings Per Share                           $          0.74             $          0.61              21         %    $          0.58             28         %
Return on Average Assets                                        1.55       %                1.38       %                                 1.47       %
Return on Average Common Stockholders’ Equity                   17.75      %                15.52      %                                 16.39      %
Average Diluted Shares Outstanding                              26,595,239                  26,506,334                                   25,697,531
YEAR-TO-DATE OPERATING RESULTS
Net Income                                           $          63,540                                                        $          52,377           21         %
Net Income Available to Common Stockholders          $          63,260                                                        $          51,946           22         %
Diluted Earnings Per Share                           $          2.39                                                          $          2.09             14         %
Return on Average Assets                                        1.38       %                                                             1.39       %
Return on Average Common Stockholders’ Equity                   15.30      %                                                             16.23      %
Average Diluted Shares Outstanding                              26,442,554                                                               24,818,221
Core Net Income*                                     $          65,307                                                        $          53,989           21         %
Core Net Income Available to Common Stockholders*    $          65,027                                                        $          53,558           21         %
Core Diluted Earnings Per Share*                     $          2.46                                                          $          2.16             14         %
Core Return on Average Assets*                                  1.42       %                                                             1.44       %
Core Return on Average Common Stockholders’ Equity*             15.73      %                                                             16.74      %
BALANCE SHEET
Total Assets                                         $          5,095,509        $          4,772,601         7          %    $          4,098,679        24         %
Loans                                                           4,216,375                   4,044,242         4          %               3,359,858        25         %
Non-interest-bearing Demand Deposits                            1,053,467                   1,029,354         2          %               810,460          30         %
Total Deposits                                                  4,223,888                   4,044,634         4          %               3,398,160        24         %
Stockholders’ Equity                                            449,147                     431,194           4          %               407,213          10         %
* 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 of $19.8 million and net income available to common stockholders of $19.7 million for the quarter ended December 31 2015, compared to net income of $15.0 million and net income available to common stockholders of $14.9 million for the same quarter in 2014. Basic and diluted earnings per common share were $0.76 and $0.74, respectively, for the fourth quarter of 2015, compared to $0.60 and $0.58, respectively, for the fourth quarter of 2014.

Return on average assets was 1.55% and return on average common stockholders’ equity was 17.75% for the fourth quarter of 2015, compared to 1.47% and 16.39%, respectively, for the fourth quarter of 2014.

Net interest income was $43.2 million for the fourth quarter of 2015, compared to $41.9 million for the third quarter of 2015 and $34.5 million for the fourth quarter of 2014. The increase in net interest income on a linked quarter basis is attributable to a $197.1 million increase in average loans outstanding and a $74.0 million increase in non-interest-bearing deposits, both resulting in a positive mix change in our balance sheet. The Company completed a private placement of $34.75 million of its 5% Subordinated Notes due July 15, 2025 during the third quarter of 2015, which partially offset the positive mix change attributable to the increase in average loans and non-interest-bearing deposits. The net interest margin in the fourth quarter of 2015 was 3.56%, a 21 basis point decrease from the third quarter of 2015 and unchanged from the fourth quarter of 2014. Excess liquidity during the fourth quarters of 2015 and 2014 drives an unfavorable volume component change when compared to their respective comparable linked quarters. The average yield on loans decreased 9 basis points to 4.44% on a linked quarter basis. Three basis points of this decrease are attributable to a $318,000 decrease in the accretion on acquired loans. Excluding accretion on acquired loans, the net interest margin decreased 22 basis points from the third quarter to the fourth quarter of 2015. Average rates paid on interest-bearing liabilities increased from 0.58% in the third quarter to 0.60% in the fourth quarter of 2015. The higher rates paid on federal funds purchased from our correspondent banks was the result of the 0.25% increase in the Federal Reserve’s targeted rate in early December 2015.

Average loans for the fourth quarter of 2015 were $4.12 billion, an increase of $197.1 million, or 5%, over average loans of $3.93 billion for the third quarter of 2015, and an increase of $896.9 million, or 28%, over average loans of $3.23 billion for the fourth quarter of 2014.

Average total deposits for the fourth quarter of 2015 were $4.21 billion, an increase of $288.1 million, or 7%, over average total deposits of $3.92 billion for the third quarter of 2015, and an increase of $805.7 million, or 24%, over average total deposits of $3.41 billion for the fourth quarter of 2014.

Non-performing assets to total assets were 0.26% for the fourth quarter of 2015, a decrease of 8 basis points compared to 0.34% for the third quarter of 2015 and a decrease of 15 basis points compared to 0.41% for the fourth quarter of 2014. Net credit charge-offs to average loans were 0.24%, a 19 basis point increase compared to 0.05% for the third quarter of 2015 and a 5 basis point increase compared to 0.19% for the fourth quarter of 2014. We recorded a $3.3 million provision for loan losses in the fourth quarter of 2015 compared to $3.1 million in the third quarter of 2015 and $2.8 million in the fourth quarter of 2014. The allowance for loan loss as a percentage of total loans was 1.03% at December 31, 2015, a decrease of 2 basis points compared to 1.05% at September 30, 2015 and a decrease of 3 basis points compared to 1.06% at December 31, 2014. 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 loss.

Non-interest income increased $449,000 during the fourth quarter of 2015, or 14%, compared to the fourth quarter of 2014. Service charges on deposit accounts increased $158,000, or 14%, compared to the fourth quarter of 2014, resulting from an increase in the number of accounts and transactions. Mortgage banking revenue increased $113,000, or 22%, compared to the fourth quarter of 2014. Interchange income on credit card transactions, included in other operating income, increased $140,000, or 25%, compared to the fourth quarter of 2014, resulting from an increase in the number of credit card accounts.

Non-interest expense for the fourth quarter of 2015 increased $5.9 million, or 45%, to $19.1 million from $13.1 million in the fourth quarter of 2014, and increased $754,000, or 4%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2015 increased $2.6 million, or 41%, to $8.9 million from $6.3 million in the fourth quarter of 2014, and decreased $1.7 million, or 16%, on a linked quarter basis. We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015 and reversed $1.0 million of accrued incentive pay during the fourth quarter of 2014. Excluding these reversals, salary and benefit expenses increased $3.6 million year over year and increased $0.3 million on a linked quarter basis. The year-over-year increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets and Birmingham. Other operating expense for the fourth quarter of 2015 increased $3.0 million, or 79%, to $6.9 million from $3.9 million in the fourth quarter of 2014, and increased $2.5 million, or 57%, on a linked quarter basis. Included in these increases were $2.4 million of write-downs in equity investments in tax credit partnerships during the fourth quarter of 2015.

Tax expense for the fourth quarter of 2015 decreased $2.1 million compared to the fourth quarter of 2014, and decreased $3.4 million on a linked quarter basis. Effective tax rates for the fourth quarter of 2015, third quarter of 2015 and fourth quarter of 2014 were 18.81%, 33.00% and 30.63%, respectively. The lower rate in the fourth quarter of 2015 was primarily the result of recognition of federal historic tax credits.

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. We recorded non-routine expenses of $2.5 million during the first half of 2014 resulting from a correction of our accounting for vested stock options and acceleration of vesting for unvested stock options previously granted to members of our advisory boards in our markets. This change in accounting treatment is a non-cash item and did not impact our operating activities or cash from operations. 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, the initial funding of reserves for unfunded loan commitments, the correction of our accounting for vested stock options and the acceleration of vesting of unvested stock options, 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 on 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 for the years ended December 31, 2015 and December 31, 2014 included in this press release. Dollars are in thousands, except share and per share data.

                                                                                          2015            2014
Provision for income taxes - GAAP                                                         $ 25,465        $ 21,601
                          Adjustments:
                          Adjustment for non-routine expense                                829             865
Core provision for income taxes                                                           $ 26,294        $ 22,466
Return on average assets - GAAP                                                             1.38       %    1.39       %
Net income - GAAP                                                                         $ 63,540        $ 52,377
                          Adjustments:
                          Adjustment for non-routine expense                                1,767           1,612
Core net income                                                                           $ 65,307        $ 53,989
Average assets                                                                            $ 4,591,860     $ 3,757,932
Core return on average assets                                                               1.42       %    1.44       %
Return on average common stockholders’ equity                                               15.30      %    16.23      %
Net income available to common stockholders - GAAP                                        $ 63,260        $ 51,946
                          Adjustments:
                          Adjustment for non-routine expense                                1,767           1,612
Core net income available to common stockholders                                          $ 65,027        $ 53,558
Average common stockholders’ equity                                                       $ 413,445       $ 320,005
Core return on average common stockholders’ equity                                          15.73      %    16.74      %
Earnings per share - diluted - GAAP                                                       $ 2.39          $ 2.09
Weighted average shares outstanding, diluted                                                26,442,554      24,818,221
Core diluted earnings per share                                                           $ 2.46          $ 2.16
Book value per share                                                                      $ 17.29         $ 14.81
Total common stockholders’ equity - GAAP                                                    449,147         367,255
                          Adjustments:
                          Adjusted for goodwill and other identifiable intangible assets    15,330          -
Tangible common stockholders’ equity                                                      $ 433,817       $ 367,255
Tangible book value per share                                                             $ 16.70         $ 14.81
Common stockholders’ equity to total assets                                                 8.81       %    8.96       %
Total assets - GAAP                                                                       $ 5,095,509     $ 4,098,679
                          Adjustments:
                          Adjusted for goodwill and other identifiable intangible assets    15,330          -
Total tangible assets                                                                       5,080,179       4,098,679
Tangible common equity to total tangible assets                                             8.54       %    8.96       %

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, 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 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. 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 2015      3rd Quarter 2015      2nd Quarter 2015      1st Quarter 2015      4th Quarter 2014
CONSOLIDATED STATEMENT OF INCOME
Interest income                                           $       48,451        $       46,532        $       44,209        $       40,783        $       38,163
Interest expense                                                  5,290                 4,670                 3,998                 3,746                 3,703
Net interest income                                               43,161                41,862                40,211                37,037                34,460
Provision for loan losses                                         3,308                 3,072                 4,062                 2,405                 2,759
Net interest income after provision for loan losses               39,853                38,790                36,149                34,632                31,701
Non-interest income                                               3,559                 3,822                 3,505                 3,077                 3,110
Non-interest expense                                              19,086                18,332                18,213                18,751                13,143
Income before income tax                                          24,326                24,280                21,441                18,958                21,668
Provision for income tax                                          4,576                 8,014                 6,972                 5,903                 6,636
Net income                                                        19,750                16,266                14,469                13,055                15,032
Preferred stock dividends                                         24                    33                    123                   100                   115
Net income available to common stockholders               $       19,726        $       16,233        $       14,346        $       12,955        $       14,917
Earnings per share - basic                                $       0.76          $       0.63          $       0.56          $       0.51          $       0.60
Earnings per share - diluted                              $       0.74          $       0.61          $       0.54          $       0.49          $       0.58
Average diluted shares outstanding                                26,595,239            26,506,334            26,426,036            26,237,980            25,697,531
CONSOLIDATED BALANCE SHEET DATA
Total assets                                              $       5,095,509     $       4,772,601     $       4,492,539     $       4,393,342     $       4,098,679
Loans                                                             4,216,375             4,044,242             3,863,734             3,607,852             3,359,858
Debt securities                                                   370,364               334,635               335,008               336,505               327,665
Non-interest-bearing demand deposits                              1,053,467             1,029,354             926,577               866,743               810,460
Total deposits                                                    4,223,888             4,044,634             3,729,132             3,638,763             3,398,160
Borrowings                                                        55,748                55,728                21,016                21,278                19,973
Stockholders’ equity                                      $       449,147       $       431,194       $       454,487       $       441,458       $       407,213
Shares outstanding                                                25,972,698            25,903,698            25,826,198            25,653,610            24,801,518
Book value per share                                      $       17.29         $       16.65         $       16.05         $       15.65         $       14.81
Tangible book value per share (1)                         $       16.70         $       15.96         $       15.35         $       14.95         $       14.81
SELECTED FINANCIAL RATIOS
Net interest margin                                               3.56       %          3.77       %          3.88       %          3.80       %          3.56       %
Return on average assets                                          1.55       %          1.38       %          1.31       %          1.26       %          1.47       %
Return on average common stockholders’ equity                     17.75      %          15.52      %          14.06      %          13.55      %          16.39      %
Efficiency ratio                                                  40.85      %          40.13      %          41.66      %          46.74      %          34.98      %
Non-interest expense to average earning assets                    1.56       %          1.63       %          1.73       %          1.90       %          1.34       %
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets (3)          9.72       %          9.59       %          9.60       %          9.93       %          N/A
Tier 1 capital to risk-weighted assets                            9.73       %          9.60       %          10.58      %          10.98      %          11.75      %
Total capital to risk-weighted assets                             11.95      %          11.89      %          12.05      %          12.49      %          13.38      %
Tier 1 capital to average assets                                  8.55       %          8.83       %          9.88       %          10.07      %          9.91       %
Tangible common equity to total tangible assets (1)               8.54       %          8.70       %          8.86       %          8.76       %          8.96       %
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(2) Regulatory capital ratios for most recent period are preliminary.
(3) Basel III final capital rules, including the new Common Equity Tier 1 Capital to Risk-Weighted Assets ratio, became effective for the Company on January 1, 2015.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
                                                                                                                                           December 31, 2015   December 31, 2014   % Change
ASSETS
Cash and due from banks                                                                                                                    $        46,614     $        48,519     (4)   %
Interest-bearing balances due from depository institutions                                                                                          270,836             248,054    9     %
Federal funds sold                                                                                                                                  34,785              891        3,804 %
                        Cash and cash equivalents                                                                                                   352,235             297,464    18    %
Available for sale debt securities, at fair value                                                                                                   342,938             298,310    15    %
Held to maturity debt securities (fair value of $27,910 and $29,974 at
                        December 31, 2015 and 2014, respectively)                                                                                   27,426              29,355     (7)   %
Restricted equity securities                                                                                                                        4,954               3,921      26    %
Mortgage loans held for sale                                                                                                                        8,249               5,984      38    %
Loans                                                                                                                                               4,216,375           3,359,858  25    %
Less allowance for loan losses                                                                                                                      (43,419)            (35,629)   22    %
                        Loans, net                                                                                                                  4,172,956           3,324,229  26    %
Premises and equipment, net                                                                                                                         19,434              7,815      149   %
Goodwill and other identifiable intangible assets                                                                                                   15,330              -
Other assets                                                                                                                                        151,987             131,601    15    %
                        Total assets                                                                                                       $        5,095,509  $        4,098,679  24    %
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
                        Non-interest-bearing                                                                                               $        1,053,467  $        810,460    30    %
                        Interest-bearing                                                                                                            3,170,421           2,587,700  23    %
                                                              Total deposits                                                                        4,223,888           3,398,160  24    %
Federal funds purchased                                                                                                                             352,360             264,315    33    %
Other borrowings                                                                                                                                    55,748              19,973     179   %
Other liabilities                                                                                                                                   14,366              9,018      59    %
                        Total liabilities                                                                                                           4,646,362           3,691,466  26    %
Stockholders’ equity:
                        Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
                                                              (liquidation preference $1,000), net of discount; 40,000 shares authorized,
                                                              no shares issued and outstanding at December 31, 2015, and
                                                              40,000 shares issued and outstanding at December 31, 2014                             -                   39,958     (100) %
                        Preferred stock, par value $0.001 per share; 1,000,000 authorized and
                                                              960,000 currently undesignated                                                        -                   -          -     %
                        Common stock, par value $0.001 per share; 50,000,000 shares authorized;
                                                              25,972,698 shares issued and outstanding at December 31, 2015 and
                                                              24,801,518 shares issued and outstanding at December 31, 2014                         26                  25         4     %
                        Additional paid-in capital                                                                                                  211,546             185,397    14    %
                        Retained earnings                                                                                                           234,150             177,091    32    %
                        Accumulated other comprehensive income                                                                                      3,048               4,490      (32)  %
                        Noncontrolling interest                                                                                                     377                 252        50    %
                                                              Total stockholders’ equity                                                            449,147             407,213    10    %
                        Total liabilities and stockholders’ equity                                                                         $        5,095,509  $        4,098,679  24    %
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
                                                                  Three Months Ended December 31,  Year Ended December 31,
                                                                  2015           2014              2015          2014
Interest income:
             Interest and fees on loans                           $      46,150  $      35,902     $    171,302  $    136,066
             Taxable securities                                          1,058          1,143           4,331         4,497
             Nontaxable securities                                       875            871             3,499         3,489
             Federal funds sold                                          46             41              127           159
             Other interest and dividends                                322            206             716           514
             Total interest income                                       48,451         38,163          179,975       144,725
Interest expense:
             Deposits                                                    4,294          3,256           14,894        12,420
             Borrowed funds                                              996            447             2,810         1,699
             Total interest expense                                      5,290          3,703           17,704        14,119
             Net interest income                                         43,161         34,460          162,271       130,606
Provision for loan losses                                                3,308          2,759           12,847        10,259
             Net interest income after provision for loan losses         39,853         31,701          149,424       120,347
Non-interest income:
             Service charges on deposit accounts                         1,326          1,168           5,088         4,265
             Mortgage banking                                            620            507             2,682         2,047
             Securities gains                                            -              -               29            3
             Increase in cash surrender value life insurance             630            649             2,621         2,280
             Other operating income                                      983            786             3,543         2,634
             Total non-interest income                                   3,559          3,110           13,963        11,229
Non-interest expense:
             Salaries and employee benefits                              8,884          6,332           38,913        31,017
             Equipment and occupancy expense                             1,519          1,335           6,389         5,547
             Professional services                                       706            558             2,607         2,435
             FDIC and other regulatory assessments                       733            516             2,660         2,094
             Other real estate owned expense                             324            528             1,227         1,533
             Merger expense                                              -              -               2,100         -
             Other operating expense                                     6,920          3,874           20,486        14,972
             Total non-interest expense                                  19,086         13,143          74,382        57,598
             Income before income tax                                    24,326         21,668          89,005        73,978
Provision for income tax                                                 4,576          6,636           25,465        21,601
             Net income                                                  19,750         15,032          63,540        52,377
             Dividends on preferred stock                                24             115             280           431
             Net income available to common stockholders          $      19,726  $      14,917     $    63,260   $    51,946
Basic earnings per common share                                   $      0.76    $      0.60       $    2.46     $    2.18
Diluted earnings per common share                                 $      0.74    $      0.58       $    2.39     $    2.09
LOANS BY TYPE (UNAUDITED)
(In thousands)
                                               4th Quarter 2015    3rd Quarter 2015    2nd Quarter 2015    1st Quarter 2015    4th Quarter 2014
Commercial, financial and agricultural         $        1,760,479  $        1,683,819  $        1,642,182  $        1,554,020  $        1,504,652
Real estate - construction                              243,267             232,895             219,607             219,005             208,769
Real estate - mortgage:
                    Owner-occupied commercial           1,014,669           978,721             930,719             869,724             793,917
                    1-4 family mortgage                 444,134             417,012             392,245             375,770             333,455
                    Other mortgage                      698,779             677,822             627,099             545,668             471,363
Subtotal: Real estate - mortgage                        2,157,582           2,073,555           1,950,063           1,791,162           1,598,735
Consumer                                                55,047              53,973              51,882              43,665              47,702
Total loans                                    $        4,216,375  $        4,044,242  $        3,863,734  $        3,607,852  $        3,359,858
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
                                                            4th Quarter 2015 3rd Quarter 2015  2nd Quarter 2015  1st Quarter 2015  4th Quarter 2014
Allowance for loan losses:
Beginning balance                                           $      42,574    $     40,020      $     37,356      $     35,629      $     34,442
Loans charged off:
       Commercial financial and agricultural                       2,186           388               1,151             77                416
       Real estate - construction                                  161             31                93                382               309
       Real estate - mortgage                                      463             -                 208               433               922
       Consumer                                                    21              126               19                5                 21
                      Total charge offs                            2,831           545               1,471             897               1,668
Recoveries:
       Commercial financial and agricultural                       241             13                6                 19                2
       Real estate - construction                                  61              13                65                99                37
       Real estate - mortgage                                      65              1                 2                 101               46
       Consumer                                                    1               -                 -                 -                 11
                      Total recoveries                             368             27                73                219               96
       Net charge-offs                                             2,463           518               1,398             678               1,572
       Provision for loan losses                                   3,308           3,072             4,062             2,405             2,759
       Ending balance                                       $      43,419    $     42,574      $     40,020      $     37,356      $     35,629
       Allowance for loan losses to total loans                    1.03   %        1.05   %          1.04   %          1.04   %          1.06    %
       Allowance for loan losses to total average
                      loans                                        1.05   %        1.08   %          1.07   %          1.07   %          1.10    %
       Net charge-offs to total average loans                      0.24   %        0.05   %          0.15   %          0.08   %          0.19    %
       Provision for loan losses to total average
                      loans                                        0.32   %        0.31   %          0.44   %          0.28   %          0.34    %
       Nonperforming assets:
                      Nonaccrual loans                      $      7,767     $     9,850       $     8,194       $     8,361       $     9,125
                      Loans 90+ days past due and accruing         1               524               470               553               925
                      Other real estate owned and
                      repossessed assets                           5,392           6,068             8,235             8,638             6,840
       Total                                                $      13,160    $     16,442      $     16,899      $     17,552      $     16,890
       Nonperforming loans to total loans                          0.18   %        0.26   %          0.22   %          0.25   %          0.30    %
       Nonperforming assets to total assets                        0.26   %        0.34   %          0.38   %          0.40   %          0.41    %
       Nonperforming assets to earning assets                      0.26   %        0.35   %          0.38   %          0.41   %          0.42    %
       Reserve for loan losses to nonaccrual loans                 559.02 %        432.22 %          488.41 %          446.79 %          390.45  %
       Restructured accruing loans                          $      6,782     $     8,266       $     8,279       $     8,280       $     8,292
       Restructured accruing loans to total loans                  0.16   %        0.20   %          0.21   %          0.23   %          0.25    %
       TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
       (In thousands)
                                                            4th Quarter 2015 3rd Quarter 2015  2nd Quarter 2015  1st Quarter 2015  4th Quarter 2014
       Beginning balance:                                   $      8,266     $     8,279       $     8,280       $     8,992       $     7,932
                      Additions                                    -               -                 -                 -                 6,250
                      Net (paydowns) / advances                    (83)            (13)              (1)               (381)             (4,492)
                      Charge-offs                                  (447)           -                 -                 (331)             (698)
                                                            $      7,736     $     8,266       $     8,279       $     8,280       $     8,992
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
                                                                 4th Quarter 2015   3rd Quarter 2015   2nd Quarter   1st Quarter 2015   4th Quarter 2014
                                                                                                       2015
Interest income:
            Interest and fees on loans                           $        46,150    $        44,401    $     42,105  $        38,646    $        35,902
            Taxable securities                                            1,058              1,041           1,104            1,128              1,143
            Nontaxable securities                                         875                890             874              860                871
            Federal funds sold                                            46                 32              24               77                 41
            Other interest and dividends                                  322                168             102              72                 206
            Total interest income                                         48,451             46,532          44,209           40,783             38,163
Interest expense:
            Deposits                                                      4,294              3,818           3,512            3,270              3,256
            Borrowed funds                                                996                852             486              476                447
            Total interest expense                                        5,290              4,670           3,998            3,746              3,703
            Net interest income                                           43,161             41,862          40,211           37,037             34,460
Provision for loan losses                                                 3,308              3,072           4,062            2,405              2,759
            Net interest income after provision for loan losses           39,853             38,790          36,149           34,632             31,701
Non-interest income:
            Service charges on deposit accounts                           1,326              1,279           1,276            1,207              1,168
            Mortgage banking                                              620                873             735              454                507
            Securities gains                                              -                  -               -                29                 -
            Increase in cash surrender value life insurance               630                683             660              648                649
            Other operating income                                        983                987             834              739                786
            Total non-interest income                                     3,559              3,822           3,505            3,077              3,110
Non-interest expense:
            Salaries and employee benefits                                8,884              10,595          10,426           9,008              6,332
            Equipment and occupancy expense                               1,519              1,575           1,634            1,661              1,335
            Professional services                                         706                668             665              568                558
            FDIC and other regulatory assessments                         733                681             626              620                516
            Other real estate owned expense                               324                400             289              214                528
            Merger expense                                                -                  -               -                2,096              -
            Other operating expense                                       6,920              4,413           4,573            4,584              3,874
            Total non-interest expense                                    19,086             18,332          18,213           18,751             13,142
            Income before income tax                                      24,326             24,280          21,441           18,958             21,668
Provision for income tax                                                  4,576              8,014           6,972            5,903              6,636
            Net income                                                    19,750             16,266          14,469           13,055             15,032
            Dividends on preferred stock                                  24                 33              123              100                115
            Net income available to common stockholders          $        19,726    $        16,233    $     14,346  $        12,955    $        14,917
Basic earnings per common share                                  $        0.76      $        0.63      $     0.56    $        0.51      $        0.60
Diluted earnings per common share                                $        0.74      $        0.61      $     0.54    $        0.49      $        0.58
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
                                                            4th Quarter 2015                 3rd Quarter 2015                 2nd Quarter 2015                 1st Quarter 2015                 4th Quarter 2014
                                                            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                                    $       4,113,044  4.44   %      $       3,915,778  4.48   %      $       3,731,699  4.51   %      $       3,492,363  4.47   %      $       3,215,400  4.41   %
                 Tax-exempt (2)                                     9,639      4.98                  9,802      4.98                  10,005     5.00                  10,180     5.03                  10,367     4.98
       Mortgage loans held for sale                                 4,362      4.27                  7,714      4.32                  12,718     2.21                  6,884      2.12                  3,410      6.05
       Debt securities:
                 Taxable                                            193,982    2.18                  189,941    2.19                  193,848    2.28                  198,104    2.28                  195,533    2.32
                 Tax-exempt (2)                                     139,435    3.88                  139,543    3.95                  136,104    3.93                  129,525    4.02                  127,909    4.19
                           Total securities (3)                     333,417    2.89                  329,484    2.94                  329,952    2.96                  327,629    2.97                  323,442    3.06
       Federal funds sold                                           33,255     0.55                  24,860     0.51                  26,638     0.36                  39,438     0.27                  68,640     0.24
       Restricted equity securities                                 4,954      4.24                  4,954      4.16                  4,953      3.16                  4,354      3.63                  3,418      3.95
       Interest-bearing balances with banks                         366,771    0.29                  168,548    0.27                  97,482     0.26                  119,195    0.28                  273,496    0.26
       Total interest-earning assets                                4,865,442  3.99   %              4,461,140  4.18   %              4,213,447  4.26   %              4,000,043  4.18   %              3,898,173  3.94   %
Non-interest-earning assets:
       Cash and due from banks                                      62,037                           63,259                           58,347                           61,911                           58,973
       Net premises and equipment                                   19,609                           18,961                           16,323                           13,847                           8,315
       Allowance for loan losses,
                 accrued interest and
                 other assets                                       124,241                          127,778                          129,233                          117,612                          101,831
                           Total assets                     $       5,071,329                $       4,671,136                $       4,417,350                $       4,193,413                $       4,067,292
Interest-bearing liabilities:
       Interest-bearing deposits:
       Checking                                             $       611,521    0.30   %      $       593,550    0.28   %      $       579,650    0.27   %      $       553,569    0.26   %      $       511,451    0.26   %
       Savings                                                      39,590     0.29                  37,281     0.30                  37,697     0.28                  36,128     0.28                  28,806     0.29
       Money market                                                 2,048,453  0.49                  1,817,997  0.47                  1,653,708  0.45                  1,618,715  0.44                  1,645,533  0.45
       Time deposits                                                503,217    1.00                  485,137    0.99                  480,140    1.05                  446,084    1.05                  395,598    1.03
       Federal funds purchased                                      295,530    0.37                  246,168    0.31                  275,888    0.29                  270,549    0.28                  231,135    0.28
       Other borrowings                                             55,805     5.11                  50,509     5.18                  21,238     5.40                  20,455     5.65                  19,969     5.62
       Total interest-bearing liabilities                           3,554,116  0.59   %              3,230,642  0.57   %              3,048,321  0.53   %              2,925,500  0.52   %              2,832,492  0.52   %
Non-interest-bearing liabilities:
       Non-interest-bearing
                 demand                                             1,062,795                        988,756                          908,020                          813,340                          823,738
       Other liabilities                                            13,469                           23,738                           11,793                           6,745                            9,969
       Stockholders’ equity                                         436,928                          424,113                          444,302                          422,847                          395,981
       Unrealized gains on securities and
                 derivatives                                        4,021                            3,911                            4,914                            4,981                            5,112
                           Total liabilities and
                                      stockholders’ equity  $       5,071,329                $       4,671,136                $       4,417,350                $       4,193,413                $       4,067,292
Net interest spread                                                            3.40   %                         3.61   %                         3.73   %                         3.66   %                         3.42   %
Net interest margin                                                            3.56   %                         3.77   %                         3.88   %                         3.80   %                         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-of-2015-300209148.html

SOURCE ServisFirst Bancshares, Inc.

http://rt.prnewswire.com/rt.gif?NewsItemId=CL06294&Transmission_Id=201601251601PR_NEWS_USPR_____CL06294&DateId=20160125



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