Group 1: Market Overview - Wall Street sold technology stocks as investors take profits amid increasing market volatility, with the Nasdaq up over 90% in the past three years [1] - The bullish market backdrop remains intact, with strong earnings growth projected for 2026 and expectations of interest rate cuts by the U.S. Federal Reserve [2] Group 2: Investment Strategy - Investors can utilize a Zacks screen to identify top Zacks Rank 1 (Strong Buy) stocks from over 200 highly-ranked companies [3] - Zacks Rank 1 stocks have historically outperformed the market, averaging an annual return of approximately 24.4% since 1988 [6] Group 3: Stock Screening Parameters - The screening parameters include a Zacks Rank of 1, positive current quarter estimate revisions, and top broker rating changes over the last four weeks [7][8] Group 4: Featured Stock - ServisFirst Bancshares, Inc. (SFBS) - ServisFirst Bancshares, Inc. is highlighted as a top-ranked finance stock, focusing on business and personal banking services across multiple states [9][10] - The company is projected to grow revenue by 20% in 2026 and 9% in the following year, boosting adjusted earnings by 22% and 10%, respectively [12] - SFBS shares have increased by 370% over the past decade, outperforming the Finance sector's 165%, and are on the verge of breaking out of a trading range [13] - Despite its strong performance, SFBS trades at a 25% discount to its sector and 20% below its own 10-year median, with a dividend yield of 1.8% [14]

Core Viewpoint - ServisFirst Bancshares (SFBS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is primarily driven by changes in a company's earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [2]. - The recent upgrade for ServisFirst reflects an improvement in its earnings outlook, which is expected to positively impact its stock price [4][6]. Impact of Earnings Revisions - There is a strong correlation between changes in earnings estimates and near-term stock price movements, making earnings estimate revisions a critical factor for investment decisions [5][7]. - ServisFirst is projected to earn $6.40 per share for the fiscal year ending December 2026, with a 4.9% increase in the Zacks Consensus Estimate over the past three months [9]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - ServisFirst's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10][11].

Core Viewpoint - ServisFirst Bancshares reported strong fourth-quarter results, leading to a significant increase in stock price by over 14% [1] Group 1: Financial Performance - Deposits increased by 5% year over year to $675.6 million, while loans rose by 12% to $384.9 million [2] - The net interest margin improved by 42 basis points to 3.38% due to declining interest rates [2] - Earnings per share surged by 33% to $1.58 [2] Group 2: Market Metrics - Market capitalization stands at $4.2 billion [3] - Stock price ranged from $82.21 to $87.98 during the trading day, with a 52-week range of $66.48 to $93.90 [3] - Average trading volume was 265,000, with a current volume of 713,000 [3] Group 3: Efficiency and Returns - The efficiency ratio improved to 29% from 36% in the previous year, indicating better management of non-interest expenses relative to revenue [3] - Return on average common stockholders' equity increased to 18.9% from 16.3% year-over-year [5] - The bank raised its dividend by 13% to $0.38 per share, rewarding shareholders [5] Group 4: Management Focus - The CFO emphasized a focus on net interest margin expansion and disciplined expense control [4]

Group 1 - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] - Occasionally, large-cap companies are analyzed to provide a broader perspective on the equity markets [1] Group 2 - There is a beneficial long position in the shares of SFBS, indicating a vested interest in the company's performance [2] - The article expresses personal opinions and is not influenced by compensation from any company mentioned [2]

Core Insights - U.S. stocks experienced an upward trend, with the Dow Jones increasing by approximately 350 points on Wednesday [1] Company Performance - Progress Software Corp reported fourth-quarter adjusted EPS of $1.51, surpassing the Street estimate of $1.31, and quarterly revenue of $252.67 million, slightly below the consensus estimate of $252.86 million [2] - Progress Software shares surged by 20.5% to $46.50 following the earnings report and positive first-quarter guidance [2] Other Notable Stock Movements - Rambus Inc saw a gain of 15.1%, reaching $126.67 [3] - ServisFirst Bancshares Inc increased by 13.3% to $86.45 after reporting better-than-expected fourth-quarter earnings [3] - Lucid Group Inc rose by 12.9% to $10.97 [3] - Red Cat Holdings Inc jumped 11.4% to $16.05 [3] - American Resources Corp surged 11% to $3.88 [3] - Zura Bio Ltd increased by 10.5% to $5.54, with a new CEO appointed [3] - SES AI Corp gained 10.5% to $2.42 [3] - Lexicon Pharmaceuticals Inc shares rose 10.3% to $1.44 after a successful FDA meeting for Pilavapadin [3] - Comstock Resources Inc increased by 9.8% to $24.49 [3] - Tronox Holdings PLC surged 9.5% to $6.06, with an analyst maintaining a Buy rating and raising the price target [3] - Teledyne Technologies Inc gained 9.2% to $618.47 after reporting better-than-expected quarterly results [3] - Intel Corp increased by 9.1% to $52.97 [3] - Arm Holdings PLC surged 9% to $116.81 after an upgrade from Neutral to Positive [3] - Nuscale Power Corp gained 8.1% to $20.50 [3] - Quantumscape Corp increased by 8% to $11.05 [3] - Moderna Inc rose 6.4% to $45.76, sharing positive data from a study on mRNA-based therapy [3]

Core Insights - ServisFirst Bancshares, Inc. (SFBS) has reported significant financial growth for the fourth quarter of 2025, with notable increases in earnings and revenue [1] Financial Performance - The earnings per share (EPS) for SFBS was $1.58, exceeding the expected $1.38, representing a 33% increase from the same period in 2024 and a 32% rise from the third quarter of 2025 [2][6] - Annual diluted EPS reached $5.06, indicating a 22% increase compared to 2024, while adjusted diluted EPS rose by 26% to $5.25 [2] - Revenue was approximately $162.2 million, surpassing the estimated $154.7 million, with a price-to-sales ratio of about 4.17 [3][6] Efficiency and Margins - The net interest margin improved to 3.38%, which is 42 basis points higher than the fourth quarter of 2024 and 29 basis points above the third quarter of 2025 [4] - The efficiency ratio decreased significantly to 29%, down from 36% in the fourth quarter of 2024 and 35% in the third quarter of 2025 [4][6] Financial Ratios - The company has a moderate debt-to-equity ratio of approximately 0.87, but faces potential liquidity concerns with a current ratio of around 0.11 [5] - The earnings yield is about 6.12%, providing insight into the return on investment [5] - The cost of interest-bearing deposits decreased by 62 basis points from the fourth quarter of 2024, now standing at 3.01% [5]

Financial Data and Key Metrics Changes - The company reported earnings per diluted share of $1.58 for the fourth quarter, representing a 32% increase from the third quarter of 2025 and a 33% increase from the fourth quarter of 2024 [9] - Full year earnings per share was $5.25 on an operating basis and $5.06 on a GAAP basis, with net income available to common shareholders at $86.4 million for the quarter and $276.5 million for the year [9] - The return on average assets was 1.62% for the year, and the return on common equity was nearly 17% [9] - The tangible book value grew 4% to $33.62 per share [9] Business Line Data and Key Metrics Changes - Loan growth for the quarter was annualized at 12%, with a significant increase in the loan pipeline, which rose by 11% quarter-over-quarter [3] - The C&I book experienced nearly 10% growth during the year, marking the highest growth rate in that segment in several years [7] - Non-interest revenue saw a 26% growth from the full year 2024 to 2025, driven by increased service charges [12] Market Data and Key Metrics Changes - The company has expanded its correspondent banking relationships to 388, including 145 that settle at the Federal Reserve Bank [5] - The new Texas banking team is expected to drive growth, with a focus on C&I lending rather than commercial real estate [49] Company Strategy and Development Direction - The company is focused on organic growth, particularly through the expansion in Texas, which is expected to contribute significantly to loan balances and deposits in 2026 [49] - The efficiency ratio is expected to remain in the low 30s as the Texas team builds its book of business [51] - The company is actively managing its loan portfolio and has a disciplined approach to loan pricing, which has contributed to margin expansion [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan demand, particularly in the C&I sector, indicating a positive trend compared to previous quarters [24] - The company is prepared for potential economic fluctuations and is focused on maintaining strong liquidity levels without reliance on brokered deposits [15] - Management noted that while there are challenges in hiring due to competition, they are committed to bringing in quality talent to support growth [60] Other Important Information - The company paid down $30 million of subordinated debt at a cost of 4.5% [14] - The company has no brokered deposits or FHLB debt, maintaining a strong liquidity position [15] Q&A Session Summary Question: Trends in loan payoffs and expectations for loan growth - Management noted that projected payoffs have decreased significantly this quarter, leading to a more optimistic outlook for loan growth [21] Question: Economic backdrop and commercial loan demand - Management rated current commercial loan demand as slightly better than before, indicating a positive trend in C&I growth [24] Question: Margin expectations and fee collection impact - Management indicated that the December margin is a good starting point for 2026, with expectations for continued margin expansion [30] Question: Charge-offs and non-performing loans - The charge-off was related to a healthcare asset, which was anticipated and reserved for, and management is actively working on multifamily assets [36] Question: Tax rate expectations for 2026 - Management plans to continue leveraging tax credits, particularly around solar credits, to manage the tax rate going forward [43] Question: Growth expectations for the Texas team - The Texas team's budgeted growth for 2026 is higher than any other region, with expectations for significant contributions to loan balances [49] Question: Overall expense growth for 2026 - Management anticipates high single-digit expense growth for 2026, primarily driven by new hires that will generate revenue [57]

Financial Data and Key Metrics Changes - The company recorded earnings per diluted share of $1.58 for the fourth quarter, representing a 32% increase from the third quarter of 2025 and a 33% increase from the fourth quarter of 2024 [9] - Full year earnings per share was $5.25 on an operating basis and $5.06 on a GAAP basis [9] - Net income available to common shareholders was $86.4 million for the quarter and $276.5 million for the year [9] - The return on average assets was 1.62% for the year, and the return on common equity was nearly 17% [9] - The tangible book value grew 4% to $33.62 per share [9] - The net interest margin rose from 2.92% in the first quarter to 3.38% in the fourth quarter [10] Business Line Data and Key Metrics Changes - Loan growth for the quarter was annualized at 12%, with a significant increase in the loan pipeline, which rose by 11% quarter-over-quarter [3] - The C&I book experienced nearly 10% growth during the year, marking the highest growth rate in that segment in several years [7] - Non-interest revenue saw a 26% growth from the full year 2024 to 2025, driven by service charge increases [12] Market Data and Key Metrics Changes - The company has expanded its correspondent banking relationships to 388, including 145 that settle at the Federal Reserve Bank [5] - The new Texas banking team is expected to drive growth, with a focus on C&I lending rather than commercial real estate [49] Company Strategy and Development Direction - The company is focused on organic growth, particularly through the expansion in Texas, which is expected to contribute significantly to loan balances and deposits in 2026 [49] - The company aims to maintain a best-in-class efficiency ratio while managing costs and increasing operating leverage [10][15] - The company is optimistic about the opportunities in the Texas market and plans to hire more personnel to support growth [49][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan demand, particularly in the C&I sector, indicating a positive trend compared to previous quarters [24] - The company is prepared for potential economic fluctuations and is focused on maintaining strong liquidity levels without relying on brokered deposits [15] - Management acknowledged the challenges posed by rising interest rates but remains confident in their ability to manage loan pricing effectively [30] Other Important Information - The company paid down $30 million of subordinated debt at a cost of 4.5% [14] - The efficiency ratio is expected to remain in the low 30s for 2026, reflecting the anticipated expenses associated with the Texas expansion [51] Q&A Session Summary Question: Loan Payoff Trends - Management noted that projected payoffs have dropped significantly quarter-over-quarter, leading to a more optimistic outlook for loan growth [21] Question: Commercial Loan Demand - Management rated current commercial loan demand as slightly better than before, indicating a positive trend in C&I growth [23] Question: Margin Expectations - The December margin is expected to serve as a good starting point for 2026, with continued margin expansion anticipated [30] Question: Charge-Off Details - The $5 million charge-off was related to a healthcare asset, which was anticipated and largely reserved for [36] Question: Tax Rate for 2026 - The company plans to continue leveraging tax credits, particularly around solar credits, to manage the tax rate going forward [44] Question: Texas Expansion Growth - The budgeted growth for the Texas team is expected to be higher than any other region, with a focus on C&I lending [49]

Financial Data and Key Metrics Changes - The company reported earnings per diluted share of $1.58 for Q4 2025, representing a 32% increase from Q3 2025 and a 33% increase from Q4 2024 [9] - Full year earnings per share was $5.25 on an operating basis and $5.06 on a GAAP basis [9] - Net income available to common shareholders was $86.4 million for the quarter and $276.5 million for the year [9] - The tangible book value grew 4% to $33.62 per share [9] - The net interest margin increased from 2.92% in Q1 2025 to 3.38% in Q4 2025 [9][10] Business Line Data and Key Metrics Changes - Loan growth for the quarter was annualized at 12%, with a notable 10% growth in the C&I book during the year, marking the highest growth rate in that segment in several years [4][7] - Non-interest revenue saw a 26% growth from full year 2024 to full year 2025, driven by increased service charges [12] - Non-interest expense remained flat compared to the same quarter last year and increased only 2% for the full year [12] Market Data and Key Metrics Changes - The company has expanded its correspondent banking relationships to 388, including 145 that settle at the Federal Reserve Bank [6] - The new Texas banking team is expected to significantly contribute to growth, with a budgeted growth for 2026 higher than any other region [42] Company Strategy and Development Direction - The company is focused on organic growth, particularly through the expansion in Texas, and aims to attract high-cost deposits back if loan demand remains robust [5][14] - The management is optimistic about the Texas team's performance and anticipates hiring more personnel in the first and second quarters of 2026 [5][42] - The company plans to maintain a strong efficiency ratio while managing expenses related to the new Texas team [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan demand, particularly in the C&I sector, indicating a positive trend compared to previous quarters [21] - The company is prepared for potential economic fluctuations and is focused on maintaining a disciplined approach to loan pricing and cost management [10][28] - The management expects continued margin expansion throughout 2026, supported by repricing opportunities on low fixed-rate loans [26] Other Important Information - The company recorded net charge-offs of approximately $6.7 million for Q4, primarily related to one credit, with an allowance for loan losses ratio of 1.25% [7][11] - The efficiency ratio dipped below 30% for the quarter, with an adjusted efficiency ratio of around 32% for the full year, marking a 14% improvement over 2024 [10] Q&A Session Summary Question: Trends in loan payoffs and expectations for loan growth - Management noted that projected payoffs have dropped substantially quarter over quarter, indicating a positive trend in loan growth [19] Question: Commercial loan demand outlook - Management rated current commercial loan demand as slightly better than before, particularly in the C&I sector, which has shown significant growth [21] Question: Margin sustainability and fee collection impact - Management indicated that the December margin is a good starting point for 2026, with expectations for continued margin expansion due to disciplined loan pricing [25][26] Question: Charge-off details and non-performing loans - The charge-off was related to a healthcare asset, which was anticipated and reserved for, and management is actively working on a multifamily asset portfolio [32] Question: Tax rate expectations for 2026 - Management plans to continue leveraging tax credits, particularly around solar credits, to manage the tax rate going forward [36] Question: Growth expectations for the Texas team - The Texas team's budgeted growth for 2026 is expected to be higher than any other region, with optimism about their performance in the market [42] Question: Overall expense growth for 2026 - Management anticipates high single-digit expense growth for 2026, primarily due to new hires that are expected to generate revenue [49]

Financial Performance - Net income for Q4 2025 was $86.4 million, a 31.7% increase from Q3 2025 and a 32.5% increase from Q4 2024[6]. - Diluted earnings per share for Q4 2025 reached $1.58, up 33% from Q4 2024 and up 32% from Q3 2025[7]. - Income before income tax for Q4 2025 was $107.6 million, compared to $79.4 million in Q4 2024[22]. - Net income for Q4 2025 was reported at $86,384, compared to $65,571 in Q3 2025, reflecting a 31.5% increase[28]. - Net income for the year ended December 31, 2025, was $276,603,000, a 22% increase from $227,242,000 in 2024[32]. - Basic earnings per common share rose to $5.06 for the year ended December 31, 2025, compared to $4.17 in 2024[32]. Asset and Loan Growth - Loans grew by $384.9 million, or 12% annualized, during Q4 2025, reaching a total of $13.70 billion[12]. - Total loans increased by 9% to $13,696,912,000 from $12,605,836,000 year-over-year[33]. - Total assets increased to $17,727,190, up from $17,584,199 in the previous quarter, representing a growth of 0.81%[24]. - Total assets increased by 2% to $17,727,190,000 from $17,351,643,000 year-over-year[31]. - Total loans net of unearned income reached $13,504,941, a slight increase from $13,205,775 in the previous quarter[38]. Deposits and Liquidity - Total deposits increased by $675.6 million, or 5%, year-over-year, totaling $14.22 billion in Q4 2025[13]. - Total deposits reached $14,219,034, an increase from $14,106,922 in the previous quarter, representing a growth of 0.79%[24]. - Liquidity remains strong with $1.63 billion in cash and cash equivalent assets, representing 9% of total assets[7]. Income and Expense Management - Net interest income for Q4 2025 was $146.5 million, compared to $123.2 million in Q4 2024, reflecting a significant year-over-year increase[22]. - Non-interest income increased by $6.9 million, or 78.2%, to $15.7 million in Q4 2025 from $8.8 million in Q4 2024[15]. - Non-interest expense decreased by $213,000, or 0.5%, to $46.7 million in Q4 2025 from $46.9 million in Q4 2024[16]. - The efficiency ratio improved to 28.78% in Q4 2025 from 35.54% in Q4 2024[16]. - Adjusted net interest income for the period was $162,212 million, compared to $144,093 million in the previous period, reflecting a growth of 12.8%[30]. Credit Quality - Non-performing assets to total assets were 0.97% for Q4 2025, up from 0.26% in Q4 2024[14]. - Annualized net charge-offs to average loans were 0.20% for Q4 2025, compared to 0.09% in Q4 2024[14]. - The allowance for credit losses increased to $171,683 thousand in Q4 2025 from $170,235 thousand in Q3 2025, reflecting a provision for credit losses of $8,130 thousand[35]. - Nonperforming loans to total loans ratio improved to 1.23% in Q4 2025 from 1.26% in Q3 2025, indicating better asset quality[35]. - The provision for credit losses decreased to $7,922 thousand in Q4 2025 from $9,463 thousand in Q3 2025, reflecting improved credit quality[37]. Market Expansion and Workforce - The company entered the Texas market with a new team of commercial bankers[7]. - The number of full-time equivalent employees increased by 36, or 5.7%, to 666 at December 31, 2025, compared to 630 at December 31, 2024[16].