Core Viewpoint - ServisFirst Bancshares, Inc. is set to announce its earnings and operating results for the quarter ending September 30, 2025, on October 20, 2025, at 4 p.m. ET [1] Group 1 - The company will host a live audio webcast to discuss its earnings and results on October 20, 2025, starting at 5:15 p.m. ET, with a replay available until October 31, 2025 [2] - ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama, providing various financial services through its subsidiary, ServisFirst Bank [3] - The bank offers commercial, consumer, and other loans, accepts deposits, and provides electronic banking services, treasury and cash management services, and correspondent banking services [3] Group 2 - The company files periodic reports with the U.S. Securities and Exchange Commission (SEC), and these filings can be accessed through the SEC's website or the company's website [4]

Core Viewpoint - Servisfirst Bancshares Inc. has shown modest stock performance with a 1.57% increase over the past month and a 2.88% increase over the past year, leading to mixed sentiments among investors regarding its valuation [1]. Group 1: Stock Performance - The current trading price of Servisfirst Bancshares Inc. is $83.86, reflecting a 0.19% increase [1]. - Over the past month, the stock has increased by 1.57%, while over the past year, it has increased by 2.88% [1]. Group 2: Price-to-Earnings Ratio Analysis - The P/E ratio of Servisfirst Bancshares Inc. is 18.32, which is higher than the aggregate P/E ratio of 17.93 in the Banks industry, suggesting that investors may expect better performance from the company compared to its peers [6]. - A higher P/E ratio may indicate that the stock is overvalued, but it could also reflect investor optimism about future performance and potential dividend increases [5][6]. Group 3: Investment Considerations - The P/E ratio is a useful metric for evaluating market performance, but it should be used cautiously as it can indicate both undervaluation and weak growth prospects [9]. - Investors are encouraged to consider the P/E ratio alongside other financial metrics, industry trends, and qualitative factors for a comprehensive analysis of a company's financial health [9].

Group 1 - ServisFirst Bancshares, Inc. declared a quarterly cash dividend of $0.335 per share, payable on October 10, 2025, to stockholders of record as of October 1, 2025 [1] - The company is based in Birmingham, Alabama, and operates through its subsidiary, ServisFirst Bank, providing business and personal financial services across multiple locations [2] - ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC), and these filings can be accessed through the SEC's website or the company's website [2]

Industry Overview - The Zacks Savings and Loan industry is benefiting from an improving lending environment, characterized by relatively low interest rates and expectations of further rate cuts [1][4] - The industry primarily consists of specialized U.S. banks focused on residential mortgage finance, offering various loan products and funding mortgages with FDIC-insured savings [3] Industry Trends - Lower interest rates are expected to enhance net interest income (NII) and net interest margin (NIM), as the Federal Reserve has reduced rates by 100 basis points in 2024 and is anticipated to cut rates again [4] - The digitization of operations is a key trend, with companies transitioning to technology-driven models to improve operational efficiency despite initial cost increases [5] - Asset quality is deteriorating, which may impact borrowers' repayment capacity due to rising inflation and less substantial rate cuts from the central bank [6] Industry Performance - The Zacks Savings and Loan industry ranks 19, placing it in the top 8% of over 245 Zacks industries, indicating solid near-term prospects [7][8] - The industry's earnings estimate has increased by 25.6% over the past year, reflecting growing analyst confidence in earnings growth potential [8] Stock Performance - The industry has underperformed compared to the Zacks Finance sector and the S&P 500, with a collective stock rally of 14.7% over the past year, while the S&P 500 rose by 21.3% [11] Valuation Metrics - The industry has a trailing 12-month price-to-tangible book ratio (P/TBV) of 2.00X, below the five-year median of 2.09X, indicating a discount compared to the broader market [15][18] - The Zacks Finance sector's current P/TBV is significantly higher at 5.69X, suggesting that the savings and loan industry is trading at a decent discount [18] Company Highlights - **ServisFirst Bancshares (SFBS)**: With total assets of $17.4 billion and loans of $13.2 billion, SFBS is expected to benefit from solid loan balances and improving market share. The Zacks Consensus Estimate for 2025 earnings is $5.22, reflecting a 24.9% year-over-year increase [21][23] - **WSFS Financial**: This company has $20.8 billion in assets and is projected to maintain stable loan growth. The Zacks Consensus Estimate for current-year earnings is $4.91, indicating an 11.9% rise [25][28] - **Provident Financial**: Following its merger with Lakeland Bancorp, Provident Financial has $24.6 billion in assets and is expected to see improved mortgage banking revenues. The Zacks Consensus Estimate for 2025 earnings is $2.15, a 77.7% year-over-year surge [32][34]

Financial Performance - Net income for the quarter ended June 30, 2025, was $61.4 million, compared to $52.1 million for the same quarter in 2024, representing a year-over-year increase of 17.9%[119] - Basic and diluted earnings per common share were both $1.12 for the second quarter of 2025, compared to $0.96 and $0.95 in the corresponding period in 2024[119] - Net income for the quarter ended June 30, 2025, was $61.4 million, up from $52.1 million in the same quarter of 2024, representing a year-over-year increase of 17.6%[168] - Basic and diluted earnings per common share for the three months ended June 30, 2025, were both $1.12, compared to $0.96 in the corresponding period in 2024, reflecting a 16.7% increase[169] Asset and Loan Growth - As of June 30, 2025, consolidated total assets were $17.38 billion, an increase of $27.0 million, or 0.2%, from $17.35 billion at December 31, 2024[118] - Total loans reached $13.23 billion, an increase of $626.7 million, or 5.0%, from $12.61 billion at December 31, 2024[130] - Total loans outstanding increased to $13,232,560 thousand in June 2025, up from $12,332,780 thousand in June 2024, representing a growth of 7.3% year-over-year[138] - Average loans for the second quarter of 2025 were $13.01 billion, an increase of $947.1 million, or 7.9%, from the second quarter of 2024[123] - The average loans outstanding for the six months ended June 30, 2025, were $12,859,947 thousand, compared to $11,901,985 thousand for the same period in 2024, showing an increase of 8.0%[138] Deposit Growth - Total deposits increased to $13.86 billion, up $318.9 million, or 2.4%, from $13.54 billion at December 31, 2024[118] - Average deposits for the second quarter of 2025 were $13.90 billion, an increase of $1.03 billion, or 8.0%, from the second quarter of 2024[123] - Total deposits increased to $13.86 billion, up $318.9 million, or 2.4%, from $13.54 billion at December 31, 2024[145] Interest Income and Margin - Net interest income for the second quarter of 2025 was $131.7 million, an increase of $25.8 million, or 24.4%, from the second quarter of 2024[123] - The net interest margin improved to 3.10% for the second quarter of 2025, up 31 basis points from 2.79% in the second quarter of 2024[123] - Taxable-equivalent net interest income increased by $25.9 million, or 24.4%, to $131.8 million for the three months ended June 30, 2025, compared to $105.9 million for the same period in 2024[171] - The net interest margin for the three months ended June 30, 2025, was 3.10%, compared to 2.79% for the corresponding period in 2024, indicating an improvement of 11.1%[171] - The net interest spread widened to 2.30% in Q2 2025 from 1.78% in Q2 2024, indicating improved efficiency in interest income generation[175] Credit Quality - The allowance for credit losses at the end of June 2025 was $169,959 thousand, compared to $158,092 thousand at the end of December 2024, reflecting an increase of 7.4%[139] - Nonperforming loans rose to $72,168 thousand as of June 30, 2025, a significant increase of 69.9% from $42,466 thousand at December 31, 2024[143] - The company reported net charge-offs of $6,484 thousand for the three months ended June 30, 2025, compared to $3,153 thousand for the same period in 2024, indicating an increase of 105.5%[139] - The provision for credit losses on loans was $11,409 thousand for the three months ended June 30, 2025, compared to $5,353 thousand for the same period in 2024, reflecting a year-over-year increase of 112.3%[139] - Nonperforming assets decreased to $311,000, a reduction of $2.2 million, or 87.7%, from $2.5 million at December 31, 2024[144] Capital and Equity - Total stockholders' equity attributable to the company was $1.72 billion, or 9.91% of total assets, as of June 30, 2025, up from $1.62 billion, or 9.32% of total assets, at December 31, 2024[155] - Total capital to risk-weighted assets ratio for ServisFirst Bank as of June 30, 2025, was 12.90%, exceeding the 8.00% regulatory requirement[157] - The company is categorized as well-capitalized under the regulatory framework for prompt corrective action as of June 30, 2025[156] Noninterest Income and Expenses - Noninterest income decreased to $421,000 for the three months ended June 30, 2025, a decline of $8.5 million, or 95.3%, compared to the same period in 2024[189] - Service charges on deposit accounts increased by $378,000, or 16.5%, to $2.7 million for the three months ended June 30, 2025[189] - Total noninterest expense rose to $44.2 million for the three months ended June 30, 2025, an increase of $1.4 million, or 3.2%, compared to the same period in 2024[191] Interest Rate Risk Management - The asset-liability committee analyzes the maturities of rate-sensitive assets and liabilities to measure the "gap" between them[198] - A gap ratio greater than one indicates an "asset-sensitive" balance sheet, while a ratio less than one indicates a "liability-sensitive" balance sheet[198] - The company maintains a policy to ensure net interest margins do not change more than 6% with a 100 basis point interest rate change[198] - There have been no changes to the policies or procedures for analyzing interest rate risk since December 31, 2024[198]

Core Insights - ServisFirst Bank has been ranked fifth among publicly traded banks with assets between $10 billion to $50 billion, according to American Banker's annual list based on year-end 2024 data [1][2] - The bank's previous ranking was fourth based on year-end 2023 data, indicating a slight decline in its position [1] - The bank reported a three-year average Return on Average Equity (ROAE) of 16.95% and a net interest margin of 2.82% for 2024 [2] Company Performance - ServisFirst Bank is recognized as the only Alabama-based institution in the top ten and among the top 80 banks nationwide, highlighting its strong financial performance [3] - The bank's success is attributed to disciplined growth, strong client relationships, and a focus on efficiency, as stated by its Chairman, President, and CEO [2] - The bank's asset size has exceeded $18 billion, reflecting its growth and stability in a competitive market [5] Industry Context - The ranking by American Banker is based on data compiled by Capital Performance Group using S&P Global Market Intelligence data and regulatory filings, emphasizing the importance of loan growth in driving earnings [2] - The median net income across the $10 billion–$50 billion tier has declined, yet ServisFirst Bank has managed to maintain its performance [2]

Core Viewpoint - ServisFirst Bancshares (SFBS) has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is primarily influenced by changes in a company's earnings potential, which is strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for ServisFirst suggest an improvement in the company's underlying business, which is expected to positively affect its stock price [5][10]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - ServisFirst's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions for ServisFirst - For the fiscal year ending December 2025, ServisFirst is expected to earn $5.12 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 1.8% over the past three months [8].

Core Insights - ServisFirst Bancshares reported a revenue of $140.67 million for the quarter ended June 2025, reflecting a year-over-year increase of 22.6% and a surprise of +1.32% over the Zacks Consensus Estimate of $138.84 million [1] - The earnings per share (EPS) for the quarter was $1.21, compared to $0.95 in the same quarter last year, resulting in an EPS surprise of +0.83% against the consensus estimate of $1.20 [1] Financial Performance Metrics - Efficiency Ratio stood at 33.5%, slightly better than the average estimate of 33.7% from two analysts [4] - Average Balance of Interest-earning Assets was reported at $17.08 billion, below the estimated $17.42 billion [4] - Net charge-offs to total average loans remained stable at 0.2%, matching the average estimate [4] - Net Interest Margin was 3.1%, exceeding the average estimate of 3% [4] - Net Interest Income reached $131.69 million, surpassing the average estimate of $130.05 million [4] - Service charges on deposit accounts totaled $2.67 million, above the average estimate of $2.54 million [4] - Mortgage banking income was reported at $1.32 million, exceeding the estimated $1.02 million [4] - Other Operating Income was $0.75 million, slightly below the average estimate of $0.9 million [4] - Total Non-interest income was $0.42 million, significantly lower than the average estimate of $8.79 million [4] - Increase in cash surrender value life insurance income was $2.13 million, matching the estimate [4] - Credit card income was reported at $2.12 million, slightly below the estimated $2.21 million [4] Stock Performance - ServisFirst shares have returned +13.8% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported net income of $61.4 million and diluted earnings per share of $1.12, representing an 18% increase from the second quarter of 2024 [13] - Pre-provision net revenue was $87.9 million, with a return on average assets of 1.4% and a return on common equity of 14.56% [13] - Net interest income for the quarter was $131.7 million, with adjusted net interest income at $129.4 million, which is $5.9 million higher than the first quarter of 2025 [17][19] - The adjusted margin increased to 3.05%, up 13 basis points from the previous quarter and 26 basis points from the same quarter last year [16] Business Line Data and Key Metrics Changes - Loan growth was solid at 11% annualized, with a year-to-date growth of 25% [10][13] - The company experienced elevated payoffs in commercial real estate but was able to replace these with new projects [5][6] - Non-interest income was significantly impacted by a bond book restructure, with an adjusted net interest revenue of just under $9 million for the quarter [20] Market Data and Key Metrics Changes - The company noted a normalization of higher-cost municipal and correspondent deposits during the quarter [7] - The loan-to-deposit ratio is in the mid-80% range, indicating a strong liquidity position [60][61] Company Strategy and Development Direction - The company is focusing on organic loan and deposit growth while maintaining price discipline for both loans and deposits [23] - A new merchant card processing team was hired to increase revenue from merchant services, aiming to improve penetration rates among existing customers [9][34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in loan demand, indicating a robust pipeline for the second half of the year despite some headwinds from payoffs [10][41] - The company expects its margin to continue increasing throughout the year, particularly if the Federal Reserve lowers benchmark rates [19] Other Important Information - The company underwent a significant restructuring of its bond portfolio, resulting in an $8.6 million loss but positioning for stronger margin performance in future quarters [14] - The tangible book value grew by an annualized 12.5% compared to the last quarter, ending at $31.27 per share [16] Q&A Session Summary Question: What is the expected trajectory for net interest margin? - The adjusted margin for the quarter was 3.06%, and it is expected to increase by about 10 to 14 basis points each quarter, potentially reaching 3.20% to 3.25% by year-end [25][26] Question: How does the company plan to drive deposit growth? - The company is managing its funding needs to align with loan growth and is prepared to onboard deposits as necessary [27][28] Question: Can you provide insights on the new lenders and markets? - The new hires include a mix of former employees and interns, with a focus on supporting existing production staff rather than expanding into new markets [30][31] Question: What trends are observed in commercial credit demand? - Management noted broad-based demand across various markets, with construction loans increasing due to a mix of new production and projects with significant equity [40][41] Question: What are the expectations for deposit cost trends? - Deposit costs are expected to normalize around the first quarter levels, with an adjusted cost of deposits around 3.50% to 3.57% [50][51] Question: What is the outlook for the loan-to-deposit ratio? - The company is comfortable with the current mid-80% loan-to-deposit ratio and prefers to be in a position where it needs to generate deposits rather than loans [61][62]

Financial Data and Key Metrics Changes - The company reported net income of $61.4 million for Q2 2025, representing an 18% increase from Q2 2024, but a slight decrease of 3% from Q1 2025 [12][16] - Diluted earnings per share were $1.12, with a return on average assets of 1.4% and a return on common equity of 14.56% [12] - The adjusted net interest margin improved to 3.05%, up 13 basis points from the previous quarter and 26 basis points from the same quarter last year [15] - The tangible book value grew by an annualized 12.5% from the last quarter, ending at $31.27 per share [15] Business Line Data and Key Metrics Changes - Loan growth was solid at 11% annualized, with a year-to-date growth of 25% [4][9] - The company experienced elevated payoffs in commercial real estate (CRE) but was able to replace these with new projects [5] - Non-interest income was significantly impacted by a bond portfolio restructuring, with a reported loss of $8.6 million [13][18] Market Data and Key Metrics Changes - The company noted a normalization of higher-cost municipal and correspondent deposits during the quarter [6] - The loan demand was characterized as good but not great, with a robust loan pipeline expected to continue [4][9] Company Strategy and Development Direction - The company is focusing on organic loan and deposit growth, emphasizing competitive and profitable pricing [22] - A new merchant services team was hired to enhance production in the merchant banking area, aiming to increase penetration among existing customers [8][32] - The company is strategically restructuring its bond portfolio to improve margin performance in future quarters [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the loan pipeline, indicating broad-based demand across various markets [40] - The company expects net interest margin to continue increasing, potentially reaching 3.20% to 3.25% by year-end, absent any Fed actions [25] - Management noted that while there are isolated incidents of credit deterioration, no systemic issues were identified [10] Other Important Information - The company successfully unwound a third-party processing configuration, switching to a direct relationship with Jack Henry, which is expected to yield cost savings [21] - The effective tax rate saw a slight decrease, and the company is strategizing to further reduce tax expenses [22] Q&A Session Summary Question: What is the expected trajectory for net interest margin? - The adjusted margin is 3.06% for the quarter, with expectations to increase by 10 to 14 basis points each quarter, potentially reaching 3.20% to 3.25% by year-end [24][25] Question: How does the company plan to drive deposit growth? - The company is managing through necessary funding for loan growth and is prepared to onboard deposits as needed [26][27] Question: Can you provide details on the new lenders and markets? - The new lenders are primarily support staff, with a focus on existing markets like Memphis and Auburn, Alabama [30][31] Question: What trends are observed in commercial credit demand? - Demand is broad-based across various markets, with construction loans increasing due to the need for reserves [39][40] Question: What are the expectations for deposit cost trends? - Deposit costs are expected to normalize around the first quarter levels, with an adjusted cost of deposits around 3.50% to 3.57% [50] Question: What is the outlook for loan-to-deposit ratios? - The adjusted loan-to-deposit ratio is in the mid-80% range, with a preference to generate deposits rather than loans [58]