ServisFirst Bancshares(US:SFBS)2023-08-02 22:10Financial Performance - Net income available to common stockholders for Q2 2023 was $53.4 million, a decrease of $8.7 million or 14.0% from $62.1 million in Q2 2022[110] - Basic and diluted earnings per common share for Q2 2023 were both $0.98, compared to $1.14 in the same period of 2022[110] - Net income for Q2 2023 was $53.4 million, down from $62.1 million in Q2 2022, representing a decrease of 11.2%[157] - Noninterest income totaled $8.6 million for the three months ended June 30, 2023, a decrease of $924,000 or 9.7% compared to $9.5 million in 2022, and $14.9 million for the six months ended June 30, 2023, down 14.6% from $17.5 million in 2022[176] Asset and Liability Management - As of June 30, 2023, total assets increased to $15.1 billion, up $477.1 million or 3.3% from $14.6 billion at December 31, 2022[109] - Total loans decreased to $11.6 billion, down $83.1 million or 0.7% from $11.7 billion at December 31, 2022[122] - Total deposits rose to $12.3 billion, an increase of $741.4 million or 6.4% from $11.5 billion at December 31, 2022[109] - The company reported a total stockholders' equity of $1.36 billion, representing 9.04% of total assets as of June 30, 2023, up from 8.89% at the end of 2022[144] - The company maintained a CET 1 Capital to Risk Weighted Assets ratio of 10.37% as of June 30, 2023, exceeding the required 4.50%[147] Credit Quality - The allowance for credit losses is believed adequate to absorb all expected future losses over the contractual life of the loans in the portfolio[123] - Nonperforming loans increased to $22.8 million at June 30, 2023, from $17.8 million at December 31, 2022, reflecting a rise of 28.3%[129] - Net charge-offs for the six months ended June 30, 2023, were $4.9 million, compared to $3.1 million for the same period in 2022, indicating an increase of 57.4%[127] - Provision for credit losses decreased to $6.7 million for the three months ended June 30, 2023, down from $9.5 million in the same period of 2022, and $10.9 million for the six months ended June 30, 2023, down from $14.9 million in 2022[175] Interest Income and Expense - Net interest income for Q2 2023 was $101.3 million, a decrease of $15.1 million or 13% from Q2 2022[115] - Net interest margin for Q2 2023 was 2.93%, down 33 basis points from 3.26% in Q2 2022[115] - The yield on loans for Q2 2023 was 5.94%, up from 4.38% in Q2 2022, indicating an increase of 1.56 percentage points[160] - The cost of total interest-bearing liabilities increased to 3.55% in Q2 2023 from 0.46% in Q2 2022, reflecting significant upward pressure on funding costs[160] - Net interest spread decreased to 1.94% in Q2 2023 from 3.08% in Q2 2022[165] Deposits and Funding - Average deposits for Q2 2023 were $11.6 billion, a decrease of $459.4 million or 4% year-over-year[115] - The company estimates approximately $7.8 billion in uninsured deposits as of June 30, 2023, compared to $7.5 billion at December 31, 2022[136] - The company had $1.30 billion in federal funds purchased at June 30, 2023, with an average interest rate of 5.13% for the quarter[139] - Liquid assets totaled $1.7 billion, with an additional $1.9 billion available from loans pledged to the FHLB[140] Operational Efficiency - Total noninterest expense was $38.5 million for the three months ended June 30, 2023, a decrease of $1.4 million or 3.4% from $39.8 million in 2022, while for the six months it increased to $78.1 million, up 1.4% from $77.0 million in 2022[178] - Salaries and employee benefits decreased by $1.9 million or 9.4% to $18.8 million for the three months ended June 30, 2023, compared to $20.7 million in 2022[179] - The number of full-time equivalent employees increased from 540 as of June 30, 2022, to 577 as of June 30, 2023[179] Regulatory and Risk Management - The asset-liability committee monitors economic indicators and conducts quarterly analyses of the rate sensitivity position to manage interest rate risk[184] - The gap between rate-sensitive assets and liabilities is analyzed to maintain net interest margins within a targeted range, with a policy to limit changes to no more than 10% for a 100 basis point change in interest rates[185] - The company is categorized as well-capitalized under FDIC guidelines as of June 30, 2023[145]