ServisFirst Bancshares(US:SFBS)2024-05-08 21:14Financial Performance - Net income for the quarter ended March 31, 2024, was $50.0 million, compared to $58.0 million for the same period in 2023[110]. - Basic and diluted earnings per common share were both $0.92 for the first quarter of 2024, down from $1.07 and $1.06 in the first quarter of 2023[110]. - Return on average assets was 1.26% for Q1 2024, down from 1.63% in Q1 2023[112]. - Return on average stockholders' equity decreased to 13.82% in Q1 2024 from 17.83% in Q1 2023[112]. - Net income for Q1 2024 was $50.0 million, down from $58.0 million in Q1 2023, primarily due to a $5.8 million decrease in net interest income[154]. - Net interest income decreased to $102.5 million in Q1 2024 from $108.3 million in Q1 2023, attributed to a $1.48 billion increase in average deposits, or 12.3% year-over-year[157]. - Total non-interest income increased by $2.5 million to $8.8 million in Q1 2024 compared to $6.3 million in Q1 2023[154]. - Noninterest income rose to $8.8 million in Q1 2024, a $2.5 million increase, with service charges on deposit accounts up 11.2% to $2.2 million and mortgage banking revenue up 53.4% to $678,000[166][167]. Asset and Liability Management - As of March 31, 2024, consolidated total assets were $15.72 billion, a decrease of $408.0 million, or 2.5%, from $16.13 billion at December 31, 2023[109]. - Total loans increased to $11.88 billion, up $221.9 million, or 1.9%, from $11.66 billion at December 31, 2023[109]. - Total deposits decreased to $12.75 billion, down $522.1 million, or 3.9%, from $13.27 billion at December 31, 2023[109]. - Investment securities available-for-sale totaled $1.07 billion as of March 31, 2024, up from $900.2 million at December 31, 2023[114]. - Total loans outstanding increased to $11,880,696 thousand as of March 31, 2024, up from $11,629,802 thousand in 2023, representing a growth of 2.15%[124]. - Total deposits decreased by $522.1 million to $12,751,448 thousand at March 31, 2024, from $13,273,511 thousand at December 31, 2023[130]. - Non-interest-bearing demand deposits accounted for 20.61% of total deposits, while interest-bearing demand deposits made up 16.19% as of March 31, 2024[132]. - The average total assets for the quarters ended March 31, 2024, and 2023 were $15.96 billion and $14.40 billion, respectively, indicating a growth in asset base[137]. - Loans represented 73.7% of total uses of funds in Q1 2024, down from 81.0% in Q1 2023, indicating a shift in asset allocation[138]. Credit Quality - Non-performing assets to total assets ratio remained strong at 0.22%[112]. - Total nonperforming loans rose to $34,837 thousand, a 61.8% increase from $21,533 thousand at December 31, 2023[126]. - The allowance for credit losses at the end of the period was $155,892 thousand, which is 1.31% of total loans, compared to 1.28% in the previous year[124]. - The provision for credit losses was $4,368 thousand for the quarter, slightly up from $4,197 thousand in the same period last year[124]. - The net charge-offs to average loans ratio was 0.06% for the quarter, compared to 0.05% in the previous year[124]. - Nonperforming loans increased to $34.8 million, or 0.29% of total loans, as of March 31, 2024, compared to $21.5 million, or 0.18%, at December 31, 2023[165]. Capital and Funding - Total stockholders' equity attributable to the company increased to $1.48 billion (9.4% of total assets) as of March 31, 2024, up from $1.44 billion (8.9% of total assets) at the end of 2023[139]. - The company is categorized as well-capitalized under FDIC guidelines, with CET1 capital to risk-weighted assets at 11.07% as of March 31, 2024, exceeding the required 4.50%[140]. - The capital ratios required by Basel III are met, with total capital to risk-weighted assets at 12.61% for consolidated figures as of March 31, 2024, above the 8.00% minimum requirement[142]. - The company has approximately $888.0 million in available unused federal funds lines of credit with regional banks to meet short-term funding needs[135]. - The company’s funding strategy includes growth in the deposit base, loan repayments, and the issuance of debt, which are deemed adequate for both immediate and long-term funding needs[136]. Regulatory and Operational Insights - The Alabama Banking Department regulates the Bank's dividend payments, which are subject to statutory and regulatory limitations[145]. - The Federal Reserve increased the targeted federal funds rate to 5.25% - 5.50% as of March 31, 2024, impacting funding costs[158]. - The number of full-time equivalent employees increased by 32, or 5.6%, to 605 as of March 31, 2024, compared to 573 a year earlier[168]. - FDIC and other regulatory assessments surged by 157.4% to $3.9 million in Q1 2024, reflecting a special assessment implemented in the previous quarter[168][169]. - The asset-liability committee (ALCO) continues to monitor interest rate risks, with current policy limits for interest margin changes ranging from -4% to -17% under various rate shock scenarios[176].