ServisFirst Bancshares(US:SFBS)2024-04-22 23:19Financial Data and Key Metrics Changes - The bank reported over $200 million in net loan growth during the first quarter, with a loan pipeline increasing by 63% since year-end [5] - Net interest margin increased by 9 basis points to 2.66%, with net interest income at its highest level since Q1 2023 [31] - Total deposits decreased by over $220 million due to deposit optimization actions and seasonal declines [11][34] Business Line Data and Key Metrics Changes - The owner-occupied real estate segment grew by $120 million, contributing to overall loan growth [8] - Approximately 70% of loan production in Q4 and Q1 was variable rate, with 75% of variable rate loans having a floor [32] Market Data and Key Metrics Changes - The bank's non-performing assets (NPAs) to total assets ratio was 22 basis points, significantly below peers and improved from 50 basis points at the end of 2019 [29] - The bank experienced a modest increase in non-interest income, excluding a one-time death benefit from a bank-owned life insurance policy [34] Company Strategy and Development Direction - The bank is focused on balanced growth in both loans and deposits, with expectations for continued loan growth throughout 2024 [40] - The management is optimistic about the economic environment, noting a resurgence in project activity that had been postponed [51] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's credit quality and loan portfolio performance, with a positive outlook for 2024 [9][35] - The bank anticipates that the yield on interest-earning assets will continue to increase as fixed-rate loans and investments mature and reprice [12] Other Important Information - The allowance for credit losses compared to non-accruals was 452%, significantly greater than the peer group [29] - The bank's CET1 ratio increased to 11.07% and Tier 1 capital to average assets ratio increased to 9.44% [14] Q&A Session Summary Question: What is the outlook for total loan growth in 2024? - Management indicated a strong loan pipeline, estimating it could close at $150 million a month, with optimism for loan growth opportunities throughout the year [40] Question: What industry is the non-performing asset tied to? - The non-performing asset is related to owner-occupied real estate, with the borrower current on all loan payments [42] Question: What are the expectations for operating expenses in the near term? - Management expects operating expenses to peak next year, with significant growth anticipated this year due to loan repricing [46]