ServisFirst Bancshares(US:SFBS)2024-01-30 04:28Financial Data and Key Metrics Changes - The company reported a year-over-year deposit growth of 15% and new commercial accounts increased by 15% over 2022, with total new accounts including retail accounts up 12% year-over-year [27] - Net interest income improved in the fourth quarter, with net interest margin increasing to $102 million compared to $100 million in the third quarter [45] - The adjusted loan-to-deposit ratio at year-end was 80.2%, indicating strong liquidity [44] Business Line Data and Key Metrics Changes - Loan growth was slight in the fourth quarter, with loans growing in five of the last seven months of the year, and a loan pipeline increased by 50% since the last quarter [29][31] - Credit card income was impacted by a vendor billing issue, but the company anticipates a return to normalized levels in 2024 [46] - The correspondent banking division saw a 15% increase in balances during the second half of the year, with nine new relationships opened in the fourth quarter [34] Market Data and Key Metrics Changes - The company is optimistic about loan demand, particularly in commercial real estate (CRE) and construction, with expectations for high-single-digit growth in loans for the year [68] - The Memphis market presents a significant opportunity, with total deposits in the area at $41 billion [26] Company Strategy and Development Direction - The company has pivoted its focus from deposit gathering to loan growth, with a balanced approach expected for 2024 [27][51] - The correspondent banking strategy is expected to benefit from a declining rate environment, with a focus on improving liability costs [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan demand and activity picking up, with expectations for normalized loan growth in 2024 [30][68] - Credit quality remains strong, with charge-offs down to 9 basis points, indicating a healthy loan portfolio [41] Other Important Information - The company has no broker deposits or Federal Home loan advances, positioning it well for potential regulatory changes [28] - The CFO, Bud Foshee, is retiring, and Kirk Pressley will take over the role [48][61] Q&A Session All Questions and Answers Question: Loan growth expectations for 2023 - Management is optimistic about loan demand, expecting high-single-digit growth for the year, with a robust pipeline indicating potential for significant loan activity [67][68] Question: Impact of expenses and tax credits - The company discussed the impact of one-time expenses and tax credits, clarifying that the tax credit investment had a net benefit to the bottom line [71][80] Question: Deposit costs and margin stabilization - Management is working to reduce higher deposit costs and stabilize margins, with efforts to rationalize interest-bearing deposit rates [74]