BIRMINGHAM, Ala., Oct. 19, 2020 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three and nine months ended September 30, 2020.

Third Quarter 2020 Highlights:

  • Diluted EPS for the third quarter increased 16% to $0.80 year over year
  • Deposits grew 14% annualized during the third quarter
  • Loans, excluding Paycheck Protection Program (“PPP”) loans, grew 10% annualized during the third quarter
  • Efficiency ratio improved to 28.50% during the third quarter 2020
  • Liquidity remains strong with liquid assets to total deposits of 22%
  • Our $34.5 million of 5% Subordinated Notes due July 15, 2025 are being refinanced with a $37 million offering of subordinated notes with an interest rate of 4% during the fourth quarter of 2020

Tom Broughton, Chairman, President and CEO, said, “I am pleased to see a rebound in loan demand from the early months of the pandemic. This is a very positive sign for the Southeastern US economy.”

Bud Foshee, CFO, said, “We continue to have a strong balance sheet with good credit quality and strong liquidity. This strong balance sheet has enabled us to perform above our peers during the pandemic.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
 
  Period Ending
September 30,
2020
 Period Ending
June 30, 2020
 % Change
From Period
Ending June
30, 2020 to
Period Ending
September 30, 2020
 Period Ending
September 30,
2019
 % Change
From Period
Ending
September 30,
2019 to Period
Ending
September 30,
2020
QUARTERLY OPERATING RESULTS                  
Net Income $43,362  $40,448  7% $37,563  15%
Net Income Available to Common Stockholders $43,362  $40,417  7% $37,563  15%
Diluted Earnings Per Share $0.80  $0.75  7% $0.69  16%
Return on Average Assets  1.54%  1.55%     1.67%   
Return on Average Common Stockholders' Equity  18.43%  18.40%     18.69%   
Average Diluted Shares Outstanding  54,232,965   54,194,506      54,096,368    
                   
YEAR-TO-DATE OPERATING RESULTS                  
Net Income $118,588         $108,206  10%
Net Income Available to Common Stockholders $118,557         $108,175  10%
Diluted Earnings Per Share $2.19         $2.00  9%
Return on Average Assets  1.54%         1.70%   
Return on Average Common Stockholders' Equity  17.73%         18.93%   
Average Diluted Shares Outstanding  54,198,422          54,087,410    
                   
BALANCE SHEET                  
Total Assets $11,394,874  $11,012,195  3% $9,005,112  27%
Loans  8,508,554   8,315,375  2%  7,022,069  21%
Non-interest-bearing Demand Deposits  2,762,814   2,678,893  3%  1,678,672  65%
Total Deposits  9,673,783   9,342,918  4%  7,724,158  25%
Stockholders' Equity  949,589   914,588  4%  810,537  17%
                   

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $43.4 million for the quarter ended September 30, 2020, compared to net income and net income available to common stockholders of $37.6 million for the same quarter in 2019. Basic and diluted earnings per common share were $0.80 and $0.80, respectively, for the third quarter of 2020, compared to $0.70 and $0.69, respectively, for the third quarter of 2019.

Annualized return on average assets was 1.54% and annualized return on average common stockholders’ equity was 18.43% for the third quarter of 2020, compared to 1.67% and 18.69%, respectively, for the third quarter of 2019.

Net interest income was $85.1 million for the third quarter of 2020, compared to $83.2 million for the second quarter of 2020 and $73.0 million for the third quarter of 2019. The net interest margin in the third quarter of 2020 was 3.14% compared to 3.32% in the second quarter of 2020 and 3.36% in the third quarter of 2019. Origination of PPP loans and increased excess liquidity drove unfavorable rate and mix changes while lower deposit rates and increases in noninterest bearing demand balances drove favorable rate and mix changes, respectively. Accretion of net fees on PPP loans of $4.0 million during the third quarter of 2020 offset the decrease in loan yield by approximately 19 basis points.

Average loans for the third quarter of 2020 were $8.36 billion, an increase of $31.5 million, or 2% annualized, over average loans of $8.33 billion for the second quarter of 2020, and an increase of $1.40 billion, or 20%, over average loans of $6.96 billion for the third quarter of 2019. We originated over 4,900 PPP loans during 2020 for a total of $1.05 billion. Excluding PPP loans, average loans for the third quarter of 2020 were $7.31 billion, a decrease of $136.0 million compared to the second quarter of 2020, and an increase of $350.6 million, or 5%, over average loans for the third quarter of 2019.

Average total deposits for the third quarter of 2020 were $9.47 billion, an increase of $595.4 million, or 27% annualized, over average total deposits of $8.87 billion for the second quarter of 2020, and an increase of $1.89 billion, or 25%, over average total deposits of $7.58 billion for the third quarter of 2019.

Nonperforming assets to total assets were 0.29% for the third quarter of 2020, an increase of three basis points compared to 0.26% for the second quarter of 2020 and a decrease of 23 basis points compared to 0.52% for the third quarter of 2019. Annualized net charge-offs to average loans were 0.54%, a 34 basis-point increase compared to 0.20% for the second quarter of 2020 and an increase of five basis points compared to 0.49% for the third quarter of 2019. The increase in net charge-offs for the third quarter of 2020 was due to a $7.2 million loan charge-off on a borrower severely impacted by the COVID-19 pandemic. We recorded a $12.3 million provision for loan losses in the third quarter of 2020 compared to $10.3 million in the second quarter of 2020 and $7.0 million in the third quarter of 2019. The allowance for loan loss as a percentage of total loans was 1.09% at September 30, 2020, a decrease of one basis point compared to 1.10% at June 30, 2020 and September 30, 2019, respectively. Excluding PPP loans, for all periods discussed, the allowance for loan loss as a percentage of total loans was 1.24% at September 30, 2020, a decrease of two basis points compared to 1.26% at June 30, 2020 and an increase of 14 basis points compared to 1.10% at September 30, 2019. The CARES Act, passed into law on March 27, 2020 as a result of the COVID-19 outbreak, allows companies to delay their adoption of Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), including the current expected credit losses methodology for estimating allowances for credit losses. We have elected to delay adoption of ASU 2016-13 until the date on which the national emergency concerning the COVID-19 outbreak terminates or December 31, 2020, with an effective retrospective implementation date of January 1, 2020. In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Noninterest income for the third quarter of 2020 increased $2.0 million, or 32%, to $8.2 million from $6.2 million in the third quarter of 2019. Mortgage banking revenue increased $1.2 million, or 89%, from the third quarter of 2019 to the third quarter of 2020. Mortgage loan origination volumes increased approximately 96% during the third quarter of 2020 when compared to the same quarter in 2019. Credit card revenue decreased $28,000, or 2%, to $1.8 million during the third quarter of 2020, compared to the third quarter of 2019. The amount of spend on purchase cards increased $23.0 million while the amount of spend on business credit cards decreased $8.0 million during the third quarter of 2020 when compared to the third quarter of 2019. Purchase card spend carries lower profit margins than credit cards due to their higher rebates. Income on life insurance policies increased $946,000, or 120%, to $1.7 million during the third quarter of 2020, compared to $787,000 during the third quarter of 2019. We purchased $75.0 million in BOLI contracts at the end of the third quarter of 2019 and another $40.0 million in July 2020. Other income for the third quarter of 2020 decreased $191,000, or 42%, to $262,000 from $453,000 in the third quarter of 2019. On May 4, 2020 we bought an interest rate cap with a term of three years and a notional amount of $300 million. The cap is tied to one-month LIBOR with a strike rate of 0.50%. We wrote down the value of the cap by $342,000 during the third quarter of 2020 and by $595,000 year-to-date through other income and are amortizing the fee paid to our counterparty over the life of the cap.

Noninterest expense for the third quarter of 2020 increased $1.4 million, or 6%, to $26.6 million from $25.2 million in the third quarter of 2019, and decreased $2.2 million, or 8%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2020 decreased $505,000, or 3%, to $15.0 million from $15.5 million in the third quarter of 2019, and decreased $798,000, or 5%, on a linked quarter basis. Costs to originate PPP loans totaling $2.4 million were incurred during the second quarter of 2020. These costs were credited against salary and benefits as a deferred expense and will be amortized over the life of the loans by netting them against accretion of deferred origination fees. Bonuses of approximately $2.5 million were paid during the second quarter of 2020 related to work performed on the PPP. Additional bonuses of $71,000 were paid to front-line employees who continued to assist customers during the peak of the pandemic. The number of FTE employees decreased to 486 as of September 30, 2020 compared to 492 as of June 30, 2020 and 506 as of September 30, 2019. Equipment and occupancy expense increased $169,000, or 7%, to $2.6 million in the third quarter of 2020, from $2.4 million in the third quarter of 2019. Third party processing expenses increased $358,000, or 12%, to $3.3 million in the third quarter of 2020, from $2.9 million in the third quarter of 2019. Professional services expense increased $68,000, or 8%, to $955,000 in the third quarter of 2020, from $887,000 in the third quarter of 2019, and decreased $136,000, or 12%, from $1.1 million on a linked-quarter basis. FDIC and other regulatory assessments were $1.1 million in the third quarter of 2020 compared to a credit of $296,000 in the third quarter of 2019. The net assessment credit for the third quarter of 2019 resulted from the FDIC’s Small Bank Assessment Credit recorded by the Bank. Expenses associated with other real estate owned increased $41,000 to $119,000 in the third quarter of 2020, from $78,000 in the third quarter of 2019. Other operating expenses for the third quarter of 2020 decreased $76,000, or 2%, to $3.6 million from $3.7 million in the third quarter of 2019, and decreased $481,000, or 12%, on a linked-quarter basis. The efficiency ratio was 28.50% during the third quarter of 2020 compared to 31.76% during the third quarter of 2019 and compared to 31.92% during the second quarter of 2020.

Income tax expense increased $1.5 million, or 16%, to $11.0 million in the third quarter of 2020, compared to $9.5 million in the third quarter of 2019. Our effective tax rate was 20.29% for the third quarter of 2020 compared to 20.20% for the third quarter of 2019. State of Alabama tax credit investments matured at the end of 2019, causing our state credit amounts to decrease from $497,000 during the third quarter of 2019 to $132,000 during the third quarter of 2020. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the third quarters of 2020 and 2019 of $180,000 and $231,000, respectively.

The Company’s 5% Subordinated Notes due July 15, 2025 became redeemable in July 2020. Those Notes are being redeemed in the fourth quarter of 2020 and replaced with up to $37 million in 4% subordinated notes to be offered to holders of the redeemed Notes.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.  We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use.  The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release.  Dollars are in thousands, except share and per share data.

 
 September 30,
2020
 June 30, 2020 March 31, 2020 December 31,
2019
 September 30,
2019
Book value per share - GAAP$17.61  $16.98  $16.38  $15.71  $15.13 
Total common stockholders' equity - GAAP 949,589   914,588   881,885   842,682   810,537 
Adjustments:                   
Adjusted for goodwill and core deposit intangible asset 13,976   14,043   14,111   14,179   14,246 
Tangible common stockholders' equity - non-GAAP$935,613  $900,545  $867,775  $828,503  $796,291 
Tangible book value per share - non-GAAP$17.35  $16.72  $16.12  $15.45  $14.86 
                    
Stockholders' equity to total assets - GAAP 8.33%  8.31%  9.42%  9.42%  9.00%
Total assets - GAAP$11,394,874  $11,012,195  $9,364,882  $8,947,653  $9,005,112 
Adjustments:                   
Adjusted for goodwill and core deposit intangible asset 13,976   14,043   14,111   14,179   14,246 
Total tangible assets - non-GAAP$11,380,898  $10,998,152  $9,350,771  $8,933,474  $8,990,866 
Tangible common equity to total tangible assets - non-GAAP 8.22%  8.19%  9.28%  9.27%  8.86%
                    

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Montgomery, Mobile and Dothan, Alabama, Pensacola, Sarasota and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words "believe," "expect," "anticipate," "project," “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including, but not limited to: the global health and economic crisis precipitated by the COVID-19 outbreak; general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2020, and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com or by calling (205) 949-0302.

Contact: ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com

 
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands except share and per share data)
 3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
CONSOLIDATED STATEMENT OF INCOME                   
Interest income$96,110  $95,080  $96,767  $98,187  $101,130 
Interest expense 11,028   11,846   19,127   22,410   28,125 
Net interest income 85,082   83,234   77,640   75,777   73,005 
Provision for loan losses 12,284   10,283   13,584   5,884   6,985 
Net interest income after provision for loan losses 72,798   72,951   64,056   69,893   66,020 
Non-interest income 8,172   7,033   6,674   6,936   6,202 
Non-interest expense 26,573   28,816   27,920   25,503   25,153 
Income before income tax 54,397   51,168   42,810   51,326   47,069 
Provision for income tax 11,035   10,720   8,032   10,289   9,506 
Net income 43,362   40,448   34,778   41,037   37,563 
Preferred stock dividends -   31   -   32   - 
Net income available to common stockholders$43,362  $40,417  $34,778  $41,005  $37,563 
Earnings per share - basic$0.80  $0.75  $0.65  $0.77  $0.70 
Earnings per share - diluted$0.80  $0.75  $0.64  $0.76  $0.69 
Average diluted shares outstanding 54,232,965   54,194,506   54,167,414   54,149,554   54,096,368 
                    
CONSOLIDATED BALANCE SHEET DATA                   
Total assets$11,394,874  $11,012,195  $9,364,882  $8,947,653  $9,005,112 
Loans 8,508,554   8,315,375   7,568,836   7,261,451   7,022,069 
Debt securities 913,299   856,378   827,032   759,649   688,271 
Non-interest-bearing demand deposits 2,762,814   2,678,893   1,925,626   1,749,879   1,678,672 
Total deposits 9,673,783   9,342,918   7,832,655   7,530,433   7,724,158 
Borrowings 64,719   64,715   64,707   64,703   64,693 
Stockholders' equity$949,589  $914,588  $881,885  $842,682  $810,537 
                    
Shares outstanding 53,915,245   53,874,276   53,844,009   53,623,740   53,579,013 
Book value per share$17.61  $16.98  $16.38  $15.71  $15.13 
Tangible book value per share (1)$17.35  $16.72  $16.12  $15.45  $14.86 
                    
SELECTED FINANCIAL RATIOS (Annualized)                   
Net interest margin 3.14%  3.32%  3.58%  3.47%  3.36%
Return on average assets 1.54%  1.55%  1.54%  1.80%  1.67%
Return on average common stockholders' equity 18.43%  18.40%  16.23%  19.75%  18.69%
Efficiency ratio 28.50%  31.92%  33.11%  30.83%  31.76%
Non-interest expense to average earning assets 0.98%  1.15%  1.29%  1.17%  1.16%
                    
CAPITAL RATIOS (2)                   
Common equity tier 1 capital to risk-weighted assets 11.24%  11.26%  10.68%  10.50%  10.39%
Tier 1 capital to risk-weighted assets 11.25%  11.27%  10.68%  10.50%  10.39%
Total capital to risk-weighted assets 13.10%  13.27%  12.54%  12.31%  12.27%
Tier 1 capital to average assets 8.22%  8.46%  9.56%  9.13%  8.88%
Tangible common equity to total tangible assets (1) 8.22%  8.19%  9.28%  9.27%  8.86%
                    
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(2) Regulatory capital ratios for most recent period are preliminary.


 
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
 September 30,
2020
 September 30,
2019
 % Change
ASSETS        
Cash and due from banks$70,472  $108,804  (35)%
Interest-bearing balances due from depository institutions 1,551,597   463,625  235 %
Federal funds sold 1,302   474,298  (100)%
 Cash and cash equivalents 1,623,371   1,046,727  55 %
Available for sale debt securities, at fair value 913,049   688,021  33 %
Held to maturity debt securities (fair value of $250 at September 30, 2020 and 2019) 250   250  - %
Mortgage loans held for sale 21,472   8,691  147 %
Loans 8,508,554   7,022,069  21 %
Less allowance for loan losses (92,440)  (77,192) 20 %
 Loans, net 8,416,114   6,944,877  21 %
Premises and equipment, net 55,273   56,570  (2)%
Goodwill and other identifiable intangible assets 13,976   14,246  (2)%
Other assets 351,369   245,730  43 %
 Total assets$11,394,874  $9,005,112  27 %
LIABILITIES AND STOCKHOLDERS' EQUITY        
Liabilities:        
Deposits:        
 Non-interest-bearing$2,762,814  $1,678,672  65 %
 Interest-bearing 6,910,969   6,045,486  14 %
  Total deposits 9,673,783   7,724,158  25 %
Federal funds purchased 669,350   370,231  81 %
Other borrowings 64,719   64,693  - %
Other liabilities 37,433   35,493  5 %
 Total liabilities 10,445,285   8,194,575  27 %
Stockholders' equity:        
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at        
  September 30, 2020 and September 30, 2019 -   -    
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,915,245 shares        
  issued and outstanding at September 30, 2020, and 53,579,113 shares issued and outstanding        
  at September 30, 2019 54   54  - %
 Additional paid-in capital 223,280   219,234  2 %
 Retained earnings 706,924   584,968  21 %
 Accumulated other comprehensive income 18,831   5,779  226 %
  Total stockholders' equity attributable to ServisFirst Bancshares, Inc. 949,089   810,035  17 %
 Noncontrolling interest 500   502  - %
  Total stockholders' equity 949,589   810,537  17 %
 Total liabilities and stockholders' equity$11,394,874  $9,005,112  27 %
             


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019  2020 2019
Interest income:           
 Interest and fees on loans$89,564 $90,767  $268,332 $264,901
 Taxable securities 5,858  4,367   16,104  12,306
 Nontaxable securities 166  316   610  1,155
 Federal funds sold 16  1,768   327  4,985
 Other interest and dividends 506  3,912   2,584  9,269
 Total interest income 96,110  101,130   287,957  292,616
Interest expense:           
 Deposits 9,876  24,787   37,377  71,172
 Borrowed funds 1,152  3,338   4,624  9,576
 Total interest expense 11,028  28,125   42,001  80,748
 Net interest income 85,082  73,005   245,956  211,868
Provision for loan losses 12,284  6,985   36,151  16,754
 Net interest income after provision for loan losses 72,798  66,020   209,805  195,114
Non-interest income:           
 Service charges on deposit accounts 1,818  1,735   5,557  5,223
 Mortgage banking 2,519  1,333   5,697  2,995
 Credit card income 1,840  1,868   5,003  5,185
 Securities gains -  34   -  28
 Increase in cash surrender value life insurance 1,733  787   4,650  2,327
 Other operating income 262  453   972  1,172
 Total non-interest income 8,172  6,210   21,879  16,930
Non-interest expense:           
 Salaries and employee benefits 14,994  15,499   46,444  44,103
 Equipment and occupancy expense 2,556  2,387   7,390  6,933
 Third party processing and other services 3,281  2,923   10,360  8,058
 Professional services 955  887   2,994  3,072
 FDIC and other regulatory assessments (credits) 1,061  (296)  2,988  1,804
 Other real estate owned expense 119  78   2,023  312
 Other operating expense 3,607  3,683   11,110  12,227
 Total non-interest expense 26,573  25,161   83,309  76,509
 Income before income tax 54,397  47,069   148,375  135,535
Provision for income tax 11,035  9,506   29,787  27,329
 Net income 43,362  37,563   118,588  108,206
 Dividends on preferred stock -  -   31  31
 Net income available to common stockholders$43,362 $37,563  $118,557 $108,175
Basic earnings per common share$0.80 $0.70  $2.20 $2.02
Diluted earnings per common share$0.80 $0.69  $2.19 $2.00
             


LOANS BY TYPE (UNAUDITED)
(In thousands)
  
  3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
Commercial, financial and agricultural$3,466,189 $3,498,627 $2,771,307 $2,696,210 $2,653,934
Real estate - construction 530,919  544,586  548,578  521,392  550,871
Real estate - mortgage:              
 Owner-occupied commercial 1,725,222  1,634,495  1,678,532  1,587,478  1,526,911
 1-4 family mortgage 671,841  665,883  675,870  644,188  632,346
 Other mortgage 2,056,549  1,911,384  1,834,137  1,747,394  1,592,072
Subtotal: Real estate - mortgage 4,453,612  4,211,762  4,188,539  3,979,060  3,751,329
Consumer 57,834  60,400  60,412  64,789  65,935
Total loans$8,508,554 $8,315,375 $7,568,836 $7,261,451 $7,022,069
               


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
   3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
Allowance for loan losses:                   
Beginning balance$91,507   $85,414   $76,584   $77,192   $71,386  
Loans charged off:                   
 Commercial, financial and agricultural 11,146    1,358    2,640    4,742    3,626  
 Real estate - construction -    376    454    -    -  
 Real estate - mortgage 200    2,520    1,678    1,689    4,974  
 Consumer 44    62    58    139    172  
  Total charge offs 11,390    4,316    4,830    6,570    8,772  
Recoveries:                   
 Commercial, financial and agricultural 12    84    62    51    126  
 Real estate - construction -    1    1    1    1  
 Real estate - mortgage 12    13    1    2    -  
 Consumer 15    28    12    24    60  
  Total recoveries 39    126    76    78    187  
 Net charge-offs 11,351    4,190    4,754    6,492    8,585  
 Allocation from Loan Guarantee Program -    -    -    -    7,406  
 Provision for loan losses 12,284    10,283    13,584    5,884    6,985  
 Ending balance$92,440   $91,507   $85,414   $76,584   $77,192  
                       
 Allowance for loan losses to total loans 1.09 %  1.10 %  1.13 %  1.05 %  1.10 %
 Allowance for loan losses to total average                   
  loans 1.11 %  1.10 %  1.16 %  1.08 %  1.11 %
 Net charge-offs to total average loans 0.54 %  0.20 %  0.26 %  0.36 %  0.49 %
 Provision for loan losses to total average                   
  loans 0.58 %  0.50 %  0.74 %  0.33 %  0.40 %
 Nonperforming assets:                   
  Nonaccrual loans$21,675   $16,881   $28,914   $30,091   $35,732  
  Loans 90+ days past due and accruing 4,898    5,133    4,954    6,021    5,317  
  Other real estate owned and                   
  repossessed assets 6,976    6,537    7,448    8,178    5,337  
 Total$33,549   $28,551   $41,316   $44,290   $46,386  
                       
 Nonperforming loans to total loans 0.31 %  0.26 %  0.45 %  0.50 %  0.58 %
 Nonperforming assets to total assets 0.29 %  0.26 %  0.44 %  0.50 %  0.52 %
 Nonperforming assets to earning assets 0.30 %  0.26 %  0.45 %  0.50 %  0.53 %
 Reserve for loan losses to nonaccrual loans 426.48 %  542.07 %  295.41 %  254.51 %  216.03 %
                       
 Restructured accruing loans$1,800   $975   $975   $625   $3,468  
                       
 Restructured accruing loans to total loans 0.02 %  0.01 %  0.01 %  0.01 %  0.05 %
                       
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
 (In thousands)
   3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
 Beginning balance:$1,568   $2,367   $3,330   $11,248   $11,284  
  Additions 1,182    -    350    250    -  
  Net (paydowns) / advances (12)   (12)   (232)   (3,481)   714  
  Charge-offs -    (412)   (1,081)   (1,333)   (750) 
  Transfer to OREO -    (375)   -    (3,354)   -  
 Ending balance$2,738   $1,568   $2,367   $3,330   $11,248  
                          


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
   3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
Interest income:              
 Interest and fees on loans$89,564 $89,383 $89,385 $89,407  $90,767 
 Taxable securities 5,858  5,092  5,154  4,702   4,367 
 Nontaxable securities 166  211  233  274   316 
 Federal funds sold 16  34  277  1,053   1,768 
 Other interest and dividends 506  360  1,718  2,751   3,912 
 Total interest income 96,110  95,080  96,767  98,187   101,130 
Interest expense:              
 Deposits 9,876  10,756  16,745  19,786   24,787 
 Borrowed funds 1,152  1,090  2,382  2,624   3,338 
 Total interest expense 11,028  11,846  19,127  22,410   28,125 
 Net interest income 85,082  83,234  77,640  75,777   73,005 
Provision for loan losses 12,284  10,283  13,584  5,884   6,985 
 Net interest income after provision for loan losses 72,798  72,951  64,056  69,893   66,020 
Non-interest income:              
 Service charges on deposit accounts 1,818  1,823  1,916  1,806   1,735 
 Mortgage banking 2,519  2,107  1,071  1,366   1,333 
 Credit card income 1,840  1,398  1,765  1,891   1,868 
 Securities (losses) gains -  -  -  (1)  34 
 Increase in cash surrender value life insurance 1,733  1,464  1,453  1,419   787 
 Other operating income 262  241  469  455   445 
 Total non-interest income 8,172  7,033  6,674  6,936   6,202 
Non-interest expense:              
 Salaries and employee benefits 14,994  15,792  15,658  13,680   15,499 
 Equipment and occupancy expense 2,556  2,434  2,400  2,339   2,387 
 Third party processing and other services 3,281  3,513  3,345  3,176   2,923 
 Professional services 955  1,091  948  1,163   887 
 FDIC and other regulatory assessments (credits) 1,061  595  1,332  1,171   (296)
 Other real estate owned expense 119  1,303  601  103   78 
 Other operating expense 3,607  4,088  3,636  3,871   3,675 
 Total non-interest expense 26,573  28,816  27,920  25,503   25,153 
 Income before income tax 54,397  51,168  42,810  51,326   47,069 
Provision for income tax 11,035  10,720  8,032  10,289   9,506 
 Net income 43,362  40,448  34,778  41,037   37,563 
 Dividends on preferred stock -  31  -  32   - 
 Net income available to common stockholders$43,362 $40,417 $34,778 $41,005  $37,563 
Basic earnings per common share$0.80 $0.75 $0.65 $0.77  $0.70 
Diluted earnings per common share$0.80 $0.75 $0.64 $0.76  $0.69 
                 


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
 
 3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019
 Average Balance Yield /
Rate
 Average Balance Yield /
Rate
 Average Balance Yield /
Rate
 Average Balance Yield /
Rate
 Average Balance Yield /
Rate
Assets:                             
Interest-earning assets:                             
 Loans, net of unearned income (1)                             
  Taxable$8,335,087 4.26% $8,301,775 4.31% $7,328,594 4.89% $7,066,576 5.00% $6,927,075 5.18%
  Tax-exempt (2) 30,068 4.14   31,929 4.12   32,555 4.04   35,563 4.00   34,195 3.98 
   Total loans, net of                             
    unearned income 8,365,155 4.26   8,333,704 4.31   7,361,149 4.88   7,102,139 4.99   6,961,270 5.17 
 Mortgage loans held for sale 20,053 1.41   13,278 2.09   4,282 2.16   6,505 2.44   6,482 2.45 
 Debt securities:                             
  Taxable 820,526 2.86   761,575 2.67   750,413 2.75   670,732 2.81   595,405 2.93 
  Tax-exempt (2) 31,880 2.51   38,201 2.62   44,029 2.33   50,825 2.17   59,992 2.21 
   Total securities (3) 852,406 2.84   799,776 2.67   794,442 2.72   721,557 2.76   655,397 2.87 
 Federal funds sold 41,884 0.15   83,274 0.16   105,423 1.06   238,927 1.75   312,968 2.24 
 Interest-bearing balances with banks 1,500,563 0.13   849,549 0.17   469,199 1.47   602,755 1.81   690,973 2.25 
 Total interest-earning assets$10,780,061 3.55% $10,079,581 3.80% $8,734,495 4.46% $8,671,883 4.49% $8,627,090 4.65%
Non-interest-earning assets:                             
 Cash and due from banks 75,065     76,212     66,140     70,381     71,418   
 Net premises and equipment 56,799     57,446     58,066     57,986     58,243   
 Allowance for loan losses, accrued                             
  interest and other assets 281,196     248,702     241,479     233,885     162,654   
   Total assets$11,193,121    $10,461,941    $9,100,180    $9,034,135    $8,919,405   
                                  
Interest-bearing liabilities:                             
 Interest-bearing deposits:                             
 Checking$1,077,595 0.31% $992,848 0.35% $956,803 0.57% $961,258 0.69% $900,754 0.84%
 Savings 82,671 0.36   72,139 0.42   67,380 0.50   62,311 0.53   57,431 0.60 
 Money market 4,739,566 0.44   4,285,907 0.52   4,061,286 1.10   4,189,283 1.34   4,265,435 1.76 
 Time deposits 841,378 1.78   877,448 1.95   805,924 2.09   712,155 2.15   703,278 2.20 
  Total interest-bearing deposits 6,741,210 0.58   6,228,342 0.69   5,891,393 1.14   5,925,007 1.32   5,926,898 1.66 
 Federal funds purchased 682,971 0.22   572,990 0.22   492,638 1.31   420,066 1.74   441,526 2.30 
 Other borrowings 64,717 4.77   64,711 4.85   64,707 4.85   64,698 4.79   64,689 4.79 
 Total interest-bearing liabilities$7,488,898 0.59% $6,866,043 0.69% $6,448,738 1.19% $6,409,771 1.39% $6,433,113 1.73%
Non-interest-bearing liabilities:                             
 Non-interest-bearing                             
  checking 2,118,889     2,646,030     1,749,671     1,759,671     1,654,928   
 Other liabilities 649,161     69,061     39,801     41,112     34,070   
 Stockholders' equity 917,626     862,500     853,800     818,320     792,284   
 Accumulated other comprehensive                             
  income 18,547     18,307     8,170     5,261     5,010   
   Total liabilities and                             
    stockholders' equity$11,193,121    $10,461,941    $9,100,180    $9,034,135    $8,919,405   
Net interest spread   2.96%    3.11%    3.27%    3.10%    2.92%
Net interest margin   3.14%    3.32%    3.58%    3.47%    3.36%
                                  
(1)Average loans include loans on which the accrual of interest has been discontinued.
(2)Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.
(3)Unrealized losses on available-for-sale debt securities are excluded from the yield calculation.