ServisFirst Bancshares, Inc. Announces Results For First Quarter of 2025

ServisFirst Bancshares, Inc. (NYSE:SFBS), today announced earnings and operating results for the quarter ended March 31, 2025.

First Quarter 2025 Highlights:

• Diluted earnings per share of $1.16 for the quarter, up 26.1% from the first quarter of 2024.
• Deposits grew by $886 million, or 26% annualized, during the quarter.
• Loans grew by $281 million, or 9% annualized, during the quarter.
• Book value per share of $30.56, up 12.9% from the first quarter of 2024 and 12.7% annualized, from the fourth quarter of 2024.
• Liquidity remains very strong with $3.3 billion in cash on hand, 18% of our total assets, and no FHLB advances or brokered deposits.
• Consolidated common equity tier 1 capital to risk-weighted assets increased from 11.07% to 11.48% year-over-year.
• Return on average common stockholder's equity increased from 13.82% to 15.63% year-over-year.

Tom Broughton, Chairman, President, and CEO, said, "With our strong balance sheet, we are looking at opportunities for new and expanded customer relationships and we continue to look at new market expansions in the Southeast."

David Sparacio, CFO, said, "This year is off to a great start with 9% annualized loan growth, non-interest expense being contained, and fixed rate loans repricing for the rest of the year. We realized 31% year-over-year growth in pre-provision net revenue, thanks to continued focus on controlling our expenses and we are continuing to see strength in our capital ratios."

^* This press release includes certain non-GAAP financial measures: adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders' equity, adjusted efficiency ratio, tangible common stockholders' equity, total tangible assets, tangible book value per share, and tangible common equity to total tangible assets. Please see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures."

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $63.2 million for the quarter ended March 31, 2025, compared to net income of $65.2 million and net income available to common stockholders of $65.1 million for the fourth quarter of 2024 and net income and net income available to common stockholders of $50.0 million for the first quarter of 2024. Basic and diluted earnings per common share were both $1.16 in the first quarter of 2025, compared to $1.19 for both in the fourth quarter of 2024 and $0.92 for both in the first quarter of 2024.

Annualized return on average assets was 1.45% and annualized return on average common stockholders' equity was 15.63% for the first quarter of 2025, compared to 1.26% and 13.82%, respectively, for the first quarter of 2024.

Net interest income was $123.6 million for the first quarter of 2025, compared to $123.2 million for the fourth quarter of 2024 and $102.5 million for the first quarter of 2024. The net interest margin in the first quarter of 2025 was 2.92% compared to 2.96% in the fourth quarter of 2024 and 2.66% in the first quarter of 2024. Loan yields were 6.28% during the first quarter of 2025 compared to 6.43% during the fourth quarter of 2024 and 6.40% during the first quarter of 2024. Investment yields were 3.31% during the first quarter of 2025 compared to 3.49% during the fourth quarter of 2024 and 3.16% during the first quarter of 2024. Average interest-bearing deposit rates were 3.40% during the first quarter of 2025, compared to 3.63% during the fourth quarter of 2024 and 4.04% during the first quarter of 2024. Average federal funds purchased rates were 4.50% during first quarter of 2025, compared to 4.80% during the fourth quarter of 2024 and 5.50% during the first quarter of 2024.

Average loans for the first quarter of 2025 were $12.71 billion, an increase of $280.9 million, or 9.2% annualized, from average loans of $12.43 billion for the fourth quarter of 2024, and an increase of $967.1 million, or 8.2%, from average loans of $11.74 billion for the first quarter of 2024. Ending total loans for the first quarter of 2025 were $12.89 billion, an increase of $281.0 million, or 9.0% annualized, from $12.61 billion for the fourth quarter of 2024, and an increase of $1.01 billion, or 8.5%, from $11.88 billion for the first quarter of 2024.

Average total deposits for the first quarter of 2025 were $13.89 billion, an increase of $406.2 million, or 12.2% annualized, from average total deposits of $13.48 billion for the fourth quarter of 2024, and an increase of $966.4 million, or 7.5%, from average total deposits of $12.92 billion for the first quarter of 2024. Ending total deposits for the first quarter of 2025 were $14.43 billion, an increase of $885.6 million, or 26.3% annualized, from $13.54 billion for the fourth quarter of 2024, and an increase of $1.68 billion, or 13.2%, from $12.75 billion for the first quarter of 2024. The increase in total deposits was primarily due to organic growth across the majority of our markets.

Non-performing assets to total assets were 0.40% for the first quarter of 2025, compared to 0.26% for the fourth quarter of 2024 and 0.22% for the first quarter of 2024. The majority of the year-over-year increase in non-performing assets is attributable to two relationships, both of which are secured by real estate. Annualized net charge-offs to average loans were 0.19% for the first quarter of 2025, compared to 0.09% for the fourth quarter of 2024 and 0.06% for the first quarter of 2024. The increase in net charge-offs was primarily attributable to individually evaluated loans that were previously impaired in the fourth quarter of 2024. In the first quarter of 2025, management concluded that partial or full charge-offs were warranted for these impaired loans. The allowance for credit losses as a percentage of total loans at March 31, 2025, December 31, 2024, and March 31, 2024, was 1.28%, 1.30%, and 1.31%, respectively. We recorded a $6.5 million provision for loan losses in the first quarter of 2025 compared to $6.4 million in the fourth quarter of 2024, and $4.4 million in the first quarter of 2024. Approximately $2.7 million of the allowance for loan losses was related to the potential impact of Hurricane Helene and Milton recorded through the provision for loan losses during the third quarter of 2024. As of March 31, 2025, management considers the storms' credit impact to have been fully assessed and has decided to release this allowance.

Non-interest income decreased $631,000, or 7.1%, to $8.3 million for the first quarter of 2025 from $8.9 million in the first quarter of 2024, and decreased $526,000, or 6.0%, on a linked quarter basis. Service charges on deposit accounts increased $408,000, or 19.0%, to $2.6 million for the first quarter of 2025 from $2.2 million in the first quarter of 2024, and decreased $92,000, or 3.5%, on a linked quarter basis. Mortgage banking revenue decreased $65,000, or 9.6%, to $613,000 for the first quarter of 2025 from $678,000 in the first quarter of 2024, and decreased $900,000, or 59.5%, on a linked quarter basis. The decrease on a linked quarter basis was primarily due to seasonal production fluctuations and a slightly higher proportion of production from lower-margin portfolio loans during the first quarter of 2025. Net credit card income decreased $187,000, or 8.7%, to $2.0 million for the first quarter of 2025 from $2.2 million in the first quarter of 2024, and increased $101,000, or 5.4%, on a linked quarter basis. Bank-owned life insurance ("BOLI") income decreased $1.1 million, or 33.9%, to $2.1 million for the first quarter of 2025 from $3.2 million in the first quarter of 2024, and increased $6,000, or 0.3%, on a linked quarter basis. The decrease year-over year was due to the recognition of $1.2 million of income attributed to the death benefit related to a former employee in our BOLI program in the prior year. Other operating income increased $307,000, or 44.2%, to $1.0 million for the first quarter of 2025 from $694,000 in the first quarter of 2024, and increased $359,000, or 55.9%, on a linked quarter basis.

Non-interest expense decreased $124,000, or 0.3%, to $46.1 million for the first quarter of 2025 from $46.2 million in the first quarter of 2024, and decreased $789,000, or 1.7%, on a linked quarter basis. Salary and benefit expense decreased $107,000, or 0.5%, to $22.9 million for the first quarter of 2025 from $23.0 million in the first quarter of 2024, and decreased $1.2 million, or 4.9%, on a linked quarter basis. The number of full-time equivalent ("FTE") employees increased by 31, or 5.12%, to 636 at March 31, 2025 compared to 605 at March 31, 2024, and increased by 6, or 1%, from the end of the fourth quarter of 2024. Equipment and occupancy expense increased $165,000, or 4.6%, to $3.7 million for the first quarter of 2025 from $3.6 million in the first quarter of 2024, and increased $122,000, or 3.4%, on a linked quarter basis. Third party processing and other services expense increased $572,000, or 8.0%, to $7.7 million for the first quarter of 2025 from $7.2 million in the first quarter of 2024, and decreased $777,000, or 9.1%, on a linked quarter basis. Professional services expense increased $469,000, or 32.0%, to $1.9 million for the first quarter of 2025 from $1.5 million in the first quarter of 2024, and decreased $48,000, or 2.4%, on a linked quarter basis. FDIC and other regulatory assessments decreased $1.1 million, or 26.9%, to $2.9 million for the first quarter of 2025 from $3.9 million in the first quarter of 2024, and increased $629,000, or 28.3%, on a linked quarter basis. In the first quarter of 2024, the FDIC implemented a special assessment adjustment to recapitalize the Deposit Insurance Fund, see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for more discussion. Other operating expenses decreased $175,000, or 2.5%, to $6.9 million for the first quarter of 2025 from $7.1 million in the first quarter of 2024, and increased $493,000, or 7.6%, on a linked quarter basis. The efficiency ratio was 34.97% during the first quarter of 2025 compared to 43.30% during the first quarter of 2024 and 35.54% during the fourth quarter of 2024.

Income tax expense increased $5.3 million, or 49.6%, to $15.9 million in the first quarter of 2025, compared to $10.6 million in the first quarter of 2024. Our effective tax rate was 20.06% for the first quarter of 2025 compared to 17.50% for the first quarter of 2024. 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 first quarters of 2025 and 2024 of $470,000 and $204,000, respectively.

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 Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate a loan production office in Florida. Through the ServisFirst Bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.

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 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: general economic conditions, especially in the credit markets and in the Southeast; the impact of tariffs and trade wars on general economic conditions, 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 as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued or re-emerging inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; 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. 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 2025, and our other SEC filings. If one or more of the assumptions forming the basis of 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.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders' equity, and adjusted efficiency ratio. We recorded a one-time expense of $7.2 million in the fourth quarter of 2023 associated with the FDIC's special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 2023. This assessment was updated in the first quarter of 2024 resulting in additional expense of $1.8 million. This expense is unusual, or infrequent, in nature and not part of the noninterest expense run rate. Each of adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average common stockholders' equity and adjusted efficiency ratio for the quarter ended March 31, 2024 excludes the impact of these items, net of tax, and are all considered non-GAAP financial measures. This press release also contains the non-GAAP financial measures of 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 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.