Exhibit 99.1

 

 

SERVISFIRST BANCSHARES, INC.

Announces Results For Fourth Quarter of 2015

 

Birmingham, Ala. – (PR Newswire) – January 25, 2016 – ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2015.

 

Fourth Quarter 2015 Highlights:

 

§

Diluted earnings per share increased 28% from $0.58 to $0.74 year over year

§

Diluted earnings per share increased 21% from $0.61 to $0.74 on a linked quarter basis

§

Net income for the quarter increased 31% year over year

§

Organic loan and deposit growth for the year of 20% and 18%, respectively

§

Fourth quarter annualized loan and deposit growth of 17% and 18%, respectively, on a linked quarter basis

§

Entry into the Tampa Bay, Florida area with hire of a new regional CEO

 

Tom Broughton, President and CEO, said, “We are pleased to welcome our new banking team in the Tampa Bay area led by Greg Bryant, a highly experienced and well known banker in the area.” Bud Foshee, CFO, stated, “2015 was a strong year in financial performance and growth.”

 

ServisFirst announces the hiring of Greg Bryant as Executive Vice President and Regional CEO. A temporary loan production office will be opened in Pasco County, for up to a year before a permanent office is established in Tampa Bay, Florida. Greg was formerly the President & CEO of Bay Cities Bank prior to the sale of the bank.

 

 

 

FINANCIAL SUMMARY (UNAUDITED)

(in Thousands except share and per share amounts)

 

		Period Ending December 31, 2015				Period Ending September 30, 2015				% Change From Period Ending September 30, 2015 to Period Ending December 31, 2015				Period Ending December 31, 2014				% Change From Period Ending December 31, 2014 to Period Ending December 31, 2015
QUARTERLY OPERATING RESULTS
Net Income		$	19,750			$	16,266				21	%		$	15,032				31	%
Net Income Available to Common Stockholders		$	19,726			$	16,233				22	%		$	14,917				32	%
Diluted Earnings Per Share		$	0.74			$	0.61				21	%		$	0.58				28	%
Return on Average Assets			1.55	%			1.38	%							1.47	%
Return on Average Common Stockholders' Equity			17.75	%			15.52	%							16.39	%
Average Diluted Shares Outstanding			26,595,239				26,506,334								25,697,531
YEAR-TO-DATE OPERATING RESULTS
Net Income		$	63,540											$	52,377				21	%
Net Income Available to Common Stockholders		$	63,260											$	51,946				22	%
Diluted Earnings Per Share		$	2.39											$	2.09				14	%
Return on Average Assets			1.38	%											1.39	%
Return on Average Common Stockholders' Equity			15.30	%											16.23	%
Average Diluted Shares Outstanding			26,442,554												24,818,221
Core Net Income*		$	65,307											$	53,989				21	%
Core Net Income Available to Common Stockholders*		$	65,027											$	53,558				21	%
Core Diluted Earnings Per Share*		$	2.46											$	2.16				14	%
Core Return on Average Assets*			1.42	%											1.44	%
Core Return on Average Common Stockholders' Equity*			15.73	%											16.74	%
BALANCE SHEET
Total Assets		$	5,095,509			$	4,772,601				7	%		$	4,098,679				24	%
Loans			4,216,375				4,044,242				4	%			3,359,858				25	%
Non-interest-bearing Demand Deposits			1,053,467				1,029,354				2	%			810,460				30	%
Total Deposits			4,223,888				4,044,634				4	%			3,398,160				24	%
Stockholders' Equity			449,147				431,194				4	%			407,213				10	%

 

* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.

 

 

 

DETAILED FINANCIALS

 

ServisFirst Bancshares, Inc. reported net income of $19.8 million and net income available to common stockholders of $19.7 million for the quarter ended December 31 2015, compared to net income of $15.0 million and net income available to common stockholders of $14.9 million for the same quarter in 2014. Basic and diluted earnings per common share were $0.76 and $0.74, respectively, for the fourth quarter of 2015, compared to $0.60 and $0.58, respectively, for the fourth quarter of 2014.

 

Return on average assets was 1.55% and return on average common stockholders’ equity was 17.75% for the fourth quarter of 2015, compared to 1.47% and 16.39%, respectively, for the fourth quarter of 2014.

 

Net interest income was $43.2 million for the fourth quarter of 2015, compared to $41.9 million for the third quarter of 2015 and $34.5 million for the fourth quarter of 2014. The increase in net interest income on a linked quarter basis is attributable to a $197.1 million increase in average loans outstanding and a $74.0 million increase in non-interest-bearing deposits, both resulting in a positive mix change in our balance sheet. The Company completed a private placement of $34.75 million of its 5% Subordinated Notes due July 15, 2025 during the third quarter of 2015, which partially offset the positive mix change attributable to the increase in average loans and non-interest-bearing deposits. The net interest margin in the fourth quarter of 2015 was 3.56%, a 21 basis point decrease from the third quarter of 2015 and unchanged from the fourth quarter of 2014. Excess liquidity during the fourth quarters of 2015 and 2014 drives an unfavorable volume component change when compared to their respective comparable linked quarters. The average yield on loans decreased 9 basis points to 4.44% on a linked quarter basis. Three basis points of this decrease are attributable to a $318,000 decrease in the accretion on acquired loans. Excluding accretion on acquired loans, the net interest margin decreased 22 basis points from the third quarter to the fourth quarter of 2015. Average rates paid on interest-bearing liabilities increased from 0.58% in the third quarter to 0.60% in the fourth quarter of 2015. The higher rates paid on federal funds purchased from our correspondent banks was the result of the 0.25% increase in the Federal Reserve’s targeted rate in early December 2015.

 

Average loans for the fourth quarter of 2015 were $4.12 billion, an increase of $197.1 million, or 5%, over average loans of $3.93 billion for the third quarter of 2015, and an increase of $896.9 million, or 28%, over average loans of $3.23 billion for the fourth quarter of 2014.

 

Average total deposits for the fourth quarter of 2015 were $4.21 billion, an increase of $288.1 million, or 7%, over average total deposits of $3.92 billion for the third quarter of 2015, and an increase of $805.7 million, or 24%, over average total deposits of $3.41 billion for the fourth quarter of 2014.

 

Non-performing assets to total assets were 0.26% for the fourth quarter of 2015, a decrease of 8 basis points compared to 0.34% for the third quarter of 2015 and a decrease of 15 basis points compared to 0.41% for the fourth quarter of 2014. Net credit charge-offs to average loans were 0.24%, a 19 basis point increase compared to 0.05% for the third quarter of 2015 and a 5 basis point increase compared to 0.19% for the fourth quarter of 2014. We recorded a $3.3 million provision for loan losses in the fourth quarter of 2015 compared to $3.1 million in the third quarter of 2015 and $2.8 million in the fourth quarter of 2014. The allowance for loan loss as a percentage of total loans was 1.03% at December 31, 2015, a decrease of 2 basis points compared to 1.05% at September 30, 2015 and a decrease of 3 basis points compared to 1.06% at December 31, 2014. 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 loss.

 

Non-interest income increased $449,000 during the fourth quarter of 2015, or 14%, compared to the fourth quarter of 2014. Service charges on deposit accounts increased $158,000, or 14%, compared to the fourth quarter of 2014, resulting from an increase in the number of accounts and transactions. Mortgage banking revenue increased $113,000, or 22%, compared to the fourth quarter of 2014. Interchange income on credit card transactions, included in other operating income, increased $140,000, or 25%, compared to the fourth quarter of 2014, resulting from an increase in the number of credit card accounts.

 

Non-interest expense for the fourth quarter of 2015 increased $5.9 million, or 45%, to $19.1 million from $13.1 million in the fourth quarter of 2014, and increased $754,000, or 4%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2015 increased $2.6 million, or 41%, to $8.9 million from $6.3 million in the fourth quarter of 2014, and decreased $1.7 million, or 16%, on a linked quarter basis. We reversed $2.0 million of accrued incentive pay during the fourth quarter of 2015 and reversed $1.0 million of accrued incentive pay during the fourth quarter of 2014. Excluding these reversals, salary and benefit expenses increased $3.6 million year over year and increased $0.3 million on a linked quarter basis. The year-over-year increase is primarily the result of the Metro Bank employees coming on board in February 2015 and employee hires in our newer markets and Birmingham. Other operating expense for the fourth quarter of 2015 increased $3.0 million, or 79%, to $6.9 million from $3.9 million in the fourth quarter of 2014, and increased $2.5 million, or 57%, on a linked quarter basis. Included in these increases were $2.4 million of write-downs in equity investments in tax credit partnerships during the fourth quarter of 2015.

 

Tax expense for the fourth quarter of 2015 decreased $2.1 million compared to the fourth quarter of 2014, and decreased $3.4 million on a linked quarter basis. Effective tax rates for the fourth quarter of 2015, third quarter of 2015 and fourth quarter of 2014 were 18.81%, 33.00% and 30.63%, respectively. The lower rate in the fourth quarter of 2015 was primarily the result of recognition of federal historic tax credits.

 

 

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

 

We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the merger of Metro Bank with and into the Bank, and recorded an expense of $500,000 resulting from the initial funding of reserves for unfunded loan commitments for the first quarter of 2015, consistent with guidance provided in the Federal Reserve Bank’s Inter-agency Policy Statement SR 06-17. We recorded non-routine expenses of $2.5 million during the first half of 2014 resulting from a correction of our accounting for vested stock options and acceleration of vesting for unvested stock options previously granted to members of our advisory boards in our markets. This change in accounting treatment is a non-cash item and did not impact our operating activities or cash from operations. Core financial measures included in this press release are “core net income,” “core net income available to common stockholders,” “core diluted earnings per share,” “core return on average assets” and “core return on average common stockholders’ equity.” Each of these five core financial measures excludes the impact of the non-routine expenses attributable to merger expenses, the initial funding of reserves for unfunded loan commitments, the correction of our accounting for vested stock options and the acceleration of vesting of unvested stock options, and are all considered non-GAAP financial measures. Other non-GAAP financial measures included in this press release are “tangible common stockholders’ equity,” “total tangible assets,” “tangible book value per share,” and “tangible common equity to total tangible assets.” All non-GAAP financial measures are more fully explained below.

 

“Core net income” is defined as net income, adjusted by the net effect of the non-routine expense.

 

“Core net income available to common stockholders” is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense.

 

“Core diluted earnings per share” is defined as net income available to common stockholders, adjusted by the net effect of the non-routine expense, divided by weighted average diluted shares outstanding.

 

“Core return on average assets” is defined as net income, adjusted by the net effect of the non-routine expense, divided by average total assets.

 

“Core return on average common stockholders’ equity” is defined as net income, adjusted by the net effect of the non-routine expense, divided by average common stockholders’ equity.

 

“Tangible common stockholders’ equity” is defined as common stockholders’ equity, adjusted by the total of goodwill and other identifiable intangible assets.

 

“Total tangible assets” is defined as total assets, adjusted by the total of goodwill and other identifiable intangible assets.

 

“Tangible book value per share” is defined as tangible common stockholders’ equity divided by the number of common shares outstanding.

 

“Tangible common equity to total tangible assets” is defined as tangible common equity divided by total tangible assets.

 

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 for the years ended December 31, 2015 and December 31, 2014 included in this press release. Dollars are in thousands, except share and per share data.

 

 

		2015				2014
Provision for income taxes - GAAP		$	25,465			$	21,601
Adjustments:
Adjustment for non-routine expense			829				865
Core provision for income taxes		$	26,294			$	22,466
Return on average assets - GAAP			1.38	%			1.39	%
Net income - GAAP		$	63,540			$	52,377
Adjustments:
Adjustment for non-routine expense			1,767				1,612
Core net income		$	65,307			$	53,989
Average assets		$	4,591,860			$	3,757,932
Core return on average assets			1.42	%			1.44	%
Return on average common stockholders' equity			15.30	%			16.23	%
Net income available to common stockholders - GAAP		$	63,260			$	51,946
Adjustments:
Adjustment for non-routine expense			1,767				1,612
Core net income available to common stockholders		$	65,027			$	53,558
Average common stockholders' equity		$	413,445			$	320,005
Core return on average common stockholders' equity			15.73	%			16.74	%
Earnings per share - diluted - GAAP		$	2.39			$	2.09
Weighted average shares outstanding, diluted			26,442,554				24,818,221
Core diluted earnings per share		$	2.46			$	2.16
Book value per share		$	17.29			$	14.81
Total common stockholders' equity - GAAP			449,147				367,255
Adjustments:
Adjusted for goodwill and other identifiable intangible assets			15,330				-
Tangible common stockholders' equity		$	433,817			$	367,255
Tangible book value per share		$	16.70			$	14.81
Common stockholders' equity to total assets			8.81	%			8.96	%
Total assets - GAAP		$	5,095,509			$	4,098,679
Adjustments:
Adjusted for goodwill and other identifiable intangible assets			15,330				-
Total tangible assets			5,080,179				4,098,679
Tangible common equity to total tangible assets			8.54	%			8.96	%

 

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, 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 http://servisfirstbancshares.investorroom.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,” “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: 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 deposit base; 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 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. 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 http://servisfirstbancshares.investorroom.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)

 

		4th Quarter 2015				3rd Quarter 2015				2nd Quarter 2015				1st Quarter 2015				4th Quarter 2014
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	48,451			$	46,532			$	44,209			$	40,783			$	38,163
Interest expense			5,290				4,670				3,998				3,746				3,703
Net interest income			43,161				41,862				40,211				37,037				34,460
Provision for loan losses			3,308				3,072				4,062				2,405				2,759
Net interest income after provision for loan losses			39,853				38,790				36,149				34,632				31,701
Non-interest income			3,559				3,822				3,505				3,077				3,110
Non-interest expense			19,086				18,332				18,213				18,751				13,143
Income before income tax			24,326				24,280				21,441				18,958				21,668
Provision for income tax			4,576				8,014				6,972				5,903				6,636
Net income			19,750				16,266				14,469				13,055				15,032
Preferred stock dividends			24				33				123				100				115
Net income available to common stockholders		$	19,726			$	16,233			$	14,346			$	12,955			$	14,917
Earnings per share - basic		$	0.76			$	0.63			$	0.56			$	0.51			$	0.60
Earnings per share - diluted		$	0.74			$	0.61			$	0.54			$	0.49			$	0.58
Average diluted shares outstanding			26,595,239				26,506,334				26,426,036				26,237,980				25,697,531
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	5,095,509			$	4,772,601			$	4,492,539			$	4,393,342			$	4,098,679
Loans			4,216,375				4,044,242				3,863,734				3,607,852				3,359,858
Debt securities			370,364				334,635				335,008				336,505				327,665
Non-interest-bearing demand deposits			1,053,467				1,029,354				926,577				866,743				810,460
Total deposits			4,223,888				4,044,634				3,729,132				3,638,763				3,398,160
Borrowings			55,748				55,728				21,016				21,278				19,973
Stockholders' equity		$	449,147			$	431,194			$	454,487			$	441,458			$	407,213
Shares outstanding			25,972,698				25,903,698				25,826,198				25,653,610				24,801,518
Book value per share		$	17.29			$	16.65			$	16.05			$	15.65			$	14.81
Tangible book value per share (1)		$	16.70			$	15.96			$	15.35			$	14.95			$	14.81
SELECTED FINANCIAL RATIOS
Net interest margin			3.56	%			3.77	%			3.88	%			3.80	%			3.56	%
Return on average assets			1.55	%			1.38	%			1.31	%			1.26	%			1.47	%
Return on average common stockholders' equity			17.75	%			15.52	%			14.06	%			13.55	%			16.39	%
Efficiency ratio			40.85	%			40.13	%			41.66	%			46.74	%			34.98	%
Non-interest expense to average earning assets			1.56	%			1.63	%			1.73	%			1.90	%			1.34	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets (3)			9.72	%			9.59	%			9.60	%			9.93	%			N/A
Tier 1 capital to risk-weighted assets			9.73	%			9.60	%			10.58	%			10.98	%			11.75	%
Total capital to risk-weighted assets			11.95	%			11.89	%			12.05	%			12.49	%			13.38	%
Tier 1 capital to average assets			8.55	%			8.83	%			9.88	%			10.07	%			9.91	%
Tangible common equity to total tangible assets (1)			8.54	%			8.70	%			8.86	%			8.76	%			8.96	%

 

(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.

(3)

Basel III final capital rules, including the new Common Equity Tier 1 Capital to Risk-Weighted Assets ratio, became effective for the Company on January 1, 2015.

 

 

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

 

		December 31, 2015				December 31, 2014				% Change
ASSETS
Cash and due from banks		$	46,614			$	48,519				(4	)%
Interest-bearing balances due from depository institutions			270,836				248,054				9	%
Federal funds sold			34,785				891				3,804	%
Cash and cash equivalents			352,235				297,464				18	%
Available for sale debt securities, at fair value			342,938				298,310				15	%
Held to maturity debt securities (fair value of $27,910 and $29,974 at
December 31, 2015 and 2014, respectively)			27,426				29,355				(7	)%
Restricted equity securities			4,954				3,921				26	%
Mortgage loans held for sale			8,249				5,984				38	%
Loans			4,216,375				3,359,858				25	%
Less allowance for loan losses			(43,419	)			(35,629	)			22	%
Loans, net			4,172,956				3,324,229				26	%
Premises and equipment, net			19,434				7,815				149	%
Goodwill and other identifiable intangible assets			15,330				-
Other assets			151,987				131,601				15	%
Total assets		$	5,095,509			$	4,098,679				24	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing		$	1,053,467			$	810,460				30	%
Interest-bearing			3,170,421				2,587,700				23	%
Total deposits			4,223,888				3,398,160				24	%
Federal funds purchased			352,360				264,315				33	%
Other borrowings			55,748				19,973				179	%
Other liabilities			14,366				9,018				59	%
Total liabilities			4,646,362				3,691,466				26	%
Stockholders' equity:
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $0.001
(liquidation preference $1,000), net of discount; 40,000 shares authorized,
no shares issued and outstanding at December 31, 2015, and
40,000 shares issued and outstanding at December 31, 2014			-				39,958				(100	)%
Preferred stock, par value $0.001 per share; 1,000,000 authorized and
960,000 currently undesignated			-				-				-	%
Common stock, par value $0.001 per share; 50,000,000 shares authorized;
25,972,698 shares issued and outstanding at December 31, 2015 and
24,801,518 shares issued and outstanding at December 31, 2014			26				25				4	%
Additional paid-in capital			211,546				185,397				14	%
Retained earnings			234,150				177,091				32	%
Accumulated other comprehensive income			3,048				4,490				(32	)%
Noncontrolling interest			377				252				50	%
Total stockholders' equity			449,147				407,213				10	%
Total liabilities and stockholders' equity		$	5,095,509			$	4,098,679				24	%

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

		Three Months Ended December 31,								Year Ended December 31,
		2015				2014				2015				2014
Interest income:
Interest and fees on loans		$	46,150			$	35,902			$	171,302			$	136,066
Taxable securities			1,058				1,143				4,331				4,497
Nontaxable securities			875				871				3,499				3,489
Federal funds sold			46				41				127				159
Other interest and dividends			322				206				716				514
Total interest income			48,451				38,163				179,975				144,725
Interest expense:
Deposits			4,294				3,256				14,894				12,420
Borrowed funds			996				447				2,810				1,699
Total interest expense			5,290				3,703				17,704				14,119
Net interest income			43,161				34,460				162,271				130,606
Provision for loan losses			3,308				2,759				12,847				10,259
Net interest income after provision for loan losses			39,853				31,701				149,424				120,347
Non-interest income:
Service charges on deposit accounts			1,326				1,168				5,088				4,265
Mortgage banking			620				507				2,682				2,047
Securities gains			-				-				29				3
Increase in cash surrender value life insurance			630				649				2,621				2,280
Other operating income			983				786				3,543				2,634
Total non-interest income			3,559				3,110				13,963				11,229
Non-interest expense:
Salaries and employee benefits			8,884				6,332				38,913				31,017
Equipment and occupancy expense			1,519				1,335				6,389				5,547
Professional services			706				558				2,607				2,435
FDIC and other regulatory assessments			733				516				2,660				2,094
Other real estate owned expense			324				528				1,227				1,533
Merger expense			-				-				2,100				-
Other operating expense			6,920				3,874				20,486				14,972
Total non-interest expense			19,086				13,143				74,382				57,598
Income before income tax			24,326				21,668				89,005				73,978
Provision for income tax			4,576				6,636				25,465				21,601
Net income			19,750				15,032				63,540				52,377
Dividends on preferred stock			24				115				280				431
Net income available to common stockholders		$	19,726			$	14,917			$	63,260			$	51,946
Basic earnings per common share		$	0.76			$	0.60			$	2.46			$	2.18
Diluted earnings per common share		$	0.74			$	0.58			$	2.39			$	2.09

 

LOANS BY TYPE (UNAUDITED)

(In thousands)

 

		4th Quarter 2015				3rd Quarter 2015				2nd Quarter 2015				1st Quarter 2015				4th Quarter 2014
Commercial, financial and agricultural		$	1,760,479			$	1,683,819			$	1,642,182			$	1,554,020			$	1,504,652
Real estate - construction			243,267				232,895				219,607				219,005				208,769
Real estate - mortgage:
Owner-occupied commercial			1,014,669				978,721				930,719				869,724				793,917
1-4 family mortgage			444,134				417,012				392,245				375,770				333,455
Other mortgage			698,779				677,822				627,099				545,668				471,363
Subtotal: Real estate - mortgage			2,157,582				2,073,555				1,950,063				1,791,162				1,598,735
Consumer			55,047				53,973				51,882				43,665				47,702
Total loans		$	4,216,375			$	4,044,242			$	3,863,734			$	3,607,852			$	3,359,858

 

 

 

 

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)

(Dollars in thousands)

 

		4th Quarter 2015				3rd Quarter 2015				2nd Quarter 2015				1st Quarter 2015				4th Quarter 2014
Allowance for loan losses:
Beginning balance		$	42,574			$	40,020			$	37,356			$	35,629			$	34,442
Loans charged off:
Commercial financial and agricultural			2,186				388				1,151				77				416
Real estate - construction			161				31				93				382				309
Real estate - mortgage			463				-				208				433				922
Consumer			21				126				19				5				21
Total charge offs			2,831				545				1,471				897				1,668
Recoveries:
Commercial financial and agricultural			241				13				6				19				2
Real estate - construction			61				13				65				99				37
Real estate - mortgage			65				1				2				101				46
Consumer			1				-				-				-				11
Total recoveries			368				27				73				219				96
Net charge-offs			2,463				518				1,398				678				1,572
Provision for loan losses			3,308				3,072				4,062				2,405				2,759
Ending balance		$	43,419			$	42,574			$	40,020			$	37,356			$	35,629
Allowance for loan losses to total loans			1.03	%			1.05	%			1.04	%			1.04	%			1.06	%
Allowance for loan losses to total average
loans			1.05	%			1.08	%			1.07	%			1.07	%			1.10	%
Net charge-offs to total average loans			0.24	%			0.05	%			0.15	%			0.08	%			0.19	%
Provision for loan losses to total average
loans			0.32	%			0.31	%			0.44	%			0.28	%			0.34	%
Nonperforming assets:
Nonaccrual loans		$	7,767			$	9,850			$	8,194			$	8,361			$	9,125
Loans 90+ days past due and accruing			1				524				470				553				925
Other real estate owned and
repossessed assets			5,392				6,068				8,235				8,638				6,840
Total		$	13,160			$	16,442			$	16,899			$	17,552			$	16,890
Nonperforming loans to total loans			0.18	%			0.26	%			0.22	%			0.25	%			0.30	%
Nonperforming assets to total assets			0.26	%			0.34	%			0.38	%			0.40	%			0.41	%
Nonperforming assets to earning assets			0.26	%			0.35	%			0.38	%			0.41	%			0.42	%
Reserve for loan losses to nonaccrual loans			559.02	%			432.22	%			488.41	%			446.79	%			390.45	%
Restructured accruing loans		$	6,782			$	8,266			$	8,279			$	8,280			$	8,292
Restructured accruing loans to total loans			0.16	%			0.20	%			0.21	%			0.23	%			0.25	%

 

TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)

(In thousands)

 

		4th Quarter 2015				3rd Quarter 2015				2nd Quarter 2015				1st Quarter 2015				4th Quarter 2014
Beginning balance:		$	8,266			$	8,279			$	8,280			$	8,992			$	7,932
Additions			-				-				-				-				6,250
Net (paydowns) / advances			(83	)			(13	)			(1	)			(381	)			(4,492	)
Charge-offs			(447	)			-				-				(331	)			(698	)
		$	7,736			$	8,266			$	8,279			$	8,280			$	8,992

 

 

 

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands except per share data)

 

		4th Quarter 2015				3rd Quarter 2015				2nd Quarter 2015				1st Quarter 2015				4th Quarter 2014
Interest income:
Interest and fees on loans		$	46,150			$	44,401			$	42,105			$	38,646			$	35,902
Taxable securities			1,058				1,041				1,104				1,128				1,143
Nontaxable securities			875				890				874				860				871
Federal funds sold			46				32				24				77				41
Other interest and dividends			322				168				102				72				206
Total interest income			48,451				46,532				44,209				40,783				38,163
Interest expense:
Deposits			4,294				3,818				3,512				3,270				3,256
Borrowed funds			996				852				486				476				447
Total interest expense			5,290				4,670				3,998				3,746				3,703
Net interest income			43,161				41,862				40,211				37,037				34,460
Provision for loan losses			3,308				3,072				4,062				2,405				2,759
Net interest income after provision for loan losses			39,853				38,790				36,149				34,632				31,701
Non-interest income:
Service charges on deposit accounts			1,326				1,279				1,276				1,207				1,168
Mortgage banking			620				873				735				454				507
Securities gains			-				-				-				29				-
Increase in cash surrender value life insurance			630				683				660				648				649
Other operating income			983				987				834				739				786
Total non-interest income			3,559				3,822				3,505				3,077				3,110
Non-interest expense:
Salaries and employee benefits			8,884				10,595				10,426				9,008				6,332
Equipment and occupancy expense			1,519				1,575				1,634				1,661				1,335
Professional services			706				668				665				568				558
FDIC and other regulatory assessments			733				681				626				620				516
Other real estate owned expense			324				400				289				214				528
Merger expense			-				-				-				2,096				-
Other operating expense			6,920				4,413				4,573				4,584				3,874
Total non-interest expense			19,086				18,332				18,213				18,751				13,142
Income before income tax			24,326				24,280				21,441				18,958				21,668
Provision for income tax			4,576				8,014				6,972				5,903				6,636
Net income			19,750				16,266				14,469				13,055				15,032
Dividends on preferred stock			24				33				123				100				115
Net income available to common stockholders		$	19,726			$	16,233			$	14,346			$	12,955			$	14,917
Basic earnings per common share		$	0.76			$	0.63			$	0.56			$	0.51			$	0.60
Diluted earnings per common share		$	0.74			$	0.61			$	0.54			$	0.49			$	0.58

 

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)

ON A FULLY TAXABLE-EQUIVALENT BASIS

(Dollars in thousands)

	4th Quarter 2015								3rd Quarter 2015								2nd Quarter 2015								1st Quarter 2015								4th Quarter 2014
	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	$	4,113,044				4.44	%		$	3,915,778				4.48	%		$	3,731,699				4.51	%		$	3,492,363				4.47	%		$	3,215,400				4.41	%
Tax-exempt (2)		9,639				4.98				9,802				4.98				10,005				5.00				10,180				5.03				10,367				4.98
Mortgage loans held for sale		4,362				4.27				7,714				4.32				12,718				2.21				6,884				2.12				3,410				6.05
Debt securities:
Taxable		193,982				2.18				189,941				2.19				193,848				2.28				198,104				2.28				195,533				2.32
Tax-exempt (2)		139,435				3.88				139,543				3.95				136,104				3.93				129,525				4.02				127,909				4.19
Total securities (3)		333,417				2.89				329,484				2.94				329,952				2.96				327,629				2.97				323,442				3.06
Federal funds sold		33,255				0.55				24,860				0.51				26,638				0.36				39,438				0.27				68,640				0.24
Restricted equity securities		4,954				4.24				4,954				4.16				4,953				3.16				4,354				3.63				3,418				3.95
Interest-bearing balances with banks		366,771				0.29				168,548				0.27				97,482				0.26				119,195				0.28				273,496				0.26
Total interest-earning assets		4,865,442				3.99	%			4,461,140				4.18	%			4,213,447				4.26	%			4,000,043				4.18	%			3,898,173				3.94	%
Non-interest-earning assets:
Cash and due from banks		62,037								63,259								58,347								61,911								58,973
Net premises and equipment		19,609								18,961								16,323								13,847								8,315
Allowance for loan losses,
accrued interest and
other assets		124,241								127,778								129,233								117,612								101,831
Total assets	$	5,071,329							$	4,671,136							$	4,417,350							$	4,193,413							$	4,067,292
Interest-bearing liabilities:
Interest-bearing deposits:
Checking	$	611,521				0.30	%		$	593,550				0.28	%		$	579,650				0.27	%		$	553,569				0.26	%		$	511,451				0.26	%
Savings		39,590				0.29				37,281				0.30				37,697				0.28				36,128				0.28				28,806				0.29
Money market		2,048,453				0.49				1,817,997				0.47				1,653,708				0.45				1,618,715				0.44				1,645,533				0.45
Time deposits		503,217				1.00				485,137				0.99				480,140				1.05				446,084				1.05				395,598				1.03
Federal funds purchased		295,530				0.37				246,168				0.31				275,888				0.29				270,549				0.28				231,135				0.28
Other borrowings		55,805				5.11				50,509				5.18				21,238				5.40				20,455				5.65				19,969				5.62
Total interest-bearing liabilities		3,554,116				0.59	%			3,230,642				0.57	%			3,048,321				0.53	%			2,925,500				0.52	%			2,832,492				0.52	%
Non-interest-bearing liabilities:
Non-interest-bearing
demand		1,062,795								988,756								908,020								813,340								823,738
Other liabilities		13,469								23,738								11,793								6,745								9,969
Stockholders' equity		436,928								424,113								444,302								422,847								395,981
Unrealized gains on securities and
derivatives		4,021								3,911								4,914								4,981								5,112
Total liabilities and
stockholders' equity	$	5,071,329							$	4,671,136							$	4,417,350							$	4,193,413							$	4,067,292
Net interest spread						3.40	%							3.61	%							3.73	%							3.66	%							3.42	%
Net interest margin						3.56	%							3.77	%							3.88	%							3.80	%							3.56	%

 

(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 35%.

(3)

Unrealized gains on available-for-sale debt securities are excluded from the yield calculation.