Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (April 2024)
35 slides from Servisfirst Bancshares's investor presentation, Apr 12, 2024
Slide 1: ServisFirst Bancshares, Inc. March 2024
ServisFirst Bancshares, Inc . NYSE: SFBS March 2024
Slide 2: Forward-Looking Statements
Forward - Looking Statements ▪ 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 Sectio
Slide 3: ServisFirst at a Glance
ServisFirst at a Glance Overview ▪ Founded in 2005 in Birmingham, AL ▪ Single bank BHC High - Performing Metropolitan Commercial Bank ▪ Total Assets (1) : $16.13 billion ▪ Stockholders’ Equity (1) : $1.44 billion High Growth Coupled with Pristine Credit Metrics (3) ▪ Gross Loans CAGR: 15% ▪ Total De
Slide 4: Our Business Strategy
Our Business Strategy ▪ Simple business model – Loans and deposits are primary drivers, not ancillary services ▪ Limited branch footprint – Technology provides efficiency ▪ Big bank products and bankers – With the style of service and delivery of a community bank ▪ Core deposit focus coupled with C
Slide 5: Opportunistic Expansion
Opportunistic Expansion ▪ Identify great bankers in attractive markets – Focus on people as opposed to places – Target minimum of $300 million in assets within 3 years – Best bankers in growing markets ▪ Market strategies – Regional CEOs execute simple business model – Back office support and risk m
Slide 6: Milestones
Milestones 6 ▪ Founded in May 2005 with initial capital raise of $35 million ▪ Reached profitability during the fourth quarter of 2005 and have been profitable every quarter since ▪ Achieved total asset milestones of $1 billion in 2008, $2 billion in 2011, $3 billion in 2013, $4 billion in 2014, $5
Slide 7: Consistently Building Shareholder Value
Consistently Building Shareholder Value ▪ Tangible Book Value has increased year/year by a minimum of 10% every year since the bank opened in 2005 (18 - year CAGR (1) = 16%) ▪ Stock price has increased by more than 4,100% (2) since initial capital raise in 2005 (18 - year CAGR (1) = 24%) ▪ Dividend
Slide 8: Our Footprint
Our Footprint 8 ServisFirst Branches ( 30) ServisFirst LPO (2)
Slide 9: Our Regions
Our Regions 9 1) Represents metropolitan statistical areas (MSAs) 4) Includes Sarasota LPO and Venice Full Service Office 2) As of December 31, 2023 5) Includes Lake Norman and Charlotte Full Service Office 3) As reported by the FDIC as of 6/30/2023 6) includes Tallahassee Mortgage LPO and Tallahass
Slide 10: Our Business Model
Our Business Model ▪ “Loan making and deposit taking” – Traditional commercial banking services – No emphasis on non - traditional business lines ▪ Culture of cost control – “Branch light,” with $442.5 million average deposits per banking center – Leverage technology and centralized infrastructure –
Slide 11: Scalable, Decentralized Structure
Scalable , Decentralized Structure ▪ Local decision - making – Emphasize local decision - making to drive customer revenue – Centralized , uniform risk management and support – Conservative local lending authorities, covers most lending decisions – Geographic organizational structure (as opposed to
Slide 12: Capacity For Growth
Capacity For Growth ▪ Potential for significant growth in both loan and deposit book size of current calling officers – Approximately 89% of the bank’s loan book is managed by approximately 50% of the bank’s calling officers and approximately 93% of the bank’s deposits is managed by approximately 50
Slide 13: Risk Management
Risk Management ▪ Manage risk centrally while delivering products and services by each Regional Bank ▪ Centralized/ Consistent : operations, compliance, risk, accounting, audit, information technology, and credit administration ▪ Investing resources in Risk Management Group – Hired CRO in 2017; impl
Slide 14: Risk Management Credit Process
Risk Management Credit Process 14 ▪ Lending focuses on middle market clients with Regional CEO and credit officers approving secured loan relationship up to $5MM; relationships greater than $5MM are approved by the CCO and/or members of executive management ▪ Centralized monitoring of ABL relationsh
Slide 15: Risk Management Credit Process
Risk Management Credit Process ▪ The Bank does not lead any Share National Credits (SNCs); the Bank does participate in 11 relationships that are classified as SNCs with current balances of $85MM as of 12/31/23 ▪ As of 12/31/23, CRE as a percent of capital was 306% and AD&C as a percent of capital w
Slide 16: Correspondent Banking Footprint
Correspondent Banking Footprint 16 Total Balance ($000s) Fed Funds Purchased Deposits (Interest Bearing ) Deposits (Non Interest Bearing ) # of Relationships Date $2,125,967 $1,256,724 $616,699 $252,544 372 12/31/2023 $2,071,940 $1,310,289 $511,439 $250,212 363 9/30/2023 $1,845,375 $1,102,936 $495,8
Slide 17: Our Management Team
Our Management Team Thomas A. Broughton, III President and Chief Executive Officer ▪ Previously President and CEO of First Commercial Bank (acquired by Synovus Financial, 1992); subsequently, regional CEO for Synovus ▪ American Banker’s 2009 Community Banker of the Year Kirk P. Pressley EVP and Chie
Slide 18: Our Regions
Our Regions Rex D. McKinney EVP and Regional CEO Northwest Florida ▪ Previously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust ( Synovus) Andrew N. Kattos EVP and Regional CEO Huntsville ▪ Previously EVP/Senior Lender for First Commercial Bank J . Harold Clemmer EVP and
Slide 19: Financial Results
a, st Bank Financial Results
Slide 20: Income Growth
Income Growth ▪ Rare combination of balance sheet growth and earnings power ▪ EPS growth includes impact of $55.1 million of common stock issued in five private placements as we entered new markets prior to our initial public offering (IPO) and $56.9 million from the IPO 20 5 - year (1) CAGR = 9 % 5
Slide 21: Balance Sheet Makeup
Balance Sheet Makeup ▪ Primary focus on building core deposits, highlighted by non - interest bearing accounts and non - reliance on CDs ▪ C & I lending expertise within a well balanced loan portfolio 21 Deposit Mix ( 1) 4.06% Cost of Interest Bearing Deposits ( 2 ) Loan Portfolio ( 1) 6.22% Yield o
Slide 22: Loan Growth by Type
Loan Growth by Type 22 Dollars in Thousands Loan Type 12/31/2022 12/31/2023 3,145,317$ 2,823,986$ (321,331)$ 1,532,388$ 1,519,619$ (12,769)$ 2,199,280$ 2,257,163$ 57,883$ 1,146,831$ 1,249,938$ 103,107$ 3,597,750$ 3,744,346$ 146,596$ 6,943,861$ 7,251,447$ 307,586$ 66,402$ 63,777$ (2,625)$ 11,687,968$
Slide 23: Credit Trends
23 Credit Trends Commercial Real Estate Trends Current Year Year Ended December 31, 12/31/2023 9/30/2023 6/30/2023 3/31/2023 2022 2021 2020 2019 2018 (In Thousands) $ 109,800 $ 107,625 $ 103,842 $ 114,050 $ 105,954 $ 74,811 $ 62,383 $ 47,809 $ 34,594 1 - 4 Family Construction Speculative $ 90,772 $
Slide 24: Credit Quality
24 ▪ Strong loan growth while maintaining asset quality discipline Allowance for Credit Losses / Total Loans Net Charge Offs / Total Average Loans Non - Performing Assets / Total Assets Non - Performing Loans / Total Loans Credit Quality 0.50% 0.09% 0.09% 0.12% 0.14% 2019 2020 2021 2022 2023 0.50% 0
Slide 25: Profitability Metrics
Profitability Metrics ▪ Consistent earnings results and strong momentum 25 Adjusted Return on Average Assets (1) Adjusted Return on Average Equity (1) Adjusted Return on Average Common Equity (1) Net Interest Margin 1) For a reconciliation of these non - GAAP measures to the most comparable GAAP mea
Slide 26: Efficiency
45.54% 41.54% 38.69% 38.75% 40.60% 39.47 34.71% 32.57% 33.28% 30.29% 31.84% 31.30% 38.28% 1.79% 1.64% 1.51% 1.47% 1.55% 1.41 1.32% 1.26% 1.20% 1.05% 0.98% 1.07% 1.11% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 27: Interest Rate Risk Profile
Interest Rate Risk Profile 27 Change in Net Interest Income Based on parallel shift in yield curve and a static balance sheet Scenario 42% of loans are variable rate Variable - Rate Loans 20% of deposits are held in non - interest bearing demand deposit accounts Deposit Mix 2.9% 1.8% - 2.8% - 5.9% 9
Slide 28: Our Regions: Centers for Continued Growth
Our Regions: Centers for Continued Growth ▪ Birmingham , Alabama – Key Industries : Metals manufacturing, finance, insurance, healthcare services and distribution – Key Employers : Protective Life, Encompass Health, Vulcan Materials Company, AT & T, American Cast Iron Pipe Company, Southern Company,
Slide 29: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth ( cont.) ▪ Dothan, Alabama – Key Industries : Agriculture, manufacturing, and healthcare services – Key Employers : Southeast Health Medical Center, Wayne Farms, Southern Nuclear, Michelin Tire, Globe Motors, and AAA Cooper Transportation ▪ Northwest Florida
Slide 30: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth ( cont.) ▪ Charleston , South Carolina – Key Industries : Maritime, information technology, higher education, military, manufacturing, and tourism – Key Employers : Joint Base Charleston, Medical University of South Carolina, Roper St. Francis Healthcare, Bo
Slide 31: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth ( cont.) ▪ Piedmont , North Carolina – Key Industries : Financial services, manufacturing, energy, automotive, and healthcare – Key Employers : Bank of America, Wells Fargo, Duke Energy, Atrium Health, Novant Health, Lowe’s, TIAA, Nucor, Sonic Automotive, an
Slide 32: Our Financial Performance: Key Operating and Performance Metrics
Our Financial Performance: Key Operating and Performance Metrics 32 1) For a reconciliation of these non - GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Exp lanation of Non - GAAP Financial Measures" included at the end of this presentation. 2) Non - GAAP
Slide 33: Our Financial Performance: Asset Quality, Credit Loss Reserve and Charge-Offs
Our Financial Performance: Asset Quality, Credit Loss Reserve and Charge - Offs 33 1) Prior periods through 2019 were estimated under the incurred loss methodology . 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Dollars in Thousands Nonaccrual Loans: 7,217 7,108 4,343 11,709 14,729 10,503 9,712
Slide 34: GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
GAAP Reconciliation and Management Explanation of Non - GAAP Financial Measures During the fourth quarter of 2021 , we recorded $ 3 . 0 million of expenses associated with our core operating system conversion scheduled to be completed during the third quarter of 2022 . The expenses relate to negotia
Slide 35: GAAP Reconciliation
GAAP Reconciliation 35 Dollars in Thousands As Of and For the Period Ended December 31, 2021 As Of and For the Period Ended December 31, 2020 As Of and For the Period Ended December 31, 2019 As Of and For the Period Ended December 31, 2018 As Of and For the Period Ended December 31, 2017 Provision f
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