Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (May 2022)
39 slides from Servisfirst Bancshares's investor presentation, May 18, 2022
Slide 1: ServisFirst Bancshares, Inc. NYSE: SFBS May 2022
ServisFirst Bancshares, Inc.NYSE: SFBSMay 2022
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 Section 21E
Slide 3: ServisFirst at a Glance
ServisFirst at a Glance OverviewFounded in 2005 in Birmingham, ALSingle bank BHCHigh-Performing Metropolitan Commercial Bank Total Assets(1): $15.34 billionStockholders’ Equity(1): $1.17 billion High Growth Coupled with Pristine Credit Metrics (3)Gross Loans CAGR: 14%Total Deposits CAGR: 18%Net Inco
Slide 4: Our Business Strategy
Our Business Strategy Simple business modelLoans and deposits are primary drivers, not ancillary servicesLimited branch footprintTechnology provides efficiencyBig bank products and bankersWith the style of service and delivery of a community bankCore deposit focus coupled with C&I lending emphasisSc
Slide 5: Opportunistic Expansion
Opportunistic Expansion Identify great bankers in attractive marketsFocus on people as opposed to placesTarget minimum of $300 million in assets within 3 yearsBest bankers in growing marketsMarket strategiesRegional CEOs execute simple business modelBack office support and risk management infrastruc
Slide 6: Milestones
Milestones 6 Founded in May 2005 with initial capital raise of $35 millionReached profitability during the fourth quarter of 2005 and have been profitable every quarter sinceAchieved total asset milestones of $1 billion in 2008, $2 billion in 2011, $3 billion in 2013, $4 billion in 2014, $5 billion
Slide 7: Consistently Building Shareholder Value
Consistently Building Shareholder Value Tangible Book Value has increased year/year by a minimum of 10% every year since the bank opened in 2005 (16-year CAGR (1) = 17%)Stock price has increased by more than 5,000% (2) since initial capital raise in 2005 (16-year CAGR (1) = 28%)Dividend has increase
Slide 8: Our Footprint
Our Footprint 8 ServisFirst Branches (23)ServisFirst LPO (5) Panama City
Slide 9: Our Regions
Our Regions 9 Represents metropolitan statistical areas (MSAs) 4) Loan Production Office (LPO)As of May 2022 5) Includes Sarasota LPO and Venice Full Service Office As reported by the FDIC as of 6/30/2021 Region (1) Total Offices (2) Total MSA Deposits (3) Market Share (3) ($ in billions) (%) Alabam
Slide 10: Our Business Model
Our Business Model “Loan making and deposit taking”Traditional commercial banking servicesNo emphasis on non-traditional business linesCulture of cost control“Branch light,” with $539.5 million average deposits per banking centerLeverage technology and centralized infrastructureHeadcount focused on
Slide 11: Scalable, Decentralized Structure
Scalable, Decentralized Structure Local decision-makingEmphasize local decision-making to drive customer revenueCentralized, uniform risk management and supportConservative local lending authorities, covers most lending decisionsGeographic organizational structure (as opposed to line of business str
Slide 12: Capacity For Growth
Capacity For Growth Potential for significant growth in loan book size of current calling officersApproximately 89% of the bank’s loan book is managed by approximately 50% of the bank’s calling officersAverage outstanding loan balances per officer as of 3/31/22 was $72 millionStrive for a minimum of
Slide 13: Risk Management
Risk Management Manage risk centrally while delivering products and services by each Regional BankCentralized/Consistent: operations, compliance, risk, accounting, audit, information technology, and credit administration Investing resources in Risk Management GroupHired CRO in 2017; implemented ente
Slide 14: Risk Management Credit Process
Risk ManagementCredit Process 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 managementCentralized monitoring of ABL relationships great
Slide 15: Risk Management Credit Process
Risk ManagementCredit 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 $134MM as of 3/31/22As of 3/31/22, CRE as a percent of capital was 290% and AD&C as a percent of capital was 86%A
Slide 16: Impact From Crossing $10 Billion Asset Threshold
Impact From Crossing $10 Billion Asset Threshold Anticipate relatively small economic and regulatory impact due to our commercial banking focus and the staffing infrastructure put in place in recent years The Durbin Amendment will limit debit card interchange feesDurbin Amendment will take effect on
Slide 17: Correspondent Banking Footprint
Correspondent Banking Footprint 17
Slide 18: Our Management Team
Our Management Team Thomas A. Broughton, IIIPresident and Chief Executive OfficerPreviously President and CEO of First Commercial Bank (acquired by Synovus Financial, 1992); subsequently, regional CEO for SynovusAmerican Banker’s 2009 Community Banker of the Year William M. FosheeEVP and Chief Finan
Slide 19: Our Regions
Our Regions Rex D. McKinneyEVP and Regional CEO Northwest FloridaPreviously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust (Synovus) Andrew N. Kattos EVP and Regional CEO HuntsvillePreviously EVP/Senior Lender for First Commercial Bank J. Harold ClemmerEVP and Regional C
Slide 20: Financial Results
wm. Bank Financial Results
Slide 21: Balance Sheet Growth
Balance Sheet Growth 5-year (1) CAGR of gross loans = 14%5-year (1) CAGR of total deposits = 18%5-year (1) CAGR of non-interest bearing deposits = 30% 21 5-year (1) CAGR = 14% 5-year (1) CAGR = 18% Gross Loans ($mm) Total Deposits ($mm) 5 – year CAGR = 12/31/2016 – 12/31/21
Slide 22: Income Growth
Income Growth Rare combination of balance sheet growth and earnings powerEPS growth includes impact of $55.1 million of common stock issued in five private placements as we entered new markets and $56.9 million from the initial public offering 22 5-year (1) CAGR = 21% 5-year (1) CAGR = 20% Net Incom
Slide 23: Balance Sheet Makeup
Balance Sheet Makeup Primary focus on building core deposits, highlighted by non-interest bearing accounts and non-reliance on CDsC&I lending expertise within a well balanced loan portfolio 23 Deposit Mix (1).32% Cost of Interest Bearing Deposits (2) Loan Portfolio (1)4.34% Yield on Loans (2) For pe
Slide 24: Loan Growth by Type (Excluding PPP)
Loan Growth by Type (Excluding PPP) 24
Slide 25: Loan Growth by Type
Loan Growth by Type Noavg ist Bank Dollars in Thousands YTD Growth by Loan Type 12/31/2021 3/31/2022 Loan Type Commercial, Financial and Agricultural $ 2,984,053 | $ 2,955,927 | $ 202,058 Real Estate - Construction 3 1,103,076 | $ 1,164,690 | $ 61,614 Real Estate - Mortgage: Owner-Occupied Commercia
Slide 26: Credit Trends: Commercial Real Estate Trends
Credit Trends 26 Commercial Real Estate Trends Year Ended December 31, Current Year (In Thousands) 2017 2018 2019 2020 2021 3/31/2022 1-4 Family Construction Speculative $ 31,230 $ 34,594 $ 47,809 $ 62,383 $ 74,811 $ 79,480 1-4 Family Construction Sold $ 47,441 $ 46,467 $ 56,105 $ 55,899 $ 96,144 $
Slide 27: Credit Quality
Credit Quality Strong loan growth while maintaining asset quality discipline 27 Allowance for Credit Losses / Total Loans Net Charge Offs / Total Average Loans Non-Performing Assets / Total Assets Non-Performing Loans /Total Loans
Slide 28: Profitability Metrics
Profitability Metrics Consistent earnings results and strong momentum 28 Core Return on Average Assets (1) Core Return on Average Equity (1) Core Return on Average Common Equity (1) Net Interest Margin For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Rec
Slide 29: Efficiency
Efficiency Our operating structure and business strategy enable efficient, profitable growth 29 Core Efficiency Ratio (1) andCore Non-interest Expense / Average Assets (1) (1) (1) For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Manage
Slide 30: Interest Rate Risk Profile
Interest Rate Risk Profile 30 Change in Net Interest Income Scenario Based on parallel shift in yield curve and a static balance sheet Variable-Rate Loans 38% of loans are variable rate (excluding PPP loans) Deposit Mix 39% of deposits are held in non-interest bearing demand deposit accounts
Slide 31: Appendix
wm. Bank Appendix
Slide 32: Our Regions: Centers for Continued Growth
Our Regions: Centers for Continued Growth Birmingham, AlabamaKey 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, Shipt, and
Slide 33: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) Dothan, AlabamaKey Industries: Agriculture, manufacturing, and healthcare servicesKey Employers: Southeast Health Medical Center, Wayne Farms, Southern Nuclear, Michelin Tire, Globe Motors, and AAA Cooper TransportationNorthwest FloridaKey Industries
Slide 34: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) Charleston, South CarolinaKey Industries: Maritime, information technology, higher education, military, manufacturing, and tourismKey Employers: Joint Base Charleston, Medical University of South Carolina, Roper St. Francis Healthcare, Boeing Company
Slide 35: Our Financial Performance: Key Operating and Performance Metrics
Our Financial Performance:Key Operating and Performance Metrics 35 For a reconciliation of these non-GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" included at the end of this presentation. Non-GAAP financial mea
Slide 36: Our Financial Performance: Asset Quality
Our Financial Performance:Asset Quality 36
Slide 37: Our Financial Performance: Credit Loss Reserve and Charge-Offs
Our Financial Performance:Credit Loss Reserve and Charge-Offs 37 Prior periods through 2019 were estimated under the incurred loss methodology.
Slide 38: 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 negotiated liq
Slide 39: GAAP Reconciliation
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