Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (November 2016)
36 slides from Servisfirst Bancshares's investor presentation, Nov 14, 2016
Slide 1: ServisFirst Bancshares, Inc. November 2016
OUR NAME IS OUR MISSION. ServisFirst Bancshares, Inc. NASDAQ: SFBS November 2016
Slide 2: Forward-Looking Statements
Forward - Looking Statements This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . In addition, ServisFirst Bancshares, Inc . may file or furnish documents with the Securities and Exchange Commission which contain forward
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) : $6.0 billion ▪ Stockholders’ Equity (1) : $508 million High Growth Coupled with Pristine Credit Metrics (3) ▪ Gross Loans CAGR: 25% ▪ Total Depos
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 Q4 - 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, $5 billion in 2015,
Slide 7: Our Footprint
Our Footprint OUR NAME IS OUR MISSION. 7 ServisFirst Branches (19)
Slide 8: Our Regions
Our Regions 8 OUR NAME IS OUR MISSION. 1) Represents metropolitan statistical areas (MSAs) 2) As of November 2016 3) As reported by the FDIC as of 6/30/2016 4) Opened in January 2016 as a loan production office Total Branches (2) Total MSA Deposits (3) ($ in billions) Market Share (3) (%) 3 40.1 5.1
Slide 9: 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 $282 million (1) average deposits per banking center – Leverage technology and centralized infrastructure
Slide 10: 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 li
Slide 11: Correspondent Banking
Correspondent Banking OUR NAME IS OUR MISSION . 11 9/30/2015 # of Accts Balance (000s) Avg Rel Bal Total Relationships 237 393,322 Fed Funds Purchased 228,415 .96 MM Deposit Accounts 164,907 0.70 MM 9/30/2016 # of Accts Balance (000s) Avg Rel Bal Total Relationships 288 634,512 Fed Funds Purchased 3
Slide 12: Correspondent Banking Footprint
Correspondent Banking Footprint November 2016 12 OUR NAME IS OUR MISSION .
Slide 13: 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 ▪ 61 years old 13 OUR NAME IS
Slide 14: Our Regions: Regional CEOs
Our Regions Rex D. McKinney EVP and Regional CEO Pensacola ▪ Previously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust ( Synovus ) ▪ 54 years old 14 OUR NAME IS OUR MISSION . Andrew N. Kattos EVP and Regional CEO Huntsville ▪ Previously EVP/Senior Lender for First Commer
Slide 15: Expansion in Tampa Bay Region
Expansion in Tampa Bay Region ▪ Greg Bryant – Regional CEO/EVP – Previously served as President and CEO for Bay Cities Bank – 29 years banking experience ▪ Gwynn Davey – Regional President – Previously served as Market President of Hillsborough County for Bay Cities Bank – 26 years banking and finan
Slide 16: Financial Results
OUR NAME IS OUR MISSION. Financial Results
Slide 17: Balance Sheet Growth
Balance Sheet Growth 17 OUR NAME IS OUR MISSION . 5 - year (1) CAGR = 24.8% 5 - year (1) CAGR = 19.2% Gross Loans ($mm) Total Deposits ($mm) ▪ Organic growth of gross loans and total deposits in the 20% range ▪ 5 - year (1) CAGR of non - interest bearing deposits = 33.3% ▪ 5 - year (1) CAGR of C&I l
Slide 18: 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 and $56.9 from the initial public offering Income Growth 18 OUR NAME IS OUR MISSION. 5 - year (1) CAGR = 29.5% 5 - y
Slide 19: Balance Sheet Makeup
▪ Primary focus on building core deposits, highlighted by non - interest bearing accounts and non - reliance on CDs ▪ C&I lending expertise within a well balanced loan portfolio Balance Sheet Makeup 19 OUR NAME IS OUR MISSION . Deposit Mix (1) 0.57% Cost of Interest Bearing Deposits (2 ) Loan Portfo
Slide 20: Loan Growth by Region
Loan Growth by Region 20 OUR NAME IS OUR MISSION . 12/31/2015 9/30/2016 YTD Growth YTD Annualized Growth Rate Birmingham, AL 1,944,161$ 2,069,014$ 124,853$ 9% Nashville, TN 268,987$ 374,394$ 105,407$ 52% Mobile, AL 229,935$ 275,805$ 45,870$ 27% Charleston, SC 74,067$ 117,281$ 43,214$ 78% Tampa Bay a
Slide 21: Loan Growth by Type
Loan Growth by Type OUR NAME IS OUR MISSION. 21 Dollars in Thousands Loan Type 12/31/2015 9/30/2016 1,760,479$ 1,910,777$ 150,298$ 34% 243,267$ 292,721$ 49,454$ 11% Owner-Occupied Commercial 1,014,669$ 1,138,308$ 123,639$ 28% 1-4 Family Mortgage 444,134$ 520,394$ 76,260$ 17% Other Mortgage 698,779$
Slide 22: Credit Trends
Credit Trends OUR NAME IS OUR MISSION. 22 (In Thousands) 2011 2012 2013 2014 2015 3/31/16 6/30/16 9/30/16 1-4 Family Construction Speculative 30,301$ 24,962$ 16,403$ 13,608$ 25,794$ 26,804$ 21,627$ 24,934$ 1-4 Family Construction Sold 11,159$ 21,607$ 21,414$ 28,124$ 29,086$ 27,682$ 37,927$ 41,698$ R
Slide 23: Credit Quality
▪ Strong loan growth while maintaining asset quality discipline Credit Quality 23 OUR NAME IS OUR MISSION. Allowance for Loan Losses / Total Loans Net Charge Offs / Total Average Loans Non - Performing Assets / Total Assets Non - Performing Loans / Total Loans 1.06% 0.69% 0.64% 0.41% 0.26% 0.16% 201
Slide 24: Profitability Metrics
▪ Consistent earnings results and strong momentum Profitability Metrics 24 OUR NAME IS OUR MISSION . Core Return on Average Assets (1) Core Return on Average Equity (1) Core Return on Average Common Equity (1) Net Interest Margin 1) Core measures in 2015 exclude merger expenses related to the acquis
Slide 25: Efficiency
▪ Our operating structure and business strategy enable efficient, profitable growth Efficiency 25 OUR NAME IS OUR MISSION. Core Efficiency Ratio (1) and Core Non - interest Expense / Average Assets (1) (1) (1) 45.54% 41.54% 38.78% 38.86% 40.73% 39.29 1.79% 1.64% 1.51% 1.47% 1.56% 1.41 0.00% 1.00% 2.
Slide 26: Interest Rate Risk Profile
Interest Rate Risk Profile 26 OUR NAME IS OUR MISSION. Change in Net Interest Income Scenario Based on parallel shift in yield curve and a static balance sheet Variable - rate Loans 50% of loans are variable rate Deposit Mix 25% of deposits are held in non - interest bearing demand deposit accounts
Slide 27: Appendix
Appendix OUR NAME IS OUR MISSION .
Slide 28: Our Regions: Centers for Continued Growth
Our Regions: Centers for Continued Growth Birmingham, AL ▪ Key Industries: Metals manufacturing, finance, insurance, healthcare services and distribution ▪ Key Employers: Protective Life, HealthSouth Corporation, Vulcan Materials Company, AT&T, and University of Alabama at Birmingham Huntsville, AL
Slide 29: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) Dothan, AL ▪ Key Industries: Agriculture, manufacturing, and healthcare services ▪ Key Employers: Southeast Alabama Medical Center, Wayne Farms, Southern Nuclear, Michelin Tire, Pemco World Air Services, Globe Motors, and AAA Cooper Transportation Pe
Slide 30: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) Nashville, TN ▪ Key Industries: Healthcare, manufacturing, transportation, and technology ▪ Key Employers: HCA Holdings, Nissan North America, Dollar General Corporation, Asurion , and Community Health Systems Charleston, SC ▪ Key Industries: Maritim
Slide 31: Tax Credit Partnership Investments
Tax Credit Partnership Investments The Bank has invested in three types of tax credit partnerships which provide loan opportunities and allow for the recognition of tax credits ▪ New Market Tax Credit – designed to encourage private sector equity investments in low income communities ▪ Low Income Ho
Slide 32: Key Operating and Performance Metrics
Our Financial Performance: Key Operating and Performance Metrics 32 OUR NAME IS OUR MISSION . Dollars in Millions Except per Share Amounts 2009 2010 2011 2012 2013 2014 2015 9/30/16 Balance Sheet Total Assets $1,573 $1,935 $2,461 $2,906 $3,521 $4.099 $5.096 $6.003 Net Loans $1,192 $1,377 $1,809 $2,3
Slide 33: Our Financial Performance: Asset Quality
Our Financial Performance: Asset Quality 33 OUR NAME IS OUR MISSION. Dollars in Thousands 2009 2010 2011 2012 2013 2014 2015 9/30/16 Nonaccrual Loans: 1-4 Family 265 202 670 453 1,878 1,596 198 255 Owner-Occupied Commercial Real Estate 909 635 792 2,786 1,435 683 -- 1,439 Other Real Estate Loans 615
Slide 34: Loan Loss Reserve and Charge-Offs
Our Financial Performance: Loan Loss Reserve and Charge - Offs 34 OUR NAME IS OUR MISSION . Dollars in Thousands 2009 9/30/16 Allowance for Loan Losses: Beginning of Year $ 10,602 $ 14,737 $ 18,077 $ 22,030 $ 26,258 $ 30,663 $ 35,629 $ 43,419 Charge-Offs: Commercial, Financial and Agricultural (2,61
Slide 35: GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
GAAP Reconciliation and Management Explanation of Non - GAAP Financial Measures 35 OUR NAME IS OUR MISSION . We recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and t he merger of Metro Bank with and into the Bank, and recorded an e
Slide 36: GAAP Reconciliation
GAAP Reconciliation OUR NAME IS OUR MISSION . 36 Dollars in Thousands $ 25,465 $ 21,601 Adjustments: Adjustment for non-routine expense 829 865 $ 26,294 $ 22,466 1.38 % 1.39 % $ 63,540 $ 52,377 Adjustments: Adjustment for non-routine expense 1,767 1,612 $ 65,307 $ 53,989 $ 4,591,861 $ 3,758,184 1.42
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