Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (August 2017)
34 slides from Servisfirst Bancshares's investor presentation, Aug 4, 2017
Slide 1: ServisFirst Bancshares, Inc. August 2017
ServisFirst Bancshares, Inc. NASDAQ: SFBS August 2017
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) : $6.3 billion ▪ Stockholders’ Equity (1) : $567 million High Growth Coupled with Pristine Credit Metrics (3) ▪ Gross Loans CAGR: 22% ▪ 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 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: Our Footprint
Our Footprint 7 • ServisFirst Branches (20)
Slide 8: Our Regions
Our Regions 8 1) Represents metropolitan statistical areas (MSAs) 2) As of May 2017 3) As reported by the FDIC as of 6/30/2016 4) Represents two full service offices and one loan production office; LPO opened in January 2017 5) Opened in January 2016 as a loan production office; converted to full se
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 $284 million (1) average deposits per banking center – Leverage technology and centralized infrastructure
Slide 10: Scalable, Decentralized Structure
Scalable, Decentralized Structure ▪ Local decision - making – Emphasize local decision - making to drive customer revenue – Centralized, uniform risk management and support – Conservative local lending authorities, covers most lending decisions ▪ Geographic organizational structure (as opposed to li
Slide 11: Correspondent Banking Footprint
Correspondent Banking Footprint 11
Slide 12: Our Management Team
Our Management Team Thomas A. Broughton, III President and Chief Executive Officer ▪ Previously President and CEO of First Commercial Bank (acquired by Synovus Financial, 1992); subsequently, regional CEO for Synovus ▪ American Banker’s 2009 Community Banker of the Year ▪ 62 years old 12 William M.
Slide 13: Our Regions
Our Regions Rex D. McKinney EVP and Regional CEO Pensacola ▪ Previously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust ( Synovus ) ▪ 54 years old 13 Andrew N. Kattos EVP and Regional CEO Huntsville ▪ Previously EVP/Senior Lender for First Commercial Bank ▪ 48 years old K
Slide 14: Financial Results
ist Bank: (OUR NAME IS OUR MISSION. Financial Results
Slide 15: Balance Sheet Growth
Balance Sheet Growth 15 5 - year (1) CAGR = 22% 5 - year (1) CAGR = 20% Gross Loans ($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 = 25% ▪ 5 - year (1) CAGR of C&I loans = 20% $1,831 $2,363 $2,859
Slide 16: 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 $56.9 from the initial public offering Income Growth 16 5 - year (1) CAGR = 29% 5 - year (1) CAGR = 21% Net Inco
Slide 17: Balance Sheet Makeup
▪ Primary focus on building core deposits, highlighted by non - interest bearing accounts and non - reliance on CDs ▪ C&I lending expertise within a well balanced loan portfolio Balance Sheet Makeup 17 Deposit Mix (1) 0.64% Cost of Interest Bearing Deposits (2 ) Loan Portfolio (1) 4.60% Yield on Loa
Slide 18: Loan Growth by Region
Loan Growth by Region 18 12/31/2016 6/30/2017 YTD Growth 2017 Annualized Growth Rate Birmingham, AL 2,155,907$ 2,299,024$ 143,117$ 13% Dothan, AL 479,623$ 524,122$ 44,499$ 19% Nashville, TN 403,490$ 446,645$ 43,155$ 22% Charleston, SC 126,831$ 165,601$ 38,770$ 62% Huntsville, AL 490,926$ 529,400$ 38
Slide 19: Loan Growth by Type
Loan Growth by Type 19 Dollars in Thousands Loan Type 12/31/2016 6/30/2017 1,982,267$ 2,115,998$ 133,731$ 31% 335,085$ 401,875$ 66,790$ 15% Owner-Occupied Commercial 1,171,719$ 1,265,230$ 93,511$ 22% 1-4 Family Mortgage 536,805$ 565,121$ 28,316$ 7% Other Mortgage 830,683$ 940,239$ 109,556$ 25% Subto
Slide 20: Credit Trends
Credit Trends 20 (In Thousands) 2011 2012 2013 2014 2015 2016 6/30/2017 1-4 Family Construction Speculative 30,301$ 24,962$ 16,403$ 13,608$ 25,794$ 27,835$ 30,901$ 1-4 Family Construction Sold 11,159$ 21,607$ 21,414$ 28,124$ 29,086$ 45,051$ 49,391$ Resi Acquisition & Development 31,400$ 20,949$ 20,4
Slide 21: Credit Quality
▪ Strong loan growth while maintaining asset quality discipline Credit Quality 21 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% 0.34% 0.23% 2011 2012 2013 2014 20
Slide 22: Profitability Metrics
▪ Consistent earnings results and strong momentum Profitability Metrics 22 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 acquisition of Metro Bancshares,
Slide 23: Efficiency
▪ Our operating structure and business strategy enable efficient, profitable growth Efficiency 23 Core Efficiency Ratio (1) and Core Non - interest Expense / Average Assets (1) (1) (1) 45.54% 41.54% 38.78% 38.86% 40.73% 39.47 36.88% 1.79% 1.64% 1.51% 1.47% 1.56% 1.41 1.39% 0.00% 1.00% 2.00% 3.00% 4.
Slide 24: Interest Rate Risk Profile
Interest Rate Risk Profile 24 Change in Net Interest Income Scenario Based on parallel shift in yield curve and a dynamic balance sheet Variable - rate Loans 51% of loans are variable rate Deposit Mix 25% of deposits are held in non - interest bearing demand deposit accounts 5.68% 1.69% 3.22% 9.70%
Slide 25: Appendix
ist Bank: (OUR NAME IS OUR MISSION.
Slide 26: 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 27: 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 28: 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 29: 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 30: Key Operating and Performance Metrics
Our Financial Performance: Key Operating and Performance Metrics 30 2009 2010 2011 2012 2013 2014 2015 2016 6/30/17 Balance Sheet Total Assets $1,573 $1,935 $2,461 $2,906 $3,521 $4.099 $5.096 $6.370 $6.330 Net Loans $1,192 $1,377 $1,809 $2,337 $2,828 $3.324 $4.173 $4.860 $5.289 Deposits $1,432 $1,75
Slide 31: Our Financial Performance: Asset Quality
Our Financial Performance: Asset Quality 31 Dollars in Thousands 2009 2010 2011 2012 2013 2014 2015 2016 6/30/2017 Nonaccrual Loans: 1-4 Family 265 202 670 453 1,878 1,596 198 74 921 Owner-Occupied Commercial Real Estate 909 635 792 2,786 1,435 683 -- -- 2,248 Other Real Estate Loans 615 -- 693 240
Slide 32: Loan Loss Reserve and Charge-Offs
Our Financial Performance: Loan Loss Reserve and Charge - Offs 32 Dollars in Thousands 2009 6/30/17 Allowance for Loan Losses: Beginning of Year $ 10,602 $ 14,737 $ 18,077 $ 22,030 $ 26,258 $ 30,663 $ 35,629 $ 43,419 $ 51,893 Charge-Offs: Commercial, Financial and Agricultural (2,616) (1,667) (1,096
Slide 33: GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
GAAP Reconciliation and Management Explanation of Non - GAAP Financial Measures 33 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 expense of $500,000 resulti
Slide 34: GAAP Reconciliation
GAAP Reconciliation 34 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 % 1.44 % 15.30 % 14.43 %
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