Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (August 2023)
38 slides from Servisfirst Bancshares's investor presentation, Aug 17, 2023
Slide 1: ServisFirst Bancshares, Inc. August 2023
ServisFirst Bancshares, Inc. NYSE: SFBS August 2023
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 Overview Founded in 2005 in Birmingham, AL Single bank BHC High-Performing Metropolitan Commercial Bank Total Assets(1): $15.07 billion Stockholders’ Equity(1): $1.36 billion High Growth Coupled with Pristine Credit Metrics (3) Gross Loans CAGR: 15% Total Deposits CAGR: 14% N
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&I lending emph
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 management infr
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 billio
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 (17-year CAGR (1) = 17%) Stock price has increased by more than 4,100% (2) since initial capital raise in 2005 (17-year CAGR (1) = 24%) Dividend has increa
Slide 8: Our Footprint
Our Footprint 8 ServisFirst Branches (29) ServisFirst LPO (3)
Slide 9: Our Regions
Our Regions 9 Represents metropolitan statistical areas (MSAs) 4) Includes Sarasota LPO and Venice Full Service Office As of June 2023 5) Includes Lake Norman LPO and Charlotte Full Service Office As reported by the FDIC as of 6/30/2022 6) Includes LPO and Tallahassee Full Service Office Region (1)
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 $424.7 million average deposits per banking center Leverage technology and centralized infrastructure Headcount focus
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 line of business
Slide 12: Capacity For Growth
Capacity For Growth Potential for significant growth in both loan and deposit book size of current calling officers Approximately 93% of the bank’s loan book is managed by approximately 50% of the bank’s calling officers and approximately 79% of the bank’s deposits are managed by approximately 50% o
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; implemented en
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 management Centralized monitoring of ABL relationships grea
Slide 15: Risk Management Credit Process
Risk ManagementCredit Process The Bank does not lead any Share National Credits (SNCs); the Bank does participate in 8 relationships that are classified as SNCs with current balances of $93MM as of 6/30/23 As of 6/30/23, CRE as a percent of capital was 308% and AD&C as a percent of capital was 86% A
Slide 16: Correspondent Banking Footprint
Correspondent Banking Footprint 16 Date # of Relationships Deposits (Non Interest Bearing) Deposits (Interest Bearing) Fed Funds Purchased Total Balance ($000s) 6/30/2023 360 $246,612 $495,830 $1,102,936 $1,845,375 3/31/2023 348 $212,644 $760,663 $1,266,303 $2,239,609 12/31/2022 346 $352,286 $761,37
Slide 17: Our Management Team
Our Management Team Thomas A. Broughton, III President and Chief Executive Officer Previously President and CEO of First Commercial Bank (acquired by Synovus Financial, 1992); subsequently, regional CEO for Synovus American Banker’s 2009 Community Banker of the Year William M. Foshee EVP and Chief F
Slide 18: Our Regions
Our Regions Rex D. McKinney EVP and Regional CEO Northwest Florida Previously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust (Synovus) Andrew N. Kattos EVP and Regional CEO Huntsville Previously EVP/Senior Lender for First Commercial Bank J. Harold Clemmer EVP and Region
Slide 19: Financial Results
seni Bank Financial Results
Slide 20: Balance Sheet Growth
Balance Sheet Growth 5-year (1) CAGR of gross loans = 15% 5-year (1) CAGR of total deposits = 14% 5-year (1) CAGR of non-interest bearing deposits = 18% 20 5-year (1) CAGR = 15% 5-year (1) CAGR = 14% Gross Loans ($mm) Total Deposits ($mm) 5 – year CAGR = 12/31/2017 – 12/31/22
Slide 21: 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 21 5-year (1) CAGR = 22% 5-year
Slide 22: 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 22 Deposit Mix (1) 3.32% Cost of Interest Bearing Deposits (2) Loan Portfolio (1) 5.94% Yield on Loans (2) Fo
Slide 23: Loan Growth by Type
Loan Growth by Type Neavg/st Bank Dollars in Thousands YTD Growth by Loan Type 12/31/2022 6/30/2023 Loan Type Commercial, Financial and Agricultural $ _3,145,3171$ 2,986,453 $ (158,864) Real Estate - Construction 3 1,532,388 | $ 1,397,732 | $ (134,656)| Real Estate - Mortgage: Owner-Occupied Commerc
Slide 24: Credit Trends Commercial Real Estate Trends
Credit Trends 24 Commercial Real Estate Trends Year Ended December 31, Current Year (In Thousands) 2018 2019 2020 2021 2022 3/31/2023 6/30/2023 1-4 Family Construction Speculative $ 34,594 $ 47,809 $ 62,383 $ 74,811 $ 105,954 $ 114,050 $ 103,842 1-4 Family Construction Sold $ 46,467 $ 56,105 $ 55,89
Slide 25: Credit Quality
Credit Quality Strong loan growth while maintaining asset quality discipline 25 Allowance for Credit Losses / Total Loans Net Charge Offs / Total Average Loans Non-Performing Assets / Total Assets Non-Performing Loans / Total Loans
Slide 26: Profitability Metrics
Profitability Metrics Consistent earnings results and strong momentum 26 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 27: Efficiency
Efficiency Our operating structure and business strategy enable efficient, profitable growth 27 Core Efficiency Ratio (1) and Core 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 Manag
Slide 28: Interest Rate Risk Profile
Interest Rate Risk Profile 28 Change in Net Interest Income Scenario Based on parallel shift in yield curve and a static balance sheet Variable-Rate Loans 39% of loans are variable rate Deposit Mix 23% of deposits are held in non-interest bearing demand deposit accounts
Slide 29: Appendix
seni Bank Appendix
Slide 30: 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, Shipt, and
Slide 31: 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 Mobile, Alabama Key Industri
Slide 32: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) Nashville, Tennessee Key Industries: Healthcare, manufacturing, transportation, and technology Key Employers: HCA Holdings, Nissan North America, Dollar General Corporation, Asurion, and Community Health Systems Charleston, South Carolina Key Industr
Slide 33: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) West Central Florida Key Industries: Defense, financial services, information technology, healthcare, transportation, grocery, manufacturing, and tourism Key Employers: Baycare Health System, University of South Florida, Tech Data, Raymond James Fina
Slide 34: Our Financial Performance: Key Operating and Performance Metrics
Our Financial Performance:Key Operating and Performance Metrics 34 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 35: Our Financial Performance: Asset Quality
Our Financial Performance:Asset Quality 35
Slide 36: Our Financial Performance: Credit Loss Reserve and Charge-Offs
Our Financial Performance:Credit Loss Reserve and Charge-Offs 36 Prior periods through 2019 were estimated under the incurred loss methodology.
Slide 37: 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 38: GAAP Reconciliation
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