Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (August 2015)
36 slides from Servisfirst Bancshares's investor presentation, Aug 31, 2015
Slide 1: ServisFirst Bancshares, Inc.
OUR NAME IS OUR MISSION. ServisFirst Bancshares, Inc. NASDAQ: SFBS
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 (1) ▪ Total Assets: $4.5 billion ▪ Stockholders’ Equity: $454 million (2) High Growth Coupled with Pristine Credit Metrics (4) ▪ Gross Loans CAGR: 23% ▪ Total Deposit
Slide 4: Our Business Strategy
Our Business Strategy ▪ Simple business model – Loans and deposits are primary drivers, not ancillary services ▪ Limited branch footprint – T echnology 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 5 years – Best bankers in growing markets • Production team (excluding mortgage origination) has grown by 33% in 2015. ▪ Market strategies –
Slide 6: Milestones
Milestones 6 ▪ Founded in May 2005 with initial capital raise of $35 million ▪ Achieved total asset milestones of $1 billion in 2008, $2 billion in 2011, $3 billion in 2013, and $4 billion in 2014, all through organic growth 2013 2014 May ’05: Founded in Birmingham, AL June ’07: Montgomery, AL March
Slide 7: Our Footprint
ServisFirst Branches (17) Our Footprint 7 Pensacola Mobile Dothan ServisFirst Branches (18) Nashville Huntsville Birmingham Atlanta Charleston Montgomery Jacksonville Tallahassee Savannah Greenville Knoxville Memphis Chattanooga Houston New Orleans Charlotte Jackson Tampa OUR NAME IS OUR MISSION
Slide 8: Our Markets
Our Markets 8 OUR NAME IS OUR MISSION. 1) Represents metropolitan statistical areas (MSAs ) 2) As reported by the FDIC; as of 6/30/2014 3) Branch 1 opened in July 2012 as a loan production office; converted to a full service branch in April 2013; Branch 2 opened 9 /3/ 2014 4) Opened as a loan produc
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 $291 million ( 1)(2) average deposits per banking center – Leverage technology and centralized infrastr
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 Correspondent bank to over 200 community banks 6/30/2014 # of Accts Balance (000s) Avg Acct Bal Total Relationships 174 272,016 Fed Funds Purchased 188,270 1.08M Deposit Accounts 83,746 0.48M 6/30/2015 # of Accts Balance (000s) Avg Acct Bal Total Rel
Slide 12: Correspondent Banking Footprint June 2015
Correspondent Banking Footprint June 2015 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 ▪ 60 years old 13 OUR NAME IS
Slide 14: Our Regional CEOs
Our Regional CEOs Rex D. McKinney EVP and Regional CEO Pensacola ▪ Previously EVP/Senior Commercial Lender for First American Bank/Coastal Bank and Trust ( Synovus ) ▪ 52 years old 14 OUR NAME IS OUR MISSION. Andrew N. Kattos EVP and Regional CEO Huntsville ▪ Previously EVP/Senior Lender for First C
Slide 15: Overview of Metro Bank Acquisition
Overview of Metro Bank Acquisition ▪ Closed deal January 31, 2015 ▪ Purchased all shares of common stock of Metro Bancshares, Inc., a Georgia state – chartered holding company with $211 million in total assets ▪ Addition of experienced Atlanta area bankers to the ServisFirst Bank team ▪ Deal value:
Slide 16: Expansion in South Carolina Region
Expansion in South Carolina Region ▪ Thomas G. Trouche – Regional CEO/EVP – Previously served as Coastal Division Executive for First Citizens Bank. – 26 years banking experience ▪ Robert H. Warrick – Commercial Banking Manager/SVP – Previously served as Commercial Market Executive for CresCom Bank
Slide 17: Financial Results
OUR NAME IS OUR MISSION. Financial Results
Slide 18: Success Measures: Balance Sheet Growth
Success Measures: Balance Sheet Growth 18 OUR NAME IS OUR MISSION. 5 - year (1) CAGR = 22.7% 5 - year (1) CAGR = 18.9% Gross Loans ($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 = 30.9% ▪ 5 - year
Slide 19: Success Measures: 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 $56.9 from the initial public offering Success Measures: Income Growth 19 OUR NAME IS OUR MISSION. 5 - year (1)
Slide 20: Success Measures: Balance Sheet Makeup
▪ Primary focus on building core deposits, highlighted by non - interest bearing accounts and non - reliance on CDs ▪ C&I lending expertise within a well balanced loan portfolio Success Measures: Balance Sheet Makeup 20 OUR NAME IS OUR MISSION. Deposit Mix (1) 0.51% Cost of Interest Bearing Deposits
Slide 21: Loan Growth by MSA
L oan Growth by MSA 21 OUR NAME IS OUR MISSION. 12/31/2014 6/30/2015 YTD Growth by Market 6 Months Ended Annualized Growth Rate Birmingham-Hoover, AL MSA 1,688,897$ 1,816,154$ 127,257$ 15% Huntsville, AL MSA 432,931$ 454,416$ 21,485$ 10% Dothan, AL MSA 387,681$ 419,866$ 32,185$ 17% Montgomery, AL MS
Slide 22: Loan Growth by Type
Loan Growth by Type OUR NAME IS OUR MISSION. 22 Dollars in Thousands Loan Type 12/31/2014 6/30/2015 1,511,545$ 1,630,134$ 118,589$ 34% 224,449$ 219,607$ (4,842)$ -1% Owner-Occupied Commercial 834,564$ 930,719$ 96,155$ 27% 1-4 Family Mortgage 352,785$ 392,245$ 39,460$ 11% Other Mortgage 532,771$ 627,
Slide 23: Success Measures: Credit Quality
▪ Strong loan growth while maintaining asset quality discipline Success Measures: 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 1.10% 1.06% 0.69% 0.6
Slide 24: Success Measures: Profitability Metrics
▪ Consistent earnings results and strong momentum Success Measures: 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 the first half of 2015 exclude me
Slide 25: Success Measures: Efficiency
▪ Our operating structure and business strategy enable efficient, profitable growth Success Measures: Efficiency 25 OUR NAME IS OUR MISSION. Core Efficiency Ratio (1) and Core Noninterest Expense / Average Assets (1) (1) (1) 1) Core measures in the first half of 2015 exclude merger expenses related
Slide 26: Well Positioned for Rising Interest Rates
Well Positioned for Rising Interest Rates 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 53% of loans are variable rate Deposit Mix 25% of deposits are held in non - interest bearing demand de
Slide 27: Appendix
Appendix OUR NAME IS OUR MISSION.
Slide 28: Our Markets: Centers for Continued Growth
Our Markets: 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 The University of Alabama at Birmingham (UAB) ( Al
Slide 29: Our Markets: Centers for Continued Growth (cont.)
Our Markets: Centers for Continued Growth (cont.) Dothan, AL ▪ Key Industries: Agricultural trade and agri - business ▪ Key Employers: Michelin, Pemco World Aviation, International Paper, Globe Motors, and AAA Cooper Transportation Pensacola, FL ▪ Key Industries : T ourism , military, health service
Slide 30: Our Markets: Centers for Continued Growth (cont.)
Our Markets: Centers for Continued Growth (cont.) Nashville, TN ▪ Key Industries: Manufacturing, healthcare, transportation, and technology ▪ Key Employers: HCA Holdings, Nissan North America, Dollar General Corporation, Asurion , and Community Health Systems Charleston, SC ▪ Key Industries: Tourism
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. 2010 2011 2012 2013 2014 1Q2015 2Q2015 Balance Sheet Total Assets $1,935 $2,461 $2,906 $3,521 $4.099 $4.393 $4.493 Net Loans $1,377 $1,809 $2,337 $2,828 $3.324 $3.570 $3.824 Deposits $1,759 $2,144 $2,512 $3,
Slide 33: Our Financial Performance: Asset Quality
Our Financial Performance: Asset Quality 33 OUR NAME IS OUR MISSION. Dollars in Thousands 2010 2011 2012 2013 2014 1Q2015 2Q2015 Nonaccrual Loans: 1-4 Family 202 670 453 1,878 1,596 966 944 Owner-Occupied Commercial Real Estate 635 792 2,786 1,435 683 724 76 Other Real Estate Loans -- 693 240 243 95
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 Allowance for Loan Losses: Beginning of Year $ 14,737 $ 18,077 $ 22,030 $ 26,258 $ 30,663 $ 35,629 $ 37,356 Charge-Offs: Commercial, Financial and Agricultural (1,667) (1,096) (1,106) (1,9
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. W e recorded expenses of $2.1 million for the first quarter of 2015 related to the acquisition of Metro Bancshares, Inc. and the mer ger of Metro Bank with and into the Bank, and recorded an e
Slide 36: Our Financial Performance: GAAP Reconciliation
Our Financial Performance: GAAP Reconciliation OUR NAME IS OUR MISSION. 36 For the Three Months Ended March 31, 2015 For the Six Months Ended June 30, 2015 For the Six Months Ended June 30, 2014 Provision for income taxes - GAAP $ 5,903 $ 12,875 $ 10,705 Adjustments: Adjustment for non - routine exp
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