Servisfirst Bancshares, Inc. · NYSE:SFBS
Servisfirst Bancshares — Investor Presentation (November 2024)
35 slides from Servisfirst Bancshares's investor presentation, Nov 7, 2024
Slide 1: ServisFirst Bancshares, Inc. November 2024
ServisFirst Bancshares, Inc. NYSE: SFBS November 2024
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 Sectio
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) : $16.45 billion ▪ Stockholders’ Equity (1) : $1.57 billion High Growth Coupled with Pristine Credit Metrics (3) ▪ Gross Loans CAGR: 15% ▪ Total De
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: 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 (18 - year CAGR (1) = 17%) ▪ Stock price has increased by approximately 4,000% (2) since initial capital raise in 2005 (18 - year CAGR (1) = 23%) ▪ Divid
Slide 8: Our Footprint
Our Footprint 8 ServisFirst Branches ( 30 ) ServisFirst LPO (4) Auburn
Slide 9: Our Regions
Our Regions 9 1) Represents metropolitan statistical areas (MSAs) 4) Includes Sarasota LPO and Venice Full Service Office 2) As of September 30, 2024 5) includes Tallahassee Mortgage LPO and Tallahassee Full Service Office 3) As reported by the FDIC as of 6/30/2024 6) Loan Production Office Market S
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 $438 million average deposits per banking center – Leverage technology and centralized infrastructure – H
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 li
Slide 12: Capacity For Growth
Capacity For Growth ▪ Potential for significant growth in both loan and deposit book size of current calling officers – Approximately 63% of the bank’s loan book is managed by approximately 20% of the bank’s calling officers and approximately 65% of the bank’s deposits is managed by approximately 20
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; implem
Slide 14: Risk Management Credit Process
Risk Management Credit 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
Slide 15: Risk Management Credit Process
Risk Management Credit Process ▪ The Bank does not lead any Share National Credits (SNCs); the Bank does participate in 13 relationships that are classified as SNCs with current balances of $106MM as of 9/30/24 ▪ As of 9/30/24, CRE as a percent of capital was 307% and AD&C as a percent of capital wa
Slide 16: Correspondent Banking Footprint
Correspondent Banking Footprint 16 Total Balance ($000s) Fed Funds Purchased Deposits (Interest Bearing) Deposits (Non Interest Bearing) # of Relationships Date $2,218,109 $1,542,623 $419,960 $255,526 380 9/30/2024 $1,890,538 $1,097,153 $529,169 $264,215 377 6/30/2024 $2,173,677 $1,345,328 $564,806
Slide 17: Our Management Team
Our Management Team Thomas A. Broughton, III Chairman 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 Edison K. Woodie SVP and Inter
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 Re
Slide 19: Financial Results
sell Bank Financial Results
Slide 20: 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 20 5 - year (1) CAGR = 22% 5
Slide 21: 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 21 Deposit Mix (1) 4.12% Cost of Interest Bearing Deposits (2 ) Loan Portfolio (1) 6.62% Yield on Loa
Slide 22: Loan Growth by Type
Loan Growth by Type 22 YTD Growth by Loan Type 9/30/2024 12/31/2023 Loan Type Dollars in Thousands $(29,997) $2,793,989 $2,823,986 Commercial, financial and agricultural $(79,971) $1,439,648 $1,519,619 Real estate - construction Real estate - mortgage $184,524 $2,441,687 $2,257,163 Owner - occupied
Slide 23: Credit Trends
Credit Trends 23 Commercial Real Estate Trends Current Period Current Year Year Ended December 31, 9/30/2024 6/30/2024 3/31/2024 2023 2022 2021 2020 2019 (In Thousands) $ 105,895 $ 95,183 $ 103,707 $ 109,800 $ 105,954 $ 74,811 $ 62,383 $ 47,809 1 - 4 Family Construction Speculative $ 109,773 $ 112,3
Slide 24: Credit Quality
Credit Quality ▪ Strong loan growth while maintaining asset quality discipline 24 Allowance for Credit Losses / Total Loans Net Charge Offs / Total Average Loans Non - Performing Assets / Total Assets Non - Performing Loans / Total Loans 0.41% 0.50% 0.21% 0.09% 0.12% 0.14% 0.25% 2018 2019 2020 2021
Slide 25: Profitability Metrics
Profitability Metrics ▪ Consistent earnings results and strong momentum 25 Adj. Return on Average Assets (1) Adj. Return on Average Equity (1) Adj. Return on Average Common Equity (1) Net Interest Margin 1) For a reconciliation of these non - GAAP measures to the most comparable GAAP measure, see "G
Slide 26: Efficiency
Efficiency ▪ Our operating structure and business strategy enable efficient, profitable growth 26 Adj. Efficiency Ratio (1) and Adj. Non - interest Expense / Average Assets (1) (1) (1) 1) For a reconciliation of these non - GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation
Slide 27: Interest Rate Sensitivity
Interest Rate Sensitivity 27 Estimated Change in Net Interest Income Over the Next 12 Months % change in NII from year 1 base, b ased on parallel shift in yield curve, and a static balance sheet Scenario 47% of loans are variable rate Variable - Rate Loans 20% of deposits are held in non - interest
Slide 28: 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, Sh
Slide 29: 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 ▪ Northwest Florida
Slide 30: Our Regions: Centers for Continued Growth (cont.)
Our Regions: Centers for Continued Growth (cont.) ▪ Tennessee – Key Industries : Healthcare, manufacturing, entertainment, transportation, and technology – Key Employers : HCA Holdings, Nissan North America, Dollar General Corporation, Asurion, Community Health Systems, FedEx, AutoZone, and Internat
Slide 31: 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 Ja
Slide 32: Our Financial Performance: Key Operating and Performance Metrics
Our Financial Performance: Key Operating and Performance Metrics 32 1) For a reconciliation of these non - GAAP measures to the most comparable GAAP measure, see "GAAP Reconciliation and Management Exp lanation of Non - GAAP Financial Measures" included at the end of this presentation. 2) Non - GAAP
Slide 33: Our Financial Performance: Asset Quality, Credit Loss Reserve and Charge-Offs
Our Financial Performance: Asset Quality, Credit Loss Reserve and Charge - Offs 33 9/30/2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Dollars in Thousands Nonaccrual Loans: 24,213 7,217 7,108 4,343 11,709 14,729 10,503 9,712 7,282 1,918 Commercial, Financial & Agricultural - 111 - - 234 1,588 99
Slide 34: 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 2023 , we recorded a one - time expense of $ 7 . 2 million associated with the FDIC’s special assessment to recapitalize the Deposit Insurance Fund following bank failures in the spring of 20
Slide 35: GAAP Reconciliation
GAAP Reconciliation 35 As Of and For the Period Ended December 31, 2014 As Of and For the Period Ended December 31, 2015 As Of and For the Period Ended December 31, 2016 As Of and For the Period Ended December 31, 2017 As Of and For the Period Ended December 31, 2018 As Of and For the Period Ended D
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