MIL-OSI: ServisFirst Bancshares, Inc. Announces Results for Third Quarter of 2021

46

Source: GlobeNewswire (MIL-OSI)

BIRMINGHAM, Ala., Oct. 18, 2021 (GLOBE NEWSWIRE) — ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights:

  • Total loans grew $163.1 million, or 8% annualized, during the quarter, while loans, excluding the impact of Paycheck Protection Program (“PPP”) loan forgiveness, grew $370.4 million, or 18% annualized, during the quarter
  • Diluted earnings per share were $0.96 for the third quarter, an increase of 20% over the third quarter of 2020
  • Deposits grew from $9.67 billion to $12.08 billion year-over-year, or 25%, and grew $1.12 billion, or 41% annualized, on a linked-quarter basis
  • Book value per share increased to $20.56, a 17% increase year-over-year
  • Liquidity reached new record levels, with approximately $4.2 billion on deposit at the Federal Reserve Bank

Tom Broughton, Chairman, President and CEO, said, “The economic recovery in the Southeast United States is resulting in very strong loan growth for our bank. Our bankers are winning in the marketplace.”

Bud Foshee, CFO, said, “Credit losses continue at historically low levels and credit quality remains very good. Operating efficiency is also very good.”

FINANCIAL SUMMARY (UNAUDITED)                                      
(in Thousands except share and per share amounts)                                
                                           
        Period Ending
September 30,
2021
  Period Ending
June 30, 2021
  % Change
From Period
Ending June
30, 2021 to
Period Ending
September 30,
2021
  Period Ending
September 30,
2020
  % Change
From Period
Ending
September 30,
2020 to Period
Ending
September 30,
2021
 
QUARTERLY OPERATING RESULTS                                      
Net Income   $ 52,499     $ 50,027     5 %   $ 43,362     21 %  
Net Income Available to Common Stockholders   $ 52,499     $ 49,996     5 %   $ 43,362     21 %  
Diluted Earnings Per Share   $ 0.96     $ 0.92     4 %   $ 0.80     20 %  
Return on Average Assets     1.50 %     1.56 %           1.54 %        
Return on Average Common Stockholders’ Equity     18.93 %     18.98 %           18.43 %        
Average Diluted Shares Outstanding     54,477,740       54,460,230             54,232,965          
                                           
YEAR-TO-DATE OPERATING RESULTS                                      
Net Income   $ 153,981                   $ 118,588     30 %  
Net Income Available to Common Stockholders   $ 153,950                   $ 118,557     30 %  
Diluted Earnings Per Share   $ 2.83                   $ 2.19     29 %  
Return on Average Assets     1.63 %                   1.54 %        
Return on Average Common Stockholders’ Equity     19.73 %                   17.73 %        
Average Diluted Shares Outstanding     54,440,004                     54,198,422          
                                           
                                           
BALANCE SHEET                                      
Total Assets   $ 14,602,228     $ 13,207,319     11 %   $ 11,394,874     28 %  
Loans     8,812,811       8,649,694     2 %     8,508,554     4 %  
Non-interest-bearing Demand Deposits     4,366,654       3,296,429     32 %     2,762,814     58 %  
Total Deposits     12,078,670       10,958,236     10 %     9,673,783     25 %  
Stockholders’ Equity     1,114,293       1,073,284     4 %     949,589     17 %  
                                           

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $52.5 million for the quarter ended September 30, 2021, compared to net income and net income available to common stockholders of $43.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.97 and $0.96, respectively, for the third quarter of 2021, compared to $0.80 for the third quarter of 2020.

Annualized return on average assets was 1.50% and annualized return on average common stockholders’ equity was 18.93% for the third quarter of 2021, compared to 1.54% and 18.43%, respectively, for the third quarter of 2020.

Net interest income was $96.3 million for the third quarter of 2021, compared to $94.7 million for the second quarter of 2021 and $85.1 million for the third quarter of 2020. The net interest margin in the third quarter of 2021 was 2.85% compared to 3.06% in the second quarter of 2021 and 3.14% in the third quarter of 2020. Accretion of net fees on PPP loans of $5.2 million during the third quarter of 2021 contributed 24 basis points of the loan yield, compared to $8.0 million of PPP loan fee accretion during the second quarter of 2021, or 37 basis points of the loan yield and $4.0 million during the third quarter of 2020, or 19 basis points of the loan yield.

Average loans for the third quarter of 2021 were $8.68 billion, an increase of $35.2 million, or 1.6% annualized, over average loans of $8.64 billion for the second quarter of 2021, and an increase of $315.0 million, or 3.8%, over average loans of $8.37 billion for the third quarter of 2020. Forgiveness of PPP loans during the third quarter of 2021 totaled $207.4 million. PPP loans outstanding as of September 30, 2021 were $387.7 million.

Average total deposits for the third quarter of 2021 were $11.49 billion, an increase of $757.1 million, or 28.0%, annualized, over average total deposits of $10.73 billion for the second quarter of 2021, and an increase of $2.02 billion, or 21.3%, over average total deposits of $9.47 billion for the third quarter of 2020.

Non-performing assets to total assets were 0.11% for the third quarter of 2021, a decrease of 4 basis points compared to 0.15% for the second quarter of 2021 and a decrease of 18 basis points compared to 0.29% for the third quarter of 2020. Annualized net charge-offs to average loans were 0.08% for the third quarter of 2021, compared to -0.01% and 0.54% for the second quarter of 2021 and third quarter of 2020, respectively. The allowance for credit losses for the quarters ending September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.24%, 1.21%, 1.12%, and 1.04%, respectively. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 1.09% at September 30, 2020. Excluding PPP loans, for all periods discussed, the allowance for credit losses as a percentage of total loans under the CECL methodology at September 30, 2021 and June 30, 2021 was 1.29% and 1.30%, respectively, compared to 1.24% at September 30, 2020, under the incurred loss model. We recorded a $6.0 million provision for credit losses in the third quarter of 2021 compared to $9.7 million in the second quarter of 2021 and $12.3 million in the third quarter of 2020.

Non-interest income for the third quarter of 2021 decreased $146,000, or 1.8%, to $8.0 million from $8.2 million in the third quarter of 2020. Mortgage banking revenue decreased $1.1 million, or 43.5%, to $1.4 million from the third quarter of 2020 to the third quarter of 2021. The number of mortgage loans originated during the third quarter of 2021 fell to 208, from 325 during the same quarter in 2020. Net credit card revenue increased $203,000, or 11.0%, to $2.0 million during the third quarter of 2021, compared to $1.8 million during the third quarter of 2020. The number of credit card accounts increased approximately 31% and the aggregate amount of spend on all credit card accounts increased 43% during the third quarter of 2021 compared to the third quarter of 2020. Increase in cash surrender value of life insurance decreased $62,000, or 3.6%, during the third quarter of 2021 compared the third quarter of 2020, due to decreases in crediting rates on policies. Other income for the third quarter of 2021 increased $900,000, or 343.5%, to $1.2 million from $262,000 in the third quarter of 2020. We wrote down the value of our interest rate cap by $98,000 during the third quarter of 2021 through other income compared to a write down of $343,000 during the third quarter of 2020. Merchant service revenue increased from $163,000 during the third quarter of 2020 to $375,000, or 30.1%, during the third quarter of 2021.

Non-interest expense for the third quarter of 2021 increased $7.8 million, or 29.4%, to $34.4 million from $26.6 million in the third quarter of 2020, and increased $3.1 million, or 9.8%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2021 increased $3.0 million, or 20.0%, to $18.0 million from $15.0 million in the third quarter of 2020, and increased $1.1 million, or 6.6%, on a linked quarter basis. Salary expense alone increased 7.6% year over year. We increased our annual incentive accrual based on the increased loan production in 2021 and on final anticipated payouts for 2021 PPP loan originations. Total incentive accruals increased $2.2 million to $4.9 million for the third quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 24 to 518 at September 30, 2021 compared to 494 at September 30, 2020, and decreased by 9 from the end of the second quarter of 2021. Equipment and occupancy expense increased $440,000, or 17.2%, to $3.0 million in the third quarter of 2021, from $2.6 million in the third quarter of 2020, and increased $152,000, or 5.3% on a linked-quarter basis. We moved our office in Nashville, Tennessee in early 2021 to expand our space and improve visibility and we opened our new office in Orlando, Florida in the third quarter of 2021. Third party processing and other services expense increased $863,000, or 26.3%, to $4.1 million in the third quarter of 2021, from $3.3 million in the third quarter of 2020 and increased $198,000, or 5.0%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. FDIC and other regulatory assessments increased $569,000 to $1.6 million in the third quarter of 2021, from $1.1 million in the third quarter of 2020, and increased $205,000, or 14.4%, on a linked quarter basis. Growth in total assets has increased our assessments. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Expenses associated with other real estate owned increased $4,000, to $123,000 in the third quarter of 2021, from $119,000 in the third quarter of 2020, and decreased $417,000 on a linked quarter basis. The third quarter of 2021 included a write-down in value of a property in our Atlanta region. The linked-quarter decrease was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the third quarter of 2021 increased $2.9 million, or 81.3%, to $6.5 million from $3.6 million in the third quarter of 2020, and increased $2.0 million on a linked-quarter basis. We invested in new market tax credits in July 2021 and wrote down the investments by $2.8 million during the third quarter of 2021 with a charge to other operating expenses. We decreased our reserve for credit losses on unfunded loan commitments by $300,000 in the third quarter of 2021. The efficiency ratio was 32.95% during the third quarter of 2021 compared to 28.50% during the third quarter of 2020 and compared to 30.03% during the second quarter of 2021.

Income tax expense increased $472,000, or 4.3%, to $11.5 million in the third quarter of 2021, compared to $11.0 million in the third quarter of 2020. Our effective tax rate was 17.98% for the third quarter of 2021 compared to 20.29% for the third quarter of 2020. We recognized $3.2 million in credits during the third quarter of 2021 related to the investment in new market tax credits in July 2021. We recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the third quarters of 2021 and 2020 of $78,000 and $180,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.  We also include total loans adjusted for the impact of PPP loan activities. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use.  The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release.  Dollars are in thousands, except share and per share data.

    At September 30, 2021   At June 30, 2021   At March 31, 2021   At December 31, 2020   At September 30, 2020  
Book value per share – GAAP   $ 20.56     $ 19.80     $ 19.03     $ 18.41     $ 17.61    
Total common stockholders’ equity – GAAP     1,114,293       1,073,284       1,030,485       992,852       949,589    
Adjustments:                                          
Adjusted for goodwill and core deposit intangible asset     13,705       13,773       13,841       13,908       13,976    
Tangible common stockholders’ equity – non-GAAP   $ 1,100,588     $ 1,059,511     $ 1,016,644     $ 978,944     $ 935,613    
Tangible book value per share – non-GAAP   $ 20.30     $ 19.55     $ 18.78     $ 18.15     $ 17.35    
                                           
Stockholders’ equity to total assets – GAAP     7.63 %     8.13 %     8.15 %     8.32 %     8.33 %  
Total assets – GAAP   $ 14,602,228     $ 13,207,319     $ 12,647,374     $ 11,932,654     $ 11,394,874    
Adjustments:                                          
Adjusted for goodwill and core deposit intangible asset     13,705       13,773       13,841       13,908       13,976    
Total tangible assets – non-GAAP   $ 14,588,523     $ 13,193,546     $ 12,633,533     $ 11,918,746     $ 11,380,898    
Tangible common equity to total tangible assets – non-GAAP     7.54 %     8.03 %     8.05 %     8.21 %     8.22 %  
                                           
Total loans – GAAP   $ 8,812,811     $ 8,649,694     $ 8,504,980                    
Adjustments:                                          
Adjusted to exclude PPP loans     387,725       595,017       967,641                    
Loans, excluding PPP loans – non-GAAP   $ 8,425,086     $ 8,054,677     $ 7,537,339                    

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Mobile, Montgomery and Dothan, Alabama, Northwest Florida, West Central Florida, Nashville, Tennessee, Atlanta, Georgia, and Charleston, South Carolina.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.

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 of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including, but not limited to: the global health and economic crisis precipitated by the COVID-19 outbreak; general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q for fiscal year 2021, and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com or by calling (205) 949-0302.

Contact: ServisFirst Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com

                                     
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)                                    
(In thousands except share and per share data)                                          
    3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020  
CONSOLIDATED STATEMENT OF INCOME                                          
Interest income   $ 104,236     $ 102,719     $ 100,396     $ 101,065     $ 96,110    
Interest expense     7,916       8,051       8,031       8,984       11,028    
Net interest income     96,320       94,668       92,365       92,081       85,082    
Provision for credit losses     5,963       9,652       7,451       6,283       12,284    
Net interest income after provision for credit losses     90,357       85,016       84,914       85,798       72,798    
Non-interest income     8,026       9,598       8,463       8,237       8,172    
Non-interest expense     34,377       31,309       28,914       28,202       26,573    
Income before income tax     64,006       63,305       64,463       65,833       54,397    
Provision for income tax     11,507       13,278       13,008       14,852       11,035    
Net income     52,499       50,027       51,455       50,981       43,362    
Preferred stock dividends           31             32          
Net income available to common stockholders   $ 52,499     $ 49,996     $ 51,455     $ 50,949     $ 43,362    
Earnings per share – basic   $ 0.97     $ 0.92     $ 0.95     $ 0.94     $ 0.80    
Earnings per share – diluted   $ 0.96     $ 0.92     $ 0.95     $ 0.94     $ 0.80    
Average diluted shares outstanding     54,477,740       54,381,991       54,273,944       54,232,965       54,194,506    
                                           
CONSOLIDATED BALANCE SHEET DATA                                          
Total assets   $ 14,602,228     $ 13,207,319     $ 12,647,374     $ 11,932,654     $ 11,394,874    
Loans     8,812,811       8,649,694       8,504,980       8,465,688       8,508,544    
Debt securities     984,600       1,013,783       962,129       886,938       913,299    
Non-interest-bearing demand deposits     4,366,654       3,296,429       3,044,611       2,788,772       2,762,814    
Total deposits     12,078,670       10,958,236       10,577,610       9,975,724       9,673,783    
Borrowings     64,701       64,696       64,691       64,748       64,719    
Stockholders’ equity   $ 1,114,293     $ 1,073,284     $ 1,030,485     $ 992,852     $ 949,589    
                                           
Shares outstanding     54,207,147       54,201,204       54,137,650       53,943,751       53,915,245    
Book value per share   $ 20.56     $ 19.80     $ 19.03     $ 18.41     $ 17.61    
Tangible book value per share (1)   $ 20.30     $ 19.55     $ 18.78     $ 18.15     $ 17.35    
                                           
SELECTED FINANCIAL RATIOS (Annualized)                                          
Net interest margin     2.85 %     3.06 %     3.20 %     3.27 %     3.14 %  
Return on average assets     1.50 %     1.56 %     1.72 %     1.74 %     1.54 %  
Return on average common stockholders’ equity     18.93 %     18.98 %     19.83 %     20.78 %     18.43 %  
Efficiency ratio     32.95 %     30.03 %     28.68 %     28.11 %     28.50 %  
Non-interest expense to average earning assets     1.01 %     1.01 %     1.00 %     1.00 %     0.98 %  
                                           
CAPITAL RATIOS (2)                                          
Common equity tier 1 capital to risk-weighted assets     10.46 %     10.60 %     10.73 %     10.50 %     11.24 %  
Tier 1 capital to risk-weighted assets     10.47 %     10.60 %     10.73 %     10.50 %     11.25 %  
Total capital to risk-weighted assets     12.18 %     12.36 %     12.48 %     12.20 %     13.10 %  
Tier 1 capital to average assets     7.80 %     8.10 %     8.25 %     8.23 %     8.22 %  
Tangible common equity to total tangible assets (1)     7.54 %     8.03 %     8.05 %     8.22 %     8.22 %  
                                           
(1) See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” for a discussion of these Non-GAAP financial measures.  
(2) Regulatory capital ratios for most recent period are preliminary.  
CONSOLIDATED BALANCE SHEETS (UNAUDITED)                    
(Dollars in thousands)                    
    September 30,
2021
  September 30,
2020
  % Change  
ASSETS                    
Cash and due from banks   $ 102,313     $ 70,472     45 %  
Interest-bearing balances due from depository institutions     4,297,473       1,551,597     177 %  
Federal funds sold     44,700       1,302     3,333 %  
Cash and cash equivalents     4,444,486       1,623,371     174 %  
Available for sale debt securities, at fair value     723,324       913,049     (21 )%  
Held to maturity debt securities (fair value of $261,276 at September 30, 2021 and $250 at September 30, 2020)     261,276       250     104,410 %  
Mortgage loans held for sale     578       21,472     (97 )%  
Loans     8,812,811       8,508,554     4 %  
Less allowance for credit losses     (108,950 )     (92,440 )   18 %  
Loans, net     8,703,861       8,416,114     3 %  
Premises and equipment, net     60,953       55,273     10 %  
Goodwill and other identifiable intangible assets     13,705       13,976     (2 )%  
Other assets     394,045       351,369     12 %  
Total assets   $ 14,602,228     $ 11,394,874     28 %  
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Liabilities:                    
Deposits:                    
Non-interest-bearing   $ 4,366,654     $ 2,762,814     58 %  
Interest-bearing     7,712,016       6,910,969     12 %  
Total deposits     12,078,670       9,673,783     25 %  
Federal funds purchased     1,286,756       669,350     92 %  
Other borrowings     64,701       64,719     %  
Other liabilities     57,808       37,433     54 %  
Total liabilities     13,487,935       10,445,285     29 %  
Stockholders’ equity:                    
Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at                    
September 30, 2021 and September 30, 2020                    
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,207,147 shares                    
issued and outstanding at September 30, 2021, and 53,915,245 shares issued and outstanding                    
at September 30, 2020     54       54     %  
Additional paid-in capital     225,648       223,280     1 %  
Retained earnings     869,731       706,924     23 %  
Accumulated other comprehensive income     18,360       18,831     (3 )%  
Total stockholders’ equity attributable to ServisFirst Bancshares, Inc.     1,113,793       949,089     17 %  
Noncontrolling interest     500       500     %  
Total stockholders’ equity     1,114,293       949,589     17 %  
Total liabilities and stockholders’ equity   $ 14,602,228     $ 11,394,874     28 %  
                     
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                    
(In thousands except per share data)                          
      Three Months Ended September 30,   Nine Months Ended September 30,  
      2021   2020   2021   2020  
Interest income:                          
Interest and fees on loans   $ 96,119   $ 89,564   $ 285,373   $ 268,332  
Taxable securities     6,544     5,858     18,666     16,104  
Nontaxable securities     62     166     255     610  
Federal funds sold     4     16     11     327  
Other interest and dividends     1,507     506     3,046     2,584  
Total interest income     104,236     96,110     307,351     287,957  
Interest expense:                          
Deposits     6,581     9,876     20,298     37,377  
Borrowed funds     1,335     1,152     3,700     4,624  
Total interest expense     7,916     11,028     23,998     42,001  
Net interest income     96,320     85,082     283,353     245,956  
Provision for credit losses     5,963     12,284     23,066     36,151  
Net interest income after provision for credit losses     90,357     72,798     260,287     209,805  
Non-interest income:                          
Service charges on deposit accounts     1,727     1,818     5,542     5,557  
Mortgage banking     1,423     2,519     6,869     5,697  
Credit card income     2,043     1,840     5,147     5,003  
Securities gains             620      
Increase in cash surrender value life insurance     1,671     1,733     5,012     4,650  
Other operating income     1,162     262     2,897     972  
Total non-interest income     8,026     8,172     26,087     21,879  
Non-interest expense:                          
Salaries and employee benefits     17,995     14,994     50,425     46,444  
Equipment and occupancy expense     2,996     2,556     8,494     7,390  
Third party processing and other services     4,144     3,281     11,506     10,360  
Professional services     948     955     2,978     2,994  
FDIC and other regulatory assessments     1,630     1,061     4,637     2,988  
Other real estate owned expense     123     119     820     2,023  
Other operating expense     6,541     3,607     15,740     11,110  
Total non-interest expense     34,377     26,573     94,600     83,309  
Income before income tax     64,006     54,397     191,774     148,375  
Provision for income tax     11,507     11,035     37,793     29,787  
Net income     52,499     43,362     153,981     118,588  
Dividends on preferred stock             31     31  
Net income available to common stockholders   $ 52,499   $ 43,362   $ 153,950   $ 118,557  
Basic earnings per common share   $ 0.97   $ 0.80   $ 2.84   $ 2.20  
Diluted earnings per common share   $ 0.96   $ 0.80   $ 2.83   $ 2.19  
LOANS BY TYPE (UNAUDITED)                              
(In thousands)                              
                               
    3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020
Commercial, financial and agricultural   $ 2,927,845   $ 3,105,243   $ 3,323,093   $ 3,295,900   $ 3,466,189
Real estate – construction     887,938     782,305     666,592     593,614     530,919
Real estate – mortgage:                              
Owner-occupied commercial     1,809,840     1,726,888     1,698,695     1,693,428     1,725,222
1-4 family mortgage     765,102     707,546     685,840     711,692     671,841
Other mortgage     2,357,812     2,262,231     2,068,560     2,106,184     2,056,549
Subtotal: Real estate – mortgage     4,932,754     4,696,665     4,453,095     4,511,304     4,453,612
Consumer     64,274     65,481     62,200     64,870     57,834
Total loans   $ 8,812,811   $ 8,649,694   $ 8,504,980   $ 8,465,688   $ 8,508,554
                                 
SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)                                
(Dollars in thousands)                                  
    3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020
Allowance for credit losses:                                        
Beginning balance   $ 104,670     $ 94,906     $ 87,942     $ 92,440     $ 91,507  
Impact of Adoption of ASC 326                       (2,000 )      
Loans charged off:                                        
Commercial financial and agricultural     1,541       150       477       8,792       11,146  
Real estate – construction                       202        
Real estate – mortgage     208       59       12             200  
Consumer     86       54       87       38       44  
Total charge offs     1,835       263       576       9,032       11,390  
Recoveries:                                        
Commercial financial and agricultural     140       298       26       94       12  
Real estate – construction           2       50       30        
Real estate – mortgage     4       62       2       114       12  
Consumer     8       13       11       13       15  
Total recoveries     152       375       89       251       39  
Net charge-offs     1,683       (112 )     487       8,781       11,351  
Provision for credit losses     5,963       9,652       7,451       6,283       12,284  
Ending balance   $ 108,950     $ 104,670     $ 94,906     $ 87,942     $ 92,440  
                                         
Allowance for credit losses to total loans     1.24 %     1.21 %     1.12 %     1.04 %      
Allowance for credit losses to total average loans     1.26 %     1.21 %     1.11 %     1.04 %      
Allowance for loan losses to total loans                             1.09 %
Allowance for loan losses to total average loans                             1.11 %
Net charge-offs (recoveries) to total average loans 0.08 %     (0.01 )%     0.02 %     0.41 %     0.54 %
Provision for credit losses to total average loans     0.27 %     0.45 %     0.35 %     0.30 %      
Provision for loan losses to total average loans                             0.58 %
Nonperforming assets:                                        
Nonaccrual loans   $ 9,145     $ 12,301     $ 13,088     $ 13,973     $ 21,675  
Loans 90+ days past due and accruing     5,326       4,888       4,804       4,981       4,898  
Other real estate owned and repossessed assets     2,068       2,039       2,067       6,497       6,976  
Total   $ 16,539     $ 19,228     $ 19,959     $ 25,451     $ 33,549  
                                         
Nonperforming loans to total loans     0.16 %     0.20 %     0.21 %     0.22 %     0.31 %
Nonperforming assets to total assets     0.11 %     0.15 %     0.16 %     0.21 %     0.29 %
Nonperforming assets to earning assets     0.11 %     0.15 %     0.16 %     0.22 %     0.30 %
Allowance for credit losses to nonaccrual loans 1,191.36 %     850.91 %     725.14 %     629.37 %      
Allowance for loan losses to nonaccrual loans                           426.48 %
                                         
Restructured accruing loans   $ 437     $ 441     $ 794     $ 818     $ 1,800  
                                         
Restructured accruing loans to total loans     %     0.01 %     0.01 %     0.01 %     0.02 %
                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)                          
(In thousands)                                
    3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020
Beginning balance:   $ 2,918     $ 3,542     $ 1,433     $ 2,738     $ 1,568  
Additions                 2,146             1,182  
Net (paydowns) / advances     (25 )     (624 )     (37 )     (619 )     (12 )
Charge-offs                       (535 )      
Transfer to OREO                       (151 )      
Ending balance   $ 2,893     $ 2,918     $ 3,542     $ 1,433     $ 2,738  
                     
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                    
(In thousands except per share data)                    
    3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020  
Interest income:                                
Interest and fees on loans   $ 96,119   $ 95,451   $ 93,803   $ 94,332   $ 89,564  
Taxable securities     6,544     6,315     5,807     6,018     5,858  
Nontaxable securities     62     86     107     129     166  
Federal funds sold     4     4     3     5     16  
Other interest and dividends     1,507     863     676     581     506  
Total interest income     104,236     102,719     100,396     101,065     96,110  
Interest expense:                                
Deposits     6,581     6,836     6,881     7,853     9,876  
Borrowed funds     1,335     1,215     1,150     1,131     1,152  
Total interest expense     7,916     8,051     8,031     8,984     11,028  
Net interest income     96,320     94,668     92,365     92,081     85,082  
Provision for credit losses     5,963     9,652     7,451     6,283     12,284  
Net interest income after provision for credit losses     90,357     85,016     84,914     85,798     72,798  
Non-interest income:                                
Service charges on deposit accounts     1,727     1,907     1,908     1,971     1,818  
Mortgage banking     1,423     2,699     2,747     3,050     2,519  
Credit card income     2,043     1,912     1,192     913     1,840  
Securities gains         620              
Increase in cash surrender value life insurance     1,671     1,683     1,658     1,660     1,733  
Other operating income     1,162     777     958     643     262  
Total non-interest income     8,026     9,598     8,463     8,237     8,172  
Non-interest expense:                                
Salaries and employee benefits     17,995     16,887     15,543     14,970     14,994  
Equipment and occupancy expense     2,996     2,844     2,654     2,680     2,556  
Third party processing and other services     4,144     3,946     3,416     3,418     3,281  
Professional services     948     1,107     923     1,248     955  
FDIC and other regulatory assessments     1,630     1,425     1,582     1,366     1,061  
Other real estate owned expense     123     540     157     140     119  
Other operating expense     6,541     4,560     4,639     4,380     3,607  
Total non-interest expense     34,377     31,309     28,914     28,202     26,573  
Income before income tax     64,006     63,305     64,463     65,833     54,397  
Provision for income tax     11,507     13,278     13,008     14,852     11,035  
Net income     52,499     50,027     51,455     50,981     43,362  
Dividends on preferred stock         31         32      
Net income available to common stockholders   $ 52,499   $ 49,996   $ 51,455   $ 50,949   $ 43,362  
Basic earnings per common share   $ 0.97   $ 0.92   $ 0.95   $ 0.94   $ 0.80  
Diluted earnings per common share   $ 0.96   $ 0.92   $ 0.95   $ 0.94   $ 0.80  
   
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)  
ON A FULLY TAXABLE-EQUIVALENT BASIS  
(Dollars in thousands)  
                                                                       
            3rd Quarter 2021   2nd Quarter 2021   1st Quarter 2021   4th Quarter 2020   3rd Quarter 2020  
            Average Balance   Yield / Rate   Average Balance   Yield / Rate   Average Balance   Yield / Rate   Average Balance   Yield / Rate   Average Balance   Yield / Rate  
Assets:                                                              
Interest-earning assets:                                                              
  Loans, net of unearned income (1)                                                              
    Taxable   $ 8,653,632   4.40 %   $ 8,618,139   4.43 %   $ 8,484,914   4.47 %   $ 8,435,237   4.43 %   $ 8,335,087   4.26 %  
    Tax-exempt (2)     26,542   4.05       26,854   4.05       27,592   4.17       29,393   4.16       30,068   4.14    
      Total loans, net of                                                              
        unearned income     8,680,174   4.39       8,644,993   4.43       8,512,506   4.47       8,464,630   4.43       8,365,155   4.26    
  Mortgage loans held for sale     7,050   1.69       11,470   1.92       13,601   1.94       19,459   1.37       20,053   1.41    
  Debt securities:                                                              
    Taxable     969,715   2.70       936,863   2.70       878,118   2.65       862,333   2.79       820,526   2.86    
    Tax-exempt (2)     12,382   2.39       16,872   2.47       21,084   2.43       25,542   2.52       31,880   2.51    
      Total securities (3)     982,097   2.70       953,735   2.69       899,202   2.64       887,875   2.78       852,406   2.84    
  Federal funds sold     8,551   0.19       8,224   0.20       11,935   0.10       16,306   0.12       41,884   0.15    
  Interest-bearing balances with banks     3,761,652   0.16       2,790,524   0.12       2,262,233   0.12       1,837,249   0.13       1,500,563   0.13    
  Total interest-earning assets   $ 13,439,524   3.08 %   $ 12,408,946   3.32 %   $ 11,699,477   3.48 %   $ 11,225,519   3.58 %   $ 10,780,061   3.55 %  
Non-interest-earning assets:                                                              
  Cash and due from banks     90,034           85,478           71,166           91,258           75,065        
  Net premises and equipment     62,845           61,240           57,198           56,315           56,799        
  Allowance for credit losses, accrued                                                              
    interest and other assets     315,178           320,729           320,407           308,746           281,196        
      Total assets   $ 13,907,581         $ 12,876,393         $ 12,148,248         $ 11,681,838         $ 11,193,121        
                                                                       
Interest-bearing liabilities:                                                              
  Interest-bearing deposits:                                                              
  Checking   $ 1,431,420   0.19 %   $ 1,350,098   0.19 %   $ 1,294,614   0.19 %   $ 1,197,908   0.23 %   $ 1,077,595   0.31 %  
  Savings     122,579   0.17       104,283   0.18       93,375   0.18       86,259   0.18       82,671   0.36    
  Money market     5,328,291   0.26       5,321,338   0.26       5,057,828   0.27       4,933,285   0.31       4,739,566   0.44    
  Time deposits     806,108   1.15       801,928   1.33       808,561   1.44       810,675   1.59       841,378   1.78    
    Total interest-bearing deposits     7,688,398   0.34       7,577,647   0.36       7,254,378   0.38       7,028,127   0.44       6,741,210   0.58    
  Federal funds purchased     1,205,327   0.21       970,708   0.22       849,772   0.22       752,765   0.22       682,971   0.22    
  Other borrowings     64,694   4.23       64,694   4.28       64,689   4.33       64,701   4.41       64,717   4.78    
  Total interest-bearing liabilities   $ 8,958,419   0.35 %   $ 8,613,049   0.37 %   $ 8,168,839   0.40 %   $ 7,845,593   0.46 %   $ 7,488,898   0.59 %  
Non-interest-bearing liabilities:                                                              
  Non-interest-bearing                                                              
    demand deposits     3,800,972           3,154,605           2,923,041           2,812,254           2,728,513        
  Other liabilities     26,891           52,027           39,442           48,642           39,537        
  Stockholders’ equity     1,100,156           1,038,012           996,741           956,847           917,626        
  Accumulated other comprehensive                                                              
    income     21,143           18,700           20,185           18,502           18,547        
      Total liabilities and                                                              
        stockholders’ equity   $ 13,907,581         $ 12,876,393         $ 12,148,248         $ 11,681,838         $ 11,193,121        
Net interest spread         2.73 %         2.95 %         3.08 %         3.12 %         2.96 %  
Net interest margin         2.85 %         3.06 %         3.20 %         3.27 %         3.14 %  
                                                                       
(1 ) Average loans include loans on which the accrual of interest has been discontinued.  
(2 ) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%.  
(3 ) Unrealized losses on available-for-sale debt securities are excluded from the yield calculation.  

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