SFBS - Earnings call transcript Q3 2018 | ServisFirst Bancshares, Inc.

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Operator

Good afternoon. And welcome to the ServisFirst Bancshares Incorporated Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Instructions]. [Operator event this being is note recorded. Please now Davis Mange, would like to to over conference the Vice turn I President, Relations. Investor ahead. go Please

Davis Mange

Good our to afternoon earnings and call. third quarter welcome

Tom the quarter started. we we'll Foshee, have We cover and I'll your can and our disclosure our some from covering get forward-looking then Bud statements will highlights our Broughton, questions. CFO, now take CEO; then and

call results may risks, of differ include filings. statements XX-K today's the Some shared assumptions, actual discussion and subject factors our projections and any earnings uncertainties, to described may in from to XX-Q due most forward-looking today in recent

Forward-looking statements to to made duty update are speak them. With Tom. they turn only over of date that, ServisFirst call no the and assumes I'll as the

Tom Broughton

pleased an good have just today growth We're our you, call the pleased be and we quarter we're that on to organic Thank and continues Davis, everyone most finished. story. ServisFirst with to afternoon.

we've year you remind XX we to and the in organic years. Just $X.X in last were the billion growth in XXXX had founded over

few Bud I'll metrics will pleased covers a So, our all few of go you we'll and going cover quarter come with things back then and after very with today. a over and the cover I'm we're financial those. that items to Foshee Bud

and year Charleston, in excuse Bay, me growth, our nice quarter in having we the Dothan, the loan growth loan talking growth Tampa during -- about solid during So, had the a loan quarter. really with best the Nashville

quarter. the a growth outstanding in a far, ever loan half one there typical quarter. It for do was the we little our growth certainly the minute the This in Typically, -- of demand pleased the but it towards usually was solid. every had analysts quarter. deposit the deposit probably in our a in quarter. our growth the pipeline very is general. a that fourth talk had. income standpoint a It typically to the is From such the outstanding most a following standpoint, strongest obviously, really solid From our growth closings we our top closings, So, most market would the of it our it too, more as a loan typically the and about quarter we've solid year end quarter. pipeline loan quarter, again from good the of We strongest have in so loan it I'll quarter on deposit growth helps we're second and a fourth quarters Almost the be so you, third typically -- in hard about To see standpoint, loan quarter. quarter doesn’t the typically in of of but growth it was our listen year. quarter, regular deposit in bit had help income is third strongest very basis, quarter -- the remind is

where of a but with very demand probably our certainly quarter. not see fourth a to to by the what that is national and often would structure when see repeating we it’s on answer and a continue asked we’re disciplined on certainly with loan loan with we solid trend loan can So and like point investor I'll basis, greatest itself be terms the saying realize all about at a realized mark demand, in credits. is very with we this We strong, it we’re continue in meeting on and is cover investors at I question probably investors, that firms basis investors that again demand that us conferences national the

the books. when probably were typically we that few they were didn't assets weren't recession, allowances get a little but we pick those don't and some good demand on but to don't relationship. we credits, going loan We did just see a They can to credits I time now. think loan of We'll to we what like they care credits during do the think earning solid bad some -- only deals all to choose to -- was where we’ll had the we certainly we at continue slow demand. very a have make full be the take those do to certainly We are we do. clients, have can our and

quarter On added the eight bankers the and usually new during front, less. -- we producer's six cover we

have our people XXX we today bankers, in production So, bank.

bankers We great to continue get continues staff to from get our and calls stronger.

standpoint. So, where that we with pleased we're from are certainly

turn it I'll financial a to few items. the now over of cover to So Bud

Bud Foshee

Thanks, afternoon. Tom. Good

to growth have continue phenomenal growth. Annualized XX%. the We in was organic loan quarter

strongest the loans. mentioned, Tom quarter As in period growth fourth normally is our

in a increase quarter. see we near if positive deposit but to rate certainty of this we So, net interest decline bit in Funding treasury We're optimistic are rates interest are increased prime the a The for increase. quarter the growth a seems the the fourth to related optimistic. costs to tenure fed growth may rate LIBOR XX%. XX-day net Higher led as another pressure the and third rate for third deposit for quarter Annualized future. have rate slight moderated margin margin. was

last credit and was charge in quarter line charge-offs credit The in the don’t horizon. was large where on year, are clouds have quality, the with one C&I involved. Regarding well third seem any year-to-date fraud storm we to

quality back Tom. asset my Our will to be strong. it to And concludes that continues section. I over turn

Tom Broughton

curve. of Thank talk interested we do margin, the betas, But to that questions. in, that what you, are what grow are on share. cover some of focus follow know it we're we we investors per before trying what wrap and today aware about -- of I’ll try strategies we’ll you up and kind yield Bud. to are is today to And investor net interest and is think the best deposit earnings

clients focus the the our serving new in marketplaces. Our accounts, and is focus winning on is on so

market year-over-year, strong markets. The ‘XX, in a recent we June did only XXth of -- a -- -- an year share of data really growth growth, and from out data has June the that Our have XX it XX market market nine -- had came of outstanding share FDIC of out that of new that’s deposits was generated we our excess and lot account the market market. in

show growth. Our account openers continue impressive new to very

on best is we growth. very metric none future optimistic the in the that in tells our future see bank which We we’re that Everything second industry. for are winning think talent us earnings to the is we think based we have we about of the marketplace, which the

we questions glad I over of will now. So turn your you Davis. to will any be back to take calls it and And

Davis Mange

please we now for if the open Yes, Tom. questions. floor Thanks, can

Operator

We question-and-answer the now Instructions]. will [Operator session. begin

The ahead. first from with question comes William James. Please Wallace go Raymond

William Wallace

guys. Thanks. afternoon, Good

the Are deposits? it lenders all incenting a would bit across markets. was growth? you Can promoting? little doing the be growth, Are explain deposit on might about mentioned more you different strong anything growth? you that you that on talk the So, Are you driving what

Tom Broughton

return -- -- an more a account Yes, but we’re bit seeing been We we We’ve opportunity are see move consistently, to shareholders the grow a than I to emphasizing on balance equity, emphasize on deposit betas deal. bank. and probably whole going we earn a come it, normal, I our are probably sheet the may NIM okay and while always we XXX mean the the opportunity. think -- we but around, grow little ROA the XX% out and

it’s had probably So but pops, just just sometimes -- Wally. it we -- it's just but -- it falls yes, how

it in like deposits off we some you quarter quarter in large a kind the big first I companies they If some goes -- of bit we accounts last year, in some fourth get they lot, but know nice sold the the just It’s fourth help first in quarter quarter. times. that the had ran a and had of how

of a But in know yes, we Wally. as growth emphasizing So, are you deposit much have we luck. bit time long as a little

William Wallace

is it account. balance the out significant of of a an the growth portion looks average on market like So money basis coming

influx of the will all end-of-period the quarter? trends balance, the different or at your fourth the stronger growth was that markets anything an end So your show wondering transaction or promoting I'm are had in of balance of you average you quarter if across than accounts

Tom Broughton

sure not Wally. I understood the question, I'm

William Wallace

two of item or line looks out It like I market onboard almost break promoting deposits, detail, -- you are markets are average to we relationship where sort is deposits? on accounts million questions. they It's which in an assuming in which XXX I balance the know, see money new basis, don't your I'm in growth

Tom Broughton

and never the never we've -- in intend at relationship years Their advertised, don't done XX any bank to. advertising we've

don't do So, don't do everything do don't consumer is We advertising. We relationships. any advertising. kind commercial advertising. of We one-on-one

think we and bank. relationships building way just build the all a to it's So, that's best

William Wallace

Okay.

Tom Broughton

don’t so know home -- any have have, And Home this member of any Federal don’t of any Wally, any don’t but Bank, deposits, or you certainly no we remind we don’t service we the we not we -- -- Internet we have have -- means any listing a other I’d are and bank use think I broker have Loan advances. ,

sheet you’re balance to is ever find. our going clean So, as

William Wallace

Okay.

that expense kind know that How don’t I and if you think perspective? I'm line, declined want efficiency curious can the about of in ratio line? holding how the maybe of that side the us think you to been quarter growth. help the actually to with you -- able an the the an see kind loan equation, impressive you it’s operations dollar you moving that you if expenses now of the to forward how expense anything or on this hold basis, Moving you from going talk just leverage expenses have you just have are about

Bud Foshee

we things, of of based everything, nature. being might historical to as fourth early fourth growth especially the marketing quarter we accruals, one judge quarter that lot make that of It’s incentive accrual but really usually this anything on be. Yes is what incentives Bud. too is primary Wally, when a our look to adjustments, The at

just a So, I fourth based give number historical for you quarter. on adjustments really can’t great

William Wallace

the bigger Well Where just do calculate could ratio XX% third you Okay. efficiency I maybe quarter. go? picture, that think a in

Bud Foshee

are going we that’s think to range, XX% I somewhere, XX% I target. think a stay to for good Yes, a

William Wallace

And existing then you see opportunity thinking there any in about might as be new? markets you’re and new the enter anything commentary not your lastly a you how any interested to that if guys if just in market versus to desire is

Tom Broughton

continue interested extremely Wally, lot to in basis would regular be we that on those and market adding Tampa well markets you in -- in today some to we’re is Bay, people our in Birmingham, we most is Charleston. of opportunities of places probably of certainly a and see be different Yes, talk people a we we interested that and typically in people know are larger are that Atlanta, in add already as efficient markets certainly and to Nashville,

those some probably markets and people probably probably we little shied the than that today that at that are one to past. time where larger markets can certainly bit we we -- continue have little smaller effective, would've in away been to we the bit more from going are choosy a interested but So being to, be people add had and in a Wally, more we’re we talk been

William Wallace

that’s Okay, helpful.

Tom Broughton

talk added of and we’ve our From we've in people we of lot lot trend the regulatory If back look back continue those employment, you, an year expense to -- sort people. things we almost spent added are standpoint, to BSA a had but -- at last office compliance Wally we relief of all over we last all I -- the tell and of the would year. people office a of about for

I efficiency we So but certainly our is want lower to continue our want drive areas we mean to to efficient is that have promise other it we to goal try. more drive go, lower, to ratio to which be to in to try don't

William Wallace

in the you’re Okay. would now? stick prudent But around be it to range that

Tom Broughton

That’s I yes. like said, Yes.

Operator

Instructions]. comes next with Stephens Inc. from Tyler ahead. question The [Operator Please go Stafford

Tyler Stafford

and on what closings you’re what I just impacts loan Hi, activity banking impact or business saw I wanted or think that about this just or that hurricane on might in and your of to mortgage have from I the the start markets growth. loan wondering the quarter fee anything like you income, guess coastal any I’m just that?

Tom Broughton

really not have are aware affected deeply not the we -- storm. that been by markets in We’re

We’re from or of on area City Panama to -- Panama in City Tallahassee. of not the sort down -- the

less exposure it of at all market, a look the it we took operations and no would on that have side where have we has -- Panama much of We be our Panama at don’t certainly lot in hammering. City there been the remain any a west City

from ask exposure if here is So on, significant. think will have the we room, will any Chief Pouncey any we Officer. other…? storm you our I Clarence to the that have Clarence Operating that don’t speak would be in

Clarence Pouncey

Tom. significant you, any No, have damage. not Thank estate we real did property

with little some a hail all damage had in institutional insurance, farmers have that. with cotton, insurance, which We rain so should crop South but of and Georgia be

Tyler Stafford

Tom, C&I where your was to I there wondering utilization or/and an seen have does you rate Clarence just today, stand today? hear it. glad Okay, yet just all that or at improvement

Tom Broughton

generally as time. pretty it’s came there, higher. been we there, we since out out have higher change we -- the steady I saw seen it’s it’s came remarkably not recession, came you been, steady not I of slightly And it’s seen but remarkably think out We a since Tyler. have think the but a steady a -- big of that of we surprisingly dramatically recession. It’s pickup We since mean big variance the I will hadn’t

Tyler Stafford

the Bud on to margin Is Maybe up the puts a the to near-term and better Are What's understand of to in reflection subside how trying quarter. on a takes going bit? margin. fourth I'm a in is the you prime the better just just dynamics the LIBOR that kind of move side? release Okay. there? moving expecting be beta the asset of deposit in just little and

Bud Foshee

was get beta and we the we about the quarter. Yes, it X.X in fourth of will right. that increased billion XXth September reprices, benefit Prime like have so

in rate third to quarter day XX really of increase September. we tied That say LIBOR. have million day Let’s the didn’t about until LIBOR XXX loans XX

I XX points in think went it basis up September.

some still that So get like we rate deposit on happens what benefit second the quarter probably of feel From and spent depends first we the a think the I quarter. the we’ve in what fourth feel like also stabilized to will stabilized but in we quarter. with the standpoint, that’s that’s fed fourth in compared some,

Tyler Stafford

Okay, got it.

Bud Foshee

obviously a I would X.XX fourth to mean quarter would you say X.XX I NIM. if from for be a range need range good

Tyler Stafford

substantially helpful. Okay, this very premiums, run this for quarter. that’s those Maybe those? lastly, insurance pretty down FDIC the just Is a better were rate now

Bud Foshee

prior and some premium especially FICO always the the They have the decreased, have they’re also the quarter back. multipliers It’s on. of look it’s -- when multiplier basing

quarter. an -- over we we had that about made probably little the XXX,XXX So adjustment of and a in third adjustment

Tyler Stafford

it. Got

Okay.

Bud Foshee

close. like Yes, it is the fund getting looks

what I our the that. and I at end X.XX guess at goal so reset think they the I happens was June fund is of think see when the goal, we’ll X.XX for

Tyler Stafford

did I’m sorry what you say the goal was?

Bud Foshee

to read time thinking I close it’s are goal sorry I’m the keep have. X.XX we'd when to -- X.XX. never get They a quarter, ago. thought we going I I very there there long next we’re and their get

banks. be there non-existent, in So I the losses pretty -- but -- all get are That as the insurance the become much long fund -- we should very as quickly news will for think. good

Operator

presentation. for concludes This session concluded. question-and-answer also conference our you the today's Thank now and attending is

now You disconnect. may

ServisFirst Bancshares (SFBS) 17 Oct 182018 Q3 Earnings call transcript