SFBS - Earnings call transcript Q1 2019 | ServisFirst Bancshares, Inc.

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Operator

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

Davis Mange

quarter Good first afternoon, welcome to and earnings call. our

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

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

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

Tom Broughton

XXXX had really Thank and Good you, Davis. afternoon, call. quarter great a conference quarter. welcome first our We to

how with quarter the ended pleased are We up.

most know, As average the but the company the the have we quarter best for is over for are did of first solid very not several the ServisFirst, is our last above pleased quarter, with which year that we you quarter years. our typically growth first of in

Atlanta, that seasonal large it our only is We not growth. off Typically certainly to affects the but account had large Mobile, having we we had solid do annualized the with well. of good numbers runs XX%, we really if but numbers, as it's and overall deposit Huntsville, On have in very first that have growth. any their and the it little our deposit first region the quarter very that overall and very affect broad-based for best the a Pensacola in was growth, this growth one side, enough large quarter Tampa, quarter, deposit it enough quarter, has

very So do account. We to of building type a is profitable unusual situation, continue that's focus core it on relationships. but sort

-- very and to first looking continue Bay openings had openings account off come really best this Atlanta year. have very and be account the Tampa a quarter on wonderful they with strong. start, is new at XXXX Our strong to the

very the growth company. best during On loan quarter. regions side, and we've experienced were the Montgomery solid our of the Atlanta loan first

Our X% typical first year's this first and annualized in I the up think were year in quarter. was annualized loan quarter growth X% last the

a it's retire in first seeing today new It have is XXX up solid five very it we're -- So minutes, net next payoffs one We It quality good projected strong. a had XXX our on the up We on pipeline. growth Bud is bit but -- we things a see to a continue from a loan there. year level, in footing discuss the the days, quarters, cover. to producers. very departed. few I'd ones. few payoffs, still but will up a solid bit the pipeline. At is credit as of up today, strong very is projected just two our metrics the and for first well added it's net credit like growth and production other One for our solid were very into we

staff a adding good of and today in the number So, of our individual actually -- upgrades month really we're level. people producers to seeing of talking number are in people a We're April.

next years. they while last numbers production about that in year trainees hiring there will over these hired the it -- done production a year. look forward That we XX so. of the but couple we've into So, be before reflect production had to don't hopefully number will a trainees We of of getting contribute, the though last or the them over

moment a talk over Bud the numbers. about that, stop turn to I'll it for with So, and to

Bud Foshee

Good afternoon. Tom. you, Thank

cover net and growth First, our margin. interest I will

deposits first XX.X%. the in strong were growth XX.X% deposit and and year-over-year grew loan Our quarter, loans

from Our quarter X.XX% in the interest in fourth margin net X.XX% quarter. decreased to first the

an the million. was contributing funds increase of of $XXX factors excess in One

for basis move purchased. points. to of by in XXXX. costs points, XX Fed XX Funding will relationships loan due The correspondent changes. growth, those to rate increased yield Funding by Our our and increased borrowings basis for December the our loan basis related the continue Fed rate is our points Fed funds banking to costs That's with XX beta XXX%. after deposit primarily in increase did increase rate prime

range For the related again remainder income margin no we reminder, a we And of X.XX% XXXX, X.XX%. a the be to accretion to of project in have acquisitions.

added services. salaries We cards Next in section have XXXX Year-over-year I salaries. added is $X.X we for increased to -- million. purchase managers merchant want cover and

about Association for talked vendor Banking fourth program. Card earnings we American call, we in endorsed our quarter from our the As Credit Agent are

We have added employees for two full-time now we to that offices. we to sales the referrals Also, are accommodate dedicated the production receiving.

mortgage We office. have a Pensacola

loan in compliance a production had salary office did have but added in from net we've certain office no ads upgraded also increases IT, or positions. We And standpoint, we and a Fort we Walton. back

any Next section, continues total to reminder income. mortgage be income we continues grow, increased XXX,XXX just it income. net of guaranteed that small non-interest XXXX. portion The card generate interest income; that is our And to from income our contribution not not government a non-interest banking do a meaningful. loans sell Credit

talk let's loss provision. loan about Next,

unimpaired were charge-offs fully the charge-offs were million and million. $X.X Our first were million $X.X net of charge-offs. quarter impaired $X.X

option have quarter Tax average was the quarter option XX.X% credits X,XXX,XXX. the for the of XXX,XXX. were of XX.X%, quarter, over We without in was in improving an fourth X.XX year. XX.X%, credits X.XX rate X.XX loans. first quarter net XXXX this the the It stock of in of Taxes, the XXXX, first and for third trend the to was first quarter charge-offs without XX.X% rate stock of

my over of rate XX.X%. turn section, XXXX, Davis. For the concludes remainder and the tax I'll is it And to that projected

Davis Mange

let's floor questions. for the With right. that, All open up

Operator

Please Sandler ahead. We will with from [Operator begin Our comes question O'Neill. now go Instructions] session. the Milsaps question-and-answer first Brad

Brad Milsaps

good Hey, afternoon.

Tom Broughton

Hey, Brad.

Bud Foshee

Brad. afternoon, Good

Brad Milsaps

everything. maybe follow-up Tom -- all color I it, on Maybe on wanted interest to net the and appreciate Bud the margin. I I appreciate

I the you've kind was cost know, things and just of year. mentioned raising liquidity are deploying excess talk to then seeing specifically of remainder X.XX behind, guidance, of has what type what built drivers you a you think on what for rates? kind it maybe in about funding of the and kind that the now you're appears up, were market rates, what a in that terms I little side stopped assuming deposit that terms curious you bit of the was that of X.XX range behind that of the that Fed of of kind

Bud Foshee

pick than now going to are little think on year gets over at still We'll excess anticipated that I we're quarter. kind -- second-half million, range, increases, this but time and normal, does in that higher know -- rate moving but somewhere deposit Fed in up, that both $XXX be it expect normal decrease time, still that more probably pricing our right the we deposit first well, with points basis deposits in XX Yes, to some Brad newly really to of year back of loan the we which a of funds. as each growth we're hoping we're up stay can of probably our in

what what higher regions, that's Southeast is grow. in we deposit be biggest look think some the to little other so we're but a would pricing is that always to going the to that of to bit something than the have other at, what going continue -- heard from -- costs I we've think deposit don't unknown people just be. are the that I know So I

that. we So, out to a will the just to side have funding way figure doing from best

Brad Milsaps

maybe of Might a market does or untapped to the you category, that it basis of think and XXX path the bit, of cost got funding you to almost which primary follow-up that, growth does the that for the it, few least a year? quarters last quarter. going sort going easiest that the you're look kind find to you do loan was come the the category that's remainder up money growth to that of this or points slow like a be just lot on Got in tend to at

Bud Foshee

think customer, know, that only normal CD the much just it's market CDs, the you just just more don't We not the more, since based time that's opened. account. grown we don't mean see we've is percentage deposits, we I in as or -- see have XX% our over bank on XX% still our in really CD probably I where to growth, a of That's deposits. about just total XX% money of

Brad Milsaps

customers take BB&T et question some, but it's for maybe be curious, doing final know all anything I in in SunTrust advantage kind Tom, but then disruption certainly of your don't early, it, might terms people, know to I markets, of overlap and of Got cetera? guys just you and just

Tom Broughton

Yes, Brad.

smart First to people hold -- and people, than their they -- people. they're have I on of because to think IQ do good going imagine I can BB&T lower everybody everybody pretty they unless I all, SunTrust everything much to know extremely most have. they are

just happened always do disruption anything have trying a -- great not don't just -- -- until there there's where people, days we're a special to to we some meet but markets. our markets, it really located I but hasn't not out. is not existing process potential markets yes, bankers what our meet yet, be So, can to that. we're today, new we're man been We're try will are Yes, in and trying of we for we're some think odd early in has doing overlap, in all just new always all doing the and we bankers --

doing it's different already we're than So, today. no what

Brad Milsaps

Great. guys. Thank you,

Tom Broughton

Brad. you, Thank

Operator

comes question Please from Stephens. next ahead. Tyler Our with Stafford go

Tyler Stafford

Hey, good guys. afternoon

Tom Broughton

Tyler. Hi,

Bud Foshee

Good afternoon, Tyler.

Tyler Stafford

wanted the Hey, or on start also follow-up to I just margin.

hike margin in had from quarter built outlook. it I outlook five points a rate quarter. don't think lower the last you fourth into basis the So,

or see, maybe So deposit you'd the that just is curious the less guess I it's expected -- abating if see? the you'd competition margin given lower here or expected from to expectation if higher than to slightly I'm liquidity for greater

Bud Foshee

think that of deposit bit. think just probably liquidity the more I Again, from time, the more a -- year, just on so -- liquidity decrease of will I history that the of bank, think I over the side. based second-half in is it's some

Tom Broughton

means make What won't off. that by will Bud Yes. is loans, run we we

deposit first to be beta the their in was exactly to be growth the be correspondence I first XX%. going really and XX% think factor going remind not -- the going quarter is in or the XXX%. the is one to XXX. strong always It's It's you, in quarter, side

Tyler Stafford

Okay.

Tom Broughton

factor So, that that's as in a well.

Tyler Stafford

did towards of beginning of quarter? corresponding the the more you pricing the moderate than deposits, or the Excluding quarter part competition see the back-end

Tom Broughton

think I quarter, during Tyler. it entire moderated the

not they're catch-up that." you like, with a it, of CD a a still rate players bit that think with bit from and bit and people been the I've of checking banner a a house there's smaller effect say, bps So, the shooting to community banks, higher do a usually catch-up -- see and side better advertising earning than well, a bank account, and down the take major "Hey, kind right on of I call road get of you the the as in Tyler. a but market, little that XX you trader

So truth. be the honest it help I'm a know know not all a thing. know wouldn't cut to I at bank’s rate why would don't you investors reason that, but -- that I don't margins I believe don't the good convinced any tell

Tyler Stafford

Got it.

to have quarter hand? on the of cost you deposit the do spot end happen at Bud, Okay. this

Bud Foshee

No.

March for day the month? the month of For the or last of

Tyler Stafford

quarter, at cost if deposit the end total the you the had it. of just Yes,

Bud Foshee

Yes, I will you. to don't have here. I it it e-mail

Tyler Stafford

to the then the talked those there's two last out. working if I just start credit on about about talked think side, just we quarter, any larger we update on able curious that non-accruals being And

Just you curious in where process? are that

Bud Foshee

Clarence, is Clarence – no , here, impairments. looking is new Pouncey at there

Clarence Pouncey

one we relationships and both the operating help out sheet We've of prudently balance continue asset bank of prudent counsel. Tyler, with moving in one that out a healthcare-related balance our to we're got manner. work the help sheet, to the bank company of

Tyler Stafford

okay. Got it,

Clarence Pouncey

or exposure new, no new Tyler, there. nothing But

Tyler Stafford

if balances balance sheet trying from you size absolute have can are, syndicated lastly just credits that remind just what -- on just me, just gauge total is? of does so, what and And the any if us to you the Okay. potential guys

Clarence Pouncey

relationships past have and are that shared They're the around we we It's national these We owe. the a bought transactions We have know know seven $XX and CFO, that credit million, or relationships, just relationship. facilities. we eight not from CEO. we

Tyler Stafford

Clarence, is And industry-specific or any broad-based? fairly it

Clarence Pouncey

It's broad-based.

Tyler Stafford

guys. Thanks, me. for it that's right, All Okay.

Tom Broughton

expect And well. one credit Thanks. with be healthcare we that I guess, the credit to made have, Tyler whole on as we

We expect XXX% repayment.

We impairment on have credit. no that

Tyler Stafford

Okay. Thanks, Tom.

Tom Broughton

know Okay. Well we next. who’s

Operator

James. Raymond question ahead. Wallace with [Operator Instructions] Our next from Please William comes go

William Wallace

guys. afternoon, Good

Tom Broughton

a for list the on dark I my your questions. Wallace, on Hey, was minute. next screen saw name also of

William Wallace

not. worried was was me to be or I thought going it you if

Tom Broughton

I the I didn't. just name you. I saw your was figured didn't. not I'm psychic. it didn't. on I I list.

William Wallace

you fingertips, numbers I would cost around margin have like but was sounds handy? one of as sounds impressed. quarter, have the deposits like the the curious that my in the been you just month average of had by But well, don't it questions have at if don't your first you

Bud Foshee

I that Total cost and of or bearing have interest for deposits February March. deposits?

William Wallace

Total of cost deposits.

Bud Foshee

Okay. was February March, Total XXth on in X.XX cost January and X.XX, in -- up January.

William Wallace

on seeing change long you variable looking structure? as before around whereas Are what for or maybe trying guys Are shorter go as behavior more terms, to anybody to could? they you now people any borrower seeing they're in looking towards were

Bud Foshee

happened, people flow -- haven't had fixed [indiscernible] cannot that. what's want We'll they who the I people rates with in see a see so offering don't loan problem I really that usually flow think want won't we People to hedge matter Wallace. from market and no don't the that profitably. we change, a to

I So know putting they're done have clearly is, what sheet that. it some they XX will that but -- on don't not the XX-year with we balance loans and default they think just

William Wallace

And the or competitive look pricing see at when do on on frustratingly irrational front? different your the markets, that markets pricing any side you you are loan

Bud Foshee

don't XX-year would -- -- able not of product. I any are No. certain clearly other They you see doing commercial owner-occupied think offering XX say some regional owner-occupied banks larger and are that more but be do much the -- to CREs. always any typically them They're on obviously are than banks fixed, won't different trying estate a loans. we to real lot regulators people it's

really. think want but regulators everybody loans, don't asking that's lot I what So they're not of rate to do CRE fixed the long-term

on that's So see it we all really. that

William Wallace

efficiency given question for the your last room you can your think be, of efficiency that hit think do level on or improvement of level would that margin for expectations ratio I growth, and you The visibility Okay. your loan have your would you guide into kind you achieve? has the best

Bud Foshee

those two month. -- the higher, you made you half, that is only because and days. net probably sorry, I'm lower; about had less fourth company I margin quarter a two days quarter in to when First think That's business have in for interest

going always higher efficiency So, ratio. first quarter is show to

William Wallace

XXXX? like thinking the maybe So, I'm for picture more bigger versus year, XXXX

Tom Broughton

have has the have We of A We we we have in versus lot 'XX them as of forward 'XX, people. lot people. last hired people pretty the back going we a and is payroll had back a of schedule office know two are are of increase years. been lot production-related, good in office quarter Those to much first expenses don't think we'll lot it it in past. year-over-year as

ratio So, in but about something efficiency improve can here, improvement our we know, you from the think ratio. it's efficiency certainly

William Wallace

the to able to time, that had. I'd cost, the appreciate love I January I see That all if I it. but get know was it's to you. important questions you're

Tom Broughton

will get to soon will of. it pull I you, Yes,

William Wallace

it. appreciate Okay,

Tom Broughton

Thank you all.

Operator

as conference. Thank And our you session the may question-and-answer well attending now you this today's for presentation concludes as disconnect. and

ServisFirst Bancshares (SFBS) 15 Apr 192019 Q1 Earnings call transcript