SFBS - Earnings call transcript Q4 2024 | ServisFirst Bancshares, Inc.

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Operator

Greetings, and welcome to the ServisFirst Bancshares Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Davis Mange. Thank you.

You may begin.

Davis Mange

to quarter welcome call. and afternoon, our earnings fourth Good the some then Today's cover from quarter speakers will highlights and questions. take your We'll Henry CEO; and interim Broughton, Chief Tom CFO. Officer; our Ed Abbott, Credit Woodie, have our our

now disclosure. cover our I'll statements forward-looking

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

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

Thomas Broughton

Thank joining you, conference Davis. Good fourth afternoon, and thank you call. our for quarter

share were importantly, turned climb diluted up share And over the net out And We recap the earnings quarter quarter trends quarter of positive. our XX% XXXX. the be of our to margin per also, of If book we XX% our ended fourth with -- interest fourth pleased from in to in we more the year-over-year. per X.XX% grew and really XXXX XXXX. year, X.XX% all steadily did value, earnings with

we're really it year ended up on. how better as So anyway, the the got went happy year and

going see but to few of We Henry use have don't -- borrowers and just that credit have would companies said normalize. we the And deal minutes, see the on ago we the low call, to weak But are problems still And are any -- we losses about loan we still normalize. a loan in a they're losses I'm with were we see I and saying a year year will really with. and industries problems. are talk that probably here that later, and low, our

quarter. the front, So fourth quarter, knew concerned payoffs fourth loan we but for pipeline we had on in we were the we a about pretty good concerned the about loan were

growth. -- gross me, Now to our of net loan growth of loan be out XX% loan excuse payoffs turned our about

So quarter. were had low million say a for the half those we of bad rate fixed payoffs those were growth a about will $XXX I all And thing, net loans. loan not payoffs

off. a saw we're have payoffs at believe. level to we But than much but in those So the more lower first the see fourth quarter, quarter, we glad some in we pay will

So loan encouraging we growth line a we from C&I standpoint, see to did It loan XX.X% XX.X% from increase the some. quarter-over-quarter. in utilization was saw and

very to over loan loan Our increased the positive, $XXX expect more pipeline election, is we normalize million XXXX. of course growth do after which and the

Memphis, X until Memphis cars and couple they've our Auburn, Auburn, mention out working making of months. good last very the Alabama markets, they've new Tennessee and really their are will of And I -- been progress.

an So they've just office. now got

are proud of their optimistic we how doing So future. and they're for

in add great and common add those did the We new I leadership both fourth the cities. many really producers have fourth think year. the X do usually half of in well first see It's in to quarter in them not the we'll of quarter.

with So in those we markets. any event, pleased are

with comes XX banks We have in the from customers. including in funding quarter, see a banks. or with of states new that nice our see good XX% correspondent in deposit funding XX the We some From that us XXX and banks XX% -- year-over-year a and with we growth we the channel are added in XXXX noninterest-bearing our standpoint, settled settlement very now did growth banks deposit deposits. in growth did correspondent are

that was very much So a positive.

turn to to overview, and I'm quick over in now discuss a it to Henry detail. that's credit more going So

Henry Abbott

outperform more portfolio our our business in quarter. level continues specifically perform Thank The model and in you, Tom. commercial-focused bank's the loan fourth I'm bank's exceptional at with performance pleased to to and continued extremely an peers. the XXXX

we at was to historical these As metrics we bank at been low stay exited to few -- by historic we've ago. basis X basis in than very X or strong lows entire era, points This for we for charge-offs punctuated points XXXX. remarkably, able Annualized the less year. net most a figures, continue in and basis the is And fourth charge-offs credit from had the XXXX. near the years COVID-stimulus for quarter, our XX had points,

we minimal very I'm with these and XXXX. pleased proud that charge-offs experienced in

was reserve ended ALLL and an the loans course to total throughout XXXX, loss loans we allowance X.XX%. for of year to the Our with of total stable loan

total Nonperforming generally is in assets quarter. for line third the XX which assets points, to the basis with were results

and ensure and appropriately with proactively portfolio to to look risk continue prospering beyond. as in strong a very the we in and monitor XXXX stable well and XXXX was from perspective, potential understand administration accordingly we new a forward Washington, the We place act credit and in growing to the year conservatively. as

you. over Ed, to I'll turn it

Edison Woodie

Henry, everyone. and afternoon, Thank good you,

the We are and momentum new very into pleased update with quarter our earnings about heading fourth our year. our results

margin experienced interest have I'll today trends on we because linked our improvement, to comments net quarters of momentum. my straight X meaningful the While recent quarter focus are

over X%. in fourth increased quarter was quarter. on compared an annualized XX% increased up interest third and million quarter diluted and basis Net net to for the $XXX.X income. Margin $X.X to a the million $XXX.X or to leader EPS in income the X% Net growth continues third income million was be up

from of repricing have benefit we rate fixed the of and to liabilities. continue assets, the We managed successfully upward cost

points quarter at of balance Net sensitive, and margin rates slightly asset position liability Earning being margin net negatively interest-bearing sheet XX liability in our $XXX that XX decreased percentage. cash, changed. hasn't rate spoke quarter, which points. last impacts interest additional by while basis We XX we're about interest increased holding basis the an the length yields prior the decreased points, over basis million

Approximately or are numbers during to offer mature our $XXX I'd to that with and analysis. yield may down million like currently some of X.X%. everyone's securities those more set pay specific XXXX, help

more up We XX points basis quarters increasing the portfolio. they billion fourth of this quarter. and yields in several repriced We we have in loans, $X.X have fixed during rate believe

$X.X interest-bearing from end rate for end checking in these XX% X.X%. days beta loans at have deposits, the third dropped the of rate billion We a quarter currently deposits Rates to X.XX% XX total following of of change. deposits within average in Most variable yielding demand reprice a from increased up at the the third XX. Noninterest-bearing fourth of the of quarter, to XX% indicating quarter. X.XX%

good income due our balance to deposit noninterest supplementary refer our to from for to service of continued had release mortgage charges income, charges strong origination quarter further higher on increased Please increased information structure. our press attached sheet another and We resulting details analysis volumes.

declined revenue credit However, card net slightly.

expense We recently to We quarter. to million $XX.X of this modestly successful We core expenses million directed $XX.X believe of quarter management. had another increased per has currently.

We for are quarter. the $XX.X reporting million

to other offset a shortfall onetime costs decrease our banks. fully health related adjustment were that However, check EDP in includes fraud in upcoming These incentive systems to receivable of plan, write-down fund our by the from enhancements an annual and accrual. a plan

efficiency the during ratio Our year. quarter past each improved

Our tax but had benefited tax a to quarter rate delays in XX.X%, the adjustment from positive construction. credit the was for investment, which

Tom is XX% guidance tax turn believe call a now our our rate prior of adjustment, this thoughts. XX.X% over and correct. the for still I'll to rate back was tax we final his Excluding

Thomas Broughton

because out do of more in thinking the election, and business and we're to dependent of course, community and we future. -- we're little optimistic Ed, bank some I the projects the in wake the election, overall for the we'll a after we in you, we And election bit of optimistic business -- a about make before is very downward continued is think were the see Thank trend outlook are pencil that better. the of rates, on optimistic short-term

to think next I year some to we're so. the have have rate over going cuts or

our to loan and improve a margins demand to -- do we margins little continue So expect improve to bit.

is so the hopeful sellers will remorseful, make up Our short and to year. here opening of now and sellers for in goal questions. We're more the there be coming stock we're course

Operator

[Operator Instructions] from is Stephen Scouten question Sandler. Our Piper first from

Stephen Scouten

maybe kind all you you extract the Just there cuts that an deposit how quarter. for kind the curious, able or about of to to that and about see the were really spoke that were NIM, expectations in of additional to you we cuts Tom, kind not of think how where if additional maybe trajectory? the at where about was there's upside current think can betas That potential environment to nice this first, are upside surprised you maybe any

Thomas Broughton

Stephen. of a of the amount I you kind not, have excess cash, you're when where management, pretty you're you a when disciplined That's question. be. in be And a tough having interest guess cannot expense luxury rate fair can about your position you of

and fair little -- any I'm with we in we disciplined about I'd just excess very we're pushback pushback pretty can and of be because with that at cash, having luxury how -- But had clients. haven't our class. we business we've surprised deal it. and we been say that So And have reasonable

higher to funds the of cost than is bank Our begin average with.

already we're them paying a market rate. So

I law go a on can returns and we know expecting lower to of So we as any diminishing rates, they're point, see cut there's you cuts, more they're that. and lower and fully of expected. fully see some At think course. more, how some here rates If lower low

nice you a really years to on in is than years. So compared I higher to floors what to, compared our we for today for see loans few try floors we in nice -- earlier ago have much us used what looked think,

help us road -- down the pricing Steve. is -- help on the the I on us, the that So will think will loans the be loan floors

if think to the loan us, help the on question. flop I from side on floors saving will your answered I the we'll side expense

Stephen Scouten

color, expecting, Can Tom. lines, see M&A, usual you the if you're be said hiring they dislocation more good with be as I of to about you people to we kind aggressive Yes. talk And in and And hire I as along expect your thinking everyone seems about how those here come potentially if then maybe No, which business kind that. people quarter. appreciate this continue helpful really year, and existing around would think, be new that's you hired, of markets? about. more into X to you that you

Thomas Broughton

going -- always be the dictate budget we always certainly, that opportunistic to internally. strategy. about don't we We're those our best We've hiring going said let that to we let have our people. to very or goals We're disclose budgeted going but not those, we're not

small maybe terms yet. fire, and couple those the a don't large anywhere close kind potential irons in of kind in have of We one not know. one We're expansions. of on I of to

we don't So know.

helped see chairs activity if yes, us -- of it of musical unhappy that are But always the terms music that the because arranged in we has people differently always after the there's merger stops. out are fall chairs,

mean, that you bank-friendly And was certainly we the brighter if least administration next have a banks, see So for line environment X while a think activity. came that, brighter a into given or I I would certainly huge to bank-friendly, merger bank looking the just years the course, as office. we in at seemingly potential they sell, upside in get of before

Stephen Scouten

Yes.

markets I And you guys list a think do you're right potential about Do you of, think hey, opportunity to that? here's that how a market don't X -- just the strategic want have X if kind you be from about, think perspective, in? I about know, really about that arose, expansion? how you you how or do we that. do for Or think a of

Thomas Broughton

file XX.X in Yes. of last on those file And a everybody XX got got each years I've talked in drawer. list my a we've each probably list We got ever markets. markets. -- over that one a or different of I've the of to I've

and So oh, that interested think, it we mergers we're when announced, in in. who okay, off that was we dust market

point we'll pretty think and the where have So now -- connectivity to do get we good to the we in a luckily, call. Southeast

network opportunity lot spot have try for We a that put and spot are can correspondent that of has in correspondent the of hiring well. that lot world opportunity they'll friends as -- Roddy people a that we bank together, are in interested to

work So together industry. other friends we tend with to in the

Stephen Scouten

great appreciate Got the color. year. I all helpful. it. a Congrats Really on

Thomas Broughton

Steve. Thank you,

Operator

is from Moss Raymond from question next Our James. Steve

Stephen Moss

kind just year. the upbeat comments the thinking the here, upcoming Tom, on here you're with curious for loan about how of loan growth -- your pipeline

X% could the it be XXXX, a about or that? did digits? You so maybe low little for bit double more Or tempering prepays

Thomas Broughton

any give go you through it, to first XXXX, quarter was I hesitate back the X. in because

Second really good. was quarter

close fourth And it think pretty quarter I nothing. quarter, was to good. Third then pretty was

you growth still been inconsistent. organic I not I see when that know know know rate don't for it's we problem what what rates it's -- that -- at I we'll have -- too So think a don't are loans. don't analysts high. And the

like don't of say to customers, little people start too and estate issue. cases. tenure short-term the borrowing higher many for a lot than in we they is The to new -- a high an our bit commercial tenure projects talked cost today is They that it's real the of and really all

well. they administration can the are our cost world cost and think in developers with multifamily happen. and is merchant and issue. And I construction -- big moving not like place, a still going obviously But ahead to new just steel pretty of not force the down concrete that's it's the lumber

but optimistic, any -- I'm don't from not improvement, So I'm on anything what XXXX. we Steve, counting I in think, saw substantial

increased you've has in We had in They'll of XXXX. more put net And build see, time living. think together like got to opportunity. to senior of don't migration lead of or going to state active to Florida potential obviously, to in We a lot housing outside have I the fight that's what did scrap I there's any -- even we see Florida.

call these They're Florida. have run there in bedrooms I build days. the going of to more for living that it they component. out think down eventually of They'll to active

we're But certainly, pretty we that the portfolio Southeast. don't So a have loan throughout help. Florida have we well-rounded optimistic be will --

Stephen Moss

Got it.

do Okay. hire, markets was Memphis, it is the previous how in And or curious, just of new we of or new more C&I, the kind Auburn just And in kind markets elsewhere? terms that? CRE, versus it think producers markets, about then of

Thomas Broughton

-- quarter, quarter, West terms additional bankers I in added down there maybe added lot fourth the there. Central Auburn, We've Memphis, new Florida one the already the a In Yes. Florida already in was In of the of Ford region. Nashville. first X we've think

be So he is in in are is half Henry, they places, say, or one is he half company, estate have on are Texas, really that real has including And Nashville customers -- from our are and to other all commercial fair we would probably only in he and dedicated Tennessee. and Texas lender.

they -- a C&I do real everybody as bent as So else at least commercial but and well. is sort estate of some

Stephen Moss

you. here, from in cash the Got I on margin the then And mentioned Okay. of terms the just heard I securities portfolio. flows

just the there's updated year, the for for change cash rate fixed on loan days? any here. curious, Just What upcoming repricing been flows thoughts if portfolio these asset

Edison Woodie

in quarter, loans Yes, we fixed it's the and at that quarter. are talked this last I little first still think We're about $X.X it looking rate a of about changed billion repricing that securities, we to and million then And back us year. talked think billion, I add $XXX last you $X.X it the that gets talked about we to quarter. up in about

loans like on And off We'd so that $X.X in Xs. billion of fixed Xs. high come back coming high in are to rate the the

Stephen Moss

was Okay. And X% I'm near point? margin expanding curious margin about assume margin to quarter. every assume how guys in that I you terms the for was of thinking December kind the just trends. above this just fair the Was over are of at -- the term?

Edison Woodie

net to if is we're balance except impact books, it for tends X%, our that that that around holding on margin liquidity interest sheet on Yes, right excess percentage.

Yes. in as X mid-X.XXs opposed probably item. seeing for So that to you're the

say like in about So in our that be would $X funds, margin billion I excess range. would we're X% more

Thomas Broughton

tend -- fourth they I we is tend see correspondence. Rodney guess in sitting they to peak terms quarter of balances. Rushing the to deposit in when a here,

Rodney Rushing

halfway They up do. our flat usually for the through previous happened quarter the quarter. first customers And and And second existing years quarter. through it fourth that has as be will this in the

Stephen Moss

it then potential and one terms know Got I update nonperformer that just if all timing have of under was to Okay. you fell through, on contract And then for of I me you. just kind sold appreciate the color. be any that resolution? of in it one curious last

Henry Abbott

a we're this that's any on, working update. but nothing attention, at of lot definitive there's have still It's one time. immediate don't I

Thomas Broughton

a they going debt contract, is It's our haven't at to it put under way, a be -- but let's this any amount. of sale multiple

difficult a we're to other So little there, they're are but trying be get which bit in creditors that's to paid may there full, why everybody do. fine, and out

we So always buyer as backup well. potentially -- there's -- have a there's a

risk like asset. with we feel So or don't loss any that there's there

Henry Abbott

Yes.

going I time. it's of think take of but loss, just risk that's is to a good statement

Stephen Moss

Great.

appreciate color and Okay. really guys. the Well, nice quarter, all here,

Thomas Broughton

Thank you, Steve.

Operator

Dave next question is from Group. Our Hovde from Bishop

David Bishop

the quick question you. a back disclosures pulled appreciate originations, the of little supplemental loan I for bit. A in terms

I the end X.XX% X%, think, right of quarter. top on of

quarter? sort they've how yields? curious origination material those Just in trended Any of post movement

Edison Woodie

I that's Dave, about think No, right.

Thomas Broughton

say, We're rate where were looking than a that of at mix fixed loans, asset let's now practically balance little little and none, a being better at better bit a rate -- of fixed between doing where we're of year liability-sensitive mean neutral and ago, a Dave. floating we're some I more a fixed -- neutral a floating and more bit neutral, as we're doing asset-sensitive looking loans approach we're some we rate we

David Bishop

commercial as curious And might over in industrial with I that construction the sort declined terms loans component more commercial them a of C&I there's just over composition, picked has estate accounts moving if percentage of bring pipeline know the operating of years I'm of up. and forward. the real

Thomas Broughton

lot inactive -- Well, I the C&I December is good our more I And a or they Dave. activity. accounts service and over of don't December the no many a a interesting usage more in on accounts, thing accounts Many -- lot lot borrow are at the we've year-over-year, says got and those looked which have may the it. nothing nonborrowing and line of I that's C&I they're -- accounts a books charges up of like XX%

a lot XXX% deposits. deposits in the So of we C&I is bring it's sort interesting no the or of thing, has either

an side. there interesting the So C&I of sort on it's phenomena

David Bishop

level charge-offs noted collapse curious Draconian a it you XX be in to basis take XX like, impact say, have here. unemployment, say, that it. point from a of very loss that the credit the maybe look preamble sort the as you to would at have and ball behaved basis would to to happen perspective, will move of net obviously, well what And are a point Got What from really just rate? to crystal

Thomas Broughton

are If the or for few on a period don't we to sustain can XX time. period -- XX of expansion rate surprised, point it basis And said XX don't XX X mean good why to is very reality points be Dave. quarter, charge-off -- time. I the commercial always margin need that's that I've over basis goes points to basis average. XX over get banks a And of long used long banks less not on to a average,

but wheels a we have to That's XX, so just -- -- might to And so I level. got don't back might the that a have come off. means of or spike normal -- XX when sort year to we if we we back

few to other everybody struggling again, borrowers the are that? poorly said make industries. we in We've senior like -- issues. has going mean. industry. particular But want But mean we just side. knows, -- industry any bit, some in. in been -- see it a don't there's as to are add well. that issues be that, script, anything industries, the Henry, to operated has had got to of you they're those a I just bankruptcy but they're whatever weaknesses in filed randomly both my that had might since they're in outside companies of there obviously, long I And I -- Trucking has some housing weak

Henry Abbott

otherwise as going weaker don't that's be specific drive I It's just No, deterioration That's specific that think one projects just ask asset to in to players? classes. you I up. it's borrowers or or nothing it going unemployment -- to weaker agree. whether there's a industries certain or thing,

Thomas Broughton

will speculation, I only Dave, the do a anything AD&C. I with thing would residential speculation, -- is unemployment think to have that in speculate would

for 'XX. going of -- become probably to we we pretty you some the gone inventory lot just exposure. between tend never 'XX, worthless, that there's lesson to and XX after think it. a 'XX, correlation to of get I 'XX could would well be is high and -- things thinking have don't learned have kind lull our kind of a see We years

the affected could wrong. I been that, be over of by unemployment. just So the is on I unemployment. to I the tied losses experience being I AD&C outside residential increasing don't side, commercial has think my But think years see that

David Bishop

correspondent a Just does the corresponding increase fund Got maybe of funding it. flows can And the know related reflect curious to takes that banking group and puts or the in Rodney. of the growth? cyclical, loan the of question period-to-period, then timing if be group. end-of-period for that's I borrowings banking

Rodney Rushing

both. It's

X growth almost where added the who then Texas, new we that during and some year. and quarter our And Tennessee, liquidity fourth XX The correspondent we market was are thereabouts. we ago the producers XXX thing the followed got by customers, doing we in in now other added years largest there had which banks is followed relationships by with hired builds well. You producers some Tennessee and

accounts that So addition, it's new fourth quarter liquidity and in growth.

Operator

session. This the turn I'd concludes like floor question-and-answer any closing to the back for comments. management to

Thomas Broughton

Thank the your for I call. in on investment joining you, our appreciate everybody, company. us

Operator

concludes This today's teleconference.

participation. disconnect may for again your Thank at you this lines your time. You

ServisFirst Bancshares (SFBS) 27 Jan 252024 Q4 Earnings call transcript