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CST: 18/06/2018 06:02:21   

ServisFirst Bancshares, Inc. Announces Results for First Quarter 2018

62 Days ago

BIRMINGHAM, Ala., April 16, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS) today announced earnings and operating results for the quarter ended March 31, 2018.

First Quarter Highlights:

  • Diluted EPS increased 43% from $0.42 to $0.60 year over year
  • Loans and deposits increased 15% and 11%, respectively, year over year
  • Quarterly cash dividend increased 120% as previously announced
  • Return on average equity exceeded 20% for the first time in the thirteen year history of the bank
  • First quarter net interest margin improved to 3.81% from 3.66% in the previous quarter

Tom Broughton, President and CEO, said, “Our strong asset quality and solid financial performance, coupled with our focus on serving client needs, continues to attract new clients.”  Bud Foshee, CFO, stated, “Even though our financial results were enhanced by lower federal corporate tax rates, our pre-tax income in the first quarter increased 31% year over year, pointing to continued improvement in our financial metrics.”

FINANCIAL SUMMARY (UNAUDITED)                                      
(in Thousands except share and per share amounts)                                      
                                           
        Period Ending
March 31, 2018
  Period Ending
December 31, 2017
  % Change
From Period
Ending
December
31, 2017 to
Period
Ending
March 31,
2018
  Period Ending
March 31, 2017
  % Change
From Period
Ending March
31, 2017 to
Period Ending
March 31,
2018
 
QUARTERLY OPERATING RESULTS                                      
Net Income   $ 32,603     $ 21,150     54   %   $ 22,519     45 %  
Net Income Available to Common Stockholders   $ 32,603     $ 21,119     54   %   $ 22,519     45 %  
Diluted Earnings Per Share   $ 0.60     $ 0.39     54   %   $ 0.42     43 %  
Return on Average Assets     1.91 %     1.20 %           1.45 %        
Return on Average Common Stockholders' Equity     21.40 %     13.97 %           17.09 %        
Average Diluted Shares Outstanding     54,183,400       54,161,788             54,133,722          
                                           
Core Net Income*   $ 32,603     $ 24,424     33   %                
Core Net Income Available to Common Stockholders*   $ 32,603     $ 24,393     34   %                
Core Diluted Earnings Per Share*   $ 0.60     $ 0.45     34   %                
Core Return on Average Assets*     1.91 %     1.39 %                      
Core Return on Average Common Stockholders' Equity*     21.40 %     16.13 %                      
                                           
BALANCE SHEET                                      
Total Assets   $ 7,011,735     $ 7,082,384     (1 ) %   $ 6,336,165     11 %  
Loans     5,928,327       5,851,261     1   %     5,151,984     15 %  
Non-interest-bearing Demand Deposits     1,407,592       1,440,326     (2 ) %     1,292,440     9 %  
Total Deposits     5,977,387       6,091,674     (2 ) %     5,361,532     11 %  
Stockholders' Equity     629,297       607,604     4   %     545,148     15 %  
                                           
* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation on Non-GAAP Financial Measures."  

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $32.6 million for the quarter ended March 31, 2018, compared to net income and net income available to common stockholders of $22.5 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.61 and $0.60, respectively, for the first quarter of 2018, compared to $0.43 and $0.42, respectively, for the first quarter of 2017.

Return on average assets was 1.91% and return on average equity was 21.40% for the first quarter of 2018, compared to 1.45% and 17.09%, respectively, for the first quarter of 2017.

Net interest income was $62.4 million for the first quarter of 2018, compared to $61.4 million for the fourth quarter of 2017 and $52.1 million for the first quarter of 2017.  The net interest margin in the first quarter of 2018 was 3.81%, an increase of 15 basis points from the fourth quarter of 2017 and an increase of 28 basis points from the first quarter of 2017.  The increase in net interest income on a linked quarter basis is attributable to a $166.6 million increase in average loans outstanding and an $18.0 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet.  A $55.1 million decrease in average non-interest-bearing deposits offset the positive mix change caused by increases in loans and stockholders’ equity, while a $226.7 million decrease in federal funds sold and interest-bearing balances with banks added to the positive mix change.  The average yield on loans increased by 12 basis points to 4.80% on a linked quarter basis, boosted by the Federal Reserve Bank’s recent increases of interest rates.

Average loans for the first quarter of 2018 were $5.88 billion, an increase of $166.6 million, or 2.9%, over average loans of $5.72 billion for the fourth quarter of 2017, and an increase of $879.5 million, or 17.6%, over average loans of $5.00 billion for the first quarter of 2017.

Average total deposits for the first quarter of 2018 were $5.95 billion, a decrease of $88.8 million, or 1.5%, from average total deposits of $6.03 billion for the fourth quarter of 2017, and an increase of $627.4 million, or 11.8%, over average total deposits of $5.32 billion for the first quarter of 2017.

Non-performing assets to total assets were 0.22% for the first quarter of 2018, a decrease of three basis points compared to 0.25% for the fourth quarter of 2017 and a decrease of five basis points compared to 0.27% for the first quarter of 2017.  Net credit charge-offs to average loans were 0.10%, a 46 basis point decrease compared to 0.56% for the fourth quarter of 2017 and a 14 basis point decrease compared to 0.24% for the first quarter of 2017.  We recorded a $4.1 million provision for loan losses in the first quarter of 2018 compared to $9.1 million in the fourth quarter of 2017 and $5.0 million in the first quarter of 2017.  The allowance for loan losses as a percentage of total loans was 1.05% at March 31, 2018 compared to 1.02% at December 31, 2017 and 1.05% at March 31, 2017.  In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income for the first quarter of 2018 increased $323,000, or 7%, to $4.9 million compared to the first quarter of 2017.  Service charges on deposit accounts increased $231,000 during the first quarter of 2018, or 17%, compared to the first quarter of 2017, primarily the result of increased non-sufficient funds charges.  Mortgage revenue decreased $381,000, or 42%, to $518,000 during the first quarter of 2018, compared to $899,000 during the first quarter of 2017, as origination volumes slowed by $12.6 million, or 30%, for the first quarter of 2018 compared to the same quarter in 2017.  Credit card revenue increased 33% to $1.6 million during the first quarter of 2018, compared to $1.2 million during the first quarter of 2017.  Spending on credit cards increased 38% for the same comparative period.   

Non-interest expense for the first quarter of 2018 increased $2.2 million, or 10%, to $23.5 million from $21.3 million in the first quarter of 2017, and increased $2.3 million, or 11%, on a linked quarter basis.  Salary and benefit expense for the first quarter of 2018 increased $1.6 million, or 14%, to $13.3 million from $11.7 million in the first quarter of 2017, and increased $1.9 million, or 17%, on a linked quarter basis.  We had 437 FTE employees at the end of March 2018 compared to 417 at the end of March 2017, an increase of 5%.  Equipment and occupancy expense decreased $296,000, or 13%, to $2.0 million in the first quarter of 2018, from $2.3 million in the first quarter of 2017.  A decrease in rental payments more than offset increased depreciation expense resulting from our fourth quarter 2017 move from our previous headquarters building, which was leased, to our new headquarters building, which is owned.  FDIC insurance assessments increased from $1.0 million during the first quarter of 2017 to $1.1 million during the first quarter of 2018, resulting primarily from asset growth which impacts our assessment base.  Our efficiency ratio for the first quarter of 2018, fourth quarter of 2017 and first quarter of 2017 was 34.93%, 32.05% and 37.58%, respectively.

Income tax expense decreased $775,000, or 10%, to $7.1 million in the first quarter of 2018, compared to $7.8 million in the first quarter of 2017.  Lower corporate income tax rates resulting from the passage of the Tax Cuts and Jobs Act in December 2017 has resulted in lower effective tax rates.  Excess tax benefits from the exercise of stock options and vesting of restricted stock were $1.5 million for the first quarter of 2018 compared to $2.1 million for the first quarter of 2017.  Our effective tax rate for the first quarter of 2018 and the first quarter of  2017 was 17.8% and 25.8%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We recorded $3.1 million of additional tax expense as a result of revaluing our net deferred tax assets at December 31, 2017 due to lower corporate income tax rates provided by the Tax Cuts and Jobs Act passed into law in December 2017.  We also recorded expenses of $347,000 related to terminating the lease agreement on our previous headquarters building in Birmingham, Alabama and expenses of moving into our new headquarters building.  Core financial measures included in this press release are “core net income,” “core net income available to common stockholders,” “core diluted earnings per share,” “core return on average assets,” and “core return on average common stockholders’ equity.”  Each of these five core financial measures excludes the impact of the non-routine expenses attributable to our net deferred tax asset revaluation, lease termination and moving expenses, and are all considered non-GAAP financial measures.  In addition to these financial measures adjusting for non-routine expenses, 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 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 tables provide 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.

        Three Months
Ended December
31, 2017
 
Return on average assets - GAAP     1.20 %  
Net income - GAAP   $ 21,150    
  Adjustments:        
  Revaluation of net deferred tax assets     3,059    
  Lease termination and moving expenses     347    
    Tax (benefit) of adjustments     (132 )  
Core net income - non-GAAP*   $ 24,424    
Average assets   $ 6,988,731    
Core return on average assets - non-GAAP*     1.39 %  
             
Return on average common stockholders' equity - GAAP     13.97 %  
Net income available to common stockholders - GAAP   $ 21,119    
  Adjustments:        
  Revaluation of net deferred tax assets     3,059    
  Lease termination and moving expenses     347    
    Tax (benefit) of adjustments     (132 )  
Core net income available to common stockholders - non-GAAP*   $ 24,393    
Average common stockholders' equity   $ 599,947    
Core return on average common stockholders' equity - non-GAAP*     16.13 %  
             
Diluted earnings per share - GAAP   $ 0.39    
Weighted average shares outstanding, diluted - GAAP     54,161,788    
Core diluted earnings per share - non-GAAP*   $ 0.45    


        At March 31,
2018
  At December
31, 2017
  At September
30, 2017
  At June 30,
2017
  At March 31,
2017
 
Book value per share - GAAP   $ 11.84     $ 11.47     $ 11.14     $ 10.72     $ 10.32    
Total common stockholders' equity - GAAP     629,297       607,604       590,213       567,086       545,148    
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     14,652       14,719       14,787       14,855       14,924    
Tangible common stockholders' equity - non-GAAP *   $ 614,645     $ 592,885     $ 575,426     $ 552,231     $ 530,224    
Tangible book value per share - non-GAAP *   $ 11.56     $ 11.19     $ 10.86     $ 10.44     $ 10.04    
                                               
Stockholders' equity to total assets - GAAP     8.98 %     8.58 %     8.79 %     8.96 %     8.60 %  
Total assets - GAAP   $ 7,011,735     $ 7,082,384     $ 6,712,103     $ 6,329,599     $ 6,336,165    
  Adjustments:                                          
  Adjusted for goodwill and core deposit intangible asset     14,652       14,719       14,787       14,855       14,924    
Total tangible assets - non-GAAP *   $ 6,997,083     $ 7,067,665     $ 6,697,316     $ 6,314,744     $ 6,321,241    
Tangible common equity to total tangible assets - non-GAAP *     8.78 %     8.39 %     8.59 %     8.75 %     8.39 %  
                                               
* Core measures exclude non-routine expenses during the comparative periods presented in this press release, as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" above.  

Conference Call

ServisFirst Bancshares, Inc. will host a live audio webcast to discuss earnings and results on Monday, April 16, 2018 beginning at 5:15 p.m. ET.  You may access the webcast at https://services.choruscall.com/links/sfbs180122.html.  The webcast will be available until April 27, 2018.

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, Montgomery, Mobile and Dothan, Alabama, Pensacola and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.

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,” “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: 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 in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; 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 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)                                          
    1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017   1st Quarter 2017  
CONSOLIDATED STATEMENT OF INCOME                                          
Interest income   $ 74,009     $ 72,060     $ 67,641     $ 63,538     $ 59,517    
Interest expense     11,573       10,652       9,245       7,971       7,465    
Net interest income     62,436       61,408       58,396       55,567       52,052    
Provision for loan losses     4,139       9,055       4,803       4,381       4,986    
Net interest income after provision for loan losses     58,297       52,353       53,593       51,186       47,066    
Non-interest income     4,869       4,905       4,790       4,805       4,546    
Non-interest expense     23,512       21,255       21,497       21,875       21,267    
Income before income tax     39,654       36,003       36,886       34,116       30,345    
Provision for income tax     7,051       14,853       11,627       9,952       7,826    
Net income     32,603       21,150       25,259       24,164       22,519    
Dividends paid on preferred stock     -       31       -       31       -    
Net income available to common stockholders   $ 32,603     $ 21,119     $ 25,259     $ 24,133     $ 22,519    
Earnings per share - basic   $ 0.61     $ 0.40     $ 0.48     $ 0.46     $ 0.43    
Earnings per share - diluted   $ 0.60     $ 0.39     $ 0.47     $ 0.45     $ 0.42    
Average diluted shares outstanding     54,183,400       54,161,788       54,099,672       54,100,604       54,133,722    
                                           
CONSOLIDATED BALANCE SHEET DATA                                          
Total assets   $ 7,011,735     $ 7,082,384     $ 6,712,103     $ 6,329,599     $ 6,336,165    
Loans     5,928,327       5,851,261       5,628,765       5,343,688       5,151,984    
Debt securities     560,885       538,330       522,724       518,065       526,023    
Non-interest-bearing demand deposits     1,407,592       1,440,326       1,405,965       1,373,353       1,292,440    
Total deposits     5,977,387       6,091,674       5,796,901       5,394,810       5,361,532    
Borrowings     64,739       64,832       54,975       55,075       55,169    
Stockholders' equity   $ 629,297     $ 607,604     $ 590,213     $ 567,086     $ 545,148    
                                           
Shares outstanding     53,147,169       52,992,586       52,970,310       52,909,362       52,812,396    
Book value per share   $ 11.84     $ 11.47     $ 11.14     $ 10.72     $ 10.32    
Tangible book value per share (1)   $ 11.56     $ 11.19     $ 10.86     $ 10.44     $ 10.04    
                                           
SELECTED FINANCIAL RATIOS                                          
Net interest margin     3.81 %     3.66 %     3.77 %     3.77 %     3.53 %  
Return on average assets     1.91 %     1.20 %     1.55 %     1.55 %     1.45 %  
Return on average common stockholders' equity     21.40 %     13.97 %     17.28 %     17.36 %     17.09 %  
Efficiency ratio     34.93 %     32.05 %     34.02 %     36.23 %     37.58 %  
Non-interest expense to average earning assets     1.43 %     1.26 %     1.38 %     1.47 %     1.43 %  
                                           
CAPITAL RATIOS (2)                                          
Common equity tier 1 capital to risk-weighted assets     9.88 %     9.51 %     9.60 %     9.72 %     9.67 %  
Tier 1 capital to risk-weighted assets     9.88 %     9.52 %     9.61 %     9.73 %     9.68 %  
Total capital to risk-weighted assets     11.91 %     11.52 %     11.51 %     11.67 %     11.66 %  
Tier 1 capital to average assets     8.95 %     8.51 %     8.91 %     8.88 %     8.46 %  
Tangible common equity to total tangible assets (1)     8.78 %     8.39 %     8.59 %     8.42 %     8.39 %  
                                           
(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)                
        March 31, 2018   March 31, 2017 % Change
        (Unaudited)   (Unaudited)    
ASSETS                
Cash and due from banks   $ 64,912     $ 54,993   18   %
Interest-bearing balances due from depository institutions     53,311       283,181   (81 ) %
Federal funds sold     197,882       127,390   55   %
  Cash and cash equivalents     316,105       465,564   (32 ) %
Available for sale debt securities, at fair value     560,635       453,956   23   %
Held to maturity debt securities (fair value of $250 and $73,180 at                
  March 31, 2018 and 2017, respectively)     250       72,057   (100 ) %
Restricted equity securities     1,026       1,034   (1 ) %
Mortgage loans held for sale     4,522       6,599   (31 ) %
Loans     5,928,327       5,151,984   15   %
Less allowance for loan losses     (62,050 )     (53,892 ) 15   %
  Loans, net     5,866,277       5,098,092   15   %
Premises and equipment, net     58,624       46,407   26   %
Goodwill and other identifiable intangible assets     14,652       14,924   (2 ) %
Other assets     189,644       177,532   7   %
  Total assets   $ 7,011,735     $ 6,336,165   11   %
LIABILITIES AND STOCKHOLDERS' EQUITY                
Liabilities:                
Deposits:                
  Non-interest-bearing   $ 1,407,592     $ 1,292,440   9   %
  Interest-bearing     4,569,795       4,069,092   12   %
    Total deposits     5,977,387       5,361,532   11   %
Federal funds purchased     326,399       358,241   (9 ) %
Other borrowings     64,739       55,169   17   %
Other liabilities     13,913       16,075   (13 ) %
  Total liabilities     6,382,438       5,791,017   10   %
Stockholders' equity:                
  Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at                
    March 31, 2018 and March 31, 2017     -       -      
  Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,147,169 shares                
    issued and outstanding at March 31, 2018, and 52,812,396 shares issued and outstanding                
    at March 31, 2017     53       53      
  Additional paid-in capital     217,536       217,195   -   %
  Retained earnings     416,311       327,029   27   %
  Accumulated other comprehensive income     (5,105 )     369   NM    
    Total stockholders' equity attributable to ServisFirst Bancshares, Inc.     628,795       544,646   15   %
  Noncontrolling interest     502       502   -   %
    Total stockholders' equity     629,297       545,148   15   %
  Total liabilities and stockholders' equity   $ 7,011,735       6,336,165   11   %
                         


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)        
(In thousands except per share data)              
        Three Months Ended March 31,  
        2018   2017  
Interest income:              
  Interest and fees on loans   $ 69,674   $ 55,556  
  Taxable securities     2,745     2,087  
  Nontaxable securities     656     765  
  Federal funds sold     551     519  
  Other interest and dividends     383     590  
  Total interest income     74,009     59,517  
Interest expense:              
  Deposits     9,621     5,982  
  Borrowed funds     1,952     1,483  
  Total interest expense     11,573     7,465  
  Net interest income     62,436     52,052  
Provision for loan losses     4,139     4,986  
  Net interest income after provision for loan losses     58,297     47,066  
Non-interest income:              
  Service charges on deposit accounts     1,585     1,354  
  Mortgage banking     518     899  
  Credit card income     1,578     1,179  
  Securities (losses) gains     4     -  
  Increase in cash surrender value life insurance     777     724  
  Other operating income     407     390  
  Total non-interest income     4,869     4,546  
Non-interest expense:              
  Salaries and employee benefits     13,296     11,713  
  Equipment and occupancy expense     1,954     2,250  
  Professional services     805     771  
  FDIC and other regulatory assessments     1,133     997  
  Other real estate owned expense     316     76  
  Other operating expense     6,008     5,460  
  Total non-interest expense     23,512     21,267  
  Income before income tax     39,654     30,345  
Provision for income tax     7,051     7,826  
  Net income     32,603     22,519  
  Dividends on preferred stock     -     -  
  Net income available to common stockholders   $ 32,603   $ 22,519  
Basic earnings per common share   $ 0.61   $ 0.43  
                   
Diluted earnings per common share   $ 0.60   $ 0.42  
                   


LOANS BY TYPE (UNAUDITED)                              
(In thousands)                              
                                 
      1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017   1st Quarter 2017
Commercial, financial and agricultural   $ 2,329,904   $ 2,279,366   $ 2,223,910   $ 2,123,498   $ 2,061,503
Real estate - construction     506,050     580,874     467,838     395,398     345,777
Real estate - mortgage:                              
  Owner-occupied commercial     1,349,679     1,328,666     1,323,383     1,272,659     1,262,578
  1-4 family mortgage     581,498     603,063     593,180     565,121     554,261
  Other mortgage     1,099,482     997,079     962,690     931,788     872,955
Subtotal: Real estate - mortgage     3,030,659     2,928,808     2,879,253     2,769,568     2,689,794
Consumer     61,714     62,213     57,764     55,224     54,910
Total loans   $ 5,928,327   $ 5,851,261   $ 5,628,765   $ 5,343,688   $ 5,151,984
                               


SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                                    
(Dollars in thousands)                                    
          1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017   1st Quarter 2017  
Allowance for loan losses:                                          
Beginning balance   $ 59,406       $ 58,459       $ 55,059       $ 53,892       $ 51,893      
Loans charged off:                                          
  Commercial financial and agricultural     1,088         7,064         924         3,067         2,855      
  Real estate - construction     -         -         16         40         -      
  Real estate - mortgage     381         1,134         550         106         266      
  Consumer     88         137         65         33         75      
    Total charge offs     1,557         8,335         1,555         3,246         3,196      
Recoveries:                                          
  Commercial financial and agricultural     4         64         67         16         190      
  Real estate - construction     7         126         12         14         16      
  Real estate - mortgage     42         26         59         2         2      
  Consumer     9         11         14         -         1      
    Total recoveries     62         227         152         32         209      
  Net charge-offs     1,495         8,108         1,403         3,214         2,987      
  Provision for loan losses     4,139         9,055         4,803         4,381         4,986      
  Ending balance   $ 62,050       $ 59,406       $ 58,459       $ 55,059       $ 53,892      
                                                 
  Allowance for loan losses to total loans     1.05   %     1.02   %     1.04   %     1.03   %     1.05   %  
  Allowance for loan losses to total average                                          
    loans     1.05   %     1.04   %     1.07   %     1.05   %     1.08   %  
  Net charge-offs to total average loans     0.10   %     0.56   %     0.10   %     0.25   %     0.24   %  
  Provision for loan losses to total average                                          
    loans     0.29   %     0.63   %     0.35   %     0.34   %     0.40   %  
  Nonperforming assets:                                          
    Nonaccrual loans   $ 9,271       $ 10,765       $ 12,356       $ 9,963       $ 12,084      
    Loans 90+ days past due and accruing     678         60         2,506         1,016         16      
    Other real estate owned and                                          
    repossessed assets     5,748         6,701         3,888         3,891         5,102      
  Total   $ 15,697       $ 17,526       $ 18,750       $ 14,870       $ 17,202      
                                                 
  Nonperforming loans to total loans     0.17   %     0.19   %     0.26   %     0.21   %     0.23   %  
  Nonperforming assets to total assets     0.22   %     0.25   %     0.28   %     0.23   %     0.27   %  
  Nonperforming assets to earning assets     0.23   %     0.25   %     0.29   %     0.24   %     0.28   %  
  Reserve for loan losses to nonaccrual loans     669.29   %     551.84   %     473.12   %     552.63   %     445.98   %  
                                                 
  Restructured accruing loans   $ 15,838       $ 16,919       $ 12,700       $ 12,716       $ 536      
                                                 
  Restructured accruing loans to total loans     0.27   %     0.29   %     0.23   %     0.24   %     0.01   %  
                                                 
  TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)                            
  (In thousands)                                  
          1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017   1st Quarter 2017  
  Beginning balance:   $ 20,572       $ 16,354       $ 16,370       $ 7,269       $ 7,292      
    Additions     -         4,233         -         12,716         -      
    Removal from TDR     -         -         -         (535 )       -      
    Net (paydowns) / advances     (1,080 )       (15 )       (16 )       (1,380 )       (23 )    
    Charge-offs     (700 )       -         -         (1,700 )       -      
          $ 18,792       $ 20,572       $ 16,354       $ 16,370       $ 7,269      
                                                           


CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                    
(In thousands except per share data)                    
        1st Quarter
2018
  4th Quarter
2017
  3rd Quarter
2017
  2nd Quarter
2017
  1st Quarter
2017
 
Interest income:                                
  Interest and fees on loans   $ 69,674   $ 67,357   $ 63,857   $ 59,912   $ 55,556  
  Taxable securities     2,745     2,468     2,288     2,274     2,087  
  Nontaxable securities     656     702     729     752     765  
  Federal funds sold     551     508     379     287     519  
  Other interest and dividends     383     1,025     388     313     590  
  Total interest income     74,009     72,060     67,641     63,538     59,517  
Interest expense:                                
  Deposits     9,621     8,954     7,574     6,321     5,982  
  Borrowed funds     1,952     1,698     1,671     1,650     1,483  
  Total interest expense     11,573     10,652     9,245     7,971     7,465  
  Net interest income     62,436     61,408     58,396     55,567     52,052  
Provision for loan losses     4,139     9,055     4,803     4,381     4,986  
  Net interest income after provision for loan losses     58,297     52,353     53,593     51,186     47,066  
Non-interest income:                                
  Service charges on deposit accounts     1,585     1,499     1,467     1,382     1,354  
  Mortgage banking     518     894     978     1,064     899  
  Credit card income     1,578     1,298     1,149     1,189     1,179  
  Securities gains     4     -     -     -     -  
  Increase in cash surrender value life insurance     777     797     825     785     724  
  Other operating income     407     417     371     385     390  
  Total non-interest income     4,869     4,905     4,790     4,805     4,546  
Non-interest expense:                                
  Salaries and employee benefits     13,296     11,432     12,428     12,031     11,713  
  Equipment and occupancy expense     1,954     1,566     1,947     2,265     2,250  
  Professional services     805     833     805     808     771  
  FDIC and other regulatory assessments     1,133     1,030     810     1,081     997  
  Other real estate owned expense     316     160     31     56     76  
  Other operating expense     6,008     6,234     5,476     5,634     5,460  
  Total non-interest expense     23,512     21,255     21,497     21,875     21,267  
  Income before income tax     39,654     36,003     36,886     34,116     30,345  
Provision for income tax     7,051     14,853     11,627     9,952     7,826  
  Net income     32,603     21,150     25,259     24,164     22,519  
  Dividends on preferred stock     -     31     -     31     -  
  Net income available to common stockholders   $ 32,603   $ 21,119   $ 25,259   $ 24,133   $ 22,519  
Basic earnings per common share   $ 0.61   $ 0.40   $ 0.48   $ 0.46   $ 0.43  
                                     
Diluted earnings per common share   $ 0.60   $ 0.39   $ 0.47   $ 0.45   $ 0.42  


AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)  
ON A FULLY TAXABLE-EQUIVALENT BASIS  
(Dollars in thousands)  
   
            1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017   1st Quarter 2017  
            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   $ 5,847,443     4.81 %   $ 5,680,227   4.68 %   $ 5,407,109   4.66 %   $ 5,192,812   4.60 %   $ 4,976,933     4.50 %  
    Tax-exempt (2)     36,357     4.06       36,992   4.95       33,357   5.17       41,143   4.92       27,322     4.72    
      Total loans, net of                                                              
        unearned income     5,883,800     4.80       5,717,219   4.68       5,440,466   4.66       5,233,955   4.60       5,004,255     4.51    
  Mortgage loans held for sale     3,698     4.50       6,199   3.52       4,862   3.51       5,958   3.90       5,637     4.10    
  Debt securities:                                                              
    Taxable     435,747     2.52       406,488   2.43       385,431   2.37       389,505   2.34       368,349     2.27    
    Tax-exempt (2)     120,270     2.56       128,201   3.27       131,478   3.34       133,590   3.38       132,578     3.45    
      Total securities (3)     556,017     2.53       534,689   2.63       516,909   2.62       523,095   2.60       500,927     2.58    
  Federal funds sold     131,472     1.70       143,905   1.40       111,175   1.35       98,598   1.17       234,460     0.90    
  Restricted equity securities     1,030     1.57       1,030   1.93       1,030   3.47       1,030   10.51       1,030     1.57    
  Interest-bearing balances with banks     96,012     1.60       310,289   1.31       118,510   1.27       109,909   1.04       295,648     0.80    
  Total interest-earning assets     6,672,029     4.51 %     6,713,331   4.29 %     6,192,952   4.37 %     5,972,545   4.30 %     6,041,957     4.03 %  
Non-interest-earning assets:                                                              
  Cash and due from banks     68,309             68,444           65,457           68,894           59,697          
  Net premises and equipment     59,709             57,320           54,727           49,813           44,739          
  Allowance for loan losses, accrued                                                              
    interest and other assets     140,558             149,636           151,786           143,286           138,289          
      Total assets   $ 6,940,605           $ 6,988,731         $ 6,464,922         $ 6,234,538         $ 6,284,682          
                                                                       
Interest-bearing liabilities:                                                              
  Interest-bearing deposits:                                                              
  Checking   $ 899,311     0.52 %   $ 899,334   0.46 %   $ 800,437   0.42 %   $ 779,916   0.39 %   $ 789,273     0.38 %  
  Savings     53,269     0.31       49,697   0.31       48,313   0.30       48,150   0.30       50,461     0.33    
  Money market     3,027,176     0.90       3,065,298   0.80       2,774,061   0.74       2,567,817   0.64       2,694,225     0.58    
  Time deposits     576,857     1.21       576,010   1.16       546,020   1.10       537,220   1.06       530,000     1.02    
    Total interest-bearing deposits     4,556,613     0.86       4,590,339   0.77       4,168,831   0.72       3,933,103   0.64       4,063,959     0.60    
  Federal funds purchased     297,051     1.60       271,248   1.37       282,806   1.34       336,344   1.11       359,747     0.86    
  Other borrowings     64,805     4.89       60,829   4.98       55,034   5.17       55,130   5.22       55,239     5.26    
  Total interest-bearing liabilities     4,918,469     0.95 %     4,922,416   0.86 %     4,506,671   0.81 %     4,324,577   0.74 %     4,478,945     0.68 %  
Non-interest-bearing liabilities:                                                              
  Non-interest-bearing                                                              
    demand deposits     1,389,217             1,444,338           1,363,207           1,338,514           1,254,496          
  Other liabilities     15,007             22,029           15,070           13,739           16,809          
  Stockholders' equity     621,004             599,754           578,626           556,521           535,232          
  Unrealized (losses) gains on securities                                                              
    and derivatives     (3,092 )           194           1,348           1,187           (800 )        
      Total liabilities and                                                              
        stockholders' equity   $ 6,940,605           $ 6,988,731         $ 6,464,922         $ 6,234,538         $ 6,284,682          
Net interest spread         3.56 %         3.43 %         3.56 %         3.56 %         3.35 %  
Net interest margin         3.81 %         3.66 %         3.77 %         3.77 %         3.53 %  
                                                                       
(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% for the 1st quarter of 2018 and 35% for the quarters in 2017.  
(3 ) Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.