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CST: 12/11/2018 12:00:01   

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2018

115 Days ago

BIRMINGHAM, Ala., July 19, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2018.

SECOND QUARTER 2018 HIGHLIGHTS:

  • Net income of $33.5 million for the second quarter of 2018 compared to $24.2 million in the second quarter of 2017, a 39% increase
  • Diluted EPS of $0.62 for the second quarter of 2018 compared to $0.45 for the second quarter of 2017, a 38% increase
  • Loans increased 14% for the quarter on an annualized basis

Tom Broughton, President and CEO, said, “We saw good activity in loan demand in the second quarter and our pipeline remains strong.”  Bud Foshee, CFO, stated, “Our pretax income is up over 26% for YTD 2018 over 2017, reflective of our continued growth and improved profitability.”

 
FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
                                     
        Period Ending
June 30, 2018
  Period Ending
March 31, 2018
  % Change
From Period
Ending March
31, 2018 to
Period Ending
June 30, 2018
  Period Ending
June 30, 2017
  % Change
From Period
Ending June
30, 2017 to
Period Ending
June 30, 2018
QUARTERLY OPERATING RESULTS                                
Net Income   $ 33,540     $ 32,603     3%   $ 24,164     39%
Net Income Available to Common Stockholders   $ 33,509     $ 32,603     3%   $ 24,133     39%
Diluted Earnings Per Share   $ 0.62     $ 0.60     3%   $ 0.45     38%
Return on Average Assets     1.91 %     1.91 %         1.55 %    
Return on Average Common Stockholders' Equity     20.89 %     21.40 %         17.36 %    
Average Diluted Shares Outstanding     54,196,023       54,183,400           54,100,604      
                                     
YEAR-TO-DATE OPERATING RESULTS                                
Net Income   $ 66,143                 $ 46,683     42%
Net Income Available to Common Stockholders   $ 66,112                 $ 46,652     42%
Diluted Earnings Per Share   $ 1.22                 $ 0.86     42%
Return on Average Assets     1.91 %                 1.50 %    
Return on Average Common Stockholders' Equity     21.13 %                 17.23 %    
Average Diluted Shares Outstanding     54,189,746                   54,117,072      
                                     
BALANCE SHEET                                
Total Assets   $ 7,084,562     $ 7,011,735     1%   $ 6,329,599     12%
Loans     6,129,649       5,928,327     3%     5,343,688     15%
Non-interest-bearing Demand Deposits     1,481,447       1,407,592     5%     1,373,353     8%
Total Deposits     6,085,682       5,977,387     2%     5,394,810     13%
Stockholders' Equity     655,114       629,297     4%     567,086     16%
                                 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $33.5 million for the quarter ended June 30, 2018, compared to net income of $24.2 million and net income available to common stockholders of $24.1 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.63 and $0.62, respectively, for the second quarter of 2018, compared to $0.46 and $0.45, respectively, for the second quarter of 2017.

Return on average assets was 1.91% and return on average common stockholders’ equity was 20.89% for the second quarter of 2018, compared to 1.55% and 17.36%, respectively, for the second quarter of 2017.

Net interest income was $64.5 million for the second quarter of 2018, compared to $62.4 million for the first quarter of 2018 and $55.6 million for the second quarter of 2017.  The net interest margin in the second quarter of 2018 was 3.82%, a one basis point increase from the first quarter of 2018 and five basis point increase from the second quarter of 2017.  The increase in net interest income on a linked quarter basis is attributable to a $104.8 million increase in average loans outstanding, an $80.0 million increase in average non-interest-bearing deposits and a $25.4 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans increased 13 basis points to 4.93% on a linked quarter basis, while the average rate paid on deposits increased by 17 basis points to 1.03% on a linked quarter basis.

Average loans for the second quarter of 2018 were $5.99 billion, an increase of $104.8 million, or 2%, over average loans of $5.88 billion for the first quarter of 2018, and an increase of $754.7 million, or 14%, over average loans of $5.23 billion for the second quarter of 2017.

Average total deposits for the second quarter of 2018 were $6.04 billion, an increase of $91.8 million, or 2%, over average total deposits of $5.95 billion for the first quarter of 2018, and an increase of $766.0 million, or 15%, over average total deposits of $5.27 billion for the second quarter of 2017.

Non-performing assets to total assets were 0.28% for the second quarter of 2018, an increase of six basis points compared to 0.22% for the first quarter of 2018 and an increase of five basis points compared to 0.23% for the second quarter of 2017.  Net credit charge-offs to average loans were 0.13%, a three basis point increase compared to 0.10% for the first quarter of 2018 and a 12 basis point decrease compared to 0.25% for the second quarter of 2017.  We recorded a $4.1 million provision for loan losses in the second quarter of 2018 compared to $4.1 million in the first quarter of 2018 and $4.4 million in the second quarter of 2017.  The allowance for loan loss as a percentage of total loans was 1.05% at June 30, 2018 compared to 1.05% at March 31, 2018 and 1.03% at June 30, 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 increased $654,000 during the second quarter of 2018, or 14%, compared to the second quarter of 2017.  Deposit service charges increased $271,000 in the second quarter of 2018, or 20%, compared to the second quarter of 2017.  The number of transaction deposit accounts increased approximately 9% from June 30, 2017 to June 30, 2018, and the amount of overdraft fees increased $120,000, or 34%, from the second quarter of 2017 to the second quarter of 2018.  Credit card revenue increased $567,000, or 48%, to $1.8 million during the second quarter of 2018, compared to $1.2 million during the second quarter of 2017, driven by increased numbers of accounts and increased purchases per account.  Mortgage banking revenue decreased by $275,000 in the second quarter of 2018, or 26%, compared to the second quarter of 2017.  The number of loans originated during the second quarter of 2018 decreased approximately 10% from the same quarter in 2017.  Also, a larger percentage of loans originated during the second quarter of 2018 were placed into the Bank’s portfolio instead of being sold into the secondary market.

Non-interest expense for the second quarter of 2018 increased $2.1 million, or 10%, to $24.0 million from $21.9 million in the second quarter of 2017, and increased $498,000, or 2%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2018 increased $1.1 million, or 9%, to $13.1 million from $12.0 million in the second quarter of 2017, and decreased $198,000, or 2%, on a linked quarter basis.  The number of FTE employees increased from 428 at June 30, 2017 to 447 at June 30, 2018.  Equipment and occupancy expense decreased $152,000, or 7%, to $2.1 million in the second quarter of 2018, from $2.3 million in the second quarter of 2017.  Ownership costs of our new headquarters building in Birmingham for the second quarter of 2018 were approximately $85,000 less than rental payments and amortization of leasehold improvements during the second quarter of 2017.  Other operating expense for the second quarter of 2018 increased $922,000, or 16%, to $6.6 million from $5.6 million in the second quarter of 2017.

Income tax expense decreased $1.7 million, or 17%, to $8.3 million in the second quarter of 2018, compared to $10.0 million in the second 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.  We also recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the second quarter of 2018 and 2017 of $457,000 and $1.4 million, respectively.  Our effective tax rate for the second quarter of 2018 and 2017 was 19.9% and 29.2%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

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

                       
      At June 30, 2018   At March 31, 2018   At December 31, 2017   At September 30, 2017   At June 30, 2017
Book value per share - GAAP   $ 12.33     $ 11.84     $ 11.47     $ 11.14     $ 10.72  
Total common stockholders' equity - GAAP     655,114       629,297       607,604       590,213       567,086  
  Adjustments:                                        
  Adjusted for goodwill and core deposit intangible asset     14,584       14,652       14,719       14,787       14,855  
Tangible common stockholders' equity - non-GAAP   $ 640,530     $ 614,645     $ 592,885     $ 575,426     $ 552,231  
Tangible book value per share - non-GAAP   $ 12.05     $ 11.56     $ 11.19     $ 10.86     $ 10.44  
                                           
Stockholders' equity to total assets - GAAP     9.25 %     8.98 %     8.58 %     8.79 %     8.96 %
Total assets - GAAP   $ 7,084,562     $ 7,011,735     $ 7,082,384     $ 6,712,103     $ 6,329,599  
  Adjustments:                                        
  Adjusted for goodwill and core deposit intangible asset     14,584       14,652       14,719       14,787       14,855  
Total tangible assets - non-GAAP   $ 7,069,978     $ 6,997,083     $ 7,067,665     $ 6,697,316     $ 6,314,744  
Tangible common equity to total tangible assets - non-GAAP     9.06 %     8.78 %     8.39 %     8.59 %     8.75 %
                                         

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 tornadoes, 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)                                        
    2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017
CONSOLIDATED STATEMENT OF INCOME                                        
Interest income   $ 78,396     $ 74,009     $ 72,060     $ 67,641     $ 63,538  
Interest expense     13,874       11,573       10,652       9,245       7,971  
Net interest income     64,522       62,436       61,408       58,396       55,567  
Provision for loan losses     4,121       4,139       9,055       4,803       4,381  
Net interest income after provision for loan losses     60,401       58,297       52,353       53,593       51,186  
Non-interest income     5,459       4,869       4,905       4,790       4,805  
Non-interest expense     24,010       23,512       21,255       21,497       21,875  
Income before income tax     41,850       39,654       36,003       36,886       34,116  
Provision for income tax     8,310       7,051       14,853       11,627       9,952  
Net income     33,540       32,603       21,150       25,259       24,164  
Preferred stock dividends     31       -       31       -       31  
Net income available to common stockholders   $ 33,509     $ 32,603     $ 21,119     $ 25,259     $ 24,133  
Earnings per share - basic   $ 0.63     $ 0.61     $ 0.40     $ 0.48     $ 0.46  
Earnings per share - diluted   $ 0.62     $ 0.60     $ 0.39     $ 0.47     $ 0.45  
Average diluted shares outstanding     54,196,023       54,183,400       54,161,788       54,099,672       54,100,604  
                                         
CONSOLIDATED BALANCE SHEET DATA                                        
Total assets   $ 7,084,562     $ 7,011,735     $ 7,082,384     $ 6,712,103     $ 6,329,599  
Loans     6,129,649       5,928,327       5,851,261       5,628,765       5,343,688  
Debt securities     583,799       560,885       538,330       522,724       518,065  
Non-interest-bearing demand deposits     1,481,447       1,407,592       1,440,326       1,405,965       1,373,353  
Total deposits     6,085,682       5,977,387       6,091,674       5,796,901       5,394,810  
Borrowings     64,648       64,739       64,832       54,975       55,075  
Stockholders' equity   $ 655,114     $ 629,297     $ 607,604     $ 590,213     $ 567,086  
                                         
Shares outstanding     53,150,733       53,147,169       52,992,586       52,970,310       52,909,362  
Book value per share   $ 12.33     $ 11.84     $ 11.47     $ 11.14     $ 10.72  
Tangible book value per share (1)   $ 12.05     $ 11.56     $ 11.19     $ 10.86     $ 10.44  
                                         
SELECTED FINANCIAL RATIOS                                        
Net interest margin     3.82 %     3.81 %     3.66 %     3.77 %     3.77 %
Return on average assets     1.91 %     1.91 %     1.20 %     1.55 %     1.55 %
Return on average common stockholders' equity     20.89 %     21.40 %     13.97 %     17.28 %     17.36 %
Efficiency ratio     34.31 %     34.93 %     32.05 %     34.02 %     36.23 %
Non-interest expense to average earning assets     1.42 %     1.43 %     1.26 %     1.38 %     1.47 %
                                         
CAPITAL RATIOS (2)                                        
Common equity tier 1 capital to risk-weighted assets     10.08 %     9.88 %     9.51 %     9.60 %     9.72 %
Tier 1 capital to risk-weighted assets     10.08 %     9.88 %     9.52 %     9.61 %     9.73 %
Total capital to risk-weighted assets     12.10 %     11.91 %     11.52 %     11.51 %     11.67 %
Tier 1 capital to average assets     9.21 %     8.95 %     8.51 %     8.91 %     8.88 %
Tangible common equity to total tangible assets (1)     9.06 %     8.78 %     8.39 %     8.59 %     8.75 %
                                         
(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)                  
        June 30, 2018   June 30, 2017   % Change
ASSETS                  
Cash and due from banks   $ 68,344     $ 71,181     (4 ) %
Interest-bearing balances due from depository institutions     81,742       134,694     (39 ) %
Federal funds sold     15,585       49,443     (68 ) %
  Cash and cash equivalents     165,671       255,318     (35 ) %
Available for sale debt securities, at fair value     583,549       438,808     33   %
Held to maturity debt securities (fair value of $250 and $80,532 at                  
  June 30, 2018 and 2017, respectively)     250       79,257     (100 ) %
Restricted equity securities     993       1,037     (4 ) %
Mortgage loans held for sale     4,605       5,673     (19 ) %
Loans     6,129,649       5,343,688     15   %
Less allowance for loan losses     (64,239 )     (55,059 )   17   %
  Loans, net     6,065,410       5,288,629     15   %
Premises and equipment, net     58,299       51,797     13   %
Goodwill and other identifiable intangible assets     14,584       14,855     (2 ) %
Other assets     191,200       194,225     (2 ) %
  Total assets   $ 7,084,562     $ 6,329,599     12   %
LIABILITIES AND STOCKHOLDERS' EQUITY                  
Liabilities:                  
Deposits:                  
  Non-interest-bearing   $ 1,481,447     $ 1,373,353     8   %
  Interest-bearing     4,604,235       4,021,457     14   %
    Total deposits     6,085,682       5,394,810     13   %
Federal funds purchased     262,659       300,226     (13 ) %
Other borrowings     64,648       55,075     17   %
Other liabilities     16,459       12,402     33   %
  Total liabilities     6,429,448       5,762,513     12   %
Stockholders' equity:                  
  Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at                  
    June 30, 2018 and June 30, 2017     -       -     -   %
  Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,150,733 shares                  
    issued and outstanding at June 30, 2018, and 52,909,362 shares issued and outstanding                  
    at June 30, 2017     53       53     -   %
  Additional paid-in capital     217,765       217,271     -   %
  Retained earnings     443,972       348,517     27   %
  Accumulated other comprehensive income     (7,178 )     743     N/M    
  Noncontrolling interest     502       502     -   %
    Total stockholders' equity     655,114       567,086     16   %
  Total liabilities and stockholders' equity   $ 7,084,562     $ 6,329,599     12   %
                           


                   
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                  
(In thousands except per share data)                        
      Three Months Ended June 30,   Six Months Ended June 30,
      2018   2017   2018   2017
Interest income:                        
  Interest and fees on loans   $ 73,620   $ 59,912   $ 143,294   $ 115,468
  Taxable securities     3,127     2,274     5,872     4,361
  Nontaxable securities     623     752     1,279     1,517
  Federal funds sold     694     287     1,245     806
  Other interest and dividends     332     313     715     903
  Total interest income     78,396     63,538     152,405     123,055
Interest expense:                        
  Deposits     11,714     6,321     21,335     12,303
  Borrowed funds     2,160     1,650     4,112     3,133
  Total interest expense     13,874     7,971     25,447     15,436
  Net interest income     64,522     55,567     126,958     107,619
Provision for loan losses     4,121     4,381     8,260     9,367
  Net interest income after provision for loan losses     60,401     51,186     118,698     98,252
Non-interest income:                        
  Service charges on deposit accounts     1,653     1,382     3,238     2,736
  Mortgage banking     789     1,064     1,307     1,963
  Credit card income     1,756     1,189     3,334     2,368
  Securities gains     -     -     4     -
  Increase in cash surrender value life insurance     786     785     1,563     1,509
  Other operating income     475     385     882     775
  Total non-interest income     5,459     4,805     10,328     9,351
Non-interest expense:                        
  Salaries and employee benefits     13,098     12,031     26,394     23,744
  Equipment and occupancy expense     2,113     2,265     4,067     4,505
  Professional services     924     808     1,729     1,579
  FDIC and other regulatory assessments     1,159     1,081     2,292     2,078
  Other real estate owned expense     160     56     476     132
  Other operating expense     6,556     5,634     12,564     11,104
  Total non-interest expense     24,010     21,875     47,522     43,142
  Income before income tax     41,850     34,116     81,504     64,461
Provision for income tax     8,310     9,952     15,361     17,778
  Net income     33,540     24,164     66,143     46,683
  Dividends on preferred stock     31     31     31     31
  Net income available to common stockholders   $ 33,509   $ 24,133   $ 66,112   $ 46,652
Basic earnings per common share   $ 0.63   $ 0.46   $ 1.24   $ 0.88
Diluted earnings per common share   $ 0.62   $ 0.45   $ 1.22   $ 0.86
                         


                               
LOANS BY TYPE (UNAUDITED)                              
(In thousands)                              
                                 
      2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017
Commercial, financial and agricultural   $ 2,345,879   $ 2,329,904   $ 2,279,366   $ 2,223,910   $ 2,123,498
Real estate - construction     522,788     506,050     580,874     467,838     395,398
Real estate - mortgage:                              
  Owner-occupied commercial     1,383,882     1,349,679     1,328,666     1,323,383     1,272,659
  1-4 family mortgage     584,133     581,498     603,063     593,180     565,121
  Other mortgage     1,225,906     1,099,482     997,079     962,690     931,788
Subtotal: Real estate - mortgage     3,193,921     3,030,659     2,928,808     2,879,253     2,769,568
Consumer     67,061     61,714     62,213     57,764     55,224
Total loans   $ 6,129,649   $ 5,928,327   $ 5,851,261   $ 5,628,765   $ 5,343,688
                               


                                   
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                                  
(Dollars in thousands)                                  
          2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017
Allowance for loan losses:                                        
Beginning balance   $ 62,050       $ 59,406       $ 58,459       $ 55,059       $ 53,892    
Loans charged off:                                        
  Commercial, financial and agricultural     1,732         1,088         7,064         924         3,067    
  Real estate - construction     -         -         -         16         40    
  Real estate - mortgage     440         381         1,134         550         106    
  Consumer     47         88         137         65         33    
    Total charge offs     2,219         1,557         8,335         1,555         3,246    
Recoveries:                                        
  Commercial, financial and agricultural     173         4         64         67         16    
  Real estate - construction     97         7         126         12         14    
  Real estate - mortgage     2         42         26         59         2    
  Consumer     15         9         11         14         -    
    Total recoveries     287         62         227         152         32    
  Net charge-offs     1,932         1,495         8,108         1,403         3,214    
  Provision for loan losses     4,121         4,139         9,055         4,803         4,381    
  Ending balance   $ 64,239       $ 62,050       $ 59,406       $ 58,459       $ 55,059    
                                               
  Allowance for loan losses to total loans     1.05   %     1.05   %     1.02   %     1.04   %     1.03   %
  Allowance for loan losses to total average                                        
    loans     1.07   %     1.05   %     1.04   %     1.07   %     1.05   %
  Net charge-offs to total average loans     0.13   %     0.10   %     0.56   %     0.10   %     0.25   %
  Provision for loan losses to total average                                        
    loans     0.28   %     0.29   %     0.63   %     0.35   %     0.34   %
  Nonperforming assets:                                        
    Nonaccrual loans   $ 8,022       $ 9,271       $ 10,765       $ 12,356       $ 9,963    
    Loans 90+ days past due and accruing     6,081         678         60         2,506         1,016    
    Other real estate owned and                                        
    repossessed assets     5,937         5,748         6,701         3,888         3,891    
  Total   $ 20,040       $ 15,697       $ 17,526       $ 18,750       $ 14,870    
                                               
  Nonperforming loans to total loans     0.23   %     0.17   %     0.19   %     0.26   %     0.21   %
  Nonperforming assets to total assets     0.28   %     0.22   %     0.25   %     0.28   %     0.23   %
  Nonperforming assets to earning assets     0.29   %     0.23   %     0.25   %     0.29   %     0.24   %
  Reserve for loan losses to nonaccrual loans     800.79   %     669.29   %     551.84   %     473.12   %     552.63   %
                                               
  Restructured accruing loans   $ 15,572       $ 15,838       $ 16,919       $ 12,700       $ 12,716    
                                               
  Restructured accruing loans to total loans     0.25   %     0.27   %     0.29   %     0.23   %     0.24   %
                                               
  TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)                          
  (In thousands)                                
          2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd Quarter 2017
  Beginning balance:   $ 18,792       $ 20,572       $ 16,354       $ 16,370       $ 7,269    
    Additions     -         -         4,233         -         12,716    
    Removal from TDR     -         -         -         -         (535 )  
    Net (paydowns) / advances     (267 )       (1,080 )       (15 )       (16 )       (1,380 )  
    Charge-offs     (1,268 )       (700 )       -         -         (1,700 )  
          $ 17,257       $ 18,792       $ 20,572       $ 16,354       $ 16,370    
                                                         


                   
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                  
(In thousands except per share data)                  
        2nd Quarter
2018
  1st Quarter
2018
  4th Quarter
2017
  3rd Quarter
2017
  2nd Quarter
2017
Interest income:                              
  Interest and fees on loans   $ 73,620   $ 69,674   $ 67,357   $ 63,857   $ 59,912
  Taxable securities     3,127     2,745     2,468     2,288     2,274
  Nontaxable securities     623     656     702     729     752
  Federal funds sold     694     551     508     379     287
  Other interest and dividends     332     383     1,025     388     313
  Total interest income     78,396     74,009     72,060     67,641     63,538
  Deposits     11,714     9,621     8,954     7,574     6,321
  Borrowed funds     2,160     1,952     1,698     1,671     1,650
  Total interest expense     13,874     11,573     10,652     9,245     7,971
  Net interest income     64,522     62,436     61,408     58,396     55,567
Provision for loan losses     4,121     4,139     9,055     4,803     4,381
  Net interest income after provision for loan losses     60,401     58,297     52,353     53,593     51,186
  Service charges on deposit accounts     1,653     1,585     1,499     1,467     1,382
  Mortgage banking     789     518     894     978     1,064
  Credit card income     1,756     1,578     1,298     1,149     1,189
  Securities gains     -     4     -     -     -
  Increase in cash surrender value life insurance     786     777     797     825     785
  Other operating income     475     407     417     371     385
  Total non-interest income     5,459     4,869     4,905     4,790     4,805
  Salaries and employee benefits     13,098     13,296     11,432     12,428     12,031
  Equipment and occupancy expense     2,113     1,954     1,566     1,947     2,265
  Professional services     924     805     833     805     808
  FDIC and other regulatory assessments     1,159     1,133     1,030     810     1,081
  Other real estate owned expense     160     316     160     31     56
  Other operating expense     6,556     6,008     6,234     5,476     5,634
  Total non-interest expense     24,010     23,512     21,255     21,497     21,875
  Income before income tax     41,850     39,654     36,003     36,886     34,116
Provision for income tax     8,310     7,051     14,853     11,627     9,952
  Net income     33,540     32,603     21,150     25,259     24,164
  Dividends on preferred stock     31     -     31     -     31
  Net income available to common stockholders   $ 33,509   $ 32,603   $ 21,119   $ 25,259   $ 24,133
Basic earnings per common share   $ 0.63   $ 0.61   $ 0.40   $ 0.48   $ 0.46
Diluted earnings per common share   $ 0.62   $ 0.60   $ 0.39   $ 0.47   $ 0.45
                               


 
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
 
                                                                     
            2nd Quarter 2018   1st Quarter 2018   4th Quarter 2017   3rd Quarter 2017   2nd 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   $ 5,958,377     4.94 %   $ 5,847,443     4.81 %   $ 5,680,227   4.68 %   $ 5,407,109   4.66 %   $ 5,192,812   4.60 %
    Tax-exempt (2)     30,246     3.94       36,357     4.06       36,992   4.95       33,357   5.17       41,143   4.92  
      Total loans, net of                                                            
        unearned income     5,988,623     4.93       5,883,800     4.80       5,717,219   4.68       5,440,466   4.66       5,233,955   4.60  
  Mortgage loans held for sale     3,770     4.26       3,698     4.50       6,199   3.52       4,862   3.51       5,958   3.90  
  Debt securities:                                                            
    Taxable     475,777     2.63       435,747     2.52       406,488   2.43       385,431   2.37       389,505   2.34  
    Tax-exempt (2)     112,145     2.60       120,270     2.56       128,201   3.27       131,478   3.34       133,590   3.38  
      Total securities (3)     587,922     2.62       556,017     2.53       534,689   2.63       516,909   2.62       523,095   2.60  
  Federal funds sold     141,915     1.96       131,472     1.70       143,905   1.40       111,175   1.35       98,598   1.17  
  Restricted equity securities     1,022     1.57       1,030     1.57       1,030   1.93       1,030   3.47       1,030   10.51  
  Interest-bearing balances with banks     73,714     1.80       96,012     1.60       310,289   1.31       118,510   1.27       109,909   1.04  
  Total interest-earning assets   $ 6,796,966     4.64 %   $ 6,672,029     4.51 %   $ 6,713,331   4.29 %   $ 6,192,952   4.37 %   $ 5,972,545   4.30 %
Non-interest-earning assets:                                                            
  Cash and due from banks     68,190             68,309             68,444           65,457           68,894      
  Net premises and equipment     59,262             59,709             57,320           54,727           49,813      
  Allowance for loan losses, accrued                                                            
    interest and other assets     129,585             140,558             149,636           151,786           143,286      
      Total assets   $ 7,054,003           $ 6,940,605           $ 6,988,731         $ 6,464,922         $ 6,234,538      
                                                                     
Interest-bearing liabilities:                                                            
  Interest-bearing deposits:                                                            
  Checking   $ 827,540     0.56 %   $ 899,311     0.52 %   $ 899,334   0.46 %   $ 800,437   0.42 %   $ 779,916   0.39 %
  Savings     54,842     0.34       53,269     0.31       49,697   0.31       48,313   0.30       48,150   0.30  
  Money market     3,089,595     1.10       3,027,176     0.90       3,065,298   0.80       2,774,061   0.74       2,567,817   0.64  
  Time deposits     596,450     1.36       576,857     1.21       576,010   1.16       546,020   1.10       537,220   1.06  
    Total interest-bearing deposits     4,568,427     1.03       4,556,613     0.86       4,590,339   0.77       4,168,831   0.72       3,933,103   0.64  
  Federal funds purchased     295,309     1.87       297,051     1.60       271,248   1.37       282,806   1.34       336,344   1.11  
  Other borrowings     64,699     4.84       64,805     4.89       60,829   4.98       55,034   5.17       55,130   5.22  
  Total interest-bearing liabilities   $ 4,928,435     1.13 %   $ 4,918,469     0.95 %   $ 4,922,416   0.86 %   $ 4,506,671   0.81 %   $ 4,324,577   0.74 %
Non-interest-bearing liabilities:                                                            
  Non-interest-bearing                                                            
    demand     1,469,194             1,389,217             1,444,338           1,363,207           1,338,514      
  Other liabilities     13,079             15,007             22,029           15,070           13,739      
  Stockholders' equity     650,641             621,004             599,754           578,626           556,521      
  Unrealized gains on securities and                                                            
    derivatives     (7,346 )           (3,092 )           194           1,348           1,187      
      Total liabilities and                                                            
        stockholders' equity   $ 7,054,003           $ 6,940,605           $ 6,988,731         $ 6,464,922         $ 6,234,538      
Net interest spread         3.51 %         3.56 %         3.43 %         3.56 %         3.56 %
Net interest margin         3.82 %         3.81 %         3.66 %         3.77 %         3.77 %
                                                                     
(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 quarters in 2018 and 35% for the quarters in 2017.
(3 ) Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.