GlobeNewswire Inc | Oct 19, 2020 04:01PM EDT

October 19, 2020

BIRMINGHAM, Ala., Oct. 19, 2020 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS), today announced earnings and operating results for the three and nine months ended September 30, 2020.

Third Quarter 2020 Highlights:

-- Diluted EPS for the third quarter increased 16% to $0.80 year over year -- Deposits grew 14% annualized during the third quarter -- Loans, excluding Paycheck Protection Program (PPP) loans, grew 10% annualized during the third quarter -- Efficiency ratio improved to 28.50% during the third quarter 2020 -- Liquidity remains strong with liquid assets to total deposits of 22% -- Our $34.5 million of 5% Subordinated Notes due July 15, 2025 are being refinanced with a $37 million offering of subordinated notes with an interest rate of 4% during the fourth quarter of 2020

Tom Broughton, Chairman, President and CEO, said, I am pleased to see a rebound in loan demand from the early months of the pandemic. This is a very positive sign for the Southeastern US economy.

Bud Foshee, CFO, said, We continue to have a strong balance sheet with good credit quality and strong liquidity. This strong balance sheet has enabled us to perform above our peers during the pandemic.

FINANCIAL SUMMARY (UNAUDITED)(in Thousands except share and per share amounts)

% Change % Change From From Period Period Ending Ending Period Ending June Period Ending September September 30, Period Ending 30, 2020 September 30, 30, 2020 June 30, 2020 to 2019 2019 to Period Period Ending Ending September September 30, 2020 30, 2020QUARTERLY OPERATING RESULTSNet Income $ 43,362 $ 40,448 7 % $ 37,563 15 %Net Income Availableto Common $ 43,362 $ 40,417 7 % $ 37,563 15 %StockholdersDiluted Earnings Per $ 0.80 $ 0.75 7 % $ 0.69 16 %ShareReturn on Average 1.54 % 1.55 % 1.67 % AssetsReturn on AverageCommon Stockholders' 18.43 % 18.40 % 18.69 % EquityAverage Diluted 54,232,965 54,194,506 54,096,368 Shares Outstanding YEAR-TO-DATE OPERATING RESULTSNet Income $ 118,588 $ 108,206 10 %Net Income Availableto Common $ 118,557 $ 108,175 10 %StockholdersDiluted Earnings Per $ 2.19 $ 2.00 9 %ShareReturn on Average 1.54 % 1.70 % AssetsReturn on AverageCommon Stockholders' 17.73 % 18.93 % EquityAverage Diluted 54,198,422 54,087,410 Shares Outstanding BALANCE SHEET Total Assets $ 11,394,874 $ 11,012,195 3 % $ 9,005,112 27 %Loans 8,508,554 8,315,375 2 % 7,022,069 21 %Non-interest-bearing 2,762,814 2,678,893 3 % 1,678,672 65 %Demand DepositsTotal Deposits 9,673,783 9,342,918 4 % 7,724,158 25 %Stockholders' Equity 949,589 914,588 4 % 810,537 17 %

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $43.4 million for the quarter ended September 30, 2020, compared to net income and net income available to common stockholders of $37.6 million for the same quarter in 2019. Basic and diluted earnings per common share were $0.80 and $0.80, respectively, for the third quarter of 2020, compared to $0.70 and $0.69, respectively, for the third quarter of 2019.

Annualized return on average assets was 1.54% and annualized return on average common stockholders equity was 18.43% for the third quarter of 2020, compared to 1.67% and 18.69%, respectively, for the third quarter of 2019.

Net interest income was $85.1 million for the third quarter of 2020, compared to $83.2 million for the second quarter of 2020 and $73.0 million for the third quarter of 2019. The net interest margin in the third quarter of 2020 was 3.14% compared to 3.32% in the second quarter of 2020 and 3.36% in the third quarter of 2019. Origination of PPP loans and increased excess liquidity drove unfavorable rate and mix changes while lower deposit rates and increases in noninterest bearing demand balances drove favorable rate and mix changes, respectively. Accretion of net fees on PPP loans of $4.0 million during the third quarter of 2020 offset the decrease in loan yield by approximately 19 basis points.

Average loans for the third quarter of 2020 were $8.36 billion, an increase of $31.5 million, or 2% annualized, over average loans of $8.33 billion for the second quarter of 2020, and an increase of $1.40 billion, or 20%, over average loans of $6.96 billion for the third quarter of 2019. We originated over 4,900 PPP loans during 2020 for a total of $1.05 billion. Excluding PPP loans, average loans for the third quarter of 2020 were $7.31 billion, a decrease of $136.0 million compared to the second quarter of 2020, and an increase of $350.6 million, or 5%, over average loans for the third quarter of 2019.

Average total deposits for the third quarter of 2020 were $9.47 billion, an increase of $595.4 million, or 27% annualized, over average total deposits of $8.87 billion for the second quarter of 2020, and an increase of $1.89 billion, or 25%, over average total deposits of $7.58 billion for the third quarter of 2019.

Nonperforming assets to total assets were 0.29% for the third quarter of 2020, an increase of three basis points compared to 0.26% for the second quarter of 2020 and a decrease of 23 basis points compared to 0.52% for the third quarter of 2019. Annualized net charge-offs to average loans were 0.54%, a 34 basis-point increase compared to 0.20% for the second quarter of 2020 and an increase of five basis points compared to 0.49% for the third quarter of 2019. The increase in net charge-offs for the third quarter of 2020 was due to a $7.2 million loan charge-off on a borrower severely impacted by the COVID-19 pandemic. We recorded a $12.3 million provision for loan losses in the third quarter of 2020 compared to $10.3 million in the second quarter of 2020 and $7.0 million in the third quarter of 2019. The allowance for loan loss as a percentage of total loans was 1.09% at September 30, 2020, a decrease of one basis point compared to 1.10% at June 30, 2020 and September 30, 2019, respectively. Excluding PPP loans, for all periods discussed, the allowance for loan loss as a percentage of total loans was 1.24% at September 30, 2020, a decrease of two basis points compared to 1.26% at June 30, 2020 and an increase of 14 basis points compared to 1.10% at September 30, 2019. The CARES Act, passed into law on March 27, 2020 as a result of the COVID-19 outbreak, allows companies to delay their adoption of Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), including the current expected credit losses methodology for estimating allowances for credit losses. We have elected to delay adoption of ASU 2016-13 until the date on which the national emergency concerning the COVID-19 outbreak terminates or December 31, 2020, with an effective retrospective implementation date of January 1, 2020. In managements opinion, the allowance is adequate and was determined by consistent application of ServisFirst Banks methodology for calculating its allowance for loan losses.

Noninterest income for the third quarter of 2020 increased $2.0 million, or 32%, to $8.2 million from $6.2 million in the third quarter of 2019. Mortgage banking revenue increased $1.2 million, or 89%, from the third quarter of 2019 to the third quarter of 2020. Mortgage loan origination volumes increased approximately 96% during the third quarter of 2020 when compared to the same quarter in 2019. Credit card revenue decreased $28,000, or 2%, to $1.8 million during the third quarter of 2020, compared to the third quarter of 2019. The amount of spend on purchase cards increased $23.0 million while the amount of spend on business credit cards decreased $8.0 million during the third quarter of 2020 when compared to the third quarter of 2019. Purchase card spend carries lower profit margins than credit cards due to their higher rebates. Income on life insurance policies increased $946,000, or 120%, to $1.7 million during the third quarter of 2020, compared to $787,000 during the third quarter of 2019. We purchased $75.0 million in BOLI contracts at the end of the third quarter of 2019 and another $40.0 million in July 2020. Other income for the third quarter of 2020 decreased $191,000, or 42%, to $262,000 from $453,000 in the third quarter of 2019. On May 4, 2020 we bought an interest rate cap with a term of three years and a notional amount of $300 million. The cap is tied to one-month LIBOR with a strike rate of 0.50%. We wrote down the value of the cap by $342,000 during the third quarter of 2020 and by $595,000 year-to-date through other income and are amortizing the fee paid to our counterparty over the life of the cap.

Noninterest expense for the third quarter of 2020 increased $1.4 million, or 6%, to $26.6 million from $25.2 million in the third quarter of 2019, and decreased $2.2 million, or 8%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2020 decreased $505,000, or 3%, to $15.0 million from $15.5 million in the third quarter of 2019, and decreased $798,000, or 5%, on a linked quarter basis. Costs to originate PPP loans totaling $2.4 million were incurred during the second quarter of 2020. These costs were credited against salary and benefits as a deferred expense and will be amortized over the life of the loans by netting them against accretion of deferred origination fees. Bonuses of approximately $2.5 million were paid during the second quarter of 2020 related to work performed on the PPP. Additional bonuses of $71,000 were paid to front-line employees who continued to assist customers during the peak of the pandemic. The number of FTE employees decreased to 486 as of September 30, 2020 compared to 492 as of June 30, 2020 and 506 as of September 30, 2019. Equipment and occupancy expense increased $169,000, or 7%, to $2.6 million in the third quarter of 2020, from $2.4 million in the third quarter of 2019. Third party processing expenses increased $358,000, or 12%, to $3.3 million in the third quarter of 2020, from $2.9 million in the third quarter of 2019. Professional services expense increased $68,000, or 8%, to $955,000 in the third quarter of 2020, from $887,000 in the third quarter of 2019, and decreased $136,000, or 12%, from $1.1 million on a linked-quarter basis. FDIC and other regulatory assessments were $1.1 million in the third quarter of 2020 compared to a credit of $296,000 in the third quarter of 2019. The net assessment credit for the third quarter of 2019 resulted from the FDICs Small Bank Assessment Credit recorded by the Bank. Expenses associated with other real estate owned increased $41,000 to $119,000 in the third quarter of 2020, from $78,000 in the third quarter of 2019. Other operating expenses for the third quarter of 2020 decreased $76,000, or 2%, to $3.6 million from $3.7 million in the third quarter of 2019, and decreased $481,000, or 12%, on a linked-quarter basis. The efficiency ratio was 28.50% during the third quarter of 2020 compared to 31.76% during the third quarter of 2019 and compared to 31.92% during the second quarter of 2020.

Income tax expense increased $1.5 million, or 16%, to $11.0 million in the third quarter of 2020, compared to $9.5 million in the third quarter of 2019. Our effective tax rate was 20.29% for the third quarter of 2020 compared to 20.20% for the third quarter of 2019. State of Alabama tax credit investments matured at the end of 2019, causing our state credit amounts to decrease from $497,000 during the third quarter of 2019 to $132,000 during the third quarter of 2020. We 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 third quarters of 2020 and 2019 of $180,000 and $231,000, respectively.

The Companys 5% Subordinated Notes due July 15, 2025 became redeemable in July 2020. Those Notes are being redeemed in the fourth quarter of 2020 and replaced with up to $37 million in 4% subordinated notes to be offered to holders of the redeemed Notes.

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.

September 30, June 30, 2020 March 31, 2020 December 31, September 30, 2020 2019 2019Book valueper share - $ 17.61 $ 16.98 $ 16.38 $ 15.71 $ 15.13 GAAPTotal commonstockholders' 949,589 914,588 881,885 842,682 810,537 equity - GAAPAdjustments: Adjusted forgoodwill andcore deposit 13,976 14,043 14,111 14,179 14,246 intangibleassetTangiblecommonstockholders' $ 935,613 $ 900,545 $ 867,775 $ 828,503 $ 796,291 equity -non-GAAPTangible bookvalue per $ 17.35 $ 16.72 $ 16.12 $ 15.45 $ 14.86 share -non-GAAP Stockholders'equity to 8.33 % 8.31 % 9.42 % 9.42 % 9.00 %total assets- GAAPTotal assets $ 11,394,874 $ 11,012,195 $ 9,364,882 $ 8,947,653 $ 9,005,112 - GAAPAdjustments: Adjusted forgoodwill andcore deposit 13,976 14,043 14,111 14,179 14,246 intangibleassetTotaltangible $ 11,380,898 $ 10,998,152 $ 9,350,771 $ 8,933,474 $ 8,990,866 assets -non-GAAPTangiblecommon equityto total 8.22 % 8.19 % 9.28 % 9.27 % 8.86 %tangibleassets -non-GAAP

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, Sarasota 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 SECs 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, could, 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, but not limited to the global health and economic crisis precipitated by the COVID-19 outbreak; 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; economic crisis and associated credit issues in industries most impacted by the COVID-19 outbreak, including but not limited to, the restaurant, hospitality and retail sectors; 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, in our Quarterly Reports on Form 10-Q for fiscal year 2020, 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 BankDavis Mange (205) 949-3420dmange@servisfirstbank.com

SELECTED FINANCIAL HIGHLIGHTS (Unaudited)(In thousands except share and per share data) 3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019CONSOLIDATED STATEMENT OF INCOMEInterest income $ 96,110 $ 95,080 $ 96,767 $ 98,187 $ 101,130 Interest expense 11,028 11,846 19,127 22,410 28,125 Net interest income 85,082 83,234 77,640 75,777 73,005 Provision for loan 12,284 10,283 13,584 5,884 6,985 lossesNet interest incomeafter provision for 72,798 72,951 64,056 69,893 66,020 loan lossesNon-interest income 8,172 7,033 6,674 6,936 6,202 Non-interest expense 26,573 28,816 27,920 25,503 25,153 Income before income 54,397 51,168 42,810 51,326 47,069 taxProvision for income 11,035 10,720 8,032 10,289 9,506 taxNet income 43,362 40,448 34,778 41,037 37,563 Preferred stock - 31 - 32 - dividendsNet income availableto common $ 43,362 $ 40,417 $ 34,778 $ 41,005 $ 37,563 stockholdersEarnings per share - $ 0.80 $ 0.75 $ 0.65 $ 0.77 $ 0.70 basicEarnings per share - $ 0.80 $ 0.75 $ 0.64 $ 0.76 $ 0.69 dilutedAverage diluted 54,232,965 54,194,506 54,167,414 54,149,554 54,096,368 shares outstanding CONSOLIDATED BALANCE SHEET DATATotal assets $ 11,394,874 $ 11,012,195 $ 9,364,882 $ 8,947,653 $ 9,005,112 Loans 8,508,554 8,315,375 7,568,836 7,261,451 7,022,069 Debt securities 913,299 856,378 827,032 759,649 688,271 Non-interest-bearing 2,762,814 2,678,893 1,925,626 1,749,879 1,678,672 demand depositsTotal deposits 9,673,783 9,342,918 7,832,655 7,530,433 7,724,158 Borrowings 64,719 64,715 64,707 64,703 64,693 Stockholders' equity $ 949,589 $ 914,588 $ 881,885 $ 842,682 $ 810,537 Shares outstanding 53,915,245 53,874,276 53,844,009 53,623,740 53,579,013 Book value per share $ 17.61 $ 16.98 $ 16.38 $ 15.71 $ 15.13 Tangible book value $ 17.35 $ 16.72 $ 16.12 $ 15.45 $ 14.86 per share (1) SELECTED FINANCIAL RATIOS (Annualized)Net interest margin 3.14 % 3.32 % 3.58 % 3.47 % 3.36 %Return on average 1.54 % 1.55 % 1.54 % 1.80 % 1.67 %assetsReturn on averagecommon stockholders' 18.43 % 18.40 % 16.23 % 19.75 % 18.69 %equityEfficiency ratio 28.50 % 31.92 % 33.11 % 30.83 % 31.76 %Non-interest expenseto average earning 0.98 % 1.15 % 1.29 % 1.17 % 1.16 %assets CAPITAL RATIOS (2) Common equity tier 1capital to 11.24 % 11.26 % 10.68 % 10.50 % 10.39 %risk-weighted assetsTier 1 capital to 11.25 % 11.27 % 10.68 % 10.50 % 10.39 %risk-weighted assetsTotal capital to 13.10 % 13.27 % 12.54 % 12.31 % 12.27 %risk-weighted assetsTier 1 capital to 8.22 % 8.46 % 9.56 % 9.13 % 8.88 %average assetsTangible commonequity to total 8.22 % 8.19 % 9.28 % 9.27 % 8.86 %tangible assets (1) (1) See "GAAP Reconciliation and Management Explanation of Non-GAAP FinancialMeasures" 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) September 30, September 30, % Change 2020 2019ASSETS Cash and due from banks $ 70,472 $ 108,804 (35 ) %Interest-bearing balances due 1,551,597 463,625 235 %from depository institutionsFederal funds sold 1,302 474,298 (100 ) % Cash and cash equivalents 1,623,371 1,046,727 55 %Available for sale debt 913,049 688,021 33 %securities, at fair valueHeld to maturity debtsecurities (fair value of 250 250 - %$250 at September 30, 2020and 2019)Mortgage loans held for sale 21,472 8,691 147 %Loans 8,508,554 7,022,069 21 %Less allowance for loan (92,440 ) (77,192 ) 20 %losses Loans, net 8,416,114 6,944,877 21 %Premises and equipment, net 55,273 56,570 (2 ) %Goodwill and otheridentifiable intangible 13,976 14,246 (2 ) %assetsOther assets 351,369 245,730 43 % Total assets $ 11,394,874 $ 9,005,112 27 %LIABILITIES AND STOCKHOLDERS' EQUITYLiabilities: Deposits: Non-interest-bearing $ 2,762,814 $ 1,678,672 65 % Interest-bearing 6,910,969 6,045,486 14 % Total deposits 9,673,783 7,724,158 25 %Federal funds purchased 669,350 370,231 81 %Other borrowings 64,719 64,693 - %Other liabilities 37,433 35,493 5 % Total liabilities 10,445,285 8,194,575 27 %Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at September 30, 2020 and - - September 30, 2019 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,915,245 shares issued and outstanding at September 30, 2020, and 53,579,113 shares issued and outstanding at September 30, 2019 54 54 - % Additional paid-in capital 223,280 219,234 2 % Retained earnings 706,924 584,968 21 % Accumulated other 18,831 5,779 226 % comprehensive income Total stockholders' equity attributable to 949,089 810,035 17 % ServisFirst Bancshares, Inc. Noncontrolling interest 500 502 - % Total stockholders' 949,589 810,537 17 % equity Total liabilities and $ 11,394,874 $ 9,005,112 27 % stockholders' equity

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Interest income: Interest and fees $ 89,564 $ 90,767 $ 268,332 $ 264,901 on loans Taxable securities 5,858 4,367 16,104 12,306 Nontaxable 166 316 610 1,155 securities Federal funds sold 16 1,768 327 4,985 Other interest and 506 3,912 2,584 9,269 dividends Total interest 96,110 101,130 287,957 292,616 incomeInterest expense: Deposits 9,876 24,787 37,377 71,172 Borrowed funds 1,152 3,338 4,624 9,576 Total interest 11,028 28,125 42,001 80,748 expense Net interest income 85,082 73,005 245,956 211,868Provision for loan 12,284 6,985 36,151 16,754losses Net interest income after provision for 72,798 66,020 209,805 195,114 loan lossesNon-interest income: Service charges on 1,818 1,735 5,557 5,223 deposit accounts Mortgage banking 2,519 1,333 5,697 2,995 Credit card income 1,840 1,868 5,003 5,185 Securities gains - 34 - 28 Increase in cash surrender value 1,733 787 4,650 2,327 life insurance Other operating 262 453 972 1,172 income Total non-interest 8,172 6,210 21,879 16,930 incomeNon-interest expense: Salaries and 14,994 15,499 46,444 44,103 employee benefits Equipment and 2,556 2,387 7,390 6,933 occupancy expense Third party processing and 3,281 2,923 10,360 8,058 other services Professional 955 887 2,994 3,072 services FDIC and other regulatory 1,061 (296 ) 2,988 1,804 assessments (credits) Other real estate 119 78 2,023 312 owned expense Other operating 3,607 3,683 11,110 12,227 expense Total non-interest 26,573 25,161 83,309 76,509 expense Income before 54,397 47,069 148,375 135,535 income taxProvision for income tax 11,035 9,506 29,787 27,329 Net income 43,362 37,563 118,588 108,206 Dividends on - - 31 31 preferred stock Net income available to common $ 43,362 $ 37,563 $ 118,557 $ 108,175 stockholdersBasic earnings per $ 0.80 $ 0.70 $ 2.20 $ 2.02common shareDiluted earnings per $ 0.80 $ 0.69 $ 2.19 $ 2.00common share

LOANS BY TYPE (UNAUDITED)(In thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2020 2020 2020 2019 2019Commercial,financial and $ 3,466,189 $ 3,498,627 $ 2,771,307 $ 2,696,210 $ 2,653,934agriculturalReal estate - 530,919 544,586 548,578 521,392 550,871constructionReal estate - mortgage: Owner-occupied 1,725,222 1,634,495 1,678,532 1,587,478 1,526,911 commercial 1-4 family 671,841 665,883 675,870 644,188 632,346 mortgage Other mortgage 2,056,549 1,911,384 1,834,137 1,747,394 1,592,072Subtotal: Real 4,453,612 4,211,762 4,188,539 3,979,060 3,751,329estate - mortgageConsumer 57,834 60,400 60,412 64,789 65,935Total loans $ 8,508,554 $ 8,315,375 $ 7,568,836 $ 7,261,451 $ 7,022,069

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)(Dollars in thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2020 2020 2020 2019 2019Allowance for loan losses:Beginning balance $ 91,507 $ 85,414 $ 76,584 $ 77,192 $ 71,386 Loans charged off: Commercial, financial and 11,146 1,358 2,640 4,742 3,626 agricultural Real estate - - 376 454 - - construction Real estate - 200 2,520 1,678 1,689 4,974 mortgage Consumer 44 62 58 139 172 Total 11,390 4,316 4,830 6,570 8,772 charge offsRecoveries: Commercial, financial and 12 84 62 51 126 agricultural Real estate - - 1 1 1 1 construction Real estate - 12 13 1 2 - mortgage Consumer 15 28 12 24 60 Total 39 126 76 78 187 recoveries Net 11,351 4,190 4,754 6,492 8,585 charge-offs Allocation from Loan - - - - 7,406 Guarantee Program Provision for 12,284 10,283 13,584 5,884 6,985 loan losses Ending balance $ 92,440 $ 91,507 $ 85,414 $ 76,584 $ 77,192 Allowance for loan losses to 1.09 % 1.10 % 1.13 % 1.05 % 1.10 % total loans Allowance for loan losses to total average loans 1.11 % 1.10 % 1.16 % 1.08 % 1.11 % Net charge-offs to 0.54 % 0.20 % 0.26 % 0.36 % 0.49 % total average loans Provision for loan losses to total average loans 0.58 % 0.50 % 0.74 % 0.33 % 0.40 % Nonperforming assets: Nonaccrual $ 21,675 $ 16,881 $ 28,914 $ 30,091 $ 35,732 loans Loans 90+ days past 4,898 5,133 4,954 6,021 5,317 due and accruing Other real estate owned and repossessed 6,976 6,537 7,448 8,178 5,337 assets Total $ 33,549 $ 28,551 $ 41,316 $ 44,290 $ 46,386 Nonperforming loans to total 0.31 % 0.26 % 0.45 % 0.50 % 0.58 % loans Nonperforming assets to 0.29 % 0.26 % 0.44 % 0.50 % 0.52 % total assets Nonperforming assets to 0.30 % 0.26 % 0.45 % 0.50 % 0.53 % earning assets Reserve for loan losses to 426.48 % 542.07 % 295.41 % 254.51 % 216.03 % nonaccrual loans Restructured $ 1,800 $ 975 $ 975 $ 625 $ 3,468 accruing loans Restructured accruing loans 0.02 % 0.01 % 0.01 % 0.01 % 0.05 % to total loans TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) (In thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2020 2020 2020 2019 2019 Beginning $ 1,568 $ 2,367 $ 3,330 $ 11,248 $ 11,284 balance: Additions 1,182 - 350 250 - Net (paydowns) (12 ) (12 ) (232 ) (3,481 ) 714 / advances Charge-offs - (412 ) (1,081 ) (1,333 ) (750 ) Transfer to - (375 ) - (3,354 ) - OREO Ending balance $ 2,738 $ 1,568 $ 2,367 $ 3,330 $ 11,248

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) 3rd 2nd 1st 4th Quarter 3rd Quarter Quarter Quarter Quarter 2019 2019 2020 2020 2020Interest income: Interest and $ 89,564 $ 89,383 $ 89,385 $ 89,407 $ 90,767 fees on loans Taxable 5,858 5,092 5,154 4,702 4,367 securities Nontaxable 166 211 233 274 316 securities Federal funds 16 34 277 1,053 1,768 sold Other interest and 506 360 1,718 2,751 3,912 dividends Total interest 96,110 95,080 96,767 98,187 101,130 incomeInterest expense: Deposits 9,876 10,756 16,745 19,786 24,787 Borrowed 1,152 1,090 2,382 2,624 3,338 funds Total interest 11,028 11,846 19,127 22,410 28,125 expense Net interest 85,082 83,234 77,640 75,777 73,005 incomeProvision for 12,284 10,283 13,584 5,884 6,985 loan losses Net interest income after 72,798 72,951 64,056 69,893 66,020 provision for loan lossesNon-interest income: Service charges on 1,818 1,823 1,916 1,806 1,735 deposit accounts Mortgage 2,519 2,107 1,071 1,366 1,333 banking Credit card 1,840 1,398 1,765 1,891 1,868 income Securities (losses) - - - (1 ) 34 gains Increase in cash surrender 1,733 1,464 1,453 1,419 787 value life insurance Other operating 262 241 469 455 445 income Total non-interest 8,172 7,033 6,674 6,936 6,202 incomeNon-interest expense: Salaries and employee 14,994 15,792 15,658 13,680 15,499 benefits Equipment and occupancy 2,556 2,434 2,400 2,339 2,387 expense Third party processing 3,281 3,513 3,345 3,176 2,923 and other services Professional 955 1,091 948 1,163 887 services FDIC and other regulatory 1,061 595 1,332 1,171 (296 ) assessments (credits) Other real estate owned 119 1,303 601 103 78 expense Other operating 3,607 4,088 3,636 3,871 3,675 expense Total non-interest 26,573 28,816 27,920 25,503 25,153 expense Income before 54,397 51,168 42,810 51,326 47,069 income taxProvision for 11,035 10,720 8,032 10,289 9,506 income tax Net income 43,362 40,448 34,778 41,037 37,563 Dividends on preferred - 31 - 32 - stock Net income available to $ 43,362 $ 40,417 $ 34,778 $ 41,005 $ 37,563 common stockholdersBasic earnings $ 0.80 $ 0.75 $ 0.65 $ 0.77 $ 0.70 per common shareDiluted earnings $ 0.80 $ 0.75 $ 0.64 $ 0.76 $ 0.69 per common share

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)ON A FULLY TAXABLE-EQUIVALENT BASIS(Dollars in thousands)

3rd Quarter 2020 2nd Quarter 2020 1st Quarter 2020 4th Quarter 2019 3rd Quarter 2019 Average Yield / Average Yield / Average Yield / Average Yield / Average Yield / Balance Rate Balance Rate Balance Rate Balance Rate Balance RateAssets: Interest-earning assets: Loans, net of unearned income (1) Taxable $ 8,335,087 4.26 % $ 8,301,775 4.31 % $ 7,328,594 4.89 % $ 7,066,576 5.00 % $ 6,927,075 5.18 % Tax-exempt (2) 30,068 4.14 31,929 4.12 32,555 4.04 35,563 4.00 34,195 3.98 Total loans, net of unearned income 8,365,155 4.26 8,333,704 4.31 7,361,149 4.88 7,102,139 4.99 6,961,270 5.17 Mortgage loans held for sale 20,053 1.41 13,278 2.09 4,282 2.16 6,505 2.44 6,482 2.45 Debt securities: Taxable 820,526 2.86 761,575 2.67 750,413 2.75 670,732 2.81 595,405 2.93 Tax-exempt (2) 31,880 2.51 38,201 2.62 44,029 2.33 50,825 2.17 59,992 2.21 Total securities (3) 852,406 2.84 799,776 2.67 794,442 2.72 721,557 2.76 655,397 2.87 Federal funds sold 41,884 0.15 83,274 0.16 105,423 1.06 238,927 1.75 312,968 2.24 Interest-bearing balances 1,500,563 0.13 849,549 0.17 469,199 1.47 602,755 1.81 690,973 2.25 with banks Total interest-earning assets $ 10,780,061 3.55 % $ 10,079,581 3.80 % $ 8,734,495 4.46 % $ 8,671,883 4.49 % $ 8,627,090 4.65 %Non-interest-earning assets: Cash and due from banks 75,065 76,212 66,140 70,381 71,418 Net premises and equipment 56,799 57,446 58,066 57,986 58,243 Allowance for loan losses, accrued interest and other assets 281,196 248,702 241,479 233,885 162,654 Total assets $ 11,193,121 $ 10,461,941 $ 9,100,180 $ 9,034,135 $ 8,919,405 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 1,077,595 0.31 % $ 992,848 0.35 % $ 956,803 0.57 % $ 961,258 0.69 % $ 900,754 0.84 % Savings 82,671 0.36 72,139 0.42 67,380 0.50 62,311 0.53 57,431 0.60 Money market 4,739,566 0.44 4,285,907 0.52 4,061,286 1.10 4,189,283 1.34 4,265,435 1.76 Time deposits 841,378 1.78 877,448 1.95 805,924 2.09 712,155 2.15 703,278 2.20 Total interest-bearing 6,741,210 0.58 6,228,342 0.69 5,891,393 1.14 5,925,007 1.32 5,926,898 1.66 deposits Federal funds purchased 682,971 0.22 572,990 0.22 492,638 1.31 420,066 1.74 441,526 2.30 Other borrowings 64,717 4.77 64,711 4.85 64,707 4.85 64,698 4.79 64,689 4.79 Total interest-bearing $ 7,488,898 0.59 % $ 6,866,043 0.69 % $ 6,448,738 1.19 % $ 6,409,771 1.39 % $ 6,433,113 1.73 % liabilitiesNon-interest-bearing liabilities: Non-interest-bearing checking 2,118,889 2,646,030 1,749,671 1,759,671 1,654,928 Other liabilities 649,161 69,061 39,801 41,112 34,070 Stockholders' equity 917,626 862,500 853,800 818,320 792,284 Accumulated other comprehensive income 18,547 18,307 8,170 5,261 5,010 Total liabilities and stockholders' equity $ 11,193,121 $ 10,461,941 $ 9,100,180 $ 9,034,135 $ 8,919,405 Net interest spread 2.96 % 3.11 % 3.27 % 3.10 % 2.92 %Net interest margin 3.14 % 3.32 % 3.58 % 3.47 % 3.36 % (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%.(3 ) Unrealized losses on available-for-sale debt securities are excluded from the yield calculation.