GlobeNewswire Inc | Jul 19, 2021 04:02PM EDT

July 19, 2021

BIRMINGHAM, Ala., July 19, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended June 30, 2021.

Second Quarter 2021 Highlights:

-- Total loans grew $144.7 million during the quarter, while loans, excluding the impact of Paycheck Protection Program (PPP) loan activity, grew $517.3 million, or 28% annualized, during the quarter -- Diluted earnings per share were $0.92 for the second quarter, an increase of 23% over the second quarter of 2020 -- Deposits grew from $9.34 billion to $10.96 billion year-over-year, or 17%, and grew $381 million, or 14% annualized, on a linked-quarter basis -- Book value per share increased to $19.80, a 17% increase year-over-year -- Liquidity reached new record levels, with approximately $3.0 billion on deposit at the Federal Reserve Bank -- We transferred the listing of our common stock to the New York Stock Exchange (NYSE) during the quarter

Tom Broughton, Chairman, President and CEO, said, Strong loan growth and a continued robust loan pipeline are evidence that we are well positioned to meet the financial needs of our customers and prospects as they return to a more normal operating environment.

Bud Foshee, CFO, said, Our credit quality and low expense structure has weathered the pandemic and we remain optimistic about the future.

FINANCIAL SUMMARY (UNAUDITED)(in Thousands except share and per share amounts) % % Change Change From From Period Period Ending Ending March June Period Ending Period Ending 31, Period Ending 30, June 30, 2021 March 31, 2021 2021 June 30, 2020 2020 to to Period Period Ending Ending June June 30, 30, 2021 2021QUARTERLY OPERATING RESULTSNet Income $ 50,027 $ 51,455 (3) % $ 40,448 24 % Net Income Availableto Common $ 49,996 $ 51,455 (3) % $ 40,417 24 % StockholdersDiluted Earnings Per $ 0.92 $ 0.95 (3) % $ 0.75 23 % ShareReturn on Average 1.56 % 1.72 % 1.55 % AssetsReturn on AverageCommon Stockholders' 18.98 % 19.83 % 18.40 % EquityAverage Diluted 54,460,230 54,381,991 54,194,506 Shares Outstanding YEAR-TO-DATE OPERATING RESULTSNet Income $ 101,482 $ 75,226 35 % Net Income Availableto Common $ 101,451 $ 75,195 35 % StockholdersDiluted Earnings Per $ 1.86 $ 1.39 34 % ShareReturn on Average 1.63 % 1.54 % AssetsReturn on AverageCommon Stockholders' 19.73 % 17.31 % EquityAverage Diluted 54,421,327 54,180,960 Shares Outstanding BALANCE SHEET Total Assets $ 13,207,319 $ 12,647,374 4 % $ 11,012,195 20 % Loans 8,649,694 8,504,980 2 % 8,315,375 4 % Non-interest-bearing 3,296,429 3,044,611 8 % 2,678,893 23 % Demand DepositsTotal Deposits 10,958,236 10,577,610 4 % 9,342,918 17 % Stockholders' Equity 1,073,284 1,030,485 4 % 914,588 17 %

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $50.0 million for the quarter ended June 30, 2021, compared to net income and net income available to common stockholders of $40.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.92 for the second quarter of 2021, compared to $0.75, for the second quarter of 2020.

Annualized return on average assets was 1.56% and annualized return on average common stockholders equity was 18.98% for the second quarter of 2021, compared to 1.55% and 18.40%, respectively, for the second quarter of 2020.

Net interest income was $94.7 million for the second quarter of 2021, compared to $92.4 million for the first quarter of 2021 and $83.2 million for the second quarter of 2020. The net interest margin in the second quarter of 2021 was 3.06% compared to 3.20% in the first quarter of 2021 and 3.32% in the second quarter of 2020. Accretion of net fees on PPP loans of $8.0 million during the second quarter of 2021 contributed 37 basis points of the loan yield, compared to $9.1 million of PPP loan fee accretion during the first quarter of 2021, or 43 basis points of the loan yield.

Average loans for the second quarter of 2021 were $8.64 billion, an increase of $132.4 million, or 6% annualized, with average loans of $8.51 billion for the first quarter of 2021, and an increase of $311.3 million, or 4%, with average loans of $8.33 billion for the second quarter of 2020. Origination of round-two PPP loans during the second quarter of 2021 totaled $28.0 million while forgiveness of round-one PPP loans during the second quarter of 2021 totaled $400.6 million.

Average total deposits for the second quarter of 2021 were $10.73 billion, an increase of $554.8 million, or 22% annualized, with average total deposits of $10.18 billion for the first quarter of 2021, and an increase of $1.86 billion, or 21%, with average total deposits of $8.87 billion for the second quarter of 2020.

Non-performing assets to total assets were 0.15% for the second quarter of 2021, a decrease of one basis point compared to 0.16% for the first quarter of 2021 and a decrease of 11 basis points compared to 0.26% for the second quarter of 2020. Annualized net recoveries to average loans were 0.01% for the second quarter of 2021, compared to annualized net charge-offs of 0.02% and 0.20% for the first quarter of 2021 and second quarter of 2020, respectively. The allowance for credit losses for the quarters ending June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.21%, 1.12% and 1.04%, respectively. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 1.10% at June 30, 2020. Excluding PPP loans, for all periods discussed, the allowance for credit losses as a percentage of total loans under the CECL methodology at June 30, 2021 and March 31, 2021 was 1.30% and 1.26%, respectively, compared to 1.26% at June 30, 2020, under the incurred loss model. We recorded a $9.7 million provision for credit losses in the second quarter of 2021 compared to $7.5 million in the first quarter of 2021 and $10.3 million in the second quarter of 2020. The $2.2 million linked-quarter increase in provision for credit losses is primarily due to loan growth and qualitative factors reflecting economic uncertainty related to the termination of the PPP.

Non-interest income for the second quarter of 2021 increased $2.6 million, or 37%, to $9.6 million from $7.0 million in the second quarter of 2020. Mortgage banking revenue increased $592,000, or 28%, to $2.7 million from the second quarter of 2020 to the second quarter of 2021. Margin pricing on mortgage loans was increased in the third quarter of 2020, increasing the per-loan revenue by approximately 18%. Net credit card revenue increased $514,000, or 37%, to $1.9 million during the second quarter of 2021, compared to $1.4 million during the second quarter of 2020. The number of credit card accounts increased approximately 36% and the aggregate amount of spend on all credit card accounts increased 47% during the second quarter of 2021 compared to the second quarter of 2020. Cash surrender value of life insurance increased $219,000, or 15%, to $1.7 million during the second quarter of 2021, compared to $1.5 million during the second quarter of 2020. Other income for the second quarter of 2021 increased $536,000, or 222%, to $777,000 from $241,000 in the second quarter of 2020. We wrote down the value of our interest rate cap by $252,000 during the second quarter of 2020 through other income. Merchant service revenue increased from $134,000 during the second quarter of 2020 to $289,000, or 15%, during the second quarter of 2021.

Non-interest expense for the second quarter of 2021 increased $2.5 million, or 9%, to $31.3 million from $28.8 million in the second quarter of 2020, and increased $2.4 million, or 8%, on a linked quarter basis. Salary and benefit expense for the second quarter of 2021 increased $1.1 million, or 7%, to $16.9 million from $15.8 million in the second quarter of 2020, and increased $1.3 million, or 9%, on a linked quarter basis. Salary expense alone only increased by $326,000 during the second quarter of 2021 compared to the second quarter of 2020. Higher loan origination cost deferrals during the second quarter of 2020 related to origination of round-one PPP loans decreased salary and benefits expenses below what they would have otherwise been during that quarter. The number of FTE employees increased by 35 to 527 at June 30, 2021 compared to 492 at June 30, 2020, and increased by 36 from the end of the first quarter of 2021. Equipment and occupancy expense increased $410,000, or 17%, to $2.8 million in the second quarter of 2021, from $2.4 million in the second quarter of 2020, and increased $190,000 on a linked-quarter basis. Third party processing and other services expense increased $324,000, or 9%, to $3.9 million in the second quarter of 2021, from $3.6 million in the second quarter of 2020 and increased $530,000 on a linked-quarter basis. FDIC and other regulatory assessments increased $830,000 to $1.4 million in the second quarter of 2021, from $595,000 in the second quarter of 2020, and decreased $157,000, or 10%, on a linked quarter basis. Lower asset growth during the second quarter of 2020 resulted in us adjusting our accrual for assessments in that quarter. Expenses associated with other real estate owned decreased $763,000 to $540,000 in the second quarter of 2021, from $1.3 million in the second quarter of 2020, and increased $383,000 on a linked quarter basis. The second quarter 2020 amount included write-downs in value of two foreclosed properties in our Birmingham region. The linked-quarter increase was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the second quarter of 2021 increased $581,000, or 15%, to $4.6 million from $4.0 million in the second quarter of 2020, and decreased $79,000 on a linked-quarter basis. We increased our reserve for credit losses on unfunded loan commitments by $500,000 in the second quarter of 2021 with a charge to other operating expenses. The efficiency ratio was 30.03% during the second quarter of 2021 compared to 31.92% during the second quarter of 2020 and compared to 28.68% during the first quarter of 2021.

Income tax expense increased $2.6 million, or 24%, to $13.3 million in the second quarter of 2021, compared to $10.7 million in the second quarter of 2020. Our effective tax rate was 20.97% for the second quarter of 2021 compared to 20.95% for the second 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 second quarters of 2021 and 2020 of $724,000 and $136,000, 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 also include total loans excluding PPP loans. 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, 2021 At March At December 31, At September 30, At June 30, 2020 31, 2021 2020 2020 Book value per $ 19.80 $ 19.03 $ 18.41 $ 17.61 $ 16.98 share - GAAPTotal commonstockholders' 1,073,284 1,030,485 992,852 949,589 914,588 equity - GAAP Adjustments: Adjusted for goodwill and core deposit 13,773 13,841 13,908 13,976 14,043 intangible assetTangible commonstockholders' $ 1,059,511 $ 1,016,644 $ 978,944 $ 935,613 $ 900,545 equity -non-GAAPTangible bookvalue per share $ 19.55 $ 18.78 $ 18.15 $ 17.35 $ 16.72 - non-GAAP Stockholders'equity to total 8.13 % 8.15 % 8.32 % 8.33 % 8.31 % assets - GAAPTotal assets - $ 13,207,319 $ 12,647,374 $ 11,932,654 $ 11,394,874 $ 11,012,195 GAAP Adjustments: Adjusted for goodwill and core deposit 13,773 13,841 13,908 13,976 14,043 intangible assetTotal tangibleassets - $ 13,193,546 $ 12,633,533 $ 11,918,746 $ 11,380,898 $ 10,998,152 non-GAAPTangible commonequity to total 8.03 % 8.05 % 8.21 % 8.22 % 8.19 % tangible assets- non-GAAP Total loans - $ 8,649,694 $ 8,504,980 GAAP Adjustments: Adjusted to exclude PPP 595,017 967,641 loansLoans,excluding PPP $ 8,054,677 $ 7,537,339 loans -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, Mobile, Montgomery and Dothan, Alabama, Northwest Florida, West Central Florida, Nashville, Tennessee, Atlanta, Georgia, and Charleston, South Carolina.

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 2021, 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 FINANCIALHIGHLIGHTS (Unaudited)(In thousands exceptshare and per share data) 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 2nd Quarter 2020 CONSOLIDATED STATEMENT OF INCOMEInterest income $ 102,719 $ 100,396 $ 101,065 $ 96,110 $ 95,080 Interest expense 8,051 8,031 8,984 11,028 11,846 Net interest income 94,668 92,365 92,081 85,082 83,234 Provision for credit 9,652 7,451 6,283 12,284 10,283 lossesNet interest incomeafter provision for 85,016 84,914 85,798 72,798 72,951 credit lossesNon-interest income 9,598 8,463 8,237 8,172 7,033 Non-interest expense 31,309 28,914 28,202 26,573 28,816 Income before income 63,305 64,463 65,833 54,397 51,168 taxProvision for income 13,278 13,008 14,852 11,035 10,720 taxNet income 50,027 51,455 50,981 43,362 40,448 Preferred stock 31 - 32 - 31 dividendsNet income availableto common $ 49,996 $ 51,455 $ 50,949 $ 43,362 $ 40,417 stockholdersEarnings per share - $ 0.92 $ 0.95 $ 0.94 $ 0.80 $ 0.75 basicEarnings per share - $ 0.92 $ 0.95 $ 0.94 $ 0.80 $ 0.75 dilutedAverage diluted 54,460,230 54,381,991 54,273,944 54,232,965 54,194,506 shares outstanding CONSOLIDATED BALANCE SHEET DATATotal assets $ 13,207,319 $ 12,647,374 $ 11,932,654 $ 11,394,874 $ 11,012,195 Loans 8,649,694 8,504,980 8,465,688 8,508,544 8,315,375 Debt securities 1,013,783 962,129 886,938 913,299 856,378 Non-interest-bearing 3,296,429 3,044,611 2,788,772 2,762,814 2,678,893 demand depositsTotal deposits 10,958,236 10,577,610 9,975,724 9,673,783 9,342,918 Borrowings 64,696 64,691 64,748 64,719 64,715 Stockholders' equity $ 1,073,284 $ 1,030,485 $ 992,852 $ 949,589 $ 914,588 Shares outstanding 54,201,204 54,137,650 53,943,751 53,915,245 53,874,276 Book value per share $ 19.80 $ 19.03 $ 18.41 $ 17.61 $ 16.98 Tangible book value $ 19.55 $ 18.78 $ 18.15 $ 17.35 $ 16.72 per share (1) SELECTED FINANCIAL RATIOS (Annualized)Net interest margin 3.06 % 3.20 % 3.27 % 3.14 % 3.32 % Return on average 1.56 % 1.72 % 1.74 % 1.54 % 1.55 % assetsReturn on averagecommon stockholders' 18.98 % 19.83 % 20.78 % 18.43 % 18.40 % equityEfficiency ratio 30.03 % 28.68 % 28.11 % 28.50 % 31.92 % Non-interest expenseto average earning 1.01 % 1.00 % 1.00 % 0.98 % 1.15 % assets CAPITAL RATIOS (2) Common equity tier 1capital to 10.60 % 10.73 % 10.50 % 11.24 % 11.26 % risk-weighted assetsTier 1 capital to 10.60 % 10.73 % 10.50 % 11.25 % 11.27 % risk-weighted assetsTotal capital to 12.36 % 12.48 % 12.20 % 13.10 % 13.27 % risk-weighted assetsTier 1 capital to 8.10 % 8.25 % 8.23 % 8.22 % 8.46 % average assetsTangible commonequity to total 8.03 % 8.05 % 8.22 % 8.22 % 8.19 % tangible assets (1) (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, 2021 June 30, 2020 % Change ASSETS Cash and due from banks $ 72,599 $ 102,282 (29 ) % Interest-bearingbalances due from 3,100,677 1,444,293 115 % depository institutionsFederal funds sold 7,500 2,352 219 % Cash and cash 3,180,776 1,548,927 105 % equivalentsAvailable for sale debtsecurities, at fair 1,013,533 856,128 18 % valueHeld to maturity debtsecurities (fair value 250 250 - of $250 at June 30,2021 and 2020)Mortgage loans held for 6,147 14,491 (58 ) % saleLoans 8,649,694 8,315,375 4 % Less allowance for (104,670 ) (91,507 ) 14 % credit losses Loans, net 8,545,024 8,223,868 4 % Premises and equipment, 67,738 55,588 22 % netGoodwill and otheridentifiable intangible 13,773 14,043 (2 ) % assetsOther assets 380,078 298,900 27 % Total assets $ 13,207,319 $ 11,012,195 20 % LIABILITIES AND STOCKHOLDERS' EQUITYLiabilities: Deposits: Non-interest-bearing $ 3,296,429 $ 2,678,893 23 % Interest-bearing 7,661,807 6,664,025 15 % Total deposits 10,958,236 9,342,918 17 % Federal funds purchased 1,059,474 635,606 67 % Other borrowings 64,696 64,715 - % Other liabilities 51,629 54,368 (5 ) % Total liabilities 12,134,035 10,097,607 20 % Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at June 30, 2021 and - - June 30, 2020 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,201,204 shares issued and outstanding at June 30, 2021, and 53,874,276 shares issued and outstanding at June 30, 2020 54 54 - % Additional paid-in 225,127 222,437 1 % capital Retained earnings 828,048 672,984 23 % Accumulated other 19,555 18,611 5 % comprehensive income Total stockholders' equity 1,072,784 914,086 17 % attributable to ServisFirst Bancshares, Inc. Noncontrolling 500 502 - % interest Total stockholders' 1,073,284 914,588 17 % equity Total liabilities and stockholders' $ 13,207,319 $ 11,012,195 20 % equity

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) Three Months Ended Six Months Ended June, June, 30 30 2021 2020 2021 2020 Interest income: Interest and fees $ 95,451 $ 89,383 $ 189,254 $ 178,768 on loans Taxable securities 6,315 5,092 12,122 10,246 Nontaxable 86 211 193 444 securities Federal funds sold 4 34 7 311 Other interest and 863 360 1,539 2,078 dividends Total interest 102,719 95,080 203,115 191,847 incomeInterest expense: Deposits 6,836 10,756 13,717 27,501 Borrowed funds 1,215 1,090 2,365 3,472 Total interest 8,051 11,846 16,082 30,973 expense Net interest income 94,668 83,234 187,033 160,874 Provision for credit 9,652 10,283 17,103 23,867 losses Net interest income after provision for 85,016 72,951 169,930 137,007 credit lossesNon-interest income: Service charges on 1,907 1,823 3,815 3,739 deposit accounts Mortgage banking 2,699 2,107 5,446 3,178 Credit card income 1,912 1,398 3,104 3,163 Securities gains 620 - 620 - Increase in cash surrender value 1,683 1,464 3,341 2,917 life insurance Other operating 777 241 1,735 710 income Total non-interest 9,598 7,033 18,061 13,707 incomeNon-interest expense: Salaries and 16,887 15,792 32,430 31,450 employee benefits Equipment and 2,844 2,434 5,498 4,834 occupancy expense Third party processing and 3,946 3,622 7,362 7,079 other services Professional 1,107 1,091 2,030 2,039 services FDIC and other regulatory 1,425 595 3,007 1,927 assessments Other real estate 540 1,303 697 1,904 owned expense Other operating 4,560 3,979 9,199 7,503 expense Total non-interest 31,309 28,816 60,223 56,736 expense Income before 63,305 51,168 127,768 93,978 income taxProvision for income 13,278 10,720 26,286 18,752 tax Net income 50,027 40,448 101,482 75,226 Dividends on 31 31 $ 31 $ 31 preferred stock Net income available to common $ 49,996 $ 40,417 $ 101,451 $ 75,195 stockholdersBasic earnings per $ 0.92 $ 0.75 $ 1.87 $ 1.40 common shareDiluted earnings per $ 0.92 $ 0.75 $ 1.86 $ 1.39 common share

LOANS BY TYPE (UNAUDITED)(In thousands) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 2021 2021 2020 2020 2020Commercial,financial and $ 3,105,243 $ 3,323,093 $ 3,295,900 $ 3,466,189 $ 3,498,627agriculturalReal estate - 782,305 666,592 593,614 530,919 544,586constructionReal estate - mortgage: Owner-occupied 1,726,888 1,698,695 1,693,428 1,725,222 1,634,495 commercial 1-4 family 707,546 685,840 711,692 671,841 665,883 mortgage Other mortgage 2,262,231 2,068,560 2,106,184 2,056,549 1,911,384Subtotal: Real 4,696,665 4,453,095 4,511,304 4,453,612 4,211,762estate - mortgageConsumer 65,481 62,200 64,870 57,834 60,400Total loans $ 8,649,694 $ 8,504,980 $ 8,465,688 $ 8,508,554 $ 8,315,375

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)(Dollars in thousands) 2nd Quarter 2021 1st Quarter 4th Quarter 2020 3rd Quarter 2nd Quarter 2021 2020 2020Allowance for credit losses:Beginning balance $ 94,906 $ 87,942 $ 92,440 $ 91,507 $ 85,414 Impact of Adoption of - - (2,000 ) - - ASC 326Loans charged off: Commercial financial and 150 477 8,792 11,146 1,358 agricultural Real estate - - - 202 - 376 construction Real estate - 59 12 - 200 2,520 mortgage Consumer 54 87 38 44 62 Total 263 576 9,032 11,390 4,316 charge offsRecoveries: Commercial financial and 298 26 94 12 84 agricultural Real estate - 2 50 30 - 1 construction Real estate - 62 2 114 12 13 mortgage Consumer 13 11 13 15 28 Total 375 89 251 39 126 recoveries Net (112 ) 487 8,781 11,351 4,190 charge-offs Provision for 9,652 7,451 6,283 12,284 10,283 credit losses Ending balance $ 104,670 $ 94,906 $ 87,942 $ 92,440 $ 91,507 Allowance for credit losses 1.21 % 1.12 % 1.04 % - - to total loans Allowance for credit losses to total average loans 1.21 % 1.11 % 1.04 % - - Allowance for loan losses to - - - 1.09 % 1.10 % total loans Allowance for loan losses to total average loans - - - 1.11 % 1.10 % Net (recoveries) charge-offs to total (0.01 ) % 0.02 % 0.41 % 0.54 % 0.20 % average loans Provision for credit losses to total average loans 0.45 % 0.35 % 0.30 % - - Provision for loan losses to total average loans - - - 0.58 % 0.50 % Nonperforming assets: Nonaccrual $ 12,301 $ 13,088 $ 13,973 $ 21,675 $ 16,881 loans Loans 90+ days past 4,888 4,804 4,981 4,898 5,133 due and accruing Other real estate owned and repossessed 2,039 2,067 6,497 6,976 6,537 assets Total $ 19,228 $ 19,959 $ 25,451 $ 33,549 $ 28,551 Nonperforming loans to total 0.20 % 0.21 % 0.22 % 0.31 % 0.26 % loans Nonperforming assets to 0.15 % 0.16 % 0.21 % 0.29 % 0.26 % total assets Nonperforming assets to 0.15 % 0.16 % 0.22 % 0.30 % 0.26 % earning assets Allowance for credit losses to nonaccrual 850.91 % 725.14 % 629.37 % - - loans Allowance for loan losses to - - - 426.48 % 542.07 % nonaccrual loans Restructured $ 441 $ 794 $ 818 $ 1,800 $ 975 accruing loans Restructured accruing loans 0.01 % 0.01 % 0.01 % 0.02 % 0.01 % to total loans TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) (In thousands) 2nd Quarter 2021 1st Quarter 4th Quarter 2020 3rd Quarter 2nd Quarter 2021 2020 2020 Beginning $ 3,542 $ 1,433 $ 2,738 $ 1,568 $ 2,367 balance: Additions - 2,146 - 1,182 - Net (paydowns) (624 ) (37 ) (619 ) (12 ) (12 ) / advances Charge-offs - - (535 ) - (412 ) Transfer to - - (151 ) - (375 ) OREO Ending balance $ 2,918 $ 3,542 $ 1,433 $ 2,738 $ 1,568

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) 2nd 1st 4th 3rd 2nd Quarter Quarter Quarter Quarter Quarter 2021 2021 2020 2020 2020Interest income: Interest and $ 95,451 $ 93,803 $ 94,332 $ 89,564 $ 89,383 fees on loans Taxable 6,315 5,807 6,018 5,858 5,092 securities Nontaxable 86 107 129 166 211 securities Federal funds 4 3 5 16 34 sold Other interest and 863 676 581 506 360 dividends Total interest 102,719 100,396 101,065 96,110 95,080 incomeInterest expense: Deposits 6,836 6,881 7,853 9,876 10,756 Borrowed 1,215 1,150 1,131 1,152 1,090 funds Total interest 8,051 8,031 8,984 11,028 11,846 expense Net interest 94,668 92,365 92,081 85,082 83,234 incomeProvision for 9,652 7,451 6,283 12,284 10,283 credit losses Net interest income after 85,016 84,914 85,798 72,798 72,951 provision for credit lossesNon-interest income: Service charges on 1,907 1,908 1,971 1,818 1,823 deposit accounts Mortgage 2,699 2,747 3,050 2,519 2,107 banking Credit card 1,912 1,192 913 1,840 1,398 income Securities 620 - - - - gains Increase in cash surrender 1,683 1,658 1,660 1,733 1,464 value life insurance Other operating 777 958 643 262 241 income Total non-interest 9,598 8,463 8,237 8,172 7,033 incomeNon-interest expense: Salaries and employee 16,887 15,543 14,970 14,994 15,792 benefits Equipment and occupancy 2,844 2,654 2,680 2,556 2,434 expense Third party processing 3,946 3,416 3,418 3,281 3,622 and other services Professional 1,107 923 1,248 955 1,091 services FDIC and other 1,425 1,582 1,366 1,061 595 regulatory assessments Other real estate owned 540 157 140 119 1,303 expense Other operating 4,560 4,639 4,380 3,607 3,979 expense Total non-interest 31,309 28,914 28,202 26,573 28,816 expense Income before 63,305 64,463 65,833 54,397 51,168 income taxProvision for 13,278 13,008 14,852 11,035 10,720 income tax Net income 50,027 51,455 50,981 43,362 40,448 Dividends on preferred 31 - 32 - 31 stock Net income available to $ 49,996 $ 51,455 $ 50,949 $ 43,362 $ 40,417 common stockholdersBasic earnings $ 0.92 $ 0.95 $ 0.94 $ 0.80 $ 0.75 per common shareDiluted earnings $ 0.92 $ 0.95 $ 0.94 $ 0.80 $ 0.75 per common share

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 2nd Quarter 2020 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 $ 8,618,139 4.43 % $ 8,484,914 4.47 % $ 8,435,237 4.43 % $ 8,335,087 4.26 % $ 8,301,775 4.31 % Tax-exempt (2) 26,854 4.05 27,592 4.17 29,393 4.16 30,068 4.14 31,929 4.12 Total loans, net of unearned 8,644,993 4.43 8,512,506 4.47 8,464,630 4.43 8,365,155 4.26 8,333,704 4.31 income Mortgage loans held 11,470 1.92 13,601 1.94 19,459 1.37 20,053 1.41 13,278 2.09 for sale Debt securities: Taxable 936,863 2.70 878,118 2.65 862,333 2.79 820,526 2.86 761,575 2.67 Tax-exempt (2) 16,872 2.47 21,084 2.43 25,542 2.52 31,880 2.51 38,201 2.62 Total securities 953,735 2.69 899,202 2.64 887,875 2.78 852,406 2.84 799,776 2.67 (3) Federal funds sold 8,224 0.20 11,935 0.10 16,306 0.12 41,884 0.15 83,274 0.16 Interest-bearing 2,790,524 0.12 2,262,233 0.12 1,837,249 0.13 1,500,563 0.13 849,549 0.17 balances with banks Total interest-earning $ 12,408,946 3.32 % $ 11,699,477 3.48 % $ 11,225,519 3.58 % $ 10,780,061 3.55 % $ 10,079,581 3.80 % assetsNon-interest-earning assets: Cash and due from 85,478 71,166 91,258 75,065 76,212 banks Net premises and 61,240 57,198 56,315 56,799 57,446 equipment Allowance for credit losses, accrued interest and other 320,729 320,407 308,746 281,196 248,702 assets Total assets $ 12,876,393 $ 12,148,248 $ 11,681,838 $ 11,193,121 $ 10,461,941 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 1,350,098 0.19 % $ 1,294,614 0.19 % $ 1,197,908 0.23 % $ 1,077,595 0.31 % $ 992,848 0.35 % Savings 104,283 0.18 93,375 0.18 86,259 0.18 82,671 0.36 72,139 0.42 Money market 5,321,338 0.26 5,057,828 0.27 4,933,285 0.31 4,739,566 0.44 4,285,907 0.52 Time deposits 801,928 1.33 808,561 1.44 810,675 1.59 841,378 1.78 877,448 1.95 Total interest-bearing 7,577,647 0.36 7,254,378 0.38 7,028,127 0.44 6,741,210 0.58 6,228,342 0.69 deposits Federal funds 970,708 0.22 849,772 0.22 752,765 0.22 682,971 0.22 572,990 0.22 purchased Other borrowings 64,694 4.28 64,689 4.33 64,701 4.41 64,717 4.78 64,711 4.85 Total interest-bearing $ 8,613,049 0.37 % $ 8,168,839 0.40 % $ 7,845,593 0.46 % $ 7,488,898 0.59 % $ 6,866,043 0.69 % liabilitiesNon-interest-bearing liabilities: Non-interest-bearing demand deposits 3,154,605 2,923,041 2,812,254 2,728,513 2,646,030 Other liabilities 52,027 39,442 48,642 39,537 69,061 Stockholders' equity 1,038,012 996,741 956,847 917,626 862,500 Accumulated other comprehensive income 18,700 20,185 18,502 18,547 18,307 Total liabilities and stockholders' $ 12,876,393 $ 12,148,248 $ 11,681,838 $ 11,193,121 $ 10,461,941 equityNet interest spread 2.95 % 3.08 % 3.12 % 2.96 % 3.11 % Net interest margin 3.06 % 3.20 % 3.27 % 3.14 % 3.32 % (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.