GlobeNewswire Inc | Oct 18, 2021 04:02PM EDT

October 18, 2021

BIRMINGHAM, Ala., Oct. 18, 2021 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights:

-- Total loans grew $163.1 million, or 8% annualized, during the quarter, while loans, excluding the impact of Paycheck Protection Program (PPP) loan forgiveness, grew $370.4 million, or 18% annualized, during the quarter -- Diluted earnings per share were $0.96 for the third quarter, an increase of 20% over the third quarter of 2020 -- Deposits grew from $9.67 billion to $12.08 billion year-over-year, or 25%, and grew $1.12 billion, or 41% annualized, on a linked-quarter basis -- Book value per share increased to $20.56, a 17% increase year-over-year -- Liquidity reached new record levels, with approximately $4.2 billion on deposit at the Federal Reserve Bank

Tom Broughton, Chairman, President and CEO, said, The economic recovery in the Southeast United States is resulting in very strong loan growth for our bank. Our bankers are winning in the marketplace.

Bud Foshee, CFO, said, Credit losses continue at historically low levels and credit quality remains very good. Operating efficiency is also very good.

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, 2021 September 30, 30, 2021 June 30, 2021 to 2020 2020 to Period Period Ending Ending September September 30, 30, 2021 2021QUARTERLY OPERATING RESULTSNet Income $ 52,499 $ 50,027 5 % $ 43,362 21 % Net Income Availableto Common $ 52,499 $ 49,996 5 % $ 43,362 21 % StockholdersDiluted Earnings Per $ 0.96 $ 0.92 4 % $ 0.80 20 % ShareReturn on Average 1.50 % 1.56 % 1.54 % AssetsReturn on AverageCommon Stockholders' 18.93 % 18.98 % 18.43 % EquityAverage Diluted 54,477,740 54,460,230 54,232,965 Shares Outstanding YEAR-TO-DATE OPERATING RESULTSNet Income $ 153,981 $ 118,588 30 % Net Income Availableto Common $ 153,950 $ 118,557 30 % StockholdersDiluted Earnings Per $ 2.83 $ 2.19 29 % ShareReturn on Average 1.63 % 1.54 % AssetsReturn on AverageCommon Stockholders' 19.73 % 17.73 % EquityAverage Diluted 54,440,004 54,198,422 Shares Outstanding BALANCE SHEET Total Assets $ 14,602,228 $ 13,207,319 11 % $ 11,394,874 28 % Loans 8,812,811 8,649,694 2 % 8,508,554 4 % Non-interest-bearing 4,366,654 3,296,429 32 % 2,762,814 58 % Demand DepositsTotal Deposits 12,078,670 10,958,236 10 % 9,673,783 25 % Stockholders' Equity 1,114,293 1,073,284 4 % 949,589 17 %

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $52.5 million for the quarter ended September 30, 2021, compared to net income and net income available to common stockholders of $43.4 million for the same quarter in 2020. Basic and diluted earnings per common share were $0.97 and $0.96, respectively, for the third quarter of 2021, compared to $0.80 for the third quarter of 2020.

Annualized return on average assets was 1.50% and annualized return on average common stockholders equity was 18.93% for the third quarter of 2021, compared to 1.54% and 18.43%, respectively, for the third quarter of 2020.

Net interest income was $96.3 million for the third quarter of 2021, compared to $94.7 million for the second quarter of 2021 and $85.1 million for the third quarter of 2020. The net interest margin in the third quarter of 2021 was 2.85% compared to 3.06% in the second quarter of 2021 and 3.14% in the third quarter of 2020. Accretion of net fees on PPP loans of $5.2 million during the third quarter of 2021 contributed 24 basis points of the loan yield, compared to $8.0 million of PPP loan fee accretion during the second quarter of 2021, or 37 basis points of the loan yield and $4.0 million during the third quarter of 2020, or 19 basis points of the loan yield.

Average loans for the third quarter of 2021 were $8.68 billion, an increase of $35.2 million, or 1.6% annualized, over average loans of $8.64 billion for the second quarter of 2021, and an increase of $315.0 million, or 3.8%, over average loans of $8.37 billion for the third quarter of 2020. Forgiveness of PPP loans during the third quarter of 2021 totaled $207.4 million. PPP loans outstanding as of September 30, 2021 were $387.7 million.

Average total deposits for the third quarter of 2021 were $11.49 billion, an increase of $757.1 million, or 28.0%, annualized, over average total deposits of $10.73 billion for the second quarter of 2021, and an increase of $2.02 billion, or 21.3%, over average total deposits of $9.47 billion for the third quarter of 2020.

Non-performing assets to total assets were 0.11% for the third quarter of 2021, a decrease of 4 basis points compared to 0.15% for the second quarter of 2021 and a decrease of 18 basis points compared to 0.29% for the third quarter of 2020. Annualized net charge-offs to average loans were 0.08% for the third quarter of 2021, compared to -0.01% and 0.54% for the second quarter of 2021 and third quarter of 2020, respectively. The allowance for credit losses for the quarters ending September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020 were calculated under the CECL methodology and as a percentage of total loans were 1.24%, 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 1.09% at September 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 September 30, 2021 and June 30, 2021 was 1.29% and 1.30%, respectively, compared to 1.24% at September 30, 2020, under the incurred loss model. We recorded a $6.0 million provision for credit losses in the third quarter of 2021 compared to $9.7 million in the second quarter of 2021 and $12.3 million in the third quarter of 2020.

Non-interest income for the third quarter of 2021 decreased $146,000, or 1.8%, to $8.0 million from $8.2 million in the third quarter of 2020. Mortgage banking revenue decreased $1.1 million, or 43.5%, to $1.4 million from the third quarter of 2020 to the third quarter of 2021. The number of mortgage loans originated during the third quarter of 2021 fell to 208, from 325 during the same quarter in 2020. Net credit card revenue increased $203,000, or 11.0%, to $2.0 million during the third quarter of 2021, compared to $1.8 million during the third quarter of 2020. The number of credit card accounts increased approximately 31% and the aggregate amount of spend on all credit card accounts increased 43% during the third quarter of 2021 compared to the third quarter of 2020. Increase in cash surrender value of life insurance decreased $62,000, or 3.6%, during the third quarter of 2021 compared the third quarter of 2020, due to decreases in crediting rates on policies. Other income for the third quarter of 2021 increased $900,000, or 343.5%, to $1.2 million from $262,000 in the third quarter of 2020. We wrote down the value of our interest rate cap by $98,000 during the third quarter of 2021 through other income compared to a write down of $343,000 during the third quarter of 2020. Merchant service revenue increased from $163,000 during the third quarter of 2020 to $375,000, or 30.1%, during the third quarter of 2021.

Non-interest expense for the third quarter of 2021 increased $7.8 million, or 29.4%, to $34.4 million from $26.6 million in the third quarter of 2020, and increased $3.1 million, or 9.8%, on a linked quarter basis. Salary and benefit expense for the third quarter of 2021 increased $3.0 million, or 20.0%, to $18.0 million from $15.0 million in the third quarter of 2020, and increased $1.1 million, or 6.6%, on a linked quarter basis. Salary expense alone increased 7.6% year over year. We increased our annual incentive accrual based on the increased loan production in 2021 and on final anticipated payouts for 2021 PPP loan originations. Total incentive accruals increased $2.2 million to $4.9 million for the third quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 24 to 518 at September 30, 2021 compared to 494 at September 30, 2020, and decreased by 9 from the end of the second quarter of 2021. Equipment and occupancy expense increased $440,000, or 17.2%, to $3.0 million in the third quarter of 2021, from $2.6 million in the third quarter of 2020, and increased $152,000, or 5.3% on a linked-quarter basis. We moved our office in Nashville, Tennessee in early 2021 to expand our space and improve visibility and we opened our new office in Orlando, Florida in the third quarter of 2021. Third party processing and other services expense increased $863,000, or 26.3%, to $4.1 million in the third quarter of 2021, from $3.3 million in the third quarter of 2020 and increased $198,000, or 5.0%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. FDIC and other regulatory assessments increased $569,000 to $1.6 million in the third quarter of 2021, from $1.1 million in the third quarter of 2020, and increased $205,000, or 14.4%, on a linked quarter basis. Growth in total assets has increased our assessments. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Expenses associated with other real estate owned increased $4,000, to $123,000 in the third quarter of 2021, from $119,000 in the third quarter of 2020, and decreased $417,000 on a linked quarter basis. The third quarter of 2021 included a write-down in value of a property in our Atlanta region. The linked-quarter decrease was due to the write-down of one property in our Nashville region during the second quarter of 2021. Other operating expenses for the third quarter of 2021 increased $2.9 million, or 81.3%, to $6.5 million from $3.6 million in the third quarter of 2020, and increased $2.0 million on a linked-quarter basis. We invested in new market tax credits in July 2021 and wrote down the investments by $2.8 million during the third quarter of 2021 with a charge to other operating expenses. We decreased our reserve for credit losses on unfunded loan commitments by $300,000 in the third quarter of 2021. The efficiency ratio was 32.95% during the third quarter of 2021 compared to 28.50% during the third quarter of 2020 and compared to 30.03% during the second quarter of 2021.

Income tax expense increased $472,000, or 4.3%, to $11.5 million in the third quarter of 2021, compared to $11.0 million in the third quarter of 2020. Our effective tax rate was 17.98% for the third quarter of 2021 compared to 20.29% for the third quarter of 2020. We recognized $3.2 million in credits during the third quarter of 2021 related to the investment in new market tax credits in July 2021. 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 2021 and 2020 of $78,000 and $180,000, 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 adjusted for the impact of PPP loan activities. 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 September 30, At June 30, 2021 At March 31, At December 31, At September 30, 2021 2021 2020 2020Book valueper share - $ 20.56 $ 19.80 $ 19.03 $ 18.41 $ 17.61 GAAPTotal commonstockholders' 1,114,293 1,073,284 1,030,485 992,852 949,589 equity - GAAPAdjustments: Adjusted forgoodwill andcore deposit 13,705 13,773 13,841 13,908 13,976 intangibleassetTangiblecommonstockholders' $ 1,100,588 $ 1,059,511 $ 1,016,644 $ 978,944 $ 935,613 equity -non-GAAPTangible bookvalue per $ 20.30 $ 19.55 $ 18.78 $ 18.15 $ 17.35 share -non-GAAP Stockholders'equity to 7.63 % 8.13 % 8.15 % 8.32 % 8.33 % total assets- GAAPTotal assets $ 14,602,228 $ 13,207,319 $ 12,647,374 $ 11,932,654 $ 11,394,874 - GAAPAdjustments: Adjusted forgoodwill andcore deposit 13,705 13,773 13,841 13,908 13,976 intangibleassetTotaltangible $ 14,588,523 $ 13,193,546 $ 12,633,533 $ 11,918,746 $ 11,380,898 assets -non-GAAPTangiblecommon equityto total 7.54 % 8.03 % 8.05 % 8.21 % 8.22 % tangibleassets -non-GAAP Total loans - $ 8,812,811 $ 8,649,694 $ 8,504,980 GAAPAdjustments: Adjusted toexclude PPP 387,725 595,017 967,641 loansLoans,excluding PPP $ 8,425,086 $ 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 as a result of our reclassification as a large financial institution by the FDIC; 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 and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; 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 FINANCIAL HIGHLIGHTS (UNAUDITED)(In thousands exceptshare and per share data) 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd Quarter 2020 CONSOLIDATED STATEMENT OF INCOMEInterest income $ 104,236 $ 102,719 $ 100,396 $ 101,065 $ 96,110 Interest expense 7,916 8,051 8,031 8,984 11,028 Net interest income 96,320 94,668 92,365 92,081 85,082 Provision for credit 5,963 9,652 7,451 6,283 12,284 lossesNet interest incomeafter provision for 90,357 85,016 84,914 85,798 72,798 credit lossesNon-interest income 8,026 9,598 8,463 8,237 8,172 Non-interest expense 34,377 31,309 28,914 28,202 26,573 Income before income 64,006 63,305 64,463 65,833 54,397 taxProvision for income 11,507 13,278 13,008 14,852 11,035 taxNet income 52,499 50,027 51,455 50,981 43,362 Preferred stock - 31 - 32 - dividendsNet income availableto common $ 52,499 $ 49,996 $ 51,455 $ 50,949 $ 43,362 stockholdersEarnings per share - $ 0.97 $ 0.92 $ 0.95 $ 0.94 $ 0.80 basicEarnings per share - $ 0.96 $ 0.92 $ 0.95 $ 0.94 $ 0.80 dilutedAverage diluted 54,477,740 54,381,991 54,273,944 54,232,965 54,194,506 shares outstanding CONSOLIDATED BALANCE SHEET DATATotal assets $ 14,602,228 $ 13,207,319 $ 12,647,374 $ 11,932,654 $ 11,394,874 Loans 8,812,811 8,649,694 8,504,980 8,465,688 8,508,544 Debt securities 984,600 1,013,783 962,129 886,938 913,299 Non-interest-bearing 4,366,654 3,296,429 3,044,611 2,788,772 2,762,814 demand depositsTotal deposits 12,078,670 10,958,236 10,577,610 9,975,724 9,673,783 Borrowings 64,701 64,696 64,691 64,748 64,719 Stockholders' equity $ 1,114,293 $ 1,073,284 $ 1,030,485 $ 992,852 $ 949,589 Shares outstanding 54,207,147 54,201,204 54,137,650 53,943,751 53,915,245 Book value per share $ 20.56 $ 19.80 $ 19.03 $ 18.41 $ 17.61 Tangible book value $ 20.30 $ 19.55 $ 18.78 $ 18.15 $ 17.35 per share (1) SELECTED FINANCIAL RATIOS (Annualized)Net interest margin 2.85 % 3.06 % 3.20 % 3.27 % 3.14 % Return on average 1.50 % 1.56 % 1.72 % 1.74 % 1.54 % assetsReturn on averagecommon stockholders' 18.93 % 18.98 % 19.83 % 20.78 % 18.43 % equityEfficiency ratio 32.95 % 30.03 % 28.68 % 28.11 % 28.50 % Non-interest expenseto average earning 1.01 % 1.01 % 1.00 % 1.00 % 0.98 % assets CAPITAL RATIOS (2) Common equity tier 1capital to 10.46 % 10.60 % 10.73 % 10.50 % 11.24 % risk-weighted assetsTier 1 capital to 10.47 % 10.60 % 10.73 % 10.50 % 11.25 % risk-weighted assetsTotal capital to 12.18 % 12.36 % 12.48 % 12.20 % 13.10 % risk-weighted assetsTier 1 capital to 7.80 % 8.10 % 8.25 % 8.23 % 8.22 % average assetsTangible commonequity to total 7.54 % 8.03 % 8.05 % 8.22 % 8.22 % 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) September 30, September 30, % Change 2021 2020ASSETS Cash and due from $ 102,313 $ 70,472 45 % banksInterest-bearingbalances due from 4,297,473 1,551,597 177 % depositoryinstitutionsFederal funds sold 44,700 1,302 3,333 % Cash and cash 4,444,486 1,623,371 174 % equivalentsAvailable for saledebt securities, at 723,324 913,049 (21 )% fair valueHeld to maturity debtsecurities (fair valueof $261,276 at 261,276 250 104,410 % September 30, 2021 and$250 at September 30,2020)Mortgage loans held 578 21,472 (97 )% for saleLoans 8,812,811 8,508,554 4 % Less allowance for (108,950 ) (92,440 ) 18 % credit lossesLoans, net 8,703,861 8,416,114 3 % Premises and 60,953 55,273 10 % equipment, netGoodwill and otheridentifiable 13,705 13,976 (2 )% intangible assetsOther assets 394,045 351,369 12 % Total assets $ 14,602,228 $ 11,394,874 28 % LIABILITIES AND STOCKHOLDERS' EQUITYLiabilities: Deposits: Non-interest-bearing $ 4,366,654 $ 2,762,814 58 % Interest-bearing 7,712,016 6,910,969 12 % Total deposits 12,078,670 9,673,783 25 % Federal funds 1,286,756 669,350 92 % purchasedOther borrowings 64,701 64,719 - % Other liabilities 57,808 37,433 54 % Total liabilities 13,487,935 10,445,285 29 % Stockholders' equity: Preferred stock, parvalue $0.001 pershare; 1,000,000 authorized andundesignated atSeptember 30, 2021 and - - September 30, 2020Common stock, parvalue $0.001 pershare; 100,000,000 shares authorized;54,207,147 sharesissued and outstandingat September 30, 2021, and 53,915,245 sharesissued and outstandingat September 30, 2020 54 54 - % Additional paid-in 225,648 223,280 1 % capitalRetained earnings 869,731 706,924 23 % Accumulated other 18,360 18,831 (3 )% comprehensive incomeTotal stockholders'equity attributable to 1,113,793 949,089 17 % ServisFirstBancshares, Inc.Noncontrolling 500 500 - % interestTotal stockholders' 1,114,293 949,589 17 % equityTotal liabilities and $ 14,602,228 $ 11,394,874 28 % stockholders' equity

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Interest income: Interest and fees on $ 96,119 $ 89,564 $ 285,373 $ 268,332 loansTaxable securities 6,544 5,858 18,666 16,104 Nontaxable securities 62 166 255 610 Federal funds sold 4 16 11 327 Other interest and 1,507 506 3,046 2,584 dividendsTotal interest income 104,236 96,110 307,351 287,957 Interest expense: Deposits 6,581 9,876 20,298 37,377 Borrowed funds 1,335 1,152 3,700 4,624 Total interest 7,916 11,028 23,998 42,001 expenseNet interest income 96,320 85,082 283,353 245,956 Provision for credit 5,963 12,284 23,066 36,151 lossesNet interest incomeafter provision for 90,357 72,798 260,287 209,805 credit lossesNon-interest income: Service charges on 1,727 1,818 5,542 5,557 deposit accountsMortgage banking 1,423 2,519 6,869 5,697 Credit card income 2,043 1,840 5,147 5,003 Securities gains - - 620 - Increase in cashsurrender value life 1,671 1,733 5,012 4,650 insuranceOther operating 1,162 262 2,897 972 incomeTotal non-interest 8,026 8,172 26,087 21,879 incomeNon-interest expense: Salaries and employee 17,995 14,994 50,425 46,444 benefitsEquipment and 2,996 2,556 8,494 7,390 occupancy expenseThird partyprocessing and other 4,144 3,281 11,506 10,360 servicesProfessional services 948 955 2,978 2,994 FDIC and otherregulatory 1,630 1,061 4,637 2,988 assessmentsOther real estate 123 119 820 2,023 owned expenseOther operating 6,541 3,607 15,740 11,110 expenseTotal non-interest 34,377 26,573 94,600 83,309 expenseIncome before income 64,006 54,397 191,774 148,375 taxProvision for income 11,507 11,035 37,793 29,787 taxNet income 52,499 43,362 153,981 118,588 Dividends on - - 31 31 preferred stockNet income availableto common $ 52,499 $ 43,362 $ 153,950 $ 118,557 stockholdersBasic earnings per $ 0.97 $ 0.80 $ 2.84 $ 2.20 common shareDiluted earnings per $ 0.96 $ 0.80 $ 2.83 $ 2.19 common share

LOANS BY TYPE (UNAUDITED)(In thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020Commercial,financial and $ 2,927,845 $ 3,105,243 $ 3,323,093 $ 3,295,900 $ 3,466,189agriculturalReal estate - 887,938 782,305 666,592 593,614 530,919constructionReal estate - mortgage:Owner-occupied 1,809,840 1,726,888 1,698,695 1,693,428 1,725,222commercial1-4 family 765,102 707,546 685,840 711,692 671,841mortgageOther mortgage 2,357,812 2,262,231 2,068,560 2,106,184 2,056,549Subtotal: Realestate - 4,932,754 4,696,665 4,453,095 4,511,304 4,453,612mortgageConsumer 64,274 65,481 62,200 64,870 57,834Total loans $ 8,812,811 $ 8,649,694 $ 8,504,980 $ 8,465,688 $ 8,508,554

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)(Dollars in thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020Allowance for credit losses:Beginning $ 104,670 $ 94,906 $ 87,942 $ 92,440 $ 91,507 balanceImpact ofAdoption of - - - (2,000 ) - ASC 326Loans charged off:Commercialfinancial and 1,541 150 477 8,792 11,146 agriculturalReal estate - - - - 202 - constructionReal estate - 208 59 12 - 200 mortgageConsumer 86 54 87 38 44 Total charge 1,835 263 576 9,032 11,390 offsRecoveries: Commercialfinancial and 140 298 26 94 12 agriculturalReal estate - - 2 50 30 - constructionReal estate - 4 62 2 114 12 mortgageConsumer 8 13 11 13 15 Total 152 375 89 251 39 recoveriesNet 1,683 (112 ) 487 8,781 11,351 charge-offsProvision for 5,963 9,652 7,451 6,283 12,284 credit lossesEnding balance $ 108,950 $ 104,670 $ 94,906 $ 87,942 $ 92,440 Allowance forcredit losses 1.24 % 1.21 % 1.12 % 1.04 % - to total loansAllowance forcredit losses 1.26 % 1.21 % 1.11 % 1.04 % - to totalaverage loansAllowance forloan losses to - - - - 1.09 %total loansAllowance forloan losses to - - - - 1.11 %totalaverageloansNet charge-offs(recoveries) to 0.08 % (0.01 )% 0.02 % 0.41 % 0.54 %total average loansProvision forcredit losses 0.27 % 0.45 % 0.35 % 0.30 % - to totalaverageloansProvision forloan losses to - - - - 0.58 %totalaverageloansNonperforming assets:Nonaccrual $ 9,145 $ 12,301 $ 13,088 $ 13,973 $ 21,675 loansLoans 90+ dayspast due and 5,326 4,888 4,804 4,981 4,898 accruingOther realestate ownedand 2,068 2,039 2,067 6,497 6,976 repossessedassetsTotal $ 16,539 $ 19,228 $ 19,959 $ 25,451 $ 33,549 Nonperformingloans to total 0.16 % 0.20 % 0.21 % 0.22 % 0.31 %loansNonperformingassets to 0.11 % 0.15 % 0.16 % 0.21 % 0.29 %total assetsNonperformingassets to 0.11 % 0.15 % 0.16 % 0.22 % 0.30 %earning assetsAllowance for creditlosses to nonaccrual 1,191.36 % 850.91 % 725.14 % 629.37 % - loansAllowance forloan losses to - - - - 426.48 %nonaccrual loans Restructured $ 437 $ 441 $ 794 $ 818 $ 1,800 accruing loans Restructuredaccruing loans - % 0.01 % 0.01 % 0.01 % 0.02 %to total loans TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)(In thousands) 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2021 2021 2021 2020 2020Beginning $ 2,918 $ 3,542 $ 1,433 $ 2,738 $ 1,568 balance:Additions - - 2,146 - 1,182 Net (paydowns) (25 ) (624 ) (37 ) (619 ) (12 )/ advancesCharge-offs - - - (535 ) - Transfer to - - - (151 ) - OREOEnding balance $ 2,893 $ 2,918 $ 3,542 $ 1,433 $ 2,738

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) 3rd 2nd 1st 4th 3rd Quarter Quarter Quarter Quarter Quarter 2021 2021 2021 2020 2020Interest income:Interest andfees on $ 96,119 $ 95,451 $ 93,803 $ 94,332 $ 89,564 loansTaxable 6,544 6,315 5,807 6,018 5,858 securitiesNontaxable 62 86 107 129 166 securitiesFederal 4 4 3 5 16 funds soldOtherinterest and 1,507 863 676 581 506 dividendsTotalinterest 104,236 102,719 100,396 101,065 96,110 incomeInterest expense:Deposits 6,581 6,836 6,881 7,853 9,876 Borrowed 1,335 1,215 1,150 1,131 1,152 fundsTotalinterest 7,916 8,051 8,031 8,984 11,028 expenseNet interest 96,320 94,668 92,365 92,081 85,082 incomeProvisionfor credit 5,963 9,652 7,451 6,283 12,284 lossesNet interestincome afterprovision 90,357 85,016 84,914 85,798 72,798 for creditlossesNon-interest income:Servicecharges on 1,727 1,907 1,908 1,971 1,818 depositaccountsMortgage 1,423 2,699 2,747 3,050 2,519 bankingCredit card 2,043 1,912 1,192 913 1,840 incomeSecurities - 620 - - - gainsIncrease incashsurrender 1,671 1,683 1,658 1,660 1,733 value lifeinsuranceOtheroperating 1,162 777 958 643 262 incomeTotalnon-interest 8,026 9,598 8,463 8,237 8,172 incomeNon-interest expense:Salaries andemployee 17,995 16,887 15,543 14,970 14,994 benefitsEquipmentand 2,996 2,844 2,654 2,680 2,556 occupancyexpenseThird partyprocessing 4,144 3,946 3,416 3,418 3,281 and otherservicesProfessional 948 1,107 923 1,248 955 servicesFDIC andother 1,630 1,425 1,582 1,366 1,061 regulatoryassessmentsOther realestate owned 123 540 157 140 119 expenseOtheroperating 6,541 4,560 4,639 4,380 3,607 expenseTotalnon-interest 34,377 31,309 28,914 28,202 26,573 expenseIncomebefore 64,006 63,305 64,463 65,833 54,397 income taxProvisionfor income 11,507 13,278 13,008 14,852 11,035 taxNet income 52,499 50,027 51,455 50,981 43,362 Dividends onpreferred - 31 - 32 - stockNet incomeavailable to $ 52,499 $ 49,996 $ 51,455 $ 50,949 $ 43,362 commonstockholdersBasicearnings per $ 0.97 $ 0.92 $ 0.95 $ 0.94 $ 0.80 common shareDilutedearnings per $ 0.96 $ 0.92 $ 0.95 $ 0.94 $ 0.80 common share

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 3rd 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 $ 8,653,632 4.40 % $ 8,618,139 4.43 % $ 8,484,914 4.47 % $ 8,435,237 4.43 % $ 8,335,087 4.26 % Tax-exempt (2) 26,542 4.05 26,854 4.05 27,592 4.17 29,393 4.16 30,068 4.14 Total loans, net of unearned income 8,680,174 4.39 8,644,993 4.43 8,512,506 4.47 8,464,630 4.43 8,365,155 4.26 Mortgage loans held for 7,050 1.69 11,470 1.92 13,601 1.94 19,459 1.37 20,053 1.41 sale Debt securities: Taxable 969,715 2.70 936,863 2.70 878,118 2.65 862,333 2.79 820,526 2.86 Tax-exempt (2) 12,382 2.39 16,872 2.47 21,084 2.43 25,542 2.52 31,880 2.51 Total securities 982,097 2.70 953,735 2.69 899,202 2.64 887,875 2.78 852,406 2.84 (3) Federal funds sold 8,551 0.19 8,224 0.20 11,935 0.10 16,306 0.12 41,884 0.15 Interest-bearing 3,761,652 0.16 2,790,524 0.12 2,262,233 0.12 1,837,249 0.13 1,500,563 0.13 balances with banks Total interest-earning $ 13,439,524 3.08 % $ 12,408,946 3.32 % $ 11,699,477 3.48 % $ 11,225,519 3.58 % $ 10,780,061 3.55 % assetsNon-interest-earning assets: Cash and due from banks 90,034 85,478 71,166 91,258 75,065 Net premises and 62,845 61,240 57,198 56,315 56,799 equipment Allowance for credit losses, accrued interest and other 315,178 320,729 320,407 308,746 281,196 assets Total assets $ 13,907,581 $ 12,876,393 $ 12,148,248 $ 11,681,838 $ 11,193,121 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 1,431,420 0.19 % $ 1,350,098 0.19 % $ 1,294,614 0.19 % $ 1,197,908 0.23 % $ 1,077,595 0.31 % Savings 122,579 0.17 104,283 0.18 93,375 0.18 86,259 0.18 82,671 0.36 Money market 5,328,291 0.26 5,321,338 0.26 5,057,828 0.27 4,933,285 0.31 4,739,566 0.44 Time deposits 806,108 1.15 801,928 1.33 808,561 1.44 810,675 1.59 841,378 1.78 Total interest-bearing 7,688,398 0.34 7,577,647 0.36 7,254,378 0.38 7,028,127 0.44 6,741,210 0.58 deposits Federal funds purchased 1,205,327 0.21 970,708 0.22 849,772 0.22 752,765 0.22 682,971 0.22 Other borrowings 64,694 4.23 64,694 4.28 64,689 4.33 64,701 4.41 64,717 4.78 Total interest-bearing $ 8,958,419 0.35 % $ 8,613,049 0.37 % $ 8,168,839 0.40 % $ 7,845,593 0.46 % $ 7,488,898 0.59 % liabilitiesNon-interest-bearing liabilities: Non-interest-bearing demand deposits 3,800,972 3,154,605 2,923,041 2,812,254 2,728,513 Other liabilities 26,891 52,027 39,442 48,642 39,537 Stockholders' equity 1,100,156 1,038,012 996,741 956,847 917,626 Accumulated other comprehensive income 21,143 18,700 20,185 18,502 18,547 Total liabilities and stockholders' $ 13,907,581 $ 12,876,393 $ 12,148,248 $ 11,681,838 $ 11,193,121 equityNet interest spread 2.73 % 2.95 % 3.08 % 3.12 % 2.96 % Net interest margin 2.85 % 3.06 % 3.20 % 3.27 % 3.14 % (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.