GlobeNewswire Inc | Jan 24, 2022 04:02PM EST

January 24, 2022

BIRMINGHAM, Ala., Jan. 24, 2022 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NYSE: SFBS), today announced earnings and operating results for the quarter and year ended December 31, 2021.

Fourth Quarter 2021 Highlights:

-- Diluted earnings per share were $0.99 for the fourth quarter of 2021, a 5% increase over the fourth quarter of 2020. Excluding the impact of core system conversion expenses recognized during the fourth quarter of 2021, diluted earnings per share were $1.03, an increase of 10% over the fourth quarter of 2020 -- Diluted earnings per share were $3.82 for 2021, a 22% increase over 2020. Excluding the impact of core system conversion expenses, diluted earnings per share were $3.86 for 2021, a 23% increase over 2020 -- Total loans grew from $8.5 billion to $9.5 billion, or by 13%, during 2021, and grew $720.1 million, or 32%, annualized, on a linked-quarter basis. Total loans, excluding the impact of Paycheck Protection Program (PPP) loan forgiveness, grew $877.7 million, or 41% annualized, during the quarter -- Deposits grew from $9.98 billion to $12.45 billion year-over-year, or 25%, and grew $374 million on a linked-quarter basis, or 12%, annualized -- Book value per share increased to $21.24, a 15% increase year-over-year -- Cash dividend increased from $0.20 to $0.23 per quarter, a 15% increase

Tom Broughton, Chairman, President and CEO, said, Our strong business development initiatives continue to result in record loan growth and a strong loan pipeline.

Bud Foshee, CFO, said, Excellent credit quality and low levels of loan losses are evidence that we will be able to leverage our excess liquidity in a profitable manner. Operating efficiency will continue to be a focus in 2022.

FINANCIAL SUMMARY (UNAUDITED)(in Thousands except share and per share amounts) % Change % Change From From Period Period Period Ending Period Ending Ending Period Ending Ending December 31, September 30, September December 31, December 2021 2021 30, 2021 2020 31, 2020 to Period to Period Ending Ending December December 31, 2021 31, 2021QUARTERLY OPERATING RESULTSNet Income $ 53,753 $ 52,499 2 % $ 50,981 5 % Net Income Availableto Common $ 53,722 $ 52,499 2 % $ 50,949 5 % StockholdersDiluted Earnings Per $ 0.99 $ 0.96 3 % $ 0.94 5 % ShareReturn on Average 1.40 % 1.50 % 1.74 % AssetsReturn on AverageCommon Stockholders' 18.75 % 18.93 % 20.78 % EquityAverage Diluted 54,493,959 54,477,740 54,273,944 Shares Outstanding Net income -adjusted for core system conversion expenses, net of $ 56,004 $ 52,499 7 % $ 50,981 10 % tax*Net Income Availableto Common Stockholders - adjusted for core system conversion expenses, net of tax* $ 55,973 $ 52,499 7 % $ 50,949 10 % Diluted Earnings PerShare - adjusted for core system conversion expenses, net of $ 1.03 $ 0.96 7 % $ 0.94 10 % tax*Return on AverageAssets - adjusted for core system conversion expenses, net of 1.46 % 1.50 % 1.74 % tax*Return on AverageCommon Stockholders' Equity - adjusted for core system conversion expenses, net of tax* 19.54 % 18.93 % 20.78 % YEAR-TO-DATE OPERATING RESULTSNet Income $ 207,734 $ 169,569 23 % Net Income Availableto Common $ 207,672 $ 169,506 23 % StockholdersDiluted Earnings Per $ 3.82 $ 3.13 22 % ShareReturn on Average 1.53 % 1.59 % AssetsReturn on AverageCommon Stockholders' 19.26 % 18.55 % EquityAverage Diluted 54,434,573 54,219,037 Shares Outstanding Net income -adjusted for core system conversion expenses, net of $ 209,985 $ 169,569 24 % tax*Net Income Availableto Common Stockholders - adjusted for core system conversion expenses, net of tax* $ 209,923 $ 169,506 24 % Diluted Earnings PerShare - adjusted for core system conversion expenses, net of $ 3.86 $ 3.13 23 % tax*Return on AverageAssets - adjusted for core system conversion expenses, net of 1.55 % 1.59 % tax*Return on AverageCommon Stockholders' Equity - adjusted for core system conversion expenses, net of tax* 19.47 % 18.55 % BALANCE SHEET Total Assets $ 15,448,806 $ 14,602,228 6 % $ 11,932,654 29 % Loans 9,532,934 8,812,811 8 % 8,465,688 13 % Non-interest-bearing 4,799,767 4,366,654 10 % 2,788,772 72 % Demand DepositsTotal Deposits 12,452,836 12,078,670 3 % 9,975,724 25 % Stockholders' Equity 1,152,015 1,114,293 3 % 992,852 16 % * The adjustment for the core system conversion expenses included in thecomparative periods presented in this press release are more fully described in "Detailed Financials" and in "GAAP Reconciliation and Management Explanation ofNon-GAAP Financial Measures" below.

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income of $53.8 million and net income available to common stockholders of $53.7 million for the quarter ended December 31, 2021, compared to net income and net income available to common stockholders of $51.0 million and $50.9 million, respectively, for the same quarter in 2020. Basic and diluted earnings per common share were $0.99 for the fourth quarter of 2021, compared to $0.94 for the fourth quarter of 2020.

Annualized return on average assets was 1.40% and annualized return on average common stockholders equity was 18.75% for the fourth quarter of 2021, compared to 1.74% and 20.78%, respectively, for the fourth quarter of 2020.

Net interest income was $101.2 million for the fourth quarter of 2021, compared to $96.3 million for the third quarter of 2021 and $92.1 million for the fourth quarter of 2020. The net interest margin in the fourth quarter of 2021 was 2.71% compared to 2.85% in the third quarter of 2021 and 3.27% in the fourth quarter of 2020. Accretion of net fees on PPP loans of $5.1 million during the fourth quarter of 2021 contributed 22 basis points of the loan yield, compared to $5.2 million of PPP loan fee accretion during the third quarter of 2021, or 24 basis points of the loan yield and $7.5 million during the fourth quarter of 2020, or 35 basis points of the loan yield.

Average loans for the fourth quarter of 2021 were $9.06 billion, an increase of $378.9 million, or 17.3% annualized, over average loans of $8.68 billion for the third quarter of 2021, and an increase of $594.4 million, or 7.0%, over average loans of $8.46 billion for the fourth quarter of 2020. Forgiveness of PPP loans during the fourth quarter of 2021 totaled $157.8 million. PPP loans outstanding as of December 31, 2021 were $230.2 million.

Average total deposits for the fourth quarter of 2021 were $12.39 billion, an increase of $897.5 million, or 31.0%, annualized, over average total deposits of $11.49 billion for the third quarter of 2021, and an increase of $2.55 billion, or 25.9%, over average total deposits of $9.84 billion for the fourth quarter of 2020.

Non-performing assets to total assets were 0.09% for the fourth quarter of 2021, a decrease of two basis points compared to 0.11% for the third quarter of 2021 and a decrease of 12 basis points compared to 0.21% for the fourth quarter of 2020. Annualized net charge-offs to average loans were 0.03% for the fourth quarter of 2021, compared to 0.08% and 0.41% for the third quarter of 2021 and fourth quarter of 2020, respectively. The allowance for credit losses for each quarter-end period presented was calculated under the CECL methodology. The allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 30, 2020 was 1.22%, 1.24% and 1.04%, respectively. Excluding PPP loans, the allowance for credit losses as a percentage of total loans at December 31, 2021, September 30, 2021 and December 31, 2020 was 1.25%, 1.29%, and 1.16%, respectively. We recorded an $8.5 million provision for credit losses in the fourth quarter of 2021 compared to $6.0 million in the third quarter of 2021 and $6.3 million in the fourth quarter of 2020.

Non-interest income decreased $872,000, or 10.6%, to $7.4 million for the fourth quarter of 2021 from $8.2 million in the fourth quarter of 2020. Service charges on deposit accounts decreased $674,000, or 34.2%, to $1.3 million from the fourth quarter of 2020 to the fourth quarter of 2021. Mortgage banking revenue decreased $2.6 million, or 84.6%, to $471,000 from the fourth quarter of 2020 to the fourth quarter of 2021. We started retaining our mortgage loans in the second quarter of 2021 to increase earning assets and use excess liquidity. As of December 31, 2021, we had retained a total of 202 1-4 family mortgages for an aggregate balance of $76.9 million. Net credit card revenue increased $1.3 million, or 141.0%, to $2.2 million during the fourth quarter of 2021, compared to $913,000 during the fourth quarter of 2020. The number of credit card accounts increased approximately 6.4% and the aggregate amount of spend on all credit card accounts increased 36% during the fourth quarter of 2021 compared to the fourth quarter of 2020. Other operating income for the fourth quarter of 2021 increased $1.1 million, or 174.8%, to $1.8 million from $643,000 in the fourth quarter of 2020. We wrote up the value of our interest rate cap by $839,000 during the fourth quarter of 2021 through other income compared to a write down of $61,000 during the fourth quarter of 2020. Increased probabilities of Fed rate increases contributed to the recovery in the fair value of our interest rate cap during the fourth quarter of 2021. Merchant service revenue increased from $168,000 during the fourth quarter of 2020 to $376,000, or 124.1%, during the fourth quarter of 2021.

Non-interest expense for the fourth quarter of 2021 increased $10.3 million, or 36.5%, to $38.5 million from $28.2 million in the fourth quarter of 2020, and increased $4.1 million, or 12.0%, on a linked quarter basis. Salary and benefit expense for the fourth quarter of 2021 increased $2.3 million, or 15.6%, to $17.3 million from $15.0 million in the fourth quarter of 2020, and decreased $692,000, or 3.8%, on a linked quarter basis. Salary expense alone increased 6.2% 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 $2.4 million to $4.4 million for the fourth quarter of 2021 compared the same quarter in 2020. The number of FTE employees increased by 9 to 502 at December 31, 2021 compared to 493 at December 31, 2020, and decreased by 16 from the end of the third quarter of 2021. Equipment and occupancy expense increased $230,000, or 8.6%, to $2.9 million in the fourth quarter of 2021, from $2.7 million in the fourth quarter of 2020, and decreased $86,000, or 2.9% 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. The linked-quarter decrease is primarily attributable to adjustments of accrued property taxes. Third party processing and other services expense increased $1.4 million, or 42.1%, to $4.9 million in the fourth quarter of 2021, from $3.4 million in the fourth quarter of 2020 and increased $712,000, or 17.2%, on a linked-quarter basis. We increased the number of correspondent banks for which we are processing transactions through the Federal Reserve Bank. Professional services expense decreased $335,000, or 26.8%, to $913,000 in the fourth quarter of 2021, from $1.2 million in the fourth quarter of 2020, primarily due to adjustments in accrued professional services fees during the fourth quarter of 2021. FDIC and other regulatory assessments decreased $324,000 to $1.0 million in the fourth quarter of 2021, from $1.4 million in the fourth quarter of 2020, and decreased $588,000, or 36.1%, on a linked quarter basis. ServisFirst Bank was reclassified as a large financial institution by the FDIC as of September 30, 2021. Other operating expenses for the fourth quarter of 2021 increased $7 million, or 160.7%, to $11.4 million from $4.4 million in the fourth quarter of 2020, and increased $4.9 million on a linked-quarter basis. This increase in other operating expenses includes a $3.0 million charge for expenses associated with the conversion to a new core operating system scheduled to take place in the third quarter of 2022. See GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures below for more discussion of these expenses. We invested $24.5 million in a new market tax credit during the fourth quarter of 2021. We wrote down the investment by $3.1 million during the fourth quarter of 2021 as we recognize the tax credits. We decreased our reserve for credit losses on unfunded loan commitments by $1.7 million in the fourth quarter of 2021. The efficiency ratio was 35.47% during the fourth quarter of 2021 compared to 28.11% during the fourth quarter of 2020 and compared to 32.95% during the third quarter of 2021. The efficiency ratio was 32.70% when adjusted for the core system conversion costs discussed above.

Income tax expense decreased $7.0 million, or 47.3%, to $7.8 million in the fourth quarter of 2021, compared to $14.9 million in the fourth quarter of 2020. Our effective tax rate was 12.70% for the fourth quarter of 2021 compared to 22.56% for the fourth quarter of 2020. We recognized an aggregate of $7.4 million in credits during the fourth quarter of 2021 related to investments in new market tax credits. 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 fourth quarters of 2021 and 2020 of $363,000 and $170,000, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

During the fourth quarter of 2021, we recorded $3.0 million of expenses associated with our core operating system conversion scheduled to be completed during the third quarter of 2022. The expenses relate to negotiated liquidated damages of our existing system contracts and the procurement of our data from those providers. Financial measures included in this press release that are presented adjusted for these expenses are net income, net income available to common stockholders, diluted earnings per share, return on average assets, return on average common stockholders equity and efficiency ratio. Each of these six financial measures excludes the impact of this item, net of tax, and are all considered non-GAAP financial measures. This press release also 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.

Three Months Ended Year Ended December 31, 2021 December 31, 2021Net income - $ 53,753 $ 207,734 GAAP Adjustments: Core system conversion 3,007 3,007 expenses Tax on (756 ) (756 ) adjustmentAdjusted netincome - $ 56,004 $ 209,985 non-GAAP Net incomeavailable tocommon $ 53,722 $ 207,672 stockholders -GAAP Adjustments: Core system conversion 3,007 3,007 expenses Tax on (756 ) (756 ) adjustmentAdjusted netincome available to commonstockholders - non-GAAP $ 55,973 $ 209,923 Diluted earnings $ 0.99 3.82 per share - GAAP Adjustments: Core system conversion 0.05 0.05 expenses Tax on (0.01 ) (0.01 ) adjustmentAdjusted dilutedearnings per $ 1.03 $ 3.86 share - non-GAAP Return onaverage assets - 1.40 % 1.53 % GAAPNet income - $ 53,753 $ 207,734 GAAP Adjustments: Core system conversion 3,007 3,007 expenses Tax on (756 ) (756 ) adjustmentAdjusted netincome - $ 56,004 $ 209,985 non-GAAPAverage assets - $ 15,250,671 $ 13,555,221 GAAPAdjusted returnon average 1.46 % 1.55 % assets -non-GAAP Return onaverage common 18.75 % 19.26 % stockholders'equity - GAAPNet incomeavailable tocommon $ 53,722 $ 207,672 stockholders -GAAP Adjustments: Core system conversion 3,007 3,007 expenses Tax on (756 ) (756 ) adjustmentAdjusted netincome available to commonstockholders - non-GAAP $ 55,973 $ 209,923 Average commonstockholders' $ 1,136,610 $ 1,078,075 equity - GAAPAdjusted returnon averagecommon 19.54 % 19.47 % stockholders'equity - non-GAAP Efficiency ratio 35.47 % Non-interest $ 38,489 expense - GAAP Adjustments: Core system conversion 3,007 expensesAdjustednon-interest 35,482 expenseNet interestincome plus $ 108,515 non-interestincome - GAAPAdjustedefficiency ratio 32.70 % - non-GAAP At December 31, At September 30, At June 30, At March 31, At December 31, 2021 2021 2021 2021 2020Book value per $ 21.24 $ 20.56 $ 19.80 $ 19.03 $ 18.41 share - GAAPTotal commonstockholders' 1,152,015 1,114,293 1,073,284 1,030,485 992,852 equity - GAAP Adjustments: Adjusted for goodwill and core deposit (13,638 ) (13,705 ) (13,773 ) (13,841 ) (13,908 ) intangible assetTangible commonstockholders' $ 1,138,377 $ 1,100,588 $ 1,059,511 $ 1,016,644 $ 978,944 equity -non-GAAPTangible bookvalue per share $ 20.99 $ 20.30 $ 19.55 $ 18.78 $ 18.15 - non-GAAP Stockholders'equity to total 7.46 % 7.63 % 8.13 % 8.15 % 8.32 % assets - GAAPTotal assets - $ 15,448,806 $ 14,602,228 $ 13,207,319 $ 12,647,374 $ 11,932,654 GAAP Adjustments: Adjusted for goodwill and core deposit (13,638 ) (13,705 ) (13,773 ) (13,841 ) (13,908 ) intangible assetTotal tangibleassets - $ 15,435,168 $ 14,588,523 $ 13,193,546 $ 12,633,533 $ 11,918,746 non-GAAPTangible commonequity to total 7.38 % 7.54 % 8.03 % 8.05 % 8.21 % tangible assets- non-GAAP Total loans - $ 9,532,934 $ 8,812,811 $ 8,649,694 $ 8,504,980 $ 8,465,688 GAAP Adjustments: Adjusted to exclude PPP (230,184 ) (387,725 ) (595,017 ) (967,641 ) (900,493 ) loansLoans, excludingPPP loans - $ 9,302,750 $ 8,425,086 $ 8,054,677 $ 7,537,339 $ 7,565,195 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) 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th Quarter 2020 CONSOLIDATED STATEMENT OF INCOMEInterest income $ 108,954 $ 104,236 $ 102,719 $ 100,396 $ 101,065 Interest expense 7,804 7,916 8,051 8,031 8,984 Net interest income 101,150 96,320 94,668 92,365 92,081 Provision for credit 8,451 5,963 9,652 7,451 6,283 lossesNet interest incomeafter provision for 92,699 90,357 85,016 84,914 85,798 credit lossesNon-interest income 7,365 8,026 9,598 8,463 8,237 Non-interest expense 38,489 34,377 31,309 28,914 28,202 Income before income 61,575 64,006 63,305 64,463 65,833 taxProvision for income 7,822 11,507 13,278 13,008 14,852 taxNet income 53,753 52,499 50,027 51,455 50,981 Preferred stock 31 - 31 - 32 dividendsNet income availableto common $ 53,722 $ 52,499 $ 49,996 $ 51,455 $ 50,949 stockholdersEarnings per share - $ 0.99 $ 0.97 $ 0.92 $ 0.95 $ 0.94 basicEarnings per share - $ 0.99 $ 0.96 $ 0.92 $ 0.95 $ 0.94 dilutedAverage diluted 54,493,959 54,477,740 54,460,230 54,381,991 54,273,944 shares outstanding CONSOLIDATED BALANCE SHEET DATATotal assets $ 15,448,806 $ 14,602,228 $ 13,207,319 $ 12,647,374 $ 11,932,654 Loans 9,532,934 8,812,811 8,649,694 8,504,980 8,465,688 Debt securities 1,305,527 984,600 1,013,783 962,129 886,938 Non-interest-bearing 4,799,767 4,366,654 3,296,429 3,044,611 2,788,772 demand depositsTotal deposits 12,452,836 12,078,670 10,958,236 10,577,610 9,975,724 Borrowings 64,706 64,701 64,696 64,691 64,748 Stockholders' equity 1,152,015 1,114,293 1,073,284 1,030,485 992,852 Shares outstanding 54,227,060 54,207,147 54,201,204 54,137,650 53,943,751 Book value per share $ 21.24 $ 20.56 $ 19.80 $ 19.03 $ 18.41 Tangible book value $ 20.99 $ 20.30 $ 19.55 $ 18.78 $ 18.15 per share (1) SELECTED FINANCIAL RATIOS (Annualized)Net interest margin 2.71 % 2.85 % 3.06 % 3.20 % 3.27 % Return on average 1.40 % 1.50 % 1.56 % 1.72 % 1.74 % assetsReturn on averagecommon stockholders' 18.75 % 18.93 % 18.98 % 19.83 % 20.78 % equityEfficiency ratio 35.47 % 32.95 % 30.03 % 28.68 % 28.11 % Non-interest expenseto average earning 1.03 % 1.01 % 1.01 % 1.00 % 1.00 % assets CAPITAL RATIOS (2) Common equity tier 1capital to 9.95 % 10.46 % 10.60 % 10.73 % 10.50 % risk-weighted assetsTier 1 capital to 9.96 % 10.47 % 10.60 % 10.73 % 10.50 % risk-weighted assetsTotal capital to 11.58 % 12.18 % 12.36 % 12.48 % 12.20 % risk-weighted assetsTier 1 capital to 7.39 % 7.80 % 8.10 % 8.25 % 8.23 % average assetsTangible commonequity to total 7.38 % 7.54 % 8.03 % 8.05 % 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) December 31, December 31, % Change 2021 2020ASSETS Cash and due from banks $ 56,934 $ 93,655 (39 ) % Interest-bearingbalances due from 4,106,790 2,115,985 94 % depository institutionsFederal funds sold 58,372 1,771 3,196 % Cash and cash 4,222,096 2,211,411 91 % equivalentsAvailable for sale debtsecurities, at fair 842,570 886,688 (5 ) % valueHeld to maturity debtsecurities (fair valueof $466,286 at December 462,957 250 NM 31, 2021 and $250 atDecember 31, 2020)Restricted equity 7,311 - securitiesMortgage loans held for 1,114 14,425 (92 ) % saleLoans 9,532,934 8,465,688 13 % Less allowance for (116,660 ) (87,942 ) 33 % credit losses Loans, net 9,416,274 8,377,746 12 % Premises and equipment, 60,300 54,969 10 % netGoodwill and otheridentifiable intangible 13,638 13,908 (2 ) % assetsOther assets 429,859 373,256 15 % Total assets $ 15,448,806 $ 11,932,654 29 % LIABILITIES AND STOCKHOLDERS' EQUITYLiabilities: Deposits: Non-interest-bearing $ 4,799,767 $ 2,788,772 72 % Interest-bearing 7,653,069 7,186,952 6 % Total deposits 12,452,836 9,975,724 25 % Federal funds purchased 1,711,777 851,545 101 % Other borrowings 64,706 64,748 - % Other liabilities 67,472 47,785 41 % Total liabilities 14,296,791 10,939,802 31 % Stockholders' equity: Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at December 31, 2021 and December 31, - - 2020 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,227,060 shares issued and outstanding at December 31, 2021, and 53,943,751 shares issued and outstanding at December 31, 54 54 - % 2020 Additional paid-in 226,397 223,856 1 % capital Retained earnings 911,008 748,224 22 % Accumulated other 14,056 20,218 (30 ) % comprehensive income Total stockholders' equity 1,151,515 992,352 16 % attributable to ServisFirst Bancshares, Inc. Noncontrolling 500 500 - % interest Total stockholders' 1,152,015 992,852 16 % equity Total liabilities and stockholders' $ 15,448,806 $ 11,932,654 29 % equity

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Interest income: Interest and fees $ 100,348 $ 94,332 $ 385,721 $ 362,664 on loans Taxable 6,747 6,018 25,413 22,122 securities Nontaxable 47 129 302 739 securities Federal funds 18 5 29 332 sold Other interest 1,794 581 4,840 3,165 and dividends Total interest 108,954 101,065 416,305 389,022 incomeInterest expense: Deposits 6,271 7,853 26,569 45,230 Borrowed funds 1,533 1,131 5,233 5,755 Total interest 7,804 8,984 31,802 50,985 expense Net interest 101,150 92,081 384,503 338,037 incomeProvision for credit 8,451 6,283 31,517 42,434 losses Net interest income after 92,699 85,798 352,986 295,603 provision for credit lossesNon-interest income: Service charges on deposit 1,297 1,971 6,839 7,528 accounts Mortgage banking 471 3,050 7,340 8,747 Credit card 2,200 913 7,347 5,916 income Securities gains - - 620 - Increase in cash surrender value 1,630 1,660 6,642 6,310 life insurance Other operating 1,767 643 4,664 1,615 income Total non-interest 7,365 8,237 33,452 30,116 incomeNon-interest expense: Salaries and 17,303 14,970 67,728 61,414 employee benefits Equipment and 2,910 2,680 11,404 10,070 occupancy expense Third party processing and 4,856 3,418 16,362 13,778 other services Professional 913 1,248 3,891 4,242 services FDIC and other regulatory 1,042 1,366 5,679 4,354 assessments Other real estate 48 140 868 2,163 owned expense Other operating 11,417 4,380 27,157 15,490 expense Total non-interest 38,489 28,202 133,089 111,511 expense Income before 61,575 65,833 253,349 214,208 income taxProvision for income 7,822 14,852 45,615 44,639 tax Net income 53,753 50,981 207,734 169,569 Dividends on 31 32 62 63 preferred stock Net income available to $ 53,722 $ 50,949 $ 207,672 $ 169,506 common stockholdersBasic earnings per $ 0.99 $ 0.94 $ 3.83 $ 3.15 common shareDiluted earnings per $ 0.99 $ 0.94 $ 3.82 $ 3.13 common share

LOANS BY TYPE (UNAUDITED)(In thousands) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2021 2021 2021 2021 2020Commercial,financial and $ 2,984,053 $ 2,927,845 $ 3,105,243 $ 3,323,093 $ 3,295,900agriculturalReal estate - 1,103,076 887,938 782,305 666,592 593,614constructionReal estate - mortgage: Owner-occupied 1,874,103 1,809,840 1,726,888 1,698,695 1,693,428 commercial 1-4 family 826,765 765,102 707,546 685,840 711,692 mortgage Other mortgage 2,678,084 2,357,812 2,262,231 2,068,560 2,106,184Subtotal: Real 5,378,952 4,932,754 4,696,665 4,453,095 4,511,304estate - mortgageConsumer 66,853 64,274 65,481 62,200 64,870Total loans $ 9,532,934 $ 8,812,811 $ 8,649,694 $ 8,504,980 $ 8,465,688

SUMMARY OF CREDIT LOSS EXPERIENCE (UNAUDITED)(Dollars in thousands) 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 4th Quarter 2021 2020Allowance for credit losses:Beginning balance $ 108,950 $ 104,670 $ 94,906 $ 87,942 $ 92,440 Impact of Adoption of ASC - - - - (2,000 ) 326Loans charged off: Commercial financial and 1,285 1,541 150 477 8,792 agricultural Real estate - 14 - - - 202 construction Real estate - - 208 59 12 - mortgage Consumer 141 86 54 87 38 Total charge 1,440 1,835 263 576 9,032 offsRecoveries: Commercial financial and 671 140 298 26 94 agricultural Real estate - - - 2 50 30 construction Real estate - 18 4 62 2 114 mortgage Consumer 10 8 13 11 13 Total 699 152 375 89 251 recoveries Net charge-offs 741 1,683 (112 ) 487 8,781 Provision for 8,451 5,963 9,652 7,451 6,283 credit losses Ending balance $ 116,660 $ 108,950 $ 104,670 $ 94,906 $ 87,942 Allowance for credit losses to 1.22 % 1.24 % 1.21 % 1.12 % 1.04 % total loans Allowance for credit losses to total average loans 1.29 % 1.26 % 1.21 % 1.11 % 1.04 % Net charge-offs (recoveries) to total 0.03 % 0.08 % (0.01 ) % 0.02 % 0.41 % average loans Provision for credit losses to total average loans 0.37 % 0.27 % 0.45 % 0.35 % 0.30 % Nonperforming assets: Nonaccrual $ 6,762 $ 9,145 $ 12,301 $ 13,088 $ 13,973 loans Loans 90+ days past due 5,335 5,326 4,888 4,804 4,981 and accruing Other real estate owned and repossessed 1,208 2,068 2,039 2,067 6,497 assets Total $ 13,305 $ 16,539 $ 19,228 $ 19,959 $ 25,451 Nonperforming loans to total 0.13 % 0.16 % 0.20 % 0.21 % 0.22 % loans Nonperforming assets to total 0.09 % 0.11 % 0.15 % 0.16 % 0.21 % assets Nonperforming assets to 0.09 % 0.11 % 0.15 % 0.16 % 0.22 % earning assets Allowance for credit losses to nonaccrual 1,725.23 % 1,191.36 % 850.91 % 725.14 % 629.37 % loans Restructured $ 431 $ 437 $ 441 $ 794 $ 818 accruing loans Restructured accruing loans - % - % 0.01 % 0.01 % 0.01 % to total loans TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED) (In thousands) 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 4th Quarter 2021 2020 Beginning $ 2,893 $ 2,918 $ 3,542 $ 1,433 $ 2,738 balance: Additions - - - 2,146 - Net (paydowns) / (303 ) (25 ) (624 ) (37 ) (619 ) advances Charge-offs (14 ) - - - (535 ) Transfer to - - - - (151 ) OREO Ending balance $ 2,576 $ 2,893 $ 2,918 $ 3,542 $ 1,433

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In thousands except per share data) 4th 3rd 2nd 1st 4th Quarter Quarter Quarter Quarter Quarter 2021 2021 2021 2021 2020Interest income: Interest and $ 100,348 $ 96,119 $ 95,451 $ 93,803 $ 94,332 fees on loans Taxable 6,747 6,544 6,315 5,807 6,018 securities Nontaxable 47 62 86 107 129 securities Federal funds 18 4 4 3 5 sold Other interest and 1,794 1,507 863 676 581 dividends Total interest 108,954 104,236 102,719 100,396 101,065 incomeInterest expense: Deposits 6,271 6,581 6,836 6,881 7,853 Borrowed 1,533 1,335 1,215 1,150 1,131 funds Total interest 7,804 7,916 8,051 8,031 8,984 expense Net interest 101,150 96,320 94,668 92,365 92,081 incomeProvision for 8,451 5,963 9,652 7,451 6,283 credit losses Net interest income after 92,699 90,357 85,016 84,914 85,798 provision for credit lossesNon-interest income: Service charges on 1,297 1,727 1,907 1,908 1,971 deposit accounts Mortgage 471 1,423 2,699 2,747 3,050 banking Credit card 2,200 2,043 1,912 1,192 913 income Securities - - 620 - - gains Increase in cash surrender 1,630 1,671 1,683 1,658 1,660 value life insurance Other operating 1,767 1,162 777 958 643 income Total non-interest 7,365 8,026 9,598 8,463 8,237 incomeNon-interest expense: Salaries and employee 17,303 17,995 16,887 15,543 14,970 benefits Equipment and occupancy 2,910 2,996 2,844 2,654 2,680 expense Third party processing 4,856 4,144 3,946 3,416 3,418 and other services Professional 913 948 1,107 923 1,248 services FDIC and other 1,042 1,630 1,425 1,582 1,366 regulatory assessments Other real estate owned 48 123 540 157 140 expense Other operating 11,417 6,541 4,560 4,639 4,380 expense Total non-interest 38,489 34,377 31,309 28,914 28,202 expense Income before 61,575 64,006 63,305 64,463 65,833 income taxProvision for 7,822 11,507 13,278 13,008 14,852 income tax Net income 53,753 52,499 50,027 51,455 50,981 Dividends on preferred 31 - 31 - 32 stock Net income available to $ 53,722 $ 52,499 $ 49,996 $ 51,455 $ 50,949 common stockholdersBasic earnings $ 0.99 $ 0.97 $ 0.92 $ 0.95 $ 0.94 per common shareDiluted earnings $ 0.99 $ 0.96 $ 0.92 $ 0.95 $ 0.94 per common share

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED) ON A FULLY TAXABLE-EQUIVALENT BASIS (Dollars in thousands) 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 4th 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 $ 9,032,914 4.40 % $ 8,653,632 4.40 % $ 8,618,139 4.43 % $ 8,484,914 4.47 % $ 8,435,237 4.43 % Tax-exempt (2) 26,148 4.07 26,542 4.05 26,854 4.05 27,592 4.17 29,393 4.16 Total loans, net of unearned income 9,059,062 4.40 8,680,174 4.39 8,644,993 4.43 8,512,506 4.47 8,464,630 4.43 Mortgage loans held for sale 998 1.99 7,050 1.69 11,470 1.92 13,601 1.94 19,459 1.37 Debt securities: Taxable 1,134,378 2.38 969,715 2.70 936,863 2.70 878,118 2.65 862,333 2.79 Tax-exempt (2) 9,823 2.36 12,382 2.39 16,872 2.47 21,084 2.43 25,542 2.52 Total securities (3) 1,144,201 2.38 982,097 2.70 953,735 2.69 899,202 2.64 887,875 2.78 Federal funds sold 39,445 0.18 8,551 0.19 8,224 0.20 11,935 0.10 16,306 0.12 Restricted equity securities 873 3.18 - - - - - - - - Interest-bearing balances with 4,561,662 0.16 3,761,652 0.16 2,790,524 0.12 2,262,233 0.12 1,837,249 0.13 banks Total interest-earning assets $ 14,806,241 2.92 $ 13,439,524 3.08 $ 12,408,946 3.32 $ 11,699,477 3.48 $ 11,225,519 3.58 Non-interest-earning assets: Cash and due from banks 79,293 90,034 85,478 71,166 91,258 Net premises and equipment 61,837 62,845 61,240 57,198 56,315 Allowance for credit losses, accrued interest and other assets 303,300 315,178 320,729 320,407 308,746 Total assets $ 15,250,671 $ 13,907,581 $ 12,876,393 $ 12,148,248 $ 11,681,838 Interest-bearing liabilities: Interest-bearing deposits: Checking $ 1,499,918 0.19 % $ 1,431,420 0.19 % $ 1,350,098 0.19 % $ 1,294,614 0.19 % $ 1,197,908 0.23 % Savings 123,179 0.18 122,579 0.17 104,283 0.18 93,375 0.18 86,259 0.18 Money market 5,100,192 0.26 5,328,291 0.26 5,321,338 0.26 5,057,828 0.27 4,933,285 0.31 Time deposits 807,342 1.05 806,108 1.15 801,928 1.33 808,561 1.44 810,675 1.59 Total interest-bearing 7,530,631 0.33 7,688,398 0.34 7,577,647 0.36 7,254,378 0.38 7,028,127 0.44 deposits Federal funds purchased 1,608,349 0.21 1,205,327 0.21 970,708 0.22 849,772 0.22 752,765 0.22 Other borrowings 64,704 4.23 64,694 4.23 64,694 4.28 64,689 4.33 64,701 4.41 Total interest-bearing $ 9,203,684 0.34 % $ 8,958,419 0.35 % $ 8,613,049 0.37 % $ 8,168,839 0.40 % $ 7,845,593 0.46 % liabilitiesNon-interest-bearing liabilities: Non-interest-bearing demand deposits 4,856,243 3,800,972 3,154,605 2,923,041 2,812,254 Other liabilities 54,134 48,060 52,027 39,442 48,642 Stockholders' equity 1,121,578 1,078,987 1,038,012 996,741 956,847 Accumulated other comprehensive income 15,032 21,143 18,700 20,185 18,502 Total liabilities and stockholders' equity $ 15,250,671 $ 13,907,581 $ 12,876,393 $ 12,148,248 $ 11,681,838 Net interest spread 2.58 % 2.73 % 2.95 % 3.08 % 3.12 % Net interest margin 2.71 % 2.85 % 3.06 % 3.20 % 3.27 % (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.