ServisFirst Bancshares (SFBS) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $52.1 million, up 4.2% sequentially but down from $53.5 million in Q2 2023; six-month net income was $102.2 million, down from $111.4 million year-over-year.

• Diluted EPS for Q2 2024 was $0.95, up from $0.92 in Q1 2024 but down from $0.98 in Q2 2023; six-month diluted EPS was $1.87, down from $2.04.

• Achieved strong annualized deposit and loan growth of 16% and 15% for the quarter, respectively, with broad-based demand.

• Added 14 new bankers and expanded into new markets, including Auburn-Opelika and Memphis.

• Optimistic outlook for the remainder of the year, supported by strong liquidity and customer acquisition.

Financial highlights

• Net interest income for Q2 2024 was $105.9 million, up 4.5% year-over-year and sequentially; net interest margin increased to 2.79% from 2.66% in Q1 2024 but declined from 2.93% in Q2 2023.

• Core non-interest income grew nearly 70% annualized, with mortgage banking revenue nearly doubling year-over-year.

• Non-interest expense increased 11.3% year-over-year to $42.8 million, mainly due to higher salaries and benefits.

• Book value per share increased to $27.71, up 11% year-over-year, maintaining strong capital ratios.

• Provision for credit losses was $5.4 million for Q2 2024, down from $6.7 million in Q2 2023.

Outlook and guidance

• Expect continued margin expansion as asset yields rise and cost of funds remains stable.

• Non-interest expenses projected to grow at a much slower rate for the rest of 2024.

• Tax rate anticipated to be around 20% for the remainder of the year.

• Loan and deposit pipelines remain strong, supporting optimism for the second half of 2024.

• Management expects continued deposit competition and higher funding costs due to the interest rate environment.