ServisFirst Bancshares Delivers Strong First Quarter Performance, Exceeding Expectations
ServisFirst Bancshares, a leading financial institution, has announced its impressive first quarter results for 2025, exceeding expectations and solidifying the company's position as a major player in the industry. According to the Q1 2025 earnings call transcript, the company reported a 9% annualized growth in loans net of payoffs, a notable achievement given that the first quarter is often down or flat in terms of loan book.
Tom Broughton, CEO of ServisFirst Bancshares, expressed satisfaction with the results, stating, "I think it's business as usual. So far, we see an improvement and things are going according to plan." This optimism was shared by Henry Abbott, Chief Credit Officer, who noted that the bank got off to a strong start with loan growth and continued to see good loan opportunities for both new and core markets.
One of the key highlights of the quarter was the strong deposit growth, which is typical in the first quarter. Most of the growth was seen in municipal and correspondent deposits, with COVID funds still working their way through the government system aiding municipal deposit growth. The company also exited non-core deposit relationships last year, but continued to add new producers in the first quarter.
The loan pipeline showed a 10% increase from January, and although there were some projected loan payoffs, the overall performance was impressive. Henry Abbott emphasized that the bank continues to be conservative in underwriting and diligent in credit servicing, with a focus on lending to high-performing businesses and long-time established players in their markets.
David Sparacio, CFO of ServisFirst Bancshares, provided a financial update, highlighting the company's net income of $63. He echoed the comments that the quarter was a solid start to 2025, and praised Ed Woodie, Controller, for his efforts in getting the company through year-end and the 10-K filing.
The bank's credit performance also showed some positive trends, with charge-offs slightly higher than desired at an annualized rate of 19 basis points. However, this figure is more in line with pre-COVID benchmarks, and the overwhelming majority of loans charged off were individually analyzed and impaired to prior quarters. The company grew its allowance for loan losses on a dollar amount for the quarter but saw a slight decrease from 1.30% to 1.28% quarter-over-quarter.
NPAs rose in the first quarter, with 70% of the increase related to two specific relationships. However, the bank took aggressive actions where needed, which slightly impacted earnings, but may set them up for success in the remaining quarters of 2025. The company reduced its OREO to under $1 million, with a $1.75 million reduction from year-end.
In conclusion, ServisFirst Bancshares' first quarter results demonstrate a strong start to 2025, exceeding expectations and solidifying the company's position in the industry. With continued growth in loans, deposits, and credit performance, the bank is well-positioned for future success.
