ServisFirst Bancshares, Inc. Announces Results For Second Quarter of 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)
				Period Ending June 30, 2021				Period Ending March 31, 2021				% Change From Period Ending March 31, 2021 to Period Ending June 30, 2021			Period Ending June 30, 2020				% Change From Period Ending June 30, 2020 to Period Ending June 30, 2021
QUARTERLY OPERATING RESULTS
Net Income				$	50,027			$	51,455			(3)	%		$	40,448			24	%
Net Income Available to Common Stockholders				$	49,996			$	51,455			(3)	%		$	40,417			24	%
Diluted Earnings Per Share				$	0.92			$	0.95			(3)	%		$	0.75			23	%
Return on Average Assets					1.56	%			1.72	%						1.55	%
Return on Average Common Stockholders' Equity					18.98	%			19.83	%						18.40	%
Average Diluted Shares Outstanding					54,460,230				54,381,991							54,194,506
YEAR-TO-DATE OPERATING RESULTS
Net Income				$	101,482										$	75,226			35	%
Net Income Available to Common Stockholders				$	101,451										$	75,195			35	%
Diluted Earnings Per Share				$	1.86										$	1.39			34	%
Return on Average Assets					1.63	%										1.54	%
Return on Average Common Stockholders' Equity					19.73	%										17.31	%
Average Diluted Shares Outstanding					54,421,327											54,180,960
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 Demand Deposits					3,296,429				3,044,611			8	%			2,678,893			23	%
Total 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 31, 2021			At December 31, 2020				At September 30, 2020				At June 30, 2020
Book value per share - GAAP			$	19.80			$	19.03			$	18.41			$	17.61			$	16.98
Total common stockholders' equity - GAAP				1,073,284				1,030,485				992,852				949,589				914,588
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			13,773				13,841				13,908				13,976				14,043
Tangible common stockholders' equity - non-GAAP			$	1,059,511			$	1,016,644			$	978,944			$	935,613			$	900,545
Tangible book value per share - non-GAAP			$	19.55			$	18.78			$	18.15			$	17.35			$	16.72
Stockholders' equity to total assets - GAAP				8.13	%			8.15	%			8.32	%			8.33	%			8.31	%
Total assets - GAAP			$	13,207,319			$	12,647,374			$	11,932,654			$	11,394,874			$	11,012,195
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset			13,773				13,841				13,908				13,976				14,043
Total tangible assets - non-GAAP			$	13,193,546			$	12,633,533			$	11,918,746			$	11,380,898			$	10,998,152
Tangible common equity to total tangible assets - non-GAAP				8.03	%			8.05	%			8.21	%			8.22	%			8.19	%
Total loans - GAAP			$	8,649,694			$	8,504,980
	Adjustments:
	Adjusted to exclude PPP loans			595,017				967,641
Loans, excluding PPP loans - non-GAAP			$	8,054,677			$	7,537,339

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 SEC’s 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 Bank
Davis Mange (205) 949-3420
dmange@servisfirstbank.com

SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands except share and per share data)
		2nd Quarter 2021				1st Quarter 2021				4th Quarter 2020				3rd Quarter 2020				2nd Quarter 2020
CONSOLIDATED STATEMENT OF INCOME
Interest 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 losses			9,652				7,451				6,283				12,284				10,283
Net interest income after provision for credit losses			85,016				84,914				85,798				72,798				72,951
Non-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 tax			63,305				64,463				65,833				54,397				51,168
Provision for income tax			13,278				13,008				14,852				11,035				10,720
Net income			50,027				51,455				50,981				43,362				40,448
Preferred stock dividends			31				-				32				-				31
Net income available to common stockholders		$	49,996			$	51,455			$	50,949			$	43,362			$	40,417
Earnings per share - basic		$	0.92			$	0.95			$	0.94			$	0.80			$	0.75
Earnings per share - diluted		$	0.92			$	0.95			$	0.94			$	0.80			$	0.75
Average diluted shares outstanding			54,460,230				54,381,991				54,273,944				54,232,965				54,194,506
CONSOLIDATED BALANCE SHEET DATA
Total 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 demand deposits			3,296,429				3,044,611				2,788,772				2,762,814				2,678,893
Total 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 per share (1)		$	19.55			$	18.78			$	18.15			$	17.35			$	16.72
SELECTED FINANCIAL RATIOS (Annualized)
Net interest margin			3.06	%			3.20	%			3.27	%			3.14	%			3.32	%
Return on average assets			1.56	%			1.72	%			1.74	%			1.54	%			1.55	%
Return on average common stockholders' equity			18.98	%			19.83	%			20.78	%			18.43	%			18.40	%
Efficiency ratio			30.03	%			28.68	%			28.11	%			28.50	%			31.92	%
Non-interest expense to average earning assets			1.01	%			1.00	%			1.00	%			0.98	%			1.15	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets			10.60	%			10.73	%			10.50	%			11.24	%			11.26	%
Tier 1 capital to risk-weighted assets			10.60	%			10.73	%			10.50	%			11.25	%			11.27	%
Total capital to risk-weighted assets			12.36	%			12.48	%			12.20	%			13.10	%			13.27	%
Tier 1 capital to average assets			8.10	%			8.25	%			8.23	%			8.22	%			8.46	%
Tangible common equity to total tangible assets (1)			8.03	%			8.05	%			8.22	%			8.22	%			8.19	%
(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-bearing balances due from depository institutions					3,100,677				1,444,293			115		%
Federal funds sold					7,500				2,352			219		%
	Cash and cash equivalents				3,180,776				1,548,927			105		%
Available for sale debt securities, at fair value					1,013,533				856,128			18		%
Held to maturity debt securities (fair value of $250 at June 30, 2021 and 2020)					250				250			-
Mortgage loans held for sale					6,147				14,491			(58	)	%
Loans					8,649,694				8,315,375			4		%
Less allowance for credit losses					(104,670	)			(91,507	)		14		%
	Loans, net				8,545,024				8,223,868			4		%
Premises and equipment, net					67,738				55,588			22		%
Goodwill and other identifiable intangible assets					13,773				14,043			(2	)	%
Other assets					380,078				298,900			27		%
	Total assets			$	13,207,319			$	11,012,195			20		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
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 capital				225,127				222,437			1		%
	Retained earnings				828,048				672,984			23		%
	Accumulated other comprehensive income				19,555				18,611			5		%
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.			1,072,784				914,086			17		%
	Noncontrolling interest				500				502			-		%
		Total stockholders' equity			1,073,284				914,588			17		%
	Total liabilities and stockholders' equity			$	13,207,319			$	11,012,195			20		%

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

LOANS BY TYPE (UNAUDITED)
(In thousands)
			2nd Quarter 2021			1st Quarter 2021			4th Quarter 2020			3rd Quarter 2020			2nd Quarter 2020
Commercial, financial and agricultural			$	3,105,243		$	3,323,093		$	3,295,900		$	3,466,189		$	3,498,627
Real estate - construction				782,305			666,592			593,614			530,919			544,586
Real estate - mortgage:
	Owner-occupied commercial			1,726,888			1,698,695			1,693,428			1,725,222			1,634,495
	1-4 family mortgage			707,546			685,840			711,692			671,841			665,883
	Other mortgage			2,262,231			2,068,560			2,106,184			2,056,549			1,911,384
Subtotal: Real estate - mortgage				4,696,665			4,453,095			4,511,304			4,453,612			4,211,762
Consumer				65,481			62,200			64,870			57,834			60,400
Total 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 2021					4th Quarter 2020						3rd Quarter 2020					2nd Quarter 2020
Allowance for credit losses:
Beginning balance					$	94,906					$	87,942				$	92,440					$	91,507				$	85,414
	Impact of Adoption of ASC 326					-						-					(2,000	)					-					-
Loans charged off:
	Commercial financial and agricultural					150						477					8,792						11,146					1,358
	Real estate - construction					-						-					202						-					376
	Real estate - mortgage					59						12					-						200					2,520
	Consumer					54						87					38						44					62
		Total charge offs				263						576					9,032						11,390					4,316
Recoveries:
	Commercial financial and agricultural					298						26					94						12					84
	Real estate - construction					2						50					30						-					1
	Real estate - mortgage					62						2					114						12					13
	Consumer					13						11					13						15					28
		Total recoveries				375						89					251						39					126
	Net charge-offs					(112	)					487					8,781						11,351					4,190
	Provision for credit losses					9,652						7,451					6,283						12,284					10,283
	Ending balance				$	104,670					$	94,906				$	87,942					$	92,440				$	91,507
	Allowance for credit losses to total loans					1.21		%				1.12	%				1.04		%				-					-
	Allowance for credit losses to total average
		loans				1.21		%				1.11	%				1.04		%				-					-
	Allowance for loan losses to total loans					-						-					-						1.09	%				1.10	%
	Allowance for loan losses to total average
		loans				-						-					-						1.11	%				1.10	%
	Net (recoveries) charge-offs to total average loans					(0.01	)	%				0.02	%				0.41		%				0.54	%				0.20	%
	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 loans			$	12,301					$	13,088				$	13,973					$	21,675				$	16,881
		Loans 90+ days past due and accruing				4,888						4,804					4,981						4,898					5,133
		Other real estate owned and
		repossessed assets				2,039						2,067					6,497						6,976					6,537
	Total				$	19,228					$	19,959				$	25,451					$	33,549				$	28,551
	Nonperforming loans to total loans					0.20		%				0.21	%				0.22		%				0.31	%				0.26	%
	Nonperforming assets to total assets					0.15		%				0.16	%				0.21		%				0.29	%				0.26	%
	Nonperforming assets to earning assets					0.15		%				0.16	%				0.22		%				0.30	%				0.26	%
	Allowance for credit losses to nonaccrual loans					850.91		%				725.14	%				629.37		%				-					-
	Allowance for loan losses to nonaccrual loans					-						-					-						426.48	%				542.07	%
	Restructured accruing loans				$	441					$	794				$	818					$	1,800				$	975
	Restructured accruing loans to total loans					0.01		%				0.01	%				0.01		%				0.02	%				0.01	%
	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
					2nd Quarter 2021						1st Quarter 2021					4th Quarter 2020						3rd Quarter 2020					2nd Quarter 2020
	Beginning balance:				$	3,542					$	1,433				$	2,738					$	1,568				$	2,367
		Additions				-						2,146					-						1,182					-
		Net (paydowns) / advances				(624			)			(37		)			(619			)			(12		)			(12		)
		Charge-offs				-						-					(535			)			-					(412		)
		Transfer to OREO				-						-					(151			)			-					(375		)
	Ending balance				$	2,918					$	3,542				$	1,433					$	2,738				$	1,568

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

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 Balance			Yield / Rate			Average Balance			Yield / Rate			Average Balance			Yield / Rate			Average Balance			Yield / Rate			Average Balance			Yield / Rate
Assets:
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 income			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
		Mortgage loans held for sale						11,470		1.92				13,601		1.94				19,459		1.37				20,053		1.41				13,278		2.09
		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 (3)				953,735		2.69				899,202		2.64				887,875		2.78				852,406		2.84				799,776		2.67
		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 balances with banks						2,790,524		0.12				2,262,233		0.12				1,837,249		0.13				1,500,563		0.13				849,549		0.17
		Total interest-earning assets					$	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	%
Non-interest-earning assets:
		Cash and due from banks						85,478						71,166						91,258						75,065						76,212
		Net premises and equipment						61,240						57,198						56,315						56,799						57,446
		Allowance for credit losses, accrued
			interest and other assets					320,729						320,407						308,746						281,196						248,702
				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 deposits					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
		Federal funds purchased						970,708		0.22				849,772		0.22				752,765		0.22				682,971		0.22				572,990		0.22
		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 liabilities					$	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	%
Non-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' equity		$	12,876,393					$	12,148,248					$	11,681,838					$	11,193,121					$	10,461,941
Net 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.