Dear
Fellow Stockholder,
2009
proved to be an interesting year, but not as profitable as we would have
liked. If ServisFirst Bancshares were an eight-cylinder engine, I
would say that we were hitting on about six cylinders for most of the
year.
I will
cover the negatives first. On the expense side, two categories went up - FDIC
premiums and credit-related expenses. FDIC premiums for all banks went up
dramatically in 2009, and we have no control over that line item. Unfortunately,
our stockholders are paying for the poor management of the failed banks and
thrifts in the U.S. The other line item, credit-related costs, is entirely our
fault. While our credit-related expenses were well below our peer
group, they were high by historical standards for a well managed bank. In
hindsight, we lent money to some developers and builders who had little
liquidity, and I hope we remember this when the good times roll again in the
building and development business.
Now let
me tell you the good news of 2009. Our deposit growth was tremendous as we
benefited from a “flight to quality” from customers of our stressed competitors.
We were fortunate to have solid growth in new core relationships that we believe
will benefit our stockholders for many years. The downside of this deposit
influx is that we could not identify good loans as quickly as the deposits came
in, so we had negative earnings on this growth for most of 2009.
Our
Dothan Region opened its new main office in 2009, and enjoyed solid growth in
2009. In fact, our Dothan Region has the highest market share of any of our
regions, with Birmingham having the lowest. If all of our regions achieve a
market share of 10%, which is possible over time, we will be a $5 billion bank
with no additional geographic expansion. We are proud of our seventeen
consecutive quarters of profitability, which very few of our peers can say, much
less those that are less than five years old. While we have felt a little of the
pain that has hit the banking industry, the opportunities that it has created
for ServisFirst are greater than I would have ever imagined possible. No one
could have written a book as bizarre as the true events in our industry over the
past two years.
As you
know, we are a public, non-traded company and file reports with the Securities
and Exchange Commission like all public companies. We have made a decision not
to forecast future earnings because we believe ”the proof of the pudding is in
the eating.” While we have achieved some national recognition recently, of which
we are proud, I can assure you that we are never satisfied with our performance,
and all of our 160 employees will continue to work hard to build stockholder
value.
Sincerely,
Thomas A.
Broughton III
Director,
President and
Chief
Executive Officer
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the years ended December 31,
|
|
|
from 05/02/05 (date of
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
(Dollars
in thousands except for share and per share data)
|
|
|
|
|
Selected
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
1,573,497 |
|
|
$ |
1,162,272 |
|
|
$ |
838,250 |
|
|
$ |
528,545 |
|
|
$ |
277,963 |
|
Total
loans
|
|
|
1,207,084 |
|
|
|
968,233 |
|
|
|
675,281 |
|
|
|
440,489 |
|
|
|
249,250 |
|
Loans,
net
|
|
|
1,192,173 |
|
|
|
957,631 |
|
|
|
667,549 |
|
|
|
435,071 |
|
|
|
246,140 |
|
Securities
available for sale
|
|
|
255,453 |
|
|
|
102,339 |
|
|
|
87,233 |
|
|
|
28,119 |
|
|
|
924 |
|
Securities
held to maturity
|
|
|
645 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Cash
and due from banks
|
|
|
26,982 |
|
|
|
22,844 |
|
|
|
15,756 |
|
|
|
15,706 |
|
|
|
4,188 |
|
Interest-bearing
balances with banks
|
|
|
48,544 |
|
|
|
30,774 |
|
|
|
34,068 |
|
|
|
22 |
|
|
|
— |
|
Fed
funds sold
|
|
|
680 |
|
|
|
19,300 |
|
|
|
16,598 |
|
|
|
37,607 |
|
|
|
20,725 |
|
Mortgage
loans held for sale
|
|
|
6,202 |
|
|
|
3,320 |
|
|
|
2,463 |
|
|
|
2,902 |
|
|
|
1,778 |
|
Restricted
equity securities
|
|
|
3,241 |
|
|
|
2,659 |
|
|
|
1,202 |
|
|
|
805 |
|
|
|
230 |
|
Premises
and equipment, net
|
|
|
5,088 |
|
|
|
3,884 |
|
|
|
4,176 |
|
|
|
2,605 |
|
|
|
1,400 |
|
Deposits
|
|
|
1,432,355 |
|
|
|
1,037,319 |
|
|
|
762,683 |
|
|
|
473,348 |
|
|
|
244,048 |
|
Other
borrowings
|
|
|
24,922 |
|
|
|
20,000 |
|
|
|
73 |
|
|
|
— |
|
|
|
— |
|
Trust
preferred securities
|
|
|
15,228 |
|
|
|
15,087 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other
liabilities
|
|
|
3,370 |
|
|
|
3,082 |
|
|
|
2,465 |
|
|
|
2,353 |
|
|
|
273 |
|
Stockholders’
equity
|
|
|
97,622 |
|
|
|
86,784 |
|
|
|
72,247 |
|
|
|
52,288 |
|
|
|
33,469 |
|
Selected
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$ |
62,197 |
|
|
$ |
5,450 |
|
|
$ |
51,417 |
|
|
$ |
30,610 |
|
|
$ |
6,580 |
|
Interest
expense
|
|
|
18,337 |
|
|
|
20,474 |
|
|
|
25,872 |
|
|
|
13,335 |
|
|
|
2,325 |
|
Net
interest income
|
|
|
43,860 |
|
|
|
34,976 |
|
|
|
25,545 |
|
|
|
17,275 |
|
|
|
4,255 |
|
Provision
for loan losses
|
|
|
10,860 |
|
|
|
6,274 |
|
|
|
3,541 |
|
|
|
3,252 |
|
|
|
3,521 |
|
Net
interest income after provision for loan losses
|
|
|
33,000 |
|
|
|
28,702 |
|
|
|
22,004 |
|
|
|
14,023 |
|
|
|
734 |
|
Noninterest
income
|
|
|
4,413 |
|
|
|
2,704 |
|
|
|
1,441 |
|
|
|
911 |
|
|
|
101 |
|
Noninterest
expense
|
|
|
28,755 |
|
|
|
20,576 |
|
|
|
14,796 |
|
|
|
8,674 |
|
|
|
3,161 |
|
Income
(loss) before income taxes
|
|
|
8,658 |
|
|
|
10,830 |
|
|
|
8,649 |
|
|
|
6,260 |
|
|
|
(2,326 |
) |
Income
taxes expenses (benefit)
|
|
|
2,780 |
|
|
|
3,825 |
|
|
|
3,152 |
|
|
|
2,189 |
|
|
|
(840 |
) |
Net
income (loss)
|
|
|
5,878 |
|
|
|
7,005 |
|
|
|
5,497 |
|
|
|
4,071 |
|
|
|
(1,486 |
) |
Per
Common Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss), basic
|
|
$ |
1.07 |
|
|
$ |
1.37 |
|
|
$ |
1.19 |
|
|
$ |
1.06 |
|
|
$ |
(0.42 |
) |
Net
income (loss), diluted
|
|
|
1.02 |
|
|
|
1.31 |
|
|
|
1.16 |
|
|
|
1.06 |
|
|
|
(0.42 |
) |
Book
value
|
|
|
17.71 |
|
|
|
16.15 |
|
|
|
14.13 |
|
|
|
11.71 |
|
|
|
9.56 |
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,485,972 |
|
|
|
5,114,194 |
|
|
|
4,631,047 |
|
|
|
3,831,881 |
|
|
|
3,500,000 |
|
Diluted
|
|
|
5,787,643 |
|
|
|
5,338,883 |
|
|
|
4,721,864 |
|
|
|
3,846,111 |
|
|
|
3,500,000 |
|
Actual
shares outstanding
|
|
|
5,513,482 |
|
|
|
5,374,022 |
|
|
|
5,113,482 |
|
|
|
4,463,607 |
|
|
|
3,500,000 |
|
Selected
Performance Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return
on average assets
|
|
|
0.43 |
% |
|
|
0.71 |
% |
|
|
0.78 |
% |
|
|
1.02 |
% |
|
|
(1.40 |
)% |
Return
on average stockholders’ equity
|
|
|
6.33 |
% |
|
|
9.28 |
% |
|
|
9.40 |
% |
|
|
9.96 |
% |
|
|
(6.65 |
)% |
Net
interest margin(1)
|
|
|
3.31 |
% |
|
|
3.70 |
% |
|
|
3.78 |
% |
|
|
4.60 |
% |
|
|
4.21 |
% |
Efficiency
ratio(2)
|
|
|
59.57 |
% |
|
|
54.61 |
% |
|
|
54.83 |
% |
|
|
50.67 |
% |
|
|
72.56 |
% |
Asset
Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs to average loans outstanding
|
|
|
0.60 |
% |
|
|
0.41 |
% |
|
|
0.23 |
% |
|
|
0.28 |
% |
|
|
0.53 |
% |
Non-performing
loans to total loans
|
|
|
1.01 |
% |
|
|
1.02 |
% |
|
|
0.66 |
% |
|
|
0.00 |
% |
|
|
0.28 |
% |
Non-performing
assets to total assets
|
|
|
1.57 |
% |
|
|
1.74 |
% |
|
|
0.73 |
% |
|
|
0.11 |
% |
|
|
0.25 |
% |
Allowance
for loan losses to total gross loans
|
|
|
1.24 |
% |
|
|
1.09 |
% |
|
|
1.15 |
% |
|
|
1.23 |
% |
|
|
1.25 |
% |
Allowance
for loan losses to total non-performing loans
|
|
|
122.34 |
% |
|
|
108.17 |
% |
|
|
173.94 |
% |
|
|
5,418.00 |
% |
|
|
446.20 |
% |
Liquidity
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loans to total deposits
|
|
|
83.23 |
% |
|
|
92.32 |
% |
|
|
87.53 |
% |
|
|
91.91 |
% |
|
|
100.86 |
% |
Net
average loans to average earning assets
|
|
|
80.06 |
% |
|
|
85.84 |
% |
|
|
77.19 |
% |
|
|
89.34 |
% |
|
|
76.35 |
% |
Noninterest-bearing
deposits to total deposits
|
|
|
14.75 |
% |
|
|
11.71 |
% |
|
|
11.15 |
% |
|
|
15.05 |
% |
|
|
20.40 |
% |
Capital
Adequacy Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity to total assets(3)
|
|
|
6.10 |
% |
|
|
7.38 |
% |
|
|
8.50 |
% |
|
|
9.89 |
% |
|
|
12.04 |
% |
Total
risk-based capital(4)
|
|
|
10.48 |
% |
|
|
11.25 |
% |
|
|
11.22 |
% |
|
|
11.58 |
% |
|
|
13.42 |
% |
Tier
I capital(5)
|
|
|
8.89 |
% |
|
|
10.18 |
% |
|
|
10.12 |
% |
|
|
10.49 |
% |
|
|
12.28 |
% |
Leverage
ratio(6)
|
|
|
6.97 |
% |
|
|
9.01 |
% |
|
|
8.40 |
% |
|
|
10.32 |
% |
|
|
14.32 |
% |
Growth
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
change in net income
|
|
|
-16.1 |
% |
|
|
27.43 |
% |
|
|
35.00 |
% |
|
|
373.93 |
% |
|
|
n/a |
|
Percentage
change in diluted net income per share
|
|
|
-22.5 |
% |
|
|
12.93 |
% |
|
|
13.21 |
% |
|
|
352.38 |
% |
|
|
n/a |
|
Percentage
change in assets
|
|
|
35.38 |
% |
|
|
38.65 |
% |
|
|
58.59 |
% |
|
|
90.15 |
% |
|
|
n/a |
|
Percentage
change in net loans
|
|
|
24.49 |
% |
|
|
45.45 |
% |
|
|
53.43 |
% |
|
|
76.76 |
% |
|
|
n/a |
|
Percentage
change in deposits
|
|
|
38.08 |
% |
|
|
36.00 |
% |
|
|
61.13 |
% |
|
|
93.96 |
% |
|
|
n/a |
|
Percentage
change in equity
|
|
|
12.49 |
% |
|
|
20.12 |
% |
|
|
38.18 |
% |
|
|
56.23 |
% |
|
|
n/a |
|
1.
|
Net
interest margin is the net yield on interest earning assets and is the
difference between the interest yield earned on interest-earning assets
and interest rate paid on interest-bearing liabilities, divided by average
earning assets.
|
2.
|
Efficiency
ratio is the result of noninterest expense divided by the sum of net
interest income and noninterest
income.
|
3.
|
Total
stockholders’ equity excluding unrealized losses on securities available
for sale, net of taxes, divided by total
assets.
|
4.
|
Total
stockholders’ equity excluding unrealized losses on securities available
for sale, net of taxes, and intangible assets plus allowance for loan
losses (limited to 1.25% of risk-weighted assets) divided by total
risk-weighted assets. The FDIC required minimum to be
well-capitalized is 10%.
|
5.
|
Total
stockholders’ equity excluding unrealized losses on securities available
for sale, net of taxes, and intangible assets divided by total
risk-weighted assets. The FDIC required minimum to be
well-capitalized is 6%.
|
6.
|
Total stockholders’ equity
excluding unrealized losses on securities available for sale, net of
taxes, and intangible assets divided by average assets less intangible
assets. The FDIC required minimum to be well-capitalized is 5%;
however, the Alabama Banking Department has required that the Bank
maintain a Tier 1 capital leverage ratio of
7%.
|
OFFICERS AND
DIRECTORS
Principal Officers:
ServisFirst Bancshares, Inc.
Thomas
A. Broughton III
Chief Executive Officer and
President,
ServisFirst
Bancshares, Inc.
William
M. Foshee
Executive
Vice President, Chief Financial Officer,
Treasurer
and Secretary,
ServisFirst
Bancshares, Inc.
Clarence
C. Pouncey III
Executive
Vice President and Chief Operating Officer,
ServisFirst
Bancshares, Inc.
Principal Officers:
ServisFirst Bank
Thomas
A. Broughton III
Chief Executive Officer and President,
ServisFirst
Bank
William
M. Foshee
Executive
Vice President, Chief Financial Officer,
Treasurer
and Secretary,
ServisFirst
Bank
Clarence
C. Pouncey III
Executive
Vice President and Chief Operating Officer,
ServisFirst
Bank
G.
Carlton Barker
Executive
Vice President and Montgomery President
and
Chief Executive Officer,
ServisFirst
Bank
Andrew
N. Kattos
Executive
Vice President and Huntsville President
and
Chief Executive Officer,
ServisFirst
Bank
Ronald
A. DeVane
Executive
Vice President and Dothan
President
and
Chief Executive Officer,
ServisFirst
Bank
Board of Directors:
ServisFirst Bancshares, Inc.
Stanley M. Brock, Chairman of the
Board
Birmingham,
Alabama
Thomas
A. Broughton III
Birmingham,
Alabama
Michael
D. Fuller
Birmingham,
Alabama
James
J. Filler
Birmingham,
Alabama
J.
Richard Cashio
Birmingham,
Alabama
Hatton
C. V. Smith
Birmingham,
Alabama
ServisFirst Bancshares,
Inc.: Committees
Nominating
and Corporate Governance
Stanley
M. Brock
Michael
D. Fuller
J.
Richard Cashio
Audit
Stanley
M. Brock
Michael
D. Fuller
J.
Richard Cashio
Compensation
James J.
Filler
Joseph R.
Cashio
Hatton
C.V. Smith
Corporate
Offices
850
Shades Creek Parkway
Suite
200
Birmingham,
Alabama 35209
205.949.0302
Main Office Banking
Center
850
Shades Creek Parkway
Suite
100
Birmingham,
Alabama 35209
205.949.0345
Downtown Banking
Center
324
Richard Arrington Jr. Boulevard N.
Birmingham,
Alabama 35203
205.949.2200
Greystone Banking
Center
5403
Highway 280
Suite
401
Birmingham,
Alabama 35242
205.949.0870
Dothan Corporate Office
& Banking Center
4801
West main Street
Dothan,
AL 36305
334.340.4300
Huntsville Corporate Office
& Downtown Banking Center
401
Meridian Street
Suite
100
Huntsville,
Alabama 35801
256.722.7800
Research Park Banking
Center
1267-A
Enterprise way
Huntsville,
Alabama 35806
256.722.7880
Montgomery Corporate
Office
One
Commerce Street
Suite
200
Montgomery,
Alabama 36104
334.223.5800
Montgomery Downtown Banking
Center
One
Commerce Street
Suite
100
Montgomery,
Alabama 36104
334.223.5800
Montgomery East Banking
Center
8117
Vaughn Road
Unit
20
Montgomery,
Alabama 36116
334.223.5600
STOCKHOLDER
INFORMATION
Annual
Meeting
The
Annual Meeting of Stockholders of ServisFirst Bancshares, Inc. will be held at
Dothan Country Club, 200 South Cherokee Avenue, Dothan, AL 36301 on Tuesday, May
4th,
2010 at 5:30 p.m., Central Daylight Time.
Form
10-K
Form 10-K
is ServisFirst Bancshares, Inc.’s annual report filed with the Securities and
Exchange Commission. A copy of ServisFirst Bancshares, Inc.’s 10-K is included
as part of this Annual Report, and additional copies may be obtained free of
charge by writing to us at 850 Shades Creek Parkway, Suite 200, Birmingham,
Alabama 35209, Attn.: Investor Relations.
Transfer
Agent
Registrar
and Transfer Company
10
Commerce Drive
Cranford,
NJ 07016
Available
Information
Our
corporate website is www.servisfirstbank.com. We
have direct links on this website to our Code of Ethics and the charters for our
Audit, Compensation and Nominations and Corporate Governance Committees by
clicking on the “Investor Relations” tab. We also have direct links
to our filings with the Securities and Exchange Commission (SEC), including, but
not limited to, our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, proxy statements and any amendments to
these
reports. You may also obtain a copy of any such report free of charge from us by
requesting such copy in writing to 850 Shades Creek Parkway, Suite 200,
Birmingham, Alabama 35209 Attn.: Investor Relations. This Annual
Report and accompanying exhibits and all other reports and filings that we file
with the SEC will be available for the public to view and copy (at prescribed
rates) at the SEC’s Public Reference Room at 100 F Street, Washington, D.C.
20549. You may also obtain copies of such information at the
prescribed rates from the SEC’s Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website that contains such
reports, proxy and information statements, and other information as we file
electronically with the SEC by clicking on http://www.sec.gov.
Independent Registered
Public Accounting
Firm
Mauldin
& Jenkins, LLC
Birmingham,
Alabama 35209
Legal
Counsel
Haskell
Slaughter Young & Rediker, LLC
1400 Park
Place Tower
2001 Park
Place North
Birmingham,
Alabama 35203
(205)
251-1000
ServisFirst
Bancshares, Inc.
850
Shades Creek Parkway
Suite
200
Birmingham,
AL 35209
Toll
Free: 866.317.0810
www.servisfirstbank.com
Our Name
– is Our Mission