ServisFirst Bancshares, Inc. Announces Results for First Quarter 2018

BIRMINGHAM, Ala., April 16, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ: SFBS) today announced earnings and operating results for the quarter ended March 31, 2018.

First Quarter Highlights:

• Diluted EPS increased 43% from $0.42 to $0.60 year over year
• Loans and deposits increased 15% and 11%, respectively, year over year
• Quarterly cash dividend increased 120% as previously announced
• Return on average equity exceeded 20% for the first time in the thirteen year history of the bank
• First quarter net interest margin improved to 3.81% from 3.66% in the previous quarter

Tom Broughton, President and CEO, said, “Our strong asset quality and solid financial performance, coupled with our focus on serving client needs, continues to attract new clients.”  Bud Foshee, CFO, stated, “Even though our financial results were enhanced by lower federal corporate tax rates, our pre-tax income in the first quarter increased 31% year over year, pointing to continued improvement in our financial metrics.”

FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
				Period Ending March 31, 2018				Period Ending December 31, 2017				% Change From Period Ending December 31, 2017 to Period Ending March 31, 2018				Period Ending March 31, 2017				% Change From Period Ending March 31, 2017 to Period Ending March 31, 2018
QUARTERLY OPERATING RESULTS
Net Income				$	32,603			$	21,150			54		%		$	22,519			45	%
Net Income Available to Common Stockholders				$	32,603			$	21,119			54		%		$	22,519			45	%
Diluted Earnings Per Share				$	0.60			$	0.39			54		%		$	0.42			43	%
Return on Average Assets					1.91	%			1.20	%							1.45	%
Return on Average Common Stockholders' Equity					21.40	%			13.97	%							17.09	%
Average Diluted Shares Outstanding					54,183,400				54,161,788								54,133,722
Core Net Income*				$	32,603			$	24,424			33		%
Core Net Income Available to Common Stockholders*				$	32,603			$	24,393			34		%
Core Diluted Earnings Per Share*				$	0.60			$	0.45			34		%
Core Return on Average Assets*					1.91	%			1.39	%
Core Return on Average Common Stockholders' Equity*					21.40	%			16.13	%
BALANCE SHEET
Total Assets				$	7,011,735			$	7,082,384			(1	)	%		$	6,336,165			11	%
Loans					5,928,327				5,851,261			1		%			5,151,984			15	%
Non-interest-bearing Demand Deposits					1,407,592				1,440,326			(2	)	%			1,292,440			9	%
Total Deposits					5,977,387				6,091,674			(2	)	%			5,361,532			11	%
Stockholders' Equity					629,297				607,604			4		%			545,148			15	%
* Core measures exclude non-routine expenses during the comparative periods presented in this press release as more fully described in "GAAP Reconciliation and Management Explanation on Non-GAAP Financial Measures."

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $32.6 million for the quarter ended March 31, 2018, compared to net income and net income available to common stockholders of $22.5 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.61 and $0.60, respectively, for the first quarter of 2018, compared to $0.43 and $0.42, respectively, for the first quarter of 2017.

Return on average assets was 1.91% and return on average equity was 21.40% for the first quarter of 2018, compared to 1.45% and 17.09%, respectively, for the first quarter of 2017.

Net interest income was $62.4 million for the first quarter of 2018, compared to $61.4 million for the fourth quarter of 2017 and $52.1 million for the first quarter of 2017.  The net interest margin in the first quarter of 2018 was 3.81%, an increase of 15 basis points from the fourth quarter of 2017 and an increase of 28 basis points from the first quarter of 2017.  The increase in net interest income on a linked quarter basis is attributable to a $166.6 million increase in average loans outstanding and an $18.0 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet.  A $55.1 million decrease in average non-interest-bearing deposits offset the positive mix change caused by increases in loans and stockholders’ equity, while a $226.7 million decrease in federal funds sold and interest-bearing balances with banks added to the positive mix change.  The average yield on loans increased by 12 basis points to 4.80% on a linked quarter basis, boosted by the Federal Reserve Bank’s recent increases of interest rates.

Average loans for the first quarter of 2018 were $5.88 billion, an increase of $166.6 million, or 2.9%, over average loans of $5.72 billion for the fourth quarter of 2017, and an increase of $879.5 million, or 17.6%, over average loans of $5.00 billion for the first quarter of 2017.

Average total deposits for the first quarter of 2018 were $5.95 billion, a decrease of $88.8 million, or 1.5%, from average total deposits of $6.03 billion for the fourth quarter of 2017, and an increase of $627.4 million, or 11.8%, over average total deposits of $5.32 billion for the first quarter of 2017.

Non-performing assets to total assets were 0.22% for the first quarter of 2018, a decrease of three basis points compared to 0.25% for the fourth quarter of 2017 and a decrease of five basis points compared to 0.27% for the first quarter of 2017.  Net credit charge-offs to average loans were 0.10%, a 46 basis point decrease compared to 0.56% for the fourth quarter of 2017 and a 14 basis point decrease compared to 0.24% for the first quarter of 2017.  We recorded a $4.1 million provision for loan losses in the first quarter of 2018 compared to $9.1 million in the fourth quarter of 2017 and $5.0 million in the first quarter of 2017.  The allowance for loan losses as a percentage of total loans was 1.05% at March 31, 2018 compared to 1.02% at December 31, 2017 and 1.05% at March 31, 2017.  In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income for the first quarter of 2018 increased $323,000, or 7%, to $4.9 million compared to the first quarter of 2017.  Service charges on deposit accounts increased $231,000 during the first quarter of 2018, or 17%, compared to the first quarter of 2017, primarily the result of increased non-sufficient funds charges.  Mortgage revenue decreased $381,000, or 42%, to $518,000 during the first quarter of 2018, compared to $899,000 during the first quarter of 2017, as origination volumes slowed by $12.6 million, or 30%, for the first quarter of 2018 compared to the same quarter in 2017.  Credit card revenue increased 33% to $1.6 million during the first quarter of 2018, compared to $1.2 million during the first quarter of 2017.  Spending on credit cards increased 38% for the same comparative period.   

Non-interest expense for the first quarter of 2018 increased $2.2 million, or 10%, to $23.5 million from $21.3 million in the first quarter of 2017, and increased $2.3 million, or 11%, on a linked quarter basis.  Salary and benefit expense for the first quarter of 2018 increased $1.6 million, or 14%, to $13.3 million from $11.7 million in the first quarter of 2017, and increased $1.9 million, or 17%, on a linked quarter basis.  We had 437 FTE employees at the end of March 2018 compared to 417 at the end of March 2017, an increase of 5%.  Equipment and occupancy expense decreased $296,000, or 13%, to $2.0 million in the first quarter of 2018, from $2.3 million in the first quarter of 2017.  A decrease in rental payments more than offset increased depreciation expense resulting from our fourth quarter 2017 move from our previous headquarters building, which was leased, to our new headquarters building, which is owned.  FDIC insurance assessments increased from $1.0 million during the first quarter of 2017 to $1.1 million during the first quarter of 2018, resulting primarily from asset growth which impacts our assessment base.  Our efficiency ratio for the first quarter of 2018, fourth quarter of 2017 and first quarter of 2017 was 34.93%, 32.05% and 37.58%, respectively.

Income tax expense decreased $775,000, or 10%, to $7.1 million in the first quarter of 2018, compared to $7.8 million in the first quarter of 2017.  Lower corporate income tax rates resulting from the passage of the Tax Cuts and Jobs Act in December 2017 has resulted in lower effective tax rates.  Excess tax benefits from the exercise of stock options and vesting of restricted stock were $1.5 million for the first quarter of 2018 compared to $2.1 million for the first quarter of 2017.  Our effective tax rate for the first quarter of 2018 and the first quarter of  2017 was 17.8% and 25.8%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

We recorded $3.1 million of additional tax expense as a result of revaluing our net deferred tax assets at December 31, 2017 due to lower corporate income tax rates provided by the Tax Cuts and Jobs Act passed into law in December 2017.  We also recorded expenses of $347,000 related to terminating the lease agreement on our previous headquarters building in Birmingham, Alabama and expenses of moving into our new headquarters building.  Core financial measures included in this press release are “core net income,” “core net income available to common stockholders,” “core diluted earnings per share,” “core return on average assets,” and “core return on average common stockholders’ equity.”  Each of these five core financial measures excludes the impact of the non-routine expenses attributable to our net deferred tax asset revaluation, lease termination and moving expenses, and are all considered non-GAAP financial measures.  In addition to these financial measures adjusting for non-routine expenses, 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 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 tables provide 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 December 31, 2017
Return on average assets - GAAP					1.20	%
Net income - GAAP				$	21,150
	Adjustments:
	Revaluation of net deferred tax assets				3,059
	Lease termination and moving expenses				347
		Tax (benefit) of adjustments			(132	)
Core net income - non-GAAP*				$	24,424
Average assets				$	6,988,731
Core return on average assets - non-GAAP*					1.39	%
Return on average common stockholders' equity - GAAP					13.97	%
Net income available to common stockholders - GAAP				$	21,119
	Adjustments:
	Revaluation of net deferred tax assets				3,059
	Lease termination and moving expenses				347
		Tax (benefit) of adjustments			(132	)
Core net income available to common stockholders - non-GAAP*				$	24,393
Average common stockholders' equity				$	599,947
Core return on average common stockholders' equity - non-GAAP*					16.13	%
Diluted earnings per share - GAAP				$	0.39
Weighted average shares outstanding, diluted - GAAP					54,161,788
Core diluted earnings per share - non-GAAP*				$	0.45

				At March 31, 2018				At December 31, 2017				At September 30, 2017				At June 30, 2017				At March 31, 2017
Book value per share - GAAP				$	11.84			$	11.47			$	11.14			$	10.72			$	10.32
Total common stockholders' equity - GAAP					629,297				607,604				590,213				567,086				545,148
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset				14,652				14,719				14,787				14,855				14,924
Tangible common stockholders' equity - non-GAAP *				$	614,645			$	592,885			$	575,426			$	552,231			$	530,224
Tangible book value per share - non-GAAP *				$	11.56			$	11.19			$	10.86			$	10.44			$	10.04
Stockholders' equity to total assets - GAAP					8.98	%			8.58	%			8.79	%			8.96	%			8.60	%
Total assets - GAAP				$	7,011,735			$	7,082,384			$	6,712,103			$	6,329,599			$	6,336,165
	Adjustments:
	Adjusted for goodwill and core deposit intangible asset				14,652				14,719				14,787				14,855				14,924
Total tangible assets - non-GAAP *				$	6,997,083			$	7,067,665			$	6,697,316			$	6,314,744			$	6,321,241
Tangible common equity to total tangible assets - non-GAAP *					8.78	%			8.39	%			8.59	%			8.75	%			8.39	%
*	Core measures exclude non-routine expenses during the comparative periods presented in this press release, as more fully described in "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" above.

Conference Call

ServisFirst Bancshares, Inc. will host a live audio webcast to discuss earnings and results on Monday, April 16, 2018 beginning at 5:15 p.m. ET.  You may access the webcast at https://services.choruscall.com/links/sfbs180122.html.  The webcast will be available until April 27, 2018.

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, Montgomery, Mobile and Dothan, Alabama, Pensacola and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.

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,” “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: 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; 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 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
[email protected]

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(In thousands except share and per share data)
		1st Quarter 2018				4th Quarter 2017				3rd Quarter 2017				2nd Quarter 2017				1st Quarter 2017
CONSOLIDATED STATEMENT OF INCOME
Interest income		$	74,009			$	72,060			$	67,641			$	63,538			$	59,517
Interest expense			11,573				10,652				9,245				7,971				7,465
Net interest income			62,436				61,408				58,396				55,567				52,052
Provision for loan losses			4,139				9,055				4,803				4,381				4,986
Net interest income after provision for loan losses			58,297				52,353				53,593				51,186				47,066
Non-interest income			4,869				4,905				4,790				4,805				4,546
Non-interest expense			23,512				21,255				21,497				21,875				21,267
Income before income tax			39,654				36,003				36,886				34,116				30,345
Provision for income tax			7,051				14,853				11,627				9,952				7,826
Net income			32,603				21,150				25,259				24,164				22,519
Dividends paid on preferred stock			-				31				-				31				-
Net income available to common stockholders		$	32,603			$	21,119			$	25,259			$	24,133			$	22,519
Earnings per share - basic		$	0.61			$	0.40			$	0.48			$	0.46			$	0.43
Earnings per share - diluted		$	0.60			$	0.39			$	0.47			$	0.45			$	0.42
Average diluted shares outstanding			54,183,400				54,161,788				54,099,672				54,100,604				54,133,722
CONSOLIDATED BALANCE SHEET DATA
Total assets		$	7,011,735			$	7,082,384			$	6,712,103			$	6,329,599			$	6,336,165
Loans			5,928,327				5,851,261				5,628,765				5,343,688				5,151,984
Debt securities			560,885				538,330				522,724				518,065				526,023
Non-interest-bearing demand deposits			1,407,592				1,440,326				1,405,965				1,373,353				1,292,440
Total deposits			5,977,387				6,091,674				5,796,901				5,394,810				5,361,532
Borrowings			64,739				64,832				54,975				55,075				55,169
Stockholders' equity		$	629,297			$	607,604			$	590,213			$	567,086			$	545,148
Shares outstanding			53,147,169				52,992,586				52,970,310				52,909,362				52,812,396
Book value per share		$	11.84			$	11.47			$	11.14			$	10.72			$	10.32
Tangible book value per share (1)		$	11.56			$	11.19			$	10.86			$	10.44			$	10.04
SELECTED FINANCIAL RATIOS
Net interest margin			3.81	%			3.66	%			3.77	%			3.77	%			3.53	%
Return on average assets			1.91	%			1.20	%			1.55	%			1.55	%			1.45	%
Return on average common stockholders' equity			21.40	%			13.97	%			17.28	%			17.36	%			17.09	%
Efficiency ratio			34.93	%			32.05	%			34.02	%			36.23	%			37.58	%
Non-interest expense to average earning assets			1.43	%			1.26	%			1.38	%			1.47	%			1.43	%
CAPITAL RATIOS (2)
Common equity tier 1 capital to risk-weighted assets			9.88	%			9.51	%			9.60	%			9.72	%			9.67	%
Tier 1 capital to risk-weighted assets			9.88	%			9.52	%			9.61	%			9.73	%			9.68	%
Total capital to risk-weighted assets			11.91	%			11.52	%			11.51	%			11.67	%			11.66	%
Tier 1 capital to average assets			8.95	%			8.51	%			8.91	%			8.88	%			8.46	%
Tangible common equity to total tangible assets (1)			8.78	%			8.39	%			8.59	%			8.42	%			8.39	%
(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)
				March 31, 2018				March 31, 2017			% Change
				(Unaudited)				(Unaudited)
ASSETS
Cash and due from banks				$	64,912			$	54,993		18		%
Interest-bearing balances due from depository institutions					53,311				283,181		(81	)	%
Federal funds sold					197,882				127,390		55		%
	Cash and cash equivalents				316,105				465,564		(32	)	%
Available for sale debt securities, at fair value					560,635				453,956		23		%
Held to maturity debt securities (fair value of $250 and $73,180 at
	March 31, 2018 and 2017, respectively)				250				72,057		(100	)	%
Restricted equity securities					1,026				1,034		(1	)	%
Mortgage loans held for sale					4,522				6,599		(31	)	%
Loans					5,928,327				5,151,984		15		%
Less allowance for loan losses					(62,050	)			(53,892	)	15		%
	Loans, net				5,866,277				5,098,092		15		%
Premises and equipment, net					58,624				46,407		26		%
Goodwill and other identifiable intangible assets					14,652				14,924		(2	)	%
Other assets					189,644				177,532		7		%
	Total assets			$	7,011,735			$	6,336,165		11		%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
	Non-interest-bearing			$	1,407,592			$	1,292,440		9		%
	Interest-bearing				4,569,795				4,069,092		12		%
		Total deposits			5,977,387				5,361,532		11		%
Federal funds purchased					326,399				358,241		(9	)	%
Other borrowings					64,739				55,169		17		%
Other liabilities					13,913				16,075		(13	)	%
	Total liabilities				6,382,438				5,791,017		10		%
Stockholders' equity:
	Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at
		March 31, 2018 and March 31, 2017			-				-
	Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,147,169 shares
		issued and outstanding at March 31, 2018, and 52,812,396 shares issued and outstanding
		at March 31, 2017			53				53
	Additional paid-in capital				217,536				217,195		-		%
	Retained earnings				416,311				327,029		27		%
	Accumulated other comprehensive income				(5,105	)			369		NM
		Total stockholders' equity attributable to ServisFirst Bancshares, Inc.			628,795				544,646		15		%
	Noncontrolling interest				502				502		-		%
		Total stockholders' equity			629,297				545,148		15		%
	Total liabilities and stockholders' equity			$	7,011,735				6,336,165		11		%

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
				Three Months Ended March 31,
				2018			2017
Interest income:
	Interest and fees on loans			$	69,674		$	55,556
	Taxable securities				2,745			2,087
	Nontaxable securities				656			765
	Federal funds sold				551			519
	Other interest and dividends				383			590
	Total interest income				74,009			59,517
Interest expense:
	Deposits				9,621			5,982
	Borrowed funds				1,952			1,483
	Total interest expense				11,573			7,465
	Net interest income				62,436			52,052
Provision for loan losses					4,139			4,986
	Net interest income after provision for loan losses				58,297			47,066
Non-interest income:
	Service charges on deposit accounts				1,585			1,354
	Mortgage banking				518			899
	Credit card income				1,578			1,179
	Securities (losses) gains				4			-
	Increase in cash surrender value life insurance				777			724
	Other operating income				407			390
	Total non-interest income				4,869			4,546
Non-interest expense:
	Salaries and employee benefits				13,296			11,713
	Equipment and occupancy expense				1,954			2,250
	Professional services				805			771
	FDIC and other regulatory assessments				1,133			997
	Other real estate owned expense				316			76
	Other operating expense				6,008			5,460
	Total non-interest expense				23,512			21,267
	Income before income tax				39,654			30,345
Provision for income tax					7,051			7,826
	Net income				32,603			22,519
	Dividends on preferred stock				-			-
	Net income available to common stockholders			$	32,603		$	22,519
Basic earnings per common share				$	0.61		$	0.43
Diluted earnings per common share				$	0.60		$	0.42

LOANS BY TYPE (UNAUDITED)
(In thousands)
			1st Quarter 2018			4th Quarter 2017			3rd Quarter 2017			2nd Quarter 2017			1st Quarter 2017
Commercial, financial and agricultural			$	2,329,904		$	2,279,366		$	2,223,910		$	2,123,498		$	2,061,503
Real estate - construction				506,050			580,874			467,838			395,398			345,777
Real estate - mortgage:
	Owner-occupied commercial			1,349,679			1,328,666			1,323,383			1,272,659			1,262,578
	1-4 family mortgage			581,498			603,063			593,180			565,121			554,261
	Other mortgage			1,099,482			997,079			962,690			931,788			872,955
Subtotal: Real estate - mortgage				3,030,659			2,928,808			2,879,253			2,769,568			2,689,794
Consumer				61,714			62,213			57,764			55,224			54,910
Total loans			$	5,928,327		$	5,851,261		$	5,628,765		$	5,343,688		$	5,151,984

SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)
(Dollars in thousands)
					1st Quarter 2018					4th Quarter 2017					3rd Quarter 2017					2nd Quarter 2017					1st Quarter 2017
Allowance for loan losses:
Beginning balance					$	59,406				$	58,459				$	55,059				$	53,892				$	51,893
Loans charged off:
	Commercial financial and agricultural					1,088					7,064					924					3,067					2,855
	Real estate - construction					-					-					16					40					-
	Real estate - mortgage					381					1,134					550					106					266
	Consumer					88					137					65					33					75
		Total charge offs				1,557					8,335					1,555					3,246					3,196
Recoveries:
	Commercial financial and agricultural					4					64					67					16					190
	Real estate - construction					7					126					12					14					16
	Real estate - mortgage					42					26					59					2					2
	Consumer					9					11					14					-					1
		Total recoveries				62					227					152					32					209
	Net charge-offs					1,495					8,108					1,403					3,214					2,987
	Provision for loan losses					4,139					9,055					4,803					4,381					4,986
	Ending balance				$	62,050				$	59,406				$	58,459				$	55,059				$	53,892
	Allowance for loan losses to total loans					1.05		%			1.02		%			1.04		%			1.03		%			1.05		%
	Allowance for loan losses to total average
		loans				1.05		%			1.04		%			1.07		%			1.05		%			1.08		%
	Net charge-offs to total average loans					0.10		%			0.56		%			0.10		%			0.25		%			0.24		%
	Provision for loan losses to total average
		loans				0.29		%			0.63		%			0.35		%			0.34		%			0.40		%
	Nonperforming assets:
		Nonaccrual loans			$	9,271				$	10,765				$	12,356				$	9,963				$	12,084
		Loans 90+ days past due and accruing				678					60					2,506					1,016					16
		Other real estate owned and
		repossessed assets				5,748					6,701					3,888					3,891					5,102
	Total				$	15,697				$	17,526				$	18,750				$	14,870				$	17,202
	Nonperforming loans to total loans					0.17		%			0.19		%			0.26		%			0.21		%			0.23		%
	Nonperforming assets to total assets					0.22		%			0.25		%			0.28		%			0.23		%			0.27		%
	Nonperforming assets to earning assets					0.23		%			0.25		%			0.29		%			0.24		%			0.28		%
	Reserve for loan losses to nonaccrual loans					669.29		%			551.84		%			473.12		%			552.63		%			445.98		%
	Restructured accruing loans				$	15,838				$	16,919				$	12,700				$	12,716				$	536
	Restructured accruing loans to total loans					0.27		%			0.29		%			0.23		%			0.24		%			0.01		%
	TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)
	(In thousands)
					1st Quarter 2018					4th Quarter 2017					3rd Quarter 2017					2nd Quarter 2017					1st Quarter 2017
	Beginning balance:				$	20,572				$	16,354				$	16,370				$	7,269				$	7,292
		Additions				-					4,233					-					12,716					-
		Removal from TDR				-					-					-					(535	)				-
		Net (paydowns) / advances				(1,080	)				(15	)				(16	)				(1,380	)				(23	)
		Charge-offs				(700	)				-					-					(1,700	)				-
					$	18,792				$	20,572				$	16,354				$	16,370				$	7,269

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
				1st Quarter 2018			4th Quarter 2017			3rd Quarter 2017			2nd Quarter 2017			1st Quarter 2017
Interest income:
	Interest and fees on loans			$	69,674		$	67,357		$	63,857		$	59,912		$	55,556
	Taxable securities				2,745			2,468			2,288			2,274			2,087
	Nontaxable securities				656			702			729			752			765
	Federal funds sold				551			508			379			287			519
	Other interest and dividends				383			1,025			388			313			590
	Total interest income				74,009			72,060			67,641			63,538			59,517
Interest expense:
	Deposits				9,621			8,954			7,574			6,321			5,982
	Borrowed funds				1,952			1,698			1,671			1,650			1,483
	Total interest expense				11,573			10,652			9,245			7,971			7,465
	Net interest income				62,436			61,408			58,396			55,567			52,052
Provision for loan losses					4,139			9,055			4,803			4,381			4,986
	Net interest income after provision for loan losses				58,297			52,353			53,593			51,186			47,066
Non-interest income:
	Service charges on deposit accounts				1,585			1,499			1,467			1,382			1,354
	Mortgage banking				518			894			978			1,064			899
	Credit card income				1,578			1,298			1,149			1,189			1,179
	Securities gains				4			-			-			-			-
	Increase in cash surrender value life insurance				777			797			825			785			724
	Other operating income				407			417			371			385			390
	Total non-interest income				4,869			4,905			4,790			4,805			4,546
Non-interest expense:
	Salaries and employee benefits				13,296			11,432			12,428			12,031			11,713
	Equipment and occupancy expense				1,954			1,566			1,947			2,265			2,250
	Professional services				805			833			805			808			771
	FDIC and other regulatory assessments				1,133			1,030			810			1,081			997
	Other real estate owned expense				316			160			31			56			76
	Other operating expense				6,008			6,234			5,476			5,634			5,460
	Total non-interest expense				23,512			21,255			21,497			21,875			21,267
	Income before income tax				39,654			36,003			36,886			34,116			30,345
Provision for income tax					7,051			14,853			11,627			9,952			7,826
	Net income				32,603			21,150			25,259			24,164			22,519
	Dividends on preferred stock				-			31			-			31			-
	Net income available to common stockholders			$	32,603		$	21,119		$	25,259		$	24,133		$	22,519
Basic earnings per common share				$	0.61		$	0.40		$	0.48		$	0.46		$	0.43
Diluted earnings per common share				$	0.60		$	0.39		$	0.47		$	0.45		$	0.42

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
							1st Quarter 2018							4th Quarter 2017						3rd Quarter 2017						2nd Quarter 2017						1st Quarter 2017
							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				$	5,847,443			4.81	%		$	5,680,227		4.68	%		$	5,407,109		4.66	%		$	5,192,812		4.60	%		$	4,976,933			4.50	%
			Tax-exempt (2)					36,357			4.06				36,992		4.95				33,357		5.17				41,143		4.92				27,322			4.72
				Total loans, net of
					unearned income			5,883,800			4.80				5,717,219		4.68				5,440,466		4.66				5,233,955		4.60				5,004,255			4.51
		Mortgage loans held for sale						3,698			4.50				6,199		3.52				4,862		3.51				5,958		3.90				5,637			4.10
		Debt securities:
			Taxable					435,747			2.52				406,488		2.43				385,431		2.37				389,505		2.34				368,349			2.27
			Tax-exempt (2)					120,270			2.56				128,201		3.27				131,478		3.34				133,590		3.38				132,578			3.45
				Total securities (3)				556,017			2.53				534,689		2.63				516,909		2.62				523,095		2.60				500,927			2.58
		Federal funds sold						131,472			1.70				143,905		1.40				111,175		1.35				98,598		1.17				234,460			0.90
		Restricted equity securities						1,030			1.57				1,030		1.93				1,030		3.47				1,030		10.51				1,030			1.57
		Interest-bearing balances with banks						96,012			1.60				310,289		1.31				118,510		1.27				109,909		1.04				295,648			0.80
		Total interest-earning assets						6,672,029			4.51	%			6,713,331		4.29	%			6,192,952		4.37	%			5,972,545		4.30	%			6,041,957			4.03	%
Non-interest-earning assets:
		Cash and due from banks						68,309							68,444						65,457						68,894						59,697
		Net premises and equipment						59,709							57,320						54,727						49,813						44,739
		Allowance for loan losses, accrued
			interest and other assets					140,558							149,636						151,786						143,286						138,289
				Total assets			$	6,940,605						$	6,988,731					$	6,464,922					$	6,234,538					$	6,284,682
Interest-bearing liabilities:
		Interest-bearing deposits:
		Checking					$	899,311			0.52	%		$	899,334		0.46	%		$	800,437		0.42	%		$	779,916		0.39	%		$	789,273			0.38	%
		Savings						53,269			0.31				49,697		0.31				48,313		0.30				48,150		0.30				50,461			0.33
		Money market						3,027,176			0.90				3,065,298		0.80				2,774,061		0.74				2,567,817		0.64				2,694,225			0.58
		Time deposits						576,857			1.21				576,010		1.16				546,020		1.10				537,220		1.06				530,000			1.02
			Total interest-bearing deposits					4,556,613			0.86				4,590,339		0.77				4,168,831		0.72				3,933,103		0.64				4,063,959			0.60
		Federal funds purchased						297,051			1.60				271,248		1.37				282,806		1.34				336,344		1.11				359,747			0.86
		Other borrowings						64,805			4.89				60,829		4.98				55,034		5.17				55,130		5.22				55,239			5.26
		Total interest-bearing liabilities						4,918,469			0.95	%			4,922,416		0.86	%			4,506,671		0.81	%			4,324,577		0.74	%			4,478,945			0.68	%
Non-interest-bearing liabilities:
		Non-interest-bearing
			demand deposits					1,389,217							1,444,338						1,363,207						1,338,514						1,254,496
		Other liabilities						15,007							22,029						15,070						13,739						16,809
		Stockholders' equity						621,004							599,754						578,626						556,521						535,232
		Unrealized (losses) gains on securities
			and derivatives					(3,092	)						194						1,348						1,187						(800	)
				Total liabilities and
					stockholders' equity		$	6,940,605						$	6,988,731					$	6,464,922					$	6,234,538					$	6,284,682
Net interest spread											3.56	%					3.43	%					3.56	%					3.56	%						3.35	%
Net interest margin											3.81	%					3.66	%					3.77	%					3.77	%						3.53	%
(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% for the 1st quarter of 2018 and 35% for the quarters in 2017.
(3	)	Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.