ServisFirst Bancshares, Inc.

Good afternoon and welcome to the Service First Bancshares, Inc. first quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Ed Woodie, Controller. Please go ahead.

Good afternoon, and welcome to our first quarter earnings call. We will have Tom Broughton, our CEO, Bud Foshee, our CFO, and Henry Abbott, our Chief Credit Officer, covering some highlights from the quarter, and then we will take your questions. Some of the discussions during our calls may include forward-looking statements. Actual results may differ from any projections shared today due to factors described in our most recent 10-K and 10-Q filings. Forward-looking statements speak only as of the date they are made and Service First assumes no duty to update them. With that, I'll turn the call over to Tom.

Good afternoon. We're very pleased with our quarter and we're glad you could join us on our call today. We do continue to see rapid improvement in the Southeastern United States economy. Supply chains are still not rebuilt, so line utilization has not improved during the first quarter. And I think we're seeing inflation, and a lot of our customers are reporting large inflation in their material cost, and so that should lead to line utilization improvement as the year goes on. I've talked to one diversified manufacturer wholesaler last week who said everyone is gouging everyone out there and I know that there's a shortage of labor in most every industry today. The unemployment rates in our state are averaging 4.7% in February and we are seeing improvement monthly in that number. And I can only recall one first quarter of any of our 16 years where we had any We did have a little bit of growth in the quarter, but one of our largest clients had seasonal pay downs that offset the growth in the non-PPP loan balance. As I've mentioned before, we have not seen the line utilization rebound as of yet, but do expect improvement through the rest of the year. And talking about our loan pipeline, our loan pipeline hit record levels at the end of March, beginning of April. Our 90-day pipeline has doubled since January, and we do expect significant loan growth in the second quarter. This includes expected fundings as well as draws on construction loans. And while our pipeline is not exact and you do have unexpected payoffs, This is the highest pipeline in the last 12 quarters, over $300 million. Our goal for the year is to replace our Triple P loans with other loans by year end. Bud Foshew will give a Triple P program update in a few minutes after Henry Abbott. So I do feel confident we will see loan growth this year. We do continue to see more opportunity due to mergers. Our performance with Triple P in attracting new clients and incumbent banks' poor performance with Triple P. Based on pinup demand, we do see continued improvement in our footprint. On the deposit side, we do continue to attract deposits with annualized growth of 24% in the first quarter. The growth has been very broad across the entire company. You know, while the industry does have substantial liquidity today, as our bank does, we do feel confident core deposits will add value over time. New account openness has steadily improved over the past six months, and we're very, very high in the month of March. So now I'm going to stop and turn it over to Henry Abbott to talk about credit quality.