ServisFirst Bancshares, Inc.

Greetings and welcome to the Service First Bank Shares first quarter earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Davis Mains, Director of Investor Relations. Thank you, Davis. You may begin.

Good afternoon and welcome to our first quarter earnings call. Today's speakers will cover some highlights from the quarter and then take your questions. We'll have Tom Broughton, our CEO, Henry Abbott, our Chief Credit Officer, and Kirk Presley, our CFO. I'll now cover our forward-looking statements disclosures. Some of the discussion in today's earnings call 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. Thank you, Davis. Good afternoon, and thank you for joining our first quarter earnings call. We do think the first quarter is off to a good start of the year. We are optimistic we'll see improvement on a quarterly basis. Kirk Presley is going to talk about our margin and deposit activity in a few minutes. In addition, our expenses are in line as expected. Henry Abbott will talk about our continued strong credit quality shortly after that. Looking at loans, first thing I'll say is we had really good growth in the quarter with over $200 million in net loans. More importantly, our lung pipeline is back to normal levels today and has increased 63% since year end. In recent weeks, our bankers are seeing greater activity and some projects that are postponed or are ramping up again. I'd say our pipeline is very close to normal levels. Production side, we were fortunate to add nine new bankers in the first quarter up from in the fourth quarter of 2023. Six of these producers are in the Memphis market. We also expect to announce a new market within a few weeks. We are working to better measure productivity of our commercial bankers as well as our support staff. Success is obvious for bankers. You know who's being productive and you know who's not, but we're working On other metrics to better gauge the required inputs to success. We are optimistic we've been successful in the coming quarters given the current economic environment. Now I'm going to turn it over to Henry Abbott first to make some comments on credit quality.

Thank you, Tom. The bank got off to a strong start in 2024 with the loan growth Tom previously mentioned. I'm pleased with our results and how the bank's loan portfolio has performed in the current interest rate environment. I'm also pleased to say with our loan growth, we experienced the largest segment of growth in our owner-occupied real estate segment, which grew by $120 million. Charge-offs for the quarter were six basis points when annualized, which is less than the fourth quarter results of nine basis points and generally in line with the first quarter of 2023. We ended the quarter with only $17 million in past due loans. which is a 35% decrease from year end 2023 and down from the same time prior period. The allowance to total loans was 1.31, which is basically flat compared to when it was 1.32 at year end and generally consistent with the past few prior quarters. Non-performing assets did increase for the quarter, and this was primarily related to one credit. credit has been on our watch list for some time, and while the customer is current on all loan payments with Service First, we felt a conservative thing to do with move loan to non-accrual given recent changes with our borrower. We have significant collateral above and beyond the loan amount, and we're working with the borrower and other parties to find a smooth landing spot that is in the best interest of the bank. The bank has been at or near historic lows for the past few years as it relates to non-performing assets. Even with this one additional credit, at the end of the first quarter, NPAs to total assets were still only 22 basis points, which is significantly below our peers and less than half of where we were at the end of 2019, which was closer to 50 basis points, and generally in line with where we were at the end of 2020 at 21 basis points. These are both good pre-COVID benchmarks. I will also note that the allowance for credit losses when compared to non-accruals was 452% at quarter end, and this is significantly greater than our peer group. We continue to feel good about the bank's loan portfolio and credit quality. I'm pleased with how the bank ended 2023, and we continued that momentum in 2024, and now our loan growth is beginning to tick up as well at a better pace. With that, I'll pass it to Kirk.