ServisFirst Bancshares, Inc.

Greetings and welcome to the Service First Bank Share second quarter earnings conference call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed in the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Davis Mange, Director of Investor Relations. Davis, please go ahead.

Good afternoon, and welcome to our second quarter earnings call. Today's speakers will cover some highlights from the quarter, and then we'll take your questions. We'll have Tom Broughton, our CEO, Jim Harper, our Chief Credit Officer, and David Spracio, our CFO. Now I'll cover our forward-looking statements disclosure. 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 violence. 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, and thank you for joining our second quarter conference call. I'm going to give you a few highlights, and we'll follow that with a credit update from Jim Harper, and then Davis Brescia will give you a little bit more financial information on the quarter. From a loan standpoint, we did see solid loan growth in the quarter. Net of payoffs, our growth was 11% annualized. We do see, continue to see the loan pipeline being very robust and staying at robust levels. I would say, you know, characterize the loan demand as good, not great. And of course, everybody, we're not immune from the payoffs that you're hearing from everybody. So we do have elevated payoffs on the commercial real estate side. Luckily, we are known as a commercial industrial lending bank. So those are certainly don't have the same level of payoffs that you see on the CRE side. We are replacing, on the CRE side, we are replacing the payoffs with new projects, but with the large equity requirements that we have today, our funding will not begin until the projects are well underway. On the real estate projects, a lot of projects still don't pencil out at today's higher interest rates. If we see a few cuts, we think the demand would be a good bit better. And I think a lot of the projects we're seeing are tax credit oriented, low income housing type products that are government supported projects. So those are still have robust demand for those. On the deposit side, we saw some normalization of some of our higher cost municipal and correspondent deposits in the quarter. We had one large municipal deposit where the funds have been sitting for two years. while construction projects are beginning and those have begun so that those funds are running off as we expected in that large account. So really we are focused on opening core deposits accounts with, you know, treasury products that go along with those. That is our focus of our bank and always has been and always will be. In the new markets area, we did hire seven new producers in the second quarter in our footprint. And also I wanted to mention that we have ramped up in the last couple of quarters in a merchant area. We brought on a team of merchant group and to increase our production on the merchant side, we think we have great potential to grow our merchant business. We don't count those people as revenues as their producer count is only commercial bankers, but they are revenue generators and we think they'll do a fantastic job growing merchant revenue for us. So I'm going to now turn it over to Jim Harper for a credit update.