ServisFirst earnings increased 33.2% in the third quarter of 2026, with net income reaching $87.3 million as loan growth and higher net interest income supported profitability. The Birmingham, Alabama-based bank holding company announced the results on October 19 for the quarter ended September 30. Diluted earnings per share rose to $0.80 from $0.60 a year earlier.
Key Takeaways
- Net interest income increased to $159.8 million, with the interest margin wider than a year earlier but unchanged sequentially.
- Loans grew 10.7% year over year, while quarter-end deposits fell 3.2% from June.
- Loan-loss provisions increased, and a newly authorized share buyback permits purchases through December 2027.
Table of Contents
- ServisFirst earnings benefit from lending and margin growth
- Loan growth outpaces quarter-end deposits
- Credit provisions rise despite stable problem-asset ratio
- Capital strengthens ahead of authorized buyback
- Conclusion
ServisFirst earnings benefit from lending and margin growth
The company’s third-quarter 2026 earnings release showed net interest income rising from $133.4 million a year earlier and $155.6 million in the second quarter. Net interest margin was 3.63%, compared with 3.09% in the third quarter of 2025.
The margin was unchanged from the preceding quarter on a reported basis. Excluding a loan-interest recovery that benefited the second quarter, however, the company said the margin improved by five basis points.
Lower funding costs helped the year-over-year comparison: average interest-bearing deposit rates fell to 2.80% from 3.41%, while loan yields declined more modestly to 6.24% from 6.34%.
Reported earnings growth also benefited from the comparison with securities losses a year earlier. Against prior-year adjusted diluted earnings of $0.65 per share, the company reported growth of 23.1%, rather than the 33.3% increase measured against reported earnings. All share and per-share figures reflect the two-for-one stock split completed during the quarter.
| Item | Details |
|---|---|
| Common equity tier 1 capital ratio | 11.98% at September 30, 2026, versus 11.49% a year earlier. |
| Book value per share | $18.63, up 14% year over year. |
| Efficiency ratio | 30.20%, versus 35.22% a year earlier and 29.65% in the second quarter. |
| Year-to-date net income | $256.1 million, up 34.6% from the comparable 2025 period. |
Loan growth outpaces quarter-end deposits
Loans ended September at $14.74 billion, up $1.43 billion from a year earlier and $258.8 million from June. Chief Executive Officer Tom Broughton said economic trends were solid and described improving loan activity and continued growth in the loan pipeline.
Quarter-end deposits moved in the opposite direction, declining $461.4 million to $14.09 billion from June and slipping 0.1% year over year. Average deposits nevertheless increased 1.4% from a year earlier to $14.33 billion, showing that the quarter-end decline was not mirrored in the quarterly average.
Noninterest-bearing deposits rose 12% year over year, although they fell 2.8% from June.
Credit provisions rise despite stable problem-asset ratio
ServisFirst recorded a $14.9 million provision for loan losses, compared with $11.7 million in the second quarter and $9.3 million a year earlier.
Annualized net charge-offs were 0.21% of average loans, up from 0.11% sequentially but below 0.27% a year earlier. Nonperforming assets remained at 0.96% of total assets across all three comparison periods.
Operating expenses rose 8.8% year over year to $52.2 million. The company attributed the increase in salary and benefit costs primarily to the full impact of its Houston expansion.
Capital strengthens ahead of authorized buyback
After quarter-end, ServisFirst announced its first stock repurchase program, authorizing purchases of up to two million common shares through December 31, 2027. The authorization establishes the permitted scope and deadline; it does not establish that any shares have already been purchased.
The company also reported stronger capital and book value than a year earlier, alongside an improved year-over-year efficiency ratio.
Conclusion
ServisFirst delivered stronger year-over-year earnings, but faster loan growth coincided with lower quarter-end deposits and higher loan-loss provisions. The newly authorized buyback provides the next defined capital-return initiative to watch, with purchases permitted through December 31, 2027.
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